UNION PLANTERS CORP
S-4, 1998-04-07
NATIONAL COMMERCIAL BANKS
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<PAGE>   1
      As filed with the Securities and Exchange Commission on April 7, 1998
                                                  Registration No. 333-
                                                                       ---------
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               -------------------

                                    FORM S-4

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

                               ------------------

                           UNION PLANTERS CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S>                                     <C>                                <C>
           TENNESSEE                                6712                                62-0859007
(State or Other Jurisdiction of         (Primary Standard Industrial       (I.R.S. Employer Identification No.)
 Incorporation or Organization)          Classification Code Number)
</TABLE>

                           7130 GOODLETT FARMS PARKWAY
                            MEMPHIS, TENNESSEE 38018
                                 (901) 580-6000

       (Address, including zip code, and telephone number, including area code,
                 of Registrant's principal executive offices)

                               E. JAMES HOUSE, JR.
                  SECRETARY AND MANAGER OF THE LEGAL DEPARTMENT
                           UNION PLANTERS CORPORATION
                           7130 GOODLETT FARMS PARKWAY
                            MEMPHIS, TENNESSEE 38018
                                 (901) 580-6596

 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                               WITH COPIES TO:

<TABLE>
<S>                                   <C>                                         <C>
      FRANK M. CONNER III                        G. THOMAS ANDES                         EDWARD D. HERLIHY
       ALSTON & BIRD LLP              CHAIRMAN OF THE BOARD, PRESIDENT, AND       WACHTELL, LIPTON, ROSEN & KATZ
 601 PENNSYLVANIA AVENUE, N.W.               CHIEF EXECUTIVE OFFICER                    51 WEST 52ND STREET
   NORTH BUILDING, 11TH FLOOR                   MAGNA GROUP, INC.                    NEW YORK, NEW YORK 10019
     WASHINGTON, D.C. 20004                      ONE MAGNA PLACE                          (212) 403-1000
         (202) 756-3303                  1401 SOUTH BRENTWOOD BOULEVARD
                                           ST. LOUIS, MISSOURI 63144
                                                 (314) 963-2548
</TABLE>

                          -----------------------------
 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:

    As soon as practicable after the merger (the "Merger") described in this
                   Registration Statement becomes effective.

     If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

<TABLE>
<CAPTION>
                                                    CALCULATION OF REGISTRATION FEE
====================================================================================================================================
   TITLE OF EACH CLASS                                     PROPOSED MAXIMUM            PROPOSED MAXIMUM
      OF SECURITIES               AMOUNT TO BE              OFFERING PRICE                 AGGREGATE                 AMOUNT OF
    TO BE REGISTERED             REGISTERED (1)              PER UNIT (2)             OFFERING PRICE (2)          REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                       <C>                        <C>                         <C>
      Common Stock,
  $5.00 par value (and
  associated Preferred
      Share Rights)                36,716,861               $58.125                   $2,203,352,861              $649,989.09
====================================================================================================================================
</TABLE>

(1)  This Registration Statement covers (i) the maximum number of shares of the
     common stock of the Registrant which is expected to be issued in connection
     with the Merger, and (ii) the maximum number of shares of common stock
     reserved for issuance under various option and other plans and debentures
     of Magna Group, Inc. ("Magna"), the obligations under which will be assumed
     by the Registrant upon consummation of the Merger but which may be issued
     prior to consummation of the Merger.

(2)  Estimated solely for purposes of calculating the registration fee and
     based, pursuant to Rule 457(c) and (f) under the Securities Act of 1933, as
     amended, on the average of the high and low sales prices of Magna common
     stock as reported on the New York Stock Exchange, Inc. on April 1,     
     1998.

     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE TIME UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), SHALL
DETERMINE.

================================================================================


<PAGE>   2
 
                               MAGNA GROUP, INC.
                                ONE MAGNA PLACE
                         1401 SOUTH BRENTWOOD BOULEVARD
                           ST. LOUIS, MISSOURI 63144
 
To the Shareholders of Magna Group, Inc.                                  , 1998
 
     You are cordially invited to attend the 1998 annual meeting of the
shareholders (the "Magna Annual Meeting") of Magna Group, Inc. ("Magna") to be
held at           , located at             at        .m., local time, on
            , 1998, notice of which is enclosed.
 
     At the Magna Annual Meeting, you will be asked to consider and vote on a
proposal to adopt the Agreement and Plan of Reorganization (the "Agreement") by
and between Magna and Union Planters Corporation, a Tennessee corporation
("UPC"), and a related Plan of Merger (the "Plan of Merger") by and between
Magna and Union Planters Holding Corporation ("UPHC"), a Tennessee corporation
and wholly-owned subsidiary of UPC. Pursuant to the Agreement and the Plan of
Merger, Magna will merge (the "Merger") with and into UPHC, with the effect that
UPHC will be the surviving corporation resulting from the Merger. Upon
consummation of the Merger, each share of (i) the $2.00 par value common stock
of Magna (together with associated Preferred Stock Purchase Rights (as defined
in the Agreement), "Magna Common Stock") issued and outstanding will be
converted into and exchanged for .9686 of a share of $5.00 par value common
stock of UPC and the associated Preferred Share Rights (as defined in the
accompanying Joint Proxy Statement/Prospectus), with cash being paid in lieu of
issuing fractional shares and (ii) the $20.00 par value Class B voting preferred
stock of Magna (the "Magna Class B Preferred Stock") issued and outstanding will
be converted into the right to receive a check from UPC in the amount of $20.00
plus any accrued but unpaid dividends at the effective time of the Merger.
 
     In addition to considering the Agreement and the Plan of Merger at the
Magna Annual Meeting, you will be asked to consider and vote upon a proposal to
elect six nominees as Class I directors of Magna to serve until the Merger is
consummated or, in the event the Merger is not consummated, until the expiration
of their respective three-year terms or until their respective successors are
elected and qualified.
 
     Enclosed are the (i) Notice of Magna Annual Meeting, (ii) Joint Proxy
Statement/Prospectus, (iii) proxy card for the Magna Annual Meeting, and (iv)
pre-addressed return envelope for the proxy card. The Joint Proxy
Statement/Prospectus describes in more detail the Agreement, the Plan of Merger,
and the proposed Merger, including a description of the conditions to
consummation of the Merger and the effects of the Merger on the rights of
Magna's shareholders. Please read these materials carefully and consider
thoughtfully the information set forth in them.
 
     Donaldson, Lufkin & Jenrette Securities Corporation, Magna's financial
advisor, has issued its opinion to your Board of Directors regarding the
fairness, from a financial point of view, of the consideration to be paid by UPC
pursuant to the Agreement. A copy of the opinion is included as Appendix C to
the Joint Proxy Statement/Prospectus.
 
     THE BOARD OF DIRECTORS OF MAGNA HAS UNANIMOUSLY APPROVED AND ADOPTED THE
AGREEMENT AND THE PLAN OF MERGER AND CONSUMMATION OF THE MERGER CONTEMPLATED
THEREBY, AND RECOMMENDS THAT YOU VOTE FOR ADOPTION OF THE AGREEMENT AND THE PLAN
OF MERGER.
 
     Adoption of the Agreement and the Plan of Merger will require the
affirmative vote of the holders of a majority of the issued and outstanding
shares of Magna Common Stock and Magna Class B Preferred Stock entitled to be
voted at the Magna Annual Meeting, voting together as a single class. Approval
of the election of six nominees as Class I directors of Magna requires the
affirmative vote of a plurality of the shares of Magna Common Stock and Magna
Class B Preferred Stock voted in the election of directors, voting together as a
single class. Whether or not you plan to attend the Magna Annual Meeting, you
are urged to complete, sign, date, and return promptly the enclosed proxy card.
If you attend the Magna Annual Meeting, you may vote in person even if you
previously returned your proxy card. The proposed Merger with UPC is a
significant step for Magna and your vote on this matter is of great importance.
<PAGE>   3
 
     ON BEHALF OF THE BOARD OF DIRECTORS, I URGE YOU TO VOTE FOR ADOPTION OF THE
AGREEMENT AND THE PLAN OF MERGER BY MARKING THE ENCLOSED PROXY CARD "FOR" ITEM
1. I ALSO URGE YOU TO VOTE FOR THE ELECTION OF THE SIX NOMINEES AS CLASS I
DIRECTORS OF MAGNA BY MARKING THE ENCLOSED PROXY CARD "FOR" ITEM 2.
 
     I look forward to seeing you at the Magna Annual Meeting.
 
                                            Sincerely,
 
                                            G. Thomas Andes
                                            Chairman, President, and
                                            Chief Executive Officer
<PAGE>   4
 
                           UNION PLANTERS CORPORATION
                          7130 GOODLETT FARMS PARKWAY
                            MEMPHIS, TENNESSEE 38018
 
To the Shareholders of Union Planters Corporation:                        , 1998
 
     You are cordially invited to attend a special meeting of the shareholders
(the "UPC Special Meeting") of Union Planters Corporation ("UPC") to be held at
the Union Planters Administrative Center, located at 7130 Goodlett Farms
Parkway, Memphis, Tennessee 38018 at               .m., local time, on
            , 1998, notice of which is enclosed.
 
     At the UPC Special Meeting, you will be asked to consider and vote on a
proposal to approve the issuance of shares of the $5.00 par value common stock
of UPC (together with associated Preferred Share Rights (as defined in the
accompanying Joint Proxy Statement/Prospectus, "UPC Common Stock") in connection
with the proposed acquisition of Magna Group, Inc. ("Magna") by UPC, pursuant to
the merger (the "Merger") of Magna with and into Union Planters Holding
Corporation ("UPHC") in accordance with the terms of the Agreement and Plan of
Reorganization (the "Agreement") by and between Magna and UPC and a related Plan
of Merger (the "Plan of Merger") by and between Magna and UPHC. Upon
consummation of the Merger, each share of (i) the $2.00 par value common stock
of Magna, together with associated Preferred Share Purchase Rights (as defined
in the accompanying Joint Proxy Statement/ Prospectus), issued and outstanding
will be converted into and exchanged for .9686 of a share of UPC Common Stock,
with cash being paid in lieu of issuing fractional shares and (ii) the $20.00
par value Class B voting preferred stock of Magna issued and outstanding will be
converted into the right to receive a check from UPC in the amount of $20.00
plus any accrued but unpaid dividends at the effective time of the Merger.
 
     Enclosed are the (i) Notice of UPC Special Meeting, (ii) Joint Proxy
Statement/Prospectus, (iii) proxy card for the UPC Special Meeting, and (iv)
pre-addressed return envelope for the proxy card. The Joint Proxy
Statement/Prospectus describes in more detail the Agreement and the proposed
Merger. Please read these materials carefully and consider thoughtfully the
information set forth in them.
 
     Stifel Nicolaus & Co., UPC's financial advisor, has issued its opinion to
your Board of Directors regarding the fairness, from a financial point of view,
of the consideration to be paid by UPC pursuant to the Agreement. A copy of the
opinion is included as Appendix D to the Joint Proxy Statement/Prospectus.
 
     THE BOARD OF DIRECTORS OF UPC HAS UNANIMOUSLY APPROVED AND ADOPTED THE
AGREEMENT AND CONSUMMATION OF THE MERGER CONTEMPLATED THEREBY, AND RECOMMENDS
THAT YOU VOTE FOR APPROVAL OF THE ISSUANCE OF SHARES OF UPC COMMON STOCK
PURSUANT TO THE AGREEMENT. YOUR BOARD BELIEVES THAT, AMONG OTHER BENEFITS, THE
MERGER WILL RESULT IN A COMPANY WITH GREATER FINANCIAL STRENGTH AND INCREASED
OPPORTUNITY AND FLEXIBILITY FOR PROFITABLE EXPANSION AND DIVERSIFICATION.
CONSUMMATION OF THE MERGER IS SUBJECT TO CERTAIN CONDITIONS, INCLUDING ADOPTION
OF THE AGREEMENT AND THE PLAN OF MERGER BY THE MAGNA SHAREHOLDERS AND APPROVAL
OF THE MERGER BY VARIOUS REGULATORY AGENCIES.
 
     Approval of the issuance of the shares of UPC Common Stock pursuant to the
Agreement will require the affirmative vote of a majority of the votes cast in
person or by proxy by the holders of UPC Common Stock at the UPC Special
Meeting, assuming a quorum is present. Whether or not you plan to attend the UPC
Special Meeting, you are urged to complete, sign, date, and return promptly the
enclosed proxy card. If you attend the UPC Special Meeting, you may vote in
person even if you previously returned your proxy card. The proposed Merger with
Magna is a significant step for UPC and your vote on this matter is of great
importance.
 
     ON BEHALF OF THE BOARD OF DIRECTORS, I URGE YOU TO VOTE FOR APPROVAL OF THE
ISSUANCE OF SHARES OF UPC COMMON STOCK PURSUANT TO THE AGREEMENT BY MARKING THE
ENCLOSED PROXY CARD "FOR" ITEM 1.
 
     I look forward to seeing you at the UPC Special Meeting.
 
                                            Sincerely,
 
                                            Benjamin W. Rawlins, Jr.
                                            Chairman and Chief Executive Officer
<PAGE>   5
 
                               MAGNA GROUP, INC.
                                ONE MAGNA PLACE
                         1401 SOUTH BRENTWOOD BOULEVARD
                           ST. LOUIS, MISSOURI 63144
 
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                 TO BE HELD AT        .M. ON             , 1998
 
     NOTICE IS HEREBY GIVEN that the 1998 annual meeting of the shareholders
(the "Magna Annual Meeting") of Magna Group, Inc. ("Magna") will be held at
               , on           , 1998, at      :00   .m., local time, for the
following purposes:
 
          1. Merger.  To consider and vote upon a proposal to adopt the
     Agreement and Plan of Reorganization (the "Agreement"), dated as of
     February 22, 1998, by and between Magna and Union Planters Corporation, a
     Tennessee corporation ("UPC"), and the related Plan of Merger (the "Plan of
     Merger"), by and between Magna and Union Planters Holding Corporation, a
     Tennessee corporation and wholly-owned subsidiary of UPC ("UPHC"), pursuant
     to which (i) Magna will merge (the "Merger") with and into UPHC, with the
     effect that UPHC will be the surviving corporation resulting from the
     Merger, and (ii) each share of (a) the $2.00 par value common stock of
     Magna (together with the associated Preferred Stock Purchase Rights (as
     defined in the Agreement), "Magna Common Stock") issued and outstanding at
     the effective time of the Merger (excluding shares held by Magna or UPC, or
     their respective subsidiaries, in each case other than shares held in a
     fiduciary capacity or as a result of debts previously contracted) will be
     converted into and exchanged for .9686 of a share of the $5.00 par value
     common stock of UPC (together with the associated Preferred Share Rights
     (as defined in the accompanying Joint Proxy Statement/Prospectus)), and
     cash in lieu of issuing any fractional share, and (b) the $20.00 par value
     Class B voting preferred stock of Magna ("Magna Class B Preferred Stock")
     issued and outstanding at the effective time of the Merger (excluding
     shares held by Magna or UPC, or their respective subsidiaries, in each case
     other than shares held in a fiduciary capacity or as a result of debts
     previously contracted, and other than shares held by dissenting
     shareholders) will be converted into the right to receive a check from UPC
     in the amount of $20.00 plus any accrued but unpaid dividends at the
     effective time of the Merger. Copies of each of the Agreement and the Plan
     of Merger are included in Appendices A and B, respectively, to the
     accompanying Joint Proxy Statement/Prospectus and are incorporated by
     reference therein.
 
          2. Election of Directors.  To consider and vote upon a proposal to
     elect six nominees as Class I directors of Magna to serve until the Merger
     is consummated or, in the event the Merger is not consummated, until the
     expiration of their respective three-year terms or until their respective
     successors are elected and qualified.
 
          3. Other Business.  To transact such other business as may come
     properly before the Magna Annual Meeting or any adjournments or
     postponements of the Magna Annual Meeting.
 
     Only shareholders of record at the close of business on             , 1998,
will be entitled to receive notice of and to vote at the Magna Annual Meeting or
any adjournment or postponement thereof. ADOPTION OF THE AGREEMENT AND THE PLAN
OF MERGER REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
ISSUED AND OUTSTANDING SHARES OF MAGNA COMMON STOCK AND MAGNA CLASS B PREFERRED
STOCK ENTITLED TO BE VOTED AT THE MAGNA ANNUAL MEETING, VOTING TOGETHER AS A
SINGLE CLASS. APPROVAL OF THE ELECTION OF SIX NOMINEES AS CLASS I DIRECTORS OF
MAGNA REQUIRES THE AFFIRMATIVE VOTE OF A PLURALITY OF THE SHARES OF MAGNA COMMON
STOCK AND MAGNA CLASS B PREFERRED STOCK VOTED IN THE ELECTION OF DIRECTORS,
VOTING TOGETHER AS A SINGLE CLASS.
 
     Notice of Dissenters' Rights.  Holders of Magna Class B Preferred Stock
have the right to dissent from the Merger and to receive the "fair value" of
their shares of Magna Class B Preferred Stock in cash, provided the proper steps
are taken to properly "perfect" statutory dissenters' rights. Statutory
dissenters' rights are more fully discussed in various sections of the
accompanying Joint Proxy Statement/Prospectus, and a copy of the Delaware
statutes governing statutory dissenters' rights is included as Appendix E to the
accompanying Joint Proxy Statement/Prospectus. Holders of Magna Class B
Preferred Stock considering the exercise of
<PAGE>   6
 
their dissenters' rights should carefully review these materials and information
before voting with respect to the Agreement and the Plan of Merger. Holders of
Magna Common Stock do not have dissenters' rights.
 
     THE BOARD OF DIRECTORS OF MAGNA UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR ADOPTION OF THE AGREEMENT AND THE PLAN OF MERGER AND FOR THE ELECTION
OF THE SIX NOMINEES AS CLASS I DIRECTORS OF MAGNA.
 
                                            BY ORDER OF THE BOARD OF DIRECTORS
 
                                            G. Thomas Andes
                                            Chairman, President, and
                                            Chief Executive Officer
 
St. Louis, Missouri
 
  WHETHER OR NOT YOU PLAN TO ATTEND THE MAGNA ANNUAL MEETING, PLEASE COMPLETE,
DATE, AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
    POSTAGE PAID RETURN ENVELOPE IN ORDER TO ENSURE THAT YOUR SHARES WILL BE
                    REPRESENTED AT THE MAGNA ANNUAL MEETING.
<PAGE>   7
 
                           UNION PLANTERS CORPORATION
                          7130 GOODLETT FARMS PARKWAY
                            MEMPHIS, TENNESSEE 38018
 
                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                 TO BE HELD AT        .M. ON             , 1998
 
     NOTICE IS HEREBY GIVEN that a special meeting of the shareholders (the "UPC
Special Meeting") of Union Planters Corporation ("UPC") will be held at the
Union Planters Administrative Center, located at 7130 Goodlett Farms Parkway,
Memphis, Tennessee 38018 at        .m., local time, on             , 1998,
notice of which is enclosed.
 
     1. Issuance of Shares of UPC Common Stock in Connection with the
Merger.  To consider and vote upon a proposal to approve the issuance of shares
of the $5.00 par value common stock of UPC (together with the associated
Preferred Share Rights (as defined in the accompanying Joint Proxy
Statement/Prospectus), "UPC Common Stock"), in connection with the proposed
acquisition of Magna Group, Inc., a Delaware corporation ("Magna"), by UPC in
accordance with the Agreement and Plan of Reorganization (the "Agreement"),
dated as of February 22, 1998, by and between Magna and UPC, and the related
Plan of Merger (the "Plan of Merger"), by and between Magna and Union Planters
Holding Corporation, a Tennessee corporation and wholly-owned subsidiary of UPC
("UPHC"), pursuant to which (i) Magna will merge (the "Merger") with and into
UPHC, with the effect that UPHC will be the surviving corporation resulting from
the Merger, and (ii) each share of (a) the $2.00 par value common stock of Magna
(together with associated Preferred Stock Purchase Rights (as defined in the
Agreement), "Magna Common Stock") issued and outstanding at the effective time
of the Merger (excluding shares held by Magna or UPC, or their respective
subsidiaries, in each case other than shares held in a fiduciary capacity or as
a result of debts previously contracted) will be converted into and exchanged
for .9686 of a share of UPC Common Stock and the associated Preferred Share
Rights, and cash in lieu of issuing any fractional share, and (b) the $20.00 par
value Class B voting preferred stock of Magna ("Magna Class B Preferred Stock")
issued and outstanding (excluding shares held by Magna or UPC, or their
respective subsidiaries, in each case other than shares held in a fiduciary
capacity or as a result of debts previously contracted, and other than shares
held by dissenting shareholders) will be converted into the right to receive a
check from UPC in the amount of $20.00 plus any accrued but unpaid dividends at
the effective time of the Merger. Copies of each of the Agreement and the Plan
of Merger are included as Appendices A and B, respectively, to the accompanying
Joint Proxy Statement/Prospectus and are incorporated by reference therein.
 
     2. Other Business.  To transact such other business as may come properly
before the UPC Special Meeting or any adjournments or postponements of the UPC
Special Meeting.
 
     Only shareholders of record at the close of business on             , 1998,
will be entitled to receive notice of and to vote at the UPC Special Meeting or
any adjournment or postponement thereof. APPROVAL OF THE ISSUANCE OF SHARES OF
UPC COMMON STOCK PURSUANT TO THE AGREEMENT REQUIRES THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE VOTES CAST IN PERSON OR BY PROXY BY THE HOLDERS OF UPC COMMON
STOCK AT THE UPC SPECIAL MEETING, ASSUMING A QUORUM IS PRESENT.
 
     THE BOARD OF DIRECTORS OF UPC UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF THE ISSUANCE OF SHARES OF UPC COMMON STOCK PURSUANT TO THE
AGREEMENT.
 
                                            BY ORDER OF THE BOARD OF DIRECTORS
 
                                            E. James House, Jr.
                                            Secretary
 
Memphis, Tennessee
 
  WHETHER OR NOT YOU PLAN TO ATTEND THE UPC SPECIAL MEETING, PLEASE COMPLETE,
DATE, AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
    POSTAGE PAID RETURN ENVELOPE IN ORDER TO ENSURE THAT YOUR SHARES WILL BE
                    REPRESENTED AT THE UPC SPECIAL MEETING.
<PAGE>   8
 
PROSPECTUS
 
                           UNION PLANTERS CORPORATION
                         COMMON STOCK, $5.00 PAR VALUE
                             JOINT PROXY STATEMENT
 
<TABLE>
<S>                         <C>
UNION PLANTERS CORPORATION        MAGNA GROUP, INC.
   7130 GOODLETT FARMS             ONE MAGNA PLACE
          PARKWAY
 MEMPHIS, TENNESSEE 38018   1401 SOUTH BRENTWOOD BOULEVARD
                              ST. LOUIS, MISSOURI 63144
</TABLE>
 
     This Prospectus of Union Planters Corporation, a bank holding company
organized and existing under the laws of the State of Tennessee ("UPC"), relates
to up to 36,716,861 shares of common stock, $5.00 par value, of UPC (together
with associated Preferred Share Rights (as defined herein), "UPC Common Stock"),
which are issuable to the shareholders of Magna Group, Inc., a bank holding
company organized and existing under the laws of the State of Delaware
("Magna"), upon consummation of the proposed merger (the "Merger") of Magna with
and into Union Planters Holding Corporation ("UPHC"), a corporation organized
and existing under the laws of the State of Tennessee and a wholly-owned
subsidiary of UPC, with the effect that UPHC will be the surviving corporation
of the Merger.
 
     The Merger will be consummated pursuant to the terms of the Agreement and
Plan of Reorganization, dated as of February 22, 1998 (the "Agreement"), by and
between UPC and Magna and the related Plan of Merger (the "Plan of Merger"), by
and between Magna and UPHC. At the effective time of the Merger (the "Effective
Time"), except as described herein, each issued and outstanding share of (i) the
$2.00 par value common stock of Magna (together with associated Preferred Stock
Purchase Rights (as defined in the Agreement), "Magna Common Stock") (excluding
shares held by Magna or UPC, or their respective subsidiaries, in each case
other than shares held in a fiduciary capacity or as a result of debts
previously contracted) will be converted into and exchanged for .9686 of a share
of UPC Common Stock (the "Exchange Ratio") and (ii) the $20.00 par value Class B
voting preferred stock of Magna ("Magna Class B Preferred Stock" and, together
with Magna Common Stock, the "Magna Capital Stock"), (excluding shares held by
Magna or UPC, or their respective subsidiaries, in each case other than shares
held in a fiduciary capacity or as a result of debts previously contracted, and
other than shares held by dissenting shareholders) will be converted into the
right to receive a check from UPC in the amount of $20.00 plus any accrued but
unpaid dividends at the Effective Time. Cash (without interest) will be paid in
lieu of the issuance of any fractional shares of UPC Common Stock.
 
     This Prospectus also serves as a Joint Proxy Statement of Magna and UPC,
and is being furnished to the shareholders of Magna and UPC in connection with
the solicitation of proxies by the Board of Directors of Magna (the "Magna
Board") for use at its 1998 annual meeting of shareholders (including any
adjournments or postponements thereof, the "Magna Annual Meeting"), and by the
Board of Directors of UPC (the "UPC Board") for use at its special meeting of
shareholders (including any adjournments or postponements thereof, the "UPC
Special Meeting"), each to be held on             , 1998, to consider and vote
upon, in the case of Magna, (i) the Agreement and the Plan of Merger and (ii)
the election of six nominees as Class I directors of Magna, and, in the case of
UPC, the issuance of shares of UPC Common Stock pursuant to the Agreement
(collectively, the "Meetings"). This Joint Proxy Statement/Prospectus (the
"Joint Proxy Statement") and related materials enclosed herewith are being
mailed to the shareholders of Magna and UPC on or about             , 1998.
  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 JOINT PROXY STATEMENT. ANY REPRESENTATION TO THE
                        CONTRARY IS A CRIMINAL OFFENSE.
   THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS, OR OTHER
   OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE FEDERAL
       DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
                                INSTRUMENTALITY.
                               ------------------
            The date of this Joint Proxy Statement is        , 1998.
<PAGE>   9
 
                             AVAILABLE INFORMATION
 
     Each of UPC and Magna is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, is required to file reports, proxy and information
statements, and other information with the Securities and Exchange Commission
(the "SEC"). Copies of such reports, proxy and information statements, and other
information can be obtained, at prescribed rates, from the SEC by addressing
written requests for such copies to the Public Reference Section at the SEC at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition,
such reports, proxy and information statements, and other information can be
inspected and copied at the public reference facilities referred to above and at
the regional offices of the SEC at 7 World Trade Center, 13th Floor, New York,
New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. The SEC also maintains a site on the World Wide
Web at http://www.sec.gov that contains reports, proxy and information
statements, and other information regarding registrants that file electronically
with the SEC. The shares of UPC Common Stock and Magna Common Stock are listed
and traded on the New York Stock Exchange, Inc. (the "NYSE") under the symbol
"UPC" and "MGR," respectively, and reports, proxy and information statements,
and other information concerning UPC and Magna also may be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
 
     This Joint Proxy Statement constitutes part of the Registration Statement
on Form S-4 of UPC (including any exhibits and amendments thereto, the
"Registration Statement") filed with the SEC under the Securities Act of 1933,
as amended (the "Securities Act"), relating to the securities offered hereby.
This Joint Proxy Statement does not include all of the information in the
Registration Statement, certain portions of which have been omitted pursuant to
the rules and regulations of the SEC. For further information about UPC, Magna,
and the securities offered hereby, reference is made to the Registration
Statement. The Registration Statement may be inspected and copied, at prescribed
rates, at the SEC's public reference facilities at the addresses set forth
above.
 
     All information contained in this Joint Proxy Statement or incorporated
herein by reference with respect to UPC was supplied by UPC, and all information
contained in this Joint Proxy Statement or incorporated herein by reference with
respect to Magna was supplied by Magna.
 
     NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS JOINT PROXY
STATEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS JOINT PROXY STATEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE
SECURITIES OFFERED BY THIS JOINT PROXY STATEMENT IN ANY JURISDICTION TO OR FROM
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS JOINT PROXY STATEMENT NOR ANY
DISTRIBUTION OF THE SECURITIES BEING OFFERED PURSUANT TO THIS JOINT PROXY
STATEMENT SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF UPC OR MAGNA OR THE INFORMATION SET FORTH OR
INCORPORATED BY REFERENCE HEREIN SINCE THE DATE OF THIS JOINT PROXY STATEMENT.
 
     THIS JOINT PROXY STATEMENT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITH
RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS, AND BUSINESS OF UPC
FOLLOWING THE CONSUMMATION OF THE MERGER AND THE OTHER ACQUISITIONS (AS DEFINED
UNDER "BUSINESS OF UPC -- RECENT DEVELOPMENTS"), INCLUDING STATEMENTS RELATING
TO THE COST SAVINGS AND REVENUE ENHANCEMENTS THAT ARE EXPECTED TO BE REALIZED
FROM THE MERGER AND THE OTHER ACQUISITIONS AND THE EXPECTED IMPACT OF THE MERGER
AND THE OTHER ACQUISITIONS ON UPC'S FINANCIAL PERFORMANCE. THESE FORWARD-LOOKING
STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. FACTORS THAT MAY CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS INCLUDE, AMONG OTHER THINGS, THE FOLLOWING
POSSIBILITIES: (I) EXPECTED COST SAVINGS FROM THE MERGER AND THE OTHER
ACQUISITIONS CANNOT BE FULLY REALIZED; (II) DEPOSIT ATTRITION, CUSTOMER LOSS, OR
REVENUE LOSS FOLLOWING THE MERGER AND THE OTHER ACQUISITIONS IS GREATER THAN
EXPECTED; (III) COMPETITIVE PRESSURE IN THE BANKING INDUSTRY INCREASES
SIGNIFICANTLY; (IV) COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE
BUSINESSES OF UPC AND THE INSTITUTIONS TO BE ACQUIRED ARE GREATER THAN EXPECTED;
(V) CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE MARGINS; (VI) GENERAL
ECONOMIC CONDITIONS, EITHER NATIONALLY OR REGIONALLY, ARE LESS FAVORABLE THAN
EXPECTED, RESULTING IN, AMONG OTHER THINGS, A DETERIORATION IN CREDIT QUALITY;
(VII) CHANGES
 
                                        i
<PAGE>   10
 
OCCUR IN THE REGULATORY ENVIRONMENT; (VIII) CHANGES OCCUR IN BUSINESS CONDITIONS
AND INFLATION; (IX) CHANGES OCCUR IN THE SECURITIES MARKETS; AND (X) DISRUPTIONS
OF THE OPERATIONS OF UPC OR ANY OF ITS SUBSIDIARIES, OR ANY OTHER GOVERNMENTAL
OR PRIVATE ENTITY AS A RESULT OF THE "YEAR 2000 PROBLEM." THE FORWARD-LOOKING
EARNINGS ESTIMATES INCLUDED IN THIS JOINT PROXY STATEMENT HAVE NOT BEEN EXAMINED
OR COMPILED BY THE INDEPENDENT PUBLIC ACCOUNTANTS OF UPC OR MAGNA, NOR HAVE SUCH
ACCOUNTANTS APPLIED ANY PROCEDURES THERETO. ACCORDINGLY, SUCH ACCOUNTANTS DO NOT
EXPRESS AN OPINION OR ANY OTHER FORM OF ASSURANCE ON THEM. FURTHER INFORMATION
ON OTHER FACTORS THAT COULD AFFECT THE FINANCIAL RESULTS OF UPC AFTER THE MERGER
AND THE OTHER ACQUISITIONS IS INCLUDED IN THE SEC FILINGS INCORPORATED BY
REFERENCE HEREIN.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     The following documents previously filed with the SEC by UPC pursuant to
the Exchange Act are hereby incorporated by reference herein (SEC File No.
1-10160):
 
          (a) UPC's Annual Report on Form 10-K for the year ended December 31,
     1997 (provided that any information included or incorporated by reference
     in response to Items 402 (a)(8), (i), (k), or (1) of Regulation S-K of the
     SEC shall not be deemed to be incorporated herein and is not part of the
     Registration Statement) (the "UPC 1997 Form 10-K");
 
          (b) UPC's Current Reports on Form 8-K dated January 15 and February
     23, 1998;
 
          (c) The description of the current management and Board of Directors
     of UPC contained in the proxy statement of UPC (the "UPC Annual Meeting
     Proxy Statement") filed pursuant to Section 14(a) of the Exchange Act with
     respect to UPC's 1998 annual meeting of shareholders to be held on April
     16, 1998;
 
          (d) UPC's Registration Statement on Form 8-A dated January 19, 1989,
     filed on February 1, 1989; (SEC File No. 0-6919) in connection with UPC's
     designation and authorization of its Series A Preferred Stock; and
 
          (e) The description of the UPC Common Stock contained in UPC's
     Registration Statement under Section 12(b) of the Exchange Act and any
     amendment or report filed for the purpose of updating such description.
 
     The following documents previously filed with the SEC by Magna pursuant to
the Exchange Act are hereby incorporated by reference herein (SEC File No.
1-12405):
 
          (a) Magna's Annual Report on Form 10-K for the fiscal year ended
     December 31, 1997 (the "Magna 1997 Form 10-K");
 
          (b) Magna's Current Report on Form 8-K dated February 22, 1998; and
 
          (c) The description of the rights set forth in Item 1 of Magna's
     Registration Statement on Form 8-A, dated November 11, 1988, filed by Magna
     pursuant to Section 12 of the Exchange Act, including any amendment or
     report filed for purposes of updating any such description.
 
     All documents filed by UPC and Magna pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the Exchange Act after the date of this Joint Proxy Statement and
prior to final adjournment of the Meetings shall be deemed to be incorporated by
reference in this Joint Proxy Statement and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes hereof to the extent that a statement
contained herein or in any subsequently filed document which also is, or is
deemed to be, incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part hereof, except as so modified or superseded.
 
     UPC will provide without charge, upon the written or oral request of any
person, including any beneficial owner, to whom this Joint Proxy Statement is
delivered, a copy of any and all information (excluding certain
 
                                       ii
<PAGE>   11
 
exhibits) relating to UPC that has been incorporated by reference in the
Registration Statement. Such requests should be directed to E. James House, Jr.,
Secretary and Manager of the Legal Department, Union Planters Corporation, 7130
Goodlett Farms Parkway, Memphis, Tennessee 38018 (telephone (901) 580-6584).
Magna will provide without charge, upon the written or oral request of any
person, including any beneficial owner, to whom this Joint Proxy Statement is
delivered, a copy of any and all information (excluding certain exhibits)
relating to Magna that has been incorporated by reference in the Registration
Statement of which this Joint Proxy Statement is a part. Such requests should be
directed to Bradford W. Koeneman, Executive Vice President, Magna Group, Inc.,
One Magna Place, 1401 South Brentwood Boulevard, St. Louis, Missouri 63144-1401
(telephone (314) 963-2500). In order to ensure timely delivery of the documents,
any request should be made by                     , 1998.
 
                                       iii
<PAGE>   12
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
SUMMARY.....................................................    1
     The Parties............................................    1
     Meetings of Shareholders...............................    2
     The Merger.............................................    3
     Additional Matters Relating to the Magna Annual
      Meeting...............................................    7
     Comparative Market Prices of Common Stock..............    7
     Selected Consolidated Financial Data...................    8
     Historical and Pro Forma Comparative Per Share Data....   11
     Selected Pro Forma Consolidated Financial Data for
      UPC...................................................   13
MEETINGS OF SHAREHOLDERS....................................   16
     Date, Place, Time, and Purpose.........................   16
     Record Date, Voting Rights, Required Vote, and
      Revocability of Proxies...............................   16
     Solicitation of Proxies................................   18
     Dissenters' Rights.....................................   19
DESCRIPTION OF TRANSACTION..................................   19
     General................................................   19
     Background of and Reasons for the Merger...............   20
     Opinion of Magna's Financial Advisor...................   22
     Opinion of UPC's Financial Advisor.....................   29
     Effective Time of the Merger...........................   33
     Dissenters' Rights.....................................   33
     Distribution of Consideration..........................   36
     Conditions to Consummation of the Merger...............   36
     Regulatory Approval....................................   37
     Waiver, Amendment, and Termination.....................   38
     Conduct of Business Pending the Merger.................   38
     Management and Operations After the Merger.............   40
     Interests of Certain Persons in the Merger.............   40
     Certain Federal Income Tax Consequences of the
      Merger................................................   43
     Accounting Treatment...................................   44
     Expenses and Fees......................................   44
     Resales of UPC Common Stock............................   45
     Option Agreement.......................................   45
EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS..............   48
     Anti-takeover Provisions Generally.....................   48
     Authorized Capital Stock...............................   48
     Preemptive Rights......................................   50
     Amendment of Charter and Bylaws........................   50
     Classified Board of Directors and Absence of Cumulative
      Voting................................................   51
     Director Removal and Vacancies.........................   52
     Limitations on Director Liability......................   52
     Indemnification........................................   52
     Special Meetings of Shareholders.......................   53
     Actions by Shareholders Without a Meeting..............   53
     Shareholder Nominations and Proposals..................   54
     Business Combinations..................................   54
     Limitations on Ability to Vote Stock...................   57
     Dissenters' Rights of Appraisal........................   57
     Shareholders' Rights to Examine Books and Records......   57
</TABLE>
 
                                       iv
<PAGE>   13
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
     Dividends..............................................   58
COMPARATIVE MARKET PRICES AND DIVIDENDS.....................   59
BUSINESS OF MAGNA...........................................   60
     General................................................   60
     Recent Developments....................................   60
BUSINESS OF UPC.............................................   60
     General................................................   60
     Recent Developments....................................   61
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION......   63
CERTAIN REGULATORY CONSIDERATIONS...........................   69
     General................................................   69
     Payment of Dividends...................................   70
     Capital Adequacy.......................................   71
     Support of Subsidiary Institutions.....................   72
     Prompt Corrective Action...............................   72
DESCRIPTION OF UPC CAPITAL STOCK............................   73
     UPC Common Stock.......................................   74
     UPC Preferred Stock....................................   74
ADDITIONAL MATTERS RELATING TO MAGNA ANNUAL MEETING.........   75
     Voting Securities of Magna and Principal Holders
      Thereof...............................................   75
     Election of Directors of Magna.........................   75
     Magna Board and Committees.............................   77
     Compensation of Directors of Magna.....................   77
     Certain Relationships and Related Transactions.........   79
     Report of Compensation Committee of Magna on Executive
      Compensation..........................................   80
     Compensation of Executive Officers of Magna............   84
     Comparison of Five-Year Total Return...................   89
     Security Ownership of Management of Magna..............   91
     Section 16(a) Beneficial Ownership Reporting
      Compliance............................................   93
OTHER MATTERS...............................................   93
SHAREHOLDER PROPOSALS.......................................   93
EXPERTS.....................................................   93
OPINIONS....................................................   93
APPENDICES:
     Appendix A -- Agreement and Plan of Reorganization,
                   dated as of February 22, 1998, by and
                   between Magna Group, Inc. and Union
                   Planters Corporation
     Appendix B -- Plan of Merger of Magna Group, Inc. into
                   and with Union Planters Holding
                   Corporation
     Appendix C -- Opinion of Donaldson, Lufkin & Jenrette
                   Securities Corporation
     Appendix D -- Opinion of Stifel, Nicolaus & Company,
                   Incorporated
     Appendix E -- Copy of Section 262 of the Delaware
                   General Corporation Law regarding
                   Dissenters' Rights
</TABLE>
 
                                        v
<PAGE>   14
 
                                    SUMMARY
 
     The following is a summary of certain information contained in this Joint
Proxy Statement and the documents incorporated herein by reference. This summary
is not intended to be a complete description of the matters covered in this
Joint Proxy Statement and is qualified in its entirety by the more detailed
information appearing elsewhere or incorporated by reference in this Joint Proxy
Statement. Shareholders are urged to read carefully the entire Joint Proxy
Statement, including the Appendices. As used in this Joint Proxy Statement, the
terms "UPC" and "Magna" refer to Union Planters Corporation and Magna Group,
Inc., respectively, and, where the context requires, to those entities and their
respective subsidiaries.
 
                                  THE PARTIES
 
     Magna.  Magna, a Delaware corporation, is a bank holding company registered
with the Board of Governors of the Federal Reserve System (the "Federal
Reserve") under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). As of December 31, 1997, Magna had total consolidated assets of
approximately $7.1 billion, total consolidated loans of approximately $4.5
billion, total consolidated deposits of approximately $5.4 billion, and total
consolidated shareholders' equity of approximately $626 million.
 
     Magna currently owns, indirectly, all of the capital stock of Magna Bank,
National Association ("Magna Bank"), a national banking association which
operates 139 community banking locations serving Missouri, Illinois, and Iowa.
Magna also owns certain non-banking subsidiaries, including brokerage and
insurance subsidiaries. Based on current deposit share, Magna is the third
largest banking institution in the St. Louis metropolitan area and ranks as the
71st largest bank holding company in the United States.
 
     Magna primarily serves consumers and small- to mid-sized businesses in its
markets as a "super community bank" (a banking institution whose business
centers on a customer-focused community banking orientation, has cost
efficiencies that do not compromise quality, and offers a broad product line
that permits a full-service customer relationship).
 
     The principal executive offices of Magna are located at One Magna Place,
1401 South Brentwood Boulevard, St. Louis, Missouri 63144 and its telephone
number at such address is (314) 963-2500. Additional information with respect to
Magna and its subsidiaries is included elsewhere herein and in documents
incorporated by reference in this Joint Proxy Statement. See "AVAILABLE
INFORMATION," "DOCUMENTS INCORPORATED BY REFERENCE," and "BUSINESS OF MAGNA."
 
     UPC.  UPC, a Tennessee corporation, is a bank holding company registered
with the Federal Reserve under the BHC Act. As of December 31, 1997, UPC had
total consolidated assets of approximately $18.1 billion, total consolidated
loans of approximately $12.7 billion, total consolidated deposits of
approximately $13.4 billion, and total consolidated shareholders' equity of
approximately $1.7 billion. At December 31, 1997, UPC ranked 41st among the
nation's 50 largest bank holding companies.
 
     UPC conducts its business activities through its principal bank subsidiary,
the $15.5 billion asset Union Planters Bank, National Association ("UPBNA"), a
multi-state national banking association headquartered in Memphis, Tennessee,
with branches in Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Missouri,
and Tennessee, one federally-chartered savings association headquartered in
Tennessee, two other Tennessee state-chartered banks headquartered in Tennessee,
and one Florida state-chartered bank headquartered in Miami, Florida
(collectively with UPBNA, the "UPC Banking Subsidiaries"). Through the UPC
Banking Subsidiaries, UPC provides a diversified range of financial services in
the communities in which it operates and maintains approximately 514 banking
offices and 651 automated teller machines ("ATMs"). UPC's total assets at
December 31, 1997 are allocable by state (before consolidating adjustments)
approximately as follows: $9.8 billion in Tennessee; $3.5 billion in
Mississippi; $2.2 billion in Florida; $1.2 billion in Missouri; $806 million in
Arkansas; $698 million in Louisiana; $449 million in Alabama; and $115 million
in Kentucky.
 
     Acquisitions have been, and are expected to continue to be, an important
part of UPC's business strategy. UPC completed 13 acquisitions in 1994, three in
1995, seven in 1996, six in 1997, and has recently completed two in 1998, adding
approximately $3.8 billion in total assets in 1994, $1.3 billion in 1995, $4.2
billion in 1996, $3.6 billion in 1997, and $539 million in 1998 ("Recently
Completed Acquisitions"). UPC currently is a party to definitive agreements to
acquire ten financial institutions, not including Magna, and to purchase certain
<PAGE>   15
 
branch locations and assume deposit liabilities of another institution
(collectively referred to herein as the "Other Pending Acquisitions"). The Other
Pending Acquisitions had aggregate total assets of approximately $5.5 billion at
December 31, 1997. For purposes of this Joint Proxy Statement, the terms
"Recently Completed Acquisitions" and "Other Pending Acquisitions" are referred
to as "Other Acquisitions." The largest of the Other Pending Acquisitions are
UPC's proposed acquisition of Peoples Financial Corporation ("Peoples"),
Paducah, Kentucky, which had total consolidated assets of approximately $1.5
billion at December 31, 1997 and the proposed purchase of 24 branch locations
and assumption of $1.5 billion of deposit liabilities of California Federal Bank
in Florida ("CalFed Branch Purchase"). For a description of the acquisitions in
addition to the Merger which are currently pending, see "BUSINESS OF
UPC -- Recent Developments."
 
     UPC expects to continue to take advantage of the consolidation of the
financial services industry by further developing its franchise through the
acquisition of financial institutions and other entities engaged in lines of
business permissible for banks and bank holding companies. Future acquisitions
may entail the payment by UPC of consideration in excess of the book value of
the underlying net assets acquired, may result in the issuance of additional
shares of UPC Common Stock or the incurring of additional indebtedness by UPC,
and could have a dilutive effect on the earnings or book value per share of UPC
Common Stock. Moreover, significant charges against earnings are sometimes
required incidental to acquisitions. For a description of the acquisitions in
addition to the Merger which are currently pending, see "BUSINESS OF
UPC -- Recent Developments."
 
     For a discussion of UPC's acquisition program, including a discussion of
the significant charges UPC has incurred incidental to acquisitions in the past
three fiscal years, see the caption "Acquisitions" (on page 10) in UPC's 1997
Annual Report to Shareholders and Note 2 to UPC's audited consolidated financial
statements for the years ended December 31, 1997, 1996, and 1995 (on pages 49
and 50) contained in UPC's 1997 Annual Report to Shareholders. UPC's 1997 Annual
Report to Shareholders is included as Exhibit 13 to UPC's 1997 Form 10-K and
Exhibit 13 is incorporated by reference herein to the extent indicated herein.
 
     The principal executive offices of UPC are located at 7130 Goodlett Farms
Parkway, Memphis, Tennessee 38018, and its telephone number at such address is
(901) 580-6000. Additional information with respect to UPC and its subsidiaries
is included elsewhere herein and in documents incorporated by reference in this
Joint Proxy Statement. See "AVAILABLE INFORMATION," "DOCUMENTS INCORPORATED BY
REFERENCE," and "BUSINESS OF UPC."
 
     UPHC.  UPHC, a Tennessee corporation, is a wholly-owned subsidiary of UPC.
UPHC is a bank holding company which owns all of the common stock of UPBNA and
other permissible investments. Certain of the directors and officers of UPHC are
executive officers of UPC.
 
MEETINGS OF SHAREHOLDERS
 
     Magna.  This Joint Proxy Statement is being furnished to the holders of
Magna Capital Stock in connection with the solicitation by the Magna Board of
proxies for use at the Magna Annual Meeting at which Magna shareholders will be
asked to vote upon (i) a proposal to adopt the Agreement and the Plan of Merger,
(ii) a proposal to elect six nominees as Class I directors of Magna, and (iii)
such other business as may properly come before the Magna Annual Meeting. The
Magna Annual Meeting will be held at                                         ,
at        .m., local time, on             , 1998. See "MEETINGS OF
SHAREHOLDERS -- Date, Place, Time, and Purpose."
 
     The Magna Board has fixed the close of business on                , 1998,
as the record date (the "Magna Record Date") for determination of the
shareholders entitled to notice of and to vote at the Magna Annual Meeting. Only
holders of record of shares of Magna Common Stock and Magna Class B Preferred
Stock on the Magna Record Date will be entitled to notice of and to vote at the
Magna Annual Meeting. Each share of Magna Common Stock and Magna Class B
Preferred Stock is entitled to one vote. On the Magna Record Date, there were
          shares of Magna Common Stock outstanding and        shares of Magna
Class B Preferred Stock outstanding, which shall vote together as a single class
on all matters considered at the Magna Annual Meeting. See "MEETINGS OF
SHAREHOLDERS -- Record Date, Voting Rights, Required Vote, and Revocability of
Proxies."
 
                                        2
<PAGE>   16
 
     Adoption of the Agreement and the Plan of Merger and the transactions
contemplated thereby requires the affirmative vote of the holders of a majority
of the issued and outstanding shares of Magna Common Stock and Magna Class B
Preferred Stock entitled to be voted at the Magna Annual Meeting, voting
together as a single class. Approval of the election of six nominees as Class I
directors of Magna requires the affirmative vote of a plurality of the shares of
Magna Common Stock and Magna Class B Preferred Stock voted, in person or by
proxy, in the election of directors, voting together as a single class. Each
share of Magna Common Stock and Magna Class B Preferred Stock is entitled to one
vote on each matter submitted to the shareholders. Holders of Magna Capital
Stock do not have the right to cumulate votes in the election of directors. The
directors and executive officers of Magna (including immediate family members
and affiliated entities) owned, as of the Magna Record Date,           shares,
or approximately        % of the outstanding shares of Magna Common Stock and no
shares of Magna Class B Preferred Stock.
 
     The directors and executive officers of UPC owned, as of the Magna Record
Date,           shares, or approximately        % of the outstanding shares of
Magna Common Stock and no shares of Magna Class B Preferred Stock. See "MEETINGS
OF SHAREHOLDERS -- Record Date, Voting Rights, Required Vote, and Revocability
of Proxies."
 
     For information with respect to the number and percentage of shares of
Magna Common Stock beneficially owned by directors and executive officers of
Magna as well as to the beneficial owners of 5% or more of the outstanding
shares of Magna Common Stock, see "ADDITIONAL MATTERS RELATING TO MAGNA ANNUAL
MEETING -- Voting Securities of Magna and Principal Holders Thereof; Security
Ownership of Management of Magna."
 
     UPC.  This Joint Proxy Statement is likewise being furnished to the holders
of UPC Common Stock in connection with the solicitation by the UPC Board of
proxies for use at the UPC Special Meeting at which UPC shareholders will be
asked to vote upon (i) a proposal to approve the issuance of shares of UPC
Common Stock pursuant to the Agreement and (ii) such other business as may
properly come before the UPC Special Meeting. The UPC Special Meeting will be
held at the Union Planters Administrative Center, located at 7130 Goodlett Farms
Parkway, Memphis, Tennessee 38018, at        .m., local time, on
               , 1998. See "MEETINGS OF SHAREHOLDERS -- Date, Place, Time, and
Purpose."
 
     The UPC Board has fixed the close of business on                , 1998, as
the record date (the "UPC Record Date") for determination of the shareholders
entitled to notice of and to vote at the UPC Special Meeting. Only holders of
record of shares of UPC Common Stock on the UPC Record Date will be entitled to
notice of and to vote at the UPC Special Meeting. Each share of UPC Common Stock
is entitled to one vote. On the UPC Record Date, there were           shares of
UPC Common Stock outstanding. See "MEETINGS OF SHAREHOLDERS -- Record Date,
Voting Rights, Required Vote, and Revocability of Proxies."
 
     Approval of the issuance of shares of UPC Common Stock pursuant to the
Agreement requires the affirmative vote of the holders of a majority of the
votes cast in person or by proxy by the holders of UPC Common Stock at the UPC
Special Meeting. The directors and executive officers of UPC (including
immediate family members and affiliated entities) owned, as of the UPC Record
Date,           shares, or approximately        % of the outstanding shares of
UPC Common Stock.
 
     The directors and executive officers of Magna owned, as of the UPC Record
Date,           shares, or approximately        % of the outstanding shares of
UPC Common Stock. See "MEETINGS OF SHAREHOLDERS -- Record Date, Voting Rights,
Required Vote, and Revocability of Proxies."
 
     For information with respect to the number and percentage of shares of UPC
Common Stock beneficially owned by directors and executive officers of UPC as
well as to the beneficial owners of 5% or more of the outstanding shares of UPC
Common Stock, see "PROPOSAL 1: ELECTION OF DIRECTORS" in the UPC Annual Meeting
Proxy Statement. See "DOCUMENTS INCORPORATED BY REFERENCE."
 
THE MERGER
 
     General.  The Agreement provides for the acquisition of Magna by UPC
pursuant to the merger of Magna with and into UPHC, a wholly-owned subsidiary of
UPC, with the effect that UPHC will be the

                                        3
<PAGE>   17
 
surviving corporation resulting from the Merger. At the Effective Time, each
share of (i) Magna Common Stock then issued and outstanding (excluding shares
held by Magna, UPC, or their respective subsidiaries, in each case other than
shares held in a fiduciary capacity or as a result of debts previously
contracted) will be converted into and exchanged for .9686 of a share of UPC
Common Stock (the "Exchange Ratio") and (ii) Magna Class B Preferred Stock then
issued and outstanding (excluding shares held by Magna or UPC, or their
respective subsidiaries, in each case other than shares held in a fiduciary
capacity or as a result of debts previously contracted, and other than shares
held by dissenting shareholders) will be converted into the right to receive a
check from UPC in the amount of $20.00 plus any accrued but unpaid dividends at
the Effective Time (the "Preferred Stock Cash Payment").
 
     No fractional shares of UPC Common Stock will be issued. Rather, cash
(without interest) will be paid in lieu of any fractional share interest to
which any holder of Magna Common Stock would otherwise be entitled upon
consummation of the Merger, in an amount equal to such fractional part of a
share of UPC Common Stock multiplied by the closing price of one share of UPC
Common Stock on the NYSE (as reported by The Wall Street Journal or, if not
reported thereby, another authoritative source as reasonably selected by UPC) on
the last trading day preceding the Effective Time. See "DESCRIPTION OF
TRANSACTION -- General."
 
     Reasons for the Merger; Recommendations of the Boards of Directors of Magna
and UPC.  The Magna Board believes that the Agreement, the Plan of Merger, and
the Merger are in the best interests of Magna and its shareholders, and the UPC
Board believes that the Agreement, the Merger, and the issuance of shares of UPC
Common Stock pursuant to the Agreement are in the best interests of UPC and its
shareholders. Each Board has approved the matters to be adopted or approved by
its respective shareholders. The Magna Board recommends that the Magna
shareholders vote FOR adoption of the Agreement and the Plan of Merger. The UPC
Board recommends that UPC shareholders vote FOR the issuance of shares of UPC
Common Stock pursuant to the Agreement. The Boards of Directors of Magna and UPC
believe that, among other things, the Merger will result in a company with
expanded opportunities for profitable growth and that the combined resources and
capital of Magna and UPC will provide an enhanced ability to compete in the
changing and competitive financial services industry. See "DESCRIPTION OF
TRANSACTION -- Background of and Reasons for the Merger."
 
     Opinion of Financial Advisors.  Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") has rendered an opinion to the Magna Board that, based upon
the matters set forth in such opinion and such other matters as it deemed
relevant, as of the date of its opinion, the Exchange Ratio is fair to the
holders of Magna Common Stock from a financial point of view. The opinion of DLJ
dated as of the date of this Joint Proxy Statement is included as Appendix C to
this Joint Proxy Statement. Magna shareholders are urged to read the DLJ opinion
in its entirety for a description of the procedures followed, matters
considered, and limitations on the reviews undertaken in connection therewith.
See "DESCRIPTION OF TRANSACTION -- Opinion of Magna's Financial Advisor."
 
     Similarly, Stifel Nicolaus & Company, Incorporated ("Stifel") has rendered
an opinion to the UPC Board that, based on and subject to the procedures,
matters, and limitations described in its opinion and such other matters as it
considered relevant, as of the date of its opinion, the Exchange Ratio is fair
to the shareholders of UPC from a financial point of view. The opinion of Stifel
dated as of the date of this Joint Proxy Statement is included as Appendix D to
this Joint Proxy Statement. UPC shareholders are urged to read the Stifel
opinion in its entirety for a description of the procedures followed, matters
considered, and limitations on the reviews undertaken in connection therewith.
See "DESCRIPTION OF TRANSACTION -- Opinion of UPC's Financial Advisor."
 
     Effective Time.  Subject to the conditions to the obligations of the
parties to effect the Merger, the Effective Time will occur on the date and at
the time that the Certificate of Merger (as defined in the Agreement) becomes
effective with the Secretary of State of the State of Delaware and the Articles
of Merger (as defined in the Agreement) become effective with the Secretary of
State of the State of Tennessee. Subject to the terms and conditions of the
Agreement, unless otherwise agreed upon in writing, by the duly authorized
officers of Magna and UPC, the parties will use their reasonable efforts to
cause the Effective Time to occur
 
                                        4
<PAGE>   18
 
on or before the 15th business day (as designated by UPC) following the last to
occur of (i) the effective date (including expiration of any applicable waiting
period) of the last consent of any regulatory authority having authority over
and approving or exempting the Merger and (ii) the date on which the
shareholders of Magna and UPC approve the matters relating to the Agreement
required to be approved by such shareholders. See "DESCRIPTION OF
TRANSACTION -- Effective Time of the Merger," "-- Conditions to Consummation of
the Merger," and "-- Waiver, Amendment, and Termination."
 
     NO ASSURANCE CAN BE PROVIDED THAT THE NECESSARY SHAREHOLDER AND REGULATORY
APPROVALS CAN BE OBTAINED OR THAT THE OTHER CONDITIONS PRECEDENT TO THE MERGER
CAN OR WILL BE SATISFIED. MAGNA AND UPC ANTICIPATE THAT ALL CONDITIONS TO THE
CONSUMMATION OF THE MERGER WILL BE SATISFIED SO THAT THE MERGER CAN BE
CONSUMMATED ON OR ABOUT JULY 1, 1998. HOWEVER, DELAYS IN THE CONSUMMATION OF THE
MERGER COULD OCCUR.
 
     Distribution of Consideration.  Promptly after the Effective Time, UPC will
cause UPBNA, acting in its capacity as exchange agent for UPC (the "Exchange
Agent"), to mail to each holder of record of a certificate or certificates
(collectively, the "Certificates") which, immediately prior to the Effective
Time, represented outstanding shares of Magna Capital Stock, a letter of
transmittal and instructions for use in effecting the surrender and cancellation
of the Certificates in exchange for certificates representing shares of UPC
Common Stock or checks representing the Preferred Stock Cash Payment as
appropriate. Cash will be paid to the holders of Magna Common Stock in lieu of
issuing any fractional shares of UPC Common Stock. In no event will the holder
of any surrendered Certificate(s) be entitled to receive interest on any cash
(including the Preferred Stock Cash Payment) to be issued to such holder, and in
no event will Magna, UPC, or the Exchange Agent be liable to any holder of Magna
Capital Stock for any consideration delivered in good faith to a public official
pursuant to any applicable abandoned property, escheat, or similar law. See
"DESCRIPTION OF TRANSACTION -- Distribution of Consideration."
 
     Regulatory Approval and Other Conditions.  The Merger is subject to the
prior approval of the Federal Reserve. An application has been filed with the
Federal Reserve for the requisite approval. THERE CAN BE NO ASSURANCE THAT SUCH
REGULATORY APPROVAL WILL BE OBTAINED OR AS TO THE TIMING OF SUCH APPROVAL.
 
     Consummation of the Merger is subject to various other conditions,
including receipt of the required approvals of the Magna and UPC shareholders,
receipt of opinions of counsel as to the tax-free nature of certain aspects of
the Merger, receipt of a letter from each of the independent accountants of UPC
and Magna to the effect that the Merger will qualify for pooling-of-interests
accounting treatment, and certain other conditions at the Effective Time. See
"DESCRIPTION OF TRANSACTION -- Regulatory Approval" and "--Conditions to
Consummation of the Merger."
 
     Waiver, Amendment, and Termination.  The Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time by mutual consent
of the Magna Board and the UPC Board, or by the action of the Board of Directors
of either company under certain circumstances, including, but not limited to, if
the Merger is not consummated by December 31, 1998, unless the failure to
consummate by such date is due to a breach of the Agreement by the party seeking
to terminate. To the extent permitted by law and as set forth in the Agreement,
the Agreement may be amended upon the written agreement of UPC and Magna without
the approval of shareholders before or after the matters relating to the
Agreement required to be approved by the Magna and UPC shareholders are approved
by such shareholders, and the Merger may be abandoned notwithstanding approval
of the matters relating to the Agreement required to be approved by the Magna
shareholders. See "DESCRIPTION OF TRANSACTION -- Waiver, Amendment, and
Termination."
 
     Dissenters' Rights.  Holders of Magna Common Stock and holders of UPC
Common Stock do not have dissenters' rights with respect to the Merger or the
issuance of shares of UPC Common Stock pursuant to the Agreement, as applicable.
Holders of Magna Class B Preferred Stock have the right under Section 262 of the
Delaware General Corporation Law ("DGCL"), to dissent from the Merger and, upon
consummation of the Merger and such holders' further compliance with Section 262
of the DGCL, to be paid in cash for their shares of Magna Class B Preferred
Stock. See "DESCRIPTION OF TRANSACTION -- Dissenters' Rights" and Appendix E to
this Joint Proxy Statement, which includes a copy of Section 262 of the DGCL.
 
                                        5
<PAGE>   19
 
     Interests of Certain Persons in the Merger.  Certain members of Magna's
management and the Magna Board may be deemed to have certain interests in the
Merger that are in addition to their interests as shareholders of Magna
generally. These additional interests may be deemed to arise from certain
actions UPC has agreed to take regarding the employment and severance
arrangements of certain Magna executive officers and the compensation and
indemnification of Magna directors. The Magna Board and the UPC Board were aware
of these interests and considered them, among other matters, in approving the
Merger. In particular, two officers of Magna have entered into employment
agreements with UPC, which will become effective after the Effective Time.
Generally, the compensatory terms of these employment agreements are intended to
guarantee that the Magna officers receive compensation and benefits after the
Effective Time that are at least comparable in the aggregate to the compensation
and benefits they were entitled to receive from Magna prior to the Effective
Time, within the framework of UPC's compensation and benefits structure for
similarly situated employees of UPC. See "DESCRIPTION OF
TRANSACTION -- Interests of Certain Persons in the Merger."
 
