-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DlDHJRoolpJX8fpNF3KCo/w7QkXZuTW5VqZzvjs770r+6aT5VORMa88mbduLdq7p nSIqc0O5MrCN5SE/txNuNA== 0000950124-96-002727.txt : 19960619 0000950124-96-002727.hdr.sgml : 19960619 ACCESSION NUMBER: 0000950124-96-002727 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960618 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMERICA INC /NEW/ CENTRAL INDEX KEY: 0000028412 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 381998421 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-04297 FILM NUMBER: 96582371 BUSINESS ADDRESS: STREET 1: 100 RENAISCANCE CTR STREET 2: SUITE 3800 CITY: DETROIT STATE: MI ZIP: 48243 BUSINESS PHONE: 3132224000 MAIL ADDRESS: STREET 1: 411 W LAFAYETTE MAIL CODE 3415 STREET 2: ATTN JAY K OBERG CITY: DETROIT STATE: MI ZIP: 48226 FORMER COMPANY: FORMER CONFORMED NAME: DETROITBANK CORP DATE OF NAME CHANGE: 19850311 424B2 1 424B2 1 Pursuant to Rule 424(b)(2) Registration No. 333-04297 Information contained in this preliminary prospectus supplement is subject to completion or amendment. This prospectus supplement and the accompanying prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. PROSPECTUS SUPPLEMENT (Subject to Completion, Issued June 14, 1996) (To Prospectus dated June 12, 1996) 5,000,000 Shares Comerica Logo Comerica Incorporated FIXED/ADJUSTABLE RATE NONCUMULATIVE PREFERRED STOCK, SERIES E ------------------ This Prospectus Supplement relates to the 5,000,000 shares of Fixed/Adjustable Rate Noncumulative Preferred Stock, Series E, $50 liquidation preference per share (the "Series E Preferred Stock") of Comerica Incorporated ("Comerica"). Dividends on the Series E Preferred Stock are payable quarterly on , , and of each year, commencing , 1996, at a rate of % per annum through , 2001. Thereafter, the dividend rate on the Series E Preferred Stock will be the Applicable Rate from time to time in effect. The Applicable Rate per annum for any dividend period beginning on or after , 2001 will be equal to % plus the highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty Year Constant Maturity Rate (each as defined herein), as determined in advance of such dividend period. The Applicable Rate per annum for any dividend period beginning on or after , 2001 will not be less than % nor greater than %. The amount of dividends payable in respect of the Series E Preferred Stock will be adjusted in the event of certain amendments to the Internal Revenue Code of 1986, as amended (the "Code"), in respect of the dividends received deduction. See "Description of Series E Preferred Stock -- Dividends." The Series E Preferred Stock is redeemable at any time on and after , 2001, at the option of Comerica, in whole or in part, at $50 per share plus accrued and unpaid dividends (whether or not declared) from the immediately preceding Dividend Payment Date, as defined herein (but without any cumulation for unpaid dividends for prior dividend periods) to the date fixed for redemption. The Series E Preferred Stock may also be redeemed prior to , 2001, in whole, at the option of Comerica, in the event of certain amendments to the Code in respect of the dividends received deduction. See "Description of Series E Preferred Stock -- Redemption." For a description of the rights and preferences of the Series E Preferred Stock, see "Description of Series E Preferred Stock." ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ PRICE $50 A SHARE ------------------
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO PUBLIC(1) AND COMMISSIONS(2) COMERICA(1)(3) ----------- ---------------------- -------------- Per Share........................................ $ $ $ Total............................................ $ $ $
- ------------ (1) Plus accrued dividends, if any, from June , 1996 to the date of delivery. (2) Comerica has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. (3) Before deducting expenses payable by Comerica estimated at $ . ------------------ The shares of Series E Preferred Stock are offered, subject to prior sale, when, as and if accepted by the Underwriters and subject to approval of certain legal matters by Skadden, Arps, Slate, Meagher & Flom, counsel for the Underwriters. It is expected that delivery of the Series E Preferred Stock will be made on or about June , 1996 at the office of Morgan Stanley & Co. Incorporated, New York, New York, against payment therefor in immediately available funds. ------------------ MERRILL LYNCH & CO. MORGAN STANLEY & CO. Incorporated June , 1996 2 NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY COMERICA OR BY ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SERIES E PREFERRED STOCK OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. ------------------------ TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT PAGE ---- Comerica............................... S-3 Summary Financial Data................. S-4 Consolidated Ratios of Earnings to Fixed Charges Including Preferred Stock Dividends...................... S-5 Use of Proceeds........................ S-5 Outstanding Capital Stock.............. S-5 Description of Series E Preferred Stock................................ S-5 Recent Tax Proposals................... S-12 Underwriters........................... S-13 Legal Opinions......................... S-13 PROSPECTUS PAGE ---- Available Information.................. 2 Incorporation of Certain Documents by Reference............................ 2 Comerica............................... 3 Regulatory Matters..................... 3 Use of Proceeds........................ 8 Consolidated Ratios of Earnings to Fixed Charges Including Preferred Stock Dividends...................... 8 Description of Comerica Capital Stock................................ 8 The Comerica Rights Plan............... 10 Description of Preferred Stock......... 12 Plan of Distribution................... 15 Experts................................ 15 Legal Matters.......................... 16
------------------------ IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES E PREFERRED STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. S-2 3 COMERICA Comerica Incorporated ("Comerica" or the "Company") is a registered bank holding company incorporated under the laws of the State of Delaware, headquartered in Detroit, Michigan, and was formed in 1973 to acquire the outstanding common stock of Comerica Bank (formerly Comerica Bank-Detroit), a Michigan banking corporation ("Comerica Bank"). As of March 31, 1996, Comerica owned directly or indirectly all the outstanding common stock (except for directors' qualifying shares, where applicable) of eight banking and thirty-nine non-banking subsidiaries. At March 31, 1996, Comerica had total assets of approximately $35.0 billion, total deposits of approximately $22.9 billion, total loans (net of unearned income) of approximately $25.5 billion, and shareholders' equity of approximately $2.7 billion. At March 31, 1996, Comerica was the largest bank holding company headquartered in Michigan in terms of both total assets and total deposits. Comerica has strategically focused its operations on three major lines of business: the Business Bank, the Individual Bank and the Investment Bank. The Business Bank is comprised of middle market lending, large corporate banking, international financial services and institutional trust. This line of business meets the needs of medium-size businesses, multinational corporations, and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, corporate and institutional trust, international trade finance, letters of credit and foreign exchange management services. The Individual Bank includes consumer lending, consumer deposit gathering, mortgage loan origination and servicing, small business banking, and private banking. This line of business offers a variety of consumer products, including deposit accounts, direct and indirect installment loans, credit cards, home equity lines of credit and residential mortgage loans. In addition, a full range of financial services is provided to local companies with annual sales under $5 million, area merchants and municipalities. Private lending and personal trust services are also provided to meet the personal financial needs of affluent individuals (as defined by individual net income or wealth). The Investment Bank is responsible for the sales of mutual fund and annuity products, as well as life, disability, and long-term care insurance products. This line of business also offers capital market products, manages loan syndications and provides investment management and advisory services, investment banking, and full and discount securities brokerage services. Comerica has strategically focused its lines of business in each of Comerica's four primary geographic markets: Michigan, Texas, California and Florida. Comerica pursues all three lines of business in Michigan, Texas and California, and has focused on the Individual Bank in Florida. S-3 4 SUMMARY FINANCIAL DATA The following table sets forth, in summary form, certain financial data for each of the years in the three-year period ended December 31, 1995 and for the three months ended March 31, 1996 and March 31, 1995. This summary should be read in conjunction with and is qualified in its entirety by the detailed financial statements and other information included in the documents incorporated by reference in the Prospectus. See "Incorporation of Certain Documents by Reference" in the accompanying Prospectus. The consolidated financial data at and for the three months ended March 31, 1996 and March 31, 1995 is derived from unaudited financial statements. The results for the three months ended March 31, 1996 are not necessarily indicative of the results for the full year or any other interim period.
