-----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, WDbaBVLB8upB8JnIU1MKiFwe2AMUMzYvkjJwGXBqQwBYwqkhsF/OuocymP0h3Hio DxflJP7fQ07UeCBzy5Mu1A== 0000950114-98-000315.txt : 19980630 0000950114-98-000315.hdr.sgml : 19980630 ACCESSION NUMBER: 0000950114-98-000315 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCANTILE BANCORPORATION INC CENTRAL INDEX KEY: 0000064907 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 430951744 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-11792 FILM NUMBER: 98656190 BUSINESS ADDRESS: STREET 1: 7TH & WASHINGTON TRAM 19 1 STREET 2: ONE MERCANTILE CENTER STREET CITY: ST LOUIS STATE: MO ZIP: 63101-1643 BUSINESS PHONE: 3144252525 MAIL ADDRESS: STREET 1: P O BOX 524 CITY: ST LOUIS STATE: MO ZIP: 63166 FORMER COMPANY: FORMER CONFORMED NAME: MERCANTILE TRUST CO DATE OF NAME CHANGE: 19720229 10-K405/A 1 MERCANTILE BANCORPORATION FORM 10-K405 AMENDMENT 1 ============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 TO ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 COMMISSION FILE NO. 1-11792 MERCANTILE BANCORPORATION INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MISSOURI 43-0951744 (STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.) P.O. BOX 524 63166-0524 ST. LOUIS, MISSOURI (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 314-418-2525 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NAME OF EXCHANGE ON WHICH REGISTERED: (1) COMMON STOCK ($0.01 PAR VALUE) (1) NEW YORK STOCK EXCHANGE (2) PREFERRED STOCK PURCHASE RIGHTS (2) NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO ----- INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K. [X] STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE REGISTRANT AS OF FEBRUARY 27, 1998: COMMON STOCK, $0.01 PAR VALUE, $6,217,819,682 INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF COMMON STOCK, AS OF FEBRUARY 27, 1998: COMMON STOCK $0.01 PAR VALUE, 133,748,539 SHARES OUTSTANDING DOCUMENT INCORPORATED BY REFERENCE AS PROVIDED HEREIN, PORTIONS OF THE DOCUMENTS BELOW ARE INCORPORATED BY REFERENCE:
DOCUMENT PART--FORM 10-K ANNUAL REPORT OF THE REGISTRANT TO ITS SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1997 PARTS I, II, IV REGISTRANT'S PROXY STATEMENT FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS PART III
2 The "Exhibit Index" as previously filed with the Form 10-K is hereby amended by inserting the following entries: No. 23-1 Consent of KPMG Peat Marwick LLP (relating to report dated June 26, 1998, Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust Financial Statements.) No. 99 Report of the Independent Auditors KPMG Peat Marwick LLP dated June 24, 1998; Statements of Net Assets Available for Plan Benefits of Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust as of December 31, 1997 and 1996; Statements of Changes in Net Assets Available For Plan Benefits for the years then ended; and the Notes and Schedules thereto. The Exhibit Index, as amended, follows, and new Exhibits 23-1 and 99 are filed herewith. 3 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION No. 3-1(a) Restated Articles of Incorporation of the Registrant, as amended and currently in effect, filed as Exhibit 3 to Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, are incorporated herein by reference. No. 3-1(b) Third Amended and Restated Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of the Registrant. No. 3-2 By-Laws of the Registrant, as amended and currently in effect, filed as Exhibit 3.2 to Amendment No. 2 to Registrant's Registration Statement No. 333-17757, are incorporated herein by reference. No. 4-1 Form of Indenture Regarding Subordinated Securities between the Registrant and The First National Bank of Chicago as Trustee, filed on March 31, 1992 as Exhibit 4.1 to Registrant's Report on Form 8-K dated September 24, 1992, is incorporated herein by reference. No. 4-2 Rights Agreement dated as of May 23, 1988, between Registrant and Mercantile Bank National Association, as Rights Agent (including as exhibits thereto the form of Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock and the form of Rights Certificate) filed as Exhibits 1 and 2 to Registrant's Registration Statement on Form 8-A, dated May 24, 1988, is incorporated herein by reference. No. 4-3 Form of Indenture Regarding Senior Debt Securities, filed as Exhibit 4.1 to Registrant's Registration Statement No. 333-25775, is incorporated herein by reference. No. 4-4 Form of Indenture Regarding Subordinated Debt Securities, filed as Exhibit 4.2 to Registrant's Registration Statement No. 333-25775, is incorporated herein by reference. No. 4-5 Indenture, dated February 4, 1997, First Supplemental Indenture, dated February 4, 1997, and Supplemental Indenture of First Supplemental Indenture, dated May 22, 1997, between the Company, as issuer, and The Chase Manhattan Bank, as Indenture Trustee, filed as Exhibits 4.5, 4.6 and 4.12, respectively, to the Company's Registration Statement on Form S-4 (No. 333-25131), are incorporated herein by reference. No. 10-1 The Mercantile Bancorporation Inc. 1987 Stock Option Plan, as amended, filed as Exhibit 10-3 to Registrant's Report on Form 10-K for the year ended December 31, 1989 (Commission File No. 1-11792), is incorporated herein by reference. No. 10-2 The Mercantile Bancorporation Inc. Amended and Restated Executive Incentive Compensation Plan, filed as Annex H to Registrant's definitive Proxy Statement for the 1997 Annual Meeting of Shareholders, is incorporated herein by reference. No. 10-3 The Mercantile Bancorporation Inc. Employee Stock Purchase Plan, filed as Exhibit 10-7 to Registrant's Report on Form 10-K for the year ended December 31, 1989 (Commission File No. 1-11792), is incorporated herein by reference. No. 10-4 The Mercantile Bancorporation Inc. 1991 Employee Incentive Plan, filed as Exhibit 10-7 to Registrant's Report on Form 10-K for the year ended December 31, 1990 (Commission File No. 1-11792), is incorporated herein by reference. 