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| CMA > SEC Filings for CMA > Form 8-K on 19-Nov-2008 | All Recent SEC Filings |
19-Nov-2008
Entry into a Material Definitive Agreement, Unregistered Sale of Equity Securi
On November 14, 2008, Comerica Incorporated (the "Registrant") entered into a
letter agreement (the "Purchase Agreement") with the United States Department of
the Treasury ("Treasury"), pursuant to which the Registrant agreed to issue and
sell (i) 2,250,000 shares of the Registrant's Fixed Rate Cumulative Perpetual
Preferred Stock, Series F without par value (the "Series F Preferred Stock") and
(ii) a warrant (the "Warrant") to purchase 11,479,592 shares of the Registrant's
common stock, par value $5.00 per share (the "Common Stock"), for an aggregate
purchase price of $2,250,000,000 in cash. The Purchase Agreement is attached as
Exhibit 10.1 hereto and is incorporated herein by reference.
The Series F Preferred Stock will qualify as Tier 1 capital and will pay cumulative dividends at a rate of 5% per annum for the first five years, and thereafter at a rate of 9% per annum. The Series F Preferred Stock may be redeemed by the Registrant after three years. The Series F Preferred Stock may not be redeemed by the Registrant during the first three years except with proceeds from one or more "Qualified Equity Offerings" (as defined in the Certificate of Designations attached as Exhibit 3.1 hereto). The restrictions on redemption are set forth in the Certificate of Designations described in Item 5.03 below. The form of certificate for the Series F Preferred Stock is attached as Exhibit 4.1 hereto and is incorporated herein by reference. The Series F Preferred Stock was issued to Treasury effective November 14, 2008.
The Warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to certain anti-dilution and other adjustments, equal to $29.40 per share of the Common Stock. The Warrant, dated November 14, 2008, is attached as Exhibit 4.2 hereto and is incorporated herein by reference.
If the Registrant receives aggregate gross cash proceeds of not less than $2,250,000,000 from Qualified Equity Offerings on or prior to December 31, 2009, the number of shares of Common Stock issuable pursuant to Treasury's exercise of the Warrant will be reduced by one-half of the original number of shares, taking into account all adjustments, underlying the Warrant. Pursuant to the Purchase Agreement, Treasury has agreed not to exercise voting power with respect to any shares of Common Stock issued upon exercise of the Warrant.
The Series F Preferred Stock and the Warrant were issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended. Upon the request of Treasury at any time, the Registrant has agreed to promptly enter into a deposit arrangement pursuant to which the Series F Preferred Stock may be deposited and depositary shares ("Depositary Shares"), representing fractional shares of Series F Preferred Stock, may be issued. The Registrant has agreed to register the Series F Preferred Stock, the Warrant, the shares of Common Stock underlying the Warrant (the "Warrant Shares") and Depositary Shares, if any, as soon as practicable after the date of the issuance of the Series F Preferred Stock and the Warrant. Neither the Series F Preferred Stock nor the Warrant will be subject to any contractual restrictions on transfer, except that Treasury may only transfer or exercise an aggregate of one-half of the Warrant Shares prior to the earlier of the redemption of 100% of the shares of Series F Preferred Stock and December 31, 2009.
Pursuant to the Purchase Agreement, the closing was subject to each of the Registrant's Senior Executive Officers, as defined in subsection 111(b)(3) of the Emergency Economic Stabilization Act of 2008 (the "EESA") and regulations issued thereunder, delivering to Treasury a written waiver voluntarily waiving . . .
The information set forth under "Item 1.01 Entry into a Material Definitive Agreement" is incorporated by reference into this Item 3.02.
Upon issuance of the Series F Preferred Stock on November 14, 2008, the ability of the Registrant to declare or pay dividends or distributions on, or purchase, redeem or otherwise acquire for consideration, shares of its Junior Stock (as defined below) and Parity Stock (as defined below) will be subject to restrictions, including the Registrant's
restriction against increasing Common Stock dividends from $0.33 per share (in conformity with the Registrant's prior publicly announced intention to reduce its Common Stock quarterly cash dividend of $0.66 per share by 50%). The redemption, purchase or other acquisition of trust preferred securities of the Registrant or its affiliates also will be restricted. These restrictions will terminate on the earlier of (a) the third anniversary of the date of issuance of the Series F Preferred Stock and (b) the date on which the Series F Preferred Stock has been redeemed in whole or Treasury has transferred all of the Series F Preferred Stock to third parties. The restrictions described in this paragraph are set forth in the Purchase Agreement.
In addition, pursuant to the Certificate of Designations, the ability of the Registrant to declare or pay dividends or distributions on, or repurchase, redeem or otherwise acquire for consideration, shares of its Junior Stock and Parity Stock will be subject to restrictions in the event that the Registrant fails to declare and pay full dividends (or declare and set aside a sum sufficient for payment thereof) on its Series F Preferred Stock. These restrictions are set forth in the Certificate of Designations described in Item 5.03.
"Junior Stock" means the Common Stock and any other class or series of stock of the Registrant the terms of which expressly provide that it ranks junior to the Series F Preferred Stock as to dividend rights and/or rights on liquidation, dissolution or winding up of the Registrant. "Parity Stock" means any class or series of stock of the Registrant the terms of which do not expressly provide that such class or series will rank senior or junior to the Series F Preferred Stock as to dividend rights and/or rights on liquidation, dissolution or winding up of the Registrant (in each case without regard to whether dividends accrue cumulatively or non-cumulatively).
The information concerning executive compensation set forth under "Item 1.01 Entry into a Material Definitive Agreement" is incorporated by reference into this Item 5.02.
On November 13, 2008, the Registrant filed a Certificate of Designations (the "Certificate of Designations") with the Delaware Secretary of State for the purpose of amending its Restated Certificate of Incorporation, as amended, to fix the designations, preferences, limitations and relative rights of the Series F Preferred Stock. The Series F Preferred Stock has a liquidation preference of $1,000 per share. The Certificate of Designations is attached hereto as Exhibit 3.1 and is incorporated by reference herein.
On November 14, 2008, the Registrant issued a press release regarding the Registrant's issuance to Treasury of the Series F Preferred Stock and the Warrant. A copy of the relevant press release is attached hereto as Exhibit 99.1.
(d) Exhibits
3.1 Certificate of Designations for the Series F Preferred Stock
4.1 Form of Certificate for the Series F Preferred Stock
4.2 Warrant for Purchase of Shares of Common Stock
10.1 Letter Agreement dated November 14, 2008 by and between the Registrant and the United States Department of the Treasury
10.2 Waiver of Senior Executive Officers dated November 14, 2008
10.3 Amendments to Benefit Plans and Related Consent of Senior Executive Officers dated November 14, 2008
99.1 Press Release dated November 14, 2008
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