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, ------------------ ----------------------------- 1996 1995 1995 1994 1993 ------- ------- ------- ------- ------- (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Net interest income............................ $ 349 $ 312 $ 1,300 $ 1,230 $ 1,134 Provision for loan losses...................... 28 12 87 56 69 ------- ------- ------- ------- ------- Net interest income after provision for loan losses.................................... 321 300 1,213 1,174 1,065 Noninterest income............................. 137 116 499 450 449 Noninterest expenses........................... 279 264 1,086 1,042 1,025 ------- ------- ------- ------- ------- Income before income taxes..................... 179 152 626 582 489 Provision for income taxes..................... 62 52 213 195 148 ------- ------- ------- ------- ------- Net income..................................... $ 117 $ 100 $ 413 $ 387 $ 341 ======= ======= ======= ======= ======= Earnings per share: Primary...................................... $ 0.98 $ 0.85 $ 3.54 $ 3.28 $ 2.85 Fully diluted................................ 0.98 0.85 3.52 3.28 2.85 Period-ended balances: Total loans.................................. $25,549 $23,097 $24,442 $22,209 $19,100 Total assets................................. 35,023 34,109 35,470 33,430 30,295 Total deposits............................... 22,911 21,916 23,167 22,432 20,950 Total shareholders' equity................... 2,711 2,513 2,608 2,392 2,182
S-4 5 CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES INCLUDING PREFERRED STOCK DIVIDENDS Comerica's ratios of earnings to combined fixed charges and preferred stock dividends are set forth below for the periods indicated:
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, ------------ ------------------------------------ 1996 1995 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- ---- ---- Consolidated ratio of earnings to combined fixed charges and preferred stock dividends (including interest on deposits)........................... 1.56x 1.49x 1.47x 1.64x 1.70x 1.38x 1.30x Consolidated ratio of earnings to combined fixed charges and preferred stock dividends (excluding interest on deposits)........................... 2.30x 2.09x 2.03x 2.61x 3.94x 3.20x 2.75x
The ratio of earnings to combined fixed charges and preferred stock dividends is computed by dividing income before income taxes and fixed charges by fixed charges and pre-tax earnings required to cover preferred stock dividends. Fixed charges are defined as interest expense and the portion of net rental expense estimated to be representative of the interest factor. USE OF PROCEEDS The net proceeds from the sale of the Series E Preferred Stock will be applied to Comerica's general funds to be utilized for such corporate purposes as may be determined by management, which may include investments in, and extensions of credit to, existing and future subsidiaries, the funding of acquisitions of banking and nonbanking institutions (including the repurchase of issued and outstanding shares of common stock of Comerica which may be used to fund part or all of the acquisition consideration) and other general corporate purposes. OUTSTANDING CAPITAL STOCK Comerica's total authorized capital stock currently consists of (i) 10,000,000 shares of preferred stock, without par value (the "Preferred Stock"), and (ii) 250,000,000 shares of common stock, with a par value of $5.00 per share (the "Common Stock"). As of May 31, 1996, there were 115,725,206 shares of Common Stock outstanding. Of the 10,000,000 shares of Preferred Stock authorized, 500,000 shares with no stated value have been designated as Series C Participating Preferred Stock (the "Comerica Series C Preferred Stock"). All shares of two former series of Preferred Stock, designated Adjustable Rate Cumulative Preferred Stock, Series A and Series B Preferred Stock, have been redeemed and restored to the status of authorized but unissued Preferred Stock. All shares designated as Comerica Series C Preferred Stock have been reserved for issuance in connection with the Comerica Rights Plan. For a description of the Comerica Rights and the Comerica Rights Plan, see "The Comerica Rights Plan" in the Prospectus. The Comerica Rights are not currently exercisable and no shares of Comerica Series C Preferred Stock are outstanding. DESCRIPTION OF SERIES E PREFERRED STOCK The following description of the particular terms of the shares of Series E Preferred Stock supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of Preferred Stock set forth in the accompanying Prospectus, to which description reference is hereby made. The summary contained herein of the terms of the Series E Preferred Stock does not purport to be complete and is subject to and qualified in its entirety by reference to all of the provisions of Comerica's Restated Certificate of Incorporation and Certificate of Designation relating to the Series E Preferred Stock, copies of which are on S-5 6 file with the Securities and Exchange Commission. Certain terms not defined in this description are defined in the Prospectus. GENERAL. The Series E Preferred Stock is a single series consisting of 5,000,000 shares. The holders of Series E Preferred Stock will have no preemptive rights. The Series E Preferred Stock, upon issuance against full payment of the purchase price therefor, will be fully paid and nonassessable. The Series E Preferred Stock will, on the date of original issuance, rank on a parity as to payment of dividends and distribution of assets upon dissolution, liquidation or winding up of Comerica with each other outstanding series of Preferred Stock. See "Description of Preferred Stock" in the Prospectus. The Series E Preferred Stock, together with each other series of Preferred Stock, will rank prior to the Common Stock of Comerica as to the payment of dividends and distribution of assets upon dissolution, liquidation or winding up of Comerica. The Series E Preferred Stock will not be convertible into shares of Common Stock of Comerica and will not be subject to any sinking fund or other obligation of Comerica to repurchase the Series E Preferred Stock. DIVIDENDS. General. Holders of shares of Series E Preferred Stock will be entitled to receive cash dividends, as, if and when declared by the Board of Directors of Comerica (the "Comerica Board") out of assets of Comerica legally available for payment. The initial dividend for the dividend period commencing on , 1996 to (but not including) , 1996 will be $ per share and will be payable on , 1996. Thereafter, dividends on the Series E Preferred Stock will be payable quarterly, as, if and when declared by the Comerica Board on , , and of each year (each a "Dividend Payment Date") at the annual rate of % or $ per share through , 2001. After , 2001, dividends on the Series E Preferred Stock will be payable quarterly, as, if and when declared by the Comerica Board on each Dividend Payment Date at the Applicable Rate from time to time in effect. The Applicable Rate per annum for any dividend period beginning on or after , 2001 will be equal to % plus the highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty Year Constant Maturity Rate (each as defined below under "Adjustable Rate Dividends"), as determined in advance of such dividend period. The Applicable Rate per annum for any dividend period beginning on or after , 2001, will not be less than % nor greater than % (without taking into account any adjustments as described below under "Changes in the Dividends Received Percentage"). If a Dividend Payment Date is not a business day, dividends (if declared) on the Series E Preferred Stock will be paid on the immediately succeeding business day, without interest. A dividend period with respect to a Dividend Payment Date is the period commencing on the immediately preceding Dividend Payment Date and ending on the day immediately prior to the next succeeding Dividend Payment Date. Each such dividend will be payable to holders of record as they appear on the stock books of Comerica on such record dates, not more than thirty nor less than fifteen days preceding the payment dates thereof, as will be fixed by the Comerica Board. Dividends on the Series E Preferred Stock will not be cumulative and no rights will accrue to the holders of the Series E Preferred Stock by reason of the fact that Comerica may fail to declare or pay dividends on the Series E Preferred Stock in any amount in any year, whether or not the earnings of Comerica in any year were sufficient to pay such dividends in whole or in part. Adjustable Rate Dividends. Except as provided below in this paragraph, the "Applicable Rate" per annum for any dividend period beginning on or after , 2001 will be equal to % plus the Effective Rate (as defined below), but not less than % nor greater than % (without taking into account any adjustments as described below under "Changes in the Dividends Received Percentage"). The "Effective Rate" for any dividend period beginning on or after , 2001 will be equal to the highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty Year Constant Maturity Rate (each as defined below) for such dividend period. In the event that Comerica determines in good faith that for any S-6 7 reason: (i) any one of the Treasury Bill Rate, the Ten Year Constant Maturity Rate or the Thirty Year Constant Maturity Rate cannot be determined for any dividend period, then the Effective Rate for such dividend period will be equal to the higher of whichever two of such rates can be so determined; (ii) only one of the Treasury Bill Rate, the Ten Year Constant Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for any dividend period, then the Effective Rate for such dividend period will be equal to whichever such rate can be so determined; or (iii) none of the Treasury Bill Rate, the Ten Year Constant Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for any dividend period, then the Effective Rate for the preceding dividend period will be continued for such dividend period. Except as described below in this paragraph, the "Treasury Bill Rate" for each dividend period will be the arithmetic average of the two most recent weekly per annum market discount rates (or the one weekly per annum market discount rate, if only one such rate is published during the relevant Calendar Period (as defined below)) for three-month U.S. Treasury bills, as published weekly by the Federal Reserve Board (as defined below) during the Calendar Period immediately preceding the last ten calendar days preceding the dividend period for which the dividend rate on the Series E Preferred Stock is being determined. In the event that the Federal Reserve Board does not publish such a weekly per annum market discount rate during any such Calendar Period, then the Treasury Bill Rate for such dividend period will be the arithmetic average of the two most recent weekly per annum market discount rates (or the one weekly per annum market discount rate, if only one such rate is published during the relevant Calendar Period) for three-month U.S. Treasury bills, as published weekly during such Calendar Period by any Federal Reserve Bank or by any U.S. Government department or agency selected by Comerica. In the event that a per annum market discount rate for three-month U.S. Treasury bills is not published by the Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government department or agency during such Calendar Period, then the Treasury Bill Rate for such dividend period will be the arithmetic average of the two most recent weekly per annum market discount rates (or the one weekly per annum market discount rate, if only one such rate is published during the relevant Calendar Period) for all of the U.S. Treasury bills then having remaining maturities of not less than 80 nor more than 100 days, as published during such Calendar Period by the Federal Reserve Board or, if the Federal Reserve Board does not publish such rates, by any Federal Reserve Bank or by any U.S. Government department or agency selected by Comerica. In the event that Comerica determines in good faith that for any reason no such U.S. Treasury bill rates are published as provided above during such Calendar Period, then the Treasury Bill Rate for such dividend period will be the arithmetic average of the per annum market discount rates based upon the closing bids during such Calendar Period for each of the issues of marketable non-interest-bearing U.S. Treasury securities with a remaining maturity of not less than 80 nor more than 100 days from the date of each such quotation, as chosen and quoted daily for each business day in New York City (or less frequently if daily quotations are not generally available) to Comerica by at least three recognized dealers in U.S. Government securities selected by Comerica. In the event that Comerica determines in good faith that for any reason Comerica cannot determine the Treasury Bill Rate for any dividend period as provided above in this paragraph, the Treasury Bill Rate for such dividend period will be the arithmetic average of the per annum market discount rates based upon the closing bids during such Calendar Period for each of the issues of marketable interest-bearing U.S. Treasury securities with a remaining maturity of not less than 80 or more than 100 days, as chosen and quoted daily for each business day in New York City (or less frequently if daily quotations are not generally available) to Comerica by at least three recognized dealers in U.S. Government securities selected by Comerica. Except as described below in this paragraph, the "Ten Year Constant Maturity Rate" for each dividend period will be the arithmetic average of the two most recent weekly per annum Ten Year Average Yields (as defined below) (or the one weekly per annum Ten Year Average Yield, if only one such yield is published during the relevant Calendar Period), as published weekly by the Federal Reserve Board during the Calendar Period immediately preceding the last ten calendar days preceding the dividend period for which the dividend rate on the Series E Preferred Stock is being determined. In the event that the Federal Reserve Board does not publish such a weekly per annum Ten Year Average Yield during such Calendar Period, then the Ten Year Constant Maturity Rate for such dividend period will be the arithmetic average of the two most recent weekly per annum Ten Year Average Yields (or the one weekly per annum Ten Year Average Yield, if only one such yield is published during the relevant Calendar Period), as published weekly during such Calendar Period by S-7 8 any Federal Reserve Bank or by any U.S. Government department or agency selected by Comerica. In the event that a per annum Ten Year Average Yield is not published by the Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government department or agency during such Calendar Period, then the Ten Year Constant Maturity Rate for such dividend period will be the arithmetic average of the two most recent weekly per annum average yields to maturity (or the one weekly per annum average yield to maturity, if only one such yield is published during the relevant Calendar Period) for all of the actively traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities (as defined below)) then having remaining maturities of not less than eight nor more than twelve years, as published during such Calendar Period by the Federal Reserve Board or, if the Federal Reserve Board does not publish such yields, by any Federal Reserve Bank or by any U.S. Government department or agency selected by Comerica. In the event that Comerica determines in good faith that for any reason Comerica cannot determine the Ten Year Constant Maturity Rate for any dividend period as provided above in this paragraph, then the Ten Year Constant Maturity Rate for such dividend period will be the arithmetic average of the per annum average yields to maturity based upon the closing bids during such Calendar Period for each of the issues of actively traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities) with a final maturity date not less than eight nor more than twelve years from the date of each such quotation, as chosen and quoted daily for each business day in New York City (or less frequently if daily quotations are not generally available) to Comerica by at least three recognized dealers in U.S. Government securities selected by Comerica. Except as described below in this paragraph, the "Thirty Year Constant Maturity Rate" for each dividend period will be the arithmetic average of the two most recent weekly per annum Thirty Year Average Yields (as defined below) (or the one weekly per annum Thirty Year Average Yield, if only one such yield is published during the relevant Calendar Period), as published weekly by the Federal Reserve Board during the Calendar Period immediately preceding the last ten calendar days preceding the dividend period for which the dividend rate on the Series E Preferred Stock is being determined. In the event that the Federal Reserve Board does not publish such a weekly per annum Thirty Year Average Yield during such Calendar Period, then the Thirty Year Constant Maturity Rate for such dividend period will be the arithmetic average of the two most recent weekly per annum Thirty Year Average Yields (or the one weekly per annum Thirty Year Average Yield, if only one such yield is published during the relevant Calendar Period), as published weekly during such Calendar Period by any Federal Reserve Bank or by any U.S. Government department or agency selected by Comerica. In the event that a per annum Thirty Year Average Yield is not published by the Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government department or agency during such Calendar Period, then the Thirty Year Constant Maturity Rate for such dividend period will be the arithmetic average of the two most recent weekly per annum average yields to maturity (or the one weekly per annum average yield to