4 No. 10-5 Amendment Number One to the Mercantile Bancorporation Inc. 1991 Employee Incentive Plan, filed as Exhibit 10-6 to Registrant's Report on Form 10-K for the year ended December 31, 1994, is incorporated herein by reference. No. 10-6 The Mercantile Bancorporation Inc. Amended and Restated Stock Incentive Plan, filed as Annex G to Registrant's definitive Proxy Statement for the 1997 Annual Meeting of Shareholders, is incorporated herein by reference. No. 10-7 The Mercantile Bancorporation Inc. 1994 Stock Incentive Plan for Non-Employee Directors, filed as Appendix E to Registrant's definitive Proxy Statement for the 1994 Annual Meeting of Shareholders, is incorporated herein by reference. No. 10-8 The Mercantile Bancorporation Inc. Amended and Restated Voluntary Deferred Compensation Plan, filed as Exhibit 10.1 to Registrant's Registration Statement on Form S-8 (File No. 333-47713), is incorporated herein by reference. No. 10-9 Employment Agreement for Thomas H. Jacobsen, as amended and restated. No. 10-10 Form of Change of Control Employment Agreement for John W. McClure, W. Randolph Adams, John Q. Arnold and Certain Other Executive Officers, filed as Exhibit 10-10 to Registrant's Report on Form 10-K for the year ended December 31, 1989 (Commission File No. 1-11792), is incorporated herein by reference. No. 10-11 Mercantile Bancorporation Inc. Supplemental Retirement Plan, filed as Exhibit 10-12 to Registrant's Report on Form 10-K for the year ended December 31, 1992, is incorporated herein by reference. No. 10-12 Mercantile Bancorporation Inc. Voluntary Deferred Compensation Plan for Non-Employee Affiliate Directors and Advisory Directors, filed as Exhibit 10.3 to Registrant's Registration statement on Form S-8 (File No. 333-47713), is incorporated herein by reference. No. 10-13 Mercantile Bancorporation Inc. Amended and Restated Stock Incentive Plan for Non-Employee Directors, filed as Exhibit 10.2 to Registrant's Registration Statement on Form S-8 (File No. 333-47713), is incorporated herein by reference. No. 10-14 Agreement and Plan of Reorganization, dated October 27, 1996, by and among Mercantile Bancorporation Inc., Ameribanc, Inc. and Mark Twain Bancshares, Inc., filed as Exhibit 2.1 to Registrant's Report on Form 8-K filed on November 6, 1996, is incorporated herein by reference. No. 10-15 Amendment to Agreement and Plan of Reorganization, dated January 24, 1997, by and among Registrant, Ameribanc, Inc. and Mark Twain Bancshares, Inc., filed as Exhibit 10-16 to Amendment No. 2 to Registrant's Registration Statement No. 333-17757, is incorporated herein by reference. No. 10-16 Stock Option Agreement, dated October 27, 1996, by and between Mercantile Bancorporation Inc., as grantee, and Mark Twain Bancshares, Inc., as issuer, filed as Exhibit 2.2 to Registrant's Report on Form 8-K filed on November 6, 1996, is incorporated herein by reference. No. 10-17 Agreement and Plan of Reorganization, dated December 22, 1996, by and between Mercantile Bancorporation Inc. and Roosevelt Financial Group, Inc., filed as Exhibit 2.1 to Registrant's Report on Form 8-K filed on December 30, 1996, is incorporated herein by reference. 5 No. 10-18 Stock Option Agreement, dated December 22, 1996, by and between Mercantile Bancorporation Inc., as grantee, and Roosevelt Financial Group, Inc., as issuer, filed as Exhibit 2.1 to Registrant's Report on Form 8-K filed on December 30, 1996, is incorporated herein by reference. No. 10-19 Employment Agreement for Alvin J. Siteman, dated November 18, 1996, filed as Exhibit 10.3 to Registrant's Report on Form 10-Q for the quarter ended March 31, 1997, is incorporated herein by reference. No. 10-20 Employment Agreement for John P. Dubinsky, dated October 27, 1996, filed as Exhibit 10.4 to Registrant's Report on Form 10-Q for the quarter ended March 31, 1997, is incorporated herein by reference. No. 10-21 Employment Agreement for Stanley J. Bradshaw, dated December 22, 1996, filed as Exhibit 10 to Registrant's Report on Form 10-Q for the quarter ended March 31, 1997, is incorporated herein by reference. No. 13 Annual Report of the Registrant to its Shareholders for the year ended December 31, 1997. No. 21 Subsidiaries of the Registrant as of February 27, 1998. No. 23 Consent of KPMG Peat Marwick LLP. No. 23-1 Consent of KPMG Peat Marwick LLP (relating to report dated June 26, 1998, Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust Financial Statements.) No. 24 Power of Attorney (on signature page). No. 27 Financial Data Schedule. No. 99 Report of the Independent Auditors KPMG Peat Marwick LLP dated June 24, 1998; Statements of Net Assets Available for Plan Benefits of Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust as of December 31, 1997 and 1996; Statements of Changes in Net Assets Available For Plan Benefits for the years then ended; and the Notes and Schedules thereto. Management contract or compensatory plan or arrangement
6 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. MERCANTILE BANCORPORATION INC. (Registrant) Date: June 26, 1998 By: /s/JOHN Q. ARNOLD --------------------------------- John Q. Arnold Vice Chairman and Chief Financial Officer 7 10-K/A EXHIBIT INDEX -------------
EXHIBIT NO. Description - ----------- ----------- No. 23-1 Consent of KPMG Peat Marwick LLP (relating to report dated June 26, 1998, Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust Financial Statements.) No. 99 Report of the Independent Auditors KPMG Peat Marwick LLP dated June 24, 1998; Statement of Net Assets Available for Plan Benefits of the Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust as of December 31, 1997 and 1996; Statements of Changes in Net Assets Available for Plan Benefits for the years then ended; and the Notes and Schedules thereto.