     Certain Federal Income Tax Consequences of the Merger.  It is intended that
the Merger will be treated as a reorganization within the meaning of Section 368
of the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, for
federal income tax purposes, no gain or loss will be recognized by holders of
Magna Common Stock upon the exchange of all of such shareholders' shares of
Magna Common Stock solely for shares of UPC Common Stock (except with respect to
cash received in lieu of a fractional share of UPC Common Stock). Consummation
of the Merger is conditioned upon receipt by UPC of an opinion of Alston & Bird
LLP and upon receipt by Magna of an opinion of Wachtell Lipton Rosen & Katz
substantially to this effect. TAX CONSEQUENCES OF THE MERGER FOR INDIVIDUAL
TAXPAYERS CAN VARY, HOWEVER, AND ALL MAGNA SHAREHOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS TO DETERMINE THE EFFECT OF THE MERGER ON THEM UNDER
FEDERAL, STATE, LOCAL, AND FOREIGN TAX LAWS. For a further discussion of the
federal income tax consequences of the Merger, see "DESCRIPTION OF
TRANSACTION -- Certain Federal Income Tax Consequences of the Merger."
 
     Accounting Treatment.  It is intended that the Merger will be accounted for
as a pooling-of-interests transaction for accounting and financial reporting
purposes. See "DESCRIPTION OF TRANSACTION -- Accounting Treatment."
 
     Certain Differences in Shareholders' Rights.  At the Effective Time,
holders of Magna Common Stock, whose rights are governed by Magna's Restated
Certificate of Incorporation (the "Magna Charter"), and Bylaws, as amended (the
"Magna Bylaws"), and by the DGCL, will automatically become UPC shareholders,
and their rights as UPC shareholders will be governed by UPC's Restated Charter
(the "UPC Charter") and Bylaws (the "UPC Bylaws") and the Tennessee Business
Corporation Act (the "TBCA"). The rights of UPC shareholders differ from the
rights of Magna shareholders in certain important respects, including with
respect to certain anti-takeover provisions provided for in UPC's Charter and
Bylaws. See "EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS."
 
     Conduct of Business Pending the Merger.  Pursuant to the Agreement, each of
Magna and UPC generally have agreed that unless the prior written consent of the
other has been obtained, and except as otherwise expressly contemplated in the
Agreement, each of Magna and UPC and their respective subsidiaries will (i)
operate its business only in the usual, regular, and ordinary course, (ii)
preserve intact its business organization and assets and maintain its rights and
franchises, (iii) use its reasonable efforts to maintain its current employee
relationships, and (iv) take no action which would (a) materially adversely
affect the ability of any party to obtain any consents required for the
transactions contemplated by the Agreement without imposition of a condition or
restriction of the type referred to in the Agreement or (b) adversely affect the
ability of either party to perform its covenants and agreements under the
Agreement.
 
     In addition, Magna has agreed that until the earlier of the Effective Time
or termination of the Agreement, Magna will not, except with the prior written
consent of the chief executive officer or chief financial officer of UPC (which
consent shall not be unreasonably withheld), agree or commit to, or permit its
subsidiaries to agree or commit to, take certain actions, including generally,
but not limited to: (i) incurring, guaranteeing, or otherwise becoming
responsible for, any additional debt obligation for borrowed money in
 
                                        6
<PAGE>   20
 
excess of $1,000,000; (ii) declare or pay any dividends, except that Magna
generally may declare and pay regular and quarterly cash dividends on the shares
of Magna Common Stock at a rate of $0.28 per share, and on the shares of Magna
Class B Preferred Stock at a rate of $0.375 per share, in each case with usual
and regular record and payments dates in accordance with past practice (as
previously disclosed by Magna to UPC); (iii) subject to certain exceptions,
permit to become outstanding, any additional shares of Magna Common Stock, or
any other capital stock of Magna or any of its subsidiaries or any rights to
acquire such stock or any security convertible into such stock; (iv) subject to
certain exceptions, acquire direct or indirect control of any other entity; (v)
subject to certain exceptions, grant any increase in compensation or benefits or
pay any bonus to the employees or officers of Magna or any of its subsidiaries;
or (vi) subject to certain exceptions, enter into or amend any employment
contract between Magna or any of its subsidiaries and any person, which Magna or
the relevant subsidiary does not have an unconditional right to terminate
without liability. See "DESCRIPTION OF TRANSACTION -- Conduct of Business
Pending the Merger."
 
     Option Agreement.  Magna, as issuer, and UPC, as grantee, entered into a
Stock Option Agreement (the "Option Agreement") pursuant to which Magna granted
UPC an option to purchase, under certain circumstances and subject to certain
adjustments and limitations, up to 6,497,180 shares, or approximately 19.9%, of
Magna Common Stock at a price of $57.50 per share. The Option Agreement is
exercisable upon the occurrence of certain events that create the potential for
another party to acquire control of Magna. To the best knowledge of Magna, no
such event which would permit exercise of the Option Agreement has occurred as
of the date of this Joint Proxy Statement. The Option Agreement was granted by
Magna as a condition of and in consideration for UPC entering into the Agreement
and is intended to increase the likelihood that the Merger will be effected by
making it more difficult and more expensive for a third party to acquire control
of Magna. See "DESCRIPTION OF TRANSACTION -- Option Agreement."
 
ADDITIONAL MATTERS RELATING TO THE MAGNA ANNUAL MEETING
 
     At the Magna Annual Meeting, the shareholders of Magna also will be voting
on a proposal to elect six nominees as Class I directors of Magna to serve until
the Merger is consummated or, in the event the Merger is not consummated, until
the expiration of their respective three-year terms or until their respective
successors are elected and qualified. See "ADDITIONAL MATTERS RELATING TO MAGNA
ANNUAL MEETING."
 
COMPARATIVE MARKET PRICES OF COMMON STOCK
 
     Shares of UPC Common Stock and Magna Common Stock are traded on the NYSE
under the symbol "UPC" and "MGR," respectively. Shares of Magna Class B
Preferred Stock are not traded on any exchange or in the over-the-counter
market.
 
     The following table sets forth the reported closing sale prices per share
for UPC Common Stock and Magna Common Stock and the equivalent per share prices
giving effect to the Merger (as explained below) for Magna Common Stock on (i)
February 20, 1998, the last trading day preceding the public announcement of the
execution of the Agreement, and (ii)                , 1998, the latest
practicable date prior to the mailing of this Joint Proxy Statement.
 
<TABLE>
<CAPTION>
                                                      UPC           MAGNA        EQUIVALENT PRICE
                                                  COMMON STOCK   COMMON STOCK   PER MAGNA SHARE(1)
                                                  ------------   ------------   ------------------
<S>                                               <C>            <C>            <C>
February 20, 1998...............................     $63.44         $46.94            $61.45
               , 1998...........................
</TABLE>
 
- ---------------
(1) The equivalent price per share of Magna Common Stock at each specified date
    represents the closing sale price of a share of UPC Common Stock on such
    date multiplied by an Exchange Ratio of .9686. See "COMPARATIVE MARKET
    PRICES AND DIVIDENDS."
 
     There can be no assurance as to what the market price of the UPC Common
Stock will be if and when the Merger is consummated, or anytime thereafter.
 
                                        7
<PAGE>   21
 
SELECTED CONSOLIDATED FINANCIAL DATA
 
     The following tables present selected consolidated financial data for UPC
and Magna for the five-year period ended December 31, 1997. The information for
UPC has been derived from the consolidated financial statements of UPC,
including the audited consolidated financial statements of UPC incorporated in
this Joint Proxy Statement by reference to the UPC 1997 Form 10-K, and should be
read in conjunction therewith and with the notes thereto. See "DOCUMENTS
INCORPORATED BY REFERENCE." The information for Magna has been derived from the
consolidated financial statements of Magna including the audited consolidated
financial statements of Magna incorporated in this Joint Proxy Statement by
reference to the Magna 1997 Form 10-K and should be read in conjunction
therewith and with the notes thereto. See "DOCUMENTS INCORPORATED BY REFERENCE."
Historical results are not necessarily indicative of results to be expected for
any future period. See "BUSINESS OF UPC -- Recent Developments" and "PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL INFORMATION" for information concerning UPC's
Other Acquisitions.
 
                    UPC SELECTED CONSOLIDATED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                        YEARS ENDED DECEMBER 31,(1)
                                    -------------------------------------------------------------------
                                       1997          1996          1995          1994          1993
                                    -----------   -----------   -----------   -----------   -----------
                                               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                 <C>           <C>           <C>           <C>           <C>
INCOME STATEMENT DATA
    Net interest income...........  $   770,385   $   744,852   $   669,451   $   627,439   $   558,036
    Provision for losses on
       loans......................      113,633        68,948        33,917        15,989        35,235
    Investment securities gains
       (losses)...................        2,104         4,099         1,433      (21,302)         6,686
    Other noninterest income......      359,506       316,403       292,277       237,129       228,996
    Noninterest expense...........      697,704       731,817       607,189       634,965       550,045
                                    -----------   -----------   -----------   -----------   -----------
    Earnings before income taxes,
       extraordinary item, and
       accounting changes.........      320,658       264,589       322,055       192,312       208,438
    Applicable income taxes.......      111,897        93,115       110,799        63,058        66,570
                                    -----------   -----------   -----------   -----------   -----------
    Earnings before extraordinary
       item and accounting
       changes....................      208,761       171,474       211,256       129,254       141,868
    Extraordinary item and
       accounting changes, net of
       taxes......................           --            --            --            --         4,505
                                    -----------   -----------   -----------   -----------   -----------
    Net earnings..................  $   208,761   $   171,474   $   211,256   $   129,254   $   146,373
                                    ===========   ===========   ===========   ===========   ===========
PER COMMON SHARE DATA(2)
    Basic
         Earnings before
           extraordinary item and
           accounting changes.....  $      2.54   $      2.13   $      2.79   $      1.67   $      2.19
         Net earnings.............         2.54          2.13          2.79          1.67          2.27
    Diluted
         Earnings before
           extraordinary item and
           accounting changes.....         2.45          2.05          2.66          1.63          2.13
         Net earnings.............         2.45          2.05          2.66          1.63          2.21
    Cash dividends................        1.495          1.08           .98           .88           .72
    Book value....................        20.72         19.57         18.34         15.28         14.50
</TABLE>
 
(continued on following page)
                                        8
<PAGE>   22
 
              UPC SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
 
<TABLE>
<CAPTION>
                                                        YEARS ENDED DECEMBER 31,(1)
                                    -------------------------------------------------------------------
                                       1997          1996          1995          1994          1993
                                    -----------   -----------   -----------   -----------   -----------
                                               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                 <C>           <C>           <C>           <C>           <C>
BALANCE SHEET DATA (AT PERIOD END)
    Total assets..................  $18,105,079   $18,330,588   $17,182,861   $15,893,162   $14,180,524
    Loans, net of unearned
       income.....................   12,658,564    12,578,571    10,917,307    10,074,458     8,077,152
    Allowance for losses on
       loans......................      225,389       189,118       179,968       174,604       172,330
    Investment securities.........    3,247,680     3,387,217     3,970,036     4,016,506     4,124,679
    Total Deposits................   13,440,269    13,514,144    13,047,488    12,506,212    11,732,707
    Short-term borrowings.........      831,627       961,051       974,416       887,074       392,980
    Long-term debt(3)
         Parent company...........      373,746       373,459       214,758       114,790       114,729
         Subsidiary banks.........    1,176,158     1,332,534     1,087,273       819,982       481,193
    Total shareholders' equity....    1,746,866     1,618,883     1,450,546     1,202,686     1,111,158
    Average assets................   17,991,160    18,202,355    16,263,164    15,472,568    13,823,185
    Average shareholders'
       equity.....................    1,690,992     1,533,348     1,334,995     1,226,852       973,087
    Average shares outstanding (in
       thousands)(2)
         Basic....................       80,336        77,240        72,512        71,678        56,169
         Diluted..................       85,195        83,542        78,798        77,579        60,832
PROFITABILITY AND CAPITAL RATIOS
    Return on average assets......         1.16%          .94%         1.30%          .84%         1.06%
    Return on average common
       equity.....................        12.54         11.38         16.56         10.74         15.88
    Net interest income (taxable-
       equivalent)/average earning
       assets(4)..................         4.79          4.56          4.60          4.56          4.58
    Loans/deposits................        94.18         93.08         83.67         80.56         68.84
    Common and preferred dividend
       payout ratio...............        54.96         44.57         29.25         35.03         24.42
    Equity/assets (period end)....         9.65          8.83          8.44          7.57          7.84
    Average shareholders' equity/
       average total assets.......         9.40          8.42          8.21          7.93          7.04
    Leverage ratio................        10.48          9.50          8.11          7.56          7.73
    Tier 1 capital/risk-weighted
       assets.....................        15.51         14.92         13.28         12.58         13.65
    Total capital/risk-weighted
       assets.....................        18.12         17.60         16.21         14.67         15.92
CREDIT QUALITY RATIOS(5)
    Allowance/period-end loans....         1.99%         1.72%         1.82%         1.87%         2.27%
    Nonperforming loans/total
       loans......................          .92           .91           .85           .74          1.18
    Allowance/nonperforming
       loans......................          215           188           213           252           193
    Nonperforming assets/loans and
       foreclosed properties......         1.13          1.21          1.09          1.08          1.76
    Provision/average loans.......         1.01           .65           .35           .19           .47
    Net charge-offs/average
       loans......................          .72           .61           .32           .27           .34
</TABLE>
 
- ---------------
(1) Reference is made to "Basis of Presentation" in Note 1 to UPC's consolidated
    financial statements contained in UPC's 1997 Annual Report to Shareholders.
 
(2) Share and per share amounts have been retroactively restated for significant
    acquisitions accounted for as poolings of interests and to reflect the
    change in presentation of EPS as discussed in Notes 2 and 16 to the
    consolidated financial statements contained in UPC's 1997 Annual Report to
    Shareholders.
 
(3) Long-term debt includes Medium-Term Bank Notes, Federal Home Loan Bank
    (FHLB) advances, Trust Preferred Securities, variable rate asset-backed
    certificates, subordinated notes and debentures, obligations under capital
    leases, mortgage indebtedness, and notes payable with maturities greater
    than one year.
 
(4) Average balances and calculations do not include the impact of the net
    unrealized gain or loss on available for sale securities.
 
(5) FHA/VA government-insured/guaranteed loans have been excluded, since they
    represent minimal credit risk to UPC.
 
                                        9
<PAGE>   23
 
                   MAGNA SELECTED CONSOLIDATED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                          YEARS ENDED DECEMBER 31,(1)
                                         --------------------------------------------------------------
                                            1997         1996         1995         1994         1993
                                         ----------   ----------   ----------   ----------   ----------
                                                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                      <C>          <C>          <C>          <C>          <C>
INCOME STATEMENT DATA
    Net interest income................  $  239,028   $  194,087   $  182,851   $  172,819   $  145,263
    Provision for losses on loans......      28,947       10,280        9,992        4,900        9,589
    Investment securities gains........       2,584          817          356          158        5,122
    Other noninterest income...........      68,698       49,541       47,507       47,345       40,718
    Noninterest expense................     172,637      138,386      146,217      150,213      131,321
                                         ----------   ----------   ----------   ----------   ----------
    Earnings before income taxes.......     108,726       95,779       74,505       65,209       50,193
    Applicable income taxes............      36,051       32,640       23,283       20,179       12,706
                                         ----------   ----------   ----------   ----------   ----------
    Net earnings.......................  $   72,675   $   63,139   $   51,222   $   45,030   $   37,487
                                         ==========   ==========   ==========   ==========   ==========
PER COMMON SHARE DATA(2)
    Basic net earnings.................  $     2.26   $     2.24   $     1.85   $     1.70   $     1.54
    Diluted net earnings...............        2.21         2.19         1.81         1.66         1.51
    Cash dividends.....................        1.00          .88          .80          .76          .72
    Book value.........................       19.06        17.15        15.93        13.49        14.02
BALANCE SHEET DATA (AT PERIOD END)
    Total assets.......................  $7,074,969   $5,458,709   $4,947,499   $4,638,502   $4,128,462
    Loans, net of unearned income......   4,483,812    3,415,309    3,202,766    2,968,201    2,564,466
    Allowance for losses on loans......      59,439       45,382       42,623       43,991       40,065
    Investment securities..............   1,988,622    1,655,907    1,364,864    1,217,174    1,213,673
    Deposits...........................   5,435,995    4,197,776    3,888,266    3,672,755    3,494,825
    Short-term borrowings..............     845,603      633,935      460,651      436,515      192,611
    Long-term debt(3)
         Parent company................      10,440       27,413       29,398       30,717       31,230
         Subsidiary banks..............      81,616       50,164       63,673       73,736          832
    Total shareholders' equity.........     626,353      483,961      446,044      371,312      360,649
    Average assets.....................   6,684,428    5,279,368    4,705,334    4,280,543    3,676,082
    Average shareholders' equity.......     591,344      459,225      407,530      362,782      333,215
    Average shares outstanding (in
       thousands)
         Basic.........................      32,090       28,183       27,704       26,498       24,369
         Diluted.......................      33,749       29,819       28,736       27,577       25,459
PROFITABILITY AND CAPITAL RATIOS
    Return on average assets...........        1.09%        1.20%        1.09%        1.05%        1.02%
    Return on average common equity....       12.29        13.75        12.57        12.41        11.25
    Net interest income (taxable-
       equivalent)/average earning
       assets..........................        3.97         4.01         4.30         4.49         4.45
    Loans/deposits.....................       82.48        81.36        82.37        80.82        73.38
    Dividend payout ratio..............       44.25        39.29        43.24        44.71        46.75
    Equity/assets (period end).........        8.85         8.87         9.02         8.00         8.74
    Average shareholders'
       equity/average total assets.....        8.85         8.70         8.66         8.48         9.06
    Leverage ratio.....................        7.24         8.45         8.73         8.57         8.67
    Tier 1 capital/risk-weighted
       assets..........................       11.09        12.97        13.06        12.79        12.81
    Total capital/risk-weighted
       assets..........................       12.32        14.18        14.29        14.07        14.10
</TABLE>
 
(continued on following page)
                                       10
<PAGE>   24
 
             MAGNA SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
 
<TABLE>
<CAPTION>
                                                          YEARS ENDED DECEMBER 31,(1)
                                         --------------------------------------------------------------
                                            1997         1996         1995         1994         1993
                                         ----------   ----------   ----------   ----------   ----------
                                                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                      <C>          <C>          <C>          <C>          <C>
CREDIT QUALITY RATIOS(4)
    Allowance/period-end loans.........        1.33%        1.33%        1.33%        1.48%        1.56%
    Nonperforming loans/total loans....         .67          .50          .77          .97         1.62
    Allowance/nonperforming loans......         198          265          173          153           96
    Nonperforming assets/loans and
       foreclosed properties...........         .71          .59          .92         1.21         2.00
    Provision/average loans............         .67          .31          .32          .18          .42
    Net charge-offs/average loans......         .65          .25          .37          .14          .59
</TABLE>
 
- ---------------
(1) Reference is made to "Basis of Presentation" in Note 2 to Magna's
    consolidated financial statements contained in Magna's 1997 Annual Report to
    Shareholders.
 
(2) Share and per share amounts have been retroactively restated to reflect the
    change in presentation of EPS as discussed in Notes 3 and 19 to the
    consolidated financial statements contained in Magna's 1997 Annual Report to
    Shareholders.
 
(3) Long-term debt includes Convertible Subordinated Capital Notes and
    Debentures, Federal Home Loan Bank Advances, and obligations under capital
    leases.
 
(4) Nonperforming loans and assets do not include loans 90 days or more past
    due.
 
HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA
 
     The following table sets forth certain comparative per share data relating
to earnings before extraordinary items and accounting changes, cash dividends,
and book value on: (i) a historical basis for UPC and Magna; (ii) a pro forma
combined basis per share of UPC Common Stock, giving effect to the Merger only;
(iii) a pro forma combined basis per share of UPC Common Stock, giving effect to
the Merger and the Other Acquisitions (as defined under "BUSINESS OF
UPC -- Recent Developments"); (iv) an equivalent pro forma basis per share of
Magna Common Stock, giving effect to the Merger only; and (v) an equivalent pro
forma basis per share of Magna Common Stock, giving effect to the Merger and the
Other Acquisitions. The UPC pro forma combined information and the Magna
equivalent pro forma information give effect to the Merger and the Other
Acquisitions and reflect an Exchange Ratio of .9686 of a share of UPC Common
Stock for each outstanding share of Magna Common Stock. The Merger and each of
the Other Pending Acquisitions (with the exception of the Duck Hill Bank, the
Charter Acquisition (as defined under "BUSINESS OF MAGNA -- Recent
Developments"), and the CalFed Branch Purchase) are expected to be, and the
Recently Completed Acquisition of Security Bancshares, Inc., was, accounted for
using the pooling-of-interests method of accounting. The Recently Completed
Acquisition of Sho-Me Financial Corp. was, and the Other Pending Acquisitions of
Duck Hill Bank, the Charter Acquisition and the CalFed Branch Purchase are,
expected to be accounted for using the purchase method of accounting. The pro
forma information for 1997 reflects the acquisition of Magna and the Other
Acquisitions as of January 1, 1997. The pro forma information for 1996 and 1995
reflect only the acquisitions of Magna, Peoples, AMBANC Corp. ("AMBANC") and
Merchants Bancshares, Inc. ("Merchants") because the Other Acquisitions (other
than Magna, Peoples, AMBANC and Merchants) are not individually or in the
aggregate, considered material to UPC from a financial statement presentation
standpoint. Furthermore, the pro forma impact of the CalFed Branch Purchase on
the pro forma statement of earnings for each of the three years presented has
been excluded due to the lack of information available for operation of the
branches on a historical basis. The pro forma data are presented for information
purposes only and are not necessarily indicative of the results of operations or
combined financial position that would have resulted had the Merger or the Other
Acquisitions been consummated at the dates or during the periods indicated, nor
are they necessarily indicative of future results of operations or combined
financial position. The pro forma data does not reflect preliminary estimates by
UPC of acquisition-related charges to be incurred in connection with
consummation of the Merger and the Other Acquisitions. For additional
information with respect to the estimated charges UPC anticipates it would incur
in connection with the Merger and the Other Acquisitions, see "BUSINESS OF
UPC -- Recent Developments." For a discussion of UPC's acquisition program,
including a discussion of the significant charges UPC has incurred incidental to
acquisitions over the past three fiscal years, see the caption "Acquisitions"
(on page 10) in UPC's 1997
 
                                       11
<PAGE>   25
 
Annual Report to Shareholders and Note 2 to UPC's audited consolidated financial
statements for the years ended December 31, 1997, 1996, and 1995 (on pages 49
and 50) contained in UPC's 1997 Annual Report to Shareholders. UPC's 1997 Annual
Report to Shareholders is included as Exhibit 13 to UPC's 1997 Form 10-K, and
Exhibit 13 is incorporated by reference herein to the extent indicated herein.
See "DOCUMENTS INCORPORATED BY REFERENCE."
 
     The information shown below should be read in conjunction with, and is
qualified in its entirety by, the historical consolidated financial statements
of UPC and Magna, including the respective notes thereto. See "DOCUMENTS
INCORPORATED BY REFERENCE," "-- Selected Consolidated Financial Data," "BUSINESS
OF UPC -- Recent Developments" and "PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
INFORMATION."
 
                                       12
<PAGE>   26
 
                UNION PLANTERS CORPORATION AND MAGNA GROUP, INC.
 
              HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA
 
<TABLE>
<CAPTION>
                                                                    YEARS ENDED
                                                                  DECEMBER 31,(1)
                                                              -----------------------
                                                               1997     1996    1995
                                                              ------   ------   -----
<S>                                                           <C>      <C>      <C>
EARNINGS BEFORE EXTRAORDINARY ITEMS AND ACCOUNTING CHANGES
     UPC
          Basic.............................................  $2.54     $2.13   $2.79
          Diluted...........................................   2.45      2.05    2.66
     pro forma (Magna Only)
          Basic.............................................   2.48      2.18    2.56
          Diluted...........................................   2.40      2.11    2.46
     pro forma (all Other Acquisitions and Magna)
          Basic.............................................   2.52      2.24    2.56
          Diluted...........................................   2.45      2.17    2.46
     Magna
          Basic.............................................   2.26      2.24    1.85
          Diluted...........................................   2.21      2.19    1.81
     Magna equivalent pro forma (Magna only)(1)
          Basic.............................................   2.40      2.11    2.48
          Diluted...........................................   2.32      2.04    2.38
     Magna equivalent pro forma (all Other Acquisitions and
      Magna)(1)
          Basic.............................................   2.44      2.17    2.48
          Diluted...........................................   2.37      2.10    2.38
CASH DIVIDENDS PER SHARE
     UPC....................................................   1.495     1.08     .98
     Magna..................................................   1.00       .88     .80
     Magna equivalent pro forma(1)..........................   1.45      1.05     .95
</TABLE>
 
<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                                       1997
                                                                   ------------
<S>                                                           <C>      <C>      <C>
BOOK VALUE PER COMMON SHARE
     UPC....................................................           $20.72
     UPC pro forma (Magna only).............................            20.45
     UPC pro forma (all Other Acquisitions and Magna).......            21.73
     Magna..................................................            19.06
     Magna equivalent pro forma (Magna only)(1).............            19.79
     Magna equivalent pro forma (all Other Acquisitions and
      Magna)(1).............................................            21.05
</TABLE>
 
- ---------------
(1) The equivalent pro forma per share data for Magna are computed by
     multiplying UPC's pro forma information by .9686, the Exchange Ratio.
 
SELECTED PRO FORMA CONSOLIDATED FINANCIAL DATA FOR UPC
 
     The following selected pro forma consolidated financial data for the
five-year period ended December 31, 1997, give effect to the Merger only as of
the date or at the beginning of the periods indicated, with the Merger treated
as a pooling of interests for accounting purposes. The selected pro forma
consolidated financial data are presented for informational purposes only and
are not necessarily indicative of the consolidated financial position or results
of operations which actually would have occurred if the Merger had been
consummated at the date or at the beginning of the periods indicated or which
may be obtained in the future.
 
     The information shown below should be read in conjunction with, and is
qualified in its entirety by, the historical consolidated financial statements
of UPC and Magna, including the respective notes thereto. See "DOCUMENTS
INCORPORATED BY REFERENCE," "-- Selected Consolidated Financial Data," and
"BUSINESS OF UPC -- Recent Developments."
 
                                       13
<PAGE>   27
 
               UPC SELECTED PRO FORMA CONSOLIDATED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                            YEARS ENDED DECEMBER 31,(1)
                                        -------------------------------------------------------------------
                                           1997          1996          1995          1994          1993
                                        -----------   -----------   -----------   -----------   -----------
                                                   (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                     <C>           <C>           <C>           <C>           <C>
INCOME STATEMENT DATA
    Net interest income...............  $ 1,009,413   $   938,939   $   852,302   $   800,258   $   703,299
    Provision for losses on loans.....      142,580        79,228        43,909        20,889        44,824
    Investment securities gains
      (losses)........................        4,688         4,916         1,789       (21,144)       11,808
    Other noninterest income..........      428,204       365,944       339,784       284,474       269,714
    Noninterest expense...............      870,341       870,203       753,406       785,178       681,366
                                        -----------   -----------   -----------   -----------   -----------
    Earnings before income taxes,
      extraordinary item, and
      accounting changes..............      429,384       360,368       396,560       257,521       258,631
    Applicable income taxes...........      147,948       125,755       134,082        83,237        79,276
                                        -----------   -----------   -----------   -----------   -----------
    Earnings before extraordinary item
      and accounting changes..........      281,436       234,613       262,478       174,284       179,355
    Extraordinary item and accounting
      changes, net of taxes...........           --            --            --            --         4,505
                                        -----------   -----------   -----------   -----------   -----------
    Net earnings......................  $   281,436   $   234,613   $   262,478   $   174,284   $   183,860
                                        ===========   ===========   ===========   ===========   ===========
PER COMMON SHARE DATA(2)
    Basic
         Earnings before extraordinary
           item and accounting
           changes....................  $      2.48   $      2.18   $      2.56   $      1.69   $      2.01
         Net earnings.................         2.48          2.18          2.56          1.69          2.07
    Diluted
         Earnings before extraordinary
           item and accounting
           changes....................         2.40          2.11          2.46          1.65          1.97
         Net earnings.................         2.40          2.11          2.46          1.65          2.02
    Cash dividends....................        1.495          1.08           .98           .88           .72
    Book value........................        20.43         19.09         17.83         14.90         14.49
BALANCE SHEET DATA (AT PERIOD END)
    Total assets......................  $25,182,178   $23,789,297   $22,130,360   $20,531,664   $18,308,986
    Loans, net of unearned income.....   17,142,376    15,993,880    14,120,073    13,042,659    10,641,618
    Allowance for losses on loans.....      284,828       234,500       222,591       218,595       212,395
    Investment securities.............    5,239,794     5,043,124     5,334,900     5,233,680     5,338,352
    Total deposits....................   18,876,264    17,711,920    16,935,754    16,178,967    15,227,532
    Short-term borrowings.............    1,677,230     1,594,986     1,435,067     1,323,589       585,591
    Long-term debt(3)
         Parent company...............      384,186       400,872       244,156       145,507       145,959
         Subsidiary banks.............    1,257,774     1,382,698     1,150,946       893,718       482,025
    Total shareholders' equity........    2,375,349     2,102,844     1,896,590     1,573,998     1,471,807
    Average assets....................   24,675,588    23,481,723    20,968,498    19,753,111    17,499,267
    Average shareholders' equity......    2,282,336     1,992,573     1,742,525     1,589,634     1,306,302
    Average shares outstanding (in
      thousands)(2)
         Basic........................      111,418       104,538        99,346        97,344        79,773
         Diluted......................      117,884       112,425       106,632       104,290        85,492
</TABLE>
 
(continued on the following page)
                                       14
<PAGE>   28
 
         UPC SELECTED PRO FORMA CONSOLIDATED FINANCIAL DATA (CONTINUED)
 
<TABLE>
<CAPTION>
                                                            YEARS ENDED DECEMBER 31,(1)
                                        -------------------------------------------------------------------
                                           1997          1996          1995          1994          1993
                                        -----------   -----------   -----------   -----------   -----------
                                                   (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                     <C>           <C>           <C>           <C>           <C>
PROFITABILITY AND CAPITAL RATIOS
    Return on average assets..........         1.14%         1.00%         1.25%         0.88%         1.05%
    Return on average common equity...        12.48         11.95         15.49         11.15         14.59
    Net interest income (taxable-
      equivalent)/average earning
      assets (4)......................         4.57          4.44          4.53          4.54          4.55
    Loans/deposits....................        90.81         90.30         83.37         80.61         69.88
    Common and preferred dividend
      payout ratio....................        52.07         43.16         32.00         37.53         29.03
    Equity/assets (period end)........         9.42          8.84          8.57          7.67          8.04
    Average shareholders'
      equity/average total assets.....         9.25          8.49          8.31          8.05          7.46
    Leverage ratio....................         9.60          9.26          8.25          7.79          7.94
    Tier 1 capital/risk-weighted
      assets..........................        14.31         14.47         13.23         12.64         13.45
    Total capital/risk-weighted
      assets..........................        16.54         16.81         15.75         14.52         15.46
CREDIT QUALITY RATIOS(5)
    Allowance/period-end loans........         1.80%         1.62%         1.70%         1.78%         2.09%
    Nonperforming loans/total loans...          .85           .82           .83           .80          1.29
    Allowance/nonperforming loans.....          212           199           204           223           162
    Nonperforming assets/loans and
      foreclosed properties...........         1.01          1.06          1.05          1.11          1.82
    Provision/average loans...........          .92           .57           .34           .18           .46
    Net charge-offs/average loans.....          .70           .52           .33           .24           .40
</TABLE>
 
- ---------------
(1) Reference is made to "Basis of Presentation" in Note 1 to UPC's consolidated
     financial statements contained in UPC's 1997 Annual Report to Shareholders.
 
(2) Share and per share amounts have been retroactively restated for significant
     acquisitions accounted for as poolings of interests and to reflect the
     change in presentation of EPS as discussed in Notes 2 and 16 to the
     consolidated financial statements contained in UPC's 1997 Annual Report to
     Shareholders.
 
(3) Long-term debt includes Medium-Term Bank Notes, Federal Home Loan Bank
     (FHLB) advances, Trust Preferred Securities, variable rate asset-backed
     certificates, subordinated notes and debentures, obligations under capital
     leases, mortgage indebtedness, and notes payable with maturities greater
     than one year.
 
(4) Average balances and calculations do not include the impact of the net
     unrealized gain or loss on available for sale securities.
 
(5) FHA/VA government-insured/guaranteed loans have been excluded, since they
     represent minimal credit risk to UPC.
 
                                       15
<PAGE>   29
 
                            MEETINGS OF SHAREHOLDERS
 
DATE, PLACE, TIME, AND PURPOSE
 
     Magna.  This Joint Proxy Statement is being furnished to the holders of
Magna Common Stock and Magna Class B Preferred Stock in connection with the
solicitation by the Magna Board of proxies for use at the Magna Annual Meeting
at which Magna shareholders will be asked to vote upon (i) a proposal to adopt
the Agreement and the Plan of Merger, (ii) a proposal to elect six nominees as
Class I directors of Magna, and (iii) such other business as may be properly
come before the Magna Annual Meeting. The Magna Annual Meeting will be held at
                    , at   .m., local time, on                     , 1998. See
"DESCRIPTION OF TRANSACTION."
 
     UPC.  This Joint Proxy Statement is being furnished to the holders of UPC
Common Stock in connection with the solicitation by the UPC Board of proxies for
use at the UPC Special Meeting at which UPC shareholders will be asked to vote
upon a proposal to approve the issuance of shares of UPC Common Stock pursuant
to the Agreement. The UPC Special Meeting will be held at Union Planters
Administrative Center, located at 7130 Goodlett Farms Parkway, Memphis,
Tennessee 38018 at   .m., local time, on                     , 1998. See
"DESCRIPTION OF TRANSACTION."
 
RECORD DATE, VOTING RIGHTS, REQUIRED VOTE, AND REVOCABILITY OF PROXIES
 
     Magna.  The close of business on                     , 1998, has been fixed
as the Magna Record Date for determining holders of outstanding shares of Magna
Common Stock and Magna Class B Preferred Stock entitled to notice of and to vote
at the Magna Annual Meeting. Only holders of Magna Common Stock and Magna Class
B Preferred Stock of record on the books of Magna at the close of business on
the Magna Record Date are entitled to notice of and to vote at the Magna Annual
Meeting. As of the Magna Record Date, there were           shares of Magna
Common Stock issued and outstanding held by approximately           holders of
record and           shares of Magna Class B Preferred Stock issued and
outstanding held by approximately           holders of record.
 
     Each holder of record of shares of Magna Common Stock and Magna Class B
Preferred Stock on the Magna Record Date is entitled to cast one vote per share
on (i) the proposal to adopt the Agreement and the Plan of Merger, (ii) the
proposal to elect six nominees as Class I directors of Magna, and (iii) on any
other matter properly submitted for the vote of the Magna shareholders at the
Magna Annual Meeting. The presence, either in person or by properly executed
proxy, of the holders of a majority of the outstanding shares of Magna Common
Stock and Magna Class B Preferred Stock entitled to vote at the Magna Annual
Meeting is necessary to constitute a quorum at the Magna Annual Meeting.
 
     Magna intends to count shares of Magna Common Stock and Magna Class B
Preferred Stock present in person at the Magna Annual Meeting but not voting,
and shares of Magna Common Stock and Magna Class B Preferred Stock for which it
has received proxies but with respect to which holders of shares have abstained
on any matter, as present at the Magna Annual Meeting for purposes of
determining the presence or absence of a quorum for the transaction of business.
Adoption of the Agreement and the Plan of Merger requires the affirmative vote
of the holders of a majority of the issued and outstanding shares of Magna
Common Stock and Magna Class B Preferred Stock entitled to vote at the Magna
Annual Meeting, voting together as a single class. Brokers who hold shares in
street name for customers who are the beneficial owners of such shares are
prohibited from giving a proxy to vote shares held for such customers on the
approval of the Agreement and the Plan of Merger without specific instructions
from such customers. Given that the approval of the Agreement and the Plan of
Merger requires the affirmative vote of the holders of a majority of the
outstanding shares of Magna Common Stock and Magna Class B Preferred Stock
entitled to vote thereon, voting together as a single class, any abstention,
non-voting share or "broker non-vote" with respect to such shares of Magna
Common Stock or Magna Class B Preferred Stock will have the same effect as a
vote AGAINST the approval of the Agreement and the Plan of Merger.
 
     Shares of Magna Common Stock and Magna Class B Preferred Stock represented
by properly executed proxies, if such proxies are received prior to or at the
Magna Annual Meeting and not revoked, will be voted in

                                       16
<PAGE>   30
 
accordance with the instructions indicated on the proxies. IF NO INSTRUCTIONS
ARE INDICATED, SUCH PROXIES WILL BE VOTED FOR (I) THE PROPOSAL TO ADOPT THE
AGREEMENT AND THE PLAN OF MERGER AND (II) THE PROPOSAL TO ELECT SIX NOMINEES AS
CLASS I DIRECTORS OF MAGNA, AND IN THE DISCRETION OF THE PROXYHOLDER AS TO ANY
OTHER MATTER WHICH MAY COME PROPERLY BEFORE THE MAGNA ANNUAL MEETING. IF
NECESSARY, THE PROXYHOLDER MAY VOTE IN FAVOR OF A PROPOSAL TO ADJOURN THE MAGNA
ANNUAL MEETING IN ORDER TO PERMIT FURTHER SOLICITATION OF PROXIES IN THE EVENT
THERE ARE NOT SUFFICIENT VOTES TO APPROVE THE FOREGOING PROPOSALS AT THE TIME OF
THE MAGNA ANNUAL MEETING. HOWEVER, NO PROXYHOLDER WILL VOTE ANY PROXIES VOTED
AGAINST ADOPTION OF THE AGREEMENT AND THE PLAN OF MERGER FOR A PROPOSAL TO
ADJOURN THE MAGNA ANNUAL MEETING.
 
     A Magna shareholder who has given a proxy solicited by the Magna Board may
revoke it at any time prior to its exercise at the Magna Annual Meeting by
either (i) giving written notice of revocation to the Corporate Secretary of
Magna, (ii) properly submitting to Magna a duly executed proxy bearing a later
date, or (iii) attending the Magna Annual Meeting and voting in person. All
written notices of revocation and other communications with respect to
revocation of proxies should be addressed as follows: Magna Group, Inc., One
Magna Place, 1401 South Brentwood Boulevard, St. Louis, Missouri 63144;
Attention: Carolyn Ryseff, Secretary.
 
     The directors and executive officers of Magna (including immediate family
members and affiliated entities) owned, as of the Magna Record Date,
shares, or approximately        % of the outstanding shares of Magna Common
Stock and no shares of Magna Class B Preferred Stock. The directors and
executive officers of UPC owned, as of the Magna Record Date,           shares,
or approximately        % of the outstanding shares of Magna Common Stock and no
shares of Magna Class B Preferred Stock.
 
     In addition, as of the Magna Record Date, various subsidiaries of Magna, as
fiduciaries, custodians, and agents, had sole or shared voting power over
          shares, or        %, of the issued and outstanding shares of Magna
Common Stock, under trust agreements and other instruments and agreements,
including shares held as trustee or agent of various Magna employee benefit and
stock purchase plans. Such subsidiaries also held           shares, or        %,
of the issued and outstanding shares of UPC Common Stock as of the UPC Record
Date. It is the policy of these subsidiaries not to vote such shares in the
absence of instructions from other appropriate parties having an interest in
such stock, such as co-fiduciaries and participants in such plans, unless the
subsidiary has sole authority with respect to shares thereto.
 
     For information with respect to beneficial owners of 5% or more of the
outstanding shares of Magna Common Stock, and information with respect to the
number and percentage of outstanding shares of Magna Common Stock and Magna
Class B Preferred Stock beneficially owned by the directors and executive
officers of Magna, see "ADDITIONAL MATTERS RELATING TO MAGNA ANNUAL
MEETING -- Voting Securities of Magna and Principal Holders Thereof; Security
Ownership of Management of Magna."
 
     UPC.  The close of business on                     , 1998, has been fixed
as the UPC Record Date for determining holders of outstanding shares of UPC
Common Stock entitled to notice of and to vote at the UPC Special Meeting. Only
holders of UPC Common Stock of record on the books of UPC at the close of
business on the UPC Record Date are entitled to notice of and to vote at the UPC
Special Meeting. As of the UPC Record Date, there were           shares of UPC
Common Stock issued and outstanding held by approximately           holders of
record.
 
     Each holder of record of shares of UPC Common Stock on the UPC Record Date
is entitled to cast one vote per share on the proposal to approve the issuance
of shares of UPC Common Stock pursuant to the Agreement, and on any other matter
properly submitted for the vote of the UPC shareholders at the UPC Special
Meeting. The presence, either in person or by properly executed proxy, of the
holders of a majority of the outstanding shares of UPC Common Stock entitled to
vote at the UPC Special Meeting is necessary to constitute a quorum at the UPC
Special Meeting.
 
     UPC intends to count shares of UPC Common Stock present in person at the
UPC Special Meeting but not voting, and shares of UPC Common Stock for which it
has received proxies but with respect to which holders of shares have abstained
on any matter, as present at the UPC Special Meeting for purposes of
 
                                       17
<PAGE>   31
 
determining the presence or absence of a quorum for the transaction of business.
Approval of the issuance of shares of UPC Common Stock pursuant to the Agreement
requires the affirmative vote of a majority of the votes cast in person or by
proxy by holders of UPC Common Stock at the UPC Special Meeting, assuming a
quorum is present. Brokers who hold shares in street name for customers who are
the beneficial owners of such shares are prohibited from giving a proxy to vote
shares held for such customers on the approval of the issuance of shares of UPC
Common Stock pursuant to the Agreement without specific instructions from such
customers. Given that the approval of the issuance of shares of UPC Common Stock
pursuant to the Agreement requires the affirmative vote of a majority of the
votes cast in person or by proxy by holders of UPC Common Stock at the UPC
Special Meeting, any abstention, non-voting share or "broker non-vote" with
respect to such shares of UPC Common Stock will be counted for purposes of
obtaining a quorum.
 
     Shares of UPC Common Stock represented by properly executed proxies, if
such proxies are received prior to or at the UPC Special Meeting and not
revoked, will be voted in accordance with the instructions indicated on the
proxies. IF NO INSTRUCTIONS ARE INDICATED, SUCH PROXIES WILL BE VOTED FOR the
proposal to approve the issuance of shares of UPC Common Stock pursuant to the
Agreement and in the discretion of the proxyholder as to any other matter which
may come properly before the UPC Special Meeting. If necessary, the proxyholder
may vote in favor of a proposal to adjourn the UPC Special Meeting in order to
permit further solicitation of proxies in the event there are not sufficient
votes to approve the foregoing proposal at the time of the UPC Special Meeting.
However, no proxyholder will vote any proxies voted AGAINST approval of the
issuance of shares of UPC Common Stock pursuant to the Agreement FOR a proposal
to adjourn the UPC Special Meeting.
 
     A UPC shareholder who has given a proxy solicited by the UPC Board may
revoke it at any time prior to its exercise at the UPC Special Meeting by either
(i) giving written notice of revocation to the Corporate Secretary of UPC, (ii)
properly submitting to UPC a duly executed proxy bearing a later date, or (iii)
attending the UPC Special Meeting and voting in person. All written notices of
revocation and other communications with respect to revocation of proxies should
be addressed as follows: Union Planters Corporation, 7130 Goodlett Farms
Parkway, Memphis, Tennessee 38018 Attn: E. James House, Jr., Secretary.
 
     The directors and executive officers of UPC (including immediate family
members and affiliated entities) owned, as of the UPC Record Date,
shares, or approximately        % of the outstanding shares of UPC Common Stock.
The directors and executive officers of Magna owned, as of the UPC Record Date,
          shares, or approximately        % of the outstanding shares of UPC
Common Stock.
 
     In addition, as of the UPC Record Date, various subsidiaries of UPC, as
fiduciaries, custodians, and agents, had sole or shared voting power over
          shares, or        %, of the issued and outstanding shares of UPC
Common Stock, under trust agreements and other instruments and agreements,
including shares held as trustee or agent of various UPC employee benefit and
stock purchase plans. Such subsidiaries also held   shares, or        %, of the
issued and outstanding shares of Magna Common Stock as of the Magna Record Date.
It is the policy of these subsidiaries not to vote such shares in the absence of
instructions from other appropriate parties having an interest in such stock,
such as co-fiduciaries and participants in such plans, unless the subsidiary has
sole authority with respect to shares thereto.
 
     For information with respect to beneficial owners of 5% or more of the
outstanding shares of UPC Common Stock, and information with respect to the
number and percentage of outstanding shares of UPC Common Stock beneficially
owned by the directors and executive officers of UPC, see "PROPOSAL 1: ELECTION
OF DIRECTORS" in the UPC Annual Meeting Proxy Statement. See "DOCUMENTS
INCORPORATED BY REFERENCE."
 
SOLICITATION OF PROXIES
 
     Proxies may be solicited by the directors, officers, employees, and agents
of Magna and UPC by mail, in person, or by telephone or telegraph. Such persons
will receive no additional compensation for such services. Magna and UPC may
make arrangements with brokerage firms and other custodians, nominees, and
 
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<PAGE>   32
 
fiduciaries, if any, for the forwarding of solicitation materials to the
beneficial owners of Magna Capital Stock and UPC Common Stock held of record by
such persons. Any such brokers, custodians, nominees, and fiduciaries will be
reimbursed for the reasonable out-of-pocket expenses incurred by them for such
services. In addition, UPC and Magna may engage a proxy solicitation firm to
solicit proxies from the holders of UPC Common Stock and Magna Common Stock,
respectively. All expenses associated with the solicitation of proxies, other
expenses associated with the Meetings and expenses related to the printing and
mailing of this Joint Proxy Statement will be shared by UPC and Magna as
provided in the Agreement, with the exception of fees paid to any proxy
solicitation firm engaged by UPC or Magna, which will be paid by UPC or Magna,
respectively. See "DESCRIPTION OF TRANSACTION -- Expenses and Fees."
 
DISSENTERS' RIGHTS
 
     Magna Common Stock.  Holders of Magna Common do not have dissenters' rights
with respect to the Merger.
 
     UPC Common Stock.  Holders of UPC Common Stock do not have dissenters'
rights with respect to the issuance of shares of UPC Common Stock pursuant to
the Agreement.
 
     Magna Class B Preferred Stock.  Holders of Magna Class B Preferred Stock
have the right to dissent from the Merger and, assuming the Merger is
consummated, to receive in cash an amount determined to be the "fair value" of
their shares of Magna Class B Preferred Stock. In order to be entitled to fully
exercise dissenters' rights, a holder of Magna Class B Preferred Stock choosing
to dissent (a "Dissenting Shareholder") must NOT vote FOR the approval of the
Agreement and the Plan of Merger and must take certain other procedural steps to
"perfect" such Dissenting Shareholders' rights under Section 262 of the DGCL. It
is not necessary for a holder of Magna Class B Preferred Stock to vote against
consummation of the Merger in order to perfect his or her right to dissent and
demand appraisal. However, no such shareholder may vote for approval and
adoption of the Agreement and the Plan of Merger and thereafter demand his or
her appraisal rights. Because all proxies submitted which do not specify how
such proxy is to be voted will be voted in favor of the adoption and approval of
the Agreement and the Plan of Merger, a holder of Magna Class B Preferred Stock
who desires to dissent from approval of the Merger should not submit such a
proxy. A holder of Magna Class B Preferred Stock who votes for approval and
adoption of the Agreement and the Plan of Merger or who submits a proxy which
does not specify how such proxy is to be voted will waive any rights of dissent
and appraisal. A vote against consummation of the Merger will not satisfy the
statutory requirement that a Dissenting Shareholder give notice of his or her
intention to dissent and make demand for payment of his or her shares of Magna
Class B Preferred Stock. See "DESCRIPTION OF TRANSACTION -- Dissenters' Rights"
and Appendix E to this Joint Proxy Statement, which includes a copy of Section
262 of the DGCL governing statutory dissenters' rights.
 
                           DESCRIPTION OF TRANSACTION
 
     The following information describes material aspects of the Merger. This
description does not purport to be complete and is qualified in its entirety by
reference to the Appendices hereto, including the Agreement and the Plan of
Merger, which are included as Appendices A and B, respectively, to this Joint
Proxy Statement and incorporated herein by reference. All shareholders are urged
to read the Appendices in their entirety.
 
GENERAL
 
     The Agreement provides for the acquisition of Magna by UPC pursuant to the
merger of Magna with and into UPHC, a wholly-owned subsidiary of UPC organized
under the laws of the State of Tennessee, with the effect that UPHC will be the
surviving corporation resulting from the Merger. At the Effective Time, each
share of (i) Magna Common Stock then issued and outstanding (excluding shares
held by Magna, UPC, or their respective subsidiaries, in each case other than
shares held in a fiduciary capacity or as a result of debts previously
contracted) will be converted into and exchanged for .9686 of a share of UPC
Common Stock and (ii) Magna Class B Preferred Stock issued and outstanding
(excluding shares held by Magna or UPC, or their respective subsidiaries, in
each case other than shares held in a fiduciary capacity as the results of debts

                                       19
<PAGE>   33
 
previously contracted, and other than shares held by dissenting shareholders)
will be converted into and the right to receive a check from UPC in the amount
of $20.00, plus any accrued but unpaid dividends at the Effective Time, the
Preferred Stock Cash Payment.
 
     No fractional shares of UPC Common Stock will be issued. Rather, cash
(without interest) will be paid in lieu of any fractional share to which any
holder of Magna Common Stock would be entitled upon consummation of the Merger,
in an amount equal to such fractional part of a share of UPC Common Stock
multiplied by the closing price of such common stock on the NYSE (as reported by
The Wall Street Journal or, if not reported thereby, another authoritative
source as reasonably selected by UPC) on the last trading day preceding the
Effective Time.
 
     As of the Magna Record Date, Magna had           shares of Magna Common
Stock outstanding. Based upon the Exchange Ratio, upon consummation of the
Merger, UPC will issue approximately           shares of UPC Common Stock.
Accordingly, UPC would then have outstanding approximately           shares of
UPC Common Stock, based on the number of shares of UPC Common Stock outstanding
on March 31, 1998 (and excluding shares to be issued pursuant to Other Pending
Acquisitions and shares to be issued pursuant to the exercise of stock options
and for other purposes).
 
BACKGROUND OF AND REASONS FOR THE MERGER
 
     Background of the Merger.  Over the years, Magna has followed its stated
"Strategic Plan Mission Statement" which was to enhance stockholder value by
being a profitable and leading supplier of high quality retail financial
services to individuals and businesses in the community markets it serves.
Magna's strategic objectives were to remain a retail super community bank,
improve earnings, and grow the assets of the corporation. Since Magna had been
actively pursuing acquisitions, it had retained Donaldson, Lufkin and Jenrette
("DLJ") as a financial advisor since 1990. Each year at its planning meeting,
the Magna Board reviewed Magna's strategic plan in detail.
 
     At its September 1997 planning meeting, the Magna Board discussed and
analyzed with its financial advisor the industry dynamics supporting Magna's
growth strategy, the industry's financial performance, the financial services
consolidation trend, characteristics of recent mergers and acquisitions of banks
and non-bank entities, and Magna as a competitive acquiror and as a desirable
target. Dramatic changes in the industry, new ways of doing business, customer
expectations, key secular forces, the change from the industrial age to the
information age, changing market trends based on customer profitability, and
changing delivery systems were also discussed, as well as bank stock trading
trends and projections. The Magna Board recognized that such trends were
changing the terms and conditions upon which Magna would be required to compete
in the future.
 
     In December 1997, Magna was contacted by another financial institution, and
the Chairman of that institution met with Mr. G. Thomas Andes, Chairman,
President and Chief Executive Officer of Magna, on January 6, 1998, and
indicated a preliminary interest in acquiring Magna. Magna was also contacted by
UPC in December 1997, and Mr. Andes met with Mr. Benjamin W. Rawlins, Jr., the
Chairman and Chief Executive Officer of UPC, on January 8, 1998. Several
follow-up meetings between senior management of Magna and UPC occurred during
January and February 1998, and on February 10, 1998 UPC offered Magna a price
range for a possible all-stock merger transaction.
 
     On February 18, 1998, the Magna Board of Directors met. The results of the
conversations with UPC, as well as the preliminary indication of interest from
the other financial institution, were presented to the Board. The preliminary
indication of interest from the other financial institution was determined to be
too speculative and not of comparative value to the proposals of UPC. Magna's
senior management and its financial advisors discussed the strategic and
business issues with respect to a strategic combination with UPC, as well as the
financial aspects of the UPC proposal. The Magna Board also reviewed its
responsibilities in evaluating any potential transaction with its legal counsel,
Wachtell, Lipton, Rosen & Katz. At the conclusion of the discussion, the Board
authorized management to continue to evaluate and negotiate the possible
acquisition of Magna by UPC and to begin due diligence on UPC. A special meeting
of the Board was scheduled for February 22, 1998.
 
                                       20
<PAGE>   34
 
     On February 19 - 22, 1998, while the performance of due diligence
continued, senior management of Magna and UPC, and their respective legal
representatives, negotiated the terms of the proposed Agreement and Option
Agreement.
 
     At the special meeting of the Magna Board on February 22, 1998, senior
management of Magna, together with its financial and legal advisors, reviewed
for the Magna Board the strategic investigation and due diligence it had
conducted, the discussions and contacts with UPC to date, the historical
performance and strategies of Magna and UPC, the financial terms of the proposed
transaction including the Exchange Ratio, and the other terms of the draft
Agreement and Option Agreement. Magna's financial advisors rendered to the Magna
Board the financial analysis set forth in "Opinion of Magna's Financial Advisor"
and the opinion that the Exchange Ratio was fair, from a financial point of
view, to Magna's stockholders. Following discussion, and questions by the Magna
Board to Magna's senior management, its financial and legal representatives, and
UPC senior management, the members of Magna's Board voted unanimously to approve
the Agreement and the transactions contemplated thereby including, without
limitation, the Option Agreement.
 
     Recommendation of the Magna Board; Reasons for the Merger.  In reaching its
unanimous conclusion that the Merger is in the best interests of Magna and its
shareholders, the Magna Board carefully considered a variety of factors. Among
the factors considered were those described above and the following: (i) the
financial terms of the Merger, including the expectation that when Magna
shareholders will receive UPC Common Stock in the Merger, the Merger will be
tax-free to such shareholders; (ii) a comparison of the terms of the Merger with
comparable transactions in Missouri and elsewhere in the country; (iii) the long
term value of UPC Common Stock in relation to the historical trading prices of
Magna Common Stock; (iv) the review by the Magna Board with its legal and
financial advisors of the provisions of the Agreement; (v) the financial advice
rendered by DLJ to the Magna Board and the opinion rendered by DLJ that the
Exchange Ratio is fair, from a financial point of view, to Magna shareholders;
(vi) the absence of any apparent regulatory impediments and the corresponding
likelihood that the proposed transaction would be consummated; (vii) the current
operating environment, including, but not limited to, the continued
consolidation and increasing competition in the banking and financial services
industries, the prospect for further changes in these industries and federal
regulatory agency consolidation and the importance of being able to capitalize
on developing opportunities in these industries; (ix) information with respect
to the financial condition, results of operations, cash flow, businesses and
prospects of Magna. In this regard, the Board analyzed the option of selling
Magna or continuing on a stand-alone basis. The range of values for a share of
Magna Common Stock on a sale of control basis was determined to generally exceed
the present value of shares of Magna Common Stock on a stand-alone basis under
business strategies that could be reasonably implemented by Magna; (x) financial
analysis, pro forma, and business results of operations, key ratios, discounted
cash flow values, stock price performance and market data with respect to UPC
and Magna prepared by DLJ, as well as the Magna Board's own knowledge of Magna,
UPC and their respective businesses. In this regard, the latest
publicly-available financial and other information for UPC and Magna were
analyzed, including a comparison to publicly-available financial and other
information for other similar institutions; (xi) similarities between the
community banking philosophies of UPC and Magna; (xii) the strength of UPC's
primary business activities, including mortgage banking, credit card and FHA/VA
lending; and (xiii) the increased ability of the combined company to deal with
the technological challenges of the future, especially Year 2000 compliance.
 
     In reaching its determination to approve and recommend the Agreement, the
Magna Board did not assign any relative or specific weights to the foregoing
factors, and individual directors may have weighed factors differently. After
deliberating with respect to the Merger and the other transactions contemplated
by the Agreement considering, among other things, the matters discussed above
and the opinion of DLJ referred to above, the Magna Board unanimously approved
and adopted the Agreement and the transactions contemplated thereby as being in
the best interests of Magna and its stockholders.
 
     FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF MAGNA
UNANIMOUSLY APPROVED AND ADOPTED THE AGREEMENT AS ADVISABLE AND IN THE BEST
INTERESTS OF MAGNA AND ITS STOCKHOLDERS AND RECOMMENDS THAT THE STOCKHOLDERS OF
MAGNA VOTE FOR THE APPROVAL AND ADOPTION OF THE AGREEMENT.

                                       21
<PAGE>   35
 
     Recommendation of the UPC Board; Reasons for the Merger.  The UPC Board
believes that the Merger is fair to, and in the best interest of, UPC and its
shareholders. ACCORDINGLY, THE UPC BOARD HAS UNANIMOUSLY APPROVED THE AGREEMENT
AND UNANIMOUSLY RECOMMENDS THAT HOLDERS OF UPC COMMON STOCK VOTE FOR THE
APPROVAL OF THE ISSUANCE OF SHARES OF UPC COMMON STOCK PURSUANT TO THE
AGREEMENT. See "-- Opinion of UPC's Financial Advisor."
 
     The terms of the Merger, including the Exchange Ratio, are the result of
arm's-length negotiations between representatives of UPC and Magna. In reaching
its decision to approve the Agreement, the UPC Board consulted with its legal
advisors regarding the terms of the transaction, with its financial advisor
regarding the financial aspects of the proposed transaction and the fairness of
the Exchange Ratio, and with management of UPC, and, without assigning any
relative or specific weights, considered a number of factors, both from a
short-term and long-term perspective, including, without limitation, those set
forth in " --Background of and Reasons for the Merger -- Background of the
Merger," and the following: (i) the information presented to the directors by
the management of UPC concerning the business, operations, earnings, asset
quality, and financial condition of Magna, including the composition of the
earning assets portfolio of Magna; (ii) the financial terms of the Merger,
including the relationship of the value of the consideration issuable in the
Merger to the market value, tangible book value, and earnings per share of Magna
Common Stock; (iii) the nonfinancial terms of the Merger, including the
treatment of the Merger as a tax-free exchange of Magna Common Stock for UPC
Common Stock for federal income tax purposes and arrangements relating to the
continued involvement of the management and Board of Directors of Magna with the
combined company; (iv) the likelihood of the Merger being approved by applicable
regulatory authorities without undue conditions or delay; (v) the opportunity
for reducing the noninterest expense of the operations of Magna and the ability
of the operations of Magna after the Effective Time to contribute to the
earnings of UPC; (vi) the attractiveness of the Magna franchise, the market
position of Magna in each of the markets in which it operates, and the
compatibility of the franchise of Magna with the operations of UPC; (vii) the
compatibility of the community bank orientation of the operations of Magna to
that of UPC; (viii) the report of Stifel Nicolaus reviewing a comparison of
Magna to selected peer banks and of premiums paid in other merger transactions;
and (ix) the opinion rendered by Stifel Nicolaus as to the fairness, from a
financial point of view, of the Exchange Ratio to the holders of UPC Common
Stock.
 
     The foregoing discussion is not intended to be exhaustive but includes all
of the material factors considered by the UPC Board in determining to recommend
that shareholders approve the issuance of shares of UPC Common Stock pursuant to
the Agreement and the Plan of Merger. The UPC Board did not quantify or
otherwise attempt to assign relative or specific weights to the factors
considered in reaching its determination that the Agreement, the Plan of Merger
and the Merger are in the best interests of shareholders.
 
OPINION OF MAGNA'S FINANCIAL ADVISOR
 
     At a meeting of Magna's Board on February 22, 1998, at which the terms of
the proposed Merger were discussed and considered, DLJ rendered a written
opinion to the Magna Board that, as of the date of such opinion, based upon the
matters set forth in such opinion and such other matters as DLJ deemed relevant,
the Exchange Ratio was fair to the holders of Magna Common Stock from a
financial point of view. DLJ has confirmed its February 22, 1998 opinion by
delivery of a written opinion to the Magna Board dated the date of this Joint
Proxy Statement stating that, as of the date hereof and based on the matters set
forth in such opinion, the Exchange Ratio is fair to the holders of Magna Common
Stock from a financial point of view. DLJ's opinion does not address the
consideration to be received by the holders of Magna Class B Preferred Stock.
 
     THE FULL TEXT OF DLJ'S OPINION DATED THE DATE HEREOF IS INCLUDED AS
APPENDIX C TO THIS JOINT PROXY STATEMENT. MAGNA SHAREHOLDERS ARE URGED TO READ
THE DLJ OPINION IN ITS ENTIRETY FOR ASSUMPTIONS MADE, PROCEDURES FOLLOWED,
MATTERS CONSIDERED, AND LIMITS OF THE REVIEW UNDERTAKEN BY DLJ. THE SUMMARY OF
THE DLJ OPINION SET FORTH IN THIS JOINT PROXY STATEMENT IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.
 
                                       22
<PAGE>   36
 
     DLJ's opinion is limited to the fairness, from a financial point of view,
of the Exchange Ratio to the holders of Magna Common Stock and does not address
Magna's underlying business decision to proceed with the Merger. The opinion is
directed only to the Exchange Ratio and does not constitute a recommendation to
any holder of Magna Capital Stock as to how such holder should vote with respect
to the Agreement. DLJ's opinion is based on the economic, market, financial, and
other conditions as they existed on, and on the information made available to
DLJ as of the date of the opinion. Although subsequent developments may affect
DLJ's opinion, DLJ is not obligated to update, revise, or reaffirm its opinion.
 