maturity, if only one such yield is published during the relevant Calendar Period) for all of the actively traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities) then having remaining maturities of not less than twenty-eight nor more than thirty years, as published during such Calendar Period by the Federal Reserve Board or, if the Federal Reserve Board does not publish such yields, by any Federal Reserve Bank or by any U.S. Government department or agency selected by Comerica. In the event that Comerica determines in good faith that for any reason Comerica cannot determine the Thirty Year Constant Maturity Rate for any dividend period as provided above in this paragraph, then the Thirty Year Constant Maturity Rate for such dividend period will be the arithmetic average of the per annum average yields to maturity based upon the closing bids during such Calendar Period for each of the issues of actively traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities) with a final maturity date not less than twenty-eight nor more than thirty years from the date of each such quotation, as chosen and quoted daily for each business day in New York City (or less frequently if daily quotations are not generally available) to Comerica by at least three recognized dealers in U.S. Government securities selected by Comerica. The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty Year Constant Maturity Rate will each be rounded to the nearest five hundredths of a percent. S-8 9 The Applicable Rate with respect to each dividend period beginning on or after , 2001 will be calculated as promptly as practicable by Comerica according to the appropriate method described above. Comerica will cause notice of each Applicable Rate to be enclosed with the dividend payment checks next mailed to the holders of Series E Preferred Stock. As used above, the term "Calendar Period" means a period of fourteen calendar days; the term "Federal Reserve Board" means the Board of Governors of the Federal Reserve System; the term "Special Securities" means securities which can, at the option of the holder, be surrendered at face value in payment of any Federal estate tax or which provide tax benefits to the holder and are priced to reflect such tax benefits or which were originally issued at a deep or substantial discount; the term "Ten Year Average Yield" means the average yield to maturity for actively traded marketable U.S. Treasury fixed interest rate securities (adjusted to constant maturities of ten years); and the term "Thirty Year Average Yield" means the average yield to maturity for actively traded marketable U.S. Treasury fixed interest rate securities (adjusted to constant maturities of thirty years). Changes in the Dividends Received Percentage. If one or more amendments to the Internal Revenue Code of 1986, as amended (the "Code"), are enacted that change the percentage of the dividends received deduction (currently 70%) as specified in Section 243(a)(1) of the Code or any successor provision (the "Dividends Received Percentage"), the amount of each dividend payable per share of the Series E Preferred Stock for dividend payments made on or after the date of enactment of such change will be adjusted by multiplying the amount of the dividend payable determined as described above under "General" (before adjustment) by a factor, which will be the number determined in accordance with the following formula (the "DRD Formula"), and rounding the result to the nearest cent: 1 - [.xx (1 - .70)] --------------------- 1 - [.xx (1 - DRP)] For the purposes of the DRD Formula, "DRP" means the Dividends Received Percentage applicable to the dividend in question. No amendment to the Code, other than a change in the percentage of the dividends received deduction set forth in Section 243(a)(1) of the Code or any successor provision, will give rise to an adjustment. Notwithstanding the foregoing provisions, in the event that, with respect to any such amendment, Comerica will receive either an unqualified opinion of nationally recognized independent tax counsel selected by Comerica and approved by Skadden, Arps, Slate, Meagher & Flom (which approval will not be unreasonably withheld) or a private letter ruling or similar form of authorization from the Internal Revenue Service to the effect that such an amendment would not apply to dividends payable on the Series E Preferred Stock, then any such amendment will not result in the adjustment provided for pursuant to the DRD Formula. The opinion referenced in the previous sentence will be based upon a specific exception in the legislation amending the DRP or upon a published pronouncement of the Internal Revenue Service addressing such legislation. Unless the context otherwise requires, references to dividends in this Prospectus Supplement will mean dividends as adjusted by the DRD Formula. Comerica's calculation of the dividends payable as so adjusted and as certified accurate as to calculation and reasonable as to method by the independent certified public accountants then regularly engaged by Comerica, will be final and not subject to review. If any amendment to the Code which reduces the Dividends Received Percentage is enacted after a dividend payable on a Dividend Payment Date has been declared, the amount of dividend payable on such Dividend Payment Date will not be increased; but instead, an amount, equal to the excess of (x) the product of the dividends paid by Comerica on such Dividend Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be equal to the reduced Dividends Received Percentage) and (y) the dividends paid by Comerica on such Dividend Payment Date, will be payable to holders of record on the next succeeding Dividend Payment Date in addition to any other amounts payable on such date. In addition, if prior to , , an amendment to the Code is enacted that reduces the Dividends Received Percentage and such reduction retroactively applies to a Dividend Payment Date as to which Comerica previously paid dividends on the Series E Preferred Stock (each an "Affected Dividend Payment Date"), Comerica will pay (if declared) additional dividends (the "Additional Dividends") on the next S-9 10 succeeding Dividend Payment Date (or if such amendment is enacted after the dividend payable on such Dividend Payment Date has been declared, on the second succeeding Dividend Payment Date following the date of enactment) to holders of record on such succeeding Dividend Payment Date in an amount equal to the excess of (x) the product of the dividends paid by Comerica on each Affected Dividend Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be equal to the Dividends Received Percentage applied to each Affected Dividend Payment Date) and (y) the dividends paid by Comerica on each Affected Dividend Payment Date. Additional Dividends will not be paid in respect of the enactment of any amendment to the Code on or after , which retroactively reduces the Dividends Received Percentage, or if prior to , , such amendment would not result in an adjustment due to Comerica having received either an opinion of counsel or tax ruling referred to in the third preceding paragraph. Comerica will only make one payment of Additional Dividends. In the event that the amount of dividend payable per share of the Series E Preferred Stock will be adjusted pursuant to the DRD Formula and/or Additional Dividends are to be paid, Comerica will cause notice of each such adjustment and, if applicable, any Additional Dividends, to be sent to the holders of the Series E Preferred Stock. In the event that the Dividends Received Percentage is reduced to % or less, Comerica may at its option, redeem the Series E Preferred Stock as a whole but not in part as described below. See "Redemption." See also "Recent Tax Proposals" for a discussion of certain Proposals (as defined below) to reduce the Dividends Received Percentage. LIQUIDATION RIGHTS. In the event of any voluntary or involuntary liquidation, dissolution or winding up of Comerica, the holders of shares of Series E Preferred Stock are entitled to receive out of assets of Comerica available for distribution to stockholders, before any distribution of assets is made to holders of Common Stock or of any other shares of stock of Comerica ranking as to such a distribution junior to the shares of Series E Preferred Stock, a liquidating distribution, in the amount of $50 per share plus accrued and unpaid dividends (whether or not declared) from the immediately preceding Dividend Payment Date (but without any cumulation for unpaid dividends for prior dividend periods on the Series E Preferred Stock). After payment of such a liquidating distribution, the holders of shares of Series E Preferred Stock will not be entitled to any further participation in any distribution of assets by Comerica. VOTING RIGHTS. Holders of the Series E Preferred Stock will have no voting rights except as set forth below or as otherwise from time to time required by law. Whenever dividends on the Series E Preferred Stock shall be unpaid for such number of dividend periods, whether or not consecutive, which shall in the aggregate contain not less than 540 days, the holders of outstanding shares of the Series E Preferred Stock (voting separately as a class with holders of shares of any one or more other series of preferred stock ranking on a parity with the Series E Preferred Stock either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable) will be entitled to vote for the election of two additional directors on the terms set forth below. Such voting rights will continue until all dividends on shares of Series E Preferred Stock shall have been paid in full for at least one year. Upon payment in full of such dividends, such voting rights shall terminate except as expressly provided by law, subject to re-vesting in the event of each and every subsequent default in the payment of dividends as aforesaid. Holders of all series of preferred stock which are granted such voting rights (which rank on a parity with the Series E Preferred Stock) will vote as a class, and each holder of shares of the Series E Preferred Stock will have one vote for each share of stock held and each other series will have such number of votes, if any, for each share of stock held as may be granted to them. In the event the holders of shares of the Series E Preferred Stock are entitled to vote as described in this paragraph, the Comerica Board will automatically be increased by two directors, and the holders of the Series E Preferred Stock will have the exclusive right, as outlined above, to elect two directors at the next annual meeting of stockholders. S-10 11 Upon termination of the right of the holders of the Series E Preferred Stock to vote for directors as discussed in the prior paragraph, the term of office of all directors then in office elected by such holders will terminate immediately. Whenever the term of office of the directors elected by such holders ends and the related special voting rights expire, the number of directors will automatically be decreased to such number as would otherwise prevail. So long as any shares of Series E Preferred Stock remain outstanding, Comerica will not, without the affirmative vote or consent of the holders of at least two-thirds of the shares of the preferred stock outstanding at the time (voting as a class with all other series of preferred stock ranking on a parity with the Series E Preferred Stock either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are then exercisable), given in person or by proxy, either in writing or at a meeting, (i) authorize, create or issue, or increase the authorized or issued amount, of any class or series of stock ranking prior to the Series E Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up; or (ii) amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of Comerica's Restated Certificate of Incorporation, as amended, or of the resolutions contained in the Certificate of Designation designating such Series E Preferred Stock and the powers, preferences and privileges, relative, participating, optional or other special rights and qualifications, limitations and restrictions thereof, so as to materially and adversely affect any right, preference, privilege or voting power of the Series E Preferred Stock or the holders thereof; provided, however, that any increase in the amount of the authorized preferred stock or the creation and issuance of other series of preferred stock, or any increase in the amount of authorized shares of Series E Preferred Stock, in each case ranking on a parity with or junior to the Series E Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. The foregoing voting provisions will not apply if all outstanding shares of Series E Preferred Stock have been redeemed or sufficient funds have been deposited in trust to effect such a redemption which is scheduled to be consummated within three months after the time that such rights would otherwise be exercisable. REDEMPTION. The Series E Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions. Prior to , 2001, the Series E Preferred Stock is not redeemable, except under certain limited circumstances as described below and under "Description of Preferred Stock--Redemption" in the Prospectus. On or after such date, shares of Series E Preferred Stock will be redeemable, in whole or in part, at the option of Comerica, at any time and from time to time upon not less than thirty nor more than sixty days' notice, at $50 per share of Series E Preferred Stock, plus accrued and unpaid dividends (whether or not declared) from the immediately preceding Dividend Payment Date (but without any cumulation for unpaid dividends for prior dividend periods on the Series E Preferred Stock) to the date fixed for redemption, including any changes in dividends payable due to changes in the Dividends Received Percentage and Additional Dividends, if any. Notwithstanding the preceding paragraph, if the Dividends Received Percentage is equal to or less than % and, as a result, the amount of dividends on the Series E Preferred Stock payable on any Dividend Payment Date will be or is adjusted upwards as described above under "Changes in the Dividends Received Percentage," Comerica, at its option, may redeem all, but not less than all, of the outstanding shares of the Series E Preferred Stock, provided, that within sixty days of the date on which an amendment to the Code is enacted which reduces the Dividends Received Percentage to % or less, Comerica sends notice to holders of the Series E Preferred Stock of such redemption. Any redemption of the Series E Preferred Stock pursuant to this paragraph will take place on the date specified in the notice, which will not be less than thirty nor more than sixty days' from the date such notice is sent to holders of the Series E Preferred Stock. Any redemption of the Series E Preferred Stock in accordance with this paragraph will be on notice as aforesaid at the applicable redemption price set forth in the following table, in each case plus accrued and unpaid dividends (whether or not declared) thereon from the immediately preceding Dividend Payment Date (but without any cumulation for unpaid dividends for prior dividend periods on the Series E Preferred Stock) to the date fixed S-11 12 for redemption, including any changes in dividends payable due to changes in the Dividends Received Percentage and Additional Dividends, if any. REDEMPTION PERIOD REDEMPTION PRICE PER SHARE - --------------------------------------- ------------------------------------- Under certain circumstances, Comerica may need the approval of the Federal Reserve Board prior to exercising its right to redeem shares of Series E Preferred Stock. Holders of Series E Preferred Stock will have no right to require redemption of the Series E Preferred Stock. TRANSFER AGENT AND REGISTRAR. Norwest Bank, Minnesota, N.A. will be the transfer agent, registrar, dividend disbursing agent and redemption agent for the Series E Preferred Stock. RECENT TAX PROPOSALS On December 7, 1995, the Clinton Administration released a budget plan that includes certain tax proposals (the "Proposals") that may affect holders of the Series E Preferred Stock. The Proposals have not yet been introduced as legislation and there can be no certainty that they will be enacted into law. Under the Proposals, the Dividends Received Percentage that is currently available to corporate shareholders for certain dividends received from another corporation in which the shareholder owns less than 20% (by vote and value) would be reduced from 70% to 50%. As proposed, this provision would be effective for dividends paid after January 31, 1996. Additionally, under current law, the dividends received deduction is allowed to a corporate shareholder only if the shareholder satisfies a 46-day holding period for the dividend-paying stock (or a 91-day period for certain dividends on preferred stock). The Proposals provide that a taxpayer is not entitled to a dividends received deduction if the taxpayer's holding period for the dividend-paying stock is not satisfied over a period immediately before or immediately after the taxpayer becomes entitled to receive the dividend. To the extent the Dividends Received Percentage is changed, the amount of dividends payable per share will be adjusted. Due to the inherently uncertain nature of proposed changes to the tax law such as the Proposals, there can be no assurance as to whether, or in what form, the Proposals may be enacted into law, or as to the effective dates of any such changes to the law. See "Description of Series E Preferred Stock -- Dividends -- Changes in the Dividends Received Percentage." S-12 13 UNDERWRITERS Under the terms and subject to the conditions contained in an Underwriting Agreement dated the date hereof, the Underwriters named below have severally agreed to purchase, and Comerica has agreed to sell to them, severally, the respective number of shares of Series E Preferred Stock set forth opposite the names of such Underwriters below.