EX-23.1 2 CONSENT OF EXPERT 1 EXHIBIT 23-1 ------------ 2 INDEPENDENT AUDITORS' CONSENT The Board of Directors Mercantile Bancorporation Inc.: Plan Administrator Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust: We consent to incorporation by reference in the Registration Statement (No. 33-35139) on Form S-8 of Mercantile Bancorporation Inc. related to the Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust of our report dated June 26, 1998, relating to the statements of net assets available for plan benefits of the Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust as of December 31, 1997 and 1996, and the related statements of changes in net assets available for plan benefits for the years then ended and the related schedules, which report appears in the 1997 Annual Report on Form 10-K/A, of Mercantile Bancorporation Inc. /s/ KPMG Peat Marwick LLP St. Louis, Missouri June 26, 1998 EX-99 3 1 EXHIBIT 99 ---------- 2 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Financial Statements and Schedules December 31, 1997 and 1996 (With Independent Auditors' Report Thereon) 3 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST TABLE OF CONTENTS
============================================================================================================== Page(s) ------- Table of Contents: Independent Auditors' Report 1 Financial Statements: Statement of Net Assets Available for Plan Benefits, December 31, 1997 2 Statement of Net Assets Available for Plan Benefits, December 31, 1996 3 Statement of Changes in Net Assets Available for Plan Benefits, Year ended December 31, 1997 4 Statement of Changes in Net Assets Available for Plan Benefits, Year ended December 31, 1996 5 Notes to Financial Statements, December 31, 1997 and 1996 6-12 Schedule -------- Item 27a: Schedule of Assets Held for Investment Purposes, December 31, 1997 1 13 Schedule of Assets Held for Investment Purposes Which Were Both Acquired and Disposed of Within the Plan Year Item 27b - Schedule of Loans or Fixed Income Obligations Item 27c - Schedule of Leases in Default or Classified as Uncollectible Item 27d - Schedule of Reportable Transactions, Year ended December 31, 1997 2 14 Item 27e - Schedule of Nonexempt Transactions There were no assets held for investment purposes which were both acquired and disposed of within the plan year ended December 31, 1997, and no nonexempt transactions during the year ended December 31, 1997 which require separate disclosure. There were no known loans, fixed income obligations, or leases in default or classified as uncollectible which have not been reported during the year ended December 31, 1997.
Definitions: Plan - Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust Trustee - Mercantile Bank National Association ERISA - Employee Retirement Income Security Act of 1974 Mercantile (or the Company) - Mercantile Bancorporation Inc. and subsidiaries Plan Administrator - Mercantile Employee Benefits Committee 4 [Letterhead of KPMG Peat Marwick LLP] INDEPENDENT AUDITORS' REPORT Mercantile Employee Benefits Committee Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust: We have audited the accompanying statements of net assets available for plan benefits of the Mercantile Bancorporation Inc. Horizon Investment and Savings Plan and Trust as of December 31, 1997 and 1996, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits as of December 31, 1997 and 1996, and the changes in net assets available for plan benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information included in Schedules 1 and 2 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for plan benefits and the statements of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and the changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ KPMG Peat Marwick LLP June 24, 1998 1 5 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Statement of Net Assets Available for Plan Benefits December 31, 1997
========================================================================================================================== Participant-directed funds --------------------------------------------------------------------- Growth Government Growth and and Money Equity Balanced Income Corporate Market Fund Fund Fund Bond Fund Fund - -------------------------------------------------------------------------------------------------------------------------- Assets: Total noninterest-bearing cash $ - 940 470 - - Receivables: Employer contributions - - - - - Accrued Income 2,485 66,967 81,340 41,481 59,077 Interfund Transfers 1,522 124,660 320,245 43,669 42,905 - -------------------------------------------------------------------------------------------------------------------------- Total receivables 4,007 191,627 401,585 85,150 101,982 - -------------------------------------------------------------------------------------------------------------------------- Investments at fair value: Interest-bearing cash (including money market funds) 9,446 579 5,645 57 13,947,792 Value of interest in registered investment companies 4,372,071 27,691,361 50,224,411 9,147,640 - Common stock - - - - - Loans to participants - - - - - Other - - - - - - -------------------------------------------------------------------------------------------------------------------------- Total investments 4,381,517 27,691,940 50,230,056 9,147,697 13,947,792 - -------------------------------------------------------------------------------------------------------------------------- Liabilities: Accrued expenses 341 3,032 2,161 1,573 1,924 Interfund transfers 68,811 - - - - - -------------------------------------------------------------------------------------------------------------------------- Total liabilities 69,152 3,032 2,161 1,573 1,924 - -------------------------------------------------------------------------------------------------------------------------- Net assets available for plan benefits $4,316,372 27,881,475 50,629,950 9,231,274 14,047,850 ========================================================================================================================== ========================================================================================================================== Participant-directed funds ------------------------------------------ Nonpar- Small Cap Mercantile Inter- ticipant- Equity Stock national directed Fund Fund Fund funds Total - -------------------------------------------------------------------------------------------------------------------------- Assets: Total noninterest-bearing cash $ - 470 - - 1,880 Receivables: Employer contributions - 5,702,174 - - 5,702,174 Accrued Income 112 1,332,584 85 3,752 1,587,883 Interfund Transfers 136,419 422,161 64,063 - 1,155,644 - -------------------------------------------------------------------------------------------------------------------------- Total receivables 136,531 7,456,919 64,148 3,752 8,445,701 - -------------------------------------------------------------------------------------------------------------------------- Investments at fair value: Interest-bearing cash (including money market funds) 877 592,932 1,142 1,413,427 15,971,897 Value of interest in registered investment companies 12,841,759 - 5,301,944 - 109,579,186 Common stock - 285,308,617 - - 285,308,617 Loans to participants - - - 8,837,826 8,837,826 Other - - - 13,489 13,489 - -------------------------------------------------------------------------------------------------------------------------- Total investments 12,842,636 285,901,549 5,303,086 10,264,742 419,711,015 - -------------------------------------------------------------------------------------------------------------------------- Liabilities: Accrued expenses 2,088 32,215 821 - 44,155 Interfund transfers 11,154 - - 1,075,679 1,155,644 - -------------------------------------------------------------------------------------------------------------------------- Total liabilities 13,242 32,215 821 1,075,679 1,199,799 - -------------------------------------------------------------------------------------------------------------------------- Net assets available for plan benefits $12,965,925 293,326,723 5,366,413 9,192,815 426,958,797 ========================================================================================================================== See accompanying notes to financial statements.