     The Magna Board selected DLJ as its financial advisor because it is a
nationally recognized investment banking firm that has substantial experience in
transactions similar to the Merger and is familiar with Magna and the financial
services industry in general. DLJ, as part of its investment banking services,
is regularly engaged in the valuation of businesses and their securities in
connection with mergers, acquisitions, underwritings, sales and distributions of
listed and unlisted securities, private placements, and valuations for corporate
and other purposes.
 
     In arriving at its opinion, DLJ: (i) reviewed the financial terms and
provisions of the Agreement and the exhibits thereto, including the Option
Agreement; (ii) reviewed financial and other information that was publicly
available or furnished to DLJ by Magna and UPC including information provided
during discussions with their respective managements; (iii) reviewed certain
financial projections of Magna for the period beginning January 1, 1998 and
ending December 31, 2002 provided by the management of Magna; (iv) reviewed
certain financial projections of UPC for the period beginning January 1, 1998
and ending December 31, 2000 provided by the management of UPC; (v) reviewed
certain pro forma financial statements provided by the management of Magna and
UPC reflecting the Merger and certain operating synergies expected to result
therefrom; (vi) compared certain financial and securities data of Magna and UPC
with various other companies whose securities are traded in public markets;
(vii) reviewed the historical stock prices and trading volumes of Magna Common
Stock and UPC Common Stock; (viii) reviewed prices and premiums paid in certain
other business combinations; and (ix) conducted such other financial studies,
analyses and investigations as DLJ deemed appropriate for purposes of its
opinion.
 
     In conducting its review and rendering its opinion, DLJ relied upon and
assumed the accuracy and completeness of all of the financial and other
information available to DLJ from public sources, that was provided to DLJ by
Magna, UPC and their respective representatives or that was otherwise reviewed
by DLJ. In particular, DLJ relied upon the estimates of the management of Magna
and UPC of the operating synergies achievable as a result of the Merger and upon
its discussion of such synergies with the management of Magna and UPC. With
respect to the financial projections used in DLJ's analysis, DLJ assumed that
such projections were reasonably prepared on the basis reflecting the best then
available estimates and judgments of the management of Magna and UPC as to the
future operating and financial performance of Magna and UPC, respectively.
 
     DLJ is not an expert in the evaluation of loan portfolios or allowances for
loan and real estate-owned losses, and, upon advice of management of Magna, DLJ
did not independently verify and assumed that the aggregate allowances for loan
losses set forth in the balance sheets of each of Magna and UPC at December 31,
1997 are adequate to cover such losses and complied fully with applicable law,
regulatory policy and sound banking practice as of the date of such financial
statements. DLJ was not retained to and DLJ did not conduct a physical
inspection of any of the properties or facilities of Magna or UPC, and did not
make any independent evaluation or appraisal of the assets, liabilities or
prospects of Magna or UPC, was not furnished with any such evaluation or
appraisal, and did not review any individual credit files. In rendering its
opinion, DLJ was advised by Magna and UPC and assumed that there were no other
factors that would delay or subject to adverse conditions any necessary
regulatory or governmental approval for the Merger, and that all conditions to
the Merger will be satisfied and not waived. DLJ further assumed that the Merger
will qualify for treatment as a tax-free reorganization and be accounted for as
a pooling of interests.
 
     The following is a brief summary of the analysis presented by DLJ to the
Magna Board of Directors in connection with DLJ's written opinion to the Magna
Board dated February 22, 1998. For purposes of this summary, "Magna Peer Group"
means Associated Banc-Corp., CNB Bancshares, Inc., Citizens Banking
 
                                       23
<PAGE>   37
 
Corporation, Commerce Bancshares, Inc., Community First Bankshares, First
American Corporation, FirstMerit Corporation, Old National Bancorp and UMB
Financial Corporation, and "UPC Peer Group" means AmSouth Bancorporation,
Compass Bancshares Inc., Crestar Financial Corporation, First American
Corporation, First Tennessee National Corporation, National Commerce
Bancorporation, Regions Financial Corporation and SouthTrust Corporation. In
connection with its analysis, DLJ used pro forma data reflecting Magna's pending
acquisition of Charter Financial, Inc. ("Charter") and related stock purchases
and adjusted 1997 earnings per share ("EPS") for a first quarter provision to
cover potential exposure related to loans to a single borrower. DLJ also used
pro forma data reflecting several pending and recently completed acquisitions by
UPC. In connection with its written opinion dated the date of this Joint Proxy
Statement, DLJ performed procedures to update certain of its analyses and
reviewed the assumptions on which such analyses were based and the factors
considered in connection therewith. In updating its opinion, DLJ did not utilize
any method of analysis in addition to those described below.
 
     Historical Financial Performance.  DLJ analyzed the historical financial
performance of Magna and UPC from 1993 through 1997, including analyses of each
company's return on average assets ("ROAA"); return on average equity ("ROAE");
net interest margin; noninterest income/total revenues ratio; efficiency ratio;
EPS growth rate; nonperforming assets ("NPAs")/loans and other real estate owned
("OREO") ratio; and leverage ratios. Magna's average performance or compounded
annual growth for 1993 through 1997 for each of the foregoing indicators of
financial performance was: ROAA -- 1.09%; ROAE -- 12.5%; net interest
margin -- 4.24%; noninterest income/total revenues -- 21.7%; efficiency
ratio -- 61.5%; EPS growth rate -- 10.2%; NPAs/loans and OREO -- 1.39%; and
leverage ratio -- 8.17%. UPC's average performance or compounded annual growth
for 1993 through 1997 for each of the foregoing indicators of financial
performance was: ROAA -- 0.97%; ROAE -- 12.3%; net interest margin -- 4.50%;
noninterest income/total revenues -- 25.5%; efficiency ratio -- 62.1%; EPS
growth rate -- (0.4%); NPAs/loans and OREO -- 0.80%; and leverage
ratio -- 8.50%.
 
     Stock Trading History.  DLJ examined the history of trading prices and
volume for Magna Common Stock and UPC Common Stock from January 1, 1993 through
January 30, 1998 and the relationship between the movements of such trading
prices to movements of the Standard & Poor's Regional Bank Index and of the
trading prices of the common stocks of the companies in the Magna Peer Group and
the UPC Peer Group.
 
     DLJ computed implied values per share of Magna Common Stock and UPC Common
Stock by applying the average price/earnings, price/book value and
price/tangible book value multiples of Magna Common Stock and UPC Common Stock
for the three years ended December 31, 1997 to the earnings per share, book
value per share and tangible book value per share of Magna Common Stock and UPC
Common Stock, respectively, at or for the twelve months ended December 31, 1997.
The implied values of Magna Common Stock derived from Magna's historical trading
multiples ranged from $25.48 to $34.44 per share. The implied values of UPC
Common Stock derived from UPC's historical trading multiples ranged from $49.41
to $62.49 per share.
 
     DLJ also noted that the annualized historical returns on Magna Common Stock
(assuming reinvestment of dividends) for the ten-, five- and two-year periods
ending on February 20, 1998 were 17.9%, 27.7% and 49.9%, respectively. The
annualized historical returns on UPC Common Stock (assuming reinvestment of
dividends) for the ten-, five- and two-year periods ending on February 20, 1998
were 23.5%, 25.6% and 48.3%, respectively.
 
     Comparison with Selected Companies.  DLJ compared selected financial ratios
(at or for the twelve months ended December 31, 1997) and trading multiples (as
of February 20, 1998) for Magna and UPC to the corresponding ratios and
multiples of the Magna Peer Group and the UPC Peer Group, respectively. DLJ also
calculated implied values for Magna Common Stock and UPC Common Stock based on
the median trading multiples for the Magna Peer Group and the UPC Peer Group. In
connection with this analysis, DLJ used median projected earnings estimates as
published by First Call Corporation ("First Call") for Magna, UPC, the Magna
Peer Group and the UPC Peer Group. First Call is a data service which monitors
and publishes a compilation of earnings estimates produced by selected research
analysts on companies of interest to investors.
 
                                       24
<PAGE>   38
 
     The trading multiples used in calculating the implied values of Magna
Common Stock were market price as a multiple of: (i) EPS for the twelve months
ended December 31, 1997 (which was 19.1x for Magna as compared to a median of
20.0x for the Magna Peer Group); (ii) 1998 estimated EPS (which was 17.5x for
Magna as compared to a median of 17.5x for the Magna Peer Group); (iii) 1999
estimated EPS (which was 16.0x for Magna as compared to a median of 15.7x for
the Magna Peer Group); (iv) book value (which was 2.51x for Magna as compared to
a median of 2.77x for the Magna Peer Group); and (v) tangible book value (which
was 3.48x for Magna as compared to a median of 3.11x for the Magna Peer Group).
 
     The implied values of Magna Common Stock derived from the Magna Peer
Group's earnings multiples ranged from $46.16 to $49.20 per share. The implied
values of Magna Common Stock derived from the Magna Peer Group's book value
multiples ranged from $41.92 to $51.77 per share.
 
     The trading multiples used in calculating the implied values of UPC Common
Stock were market price as a multiple of: (i) EPS for the twelve months ended
December 31, 1997 (which was 20.2x for UPC as compared to a median of 20.7x for
the UPC Peer Group); (ii) 1998 estimated EPS (which was 16.9x for UPC as
compared to a median of 18.5x for the UPC Peer Group); (iii) 1999 estimated EPS
(which was 15.3x for UPC as compared to a median of 16.4x for the UPC Peer
Group); (iv) book value (which was 2.97x for UPC as compared to a median of
3.42x for the UPC Peer Group); and (v) tangible book value (which was 3.06x for
UPC as compared to a median of 3.83x for the UPC Peer Group). In connection with
this analysis, DLJ used pro forma data reflecting UPC's pending major
acquisitions and excluded material nonrecurring items.
 
     The implied values of UPC Common Stock derived from the UPC Peer Group's
earnings multiples ranged from $65.00 to $69.38 per share. The implied values of
UPC Common Stock derived from the UPC Peer Group's book value multiples ranged
from $73.15 to $79.28 per share.
 
     Discounted Cash Flow Analysis.  Using discounted cash flow analysis, DLJ
estimated the future dividend streams that Magna could produce over the period
from December 31, 1997 through December 31, 2002, if Magna performed in
accordance with forecasts provided by management of Magna and assuming a minimum
required tangible equity level of 6.0% of tangible total assets. DLJ also
estimated the terminal value of Magna Common Stock as of December 31, 2002 by
applying multiples of 14.0x to 20.0x to Magna's projected 2002 earnings. DLJ
selected the range of terminal multiples on the basis of past and current
trading multiples for Magna and other comparable commercial banks. The dividend
streams and terminal value were discounted to present values as of December 31,
1997 using discount rates ranging from 12.0% to 14.0%, which reflect different
assumptions regarding the required rates of return of holders and prospective
buyers of Magna Common Stock. The range of present values per fully diluted
share of Magna Common Stock resulting from this analysis was $39.63 to $55.56.
DLJ also performed a discounted cash flow analysis with a sensitivity to
differing cost savings assumptions resulting from the Merger ranging from 15% to
40% of Magna's expense base. Assuming annual overhead growth rates of 3% to 5%
and using a discount rate of 13%, the analysis resulted in a range of present
values per fully diluted share of Magna Common Stock of $44.13 to $70.86.
 
     Using discounted cash flow analysis, DLJ estimated the future dividend
streams that UPC could produce over the period from December 31, 1997 through
December 31, 2002, if UPC performed in accordance with forecasts provided by
management of UPC (and extended by DLJ in consultation with management of UPC
through December 31, 2002) and assuming a minimum required tangible equity level
of 6.0% of tangible total assets. DLJ also estimated the terminal value of the
UPC Common Stock as of December 31, 2002 by applying multiples of 14.0x to 20.0x
to UPC's projected 2002 earnings. DLJ selected the range of terminal multiples
on the basis of past and current trading multiples for UPC and other comparable
commercial banks. The dividend streams and terminal value were discounted to
present values as of December 31, 1997 by using discount rates ranging from
12.0% to 14.0%, which reflect different assumptions regarding the required rates
of return of holders and prospective buyers of UPC Common Stock. The range of
present values per fully diluted share of UPC Common Stock resulting from this
analysis was $54.04 to $74.22.
 
     DLJ performed a pro forma discounted cash flow analysis for the combined
company to reflect the effects of the Merger on the holders of Magna Common
Stock. The analysis resulted in a range of pro forma values
 
                                       25
<PAGE>   39
 
per fully diluted share for holders of Magna Common Stock of $50.18 to $71.62,
which reflects a per-share accretion to the holders of Magna Common Stock of
$10.55 to $16.05.
 
     Analysis of Selected Mergers.  As part of its analyses, DLJ reviewed 17
mergers and acquisitions of commercial banks announced from July 1, 1996 to
February 9, 1998 in which the total assets of the acquired company were between
$1.47 billion and $11.85 billion. The 17 transactions involved the following
pairs of institutions (acquiror/acquiree): Regions Financial Corporation/First
Commercial Corporation; Mercantile Bancorporation Inc./Firstbank of Illinois
Co.; National City Corporation/Fort Wayne National Corporation; First American
Corporation/Deposit Guaranty Corp.; Union Planters Corporation/Peoples First
Corporation; Banc One Corporation/First Commerce Corporation; CNB Bancshares,
Inc./Pinnacle Financial Services, Inc.; Union Planters Corporation/Capital
Bancorp; First Union Corporation/Signet Banking Corporation; Wachovia
Corporation/Central Fidelity Banks Inc; Wachovia Corporation/Jefferson
Bankshares, Inc.; Huntington Bancshares Incorporated/First Michigan Bank
Corporation; Allied Irish Banks Plc/Dauphin Deposit Corporation; Banc One
Corporation/Liberty Bancorp, Inc.; BB&T Corporation/United Carolina Bancshares
Corporation; Mercantile Bancorporation Inc./Mark Twain Bancshares, Inc.; and
Crestar Financial Corporation/Citizens Bancorporation. For each transaction, DLJ
calculated the multiple of the offer value to the acquired company's (i) market
price per share one month prior to the announcement of the Merger; (ii) EPS for
the twelve months preceding announcement of the transaction occurred("LTM"),
(iii) EPS for the fiscal year in which the announcement of the transaction
occurred ("FY estimated EPS"); (iv) EPS for the fiscal year following the year
in which the announcement of the transaction occurred ("FY+1 estimated EPS");
(v) book value per share; and (vi) tangible book value per share. DLJ also
calculated the offer value as a percentage of the acquired company's total
assets, and calculated the tangible book premium of the offer as a percentage of
total deposits and core deposits.
 
     The calculations for the foregoing 17 transactions yielded a range of
multiples of offer value to (i) market price per share of 1.06x to 1.69x with a
mean of 1.32x and a median of 1.29x compared to 1.49x for the Merger; (ii) LTM
EPS of 16.0x to 34.6x, with a mean of 22.4x and a median of 20.6x compared to
27.8x (based on Magna's reported 1997 EPS) for the Merger; (iii) FY estimated
EPS of 15.6x to 28.2x, with a mean of 20.6x and a median of 19.5x compared to
22.9x for the Merger; (iv) FY+1 estimated EPS of 14.1x to 25.5x, with a mean of
18.5x and a median of 18.1x compared to 20.9x for the Merger; (v) book value of
1.82x to 4.19x, with a mean of 2.93x and a median of 2.84x compared to 3.29x for
the Merger; (vi) tangible book value of 1.87x to 5.41x, with a mean of 3.19x and
a median of 3.02x compared to 4.56x for the Merger. The calculations for the 17
transactions yielded a range of percentages of offer value to (i) total assets
of 18.1% to 39.4% with a mean of 26.6% and a median of 25.4% compared to 28.9%
for the Merger; (ii) total deposits of 10.9% to 41.8% with a mean of 23.3% and a
median of 20.6% compared to 29.6% for the Merger; and (iii) core deposits of
13.0% to 45.6% with a mean of 26.5% and a median of 25.8% compared to 34.1% for
the Merger.
 
     DLJ used these comparable transaction multiples and percentages to
calculate implied values for Magna Common Stock in the Merger based on the
median multiples and percentages of the 17 transactions set forth above. In
calculating the implied median valuation, DLJ used the closing price per share
of Magna Common Stock on January 23, 1998, Magna's EPS for the twelve months
ended December 31, 1997, estimated EPS for the year ending December 31, 1998,
estimated EPS for the year ending December 31, 1999, book value per share and
tangible book value per share as of December 31, 1998, total assets as of
December 31, 1997, total deposits as of December 31, 1997 and core deposits as
of December 31, 1997. DLJ calculated that the implied value per share of Magna
Common Stock, based on the 17 comparable transactions set forth above, was
$50.68 based on Magna's 1997 EPS, $52.26 based on Magna's 1998 estimated EPS,
$53.21 based on Magna's 1999 estimated EPS, $53.08 based on Magna's book value
per share, $40.71 based on Magna's tangible book value per share, $53.29 based
on Magna's market price per share on January 23, 1998, $54.08 based on Magna's
total assets, $47.13 based on Magna's total deposits and $50.00 based on Magna's
core deposits.
 
     DLJ compared the Merger to four recent St. Louis area transactions. These
transactions were Mercantile Bancorporation Inc./Firstbank of Illinois Co.;
Mercantile Bancorporation Inc./Roosevelt Financial Group, Inc.; Mercantile
Bancorporation Inc./Mark Twain Bancshares, Inc.; and NationsBank
Corporation/Boatmen's Bancshares, Inc. The aggregate value of such transactions
ranged from approximately $681 million to approximately $9.7 billion compared to
approximately $2.3 billion for the Merger. The value of such

                                       26
<PAGE>   40
 
transactions as a multiple of market price 30 days prior to the announcement of
the transaction ranged from 1.12x to 1.50x compared to 1.49x for the Merger. The
value of such transactions as a multiple of LTM EPS ranged from 16.0x to 27.1x
compared to 27.8x (based on Magna's reported 1997 EPS) for the Merger. The value
of such transactions as a multiple of FY estimated EPS ranged from 15.7x to
21.6x compared to 22.9x for the Merger. The value of such transactions as a
multiple of FY+1 estimated EPS ranged from 14.1x to 19.7x compared to 20.9x for
the Merger. The value of such transactions as a multiple of book value ranged
from 1.99x to 2.90x compared to 3.29x for the Merger. The value of such
transactions as a multiple of tangible book value ranged from 2.10x to 3.26x
compared to 4.56x for the Merger. The value of such transactions as a percentage
of assets ranged from 11.9% to 31.4% compared to 28.9% for the Merger. The value
of such transactions as a percentage of total deposits ranged from 11.9% to
25.1% compared to 29.6% for the Merger. The value of such transactions as a
percentage of core deposits ranged from 12.8% to 28.8% compared to 34.1% for the
Merger.
 
     DLJ compared the Merger to three recent national transactions of
approximately the same size. These transactions were Regions Financial
Corporation/First Commercial Corporation; First American Corporation/Deposit
Guaranty Corp.; and Banc One Corporation/First Commerce Corporation. The
aggregate value of these transactions ranged from approximately $2.7 billion to
approximately $3.1 billion compared to approximately $2.2 billion for the
Merger. The value of such transactions as a multiple of market price 30 days
prior to the announcement of the transaction ranged from 1.24x to 1.69x compared
to 1.49x for the Merger. The value of such transactions as a multiple of LTM EPS
ranged from 23.3x to 29.8x compared to 27.8x (based on Magna's reported 1997
EPS) for the Merger. The value of such transactions as a multiple of FY+1
estimated EPS ranged from 22.5x to 28.2x compared to 22.1x for the Merger. The
value of such transactions as a multiple of FY+1 estimated EPS ranged from 20.1x
to 25.5x compared to 20.9x for the Merger. The value of such transactions as a
multiple of book value ranged from 3.48x to 4.19x compared to 3.29x for the
Merger. The value of such transactions as a multiple of tangible book value
ranged from 3.57x to 5.41x compared to 4.56x for the Merger. The value of such
transactions as a percentage of assets ranged from 32.9% to 39.4% compared to
28.9% for the Merger. The value of such transactions as a percentage of total
deposits ranged from 30.6% to 41.8% compared to 29.6% for the Merger. The value
of such transactions as a percentage of core deposits ranged from 37.4% to 45.6%
compared to 34.1% for the Merger.
 
     DLJ analyzed premiums offered in 22 recent proposed acquisitions of
commercial banking institutions by UPC. The institutions proposed to be acquired
by UPC were: Merchants Bancshares Inc; CB&T, Inc.; First National Bancshares of
Wetumpka; Capital Savings Bancorp, Inc.; Peoples First Corporation; Security
Bancshares, Inc.; Capital Bancorp; Sho-Me Financial Corp.; First Acadian
Bancshares, Inc.; Magna Bancorp, Inc.; Citizens of Hardeman County Financial
Services; SBT Bancshares, Inc; Financial Bancshares, Inc.; BancAlabama, Inc.;
Leader Financial Corp.; Franklin Financial Group, Inc.; Valley Federal Savings
Bank; Capital Bancorporation; Eastern National Bank; First State Bancorporation,
Inc.; First Bancshares of Northeast Arkansas, Inc.; and First Bancshares of
Eastern Arkansas. The calculations for such transactions yielded a range of
multiples of offer value to (i) market price per share of 0.95x to 2.25x, with a
mean of 1.29x and a median of 1.17x compared to 1.49x for the Merger; (ii) LTM
EPS of 13.1x to 26.9x, with a mean of 18.5x and a median of 18.0x compared to
27.8x (based on Magna's reported 1997 EPS) for the Merger; (iii) book value of
1.20x to 2.74x, with a mean of 1.92x and a median of 1.89x compared to 3.29x for
the Merger; (vi) tangible book value of 1.20x to 2.74x, with a mean of 1.97x and
a median of 1.91x compared to 4.56x for the Merger.
 
     No company or transaction used in the above analyses as a comparison is
identical to Magna, UPC, or the Merger. Accordingly, an analysis of the results
of the foregoing is not mathematical; rather, it involves complex considerations
and judgments concerning differences in financial and operating characteristics
of the companies and other facts that could affect the public trading value of
the companies to which they are being compared.
 
     Contribution Analysis.  DLJ computed the contribution to the combined
entity's pro forma balance sheet and income statement at or for the year ended
December 31, 1997. The computation showed, among other things, that Magna and
UPC contributed to the combined entity approximately 26.2% and 73.8%,
respectively, of total assets; 24.5% and 75.5%, respectively, of total loans;
26.5% and 73.5%, respectively, of

                                       27
<PAGE>   41
 
total deposits; 23.2% and 76.8%, respectively, of total equity; 18.3% and 81.7%,
respectively, of tangible equity; 21.8% and 78.2%, respectively, of net interest
income; 12.4% and 87.6%, respectively, of loan loss provisions; 15.3% and 84.7%,
respectively, of noninterest revenue (excluding nonrecurring items); 20.1% and
79.9%, respectively, of noninterest expense (excluding nonrecurring items);
21.0% and 79.0%, respectively, of net income (excluding nonrecurring items);
20.9% and 79.1%, respectively, of market capitalization; and 25.7% and 74.3%,
respectively, of the pro forma ownership of the combined company based on the
Exchange Ratio.
 
     Pro Forma Merger Analysis.  DLJ conducted an analysis of the pro forma
impact of the Merger on the combined entity based on an exchange ratio of 0.9686
and with anticipated cost savings of 15% in 1998 and 30% in 1999. The impact of
the Merger on Magna is anticipated to be approximately (i) 31.3% accretive to
Magna's 1998 estimated EPS; (ii) 36.4% accretive to Magna's 1999 estimated EPS;
(iii) 7.9% accretive to Magna's book value; (iv) 34.4% accretive to Magna's
tangible book value; and (v) 73% accretive to Magna's dividends per share. The
book value and tangible book value data assumed conversion of Magna's and UPC's
convertible debt and preferred stock.
 
     The summary set forth above describes the material analyses performed by
DLJ and presented to the Magna Board on February 22, 1998 and does not purport
to be a complete description of such analyses. The preparation of a fairness
opinion is a complex process and is not necessarily susceptible to partial
analysis or summary description. DLJ believes that its analyses must be
considered as a whole and that selecting portions of its analyses, without
considering all factors and analyses, would create an incomplete view of the
process underlying the analyses by which DLJ reached its opinions. The ranges of
valuations resulting from any particular analysis described above should not be
taken to be DLJ's view of the actual value of Magna, UPC or the combined
company.
 
     In performing its analyses, DLJ made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters, many of which are beyond the control of Magna and UPC . The analyses
performed by DLJ are not necessarily indicative of actual value or actual future
results, which may be significantly more or less favorable than suggested by
such analyses. Such analyses were prepared solely as part of DLJ's analysis of
the fairness of the Exchange Ratio, from a financial point of view, to the
holders of Magna Common Stock. The analyses do not purport to be appraisals or
to reflect the prices at which a company or its securities may actually be
bought or sold. DLJ used in its analyses various projections prepared in
consultation with the managements of Magna and UPC. Neither Magna nor UPC
publicly discloses internal management projections of the type prepared in
consultation with DLJ in connection with its review. Such projections were not
prepared for, or with a view toward, public disclosure. In addition, such
projections were based on numerous variables and assumptions that are inherently
uncertain, including, without limitation, factors related to general economic
and competitive conditions, many of which are beyond the control of the
managements of Magna and UPC. Accordingly, actual results could vary
significantly from those set forth in such projections.
 
     Pursuant to the terms of a letter agreement dated February 17, 1998 (the
"Engagement Letter"), for DLJ's services in connection with the Merger,
including the rendering of its opinions, Magna (i) paid DLJ $500,000 at the time
the Engagement Letter was executed, (ii) paid DLJ $1,000,000 at the time Magna
executed the Agreement, and (iii) paid DLJ $2,000,000 at the time DLJ delivered
its opinion to the Board of Directors of Magna, which payment was not
conditioned on the conclusions reached in the opinion, and (iv) is obligated to
pay DLJ upon consummation of the Merger additional cash compensation in an
amount equal to 0.55% of the aggregate value of outstanding Magna Common Stock
(treating any shares issuable upon exercise of options, warrants or other rights
of conversion as outstanding) less the amounts paid to Magna described in the
immediately preceding clauses (i), (ii), and (iii) of this paragraph as well as
any retainer fees paid pursuant to the general advisory retainer agreement,
dated September 16, 1997, between Magna and DLJ. Magna has also agreed under the
Engagement Letter to reimburse DLJ for all reasonable out-of-pocket expenses,
including reasonable fees and expenses of counsel, and has agreed to indemnify
DLJ against certain expenses and liabilities incurred in connection with its
engagement, including liabilities under federal securities law.
 
                                       28
<PAGE>   42
 
     DLJ, in the ordinary course of its business, actively trades debt and
equity securities of Magna and UPC for its own account or for the accounts of
customers and thus may hold long or short positions in such securities at any
time.
 
     DLJ has performed investment banking and other services for Magna in the
past and has been compensated for such services. These relationships are
considered by Magna to be in the ordinary course of business and to be
immaterial to DLJ's engagement relative to the Merger.
 
OPINION OF UPC'S FINANCIAL ADVISOR
 
     UPC has retained Stifel as its financial advisor in connection with the
Merger and to render a fairness opinion with respect thereto. Stifel is an
investment banking and securities firm with membership on all principal U.S.
securities exchanges. As part of its investment banking activities, Stifel is
regularly engaged in the valuation of businesses and their securities in
connection with merger transactions and other types of acquisitions,
underwritings, sales and distributions of listed and unlisted securities,
private placements and valuations for estate, corporate, and other purposes. In
connection with the meeting of the UPC Board held on February 19, 1998, on
February 18, 1998 Stifel rendered its oral opinion as of February 18, 1998 that
the Exchange Ratio was fair to the holders of UPC Common Stock from a financial
point of view. Stifel has confirmed its February 18, 1998 oral opinion by
delivery of its written opinion to the UPC Board, dated the date of this Joint
Proxy Statement, that, based upon and subject to the various considerations set
forth therein, as of the date hereof the Exchange Ratio is fair to the holders
of UPC Common Stock from a financial point of view. Stifel is familiar with UPC,
having acted as its financial advisor in connection with, and having
participated in the negotiations leading to, the Agreement.
 
     The full text of Stifel's opinion as of the date hereof, which sets forth
the assumptions made, matters considered, and limitations of the review
undertaken, is attached as Appendix D to this Joint Proxy Statement and is
incorporated herein by reference, and should be read in its entirety in
connection with this Joint Proxy Statement. The summary of the opinion of Stifel
set forth in this Joint Proxy Statement is qualified in its entirety by
reference to the full text of such opinion. Stifel's opinion addresses the
fairness of the Exchange Ratio applicable to the holders of Magna Common Stock,
and does not address the consideration to be received by the holders of Magna
Class B Preferred Stock.
 
     STIFEL'S OPINION IS DIRECTED ONLY TO THE FAIRNESS OF THE EXCHANGE RATIO
FROM A FINANCIAL POINT OF VIEW AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY
HOLDERS OF UPC COMMON STOCK AS TO HOW SUCH HOLDERS OF UPC COMMON STOCK SHOULD
VOTE AT THE UPC SPECIAL MEETING OR AS TO ANY OTHER MATTER.
 
     In connection with its February 18, 1998 oral opinion and its written
opinion dated the date hereof, Stifel reviewed, among other things: the
Agreement; the financial statements of UPC and Magna included in their
respective Annual Reports on Form 10-K for the five years ended December 31,
1996 and their respective Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1996 and June 30, 1996; certain internal financial analyses and
forecasts for UPC and Magna prepared by their respective managements; and
certain internal financial forecasts for UPC and Magna on a combined basis,
giving effect to the Merger, prepared by the management of UPC. Stifel conducted
conversations with UPC's senior management regarding recent developments and
management's financial forecasts for UPC and Magna. In addition, Stifel spoke to
members of UPC's senior management and Magna's senior management regarding
factors which affect each entity's business. Stifel also compared certain
financial and securities data of UPC and Magna with various other companies
whose securities are traded in public markets, reviewed the historical stock
prices and trading volumes of the common stock of UPC and Magna, reviewed the
financial terms of certain other business combinations and conducted such other
financial studies, analyses, and investigations as it deemed appropriate for
purposes of its opinion. Stifel also took into account its assessment of general
economic, market, and financial conditions and its experience in other
transactions, as well as its experience in securities valuations and its
knowledge of the commercial banking industry generally.
 
     In rendering its opinion, Stifel relied upon and assumed, without
independent verification, the accuracy and completeness of all of the financial
and other information that was provided to it or that was otherwise reviewed by
it and did not assume any responsibility for independently verifying any of such
information. With
                                       29
<PAGE>   43
 
respect to the financial forecasts supplied to Stifel (including without
limitation, projected cost savings and operating synergies resulting from the
Merger), Stifel assumed with UPC's consent that they were reasonably prepared on
the basis reflecting the best currently available estimates and judgments of UPC
and Magna as to the future operating and financial performance of UPC and Magna,
that they would be realized in the amounts and time periods estimated and that
they provided a reasonable basis upon which Stifel could form its opinion.
Stifel also assumed that there were no material changes in the assets,
liabilities, financial condition, results of operations, business, or prospects
of either UPC or Magna since the date of the last financial statements made
available to it. Stifel also assumed, without independent verification and with
UPC's consent, that the aggregate allowances for loan losses set forth in the
financial statements of UPC and Magna are in the aggregate adequate to cover all
such losses. Stifel did not make or obtain any independent evaluation,
appraisal, or physical inspection of UPC's or Magna's assets or liabilities, the
collateral securing any of such assets or liabilities, or the collectibility of
any such assets nor did it review loan or credit files of UPC or Magna. Stifel
relied on advice of counsel to UPC as to all legal matters with respect to UPC,
the Agreement, and the transactions and other matters contained or contemplated
therein. Stifel assumed, with UPC's consent, that there are no factors that
would delay or subject to any adverse conditions any necessary regulatory or
governmental approval and that all conditions to the Merger will be satisfied
and not waived. Stifel was retained by the UPC Board to express an opinion as to
the fairness of the Exchange Ratio to the holders of UPC Common Stock, from a
financial point of view.
 
     The financial forecasts furnished to Stifel for UPC and Magna and estimates
of cost savings and operating synergies resulting from the Merger were prepared
by the respective managements of each company and constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. As a matter of policy, neither UPC nor Magna publicly discloses internal
management forecasts, projections or estimates of the type furnished to Stifel
in connection with its analysis of the financial terms of the Merger, and such
forecasts and estimates were not prepared with a view towards public disclosure.
These forecasts and estimates were based on numerous variables and assumptions
which are inherently uncertain and which may not be within the control of the
management of either UPC or Magna, including, without limitation, factors
related to the integration of UPC and Magna and general economic, regulatory,
and competitive conditions. Accordingly, actual results could vary materially
from those set forth in such forecasts and estimates.
 
     In connection with rendering its February 18, 1998 oral opinion, Stifel
performed a variety of financial analyses that are summarized below. Such
summary does not purport to be a complete description of such analyses. Stifel
believes that its analyses and the summary set forth herein must be considered
as a whole and that selecting portions of such analyses and the factors
considered therein, without considering all factors and analyses, could create
an incomplete view of the analyses and processes underlying its opinions. The
preparation of a fairness opinion is a complex process involving subjective
judgments and is not necessarily susceptible to partial analysis or summary
description. In its analyses, Stifel made numerous assumptions with respect to
industry performance, business, and economic conditions, and other matters, many
of which are beyond the control of UPC or Magna. Any estimates contained in
Stifel's analyses are not necessarily indicative of actual future values or
results, which may be significantly more or less favorable than suggested by
such estimates. Estimates of values of companies do not purport to be appraisals
or necessarily reflect the actual prices at which companies or their securities
actually may be sold. No company or transaction utilized in Stifel's analyses
was identical to UPC or Magna or the Merger. Accordingly, such analyses are not
based solely on arithmetic calculations; rather, they involve complex
considerations and judgments concerning differences in financial and operating
characteristics of the relevant companies, the timing of the relevant
transactions, and prospective buyer interest, as well as other factors that
could affect the public trading values of the company or companies to which they
are being compared. None of the analyses performed by Stifel was assigned a
greater significance by Stifel than any other.
 
     The following is a summary of the financial analyses performed by Stifel in
connection with providing its oral opinion, on February 18, 1998. In certain
circumstances, Stifel examined two scenarios regarding the number of Magna
shares to be acquired by UPC based on: (i) no share repurchases in conjunction
with Magna's pending acquisition (the "Base Case") and (ii) the execution of
previously announced share
 
                                       30
<PAGE>   44
 
repurchases in conjunction with Magna's pending acquisition (the "Repurchase
Case"). In connection with its written opinion dated as of the date of this
Joint Proxy Statement, Stifel performed procedures to update certain of its
analyses and reviewed the assumptions on which such analyses were based and the
factors considered in connection therewith. In updating its opinion, Stifel did
not utilize any methods of analysis in addition to those described.
 
     Pro Forma Effect of the Merger.  Stifel reviewed certain estimated future
operating and financial information developed by both UPC and Magna for the pro
forma combined entity resulting from the Merger for the 12-month period ended
December 31, 1999. Based on this analysis, Stifel compared UPC's estimated
future stand-alone per share earnings with such estimated figures for the pro
forma combined entity for this 12-month period. Under the Base Case, the Merger
is forecast to be accretive on an estimated pro forma basis with respect to
earnings per share by approximately 1.16%. Under the Repurchase Case, the Merger
is forecast to be accretive on an estimated pro forma basis with respect to
earnings per share by approximately 1.87%. This analysis did not purport to be
indicative of actual future results. Stifel also reviewed certain historical
financial information developed by both UPC and Magna for the pro forma combined
entity resulting from the Merger for the period ended December 31, 1997. Based
on this analysis, Stifel compared UPC's stand-alone book value per share and
tangible book value with such calculated figures for the pro forma combined
entity at December 31, 1997. Under the Base Case, the Merger is dilutive on a
pro forma basis with respect to book value per share by approximately 0.23% and
to tangible book value per share by approximately 5.72%. Under the Repurchase
Case, the Merger is dilutive on a pro forma basis with respect to book value per
share by approximately 3.49% and to tangible book value per share by
approximately 9.24%.
 
     Analysis of Bank Merger Transactions.  Stifel analyzed certain information
relating to recent transactions in the banking industry, consisting of ten
acquisitions announced in the U.S. between January 1, 1997 and February 18,
1998, with publicly announced transaction values in excess of $1 billion (the
"Selected Transactions"). The Selected Transactions included the following
parties (Buyer/Seller): Regions Financial Corporation/First Commercial
Corporation; First American Corporation/Deposit Guaranty Corp.; National City
Corporation/First of America Bank Corporation; First Union
Corporation/CoreStates Financial Corp; Banc One Corporation/First Commerce
Corporation; NationsBank Corporation/Barnett Banks Inc.; First Union
Corporation/Signet Banking Corporation; Wachovia Corporation/Central Fidelity
Banks, Inc.; First Bank System, Inc./US Bancorp; and Allied Irish Banks/Dauphin
Deposit Corp.
 
     Stifel calculated the following ratios with respect to the Merger (under
the Base Case and the Repurchase Case) and the Selected Transactions:
 
<TABLE>
<CAPTION>
                                                      UPC/MAGNA            SELECTED TRANSACTIONS
                                                ----------------------   --------------------------
                    RATIOS                      BASE CASE   REPURCHASE   MINIMUM   MEDIAN   MAXIMUM
                    ------                      ---------   ----------   -------   ------   -------
<S>                                             <C>         <C>          <C>       <C>      <C>
Deal Price per share
     Book Value...............................    300.6%      346.1%      239.4%   366.0%    539.4%
     Tangible Book Value......................    393.5       487.7       246.1    410.4     593.2
Adjusted Deal Price/6.50% Equity..............    420.0       419.2       307.9    476.8     565.5
Deal Price per share
     Last 12 months' earnings per share.......    27.94x      27.94x      19.18x   23.07x    34.57x
     Forward earnings per share...............    20.99       20.72       15.75    19.90     25.52
Deal Price/Assets.............................     30.8%       29.0%       21.8%    32.9%     39.4%
Premium over Tangible Book Value/Deposits.....     30.3        30.3        19.1     32.1      42.3
Deal Price/Deposits...........................     40.5        38.1        28.7     42.3      51.0
</TABLE>
 
     Comparison of Selected Companies.  Stifel reviewed and compared certain
multiples and ratios relating to Magna to the publicly available corresponding
data for a peer group of selected banks which Stifel deemed to be relevant. The
group of selected banks consisted of Centura Banks, Inc., Commerce Bancshares,
Inc., CCB Financial Corp., Colonial BancGroup, Inc., Keystone Financial, Inc.,
Mercantile Bankshares Corp., Old National Bancorp, Provident Financial Group,
Inc., Trustmark Corp., and UMB Financial Corp. Utilizing the range of multiples
and ratios for the peer group specified above and a 30% equity control premium,
Stifel
 
                                       31
<PAGE>   45
 
calculated a range of imputed values for a share of Magna Common Stock by
comparing the closing price on February 18, 1998, to each of book value,
tangible book value, adjusted 6.5% equity, latest 12 month earnings, estimated
1999 earnings as provided by IBES, assets, tangible book value to deposits, and
deposits, applied to the appropriate financial results of Magna. This analysis,
including the assumed 30% equity control premium, resulted in a range of imputed
values for Magna Common Stock of between $60.59 and $79.95 based on the median
multiples and ratios for the peer group and a range of imputed values for Magna
Common Stock of between $40.86 and $92.58 based on the entire range of multiples
and ratios for the peer group. This analysis did not purport to reflect the
prices at which shares of Magna Common Stock may trade.
 
     Present Value Analysis.  Applying discounted cash flow analysis to the
theoretical future earnings and dividends of UPC and Magna, Stifel compared the
calculated value of a UPC share to the calculated value of a share of the
combined entity. The analysis was based upon a range of projected earnings
growth rates (consistent with First Call's estimates), current dividend rates, a
range of assumed price/earnings ratios, and an 11% discount rate. Stifel
selected the range of terminal price/earnings ratios on the basis of past and
current trading multiples for UPC and other commercial banks. The stand-alone
present value of UPC Common Stock calculated on this basis ranged from $67.93 to
$82.78 per share. The present value of one share in the combined entity under
the terms of the Agreement calculated on this basis, assuming estimated
synergies are recognized fully in 1999, ranged from $67.90 to $82.75 under the
Base Case and ranged from $68.35 to $83.31 under the Repurchase Case.
 
     Discounted Cash Flow Analysis.  Using a discounted cash flow ("DCF")
analysis, Stifel estimated the net present value of the future streams of
after-tax cash flow that Magna could produce to benefit UPC ("Dividendable Net
Income"). In this analysis, Stifel assumed that Magna would perform in
accordance with consensus earnings estimates (as compiled by First Call for the
years 1998 and 1999 and increased at Magna's First Call consensus long-term
growth rate of 9% for the years 2000 through 2003) and calculated assumed
after-tax distributions to UPC such that Magna's common equity ratio would be
maintained at 6.5% of assets. Additionally, Stifel assumed certain cost savings
and revenue enhancements estimated by UPC and Magna to result from the Merger
and Stifel adjusted Magna's pre-merger equity by the amount of the estimated
after-tax restructuring charge estimated by UPC and Magna to result from the
Merger. Stifel calculated the sum of (i) the estimated terminal values per share
of Magna Common Stock based on assumed multiples to Magna's projected 2003
earnings ranging from 14.0x to 18.0x, plus (ii) the assumed 1998-2002
Dividendable Net Income streams per share, in each case discounted to present
values at assumed discount rates ranging from 11.0% to 13.0%. This DCF analysis
indicated an implied equity value reference range of $61.43 to $80.48 per share
of Magna Common Stock. This analysis did not purport to be indicative of actual
future results and did not purport to reflect the prices at which shares of
Magna Common Stock may trade. A DCF analysis was included because it is a widely
used valuation methodology, but the results of such methodology are highly
dependent upon the numerous assumptions that must be made, including estimated
cost savings and revenue enhancements, earnings growth rates, dividend payout
rates, terminal values, and discount rates.
 
     Contribution Analysis.  Stifel reviewed certain financial information for
UPC and Magna for the 12-month period ended December 31, 1997 including net
revenues before and after provision for loan losses, net income before preferred
dividends and extraordinary items, total assets, loans, total deposits, and
total equity and compared the percentage contribution of Magna to the pro forma
combined figures for UPC and Magna and to the percentage of total outstanding
UPC Common Stock that would be owned by the Magna shareholders as a result of
the Merger. The contribution analysis showed that Magna would contribute 20.6%
of pro forma combined net revenues before provision for loan losses, 20.9% of
pro forma combined net revenues after provision for loan losses, 24.7% of pro
forma combined net income before preferred dividends and extraordinary items,
26.3% of pro forma combined total assets, 24.5% of pro forma combined loans,
26.5% of pro forma combined total deposits, and 26.1% of pro forma combined
total equity under the Base Case and 22.4% of pro forma combined total equity
under the Repurchase Case while receiving 27.2% of the outstanding shares in the
combined institution under the Base Case and 26.0% of the outstanding shares in
the combined institution under the Repurchase Case. Ownership figures are based
on the Exchange Ratio.
 
     No company or transaction used in the above analyses as a comparison is
identical to Magna, UPC, or the Merger. Accordingly, an analysis of the results
of the foregoing is not mathematical; rather, it involves

                                       32
<PAGE>   46
 
complex considerations and judgments concerning differences in financial and
operating characteristics of the companies and other facts that could affect the
public trading value of the companies to which they are being compared.
 
     As described above, Stifel's oral opinion was among the many factors taken
into consideration by the UPC Board in making its determination to approve the
Merger.
 
     Pursuant to the terms of Stifel's engagement, UPC agreed to pay Stifel a
nonrefundable cash fee of $150,000 upon the execution of the engagement letter
and a nonrefundable cash fee of $250,000 at the time of mailing of the Joint
Proxy Statement. In addition, UPC has agreed to pay Stifel an additional fee of
0.10% of the total aggregate consideration paid in the transaction, less the
fees already paid, upon consummation of the Merger. UPC has also agreed to
reimburse Stifel for certain out-of-pocket expenses and has agreed to indemnify
Stifel, its affiliates and their respective partners, directors, officers,
agents, consultants, employees and controlling persons against certain
liabilities, including liabilities under the federal securities laws. Stifel has
rendered investment banking services to UPC from time to time in the past with
respect to other transactions, and expects to continue to do so in the future.
 
     In the ordinary course of its business, Stifel actively trades equity
securities of UPC and Magna for its own account and for the accounts of its
customers and, accordingly, may at any time hold a long or short position in
such securities.
 
EFFECTIVE TIME OF THE MERGER
 
     Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Time will occur on the date and at the time that the
Certificate of Merger reflecting the Merger becomes effective with the Secretary
of State of the State of Delaware and the Articles of Merger become effective
with the Secretary of State of the State of Tennessee. Subject to the terms and
conditions of the Agreement, unless otherwise agreed upon in writing by UPC and
Magna, the parties will use their reasonable efforts to cause the Effective Time
to occur on or before the 15th business day (as designated by UPC) following the
last to occur of (i) the effective date (including any applicable waiting period
in respect thereof) of the last required consent of any regulatory authority
having authority over and approving or exempting the Merger and (ii) the date on
which the shareholders of Magna and UPC approve the matters relating to the
Agreement required to be approved by such shareholders.
 
     No assurance can be provided that the necessary shareholder and regulatory
approvals can be obtained or that other conditions precedent to the Merger can
or will be satisfied. Magna and UPC anticipate that all conditions to
consummation of the Merger will be satisfied so that the Merger can be
consummated on or about July 1, 1998. However, delays in the consummation of the
Merger could occur.
 
     The Board of Directors of either Magna or UPC generally may terminate the
Agreement and the Plan of Merger if the Merger is not consummated by December
31, 1998, unless the failure to consummate the transactions contemplated by the
Agreement on or before such date is caused by any breach of the Agreement by the
party seeking termination or certain other specific conditions exist. See
"-- Conditions to Consummation of the Merger" and "-- Waiver, Amendment, and
Termination."
 
DISSENTERS' RIGHTS
 
     Magna Common Stock.  Holders of Magna Common do not have dissenters' rights
with respect to the Merger.
 
     UPC Common Stock.  Holders of UPC Common Stock do not have dissenters'
rights with respect to the issuance of shares of UPC Common Stock pursuant to
the Agreement.
 
     Magna Class B Preferred Stock.  Any holder of Magna Class B Preferred Stock
may dissent from approval of the Agreement, the Plan of Merger, and the Merger
by complying with procedures described in this section. The following summary
does not purport to be a complete statement of dissenters' rights of
 
                                       33
<PAGE>   47
 
appraisal, and such summary is qualified in its entirety by reference to Section
262 of the DGCL, which is reproduced in full as Appendix E to this Joint Proxy
Statement.
 
     If the Merger is consummated, holders of Magna Class B Preferred Stock will
be entitled to have the "fair value" of their shares of Magna Class B Preferred
Stock at the Effective Time (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) judicially determined and paid to
them in cash, together with interest, if any, by complying with the provisions
of Section 262 of the DGCL ("Section 262").
 
     Shareholders of record who desire to exercise their appraisal rights must
satisfy all of the following conditions. A written demand for appraisal of their
Magna Class B Preferred Stock must be delivered to Magna before the taking of
the vote of the Magna shareholders at the Magna Annual Meeting on approval of
the Agreement. Such demand will be sufficient if it reasonably informs Magna of
the shareholder's identity and that the shareholder intends thereby to demand
appraisal of such holder's shares. This written demand for appraisal of shares
must be in addition to and separate from voting against, abstaining from voting,
or failing to vote on adoption of the Agreement. Voting against, abstaining from
voting, or failing to vote on adoption of the Agreement will not constitute a
demand for appraisal within the meaning of Section 262.
 
     Shareholders electing to exercise their appraisal rights under Section 262
must not vote for adoption of the Agreement. Voting for adoption of the
Agreement, or delivering a proxy in connection with the Magna Annual Meeting
(unless the proxy specifies a vote against, or abstaining from voting on,
adoption of the Agreement), will constitute a waiver of a shareholder's right of
appraisal and will nullify any written demand for appraisal submitted by the
shareholder.
 
     A demand for appraisal must be executed by or for the shareholder of
record, fully and correctly, as such shareholder's name appears on such
shareholder's Certificates. If the Magna Class B Preferred Stock is owned of
record in a fiduciary capacity, such as by a trustee, guardian, or custodian,
such demand must be executed by the fiduciary. If the Magna Class B Preferred
Stock is owned of record by more than one person, as in a joint tenancy or
tenancy in common, such demand must be executed by all joint owners. An
authorized agent, including an agent for two or more joint owners, may execute
the demand for appraisal for a shareholder of record; however, the agent must
identify the record owner and expressly disclose the fact that, in exercising
the demand, such holder is acting as agent for the record owner.
 
     A record owner, such as a broker who holds Magna Class B Preferred Stock as
a nominee for others may exercise appraisal rights with respect to the shares
held for all or less than all beneficial owners of shares as to which the holder
is the record owner. In such case, the written demand must set forth the number
of shares covered by such demand. Where the number of shares is not expressly
stated, the demand will be presumed to cover all shares of Magna Class B
Preferred Stock outstanding in the name of such record owner.
 
     Shareholders who elect to exercise appraisal rights should mail or deliver
their written demands to: Magna Group, Inc., One Magna Place, 1401 South
Brentwood Boulevard, St. Louis, Missouri 63144, Attention: Carolyn B. Ryseff,
Secretary. The written demand for appraisal should specify the shareholder's
name and mailing address, the number of shares of Magna Class B Preferred Stock
owned, and state that the shareholder is thereby demanding appraisal. Within ten
days after the Effective Time, UPHC, as successor to Magna, must provide notice
of the Effective Time to all shareholders who have complied with Section 262 and
have not voted for adoption of the Agreement.
 
     Within 120 days after the Effective Time, either UPHC, as successor to
Magna, or any shareholder who has complied with the foregoing requirements of
Section 262 and who is otherwise entitled to appraisal rights may file a
petition in the Delaware Court of Chancery demanding a determination of the fair
value of shares of Dissenting Shareholders. If a petition for an appraisal is
timely filed, after a hearing on such petition, the Court of Chancery will
determine which shareholders are entitled to appraisal rights and will appraise
the shares of Magna Class B Preferred Stock owned by such shareholders,
determining the fair value of such shares, exclusive of any element of value
arising from the accomplishment or expectation of the Merger, together with a
fair rate of interest, if any, to be paid upon the amount determined to be the
fair value. In determining fair value, the court is to take into account all
relevant factors. In Weinberger v. UOP, Inc., et al.,
 
                                       34
<PAGE>   48
 
decided February 1, 1983, the Delaware Supreme Court expanded the considerations
that could be considered in determining fair value in an appraisal proceeding,
stating that ". . . proof of value by any techniques or methods which are
generally considered acceptable in the financial community and otherwise
admissible in court. . ." should be considered, and that ". . . [f]air price
obviously requires consideration of all relevant factors involving the value of
a company . . ." The Delaware Supreme Court stated that in making this
determination of fair value the court must consider ". . . market value, asset
value, dividends, earnings prospects, the nature of the enterprise and any other
facts which were known or which could be ascertained as of the date of merger
and which throw any light on future prospects of the merged corporation . . ."
The court further stated that ". . . elements of future value, including the
nature of the enterprise, which are known or susceptible of proof as of the date
of the merger and not the product of speculation, may be considered . . ."
However, the court noted that Section 262 provides that fair value is to be
determined ". . . exclusive of any element of value arising from the
accomplishment or expectation of the merger . . .".
 
     The fair value of shares determined under Section 262 could be more than,
the same as, or less than the consideration holders of Magna Class B Preferred
Stock are entitled to receive pursuant to the Agreement if they do not seek
appraisal of their shares.
 
     At the hearing on such petition filed in the Court of Chancery, the court
will determine the shareholders who have complied with Section 262 and who have
become entitled to rights. The court may require Dissenting Shareholders to
submit their stock certificates to the Register in Chancery for notation thereon
of the pendency of the appraisal proceedings. Failure of a Dissenting
Shareholder to submit such holder's certificates may result in the dismissal of
such shareholder's appraisal proceedings.
 
     The cost of the appraisal proceeding may be determined by the Court of
Chancery and taxed against the parties as the court deems equitable in the
circumstances. Upon application of a Dissenting Shareholder, the court may order
that all or a portion of the expenses incurred by any Dissenting Shareholder in
connection with the appraisal proceeding, including, without limitation,
reasonable attorneys' fees and the fees and expenses of experts, be charged pro
rata against the value of all shares of Magna Class B Preferred Stock entitled
to appraisal. In the absence of such a determination or assessment, each party
bears its own expenses.
 
     Any Dissenting Shareholder who has duly demanded appraisal in compliance
with Section 262 will not, after the Effective Time, be entitled to vote for any
purpose the shares of Magna Class B Preferred Stock subject to such demand or to
receive payment of dividends or other distributions, if any, on such shares,
except for dividends or distributions payable to shareholders of record as of a
date prior to the Effective Time.
 
     At any time within 60 days after the Effective Time, any former holder of
Magna Class B Preferred Stock will have the right to withdraw a demand for
appraisal and to accept the consideration offered in the Agreement. After this
period, such holder may withdraw such holder's demand for appraisal only with
the consent of Magna. If no petition for appraisal is filed with the Court of
Chancery within 120 days after the Effective Time, shareholders' rights to
appraisal shall cease and all shareholders will be entitled to receive the
consideration provided in the Agreement. Inasmuch as Magna has no obligation to
file such a petition, and has no present intention to do so, any shareholder who
desires such a petition to be filed is advised to file it on a timely basis.
However, no petition timely filed in the Court of Chancery demanding appraisal
will be dismissed as to any shareholder without the approval of the court, and
such approval may be conditioned upon such terms as the court deems just.
 
     Within 120 days after the Effective Time, any holder of Magna Class B
Preferred Stock who has complied with the foregoing requirements of Section 262
is entitled, upon written request, to receive from Magna a statement setting
forth the aggregate number of shares not voted in favor of the Merger and the
aggregate number of holders of shares who have demanded appraisal. Such written
statement shall be mailed to such shareholder within ten days of such holder's
request.
 
     The foregoing is only a summary of the rights of dissenting holders of
Magna Class B Preferred Stock. Any holder of Magna Class B Preferred Stock who
intends to dissent should carefully review the text of the Delaware statutory
law set forth in Appendix E to this Joint Proxy Statement and should also
consult with such holder's attorney. The failure of a UPC shareholder to follow
precisely the procedures summarized above
 
                                       35
<PAGE>   49
 
and set forth in Appendix E to this Joint Proxy Statement, may result in loss of
appraisal rights. No further notice of the events giving rise to appraisal
rights or any steps associated therewith will be furnished to holders of Magna
Class B Preferred Stock, except as indicated above or otherwise required by law.
 
     In general, any Dissenting Shareholder who perfects such holder's right to
be paid the "fair value" of such holder's Magna Class B Preferred Stock in cash
will recognize taxable gain or loss for federal income tax purposes upon receipt
of such cash. See "-- Certain Federal Income Tax Consequences of the Merger."
 
DISTRIBUTION OF CONSIDERATION
 
     Promptly after the Effective Time, UPC and Magna will cause UPBNA, acting
in its capacity as Exchange Agent, to mail to the former shareholders of Magna a
letter of transmittal, together with instructions for the exchange of the
Certificates representing shares of Magna Capital Stock for certificates
representing shares of UPC Common Stock or checks representing the Preferred
Stock Cash Payments, as applicable.
 
     MAGNA SHAREHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY RECEIVE
THE LETTER OF TRANSMITTAL AND INSTRUCTIONS.
 
     Upon surrender to the Exchange Agent of Certificates for Magna Capital
Stock, together with a properly completed letter of transmittal, there will be
issued and mailed (i) to each holder of Magna Common Stock surrendering such
items a certificate or certificates representing the number of shares of UPC
Common Stock to which such holder is entitled and a check for the amount to be
paid in lieu of any fractional share (without interest), if any, together with
all undelivered dividends or distributions in respect of such shares (without
interest thereon), if any, and (ii) to each holder of Magna Class B Preferred
Stock, a check representing the Preferred Stock Cash Payment (without interest).
UPC will not be obligated to deliver the consideration to which any former
holder of Magna Capital Stock is entitled as a result of the Merger until the
holder surrenders such holder's Certificates representing the shares of Magna
Capital Stock. Whenever a dividend or other distribution is declared by UPC on
UPC Common Stock, the record date for which is at or after the Effective Time,
the declaration will include dividends or other distributions on all shares of
UPC Common Stock issuable pursuant to the Agreement, but beginning 30 days after
the Effective Time, no dividend or other distribution payable after the
Effective Time with respect to UPC Common Stock will be paid to the holder of
any unsurrendered Magna Common Stock Certificate until the holder duly
surrenders such Certificate. Upon surrender of such Magna Common Stock
Certificate, however, both the UPC Common Stock certificate, together with all
undelivered dividends or other distributions (without interest) and any
undelivered cash payment to be paid in lieu of a fractional share (without
interest), will be delivered and paid with respect to the shares represented by
such Certificate. In the event any Magna Capital Stock Certificate has been
lost, stolen, or destroyed, upon the making of an affidavit of that fact by the
person claiming the Certificate to be lost, stolen, or destroyed and, if
required by UPC, the posting by such person of a bond in such amount as UPC may
reasonably direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent will issue in exchange for
such lost, stolen, or destroyed Certificate the consideration to which the
former holder of Magna Capital Stock is entitled.
 
     At the Effective Time, other than with respect to holders of shares of
Magna Class B Preferred Stock who dissent from the Merger pursuant to Section
262 of the DGCL, the stock transfer books of Magna will be closed to holders of
Magna Capital Stock and no transfer of shares of Magna Capital Stock by any such
holder will thereafter be made or recognized. If Certificates representing
shares of Magna Capital Stock are presented for transfer after the Effective
Time, other than with respect to holders of shares of Magna Class B Preferred
Stock who dissent from the Merger pursuant to Section 262 of the DGCL they will
be canceled and exchanged for the consideration to which such holder of Magna
Capital Stock is entitled.
 
CONDITIONS TO CONSUMMATION OF THE MERGER
 
     Consummation of the Merger is subject to various conditions, including (i)
receipt of the approval of the shareholders of Magna and UPC of matters relating
to the Agreement required to be approved by such shareholders, (ii) receipt of
certain regulatory approvals required for consummation of the Merger,
                                       36
<PAGE>   50
 
(iii) receipt by UPC of a written opinion of counsel from Alston & Bird LLP and
by Magna of a written opinion of counsel from Wachtell Lipton Rosen & Katz as to
the tax-free nature of the Merger (except to the extent of cash received), (iv)
approval of the shares of UPC Common Stock issuable pursuant to the Merger for
listing on the NYSE, subject to official notice of issuance, (v) the
Registration Statement being declared effective under the Securities Act, (vi)
the accuracy, as of the date of the Agreement and as of the Effective Time, of
the representations and warranties of Magna and UPC as set forth in the
Agreement, (vii) the performance of all agreements and the compliance with all
covenants of Magna and UPC as set forth in the Agreement, (viii) receipt of all
consents required for consummation of the Merger or for the preventing of any
default under any contract or permit which, if not obtained or made, is
reasonably likely to have, individually or in the aggregate, a material adverse
effect on Magna or UPC, (ix) receipt by UPC and Magna of letters from Price
Waterhouse LLP and Ernst & Young LLP to the effect that the Merger will qualify
for pooling-of-interests accounting treatment, (x) the absence of any law or
order or any action taken by any court, governmental, or regulatory authority of
competent jurisdiction prohibiting, restricting, or making illegal the
consummation of the transactions contemplated by the Agreement, (xi) receipt by
UPC of agreements from each person Magna reasonably believes may be deemed an
affiliate of Magna, and (xii) satisfaction of certain other conditions,
including the receipt of various certificates from the officers of Magna and
UPC. See "-- Regulatory Approval" and "-- Waiver, Amendment, and Termination."
 
     No assurance can be provided as to when or if all of the conditions
precedent to the Merger can or will be satisfied or waived by the party
permitted to do so. Except in limited circumstances, in the event the Merger is
not effected on or before December 31, 1998, the Agreement may be terminated and
the Merger abandoned by the Board of Directors of either Magna or UPC. See
"-- Waiver, Amendment, and Termination."
 
REGULATORY APPROVAL
 
     THE MERGER MAY NOT PROCEED IN THE ABSENCE OF RECEIPT OF THE REQUISITE
REGULATORY APPROVALS. THERE CAN BE NO ASSURANCE THAT SUCH REGULATORY APPROVALS
WILL BE OBTAINED OR AS TO THE TIMING OF SUCH APPROVALS. APPLICATIONS FOR THE
APPROVALS DESCRIBED BELOW HAVE BEEN SUBMITTED TO THE APPROPRIATE REGULATORY
AUTHORITIES.
 
     It is a condition to the consummation of the Merger that UPC and Magna
shall have received all applicable regulatory approvals to consummate the
transactions contemplated by the Agreement. There can be no assurance that such
approvals will not contain terms, conditions or requirements which cause such
approvals to fail to satisfy such condition to the consummation of the Merger.
 
     Neither Magna nor UPC are aware of any material governmental approvals or
actions that are required for consummation of the Merger, except as described
below. Should any other approval or action be required, it presently is
contemplated that such approval or action would be sought.
 
