1
RULE 424(b)2
REGISTRATION STATEMENT No. 333-63090
333-63090-1
333-63090-2
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 20, 2001
[COMERICA LOGO]
$350,000,000
COMERICA CAPITAL TRUST I
7.60% Trust Preferred Securities
fully and unconditionally guaranteed by
COMERICA INCORPORATED
------------------
Each of the 7.60% Trust Preferred Securities, which we refer to in this
prospectus supplement as the "preferred securities", represents an undivided
beneficial ownership interest in the assets of Comerica Capital Trust I.
Comerica Incorporated will be the owner of all of the undivided ownership
interests represented by common securities of Comerica Capital Trust I.
The preferred securities have been approved for listing on the New York
Stock Exchange.
INVESTING IN THE PREFERRED SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" ON
PAGE S-9.
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND COMERICA
PUBLIC (1) COMMISSIONS INCORPORATED (1)
------------ ------------- ----------------
Per Preferred Security............................... $25.00 $0.7875 $24.2125
Total................................................ $350,000,000 $11,025,000 $338,975,000
(1) Plus accrued distributions, if any, from July 31, 2001.
Delivery of the preferred securities in book-entry form only will be made
on or about July 31, 2001.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved any of these securities or determined if
this prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.
These preferred securities and the junior subordinated debentures are not
deposits or other obligations of a bank and are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency.
JOINT BOOK-RUNNING MANAGERS
CREDIT SUISSE FIRST BOSTON SALOMON SMITH BARNEY
A.G. EDWARDS & SONS, INC.
COMERICA SECURITIES
JPMORGAN
MERRILL LYNCH & CO.
MORGAN STANLEY
UBS WARBURG
DAIN RAUSCHER WESSELS
GOLDMAN, SACHS & CO.
KEEFE, BRUYETTE & WOODS, INC.
LEHMAN BROTHERS
The date of this prospectus supplement is July 25, 2001.
2
------------------
TABLE OF CONTENTS
Page
----
PROSPECTUS SUPPLEMENT
SUMMARY.............................. S-3
RISK FACTORS......................... S-9
COMERICA INCORPORATED................ S-12
RECENT FINANCIAL RESULTS............. S-12
THE TRUST............................ S-12
USE OF PROCEEDS...................... S-13
ACCOUNTING TREATMENT................. S-14
REGULATORY TREATMENT................. S-14
CAPITALIZATION....................... S-15
CERTAIN TERMS OF THE PREFERRED
SECURITIES......................... S-16
CERTAIN TERMS OF THE JUNIOR
SUBORDINATED DEBENTURES............ S-22
Page
----
RELATIONSHIP AMONG THE PREFERRED
SECURITIES, THE JUNIOR SUBORDINATED
DEBENTURES AND THE GUARANTEE....... S-25
UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES....................... S-26
ERISA CONSIDERATIONS................. S-31
UNDERWRITING......................... S-35
NOTICE TO CANADIAN RESIDENTS......... S-38
LEGAL OPINIONS....................... S-39
PROSPECTUS
ABOUT THIS PROSPECTUS................ 1
WHERE YOU CAN FIND MORE INFORMATION
ABOUT COMERICA INCORPORATED........ 2
SUMMARY.............................. 3
COMERICA INCORPORATED................ 4
THE TRUSTS........................... 4
USE OF PROCEEDS...................... 6
CONSOLIDATED RATIOS OF EARNINGS TO
FIXED CHARGES...................... 6
ACCOUNTING TREATMENT................. 6
DESCRIPTION OF THE PREFERRED
SECURITIES......................... 6
DESCRIPTION OF THE GUARANTEES........ 14
DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES............ 19
BOOK-ENTRY ISSUANCE.................. 31
ERISA MATTERS........................ 34
PLAN OF DISTRIBUTION................. 34
LEGAL OPINIONS....................... 36
EXPERTS.............................. 36
------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS MAY ONLY BE USED WHERE IT IS LEGAL TO
SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON
THE DATE OF THIS DOCUMENT.
S-2
3
SUMMARY
The following information should be read together with the information
contained in other parts of this prospectus supplement and in the accompanying
prospectus. It may not contain all the information that is important to you. You
should carefully read this entire prospectus supplement and the accompanying
prospectus to understand fully the terms of the preferred securities and the
related guarantee and junior subordinated debentures, as well as the tax and
other considerations that may be important to you in making a decision about
whether to invest in the preferred securities. You should pay special attention
to the "Risk Factors" section of this prospectus supplement to determine whether
an investment in the preferred securities is appropriate for you.
ABOUT COMERICA INCORPORATED
We are a multi-state financial services provider, incorporated under the
laws of the State of Delaware, headquartered in Detroit, Michigan. Based on
assets as of December 31, 2000, we were the 22nd largest bank holding company in
the United States and the largest bank holding company headquartered in Michigan
in terms of both total assets and total deposits. We were formed in 1973 to
acquire the outstanding common stock of Comerica Bank (formerly Comerica
Bank-Detroit), one of Michigan's oldest banks. Since that time, we have acquired
financial institutions in California, Texas and Florida, and formed Comerica
Bank-Canada in 1998 and Comerica Bank-Mexico, S.A. in 1997. As of December 31,
2000, we owned directly or indirectly all the outstanding common stock of seven
banking and 35 non-banking subsidiaries. In addition, on January 29, 2001, we
completed our acquisition of Imperial Bancorp through the merger of Imperial
with and into Comerica Holdings Incorporated, a wholly-owned subsidiary of
Comerica. We accounted for this acquisition as a pooling of interests and have
restated our financial statements to reflect this acquisition.
At December 31, 2000, we had total assets of approximately $50.0 billion,
total deposits of approximately $33.9 billion, total loans (net of unearned
income) of approximately $40.2 billion and common shareholders' equity of
approximately $4.5 billion.
ABOUT COMERICA CAPITAL TRUST I
Comerica Capital Trust I is a business trust organized under Delaware law
by its trustees and us. Comerica Capital Trust I was established solely for the
following purposes:
- to issue to us, in exchange for our junior subordinated debentures, the
preferred securities, which represent undivided beneficial ownership
interests in Comerica Capital Trust I's assets;
- to issue common securities to us in exchange for our junior subordinated
debentures in a total liquidation amount equal to at least 3% of Comerica
Capital Trust I's total capital; and
- to engage in other activities that are directly related to the activities
described above, such as registering the transfer of the preferred
securities.
Because Comerica Capital Trust I was established only for the purposes
listed above, the junior subordinated debentures will be Comerica Capital Trust
I's sole assets. Payments on the junior subordinated debentures will be Comerica
Capital Trust I's sole source of income. Comerica Capital Trust I will issue
only one series of preferred securities.
S-3
4
THE OFFERING
TITLE...................... Comerica Capital Trust I 7.60% Trust Preferred
Securities.
SECURITIES OFFERED......... $350,000,000 of preferred securities in
denominations of $25 each. Each preferred security
will represent an undivided beneficial ownership
interest in the assets of Comerica Capital Trust I.
Each preferred security will entitle its holder to
receive quarterly cash distributions as described
below.
COMERICA CAPITAL TRUST I... The issuer of the preferred securities is Comerica
Capital Trust I, a Delaware business trust. We
created it for the sole purpose of issuing the
preferred securities to the public and the common
securities to us in exchange for our 7.60% junior
subordinated debentures due July 1, 2050 and
engaging in the other transactions described below.
Comerica Capital Trust I has five trustees. The
three administrative trustees are officers of
Comerica Incorporated. Chase Manhattan Trust
Company, National Association will act as the
property trustee and Chase Manhattan Bank USA,
National Association will act as the Delaware
trustee.
Comerica Capital Trust I will hold the junior
subordinated debentures that it receives from us in
exchange for the issuance of preferred securities
and common securities to us. We will sell the
preferred securities to the public and retain the
common securities that we receive from Comerica
Capital Trust I. We will pay interest on the junior
subordinated debentures at the same rate and at the
same times as Comerica Capital Trust I makes
payments on the preferred securities. Comerica
Capital Trust I will use the payments it receives
on the junior subordinated debentures to make the
corresponding payments on the preferred securities.
We will guarantee payments made on the preferred
securities to the extent described below. Both the
junior subordinated debentures and the guarantee
will be subordinated to the holders of our existing
and future senior debt.
DISTRIBUTIONS.............. If you purchase the preferred securities, as an
undivided beneficial owner in the junior
subordinated debentures, you will be entitled to
receive cumulative cash distributions at an annual
rate of 7.60%. Interest on the junior subordinated
debentures will accrue, and as a result
distributions on the preferred securities will
accumulate, from the date of issuance, and will be
paid quarterly in arrears on January 1, April 1,
July 1 and October 1 of each year, beginning
October 1, 2001, unless they are deferred as
described below.
DISTRIBUTION DEFERRAL...... We can, on one or more occasions, defer the
quarterly interest payments on the junior
subordinated debentures for up to 20 consecutive
quarterly periods. In other words, we may declare
at our discretion up to a five-year interest
payment moratorium on the junior subordinated
debentures and may choose to do that on more than
one occasion. A deferral of interest payments
cannot extend, however, beyond the maturity date of
the junior subordinated debentures, nor can we
begin a new interest deferral period until we have
paid all accrued interest on the junior
subordinated debentures from the previous interest
deferral period.
S-4
5
If we defer interest payments on the junior
subordinated debentures, Comerica Capital Trust I
will also defer distributions on the preferred
securities. Any deferred interest on the junior
subordinated debentures will accrue additional
interest at an annual rate of 7.60%, and, as a
result, any deferred distributions will accumulate
additional amounts at an annual rate of 7.60%,
compounded quarterly. Once we pay all deferred
interest payments on the junior subordinated
debentures, with accrued interest, we can again
defer interest payments on the junior subordinated
debentures as described above, but not beyond the
maturity date of the junior subordinated
debentures.
During any period in which we defer interest
payments on the junior subordinated debentures, we
will not and our subsidiaries will not do any of
the following, with certain limited exceptions:
- declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a
liquidation payment regarding, any of our
capital stock;
- make any payment of principal, interest or
premium, if any, on or repay, repurchase or
redeem any of our debt securities (including
other junior subordinated debentures) that rank
equally with or junior in interest to the
junior subordinated debentures; or
- make any guarantee payments on any guarantee of
debt securities of any of our subsidiaries
(including under other guarantees of junior
subordinated debentures) if the guarantee ranks
equally with or junior in interest to the
junior subordinated debentures, except in some
circumstances.
If we defer payments of interest on the junior
subordinated debentures, the junior subordinated
debentures will be treated at that time as being
issued with original issue discount for United
States federal income tax purposes. This means you
would be required to accrue interest income in an
amount equal to the deferred distributions on your
preferred securities even though you will not be
receiving any cash distributions on your preferred
securities. These amounts will be included in your
gross income for United States federal income tax
purposes. For more information, see below under the
caption "United States Federal Income Tax
Consequences" in this prospectus supplement.
REDEMPTION................. Comerica Capital Trust I will redeem all of the
outstanding preferred securities when the junior
subordinated debentures are repaid at maturity. The
junior subordinated debentures are scheduled to
mature on July 1, 2050.
In addition, if we redeem any junior subordinated
debentures before their maturity, Comerica Capital
Trust I will use the cash it receives on the
redemption of the junior subordinated debentures to
redeem, on a proportionate basis, the preferred
securities and the common securities. We can redeem
the junior subordinated debentures before their
maturity at 100% of their principal amount plus
accrued and unpaid interest in whole or in part on
one or more occasions any time on and after July
31, 2006, or in whole at any time if certain
S-5
6
changes occur in tax or investment company laws and
regulations or in the treatment of the preferred
securities for bank regulatory purposes. These
circumstances are more fully described below under
the caption "Certain Terms of the Preferred
Securities -- Redemption" in this prospectus
supplement.
We will not redeem the junior subordinated
debentures unless we obtain the prior approval of
the Board of Governors of the Federal Reserve
System to do so, if then required under the Federal
Reserve Board's capital rules.