2 6 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Statement of Net Assets Available for Plan Benefits December 31, 1996
=========================================================================================================== Participant-directed funds ------------------------------------------------------- Growth Government and and Money Balanced Income Corporate Market Fund Fund Bond Fund Fund - ----------------------------------------------------------------------------------------------------------- Total noninterest-bearing cash $ 7 - - - Receivables: Employer contributions - - - - Accrued Income 158 308 39,984 40,265 - ----------------------------------------------------------------------------------------------------------- Total receivables 158 308 39,984 40,265 - ----------------------------------------------------------------------------------------------------------- Investments at fair value: Interest-bearing cash (including money market funds) 133,084 272,113 47,883 9,877,783 Certificates of deposit - - - 33,517 Value of interest in registered investment companies 23,679,586 36,710,411 7,953,756 - Common stock - - - - Loans to participants - - - - Other - - - - - ----------------------------------------------------------------------------------------------------------- Total investments 23,812,670 36,982,524 8,001,639 9,911,300 - ----------------------------------------------------------------------------------------------------------- Net assets available for plan benefits $23,812,835 36,982,832 8,041,623 9,951,565 =========================================================================================================== ========================================================================================================================== Participant-directed funds ---------------------------------------------- Nonpar- Small Cap Mercantile Inter- ticipant- Equity Stock national directed Fund Fund Fund funds Total - -------------------------------------------------------------------------------------------------------------------------- Total noninterest-bearing cash $ - - - 8,653 8,660 Receivables: Employer contributions - 5,090,806 - - 5,090,806 Accrued Income 162 1,018,403 97 3,108 1,102,485 - -------------------------------------------------------------------------------------------------------------------------- Total receivables 162 6,109,209 97 3,108 6,193,291 - -------------------------------------------------------------------------------------------------------------------------- Investments at fair value: Interest-bearing cash (including money market funds) 143,631 911,244 72,156 909,624 12,367,518 Certificates of deposit - - - - 33,517 Value of interest in registered investment companies 9,900,814 - 3,934,068 - 82,178,635 Common stock - 127,846,585 - - 127,846,585 Loans to participants - - - 7,005,709 7,005,709 Other - - - 13,489 13,489 - -------------------------------------------------------------------------------------------------------------------------- Total investments 10,044,445 128,757,829 4,006,224 7,928,822 229,445,453 - -------------------------------------------------------------------------------------------------------------------------- Net assets available for plan benefits $10,044,607 134,867,038 4,006,321 7,940,583 235,647,404 ==========================================================================================================================
See accompanying notes to financial statements. 3 7 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1997
========================================================================================================================== Participant-directed funds --------------------------------------------------------------------- Growth Government Growth and and Money Equity Balanced Income Corporate Market Fund Fund Fund Bond Fund Fund - -------------------------------------------------------------------------------------------------------------------------- Additions: Contributions from: Employer $ - - - - - Participants 2,387 1,755,877 4,354,171 571,115 888,576 - -------------------------------------------------------------------------------------------------------------------------- Total contributions 2,387 1,755,877 4,354,171 571,115 888,576 - -------------------------------------------------------------------------------------------------------------------------- Earnings on investments: Interest: Interest-bearing cash (including money market funds) 411 2,600 4,664 1,436 586,842 Certificates of deposit - - - - 737 Loans to participants - - - - - - -------------------------------------------------------------------------------------------------------------------------- Total interest 411 2,600 4,664 1,436 587,579 - -------------------------------------------------------------------------------------------------------------------------- Common stock dividends - - - - - Net appreciation in fair value of investments in common stock - - - - - Net investment appreciation (depre- ciation) in fair value of investments in registered investment companies (25,404) 4,169,602 10,259,961 672,878 - Other income - 5,648 17,772 59 - - -------------------------------------------------------------------------------------------------------------------------- Total earnings on investments (24,993) 4,177,850 10,282,397 674,373 587,579 - -------------------------------------------------------------------------------------------------------------------------- Total additions (22,606) 5,933,727 14,636,568 1,245,488 1,476,155 - -------------------------------------------------------------------------------------------------------------------------- Deductions: Administrative expenses 341 22,307 36,355 8,455 11,021 Benefit payments to participants or beneficiaries 325,072 2,486,574 3,080,210 812,541 1,867,589 - -------------------------------------------------------------------------------------------------------------------------- Total deductions 325,413 2,508,881 3,116,565 820,996 1,878,610 - -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets available for plan benefits prior to transfers (348,019) 3,424,846 11,520,003 424,492 (402,455) Transfers to the Plan 4,331,323 1,215,320 2,516,976 546,464 3,943,976 Interfund transfers, net 333,068 (571,526) (389,861) 218,695 554,764 - -------------------------------------------------------------------------------------------------------------------------- Net increase in net assets available for plan benefits 4,316,372 4,068,640 13,647,118 1,189,651 4,096,285 Net assets available for plan benefits: Beginning of year - 23,812,835 36,982,832 8,041,623 9,951,565 - -------------------------------------------------------------------------------------------------------------------------- End of year $4,316,372 27,881,475 50,629,950 9,231,274 14,047,850 ========================================================================================================================== ========================================================================================================================== Participant-directed funds ------------------------------------------ Nonpar- Small Cap Mercantile Inter- ticipant- Equity Stock national directed Fund Fund Fund funds Total - -------------------------------------------------------------------------------------------------------------------------- Additions: Contributions from: Employer $ - 10,821,114 - 3,799 10,824,913 Participants 1,959,909 4,146,377 961,615 848 14,640,875 - -------------------------------------------------------------------------------------------------------------------------- Total contributions 1,959,909 14,967,491 961,615 4,647 25,465,788 - -------------------------------------------------------------------------------------------------------------------------- Earnings on investments: Interest: Interest-bearing cash (including money market funds) 2,040 39,606 1,250 152,038 790,887 Certificates of deposit - - - - 737 Loans to participants - - - 783,730 783,730 - -------------------------------------------------------------------------------------------------------------------------- Total interest 2,040 39,606 1,250 935,768 1,575,354 - -------------------------------------------------------------------------------------------------------------------------- Common stock dividends - 4,704,859 - 32,515 4,737,374 Net appreciation in fair value of investments in common stock - 113,817,305 - 1,561,769 115,379,074 Net investment appreciation (depre- ciation) in fair value of investments in registered investment companies 2,121,670 - 156,711 493,317 17,848,735 Other income 2,905 1 883 208,342 235,610 - -------------------------------------------------------------------------------------------------------------------------- Total earnings on investments 2,126,615 118,561,771 158,844 3,231,711 139,776,147 - -------------------------------------------------------------------------------------------------------------------------- Total additions 4,086,524 133,529,262 1,120,459 3,236,358 165,241,935 - -------------------------------------------------------------------------------------------------------------------------- Deductions: Administrative expenses 10,733 145,745 3,914 5,285 244,156 Benefit payments to participants or beneficiaries 789,301 15,883,396 349,836 3,767,103 29,361,622 - -------------------------------------------------------------------------------------------------------------------------- Total deductions 800,034 16,029,141 353,750 3,772,388 29,605,778 - -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets available for plan benefits prior to transfers 3,286,490 117,500,121 766,709 (536,030) 135,636,157 Transfers to the Plan 640,946 41,887,472 518,459 74,300 55,675,236 Interfund transfers, net (1,006,118) (927,908) 74,924 1,713,962 - - -------------------------------------------------------------------------------------------------------------------------- Net increase in net assets available for plan benefits 2,921,318 158,459,685 1,360,092 1,252,232 191,311,393 Net assets available for plan benefits: Beginning of year 10,044,607 134,867,038 4,006,321 7,940,583 235,647,404 - -------------------------------------------------------------------------------------------------------------------------- End of year $12,965,925 293,326,723 5,366,413 9,192,815 426,958,797 ========================================================================================================================== See accompanying notes to financial statements.