     The Merger is subject to the prior approval of the Federal Reserve,
pursuant to Sections 3 and 4 of the BHC Act. In evaluating the Merger, the
Federal Reserve must consider, among other factors, the financial and managerial
resources and future prospects of the institutions and the convenience and needs
of the communities to be served. The relevant statutes prohibit the Federal
Reserve from approving the Merger if (i) it would result in a monopoly or be in
furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any part of the United States or (ii) its
effect in any section of the country could be to substantially lessen
competition or to tend to create a monopoly, or if it would result in a
restraint of trade in any other manner, unless the Federal Reserve should find
that any anticompetitive effects are outweighed clearly by the public interest
and the probable effect of the transaction in meeting the convenience and needs
of the communities to be served. The Merger may not be consummated until the
30th day (which the Federal Reserve may reduce to 15 days) following the date of
the Federal Reserve approval, during which time the United States Department of
Justice would be afforded the opportunity to challenge the transaction on
antitrust grounds. The commencement of any antitrust action would stay the
effectiveness of the approval of the agencies, unless a court of competent
jurisdiction should specifically order otherwise.
 
                                       37
<PAGE>   51
 
WAIVER, AMENDMENT, AND TERMINATION
 
     To the extent permitted by law, the Agreement may be amended by a
subsequent writing signed by each of the parties upon the approval of the Board
of Directors of each of the parties, before or after approval of the matters
relating to the Agreement required to be approved by the Magna and UPC
shareholders; provided, that after the approval of the Magna shareholders has
been obtained, no amendment may be made which modifies in any material respect
the consideration to be received by the holders of Magna Common Stock without
the further approval of such shareholders. In addition, prior to or at the
Effective Time, generally either Magna or UPC, or both, acting through their
respective Boards of Directors, chief executive officers, or other authorized
officers, may waive any default in the performance of any term of the Agreement
by the other party, may waive or extend the time for the compliance or
fulfillment by the other party of any and all of its obligations under the
Agreement, and may waive any of the conditions precedent to the obligations of
such party under the Agreement, except any condition that, if not satisfied,
would result in the violation of any applicable law or governmental regulation.
No such waiver will be effective unless written and unless executed by a duly
authorized officer of Magna or UPC, as the case may be.
 
     The Agreement and the Plan of Merger may be terminated and the Merger
abandoned at any time prior to the Effective Time, notwithstanding the
provisions of the Agreement and the approval of the Agreement by the Magna
shareholders, (i) by the mutual consent of the Boards of Directors of Magna and
UPC and (ii) by the Magna Board or the UPC Board (a) in the event of any
inaccuracy of any representation or warranty of the other party contained in the
Agreement which cannot be or has not been cured within 30 days after giving
written notice to the breaching party of such inaccuracy and which inaccuracy
would provide the terminating party the ability to refuse to consummate the
Merger under the applicable standards set forth in the Agreement (provided that
the terminating party is not then in breach of any representation or warranty
contained in the Agreement under the applicable standards set forth in the
Agreement or in material breach of any covenant or other agreement contained in
the Agreement), (b) in the event of a material breach by the other party of any
covenant or agreement contained in the Agreement which cannot be or has not been
cured within 30 days after the giving of written notice to the breaching party
of such breach (provided that the terminating party is not then in breach of any
representation or warranty contained in the Agreement under the applicable
standards set forth in the Agreement or in material breach of any covenant or
other agreement contained in the Agreement), (c) if (1) any consent of any
regulatory authority required for consummation of the Merger and the other
transactions contemplated by the Agreement has been denied by final
nonappealable action, or if any action taken by such authority is not appealed
within the time limit for appeal or (2) the shareholders of Magna or UPC fail to
vote their approval of the matters submitted for the approval of such
shareholders at the Meetings, or (d) if the Merger is not consummated by
December 31, 1998, provided that the failure to consummate is not caused by any
breach of the Agreement by the party electing to terminate.
 
     If the Merger is terminated as described above, the Agreement and the Plan
of Merger will become void and have no effect, except that certain provisions of
the Agreement, including those relating to the obligations to share certain
expenses, maintain the confidentiality of certain information obtained, and
return all documents obtained from the other party under the Agreement, will
survive. See "-- Expenses and Fees."
 
CONDUCT OF BUSINESS PENDING THE MERGER
 
     Pursuant to the Agreement, each of Magna and UPC generally have agreed that
unless the prior written consent of the other party has been obtained, and
except as otherwise expressly contemplated in the Agreement, each of such
parties and its subsidiaries will: (i) operate its business only in the usual,
regular, and ordinary course; (ii) preserve intact its business organization and
assets and maintain its rights and franchises; (iii) use its reasonable efforts
to maintain its current employee relationships; and (iv) take no action which
would (a) materially adversely affect the ability of any party to obtain any
consents required for the transactions contemplated by the Agreement without
imposition of or condition or restriction of the type referred to in the
Agreement or (b) adversely affect the ability of any party to perform its
covenants and agreements under the Agreement.
 
                                       38
<PAGE>   52
 
     In addition, Magna has agreed that until the earlier of the Effective Time
or termination of the Agreement, Magna will not, except with the prior written
consent of the chief executive officer or chief financial officer of UPC (which
consent shall not be unreasonably withheld), agree or commit to do, or permit
any of its subsidiaries to agree or commit to do, any of the following: (i)
amend the charter, bylaws, or other governing instruments of Magna or any Magna
subsidiary (each a "Magna company" and together, the "Magna companies"), except
as expressly contemplated by the Agreement or the Magna rights agreement; (ii)
incur, guarantee, or otherwise become responsible for any additional debt
obligation for borrowed money (other than indebtedness of a Magna company to
another Magna company) in excess of an aggregate of $1,000,000 (for the Magna
companies on a consolidated basis) except in the ordinary course of business
consistent with past practices (which shall include, for Magna Bank, the
creation of deposit liabilities, purchases of federal funds, advances from the
Federal Reserve Bank or the Federal Home Loan Bank, and entry into repurchase
agreements fully secured by U.S. government or agency securities), or impose, or
suffer the imposition, on any asset of any Magna company of any lien or permit
any such lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts established in
the ordinary course of business, the satisfaction of legal requirements in the
exercise of trust powers, and liens in effect as of the date of the Agreement
that were previously disclosed to UPC by Magna); (iii) repurchase, redeem, or
otherwise acquire or exchange (other than exchanges in the ordinary course under
employee benefit plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any Magna company, or
declare or pay any dividend or make any other distribution in respect of any
Magna capital stock, provided that Magna may (to the extent legally and
contractually permitted to do so), but shall not be obligated to, declare and
pay regular quarterly cash dividends on the shares of Magna Common Stock at a
rate of $0.28 per share and on the shares of Magna Class B Preferred Stock at a
rate of $0.375 per share, in each case with usual and regular record and payment
dates in accordance with past practice, provided that, notwithstanding the
provisions of the Agreement, or the Option Agreement, or pursuant to rights
outstanding as of the date of the Agreement, the parties shall cooperate in
selecting the Effective Time to ensure that, with respect to the quarterly
period in which the Effective Time occurs, the holders of Magna Common Stock do
not receive both a dividend in respect of their Magna Common Stock and a
dividend in respect of UPC Common Stock or fail to receive any dividend; (iv)
except for the Agreement, or pursuant to the Option Agreement or the exercise of
rights outstanding as of the date of the Agreement and the terms thereof in
existence on the date of the Agreement, issue, sell, pledge, encumber, authorize
the issuance of, enter into any contract to issue, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of Magna Common Stock, or any other capital stock of any Magna
company, or any stock appreciation rights, or any option, warrant, conversion,
or other right to acquire any such stock, or any security convertible into any
such stock; (v) adjust, split, combine, or reclassify any capital stock of any
Magna company or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of Magna Common Stock, or sell, lease,
mortgage, or otherwise dispose of or otherwise encumber (a) any shares of stock
of any subsidiary of Magna (unless any such shares of stock are sold or
otherwise transferred to another Magna company) or (b) any asset having a book
value in excess of $250,000 other than in the ordinary course of business for
reasonable and adequate consideration; (vi) except for purchases of investment
securities acquired in the ordinary course of business consistent with past
practices, purchase any securities or make any material investment, either by
purchase of stock or securities, contributions to capital, asset transfers, or
purchase of any assets, in any person other than a wholly-owned Magna
subsidiary, or otherwise acquire direct or indirect control over any person,
with certain exceptions; (vii) grant any increase in compensation or benefits to
the employees or officers of any Magna company, except in the ordinary course of
business consistent with past practices as previously disclosed to UPC by Magna
or as required by law, pay any severance or termination pay or any bonus other
than pursuant to written policies or written contracts in effect on the date of
the Agreement, enter into or amend any severance agreements with officers of any
Magna company, grant any material increase in fees or other increases in
compensation or other benefits to directors of any Magna company, or voluntarily
accelerate the vesting of any stock options or other stock-based compensation or
employee benefits; (viii) enter into or amend any employment contract between
any Magna company and any person (unless such amendment is required by law or a
pre-existing contractual obligation) that the Magna company does not have the
unconditional right to terminate without liability (other than liability for
services already rendered), at any

                                       39
<PAGE>   53
 
time on or after the Effective Time; (ix) adopt any new employee benefit plan of
any Magna company or terminate or withdraw from, or make any material change in
or to, any existing employee benefit plans of any Magna company other than any
such change that is required by law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such plan;
(x) make any significant change in any tax or accounting methods or systems of
internal accounting controls, except as may be appropriate to conform to changes
in tax laws or regulatory accounting requirements or generally accepted
accounting principles; (xi) commence any litigation other than as necessary for
the prudent operation of its business or settle any litigation involving any
liability of any Magna company for material money damages or restrictions upon
the operations of any Magna company; or (xii) except in the ordinary course of
business, modify, amend, or terminate any material contract or waive, release,
compromise, or assign any material rights or claims.
 
     Magna has also agreed, that, except with respect to the Agreement, the Plan
of Merger, and the transactions contemplated thereby, no Magna company or any
representative thereof will, directly or indirectly, solicit or engage in
negotiations concerning any acquisition proposal, or provide any confidential
information or assistance to, or have any discussions with, any person with
respect to an acquisition proposal; provided, that Magna may, and may authorize
and permit its representatives to, provide persons with confidential
information, have discussions or negotiations with, or otherwise facilitate an
effort or attempt by such person to make or implement an acquisition proposal
not solicited in violation of the Agreement if Magna's Board, after having
consulted with, and based upon the advice of, outside counsel, determines in
good faith that the failure to take such actions could constitute a breach of
the fiduciary duties of Magna's Board under applicable law, subject to the
satisfaction of certain conditions.
 
MANAGEMENT AND OPERATIONS AFTER THE MERGER
 
     Upon consummation of the Merger, the current directors of UPC will continue
to serve as directors of UPC. In addition, the UPC Board will take all corporate
action necessary to increase the number of directors comprising the UPC Board
and will elect four individuals (one of whom shall be G. Thomas Andes, Chairman,
President, and Chief Executive Officer of Magna) from the Magna Board to the UPC
Board to serve as members of such classes of the UPC Board as necessary so that
each class of the UPC Board is as nearly equal in number as practicable.
Similarly, the current officers of UPC will continue to serve in their
respective capacities on behalf of UPC and G. Thomas Andes, Chairman, President,
and Chief Executive Officer of Magna, will be elected Vice Chairman of UPC,
reporting directly to Benjamin W. Rawlins, Jr., the Chairman and Chief Executive
Officer of UPC. Information concerning the management of UPC is included in the
documents incorporated herein by reference. See "DOCUMENTS INCORPORATED BY
REFERENCE." For additional information regarding the interests of certain
persons in the Merger, see "-- Interests of Certain Persons in the Merger."
 
     UPHC will be the surviving corporation resulting from the Merger and shall
continue to be governed by the laws of the State of Tennessee and operate in
accordance with its Charter and Bylaws.
 
INTERESTS OF CERTAIN PERSONS IN THE MERGER
 
  Employment Arrangements.
 
     Employment Agreements with UPC.  In connection with the execution of the
Agreement, UPC entered into employment agreements (the "Employment Agreements")
with each of G. Thomas Andes and Ronald A. Buerges (the "Executives"). Each
Employment Agreement is for an initial term of three years commencing at the
Effective Time and, in the case of Mr. Andes, the initial term is subject to an
automatic extension until the fifth anniversary of the Effective Time if the
Executive remains employed by UPC on the first anniversary of the Effective Time
(the initial term and any extension referred to herein as the "Employment
Period"). During the Employment Period, Mr. Andes will serve as Vice Chairman of
UPC and Mr. Buerges will serve as an executive officer of UPC reporting directly
to Mr. Andes. During the Employment Period, Mr. Andes will receive an annual
base salary at least equal to the annual base salary paid to him by Magna prior
to the Effective Time or, if greater, 90% of the annual base salary paid to the
Chief Executive Officer of UPC. Mr. Andes' Employment Agreement also provides
that his annual bonus will be at
 
                                       40
<PAGE>   54
 
least equal to 90% of the annual bonus paid to the Chief Executive Officer of
UPC, provided that for the 1998 calendar year his annual bonus will not be less
than his target bonus under the Magna annual incentive plan (the "1998 Target
Bonus"). During the Employment Period, Mr. Buerges will receive an annual base
salary at least equal to the annual base salary paid to him by Magna prior to
the Effective Time and will be eligible to receive an annual bonus on the same
basis as peer executives of UPC. As of the Effective Time, Mr. Andes will be
granted an option to acquire 100,000 shares of UPC Common Stock, and Mr. Buerges
will be granted an option to acquire 30,000 shares of UPC Common Stock (in the
case of each Executive, the "Option"), at an exercise price equal to the fair
market value of the UPC Common Stock on the date of grant. Each Option will vest
in three equal installments on the first, second and third anniversaries of the
date of grant (subject to accelerated vesting upon a change of control of UPC
and upon certain terminations as described below). As of the Effective Time, Mr.
Andes will be granted 50,000 shares of restricted stock, and Mr. Buerges will be
granted 15,000 shares of restricted stock (in the case of each Executive, the
"Restricted Stock"). The Restricted Stock will vest in 12 equal annual
installments from the Effective Time (subject to accelerated vesting upon a
change of control of UPC and upon certain terminations as described below).
Pursuant to Mr. Andes' Employment Agreement, upon Mr. Andes' termination of
employment due to death, disability, the expiration of the Employment Period or
following a change of control of UPC, Mr. Andes will be paid an annual
retirement benefit of $850,000 (the "Retirement Benefit"), less benefits payable
under UPC's and Magna's tax qualified plans and in lieu of any benefit Mr. Andes
is entitled to receive under Magna's Senior Supplemental Executive Retirement
Plan or any non-qualified defined benefit plan of UPC. Mr. Buerges will continue
to participate in the Magna Supplemental Executive Retirement Plan. Except as
previously described, the Employment Agreements provide that each Executive will
be entitled to participate in the employee benefit plans, practices and policies
provided to peer executives of UPC. The Employment Agreements also provide that
upon the Effective Time, each of Messrs. Andes and Buerges will be entitled to a
severance payment, calculated pursuant to the terms of their agreements with
Magna as if each Executive had been terminated without cause thereunder, equal
to approximately $3,408,600 and $650,000, respectively. The Employment
Agreements further provide that, upon the termination of an Executive's
employment with UPC other than for cause (as defined in the Employment
Agreements), death or disability, or if the Executive terminates employment for
good reason (as defined in the Employment Agreements), each Executive is
entitled to a lump-sum cash payment equal to the sum of (i) any unpaid salary,
(ii) a pro rata annual bonus, based on the highest bonus earned in the three
years prior to the date of termination (the "Recent Annual Bonus") (in the case
of Mr. Andes, the Recent Annual Bonus will be at least equal to the 1998 Target
Bonus), and (iii) the product of (x) the number of months from the date of
termination until the third (in the case of Mr. Andes, the fifth) anniversary of
the Effective Time divided by 12 and (y) the sum of an Executive's base salary
and the Recent Annual Bonus. Upon such terminations, the Option and Restricted
Stock will vest immediately and each Covered Executive will be entitled to
receive medical and welfare benefits coverage through the end of the Employment
Period (in the case of Mr. Andes, for his life). In addition, Mr. Andes'
Retirement Benefit will commence upon such a termination. If any amounts payable
to an Executive under the Employment Agreement or otherwise would subject such
Executive to the excise tax under Section 4999 of the Code, UPC will make a
payment to the Executive such that after the payment of all income and excise
taxes, the Executive will be in the same after-tax position as if no excise tax
under Section 4999 had been imposed, provided that, if such payments (excluding
additional amounts payable due to the excise tax) do not exceed 110% of the
greatest amount that could be paid without giving rise to the excise tax, no
additional payments will be made with respect to the excise tax, and the
payments otherwise due to the Executive will be reduced to an amount necessary
to prevent the application of the excise tax. Each Employment Agreement contains
a restrictive covenant, which prohibits the Executive from disclosing
confidential information during the Employment Period and thereafter.
 
     Magna Employment Arrangements.  On May 27, 1997, Magna and Mr. Andes
entered into an amended and restated employment agreement (the "Amended
Agreement"), which provides for a term that expires on the earlier of December
31, 1999 or Mr. Andes' termination of employment. Certain other executives of
Magna (together with Mr. Andes, the "Covered Executives"), including Mr.
Buerges, are parties to change of control employment agreements (together with
the Amended Agreement, the "Magna Agreements"). The Magna Agreements provide,
among other things, for the payment of severance upon the termination of a
 
                                       41
<PAGE>   55
 
Covered Executive's employment without Cause (as defined in the Magna
Agreements) or by the Covered Executive for Good Reason (as defined in the Magna
Agreements) within two years following a Change in Control of Magna (as defined
in the Magna Agreements). The Merger will constitute a Change of Control for
purposes of the Magna Agreements. Upon a covered termination, each Covered
Executive is entitled to receive a lump-sum payment equal to the sum of (i) any
unpaid base salary through the date of termination, accrued vacation pay and
(ii) the product of (x) two (2.99 and 2.5, in the case of Messrs. Andes and
Buerges, respectively) and (y) the sum of the Executive's base salary and
incentive bonus based on the incentive bonus earned by the Covered Executive in
the year prior to the date of termination (in the case of Mr. Andes, based on
the incentive bonus that would have been earned by him in the year of
termination assuming that Magna's and Mr. Andes' performance levels were at or
above the levels permitting the maximum award and any discretionary award was
made at the maximum level). In addition, pursuant to the Magna Agreements (other
than Mr. Andes'), all stock options then held by a Covered Executive will become
immediately vested and exercisable. Pursuant to his Agreement, Mr. Andes' will
be entitled to receive medical and welfare benefits coverage for a period of
three years following the date of termination. Pursuant to the Magna Agreements
(other than Mr. Andes'), if the severance benefit payable to a Covered Executive
under the Magna Agreement or otherwise would be nondeductible by the paying
company for federal income tax purposes because of Section 280G of the Code and
therefore subject to the excise tax under Section 4999 of the Code, then the
severance benefits will be reduced so that no portion of the severance benefits
will be nondeductible to the paying company or subject to the excise tax. Mr.
Andes' Agreement provides that if the severance benefits payable under the
Amended Agreement or otherwise would subject him to the excise tax under Section
4999 of the Code, Magna will make a payment to him such that after the payment
of all income and excise taxes, he will be in the same after-tax position as if
no excise tax under Section 4999 had been imposed. From and after the Effective
Time, the Employment Agreements between UPC and Messrs. Andes and Buerges will
supersede the Magna Agreements and any other employment, severance or change of
control agreement between Magna and Messrs. Andes or Buerges. Each Magna
Agreement also contains a restrictive covenant, which prohibits a Covered
Executive from disclosing confidential information relating to Magna. Magna also
maintains the Magna Group, Inc. Supplemental Executive Retirement Plan (the
"SERP"), which provides supplemental retirement benefits to a group of
management employees, including Mr. Buerges. The SERP provides supplemental
retirement benefits equal to approximately 1.429% of a participant's five-year
average salary (highest five years out of the final ten years) for each year of
service, reduced by any benefits payable to such employees under Magna's
tax-qualified retirement plans. Upon the termination of a SERP participant's
employment within two years following a Change of Control of Magna (as defined
in the SERP), such participant will be entitled to receive his or her accrued
supplemental benefit under the SERP based on actual years of service to the date
of the Change of Control plus two additional years of service.
 
     Retention/Severance Program.  In connection with the Merger, Magna may
establish a special key employee retention and severance program for employees
of Magna who are likely to be terminated after the Effective Time as a result of
the Merger and who are not parties to individual severance, employment or change
of control agreements. Mr. Andes will administer this program subject to the
concurrence of UPC's Chief Executive Officer. The total benefits payable under
the program, plus the other severance benefits payable to Magna employees
pursuant to the severance plans and programs maintained by Magna and UPC (other
than the individual arrangements) will not exceed $10 million.
 
     Board of Directors.  Pursuant to the Agreement at the first meeting of the
UPC Board after the Effective Time, UPC will take all corporate action necessary
to increase the number of directors comprising the UPC Board and will elect four
members of the Magna Board (one of whom will be Mr. Andes and the other three
taking into account Magna's suggestions) to serve as members of such classes of
the UPC Board as is necessary so that each class of the UPC Board is as nearly
equal in number as practicable. Each of the Magna directors will also be named
to committees of the UPC, and Mr. Andes will be elected to the Executive
Committee of the UPC Board.
 
     Stock Rights.  The Agreement provides that at the Effective Time, each
outstanding award, option or other right to acquire shares of Magna Common Stock
granted (whether or not vested) by Magna pursuant to
 
                                       42
<PAGE>   56
 
the terms of Magna's Amended and Restated 1992 Long Term Performance Plan and
Amended and Restated 1996 Long Term Performance Plan (the "Magna Stock Plans")
will cease to represent the right to acquire shares of Magna Common Stock and
will be converted into and become a right with respect to UPC Common Stock.
 
     Pursuant to the terms of the Magna Stock Plans, as a result of the
transactions contemplated by the Agreement, the stock options and restricted
stock awards held by certain employees of Magna and its subsidiaries, including
executive officers of Magna and an employee director of Magna, will become fully
vested and exercisable and all restrictions on any such awards will lapse. The
number of unvested stock options to acquire shares of Magna Common Stock and
awards of restricted stock held by Messrs. Andes and Buerges that will become
fully vested and transferable as a result of the Merger are 174,093 and 39,405,
respectively.
 
     Indemnification; Directors and Officers Insurance.  The Agreement provides
that UPC will, subject to the conditions set forth therein, indemnify the
present and former directors, officers, employees, and agents of Magna and its
subsidiaries against all Liabilities (as defined in the Agreement) arising out
of actions or omissions occurring at or prior to the Effective Time (including
the transactions contemplated by the Agreement) to the full extent permitted
under any of Delaware law, the Magna Charter and Bylaws, and any indemnity
agreements previously entered into by Magna or any of its subsidiaries and any
director, officer, employee, or agent of Magna or any of its subsidiaries. This
provision of the Agreement is consistently included in UPC's standard form
merger agreement and is not intended to broaden in any manner the scope of
indemnification to which the present and former directors, officers, employees,
and agents of Magna and its subsidiaries are entitled, but serves to ratify the
legal obligations of Magna and its subsidiaries (to be assumed by UPHC upon
consummation of the Merger) to provide indemnification in accordance with
Delaware law, the Magna Charter and Bylaws, and any indemnification agreements
to which Magna or its subsidiaries is a party with an indemnified person. The
indemnification provided under the provisions of such instruments will be
subject to the same standards that are currently applicable for determining
whether indemnified parties are entitled to indemnification under such
instruments. The Agreement also provides that UPC will maintain, subject to
certain limitations, Magna's existing directors' and officers' liability
insurance policy (or a comparable policy) in effect for a period of three years
after the Effective Time.
 
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
 
     THE FOLLOWING IS A DISCUSSION OF THE MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER TO HOLDERS OF MAGNA CAPITAL STOCK. THE DISCUSSION MAY
NOT APPLY TO SPECIAL SITUATIONS, SUCH AS MAGNA SHAREHOLDERS, IF ANY, WHO
RECEIVED MAGNA CAPITAL STOCK UPON THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR
OTHERWISE AS COMPENSATION, THAT HOLD MAGNA CAPITAL STOCK AS PART OF A "STRADDLE"
OR "CONVERSION TRANSACTION," OR THAT ARE INSURANCE COMPANIES, SECURITIES
DEALERS, FINANCIAL INSTITUTIONS OR FOREIGN PERSONS, AND DOES NOT DISCUSS ANY
ASPECTS OF STATE, LOCAL, OR FOREIGN TAXATION. THIS DISCUSSION IS BASED UPON
LAWS, REGULATIONS, RULINGS AND DECISIONS NOW IN EFFECT AND ON PROPOSED
REGULATIONS, ALL OF WHICH ARE SUBJECT TO CHANGE (POSSIBLY WITH RETROACTIVE
EFFECT) BY LEGISLATION, ADMINISTRATIVE ACTION, OR JUDICIAL DECISION. NO RULING
HAS BEEN OR WILL BE REQUESTED FROM THE INTERNAL REVENUE SERVICE ON ANY MATTER
RELATING TO THE TAX CONSEQUENCES OF THE MERGER.
 
     As of the date of the Joint Proxy Statement, Alston & Bird LLP, counsel for
UPC, and Wachtell, Lipton, Rosen & Katz, special counsel to Magna, have advised
UPC and Magna, respectively, that in their opinion:
 
          (i) the Merger will constitute a reorganization within the meaning of
     Section 368(a) of the Code;
 
          (ii) no gain or loss will be recognized by holders of Magna Common
     Stock who exchange all of their Magna Common Stock solely for UPC Common
     Stock pursuant to the Merger (except with respect to any cash received in
     lieu of a fractional share interest in UPC Common Stock);
 
          (iii) the tax basis of the UPC Common Stock received by holders of
     Magna Common Stock who exchange all of their Magna Common Stock solely for
     UPC Common Stock in the Merger will be the same as the tax basis of the
     Magna Common Stock surrendered in exchange for the UPC Common Stock
     (reduced by an amount allocable to a fractional share interest in UPC
     Common Stock for which cash is received); and
 
                                       43
<PAGE>   57
 
          (iv) the holding period of the UPC Common Stock received by holders
     who exchange all of their Magna Common Stock solely for UPC Common Stock in
     the Merger will be the same as the holding period of the Magna Common Stock
     surrendered in exchange therefor, provided that such Magna Common stock is
     held as a capital asset at the Effective Time.
 
     In addition, the obligation of each party to consummate the Merger is
conditioned, among other things, upon receipt by UPC of an opinion of Alston &
Bird LLP and by Magna of an opinion of Wachtell, Lipton, Rosen & Katz, each
dated the date of the Effective Time, substantially to the foregoing effect. The
tax opinions of Alston & Bird LLP and Wachtell, Lipton, Rosen & Katz summarized
above are or will be based, among other things, on representations relating to
certain facts and circumstances of, and the intentions of the parties to, the
Merger.
 
     Cash received by a holder of Magna Common Stock in lieu of a fractional
share interest in UPC Common Stock will be treated as received for such
fractional share interest and, provided the fractional share interest would have
constituted a capital asset in the hands of such holder, the holder should
generally recognize capital gain or loss in an amount equal to the difference
between the amount of cash received and the portion of the holder's adjusted tax
basis in the Magna Common Stock allocable to the fractional share interest.
 
     The exchange by Magna stockholders of Magna Class B Preferred Stock for
Preferred Stock Cash Payments pursuant to the Merger will be a taxable event.
Generally, a holder of Magna Class B Preferred Stock should recognize income
equal to the excess of the cash received over its adjusted tax basis in the
Magna Class B Preferred Stock exchanged therefor.
 
     Because certain tax consequences of the Merger may vary depending upon the
particular circumstances of each holder of Magna Common Stock and other factors,
each such holder is urged to consult such holder's own tax advisor to determine
the particular tax consequences of the Merger to such holder (including the
application and effect of state and local income and other tax laws).
 
ACCOUNTING TREATMENT
 
     It is anticipated that the Merger will be accounted for as a pooling of
interests. Under the pooling-of-interests method of accounting, the recorded
amounts of the assets and liabilities of Magna will be carried forward at their
previously recorded amounts, and current and prior period financial statements
will be restated for all periods as though Magna and UPC had been combined at
the beginning of the earliest period presented.
 
     In order for the Merger to qualify for pooling-of-interests accounting
treatment, substantially all (90% or more) of the outstanding Magna Common Stock
must be exchanged for UPC Common Stock with substantially similar terms. There
are certain other criteria that must be satisfied in order for the Merger to
qualify as a pooling of interests, some of which criteria cannot be satisfied
until after the Effective Time. In addition, it is a condition to closing that
each party receive a letter, dated as of the Effective Time, from Price
Waterhouse LLP and Ernst & Young LLP to the effect that the Merger will qualify
for pooling-of-interests accounting treatment.
 
     For information concerning certain conditions to be imposed on the exchange
of Magna Common Stock for UPC Common Stock in the Merger by affiliates of Magna
and certain restrictions to be imposed on the transferability of the UPC Common
Stock received by those affiliates in the Merger in order, among other things,
to ensure the availability of pooling-of-interests accounting treatment, see
"-- Resales of UPC Common Stock."
 
EXPENSES AND FEES
 
     The Agreement provides that each of the parties will bear and pay its own
expenses in connection with the transactions contemplated by the Agreement,
including filing, negotiation, and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that each of UPC and Magna will bear and pay
one-half of the printing costs incurred in connection with the Registration
Statement and this Joint Proxy Statement.

                                       44
<PAGE>   58
 
RESALES OF UPC COMMON STOCK
 
     UPC Common Stock to be issued to shareholders of Magna in connection with
the Merger will be registered under the Securities Act. All shares of UPC Common
Stock received by holders of Magna Common Stock and all shares of UPC Common
Stock issued and outstanding immediately prior to the Effective Time will be
freely transferable upon consummation of the Merger by those shareholders of
Magna not deemed to be "Affiliates" of Magna or UPC. "Affiliates" generally are
defined as persons or entities who control, are controlled by, or are under
common control with Magna or UPC at the time of the Magna Annual Meeting
(generally, executive officers, directors, and 10% or greater shareholders).
 
     Rule 145 promulgated under the Securities Act restricts the sale of UPC
Common Stock received in the Merger by Affiliates and certain of their family
members and related interests. Under the rule, during the one-year period
following the Effective Time, Affiliates of Magna or UPC may resell publicly the
UPC Common Stock received by them in the Merger within certain limitations as to
the amount of UPC Common Stock sold in any three-month period and as to the
manner of sale. After the one-year period, such Affiliates of Magna who are not
Affiliates of UPC may resell their shares without restriction. The ability of
Affiliates to resell shares of UPC Common Stock received in the Merger under
Rule 145 will be subject to UPC having satisfied its Exchange Act reporting
requirements for specified periods prior to the time of sale. Affiliates will
receive additional information regarding the effect of Rule 145 on their ability
to resell UPC Common Stock received in the Merger. Affiliates also would be
permitted to resell UPC Common Stock received in the Merger pursuant to an
effective registration statement under the Securities Act or an available
exemption from the Securities Act registration requirements. This Joint Proxy
Statement does not cover any resales of UPC Common Stock received by persons who
may be deemed to be Affiliates of Magna or UPC.
 
     Magna has agreed to use its reasonable efforts to cause each person who may
be deemed to be an Affiliate of Magna to execute and deliver to UPC not later
than 30 days prior to the Effective Time, an agreement (each, an "Affiliate
Agreement") providing that such Affiliate will not sell, pledge, transfer, or
otherwise dispose of any Magna Common Stock held by such Affiliate except as
contemplated by the Agreement or the Affiliate Agreement, and will not sell,
pledge, transfer or otherwise dispose of any UPC Common Stock received by such
Affiliate upon consummation of the Merger (i) except in compliance with the
Securities Act and the rules and regulations thereunder and (ii) until such time
as financial results covering 30 days of combined operations of UPC and Magna
have been published. Shares of UPC Common Stock issued to such Affiliates of
Magna in exchange for shares of Magna Common Stock will not be transferable
until such time as financial results covering at least 30 days of combined
operations of UPC and Magna have been published, regardless of whether each such
Affiliate has provided an Affiliate Agreement (and UPC shall be entitled to
place restrictive legends upon certificates for shares of UPC Common Stock
issued to Affiliates of Magna). Certificates representing shares of Magna Common
Stock surrendered for exchange by any person who is an Affiliate of Magna for
purposes of Rule 145(c) under the Securities Act shall be exchanged for
certificates representing shares of UPC Common Stock as described under
"-- Distribution of Consideration," with the certificates representing such
shares of UPC Common Stock containing a legend summarizing the foregoing
restrictions. Prior to publication of such results, UPC will not transfer on its
books any shares of UPC Common Stock received by an Affiliate pursuant to the
Merger. See "-- Conditions to Consummation of the Merger."
 
OPTION AGREEMENT
 
     As an inducement and a condition to UPC entering into the Agreement, Magna
and UPC entered into the Option Agreement, pursuant to which Magna granted UPC
an option (the "Option") entitling it to purchase up to 6,497,180 shares
(representing approximately 19.9% of the shares issued and outstanding before
giving effect to the issuance of additional shares of Magna Common Stock
pursuant to the exercise of such option) of Magna Common Stock under the
circumstances described below, at a cash price per share equal to $57.50,
subject to possible adjustment in certain circumstances (the "Purchase Price").
This description of the Option Agreement and the Option does not purport to be
complete and is qualified in its
 
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<PAGE>   59
 
entirety by reference to the Option Agreement, which is filed as an exhibit to
the Registration Statement and incorporated herein by reference.
 
     Provided no preliminary or permanent injunction or other order against the
delivery of the shares of Magna Common Stock covered by the Option issued by any
court of competent jurisdiction shall be in effect, UPC may exercise the Option,
in whole or in part, at any time, from time to time, if, but only if, a Purchase
Event (as defined below) occurs prior to the Option's termination; provided that
UPC, at the time, is not in material breach of the Option Agreement or the
Agreement. As defined in the Option Agreement, "Purchase Event" means either of
the following events:
 
          (a) without UPC's prior written consent, Magna authorizes, recommends,
     publicly proposes, or publicly announces an intention to authorize,
     recommend or propose or entering into an agreement with any third party to
     effect (i) a merger, consolidation, or similar transaction involving Magna
     or any of its subsidiaries (other than transactions solely between Magna's
     subsidiaries and transactions involving Magna or any of Magna's
     subsidiaries in which the voting securities outstanding immediately prior
     thereto continue to represent (by either remaining outstanding or being
     converted into securities of the surviving entity or the parent thereof) at
     least 75% of the combined voting power of the voting securities of Magna or
     the surviving entity or the parent thereof outstanding immediately after
     the consummation of the transaction)), (ii) the disposition, by sale,
     lease, exchange, or otherwise, of 20% or more of the consolidated assets of
     Magna and its subsidiaries or (iii) the issuance, sale, or other
     disposition (including by way of merger, consolidation, share exchange, or
     any similar transaction) of securities representing 20% or more of the
     voting power of Magna or any of its subsidiaries; or
 
          (b) any person (other than UPC or any subsidiary of UPC) acquires
     beneficial ownership (as such term is defined in Rule 13d-3 promulgated
     under the Exchange Act), or the right to acquire beneficial ownership of,
     or the formation of any "group" (as defined under the Exchange Act), other
     than a group of which UPC or any UPC subsidiary is a member, that
     beneficially owns or has the right to acquire beneficial ownership of, 20%
     or more of the outstanding shares of Magna Common Stock.
 
     The Option will terminate upon the earliest of the following:
 
          (a) the Effective Time;
 
          (b) termination of the Agreement in accordance with the terms thereof
     prior to the occurrence of a Purchase Event or a Preliminary Purchase Event
     (as defined below) (other than a termination of the Agreement under certain
     circumstances involving generally a willful breach by Magna of a
     representation or warranty contained in the Agreement or a breach by Magna
     of a covenant contained in the Agreement) (a "Default Termination");
 
          (c) 18 months after termination of the Agreement by UPC pursuant to a
     Default Termination; and
 
          (d) 18 months after termination of the Agreement following the
     occurrence of a Purchase Event or a Preliminary Purchase Event.
 
     As defined in the Option Agreement, "Preliminary Purchase Event" includes
either of the following events:
 
          (a) commencement or filing of a registration statement under the
     Securities Act by any third party of a tender offer or exchange offer to
     purchase any shares of Magna Common Stock such that, upon consummation of
     such offer, such person would own or control 15% or more of the
     then-outstanding shares of Magna Common Stock (a "Tender Offer" or an
     "Exchange Offer," respectively); or
 
          (b) failure of the shareholders of Magna Common Stock to approve the
     Agreement and the Plan of Merger at the Magna Annual Meeting, the failure
     to have the Magna Annual Meeting or another such meeting held for the
     purpose of voting on the Agreement, or the cancellation of such meeting
     prior to termination of the Agreement, or the withdrawal or modification by
     the Magna Board in a manner adverse to UPC of the recommendation of the
     Magna Board with respect to the Agreement, in each case, after public
     announcement that a third party (i) made a proposal to engage in an
     acquisition transaction,
 
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<PAGE>   60
 
     (ii) commenced a Tender Offer or filed a registration statement under the
     Securities Act with respect to an Exchange Offer or (iii) filed an
     application or given a notice under any federal or state statute or
     regulation for approval or consent to engage in an acquisition transaction.
 
     In the event of any change in Magna Common Stock by reason of a stock
dividend, stock split, split-up, recapitalization, combination, exchange of
shares, or similar transaction, the type and number of securities subject to the
Option, and the purchase price therefor shall be adjusted appropriately. In the
event that any additional shares of Magna Common Stock are issued after February
22, 1998 (other than pursuant to an event described in the preceding sentence),
the number of shares of Magna Common Stock subject to the Option will be
adjusted so that, after such issuance, it, together with any shares of Magna
Common Stock previously issued pursuant to the Option Agreement, equals the
lesser of 19.9% of the number of shares then issued and outstanding, without
giving effect to any shares subject to or issued pursuant to the Option and (ii)
that minimum number of shares of Magna Common Stock which, when aggregated with
any other shares of Magna Common Stock, beneficially owned by UPC or any
affiliate of UPC, would cause the provisions of any Delaware takeover laws to be
applicable to the Merger.
 
     Upon the occurrence of a Repurchase Event (as defined below) that occurs
prior to the exercise or termination of the Option, at the request of UPC,
delivered within 18 months of the Repurchase Event, Magna will, subject to
regulatory restrictions, be obligated to repurchase the Option and any shares of
Magna Common Stock therefor purchased pursuant to the Option Agreement at a
specified price.
 
     As defined in the Option Agreement, "Repurchase Event" shall occur if (i)
any person (other than UPC or any UPC subsidiary) shall have acquired beneficial
ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange
Act), or the right to acquire beneficial ownership, or any "group" (as such term
is defined under the Exchange Act) shall have been formed which beneficially
owns or has the right to acquire beneficial ownership of 50% or more of the
then-outstanding shares of Magna Common Stock, or (ii) any of the following
transactions is consummated: (a) Magna consolidates with or merges into any
person, other than UPC or one of UPC's subsidiaries, and is not the continuing
or surviving corporation of such consolidation or merger; (b) Magna permits any
person, other than UPC or one of UPC's subsidiaries, to merge into Magna and
Magna shall be the continuing or surviving corporation, but, in connection with
such merger, the then-outstanding shares of Magna Common Stock shall be changed
into or exchanged for stock or other securities of Magna or any other person or
cash or any other property or the outstanding shares of Magna Common Stock
immediately prior to such merger shall after such merger represent less than 50%
of the outstanding shares and share equivalents of the merged company; or (c)
Magna sells or otherwise transfers all or substantially all of its assets to any
person, other than UPC or one of UPC's subsidiaries.
 
     In the event that prior to the exercise or termination of the Option, Magna
enters into an agreement to engage in any of the transactions described in
clause (ii) of the definition of Repurchase Event above, the agreement governing
such transaction must make proper provision so that UPC will receive for each
share of Magna Common Stock subject to the option an amount of consideration
that would be received by a holder of Magna Common Stock in such transaction
less the Purchase Price.
 
     After the occurrence of a Purchase Event, UPC may assign the Option
Agreement and its rights thereunder in whole or in part.
 
     Upon the occurrence of certain events, Magna has agreed to file with the
SEC and to cause to become effective certain registration statements under the
Securities Act with respect to dispositions by UPC and its assigns of all or
part of the Option and/or any shares of Magna Common Stock into which the Option
is exercisable.
 
                                       47
<PAGE>   61
 
                 EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS
 
     As a result of the Merger, holders of Magna Common Stock will be exchanging
their shares of a Delaware corporation governed by the DGCL, the Magna Charter
and Magna Bylaws, for shares of UPC, a Tennessee corporation governed by the
TBCA and the UPC Charter and UPC Bylaws. Certain significant differences exist
between the rights of Magna shareholders and those of UPC shareholders. In
particular, the UPC Charter and UPC Bylaws contain several provisions that may
be deemed to have an anti-takeover effect in that they could impede or prevent
an acquisition of UPC unless the potential acquirer has obtained the approval of
the UPC Board. The following discussion is necessarily general; it is not
intended to be a complete statement of all differences affecting the rights of
shareholders and their respective entities, and it is qualified in its entirety
by reference to the DGCL and the TBCA as well as to the UPC Charter and UPC
Bylaws and the Magna Charter and Magna Bylaws.
 
ANTI-TAKEOVER PROVISIONS GENERALLY
 
     The provisions of the UPC Charter and UPC Bylaws described below under the
headings, "-- Authorized Capital Stock," "-- Amendment of Charter and Bylaws,"
"-- Classified Board of Directors and Absence of Cumulative Voting,"
"-- Director Removal and Vacancies," "-- Limitations on Director Liability,"
"-- Indemnification," "-- Special Meetings of Shareholders," "-- Actions by
Shareholders Without a Meeting," "-- Shareholder Nominations and Proposals" and
"-- Business Combinations" are referred to herein as the "Protective
Provisions." In general, one purpose of the Protective Provisions is to assist
the UPC Board in playing a role if any group or person attempts to acquire
control of UPC, so that the UPC Board can further protect the interests of UPC
and its shareholders as appropriate under the circumstances, including, if the
UPC Board determines that a sale of control is in the best interests of UPC's
shareholder, by enhancing the UPC Board's ability to maximize the value to be
received by the shareholders upon such a sale.
 
     Although UPC's management believes the Protective Provisions are,
therefore, beneficial to UPC's shareholders, the Protective Provisions also may
tend to discourage some takeover bids. As a result, UPC's shareholders may be
deprived of opportunities to sell some or all of their shares at prices that
represent a premium over prevailing market prices. On the other hand, defeating
undesirable acquisition offers can be a very expensive and time-consuming
process. To the extent that the Protective Provisions discourage undesirable
proposals, UPC may be able to avoid those expenditures of time and money.
 
     The Protective Provisions also may discourage open market purchases by a
potential acquirer. Such purchases may increase the market price of UPC Common
Stock temporarily, enabling shareholders to sell their shares at a price higher
than that which otherwise would prevail. In addition, the Protective Provisions
may decrease the market price of UPC Common Stock by making the stock less
attractive to persons who invest in securities in anticipation of price
increases from potential acquisition attempts. The Protective Provisions also
may make it more difficult and time consuming for a potential acquirer to obtain
control of UPC through replacing the Board of Directors and management.
Furthermore, the Protective Provisions may make it more difficult for UPC's
shareholders to replace the Board of Directors or management, even if a majority
of the shareholders believe such replacement is in the best interests of UPC. As
a result, the Protective Provisions may tend to perpetuate the incumbent Board
of Directors and management.
 
AUTHORIZED CAPITAL STOCK
 
     UPC.  The UPC Charter currently authorizes the issuance of up to (i)
[300,000,000] shares of UPC Common Stock, of which 83,865,183 shares were
outstanding as of March 31, 1998, and (ii) 10,000,000 shares of no par value
preferred stock ("UPC Preferred Stock" and, together with the UPC Common Stock,
the "UPC Capital Stock"), of which no shares of UPC Series A Preferred Stock,
and 1,478,888 shares of UPC's 8% Cumulative, Convertible Preferred Stock, Series
E (the "Series E Preferred Stock") were issued and outstanding as of March 31,
1998. [At the 1998 annual meeting of shareholders of UPC, the UPC shareholders
approved an amendment to the UPC Charter to increase the number of authorized
shares of UPC Common Stock from 100,000,000 shares to 300,000,000 shares.
Accordingly, UPC
 
                                       48
<PAGE>   62
 
has sufficient authorized shares of UPC Common Stock to consummate the Merger
and all Other Pending Acquisitions.]
 
     The UPC Board may authorize the issuance of additional authorized shares of
UPC Common Stock without further action by UPC's shareholders, unless such
action is required in a particular case by applicable laws or regulations or by
any stock exchange upon which UPC Common Stock may be listed.
 
     With certain exceptions, the UPC Board may issue, without any further
action by the shareholders, shares of UPC Preferred Stock, in one or more
classes or series, with the voting, conversion, dividend, and liquidation rights
specified in the UPC Charter. In providing for the issuance of such shares, the
UPC Board may determine, among other things, the distinctive designation and
number of shares comprising a series of preferred stock, the dividend rate or
rates on the shares of such series and the relation of such dividends to the
dividends payable on other classes of stock, whether the shares of such series
shall be convertible into or exchangeable for shares of any other class or
series of UPC Capital Stock, the voting powers if any of such series, and any
other preferences, privileges, and powers of such series.
 
     In the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets, or winding up of UPC, the holders of any series of UPC
Preferred Stock will have priority over holders of UPC Common Stock.
 
     The authority to issue additional authorized shares of UPC Common Stock or
UPC Preferred Stock provides UPC with the flexibility necessary to meet its
future needs without the delay resulting from seeking shareholder approval. The
authorized but unissued shares of UPC Common Stock and UPC Preferred Stock will
be issuable from time to time for any corporate purpose, including, without
limitation, stock splits, stock dividends, employee benefit and compensation
plans, acquisitions, and public or private sales for cash as a means of raising
capital. Such shares could be used to dilute the stock ownership of persons
seeking to obtain control of UPC. In addition, the sale of a substantial number
of shares of UPC voting stock to persons who have an understanding with UPC
concerning the voting of such shares, or the distribution or declaration of a
dividend of shares of UPC voting stock (or the right to receive UPC voting
stock) to UPC shareholders, may have the effect of discouraging or increasing
the cost of unsolicited attempts to acquire control of UPC.
 
     In 1989, the UPC Board adopted a Share Purchase Rights Plan ("Preferred
Share Rights Plan") and distributed a dividend of one Preferred Share Unit
Purchase Right ("Preferred Share Right") for each outstanding share of UPC
Common Stock. In addition, under the Preferred Share Rights Plan, one Preferred
Share Right is to be automatically, and without further action by UPC,
distributed in respect to each share of UPC Common Stock issued after adoption
of the Preferred Share Rights Plan. The Preferred Share Rights are generally
designed to deter coercive takeover tactics and to encourage all persons
interested in potentially acquiring control of UPC to treat each shareholder on
a fair and equal basis. Each Preferred Share Right trades in tandem with the
share of UPC Common Stock to which it relates until the occurrence of certain
events indicating a potential change in control of UPC. Upon the occurrence of
such an event, the Preferred Share Rights would separate from UPC Common Stock
and each holder of a Preferred Share Right (other than the potential acquiror)
would be entitled to purchase certain equity securities of UPC at prices below
their market value. UPC has authorized 750,000 shares of Series A Preferred
Stock for issuance under the Preferred Share Rights Plan and no shares have been
issued as of the date of this Joint Proxy Statement. Until a Preferred Share
Right is exercised, the holder thereof, as such, has no rights of a shareholder
of UPC, including the right to vote or receive dividends.
 
     Magna.  The Magna Charter authorizes the issuance of up to (i) 80,000,000
shares of Magna Common Stock, of which           shares were issued and
outstanding as of the Magna Record Date, (ii) 1,000,000 shares of Preferred
Stock with no par value per share ("No Par Value Preferred Stock"), of which no
shares were issued as of the Magna Record Date, (iii) 49,500 shares of Magna
Class B Preferred Stock, of which           shares were issued and outstanding
as of the Magna Record Date, and (iv) 1,000,000 shares of Class C Non-Voting
Preferred Stock, of which no shares had been issued as of the Magna Record Date
(collectively, the "Magna Preferred Stock"). The Magna Board may authorize the
issuance of additional authorized shares of Magna's Common Stock without further
action by Magna's
 
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<PAGE>   63
 
shareholders, unless such action is required in a particular case by applicable
laws or regulations or by any stock exchange upon which Magna's capital stock
may be listed.
 
     Subject to certain provisions of the DGCL, the Magna Board may provide for
the issuance of shares of Magna Preferred Stock and series, by filing a
certificate pursuant to the applicable law of the State of Delaware (a
"Preferred Stock Designation"), to establish, from time to time, the number of
shares to be included in such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and any qualifications,
limitations or restrictions. The number of authorized shares of Magna Preferred
Stock may be increased or decreased, though not below the level of the number of
shares then outstanding, by the affirmative vote of the holders of a majority of
Magna Common Stock, without a vote of the holders of Magna Preferred Stock,
unless required by a Preferred Stock Designation.
 
     In 1988, the Magna Board adopted a Share Purchase Rights Plan (the "Rights
Agreement") and distributed a dividend of one Preferred Share Purchase Right
("Rights") for each outstanding share of Magna Common Stock. One Right is
attached to each share of Magna Common Stock. The Rights trade automatically
with shares of Magna Common Stock and become exercisable and will trade
separately from the Magna Common Stock on the 10th day after public
announcement, or notice to Magna, that a person or group has acquired, or has
the right to acquire, beneficial ownership of 20% or more of the outstanding
shares of Magna Common Stock, or upon commencement or announcement, or notice to
Magna, of intent to make a tender offer for 20% or more of the outstanding
shares of Magna Common Stock, in either case without prior written consent of
Magna. When exercisable, each Right will entitle the holder to purchase 1/100th
of a share of Magna Series A Junior Participating Preferred Stock (designated
from Magna's No Par Value Preferred Stock) at a price of $50 per 1/100th of a
share. In the event Magna is acquired in a merger or other business combination
transaction in which Magna is not the surviving corporation or in which Magna
Common Stock is exchanged or 50% or more of Magna's assets or earning power is
sold, holders of Rights (other than the acquiring person or group) may purchase
Magna Common Stock having a market value of twice the then current exercise
price of each Right. If Magna is acquired by any person or group after the
Rights become exercisable, each Right will entitle its holder to purchase stock
of the acquiring company having a market value of twice the current exercise
price of each Right at the exercise price. The Rights are designed to protect
the interests of Magna and its shareholders against coercive takeover tactics.
The purpose of the Rights is to encourage potential acquirors to negotiate with
the Magna Board prior to attempting a takeover and to give the Magna Board
leverage in negotiating on behalf of all shareholders the terms of any proposed
takeover. The Rights may deter certain takeover proposals. The Rights, which can
be redeemed by the Magna Board in certain circumstances, expire by their terms
on November 22, 1998. Magna has entered into an amendment to the Rights
Agreement under which the Rights are authorized. The amendment provides that the
execution of the Agreement (and certain related documents) and the consummation
of the Merger will not cause the Magna Rights to become exercisable. The
amendment also provides that the Rights Agreement, as amended, will expire
immediately prior to the Effective Time.
 
PREEMPTIVE RIGHTS
 
     UPC.  The TBCA provides that, unless a Tennessee corporation's charter
expressly provides for preemptive rights, shareholders of a Tennessee
corporation do not have a preemptive right to acquire proportional amounts of
the corporation's unissued shares upon a decision of the board of directors to
issue shares. The UPC Charter denies preemptive rights to its shareholders.
 
     Magna.  The DGCL provides that, unless a Delaware corporation's certificate
of incorporation expressly provides for preemptive rights, shareholders of a
Delaware corporation do not have a preemptive right to acquire proportionate
amounts of the corporation's unissued shares upon a decision of the board of
directors to issue shares. The Magna Charter denies preemptive rights to its
shareholders.
 
AMENDMENT OF CHARTER AND BYLAWS
 
     UPC.  The UPC Charter generally provides that amendments thereto may be
adopted in any manner permitted by the TBCA. The TBCA provides that a Tennessee
corporation's charter may be amended by a
 
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<PAGE>   64
 
majority of votes entitled to be cast on the amendment, subject to any condition
the board of directors may place on its submission of the amendment to the
shareholders. The UPC Charter requires a majority vote of the shares of capital
stock entitled to vote in an election of directors to amend the articles of the
UPC Charter governing directors and to remove a director from office whether
with or without cause. A super-majority vote is also required to amend, alter,
or repeal the article of the UPC Charter relating to business combinations.
 
     The UPC Board may adopt, amend or repeal the UPC Bylaws by a majority vote
of the entire Board of Directors. The UPC Bylaws may also be amended or repealed
by action of UPC's shareholders.
 
     The UPC Charter provides that all corporate powers of UPC shall be
exercised by the UPC Board except as otherwise provided by law. The UPC Board
may designate an executive committee consisting of five or more directors and
may authorize such committee to exercise all of the authority of the UPC Board,
including the authority to adopt, amend and repeal the Bylaws, to submit any
action to the shareholders, to fill vacancies on the UPC Board or any committee,
to declare dividends or other corporate distributions, and to issue or reissue
any capital stock or any warrant, right, or option to acquire capital stock of
the corporation.
 
     Magna.  The Magna Charter provides that the Magna Board has the power to
adopt, amend, or repeal the Bylaws of Magna. Any adoption, amendment, or repeal
of the Magna Bylaws by the Magna Board must be approved by a majority of the
Magna Board. The Magna Charter also provides that the shareholders have the
power to adopt, amend, or appeal the Magna Bylaws. Notwithstanding the
foregoing, matters related to (i) action by written consent, (ii) number, tenure
and qualifications of the Magna Board, (iii) filling vacancies on the Magna
Board, (iv) removal of directors, and (v) the power of the Magna Board to make,
amend, or repeal the Magna Bylaws, shall not be adopted, amended, or repealed
without the affirmative vote of at least 80% of the voting power of the
outstanding shares of capital stock of Magna, voting together as a single class,
unless such amendment or appeal shall have been previously approved by the
affirmative vote or consent of at least 66 2/3% of the number of directors of
Magna then in office.
 
CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING
 
     UPC.  The UPC Charter provides that the UPC Board is divided into three
classes, with each class to be as nearly equal in number as possible. The
directors in each class serve three-year terms of office. The effect of UPC's
having a classified Board of Directors is that only approximately one-third of
the members of the UPC Board are elected each year, which effectively requires
two annual meetings for UPC's shareholders to change a majority of the members
of the UPC Board. The purpose of dividing the UPC Board into classes is to
facilitate continuity and stability of leadership of UPC by ensuring that
experienced personnel familiar with UPC will be represented on the UPC Board at
all times, and to permit UPC's management to plan for the future for a
reasonable amount of time. However, by potentially delaying the time within
which an acquiror could obtain working control of the UPC Board, this provision
may discourage some potential mergers, tender offers, or takeover attempts.
 
     Pursuant to the UPC Charter, each holder of UPC Common Stock is entitled to
one vote for each share of UPC Common Stock held in the election of directors,
and is not entitled to cumulative voting rights in the election of directors.
With cumulative voting, a shareholder has the right to cast a number of votes
equal to the total number of such holder's shares multiplied by the number of
directors to be elected. The shareholder has the right to distribute all of his
or her votes in any manner among any number of candidates or to accumulate such
shares in favor of one candidate. Directors are elected by a plurality of the
total votes cast by all shareholders. With cumulative voting, it may be possible
for minority shareholders to obtain representation on the UPC Board. Without
cumulative voting, the holders of more than 50% of the shares of UPC Common
Stock generally have the ability to elect 100% of the UPC Board. As a result,
the holders of the remaining UPC Common Stock effectively may not be able to
elect any person to the UPC Board. The absence of cumulative voting thus could
make it more difficult for a shareholder who acquires less than a majority of
the shares of UPC Common Stock to obtain representation on the UPC Board.
 
     Magna.  As permitted by the DGCL, the Magna Charter contains a provision
similar to the provision in the Bylaws of UPC that requires that the Magna Board
shall be divided into three classes serving staggered three-year terms, with the
term of one class of directors to expire each year. Pursuant to the Magna
Bylaws,

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<PAGE>   65
 
each shareholder is entitled to one vote for each share of Magna Common Stock
held and is not entitled to cumulative voting rights in the election of
directors.
 
DIRECTOR REMOVAL AND VACANCIES
 
     UPC.  The UPC Charter provides that a director may be removed by the UPC
shareholders only upon the affirmative vote of the holders of at least a
majority of the voting power of all shares of UPC Common Stock entitled to vote
generally in the election of directors. The purpose of this provision is to
prevent a majority shareholder from circumventing the classified board system by
removing directors and filling the vacancies with new individuals selected by
that shareholder. Accordingly, the provision may have the effect of impeding
efforts to gain control of the Board of Directors by anyone who obtains a
controlling interest in UPC Common Stock. Vacancies on the UPC Board may be
filled by the members of the UPC Board or by UPC shareholders, as provided under
the UPC Bylaws and the TBCA. The term of a director appointed to fill a vacancy
expires at the next meeting of shareholders at which directors are elected.
 
     Magna.  The DGCL provides that, unless the corporation's certificate of
incorporation provides otherwise, the shareholders of a corporation that has a
classified board (as described above) may remove a director only for cause. In
addition, the DGCL provides that, unless the corporation's certificate of
incorporation provides for a higher voting requirement, directors may be removed
by the holders of a majority of the shares then entitled to vote in the election
of such directors. The Magna Charter and Magna Bylaws provide that directors may
be removed only for cause and only by the affirmative vote of at least 80% of
the voting power of all the then-outstanding shares of capital stock of Magna
entitled to vote generally in the election of directors, voting together as a
single class.
 
LIMITATIONS ON DIRECTOR LIABILITY
 
     UPC.  The UPC Charter does not address the issue of director liability to
the corporation.
 
     Magna.  The Magna Charter contains a provision limiting directors'
liability to the corporation or its shareholders. Under the Magna Charter, as
allowed by Section 102 of the DGCL, a Magna director will not have personal
liability to Magna or its shareholders for monetary damage for breach of
fiduciary duty as of director, except for liability (i) for any breach of the
director's duty of loyalty to Magna or its shareholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) for any act or omission under Section 174 of the DGCL
(involving certain unlawful dividends and stock purchases or redemptions), or
(iv) for any transaction from which the director derived an improper personal
benefit. This provision would absolve directors of personal liability for
negligence in the performance of duties, even gross negligence. It would not
permit, however, a director to be exculpated for liability for actions involving
conflicts of interest or breaches of the traditional duty of loyalty to Magna
and its shareholders, and it would not affect the availability of injunctive or
other equitable relief to Magna or its shareholders.
 
INDEMNIFICATION
 
     UPC.  Under the TBCA, subject to certain exceptions, a Tennessee
corporation may indemnify an individual made a party to a proceeding, because he
or she is or was a director, against liability incurred in the proceeding if (i)
he or she conducted himself or herself in good faith, (ii) he or she reasonably
believed (a) in the case of conduct in his or her official capacity with the
corporation, that his or her conduct was in the best interests of the
corporation, and (b) in all other cases, that his or her conduct was at least
not opposed to the corporation's best interests, and (iii) in the case of any
criminal proceeding, he or she had no reasonable cause to believe his or her
conduct was unlawful (the "Standard of Conduct"). Moreover, unless limited by
its charter of incorporation, a Tennessee corporation must indemnify a director
who was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he or she was a party because he or she is or was a director
of the corporation against reasonable expenses incurred by him or her in
connection with the proceeding. Expenses incurred by a director in defending a
proceeding may be paid by the corporation in advance of the final disposition of
such proceeding upon receipt of a written affirmation by the director of his or
her good faith belief that he or she has met the Standard of Conduct and a
written undertaking by or on
 
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<PAGE>   66
 
behalf of a director to repay such amount if it shall ultimately be determined
that he or she is entitled to be indemnified by the corporation against such
expenses and a determination is made that the facts known to those making the
determination would preclude indemnification. Before any such indemnification is
made, it must be determined that such indemnification would not be precluded by
the TBCA.
 
     A director of a Tennessee corporation may also apply for court-ordered
indemnification under certain circumstances. Unless a Tennessee corporation's
charter of incorporation provide otherwise, (i) an officer of a corporation is
entitled to mandatory indemnification and is entitled to apply for court-ordered
indemnification to the same extent as a director; (ii) the corporation may
indemnify and advance expenses to an officer, employee, or agent of the
corporation to the same extent as to a director; and (iii) a corporation may
also indemnify and advance expenses to an officer, employee, or agent who is not
a director to the extent, consistent with public policy, that may be provided by
its charter of incorporation, bylaws, general or specific action of its board of
directors, or contract.
 
     The UPC Charter and UPC Bylaws provide for the indemnification of its
directors and officers to the fullest extent permitted by Tennessee law.
 
     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling UPC pursuant to
the foregoing provisions, UPC has been informed that, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
 
     Magna.  The Magna Charter provides that each person who is or is made a
party or is threatened to be made a party to, or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, because of the fact that he or she was a director, officer,
employee, or agent of Magna or is or was serving at the request of Magna as an
officer, director, employee, or agent of another corporation, including service
with respect to an employee benefit plan, whether the allegations are based on
his or her action in an official capacity as a director or officer, will be
indemnified and held harmless by Magna to the fullest extent authorized by the
DGCL, against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes, or penalties in amounts paid in the
settlement) reasonably incurred or suffered; provided, that such indemnification
shall only apply in connection with proceedings initiated by the Indemnitee if
such proceeding was authorized by the Magna Board.
 
SPECIAL MEETINGS OF SHAREHOLDERS
 
     UPC.  The UPC Bylaws provide that special meetings of UPC shareholders may
be called, unless otherwise prescribed by law, for any purpose or purposes
whatever at any time by the Chairman of the Board, the President, the Secretary,
or the holders of not less than one-tenth of the shares entitled to vote at such
meeting.
 