RANKING.................... The preferred securities generally will rank on
parity, and payments thereon will be made pro rata,
with the common securities of the Trust. The junior
subordinated debentures will be our unsecured
obligations and will rank subordinate and junior in
right of payment to all senior indebtedness.
THE GUARANTEE.............. We will fully and unconditionally guarantee the
payments of all amounts due on the preferred
securities to the extent Comerica Capital Trust I
has funds available for payment of such
distributions.
We also are obligated to pay most of the expenses
and obligations of Comerica Capital Trust I (other
than Comerica Capital Trust I's obligations to make
payments on the preferred securities and common
securities, which are covered only by the
guarantee).
The guarantee does not cover payments when Comerica
Capital Trust I does not have sufficient funds to
make payments on the preferred securities. In other
words, if we do not make a payment on the junior
subordinated debentures, Comerica Capital Trust I
will not have sufficient funds to make payments on
the preferred securities, and the guarantee will
not obligate us to make those payments on Comerica
Capital Trust I's behalf. In addition, our
obligations under the guarantee are subordinate to
our obligations to other creditors to the same
extent as the junior subordinated debentures. For
more information, see "Description of the
Guarantees" in the accompanying prospectus.
LIQUIDATION PREFERENCE..... Upon any dissolution, winding-up or liquidation of
Comerica Capital Trust I, the holders of the
preferred securities will be entitled to receive,
out of assets held by Comerica Capital Trust I,
subject to the rights of any creditors of Comerica
Capital Trust I, the liquidation distribution in
cash. Comerica Capital Trust I will be able to make
this distribution of cash only if we redeem the
junior subordinated debentures. If we do not redeem
the junior subordinated debentures, upon
liquidation of Comerica Capital Trust I holders of
the preferred securities will be entitled to
receive junior subordinated debentures.
DISSOLUTION OF COMERICA
CAPITAL TRUST I AND
DISTRIBUTIONS OF THE
JUNIOR SUBORDINATED
DEBENTURES.............. We can dissolve Comerica Capital Trust I at any
time, subject to obtaining any required prior
approval of the Federal Reserve Board to do so, and
distribute the junior subordinated debentures to
holders of the preferred securities and the common
securities on a proportionate basis.
S-6
7
USE OF PROCEEDS............ The net proceeds from the offering of the preferred
securities are estimated to be $338,435,000. We
currently intend to use $250,000,000 of the
proceeds from the sale of the preferred securities
to redeem our outstanding preferred stock. We
expect the preferred securities to qualify as Tier
1 capital under the capital guidelines of the
Federal Reserve Board. We expect to use the
remainder of the proceeds from the sale of the
preferred securities for general corporate
purposes, which may include the repayment of debt
and investments in or extensions of credit to our
subsidiaries.
LISTING.................... The preferred securities have been approved for
listing on the New York Stock Exchange. Trading is
expected to commence within 30 days after the
preferred securities are first issued. You should
be aware that the listing of the preferred
securities will not necessarily ensure that an
active trading market will be available for the
preferred securities or that you will be able to
sell your preferred securities at the price you
originally paid for them.
If Comerica Capital Trust I distributes the junior
subordinated debentures, we will use our best
efforts to list them on the New York Stock Exchange
or wherever the preferred securities are then
listed.
FORM OF THE PREFERRED
SECURITIES.............. The preferred securities will be represented by one
or more global securities that will be deposited
with and registered in the name of The Depository
Trust Company, New York, New York. This means that
you will not receive a certificate for your
preferred securities and the preferred securities
will not be registered in your name. For more
details, see the information under the caption
"Book-Entry Issuance" in the accompanying
prospectus.
S-7
8
SUMMARY CONSOLIDATED FINANCIAL DATA OF
COMERICA INCORPORATED
We provide below summary consolidated financial data of our company as of
and for the periods specified. You should read the data below with the more
detailed information, consolidated financial statements and the notes to the
consolidated financial statements that we refer you to in the accompanying
prospectus under the caption "Where You Can Find More Information About Comerica
Incorporated".
Three Months
Ended
March 31, Year Ended December 31,
------------------ -----------------------------
2001 2000 2000 1999 1998
------- ------- ------- ------- -------
(in millions, except share data)
Net interest income............................ $ 512 $ 484 $ 2,004 $ 1,817 $ 1,720
Provision for credit losses.................... 72 67 255 146 146
------- ------- ------- ------- -------
Net interest income after provision
for credit losses......................... 440 417 1,749 1,671 1,574
Noninterest income............................. 170 255 959 867 667
Noninterest expense............................ 450 367 1,486 1,359 1,237
------- ------- ------- ------- -------
Income before income taxes..................... 160 305 1,222 1,179 1,004
Provision for income taxes..................... 66 108 431 419 353
------- ------- ------- ------- -------
Net income..................................... $ 94 $ 197 $ 791 $ 760 $ 651
======= ======= ======= ======= =======
Earnings per share:
Basic........................................ $ 0.50 $ 1.09 $ 4.38 $ 4.20 $ 3.58
Diluted...................................... 0.50 1.08 4.31 4.13 3.51
Period-ended balances:
Total loans.................................. $40,925 $37,659 $40,170 $36,305 $34,053
Total assets................................. 50,270 46,662 49,534 45,510 42,785
Total deposits............................... 36,786 29,396 33,854 29,196 29,883
Total shareholders' equity................... 4,669 4,057 4,500 3,948 3,428
S-8
9
RISK FACTORS
Before purchasing any preferred securities, you should read carefully this
prospectus supplement and the accompanying prospectus and pay special attention
to the following risk factors.
Because Comerica Capital Trust I will rely on the payments it receives on
the junior subordinated debentures to fund all payments on the preferred
securities, and because Comerica Capital Trust I may distribute the junior
subordinated debentures in exchange for the preferred securities, you are making
an investment regarding the junior subordinated debentures as well as the
preferred securities. You should carefully review the information in this
prospectus supplement and the accompanying prospectus about the preferred
securities, the guarantee and the junior subordinated debentures.
HOLDERS OF OUR SENIOR INDEBTEDNESS WILL GET PAID BEFORE YOU WILL GET PAID
Our obligations under the junior subordinated debentures and the guarantee
will be junior in right of payment to all of our existing and future senior
debt. This means that we cannot make any payments on the junior subordinated
debentures or the guarantee if we are in default on any of our senior debt.
Accordingly, in the event of our bankruptcy, liquidation or dissolution, our
assets must be used to pay off our senior obligations in full before any
payments may be made on the junior subordinated debentures, the guarantee or the
preferred securities.
As of March 31, 2001, we had outstanding senior debt of approximately $7.3
billion. The indenture pursuant to which the junior subordinated debentures will
be issued, the guarantee and the certificate of trust which created Comerica
Capital Trust I do not limit our ability to incur additional senior debt.
For more information, see below under the captions "Certain Terms of the
Junior Subordinated Debentures -- Ranking" in this prospectus supplement and
"Description of the Guarantees -- Ranking" in the accompanying prospectus.
OUR RESULTS OF OPERATIONS AND THE AVAILABILITY OF CASH TO MAKE PAYMENTS UNDER
THE JUNIOR SUBORDINATED DEBENTURES DEPEND UPON THE RESULTS OF OPERATIONS AND
ABILITY TO PAY DIVIDENDS OF OUR SUBSIDIARIES
We are a holding company that conducts substantially all of our operations
through our banks and other subsidiaries. As a result, our ability to make
payments on the junior subordinated debentures and the guarantee will depend
primarily upon the receipt of dividends and other distributions from our
subsidiaries.
There are various regulatory restrictions on the ability of our banking
subsidiaries to pay dividends or make other payments to us. At March 31, 2001,
our banking subsidiaries could pay a total of approximately $1.0 billion in
dividends to us without prior regulatory approval.
In addition, our right to participate in any distribution of assets of any
of our subsidiaries upon the subsidiary's liquidation or otherwise, and thus
your ability as a holder of the preferred securities to benefit indirectly from
such distribution, will be subject to the prior claims of creditors of that
subsidiary, except to the extent that any of our claims as a creditor of such
subsidiary may be recognized. As a result, the preferred securities, the junior
subordinated debentures and the guarantee will effectively be subordinated to
all existing and future liabilities and obligations of our subsidiaries.
Therefore, holders of the preferred securities should look only to our assets
for payments on the preferred securities.
At March 31, 2001, our subsidiaries had outstanding debt and other
liabilities, excluding deposits, of approximately $8.8 billion and approximately
$36.8 billion of deposits.
IF WE DO NOT MAKE PAYMENTS ON THE JUNIOR SUBORDINATED DEBENTURES, COMERICA
CAPITAL TRUST I WILL NOT BE ABLE TO PAY DISTRIBUTIONS AND OTHER PAYMENTS ON THE
PREFERRED SECURITIES AND THE GUARANTEE WILL NOT APPLY
Comerica Capital Trust I's ability to make timely distribution and
redemption payments on the preferred securities is completely dependent upon our
making timely payments on the junior subordinated
S-9
10
debentures. If we default on the junior subordinated debentures, Comerica
Capital Trust I will lack funds for the payments on the preferred securities. If
this happens, holders of preferred securities will not be able to rely upon the
guarantee for payment of such amounts because the guarantee only guarantees that
we will make distribution and redemption payments on the preferred securities if
Comerica Capital Trust I has the funds to do so but does not. To the extent
Comerica Capital Trust I has funds but does not make payments on the preferred
securities, you or the property trustee may proceed directly against us for
payment of any amounts due on the preferred securities.
For more information, see below under the caption "Certain Terms of the
Preferred Securities -- Trust Enforcement Events" in this prospectus supplement.
DISTRIBUTIONS ON THE PREFERRED SECURITIES COULD BE DEFERRED; YOU MAY HAVE TO
INCLUDE INTEREST IN YOUR TAXABLE INCOME BEFORE YOU RECEIVE CASH; THE MARKET
PRICE OF THE PREFERRED SECURITIES COULD BE AFFECTED BY A DEFERRAL
As long as the junior subordinated debentures are not in default, we can,
on one or more occasions, defer interest payments on the junior subordinated
debentures for up to 20 consecutive quarterly periods, but not beyond the
maturity date of the junior subordinated debentures. Because interest payments
on the junior subordinated debentures fund the distributions on the preferred
securities, each such deferral would result in a corresponding deferral of
distributions on the preferred securities.
We do not currently intend to defer interest payments on the junior
subordinated debentures. However, if we do so in the future, you will be
required to accrue interest income for United States federal income tax purposes
in respect of your proportionate share of the accrued but unpaid interest on the
junior subordinated debentures held by Comerica Capital Trust I, even if you
normally report income when received. As a result, you will be required to
include the accrued interest (even if not yet received) in your gross income for
United States federal income tax purposes prior to your receiving any cash
distribution. If you sell your preferred securities prior to the record date for
the first distribution after a deferral period, you will never receive the cash
from us related to the accrued interest that you reported for tax purposes. YOU
SHOULD CONSULT WITH YOUR OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF AN
INVESTMENT IN THE PREFERRED SECURITIES.
In addition, if we defer any interest payments on the junior subordinated
debentures, the preferred securities may trade at a price that does not reflect
fully the value of the accrued but unpaid distributions. Even if we do not do
so, our right to defer interest payments on the junior subordinated debentures
could mean that the market price for the preferred securities may be more
volatile than that of other securities without interest deferral rights.
For more information regarding the tax consequences of purchasing the
preferred securities, see below under the caption "United States Federal Income
Tax Consequences -- Interest Income and Original Issue Discount" and "-- Sales
of Preferred Securities or Redemption of Junior Subordinated Debentures" in this
prospectus supplement.
THE PREFERRED SECURITIES MAY BE REDEEMED PRIOR TO MATURITY AND YOU MAY BE TAXED
ON THE PROCEEDS
The junior subordinated debentures (and therefore the preferred securities)
may be redeemed in whole or in part on one or more occasions any time on or
after July 31, 2006 or in whole upon the occurrence of certain special events
relating to changes in tax law, the Investment Company Act of 1940 or the
treatment of the preferred securities for bank regulatory capital purposes,
subject to receipt of any necessary Federal Reserve Board approval. The
redemption price for the junior subordinated debentures would be equal to 100%
of the principal amount plus accrued and unpaid interest. If such a redemption
happens, Comerica Capital Trust I must use the redemption price it receives to
redeem on a proportionate basis preferred securities and common securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the junior subordinated debentures redeemed.