4 8 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1996
========================================================================================================================== Participant-directed funds --------------------------------------------------------------------- Growth Government and and Money Balanced Income Corporate Market Fund Fund Bond Fund Fund - -------------------------------------------------------------------------------------------------------------------------- Additions: Contributions from: Employer $ - - - - Participants 1,593,743 3,214,338 648,110 1,021,747 - -------------------------------------------------------------------------------------------------------------------------- Total contributions 1,593,743 3,214,338 648,110 1,021,747 - -------------------------------------------------------------------------------------------------------------------------- Earnings on investments: Interest: Interest-bearing cash (including money market funds) 1,653 2,765 1,014 468,645 Certificates of deposit - - - 3,487 Loans to participants - - - - - -------------------------------------------------------------------------------------------------------------------------- Total interest 1,653 2,765 1,014 472,132 - -------------------------------------------------------------------------------------------------------------------------- Common stock dividends - - - - Net appreciation in fair value of investments - - - 2,028 Net investment appreciation (depre- ciation) in fair value of investments in registered investment companies 2,437,164 5,454,325 147,586 - Other income 1,142 768 185 288 - -------------------------------------------------------------------------------------------------------------------------- Total earnings on investments 2,439,959 5,457,858 148,785 474,448 - -------------------------------------------------------------------------------------------------------------------------- Total additions 4,033,702 8,672,196 796,895 1,496,195 - -------------------------------------------------------------------------------------------------------------------------- Deductions: Administrative expenses 15,932 22,104 5,421 7,979 Benefit payments to participants or beneficiaries 1,063,229 1,437,697 511,676 3,058,860 - -------------------------------------------------------------------------------------------------------------------------- Total deductions 1,079,161 1,459,801 517,097 3,066,839 - -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets available for plan benefits prior to transfers 2,954,541 7,212,395 279,798 (1,570,644) Transfers to the Plan 3,466,527 5,313,946 1,866,808 3,261,876 Interfund transfers, net (468,420) (105,443) (108,689) (424,417) - -------------------------------------------------------------------------------------------------------------------------- Net increase in net assets available for plan benefits 5,952,648 12,420,898 2,037,917 1,266,815 Net assets available for plan benefits: Beginning of year 17,860,187 24,561,934 6,003,706 8,684,750 - -------------------------------------------------------------------------------------------------------------------------- End of year $23,812,835 36,982,832 8,041,623 9,951,565 ========================================================================================================================== ========================================================================================================================== Participant-directed funds --------------------------------------------------------------------- Nonpar- Small Cap Mercantile Inter- ticipant- Equity Stock national directed Fund Fund Fund funds Total - -------------------------------------------------------------------------------------------------------------------------- Additions: Contributions from: Employer $ - 10,313,669 - - 10,313,669 Participants 1,873,718 2,973,250 921,583 - 12,246,489 - -------------------------------------------------------------------------------------------------------------------------- Total contributions 1,873,718 13,286,919 921,583 - 22,560,158 - -------------------------------------------------------------------------------------------------------------------------- Earnings on investments: Interest: Interest-bearing cash (including money market funds) 1,430 33,317 1,005 117,095 626,924 Certificates of deposit - - - - 3,487 Loans to participants - - - 542,902 542,902 - -------------------------------------------------------------------------------------------------------------------------- Total interest 1,430 33,317 1,005 659,997 1,173,313 - -------------------------------------------------------------------------------------------------------------------------- Common stock dividends - 3,643,305 - - 3,643,305 Net appreciation in fair value of investments - 13,869,035 - 2 13,871,065 Net investment appreciation (depre- ciation) in fair value of investments in registered investment companies 837,400 - 284,540 - 9,161,015 Other income 201 10,481 70 107,342 120,477 - -------------------------------------------------------------------------------------------------------------------------- Total earnings on investments 839,031 17,556,138 285,615 767,341 27,969,175 - -------------------------------------------------------------------------------------------------------------------------- Total additions 2,712,749 30,843,057 1,207,198 767,341 50,529,333 - -------------------------------------------------------------------------------------------------------------------------- Deductions: Administrative expenses 5,792 73,083 1,745 16,907 148,963 Benefit payments to participants or beneficiaries 516,888 10,449,445 195,983 326,539 17,560,317 - -------------------------------------------------------------------------------------------------------------------------- Total deductions 522,680 10,522,528 197,728 343,446 17,709,280 - -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets available for plan benefits prior to transfers 2,190,069 20,320,529 1,009,470 423,895 32,820,053 Transfers to the Plan 1,862,255 26,235,601 999,296 49,745 43,056,054 Interfund transfers, net (212,003) (1,502,541) 410,827 2,410,686 - - -------------------------------------------------------------------------------------------------------------------------- Net increase in net assets available for plan benefits 3,840,321 45,053,589 2,419,593 2,884,326 75,876,107 Net assets available for plan benefits: Beginning of year 6,204,286 89,813,449 1,586,728 5,056,257 159,771,297 - -------------------------------------------------------------------------------------------------------------------------- End of year $10,044,607 134,867,038 4,006,321 7,940,583 235,647,404 ========================================================================================================================== See accompanying notes to financial statements.