NUMBER NAME OF SHARES ------------------------------------------------------------------- --------- Merrill Lynch, Pierce, Fenner & Smith Incorporated.......................................... Morgan Stanley & Co. Incorporated.................................. --------- Total................................................. 5,000,000 ========
The Underwriting Agreement provides that the obligations of the several Underwriters to pay for and accept delivery of the shares of Series E Preferred Stock are subject to, among other things, the approval of certain legal matters by counsel and to certain other conditions. The Underwriters initially propose to offer part of the shares of Series E Preferred Stock directly to the public at the public offering price set forth on the cover page of this Prospectus Supplement, and part to certain dealers at a price which represents a concession not in excess of $ per share of Series E Preferred Stock under the public offering price. The Underwriters may allow, and such dealers may reallow, a discount not in excess of $ per share to certain other dealers. After the initial offering, the public offering price and other selling terms may from time to time be varied by the Underwriters. The shares of Series E Preferred Stock are new securities with no established trading market. The Underwriters have advised Comerica that they intend to make a market in the shares of Series E Preferred Stock. The Underwriters will have no obligation to make a market in the shares of Series E Preferred Stock, however, and may cease market making activities, if commenced, at any time without notice. No assurance can be given as to the liquidity of the trading market for the shares of Series E Preferred Stock. Comerica has agreed to indemnify the Underwriters against, or contribute to payments that the Underwriters may be required to make in respect of, certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Underwriters have provided, and may from time to time continue to provide, investment banking and other financial services for Comerica and its affiliates. LEGAL OPINIONS The validity of the Series E Preferred Stock will be passed upon for Comerica by Bodman, Longley & Dahling LLP, Detroit, Michigan, and for the Underwriters by Skadden, Arps, Slate, Meagher & Flom, New York, New York. S-13 14 PROSPECTUS COMERICA LOGO COMERICA INCORPORATED PREFERRED STOCK Comerica Incorporated ("Comerica"), directly or through agents designated from time to time, or through dealers or underwriters also to be designated, may offer from time to time in one or more series shares of its preferred stock (the "Preferred Stock"). The Preferred Stock may be offered, in separate series in amounts, at prices and on terms determined at the time of sale and set forth in one or more supplements to this Prospectus (together, the "Prospectus Supplement"). Pursuant to the terms of the Registration Statement of which this Prospectus forms a part, Comerica's unsecured subordinated debt securities (the "Debt Securities" and, together with the Preferred Stock, the "Securities") may also be offered under such Registration Statement. In no event will the aggregate initial offering price of the Preferred Stock and Debt Securities issued under such Registration Statement exceed $600,000,000 (or its equivalent based upon the applicable exchange rate at the time of the offering). The Prospectus Supplement will also include the specific designation, the aggregate number of shares offered, the dividend rate or method of calculation, the dividend period and dividend payment dates, whether such dividends will be cumulative or noncumulative, the liquidation preference and any terms for redemption at the option of the holder or Comerica. This Prospectus may not be used to consummate sales of the Preferred Stock unless accompanied by a Prospectus Supplement. The delivery of this Prospectus together with a Prospectus Supplement relating to particular Preferred Stock shall not constitute an offer in any jurisdiction of any of the other Preferred Stock covered by this Prospectus. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. If an agent of Comerica or a dealer or underwriter is involved in the sale of the Preferred Stock in respect of which this Prospectus is being delivered, the agent's commission, dealer's purchase price, or underwriter's discount will be set forth in, or may be calculated from, the Prospectus Supplement and the net proceeds to Comerica from such sale will be the purchase price of such Preferred Stock less such commission in the case of an agent, the purchase price of such Preferred Stock in the case of a dealer or the public offering price less such discount in the case of an underwriter, and less, in each case, the other attributable issuance expenses. The aggregate proceeds to Comerica from all the Preferred Stock will be the purchase price of the Preferred Stock sold less the aggregate of agents' commissions and underwriters' discounts and other expenses of issuance and distribution. See "Plan of Distribution" for possible indemnification arrangements for the agents, dealers and underwriters. The date of this Prospectus is June 12, 1996 15 AVAILABLE INFORMATION Comerica is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith Comerica files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material also can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, material filed by Comerica can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Comerica has filed with the Commission a Registration Statement on Form S-3 (together with any amendments thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does not contain all the information set forth in the Registration Statement and the exhibits thereto, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to said Registration Statement. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed by Comerica with the Commission pursuant to the Exchange Act, are incorporated by reference in this Prospectus and shall be deemed to be a part hereof: 1. Comerica's Annual Report on Form 10-K for the fiscal year ended December 31, 1995; 2. Comerica's Quarterly Report on Form 10-Q for the period ended March 31, 1996; and 3. Comerica's Registration Statement on Form 8-A dated March 4, 1991, as amended by an amendment on Form 8 dated November 1, 1991. All documents filed by Comerica with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering hereunder shall be deemed to be incorporated by reference in this Prospectus and to be made a part hereof from their respective dates of filing. The documents incorporated by reference or deemed to be incorporated by reference herein are sometimes hereinafter called the "Incorporated Documents". Any statement contained herein or in any Incorporated Documents shall be deemed to be modified or superseded for all purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any subsequently filed Incorporated Document modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The information relating to Comerica contained in this Prospectus summarizes, is based upon, or refers to, information and financial statements contained in one or more of the documents incorporated by reference herein; accordingly, such information contained herein is qualified in its entirety by reference to such documents and should be read in conjunction therewith. Comerica hereby undertakes to provide without charge to each person, including any beneficial owner, to whom this Prospectus has been delivered, upon the written or oral request of any such person, a copy of any or all of the Incorporated Documents, except exhibits that are specifically incorporated by reference into the information that this Prospectus incorporates. Requests for such copies should be directed to: Comerica Incorporated, 500 Woodward Avenue, Detroit, Michigan 48226: Attention: Mark W. Yonkman, Vice President (telephone (313) 222-3432). 2 16 COMERICA Comerica Incorporated ("Comerica" or the "Company") is a registered bank holding company incorporated under the laws of the State of Delaware, headquartered in Detroit, Michigan, and was formed in 1973 to acquire the outstanding common stock of Comerica Bank (formerly Comerica Bank-Detroit), a Michigan banking corporation ("Comerica Bank"). As of March 31, 1996, Comerica owned directly or indirectly all the outstanding common stock (except for directors' qualifying shares, where applicable) of eight banking and thirty-nine non-banking subsidiaries. At March 31, 1996, Comerica had total assets of approximately $35.0 billion, total deposits of approximately $22.9 billion, total loans (net of unearned income) of approximately $25.5 billion, and shareholders' equity of approximately $2.7 billion. At March 31, 1996, Comerica was the largest bank holding company headquartered in Michigan in terms of both total assets and total deposits. Comerica has strategically focused its operations on three major lines of business: the Business Bank, the Individual Bank and the Investment Bank. The Business Bank is comprised of middle market lending, large corporate banking, international financial services and institutional trust. This line of business meets the needs of medium-size businesses, multinational corporations, and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, corporate and institutional trust, international trade finance, letters of credit and foreign exchange management services. The Individual Bank includes consumer lending, consumer deposit gathering, mortgage loan origination and servicing, small business banking, and private banking. This line of business offers a variety of consumer products, including deposit accounts, direct and indirect installment loans, credit cards, home equity lines of credit and residential mortgage loans. In addition, a full range of financial services is provided to local companies with annual sales under $5 million, area merchants and municipalities. Private lending and personal trust services are also provided to meet the personal financial needs of affluent individuals (as defined by individual net income or wealth). The Investment Bank is responsible for the sales of mutual fund and annuity products, as well as life, disability, and long-term care insurance products. This line of business also offers capital market products, manages loan syndications and provides investment management and advisory services, investment banking, and full and discount securities brokerage services. Comerica has strategically focused its lines of business in each of Comerica's four primary geographic markets: Michigan, Texas, California and Florida. Comerica pursues all three lines of business in Michigan, Texas and California, and has focused on the Individual Bank in Florida. Comerica's executive offices are located at Comerica Tower at Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226 and its telephone number is (313) 222-4000. REGULATORY MATTERS General. Comerica is a bank holding company subject to supervision and regulation by the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") under the Bank Holding Company Act of 1956, as amended (the "BHCA"). As a bank holding company, Comerica's activities and those of its banking and nonbanking subsidiaries are limited to the business of banking and activities closely related or incidental to banking, and Comerica may not directly or indirectly acquire the ownership or control of more than five percent of any class of voting shares or substantially all of the assets of any company, including a bank, without the prior approval of the Federal Reserve Board. Comerica Bank is chartered by the State of Michigan and is supervised and regulated by the Financial Institutions Bureau of the State of Michigan. Comerica Bank-Texas is chartered by the State of Texas and is supervised and regulated by the Texas Department of Banking. Comerica Bank-Midwest, N.A. and Comerica Bank-Ann Arbor, N.A. are chartered under federal law and subject to supervision and regulation by the Office of the Comptroller of the Currency (the "OCC"). Comerica Bank-California is chartered and regulated by 3 17 the State of California. Comerica Bank & Trust, FSB is chartered under federal law and subject to supervision and regulation by the Office of Thrift Supervision (the "OTS"). Comerica Bank-Illinois is chartered by the State of Illinois and is regulated by the State of Illinois Commissioner of Banks and Trust Companies. Comerica Bank and Comerica Bank-Illinois are members of the Federal Reserve System. State member banks are also regulated by the local Federal Reserve Bank and state non-member banks are also regulated by the Federal Deposit Insurance Corporation (the "FDIC"). Comerica Bank-Texas and Comerica Bank-California are not members of the Federal Reserve System, and as such, are also regulated by the FDIC. The FDIC also has back-up enforcement authority with respect to the above banking subsidiaries. Comerica's banking subsidiaries are also subject to requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be made and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered. Various consumer laws and regulations also affect the operations of Comerica's banking subsidiaries. Supervision and regulation of bank holding companies and their subsidiaries is intended primarily for the protection of depositors, the deposit insurance funds of the FDIC and the banking system as a whole, not for the protection of bank holding company shareholders or creditors. The following description summarizes some of the laws to which Comerica and its banking subsidiaries are subject. To the extent statutory or regulatory provisions or proposals are described, the description is