The redemption of the preferred securities would be a taxable event to you
for United States federal income tax purposes.
S-10
11
FEDERAL BANKING AUTHORITIES MAY RESTRICT THE ABILITY OF COMERICA CAPITAL TRUST I
TO MAKE DISTRIBUTIONS ON OR REDEEM THE PREFERRED SECURITIES
Federal banking authorities will have the right to examine Comerica Capital
Trust I and its activities because Comerica Capital Trust I is our subsidiary.
Under certain circumstances, including any determination that our relationship
to Comerica Capital Trust I would result in an unsafe and unsound banking
practice, these banking authorities have the authority to issue orders which
could restrict the ability of Comerica Capital Trust I to make distributions on
or to redeem the preferred securities.
AN ACTIVE TRADING MARKET FOR THE PREFERRED SECURITIES MAY NOT DEVELOP
The preferred securities have been approved for listing on the New York
Stock Exchange. Trading is expected to commence within 30 days after the
preferred securities are first issued. You should be aware that the listing of
the preferred securities will not necessarily ensure that an active trading
market will be available for the preferred securities or that you will be able
to sell your preferred securities at the price you originally paid for them.
WE GENERALLY WILL CONTROL COMERICA CAPITAL TRUST I BECAUSE YOUR VOTING RIGHTS
ARE VERY LIMITED
You will only have limited voting rights. In particular, you may not elect
and remove any trustees, except when there is a default under the junior
subordinated debentures. If such a default occurs, a majority in liquidation
amount of the holders of the preferred securities would be entitled to remove or
appoint the property trustee and the Delaware trustee.
For more information, see below under the caption "The Trust" in this
prospectus supplement.
S-11
12
COMERICA INCORPORATED
We are a multi-state financial services provider, incorporated under the
laws of the State of Delaware, headquartered in Detroit, Michigan. Based on
assets as of December 31, 2000, we were the 22nd largest bank holding company in
the United States and the largest bank holding company headquartered in Michigan
in terms of both total assets and total deposits. We were formed in 1973 to
acquire the outstanding common stock of Comerica Bank (formerly Comerica
Bank-Detroit), one of Michigan's oldest banks. Since that time, we have acquired
financial institutions in California, Texas and Florida, and formed Comerica
Bank-Canada in 1998 and Comerica Bank-Mexico, S.A. in 1997. As of December 31,
2000, we owned directly or indirectly all the outstanding common stock of seven
banking and 35 non-banking subsidiaries. In addition, on January 29, 2001, we
completed our acquisition of Imperial Bancorp through the merger of Imperial
with and into Comerica Holdings Incorporated, a wholly-owned subsidiary of
Comerica. We accounted for this acquisition as a pooling of interests and have
restated our financial statements to reflect this acquisition.
At December 31, 2000, we had total assets of approximately $50.0 billion,
total deposits of approximately $33.9 billion, total loans (net of unearned
income) of approximately $40.2 billion and common shareholders' equity of
approximately $4.5 billion.
CONTACT INFORMATION
Our executive offices are located at Comerica Tower at Detroit Center,
Detroit, Michigan 48226, and our telephone number is (800) 521-1190.
RECENT FINANCIAL RESULTS
On July 17, 2001, we reported net income of $208 million for the quarter
ended June 30, 2001, as compared with net income of $206 million in the same
quarter for the prior year. We recognized $8 million (net of taxes) of
restructuring charges during the quarter ended June 30, 2001 related to the
Imperial Bancorp acquisition. Net income for the six months ended June 30, 2001
was $302 million, as compared with $403 million for the six months ended June
30, 2000. Excluding restructuring charges of $103 million after tax and the
effect of a first quarter one-time $34 million after tax charge related to
long-term incentive plans at an unconsolidated subsidiary of Munder Capital
Management (our investment management subsidiary), net income for the six months
ended June 30, 2001 was $439 million, an increase in net income of nine percent
over the same period of 2000. Assets totaled $49 billion at June 30, 2001, as
compared with $48 billion at June 30, 2000. All prior period financial
information has been restated to reflect the Imperial Bancorp acquisition.
THE TRUST
PURPOSE AND OWNERSHIP OF COMERICA CAPITAL TRUST I
Comerica Capital Trust I is a business trust organized under Delaware law
by the trustees and us. Comerica Capital Trust I was established solely for the
following purposes:
- to issue to us, in exchange for our junior subordinated debentures, the
preferred securities, which represent undivided beneficial ownership
interests in Comerica Capital Trust I's assets;
- to issue common securities to us in exchange for our junior subordinated
debentures in a total liquidation amount equal to at least 3% of Comerica
Capital Trust I's total capital; and
- to engage in other activities that are directly related to the activities
described above, such as registering the transfer of the preferred
securities.
Because Comerica Capital Trust I was established only for the purposes
listed above, the junior subordinated debentures will be Comerica Capital Trust
I's sole assets. Payments on the junior
S-12
13
subordinated debentures will be Comerica Capital Trust I's sole source of
income. Comerica Capital Trust I will issue only one series of preferred
securities.
As issuer of the junior subordinated debentures, we will pay:
- all fees, expenses and taxes related to Comerica Capital Trust I and the
offering of the preferred securities and common securities; and
- all ongoing costs, expenses and liabilities of Comerica Capital Trust I,
except obligations to make distributions and other payments on the common
securities and the preferred securities.
For so long as the preferred securities remain outstanding, we will:
- own, directly or indirectly, all of the common securities;
- cause Comerica Capital Trust I to remain a business trust and not to
voluntarily dissolve, wind-up, liquidate or be terminated, except as
permitted by the declaration of trust; and
- take no action that would be reasonably likely to cause Comerica Capital
Trust I to be classified as other than a grantor trust for United States
federal income tax purposes.
THE TRUSTEES
The business and affairs of Comerica Capital Trust I will be conducted by
its five trustees. The three administrative trustees will be individuals who are
our employees. The fourth trustee, Chase Manhattan Trust Company, National
Association, as property trustee, will hold title to the junior subordinated
debentures for the benefit of the holders of the preferred securities and will
have the power to exercise all the rights and powers of a registered holder of
the junior subordinated debentures. The fifth trustee, Chase Manhattan Bank USA,
National Association, as Delaware trustee, maintains its principal place of
business in Delaware and meets the requirements of Delaware law for Delaware
business trusts. In addition, Chase Manhattan Trust Company, National
Association, as guarantee trustee, will hold the guarantee for the benefit of
the holders of the preferred securities.
We have the sole right to appoint, remove and replace the trustees of
Comerica Capital Trust I, unless an event of default occurs with respect to the
junior subordinated debentures. In that case, the holders of a majority in
liquidation amount of the preferred securities will have the sole right to
remove and appoint the property trustee and the Delaware trustee.
ADDITIONAL INFORMATION
For additional information concerning Comerica Capital Trust I, see "The
Trusts" in the accompanying prospectus. Comerica Capital Trust I will not be
required to file any reports with the SEC after the issuance of the preferred
securities. As discussed below under the caption "Accounting Treatment" in this
prospectus supplement, we will not provide separate financial information about
Comerica Capital Trust I but will include its accounts in our consolidated
financial statements included in our own periodic reports to the SEC.
OFFICE OF COMERICA CAPITAL TRUST I
The executive office of Comerica Capital Trust I is c/o Comerica
Incorporated, Comerica Tower at Detroit Center, Detroit, Michigan 48226, and its
telephone number is (800) 521-1190.
USE OF PROCEEDS
Comerica Capital Trust I will issue the preferred securities and common
securities to us in exchange for our junior subordinated debentures.
S-13
14
We will sell the preferred securities to the public. The net proceeds from
the offering of the preferred securities are estimated to be $338,435,000. We
currently intend to use $250,000,000 of the proceeds from the sale of the
preferred securities to redeem our outstanding preferred stock. We expect to use
the remainder of the proceeds from the sale of the preferred securities for
general corporate purposes, which may include the repayment of debt and
investments in or extensions of credit to our subsidiaries.
ACCOUNTING TREATMENT
For financial reporting purposes, Comerica Capital Trust I will be treated
as our subsidiary, and its accounts will be included in our consolidated
financial statements.
In our future financial reports, we will:
- present the preferred securities as part of debt on our consolidated
statement of financial condition;
- record distributions payable on the preferred securities as interest
expense; and
- include a footnote in our consolidated financial statements with
appropriate disclosure about the junior subordinated debentures and the
guarantee.
REGULATORY TREATMENT
We are required by the Federal Reserve Board to maintain certain levels of
capital for bank regulatory purposes. We expect that the preferred securities
will be treated as Tier 1 capital of Comerica Incorporated for these purposes.
S-14
15
CAPITALIZATION
We provide in the table below our unaudited consolidated capitalization as
of March 31, 2001 and as adjusted to reflect the issuance of the preferred
securities and our application of the proceeds from the sale of the junior
subordinated debentures to Comerica Capital Trust I as described under "Use of
Proceeds". You should read it together with the detailed information and our
financial statements included in the documents incorporated by reference to the
accompanying prospectus. See "Where You Can Find More Information About Comerica
Incorporated" in the prospectus.
As of March 31, 2001
----------------------------
Actual As Adjusted
----------- -----------
(dollars in thousands)
Medium and long-term debt................................... $ 7,289,301 $ 7,289,301
Preferred securities........................................ -- 350,000
----------- -----------
Total medium and long-term debt........................ 7,289,301 7,639,301
Preferred stock -- $50 stated value:
Authorized -- 5,000,000 shares
Issued -- 5,000,000 shares actual; none as adjusted....... 250,000 --
Common stock -- $5 par value:
Authorized -- 325,000,000
Issued -- 178,337,648 shares.............................. 891,688 891,688
Capital surplus............................................. 326,134 326,134
Unearned employee stock ownership plan -- 176,462 shares.... (6,750) (6,750)
Accumulated other comprehensive income...................... 127,490 127,490
Retained earnings........................................... 3,086,915 3,086,915
Deferred compensation....................................... (6,963) (6,963)
Total shareholders' equity............................. 4,668,514 4,418,514
----------- -----------
Total medium and long-term debt and shareholders'
equity.......................................... $11,957,815 $12,057,815
=========== ===========
S-15
16
CERTAIN TERMS OF THE PREFERRED SECURITIES
We have summarized below certain terms of the preferred securities. This
summary supplements the general description of the preferred securities under
the caption "Description of the Preferred Securities" and elsewhere in the
accompanying prospectus. To the extent that this summary is inconsistent with
the description in the accompanying prospectus, you should rely on the summary
below. This summary is not a complete description of all of the terms and
provisions of the preferred securities. For more information, we refer you to
the certificate of trust, the form of the amended and restated declaration of
trust and the form of preferred security certificate (which will be
substantially similar to the form of the preferred securities), which we filed
as exhibits to the registration statement of which the prospectus is a part.
The preferred securities represent undivided beneficial ownership interests
in the assets of Comerica Capital Trust I. The only assets of Comerica Capital
Trust I will be the junior subordinated debentures. The preferred securities
will rank equally with the common securities except as described below under the
caption "-- Subordination of Common Securities" in this section.
DISTRIBUTIONS
As an undivided beneficial owner in the junior subordinated debentures, you
will receive distributions on the preferred securities that are cumulative and
will accumulate from the date of issuance at the annual rate of 7.60% of the
liquidation amount of $25 for each preferred security. Interest on the junior
subordinated debentures will accrue and, as a result, distributions on the
preferred securities will accumulate and will be payable quarterly in arrears on
January 1, April 1, July 1 and October 1 of each year, beginning October 1,
2001. The amount of distributions payable for any period will be computed on the
basis of a 360-day year comprised of twelve 30-day months. The amount of
distributions payable for any period shorter than a full quarterly period will
be computed on the basis of a 30-day month and, for periods of less than a
month, the actual number of days elapsed per 30-day month. If the preferred
securities are issued in the form of global securities, as is expected, the
record date for determining who will receive distributions on the preferred
securities will be the business day preceding the payment date for such
distributions; otherwise the record date will be the fifteenth day preceding the
payment date for such distributions. For more information on global securities,
see "-- Global Securities; Book-Entry Issue" below, and under the caption
"Book-Entry Issuance" in the accompanying prospectus.