5 9 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Notes to Financial Statements December 31, 1997 and 1996 =============================================================================== (1) DESCRIPTION OF THE PLAN The following description of the Plan provides only general information. Interested parties should refer to the plan document for a more complete description of the Plan's provisions. GENERAL The Plan, which was adopted in 1969, is a defined contribution plan which covers all employees of Mercantile who have completed one year of eligible service or employees with an account balance resulting from a qualified rollover. The Plan is subject to the provisions of ERISA and structured to incorporate the provisions available under Section 401(k) of the Internal Revenue Code, which allows member and sponsor contributions to be excluded from federal and state income taxation within certain prescribed limits. The Plan Administrator, appointed by the Mercantile Board of Directors, manages and directs the operation of the Plan. CONTRIBUTIONS Each participant may contribute 1% to 15% of their annual compensation (subject to federal limits) and may elect to have their contributions invested and allocated earnings reinvested to their account in the following separate investment funds within the Plan: * Growth Equity Fund, which invests in the Arch Growth Equity Portfolio. The Arch Growth Equity Portfolio is a mutual fund that invests in common stocks of proven mid-to-large-sized companies. * Balanced Fund, which invests in the Arch Balanced Portfolio. The Arch Balanced Portfolio is a mutual fund that invests in fixed-income securities and equity securities. * Growth and Income Fund, which invests in the Arch Growth and Income Equity Portfolio. The Arch Growth and Income Equity Portfolio is a mutual fund that primarily invests in broadly diversified equity securities. * Government and Corporate Bond Fund, which invests in the Arch Government and Corporate Bond Portfolio. The Arch Government and Corporate Bond Portfolio is a mutual fund that primarily invests in debt obligations with maturity dates of one year or more. * Money Market Fund, which invests in the Arch Money Market Portfolio Trust Shares. The Arch Money Market Portfolio Trust Shares is a mutual fund that primarily invests in fixed income obligations with maturity dates of less than one year. * Small Cap Equity Fund which invests in the Arch Small Cap Equity Portfolio. The Arch Small Cap Equity Portfolio is a mutual fund that invests in common stocks of emerging or established small-to-medium-sized companies. * Mercantile Stock Fund, which invests in the common stock of Mercantile. * International Fund, which invests in the Arch International Equity Portfolio. The Arch International Equity Portfolio is a mutual fund that invests in a diversified portfolio of international stocks. (Continued) 6 10 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Notes to Financial Statements =============================================================================== Subject to the provisions of the Plan, each participant is eligible to receive employer contributions. Mercantile's contribution has both a matching and incentive component. As a matching component, Mercantile contributes 50% of a participant's contribution up to a maximum employer contribution equal to 3% of a participant's salary. Mercantile's incentive contribution is based on a formula using a return-on-assets ratio. Incentive contributions cannot exceed 6% of the total compensation paid to participants during a plan year. Both the matching and the incentive contributions are invested in the Mercantile Stock Fund. Effective January 1, 1998, Mercantile eliminated the incentive component of company contributions. Instead, Mercantile will contribute 100% of a participant's contribution up to 3% of a participant's salary and 50% of a participant's contribution up to the next 3% of a participant's salary. PARTICIPANT ACCOUNTS Each participant account is credited with the participant's contribution, an allocation of employer contributions, and an allocation of Plan earnings net of administrative expenses. Allocations are based on participant compensation or account balances, as defined in the Plan document. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. NONPARTICIPANT-DIRECTED FUNDS Included in nonparticipant-directed funds are a Loan Fund, Insurance Fund, several temporary funds, and Suspense Fund. The Loan Fund allows participating employees to borrow money, within specified limits, in the form of interest-bearing promissory notes from the Plan to be repaid over a period not to exceed five years for general loans or 10 years for mortgage loans. The Insurance Fund relates only to certain employees who were merged into the Plan via acquisition activity. The Insurance Fund provides for the payment of a participant's life insurance premiums via pre-tax contributions. The temporary funds capture and distribute assets received from plans merged into the Plan. The Suspense Fund captures and distributes contributions, administrative expenses, and benefit payments to participants or beneficiaries. VESTING Participants are fully vested in their account balances, including employer matching and incentive contributions. BENEFIT PAYMENTS Upon termination of employment, participants with an account balance less than $5,000 are paid in a lump sum. Participants with an account balance of $5,000 or more, upon termination of employment, may elect to be paid the balance of their account, either immediately or upon retirement, in a lump sum or installments over a period not to exceed 10 years in accordance with Plan provisions. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The accompanying financial statements have been prepared on an accrual basis, with the exception of benefits which are recorded when paid, and present the net assets available for plan benefits and changes in those assets. The preparation of the accompanying financial statements in conformity with generally accepted accounting principles requires the Plan's management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates. (Continued) 7 11 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Notes to Financial Statements =============================================================================== VALUATION OF INVESTMENTS The Plan's investments are stated at current (or fair) value. Securities traded on a national securities exchange, including Mercantile Bancorporation Inc. common stock, are valued at the last reported sales price on the last business day of the plan year. Interest in registered investment companies represents units of participation in Arch mutual funds. Interest-bearing cash represents units of participation in the Arch Money Market Portfolio Trust Shares. Units of Arch mutual funds and Arch Money Market Portfolio Shares are valued at quoted market prices which represent the net asset value of shares held by the Plan as provided by BYSIS Fund Services, the administrator of the Arch Funds, Inc. Loans to participants represent the unpaid principal of employee loans and are valued at cost which approximates fair value. INVESTMENT TRANSACTIONS Investment purchases and sales are recorded on a trade-date basis (date the order to buy or sell is executed). The realized gains or losses on investments are determined principally using the average cost of the individual security issue as a basis. Average cost is based on the market value of the security at the beginning of the year and the acquisition cost of any purchases made during the year. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Uninvested moneys within each fund are temporarily invested in the Arch Money Market Portfolio. COSTS OF PLAN ADMINISTRATION Fees and expenses incurred by the Trustee and the Plan's management in the administration of the Plan are paid by Mercantile and from plan assets. Expenses solely attributable to the investment of plan funds are paid by plan assets. (Continued) 8 12 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Notes to Financial Statements =============================================================================== (3) INVESTMENTS The Plan's investments are maintained in a trust fund managed by the Trustee on behalf of the Plan. The investments and changes therein of this trust fund have been reported to the Plan by the Trustee. The following table presents the fair value of investments at December 31, 1997 and 1996. Investments that represent 5% or more of the Plan's assets are separately identified: ======================================================================================================
1997 1996 - ------------------------------------------------------------------------------------------------------ Investments at fair value as determined by quoted market price: Interest in registered investment companies: Arch Money Market Portfolio Trust Shares $ 15,971,897 10,568,413 Arch Balanced Portfolio 27,691,361 23,679,586 Arch Growth and Income Equity Portfolio 50,224,411 36,710,411 Other 31,663,414 23,587,743 Common stocks: Mercantile Bancorporation Inc., 4,639,165 and 2,488,498 shares, respectively 285,308,617 127,846,585 - ------------------------------------------------------------------------------------------------------ 410,859,700 222,392,738 Investments at estimated fair value 8,851,315 7,052,715 - ------------------------------------------------------------------------------------------------------ Total investments $419,711,015 229,445,453 ======================================================================================================