     Magna.  The DGCL provides that special meetings of shareholders may be
called by such persons as may be authorized by a corporation's certificate of
incorporation or bylaws. The Magna Bylaws provide that special meetings of
shareholders of Magna may be called only by the Chairman of the Board or by the
Magna Board pursuant to a resolution adopted by a majority of the total number
of directors which Magna would have if there were no vacancies on the Magna
Board. Because a special meeting may be necessary for a potential acquirer to
gain control of Magna, this requirement could discourage or make more difficult
an attempt to gain control of Magna, and could tend to perpetuate the incumbent
directors and management.
 
ACTIONS BY SHAREHOLDERS WITHOUT A MEETING
 
     UPC.  The UPC Charter and UPC Bylaws provide that any action required or
permitted to be taken by UPC shareholders at a duly called meeting of UPC
shareholders may be effected by the unanimous written consent of the
shareholders entitled to vote on such action.
 
     Magna.  The Magna Charter states that any action required or permitted to
be taken by the shareholders must be effected by a duly constituted meeting and
may not be effected by written consent.
 
                                       53
<PAGE>   67
 
SHAREHOLDER NOMINATIONS AND PROPOSALS
 
     UPC.  The UPC Charter and UPC Bylaws do not address whether a shareholder
may nominate members of the UPC Board.
 
     Holders of UPC Common Stock are entitled to submit proposals to be
presented at an annual meeting of UPC shareholders. The UPC Bylaws provide that
any proposal of a shareholder which is to be presented at any annual meeting of
shareholders shall be sent so as to be received by UPC not less than 120 days in
advance of the date of the proxy statement issued in connection with the
previous year's annual meeting.
 
     Magna.  The Magna Bylaws generally provide that any shareholder of the
corporation entitled to vote for the election of directors may nominate persons
for election to the Magna Board. The shareholder must provide written notice of
such nomination to the Secretary of Magna not less that 60 days nor more than 90
days prior to the first anniversary of the previous year's annual meeting. The
shareholder's notice must set forth all information relating to the person whom
the shareholder proposes to nominate that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required,
under the Exchange Act.
 
     The Magna Bylaws also provide that any shareholder who is entitled to vote
at the annual meeting of shareholders may propose business to be conducted at
such meeting. The shareholder must provide written notice to the Secretary of
Magna not less than 60 days nor more than 90 days prior to the first anniversary
of the previous year's annual meeting. The shareholder must set forth in the
notice provided to the Secretary, a brief description of the business the
shareholder desires to conduct, the reasons for conducting the business at the
meeting, and any material interest of the shareholder in such business.
 
BUSINESS COMBINATIONS
 
     UPC.  The UPC Charter requires the affirmative vote of a super-majority of
the outstanding shares of UPC Common Stock for approval of a merger,
consolidation, or a sale or lease of all or substantially all of the assets of
UPC if the other party to the transaction is a beneficial owner of 10% or more
of the outstanding shares of UPC Common Stock. A majority vote is not required
for any merger or consolidation of UPC with or into any corporation or entity of
which a majority of the outstanding shares of all classes of capital stock is
owned by UPC or any UPC subsidiary.
 
     The requirement of a supermajority vote of UPC's shareholders to approve
certain business transactions, as described above, may discourage a change in
control of UPC by allowing a minority of UPC's shareholders to prevent a
transaction favored by the majority of the shareholders. Also, in some
circumstances, the UPC Board could cause a majority vote to be required to
approve a transaction thereby enabling management to retain control over the
affairs of UPC and their positions with UPC. The primary purpose of the
supermajority vote requirement, however, is to encourage negotiations with UPC's
management by groups or corporations interested in acquiring control of UPC and
to reduce the danger of a forced merger or sale of assets.
 
     As a Tennessee corporation, UPC is or could be subject to various
legislative acts set forth in Chapter 35 of Title 48 of the Tennessee Code,
which impose certain restrictions on business combinations, including, but not
limited to, combinations with interested shareholders similar to those described
above.
 
     The TBCA generally prohibits a "business combination" (generally defined to
include mergers, share exchanges, sales and leases of assets, issuances of
securities, and similar transactions) by UPC or a subsidiary with an "interested
shareholder" (generally defined as any person or entity which beneficially owns
10% or more of the voting power of any class or series of UPC's stock then
outstanding) within five years after the person or entity becomes an interested
shareholder, unless the business combination or the transaction pursuant to
which the interested shareholder became such was approved by the UPC Board
before the interested shareholder became such, and the business combination
satisfies any other applicable requirements imposed by law or by the UPC Charter
or Bylaws. The TBCA also severely limits the extent to which UPC or any of its
officers or directors could be held liable for resisting any business
combination.
 
     The Tennessee Control Share Acquisition Act (the "Tennessee CSAA")
generally provides that any person or group of persons that acquires the power
to vote more than specified levels (one-fifth, one-third, or a
 
                                       54
<PAGE>   68
 
majority) of the shares of certain Tennessee corporations will not have the
right to vote such shares unless granted voting rights by the holders of a
majority of the votes entitled to be cast, excluding "interested shares."
Interested shares are those shares held by the acquiring person, officers of the
corporation, and employees of the corporation who are also directors of the
corporation. If approval of voting power for the shares is obtained at one of
the specified levels, additional shareholder approval is required when a
shareholder seeks to acquire the power to vote shares at the next level. In the
absence of such approval, the additional shares acquired by the shareholder may
not be voted until they are transferred to another person in a transaction other
than a control share acquisition. The Tennessee CSAA applies only to those
Tennessee corporations whose charters or bylaws contain an express declaration
that control share acquisitions in respect of the shares of such corporations
are governed by and subject to the provisions of such act. The UPC Charter and
Bylaws do not currently contain such an express declaration.
 
     The Tennessee Greenmail Act (the "Tennessee GA") prohibits a Tennessee
corporation having a class of voting stock registered or traded on a national
securities exchange or registered with the SEC pursuant to Section 12(g) of the
Exchange Act from purchasing, directly or indirectly, any of its shares at a
price above the market value of such shares (defined as the average of the
highest and lowest closing market price of such shares during the 30 trading
days preceding the purchase or preceding the commencement or announcement of a
tender offer if the seller of such shares has commenced a tender offer or
announced an intention to seek control of the corporation) from any person who
holds more than 3% of the class of securities to be purchased if such person has
held such shares for less than two years, unless the purchase has been approved
by the affirmative vote of a majority of the outstanding shares of each class of
voting stock issued by such corporation or the corporation makes an offer, of at
least equal value per share, to all holders of shares of such class.
 
     The TBCA provides that no Tennessee corporation having any class of voting
stock registered or traded on a national securities exchange or registered with
the SEC pursuant to Section 12(g) of the Exchange Act or any of its officers or
directors may be held liable at law or in equity for either having failed to
approve the acquisition of shares by an interested shareholder on or before such
interested shareholder's share acquisition date, or for seeking to enforce or
implement the provisions of the TBCA or the Tennessee CSAA, or for failing to
adopt or recommend any charter or bylaw amendment or provision in respect of any
one or more of these acts or the Tennessee GA, or for opposing any merger,
exchange, tender offer, or significant disposition of the assets of the resident
domestic corporation or any subsidiary of such corporation because of a good
faith belief that such merger, exchange, tender offer, or significant
disposition of assets would adversely affect the corporation's employees,
customers, suppliers, the communities in which the corporation or its
subsidiaries operate or are located or any other relevant factor if such factors
are permitted to be considered by the board of directors under the corporation's
charter in connection with the merger, exchange, tender offer or significant
disposition of assets.
 
     The acts described above along with the provisions of the UPC Charter
regarding business combinations might be deemed to make UPC less attractive as a
candidate for acquisition by another company than would otherwise be the case in
the absence of such provisions. For example, if another company should seek to
acquire a controlling interest of less than 66-2/3% of the outstanding shares of
UPC Common Stock, the acquiror would not thereby obtain the ability to replace a
majority of the UPC Board until at least the second annual meeting of
shareholders following the acquisition, and furthermore the acquiror would not
obtain the ability immediately to effect a merger, consolidation, or other
similar business combination unless the described conditions were met.
 
     As a result, UPC's shareholders may be deprived of opportunities to sell
some or all of their shares at prices that represent a premium over prevailing
market prices in a takeover context. The provisions described above also may
make it more difficult for UPC's shareholders to replace the UPC Board or
management, even if the holders of a majority of the UPC Common Stock should
believe that such replacement is in the interests of UPC. As a result, such
provisions may tend to perpetuate the incumbent UPC Board and management.
 
     Magna.  The DGCL requires the approval of the Magna Board and the holders
of a majority of the outstanding stock of Magna entitled to vote thereon for
mergers or consolidations, and for sales, leases, or exchanges of substantially
all of Magna's property and assets. The DGCL permits Magna to merge with
 
                                       55
<PAGE>   69
 
another corporation without obtaining the approval of Magna's shareholders if:
(i) Magna is the surviving corporation of the merger; (ii) the merger agreement
does not amend the Magna Charter; (iii) each share of Magna capital stock
outstanding immediately prior to the effective date of the merger is to be an
identical outstanding or treasury share of Magna after the merger; and (iv) any
authorized unissued shares or treasury shares of Magna Common Stock to be issued
or delivered under the plan of merger plus those initially issuable upon
conversion of any other securities or obligations to be issued or delivered
under such plan do not exceed 20% of the shares of Magna Common Stock
outstanding immediately prior to the effective date of the merger. As a result,
the Magna Board could effect significant acquisitions and issue significant
amounts of Magna capital stock on terms that may dilute the interests of
existing Magna shareholders, without seeking shareholder approval.
 
     Section 203 of the DGCL ("Section 203").  Section 203 generally prohibits
any person who acquires 15% or more of a corporation's outstanding voting stock
(an "Interested Shareholder") from entering into any "Business Combination" with
the corporation for three years, unless one of the specified exceptions applies.
"Business Combination" is defined generally to include mergers and
consolidations, dispositions of the corporation's assets, transactions resulting
in the issuance or transfer by the corporation of its stock, transactions having
the effect of increasing the proportionate share of the stock of any class or
series of the corporation, and the receipt by the Interested Shareholder of
certain financial benefits provided by or through the corporation.
 
     That three-year prohibition does not apply, however, if (i) the
corporation's Board of Directors approved the Business Combination or approved
(in advance) the transaction that resulted in 15% ownership; (ii) in the
transaction in which the Interested Shareholder acquired 15% ownership, that
shareholder acquired at least 85% of the voting stock outstanding when the
transaction was initiated (excluding shares owned by officer-directors and
certain employee stock plan); or (iii) the Business Combination subsequently is
approved by the Board of Directors and authorized at a shareholders' meeting by
at least 66-2/3% of the outstanding voting stock, excluding the stock owned by
the Interested Shareholder. In addition, Section 203 does not apply at all if
(i) the corporation's original certificate of incorporation expressly elects to
avoid application of Section 203; (ii) the Board of Directors amended the
corporation's bylaws within 90 days of the effective date of Section 203
expressly to avoid application of Section 203; (iii) the corporation's
shareholders amend the certificate or bylaws to avoid application of Section 203
(although such amendment will not be effective for 12 months); (iv) the
corporation's voting stock is not listed on a national securities exchange,
authorized for quotation on an interdealer quotation system on a registered
national securities association, or held of record by more than 2,000
shareholders (unless the corporation nonetheless elects to be governed by
Section 203); (v) the shareholder acquires 15% ownership inadvertently and then
disposes of sufficient shares to eliminate that status; or (vi) the Business
Combination is proposed after the public announcement, or the publication of
notice, of a proposed business-combination type of transaction and prior to the
consummation or abandonment of such transaction. Because the Magna Board has
approved the Merger, the provisions of Section 203 would not apply to the
Merger.
 
     Article Eleven of the Magna Charter requires that Business Combinations (as
defined therein) between Magna (or any majority-owned subsidiary thereof) and an
"Interested Shareholder" either:
 
          (a) be approved by the vote of the holders of at least 80% of the
     voting power of the then-outstanding shares of stock of Magna, voting
     together as a single class; or
 
          (b) be approved by at least 66 2/3% of the number of directors then in
     office.
 
     Article Eleven defines "Interested Shareholder" as a beneficial owner of at
least 5% of the outstanding voting stock of the corporation, or an affiliate or
associate of an Interested Shareholder. Because the Magna Board has unanimously
approved the Merger (as described in paragraph (b) above), the provisions of
Article Eleven do not apply to the Merger.
 
     The provisions of Article Eleven are designed to encourage any person or
entity seeking to acquire Magna to negotiate with the Magna Board, with the goal
that any resulting transaction would be structured to provide all of the
shareholders with their pro rata share of any acquisition premium, and that
shareholders would be
 
                                       56
<PAGE>   70
 
protected against coercive or unfair purchase offers and "freeze-out"
transactions. Those provisions may have the effect, however, of discouraging or
rendering more difficult takeover attempts not previously approved by the Magna
Board (including takeover attempts that certain shareholders may deem to be in
their interests), and of perpetuating the incumbent directors and management.
 
LIMITATIONS ON ABILITY TO VOTE STOCK
 
     UPC.  The UPC Charter and UPC Bylaws do not contain any provision
restricting a shareholder's ability to vote shares of UPC voting stock.
 
     Magna.  The Magna Charter and Magna Bylaws do not contain any provision
restricting a shareholder's ability to vote shares of Magna Common Stock.
 
DISSENTERS' RIGHTS OF APPRAISAL
 
     UPC.  Under the TBCA, a shareholder of a Tennessee corporation is generally
entitled to dissent from certain corporate actions, and obtain payment of the
fair value of his or her shares in the event of: (i) consummation of a plan of
merger to which the corporation is a party, unless shareholder approval is not
required by the TBCA; (ii) consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be acquired if the
shareholder is entitled to vote on the plan; (iii) consummation of a sale or
exchange of substantially all of the corporation's property other than in the
usual and regular course of business, if the shareholder is entitled to vote on
the sale or exchange, including a sale in dissolution, but not including a sale
pursuant to court order or to a plan by which substantially all of the net
proceeds of the sale will be distributed in cash to the shareholders within one
year after the date of sale; (iv) an amendment of the charter that materially
and adversely affects rights in respect of a dissenter's shares because it (a)
alters or abolishes a preferential right of the shares, (b) creates, alters, or
abolishes a right in respect of redemption of the shares, including a provision
respecting a sinking fund for the redemption or repurchase of the shares, (c)
alters or abolishes a preemptive right of the holder of the shares to acquire
shares or other securities, (d) excludes or limits the right of the shares to
vote on any matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting rights, or
(e) reduces the number of shares owned by the shareholder to a fraction of a
share if the fractional share so created is to be acquired for cash under the
TBCA; or (v) any corporate action taken pursuant to a shareholder vote, to the
extent the charter, bylaws, or a resolution of the board of directors provide
that voting or nonvoting shareholders are entitled to dissent and obtain payment
for their shares. The UPC Charter and Bylaws do not provide for any such
additional dissenters' rights.
 
     Magna.  The rights of appraisal of dissenting shareholders of Magna are
governed by the DGCL. Pursuant thereto, except as described below, any
shareholder has the right to dissent from any merger of which Magna could be a
constituent corporation. No appraisal rights are available, however, for (i) the
shares of any class or series of stock that is either listed on a national
securities exchange, quoted on the Nasdaq National Market System, or held of
record by more than 2,000 shareholders or (ii) any shares of stock of the
constituent corporation surviving a merger if the merger did not require the
approval of the surviving corporation's shareholders, unless, in either case,
the holders of such stock are required by an agreement of merger or
consolidation to accept for that stock something other than: (a) shares of stock
of the corporation surviving or resulting from the merger or consolidation; (b)
shares of stock of any other corporation that will be listed at the effective
time of the merger on a national securities exchange, quoted on the Nasdaq
National Market System, or held of record by more than 2,000 shareholders; (c)
cash in lieu of fractional shares of stock described in clause (a) or (b)
immediately above; or (d) any combination of the shares of stock and cash in
lieu of fractional shares described in clauses (a) through (c) immediately
above.
 
SHAREHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS
 
     UPC.  The TBCA provides that a shareholder of a Tennessee corporation may
inspect and copy books and records of the corporation during regular business
hours, if he or she gives the corporation written notice of his or her demand at
least five business days before the date of the inspection. In order to inspect
certain
 
                                       57
<PAGE>   71
 
records, written demand must also be made in good faith and for a proper purpose
and must describe with reasonable particularity the purpose of the request and
the records the shareholder desires to inspect.
 
     Magna.  The DGCL similarly provides that a shareholder may inspect books
and records upon written demand under oath stating the purpose of the
inspection, if such purpose is reasonably related to such person's interest as a
shareholder.
 
DIVIDENDS
 
     UPC.  UPC's ability to pay dividends on UPC Capital Stock is governed by
Tennessee corporate law. Under Tennessee corporate law, dividends may be paid so
long as the corporation would be able to pay its debts as they become due in the
ordinary course of business and the corporation's total assets would not be less
than the sum of its total liabilities plus the amount that would be needed, if
the corporation were to be dissolved at the time of the distribution, to satisfy
the preferential rights upon dissolution to shareholders whose preferential
rights are superior to those receiving the distribution.
 
     There are various statutory limitations on the ability of the UPC Banking
Subsidiaries to pay dividends to UPC. See "CERTAIN REGULATORY
CONSIDERATIONS -- Payment of Dividends."
 
     Magna.  The DGCL provides that, subject to any restrictions in the
corporation's certificate of incorporation, dividends may be declared from the
corporation's surplus, or, if there is no surplus, from its net profits for the
fiscal year in which the dividend is declared and the preceding fiscal year.
Dividends may not be declared, however, if the corporation's capital has been
diminished to an amount less than the aggregate amount of all capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. Substantially all of the funds
available for the payment of dividends by Magna are derived from its subsidiary
depository institution. There are various statutory limitations on the ability
of Magna's subsidiary depository institution to pay dividends to Magna.
 
                                       58
<PAGE>   72
 
                    COMPARATIVE MARKET PRICES AND DIVIDENDS
 
     UPC Common Stock is traded on the NYSE under the symbol "UPC," and Magna
Common Stock is traded on the NYSE under the symbol "MGR." The following table
sets forth, for the indicated periods, the high and low closing sale prices for
the UPC Common Stock and Magna Common Stock as reported by the NYSE, and the
cash dividends declared per share of UPC Common Stock and Magna Common Stock for
the indicated periods. The stock prices do not include retail mark-ups,
mark-downs or commissions. Magna Class B Preferred Stock is not traded on any
exchange or in the over-the-counter market.
 
<TABLE>
<CAPTION>
                                                                        UPC                          MAGNA
                                                            ---------------------------   ---------------------------
                                                                                CASH                          CASH
                                                                              DIVIDENDS                     DIVIDENDS
                                                              PRICE RANGE     DECLARED      PRICE RANGE     DECLARED
                                                            ---------------      PER      ---------------      PER
                                                             HIGH     LOW       SHARE      HIGH     LOW       SHARE
                                                            ------   ------   ---------   ------   ------   ---------
<S>                                                         <C>      <C>      <C>         <C>      <C>      <C>
1998
    First Quarter.........................................  $67.31   $58.38    $  .50     $60.31   $39.00     $ .28
    Second Quarter (through       , 1998).................                      --                            --
                                                            ------   ------    ------     ------   ------     -----
                                                                                  .50                           .28
                                                                               ======                         =====
1997
    First Quarter.........................................  $47.75   $38.38    $ .320     $35.38   $28.50     $ .25
    Second Quarter........................................   52.13    41.25      .375      34.75    28.63       .25
    Third Quarter.........................................   56.50    49.25      .400      41.00    33.19       .25
    Fourth Quarter........................................   67.88    57.00      .400      46.75    37.13       .25
                                                                               ------                         -----
        Total.............................................                     $1.495                         $1.00
                                                                               ======                         =====
1996
    First Quarter.........................................  $31.75   $29.00    $  .27     $24.00   $21.88     $ .22
    Second Quarter........................................   31.25    29.63       .27      24.50    21.75       .22
    Third Quarter.........................................   36.25    28.63       .27      28.13    22.00       .22
    Fourth Quarter........................................   41.38    34.63       .27      31.25    26.00       .22
                                                                               ------                         -----
        Total.............................................                     $ 1.08                         $ .88
                                                                               ======                         =====
</TABLE>
 
     On April        , 1998, the last sale prices of UPC Common Stock and Magna
Common Stock as reported on the NYSE were $     and $     per share,
respectively. On February 20, 1998, the last business day prior to public
announcement of the Merger, the last sale prices of UPC Common Stock and Magna
Common Stock as reported by the NYSE were $63.44 and $46.94 per share,
respectively.
 
     The holders of UPC Common Stock are entitled to receive dividends when and
if declared by the Board of Directors out of funds legally available therefor.
Although UPC currently intends to continue to pay quarterly cash dividends on
the UPC Common Stock, there can be no assurance that UPC's dividend policy will
remain unchanged after completion of the Merger. The declaration and payment of
dividends thereafter will depend upon business conditions, operating results,
capital and reserve requirements, and the UPC Board's consideration of other
relevant factors. The Agreement provides that Magna may not declare and pay cash
dividends, other than regular quarterly cash dividends on the shares of (i)
Magna Common Stock in an amount not to exceed $0.28 per share and (ii) Magna
Class B Preferred Stock in an amount not to exceed $0.375 per share. There is no
assurance that Magna will pay any dividends at any time, or if it does, the
amount of dividends it would declare.
 
     UPC and Magna are each legal entities separate and distinct from their
subsidiaries and their revenues depend in significant part on the payment of
dividends and management fees from their respective subsidiary depository
institutions. UPC's and Magna's subsidiary depository institutions are subject
to certain legal restrictions on the amount of dividends they are permitted to
pay. See "CERTAIN REGULATORY CONSIDERATIONS -- Payment of Dividends."
 
                                       59
<PAGE>   73
 
                               BUSINESS OF MAGNA
 
GENERAL
 
     Magna, a Delaware corporation, is a bank holding company registered with
the Federal Reserve under the BHC Act. As of December 31, 1997, Magna had total
consolidated assets of approximately $7.1 billion, total consolidated loans of
approximately $4.5 billion, total consolidated deposits of approximately $5.4
billion, and total consolidated shareholders' equity of approximately $626
million.
 
     Magna currently owns, indirectly, all of the capital stock of Magna Bank, a
national banking association which operates 139 community banking locations
serving Missouri, Illinois, and Iowa. Magna also owns certain non-banking
subsidiaries, including brokerage and insurance subsidiaries. Based on current
deposit share, Magna is the third largest banking institution in the St. Louis
metropolitan area and ranks as the 71st largest bank holding company in the
United States.
 
     Magna primarily serves consumers and small- to mid-sized businesses in its
markets as a "super community bank" (a banking institution whose business
centers on a customer-focused community banking orientation, has cost
efficiencies that do not compromise quality, and offers a broad product line
that permits a full-service customer relationship).
 
     The principal executive offices of Magna are located at One Magna Place,
1401 South Brentwood Boulevard, St. Louis, Missouri 63144 and its telephone
number at such address is (314) 963-2500. Additional information with respect to
Magna and its subsidiaries is included elsewhere herein and in documents
incorporated by reference in this Joint Proxy Statement. See "AVAILABLE
INFORMATION" and "DOCUMENTS INCORPORATED BY REFERENCE."
 
RECENT DEVELOPMENTS
 
     Magna has entered into a definitive agreement to acquire Charter and its
subsidiary, Charter Bank, S.B. (the "Charter Acquisition"), which Magna
considers probable of consummation prior to the Effective Time. Charter is
located in Sparta, Illinois, and had at December 31, 1997, total assets of
approximately $382 million, total deposits of approximately $276 million, and
total shareholders' equity of approximately $58.4 million. The Charter
Acquisition is expected to be accounted for as a purchase.
 
                                BUSINESS OF UPC
 
GENERAL
 
     UPC, a Tennessee corporation, is a bank holding company registered with the
Federal Reserve under the BHC Act. As of December 31, 1997, UPC had total
consolidated assets of approximately $18.1 billion, total consolidated loans of
approximately $12.7 billion, total consolidated deposits of approximately $13.4
billion, and total consolidated shareholders' equity of approximately $1.7
billion.
 
     UPC conducts its business activities through its principal bank subsidiary,
the $15.5 billion asset Union Planters Bank, founded in 1869, headquartered in
Memphis, Tennessee, with branches in Alabama, Arkansas, Kentucky, Louisiana,
Mississippi, Missouri, and Tennessee. UPC also had, as of January 1, 1998, four
other financial institution subsidiaries, the largest of which being Union
Planters Bank of Florida, Miami, Florida, which had total consolidated assets as
of December 31, 1997 of approximately $2.2 billion. UPC undertook a corporate
reorganization plan in the fourth quarter of 1997, the primary purpose of which
was to consolidate substantially all of its bank subsidiaries into UPBNA. It is
likely that UPC will continue to consolidate its various bank subsidiaries into
UPBNA in the future, to the extent allowed by law. Through the UPC Banking
Subsidiaries, UPC provides a diversified range of financial services in the
communities in which it operates and maintains approximately 514 banking offices
and 651 ATMs. UPC's total assets at December 31, 1997 are allocable by state to
its banking offices (before consolidating adjustments) approximately as follows:
$9.8 billion in Tennessee; $3.5 billion in Mississippi; $2.2 billion in Florida;
$1.2 billion in Missouri; $806 million in Arkansas; $698 million in Louisiana;
$449 million in Alabama; and $115 million in Kentucky.

                                       60
<PAGE>   74
 
     Acquisitions have been, and are expected to continue to be, an important
part of the expansion of UPC's business. UPC completed three acquisitions in
1995, seven in 1996, and seven in 1997, adding approximately $1.3 billion in
total assets in 1995, $4.2 billion in 1996, and $3.6 in 1997. UPC is currently a
party to definitive agreements to acquire ten financial institutions, not
including Magna, and to the agreement relating to the CalFed Branch Purchase,
all of which had aggregate total assets of approximately $5.5 billion at
December 31, 1997. For information with respect to these acquisitions see
"-- Recent Developments."
 
     UPC expects to continue to take advantage of the consolidation of the
financial services industry by further developing its franchise through the
acquisition of financial institutions and other entities engaged in lines of
business permissible for banks and bank holding companies. Future acquisitions
may entail the payment by UPC of consideration in excess of the book value of
the underlying net assets acquired, may result in the issuance of additional
shares of UPC capital stock or the incurring of additional indebtedness by UPC,
and could have a dilutive effect on the earnings or book value per share of UPC
Common Stock. Moreover, significant charges against earnings are sometimes
required incidental to acquisitions. For a discussion of UPC's acquisition
program, including a discussion of the significant charges UPC has incurred over
the past three fiscal years incidental to acquisitions, see the caption
"Acquisitions" (on page 10) in UPC's Annual Report to Shareholders and Note 2 to
UPC's audited consolidated financial statements for the years ended December 31,
1997, 1996, and 1995 (on pages 49 and 50) contained in such Annual Report to
Shareholders. UPC's Annual Report to Shareholders is included as Exhibit 13 to
the UPC 1997 Form 10-K and Exhibit 13 is incorporated by reference herein to the
extent indicated herein.
 
     The principal executive offices of UPC are located at 7130 Goodlett Farms
Parkway, Memphis, Tennessee 38018, and its telephone number at such address is
(901) 580-6000. Additional information with respect to UPC and its subsidiaries
is included in documents incorporated by reference in this Joint Proxy
Statement. See "AVAILABLE INFORMATION" and "DOCUMENTS INCORPORATED BY
REFERENCE."
 
RECENT DEVELOPMENTS
 
     Recently Completed Acquisitions.  Since December 31, 1997, UPC has
completed the acquisitions of two institutions (the "Recently Completed
Acquisitions").
 
<TABLE>
<CAPTION>
                                                        ASSET SIZE
                     INSTITUTION                       (IN MILLIONS)   TYPE OF CONSIDERATION
                     -----------                       -------------   ---------------------
<S>                                                    <C>             <C>
Sho-Me Financial Corp, Mt. Vernon, Missouri, and its       $374        1,153,459 shares
  subsidiary, 1st Savings Bank, f.s.b.,                                  of UPC Common Stock
  Mt. Vernon, Missouri
Security Bancshares, Inc., Des Arc, Arkansas and its        165        490,858 shares
  subsidiaries, Farmers & Merchants Bank, Des Arc,                       of UPC Common Stock
  Arkansas and Merchants & Farmers Bank,
  West Helena, Arkansas
                                                           ----
          Total                                            $539
                                                           ====
</TABLE>
 
     Other Pending Acquisitions.  UPC has entered into definitive agreements to
acquire the following financial institutions in addition to Magna (collectively,
the "Other Pending Acquisitions" and, together with the Recently Completed
Acquisitions, the "Other Acquisitions") which UPC's management considers
probable of consummation and which are expected to close in 1998. In addition to
the pending acquisitions of the following institutions, Magna currently has one
acquisition pending, as described under "BUSINESS OF MAGNA -- Recent
Developments." For purposes of this Joint Proxy Statement, including the pro
forma
 
                                       61
<PAGE>   75
 
financial information included herein, the term "Other Pending Acquisitions"
includes the Charter Acquisition.
 
<TABLE>
<CAPTION>
                                     ASSET SIZE                                        PROJECTED
          INSTITUTION             (IN MILLIONS)(1)      TYPE OF CONSIDERATION(2)      CLOSING DATE
          -----------             ----------------   ------------------------------  --------------
<S>                               <C>                <C>                             <C>
Peoples First Corporation,             $1,501        Approximately 6,338,000 shares  Second Quarter
  Paducah, Kentucky and its                          of UPC Common Stock                  1998
  subsidiaries, including
  Peoples First National Bank,
  Paducah, Kentucky
Purchase of 24 branches and             1,465        $110 million deposit            Third Quarter
  assumption of $1.5 billion of                      premium in cash                      1998
  deposit liabilities of
  California Federal Bank in
  Florida ("CalFed Branch
  Purchase")
AMBANC Corp., Vincennes,                  759        Approximately 3,398,000 shares  Third Quarter
  Indiana, and its subsidiaries,                     of UPC Common Stock                  1998
  AMBANC Illinois, N.A., AMBANC
  Indiana, and American National
  Realty Corp.
Merchants Bancshares, Inc.,               546        Approximately 1,952,000 shares  Second Quarter
  Houston, Texas, and its                            of UPC Common Stock                  1998
  subsidiary, Merchants Bank,
  Houston, Texas
Transflorida Bank, Boca Raton,            316        Approximately 1,655,000 shares  Third Quarter
  Florida                                            of UPC Common stock                  1998
CB & T, Inc., McMinnville,                268        Approximately 1,450,000 shares  Second Quarter
  Tennessee, and its subsidiary,                     of UPC Common Stock                  1998
  City Bank & Trust Company,
  McMinnville, Tennessee
Capital Savings Bancorp, Inc.,            242        Approximately 801,000 shares    Second Quarter
  Jefferson City, Missouri, and                      of UPC Common Stock                  1998
  its subsidiary, Capital
  Savings Bank, FSB, Jefferson
  City, Missouri
First National Bancshares of              211        Approximately 836,000 shares    Second Quarter
  Wetumpka, Inc., Wetumpka,                          of UPC Common Stock                  1998
  Alabama, and its subsidiary,
  First National Bank, Wetumpka,
  Alabama
Alvin Bancshares, Inc., Alvin,            140        Approximately 425,000 shares    Fourth Quarter
  Texas, and its subsidiary,                         of UPC Common Stock                  1998
  Alvin State Bank, Alvin, Texas
First Community Bancshares,                41        Approximately 129,000 shares    Second Quarter
  Inc., Middleton, TN, and its                       of UPC Common Stock                  1998
  subsidiary, Bank of Middleton,
  Middleton, Tennessee
Duck Hill Bank, Duck Hill,                 21        Approximately 42,000 shares of  Third Quarter
  Mississippi                                        UPC Common Stock                     1998
                                       ------
          Totals                       $5,510
                                       ======
</TABLE>
 
- ---------------
(1) Approximate total assets at December 31, 1997.
 
(2) Assumes no adjustment to shares pursuant to exchange ratio adjustment
mechanisms.
 
                                       62
<PAGE>   76
 
     Earnings Considerations Related to the Merger and the Other Pending
Acquisitions.  It is expected that either UPC or the institutions to be acquired
in connection with the Merger and the Other Pending Acquisitions will incur
charges arising from such acquisitions and from the assimilation of those
institutions into the UPC organization. Most of the charges are expected to
relate to the Magna and the Peoples acquisitions. Anticipated charges would
normally arise from matters such as, but not limited to, legal and accounting
fees, financial advisory fees, consulting fees, payment of contractual benefits
triggered by a change of control, early retirement and involuntary separation
and related benefits, costs associated with elimination of duplicate facilities
and branch consolidations, data processing charges, cancellation of vendor
contracts, and the potential for additional provisions for loan losses and other
contingencies and similar costs which normally arise from the consolidation of
operational activities.
 
     For a discussion of the significant charges UPC has incurred over the past
three years incidental to its acquisition program, see the caption
"Acquisitions" (on page 10) in UPC's Annual Report to Shareholders. UPC's Annual
Report to Shareholders is included as Exhibit 13 to UPC's 1997 Form 10-K and
Exhibit 13 is incorporated by reference herein to the extent indicated herein.
 
     The Merger and the Other Pending Acquisitions, with the exception of the
Duck Hill Bank, the Charter Acquisition, and the CalFed Branch Purchase each of
which is expected to be accounted for as a purchase, are expected to be
accounted for as a pooling of interests. UPC currently estimates incurring
aggregate charges in the range of $160 million to $175 million before taxes in
connection with the consummation of the Merger and the Other Pending
Acquisitions. To the extent that UPC's recognition of these acquisition-related
charges is contingent upon consummation of a particular transaction, those
charges would be recognized in the period in which such transaction closes.
 
     The range of anticipated charges to be incurred in connection with
consummating the Merger and the Other Pending Acquisitions is a preliminary
estimate of the significant charges which may, in the aggregate, be required and
should be viewed accordingly. These charges are not reflected in the pro forma
consolidated data included in this Joint Proxy Statement. Moreover, this range
has been based on the due diligence that has been performed to date in
connection with the Merger and the Other Pending Acquisitions and the range may
be subject to change and the actual charges incurred may be higher or lower than
what is currently contemplated, once those institutions are assimilated from an
operational perspective and various contingencies are either satisfied or
eliminated. Furthermore, the range of anticipated charges will change if
additional entities are acquired. UPC regularly evaluates the potential
acquisition of, and holds discussions with, various potential acquisition
candidates. As a general rule, UPC will publicly announce such acquisitions only
after a definitive agreement has been reached, and only then if UPC considers
the acquisition to be of such a size as to be a significant acquisition. Since
the range of anticipated acquisition related charges is likely to change with
additional acquisitions, and since UPC regularly engages in acquisitions, such
range could change, and Magna's shareholders should view such information
accordingly.
 
             PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 
     The following tables contain unaudited pro forma condensed consolidated
financial statements including a balance sheet as of December 31, 1997 and
statements of earnings for the years ended December 31, 1997, 1996, and 1995.
These statements present on a pro forma basis historical results for (i) UPC for
all periods, (ii) UPC and Magna for all periods, (iii) UPC, Magna, and the Other
Acquisitions for the year ended December 31, 1997, and (iv) UPC, Magna, Peoples,
AMBANC, and Merchants for the years ended December 31, 1996 and 1995 (see
"BUSINESS OF MAGNA -- Recent Developments" and "BUSINESS OF UPC -- Recent
Developments -- Other Pending Acquisitions").
 
     The Merger and all but four of the Other Acquisitions, are expected to be
accounted for using the pooling of interests method of accounting. The pro forma
information as of December 31, 1997 and for the year ended December 31, 1997,
reflect the acquisition of Magna and the Other Acquisitions as of January 1,
1997. The pro forma information for the years ended December 31, 1996 and 1995,
reflect only the acquisition of Magna, Peoples, AMBANC, and Merchants, because
the Other Acquisitions (other than Magna, Peoples, AMBANC, and Merchants) are
not individually or in the aggregate, considered material to UPC from a
                                       63
<PAGE>   77
 
financial statement presentation standpoint. Furthermore, the pro forma impact
of the CalFed Branch Purchase on the pro forma statement of earnings for each of
the three years presented has been excluded due to the lack of information
available for operation of the branches on a historical basis. Pro forma
financial information are presented for information purposes only and are not
necessarily indicative of the results of operations or combined financial
position that would have resulted had the Merger or the Other Acquisitions been
consummated at the dates or during the periods indicated, nor are they
necessarily indicative of future results of operations or combined financial
position. The pro forma financial information does not reflect preliminary
estimates by UPC of acquisition-related charges to be incurred in connection
with consummation of the Merger and the Other Acquisitions. For additional
information with respect to the estimated charges UPC anticipates it would incur
in connection with the Merger and the Other Acquisitions, see "BUSINESS OF
UPC -- Recent Developments." For a discussion of UPC's acquisition program,
including a discussion of the significant charges UPC has incurred incidental to
acquisitions over the past three fiscal years, see the caption "Acquisitions"
(on page 10) in UPC's 1997 Annual Report to Shareholders and Note 2 to UPC's
audited consolidated financial statements for the years ended December 31, 1997,
1996, and 1995 (on pages 49 and 50) contained in such UPC 1997 Annual Report to
Shareholders. UPC's 1997 Annual Report to Shareholders is included as Exhibit 13
to UPC's 1997 Form 10-K, and Exhibit 13 is incorporated by reference herein to
the extent indicated herein. See "DOCUMENTS INCORPORATED BY REFERENCE."
 
     The unaudited pro forma condensed consolidated financial statements should
be read in conjunction with the consolidated historical financial statements of
UPC and Magna which are incorporated by reference herein. Pro forma results are
not necessarily indicative of future operating results. Certain nonrecurring
charges as discussed in "BUSINESS OF UPC -- Recent Developments -- Earnings
Considerations Related to the Merger and the Other Pending Acquisitions" have
not been included in the unaudited pro forma condensed consolidated financial
statements. See "DOCUMENTS INCORPORATED BY REFERENCE."
 
                                       64
<PAGE>   78
 
                  UNION PLANTERS CORPORATION AND SUBSIDIARIES
 
                 UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
                               DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                    UPC, MAGNA,
                                                                          UPC           AND
                                                                          AND          OTHER
                                                            UPC          MAGNA      ACQUISITIONS
                                                        -----------   -----------   ------------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                                     <C>           <C>           <C>
                                             ASSETS
Cash and due from banks...............................  $   816,472   $ 1,064,404   $ 1,242,983
Interest-bearing deposits at financial institutions...       24,490        24,490        33,944
Federal funds sold and securities purchased under
  agreements to resell................................      109,192       157,394       249,017
Trading account assets................................      187,419       187,419       187,419
Loans held for resale.................................      170,742       170,742       175,325
Available for sale securities, at fair value..........    3,247,680     5,239,794     7,621,521
Loans.................................................   12,687,089    17,171,055    20,642,776
     Less:  Unearned income...........................      (28,525)      (28,679)      (36,230)
            Allowance for losses on loans.............     (225,389)     (284,828)     (323,066)
                                                        -----------   -----------   -----------
     Net loans........................................   12,433,175    16,857,548    20,283,480
Premises and equipment................................      330,703       449,290       534,679
Accrued interest receivable...........................      204,504       251,240       281,558
FHA/VA claims receivable..............................      134,112       134,112       134,112
Mortgage servicing rights.............................       61,346        61,346        61,346
Goodwill and other intangibles........................       52,655       174,472       376,146
Other assets..........................................      332,589       409,927       451,723
                                                        -----------   -----------   -----------
          Total assets................................  $18,105,079   $25,182,178   $31,633,253
                                                        ===========   ===========   ===========
<CAPTION>
                              LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                                     <C>           <C>           <C>
Deposits
     Noninterest-bearing..............................  $ 2,323,367   $ 3,034,530   $ 3,839,096
     Certificates of deposit of $100,000 and over.....    1,426,751     2,166,011     2,625,003
     Other interest-bearing...........................    9,690,151    13,675,723    17,830,188
                                                        -----------   -----------   -----------
          Total deposits..............................   13,440,269    18,876,264    24,294,287
Short-term borrowings.................................      831,627     1,677,230     1,875,613
Medium-term bank notes................................      135,000       135,000       135,000
Federal Home Loan Bank advances.......................      703,996       703,996       930,738
Other long-term debt..................................      710,908       802,964       852,325
Accrued interest, expenses and taxes..................      145,452       194,499       212,821
Other liabilities.....................................      390,961       416,876       443,918
                                                        -----------   -----------   -----------
          Total liabilities...........................   16,358,213    22,806,829    28,744,702
                                                        -----------   -----------   -----------
Shareholders' equity
     Convertible preferred stock......................       54,709        54,749        54,749
     Common stock.....................................      408,255       567,406       652,197
     Additional paid-in capital.......................      193,032       405,322       590,014
     Retained earnings................................    1,061,670     1,318,281     1,548,858
     Unearned compensation............................       (9,529)      (14,364)       (9,554)
     Net unrealized gain on available for sale
       securities.....................................       38,729        43,955        52,287
                                                        -----------   -----------   -----------
          Total shareholders' equity..................    1,746,866     2,375,349     2,888,551
                                                        -----------   -----------   -----------
          Total liabilities and shareholders'
            equity....................................  $18,105,079   $25,182,178   $31,633,253
                                                        ===========   ===========   ===========
</TABLE>
 
                                       65
<PAGE>   79
 
                  UNION PLANTERS CORPORATION AND SUBSIDIARIES
 
             UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
                      FOR THE YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                             UPC, MAGNA,
                                                                                UPC              AND
                                                                                AND             OTHER
                                                                UPC            MAGNA        ACQUISITIONS
                                                           -------------   -------------   ---------------
                                                            (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                        <C>             <C>             <C>
Interest income
     Interest and fees on loans..........................   $1,165,925      $1,536,829       $1,839,742
     Interest on investment securities
          Taxable........................................      187,221         290,351          343,598
          Tax-exempt.....................................       29,032          40,516           52,133
     Interest on deposits at financial institutions......        2,627           2,627            3,179
     Interest on federal funds sold and securities
       purchased under agreements to resell..............        9,114          13,760           18,554
     Interest on trading account assets..................       14,956          14,956           14,956
     Interest on loans held for resale...................        7,819           7,819            7,982
                                                            ----------      ----------       ----------
               Total interest income.....................    1,416,694       1,906,858        2,280,144
                                                            ----------      ----------       ----------
Interest expense
     Interest on deposits................................      494,517         698,778          860,526
     Interest on short-term borrowings...................       41,280          81,980          104,620
     Interest on long-term debt..........................      110,512         116,687          120,184
                                                            ----------      ----------       ----------
               Total interest expense....................      646,309         897,445        1,085,330
                                                            ----------      ----------       ----------
               Net interest income.......................      770,385       1,009,413        1,194,814
Provision for losses on loans............................      113,633         142,580          154,163
                                                            ----------      ----------       ----------
               Net interest income after provision for
                 losses on loans.........................      656,752         866,833        1,040,651
Noninterest income
     Service charges on deposit accounts.................      107,248         133,352          151,454
     Mortgage servicing income...........................       57,265          57,265           58,051
     Bank card income....................................       31,317          38,544           39,239
     Factoring commissions...............................       30,140          30,140           30,140
     Trust service income................................        9,020          21,663           24,355
     Profits and commissions from trading activities.....        7,295           7,295            7,295
     Investment securities gains.........................        2,104           4,688            5,481
     Other income........................................      117,221         139,945          153,075
                                                            ----------      ----------       ----------
               Total noninterest income..................      361,610         432,892          469,090
                                                            ----------      ----------       ----------
Noninterest expense
     Salaries and employee benefits......................      284,648         372,959          440,212
     Net occupancy expense...............................       44,813          64,140           73,676
     Equipment expense...................................       43,812          53,579           62,466
     Other expense.......................................      324,431         379,663          430,225
                                                            ----------      ----------       ----------
               Total noninterest expense.................      697,704         870,341        1,006,579
                                                            ----------      ----------       ----------
               Earnings before income taxes..............      320,658         429,384          503,162
Applicable income taxes..................................      111,897         147,948          173,787
                                                            ----------      ----------       ----------
               Net earnings..............................   $  208,761      $  281,436       $  329,375
                                                            ==========      ==========       ==========
Earnings per common share
     Basic...............................................   $     2.54      $     2.48       $     2.52
     Diluted.............................................         2.45            2.40             2.45
Weighted average shares outstanding (in thousands)
     Basic...............................................       80,336         111,418          128,555
     Diluted.............................................       85,195         117,884          135,180
</TABLE>
 
                                       66
<PAGE>   80
 
                  UNION PLANTERS CORPORATION AND SUBSIDIARIES
 
             UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
                      FOR THE YEAR ENDED DECEMBER 31, 1996
 
<TABLE>
<CAPTION>
                                                                         UPC          UPC, MAGNA,
                                                                         AND       PEOPLES, AMBANC,
                                                           UPC          MAGNA        AND MERCHANTS
                                                       -----------   -----------   -----------------
                                                       (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                    <C>           <C>           <C>
Interest income
     Interest and fees on loans......................  $1,095,148    $1,380,299       $1,535,342
     Interest on investment securities
          Taxable....................................     247,716       340,745          372,233
          Tax-exempt.................................      30,839        37,980           45,560
     Interest on deposits at financial
       institutions..................................       1,593         1,593            1,910
     Interest on federal funds sold and securities
       purchased under agreements to resell..........      16,948        19,462           21,664
     Interest on trading account assets..............      13,895        13,895           13,895
     Interest on loans held for resale...............       6,852         6,852            7,241
                                                       ----------    ----------       ----------
               Total interest income.................   1,412,991     1,800,826        1,997,845
                                                       ----------    ----------       ----------
Interest expense
     Interest on deposits............................     512,668       670,856          755,680
     Interest on short-term borrowings...............      64,689        93,501          100,543
     Interest on long-term debt......................      90,782        97,530           97,680
                                                       ----------    ----------       ----------
               Total interest expense................     668,139       861,887          953,903
                                                       ----------    ----------       ----------
               Net interest income...................     744,852       938,939        1,043,942
Provision for losses on loans........................      68,948        79,228           84,198
                                                       ----------    ----------       ----------
               Net interest income after provision
                 for losses on loans.................     675,904       859,711          959,744
Noninterest income
     Service charges on deposit accounts.............     107,535       130,978          141,119
     Mortgage servicing income.......................      63,003        63,003           63,003
     Bank card income................................      24,975        30,988           31,636
     Factoring commissions...........................      26,066        26,066           26,066
     Trust service income............................      10,130        19,512           21,496
     Profits and commissions from trading
       activities....................................       5,765         5,765            5,765
     Investment securities gains.....................       4,099         4,916            4,942
     Other income....................................      78,929        89,632           94,739
                                                       ----------    ----------       ----------
               Total noninterest income..............     320,502       370,860          388,766
                                                       ----------    ----------       ----------
Noninterest expense
     Salaries and employee benefits..................     282,726       351,868          388,972
     Net occupancy expense...........................      47,215        65,195           70,142
     Equipment expense...............................      44,418        53,149           60,704
     Other expense...................................     357,458       399,991          422,915
                                                       ----------    ----------       ----------
               Total noninterest expense.............     731,817       870,203          942,733
                                                       ----------    ----------       ----------
               Earnings before income taxes..........     264,589       360,368          405,777
Applicable income taxes..............................      93,115       125,755          139,649
                                                       ----------    ----------       ----------
               Net earnings..........................  $  171,474    $  234,613       $  266,128
                                                       ==========    ==========       ==========
Earnings per common share
     Basic...........................................  $     2.13    $     2.18       $     2.24
     Diluted.........................................        2.05          2.11             2.17
Weighted average shares outstanding (in thousands)
     Basic...........................................      77,240       104,539          115,726
     Diluted.........................................      83,542       112,425          123,714
</TABLE>
 
                                       67
<PAGE>   81
 
                  UNION PLANTERS CORPORATION AND SUBSIDIARIES
 
             UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
                      FOR THE YEAR ENDED DECEMBER 31, 1995
 
<TABLE>
<CAPTION>
                                                                         UPC          UPC, MAGNA,
                                                                         AND       PEOPLES, AMBANC,
                                                           UPC          MAGNA        AND MERCHANTS
                                                       -----------   -----------   -----------------
                                                       (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                    <C>           <C>           <C>
Interest income
     Interest and fees on loans......................  $  986,230    $1,252,376       $1,388,252
     Interest on investment securities
          Taxable....................................     202,890       274,743          304,771
          Tax-exempt.................................      32,400        39,666           47,200
     Interest on deposits at financial
       institutions..................................       5,284         5,284            6,153
     Interest on federal funds sold and securities
       purchased under agreements to resell..........      19,965        21,868           24,547
     Interest on trading account assets..............      14,191        14,191           14,191
     Interest on loans held for resale...............       4,858         4,858            5,184
                                                       ----------    ----------       ----------
               Total interest income.................   1,265,818     1,612,986        1,790,298
                                                       ----------    ----------       ----------
Interest expense
     Interest on deposits............................     478,641       616,666          695,224
     Interest on short-term borrowings...............      44,492        64,725           70,706
     Interest on long-term debt......................      73,234        79,293           79,674
                                                       ----------    ----------       ----------
               Total interest expense................     596,367       760,684          845,604
                                                       ----------    ----------       ----------
               Net interest income...................     669,451       852,302          944,694
Provision for losses on loans........................      33,917        43,909           47,393
                                                       ----------    ----------       ----------
               Net interest income after provision
                 for losses on loans.................     635,534       808,393          897,301
Noninterest income
     Service charges on deposit accounts.............     102,932       125,419          134,243
     Mortgage servicing income.......................      55,903        55,903           55,903
     Bank card income................................      20,758        26,559           27,124
     Factoring commissions...........................      19,519        19,519           19,519
     Trust service income............................       8,326        16,964           18,786
     Profits and commissions from trading
       activities....................................      12,362        12,362           12,362
     Investment securities gains.....................       1,433         1,789            2,008
     Other income....................................      72,477        83,058           87,381
                                                       ----------    ----------       ----------
               Total noninterest income..............     293,710       341,573          357,326
                                                       ----------    ----------       ----------
Noninterest expense
     Salaries and employee benefits..................     264,663       337,656          371,136
     Net occupancy expense...........................      44,061        61,738           66,224
     Equipment expense...............................      42,251        51,218           57,289
     Other expense...................................     256,214       302,794          324,295
                                                       ----------    ----------       ----------
               Total noninterest expense.............     607,189       753,406          818,944
                                                       ----------    ----------       ----------
               Earnings before income taxes..........     322,055       396,560          435,683
Applicable income taxes..............................     110,799       134,082          145,486
                                                       ----------    ----------       ----------
               Net earnings..........................  $  211,256    $  262,478       $  290,197
                                                       ==========    ==========       ==========
Earnings per common share
     Basic...........................................  $     2.79    $     2.56       $     2.56
     Diluted.........................................        2.66          2.46             2.46
Weighted average shares outstanding (in thousands)
     Basic...........................................      72,512        99,346          110,196
     Diluted.........................................      78,798       106,632          117,604
</TABLE>
 
                                       68
<PAGE>   82
 
                       CERTAIN REGULATORY CONSIDERATIONS
 
     The following discussion sets forth certain of the material elements of the
regulatory framework applicable to banks and bank holding companies and provides
certain specific information related to UPC. A more complete discussion is
included in the UPC 1997 Form 10-K. Information relating to Magna is included in
the Magna 1997 Form 10-K. See "AVAILABLE INFORMATION" and "DOCUMENTS
INCORPORATED BY REFERENCE."
 
GENERAL
 
     UPC is a bank holding company registered with the Federal Reserve under the
BHC Act. As such, UPC and its non-bank subsidiaries are subject to the
supervision, examination, and reporting requirements of the BHC Act and the
regulations of the Federal Reserve.
 
     The BHC Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before: (i) it may acquire direct or indirect
ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or control
more than 5% of the voting shares of the bank; (ii) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of any bank; or (iii) it may merge or consolidate with any other bank
holding company.
 
     The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy which is discussed below, and consideration of convenience and needs
issues includes the parties' performance under the Community Reinvestment Act of
1977.
 
     The BHC Act, as amended by the interstate banking provisions of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ("Interstate
Banking Act"), which became effective in September 1995, repealed the prior
statutory restrictions on interstate acquisitions of banks by bank holding
companies, such that UPC and any other bank holding company located in Tennessee
may now acquire a bank located in any other state, and any bank holding company
located outside Tennessee may lawfully acquire any Tennessee-based bank,
regardless of state law to the contrary, in either case subject to certain
deposit-percentage limitations, aging requirements, and other restrictions. The
Interstate Banking Act also generally provides that, after June 1, 1997,
national and state-chartered banks may branch interstate through acquisitions of
banks in other states. By adopting legislation prior to that date, a state has
the ability either to "opt in" and accelerate the date after which interstate
branching is permissible or "opt out" and prohibit interstate branching
altogether. None of the states in which the banking subsidiaries of UPC are
currently located or intends to be located through an Other Pending Acquisition
(other than Texas, which elected to opt-out pursuant to legislation that expires
September 2, 1999), has either moved up the date after which interstate
branching will be permissible or "opted out." UPC utilized the provisions of the
Interstate Banking Act at the end of 1997 to merge substantially all of UPC's
Banking Subsidiaries with and into UPBNA. As a result of such consolidation,
UPBNA is now a multi-state national bank with branches in Alabama, Arkansas,
Kentucky, Louisiana, Mississippi, Missouri, and Tennessee.
 
     The BHC Act generally prohibits UPC from engaging in activities other than
banking or managing or controlling banks or other permissible subsidiaries and
from acquiring or retaining direct or indirect control of any company engaged in
any activities other than those activities determined by the Federal Reserve to
be so closely related to banking or managing or controlling banks as to be a
proper incident thereto. In determining whether a particular activity is
permissible, the Federal Reserve must consider whether the performance of such
an activity reasonably can be expected to produce benefits to the public, such
as greater convenience,

                                       69
<PAGE>   83
 
increased competition, or gains in efficiency, that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices. For example,
factoring accounts receivable, acquiring or servicing loans, leasing personal
property, conducting discount securities brokerage activities, performing
certain data processing services, acting as agent or broker in selling credit
life insurance and certain other types of insurance in connection with credit
transactions, and performing certain insurance underwriting activities all have
been determined by the Federal Reserve to be permissible activities of bank
holding companies. The BHC Act does not place territorial limitations on
permissible nonbanking activities of bank holding companies. Despite prior
approval, the Federal Reserve has the power to order a holding company or its
subsidiaries to terminate any activity or to terminate its ownership or control
of any subsidiary when it has reasonable cause to believe that continuation of
such activity or such ownership or control constitutes a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of that bank
holding company.
 
     Each of the UPC Banking Subsidiaries is a member of the Federal Deposit
Insurance Corporation ("FDIC"), and as such, its deposits are insured by the
FDIC to the extent provided by law. Each such subsidiary is also subject to
numerous state and federal statutes and regulations that affect is business,
activities, and operations, and each is supervised and examined by one or more
state or federal bank regulatory agencies.
 
     The regulatory agencies having supervisory jurisdiction over the respective
subsidiary institutions of UPC and Magna (the FDIC and the applicable state
authority in the case of state-chartered nonmember banks, the Office of Thrift
Supervision ("OTS") in the case of federally chartered thrift institutions, the
Federal Reserve in the case of state-chartered member banks, and the Office of
the Comptroller of the Currency ("OCC") in the case of national banks) regularly
examine the operations of such institutions and have authority to approve or
disapprove mergers, consolidations, the establishment of branches, and similar
corporate actions. The federal and state banking regulators also have the power
to prevent the continuance or development of unsafe or unsound banking practices
or other violations of law.
 
PAYMENT OF DIVIDENDS
 
     UPC is a legal entity separate and distinct from its banking and other
subsidiaries. The principal sources of cash flow of UPC, including cash flow to
pay dividends to its shareholders, are dividends from its subsidiary depository
institutions. There are statutory and regulatory limitations on the payment of
dividends by these subsidiary depository institutions to UPC and Magna, as well
as by UPC and Magna to their shareholders.
 
     As to the payment of dividends, each of UPC's state-chartered banking
subsidiaries is subject to the respective laws and regulations of the state in
which such bank is located, and to the regulations of the bank's primary federal
regulator. UPBNA is subject to the regulations of the OCC.
 
     If, in the opinion of the federal banking regulator, a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
depository institution, could include the payment of dividends), such agency may
require, after notice and hearing, that such institution cease and desist from
such practice. The federal banking agencies have indicated that paying dividends
that deplete a depository institution's capital base to an inadequate level
would be an unsafe and unsound banking practice. Under the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA"), a depository
institution may not pay any dividend if payment would cause it to become
undercapitalized or if it already is undercapitalized. See "-- Prompt Corrective
Action." Moreover, the federal agencies have issued policy statements that
provide that bank holding companies and insured banks should generally only pay
dividends out of current operating earnings.
 
     At December 31, 1997, under dividend restrictions imposed under federal and
state laws, the UPC Banking Subsidiaries, without obtaining governmental
approvals, could declare aggregate dividends to UPC of approximately $103
million.
 
     The payment of dividends by UPC and the UPC Banking Subsidiaries may also
be affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.
 
                                       70
<PAGE>   84
 
CAPITAL ADEQUACY
 
     UPC and the UPC Banking Subsidiaries are required to comply with the
capital adequacy standards established by the Federal Reserve in the case of
UPC, and the appropriate federal banking regulator in the case of each of the
UPC Banking Subsidiaries. There are two basic measures of capital adequacy for
bank holding companies and their subsidiary depository institutions that have
been promulgated by the Federal Reserve and each of the federal bank regulatory
agencies: a risk-based measure and a leverage measure. All applicable capital
standards must be satisfied for a bank holding company to be considered in
compliance.
 
     The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profile among depository
institutions and bank holding companies, to account for off-balance-sheet
exposure, and to minimize disincentives for holding liquid assets. Assets and
off-balance-sheet items are assigned to broad risk categories, each with
appropriate weights. The resulting capital ratios represent capital as a
percentage of total risk-weighted assets and off-balance-sheet items.
 
     The minimum guideline for the ratio ("Total Capital Ratio") of total
capital ("Total Capital") to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8.0%. At least
half of Total Capital must be composed of common equity, undivided profits,
minority interests in the equity accounts of consolidated subsidiaries,
noncumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less goodwill and certain other intangible assets
("Tier 1 Capital"). The remainder may consist of subordinated debt, other
preferred stock, and a limited amount of loan loss reserves ("Tier 2 Capital").
At December 31, 1997, UPC's consolidated Total Capital Ratio and its Tier 1
Capital Ratio (i.e., the ratio of Tier 1 Capital to risk-weighted assets) were
18.12% and 15.51%, respectively.
 
     In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less goodwill
and certain other intangible assets, of 3.0% for bank holding companies that
meet certain specified criteria, including having the highest regulatory rating.
All other bank holding companies generally are required to maintain a Leverage
Ratio of at least 3.0%, plus an additional cushion of 100 to 200 basis points.
UPC's Leverage Ratio at December 31, 1997, was 10.48%. The guidelines also
provide that bank holding companies 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. Furthermore, the Federal Reserve has indicated that it will consider a
"tangible Tier 1 Capital Leverage Ratio" (deducting all intangibles) and other
indicia of capital strength in evaluating proposals for expansion or new
activities.
 
     Each of the UPC Banking Subsidiaries is subject to risk-based and leverage
capital requirements adopted by its federal banking regulatory which are
substantially similar to those adopted by the Federal Reserve for bank holding
companies. Each of the UPC Banking Subsidiaries was in compliance with
applicable minimum capital requirements as of December 31, 1997. Neither UPC nor
any of the UPC Banking Subsidiaries has been advised by any federal banking
agency of any specific minimum capital ratio requirement applicable to it.
 
     Failure to meet capital guidelines could subject a bank or thrift to a
variety of enforcement remedies, including issuance of a capital directive, the
termination of deposit insurance by the FDIC, a prohibition on the taking of
brokered deposits, and certain other restrictions on its business. As described
below, substantial additional restrictions can be imposed upon FDIC-insured
depository institutions that fail to meet applicable capital requirements. See
"-- Prompt Corrective Action."
 
     The federal bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations beyond their current
levels. In this regard, the Federal Reserve, the FDIC, and the OCC have,
pursuant to FDICIA, proposed an amendment to the risk-based capital standards
that would calculate the change in an institution's net economic value
attributable to increases and decreases in market interest rates and would
require banks with excessive interest rate risk exposure to hold additional
amounts of capital against such exposures. The OTS has already included an
interest-rate risk component in its risk-based capital guidelines for savings
associations that it regulates.
 
                                       71
<PAGE>   85
 
SUPPORT OF SUBSIDIARY INSTITUTIONS
 
     Under Federal Reserve policy, UPC is expected to act as a source of
financial strength for, and to commit resources to support, each of the UPC
Banking Subsidiaries. This support may be required at times when, absent such
Federal Reserve policy, UPC may not be inclined to provide it. In addition, any
capital loans by a bank holding company to any of its banking subsidiaries are
subordinate in right of payment to deposits and to certain other indebtedness of
such banks. In the event of a bank holding company's bankruptcy, any commitment
by the bank holding company to a federal bank regulatory agency to maintain the
capital of a banking subsidiary will be assumed by the bankruptcy trustee and
entitled to a priority of payment.
 
     Under the Federal Deposit Insurance Act (the "FDIA"), 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 after August 9, 1989, in
connection with (i) the default of a commonly controlled FDIC-insured depository
institution or (ii) any assistance provided by the FDIC to any commonly
controlled FDIC-insured depository institution "in danger of default." "Default"
is defined generally as the appointment of a conservator or receiver, and "in
danger of default" is defined generally as the existence of certain conditions
indicating that a default is likely to occur in the absence of regulatory
assistance. The FDIC's claim for damages is superior to claims of shareholders
of the insured depository institution or its holding company, but is subordinate
to claims of depositors, secured creditors, and holders of subordinated debt
(other than affiliates) of the commonly controlled insured depository
institution. The UPC Banking Subsidiaries are subject to these cross-guarantee
provisions. As a result, any loss suffered by the FDIC in respect of any of
these subsidiaries would likely result in assertion of the cross-guarantee
provisions, the assessment of such estimated losses against the depository
institution's banking or thrift affiliates, and a potential loss of UPC's
respective investments in such other subsidiary depository institutions.
 