Interest not paid when due will accrue additional interest at the annual
rate of 7.60% on the amount of unpaid interest, compounded quarterly. As a
result, distributions not paid when due will accumulate additional distributions
at the annual rate of 7.60% on the amount of unpaid distributions, compounded
quarterly. When we refer to any payment of distributions, the term
"distributions" includes any such additional accumulated distributions.
If distributions are payable on a date that is not a "business day",
payment will be made on the next business day and without any interest or other
payment as a result of such delay. A "business day" means each day except
Saturday, Sunday and any day on which banking institutions in Detroit, Michigan
or The City of New York are authorized or required by law to close or on which
the corporate trust office of the property trustee or the indenture trustee is
closed for business.
Comerica Capital Trust I's income available for the payment of
distributions will be limited to our payments made on the junior subordinated
debentures. As a result, if we do not make interest payments on the junior
subordinated debentures, then Comerica Capital Trust I will not have funds to
make distributions on the preferred securities.
DEFERRAL OF DISTRIBUTIONS
If the junior subordinated debentures are not in default, we can, on one or
more occasions, defer interest payments on the junior subordinated debentures
for up to 20 consecutive quarterly interest payment periods. A deferral of
interest payments cannot extend, however, beyond the maturity date of the junior
subordinated debentures. If we defer interest payments on the junior
subordinated debentures,
S-16
17
Comerica Capital Trust I also will defer distributions on the preferred
securities. During a deferral period, interest on the junior subordinated
debentures will accrue and compound quarterly at the annual rate of 7.60%, to
the extent permitted by applicable law, and as a result distributions otherwise
due to you would continue to accumulate from the date that these distributions
were due. Once we make all deferred interest payments on the junior subordinated
debentures, we again can defer interest payments on the junior subordinated
debentures in the same manner as discussed above. As a result, there could be
multiple periods of varying length during which you would not receive cash
distributions from Comerica Capital Trust I.
We currently do not intend to defer interest payments on the junior
subordinated debentures. If we defer such interest payments, however, neither we
nor our subsidiaries generally will be permitted to pay dividends on or
repurchase shares of our capital stock or make payments on debt securities or
guarantees that rank equal or junior to the junior subordinated debentures and
the guarantee. These limitations are described in greater detail below under the
caption "Certain Terms of the Junior Subordinated Debentures -- Option to Defer
Interest Payments" in this prospectus supplement.
If we choose to defer payments of interest on the junior subordinated
debentures, then the junior subordinated debentures would at that time be
treated as being issued with original issue discount for United States federal
income tax purposes. This means you will be required to include your share of
the accrued but unpaid interest on the junior subordinated debentures in your
gross income for United States federal income tax purposes before you receive
cash distributions from Comerica Capital Trust I. This treatment will apply as
long as you own preferred securities. For more information, see below under the
caption "United States Federal Income Tax Consequences -- Interest Income and
Original Issue Discount" in this prospectus supplement.
PAYMENT OF DISTRIBUTIONS
Distributions on the preferred securities will be payable to holders as of
the relevant record date. As long as the preferred securities are only in
book-entry form, the record date for the payment of distributions will be one
business day before the distribution date. If the preferred securities are ever
issued in certificated form, the record date for the payment of distributions
will be the fifteenth day before the relevant payment date. Distributions
payable on any preferred securities that are not paid on the scheduled
distribution date will cease to be payable to the person in whose name such
preferred securities are registered on the relevant record date, and such
distribution will instead be payable to the person in whose name such preferred
securities are registered on a special record date set for this purpose.
Payments on the preferred securities while they are in book-entry form will
be made in immediately available funds to DTC, the depositary for the preferred
securities.
REDEMPTION
We may redeem the junior subordinated debentures before their maturity at
100% of their principal amount plus accrued and unpaid interest:
- in whole or in part, on one or more occasions at any time on and after
July 31, 2006; or
- in whole at any time if certain changes occur in tax or investment
company laws and regulations, or in the treatment of the preferred
securities for bank regulatory capital purposes. These events, which we
refer to as "Special Events", are described in detail below under the
caption "-- Redemption Upon a Special Event".
We may not redeem the junior subordinated debentures unless we receive the
prior approval of the Federal Reserve Board to do so, if that approval is then
required under the Federal Reserve Board's capital rules.
S-17
18
GENERAL
When we repay the junior subordinated debentures, either at maturity on
July 1, 2050 or upon early redemption (as discussed above), Comerica Capital
Trust I will use the cash it receives from the repayment or redemption of the
junior subordinated debentures to redeem a corresponding amount of the preferred
securities and common securities. The redemption price for the preferred
securities will be equal to the liquidation amount, $25 per preferred security,
plus accumulated but unpaid distributions on the preferred securities to the
redemption date.
If less than all the preferred securities and the common securities are
redeemed, the total amount of the preferred securities and the common securities
to be redeemed will be allocated proportionately among the preferred securities
and common securities, unless an event of default under the junior subordinated
debentures or similar event has occurred, as described below under the caption
"-- Subordination of Common Securities" in this section.
If we do not elect to redeem the junior subordinated debentures, then the
preferred securities will remain outstanding until the repayment of the junior
subordinated debentures unless we liquidate Comerica Capital Trust I and
distribute the junior subordinated debentures to you. For more information, see
"-- Optional Liquidation of Comerica Capital Trust I and Distribution of Junior
Subordinated Debentures" in this section.
REDEMPTION UPON A SPECIAL EVENT
If a Special Event has occurred and is continuing, then we may redeem the
junior subordinated debentures within 90 days following the occurrence of the
Special Event. A "Special Event" means, for these purposes, the occurrence of a
"Tax Event", a "Regulatory Capital Event" or an "Investment Company Event." We
summarize each of these events below.
A "Tax Event" means the receipt by Comerica Capital Trust I of an opinion
of an independent counsel experienced in such matters to the effect that as a
result of:
- any amendment to, change in or announced proposed change in the laws or
regulations interpreting such laws of the United States or any political
subdivision or taxing authority; or
- any official administrative pronouncement, action or judicial decision
interpreting or applying such laws or regulations,
which amendment or change becomes effective, or proposed change, pronouncement,
action or decision is announced, on or after the date of the original issuance
of the preferred securities, there is more than an insubstantial risk currently
or within the 90 days following such opinion that:
- Comerica Capital Trust I will be subject to United States federal income
tax regarding income received or accrued on the junior subordinated
debentures;
- interest payable by us on the junior subordinated debentures will not be
deductible by us, in whole or in part, for United States federal income
tax purposes; or
- Comerica Capital Trust I will be subject to more than a de minimis amount
of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that we shall have received an opinion
of an independent counsel experienced in such matters to the effect that, as a
result of:
- any amendment to or change (including any announced prospective change)
in the laws (or any regulations thereunder) of the United States or any
rules, guidelines or policies of the Federal Reserve System; or
- any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations,
S-18
19
which amendment or change is effective or pronouncement or decision is announced
on or after the date of original issuance of the preferred securities, the
preferred securities do not constitute, or within 90 days following the date of
such opinion will not constitute, Tier 1 capital of Comerica Incorporated or its
equivalent at the time.
An "Investment Company Event" means the receipt by Comerica Capital Trust I
of an opinion of an independent counsel experienced in such matters to the
effect that, as a result of:
- change in law or regulation; or
- a written change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority,
there is more than an insubstantial risk that Comerica Capital Trust I will be
considered an "investment company" under the Investment Company Act of 1940 that
is required to be registered under this law on or after the date of the issuance
of the preferred securities.
If we do not elect to redeem the junior subordinated debentures following a
Special Event, then the preferred securities will remain outstanding until the
repayment of the junior subordinated debentures, unless we liquidate Comerica
Capital Trust I and distribute the junior subordinated debentures to you. For
more information, see "-- Optional Liquidation of Comerica Capital Trust I and
Distribution of Junior Subordinated Debentures" in this section.
REDEMPTION PROCEDURES
Comerica Capital Trust I will give you at least 30 days' but not more than
60 days' notice before any redemption of preferred securities. To the extent
funds are available for payment, Comerica Capital Trust I will irrevocably
deposit with DTC sufficient funds to pay the redemption amount for the preferred
securities being redeemed. Comerica Capital Trust I also will give DTC
irrevocable instructions and authority to pay the redemption amount to its
participants. Any distribution to be paid on or before a redemption date for any
preferred securities called for redemption will be payable to the registered
holders on the record date for the distribution.
Once notice of redemption is given and Comerica Capital Trust I irrevocably
deposits the redemption amount, additional distributions on the preferred
securities will cease to accumulate from and after the redemption date. In
addition, all rights of the holders of the preferred securities called for
redemption will cease, except for the right to receive distributions payable
prior to the redemption date and the redemption amount.
If any redemption date is not a business day, the redemption amount will be
payable on the next business day, without any interest or other payment in
respect of any such delay.
If payment of the redemption amount for any preferred securities called for
redemption is not paid because the payment of the redemption price on the junior
subordinated debentures is not made, interest on the junior subordinated
debentures will continue to accrue from the originally scheduled redemption date
to the actual date of payment, and, as a result, distributions on the preferred
securities will continue to accumulate.
In addition, we may and our affiliates may, at any time, purchase
outstanding preferred securities by tender, in the open market or by private
agreement.
OPTIONAL LIQUIDATION OF COMERICA CAPITAL TRUST I AND DISTRIBUTION OF JUNIOR
SUBORDINATED DEBENTURES
We may dissolve Comerica Capital Trust I at any time, and after satisfying
the creditors of Comerica Capital Trust I, may cause the junior subordinated
debentures to be distributed to the holders of the preferred securities. We may
not dissolve Comerica Capital Trust I, however, unless we first receive:
- the approval of the Federal Reserve Board to do so, if that approval is
then required under the Federal Reserve Board's capital rules; and
S-19
20
- an opinion of independent counsel that the distribution of the junior
subordinated debentures will not be taxable to the holders for United
States federal income tax purposes.
See below under the caption "Certain Terms of the Junior Subordinated
Debentures -- Distribution of Junior Subordinated Debentures" in this prospectus
supplement.
If we elect to dissolve Comerica Capital Trust I, thus causing the junior
subordinated debentures to be distributed to the holders of the preferred
securities, we will continue to have the right to redeem the junior subordinated
debentures in certain circumstances as described above.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions or any redemption or liquidation amounts by
Comerica Capital Trust I regarding the preferred securities and the common
securities will be made proportionately based on the total liquidation amounts
of the securities. However, if we are in default under the junior subordinated
debentures, Comerica Capital Trust I will make no payments on the common
securities until all unpaid amounts on the preferred securities have been
provided for or paid in full.
TRUST ENFORCEMENT EVENTS
An event of default under the indenture constitutes an event of default
under the amended and restated declaration of trust. We refer to such an event
as a "Trust Enforcement Event". For more information on events of default under
the indenture, see "Description of the Junior Subordinated Debt
Debentures -- Events of Default" in the accompanying prospectus. Upon the
occurrence and continuance of a Trust Enforcement Event, the property trustee,
as the sole holder of the junior subordinated debentures, will have the right
under the indenture to declare the principal amount of the junior subordinated
debentures due and payable.
If the property trustee fails to enforce its rights under the junior
subordinated debentures, any holder of preferred securities may, to the extent
permitted by applicable law, institute a legal proceeding against us to enforce
the property trustee's rights under the junior subordinated debentures and the
indenture without first instituting legal proceedings against the property
trustee or any other person. In addition, if a Trust Enforcement Event is due to
our failure to pay interest or principal on the junior subordinated debentures
when due, then the registered holder of preferred securities may institute a
direct action on or after the due date directly against us for enforcement of
payment to that holder of the principal of or interest on the junior
subordinated debentures having a principal amount equal to the total liquidation
amount of that holder's preferred securities. In connection with such a direct
action, we will have the right under the indenture to set off any payment made
to that holder by us. The holders of preferred securities will not be able to
exercise directly any other remedy available to the holders of the junior
subordinated debentures.