During 1997 and 1996, the Plan's investments, exclusive of investments in registered investment companies, appreciated in fair value as follows: =====================================================================================================================
1997 1996 ----------------------- ----------------------- Realized Unrealized Realized Unrealized - --------------------------------------------------------------------------------------------------------------------- Investments at fair value as determined by quoted market price - common stocks $3,134,261 112,244,813 173,587 13,695,448 Investments at estimated fair value - certificates of deposit - - 914 1,116 - --------------------------------------------------------------------------------------------------------------------- Net appreciation in fair value of investments $3,134,261 112,244,813 174,501 13,696,564 =====================================================================================================================
(Continued) 9 13 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Notes to Financial Statements =============================================================================== (4) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for plan benefits per the financial statements to Form 5500: ======================================================================================================
1997 1996 - ------------------------------------------------------------------------------------------------------ Net assets available for plan benefits per the financial statements $426,958,797 235,647,404 Amounts allocated to withdrawing participants (11,122,033) (2,688,173) - ------------------------------------------------------------------------------------------------------ Net assets available for plan benefits per the Form 5500 $415,836,764 232,959,231 ======================================================================================================
The following is a reconciliation of benefits paid to participants per the financial statements to Form 5500: ======================================================================================================
1997 1996 - ------------------------------------------------------------------------------------------------------ Benefits paid to participants per the financial statements $29,361,622 17,560,317 Add amounts allocated to withdrawing participants at December 31, current year 11,122,033 2,688,173 Less amounts allocated to withdrawing participants at December 31, prior year (2,688,173) (196,790) - ------------------------------------------------------------------------------------------------------ Benefits paid to participants per the Form 5500 $37,795,482 20,051,700 ======================================================================================================
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. (Continued) 10 14 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Notes to Financial Statements =============================================================================== (5) TRANSFERS TO THE PLAN During 1997 and 1996, the following plans merged into the Plan. The mergers were related to Mercantile's corporate acquisitions: ======================================================================================================================
Effective Total date plan assets - ---------------------------------------------------------------------------------------------------------------------- 1997 plan mergers: First Financial Corporation of America Profit Sharing Trust January 1, 1997 $ 1,718,501 Peoples State Bank Employee Savings and Profit Sharing Plan January 1, 1997 1,074,608 Today's Bancorp, Inc. Employees Stock Ownership Plan March 3, 1997 3,845,310 Regional Bancshares, Inc. 401(k) Plan July 1, 1997 969,953 First City National Bank 401(k) Plan July 3, 1997 112,434 Mark Twain Bancshares, Inc. Savings Challenge Plan November 5, 1997 47,954,430 - ---------------------------------------------------------------------------------------------------------------------- Total transfers to the Plan $55,675,236 ====================================================================================================================== 1996 plan mergers: TCBankshares, Inc. 401(k) Profit Sharing Plan January 1, 1996 $2,251,672 First Federal Savings Bank of Iowa Retirement Savings Plan January 1, 1996 4,881,151 Southwest Bancshares, Inc. 401(k) Plan January 1, 1996 651,083 Security Bank of Conway Profit Sharing Plan March 1, 1996 355,763 Hawkeye Bank Corporation Employees Stock Ownership Plan and Hawkeye Bank Corporation Employees Stock Ownership Plan July 1, 1996 31,545,745 First National Bank of Sterling Rock Falls Savings and Retirement Plan July 1, 1996 2,213,741 Metro Savings Bank F.S.B. Profit Sharing Plan and Metro Savings Bank F.S.B. Employee Stock Ownership Plan July 1, 1996 1,156,899 - ---------------------------------------------------------------------------------------------------------------------- Total transfers to the Plan $43,056,054 ======================================================================================================================
(Continued) 11 15 MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Notes to Financial Statements =============================================================================== (6) RELATED PARTY TRANSACTIONS On various dates during 1997, the Plan purchased and sold shares of Mercantile common stock at fair market value for investment in the Plan's Mercantile Stock Fund. Certain Plan investments are shares of mutual funds managed by Mercantile Bank N.A., a wholly owned subsidiary of Mercantile. Mercantile Bank N.A. is the trustee of the Plan and, therefore, these transactions qualify as party-in-interest transactions. (7) INCOME TAX STATUS The Internal Revenue Service has determined and informed Mercantile by a letter dated August 7, 1996, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code and, therefore, are exempt from federal income taxes. (8) PLAN TERMINATION While Mercantile has not expressed any intent to terminate the Plan or discontinue contributions, it may do so at any time, subject to the provisions set forth in ERISA. (9) SUBSEQUENT EVENTS (UNAUDITED) In July 1997, Mercantile acquired Roosevelt Financial Group, Inc. (Roosevelt). In conjunction with the acquisition, the Roosevelt Bank Employees' Savings and Profit Sharing Plan (Roosevelt Plan) merged into the Plan effective January 6, 1998. The fair value of the Roosevelt Plan's assets was approximately $22,415,000 at January 6, 1998. Also in conjunction with the Roosevelt acquisition, the Kirksville Federal Savings Bank 401(k) Plan (Kirksville Plan) merged into the Plan effective April 20, 1998. The fair value of the Kirksville Plan was approximately $2,735,000 at March 31, 1998. In March 1998, Mercantile acquired HomeCorp, Inc. In connection with the acquisition, the HomeCorp Inc. Employee Stock Ownership and 401(k) Plan (HomeCorp Plan) will be merged into the Plan effective July 1, 1998. The fair value of the HomeCorp Plan's assets was approximately $2,046,000 at April 30, 1998. 12 16 Schedule 1 ---------- MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Item 27a - Schedule of Assets Held for Investment Purposes December 31, 1997 ====================================================================================================================
Shares or Current units Cost value - -------------------------------------------------------------------------------------------------------------------- Cash equivalents: 15,971,897 Arch Money Market Portfolio Trust Shares $ 15,971,897 15,971,897 - -------------------------------------------------------------------------------------------------------------------- 15,971,897 15,971,897 - -------------------------------------------------------------------------------------------------------------------- Registered investment companies: 452,384 Arch International Equity Portfolio 5,099,598 5,301,944 925,199 Arch Small Cap Equity Portfolio 11,636,548 12,841,759 877,893 Arch Government and Corporate Bond Portfolio 8,976,915 9,147,640 2,330,923 Arch Balanced Portfolio 25,593,502 27,691,361 2,820,012 Arch Growth and Income Equity Portfolio 44,404,840 50,224,411 263,219 Arch Growth Equity Portfolio 4,400,000 4,372,071 - -------------------------------------------------------------------------------------------------------------------- 100,111,403 109,579,186 - -------------------------------------------------------------------------------------------------------------------- 4,639,165 Mercantile Bancorporation Inc. Common Stock 85,707,161 285,308,617 Loans to participants - general purpose and residential 8,837,826 loans (interest rates range from 10% to 10.5%) 8,837,826 8,837,826 150,024 Equitable Life Insurance 7,391 13,489 - -------------------------------------------------------------------------------------------------------------------- Total assets held for investment purposes $210,635,678 419,711,015 ==================================================================================================================== Represents party-in-interest transaction allowable under ERISA regulations. See accompanying independent auditors' report.