qualified in its entirety by reference to the particular statutory or regulatory provisions or proposals. Regulatory Restrictions on Dividends. It is the policy of the Federal Reserve Board that bank holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the organization's expected future needs and financial condition. The policy provides that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company's ability to serve as a source of strength to its banking subsidiaries. Principal sources of revenues for Comerica are dividends received from its banks and other subsidiaries. Each state bank that is a member of the Federal Reserve System and each national bank is limited in the amount of dividends it may declare. Two different calculations are performed to measure the amount of dividends that may be paid: a recent earnings test and a cumulative net profit test. Under the recent earnings test, a dividend may not be paid if the total of all dividends declared by the bank in any calendar year is in excess of the current year's net profits combined with the retained net profits of the two preceding years unless the bank obtains the approval of the appropriate regulatory agency. Under the cumulative net undivided profits test, a dividend may not be paid in excess of a bank's cumulative net profits after deducting bad debts in excess of the reserve for loan losses. Comerica's state bank subsidiaries that are not members of the Federal Reserve System are also subject to limitations under state law regarding the amount of earnings that may be paid out as dividends. In addition, the OTS also limits the amount of earnings that may be paid out as dividends. Under the foregoing dividend restrictions, at January 1, 1996 Comerica's banking subsidiaries, without obtaining governmental approvals, could declare aggregate dividends of approximately $279 million from retained net profits of the preceding two years, plus an amount approximately equal to the net profits (as measured under current regulations), if any, earned for the period from January 1, 1996 through the date of declaration. Dividends paid to Comerica by its subsidiary banks amounted to $184 million in 1995 and $293 million in 1994. In addition, the federal regulatory agencies are authorized to prohibit a banking institution or bank holding company from engaging in an unsafe or unsound banking practice. Depending upon the circumstances, the agencies could take the position that paying a dividend would constitute an unsafe or unsound banking practice. Holding Company Structure. Comerica's banking subsidiaries are subject to restrictions under federal law which limit certain transactions by each of them with Comerica and its nonbanking subsidiaries, including loans, other extensions of credit, investments or asset purchases. Such transactions by any banking subsidiary with Comerica or any of its nonbanking subsidiaries are limited in amount to ten percent of such banking 4 18 subsidiary's capital and surplus and, with respect to Comerica and all of its nonbanking subsidiaries together, to an aggregate of twenty percent of such banking subsidiary's capital and surplus. Furthermore, such loans and extensions of credit, as well as certain other transactions, are required to be secured in specified amounts. These and certain other transactions, including any payment of money to Comerica, must be on terms and conditions that are or in good faith would be offered to nonaffiliated companies. Because Comerica is a legal entity separate and distinct from its subsidiaries, its right to participate in the distribution of assets of any subsidiary upon the subsidiary's liquidation or reorganization will be subject to the prior claims of the subsidiary's creditors. In the event of a liquidation or other resolution of an insured depository institution, the claims of depositors and other general or subordinated creditors are entitled to a priority of payment over the claims of holders of any obligation of the institution to its shareholders, including any depository institution holding company (such as Comerica) or any shareholder or creditor thereof. Cross-Guaranty and Holding Company Liability. A depository institution insured by the FDIC can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonly controlled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to a commonly controlled depository institution in danger of default. Each of Comerica's banking subsidiaries is a commonly controlled depository institution for this purpose. Cross-guarantee liability may result in the ultimate failure or insolvency of other insured depository institutions in a holding company structure. Any obligation or liability owed by a banking subsidiary to its parent company or any of the banking subsidiary's other affiliates is subordinate to the banking subsidiary's cross-guarantee liability. Under Federal Reserve Board policy, a bank holding company is expected to act as a source of financial strength to each of its banking subsidiaries and commit resources to their support. Such support may be required at times when, absent this Federal Reserve Board policy, a holding company may not be inclined to provide it. As discussed below under "Prompt Corrective Action," a bank holding company in certain circumstances could be required to guarantee the capital plan of an undercapitalized banking subsidiary. In the event of a bank holding company's bankruptcy under Chapter 11 of the U.S. Bankruptcy Code, the trustee will be deemed to have assumed and is required to cure immediately any deficit under any commitment by the debtor holding company to any of the federal banking agencies to maintain the capital of an insured depository institution, and any claim for breach of such obligation will generally have priority over most other unsecured claims. Prompt Corrective Action. Under the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), the federal banking agencies must take prompt supervisory and regulatory actions against undercapitalized depository institutions. Depository institutions are assigned one of five capital categories: "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," and "critically undercapitalized," and subjected to differential regulation corresponding to the capital category within which the institution falls. Under certain circumstances, a well capitalized, adequately capitalized or undercapitalized institution may be treated as if the institution were in the next lower capital category. A depository institution is generally prohibited from making capital distributions (including paying dividends) or paying management fees to a holding company if the institution would thereafter be undercapitalized. Adequately capitalized institutions cannot accept, renew or roll over brokered deposits except with a waiver from the FDIC, and are subject to restrictions on the interest rates that can be paid on such deposits. Undercapitalized institutions may not accept, renew, or roll over brokered deposits. The banking regulatory agencies are permitted or, in certain cases, required to take certain actions with respect to institutions falling within one of the three undercapitalized categories. Depending on the level of an institution's capital, the agency's corrective powers include, among other things: prohibiting the payment of principal and interest on subordinated debt; prohibiting the holding company from making distributions without prior regulatory approval; placing limits on asset growth and restrictions on activities; placing additional restrictions on transactions with affiliates; restricting the interest rate the institution may pay on deposits; prohibiting the institution from accepting deposits from correspondent banks; and in the most severe cases, appointing a conservator or receiver for the institution. A banking institution that is undercapitalized is required to submit a capital restoration plan, and such a plan will not be accepted unless, among other things, 5 19 the banking institution's holding company guarantees the plan up to a certain specified amount. Any such guarantee from a depository institution's holding company is entitled to a priority of payment in bankruptcy. As of December 31, 1995, all of Comerica's banking subsidiaries exceeded the required capital ratios for classification as "well capitalized." See "Capital Adequacy." Capital Adequacy. The Federal Reserve Board has adopted risk-based capital guidelines for bank holding companies. The minimum ratio of total capital to risk-weighted assets (which are the credit risk equivalents of balance sheet assets and certain off balance sheet items such as standby letters of credit) is 8.00 percent. At least half of the total capital must be composed of common stockholders' equity (including retained earnings), qualifying non-cumulative perpetual preferred stock (and, for bank holding companies only, a limited amount of qualifying cumulative perpetual preferred stock), and minority interests in the equity accounts of consolidated subsidiaries, less goodwill, other disallowed intangibles and disallowed deferred tax assets, among other items ("Tier 1 capital"). The remainder may consist of a limited amount of subordinated debt, other perpetual preferred stock, hybrid capital instruments, mandatory convertible debt securities that meet certain requirements, as well as a limited amount of reserves for loan losses ("Tier 2 capital"). The Federal Reserve Board has also adopted a minimum leverage ratio for bank holding companies, requiring Tier 1 capital of at least 3.00 percent of average total consolidated assets. The OCC, the FDIC, the Federal Reserve Board, and the OTS have also established risk-based and leverage capital guidelines for banking institutions. These regulations are generally similar to those established by the Federal Reserve Board for bank holding companies. The federal banking agencies' risk-based and leverage ratios are minimum supervisory ratios generally applicable to banking organizations that meet certain specified criteria, assuming that they have the highest regulatory rating. Banking organizations not meeting these criteria are expected to operate with capital positions well above the minimum ratios. The federal bank regulatory agencies may set capital requirements for a particular banking organization that are higher than the minimum ratios when circumstances warrant. Federal Reserve Board guidelines also provide that banking organizations experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels, without significant reliance on intangible assets. In addition, the regulations of the Federal Reserve Board provide that concentration of credit risk and certain risks arising from nontraditional activities, as well as an institution's ability to manage these risks, are important factors to be taken into account by regulatory agencies in assessing an organization's overall capital adequacy. The Federal Reserve Board and the other federal banking agencies recently adopted amendments to their risk-based capital regulations to provide for the consideration of interest rate risk in the agencies' determination of a banking institution's capital adequacy. The amendments require such institutions to effectively measure and monitor their interest rate risk and to maintain capital adequate for that risk. The agencies have also issued for comment a joint policy statement that describes a framework that may be used by the agencies to measure and monitor an institution's level of interest rate risk in the assessment of a banking institution's capital adequacy. The agencies plan at some future date to propose the establishment of an explicit minimum capital requirement to account for interest rate risk. As discussed below under "Enforcement Powers of the Federal Banking Agencies," failure to meet the minimum regulatory capital requirements could subject a banking institution to a variety of enforcement remedies available to federal regulatory authorities, including, in the most severe cases, the termination of deposit insurance by the FDIC and placing the institution into conservatorship or receivership. As of December 31, 1995, Comerica exceeded the minimum ratio of total capital to risk-weighted assets and the minimum leverage ratio for bank holding companies. Enforcement Powers of the Federal Banking Agencies. The Federal Reserve Board and the other federal banking agencies have broad enforcement powers, including the power to terminate deposit insurance, impose substantial fines and other civil and criminal penalties and appoint a conservator or receiver. Failure to comply with applicable laws, regulations and supervisory agreements could subject Comerica or its banking subsidiaries, as well as officers, directors and other institution-affiliated parties of these organizations, to administrative sanctions and potentially substantial civil money penalties. In addition to the grounds discussed 6 20 under "Prompt Corrective Action," the appropriate federal banking agency may appoint the FDIC as conservator or receiver for a banking institution (or the FDIC may appoint itself, under certain circumstances) if any one or more of a number of circumstances exist, including, without limitation, the fact that the banking institution is undercapitalized and has no reasonable prospect of becoming adequately capitalized; fails to become adequately capitalized when required to do so; fails to submit a timely and acceptable capital restoration plan; or materially fails to implement an accepted capital restoration plan. FDIC Insurance Assessments. The deposits of all the banking subsidiaries are insured by the Bank Insurance Fund (the "BIF") of the FDIC to the extent