Pursuant to the amended and restated declaration of trust, the holder of
the common securities will be deemed to have waived any Trust Enforcement Event
regarding the common securities until all Trust Enforcement Events regarding the
preferred securities have been cured, waived or otherwise eliminated. Until all
Trust Enforcement Events regarding the preferred securities have been so cured,
waived or otherwise eliminated, the property trustee will act solely on behalf
of the holders of the preferred securities and only the holders of the preferred
securities will have the right to direct the enforcement actions of the property
trustee.
VOTING RIGHTS
Holders of preferred securities will have only limited voting rights. In
particular, holders of preferred securities may not elect or remove any trustee,
except when there is a default under the junior subordinated debentures. If such
a default occurs, a majority in liquidation amount of the holders of the
preferred securities would be entitled to remove or appoint the property trustee
and the Delaware trustee.
S-20
21
REMEDIES
So long as any junior subordinated debentures are held by the property
trustee, the holders of a majority of all outstanding preferred securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the property trustee, or to direct the exercise of
any power conferred upon the property trustee under the amended and restated
declaration of trust, including the right to direct the property trustee, as
holder of the junior subordinated debentures, to:
- exercise the remedies available to it under the indenture as a holder of
the junior subordinated debentures, including the right to rescind or
annul a declaration that the principal of all the junior subordinated
indentures will be due and payable;
- consent to any amendment, modification or termination of the indenture or
the junior subordinated debentures; or
- waive any past default that is waivable under the indenture.
However, where a consent or action under the indenture would require the
consent or action of the holders of more than a majority of the total principal
amount of junior subordinated debentures affected by it, only the holders of
that greater percentage of the preferred securities may direct the property
trustee to give the consent or to take such action. See "Description of
Preferred Securities -- Amendments" in the accompanying prospectus.
If an event of default under the indenture has occurred and is continuing,
the holders of 25% of the total liquidation amount of the preferred securities
may direct the property trustee to declare the principal and interest on the
junior subordinated debentures due and payable.
MEETINGS
Any required approval of holders of preferred securities may be given at a
meeting of holders of preferred securities convened for such purpose or pursuant
to written consent. The property trustee will cause a notice of any meeting at
which holders of preferred securities are entitled to vote to be given to each
holder of record of preferred securities in the manner described in the amended
and restated declaration of trust.
No vote or consent of the holders of preferred securities will be required
for Comerica Capital Trust I to redeem and cancel its preferred securities in
accordance with the amended and restated declaration of trust.
GLOBAL SECURITIES; BOOK-ENTRY ISSUE
We expect that the preferred securities will be issued in the form of
global securities held by The Depository Trust Company as described under the
caption "Book-Entry Issuance" in the accompanying prospectus.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, other than during the occurrence and continuance of a
Trust Enforcement Event, undertakes to perform only the duties that are
specifically described in the amended and restated declaration of trust and,
after a Trust Enforcement Event which has not been cured or waived, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his own affairs. Subject to this provision, the property
trustee is under no obligation to exercise any of the powers vested in it by the
amended and restated declaration of trust at the request of any holder of
preferred securities unless it is offered reasonable security and indemnity
against the costs, expenses and liabilities that might be incurred in connection
with taking that action.
S-21
22
CERTAIN TERMS OF THE JUNIOR SUBORDINATED DEBENTURES
We have summarized below certain terms of the junior subordinated
debentures. This summary supplements the general description of these securities
under the caption "Description of Junior Subordinated Debentures" and elsewhere
in the accompanying prospectus. To the extent that this summary is inconsistent
with the description in the accompanying prospectus, you should rely on the
summary below. This summary is not a complete description of all of the terms
and provisions of the junior subordinated debentures. For more information, we
refer you to the indenture and the form of the junior subordinated debentures,
which we filed as exhibits to the registration statement of which the
accompanying prospectus is a part.
The junior subordinated debentures will be issued pursuant to an indenture
between us and Chase Manhattan Trust Company, National Association, as indenture
trustee. The indenture provides for the issuance from time to time of junior
subordinated debentures in an unlimited dollar amount and an unlimited number of
series.
INTEREST RATE AND MATURITY
The junior subordinated debentures will bear interest at the annual rate of
7.60%, payable quarterly in arrears on January 1, April 1, July 1 and October 1
of each year, beginning October 1, 2001. Interest payments not paid when due
will themselves accrue additional interest at the annual rate of 7.60% on the
amount of unpaid interest, to the extent permitted by law, compounded quarterly.
The amount of interest payable for any period will be computed based on a
360-day year comprised of twelve 30-day months. The amount of interest payable
for any period shorter than a full quarterly period will be computed on the
basis of a 30-day month and, for periods of less than a month, the actual number
of days elapsed per 30-day month. The distribution provisions of the preferred
securities correspond to the interest payment provisions for the junior
subordinated debentures because the preferred securities represent undivided
beneficial ownership interests in the junior subordinated debentures.
The junior subordinated debentures do not have a sinking fund. This means
that we are not required to make any principal payments prior to maturity. The
junior subordinated debentures will mature on July 1, 2050.
RANKING
The junior subordinated debentures will be unsecured and will rank junior
and be subordinate in right of payment to all our senior debt. At March 31,
2001, approximately $7.3 billion of our senior debt was outstanding.
As a holding company, our assets primarily consist of the equity securities
of our subsidiaries. As a result, the ability of holders of the junior
subordinated debentures to benefit from any distribution of assets of any
subsidiary upon the liquidation or reorganization of such subsidiary is
subordinate to the prior claims of present and future creditors of that
subsidiary. At March 31, 2001, our subsidiaries had outstanding debt and other
liabilities, excluding deposits, of approximately $8.8 billion and deposits of
approximately $36.8 billion.
The preferred securities, the junior subordinated debentures and the
guarantee do not limit our or our subsidiaries' ability to incur additional
debt, including debt that ranks senior in priority of payment to the junior
subordinated debentures and the guarantee.
REDEMPTION
We may, under certain circumstances, redeem some or all of the junior
subordinated debentures before their maturity. For more information, see above
under the caption "Certain Terms of the Preferred Securities -- Redemption" in
this prospectus supplement.
S-22
23
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
If the property trustee distributes the junior subordinated debentures to
the holders of the preferred securities and the common securities upon the
liquidation of Comerica Capital Trust I, we will cause the junior subordinated
debentures to be issued in denominations of $25 principal amount and integral
multiples thereof. We anticipate that the junior subordinated debentures would
be distributed in the form of one or more global securities and that DTC would
act as depositary for the junior subordinated debentures. The depositary
arrangements for the junior subordinated debentures would be substantially the
same as those in effect for the preferred securities.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemption and other notices and
other matters, see "Book-Entry Issuance" in the accompanying prospectus.
OPTION TO DEFER INTEREST PAYMENTS
We can defer interest payments on the junior subordinated debentures for up
to 20 consecutive quarterly interest payment periods if the junior subordinated
debentures are not in default. A deferral of interest payments cannot extend,
however, beyond the maturity date of the junior subordinated debentures. During
the deferral period, interest will continue to accrue on the junior subordinated
debentures, compounded quarterly, and deferred interest payments will accrue
additional interest at 7.60%. No interest will be due and payable on the junior
subordinated debentures until the end of the deferral period except upon a
redemption of the junior subordinated debentures during a deferral period.
We may pay at any time all or any portion of the interest accrued to that
point during a deferral period. At the end of the deferral period or on any
redemption date, we will be obligated to pay all accrued and unpaid interest.
Once we pay all accrued and unpaid interest on the junior subordinated
debentures, we again can defer interest payments on the junior subordinated
debentures as described above, provided that a deferral period cannot extend
beyond the maturity date of the junior subordinated debentures.
CERTAIN LIMITATIONS DURING A DEFERRAL PERIOD
During any deferral period, we will not and our subsidiaries will not be
permitted to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment on, any of our capital stock;
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of our debt securities (including other junior
subordinated debentures) that rank equally with or junior in interest to
the junior subordinated debentures; or
- make any guarantee payments on any guarantee of debt securities of any of
our subsidiaries (including under other guarantees of junior subordinated
debentures) if the guarantee ranks equally with or junior in interest to
the junior subordinated debentures.
However, at any time, including during a deferral period, we may do the
following:
- make payments under the guarantee of the series of the preferred
securities and common securities;
- repurchase, redeem or otherwise acquire our capital stock in connection
with any of the following:
- any employment contract, benefit plan or other similar arrangements with
or for the benefit of any one or more employees, officers, directors, or
consultants;
- any dividend reinvestment or stockholder stock purchase plan; or
S-23
24
- the issuance of our capital stock (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into before the default or deferral period, as the
case may be;
- exchange or convert:
- any class series of our capital stock (or any capital stock of any
subsidiary of ours) for any class or series of our capital stock; or
- any class or series of our indebtedness for any class or series of our
capital stock;
- purchase fractional interest in shares of our capital stock pursuant to
the conversion or exchange provisions of such capital stock or the
security being converted or exchanged;
- declare a dividend in connection with any shareholders' rights plan, or
the issuance of rights, stock or other property under any such plan, or
the redemption or repurchase of any such rights pursuant thereto; and
- declare a dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks pari passu with or junior to such
stock.
We are not limited in our ability to make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any of our debt
securities that rank senior in interest to such junior subordinated debentures
or to make any guarantee payments regarding any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks senior in interest
to such junior subordinated debentures.
NOTICE
We will give Comerica Capital Trust I, the administrative trustees and the
property trustee notice if we decide to defer interest payments on the junior
subordinated debentures. We will give that notice one business day before the
earlier of:
- the next date distributions on the preferred securities are payable; or
- the date Comerica Capital Trust I is required to give notice to the New
York Stock Exchange (or any applicable self-regulatory organization) or
to holders of the preferred securities on the record date or the date any
distribution is payable, but in any event at least one business day
before the record date.
The administrative trustees will give notice to the holders of preferred
securities if we decide to defer interest payments on the junior subordinated
debentures.
AGREEMENT BY PURCHASERS OF CERTAIN TAX TREATMENT
Each junior subordinated debenture will provide that, by acceptance of the
junior subordinated debentures, or a beneficial interest therein, the holder of
the junior subordinated debenture intends that such junior subordinated
debenture constitutes debt and agrees to treat it as debt for United States
federal, state and local tax purposes.
MISCELLANEOUS
The indenture requires us to pay all costs and expenses and all debt and
obligations of Comerica Capital Trust I, other than obligations of Comerica
Capital Trust I to you under the terms of the preferred securities or other
similar interests.
S-24
25
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of distributions and other amounts due on the preferred securities
are irrevocably guaranteed by us, to the extent Comerica Capital Trust I has
funds available for the payment of such distributions, as described under
"Description of the Guarantees" in the accompanying prospectus.
If we do not make payments under the junior subordinated debentures,
Comerica Capital Trust I will not have sufficient funds to pay distributions or
other amounts due on the preferred securities. The guarantee does not cover
payment of distributions when Comerica Capital Trust I does not have sufficient
funds to pay such distributions. In that event, a holder of preferred securities
may institute a legal proceeding directly against us to enforce payment of the
junior subordinated debentures to such holder in accordance with their terms,
including our right to defer interest payments.
Taken together, our obligations under the amended and restated declaration
of trust, the junior subordinated debentures, the indenture and the guarantee
provide a full and unconditional guarantee of payments of distributions and
other amounts due on the preferred securities.