PROMPT CORRECTIVE ACTION
 
     FDICIA establishes a system of prompt corrective action to resolve the
problems of undercapitalized institutions. Under this system, which became
effective in December 1992, the federal banking regulators are required to
establish five capital categories (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized, and critically
undercapitalized) and to take certain mandatory supervisory actions, and are
authorized to take other discretionary actions, with respect to institutions in
the three undercapitalized categories, the severity of which will depend upon
the capital category in which the institution is placed. Generally, subject to a
narrow exception, FDICIA requires the banking regulator to appoint a receiver or
conservator for an institution that is critically undercapitalized. The federal
banking agencies have specified by regulation the relevant capital level for
each category.
 
     Under the final agency rules implementing the prompt corrective action
provisions, an institution that (i) has a Total Capital Ratio of 10% or greater,
a Tier 1 Capital Ratio of 6.0% or greater, and a Leverage Ratio of 5.0% or
greater and (ii) is not subject to any written agreement, order, capital
directive, or prompt corrective action directive issued by the appropriate
federal banking agency is deemed to be well capitalized. An institution with a
Total Capital Ratio of 8.0% or greater, a Tier 1 Capital Ratio of 4.0% or
greater, and a Leverage Ratio of 4.0% or greater is considered to be adequately
capitalized. A depository institution that has a Total Capital Ratio of less
than 8.0%, a Tier 1 Capital Ratio of less than 4.0%, or a Leverage Ratio of less
than 4.0% is considered to be undercapitalized. A depository institution that
has a Total Capital Ratio of less than 6.0%, a Tier 1 Capital Ratio of less than
3.0%, or a Leverage Ratio of less than 3.0% is considered to be significantly
undercapitalized, and an institution that has a tangible equity capital to
assets ratio equal to or less than 2.0% is deemed to be critically
undercapitalized. For purposes of the regulation, the term "tangible equity"
includes core capital elements counted as Tier 1 Capital for purposes of the
risk-based capital standards, plus the amount of outstanding cumulative
perpetual preferred stock (including related surplus), minus all intangible
assets with certain exceptions. A depository institution may be deemed to be in
a capitalization category that is lower than is indicated by its actual capital
position if it receives an unsatisfactory examination rating.
 
                                       72
<PAGE>   86
 
     An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
Under FDICIA, a bank holding company must guarantee that a subsidiary depository
institution meet its capital restoration plan, subject to certain limitations.
The obligation of a controlling bank holding company under FDICIA to fund a
capital restoration plan is limited to the lesser of 5.0% of an undercapitalized
subsidiary's assets or the amount required to meet regulatory capital
requirements. An undercapitalized institution is also generally prohibited from
increasing its average total assets, making acquisitions, establishing any
branches, or engaging in any new line of business, except in accordance with an
accepted capital restoration plan or with the approval of the FDIC. In addition,
the appropriate federal banking agency is given authority with respect to any
undercapitalized depository institution to take any of the actions it is
required to or may take with respect to a significantly undercapitalized
institution as described below if it determines "that those actions are
necessary to carry out the purpose" of FDICIA.
 
     For those institutions that are significantly undercapitalized or
undercapitalized and either fail to submit an acceptable capital restoration
plan or fail to implement an approved capital restoration plan, the appropriate
federal banking agency must require the institution to take one or more of the
following actions: (i) sell enough shares, including voting shares, to become
adequately capitalized; (ii) merge with (or be sold to) another institution (or
holding company), but only if grounds exist for appointing a conservator or
receiver; (iii) restrict certain transactions with banking affiliates as if the
"sister bank" exception to the requirements of Section 23A of the Federal
Reserve Act did not exist; (iv) otherwise restrict transactions with bank or
non-bank affiliates; (v) restrict interest rates that the institution pays on
deposits to "prevailing rates" in the institution's "region;" (vi) restrict
asset growth or reduce total assets; (vii) alter, reduce, or terminate
activities; (viii) hold a new election of directors; (ix) dismiss any director
or senior executive officer who held office for more than 180 days immediately
before the institution became undercapitalized, provided that in requiring
dismissal of a director or senior officer, the agency must comply with certain
procedural requirements, including the opportunity for an appeal in which the
director or officer will have the burden of proving his or her value to the
institution; (x) employ "qualified" senior executive officers; (xi) cease
accepting deposits from correspondent depository institutions; (xii) divest
certain nondepository affiliates which pose a danger to the institution; or
(xiii) be divested by a parent holding company. In addition, without the prior
approval of the appropriate federal banking agency, a significantly
undercapitalized institution may not pay any bonus to any senior executive
officer or increase the rate of compensation for such an officer.
 
     At December 31, 1997, all of the UPC Banking Subsidiaries had the requisite
capital levels to qualify as well capitalized. An institution's capital category
is determined solely for the purposes of applying the prompt corrective action
law and it may not constitute an accurate representation of an institution's
overall financial condition or prospects.
 
                        DESCRIPTION OF UPC CAPITAL STOCK
 
     UPC's Charter currently authorizes the issuance of [300,000,000] shares of
UPC Common Stock and 10,000,000 shares of UPC Preferred Stock. As of March 31,
1998, 83,865,183 shares of UPC Common Stock were outstanding and approximately
8,548,615 shares were earmarked for issuance with currently outstanding UPC
options, UPC's dividend reinvestment plan, and with respect to conversion rights
of currently outstanding UPC Series E Preferred Stock (defined below). In
addition, as of March 31, 1998, 1,478,888 shares of the Series E Preferred Stock
were outstanding. As of March 31, 1998, none of UPC's 750,000 authorized shares
of Series A Preferred Stock were issued and outstanding nor is management aware
of the existence of circumstances from which it may be inferred that such
issuance is imminent. THE CAPITAL STOCK OF UPC DOES NOT REPRESENT OR CONSTITUTE
A DEPOSIT ACCOUNT AND IS NOT INSURED BY THE FDIC, THE BANK INSURANCE FUND, THE
SAVINGS ASSOCIATION INSURANCE FUND, OR ANY GOVERNMENTAL AGENCY.
 
                                       73
<PAGE>   87
 
UPC COMMON STOCK
 
     General.  Shares of UPC Common Stock may be issued at such time or times
and for such consideration (not less than the par value thereof) as the UPC
Board may deem advisable, subject to such limitations as may be set forth in the
laws of the State of Tennessee, the UPC Charter or Bylaws, or the rules of the
NYSE. UPBNA, a subsidiary of UPC, is the Registrar, Transfer Agent and Dividend
Disbursing Agent for shares of UPC Common Stock. Its address is Union Planters
Bank, National Association, Corporate Trust Department, 6200 Poplar Avenue,
Third Floor, Memphis, Tennessee 38119. Its mailing address is P.O. Box 387,
Memphis, Tennessee 38147.
 
     Dividends.  Subject to the preferential dividend rights applicable to
outstanding shares of the UPC Preferred Stock and subject to applicable
requirements, if any, with respect to the setting aside of sums for purchase,
retirement, or sinking funds, if any, for all outstanding UPC Preferred Stock,
the holders of the UPC Common Stock are entitled to receive, to the extent
permitted by law, only such dividends as may be declared from time to time by
the UPC Board.
 
     UPC has the right to, and may from time to time, enter into borrowing
arrangements or issue other debt instruments, the provisions of which may
contain restrictions on payment of dividends and other distributions on UPC
Common Stock and UPC Preferred Stock. In December, 1996, UPC caused to be issued
$200,000,000 in aggregate liquidation amount of 8.20% Capital Trust Pass-through
Securities ("UPC Capital Securities") through a Delaware trust subsidiary.
Pursuant to the terms of the governing instruments, UPC would be prohibited from
paying dividends on any Capital Stock if all quarterly payments on the UPC
Capital Securities had not been paid in full. The UPC Capital Securities mature
in 2026 and may be redeemed under certain circumstances prior to maturity.
 
     Liquidation Rights.  In the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets, or winding-up of UPC, after
distribution in full of the preferential amounts required to be distributed to
the holders of UPC Preferred Stock, holders of UPC Common Stock will be entitled
to receive all of the remaining assets of UPC, of whatever kind, available for
distribution to shareholders ratably in proportion to the number of shares of
UPC Common Stock held. The UPC Board may distribute in kind to the holders of
UPC Common Stock such remaining assets of UPC or may sell, transfer, or
otherwise dispose of all or any part of such remaining assets to any other
person or entity and receive payment therefor in cash, stock, or obligations of
such other person or entity, and may sell all or any part of the consideration
so received and distribute any balance thereof in kind to holders of UPC Common
Stock. Neither the merger or consolidation of UPC into or with any other
corporation, nor the merger of any other corporation into UPC, nor any purchase
or redemption of shares of stock of UPC of any class, shall be deemed to be a
dissolution, liquidation, or winding-up of UPC for purposes of this paragraph.
 
     Because UPC is a holding company, its right and the rights of its creditors
and shareholders, including the holders of UPC Preferred Stock and UPC Common
Stock, to participate in the distribution of assets of a subsidiary on its
liquidation or recapitalization may be subject to prior claims of such
subsidiary's creditors except to the extent that UPC itself may be a creditor
having recognized claims against such subsidiary.
 
     For a further description of UPC Common Stock, see "EFFECT OF THE MERGER ON
RIGHTS OF SHAREHOLDERS."
 
UPC PREFERRED STOCK
 
     Series A Preferred Stock.  UPC's Charter provides for the issuance of up to
750,000 shares (subject to adjustment by action of the UPC Board) of Series A
Preferred Stock under certain circumstances involving a potential change in
control of UPC. None of such shares are outstanding and management is aware of
no facts suggesting that issuance of such shares may be imminent. The Series A
Preferred Stock is described in more detail in UPC's Registration Statement on
Form 8-A, dated January 19, 1989, and filed February 1, 1989 (SEC File No.
0-6919) which is incorporated by reference herein.
 
     Series E Preferred Stock.  As of March 31, 1998, 1,478,888 shares of Series
E Preferred Stock were outstanding. All shares of Series E Preferred Stock have
a stated value of $25.00 per share. Dividends are

                                       74
<PAGE>   88
 
payable at the rate of $0.50 per share per quarter and are cumulative. The
Series E Preferred Stock is convertible at the rate of 1.25 shares of UPC Common
Stock for each share of Series E Preferred Stock. The Series E Preferred Stock
is not subject to any sinking fund provisions and has no preemptive rights. Such
shares have a liquidation preference of $25.00 per share plus unpaid dividends
accrued thereon and, at UPC's option and with the prior approval of the Federal
Reserve, are subject to redemption by UPC at any time at a redemption price of
$25.00 per share plus any unpaid dividends accrued thereon. Holders of Series E
Preferred Stock have no voting rights except as required by law and in certain
other limited circumstances. See "CERTAIN REGULATORY CONSIDERATIONS -- Payment
of Dividends."
 
              ADDITIONAL MATTERS RELATING TO MAGNA ANNUAL MEETING
 
VOTING SECURITIES OF MAGNA AND PRINCIPAL HOLDERS THEREOF
 
     The Magna Common Stock and Magna Class B Preferred Stock vote as a single
class on each matter submitted to the shareholders and each share is entitled to
one vote on each such matter. Holders of Magna Capital Stock do not have the
right to cumulate votes in the election of directors.
 
     To the knowledge of Magna, no person beneficially owned more than 5% of the
shares of Magna Common Stock outstanding as of the Magna Record Date (which
class of securities represents approximately 99.9% of the total outstanding
Magna Capital Stock). Of the shares of Magna Class B Preferred Stock outstanding
on such date, there were five shareholders who each owned more than 5% (99
shares or more) of such securities.
 
ELECTION OF DIRECTORS OF MAGNA
 
     The Magna Restated Charter and Bylaws provide for the division of the Magna
Board into three classes. Approximately one-third of the members of the Magna
Board are nominated each year to serve as directors for a three-year term or
until their successors shall have been duly elected and qualified.
 
     Pursuant to action previously taken by the Magna Board, the total number of
directors is 17, and the holders of Magna Capital Stock will vote on the
election of six Class I directors to serve until the Merger is consummated or,
in the event the Merger is not consummated, until the expiration of their
respective three-year terms or until their respective successors are elected and
qualified. Under Magna's Bylaws, a plurality of the votes cast at the Magna
Annual Meeting will elect the new directors.
 
     Each properly executed proxy in the form enclosed that is received by Magna
prior to the vote will be voted for the six Class I nominees listed below,
except as directed otherwise by the shareholder executing such proxy. The
nominees have been designated as such by the Magna Board (on the recommendation
of its Nominating Committee), and it is anticipated that all nominees will be
candidates when the Magna Annual Meeting is held. However, if for any reason any
nominee is not a candidate at that time, proxies will be voted for any
substitute nominee designated by the Magna Board (except where a proxy withholds
authority with respect to the election of directors) or the Magna Board may
reduce the number of directors to be elected. All nominees are currently
directors of Magna.
 
     Certain information with respect to the nominees and the other directors
whose terms of office will continue after the Magna Annual Meeting is set forth
below. Each of the directors has held the same position or another executive
position with the entity shown or an affiliated entity for at least the past
five years except as otherwise noted.
 
     THE MAGNA BOARD RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES.
 
                                       75
<PAGE>   89
 
<TABLE>
<CAPTION>
                                                               MAGNA
                                                              DIRECTOR
        NAME, AGE, PRINCIPAL OCCUPATION OR POSITION            SINCE
        -------------------------------------------           --------
<S>                                                           <C>
CLASS I (TO BE ELECTED TO SERVE A THREE-YEAR TERM OR UNTIL
  THE EFFECTIVE TIME):
JAMES A. AUFFENBERG, JR.; 47; President and Director of St.
  Clair AutoMall, Auffenberg Belleville and Auffenberg
  Enterprises of Illinois, Inc.                                 1995
C. E. HEILIGENSTEIN; 68; Attorney, Heiligenstein & Badgley,
  P.C.                                                          1984
CARL G. HOGAN, SR.; 68; Chairman of the Board and Chief
  Executive Officer, Hogan Motor Leasing, Inc., a truck
  leasing and transportation firm.                              1991
RALPH F. KORTE; 63; Chairman of the Board, Korte
  Construction Company, a general construction firm.            1991
WILLIAM A. PECK; 64; Dean of the School of Medicine and
  Executive Vice Chancellor for Medical Affairs, Washington
  University, St. Louis, Missouri.                              1997
FRANK R. TRULASKE; 49; President of True Fitness Technology,
  Inc., a manufacturer of treadmills for residential,
  commercial and medical use.                                   1995
CLASS II (TO CONTINUE IN OFFICE FOR ONE YEAR OR UNTIL THE
  EFFECTIVE TIME):
G. THOMAS ANDES; 55; Chairman of the Board, President, and
  Chief Executive Officer of Magna.                             1981
DONALD P. GALLOP; 65; Chairman of the law firm of Gallop,
  Johnson & Neuman, L.C. Mr. Gallop is a director of Falcon
  Products, Inc. and Data Research Associates, Inc.             1991
RANDALL E. GANIM; 44; Certified Public Accountant;
  President, Ganim, Meder, Childers & Hoering, P.C.             1996
ROGER J. LOWERY; 56; District Agent, Northwestern Mutual
  Life Insurance Company. Owner, The Lowery Group, a
  full-service, fringe-benefit company located in
  Belleville, Illinois.                                         1997
ERL A. SCHMIESING; 58; Former Chairman of the Board,
  President and Chief Executive Officer of Homeland
  Bankshares Corporation ("Homeland"), which was acquired by
  Magna in March 1997.                                          1997
DOUGLAS K. SHULL; 55; Treasurer and Chief Financial Officer
  of Casey's General Stores, Inc., a chain of convenience
  stores located in the Midwest. Mr. Shull is a director of
  Casey's General Stores, Inc.                                  1997
CLASS III (TO CONTINUE IN OFFICE FOR TWO YEARS OR UNTIL THE
  EFFECTIVE TIME):
WAYNE T. EWING; 64; Coal Industry Management Consultant, The
  Ewing Company, since October 1996. Prior thereto, Mr.
  Ewing served as President of Peabody Development Company,
  a subsidiary of Peabody Holding Company, until October
  1990, as a consultant to Peabody Holding Company until
  February 1993, as Executive Vice President-Marketing of
  Kerr-McGee Coal Corporation, a subsidiary of Kerr-McGee
  Corporation, until November 1995 and thereafter as Senior
  Vice President of Kerr-McGee Corporation.                     1984
JOHN G. HELMKAMP, JR.; 50; Retired Chairman of the Board and
  Chief Executive Officer of River Bend Bancshares, Inc.
  ("River Bend"), which was acquired by Magna in February
  1996.                                                         1996
FRANKLIN A. JACOBS; 65; Chairman of the Board and Chief
  Executive Officer, Falcon Products, Inc., commercial
  furniture manufacturer. Mr. Jacobs is a director of Falcon
  Products, Inc. and Top Air Manufacturing, Inc.                1991
S. LEE KLING; 69; Chairman of the Board, Kling Rechter &
  Co., merchant banking. Mr. Kling served as Chairman of the
  Board, and prior to October 1990, Chief Executive Officer,
  of Landmark Bancshares Corporation ("Landmark"), which was
  acquired by Magna in December 1991. Mr. Kling is a
  director of Bernard Chaus, Inc., Electro Rent Corp.,
  Falcon Products, Inc., Hanover Direct, Inc., Lewis Galoob
  Toys, Inc., National Beverage Corp. and Top Air
  Manufacturing, Inc.                                           1991
GEORGE T. WILKINS, JR.; 65; Physician.                          1987
</TABLE>
 
                                       76
<PAGE>   90
 
MAGNA BOARD AND COMMITTEES
 
     During 1997, there were 12 meetings of the Magna Board. All of the
directors attended not less than 75% of the meetings of the Magna Board, and of
the committees of which they were members, during the period in which they were
directors in 1997.
 
     Magna has a standing Audit and Compliance Committee. The current members of
the Audit and Compliance Committee are Messrs. C. E. Heiligenstein (Chairman),
John G. Helmkamp, Jr., Erl A. Schmiesing, Frank R. Trulaske and George T.
Wilkins, Jr. The committee met four times during 1997. The duties of the Audit
and Compliance Committee include meeting periodically with Magna's independent
public accountants, management and internal auditors to review the work of each
and to ensure that each is properly discharging its responsibilities.
 
     Magna has a standing Compensation Committee. The current members of the
Compensation Committee are Messrs. Carl G. Hogan, Sr. (Chairman), James A.
Auffenberg, Jr., Randall E. Ganim, Franklin A. Jacobs and Dr. William A. Peck.
Dr. Peck became a member of the Compensation Committee in July 1997. There were
three Compensation Committee meetings during 1997. The report of the
Compensation Committee on executive compensation is contained herein under
"-- Report of Compensation Committee of Magna on Executive Compensation."
 
     Magna has a standing Nominating Committee. The current members of the
Nominating Committee are Messrs. S. Lee Kling (Chairman), Wayne T. Ewing, Donald
P. Gallop, Ralph F. Korte, Douglas K. Shull and Roger J. Lowery. Mr. Lowery
became a member of the Nominating Committee in July 1997. The committee met two
times in 1997. The duties of the Nominating Committee include the evaluation and
recommendation to the Board of qualified nominees for election as directors of
Magna, and other matters pertaining to the size and composition of the Magna
Board. The Nominating Committee will give appropriate consideration to a written
recommendation by a shareholder for the nomination of a qualified person as a
director, provided that such recommendation must contain certain information
regarding the proposed nominee. Shareholder nominations for director that have
not been approved by the Nominating Committee must comply with certain
requirements as set forth in Magna's Bylaws prior to submission to the
shareholders at a meeting.
 
COMPENSATION OF DIRECTORS OF MAGNA
 
     Directors Fees.  Currently, all directors of Magna, except those directors
who are officers of Magna or one of its subsidiaries, receive an annual retainer
of $8,000, plus $1,000 for each meeting of the Magna Board attended. Directors
who serve on a committee of the Magna Board or as Chairman of such committee
receive a fee of $600 or $700, respectively, for each committee meeting
attended. During 1997, directors of Magna also were afforded the opportunity to
obtain medical insurance benefits. The policy premiums for these benefits were
paid by the directors.
 
     Directors' Compensatory Plans.  Each director may, at such director's
option, participate in Magna's Directors' Survivor Benefit Plan (the "Fee
Continuation Plan"). Pursuant to the Fee Continuation Plan, if the director is
serving as a director of Magna at the time of his death, his designated
beneficiaries will be entitled to receive from Magna an amount of survivors'
benefits specified in the participation agreement of the individual director. No
benefits are payable under the Fee Continuation Plan if the director terminates
his service as a director of Magna or a subsidiary of Magna for any reason prior
to his death. In addition, the payment of benefits under the Fee Continuation
Plan may be offset by certain benefits received by beneficiaries under the
former Directors' Deferred Compensation Plan. The survivors' benefits payable in
a particular case are computed on the basis of actuarial assumptions made at the
date of enrollment of the director in the Fee Continuation Plan. Benefits are
payable in equal monthly installments over ten years. During 1997 the increase
in the cash values of the insurance policies funding the Fee Continuation Plan
approximated the cost of premiums paid by Magna. The Directors' Deferred
Compensation Plan was terminated in 1996 with respect to new and continuing
participation, but will provide benefits to former participants upon retirement,
disability for 12 consecutive months or other termination of service based upon
the amount of compensation previously deferred and the amount of interest
credited thereto.
 
                                       77
<PAGE>   91
 
     Magna maintains the Directors' Stock Option Plan, which was approved by the
shareholders in 1992 and subsequently amended and restated by the Board of
Directors in 1996 (the "1992 Directors' Plan"). The 1992 Directors' Plan
provides for the granting of non-qualified stock options to the non-employee
directors of Magna, pursuant to a formula that determines the number of shares
which will be subject to the options granted. The exercise price of an option is
the fair market value of a share of Magna Common Stock on the date of grant. On
May 8, 1997, each nonemployee director of Magna received an option to purchase
805 shares of Magna Common Stock at an exercise price of $29.875 per share. In
each subsequent year, on the first business day after the annual meeting, each
director will receive an option to purchase a number of shares of Magna Common
Stock determined by dividing the average of the annual directors' fees
(including committee fees) of all non-employee directors who have served
continuously during the past year by the fair market value of Magna Common Stock
on the date of grant. All non-employee directors serving on the date of grant
are entitled to receive a grant of an option to purchase the full number of
shares determined under the formula described above. The options become
exercisable at the rate of 33%, 67% and 100% of the total grant on each of the
first, second and third anniversaries, respectively, of the date of grant and
have a term of ten years. Options outstanding and unexercised at the time the
holder ceases to be an outside director of Magna will terminate on the earlier
of (i) the expiration date or (ii) 24 months after the month in which the holder
ceases to be an outside director of Magna.
 
     Magna also maintains the 1996 Directors' Stock Option Plan, which was
approved by the shareholders in 1996 and subsequently amended and restated by
the Board of Directors in 1996 (the "1996 Directors' Plan"). The 1996 Directors'
Plan provides that each non-employee director of Magna, on the first business
day after the date of the annual meeting of shareholders in each year, will be
granted an option to acquire 1,000 shares of Magna Common Stock at the fair
market value of Magna Common Stock on such date. With respect to options granted
in 1996, each option will become exercisable at the rate of one-third of the
number of shares subject thereto on the first anniversary of the date of grant
and the remainder of the option will become exercisable on the second
anniversary of the date of grant. Options granted in 1997 will not be
exercisable during the first year after the date of grant; however, such options
will become fully exercisable on the first anniversary of the date of grant.
Options granted in 1998 or thereafter will be fully exercisable as of the date
of grant. Options outstanding and unexercised at the time the holder ceases to
be an outside director of Magna terminate on the earlier of (i) the expiration
date or (ii) 24 months after the month in which the holder ceases to be an
outside director of Magna.
 
     On August 21, 1996, the Magna Board also adopted the Magna Group, Inc.
Directors Deferred Compensation Plan (the "1996 Deferred Compensation Plan")
which subsequently was amended by action of the Magna Board on March 18, 1998,
which provides for the deferral by a non-employee director of Magna or any of
its subsidiaries of all or any portion of a retainer, committee chair and/or
meeting fees payable by Magna or any of its subsidiaries for the period up to
and including March 31, 1998 (the "Fees"). Such Fees will be credited to a
bookkeeping reserve account and converted into a number of stock units equal to
125% of the Fees divided by the fair market value of a share of Magna Common
Stock on the last day of the quarter in which such Fees would have been paid but
for the deferral. Such stock units will then be credited to a participating
director's stock unit account. Additionally, each stock unit account will be
credited with a number of stock units equal to the per-share dividend payable
with respect to a share of Magna Common Stock multiplied by the number of stock
units held in such stock unit account as of the first business day prior to such
dividend payment date, divided by the fair market value of Magna Common Stock on
such date. On or before December 31 of each calendar year, a director is
permitted to make an irrevocable election with respect to the deferral of Fees
for the following year. Distributions may be made in a single sum distribution
or an annual distribution over a period of less than 10 years (each distribution
being payable in a whole number of shares of Magna Common Stock and a cash
payment for any fractional share interest). The director must elect the form of
distribution with respect to the Fees being deferred pursuant to each deferral
election and may elect a different form of distribution for the Fees being
deferred pursuant to each such election.
 
                                       78
<PAGE>   92
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The law firm of Gallop, Johnson & Neuman, L.C., of which Mr. Donald P.
Gallop, a director of Magna, is a member, provided legal services to Magna or
its subsidiaries during 1997 and will provide legal services to Magna or its
subsidiaries during 1998.
 
     During 1997, Magna entered into various construction contracts with Korte
Construction Company, of which Mr. Ralph F. Korte, a director of Magna, is
Chairman of the Board, pursuant to which Korte Construction Company was paid
approximately $816,367 with respect to the renovation and/or expansion of
certain banking facilities. In connection with such projects, Korte Construction
Company provided various consultation and other services in the design phase of
the projects and, during the construction phase of the projects, was responsible
for all aspects of coordination and construction of the projects. Magna believes
that the terms of these contracts were typical for agreements of this type and
commensurate with those that could have been obtained from unrelated parties.
 
     In March 1997, Magna entered into a letter agreement (the "Letter
Agreement") with Mr. Erl A. Schmiesing, the former Chairman, President and Chief
Executive Officer of Homeland and a current director of Magna, pursuant to which
Magna agreed (i) to pay Mr. Schmiesing annual compensation payments equal to
$261,714 for three years beginning July 1, 1997, (ii) to allow Mr. Schmiesing
and his wife to participate in Magna's health insurance plan, at their sole
expense, until March 2005, (iii) that Mr. Schmiesing would receive, pursuant to
the terms of the Homeland Supplemental Retirement Income Plan, $94,039 annually
for fifteen years, (iv) to maintain Mr. Schmiesing's current country club
membership for three years and (v) to appoint Mr. Schmiesing to the Board of
Directors for a term of three years. The amounts due pursuant to the Letter
Agreement are in lieu of any and all amounts to which Mr. Schmiesing was
entitled pursuant to his severance agreement with Homeland. In addition,
pursuant to the Letter Agreement, Mr. Schmiesing agreed not to become associated
with any business enterprise in substantial direct competition with Magna for a
period ending three years after Mr. Schmiesing ceases to be a member of the
Magna Board.
 
     In connection with its acquisition of River Bend in February 1996, Magna
entered into a Supplemental Agreement (the "Supplemental Agreement") with Mr.
John G. Helmkamp, Jr., the former Chairman and Chief Executive Officer of River
Bend and a current member of the Magna Board, pursuant to which Magna agreed to
allow Mr. Helmkamp and his wife and children to participate in Magna's health
insurance plan, at Mr. Helmkamp's sole expense, and to provide Mr. Helmkamp with
an office, telephone, mail and secretarial service until Mr. Helmkamp attains
the age of 65. In addition, pursuant to the Supplemental Agreement, Mr. Helmkamp
agreed not to become associated with any business enterprise in substantial
direct competition with Magna for a period ending three years after Mr. Helmkamp
ceases to be a member of the Magna Board.
 
     In connection with its acquisition of Landmark in December 1991, Magna
assumed the employment agreement of Mr. S. Lee Kling. The agreement provided
that upon Mr. Kling's retirement, which was effective June 30, 1994, Mr. Kling
would be entitled to payments for ten years equal to $130,246. Magna also
assumed the obligation to pay amounts due Mr. Kling under Landmark's retirement
plans, including its former Supplemental Retirement Plan. All medical,
hospitalization and life insurance coverage (other than a split-dollar insurance
policy) provided to Mr. Kling during his employment are being continued at
Magna's expense for the remainder of Mr. Kling's life.
 
     Certain of the executive officers, directors and some of their associates
and affiliated businesses are and have been customers of Magna Bank and have had
and are expected to have transactions with such bank in the ordinary course of
business. All such transactions were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons. In the
opinion of management of Magna, such transactions did not involve more than the
normal risk of collectibility or present other unfavorable features. The
percentage of shareholders' equity represented by loans to executive officers
and directors and certain of their associates and affiliated businesses was
11.3% at December 31, 1997.
 
                                       79
<PAGE>   93
 
REPORT OF COMPENSATION COMMITTEE OF MAGNA ON EXECUTIVE COMPENSATION
 
     THE COMPENSATION COMMITTEE OF THE MAGNA BOARD HAS ISSUED THE FOLLOWING
REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997.
 
     Committee Responsibilities.  The Compensation Committee of the Magna Board
(the "Committee") is responsible for the following matters with respect to the
compensation of executive officers of Magna and its subsidiaries: (i) reviews
and recommends the base salaries of the executive officers of Magna and its
subsidiaries; (ii) reviews and recommends all aspects of Magna's annual
executive incentive compensation plan; (iii) administers all aspects of Magna's
non-trustee, stock-based compensation and purchase plans; (iv) reviews and
recommends all employment related agreements and amendments thereof for senior
officers; (v) reviews and recommends all aspects of Magna's retirement plans and
Savings and Stock Investment Plan; (vi) reviews and recommends all supplemental
compensation or benefits for senior officers; and (vii) reviews and recommends
all aspects of compensation of directors of Magna.
 
     The Committee continually monitors market practices and trends, and makes
revisions as necessary to ensure that Magna's programs are adequate to attract
and retain the best possible executive talent.
 
     Statement of Policy.  Magna's compensation for its executives is designed
to be closely linked to corporate performance and returns to shareholders. To
this end, Magna has developed an overall compensation strategy and specific
compensation plans that tie a significant portion of executive compensation to
Magna's success in meeting specified performance goals and to appreciation in
the Magna Common Stock price.
 
     The overall objectives of Magna's executive compensation strategy are: (i)
to attract and retain the best possible executive talent; (ii) to provide
additional incentives to these executives to achieve the goals inherent in
Magna's business strategy; (iii) to link executive and shareholder interests
through equity based plans; and (iv) to provide compensation that recognizes
individual contributions as well as overall business results.
 
     Each year the Committee conducts a full review of Magna's executive
compensation. This review includes a comprehensive report from an independent
compensation consultant assessing the effectiveness of Magna's executive
compensation and comparing Magna's executive compensation and corporate
performance to a peer group of bank holding companies of comparable market
capitalization as well as selected bank holding companies operating in the St.
Louis market.
 
     The Committee reviews the selection of peer companies used for compensation
analysis. It also reviews the executive compensation of four selected bank
holding companies in the St. Louis market. This peer group is currently
comprised of eighteen bank holding companies of comparable market
capitalization, four of which represent a sub-set of the companies used to
prepare the performance graph contained herein. The Dow Jones Equity Market
Index and the Dow Jones Bank Index used to prepare the performance graph include
companies of various sizes. The annual compensation review permits an ongoing
evaluation of the link between Magna's performance and its executive
compensation practices within the context of the compensation programs of other
companies.
 
     The basic elements of Magna's executive compensation packages are base
salary, annual incentive compensation and long term incentive compensation. The
Committee's policies with respect to each of these elements, including the basis
for the compensation awarded to Mr. G. Thomas Andes, Magna's Chief Executive
Officer, are discussed below. In addition, while the elements of compensation
described below are considered separately, the Committee takes into account the
full compensation package afforded by Magna to each individual, including
pension benefits, supplemental retirement benefits, insurance and other
benefits. All actions of the Committee with respect to executive compensation in
1997 were subsequently unanimously approved by the Magna Board.
 
     Section 162(m) of the Code.  The Committee considered Section 162(m) of the
Code regarding qualifying compensation paid to Magna's executive officers for
deductibility in structuring compensation arrangements for 1997. The Committee
attempts to ensure that all compensation awarded to Magna's executives is
substantially deductible, except where Magna has or may determine to pay an
excise tax as
 
                                       80
<PAGE>   94
 
provided in Section 4999 of the Code or related income tax liabilities. See
"-- Compensation of Executive Officers of Magna -- Change in Control and
Termination Arrangements."
 
     Base Salary.  The Committee's approach to base compensation for Magna's
executives, including the Chief Executive Officer and the named executives in
the Summary Compensation Table, has been to offer base salaries that are
competitive after reviewing Magna's peer group and selected St. Louis bank
holding companies. The Committee reviewed the duties and responsibilities of the
Magna executive officers as compared to the duties and responsibilities (in the
view of the Committee) of officers at other institutions holding nominally
comparable positions. Adjustments to base compensation reflect the Committee's
collective, subjective judgment as to individual performance, considering such
personal qualities (without assignment of relative weights) as leadership,
team-building, fiscal management, ability to develop effective programs in
response to changes in the financial services industry, and the ability to
successfully integrate acquisitions completed by Magna. In addition, the
increase for Mr. Ronald A. Buerges reflects his appointment as Senior Executive
Vice President during 1997. In reviewing the individual performance of Magna's
executive officers (other than the Chief Executive Officer), the Committee takes
into account the views of the Chief Executive Officer. Individual executive
officer salaries were reviewed and recommendations for adjustments were made
based on the above-mentioned criteria.
 
     Annual Incentive Compensation.  Magna's historic practice has been to
determine desired annual earnings based on achievable goals expressed as a per
share dollar amount. To the extent Magna achieved its goal, after a threshold
level established by the Committee was reached, a bonus was paid to designated
executive officers. In 1997, the threshold level required to be met by Magna
before any bonus could be paid to the executives was 95% of the targeted
earnings per share goal.
 
     In 1997, the threshold level was not met by Magna and, therefore, no bonus
payments were made to Magna's executives.
 
     Long Term Incentive Compensation.  Magna maintains, for senior officers of
Magna and its subsidiaries, certain stock-based compensation plans that allow
the Committee to award to selected individuals, stock options, stock
appreciation rights, restricted stock and performance shares. Awards under
Magna's stock-based compensation plans directly link potential participant
rewards to increases in shareholder value.
 
     Magna historically has provided the majority of its stock-based
compensation in the form of stock options. Stock options are granted with an
exercise price equal to the market price of Magna Common Stock on the date of
the grant and become exercisable within a two-year period. This approach is
designed to encourage the creation of shareholder value and the retention of the
executives over the long term, as this element of the compensation package has
value only to the extent that stock price appreciation occurs.
 
     To further motivate the executives, the Committee reaffirmed its guidelines
for executive stock ownership. The program establishes levels of stock ownership
expressed as a multiple of base salary. These levels are as follows:
 
<TABLE>
<S>                                 <C>
Chairman and CEO                    5 times base salary
President and COO                   4 times base salary
Executive Vice President            3 times base salary
Other Senior Executives             2 times base salary
Other Executives                    1 times base salary
</TABLE>
 
     It is the Committee's expectation that these levels of ownership will be
attained by October 2000 for those executives who have held their position for
at least five years. The stock ownership requirement can be met with shares
beneficially owned by the executive, shares allocated to the executive through
Magna's 401(k) plan, shares purchased through the Employee Stock Purchase Plan
and restricted stock awards. Unexercised stock options do not apply toward the
ownership guidelines.
 
     The total number of options granted to Magna's executive officers in
September 1997 was determined pursuant to the recommendations of an independent
compensation consultant and the Committee's collective, subjective judgment as
to individual performance on a qualitative basis. In making this determination,
the

                                       81
<PAGE>   95
 
Committee considered (without assignment of relative weights) the
recommendations of Mr. Andes as to such personal qualities of the executive
officers (other than himself) as leadership, team-building, fiscal management,
ability to develop effective programs in response to changes in the financial
services industry, and the ability to successfully integrate acquisitions
completed by Magna. The Committee also considered the amount of options already
held by the executive officers in determining the amount of the 1997 grants.
 
     In 1997, the Committee made conditional awards of restricted stock to the
following Executive Vice Presidents: 20,000 shares to Mr. Buerges, 10,000 shares
to Mr. Robert J. Mathias, and 5,000 shares to Mr. Robert M. Olson, Jr. In
awarding the restricted stock, the Committee reviewed a comprehensive report
from an independent consultant as to long term incentive executive compensation
of a peer group of selected bank holding companies of comparable market
capitalization compared to Magna's executive long term incentive compensation.
In addition, the Committee used its collective, subjective judgment as to
individual performance on a qualitative basis. In making this determination, the
Committee considered (without assignment of relative weights) the
recommendations of Mr. Andes as to such personal qualities of the executive
officers (other than himself) as leadership, team-building, fiscal management,
ability to develop effective programs in response to changes in the financial
service industry, and the ability to successfully integrate acquisitions
completed by Magna.
 
     Mr. Buerges was issued 10,000 shares of restricted stock pursuant to an
award made to him in 1996 under Magna's 1996 Amended and Restated Long Term
Performance Plan, which award provided that shares of restricted stock would be
issued only if certain target share prices for Magna Common Stock were attained
by September 17, 2006. The restricted shares were issued in blocks of 2,000,
3,000 and 5,000 shares as a result of the Magna Common Stock reaching and
maintaining an average closing price of at least $34.25, $38.625 and $43.625,
respectively, for twenty consecutive trading days.
 
     CEO Compensation.  At the December 18, 1996 Committee meeting, Mr. Andes'
base salary was reviewed. The Committee reviewed a comprehensive report provided
by an independent consultant as to compensation for a chief executive officer in
regard to Magna's peer group and selected St. Louis bank holding companies. The
Committee considered Mr. Andes' role in negotiating the acquisition of Homeland,
Magna's then-projected growth to a $6.2 billion organization and Magna's
anticipated financial results for 1996. Based upon such considerations, the
Committee recommended, and the Magna Board unanimously approved, an increase in
Mr. Andes base salary to $475,000. which became effective January 1, 1997.
 
     In 1997, since the threshold level of 95% of the targeted earnings per
share goal was not met by Magna, Mr. Andes received no bonus.
 
     Mr. Andes received a stock option grant to purchase 80,000 shares of Magna
Common Stock at an exercise price of $37.00 per share, the fair market value of
the Magna Common Stock on the date of grant. The Committee considered the amount
of options already held by Mr. Andes in making such award. The Committee
believes that Mr. Andes' stock option grant continues to align his compensation
more directly with the interests of Magna's shareholders.
 
     Similarly, in December 1997, the Committee granted a restricted stock award
to Mr. Andes totaling 50,000 shares of Magna Common Stock, which award provides
that shares of restricted stock will be issued only if certain target share
prices for the Magna Common Stock are attained by December 17, 2001. This award
directly links Mr. Andes' total potential compensation to the appreciation in
the Magna Common Stock price and increases his potential ownership position in
Magna. In addition, in 1997, pursuant to an award made to him in April 1996, Mr.
Andes was issued 37,500 shares of restricted stock in three blocks of 12,500
shares each as a result of the Magna Common Stock reaching and maintaining an
average price of at least $32.00, $35.00 and $39.00, respectively, for twenty
consecutive trading days.
 
                                       82
<PAGE>   96
 
     Conclusion.  Through the programs described above, a significant portion of
Magna's executive compensation is linked directly to individual and corporate
performance and stock price appreciation. The Committee intends to continue the
policy of linking executive compensation to individual and corporate performance
and returns to shareholders, recognizing that the business cycle from time to
time may result in an imbalance for a particular period.
 
                                          THE MEMBERS OF
                                          THE COMPENSATION COMMITTEE
 
                                          Carl G. Hogan, Sr., Chairman
                                          James A. Auffenberg, Jr.
                                          Randall E. Ganim
                                          Franklin A. Jacobs
                                          William A. Peck, M.D.
 
March 31, 1998
 
                                       83
<PAGE>   97
 
COMPENSATION OF EXECUTIVE OFFICERS OF MAGNA
 
     Unless otherwise indicated, the following table sets forth the compensation
of Magna's chief executive officer and the four most highly compensated
executive officers, other than the chief executive officer, for each of the last
three years:
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                                      LONG-TERM
                                                                                 COMPENSATION AWARDS
                                            ANNUAL COMPENSATION          -----------------------------------
                                      --------------------------------   RESTRICTED   SECURITIES
                                                             OTHER       SECURITIES   UNDERLYING
                                                             ANNUAL        STOCK       OPTIONS/      LTIP       ALL OTHER
          NAME AND                    SALARY     BONUS    COMPENSATION    AWARD(S)       SARS      PAYMENTS    COMPENSATION
     PRINCIPAL POSITION        YEAR     ($)       ($)         ($)          ($)(1)        (#)          ($)          ($)
     ------------------        ----   -------   -------   ------------   ----------   ----------   ---------   ------------
<S>                            <C>    <C>       <C>       <C>            <C>          <C>          <C>         <C>
G. THOMAS ANDES..............  1997   475,000         0      26,427             0       80,000     1,715,625      25,391(2)
Chairman and Chief             1996   375,000   171,266       9,238        58,292       40,000      368,750       20,496
Executive Officer              1995   375,000   128,870       5,375        42,940       32,252      356,250       20,138
RONALD A. BUERGES............  1997   197,500         0         950             0       20,000      457,500        8,838(3)
Senior Executive               1996   152,750    59,618         186        20,266       15,000            0        5,590
Vice President                 1995   108,000    11,759           0         3,895        2,400            0        4,310
LINDA K. FABEL...............  1997   192,500         0       4,050             0       10,000            0       11,193(4)
Executive Vice                 1996   190,000    65,106       1,245        22,125       10,000      236,000       10,275
President, Retail              1995   190,000    45,712         635        15,224       15,048       47,500       10,029
Banking
ROBERT M. OLSON, JR..........  1997   190,000         0       1,909             0       12,500            0        9,481(5)
Executive Vice                 1996   182,500    62,519         430        21,269       10,000      236,000        9,123
President, Operations          1995   182,500    43,900         132        14,630       14,483       47,500        8,858
and Technology
ROBERT J. MATHIAS............  1997   158,021(6)       0          0             0       12,500            0        3,563(7)
Executive Vice                 1996       N/A       N/A         N/A           N/A          N/A          N/A          N/A
President, Credit              1995       N/A       N/A         N/A           N/A          N/A          N/A          N/A
Administration
</TABLE>
 
- ---------------
(1) Represents the dollar value of shares of restricted stock issued in lieu of
    cash compensation payable under Magna's annual incentive compensation plan.
    The aggregate value of restricted stock holdings for the individuals named
    in the Summary Compensation Table at the end of the last completed fiscal
    year was $333,655 for Mr. Andes, $141,459 for Ms. Fabel and $48,266 and
    $99,415 for Messrs. Buerges and Olson, respectively, based upon a per share
    price of $45.75 being the last transaction price on December 31, 1997. The
    aggregate number of shares of restricted stock held by the individuals named
    in the Summary Compensation Table at the end of the last completed fiscal
    year was 7,293 for Mr. Andes, 3,092 for Ms. Fabel and 1,055 and 2,173 for
    Messrs. Buerges and Olson, respectively. The restrictions applicable to such
    restricted stock holdings lapse upon the earliest of (i) the date on which
    the executive's employment with Magna ends by reason of retirement, death or
    disability, (ii) the date on which a Change in Control of Magna (as
    described under "-- Change in Control and Termination Arrangements") occurs,
    or (iii) within five years of the date of award. The holders thereof are
    entitled to receive dividends on their shares to the same extent as other
    holders of the Magna Common Stock.
 
    The foregoing amounts do not include (i) 50,000 shares of restricted stock
    subject to an award made to Mr. Andes in 1992 under Magna's 1992 Amended and
    Restated Long Term Performance Plan (the "1992 Performance Plan"), which
    award provided that shares of restricted stock would be issued only if
    certain target share prices for the Magna Common Stock were attained by
    March 9, 1996, (ii) 50,000 shares of restricted stock subject to an award
    made to Mr. Andes in 1996 under Magna's 1996 Amended and Restated Long Term
    Performance Plan (the "1996 Performance Plan"), which award provided that
    shares of restricted stock would be issued only if certain target share
    prices for the Magna Common Stock were attained by March 10, 2000, or (iii)
    50,000 shares of restricted stock subject to an award made to Mr. Andes in
    1997 under the 1996 Performance Plan, which award provided that shares of
    restricted stock would be issued only if certain target share prices for
    Magna Common Stock were attained by December 17, 2001. During 1994 and 1995,
    10,000 and 15,000 shares, respectively, of restricted stock were issued to
    Mr. Andes under the 1992 award. During 1996 and 1997, 12,500 and
 
                                       84
<PAGE>   98
 
    37,500 shares, respectively, of restricted stock were issued to Mr. Andes
    under the 1996 award. Based upon a per share price of $45.75, the aggregate
    value of such 75,000 shares at December 31, 1997 was $3,431,250. Pursuant to
    the terms of Mr. Andes' Restricted Stock Agreement, the remaining 25,000
    shares of restricted stock subject to the 1992 award were forfeited on March
    9, 1996.
 
    The foregoing amounts do not include 10,000 and 20,000 shares of restricted
    stock subject to awards made to Mr. Buerges in 1996 and 1997, respectively,
    under the 1996 Performance Plan, which awards provided that shares of
    restricted stock would be issued only if certain target share prices for
    Magna Common Stock were attained by December 18, 2000 and December 17, 2001,
    respectively. During 1997, 10,000 shares of restricted stock were issued to
    Mr. Buerges pursuant to the 1996 award. Based upon a per share price of
    $45.75, the aggregate value of such shares at December 31, 1997 was
    $457,500.
 
    The foregoing amounts do not include 10,000 shares of restricted stock
    subject to awards made to each of Ms. Fabel and Mr. Olson in 1994 under the
    1992 Performance Plan, which awards provided that shares of restricted stock
    would be issued only if certain target share prices for the Magna Common
    Stock are attained by December 30, 1998. During 1995 and 1996, 2,000 and
    8,000 shares, respectively, of restricted stock were issued to each of Ms.
    Fabel and Mr. Olson under these awards. Based upon a per share price of
    $45.75, the aggregate value of such shares at December 31, 1997 was $457,500
    for each of Ms. Fabel and Mr. Olson.
 
    The foregoing amounts do not include 10,000 and 5,000 shares of restricted
    stock subject to awards made to each of Mr. Mathias and Mr. Olson,
    respectively, in 1997 under the 1996 Performance Plan, which awards provided
    that shares of restricted stock would be issued only if certain target share
    prices for the Magna Common Stock are attained by December 17, 2001. No
    shares were issued to Messrs. Mathias or Olson in 1997 under the terms of
    these awards. See "-- Long Term Incentive Plans-Awards in Last Fiscal Year."
 
(2) Includes the following: $2,334 for split-dollar life insurance, $3,669 for
    premiums paid by Magna on a carve-out life insurance policy owned by the
    executive which builds cash value, $16,538 in matching contributions to
    Magna's Executive Supplemental Deferral Plan and $2,850 in matching
    contributions to Magna's Savings and Stock Investment Plan.
 
(3) Includes the following: $1,124 for premiums paid by Magna on a carve-out
    life insurance policy owned by the executive which builds cash value, $4,864
    in matching contributions to Magna's Executive Supplemental Deferral Plan
    and $2,850 in matching contributions to Magna's Savings and Stock Investment
    Plan.
 
(4) Includes the following: $3,465 for premiums paid by Magna on a carve-out
    life insurance policy owned by the executive which builds cash value, $4,878
    in matching contributions to Magna's Executive Supplemental Deferral Plan
    and $2,850 in matching contributions to Magna's Savings and Stock Investment
    Plan.
 
(5) Includes the following: $1,806 for premiums paid by Magna on a carve-out
    life insurance policy owned by the executive which builds cash value, $4,825
    in matching contributions to Magna's Executive Supplemental Deferral Plan
    and $2,850 in matching contributions to Magna's Savings and Stock Investment
    Plan.
 
(6) Mr. Mathias joined Magna in February 1997 and became an executive officer of
    Magna at that time. Accordingly, compensation information for the year 1997
    relates only to the period Mr. Mathias was employed by Magna.
 
(7) This amount represents matching contributions to Magna's Savings and Stock
    Investment Plan.
 
     Change in Control and Termination Arrangements.  Each of the executive
officers named in the Summary Compensation Table, and certain other executive
officers of Magna, have individual agreements under which each such executive
officer will receive severance benefits in certain circumstances either prior to
(with respect to Mr. Andes) or after (with respect to all executive officers) a
"Change in Control" (as defined below) of Magna. The employment agreement of Mr.
Andes is for a term through December 31, 1999. The agreements of the other
executive officers continue until terminated pursuant to their terms or December
31 of
 
                                       85
<PAGE>   99
 
any calendar year if notice is given, by December 1 of such year, by either
party of such party's intention not to renew the agreement.
 
     If prior to a Change in Control of Magna, Magna terminates the employment
of Mr. Andes without "cause" (generally, willful failure to perform his duties,
willful misconduct injurious to Magna or a material breach of the agreement) or
if Mr. Andes terminates his employment with "good reason" (as defined below),
Magna will be required to pay severance benefits to Mr. Andes in an amount equal
to Mr. Andes' then-current annual salary through December 31, 1999.
Additionally, Mr. Andes would be entitled to the continuation of certain welfare
benefits to which he otherwise would have been entitled through December 31,
1999. In the event Mr. Andes became reemployed, the obligation of Magna to
provide such welfare benefits would be secondary to the obligation of Mr. Andes'
new employer to provide any such benefit. The agreements with the other
executive officers do not provide for the payment of severance or welfare
benefits if such officers are terminated prior to a Change in Control of Magna.
 
     The employment agreement of Mr. Andes and the agreements of Ms. Fabel and
Messrs. Buerges, Olson and Mathias and certain other executive officers provide
substantially similar protection in the event of a termination of the executive
officer's employment after a Change in Control of Magna but differ somewhat in
the severance payments made available to such executive officers. "Change in
Control" is defined in the agreements to mean, generally, (i) the acquisition by
any person of 20% or more of the then outstanding voting power of Magna; (ii) a
change in the composition of the Magna Board such that during any two
consecutive years incumbent directors and their nominees do not constitute a
majority of the Board; (iii) a reorganization, merger or consolidation of Magna
unless owners of all of the Magna Common Stock or voting securities of Magna
prior to such event own voting securities of the surviving corporation following
such event in the same proportions as they owned Magna voting securities prior
to such event; (iv) a merger or consolidation in which Magna is the surviving
corporation and the holders of Magna Common Stock do not own at least 50% of the
stock of the surviving corporation; (v) any sale, lease, exchange or transfer of
all, or substantially all, of the assets of Magna; or (vi) the liquidation or
dissolution of Magna.
 
     If an executive officer terminates his or her employment with Magna or the
successor corporation for "good reason" (generally, the assignment of duties
inconsistent with the executive's position, a material diminution in authority
or responsibilities, a reduction in any benefit specified in the agreement, any
material breach of the agreement by Magna, or, within one year following the
Change in Control, resignation by the executive in his or her sole and absolute
discretion), or if Magna or the successor corporation terminates the executive
officer's employment without cause within two years after the Change in Control
of Magna, Magna or the successor corporation will be required to pay severance
benefits. In the case of Mr. Andes, Magna or its successor will be required to
pay a lump sum cash amount equal to 2.99 times his "cash compensation" (as
defined in his employment agreement) for the most recent calendar year prior to
the Change in Control. If the receipt of benefits upon a Change in Control of
Magna subjects Mr. Andes to any Federal excise tax pursuant to Section 4999 of
the Code, Magna also will be obligated to pay him an additional amount equal to
the entire excise tax due. In the case of the remaining executive officers
(other than Mr. Buerges), Magna or its successor will be required to pay a
lump-sum cash amount equal to two times the executive officer's "annual base
salary" plus the executive officer's "incentive bonus" (each as defined in the
agreements). In Mr. Buerges' case, the lump-sum cash amount shall be equal to
2.5 times his "annual base salary" plus his "incentive bonus" (each as defined
in his agreement). The cash payments to the executive officers (other than Mr.
Andes) are subject to reduction to the extent that such payment would require
the executive officer to pay a Federal excise tax under the Code.
 
     For information with respect to the impact of the Merger on the
compensation and benefits provided to the executive officers of Magna, see
"DESCRIPTION OF TRANSACTION -- Interests of Certain Persons in the Merger."
 
                                       86
<PAGE>   100
 
     Option/SAR Grants in Last Fiscal Year.  The following table sets forth
information concerning stock option grants made in the fiscal year ended
December 31, 1997 to the individuals named in the Summary Compensation Table. No
SARs were granted to the named individuals in 1997.
 
<TABLE>
<CAPTION>
                                                    INDIVIDUAL GRANTS
                            -----------------------------------------------------------------   POTENTIAL REALIZABLE
                              NUMBER OF                                                           VALUE AT ASSUMED
                              SECURITIES     PERCENT OF TOTAL                                    ANNUAL STOCK PRICE
                              UNDERLYING       OPTIONS/SARS     EXERCISE                          APPRECIATION FOR
                             OPTIONS/SARS       GRANTED TO       OR BASE                           OPTION TERM (1)
                               GRANTED         EMPLOYEES IN     PRICE (3)      EXPIRATION       ---------------------
           NAME                 (2)(#)         FISCAL YEAR       ($/SH)         DATE (4)          5%($)      10%($)
           ----             --------------   ----------------   ---------   -----------------   ---------   ---------
<S>                         <C>              <C>                <C>         <C>                 <C>         <C>
G. Thomas Andes...........      80,000            20.00           37.00     September 9, 2007   4,821,600   7,677,600
Ronald A. Buerges.........      20,000             5.00           37.00     September 9, 2007   1,205,400   1,919,400
Linda K. Fabel............      10,000             2.50           37.00     September 9, 2007     602,700     959,700
Robert M. Olson, Jr. .....      12,500             3.13           37.00     September 9, 2007     753,375   1,199,625
Robert J. Mathias.........      12,500             3.13           37.00     September 9, 2007     753,375   1,199,625
</TABLE>
 
- ---------------
(1) The indicated 5% and 10% rates of appreciation are provided to comply with
    SEC regulations and do not necessarily reflect the views of Magna as to the
    likely trend in the price of Magna Common Stock. The effect of 5% and 10%
    rates of appreciation on Magna Common Stock held for ten years is
    demonstrated by the following: a share of Magna Common Stock purchased on
    September 10, 1997 at a price per share of $37.00 and held until September
    9, 2007 would have a value of $60.27 at a 5% rate of appreciation, and a
    value of $95.97 at a 10% rate of appreciation. Actual gains, if any, on
    stock option exercises and Magna Common Stock holdings will be dependent on,
    among other things, the future performance of Magna Common Stock and overall
    market conditions. There can be no assurance that the amounts reflected
    herein will be achieved. Additionally, these values do not take into
    consideration the provisions of the options providing for nontransferability
    or delayed exercisability.
 
(2) Each option became exercisable with respect to 33% and will be exercisable
    with respect to 67% of the total number of shares subject to the option on
    March 10, 1998 and September 10, 1998, respectively, and after September 10,
    1999 will be exercisable as to all such shares. On a Change in Control of
    Magna, as described herein under "-- Change in Control and Termination
    Arrangements." and upon death, disability or retirement, all options become
    fully exercisable.
 
(3) The exercise price may be paid in cash or, at the discretion of the
    Committee, by shares of Magna Common Stock already owned or to be issued
    pursuant to the exercise, valued at fair market value on the date of
    exercise, or a combination of cash and Magna Common Stock.
 
(4) The options terminate on the earlier of ten years after grant or, generally,
    immediately on termination for reasons other than retirement, disability or
    death.
 
     Long Term Incentive Plans-Awards in Last Fiscal Year.  The following table
sets forth information concerning shares of restricted stock subject to awards
made to Messrs. Andes, Buerges, Olson and Mathias in 1997 pursuant to the 1996
Performance Plan. The shares of restricted stock subject to such awards will be
forfeited if certain target share prices for Magna Common Stock are not attained
by certain specified dates, as described below.
 
<TABLE>
<CAPTION>
                                               NUMBER OF             PERFORMANCE OR
                                             SHARES, UNITS         OTHER PERIOD UNTIL
                  NAME                     OR OTHER RIGHTS(1)     MATURATION OR PAYOUT
                  ----                     ------------------   -------------------------
<S>                                        <C>                  <C>
G. Thomas Andes..........................        50,000         Through December 17, 2001
Ronald A. Buerges........................        20,000         Through December 17, 2001
Robert M. Olson, Jr. ....................         5,000         Through December 17, 2001
Robert J. Mathias........................        10,000         Through December 17, 2001
</TABLE>
 
- ---------------
(1) Restricted stock vests as follows: 20% if the average closing price of Magna
    Common Stock equals or exceeds $50.25 for 20 consecutive trading days; 50%
    if the average closing price of Magna Common Stock equals or exceeds $56.75
    for 20 consecutive trading days; and 100% if the average closing price of
    Magna Common Stock equals or exceeds $64.125 for 20 consecutive trading
    days. Shares of restricted stock subject to the awards will be issued if
    such price is reached before the earliest to occur of (i) the
 
                                       87
<PAGE>   101
 
    date on which the executive's employment with Magna ends, (ii) the date on
    which there occurs a Change in Control (as described under "-- Change in
    Control and Termination Arrangements") or (iii) December 17, 2001. Shares of
    restricted stock issued under the award, if any, will be forfeited if
    employment terminates prior to or on the fifth anniversary of the date of
    issuance of such shares, other than by reason of retirement, disability or
    death, unless a Change in Control has occurred. Such shares will not be
    forfeited if a Change in Control has occurred.
 
     Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values.  The following table sets forth information concerning the aggregate
dollar value realized upon exercise of options during 1997, the number of
securities underlying options outstanding at year-end 1997 and the value of
options outstanding at year-end 1997 having an exercise price lower than the
market price of Magna Common Stock ("in-the-money" options), held by the
individuals named in the Summary Compensation Table. As of December 31, 1997, no
SARs were outstanding.
 
<TABLE>
<CAPTION>
                                                              NUMBER OF SECURITIES
                                        SHARES               UNDERLYING UNEXERCISED    VALUE OF UNEXERCISED
                                       ACQUIRED                OPTIONS AT FISCAL      IN-THE-MONEY OPTIONS AT
                                          ON       VALUE          YEAR-END (#)          FISCAL YEAR-END ($)
                                       EXERCISE   REALIZED        EXERCISABLE/             EXERCISABLE/
                NAME                     (#)        ($)          UNEXERCISABLE             UNEXERCISABLE
                ----                   --------   --------   ----------------------   -----------------------
<S>                                    <C>        <C>        <C>                      <C>
G. Thomas Andes......................     0          0           122,529/93,200          2,923,840/960,700
Ronald A. Buerges....................     0          0            17,450/24,950            381,238/272,763
Linda K. Fabel.......................     0          0            51,348/13,300          1,264,998/152,675
Robert M. Olson, Jr. ................     0          0            33,960/15,800            765,158/174,550
Robert J. Mathias....................     0          0             3,300/19,200             45,375/201,500
</TABLE>
 
- ---------------
(1) Based on a price per share of $45.75, being the last transaction price on
    December 31, 1997.
 
     Retirement Plans.  Officers and employees of Magna and its subsidiaries
participate in Magna's Pension Plan, as amended (the "Retirement Plan"). An
officer or employee must have attained age 21 and completed one year of service
to be eligible to participate in the Retirement Plan. The annual retirement
benefit at normal retirement age (age 65) is accrued for each year of service
based upon percentages of the designated portions of the participant's
compensation for that year. The annual retirement benefit is 1.35% of the
participant's Basic Compensation (as defined below) plus an annual benefit equal
to the applicable percentage of the participant's Basic Compensation and the
applicable percentage of the participant's Excess Compensation (as defined
below) as follows:
 
<TABLE>
<CAPTION>
                                                      PERCENT OF     PERCENT OF
                                                        BASIC          EXCESS
                   YEAR OF BIRTH                     COMPENSATION   COMPENSATION
                   -------------                     ------------   ------------
<S>                                                  <C>            <C>
Prior to 1938......................................      .00%           .60%
1938-1954..........................................      .05            .55
1955 and thereafter................................      .10            .50
</TABLE>
 
     "Basic Compensation" under the Retirement Plan is the participant's annual
base rate salary on January 1 received for services rendered to Magna or its
subsidiaries, but does not include payments by Magna or its subsidiaries under
Magna's Section 401(k) plan or any bonus plan of Magna or its subsidiaries.
"Excess Compensation" is the amount by which the participant's Basic
Compensation exceeds one-half of the maximum amount that may be considered as
wages under the federal Social Security Act for a particular tax year. The
maximum number of years that may be utilized in computing a participant's total
retirement benefit under the Retirement Plan is 35 or a participant's total
period of service as of December 31, 1988, if greater. Generally, accrued
benefits are not vested for participants who have been employed by Magna or its
subsidiaries for less than five years. Benefits payable under the Retirement
Plan are subject to the maximum
 
                                       88
<PAGE>   102
 
annual benefit which may be paid pursuant to Section 415 of the Code. Maximum
annual benefits at age 65 for 1997 were based upon year of birth as follows:
 
<TABLE>
<CAPTION>
                                                              MAXIMUM ANNUAL
                       YEAR OF BIRTH                             BENEFIT
                       -------------                          --------------
<S>                                                           <C>
Prior to 1938...............................................     $119,210
1938-1954...................................................      110,548
1955 and thereafter.........................................      101,907
</TABLE>
 
     These maximum benefits are subject to future cost-of-living increases and
potential reduction by reason of contributions under the tax-qualified defined
contribution plans maintained by Magna. The Basic Compensation used in computing
retirement benefits is limited by Section 401(a)(17) of the Code. For 1998, this
limit is $160,000. The limit is subject to future cost-of-living increases.
Magna has established two separate Supplemental Executive Retirement Plans (the
"Supplemental Plans") for certain executive officers that will provide
retirement benefits at age 65 equal to a percentage of the five-year average
salary (highest five years out of the final ten years) for each year of service
(up to a maximum of 35 years), less the Retirement Plan benefits. One
Supplemental Plan (the "60% Supplemental Plan") provides approximately 1.714%
for each year of service, while the other Supplemental Plan (the "50%
Supplemental Plan") provides approximately 1.429% for each year of service. A
participant's five-year average salary is based on the total of base salary,
bonuses and restricted stock awards earned during complete calendar years of
employment. Benefits are payable as a ten-year certain and life annuity. Other
forms of payment are available at the option of the participant.
 