provided by law, except that the deposits of Comerica Bank & Trust, FSB and certain deposits of other banking subsidiaries that were acquired from insolvent savings associations are insured by the FDIC's Savings Association Insurance Fund (the "SAIF"). The FDIC has adopted a risk-based assessment system under which the assessment rate for an insured depository institution varies according to the level of risk involved in its activities. Under this risk-based insurance system, effective January 1, 1996, the rate assessed for each of Comerica's BIF-insured banking subsidiaries decreased from 4 cents per $100 of eligible deposits to zero, subject to a minimum assessment of $2,000 per institution per year. Most thrift institutions are insured by the SAIF of the FDIC and are currently assessed deposit insurance premiums higher than those assessed against most BIF institutions. The deposits held by Comerica's federal savings bank in Florida, as well as SAIF-insured deposits that were acquired from insolvent savings associations by Comerica's subsidiary banks, are subject to this higher premium. In response to concerns that this insurance premium disparity would have a negative effect on SAIF-insured institutions and the SAIF, Congress recently passed legislation that would have, among other things, eliminated the deposit insurance premium disparity and utilized BIF assessments to help fund debt service on certain Financing Corporation (FICO) bonds, which could have resulted in higher insurance premiums for BIF-insured institutions. This legislation was vetoed by President Clinton in December 1995, but could reappear in subsequent legislation. In addition, other bills to eliminate the BIF-SAIF assessment disparity have been introduced in Congress. It cannot be predicted whether, when or in what form any such legislation will be enacted, or what effect such legislation will have on Comerica's banking subsidiaries. Control Acquisitions. The Change in Bank Control Act (the "CBCA") prohibits a person or group of persons from acquiring "control" of a bank holding company unless the Federal Reserve Board has been notified and has not objected to the transaction. Under a rebuttable presumption established by the Federal Reserve Board, the acquisition of 10% or more of a class of voting stock of a bank holding company with a class of securities registered under Section 12 of the Exchange Act, such as Comerica, would, under the circumstances set forth in the presumption, constitute acquisition of control of Comerica. In addition, any company is required to obtain the approval of the Federal Reserve Board under the BHCA before acquiring 25% (5% in the case of an acquiror that is a bank holding company) or more of the outstanding Common Stock of Comerica, or otherwise obtaining control or a "controlling influence" over Comerica. Effective September 24, 1995, the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 has permitted an adequately capitalized and adequately managed bank holding company, with Federal Reserve Board approval, to acquire banking institutions located in states other than the bank holding company's home state without regard to whether the transaction is prohibited under state law. In addition, effective June 1, 1997, national banks and state banks with different home states will be permitted to merge across state lines, with the approval of the appropriate federal banking agency, unless the home state of a participating banking institution passes legislation prior to that date that expressly prohibits interstate mergers. Of Comerica's primary markets, Texas is the only state to date to have opted out of the interstate branching provisions. Further, such interstate mergers may be effected prior to June 1, 1997 so long as the home state of each participating banking institution has passed qualifying legislation that expressly permits such transactions. Michigan, California, and Illinois have all passed early opt-in legislation. The Michigan and California legislation is already effective. The Illinois legislation will be effective as of January 6, 1997. 7 21 Future Legislation. Various legislation, including proposals to overhaul the bank regulatory system, expand the powers of banking institutions and bank holding companies and limit the investments that a depository institution may make with insured funds, is from time to time introduced in Congress. Such legislation may change banking statutes and the operating environment of Comerica and its banking subsidiaries in substantial and unpredictable ways. Comerica cannot determine the ultimate effect that potential legislation, if enacted, or implementing regulations, would have upon the financial condition or results of operations of Comerica or its subsidiaries. USE OF PROCEEDS Except as otherwise specified in a Prospectus Supplement, the net proceeds from the sale of the Preferred Stock offered by this Prospectus will be applied to Comerica's general funds to be utilized for such corporate purposes as may be determined by management, which may include investments in, and extensions of credit to, existing and future subsidiaries, the funding of acquisitions of banking and nonbanking institutions (including the repurchase of issued and outstanding shares of common stock of Comerica which may be used to fund part or all of the acquisition consideration) and other general corporate purposes. Except as otherwise indicated in a Prospectus Supplement, specific allocations of the proceeds to such purposes will not have been made at the date of the applicable Prospectus Supplement. The precise amount and timing of investments in, and extensions of credit to, subsidiaries will depend upon their funding requirements and the availability of other funds to Comerica and its subsidiaries. Based upon the anticipated future financing requirements of Comerica and its subsidiaries, Comerica expects that it will, from time to time, engage in additional financings of a character and in an amount to be determined. CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES INCLUDING PREFERRED STOCK DIVIDENDS Comerica's ratios of earnings to combined fixed charges and preferred stock dividends are set forth below for the periods indicated:
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, ------------ ------------------------------------ 1996 1995 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- ---- ---- Consolidated ratio of earnings to combined fixed charges and preferred stock dividends (including interest on deposits)........................... 1.56x 1.49x 1.47x 1.64x 1.70x 1.38x 1.30x Consolidated ratio of earnings to combined fixed charges and preferred stock dividends (excluding interest on deposits)........................... 2.30x 2.09x 2.03x 2.61x 3.94x 3.20x 2.75x
The ratio of earnings to combined fixed charges and preferred stock dividends is computed by dividing income before income taxes and fixed charges by fixed charges and pre-tax earnings required to cover preferred stock dividends. Fixed charges are defined as interest expense and the portion of net rental expense estimated to be representative of the interest factor. DESCRIPTION OF COMERICA CAPITAL STOCK The following description contains a summary of all of the material features of the capital stock of Comerica but does not purport to be complete and is subject to and qualified in its entirety by reference to the Comerica Restated Certificate of Incorporation, including the Certificate of Designation for the Comerica Series C Preferred Stock (the "Comerica Charter"), both of which are filed as exhibits to the Registration Statement of which this Prospectus forms a part and are incorporated herein by reference. 8 22 General. Comerica's total authorized capital stock currently consists of (i) 10,000,000 shares of preferred stock, without par value (the "Preferred Stock"), and (ii) 250,000,000 shares of common stock, with a par value of $5.00 per share (the "Common Stock"). Preferred Stock. For a general description of the Preferred Stock being offered pursuant to this Prospectus, see "Description of Preferred Stock" below. Of the 10,000,000 shares of Preferred Stock authorized, 500,000 shares with no stated value have been designated as Series C Participating Preferred Stock (the "Comerica Series C Preferred Stock"). All shares of two former series of Preferred Stock, designated Adjustable Rate Cumulative Preferred Stock, Series A and Series B Preferred Stock, have been redeemed and restored to the status of authorized but unissued Preferred Stock. All shares designated as Comerica Series C Preferred Stock have been reserved for issuance in connection with the Comerica Rights Plan. For a description of the Comerica Rights and the Comerica Rights Plan, see "The Comerica Rights Plan" below. The Comerica Rights are not currently exercisable and no shares of Comerica Series C Preferred Stock are outstanding. Comerica Series C Preferred Stock. The Comerica Series C Preferred Stock is issuable upon exercise of the Comerica Rights. The Comerica Rights are not currently exercisable and no shares of Comerica Series C Preferred Stock are outstanding. For a description of the Comerica Rights, see "The Comerica Rights Plan" below. The Comerica Series C Preferred Stock carries a quarterly dividend rate equal (rounded to the nearest cent) to the greater of (a) $10 or (b) a multiple (the "Comerica Multiple") times the aggregate per share amount of all cash dividends and the Comerica Multiple times the aggregate per share amount of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock, declared on the Common Stock during the period specified. Dividends on the Comerica Series C Preferred Stock are cumulative. The Comerica Multiple, which is subject to adjustment upon the occurrence of stock dividends on, or splits or combinations of, outstanding Common Stock is 450. Unless all dividends on the Comerica Series C Preferred Stock have been paid in full, no dividend may be declared or paid on the Common Stock. If dividends shall be in arrears in an amount equal to six quarterly dividends, the holders of the Comerica Series C Preferred Stock shall have the right, voting as a class, to elect two directors. Each share of Comerica Series C Preferred Stock is entitled to vote on all matters submitted to a vote of the shareholders of Comerica, the number of votes being subject to adjustment under the same circumstances which require an adjustment of the Comerica Multiple but may not have more than one vote per share. Except as otherwise required by the Comerica Charter or by law, the holders of shares of Comerica Series C Preferred Stock and the holders of Common Stock vote together as one class. Upon any liquidation, dissolution or winding up of Comerica, each share of Comerica Series C Preferred Stock is entitled, prior to any payment or distribution in respect of the Common Stock, to a liquidation preference equal to $100 plus any accrued and unpaid dividends. If sufficient assets of Comerica remain after payment of the liquidation preference in respect of the Comerica Series C Preferred Stock and certain payments to the holders of Common Stock, the Comerica Series C Preferred Stock participates with the Common Stock in respect of the remaining assets of Comerica based on a ratio. The Series C Preferred Stock shall rank junior as to the payment of dividends and as regards liquidation, dissolution and winding up and shall rank junior to all other series of the Preferred Stock as to the payment of dividends and as regards liquidation, dissolution and winding up, unless the terms of any such series shall provide otherwise. If Comerica enters into any consolidation, merger, combination or other transaction in which Common Stock is exchanged for other stock, securities, cash or other property, then the shares of Comerica Series C Preferred Stock will at the same time be similarly exchanged in an amount per share, subject to certain adjustments, equal to the Comerica Multiple times the aggregate amount of stock, security, cash or other property into which or for which each share of Common Stock is changed or exchanged. Common Stock. Subject to the rights of any outstanding shares of Preferred Stock, the holders of Common Stock are entitled to receive such dividends as may from time to time be declared by the Comerica 9 23 Board of Directors (the "Comerica Board"). They are entitled to one vote per share of Common Stock on every issue submitted to them as Comerica shareholders at a meeting of shareholders or otherwise. In the event of liquidation they are entitled, after payment in full of the liquidation preference of any outstanding Preferred Stock and subject to the right of the holders of Comerica Series C Preferred Stock to participate in certain distributions, to share ratably in all assets of Comerica available for distribution to holders of Common Stock. Holders of shares of Common Stock do not have preemptive or cumulative voting rights. All shares of Common Stock now issued and outstanding are fully paid and nonassessable. As of April 30, 1996, 116,667,000 shares of Common Stock were issued and outstanding. The registrar and transfer agent for the Common Stock is Norwest Bank, Minnesota, N.A. THE COMERICA RIGHTS PLAN On January 26, 1988, the Comerica Board declared a dividend distribution of one right (each, a "Comerica Right") for each outstanding share of Comerica Common Stock to shareholders of record at the close of business on February 8, 1988. Each Comerica Right entitles the registered holder to purchase from Comerica a unit consisting of 1/100th of one share (a "Unit") of Comerica Series C Preferred Stock at a Purchase Price (the "Comerica Purchase Price") of $175 in cash per Unit, subject to adjustment. The number of Comerica Rights per share of Comerica Common Stock is subject to adjustment in certain events described below. Each share of Comerica Common Stock currently carries 2/9th of one Comerica Right. The description and terms of the Comerica Rights are set forth in a Rights Agreement (the "Comerica Rights Agreement"), dated as of January 28, 1988, between Comerica and Comerica Bank, as Rights Agent (the "Comerica Rights Agent"). At the present time, the Comerica Rights attach to all Comerica Common Stock certificates representing outstanding shares, and no separate Comerica Rights certificates have been distributed. The Comerica Rights will separate from the Comerica Common Stock and a "Comerica Distribution Date" will occur upon the earlier of (i) ten days following a public announcement that a person or group of affiliated or associated persons (a "Comerica Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of 20 percent or more of the outstanding shares of Comerica Common Stock (the "Comerica Stock Acquisition Date"), or (ii) ten business days following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 25% or more of such outstanding shares of Comerica Common Stock. Until a Comerica Distribution Date, (i) the Comerica Rights will be evidenced by the Comerica Common Stock certificates and will be transferred with and only with such Comerica Common Stock certificates, (ii) new Comerica Common Stock certificates issued after February 8, 1988 will contain a notation incorporating the Comerica Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for Comerica Common Stock outstanding will also constitute the transfer of the Comerica Rights associated with the Comerica Common Stock represented by such certificates. The Comerica Rights are not exercisable until the Comerica Distribution Date and will expire at the earlier of (i) the close of business on February 8, 1998, and (ii) the date which is 24 months after the first date upon which Comerica can generally be acquired by bank holding companies, and Comerica is generally permitted to acquire banks, principally located in at least 15 of the 20 states listed on Exhibit D to the Comerica Rights Agreement, unless earlier redeemed by Comerica as described below. Pursuant to the Comerica Rights Agreement, Comerica reserves the right to require prior to the occurrence of a Comerica Triggering Event (as defined below) that, upon any exercise of Comerica Rights, a number of Comerica Rights be exercised so that only whole shares of Comerica Series C Preferred Stock will be issued. As soon as practicable after a Comerica Distribution Date, Comerica Rights certificates will be mailed to holders of record of the Comerica Common Stock as of the close of business on the Comerica Distribution Date and, thereafter, the separate Comerica Rights certificates alone will represent the Comerica Rights. Except as otherwise determined by the Comerica Board and except in connection with the shares of Comerica Common Stock issued upon the exercise of employee stock options or the conversion of convertible securities, only shares of Comerica Common Stock issued prior to the Comerica Distribution Date will be issued with 10 24 Comerica Rights. The number of Comerica Rights per share of Comerica Common Stock is subject to adjustment upon the occurrence of stock dividends on, or splits or combinations of, outstanding Comerica Common Stock. Currently, each share of Comerica Common Stock currently carries 2/9th of one Comerica Right. In the event that, at any time following the Comerica Distribution Date, (i) a person becomes the beneficial owner of more than 25 percent of the then outstanding shares of Comerica Common Stock except pursuant to an offer for all outstanding shares of Comerica Common Stock which the independent directors serving on the Comerica Board determine to be fair to, and otherwise in the best interests of, Comerica shareholders, or (ii) Comerica is the surviving corporation in a merger with a Comerica Acquiring Person and the Comerica Common Stock is not changed or exchanged, each holder of a Comerica Right will thereafter have the right to receive, upon exercise, Comerica Common Stock (or, in certain circumstances, cash, property, or other securities of Comerica) having a value equal to two times the exercise price of the Comerica Right. Notwithstanding the foregoing, following the occurrence of any of the events set forth in this paragraph, all Comerica Rights that are, or (under certain circumstances specified in the Comerica Rights Agreement) were, beneficially owned by any Comerica Acquiring Person will be null and void. However, Comerica Rights are not exercisable following the occurrence of either of the events set forth above until such time as the Comerica Rights are no longer redeemable by Comerica as set forth below. In the event that, at any time following the Comerica Stock Acquisition Date, (i) Comerica is acquired in a merger or other business combination transaction in which Comerica is not the surviving corporation or Comerica Common Stock is changed or exchanged (other than a merger which follows an offer described in clause (i) of the preceding paragraph), or (ii) 50 percent or more of Comerica's assets or earning power is sold or transferred, each holder of a Comerica Right (except Comerica Rights which previously have been voided as set forth above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Comerica Right. Each of the events set forth in this paragraph and in the preceding paragraph is referred to as a "Comerica Triggering Event." The Comerica Purchase Price payable, and the number of Units of Comerica Series C Preferred Stock or other securities or property issuable, upon exercise of the Comerica Rights are subject to adjustment in certain events. At any time until ten days following the Comerica Stock Acquisition Date, Comerica may redeem the Comerica Rights in whole, but not in part, at a price of $0.05 per Comerica Right, subject to adjustment where appropriate (payable in cash, stock, or other consideration deemed appropriate by the Comerica Board). After the redemption period has expired, Comerica's right of redemption may be reinstated if a Comerica Acquiring Person reduces his or her beneficial ownership to 10 percent or less of the outstanding shares of Comerica Common Stock in a transaction or series of transactions not involving Comerica. Immediately upon the action of the Comerica Board ordering redemption of the Comerica Rights, the Comerica Rights will terminate and the only right of the holders of Comerica Rights will be to receive the $0.05 redemption price. Until a Comerica Right is exercised, the holder thereof, as such, will have no rights as a holder of Comerica shares, including, without limitation, the right to vote or to receive dividends. Other than those provisions relating to the principal economic terms of the Comerica Rights, any of the provisions of the Comerica Rights Agreement (including the provisions relating to the termination of such agreement) may be amended by the Comerica Board prior to the Comerica Distribution Date. After the Comerica Distribution Date, the provisions of the Comerica Rights Agreement may be amended by the Comerica Board in order to cure any ambiguity, to make changes which do not adversely affect the interests of holders of Comerica Rights (excluding the interests of any Comerica Acquiring Person), or to shorten or lengthen any time period under the Comerica Rights Agreement; provided, however, that no amendment to adjust the time period governing redemption shall be made at such time as the Comerica Rights are not redeemable. The Comerica Rights have certain anti-takeover effects. The Comerica Rights will cause substantial dilution to a person or group that attempts to acquire Comerica on terms not approved by the Comerica 11 25 Board, unless the offer is conditional on a substantial number of Comerica Rights being acquired. The Comerica Rights, however, should not affect any prospective offeror willing to make an offer at a fair price and otherwise in the best interests of Comerica and its shareholders as determined by a majority of the independent directors on the Comerica Board, or willing to negotiate with the Comerica Board. The Comerica Rights should not interfere with any merger or other business combination approved by the Comerica Board since the Comerica Board may, at its option, at any time until ten days following the Comerica Stock Acquisition Date redeem all but not less than all of the then outstanding Comerica Rights at the $0.05 redemption price. The foregoing description of the Comerica Rights does not purport to be complete and is qualified in its entirety by reference to the Comerica Rights Agreement, as amended, which is incorporated by reference herein. See "Incorporation of Certain Documents by Reference" above. DESCRIPTION OF PREFERRED STOCK General. Comerica is authorized by its Restated Certificate of Incorporation, as amended, to issue 10,000,000 shares of Preferred Stock, without par value, which may be issued in one or more series with such voting powers, full or limited, but not to exceed one vote per share, or without voting powers, and with such designations, preferences and privileges, relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issue thereof adopted by the Comerica Board and the Preferred Stock Designation Committee thereof (the "Stock Committee"). Of the 10,000,000 shares of Preferred Stock authorized, 500,000 shares with no stated value have been designated as Series C Participating Preferred Stock. See "Description of Comerica Capital Stock -- Comerica Series C Preferred Stock", above. The following description of the terms of the Preferred Stock being offered pursuant to this Prospectus sets forth certain general terms and provisions of the Preferred Stock to which any Prospectus Supplement may relate. Certain terms of any series of Preferred Stock offered by any Prospectus Supplement will be described in the Prospectus Supplement relating to such series of Preferred Stock. If so indicated in the Prospectus Supplement, the terms of any such series may differ from the terms set forth below. The Stock Committee is authorized to establish and designate series and to fix the number of shares and the relative rights, preferences and limitations of the respective series of Preferred Stock (other than voting rights), all of which terms and conditions shall be set forth in the Prospectus Supplement accompanying this Prospectus relating to the particular series of Preferred Stock offered thereby. The terms of particular series of Preferred Stock may differ, among other things, in (a) the number of shares to constitute such series, (b) the dividend rate (or the method of calculation thereof) on the shares of such series and whether such dividends will be cumulative or noncumulative, (c) whether or not the shares of the series will be redeemable or convertible at the option of the holder or Comerica and the terms thereof, (d) the amount per share payable on the shares of the series in case of liquidation, dissolution or winding up of Comerica and (e) the other rights and privileges and any qualifications, limitations or restrictions of such rights or privileges of such series. Unless stated otherwise in the applicable Prospectus Supplement, when issued, each series of Preferred Stock will rank on a parity with all the other outstanding series of preferred stock issued by Comerica as to payment of dividends (except with respect to the cumulation thereof) and as to the distribution of assets upon liquidation, dissolution or winding up. Subject to the terms of the Preferred Stock to be offered, the remaining shares of undesignated Preferred Stock may be issued by Comerica in one or more series, at any time or from time to time, with such rights, preferences and limitations as the Comerica Board or any duly authorized committee thereof (including the Stock Committee) shall determine, all without further action of the holders of the Preferred Stock or any other stockholders. Norwest Bank, Minnesota, N.A. will be the transfer agent, dividend disbursing agent and registrar for the shares of Preferred Stock. Under existing interpretations of the Federal Reserve Board and the Office of Thrift Supervision, if the holders of the Preferred Stock become entitled to vote for the election of directors, Preferred Stock may then be deemed a "class of voting securities" and a holder of 25% or more of the Preferred Stock (or a holder of 5% 12 26 or more of the Preferred Stock that otherwise exercises a "controlling influence" over Comerica) may then be subject to regulation as a "bank holding company" in accordance with the Bank Holding Company Act of 1956, as amended, and a holder of 25% or more of the Preferred Stock (or a holder of 10% or more of the Preferred Stock that otherwise possesses certain "control factors" with respect to Comerica) may then be subject to regulation as a "savings and loan holding company" in accordance with the Home Owners' Loan Act of 1933, as amended. In addition, at such time, (i) any bank holding company or foreign bank with a U.S. presence generally would be required to obtain the approval of the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended, to acquire or retain 5% or more of the Preferred Stock; (ii) any person other than a bank holding company may be required to obtain the approval of the Federal Reserve Board and the Office of Thrift Supervision under the Change in Bank Control Act to acquire or retain 10% or more of the Preferred Stock; and (iii) any savings and loan holding company generally could not