SUFFICIENCY OF PAYMENTS
As long as payments of interest, principal and other payments are made when
due on the junior subordinated debentures, those payments will be sufficient to
cover distributions and other payments due on the preferred securities because
of the following factors:
- the total principal amount of the junior subordinated debentures will be
equal to the sum of the total stated liquidation amount of the preferred
securities and the common securities;
- the interest rate and payment dates on the junior subordinated debentures
will match the distribution rate and payment dates for the preferred
securities;
- we will pay, and Comerica Capital Trust I will not be obligated to pay,
all costs, expenses and liabilities of Comerica Capital Trust I except
Comerica Capital Trust I's obligations under the preferred securities and
common securities; and
- the amended and restated declaration of trust further provides that
Comerica Capital Trust I will engage only in activity that is consistent
with the limited purposes of Comerica Capital Trust I.
We have the right to set-off any payment we are otherwise required to make
under the indenture with and to the extent we make a related payment under the
guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
If a Trust Enforcement Event occurs, the holders of preferred securities
would rely on the enforcement by the property trustee of its rights as
registered holder of the junior subordinated debentures against us. In addition,
the holders of a majority in liquidation amount of the preferred securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the property trustee or to direct the exercise of
any trust or power conferred upon the property trustee under the amended and
restated declaration of trust, including the right to direct the property
trustee to exercise the remedies available to it as the holder of the junior
subordinated debentures.
If the property trustee fails to enforce its rights under the junior
subordinated debentures in respect of an event of default under the indenture
after a holder of preferred securities has made a written request, such holder
may, to the extent permitted by applicable law, institute a legal proceeding
against us to enforce the property trustee's rights under the junior
subordinated debentures. In addition, if we fail to pay interest or principal on
the junior subordinated debentures, a holder of preferred securities may
institute a proceeding directly against us for enforcement of payment to that
holder of the principal of or interest on
S-25
26
junior subordinated debentures having a principal amount equal to the total
liquidation amount of that holder's preferred securities (which we refer to as a
"direct action"). In connection with such a direct action, we will have the
right to set off any payment made to such holder by us.
The holders of preferred securities will not be able to exercise directly
any other remedy available to the holders of the junior subordinated debentures.
LIMITED PURPOSE OF TRUST
The preferred securities evidence undivided beneficial ownership interests
in the assets of Comerica Capital Trust I, and Comerica Capital Trust I exists
for the sole purpose of issuing the common securities and preferred securities
to us in exchange for the junior subordinated debentures. A principal difference
between the rights of a holder of preferred securities and a holder of junior
subordinated debentures is that a holder of junior subordinated debentures is
entitled to receive from us the principal of and interest accrued on junior
subordinated debentures held, while a holder of preferred securities is entitled
to receive distributions to the extent Comerica Capital Trust I has funds
available for the payment of such distributions.
RIGHTS UPON TERMINATION
Upon any dissolution, winding-up or liquidation of Comerica Capital Trust I
involving the liquidation of the junior subordinated debentures, the holders of
the preferred securities will be entitled to receive, out of assets held by
Comerica Capital Trust I, subject to the rights of any creditors of Comerica
Capital Trust I, the liquidation distribution in cash. Upon our voluntary or
involuntary liquidation or bankruptcy, the property trustee, as holder of the
junior subordinated debentures, would be our subordinated creditor, subordinated
in right of payment to all senior debt as described in the indenture, but
entitled to receive payment in full of principal and interest before any of our
stockholders receive payments or distributions. Because we are the guarantor
under the guarantee and, under the indenture, as borrower, we have agreed to pay
for all costs, expenses and liabilities of Comerica Capital Trust I (other than
Comerica Capital Trust I's obligations to the holders of the preferred
securities), the positions of a holder of preferred securities and a holder of
the junior subordinated debentures relative to other creditors and to our
stockholders in the event of our liquidation or bankruptcy would be
substantially the same.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the material United States federal income
tax consequences of the purchase, ownership and disposition of the preferred
securities as of the date of this prospectus supplement. Where noted, it
constitutes the opinion of Mayer, Brown & Platt, counsel to Comerica
Incorporated and Comerica Capital Trust I.
Except where we state otherwise, this summary deals only with preferred
securities held as capital assets by a holder who:
- is a United States person (as defined below), and
- purchases the preferred securities upon original issuance at their
original issue price.
A "United States person" is a holder who is one of the following:
- a citizen or resident of the United States;
- a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision of the
United States;
- an estate the income of which is subject to United States federal income
taxation regardless of its source; or
S-26
27
- a trust
- that is subject to the primary supervision of a court within the United
States and the control of one or more United States persons, or
- that has a valid election in effect under applicable United States
Treasury regulations to be treated as a United States person.
Your tax treatment may vary depending on your particular situation. This
summary does not address all the tax consequences that may be relevant to
holders that are subject to special tax treatment, such as:
- dealers in securities or currencies;
- financial institutions;
- tax-exempt investors;
- traders in securities that elect to use a mark-to-market method of
accounting for their securities holdings;
- persons liable for alternative minimum tax;
- insurance companies;
- persons holding preferred securities as part of a hedging, conversion,
integrated or constructive sale transaction;
- persons holding preferred securities as part of a straddle; or
- persons whose functional currency is not the United States dollar.
In addition, this summary does not include any description of the tax laws
of any state, local or foreign government.
Furthermore, if a partnership holds preferred securities, the tax treatment
of a partner will generally depend upon the status of the partner and the
activities of the partnership. If you are a partner of a partnership holding
preferred securities, you should consult your own tax advisor.
This summary is based on the Internal Revenue Code of 1986, as amended
(which we refer to as the "Code"), the Treasury regulations promulgated under
the Code and administrative and judicial interpretations thereof. These income
tax laws, regulations and interpretations, however, may change at any time. Any
change could be retroactive to the issuance date of the preferred securities.
The authorities on which this summary is based are subject to various
interpretations, and the opinions of Mayer, Brown & Platt are not binding on the
Internal Revenue Service (which we refer to as the "IRS") or the courts. Either
the IRS or the courts could disagree with the explanations or conclusions
contained in this summary. Nevertheless, Mayer, Brown & Platt has advised us
that they believe that the opinions expressed in this summary, if challenged,
would be sustained by a court with jurisdiction in a properly presented case.
You should consult your own tax advisor regarding the tax consequences to
you of the purchase, ownership and disposition of the preferred securities,
including the tax consequences under state, local, foreign and other tax laws.
For a discussion of the possible redemption of the preferred securities upon the
occurrence of a Tax Event, see "Certain Terms of the Preferred
Securities -- Redemption -- Redemption Upon a Special Event" in this prospectus
supplement.
CLASSIFICATION OF COMERICA CAPITAL TRUST I
In connection with the issuance of the preferred securities, Mayer, Brown &
Platt is of the opinion that under current law and assuming full compliance with
the terms of the amended and restated declaration of trust, and based upon
certain facts and assumptions contained in such opinion, Comerica Capital Trust
I will be classified as a grantor trust for United States federal income tax
purposes and not
S-27
28
as an association taxable as a corporation. As a result, for United States
federal income tax purposes, you generally will be treated as owning an
undivided beneficial ownership interest in the junior subordinated debentures.
Thus, you will be required to include in your gross income your proportionate
share of the interest income or original issue discount that is paid or accrued
on the junior subordinated debentures. See below under the caption "-- Interest
Income and Original Issue Discount" in this section.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
Comerica Incorporated, Comerica Capital Trust I and you (by your acceptance
of a beneficial ownership interest in a preferred security) agree to treat the
junior subordinated debentures as indebtedness for all United States tax
purposes. In connection with the issuance of the junior subordinated debentures,
Mayer, Brown & Platt is of the opinion that under current law, and based on
certain representations, facts and assumptions set forth in its opinion, the
junior subordinated debentures will be classified as indebtedness for United
States federal income tax purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
We anticipate that the junior subordinated debentures will not be issued
with an issue price that is less than their stated redemption price at maturity.
In this case, subject to the discussion below, the junior subordinated
debentures will not be subject to the special original issue discount (which we
refer to as "OID") rules, at least upon initial issuance, so that you will
generally be taxed on the stated interest on the junior subordinated debentures
as ordinary income at the time it is paid or accrued in accordance with your
regular method of tax accounting.
If, however, we exercise our right to defer payments of interest on the
junior subordinated debentures, the junior subordinated debentures will become
OID instruments at such time. In such case, you will be subject to the special
OID rules described below. Once the junior subordinated debentures become OID
instruments, they will be taxed as OID instruments for as long as they remain
outstanding.
Under the OID economic accrual rules, the following occur:
- regardless of your method of accounting, you would accrue an amount of
interest income each year that approximates the stated interest payments
called for under the terms of the junior subordinated debentures using
the constant-yield-to-maturity method of accrual described in section
1272 of the Code;
- the actual cash payments of interest you receive on the junior
subordinated debentures would not be reported separately as taxable
income;
- any amount of OID included in your gross income (whether or not during a
deferral period) with respect to the preferred securities would increase
your tax basis in such preferred securities; and
- the amount of distributions in respect of such accrued OID would reduce
your tax basis in such preferred securities.
The United States Treasury regulations dealing with OID and the deferral of
interest payments have not yet been addressed in any rulings or other
interpretations by the IRS. It is possible that the IRS could assert that the
junior subordinated debentures were issued initially with OID, merely because of
our right to defer payments of interest. If the IRS were successful in this
regard, you would be subject to the special OID rules described above,
regardless of whether we exercise our option to defer payments of interest on
such junior subordinated debentures.
Because the junior subordinated debentures are debt for tax purposes, you
will not be entitled to a dividends received deduction with respect to any
income you recognize on the preferred securities.
S-28
29
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF
COMERICA CAPITAL TRUST I
As described under the caption "Certain Terms of the Preferred
Securities -- Optional Liquidation of Comerica Capital Trust I and Distribution
of Junior Subordinated Debentures" in this prospectus supplement, the junior
subordinated debentures held by Comerica Capital Trust I may be distributed to
you in exchange for your preferred securities if Comerica Capital Trust I is
liquidated before the maturity of the junior subordinated debentures, as long as
we first receive:
- the approval of the Federal Reserve Board to do so, if that approval is
then required under the Federal Reserve System's capital rules; and
- an opinion of independent counsel to the effect that the distribution of
the junior subordinated debentures will not be taxable to you.
Under current law, except as described below, this type of distribution
from a grantor trust would not be taxable. Upon such a distribution, you will
receive your proportionate share of the junior subordinated debentures
previously held indirectly through Comerica Capital Trust I. Your holding period
and total tax basis in the junior subordinated debentures will equal the holding
period and total tax basis that you had in your preferred securities before the
distribution.
If, however, Comerica Capital Trust I is treated as an association taxable
as a corporation, a Tax Event will occur. If we elect to distribute the junior
subordinated debentures to you at this time, the distribution would be taxable
to Comerica Capital Trust I and to you.
If you receive junior subordinated debentures in exchange for your
preferred securities, you would accrue interest in respect of the junior
subordinated debentures received from Comerica Capital Trust I in the manner
described above under the caption "-- Interest Income and Original Issue
Discount" in this section. In certain circumstances described above under the
captions "Certain Terms of the Preferred Securities -- Redemption -- Redemption
Upon a Special Event" in this prospectus supplement, we may redeem the junior
subordinated debentures and distribute cash in liquidation of Comerica Capital
Trust I. This distribution of cash would be taxable as described below under
"-- Sales of Preferred Securities or Redemption of Junior Subordinated
Debentures" in this section.
SALES OF PREFERRED SECURITIES OR REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES
If you sell your preferred securities or receive cash upon redemption of
the junior subordinated debentures, you will recognize gain or loss equal to the
difference between:
- the amount realized on the sale or redemption of the preferred securities
or junior subordinated debentures (less an amount equal to any accrued
but unpaid qualified stated interest that you did not previously include
in income, which will be taxable as interest income); and
- your adjusted tax basis in your preferred securities or junior
subordinated debentures sold or redeemed.
Your gain or loss will be a capital gain or loss, provided that you held
the preferred securities or junior subordinated debentures as a capital asset.
The gain or loss will generally be a long-term capital gain or loss if you have
held your preferred securities or junior subordinated debentures for more than
one year. Long-term capital gains of individuals are currently subject to tax at
a maximum rate of 20% (or 18% for capital assets held for more than five years).
The deductibility of capital losses is subject to limitations.