13 17 Schedule 2 ---------- MERCANTILE BANCORPORATION INC. HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST Item 27d - Schedule of Reportable Transactions Year ended December 31, 1997
========================================================================================================================== Identity of Purchase Selling Lease party involved Description of asset price price rental - -------------------------------------------------------------------------------------------------------------------------- Arch Money Market Purchases of the Arch Money Portfolio Trust Shares Market Portfolio Trust Shares $98,075,265 - - Arch Money Market Sales of the Arch Money Portfolio Trust Shares Market Portfolio Trust Shares - 92,544,337 - MTC Master Money Purchases of the MTC Market Account Master Money Market Account 444,438 - - MTC Master Money Sales of the MTC Market Account Master Money Market Account - 811,570 - Mercantile Bancorpora- Purchases of Mercantile tion Inc. Bancorporation Inc. common stock 15,186,384 - - Mercantile Bancorpora- Sales of Mercantile tion Inc. Bancorporation Inc. common stock - 405,736 - Arch Balanced Portfolio Purchases of the Arch Balanced Portfolio shares 6,633,546 - - Arch Balanced Portfolio Sales of the Arch Balanced Portfolio shares - 3,132,733 - Arch Small Capital Equity Purchases of Arch Small Cap Portfolio Equity Portfolio Shares 3,516,131 - - Arch Small Capital Equity Sales of Arch Small Cap Portfolio Equity Portfolio Shares - 1,689,000 - Arch Government and Purchases of the Arch Government Corporate Bond Portfolio and Corporate Bond Portfolio shares 1,936,788 - - Arch Government and Sales of the Arch Government Corporate Bond Portfolio and Corporate Bond Portfolio shares - 954,397 - Arch International Equity Purchases of Arch International Portfolio shares Equity Portfolio shares 1,768,970 - - Arch International Equity Sales of Arch International Portfolio shares Equity Portfolio shares - 339,000 - Arch Growth and Income Purchases of Arch Growth Equity Portfolio and Income Equity Portfolio shares 14,795,141 - - Arch Growth and Income Sales of Arch Growth Equity Portfolio and Income Equity Portfolio shares - 2,934,555 - Arch Growth Equity Purchases of Arch Growth Equity Portfolio Portfolio shares 4,400,000 - - Arch Growth Equity Sales of Arch Growth Equity Portfolio Portfolio shares - 4,415,797 - Arrow Equity Portfolio Purchases of Arrow Equity Portfolio shares 1,232,575 - - Arrow Equity Portfolio Sales of Arrow Equity Portfolio shares - 504,664 - ========================================================================================================================== Represents party-in-interest transaction allowable under ERISA regulations. ============================================================================================================================== Expenses Current value incurred Cost of asset on Identity of with of transaction Net gain party involved Description of asset transaction assets date or (loss) - ------------------------------------------------------------------------------------------------------------------------------ Arch Money Market Purchases of the Arch Money Portfolio Trust Shares Market Portfolio Trust Shares - 98,075,265 98,075,265 - Arch Money Market Sales of the Arch Money Portfolio Trust Shares Market Portfolio Trust Shares - 92,544,337 92,544,337 - MTC Master Money Purchases of the MTC Market Account Master Money Market Account - 444,438 444,438 - MTC Master Money Sales of the MTC Market Account Master Money Market Account - 811,570 811,570 - Mercantile Bancorpora- Purchases of Mercantile tion Inc. Bancorporation Inc. common stock 12,549 15,186,384 15,186,384 - Mercantile Bancorpora- Sales of Mercantile tion Inc. Bancorporation Inc. common stock - 352,302 405,736 53,434 Arch Balanced Portfolio Purchases of the Arch Balanced Portfolio shares - 6,633,546 6,633,546 - Arch Balanced Portfolio Sales of the Arch Balanced Portfolio shares - 2,932,916 3,132,733 199,817 Arch Small Capital Equity Purchases of Arch Small Cap Portfolio Equity Portfolio Shares - 3,516,131 3,516,131 - Arch Small Capital Equity Sales of Arch Small Cap Portfolio Equity Portfolio Shares - 1,506,510 1,689,000 182,490 Arch Government and Purchases of the Arch Government Corporate Bond Portfolio and Corporate Bond Portfolio shares - 1,936,788 1,936,788 - Arch Government and Sales of the Arch Government Corporate Bond Portfolio and Corporate Bond Portfolio shares - 957,184 954,397 (2,787) Arch International Equity Purchases of Arch International Portfolio shares Equity Portfolio shares - 1,768,970 1,768,970 - Arch International Equity Sales of Arch International Portfolio shares Equity Portfolio shares - 331,696 339,000 7,304 Arch Growth and Income Purchases of Arch Growth Equity Portfolio and Income Equity Portfolio shares - 14,795,141 14,795,141 - Arch Growth and Income Sales of Arch Growth Equity Portfolio and Income Equity Portfolio shares - 2,560,228 2,934,555 374,327 Arch Growth Equity Purchases of Arch Growth Equity Portfolio Portfolio shares - 4,400,000 4,400,000 - Arch Growth Equity Sales of Arch Growth Equity Portfolio Portfolio shares - 4,262,526 4,415,797 153,271 Arrow Equity Portfolio Purchases of Arrow Equity Portfolio shares - 1,232,575 1,232,575 - Arrow Equity Portfolio Sales of Arrow Equity Portfolio shares - 496,020 504,664 8,644 ============================================================================================================================== Represents party-in-interest transaction allowable under ERISA regulations. See accompanying independent auditors' report.
14 -----END PRIVACY-ENHANCED MESSAGE-----