retain in excess of 5% of the Preferred Stock. The following statements are brief summaries of certain provisions that will be contained in the Certificate of Designation authorizing the issuance of a series of Preferred Stock, do not purport to be complete and are qualified in their entirety by reference to such Certificate of Designation and Comerica's Restated Certificate of Incorporation, as amended. Prior to the issuance of a series of Preferred Stock the resolutions set forth in the Certificate of Designation will be adopted by the Comerica Board or the Stock Committee and such Certificate of Designation will then be filed with the Secretary of State of the State of Delaware. Dividends. Holders of shares of Preferred Stock will be entitled to receive, as, if and when declared by the Comerica Board out of assets of Comerica legally available for payment, cash dividends at the rate set forth in, or calculated in accordance with the formula set forth in, the Prospectus Supplement. Dividends on the Preferred Stock may be cumulative ("Cumulative Preferred Stock") or noncumulative ("Noncumulative Preferred Stock") as provided in the Prospectus Supplement. Unless otherwise provided in the Prospectus Supplement, dividends on Cumulative Preferred Stock will be cumulative from the date of original issue of such series and will be payable quarterly in arrears on the dates specified in the Prospectus Supplement. If any date so specified as a dividend payment date is not a business day, dividends (if declared) on the Preferred Stock (unless otherwise provided in the Prospectus Supplement) will be paid on the immediately succeeding business day, without interest. A dividend period with respect to a dividend payment date is the period commencing on the immediately preceding dividend payment date (or, in the case of the initial dividend period, the date of issuance of the Preferred Stock) and ending on the day immediately prior to the next succeeding dividend payment date. If the Comerica Board or the Stock Committee fails to declare or pay a dividend on any series of Noncumulative Preferred Stock for any dividend period, Comerica shall have no obligation to pay a dividend for such period, whether or not dividends on such series of Noncumulative Preferred Stock are declared for any future dividend period. Dividends on the Preferred Stock will be payable in arrears to holders of record as they appear on the stock register of Comerica on such record dates, not more than thirty nor less than fifteen days preceding the payment dates thereof, as shall be fixed by the Comerica Board or the Stock Committee. No full dividends will be declared or paid or set apart for payment on the preferred stock of any series ranking, as to dividends, on a parity with or junior to any other series of Preferred Stock for any period unless full dividends have been or are contemporaneously declared and paid or declared and a sum sufficient for the payment thereof is set apart for such payment on such series of Preferred Stock for (i) all dividend periods terminating on or prior to the date of payment of such full cumulative dividends (in the case of a series of Cumulative Preferred Stock) or (ii) the immediately preceding dividend period (in the case of a series of Noncumulative Preferred Stock). When dividends are not paid in full upon any series of Preferred Stock (whether Cumulative Preferred Stock or Noncumulative Preferred Stock) and any other preferred stock ranking on a parity as to dividends with such series of Preferred Stock, all dividends declared upon shares of such series of Preferred Stock and any other preferred stock ranking on a parity as to dividends will be declared pro rata so that the amount of dividends declared per share on such series of Preferred Stock and such other preferred stock will in all cases bear to each other the same ratio that accrued dividends per share (which, in the case of Noncumulative Preferred Stock, shall not include any cumulation in respect of unpaid dividends for prior dividend periods) on the shares of such series of Preferred Stock and such other preferred stock bear to each other. Except as provided in the preceding sentence, unless full dividends on all 13 27 outstanding shares of any such series of Preferred Stock have been declared and paid or set apart for payment for all past dividend periods, in the case of a series of Cumulative Preferred Stock, or for the immediately preceding dividend period, in the case of a series of Noncumulative Preferred Stock, and Comerica is not in default with respect to any redemption of shares of Preferred Stock announced by Comerica as described under "Redemption" below, no dividends (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, the Common Stock of Comerica or another stock of Comerica ranking junior to the Preferred Stock as to dividends and upon liquidation) will be declared or paid or set aside for payment or other distribution declared or made upon the Common Stock of Comerica or upon any other stock of Comerica ranking junior to or on parity with the Preferred Stock as to dividends or upon liquidation, nor will any Common Stock of Comerica nor any other stock of Comerica ranking junior to or on parity with such Preferred Stock as to dividends or upon liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by Comerica (except by conversion into or exchange for stock of Comerica ranking junior to the Preferred Stock as to dividends and upon liquidation). Unless otherwise specified in the Prospectus Supplement, the amount of dividends payable for any period shorter than a full dividend period shall be computed on the basis of twelve 30-day months, a 360-day year and the actual number of days elapsed in any period of less than one month. Liquidation Preference. Upon any liquidation, dissolution or winding up of Comerica, whether voluntary or involuntary, the holders of the Preferred Stock will have preference and priority over the Common Stock, or any other class of stock of Comerica ranking on liquidation, dissolution or winding up junior to the Preferred Stock, for payments out of or distribution of the assets of Comerica or proceeds thereof, whether from capital or surplus, of the amount per share set forth in the Prospectus Supplement plus all dividends (whether or not earned or declared), accrued and unpaid thereon to the date of final distribution to such holders (but in the case of Noncumulative Preferred Stock, without cumulation of unpaid dividends for prior dividend periods), and after such payment the holders of Preferred Stock will be entitled to no other payments. If, in the case of any such liquidation, dissolution or winding up of Comerica, the assets of Comerica or proceeds thereof should be insufficient to make the full liquidation payment in the amount per share set forth in the Prospectus Supplement, plus all accrued and unpaid dividends on the Preferred Stock (but in the case of Noncumulative Preferred Stock without cumulation of unpaid dividends for prior dividend periods) and liquidating payments on any other preferred stock ranking as to liquidation, dissolution or winding up on a parity with the Preferred Stock, then such assets or proceeds thereof will be distributed among the holders of the Preferred Stock and any such other preferred stock ratably in accordance with the respective amounts which would be payable on such shares of Preferred Stock and any such other preferred stock if all amounts thereon were paid in full. A consolidation or merger of Comerica with one or more corporations will not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of Comerica. Redemption. Unless otherwise specified in the applicable Prospectus Supplement, Comerica may, at its option, with prior Federal Reserve Board approval to the extent then required by applicable law, at any time or from time to time on not less than 30 and not more than 60 days' notice, redeem any series of Preferred Stock in whole or part at the redemption prices and on the dates set forth in the Prospectus Supplement for the related series of Preferred Stock. If less than all outstanding shares of a series of Preferred Stock are to be redeemed, the selection of the shares to be redeemed will be decided by lot or pro rata as may be determined by the Comerica Board or the Stock Committee, or by any other method which may be determined by the Comerica Board or the Stock Committee to be equitable. From and after the redemption date (unless default shall be made by Comerica in providing money for the payment of the redemption price), dividends will cease to accrue on the shares of Preferred Stock called for redemption, such shares will no longer be deemed to be outstanding and all rights of the holders thereof (except the right to receive the redemption price) will cease. In addition, Comerica, at its option, may, with prior Federal Reserve Board approval to the extent then required by applicable law, redeem all, but not less than all, of the outstanding shares of the Preferred Stock, out of funds legally available therefor, if the holders of such shares would be entitled to vote upon or consent to a merger or consolidation of Comerica under the circumstances, if any, specified in the applicable Prospectus 14 28 Supplement and all of the following conditions have been satisfied: (i) Comerica shall have requested the vote or consent of the holders of such shares to the consummation of such merger or consolidation, stating in such request that failing the requisite favorable vote or consent Comerica will have the option to redeem such shares, (ii) Comerica shall have not received the favorable vote or consent requisite to the consummation of the transaction within 60 days after making such request and (iii) such transaction shall be consummated on the date fixed for such redemption, which date shall be no more than one year after such request is made. Any such redemption shall be on notice as aforesaid at a redemption price per share of the Preferred Stock set forth in the Prospectus Supplement, plus accrued and unpaid dividends thereon (but in the case of Noncumulative Preferred Stock without cumulation of unpaid dividends for prior dividend periods) to the date fixed for redemption. Voting Rights. Unless otherwise specified in the applicable Prospectus Supplement, holders of the Preferred Stock will have no voting rights except as from time to time required by law. Transfer Agent. The registrar and transfer agent for the Preferred Stock is Norwest Bank, Minnesota, N.A. PLAN OF DISTRIBUTION Preferred Stock may be offered and sold by Comerica by any of three means of distribution: (1) through agents, (2) through underwriters or dealers or (3) directly to one or more purchasers. Such underwriters, dealers or agents may be affiliates of Comerica, and offers and sales of Preferred Stock may include secondary market transactions by affiliates of Comerica. The applicable Prospectus Supplement will set forth the terms of the offering to which such Prospectus Supplement relates, including the name or names of any underwriters or agents, the public offering or purchase price, the net proceeds to Comerica, underwriting discounts and other items constituting underwriters' compensation, any discounts and commissions allowed or paid to dealers, any commissions allowed or paid to agents, and the securities exchanges, if any, on which such Preferred Stock will be listed. Dealer trading may take place in certain of the Preferred Stock, including Preferred Stock not listed on any securities exchange. Direct sales may be made on a national securities exchange or otherwise. The Preferred Stock may be purchased to be reoffered to the public through underwriting syndicates led by one or more managing underwriters, or through one or more underwriters acting alone. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. If so indicated in the applicable Prospectus Supplement, Comerica will authorize underwriters or agents to solicit offers by certain institutions to purchase securities from Comerica pursuant to Delayed Delivery Contracts providing for payment and delivery at a future date. Any underwriter or agent participating in the distribution of the Preferred Stock may be deemed to be an underwriter, as that term is defined in the Securities Act of 1933, as amended (the "Securities Act"), of the Preferred Stock so offered and sold and any discounts or commissions received by them and any profit realized by them on the sale or resale of the Preferred Stock may be deemed to be underwriting discounts and commissions under the Securities Act. Underwriters, agents and their controlling persons may be entitled, under agreements entered into with Comerica, to indemnification by Comerica against certain civil liabilities, including liabilities under the Securities Act. Underwriters, agents or their controlling persons may engage in transactions with and perform services for Comerica in the ordinary course of business. EXPERTS The consolidated financial statements of Comerica as of December 31, 1995 and 1994 incorporated by reference in this Prospectus from Comerica's Annual Report on Form 10-K for the year ended December 31, 1995 have been audited by Ernst & Young LLP, independent public accountants, and are given on the authority of said firm as experts in auditing and accounting. 15 29 LEGAL MATTERS The validity of the Preferred Stock will be passed upon for Comerica by Bodman, Longley & Dahling LLP, Detroit, Michigan. As of May 20, 1996, approximately 62,269 shares of Comerica's Common Stock, $5 par value, were beneficially owned by the attorneys in the firm of Bodman, Longley & Dahling LLP. 16 30 COMERICA LOGO -----END PRIVACY-ENHANCED MESSAGE-----