NON-UNITED STATES HOLDERS
The following discussion only applies to you if you are not a United States
person. As discussed above, the preferred securities will be treated by the
parties as evidence of undivided beneficial ownership interests in the junior
subordinated debentures. See above under the caption "-- Classification of
Comerica Capital Trust I" in this section.
S-29
30
U.S. FEDERAL WITHHOLDING TAX
The 30% U.S. federal withholding tax will not apply to any payment of
principal or interest (including OID) on the preferred securities (or the junior
subordinated debentures) provided that:
- you do not actually (or constructively) own 10% or more of the total
combined voting power of all classes of our voting stock within the
meaning of the Code and the United States Treasury regulations;
- you are not a controlled foreign corporation that is related to us
through stock ownership;
- you are not a bank whose receipt of interest on the preferred securities
(or the junior subordinated debentures) is described in section
881(c)(3)(A) of the Code; and
- (a) you provide your name and address on an IRS Form W-8BEN (or other
applicable form), and certify, under penalties of perjury, that you are
not a United States person, or (b) you hold your preferred securities (or
junior subordinated debentures) through certain foreign intermediaries
and you satisfy the certification requirements of applicable United
States Treasury regulations.
Special certification rules apply to non-United States persons that are
entities rather than individuals. If you cannot satisfy the requirements
described above, payments of premium, if any, and interest (including OID) made
to you will be subject to the 30% U.S. federal withholding tax, unless you
provide us with a properly executed (1) IRS Form W-8BEN (or other applicable
form) claiming an exemption from, or reduction in the rate of, withholding under
the benefit of an applicable tax treaty or (2) IRS Form W-8ECI (or successor
form) stating that interest paid on the preferred securities (or the junior
subordinated debentures) is not subject to withholding tax because it is
effectively connected with your conduct of a trade or business in the United
States as discussed below under the caption "U.S. Federal Income Tax" in this
section.
The 30% U.S. federal withholding tax will not apply to any gain that you
realize on the sale, exchange, retirement or other disposition of the preferred
securities or junior subordinated debentures.
U.S. FEDERAL INCOME TAX
If you are engaged in a trade or business in the United States and interest
on the preferred securities (or the junior subordinated debentures) is
effectively connected with the conduct of that trade or business (and, if
certain treaties apply, is attributable to a U.S. permanent establishment), you
will be subject to U.S. federal income tax on that interest on a net income
basis (although exempt from the 30% withholding tax), in the same manner as if
you were a United States person as defined under the Code. In addition, if you
are a foreign corporation, you may be subject to a branch profits tax equal to
30% (or lower applicable treaty rate) of your earnings and profits for the
taxable year, subject to adjustments, that are effectively connected with the
conduct by you of a trade or business in the United States.
Any gain realized on the disposition of a preferred security (or a junior
subordinated debenture) generally will not be subject to U.S. federal income tax
unless (1) that gain is effectively connected with the conduct of a trade or
business by you in the United States (and, if certain treaties apply, is
attributable to a U.S. permanent establishment), or (2) you are an individual
who is present in the United States for 183 days or more in the taxable year of
that disposition, and certain other conditions are met.
U.S. FEDERAL ESTATE TAX
Your estate will not be subject to U.S. federal estate tax on the preferred
securities (or the junior subordinated debentures) beneficially owned by you at
the time of your death, provided that (1) you do not own 10% or more of the
total combined voting power of all classes of our voting stock (within the
meaning of the Code and the United States Treasury regulations) and (2) interest
on those preferred securities (or junior subordinated debentures) would not have
been, if received at the time of your death, effectively connected with the
conduct by you of a trade or business in the United States.
S-30
31
INFORMATION REPORTING AND BACKUP WITHHOLDING
UNITED STATES HOLDERS
In general, information reporting requirements will apply to payments of
income on the preferred securities (or the junior subordinated debentures) and
to the proceeds of the sale of the preferred securities (or the junior
subordinated debentures) made to you (unless you are an exempt recipient such as
a corporation). Backup withholding tax of up to 31% will apply to such payments
if you fail to provide a taxpayer identification number, a certification of
exempt status, or fail to report in full interest income.
NON-UNITED STATES HOLDERS
In general, no information reporting or backup withholding will be required
regarding payments of income on the preferred securities (or the junior
subordinated debentures) that we make to you provided that we do not have actual
knowledge that you are a United States person and we have received from you the
certification described above in the fourth bullet point under the caption
"Non-United States Holders -- U.S. Federal Withholding Tax" in this section.
In addition, no information reporting or backup withholding will be
required regarding the proceeds of the sale of preferred securities (or junior
subordinated debentures) made within the United States or conducted through
certain United States financial intermediaries if (1) the payor receives the
certification described above and does not have actual knowledge that you are a
United States person or (2) you otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against your U.S. federal income tax liability provided the
required information is furnished to the IRS.
ERISA CONSIDERATIONS
Each fiduciary of an employee benefit plan subject to Title I of ERISA, a
plan described in Section 4975 of the Code, including an individual retirement
arrangement or a Keogh plan, a plan subject to provisions under applicable
federal, state, local, non-U.S. or other laws or regulations that are similar to
the provisions of Title I of ERISA or Section 4975 of the Code ("Similar Laws"),
and any entity whose underlying assets include "plan assets" by reason of any
such employee benefit plan's or plan's investment in such entity (each of which
we refer to as a "Plan") should consider the fiduciary responsibility and
prohibited transaction provisions of ERISA, applicable Similar Laws and Section
4975 of the Code in the context of the Plan's particular circumstances before
authorizing an investment in the preferred securities. Accordingly, such a
fiduciary should consider, among other factors, that each Plan investing in the
preferred securities will be deemed to have represented that the Plan's purchase
of the preferred securities is covered by one or more prohibited transaction
exemptions. Plan fiduciaries should also consider whether the Plan's investment
in the preferred securities would satisfy the prudence and diversification
requirements of ERISA and would be consistent with the documents and instruments
governing their Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans from
engaging in certain transactions involving "plan assets" with persons who are
"parties in interest" under ERISA or "disqualified persons" under the Code
("Parties in Interest") regarding such a Plan. A violation of these "prohibited
transaction" rules may result in an excise tax, penalty or other liabilities
under ERISA and/or Section 4975 of the Code for such persons or, in the case of
an individual retirement account, the occurrence of a prohibited transaction
involving the individual who established the individual retirement account, or
his or her beneficiaries, would cause the individual retirement account to lose
its tax-exempt status, unless exemptive relief is available under an applicable
statutory or administrative exemption. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church plans
(as defined in Section 3(33) of ERISA or Section 4975(g)(3) of the Code) and
foreign plans (as described in Section 4(b)(4) of ERISA) are not subject to the
requirements of ERISA or Section 4975 of the Code but may be subject to
substantially similar laws.
S-31
32
ERISA and the Code do not define "plan assets". However, regulations (the
"Plan Assets Regulations") promulgated under ERISA by the Department of Labor
("DOL") generally provide that when a Plan subject to Title I of ERISA or
Section 4975 of the Code acquires an equity interest in an entity that is
neither a "publicly-offered security" nor a security issued by an investment
company registered under the Investment Company Act, the Plan's assets include
both the equity interest and an undivided interest in each of the underlying
assets of the entity unless it is established either that equity participation
in the entity by "benefit plan investors" is not "significant" or that the
entity is an "operating company," in each case as defined in the Plan Assets
Regulations. Comerica Capital Trust I is not expected to qualify as an operating
company and will not be an investment company registered under the Investment
Company Act. For purposes of the Plan Assets Regulations, equity participation
in an entity by benefit plan investors will not be significant if benefit plan
investors hold, in the aggregate, less than 25% of the value of any class of
such entity's equity, excluding equity interests held by persons (other than a
benefit plan investor) with discretionary authority or control over the assets
of the entity or who provide investment advice for a fee (direct or indirect)
with respect to such assets, and any affiliates thereof. For purposes of this
25% test (the "Benefit Plan Investor Test"), "benefit plan investors" include
all employee benefit plans, whether or not subject to ERISA or the Code,
including governmental plans, "Keogh" plans, individual retirement accounts and
pension plans maintained by foreign corporations, as well as any entity whose
underling assets are deemed to include plan assets under the Plan Assets
Regulations. No assurance can be given that the value of the preferred
securities held by "benefit plan investors" will not be significant, and no
monitoring or other measures will be taken regarding the satisfaction of the
conditions to this exception. All of the common securities will be purchased and
held by Comerica Incorporated.
For purposes of the Plan Assets Regulations, a "publicly-offered security"
is a security that is (a) "freely transferable", (b) part of a class of
securities that is "widely held", and (c)(i) sold to the Plan as part of an
offering of securities to the public pursuant to an effective registration
statement under the Securities Act of 1933 within 120 days after the end of the
fiscal year of the issuer during which the offering of such securities to the
public occurred or (ii) is part of a class of securities that is registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 (the
"Registration Requirement"). It is anticipated that the preferred securities
will be offered in a manner which satisfies the Registration Requirement. The
Plan Assets Regulations provide that a security is "widely held" only if it is
part of a class of securities that is owned by 100 or more investors independent
of the issuer and of one another. A security will not fail to be "widely held"
because the number of independent investors falls below 100 subsequent to the
initial offering as a result of events beyond the control of the issuer. It is
anticipated that the preferred securities will be "widely held" within the
meaning of the Plan Assets Regulations, although no assurance can be given in
this regard. The Plan Assets Regulations provide that whether a security is
"freely transferable" is a factual question to be determined on the basis of all
relevant facts and circumstances.
The Plan Assets Regulations further provide that when a security is part of
an offering in which the minimum investment in US $10,000 or less, certain
restrictions described in the Plan Assets Regulations ordinarily will not, alone
or in combination, affect the finding that such securities are "freely
transferable". It is anticipated that the preferred securities will be "freely
transferable" within the meaning of the Plan Assets Regulations, although no
assurance can be given in this regard.
As indicated above, there can be no assurance that any of the exceptions
set forth in the Plan Assets Regulations will apply to the preferred securities,
and, as a result, under the terms of the Plan Assets Regulations, an investing
Plan's assets could be considered to include an undivided interest in the assets
held by Comerica Capital Trust I (including the junior subordinated debentures).
If the assets of Comerica Capital Trust I were to be deemed to be "plan
assets" under ERISA, this would result, among other things, in (i) the
application of the prudence and other fiduciary responsibility standards of
ERISA to investments made by Comerica Capital Trust I and (ii) the possibility
that certain transactions in which Comerica Capital Trust I might seek to engage
could constitute "prohibited transactions" under ERISA and the Code. If a
prohibited transaction occurs for which no exemption is available, any fiduciary
that has engaged in the prohibited transaction could be required (i) to restore
to
S-32
33
the Plan any profit realized on the transaction and (ii) to reimburse the Plan
for any losses suffered by the Plan as a result of the investment. In addition,
each disqualified person (within the meaning of Section 4975 of the Code)
involved could be subject to an excise tax equal to 15% of the amount involved
in the prohibited transaction for each year the transaction continues and,
unless the transaction is corrected within statutorily required periods, to an
additional tax of 100%. Plan fiduciaries who decide to invest in Comerica
Capital Trust I could, under certain circumstances, be liable for prohibited
transactions or other violations as a result of their investment in Comerica
Capital Trust I or as co-fiduciaries for actions taken by or on behalf of
Comerica Capital Trust I. With respect to an individual retirement account
("IRA") that invests in Comerica Capital Trust I, the occurrence of a prohibited
transaction involving the individual who established the IRA, or his or her
beneficiaries, would cause the IRA to lose its tax-exempt status,
Regardless of whether the assets of Comerica Capital Trust I are deemed to
be "plan assets" of Plans investing in Comerica Capital Trust I, as discussed
above, the acquisition and holding of the preferred securities with "plan
assets" of a Plan could itself result in a prohibited transaction. The DOL has
issued five prohibited transaction class exemptions ("PTCE's") that may provide
exemptive relief for direct or indirect prohibited transactions resulting from
the purchase and/or holding of the preferred securities by a Plan. These class
exemptions are:
- PTCE 96-23 (for certain transactions determined by "in-house asset
managers");
- PTCE 95-60 (for certain transactions involving insurance company general
accounts);
- PTCE 91-38 (for certain transactions involving bank collective investment
funds);
- PTCE 90-1 (for certain transactions involving insurance company pooled
separate accounts); and
- PTCE 84-14 (for certain transactions determined by independent "qualified
professional asset managers").