     Benefits payable pursuant to the Retirement Plans generally are paid in the
form of monthly life income, with 120 monthly payments guaranteed in any event.
If a participant is married at the time of their retirement, they will receive,
unless they elect otherwise and their spouse executes a written consent, such
retirement income in the form of a joint and survivor annuity. In lieu of the
amount and form of retirement income otherwise payable, a participant has the
option, with spousal consent, of electing a lump-sum distribution from the
Retirement Plans. As specified in the Retirement Plans and required by Internal
Revenue Service regulations, the lump sum amount is actuarially determined based
on standard mortality rates published by the Pension Benefit Guaranty
Corporation. These published interest rates vary with market conditions.
 
     During 1997, Mr. Andes participated in the Retirement Plan and the 60%
Supplemental Plan. Ms. Fabel and Messrs. Buerges and Olson participated in the
Retirement Plan and the 50% Supplemental Plan during 1997.
 
     Mr. Mathias participated in the 50% Supplemental Plan during 1997; however,
due to the service requirement, Mr. Mathias was not eligible to participate in
the Retirement Plan. At December 31, 1997, the annual accrued benefits payable
by Magna upon retirement at the normal retirement age of 65 under the Retirement
Plan and the Supplemental Plans for each of the executive officers named in the
Summary Compensation Table was as follows: $278,247 for Mr. Andes, $21,317 for
Ms. Fabel and $11,931, $13,282 and $0 for each of Messrs. Buerges, Olson and
Mathias, respectively.
 
     For information with respect to the impact of the Merger on the
compensation and benefits provided to the executive officers of Magna, see
"DESCRIPTION OF TRANSACTION -- Interests of Certain Persons in the Merger."
 
                                       89
<PAGE>   103
 
COMPARISON OF FIVE-YEAR TOTAL RETURN
 
     The following graph and Table I compare the five-year cumulative total
shareholder return (including reinvestment of dividends) on an indexed basis
among Magna, the Dow Jones Equity Market Index and the Dow Jones Bank Index. The
Dow Jones Bank Index is comprised of 48 national and regional bank holding
companies, that trade on the New York Stock Exchange. The graph and Table I
assume that the value of the investment in Magna Common Stock and each Index was
$100 on December 31, 1992. Table II sets forth the annual return on the
investment on a fiscal year-end basis, non-cumulatively. All data assumes that
all dividends were reinvested on the ex-dividend date.
 
<TABLE>
<CAPTION>
        Measurement Period          Dow Jones Equity    Dow Jones Bank      Magna Common
      (Fiscal Year Covered)           Market Index           Index              Stock
<S>                                 <C>                <C>                <C>
1992                                           100.00             100.00             100.00
1993                                           109.95             108.71             117.98
1994                                           110.79             104.21             111.51
1995                                           153.31             167.20             157.06
1996                                           189.28             236.18             202.18
1997                                           251.71             351.60             323.27
</TABLE>
 
TABLE I -- CUMULATIVE VALUE OF $100 INVESTMENT
 
<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                                 ---------------------------------------------------------
                                                  1992      1993      1994      1995      1996      1997
                                                 -------   -------   -------   -------   -------   -------
<S>                                              <C>       <C>       <C>       <C>       <C>       <C>
Dow Jones Equity Market Index..................  $100.00   $109.95   $110.79   $153.31   $189.28   $251.71
Dow Jones Bank Index...........................   100.00    108.71    104.21    167.20    236.18    351.60
Magna Common Stock.............................   100.00    117.98    111.51    157.06    202.18    323.27
</TABLE>
 
TABLE II -- NON-CUMULATIVE ANNUAL RETURN
 
<TABLE>
<CAPTION>
                                                                                DECEMBER 31,
                                                         -----------------------------------------------------------
                                                         1992      1993       1994       1995       1996       1997
                                                         ----      -----      -----      -----      -----      -----
<S>                                                      <C>       <C>        <C>        <C>        <C>        <C>
Dow Jones Equity Market Index......................      N/A        9.95%      0.76%     38.38%     23.46%     32.98%
Dow Jones Bank Index...............................      N/A        8.71      (4.14)     60.45      41.26      48.87
Magna Common Stock.................................      N/A       17.98      (5.48)     40.85      28.73      59.89
</TABLE>
 
                                       90
<PAGE>   104
 
SECURITY OWNERSHIP OF MANAGEMENT OF MAGNA
 
     The following information is furnished as of March 12, 1998 to indicate
beneficial ownership by each current director, the executive officers named in
the Summary Compensation Table, individually, and all current directors and
executive officers as a group, of shares of Magna Common Stock. No director or
executive officer beneficially owned any shares of Magna Class B Preferred Stock
on March 12. 1998.
 
<TABLE>
<CAPTION>
                                                              NUMBER OF SHARES OF
                                                                 MAGNA COMMON
                                                                     STOCK
                                                                 BENEFICIALLY
                  NAME OF BENEFICIAL OWNER                        OWNED(1)(2)
                  ------------------------                    -------------------
<S>                                                           <C>
G. Thomas Andes(3)..........................................         360,188
James A. Auffenberg, Jr.(4).................................          11,672
Ronald A. Buerges(5)........................................          59,273
Wayne T. Ewing(6)...........................................          24,367
Linda K. Fabel(7)...........................................          77,228
Donald P. Gallop(8).........................................          35,389
Randall E. Ganim(9).........................................          34,393
C. E. Heiligenstein(10).....................................         249,794
John G. Helmkamp, Jr.(11)...................................         305,824
Carl G. Hogan, Sr.(12)......................................          41,681
Franklin A. Jacobs(13)......................................         148,758
S. Lee Kling(14)............................................         252,021
Ralph F. Korte(15)..........................................          61,837
Roger J. Lowery(16).........................................           1,821
Robert J. Mathias(17).......................................          20,915
Robert M. Olson, Jr.(18)....................................          58,649
William A. Peck(19).........................................           1,500
Erl A. Schmiesing(20).......................................          37,703
Douglas K. Shull(21)........................................           5,985
Frank R. Trulaske(22).......................................          41,227
George T. Wilkins, Jr.(23)..................................         183,007
All current directors and executive officers as a group (24
  persons)(24)..............................................       2,128,517
</TABLE>
 
- ---------------
 (1) Except as otherwise noted, each director or executive officer has sole
     voting and investment power over the shares listed beside his or her name.
 
 (2) No director or executive officer beneficially owned more than one percent
     of the total outstanding shares of Magna Common Stock on such date.
 
 (3) Includes 3,375 shares that Mr. Andes owns jointly with his spouse, 721
     shares that are owned by Mr. Andes' spouse, as to which shares Mr. Andes
     has shared voting and investment power, and 214 shares registered as owned
     by Mr. Andes as custodian. Also includes 148,929 shares subject to options
     exercisable currently or within 60 days after March 12, 1998 and 50,000
     shares of restricted stock that could be issued to Mr. Andes if certain
     target share prices for Magna Common Stock are attained within 60 days
     after March 12, 1998.
 
 (4) Includes 1,000 shares owned by Mr. Auffenberg's spouse, as to which shares
     Mr. Auffenberg has shared voting and investment power, 1,500 shares owned
     by Mr. Auffenberg as custodian for his minor children and 3,507 shares
     subject to options exercisable currently or within 60 days after March 12,
     1998.
 
 (5) Includes 24,050 shares subject to options exercisable currently or within
     60 days after March 12, 1998 and 20,000 shares of restricted stock that
     could be issued to Mr. Buerges if certain target share prices for Magna
     Common Stock are attained within 60 days after March 12, 1998.
 
                                       91
<PAGE>   105
 
 (6) Includes 1,046 shares that are owned by Mr. Ewing's spouse, as to which
     shares Mr. Ewing has shared voting and investment power, and 7,605 shares
     subject to options exercisable currently or within 60 days after March 12,
     1998.
 
 (7) Includes 13,050 shares that Ms. Fabel owns jointly with her spouse, as to
     which shares Ms. Fabel has shared voting and investment power. Also
     includes 54,648 shares subject to options exercisable currently or within
     60 days after March 12, 1998.
 
 (8) Includes 4,688 shares held of record by the trustees of the testamentary
     trust of Mr. Philip Gallop, of which Mr. Gallop is a co-trustee and has
     shared voting and investment power, and 18,622 shares owned by Mr. Gallop's
     spouse, as to which shares Mr. Gallop disclaims beneficial ownership. Also
     includes 7,605 shares subject to options exercisable currently or within 60
     days after March 12, 1998.
 
 (9) Includes 500 shares that Mr. Ganim owns jointly with his spouse, as to
     which shares Mr. Ganim has shared voting and investment power and 5 shares
     owned by Mr. Ganim as custodian for his son. Also includes 2,266 shares
     subject to options exercisable currently or within 60 days after March 12,
     1998.
 
(10) Includes 4,668 shares owned by Mr. Heiligenstein's spouse, as to which
     shares Mr. Heiligenstein has shared voting and investment power, and 3,507
     shares subject to options exercisable currently or within 60 days after
     March 12, 1998.
 
(11) Includes 280,082 shares that are subject to various trusts as to which
     shares Mr. Helmkamp has either sole or shared voting and investment power
     (Mr. Helmkamp disclaims beneficial ownership as to certain of such shares),
     14,804 shares owned by Mr. Helmkamp's spouse and 5,458 shares subject to
     the Elizabeth Helmkamp Charitable Trust, as to which Mr. Helmkamp disclaims
     beneficial ownership. Also includes 3,873 shares subject to options
     exercisable currently or within 60 days after March 12, 1998.
 
(12) Includes 3,507 shares subject to options exercisable currently or within 60
     days after March 12, 1998.
 
(13) Includes 5,741 shares subject to options exercisable currently or within 60
     days after March 12, 1998.
 
(14) Includes 107 shares that are owned as custodian by Mr. Kling's spouse, as
     to which shares Mr. Kling disclaims beneficial ownership. Also includes
     10,136 shares subject to options exercisable currently or within 60 days
     after March 12, 1998.
 
(15) Includes 7,272 shares subject to options exercisable currently or within 60
     days after March 12, 1998.
 
(16) Includes 1,000 shares subject to options exercisable currently or within 60
     days after March 12, 1998.
 
(17) Includes 10,825 shares subject to options exercisable currently or within
     60 days after March 12, 1998 and 10,000 shares of restricted stock that
     could be issued to Mr. Mathias if certain target share prices for Magna
     Common Stock are attained within 60 days after March 12, 1998.
 
(18) Includes 38,085 shares subject to options exercisable currently or within
     60 days after March 12, 1998 and 5,000 shares of restricted stock that
     could be issued to Mr. Olson if certain target share prices for Magna
     Common Stock are attained within 60 days after March 12, 1998.
 
(19) Includes 500 shares that Dr. Peck owns jointly with his spouse, as to which
     shares Dr. Peck has shared voting and investment power and 1,000 shares
     subject to options exercisable currently or within 60 days after March 12,
     1998.
 
(20) Includes 2,266 shares subject to options exercisable currently or within 60
     days after March 12, 1998.
 
(21) Includes 2,266 shares subject to options exercisable currently or within 60
     days after March 12, 1998.
 
(22) Includes 35,122 shares that are subject to various trusts as to which
     shares Mr. Trulaske has either sole or shared voting and investment power
     and 4,679 shares subject to options exercisable currently or within 60 days
     after March 12, 1998.
 
(23) Includes 1,214 shares that Dr. Wilkins owns jointly with his spouse, as to
     which shares Dr. Wilkins has shared voting and investment power, and 7,272
     shares subject to options exercisable currently or within 60 days after
     March 12,1998.
 
(24) This amount represents 6% of the outstanding shares of Magna Common Stock
     on March 12, 1998. This amount includes 402,896 shares subject to options
     exercisable currently or within 60 days after
 
                                       92
<PAGE>   106
 
     March 12, 1998, and 105,000 shares of restricted stock issuable if certain
     target prices for Magna Common Stock are attained within 60 days after
     March 12, 1998.
 
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     Section 16(a) of the Exchange Act requires Magna's directors and executive
officers ("Reporting Persons") to file with the SEC initial reports of ownership
and reports of changes in ownership of Magna Common Stock and other equity
securities of Magna. Magna has designated an officer who is available to Magna's
Reporting Persons to assist them in filing the required reports, and Magna
circulates monthly transaction reminders and other materials to promote
compliance with Section 16(a). To Magna's knowledge, based solely on its review
of the copies of such reports furnished to Magna and written representations
that no other reports were required, all Section 16(a) filing requirements
applicable to the Reporting Persons were complied with during the year ended
December 31, 1997.
 
                                 OTHER MATTERS
 
     As of the date of this Joint Proxy Statement, the Magna Board knows of no
matters that will be presented for consideration at the Magna Annual Meeting
other than as described in this Joint Proxy Statement, and the UPC Board knows
of no matters that will be presented for consideration at the UPC Special
Meeting other than as described in this Joint Proxy Statement. However, if any
other matters shall properly come before the Magna Annual Meeting or UPC Special
Meeting and be voted upon, the enclosed proxy shall be deemed to confer
discretionary authority to the individuals named as proxies therein to vote the
shares represented by such proxy as to any such matters.
 
                             SHAREHOLDER PROPOSALS
 
     UPC expects to hold its next annual meeting of shareholders after the
Merger in April 1999. Under SEC rules, proposals of UPC shareholders intended to
be presented at that meeting must be received by UPC at its principal executive
offices no later than the date specified in UPC's 1998 annual meeting proxy
statement. In the event the Merger is not consummated, proposals of Magna
shareholders intended to be presented at the 1999 annual meeting of shareholders
of Magna must be received by Magna at its principal executive offices no later
than December 1, 1998.
 
                                    EXPERTS
 
     The consolidated financial statements of UPC and subsidiaries incorporated
in this Joint Proxy Statement by reference to the UPC Annual Report on Form 10-K
for the year ended December 31, 1997, have been so incorporated in reliance on
the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
 
     The consolidated financial statements of Magna included in Magna's Annual
Report (Form 10-K) for the year ended December 31, 1997, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
 
                                    OPINIONS
 
     The legality of the shares of UPC Common Stock to be issued in the Merger
will be passed upon by E. James House, Jr., Secretary and Manager of the Legal
Department of UPC. E. James House, Jr. is an officer of, and receives
compensation from, UPC.
 
     Certain tax consequences of the transaction have been passed upon by Alston
& Bird LLP, Washington, D.C. and Wachtell, Lipton, Rosen & Katz, New York, New
York.
 
                                       93
<PAGE>   107
 
                                                                      APPENDIX A
 
                      AGREEMENT AND PLAN OF REORGANIZATION
 
                                 BY AND BETWEEN
 
                               MAGNA GROUP, INC.
 
                                      AND
 
                           UNION PLANTERS CORPORATION
 
                         DATED AS OF FEBRUARY 22, 1998
 
                                       A-1
<PAGE>   108
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Parties.....................................................  A- 6
Preamble....................................................  A- 6
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER...............  A- 6
     1.1 Merger.............................................  A- 6
     1.2 Time and Place of Closing..........................  A- 6
     1.3 Effective Time.....................................  A- 7
     1.4 Execution of Stock Option Agreement................  A- 7
ARTICLE 2 -- TERMS OF MERGER................................  A- 7
     2.1 Charter............................................  A- 7
     2.2 Bylaws.............................................  A- 7
     2.3 Directors and Officers.............................  A- 7
ARTICLE 3 -- MANNER OF CONVERTING SHARES....................  A- 7
     3.1 Conversion of Shares...............................  A- 7
     3.2 Anti-Dilution Provisions...........................  A- 7
     3.3 Shares Held by Magna or UPC........................  A- 8
     3.4 Dissenting Shareholders............................  A- 8
     3.5 Fractional Shares..................................  A- 8
     3.6 Conversion of Stock Rights.........................  A- 8
ARTICLE 4 -- EXCHANGE OF SHARES.............................  A- 9
     4.1 Exchange Procedures................................  A- 9
     4.2 Rights of Former Magna Shareholders................  A-10
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF MAGNA........  A-10
     5.1 Organization, Standing, and Power..................  A-10
     5.2 Authority; No Breach By Agreement..................  A-10
     5.3 Capital Stock......................................  A-11
     5.4 Magna Subsidiaries.................................  A-12
     5.5 SEC Filings; Financial Statements..................  A-12
     5.6 Absence of Undisclosed Liabilities.................  A-12
     5.7 Absence of Certain Changes or Events...............  A-13
     5.8 Tax Matters........................................  A-13
     5.9 Assets.............................................  A-13
     5.10 Environmental Matters.............................  A-14
     5.11 Compliance with Laws..............................  A-14
     5.12 Labor Relations...................................  A-15
     5.13 Employee Benefit Plans............................  A-15
     5.14 Material Contracts................................  A-17
     5.15 Legal Proceedings.................................  A-17
     5.16 Reports...........................................  A-18
     5.17 Statements True and Correct.......................  A-18
     5.18 Accounting, Tax, and Regulatory Matters...........  A-18
     5.19 State Takeover Laws...............................  A-18
     5.20 Charter Provisions................................  A-18
     5.21 Rights Agreement..................................  A-18
     5.22 Derivatives.......................................  A-19
     5.23 Year 2000.........................................  A-19
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF UPC..........  A-19
     6.1 Organization, Standing, and Power..................  A-19
     6.2 Authority; No Breach By Agreement..................  A-19
     6.3 Capital Stock......................................  A-20
</TABLE>
 
                                       A-2
<PAGE>   109
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
     6.4 UPC Subsidiaries...................................  A-20
     6.5 SEC Filings; Financial Statements..................  A-20
     6.6 Absence of Undisclosed Liabilities.................  A-21
     6.7 Absence of Certain Changes or Events...............  A-21
     6.8 Tax Matters........................................  A-21
     6.9 Assets.............................................  A-22
     6.10 Environmental Matters.............................  A-22
     6.11 Compliance with Laws..............................  A-23
     6.12 Labor Relations...................................  A-23
     6.13 Legal Proceedings.................................  A-24
     6.14 Reports...........................................  A-24
     6.15 Statements True and Correct.......................  A-24
     6.16 Accounting, Tax, and Regulatory Matters...........  A-24
     6.17 Employee Benefit Plans............................  A-24
     6.18 Derivatives.......................................  A-25
     6.19 Year 2000.........................................  A-25
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION.......  A-25
     7.1 Affirmative Covenants of Both Parties..............  A-25
     7.2 Negative Covenants of Magna........................  A-25
     7.3 Adverse Changes in Condition.......................  A-27
     7.4 Reports............................................  A-27
ARTICLE 8 -- ADDITIONAL AGREEMENTS..........................  A-27
     8.1 Registration Statement; Joint Proxy Statement;
         Shareholder Approvals..............................  A-27
     8.2 Exchange Listing...................................  A-28
     8.3 Applications.......................................  A-28
     8.4 Filings with State Offices.........................  A-28
     8.5 Agreement as to Efforts to Consummate..............  A-28
     8.6 Investigation and Confidentiality..................  A-28
     8.7 Press Releases.....................................  A-29
     8.8 Certain Actions....................................  A-29
     8.9 Accounting and Tax Treatment.......................  A-29
     8.10 State Takeover Laws...............................  A-29
     8.11 Charter Provisions................................  A-29
     8.12 Rights Agreement..................................  A-30
     8.13 Agreement of Affiliates...........................  A-30
     8.14 Employee Benefits and Contracts...................  A-30
     8.15 Indemnification...................................  A-31
     8.16 Certain Modifications.............................  A-32
     8.17 Pending Magna Acquisition.........................  A-32
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO
  CONSUMMATE................................................  A-32
     9.1 Conditions to Obligations of Each Party............  A-32
     9.2 Conditions to Obligations of UPC...................  A-33
     9.3 Conditions to Obligations of Magna.................  A-34
ARTICLE 10 -- TERMINATION...................................  A-35
     10.1 Termination.......................................  A-35
     10.2 Effect of Termination.............................  A-36
     10.3 Non-Survival of Representations and Covenants.....  A-36
ARTICLE 11 -- MISCELLANEOUS.................................  A-36
     11.1 Definitions.......................................  A-36
     11.2 Expenses..........................................  A-42
     11.3 Brokers and Finders...............................  A-42
</TABLE>
 
                                       A-3
<PAGE>   110
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
     11.4 Entire Agreement..................................  A-42
     11.5 Amendments........................................  A-43
     11.6 Waivers...........................................  A-43
     11.7 Assignment........................................  A-43
     11.8 Notices...........................................  A-43
     11.9 Governing Law.....................................  A-44
     11.10 Counterparts.....................................  A-44
     11.11 Captions.........................................  A-44
     11.12 Interpretations..................................  A-44
     11.13 Enforcement of Agreement.........................  A-44
     11.14 Severability.....................................  A-45
Signatures..................................................  A-45
</TABLE>
 
                                       A-4
<PAGE>   111
 
                                LIST OF EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT NUMBER                           DESCRIPTION
- --------------                           -----------
<S>              <C>
1.               Form of Stock Option Agreement. (sec. 1.4).
2.               Form of Plan of Merger. (sec. 1.1)
3.               Form of Affiliate Agreement. (secs.8.13, 9.2(d)).
</TABLE>
 
                                       A-5
<PAGE>   112
 
                      AGREEMENT AND PLAN OF REORGANIZATION
 
     THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of February 22, 1998, by and between MAGNA GROUP, INC.
("Magna"), a corporation organized and existing under the Laws of the State of
Delaware, with its principal office located in St. Louis, Missouri; and UNION
PLANTERS CORPORATION ("UPC"), a corporation organized and existing under the
Laws of the State of Tennessee, with its principal office located in Memphis,
Tennessee.
 
                                    PREAMBLE
 
     The Boards of Directors of Magna and UPC are of the opinion that the
transactions described herein are in the best interests of the parties to this
Agreement and their respective stockholders. This Agreement provides for the
acquisition of Magna by UPC pursuant to the merger (the "Merger") of Magna with
and into Union Planters Holding Corporation ("UPHC"), a wholly-owned subsidiary
of UPC organized under the Laws of the State of Tennessee. At the effective time
of the Merger, the outstanding shares of the common stock of Magna shall be
converted into shares of the common stock of UPC (except as provided herein) and
the outstanding shares of preferred stock of Magna shall be converted into cash
payments. As a result, stockholders of Magna shall become stockholders of UPC,
and UPHC shall continue to conduct the business and operations of Magna as a
wholly-owned subsidiary of UPC. The transactions described in this Agreement are
subject to the approvals of the stockholders of Magna, the stockholders of UPC,
the Board of Governors of the Federal Reserve System, and certain state
regulatory authorities, and the satisfaction of certain other conditions
described in this Agreement. It is the intention of the parties to this
Agreement that the Merger (i) for federal income tax purposes shall qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code and (ii) for accounting purposes shall qualify for treatment as a pooling
of interests.
 
     Immediately after the execution and delivery of this Agreement, as a
condition and inducement to UPC's willingness to enter into this Agreement,
Magna and UPC are entering into a stock option agreement (the "Stock Option
Agreement"), in substantially the form of Exhibit 1, pursuant to which Magna is
granting to UPC an option to purchase shares of Magna Common Stock.
 
     Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
 
     NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
 
                                   ARTICLE 1
                        TRANSACTIONS AND TERMS OF MERGER
 
     1.1  Merger.  Subject to the terms and conditions of this Agreement, at the
Effective Time, Magna shall be merged with and into UPHC in accordance with the
provisions of Section 252 of the DGCL and with the effect provided in Section
259 of the DGCL and in accordance with the provisions of Section 48-21-109 of
the TBCA and with the effect provided in Section 48-21-108 of the TBCA (the
"Merger"). UPHC shall be the Surviving Corporation resulting from the Merger and
shall continue to be governed by the Laws of the State of Tennessee. The Merger
shall be consummated pursuant to the terms of this Agreement, which has been
approved and adopted by the respective Boards of Directors of Magna and UPC, and
the Plan of Merger, in substantially the form of Exhibit 2, which has been
approved and adopted by the Board of Directors of Magna and will be approved and
adopted by the Board of Directors of UPHC prior to the Effective Time.
 
     1.2  Time and Place of Closing.  The consummation of the Merger (the
"Closing") shall take place at 9:00 A.M. on the date that the Effective Time
occurs (or the immediately preceding day if the Effective Time is earlier than
9:00 A.M.), or at such other time as the Parties, acting through their duly
authorized officers, may mutually agree. The place of Closing shall be at such
location as may be mutually agreed upon by the Parties.
 
                                       A-6
<PAGE>   113
 
     1.3  Effective Time.  The Merger and the other transactions contemplated by
this Agreement shall become effective on the date and at the time the
Certificate of Merger shall become effective with the Secretary of State of the
State of Delaware and the Articles of Merger shall become effective with the
Secretary of State of the State of Tennessee (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the duly authorized officers of each Party, the Parties shall use
their reasonable efforts to cause the Effective Time to occur on or before the
15th business day (as designated by UPC) following the last to occur of (i) the
effective date (including expiration of any applicable waiting period) of the
last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger and (ii) the date on which the stockholders of
UPC and Magna approve the matters relating to this Agreement required to be
approved by such stockholders by applicable Law.
 
     1.4  Execution of Stock Option Agreement.  Immediately after the execution
of this Agreement and as a condition hereto, Magna is executing and delivering
to UPC the Stock Option Agreement.
 
                                   ARTICLE 2
                                TERMS OF MERGER
 
     2.1  Charter.  The Charter of UPHC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
 
     2.2  Bylaws.  The Bylaws of UPHC in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
 
     2.3  Directors and Officers.  The directors of UPHC in office immediately
prior to the Effective Time, together with such additional individuals
thereafter elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of UPHC in office immediately prior to the Effective
Time, together with such additional individuals thereafter elected, shall serve
as the officers of the Surviving Corporation from and after the Effective Time
in accordance with the Bylaws of the Surviving Corporation.
 
                                   ARTICLE 3
                          MANNER OF CONVERTING SHARES
 
     3.1  Conversion of Shares.  Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of UPC or Magna, or the stockholders of either of the foregoing, the shares of
the constituent corporations shall be converted as follows:
 
          (a) Each share of UPC Common Stock issued and outstanding immediately
     prior to the Effective Time shall remain issued and outstanding from and
     after the Effective Time.
 
          (b) Each share of UPHC Common Stock issued and outstanding immediately
     prior to the Effective Time shall remain issued and outstanding from and
     after the Effective Time.
 
          (c) Each share of Magna Common Stock (including any associated
     Preferred Stock Purchase Rights, but excluding shares held by any Magna
     Company or any UPC Company, in each case other than in a fiduciary capacity
     or as a result of debts previously contracted) issued and outstanding at
     the Effective Time shall be converted into .9686 of a share of UPC Common
     Stock (the "Exchange Ratio"). Pursuant to the UPC Rights Agreement, each
     share of UPC Common Stock issued in connection with the Merger upon
     conversion of Magna Common Stock shall be accompanied by a UPC Right.
 
          (d) Each share of Magna Class B Preferred Stock (excluding any shares
     held by any Magna Company or any UPC Company, in each case other than in a
     fiduciary capacity as a result of debts previously contracted) issued and
     outstanding at the Effective Time, shall be converted into the right to
     receive a check from UPC in the amount of the Preferred Stock Cash Payment
     Amount.
 
     3.2  Anti-Dilution Provisions.  In the event Magna changes the number of
shares of Magna Common Stock or Magna Class B Preferred Stock issued and
outstanding prior to the Effective Time as a result of a
                                       A-7
<PAGE>   114
 
stock split, stock dividend, recapitalization, or similar transaction with
respect to such stock, the Exchange Ratio and the Preferred Stock Cash Payment
Amount, as the case may be, shall be proportionately adjusted. In the event UPC
changes the number of shares of UPC Common Stock issued and outstanding prior to
the Effective Time as a result of a stock split, stock dividend,
recapitalization, or similar transaction with respect to such stock and the
record date therefor (in the case of a stock dividend) or the effective date
thereof (in the case of a stock split or similar recapitalization for which a
record date is not established) shall be prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.
 
     3.3  Shares Held by Magna or UPC.  Each of the shares of Magna Capital
Stock held by any Magna Company or by any UPC Company, in each case other than
in a fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time and no consideration shall be issued
in exchange therefor.
 
     3.4  Dissenting Stockholders.  Any holder of shares of Magna Class B
Preferred Stock who perfects such holder's dissenters' rights of appraisal in
accordance with and as contemplated by Section 262 of the DGCL shall be entitled
to receive the value of such shares in cash as determined pursuant to such
provision of Law; provided, however, that no such payment shall be made to any
dissenting stockholder unless and until such dissenting stockholder has complied
with the applicable provisions of the DGCL and surrendered to Magna the
certificate or certificates representing the shares for which payment is being
made. In the event that after the Effective Time a dissenting stockholder of
Magna fails to perfect, or effectively withdraws or loses, such holder's right
to appraisal of and payment for such holder's shares, UPC shall issue and
deliver the consideration to which such holder of shares of Magna Class B
Preferred Stock is entitled under this Article 3 (without interest) upon
surrender by such holder of the certificate or certificates representing shares
of Magna Class B Preferred Stock held by such holder. Magna will establish an
escrow account with an amount sufficient to satisfy the maximum aggregate
payment that may be required to be paid to dissenting stockholders. Upon
satisfaction of all claims of dissenting stockholders, the remaining escrowed
amount, reduced by payment of the fees and expenses of the escrow agent, will be
returned to the Surviving Corporation.
 
     3.5  Fractional Shares.  Notwithstanding any other provision of this
Agreement, each holder of shares of Magna Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of UPC Common Stock (after taking into account all certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of UPC Common Stock multiplied
by the market value of one share of UPC Common Stock at the Effective Time. The
market value of one share of UPC Common Stock at the Effective Time shall be the
last sale price of UPC Common Stock on the NYSE-Composite Transactions List (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by UPC) on the last trading day preceding the
Effective Time. No such holder will be entitled to dividends, voting rights, or
any other rights as a stockholder in respect of any fractional shares.
 
     3.6  Conversion of Stock Rights.
 
          (a) At the Effective Time, each award, option, or other right to
     purchase or acquire shares of Magna Common Stock pursuant to stock options,
     stock appreciation rights, or stock awards ("Magna Rights") granted by
     Magna under the Magna Stock Plans, which are outstanding at the Effective
     Time, whether or not exercisable, shall be converted into and become rights
     with respect to UPC Common Stock, and UPC shall assume each Magna Right, in
     accordance with the terms of the Magna Stock Plan and stock option
     agreement by which it is evidenced, except that from and after the
     Effective Time, (i) UPC and its Salary and Benefits Committee shall be
     substituted for Magna and the Committee of Magna's Board of Directors
     (including, if applicable, the entire Board of Directors of Magna)
     administering such Magna Stock Plan, (ii) each Magna Right assumed by UPC
     may be exercised solely for shares of UPC Common Stock (or cash in the case
     of stock appreciation rights), (iii) the number of shares of UPC Common
     Stock subject to such Magna Right shall be equal to the number of shares of
     Magna Common Stock subject to such Magna Right immediately prior to the
     Effective Time multiplied by the Exchange Ratio and rounding down to the
     nearest whole share, and (iv) the per share exercise
 
                                       A-8
<PAGE>   115
 
     price (or similar threshold price, in the case of stock awards) under each
     such Magna Right shall be adjusted by dividing the per share exercise (or
     threshold) price under each such Magna Right by the Exchange Ratio and
     rounding up to the nearest cent. Notwithstanding the provisions of clauses
     (iii) and (iv) of the first sentence of this Section 3.6, each Magna Right
     which is an "incentive stock option" shall be adjusted as required by
     Section 424 of the Internal Revenue Code, so as not to constitute a
     modification, extension, or renewal of the option, within the meaning of
     Section 424(h) of the Internal Revenue Code. UPC agrees to take all
     necessary steps to effectuate the foregoing provisions of this Section 3.6.
 
          (b) As soon as reasonably practicable after the Effective Time, UPC
     shall deliver to the participants in each Magna Stock Plan an appropriate
     notice setting forth such participant's rights pursuant thereto and the
     grants pursuant to such Magna Stock Plan shall continue in effect on the
     same terms and conditions (subject to the adjustments required by Section
     3.6(a) after giving effect to the Merger), and UPC shall comply with the
     terms of each Magna Stock Plan to ensure, to the extent required by, and
     subject to the provisions of, such Magna Stock Plan, that Magna Rights
     which qualified as incentive stock options prior to the Effective Time
     continue to qualify as incentive stock options after the Effective Time. At
     or prior to the Effective Time, UPC shall take all corporate action
     necessary to reserve for issuance sufficient shares of UPC Common Stock for
     delivery upon exercise of Magna Rights assumed by it in accordance with
     this Section 3.6. As soon as reasonably practicable after the Effective
     Time, UPC shall file a registration statement on Form S-3 or Form S-8, as
     the case may be (or any successor or other appropriate forms), with respect
     to the shares of UPC Common Stock subject to such options and shall use its
     reasonable efforts to maintain the effectiveness of such registration
     statements (and maintain the current status of the prospectus or
     prospectuses contained therein) for so long as such options remain
     outstanding. With respect to those individuals who subsequent to the Merger
     will be subject to the reporting requirements under Section 16(a) of the
     1934 Act, where applicable, UPC shall administer the Magna Stock Plan
     assumed pursuant to this Section 3.6 in a manner that complies with Rule
     16b-3 promulgated under the 1934 Act.
 
          (c) All restrictions or limitations on transfer with respect to Magna
     Common Stock awarded under the Magna Stock Plans or any other plan,
     program, or arrangement of any Magna Company, to the extent that such
     restrictions or limitations shall not have already lapsed, and except as
     otherwise expressly provided in such plan, program, or arrangement, shall
     remain in full force and effect with respect to shares of UPC Common Stock
     into which such restricted stock is converted pursuant to Section 3.1 of
     this Agreement.
 
                                   ARTICLE 4
                               EXCHANGE OF SHARES
 
     4.1  Exchange Procedures.  Promptly after the Effective Time, UPC and Magna
shall cause the exchange agent selected by UPC (the "Exchange Agent") to mail to
the former stockholders of Magna appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of Magna Capital Stock shall pass,
only upon proper delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of Magna Capital Stock (other than shares
to be canceled pursuant to Section 3.3 of this Agreement or as to which the
holder thereof has perfected dissenters' rights of appraisal as contemplated by
Section 3.4 of this Agreement) issued and outstanding at the Effective Time
shall surrender the certificate or certificates representing such shares to the
Exchange Agent and shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 3.1 of this Agreement, together
with all undelivered dividends or distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2 of this Agreement. To the
extent required by Section 3.5 of this Agreement, each holder of shares of Magna
Common Stock issued and outstanding at the Effective Time also shall receive,
upon surrender of the certificate or certificates representing such shares, cash
in lieu of any fractional share of UPC Common Stock to which such holder may be
otherwise entitled (without interest). UPC shall not be obligated to deliver the
consideration to which any former holder of Magna Capital Stock is entitled as a
result of the Merger until such holder surrenders such holder's certificate
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or certificates representing the shares of Magna Capital Stock for exchange as
provided in this Section 4.1. The certificate or certificates of Magna Capital
Stock so surrendered shall be duly endorsed as the Exchange Agent may require.
Any other provision of this Agreement notwithstanding, neither the Surviving
Corporation nor the Exchange Agent shall be liable to a holder of Magna Capital
Stock for any amounts paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property Law.
 
     4.2  Rights of Former Magna Stockholders.  At the Effective Time, the stock
transfer books of Magna shall be closed as to holders of Magna Capital Stock
immediately prior to the Effective Time and no transfer of Magna Capital Stock
by any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of Magna Capital Stock (other
than shares to be canceled pursuant to Section 3.3 of this Agreement or as to
which the holder thereof has perfected dissenters' rights of appraisal as
contemplated by Section 3.4 of this Agreement) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Sections 3.1 and 3.5 of this Agreement in exchange
therefor, subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which have been declared or made by Magna in respect of such
shares of Magna Capital Stock in accordance with the terms of this Agreement and
which remain unpaid at the Effective Time. To the extent permitted by Law,
former stockholders of record of Magna shall be entitled to vote after the
Effective Time at any meeting of UPC stockholders the number of whole shares of
UPC Common Stock into which their respective shares of Magna Common Stock are
converted, regardless of whether such holders have exchanged their certificates
representing Magna Common Stock for certificates representing UPC Common Stock
in accordance with the provisions of this Agreement. Whenever a dividend or
other distribution is declared by UPC on the UPC Common Stock, the record date
for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares issuable pursuant to this
Agreement, but beginning 30 days after the Effective Time no dividend or other
distribution payable to the holders of record of UPC Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Magna Common Stock issued and outstanding at
the Effective Time until such holder surrenders such certificate for exchange as
provided in Section 4.1 of this Agreement. However, upon surrender of such Magna
Common Stock certificate, both the UPC Common Stock certificate (together with
all such undelivered dividends or other distributions without interest) and any
undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
 
                                   ARTICLE 5
                    REPRESENTATIONS AND WARRANTIES OF MAGNA
 
     Except as set forth in the Magna Disclosure Memorandum referencing a
specific section of this Agreement, Magna hereby represents and warrants to UPC
as follows:
 
     5.1  Organization, Standing, and Power.  Magna is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its Material Assets. Magna is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Magna.
 
     5.2  Authority; No Breach By Agreement.
 
          (a) Magna has the corporate power and authority necessary to execute,
     deliver, and perform its obligations under this Agreement and the Plan of
     Merger and to consummate the transactions contemplated hereby and thereby.
     The execution, delivery, and performance of this Agreement and the Plan of
     Merger, and the consummation of the transactions contemplated herein and
     therein, including the Merger, have been duly and validly authorized by all
     necessary corporate action in respect thereof on the part of Magna, subject
     to the approval of this Agreement and the Plan of Merger by holders of the
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     requisite number of shares of Magna Capital Stock, voting together as one
     class, as required by Law, which is the only stockholder vote required for
     approval of this Agreement and the Plan of Merger and consummation of the
     Merger by Magna. Subject to such requisite stockholder approval, this
     Agreement and the Plan of Merger represent legal, valid, and binding
     obligations of Magna, enforceable against Magna in accordance with their
     respective terms (except in all cases as such enforceability may be limited
     by applicable bankruptcy, insolvency, reorganization, receivership,
     conservatorship, moratorium, or similar Laws affecting the enforcement of
     creditors' rights generally and except that the availability of the
     equitable remedy of specific performance or injunctive relief is subject to
     the discretion of the court before which any proceeding may be brought).
 
          (b) Neither the execution and delivery of this Agreement and the Plan
     of Merger by Magna, nor the consummation by Magna of the transactions
     contemplated hereby or thereby, nor compliance by Magna with any of the
     provisions hereof or thereof, will (i) conflict with or result in a breach
     of any provision of Magna's Certificate of Incorporation or Bylaws or (ii)
     constitute or result in a Default under, or require any Consent pursuant
     to, or result in the creation of any Lien on any Asset of any Magna Company
     under, any Contract or Permit of any Magna Company, where such Default or
     Lien, or any failure to obtain such Consent, is reasonably likely to have,
     individually or in the aggregate, a Material Adverse Effect on Magna, or
     (iii) subject to receipt of the requisite Consents referred to in Section
     9.1(b) of this Agreement, violate any Law or Order applicable to any Magna
     Company or any of their respective Material Assets.
 
          (c) Other than in connection or compliance with the provisions of the
     Securities Laws, applicable state corporate and securities Laws, and rules
     of the NYSE, and other than Consents required from Regulatory Authorities,
     and other than notices to or filings with the Internal Revenue Service or
     the Pension Benefit Guaranty Corporation with respect to any employee
     benefit plans, or under the HSR Act, and other than Consents, filings, or
     notifications which, if not obtained or made, are not reasonably likely to
     have, individually or in the aggregate, a Material Adverse Effect on Magna,
     no notice to, filing with, or Consent of, any public body or authority is
     necessary for the consummation by Magna of the Merger and the other
     transactions contemplated in this Agreement and the Plan of Merger.
 
     5.3  Capital Stock.
 
          (a) The authorized capital stock of Magna consists, as of the date of
     this Agreement, of (i) 80,000,000 shares of Magna Common Stock, of which
     32,649,181 shares were issued and outstanding as of February 20, 1998 and,
     excluding shares of Magna Common Stock issuable in connection with the
     transaction referenced in Section 8.17 of this Agreement and without taking
     into account any shares of Magna Common Stock repurchased by Magna prior to
     the Effective Time, not more than 35,257,887 shares will be issued and
     outstanding at the Effective Time, (ii) 1,000,000 shares of Magna Preferred
     Stock, of which no shares are issued and outstanding as of the date of this
     Agreement and no shares will be issued and outstanding as of the Effective
     Time, (iii) 49,500 shares of Magna Class B Preferred Stock, of which 1,981
     shares are issued and outstanding as of the date of this Agreement and not
     more than 1,981 shares will be issued and outstanding at the Effective
     Time, and (iv) 1,000,000 shares of Magna Class C Preferred Stock, of which
     no shares are issued and outstanding as of the date of this Agreement and
     no shares will be issued and outstanding at the Effective Time. All of the
     issued and outstanding shares of Magna Capital Stock are duly and validly
     issued and outstanding and are fully paid and nonassessable under the DGCL.
     None of the outstanding shares of Magna Capital Stock has been issued in
     violation of any preemptive rights of the current or past stockholders of
     Magna.
 
          (b) Except (i) as set forth in Section 5.3(a) of this Agreement, (ii)
     with respect to shares of Magna Common Stock issuable under the Magna
     Dividend Reinvestment Plan and the Magna Employee Stock Purchase Plan and
     1,337,194 shares of Magna Common Stock subject to outstanding options under
     the Magna Stock Plans, (iii) as provided pursuant to the Stock Option
     Agreement or the Magna Rights Agreement, or (iv) pursuant to the 7%
     Convertible Subordinated Capital Notes and 8 3/4% Convertible Subordinated
     Debentures of Magna, there are no shares of capital stock or other equity
     securities of Magna outstanding and no outstanding Rights relating to the
     capital stock of Magna.
 
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<PAGE>   118
 
     5.4  Magna Subsidiaries.  Magna has disclosed in Section 5.4 of the Magna
Disclosure Memorandum all of the Magna Subsidiaries as of the date of this
Agreement. Magna or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each Magna Subsidiary. No equity
securities of any Magna Subsidiary are or may become required to be issued
(other than to another Magna Company) by reason of any Rights, and there are no
Contracts by which any Magna Subsidiary is bound to issue (other than to another
Magna Company) additional shares of its capital stock or Rights or by which any
Magna Company is or may be bound to transfer any shares of the capital stock of
any Magna Subsidiary (other than to another Magna Company). There are no
Contracts relating to the rights of any Magna Company to vote or to dispose of
any shares of the capital stock of any Magna Subsidiary. All of the shares of
capital stock of each Magna Subsidiary held by a Magna Company are duly
authorized, validly issued, and fully paid and, except as provided in statutes
pursuant to which depository institution Subsidiaries are organized,
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Magna Company
free and clear of any Lien. Each Magna Subsidiary is either a bank or a
corporation, and is duly organized, validly existing, and (as to corporations)
in good standing under the Laws of the jurisdiction in which it is incorporated
or organized, and has the corporate power and authority necessary for it to own,
lease, and operate its Assets and to carry on its business as now conducted.
Each Magna Subsidiary is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna. Each Magna Subsidiary that is a depository institution is an
"insured institution" as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits in which are insured by the
Bank Insurance Fund or Savings Association Insurance Fund.
 
     5.5  SEC Filings; Financial Statements.
 
          (a) Magna has filed and made available to UPC all forms, reports, and
     documents required to be filed by Magna with the SEC since December 31,
     1993 (collectively, the "Magna SEC Reports"). The Magna SEC Reports (i) at
     the time filed, complied in all Material respects with the applicable
     requirements of the 1933 Act and the 1934 Act, as the case may be and (ii)
     did not at the time they were filed (or if amended or superseded by a
     filing prior to the date of this Agreement, then on the date of such
     filing) contain any untrue statement of a Material fact or omit to state a
     Material fact required to be stated in such Magna SEC Reports or necessary
     in order to make the statements in such Magna SEC Reports, in light of the
     circumstances under which they were made, not misleading. Except for Magna
     Subsidiaries that are registered as a broker, dealer, or investment advisor
     or filings required due to fiduciary holdings of the Magna Subsidiaries,
     none of Magna's Subsidiaries is required to file any forms, reports, or
     other documents with the SEC.
 
          (b) Each of the Magna Financial Statements (including, in each case,
     any related notes) contained in the Magna SEC Reports, including any Magna
     SEC Reports filed after the date of this Agreement until the Effective
     Time, complied or will comply as to form in all Material respects with the
     applicable published rules and regulations of the SEC with respect thereto,
     was prepared or will be prepared in accordance with GAAP applied on a
     consistent basis throughout the periods involved (except as may be
     indicated in the notes to such financial statements, or, in the case of
     unaudited statements, as permitted by Form 10-Q of the SEC), and fairly
     presented or will fairly present the consolidated financial position of
     Magna and its Subsidiaries as at the respective dates and the consolidated
     results of its operations and cash flows for the periods indicated, except
     that the unaudited interim financial statements were or are subject to
     normal and recurring year-end adjustments which were not or are not
     expected to be Material in amount or effect.
 
     5.6  Absence of Undisclosed Liabilities.  No Magna Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Magna, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Magna as of
September 30, 1997, included in the Magna Financial Statements or reflected in
the notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to September 30, 1997. No Magna Company has
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incurred or paid any Liability since September 30, 1997, except for such
Liabilities incurred or paid in the ordinary course of business consistent with
past business practice and which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Magna.
 
     5.7  Absence of Certain Changes or Events.  Since September 30, 1997,
except as disclosed in the Magna Financial Statements, (i) there have been no
events, changes, or occurrences which have had, or are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Magna and
(ii) the Magna Companies have conducted their respective businesses in the
ordinary and usual course (excluding the incurrence of expenses in connection
with this Agreement and the transactions contemplated hereby).
 
     5.8  Tax Matters.
 
          (a) All Tax Returns required to be filed by or on behalf of any of the
     Magna Companies have been timely filed, or requests for extensions have
     been timely filed, granted, and have not expired for periods ended on or
     before December 31, 1996, and, to the Knowledge of Magna, all Tax Returns
     filed are complete and accurate in all Material respects. All Tax Returns
     for periods ending on or before the date of the most recent fiscal year end
     immediately preceding the Effective Time will be timely filed or requests
     for extensions will be timely filed. All Taxes shown on filed Tax Returns
     have been paid. There is no audit examination, deficiency, or refund
     Litigation with respect to any Taxes, that is reasonably likely to result
     in a determination that would have, individually or in the aggregate, a
     Material Adverse Effect on Magna, except to the extent reserved against in
     the Magna Financial Statements dated prior to the date of this Agreement.
     All Taxes and other Liabilities due with respect to completed and settled
     examinations or concluded Litigation have been paid.
 
          (b) None of the Magna Companies has executed an extension or waiver of
     any statute of limitations on the assessment or collection of any Tax due
     (excluding such statutes that relate to years currently under examination
     by the Internal Revenue Service or other applicable taxing authorities)
     that is currently in effect.
 
          (c) Adequate provision for any Taxes due or to become due for any of
     the Magna Companies for the period or periods through and including the
     date of the respective Magna Financial Statements has been made and is
     reflected on such Magna Financial Statements.
 
          (d) Each of the Magna Companies is in compliance with, and its records
     contain all information and documents (including properly completed IRS
     Forms W-9) necessary to comply with, all applicable information reporting
     and Tax withholding requirements under federal, state, and local Tax Laws,
     and such records identify with specificity all accounts subject to backup
     withholding under Section 3406 of the Internal Revenue Code, except for
     such instances of noncompliance and such omissions as are not reasonably
     likely to have, individually or in the aggregate, a Material Adverse Effect
     on Magna.
 
          (e) None of the Magna Companies has made any payments, is obligated to
     make any payments, or is a party to any contract, agreement, or other
     arrangement that could obligate it to make any payments that would be
     disallowed as a deduction under Section 280G or 162(m) of the Internal
     Revenue Code.
 
          (f) There are no Material Liens with respect to Taxes upon any of the
     Assets of the Magna Companies.
 
          (g) No Magna Company has filed any consent under Section 341(f) of the
     Internal Revenue Code concerning collapsible corporations.
 
     5.9  Assets.  The Magna Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except where the failure
to have such good and marketable title is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna. All
tangible properties used in the businesses of the Magna Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with Magna's past practices. All Assets which are
Material to Magna's business on a consolidated basis, held under leases or
subleases by any of the Magna Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or other Laws affecting the
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enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect. The Magna Companies currently
maintain insurance in amounts, scope, and coverage reasonably necessary for
their operations. None of the Magna Companies has received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated or (ii) premium costs with respect to
such policies of insurance will be substantially increased. The Assets of the
Magna Companies include all Assets required to operate the business of the Magna
Companies as presently conducted.
 
     5.10  Environmental Matters.
 
          (a) To the Knowledge of Magna, each Magna Company, its Participation
     Facilities, and its Loan Properties are, and have been, in compliance with
     all Environmental Laws, except those violations which are not reasonably
     likely to have, individually or in the aggregate, a Material Adverse Effect
     on Magna.
 
          (b) There is no Litigation pending or, to the Knowledge of Magna,
     threatened before any court, governmental agency, or authority, or other
     forum in which any Magna Company or any of its Participation Facilities has
     been or, with respect to threatened Litigation, may reasonably be expected
     to be named as a defendant (i) for alleged noncompliance (including by any
     predecessor) with any Environmental Law or (ii) relating to the release
     into the environment of any Hazardous Material, whether or not occurring
     at, on, under, or involving a site owned, leased, or operated by any Magna
     Company or any of its Participation Facilities, except for such Litigation
     pending or threatened that is not reasonably likely to have, individually
     or in the aggregate, a Material Adverse Effect on Magna.
 
          (c) There is no Litigation pending, or to the Knowledge of Magna,
     threatened before any court, governmental agency, or board, or other forum
     in which any of its Loan Properties (or Magna in respect of such Loan
     Property) has been or, with respect to threatened Litigation, may
     reasonably be expected to be named as a defendant or potentially
     responsible party (i) for alleged noncompliance (including by any
     predecessor) with any Environmental Law or (ii) relating to the release
     into the environment of any Hazardous Material, whether or not occurring
     at, on, under, or involving a Loan Property, except for such Litigation
     pending or threatened that is not reasonably likely to have, individually
     or in the aggregate, a Material Adverse Effect on Magna.
 
          (d) To the Knowledge of Magna, there is no reasonable basis for any
     Litigation of a type described in subsections (b) or (c), except such as is
     not reasonably likely to have, individually or in the aggregate, a Material
     Adverse Effect on Magna.
 
          (e) To the Knowledge of Magna, during the period of (i) any Magna
     Company's ownership or operation of any of their respective current
     properties, (ii) any Magna Company's participation in the management of any
     Participation Facility, or (iii) any Magna Company's holding of a security
     interest in a Loan Property, there have been no releases of Hazardous
     Material in, on, under, or affecting (or potentially affecting) such
     properties, except such as are not reasonably likely to have, individually
     or in the aggregate, a Material Adverse Effect on Magna. To the Knowledge
     of Magna, prior to the period of (i) any Magna Company's ownership or
     operation of any of their respective current properties, (ii) any Magna
     Company's participation in the management of any Participation Facility, or
     (iii) any Magna Company's holding of a security interest in a Loan
     Property, to the Knowledge of Magna, there were no releases of Hazardous
     Material in, on, under, or affecting any such property, Participation
     Facility, or Loan Property, except such as are not reasonably likely to
     have, individually or in the aggregate, a Material Adverse Effect on Magna.
 
     5.11  Compliance with Laws.  Magna is duly registered as a bank holding
company under the BHC Act. Each Magna Company has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry on
its business as now conducted, except for those Permits the absence of which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Magna, and there has
 
                                      A-14
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occurred no Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna. None of the Magna Companies:
 
          (a) is in violation of any Laws, Orders, or Permits applicable to its
     business or employees conducting its business, except for violations which
     are not reasonably likely to have, individually or in the aggregate, a
     Material Adverse Effect on Magna; and
 
          (b) has received any notification or communication from any agency or
     department of federal, state, or local government or any Regulatory
     Authority or the staff thereof (i) asserting that any Magna Company is not
     in compliance with any of the Laws or Orders which such governmental
     authority or Regulatory Authority enforces, where such noncompliance is
     reasonably likely to have, individually or in the aggregate, a Material
     Adverse Effect on Magna, (ii) threatening to revoke any Permits, the
     revocation of which is reasonably likely to have, individually or in the
     aggregate, a Material Adverse Effect on Magna, or (iii) requiring any Magna
     Company (x) to enter into or consent to the issuance of a cease and desist
     order, formal agreement, directive, commitment, or memorandum of
     understanding, or (y) to adopt any Board resolution or similar undertaking,
     which restricts materially the conduct of its business, or in any manner
     relates to its capital adequacy, its credit or reserve policies, its
     management, or the payment of dividends.
 
     5.12  Labor Relations.  No Magna Company is the subject of any Litigation
asserting that it or any other Magna Company has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state Law) or seeking to compel it or any other Magna Company to bargain with
any labor organization as to wages or conditions of employment, nor is any Magna
Company a party to or bound by any collective bargaining agreement, Contract, or
other agreement or understanding with a labor union or labor organization, nor
is there any strike or other labor dispute involving any Magna Company, pending
or, to the Knowledge of Magna, threatened, or to the Knowledge of Magna, is
there any activity involving any Magna Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
 
     5.13  Employee Benefit Plans.
 
          (a) Magna has disclosed to UPC in writing prior to the execution of
     the Agreement and in Section 5.13 of the Magna Disclosure Memorandum, and
     has delivered or made available to UPC prior to the execution of this
     Agreement correct and complete copies in each case of, all Material Magna
     Benefits Plans. For purposes of this Agreement, "Magna Benefit Plans" means
     all pension, retirement, profit-sharing, deferred compensation, stock
     option, employee stock ownership, severance pay, vacation, bonus, or other
     incentive plan, all other written employee programs or agreements, all
     medical, vision, dental, or other health plans, all life insurance plans,
     and all other employee benefit plans or fringe benefit plans, including,
     without limitation, "employee benefit plans" as that term is defined in
     Section 3(3) of ERISA maintained by, sponsored in whole or in part by, or
     contributed to by, any Magna Company for the benefit of employees,
     retirees, dependents, spouses, directors, independent contractors, or other
     beneficiaries and under which employees, retirees, dependents, spouses,
     directors, independent contractors, or other beneficiaries are eligible to
     participate. Any of the Magna Benefit Plans which is an "employee welfare
     benefit plan," as that term is defined in Section 3(l) of ERISA, or an
     "employee pension benefit plan," as that term is defined in Section 3(2) of
     ERISA, is referred to herein as a "Magna ERISA Plan." Any Magna ERISA Plan
     which is also a "defined benefit plan" (as defined in Section 414(j) of the
     Internal Revenue Code or Section 3(35) of ERISA) is referred to herein as a
     "Magna Pension Plan." Neither Magna nor any Magna Company has an
     "obligation to contribute" (as defined in ERISA Section 4212) to a
     "multiemployer plan" (as defined in ERISA Sections 4001(a)(3) and
     3(37)(A)). Each "employee pension benefit plan," as defined in Section 3(2)
     of ERISA, maintained by any Magna Company at any time during the last six
     years that was intended to qualify under Section 401(a) of the Internal
     Revenue Code and with respect to which any Magna Company has any Liability,
     is disclosed as such in Section 5.13 of the Magna Disclosure Memorandum.
 
          (b) Magna has delivered or made available to UPC prior to the
     execution of this Agreement correct and complete copies of the following
     documents: (i) all trust agreements or other funding arrangements
                                      A-15
<PAGE>   122
 
     for such Magna Benefit Plans (including insurance contracts), and all
     amendments thereto, (ii) with respect to any such Magna Benefit Plans or
     amendments thereto, all determination letters, rulings, opinion letters,
     information letters, or advisory opinions issued by the Internal Revenue
     Service, the United States Department of Labor, or the Pension Benefit
     Guaranty Corporation after December 31, 1994, (iii) annual reports or
     returns, audited or unaudited financial statements, actuarial valuations
     and reports, and summary annual reports prepared for any Magna Benefit Plan
     with respect to the most recent plan year, and (iv) the most recent summary
     plan descriptions and any modifications thereto.
 
          (c) All Magna Benefit Plans are in compliance with the applicable
     terms of ERISA, the Internal Revenue Code, and any other applicable Laws,
     the breach or violation of which is reasonably likely to have, individually
     or in the aggregate, a Material Adverse Effect on Magna. Each Magna ERISA
     Plan which is intended to be qualified under Section 401(a) of the Internal
     Revenue Code has received a favorable determination letter from the
     Internal Revenue Service, and Magna is not aware of any circumstances which
     could reasonably result in revocation of any such favorable determination
     letter. Each trust created under any Magna ERISA Plan has been determined
     to be exempt from Tax under Section 501(a) of the Internal Revenue Code and
     Magna is not aware of any circumstance which could reasonably result in
     revocation of such exemption. With respect to each Magna Benefit Plan to
     the Knowledge of Magna, no event has occurred which could reasonably give
     rise to a loss of any intended Tax consequences under the Internal Revenue
     Code or to any Tax under Section 511 of the Internal Revenue Code that is
     reasonably likely, individually or in the aggregate, to have a Material
     Adverse Effect on Magna. There is no Material pending or, to the Knowledge
     of Magna, threatened Litigation (other than routine claims for benefits)
     relating to any Magna ERISA Plan.
 
          (d) No Magna Company has engaged in a transaction with respect to any
     Magna Benefit Plan that, assuming the Taxable Period of such transaction
     expired as of the date of this Agreement, would subject any Magna Company
     to a Material tax or penalty imposed by either Section 4975 of the Internal
     Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
     likely to have, individually or in the aggregate, a Material Adverse Effect
     on Magna. Neither Magna nor, to the Knowledge of Magna, any administrator
     or fiduciary of any Magna Benefit Plan (or any agent of any of the
     foregoing) has engaged in any transaction, or acted or failed to act in any
     manner which could subject Magna to any direct or indirect Liability (by
     indemnity or otherwise) for breach of any fiduciary, co-fiduciary, or other
     duty under ERISA, where such Liability, individually or in the aggregate,
     is reasonably likely to have a Material Adverse Effect on Magna. Except as
     disclosed under Section 5.13 of the Magna Disclosure Memorandum, no oral or
     written representation or communication with respect to any aspect of the
     Magna Benefit Plans has been made to employees of any Magna Company which
     is not in accordance with the written or otherwise preexisting terms and
     provisions of such plans, where any Liability with respect to such
     representation or disclosure is reasonably likely to have a Material
     Adverse Effect on Magna.
 
          (e) No Magna Pension Plan has any "unfunded current liability," as
     that term is defined in Section 302(d)(8)(A) of ERISA, and the fair market
     value of all benefits (whether vested or not) accrued to date by all
     present or former participants in such Magna Pension Plan exceeds the
     plan's "benefit liabilities" as that term is defined in Section 4001(a)(16)
     of ERISA. For this purpose, the assumptions for valuing plan Assets or
     Liabilities shall be the assumptions set forth in the most recent actuarial
     valuations and reports with respect to any such Magna Pension Plan. Since
     the date of the most recent actuarial valuation, there has been (i) no
     Material change in the financial position or funded status of any Magna
     Pension Plan, (ii) no change in the actuarial assumptions with respect to
     any Magna Pension Plan, and (iii) no increase in benefits under any Magna
     Pension Plan as a result of plan amendments or changes in applicable Law,
     any of which is reasonably likely to have, individually or in the
     aggregate, a Material Adverse Effect on Magna. Neither any Magna Pension
     Plan nor any "single-employer plan," within the meaning of Section
     4001(a)(15) of ERISA, currently or formerly maintained by any Magna
     Company, or the single-employer plan of any entity which is considered one
     employer with Magna under Section 4001 of ERISA or Section 414 of the
     Internal Revenue Code or Section 302 of ERISA (a "Magna ERISA Affiliate")
     has an "accumulated funding deficiency" within the meaning of
 
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     Section 412 of the Internal Revenue Code or Section 302 of ERISA (whether
     or not waived). All contributions with respect to a Magna Pension Plan or
     any single-employer plan of a Magna ERISA Affiliate have or will be timely
     made and there is no lien or expected to be a lien under Internal Revenue
     Code Section 412(n) or ERISA Section 302(f) or Tax under Internal Revenue
     Code Section 4971. No Magna Company has provided, or is required to
     provide, security to a Magna Pension Plan or to any single-employer plan of
     a Magna ERISA Affiliate pursuant to Section 401(a)(29) of the Internal
     Revenue Code. All premiums required to be paid under ERISA Section 4006
     have been timely paid by Magna, except to the extent any failure would not
     have a Material Adverse Effect on Magna.
 