Such class exemptions may not, however, apply to all of the transactions
that could be deemed prohibited transactions in connection with a Plan's
investment in the preferred securities.
Any purchaser of the preferred securities that is an insurance company
using assets of its general account should note that, based on the reasoning of
the United States Supreme Court set forth in John Hancock Mutual Life Insurance
Company v. Harris Trust & Savings Bank, 114 S. Ct. 517 (1993), and amendments to
ERISA Section 401(c), an insurance company's general account may be deemed to
include assets of Plans investing in such general account (e.g., through the
purchase of an annuity contract).
Because of ERISA's prohibitions and those of Section 4975 of the Code,
discussed above and the potential application of Similar Laws to Plans not
subject to Title I of ERISA or Section 4975 of the Code (a "Non-ERISA Plan"),
the preferred securities, or any interest therein, should not be purchased or
held by any Plan or any person investing "plan assets" of any Plan, unless such
purchase and holding is covered by the exemptive relief available under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14 (or some other applicable class or individual
exemption) (or, in the case of a Non-ERISA Plan, a similar exemption applicable
to the transaction). Accordingly, each purchaser or holder of the preferred
securities or any interest therein will be deemed to have represented by its
purchase and holding thereof that either:
- it is not a Plan and no part of the assets to be used by it to purchase
and/or hold such preferred securities or any interest therein constitutes
"plan assets" of any Plan; or
- it is itself a Plan, or is purchasing or holding the preferred securities
or an interest therein on behalf of or with "plan assets" of one or more
Plans, and each such purchase and holding of such securities will not
result in a non exempt prohibited transaction under ERISA or the Code or
its equivalent under applicable Similar Laws.
Although, as noted above, governmental plans and certain other plans are
not subject to ERISA, including the prohibited transaction provisions thereof,
or of Section 4975 of the Code, Similar Laws governing the investment and
management of the assets of such plans may contain fiduciary and prohibited
S-33
34
transaction provisions similar to those under ERISA and Section 4975 of the Code
discussed above. Similarly, fiduciaries of other plans not subject to ERISA may
be subject to other legal restrictions under applicable Similar Laws.
Accordingly, fiduciaries of governmental plans or other plans not subject to
ERISA, in consultation with their advisors, should consider the impact of their
respective Similar Laws on their investment in preferred securities, and the
considerations discussed above, to the extent applicable.
The foregoing discussion is general in nature and is not intended to be
inclusive. Consequently, and due to the complexity of the fiduciary
responsibility and prohibited transaction rules described above and the
penalties that may be imposed upon persons involved in non-exempt prohibited
transactions, it is particularly important that fiduciaries or other persons
considering purchasing the preferred securities on behalf of or with "plan
assets" of any Plan consult with their counsel, prior to any such purchase,
regarding the potential applicability of ERISA, Section 4975 of the Code and any
Similar Laws to such investment and whether any exemption would be applicable
and determine on their own whether all conditions of such exemption or
exemptions have been satisfied such that the acquisition and holding of
preferred securities by the purchaser Plan are entitled to full exemptive relief
thereunder.
S-34
35
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated July 25, 2001, we have agreed to sell to the underwriters named
below, for whom Credit Suisse First Boston Corporation and Salomon Smith Barney,
Inc. are acting as representatives, the following respective number of preferred
securities:
Number of
Preferred
Underwriter Securities
----------- ----------
Credit Suisse First Boston Corporation...................... 1,494,500
Salomon Smith Barney Inc. .................................. 1,494,500
A.G. Edwards & Sons, Inc. .................................. 1,470,000
Comerica Securities, Inc. .................................. 1,470,000
J.P. Morgan Securities Inc. ................................ 1,470,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 1,470,000
Morgan Stanley & Co. Incorporated........................... 1,470,000
UBS Warburg LLC............................................. 1,470,000
Dain Rauscher Incorporated.................................. 105,000
Goldman, Sachs & Co......................................... 105,000
Keefe, Bruyette & Woods, Inc. .............................. 105,000
Lehman Brothers Inc. ....................................... 105,000
ABN AMRO Incorporated....................................... 56,000
Banc of America Securities LLC.............................. 56,000
Bear Stearns & Co. Inc. .................................... 56,000
Charles Schwab & Co. Inc. .................................. 56,000
CIBC World Markets Corp. ................................... 56,000
Deutsche Banc Alex. Brown Inc. ............................. 56,000
First Union Securities, Inc. ............................... 56,000
H&R Block Financial Advisors, Inc. ......................... 56,000
Legg Mason Wood Walker, Incorporated........................ 56,000
McDonald Investments Inc.................................... 56,000
Prudential Securities Incorporated.......................... 56,000
Quick & Reilly, Inc. ....................................... 56,000
Raymond James & Associates, Inc. ........................... 56,000
Tucker Anthony Incorporated................................. 56,000
U.S. Bancorp Piper Jaffray Inc. ............................ 56,000
Wells Fargo Brokerage Services LLC ......................... 56,000
Advest Inc. ................................................ 35,000
BB&T Capital Markets, a Division of Scott Stringfellow...... 35,000
C.L. King & Associates, Inc. ............................... 35,000
Crowell, Weedon & Co........................................ 35,000
D.A. Davidson & Co. ........................................ 35,000
Davenport & Company LLC..................................... 35,000
Fahnestock & Co. Inc. ...................................... 35,000
Fifth Third Securities, Inc. ............................... 35,000
Gibraltar Securities Co. ................................... 35,000
Gruntal & Co., L.L.C. ...................................... 35,000
HSBC Securities (USA) Inc. ................................. 35,000
J.J.B. Hilliard, W.L. Lyons, Inc. .......................... 35,000
Janney Montgomery Scott LLC................................. 35,000
Mesirow Financial, Inc. .................................... 35,000
Morgan Keegan & Company, Inc. .............................. 35,000
S-35
36
Number of
Preferred
Underwriter Securities
----------- ----------
NatCity Investments, Inc. .................................. 35,000
Parker/Hunter Incorporated.................................. 35,000
Robert W. Baird & Co. Incorporated.......................... 35,000
Southwest Securities, Inc. ................................. 35,000
Stifel, Nicolaus & Company Inc. ............................ 35,000
TD Securities (USA) Inc. ................................... 35,000
Utendahl Capital Partners, L.P. ............................ 35,000
Wachovia Securities, Inc. .................................. 35,000
Wedbush Morgan Securities, Inc.............................. 35,000
William Blair & Company, L.L.C. ............................ 35,000
----------
Total.................................................. 14,000,000
==========
The underwriting agreement provides that the underwriters are obligated to
purchase all of the preferred securities if any are purchased. The underwriting
agreement also provides that if an underwriter defaults the purchase commitments
of non-defaulting underwriters may be increased or the offering of preferred
securities may be terminated.
Comerica Capital Trust I and we have agreed that, during a period of 30
days from the date of this prospectus supplement, we will not offer, sell,
contract to sell or otherwise dispose of any preferred securities, junior
subordinated debentures, any other beneficial interests in Comerica Capital
Trust I, or any other securities that are substantially similar to the preferred
securities or junior subordinated debentures, including any guarantee of such
securities, or any securities convertible into or exchangeable for or
representing the right to receive preferred securities, junior subordinated
debentures or any such substantially similar securities, without the prior
written consent of Credit Suisse First Boston Corporation, except for the
preferred securities offered in connection with this offering.
The underwriters propose to offer the preferred securities initially at the
public offering price on the cover page of this prospectus supplement and to
selling group members at that price less a selling concession of $0.50 per
preferred security. The underwriters and selling group members may allow a
discount of $0.30 per preferred security on sales to other broker/dealers. After
the initial public offering the representatives may change the public offering
price and concession and discount to broker/dealers.
Comerica Incorporated estimate that its out-of-pocket expenses for this
offering will be approximately $540,000.
Prior to this offering, there has been no public market for the preferred
securities. The preferred securities have been approved for listing on the New
York Stock Exchange. Trading of the preferred securities on the New York Stock
Exchange is expected to commence within a 30-day period after the initial
delivery of the preferred securities. In order to meet one of the requirements
for listing the preferred securities on the New York Stock Exchange, the
underwriters have undertaken to sell the preferred securities to a minimum of
400 beneficial owners. The representatives have advised us that they intend to
make a market in the preferred securities prior to the commencement of trading
on the New York Stock Exchange, but are not obligated to do so, and may
discontinue market making at any time without notice. We cannot give any
assurance as to the liquidity of the trading market for the preferred
securities.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments which the underwriters may be required
to make in that respect.
Certain of the underwriters and certain of their respective affiliates have
provided from time to time, and expect to provide in the future, investment
banking and other financial services to us and our affiliates, for which such
underwriters or their affiliates have received or will receive customary fees
and commissions.
S-36
37
In connection with the offering the underwriters, may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934 (the "Exchange Act").
- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Over-allotment involves sales by the underwriters of preferred securities
in excess of the number of preferred securities the underwriters are
obligated to purchase, which creates a syndicate short position.
- Syndicate covering transactions involve purchases of the preferred
securities in the open market after the distribution has been completed
in order to cover syndicate short positions. A short position is more
likely to be created if the underwriters are concerned that there may be
downward pressure on the price of the preferred securities in the open
market after pricing that could adversely affect investors who purchase
in the offering.
- Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the preferred securities originally sold by
the syndicate member are purchased in a stabilizing transaction or a
syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty
bids may have the effect of raising or maintaining the market price of the
preferred securities or preventing or retarding a decline in the market price of
the preferred securities. As a result, the price of the preferred securities may
be higher than the price that might otherwise exist in the open market. These
transactions may be effected on the New York Stock Exchange and, if commenced,
may be discontinued at any time.
S-37
38
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the preferred securities in Canada is being made only
on a private placement basis exempt from the requirement that we prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of preferred securities are made. Any resale of the preferred
securities in Canada must be made under applicable securities laws which will
vary depending on the relevant jurisdiction, and which may require resales to be
made under available statutory exemptions or under a discretionary exemption
granted by the applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the preferred
securities.
REPRESENTATIONS OF PURCHASERS
By purchasing preferred securities in Canada and accepting a purchase
confirmation a purchaser is representing to us and the dealer from whom the
purchase confirmation is received that
- the purchaser is entitled under applicable provincial securities laws to
purchase the preferred securities without the benefit of a prospectus
qualified under those securities laws,
- where required by law, that the purchaser is purchasing as principal and
not as agent, and
- the purchaser has reviewed the text above under the caption "-- Resale
Restrictions".
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of preferred securities to whom the Securities Act (British
Columbia) applies is advised that the purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any preferred securities acquired by the purchaser in this offering. The report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one report must
be filed for preferred securities acquired on the same date and under the same
prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of preferred securities should consult their own legal
and tax advisors with respect to the tax consequences of an investment in the
preferred securities in their particular circumstances and about the eligibility
of the preferred securities for investment by the purchaser under relevant
Canadian legislation.
S-38
39
LEGAL OPINIONS
The due authorization, execution and delivery of the junior subordinated
debentures and the validity of the junior subordinated debentures and the
guarantees will be passed upon for Comerica Incorporated and Comerica Capital
Trust I by Mayer, Brown & Platt, Chicago, Illinois. The validity of the junior
subordinated debentures and the guarantees will be passed upon for the
underwriters by Simpson Thacher & Bartlett, New York, New York. Certain United
States federal income taxation matters also will be passed upon for Comerica
Incorporated and Comerica Capital Trust I by Mayer, Brown & Platt, Chicago,
Illinois. Certain matters of Delaware law relating to Comerica Capital Trust I
will be passed upon for Comerica Capital Trust I and Comerica Incorporated by
Richards, Layton & Finger, P.A., Wilmington, Delaware.
S-39
40
[COMERICA LOGO]