          (f) No Liability under Title IV of ERISA has been or is expected to be
     incurred by any Magna Company with respect to any defined benefit plan
     currently or formerly maintained by any of them or by any Magna ERISA
     Affiliate that has not been satisfied in full (other than Liability for
     Pension Benefit Guaranty Corporation premiums, which have been paid when
     due) except to the extent any failure would not have a Material Adverse
     Effect on Magna.
 
          (g) Except as set forth in Section 5.13(g) of the Magna Disclosure
     Memorandum, no Magna Company has any obligations for retiree health and
     retiree life benefits under any of the Magna Benefit Plans other than with
     respect to benefit coverage mandated by applicable Law.
 
          (h) Except as set forth in Section 5.13(h) of the Magna Disclosure
     Memorandum, neither the execution and delivery of this Agreement nor the
     consummation of the transactions contemplated hereby will, by themselves,
     (i) result in any payment (including, without limitation, severance, golden
     parachute, or otherwise) becoming due to any director or any employee of
     any Magna Company from any Magna Company under any Magna Benefit Plan or
     otherwise, (ii) increase any benefits otherwise payable under any Magna
     Benefit Plan, or (iii) result in any acceleration of the time of payment or
     vesting of any such benefit.
 
     5.14  Material Contracts.  Except as set forth in Section 5.14 of the Magna
Disclosure Memorandum, none of the Magna Companies, nor any of their respective
Assets, businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination, consulting,
or retirement Contract providing for aggregate payments to any Person in any
calendar year in excess of $100,000, (ii) any Contract relating to the borrowing
of money by any Magna Company or the guarantee by any Magna Company of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, fully-secured repurchase agreements, and Federal Home Loan Bank
advances of depository institution Subsidiaries, trade payables, and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
and (iii) any other Contract or amendment thereto that would be required to be
filed as an exhibit to a Form 10-K filed by Magna with the SEC as of the date of
this Agreement that has not been filed as an exhibit to Magna's Form 10-K filed
for the fiscal year ended December 31, 1996, or in another SEC Document
(together with all Contracts referred to in Sections 5.9 and 5.13(a) of this
Agreement, the "Magna Contracts"). With respect to each Magna Contract: (i) the
Contract is in full force and effect; (ii) no Magna Company is in Default
thereunder, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna; (iii) no
Magna Company has repudiated or waived any Material provision of any such
Contract; and (iv) no other party to any such Contract is, to the Knowledge of
Magna, in Default in any respect, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Magna, or has repudiated or waived any Material provision thereunder.
 
     5.15  Legal Proceedings.
 
          (a) There is no Litigation instituted or pending, or, to the Knowledge
     of Magna, threatened (or unasserted but considered probable of assertion
     and which if asserted would have at least a reasonable probability of an
     unfavorable outcome to any Magna Company) against any Magna Company, or
     against any Asset, employee benefit plan, interest, or right of any of
     them, that is reasonably likely to have, individually or in the aggregate,
     a Material Adverse Effect on Magna, nor are there any Orders of any
     Regulatory Authorities, other governmental authorities, or arbitrators
     outstanding against any Magna
 
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     Company, that are reasonably likely to have, individually or in the
     aggregate, a Material Adverse Effect on Magna.
 
          (b) Section 5.15(b) of the Magna Disclosure Memorandum includes a
     summary report of all Litigation as of the date of this Agreement to which
     any Magna Company is a party and which names a Magna Company as a defendant
     or cross-defendant and where the maximum exposure is estimated to be
     $250,000 or more.
 
     5.16  Reports.  Since January 1, 1994, or the date of organization if
later, each Magna Company has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with any Regulatory Authorities, except failures to file which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Magna. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all Material respects with all applicable Laws.
 
     5.17  Statements True and Correct.  None of the information supplied or to
be supplied by any Magna Company regarding Magna for inclusion in the
Registration Statement to be filed by UPC with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect to
any Material fact, or contain any untrue statement of a Material fact, or omit
to state any Material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to be
supplied by any Magna Company for inclusion in the Joint Proxy Statement to be
mailed to UPC's and Magna's stockholders in connection with the Stockholders'
Meetings will, when first mailed to the stockholders of UPC and Magna, be false
or misleading with respect to any Material fact, or contain any misstatement of
Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Joint Proxy Statement or any amendment thereof or supplement thereto, at the
time of the Stockholders' Meetings, be false or misleading with respect to any
Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to correct any Material statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meetings. All documents that any Magna Company is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all Material respects with the
provisions of applicable Law.
 
     5.18  Accounting, Tax, and Regulatory Matters.  No Magna Company has taken
or agreed to take any action, and Magna has no Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code or (ii) materially impede
or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
 
     5.19  State Takeover Laws.  Each Magna Company has taken all necessary
action to exempt the transactions contemplated by this Agreement and the Plan of
Merger from any applicable "moratorium," "control share," "fair price,"
"business combination," or other anti-takeover laws and regulations, including
Section 203 of the DGCL, of the State of Delaware (collectively, "Takeover
Laws").
 
     5.20  Charter Provisions.  Each Magna Company has taken all action so that
the entering into of this Agreement and the Plan of Merger and the consummation
of the Merger and the other transactions contemplated by this Agreement and the
Plan of Merger do not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws, or other governing
instruments of any Magna Company or restrict or impair the ability of UPC or any
of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Magna Company that may be directly or
indirectly acquired or controlled by it.
 
     5.21  Rights Agreement.  Magna has taken all necessary action (including,
if required, redeeming all of the outstanding Preferred Stock Purchase Rights or
amending or terminating the Magna Rights Agreement)
 
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so that the entering into of this Agreement and the Plan of Merger, the
acquisition of shares pursuant to, or other exercise of rights under, the Stock
Option Agreement and consummation of the Merger and the other transactions
contemplated hereby and thereby do not and will not result in any Person
becoming able to exercise any Preferred Stock Purchase Rights under the Magna
Rights Agreement or enabling or requiring the Preferred Stock Purchase Rights to
be separated from the shares of Magna Common Stock to which they are attached or
to be triggered or to become exercisable.
 
     5.22  Derivatives.  All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Magna's own account, or for the account
of one or more the Magna Subsidiaries or their customers, were entered into (i)
in accordance with prudent business practices and all applicable Laws and (ii)
with counterparties believed to be financially responsible.
 
     5.23  Year 2000.  Magna has disclosed to UPC a complete and accurate copy
of Magna's plan, including an estimate of the anticipated associated costs, for
implementing modifications to Magna's hardware, software, and computer systems,
chips, and microprocessors, to ensure proper execution and accurate processing
of all date-related data, whether from years in the same century or in different
centuries. Between the date of this Agreement and the Effective Time, Magna
shall endeavor to continue its efforts to implement such plan.
 
                                   ARTICLE 6
                     REPRESENTATIONS AND WARRANTIES OF UPC
 
     UPC hereby represents and warrants to Magna as follows:
 
     6.1  Organization, Standing, and Power.  UPC is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Tennessee, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its Material Assets. UPC is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on UPC.
 
     6.2  Authority; No Breach By Agreement.
 
          (a) UPC has the corporate power and authority necessary to execute,
     deliver, and perform its obligations under this Agreement and to consummate
     the transactions contemplated hereby. The execution, delivery, and
     performance of this Agreement and the consummation of the transactions
     contemplated herein, including the Merger, have been duly and validly
     authorized by all necessary corporate action in respect thereof on the part
     of UPC, subject to the approval of (i) the UPC Charter Amendment and (ii)
     the issuance of the shares of UPC Common Stock pursuant to the Merger by
     holders of the requisite number of shares of UPC Common Stock required by
     Law, which is the only stockholder vote required for the consummation of
     the Merger by UPC. Subject to such requisite stockholder approval, this
     Agreement represents a legal, valid, and binding obligation of UPC,
     enforceable against UPC in accordance with its terms (except in all cases
     as such enforceability may be limited by applicable bankruptcy, insolvency,
     reorganization, receivership, conservatorship, moratorium, or similar Laws
     affecting the enforcement of creditors' rights generally and except that
     the availability of the equitable remedy of specific performance or
     injunctive relief is subject to the discretion of the court before which
     any proceeding may be brought).
 
          (b) Neither the execution and delivery of this Agreement by UPC, nor
     the consummation by UPC of the transactions contemplated hereby, nor
     compliance by UPC with any of the provisions hereof, will (i) conflict with
     or result in a breach of any provision of UPC's Restated Charter of
     Incorporation or Bylaws (subject to the amendment of the UPC Restated
     Charter of Incorporation pursuant to the UPC Charter Amendment to increase
     the number of authorized shares of UPC Common Stock), (ii) constitute or
     result in a Default under, or require any Consent pursuant to, or result in
     the creation of
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     any Lien on any Asset of any UPC Company under, any Contract or Permit of
     any UPC Company, where such Default or Lien, or any failure to obtain such
     Consent, is reasonably likely to have, individually or in the aggregate, a
     Material Adverse Effect on UPC, or (iii) subject to receipt of the
     requisite Consents referred to in Section 9.1(b) of this Agreement, violate
     any Law or Order applicable to any UPC Company or any of their respective
     Material Assets.
 
          (c) Other than in connection or compliance with the provisions of the
     Securities Laws, applicable state corporate and securities Laws, and rules
     of the NYSE, and other than Consents required from Regulatory Authorities,
     and other than notices to or filings with the Internal Revenue Service or
     the Pension Benefit Guaranty Corporation with respect to any employee
     benefit plans, or under the HSR Act, and other than Consents, filings, or
     notifications which, if not obtained or made, are not reasonably likely to
     have, individually or in the aggregate, a Material Adverse Effect on UPC,
     no notice to, filing with, or Consent of, any public body or authority is
     necessary for the consummation by UPC of the Merger and the other
     transactions contemplated in this Agreement.
 
     6.3  Capital Stock.  The authorized capital stock of UPC consists of (i)
100,000,000 shares of UPC Common Stock, of which 81,650,946 shares are issued
and outstanding as of December 31, 1997 and (ii) 10,000,000 shares of UPC
Preferred Stock, of which 2,188,358 shares of UPC Series E Preferred Stock are
issued and outstanding. All of the issued and outstanding shares of UPC Capital
Stock are, and (subject to the amendment of UPC's Restated Charter of
Incorporation pursuant to the UPC Charter Amendment) all of the shares of UPC
Common Stock to be issued in exchange for shares of Magna Common Stock upon
consummation of the Merger when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid and
nonassessable under the TBCA. None of the outstanding shares of UPC Capital
Stock has been, and none of the shares of UPC Common Stock to be issued in
exchange for shares of Magna Common Stock upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current or past
stockholders of UPC.
 
     6.4  UPC Subsidiaries.  Except with respect to Capital Factors, Inc., UPC
or one of its Subsidiaries owns all of the issued and outstanding shares of
capital stock of each UPC Subsidiary. No equity securities of any UPC Subsidiary
are or may become required to be issued (other than to another UPC Company) by
reason of any Rights, and there are no Contracts by which any UPC Subsidiary is
bound to issue (other than to another UPC Company) additional shares of its
capital stock or Rights or by which any UPC Company is or may be bound to
transfer any shares of the capital stock of any UPC Subsidiary (other than to
another UPC Company). There are no Contracts relating to the rights of any UPC
Company to vote or to dispose of any shares of the capital stock of any UPC
Subsidiary. All of the shares of capital stock of each UPC Subsidiary held by a
UPC Company are fully paid and, except as provided in statutes pursuant to which
depository institution Subsidiaries are organized, nonassessable under the
applicable corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the UPC Company free and clear of any
Lien. Each UPC Subsidiary is either a bank or a corporation, and is duly
organized, validly existing, and (as to corporations) in good standing under the
Laws of the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each UPC Subsidiary is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on UPC. Each UPC Subsidiary that is
a depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or Savings Association Insurance
Fund.
 
     6.5  SEC Filings; Financial Statements.
 
          (a) UPC has filed and made available to Magna all forms, reports, and
     documents required to be filed by UPC with the SEC since December 31, 1993
     (collectively, the "UPC SEC Reports"). The UPC SEC Reports (i) at the time
     filed, complied in all Material respects with the applicable requirements
     of
 
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     the 1933 Act and the 1934 Act, as the case may be and (ii) did not at the
     time they were filed (or if amended or superseded by a filing prior to the
     date of this Agreement, then on the date of such filing) contain any untrue
     statement of a Material fact or omit to state a Material fact required to
     be stated in such UPC SEC Reports or necessary in order to make the
     statements in such UPC SEC Reports, in light of the circumstances under
     which they were made, not misleading. Except for UPC Subsidiaries that are
     registered as a broker, dealer, or investment advisor or filings required
     due to fiduciary holdings of the UPC Subsidiaries, none of UPC Subsidiaries
     is required to file any forms, reports, or other documents with the SEC.
 
          (b) Each of the UPC Financial Statements (including, in each case, any
     related notes) contained in the UPC SEC Reports, including any UPC SEC
     Reports filed after the date of this Agreement until the Effective Time,
     complied or will comply as to form in all Material respects with the
     applicable published rules and regulations of the SEC with respect thereto,
     was or will be prepared in accordance with GAAP applied on a consistent
     basis throughout the periods involved (except as may be indicated in the
     notes to such financial statements or, in the case of unaudited statements,
     as permitted by Form 10-Q of the SEC), and fairly presented or will fairly
     present the consolidated financial position of UPC and its Subsidiaries as
     at the respective dates and the consolidated results of its operations and
     cash flows for the periods indicated, except that the unaudited interim
     financial statements were or are subject to normal and recurring year-end
     adjustments which were not or are not expected to be Material in amount or
     effect.
 
     6.6  Absence of Undisclosed Liabilities.  No UPC Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of UPC as of
September 30, 1997, included in the UPC Financial Statements or reflected in the
notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to September 30, 1997. No UPC Company has incurred or paid
any Liability since September 30, 1997, except for such Liabilities incurred or
paid in the ordinary course of business consistent with past business practice
and which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
 
     6.7  Absence of Certain Changes or Events.  Since September 30, 1997,
except as disclosed in the UPC Financial Statements delivered prior to the date
of this Agreement, (i) there have been no events, changes or occurrences which
have had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC and (ii) the UPC Companies have conducted their
respective businesses in the ordinary and usual course (excluding the incurrence
of expenses in connection with this Agreement and the transactions contemplated
hereby).
 
     6.8  Tax Matters.
 
          (a) All Tax Returns required to be filed by or on behalf of any of the
     UPC Companies have been timely filed, or requests for extensions have been
     timely filed, granted, and have not expired for periods ended on or before
     December 31, 1996, and, to the Knowledge of UPC, all Tax Returns filed are
     complete and accurate in all Material respects. All Tax Returns for periods
     ending on or before the date of the most recent fiscal year end immediately
     preceding the Effective Time will be timely filed or requests for
     extensions will be timely filed. All Taxes shown on filed Tax Returns have
     been paid. There is no audit examination, deficiency, or refund Litigation
     with respect to any Taxes, that is reasonably likely to result in a
     determination that would have, individually or in the aggregate, a Material
     Adverse Effect on UPC, except to the extent reserved against in the UPC
     Financial Statements dated prior to the date of this Agreement. All Taxes
     and other Liabilities due with respect to completed and settled
     examinations or concluded Litigation have been paid.
 
          (b) None of the UPC Companies has executed an extension or waiver of
     any statute of limitations on the assessment or collection of any Tax due
     (excluding such statutes that relate to years currently under examination
     by the Internal Revenue Service or other applicable taxing authorities)
     that is currently in effect.
 
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<PAGE>   128
 
          (c) Adequate provision for any Taxes due or to become due for any of
     the UPC Companies for the period or periods through and including the date
     of the respective UPC Financial Statements has been made and is reflected
     on such UPC Financial Statements.
 
          (d) Each of the UPC Companies is in compliance with, and its records
     contain all information and documents (including properly completed IRS
     Forms W-9) necessary to comply with, all applicable information reporting
     and Tax withholding requirements under federal, state, and local Tax Laws,
     and such records identify with specificity all accounts subject to backup
     withholding under Section 3406 of the Internal Revenue Code, except for
     such instances of noncompliance and such omissions as are not reasonably
     likely to have, individually or in the aggregate, a Material Adverse Effect
     on UPC.
 
          (e) None of the UPC Companies has made any payments, is obligated to
     make any payments, or is a party to any contract, agreement, or other
     arrangement that could obligate it to make any payments that would be
     disallowed as a deduction under Section 280G or 162(m) of the Internal
     Revenue Code.
 
          (f) There are no Material Liens with respect to Taxes upon any of the
     Assets of the UPC Companies.
 
          (g) No UPC Company has filed any consent under Section 341(f) of the
     Internal Revenue Code concerning collapsible corporations.
 
     6.9  Assets.  The UPC Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except where the failure
to have such good and marketable title is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. All tangible
properties used in the businesses of the UPC Companies are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with UPC's past practices. All Assets which are Material to
UPC's business on a consolidated basis, held under leases or subleases by any of
the UPC Companies, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect. The UPC Companies currently
maintain insurance similar in amounts, scope, and coverage reasonably necessary
for their operations. None of the UPC Companies has received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated or (ii) premium costs with respect to
such policies of insurance will be substantially increased. The Assets of the
UPC Companies include all Assets required to operate the business of the UPC
Companies as presently conducted.
 
     6.10  Environmental Matters.
 
          (a) To the Knowledge of UPC, each UPC Company, its Participation
     Facilities, and its Loan Properties are, and have been, in compliance with
     all Environmental Laws, except those violations which are not reasonably
     likely to have, individually or in the aggregate, a Material Adverse Effect
     on UPC.
 
          (b) There is no Litigation pending or, to the Knowledge of UPC,
     threatened before any court, governmental agency, or authority, or other
     forum in which any UPC Company or any of its Participation Facilities has
     been or, with respect to threatened Litigation, may reasonably be expected
     to be named as a defendant (i) for alleged noncompliance (including by any
     predecessor) with any Environmental Law or (ii) relating to the release
     into the environment of any Hazardous Material, whether or not occurring
     at, on, under, or involving a site owned, leased, or operated by any UPC
     Company or any of its Participation Facilities, except for such Litigation
     pending or threatened that is not reasonably likely to have, individually
     or in the aggregate, a Material Adverse Effect on UPC.
 
          (c) There is no Litigation pending or, to the Knowledge of UPC,
     threatened before any court, governmental agency, or board, or other forum
     in which any of its Loan Properties (or UPC in respect of such Loan
     Property) has been or, with respect to threatened Litigation, may
     reasonably be expected to be named as a defendant or potentially
     responsible party (i) for alleged noncompliance (including by any
 
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     predecessor) with any Environmental Law or (ii) relating to the release
     into the environment of any Hazardous Material, whether or not occurring
     at, on, under, or involving a Loan Property, except for such Litigation
     pending or threatened that is not reasonably likely to have, individually
     or in the aggregate, a Material Adverse Effect on UPC.
 
          (d) To the Knowledge of UPC, there is no reasonable basis for any
     Litigation of a type described in subsections (b) or (c), except such as is
     not reasonably likely to have, individually or in the aggregate, a Material
     Adverse Effect on UPC.
 
          (e) To the Knowledge of UPC, during the period of (i) any UPC
     Company's ownership or operation of any of their respective current
     properties, (ii) any UPC Company's participation in the management of any
     Participation Facility, or (iii) any UPC Company's holding of a security
     interest in a Loan Property, there have been no releases of Hazardous
     Material in, on, under, or affecting (or potentially affecting) such
     properties, except such as are not reasonably likely to have, individually
     or in the aggregate, a Material Adverse Effect on UPC. To the Knowledge of
     UPC, prior to the period of (i) any UPC Company's ownership or operation of
     any of their respective current properties, (ii) any UPC Company's
     participation in the management of any Participation Facility, or (iii) any
     UPC Company's holding of a security interest in a Loan Property, to the
     Knowledge of UPC, there were no releases of Hazardous Material in, on,
     under, or affecting any such property, Participation Facility, or Loan
     Property, except such as are not reasonably likely to have, individually or
     in the aggregate, a Material Adverse Effect on UPC.
 
     6.11  Compliance with Laws.  UPC is duly registered as a bank holding
company under the BHC Act. Each UPC Company has in effect all Permits necessary
for it to own, lease, or operate its Material Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC, and there has occurred no Default under any such Permit, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC. None of the UPC Companies:
 
          (a) is in violation of any Laws, Orders, or Permits applicable to its
     business or employees conducting its business, except for violations which
     are not reasonably likely to have, individually or in the aggregate, a
     Material Adverse Effect on UPC; and
 
          (b) has received any notification or communication from any agency or
     department of federal, state, or local government or any Regulatory
     Authority or the staff thereof (i) asserting that any UPC Company is not in
     compliance with any of the Laws or Orders which such governmental authority
     or Regulatory Authority enforces, where such noncompliance is reasonably
     likely to have, individually or in the aggregate, a Material Adverse Effect
     on UPC, (ii) threatening to revoke any Permits, the revocation of which is
     reasonably likely to have, individually or in the aggregate, a Material
     Adverse Effect on UPC, or (iii) requiring any UPC Company (x) to enter into
     or consent to the issuance of a cease and desist order, formal agreement,
     directive, commitment, or memorandum of understanding, or (y) to adopt any
     Board resolution or similar undertaking, which restricts materially the
     conduct of its business, or in any manner relates to its capital adequacy,
     its credit or reserve policies, its management, or the payment of
     dividends.
 
     6.12  Labor Relations.  No UPC Company is the subject of any Litigation
asserting that it or any other UPC Company has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state Law) or seeking to compel it or any other UPC Company to bargain with any
labor organization as to wages or conditions of employment, nor is any UPC
Company a party to or bound by any collective bargaining agreement, Contract, or
other agreement or understanding with a labor union or labor organization, nor
is there any strike or other labor dispute involving any UPC Company, pending
or, to the Knowledge of UPC, threatened, or to the Knowledge of UPC, is there
any activity involving any UPC Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
 
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<PAGE>   130
 
     6.13  Legal Proceedings.  There is no Litigation instituted or pending, or,
to the Knowledge of UPC, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome to any UPC Company) against any UPC Company, or against
any Asset, employee benefit plan, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any UPC Company,
that are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC.
 
     6.14  Reports.  Since January 1, 1994, or the date of organization if
later, each UPC Company has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with any Regulatory Authorities, except failures to file which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all Material respects with all applicable Laws.
 
     6.15  Statements True and Correct.  None of the information supplied or to
be supplied by any UPC Company regarding UPC for inclusion in the Registration
Statement to be filed by UPC with the SEC will, when the Registration Statement
becomes effective, be false or misleading with respect to any Material fact, or
contain any untrue statement of a Material fact, or omit to state any Material
fact required to be stated thereunder or necessary to make the statements
therein not misleading. None of the information supplied or to be supplied by
any UPC Company for inclusion in the Joint Proxy Statement to be mailed to
Magna's and UPC's stockholders in connection with the Stockholders' Meetings,
will, when first mailed to the stockholders of Magna and UPC, be false or
misleading with respect to any Material fact, or contain any misstatement of
Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Joint Proxy Statement or any amendment thereof or supplement thereto, at the
time of the Stockholders' Meetings, be false or misleading with respect to any
Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to correct any Material statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meetings. All documents that any UPC Company is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all Material respects with the
provisions of applicable Law.
 
     6.16  Accounting, Tax, and Regulatory Matters.  No UPC Company or any
Affiliate thereof has taken or agreed to take any action, and UPC has no
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code or (ii) materially impede
or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
 
     6.17  Employee Benefit Plans.  All UPC Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. For purposes
of this Agreement, the term "UPC Plan" means each bonus, incentive compensation,
severance pay, medical or other insurance program, retirement plan, or other
employee benefit plan program, agreement, or arrangement sponsored, maintained,
or contributed to by UPC or any trade or business, whether or not incorporated,
that together with UPC or any of its Subsidiaries would be deemed a "single
employer" under Section 4001 of ERISA or Section 414 of the Internal Revenue
Code (a "UPC ERISA Affiliate") or under which UPC or any UPC ERISA Affiliate has
any Liability or obligation. No Liability under Title IV of ERISA has been
incurred by UPC or any UPC ERISA Affiliate that has not been satisfied in full,
and no condition exists that presents a Material risk to UPC or any UPC ERISA
Affiliate of incurring any such Liability. With respect to any UPC Plan that is
subject to Title IV of ERISA, full payment has been made, or will be made in
accordance with Section 404(a)(6) of the Internal Revenue Code, of all amounts
that UPC or any UPC ERISA Affiliate is required to pay under Section 412 of the
Internal Revenue Code or under the terms of the
                                      A-24
<PAGE>   131
 
UPC Plans, and no accumulated funding deficiency (within the meaning of Section
412 of the Internal Revenue Code or Section 302 of ERISA, whether or not waived)
exists with respect to any UPC Plan. There are no Material actions, suits, or
claims pending, or, to the Knowledge of UPC, threatened or anticipated relating
to any UPC Plan. There has been no Material adverse change in the financial
position or funded status of any UPC Plan that is subject to Title IV of ERISA
since the date of the information relating to the financial position and funded
status of each such plan contained in the most recent Annual Report on Form 10-K
filed by UPC with the SEC.
 
     6.18  Derivatives.  All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for UPC's own account, or for the account of
one or more the UPC Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable Laws and (ii) with
counterparties believed to be financially responsible.
 
     6.19  Year 2000.  UPC has disclosed to Magna a complete and accurate copy
of UPC's plan, including an estimate of the anticipated associated costs, for
implementing modifications to UPC's hardware, software, and computer systems,
chips, and microprocessors, to ensure proper execution and accurate processing
of all date-related data, whether from years in the same century or in different
centuries. Between the date of this Agreement and the Effective Time, UPC shall
endeavor to continue its efforts to implement such plan.
 
                                   ARTICLE 7
                    CONDUCT OF BUSINESS PENDING CONSUMMATION
 
     7.1  Affirmative Covenants of Both Parties.  From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of the other Party shall have been
obtained, and except as otherwise expressly contemplated herein, each Party
shall and shall cause each of its Subsidiaries to (i) operate its business only
in the usual, regular, and ordinary course, (ii) preserve intact its business
organization and Assets and maintain its rights and franchises, (iii) use its
reasonable efforts to maintain its current employee relationships, and (iv) take
no action which would (a) adversely affect the ability of any Party to obtain
any Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
sentence of Section 9.1(b) of this Agreement, or (b) adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement; provided that in the case of UPC, the provisions of this Section 7.1
(other than the provisions of clause (iv) above) shall not be deemed to preclude
UPC from continuing to implement its program of acquiring unaffiliated
depository and nondepository institutions.
 
     7.2  Negative Covenants of Magna.  From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, Magna
covenants and agrees that it will not do or agree or commit to do, or permit any
of its Subsidiaries to do or agree or commit to do, any of the following without
the prior written consent of the chief executive officer or chief financial
officer of UPC, which consent shall not be unreasonably withheld:
 
          (a) amend the Articles of Incorporation, Bylaws, or other governing
     instruments of any Magna Company or, except as expressly contemplated by
     this Agreement, the Magna Rights Agreement, or
 
          (b) incur, guarantee, or otherwise become responsible for, any
     additional debt obligation or other obligation for borrowed money (other
     than indebtedness of a Magna Company to another Magna Company) in excess of
     an aggregate of $1,000,000 (for the Magna Companies on a consolidated
     basis), except in the ordinary course of the business consistent with past
     practices (which shall include, for Magna Subsidiaries that are depository
     institutions, creation of deposit liabilities, purchases of federal funds,
     advances from the Federal Reserve Bank or Federal Home Loan Bank, and entry
     into repurchase agreements fully secured by U.S. government or agency
     securities), or impose, or suffer the imposition, on any Asset of any Magna
     Company of any Lien or permit any such Lien to exist (other than in
     connection with deposits, repurchase agreements, bankers acceptances,
     "treasury tax and loan" accounts established in the ordinary course of
     business, the satisfaction of legal requirements in the exercise of
 
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<PAGE>   132
 
     trust powers, and Liens in effect as of the date hereof that are disclosed
     in the Magna Disclosure Memorandum); or
 
          (c) repurchase, redeem, or otherwise acquire or exchange (other than
     exchanges in the ordinary course under employee benefit plans), directly or
     indirectly, any shares, or any securities convertible into any shares, of
     the capital stock of any Magna Company, or declare or pay any dividend or
     make any other distribution in respect of Magna's capital stock, provided
     that Magna may (to the extent legally and contractually permitted to do
     so), but shall not be obligated to, declare and pay regular quarterly cash
     dividends on the shares of (i) Magna Common Stock at a rate of $0.28 per
     share and (ii) Magna Class B Preferred Stock at a rate of $0.375 per share,
     in each case with usual and regular record and payment dates in accordance
     with past practice as disclosed in Section 7.2(c) of the Magna Disclosure
     Memorandum and such dates may not be changed without the prior written
     consent of UPC; provided, that, notwithstanding the provisions of Section
     1.3 of this Agreement, the Parties shall cooperate in selecting the
     Effective Time to ensure that, with respect to the quarterly period in
     which the Effective Time occurs, the holders of Magna Common Stock do not
     receive both a dividend in respect of their Magna Common Stock and a
     dividend in respect of UPC Common Stock or fail to receive any dividend; or
 
          (d) except for this Agreement, or pursuant to the Stock Option
     Agreement or pursuant to the exercise of Rights outstanding as of the date
     of this Agreement and pursuant to the terms thereof in existence on the
     date of this Agreement, issue, sell, pledge, encumber, authorize the
     issuance of, enter into any Contract to issue, sell, pledge, encumber, or
     authorize the issuance of, or otherwise permit to become outstanding, any
     additional shares of Magna Common Stock or any other capital stock of any
     Magna Company, or any stock appreciation rights, or any option, warrant,
     conversion, or other right to acquire any such stock, or any security
     convertible into any such stock; or
 
          (e) adjust, split, combine, or reclassify any capital stock of any
     Magna Company or issue or authorize the issuance of any other securities in
     respect of or in substitution for shares of Magna Common Stock, or sell,
     lease, mortgage, or otherwise dispose of or otherwise encumber (i) any
     shares of capital stock of any Magna Subsidiary (unless any such shares of
     stock are sold or otherwise transferred to another Magna Company) or (ii)
     any Asset having a book value in excess of $250,000 other than in the
     ordinary course of business for reasonable and adequate consideration; or
 
          (f) except for purchases of investment securities acquired in the
     ordinary course of business consistent with past practice, purchase any
     securities or make any Material investment, either by purchase of stock or
     securities, contributions to capital, Asset transfers, or purchase of any
     Assets, in any Person other than a wholly-owned Magna Subsidiary, or
     otherwise acquire direct or indirect control over any Person, other than in
     connection with (i) foreclosures in the ordinary course of business, (ii)
     acquisitions of control by a depository institution Subsidiary in its
     fiduciary capacity, (iii) the creation of new wholly-owned Subsidiaries
     organized to conduct or continue activities otherwise permitted by this
     Agreement, or (iv), subject to the provisions of Section 8.17 of this
     Agreement, that certain Agreement and Plan of Merger, dated as of November
     19, 1997, as amended December 4, 1997, by and between Magna and Charter
     Financial, Inc. ("Charter") (the "Charter Agreement"); or
 
          (g) grant any increase in compensation or benefits to the employees or
     officers of any Magna Company, except in accordance with the ordinary
     course of business consistent with past practice or as required by Law; pay
     any severance or termination pay or any bonus other than pursuant to
     written policies or written Contracts in effect on the date of this
     Agreement; enter into or amend any severance agreements with officers of
     any Magna Company; grant any Material increase in fees or other increases
     in compensation or other benefits to directors of any Magna Company except
     in accordance with the ordinary course of business consistent with past
     practice; or voluntarily accelerate the vesting of any stock options or
     other stock-based compensation or employee benefits; or
 
          (h) enter into or amend any employment Contract between any Magna
     Company and any Person (unless such amendment is required by Law or a
     pre-existing contractual obligation) that the Magna
 
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<PAGE>   133
 
     Company does not have the unconditional right to terminate without
     Liability (other than Liability for services already rendered), at any time
     on or after the Effective Time; or
 
          (i) adopt any new employee benefit plan of any Magna Company or make
     any Material change in or to any existing employee benefit plans of any
     Magna Company other than any such change that is required by Law or that,
     in the opinion of counsel, is necessary or advisable to maintain the tax
     qualified status of any such plan; or
 
          (j) make any significant change in any Tax or accounting methods or
     systems of internal accounting controls, except as may be appropriate to
     conform to changes in Tax Laws or regulatory accounting requirements or
     GAAP; or
 
          (k) commence any Litigation other than as necessary for the prudent
     operation of its business or settle any Litigation involving any Liability
     of any Magna Company for Material money damages or restrictions upon the
     operations of any Magna Company; or
 
          (l) except in the ordinary course of business, modify, amend, or
     terminate any Material Contract or waive, release, compromise, or assign
     any Material rights or claims.
 
     7.3  Adverse Changes in Condition.  Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
Material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
 
     7.4  Reports.  Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not Material). As of their
respective dates, such reports filed with the SEC will comply in all Material
respects with the Securities Laws and will not contain any untrue statement of a
Material fact or omit to state a Material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.
 
                                   ARTICLE 8
                             ADDITIONAL AGREEMENTS
 
     8.1  Registration Statement; Joint Proxy Statement; Stockholder
Approvals.  As soon as reasonably practicable after execution of this Agreement,
UPC shall file the Registration Statement with the SEC, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
the 1933 Act and take any action required to be taken under the applicable state
Blue Sky or securities Laws in connection with the issuance of the shares of UPC
Common Stock upon consummation of the Merger. Magna shall furnish all
information concerning it and the holders of its capital stock as UPC may
reasonably request in connection with such action. Magna shall call a
Stockholders' Meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of (i) this Agreement and the Plan of Merger and (ii) such
other related matters as it deems appropriate. UPC shall call a Stockholders'
Meeting, to be held as soon as reasonably practicable after the Registration
Statement is declared effective by the SEC, for the purpose of voting upon
approval of (i) the UPC Charter Amendment (to the extent such amendment is not
previously approved at the 1998 annual meeting of stockholders of UPC), (ii) the
issuance of shares of UPC Common Stock pursuant to the Merger, and (iii) such
other related matters as it deems appropriate. In connection with the
Stockholders' Meetings,
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<PAGE>   134
 
(i) UPC and Magna shall prepare and file with the SEC a Joint Proxy Statement
and mail such Joint Proxy Statement to their respective stockholders, (ii) the
Parties shall furnish to each other all information concerning them that they
may reasonably request in connection with such Joint Proxy Statement, (iii) the
Boards of Directors of UPC and Magna shall recommend to their respective
stockholders the approval of the matters submitted for approval, and (iv) the
Boards of Directors and officers of UPC and Magna shall use their reasonable
efforts to obtain such stockholders' approvals, provided that each of UPC and
Magna may withdraw, modify, or change in an adverse manner to the other Party
its recommendations if the Board of Directors of such Party, after having
consulted with and based upon the advice of outside counsel, determines in good
faith that the failure to so withdraw, modify, or change its recommendation
could constitute a breach of the fiduciary duties of such Party's Board of
Directors under applicable Law. In addition, nothing in this Section 8.1 or
elsewhere in this Agreement shall prohibit accurate disclosure by either Party
of information that is required to be disclosed in the Registration Statement or
the Joint Proxy Statement or in any other document required to be filed with the
SEC (including, without limitation, a Solicitation/Recommendation Statement on
Schedule 14D-9) or otherwise required to be publicly disclosed by applicable Law
or regulations or rules of the NYSE.
 
     8.2  Exchange Listing.  UPC shall use its reasonable efforts to list, prior
to the Effective Time, on the NYSE, subject to official notice of issuance, the
shares of UPC Common Stock to be issued to the holders of Magna Capital Stock
pursuant to the Merger.
 
     8.3  Applications.  UPC shall promptly prepare and file, and Magna shall
cooperate in the preparation and, where appropriate, filing of, applications
with all Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement.
 
     8.4  Filings with State Offices.  Upon the terms and subject to the
conditions of this Agreement, UPC shall cause UPHC to execute and file the
Certificate of Merger with the Secretary of State of the State of Delaware and
the Articles of Merger with the Secretary of State of the State of Tennessee.
 
     8.5  Agreement as to Efforts to Consummate.  Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation, using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement; provided, that
nothing herein shall preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement.
 
     8.6  Investigation and Confidentiality.
 
          (a) Prior to the Effective Time, each Party shall keep the other Party
     advised of all Material developments relevant to its business and to
     consummation of the Merger and shall permit the other Party to make or
     cause to be made such investigation of the business and properties of it
     and its Subsidiaries and of their respective financial and legal conditions
     as the other Party reasonably requests, provided that such investigation
     shall be reasonably related to the transactions contemplated hereby and
     shall not interfere unnecessarily with normal operations. No investigation
     by a Party shall affect the representations and warranties of the other
     Party.
 
          (b) Each Party shall, and shall cause its advisers and agents to,
     maintain the confidentiality of all confidential information furnished to
     it by the other Party concerning its and its Subsidiaries' businesses,
     operations, and financial positions and shall not use such information for
     any purpose except in furtherance of the transactions contemplated by this
     Agreement. If this Agreement is terminated prior to the Effective Time,
     each Party shall promptly return or certify the destruction of all
     documents and copies thereof, and all work papers containing confidential
     information received from the other Party.
 
                                      A-28
<PAGE>   135
 
          (c) Each Party agrees to give the other Party notice as soon as
     practicable after any determination by it of any fact or occurrence
     relating to the other Party which it has discovered through the course of
     its investigation and which represents, or is reasonably likely to
     represent, either a Material breach of any representation, warranty,
     covenant, or agreement of the other Party or which has had or is reasonably
     likely to have a Material Adverse Effect on the other Party.
 
          (d) Neither Party nor any of their respective Subsidiaries shall be
     required to provide access to or to disclose information where such access
     or disclosure would violate or prejudice the rights of its customers,
     jeopardize the attorney-client or similar privilege with respect to such
     information or contravene any Law, rule, regulation, Order, judgment,
     decree, fiduciary duty, or agreement entered into prior to the date of this
     Agreement. The Parties will use their reasonable efforts to make
     appropriate substitute disclosure arrangements, to the extent practicable,
     in circumstances in which the restrictions of the preceding sentence apply.
 
     8.7  Press Releases.  Prior to the Effective Time, UPC and Magna shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
 
     8.8  Certain Actions.  Except with respect to this Agreement and the Plan
of Merger and the transactions contemplated hereby and thereby, no Magna Company
nor any Affiliate thereof nor any Representatives thereof retained by any Magna
Company shall directly or indirectly solicit or engage in negotiations
concerning any Acquisition Proposal, or provide any confidential information or
assistance to, or have any discussions with, any Person with respect to an
Acquisition Proposal. Notwithstanding the foregoing, Magna may, and may
authorize and permit its Representatives to, provide Persons with confidential
information, have discussions or negotiations with, or otherwise facilitate an
effort or attempt by such Person to make or implement an Acquisition Proposal
not solicited in violation of this Agreement if Magna's Board of Directors,
after having consulted with, and based upon the advice of, outside counsel,
determines in good faith that the failure to take such actions could constitute
a breach of the fiduciary duties of Magna's Board of Directors under applicable
Law; provided, that Magna shall promptly advise UPC following the receipt of any
Acquisition Proposal and the Material details thereof; and, provided further,
that prior to delivery of confidential information relating to Magna or access
to Magna's books, records, or properties in connection therewith, the other
Person shall have entered into a confidentiality agreement substantially similar
to the Confidentiality Agreement previously entered into between Magna and UPC.
Nothing contained in this Section 8.8 shall prohibit the Board of Directors of
Magna from complying with Rule 14e-2, promulgated under the 1934 Act. Magna
shall (i) immediately cease and cause to be terminated any existing activities,
discussions, or negotiations with any Persons conducted heretofore with respect
to any of the foregoing and (ii) direct and use its reasonable efforts to cause
of all its Representatives not to engage in any of the foregoing.
 
     8.9  Accounting and Tax Treatment.  Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a pooling of
interests for accounting purposes or as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code for federal income tax purposes.
 
     8.10  State Takeover Laws.  Each Magna Company shall take all necessary
steps to exempt the transactions contemplated by this Agreement and the Plan of
Merger from, or if necessary challenge the validity or applicability of, any
applicable Takeover Laws.
 
     8.11  Charter Provisions.  Each Magna Company shall take all necessary
action to ensure that the entering into of this Agreement and the Plan of Merger
and the consummation of the Merger and the other transactions contemplated
hereby and thereby do not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws, or other governing
instruments of any Magna Company or restrict or impair the ability of UPC or any
of its Subsidiaries to vote, or otherwise to exercise the rights of a
 
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<PAGE>   136
 
stockholder with respect to, shares of any Magna Company that may be directly or
indirectly acquired or controlled by it.
 
     8.12  Rights Agreement.  Magna shall take all necessary action (including,
if required, redeeming all of the outstanding Preferred Stock Purchase Rights or
amending or terminating the Magna Rights Agreement) so that the entering into of
this Agreement, the acquisition of shares pursuant to the Stock Option
Agreement, and consummation of the Merger and the other transactions
contemplated hereby do not and will not result in any Person becoming able to
exercise any Preferred Stock Purchase Rights under the Magna Rights Agreement or
enabling or requiring the Preferred Stock Purchase Rights to be separated from
the shares of Magna Common Stock to which they are attached or to be triggered
or to become exercisable.
 
     8.13  Agreement of Affiliates.  Magna has disclosed in Section 8.13 of the
Magna Disclosure Memorandum each Person whom it reasonably believes may be
deemed an "affiliate" of Magna for purposes of Rule 145 under the 1933 Act.
Magna shall use its reasonable efforts to cause each such Person to deliver to
UPC not later than 30 days prior to the Effective Time, a written agreement, in
substantially the form of Exhibit 3, providing that such Person will not sell,
pledge, transfer, or otherwise dispose of the shares of Magna Common Stock held
by such Person except as contemplated by such agreement or by this Agreement and
will not sell, pledge, transfer, or otherwise dispose of the shares of UPC
Common Stock to be received by such Person upon consummation of the Merger
except in compliance with applicable provisions of the 1933 Act and the rules
and regulations thereunder and until such time as financial results covering at
least 30 days of combined operations of UPC and Magna have been published within
the meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies. Shares of UPC Common Stock issued to such affiliates of Magna in
exchange for shares of Magna Common Stock shall not be transferable until such
time as financial results covering at least 30 days of combined operations of
UPC and Magna have been published within the meaning of Section 201.01 of the
SEC's Codification of Financial Reporting Policies, regardless of whether each
such affiliate has provided the written agreement referred to in this Section
8.13 (and UPC shall be entitled to place restrictive legends upon certificates
for shares of UPC Common Stock issued to affiliates of Magna pursuant to this
Agreement to enforce the provisions of this Section 8.13). UPC shall not be
required to maintain the effectiveness of the Registration Statement under the
1933 Act for the purposes of resale of UPC Common Stock by such affiliates.
 
     8.14  Employee Benefits and Contracts.  Following the Effective Time, but
in no event earlier than the consolidation of Magna's depository institution
Subsidiaries with UPC's depository institution Subsidiaries, UPC shall provide
to officers and employees of the Magna Companies (the "Continuing Employees"),
employee benefits under employee benefit plans on terms and conditions which
when taken as a whole are substantially similar to those currently provided by
the UPC Companies to their similarly situated officers and employees. For
purposes of participation, vesting, and benefit accruals (but not accrual of
benefits under UPC's tax-qualified retirement plans) under such employee benefit
plans, (i) service under any qualified defined benefit or contribution plans of
Magna shall be treated as service under UPC's qualified defined benefit or
contribution plans and (ii) service under any other employee benefit plans of
Magna shall be treated as service under any similar employee benefit plans
maintained by UPC. UPC shall cause the UPC welfare benefit plans that cover the
Continuing Employees after the Effective Time to (i) waive any waiting period
and restrictions and limitations for preexisting conditions or insurability and
(ii) cause any deductible, co-insurance, or maximum out-of-pocket payments made
by the Continuing Employees under Magna's welfare benefit plans to be credited
to such Continuing Employees under the UPC welfare benefit plans, so as to
reduce the amount of any deductible, co-insurance, or maximum out-of-pocket
payments payable by the Continuing Employees under the UPC welfare benefit
plans. Prior to the commencement of the Continuing Employee's participation in
the UPC employee benefit plans and programs, the benefit coverage of, and
participation in benefit plans by, the Continuing Employees shall continue under
the Magna Benefit Plans, as in effect immediately prior to the Effective Time.
During such transition period, the coverage under and participation in the Magna
Benefit Plans shall be deemed to provide the Continuing Employees with benefits
that are no less favorable than those offered to other employees of UPC and its
Subsidiaries. Except as expressly provided in the Supplemental Letter, UPC also
shall cause Magna and its Subsidiaries to honor all employment, severance,
consulting, and other compensation Contracts disclosed in Section 8.14 of the
Magna
 
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Disclosure Memorandum to UPC between any Magna Company and any current or former
director, officer, independent contractor, or employee thereof, and all
provisions of the Magna Benefit Plans.
 
     8.15  Indemnification.
 
          (a) After the Effective Time, UPC shall indemnify, defend and hold
     harmless the present and former directors, officers, employees, and agents
     of Magna or any of Magna's Subsidiaries (each, a "Indemnified Party")
     (including any person who becomes a director, officer, employee, or agent
     prior to the Effective Time) against all Liabilities (including reasonable
     attorneys' fees, and expenses, judgments, fines and amounts paid in
     settlement) arising out of actions or omissions occurring at or prior to
     the Effective Time (including the transactions contemplated by this
     Agreement and the Stock Option Agreement) to the full extent permitted
     under Delaware Law and by Magna's Certificate of Incorporation and Bylaws,
     as in effect on the date hereof and any indemnity agreements entered into
     prior to the date of this Agreement by any of the Magna Companies and any
     director, officer, employee, or agent of any of the Magna Companies,
     including, without limitation, provisions relating to advances of expenses
     incurred in the defense of any Litigation. Without limiting the foregoing,
     in any case in which approval by UPC is required to effectuate any
     indemnification, UPC shall direct, at the election of the Indemnified
     Party, that the determination of any such approval shall be made by
     independent counsel mutually agreed upon between UPC and the Indemnified
     Party.
 
          (b) UPC and the Surviving Corporation shall use their reasonable
     efforts (and Magna shall cooperate prior to the Effective Time in these
     efforts) to maintain in effect for a period of three years after the
     Effective Time, Magna's existing directors' and officers' liability
     insurance policy (provided that UPC and the Surviving Corporation may
     substitute therefor (i) policies of at least the same coverage and amounts
     containing terms and conditions which are substantially no less
     advantageous or (ii) with the consent of Magna given prior to the Effective
     Time, any other policy) with respect to claims arising from facts or events
     which occurred prior to the Effective Time and covering persons who are
     currently covered by such insurance; provided, that the Surviving
     Corporation shall not be obligated to make aggregate annual premium
     payments for such three-year period in respect of such policy (or coverage
     replacing such policy) which exceed, for the portion related to Magna's
     directors and officers, 150% of the annual premium payments on Magna's
     current policy in effect as of the date of this Agreement (the "Maximum
     Amount"). If the amount of the premiums necessary to maintain or procure
     such insurance coverage exceeds the Maximum Amount, UPC shall use its
     reasonable efforts to maintain the most advantageous policies of directors'
     and officers' liability insurance obtainable for a premium equal to the
     Maximum Amount.
 
          (c) Any Indemnified Party wishing to claim indemnification under
     paragraph (a) of this Section 8.15, upon learning of any such Liability or
     Litigation, shall promptly notify UPC thereof, provided that the failure so
     to notify shall not affect the obligations of UPC under this Section 8.15
     unless and to the extent such failure materially increases UPC's Liability
     under this Section 8.15. In the event of any such Litigation (whether
     arising before or after the Effective Time), (i) UPC or the Surviving
     Corporation shall have the right to assume the defense thereof and UPC
     shall not be liable to such Indemnified Parties for any legal expenses of
     other counsel or any other expenses subsequently incurred by such
     Indemnified Parties in connection with the defense thereof, except that if
     UPC or the Surviving Corporation elects not to assume such defense or
     counsel for the Indemnified Parties advises that there are substantive
     issues which raise conflicts of interest between UPC or the Surviving
     Corporation and the Indemnified Parties, the Indemnified Parties may retain
     counsel satisfactory to them, and UPC or the Surviving Corporation shall
     pay all reasonable fees and expenses of such counsel for the Indemnified
     Parties promptly as statements therefor are received; provided, that UPC
     shall be obligated pursuant to this paragraph (c) to pay for only one firm
     of counsel for all Indemnified Parties in any jurisdiction, (ii) the
     Indemnified Parties will cooperate in the defense of any such Litigation,
     and (iii) UPC shall not be liable for any settlement effected without its
     prior written consent; and provided further that the Surviving Corporation
     shall not have any obligation hereunder to any Indemnified Party when and
     if a court of competent jurisdiction shall determine, and such
     determination shall have become final, that the
 
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<PAGE>   138
 
     indemnification of such Indemnified Party in the manner contemplated hereby
     is prohibited by applicable Law.
 
          (d) The Surviving Corporation shall not be liable for any settlement
     effected without its prior written consent which shall not be unreasonably
     withheld.
 
          (e) If either UPC or the Surviving Corporation or any of their
     respective successors or assigns shall consolidate with or merge into any
     other Person and shall not be the continuing or surviving Person of such
     consolidation or merger or shall transfer all or substantially all of its
     Assets to any Person, then and in each case, proper provision shall be made
     so that the successors and assigns of either UPC or the Surviving
     Corporation shall assume the obligations set forth in this Section 8.15.
 
          (f) UPC shall pay all reasonable costs, including attorneys' fees,
     that may be incurred by any Indemnified Party in enforcing the indemnity
     and other obligations provided for in this Section 8.15.
 
          (g) The provisions of this Section 8.15 are intended to be for the
     benefit of, and shall be enforceable by, each Indemnified Party and his or
     her heirs or representatives.
 
     8.16  Certain Modifications.  UPC and Magna shall consult with respect to
their loan, litigation, and real estate valuation policies and practices
(including loan classifications and levels of reserves) and Magna shall make
such modifications or changes to its policies and practices, if any, prior to
the Effective Time, as may be mutually agreed upon. UPC and Magna also shall
consult with respect to the character, amount, and timing of restructuring and
Merger-related expense charges to be taken by each of the Parties in connection
with the transactions contemplated by this Agreement and shall take such charges
in accordance with GAAP as may be mutually agreed upon by the Parties. Neither
Party's representations, warranties, and covenants contained in this Agreement
shall be deemed to be inaccurate or breached in any respect as a consequence of
any modifications or charges undertaken solely on account of this Section 8.16.
 
     8.17  Pending Magna Acquisition.  Each of UPC and Magna shall use its
reasonable efforts to modify or amend (or cause to be modified or amended) this
Agreement or the Charter Agreement as necessary or appropriate to ensure that
each of the acquisition of Magna by UPC and the acquisition of Charter by Magna
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code. Any such amendments or modifications shall be made as
soon as reasonably practicable after the date of this Agreement.
 
                                   ARTICLE 9
               CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
 
     9.1  Conditions to Obligations of Each Party.  The respective obligations
of each Party to perform this Agreement and the Plan of Merger and to consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties pursuant
to Section 11.6 of this Agreement:
 
          (a) Stockholder Approvals.  The stockholders of Magna shall have
     approved this Agreement and the Plan of Merger and the consummation of the
     transactions contemplated hereby and thereby, including the Merger, as and
     to the extent required by Law, by the provisions of any governing
     instruments, and by the rules of the NYSE. The stockholders of UPC shall
     have approved the UPC Charter Amendment and the issuance of shares of UPC
     Common Stock pursuant to the Merger, as and to the extent required by Law,
     by the provisions of any governing instruments, and by the rules of the
     NYSE.
 
          (b) Regulatory Approvals.  All Consents of, filings and registrations
     with, and notifications to, all Regulatory Authorities required for
     consummation of the Merger shall have been obtained or made and shall be in
     full force and effect and all waiting periods required by Law shall have
     expired. No Consent obtained from any Regulatory Authority which is
     necessary to consummate the transactions contemplated hereby shall be
     conditioned or restricted in a manner (excluding requirements relating to
     the raising of additional capital or the disposition of Assets or deposits)
     which in the reasonable good faith
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<PAGE>   139
 
     judgment of the Board of Directors of UPC would so materially adversely
     impact the economic or business benefits of the transactions contemplated
     by this Agreement so as to render inadvisable the consummation of the
     Merger.
 
          (c) Consents and Approvals.  Each Party shall have obtained any and
     all Consents required for consummation of the Merger (other than those
     referred to in Section 9.1(b) of this Agreement) or for the preventing of
     any Default under any Contract or Permit of such Party which, if not
     obtained or made, is reasonably likely to have, individually or in the
     aggregate, a Material Adverse Effect on such Party.
 
          (d) Legal Proceedings.  No court or governmental or Regulatory
     Authority of competent jurisdiction shall have enacted, issued,
     promulgated, enforced, or entered any Law or Order (whether temporary,
     preliminary, or permanent) or taken any other action which prohibits,
     restricts, or makes illegal consummation of the transactions contemplated
     by this Agreement.
 
          (e) Registration Statement.  The Registration Statement shall be
     effective under the 1933 Act, no stop orders suspending the effectiveness
     of the Registration Statement shall have been issued, no action, suit,
     proceeding, or investigation by the SEC to suspend the effectiveness
     thereof shall have been initiated and be continuing, and all necessary
     approvals under state securities Laws or the 1933 Act or 1934 Act relating
     to the issuance or trading of the shares of UPC Common Stock issuable
     pursuant to the Merger shall have been received.
 
          (f) Exchange Listing.  The shares of UPC Common Stock issuable
     pursuant to the Merger shall have been approved for listing on the NYSE,
     subject to official notice of issuance.
 
          (g) Tax Matters.  Magna shall have received a written opinion from
     Wachtell, Lipton, Rosen & Katz and UPC shall have received a written
     opinion from Alston & Bird LLP, in each case in a form reasonably
     satisfactory to such Party (the "Tax Opinions"), dated the date of the
     Effective Time, substantially to the effect that (i) the Merger will
     constitute a reorganization within the meaning of Section 368(a) of the
     Internal Revenue Code, (ii) no gain or loss will be recognized by holders
     of Magna Common Stock who exchange all of their Magna Common Stock solely
     for UPC Common Stock pursuant to the Merger (except with respect to any
     cash received in lieu of a fractional share interest in UPC Common Stock),
     (iii) the tax basis of the UPC Common Stock received by holders of Magna
     Common Stock who exchange all of their Magna Common Stock solely for UPC
     Common Stock in the Merger will be the same as the tax basis of the Magna
     Common Stock surrendered in exchange for the UPC Common Stock (reduced by
     an amount allocable to a fractional share interest in UPC Common Stock for
     which cash is received), and (iv) the holding period of the UPC Common
     Stock received by holders who exchange all of their Magna Common Stock
     solely for UPC Common Stock in the Merger will be the same as the holding
     period of the Magna Common Stock surrendered in exchange therefor, provided
     that such Magna Common Stock is held as a capital asset at the Effective
     Time. In rendering such Tax Opinions, such counsel shall be entitled to
     rely upon representations of officers of Magna and UPC reasonably
     satisfactory in form and substance to such counsel.
 
          (h) Pooling Letters.  Each Party shall have received a letter, dated
     as of the Effective Time, in a form reasonably acceptable to such Party,
     from Price Waterhouse LLP to the effect that the Merger will qualify for
     pooling-of-interests accounting treatment. Each Party shall have received a
     letter, dated as of the Effective Time, in a form reasonably acceptable to
     such Party, from Ernst & Young LLP to the effect that such firm is not
     aware of any matters relating to Magna and its Subsidiaries which would
     preclude the Merger from qualifying for pooling-of-interests accounting
     treatment.
 
     9.2  Conditions to Obligations of UPC.  The obligations of UPC to perform
this Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by UPC pursuant to Section 11.6(a) of this Agreement:
 
          (a) Representations and Warranties.  For purposes of this Section
     9.2(a), the accuracy of the representations and warranties of Magna set
     forth in this Agreement shall be assessed as of the date of this Agreement
     and as of the Effective Time with the same effect as though all such
     representations and warranties had been made on and as of the Effective
     Time (provided that representations and warranties
                                      A-33
<PAGE>   140
 
     which are confined to a specified date shall speak only as of such date).
     The representations and warranties of Magna set forth in Section 5.3 of
     this Agreement shall be true and correct (except for inaccuracies which are
     de minimis in amount). The representations and warranties of Magna set
     forth in Sections 5.18, 5.19, 5.20, and 5.21 of this Agreement shall be
     true and correct in all Material respects. There shall not exist
     inaccuracies in the representations and warranties of Magna set forth in
     this Agreement (including the representations and warranties set forth in
     Sections 5.3, 5.18, 5.19, 5.20, and 5.21) such that the aggregate effect of
     such inaccuracies has, or is reasonably likely to have, a Material Adverse
     Effect on Magna; provided that, for purposes of this sentence only, those
     representations and warranties which are qualified by references to
     "material, "Material," "Material Adverse Effect," or variations thereof, or
     to the "Knowledge" of Magna or to a matter being "known" by Magna shall be
     deemed not to include such qualifications.
 
          (b) Performance of Agreements and Covenants.  Each and all of the
     agreements and covenants of Magna to be performed and complied with
     pursuant to this Agreement and the other agreements contemplated hereby
     prior to the Effective Time shall have been duly performed and complied
     with in all Material respects.
 
          (c) Certificates.  Magna shall have delivered to UPC (i) a
     certificate, dated as of the Effective Time and signed on its behalf by its
     duly authorized officers, to the effect that the conditions of its
     obligations set forth in Section 9.2(a) and 9.2(b) of this Agreement have
     been satisfied and (ii) certified copies of resolutions duly adopted by
     Magna's Board of Directors and stockholders evidencing the taking of all
     corporate action necessary to authorize the execution, delivery, and
     performance of this Agreement and the Plan of Merger, and the consummation
     of the transactions contemplated hereby and thereby, all in such reasonable
     detail as UPC and its counsel shall request.
 
          (d) Affiliate Agreements.  UPC shall have received from each affiliate
     of Magna the affiliates agreement referred to in Section 8.12 of this
     Agreement, to the extent necessary to assure in the reasonable judgment of
     UPC that the transactions contemplated hereby will qualify for pooling-of-
     interests accounting treatment.
 
          (e) Rights Agreement.  None of the events described in Sections 3, 7,
     or 11 of the Magna Rights Agreement shall have occurred, and the Preferred
     Stock Purchase Rights shall not have become non-redeemable or exercisable
     for capital stock of UPC upon consummation of the Merger.
 
     9.3  Conditions to Obligations of Magna.  The obligations of Magna to
perform this Agreement and the Plan of Merger and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Magna pursuant to Section 11.6(b) of this
Agreement:
 
          (a) Representations and Warranties.  For purposes of this Section
     9.3(a), the accuracy of the representations and warranties of UPC set forth
     in this Agreement shall be assessed as of the date of this Agreement and as
     of the Effective Time with the same effect as though all such
     representations and warranties had been made on and as of the Effective
     Time (provided that representations and warranties which are confined to a
     specified date shall speak only as of such date). The representations and
     warranties of UPC set forth in Section 6.3 of this Agreement shall be true
     and correct (except for inaccuracies which are de minimis in amount). The
     representations and warranties of UPC set forth in Section 6.16 of this
     Agreement shall be true and correct in all Material respects. There shall
     not exist inaccuracies in the representations and warranties of UPC set
     forth in this Agreement (including the representations and warranties set
     forth in Sections 6.3 and 6.16) such that the aggregate effect of such
     inaccuracies has, or is reasonably likely to have, a Material Adverse
     Effect on UPC; provided that, for purposes of this sentence only, those
     representations and warranties which are qualified by references to
     "material," "Material," "Material Adverse Effect," or variations thereof,
     or to the "Knowledge" of UPC or to a matter being "known" by UPC shall be
     deemed not to include such qualifications.
 
          (b) Performance of Agreements and Covenants.  Each and all of the
     agreements and covenants of UPC to be performed and complied with pursuant
     to this Agreement and the other agreements
 
                                      A-34
<PAGE>   141
 
     contemplated hereby prior to the Effective Time shall have been duly
     performed and complied with in all Material respects.
 
          (c) Certificates.  UPC shall have delivered to Magna (i) a
     certificate, dated as of the Effective Time and signed on its behalf by its
     duly authorized officers, to the effect that the conditions of its
     obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have
     been satisfied and (ii) certified copies of resolutions duly adopted by
     UPC's Board of Directors and stockholders evidencing the taking of all
     corporate action necessary to authorize the execution, delivery, and
     performance of this Agreement, and the consummation of the transactions
     contemplated hereby, all in such reasonable detail as Magna and its counsel
     shall request.
 
                                   ARTICLE 10
                                  TERMINATION
 
     10.1  Termination.  Notwithstanding any other provision of this Agreement
and the Plan of Merger, and notwithstanding the approval of this Agreement by
the stockholders of Magna or UPC, this Agreement may be terminated and the
Merger abandoned at any time prior to the Effective Time:
 
          (a) By mutual consent of the Board of Directors of UPC and the Board
     of Directors of Magna; or
 
          (b) By the Board of Directors of either Party (provided that the
     terminating Party is not then in breach of any representation or warranty
     contained in this Agreement under the applicable standard set forth in
     Section 9.2(a) of this Agreement in the case of Magna and Section 9.3(a) of
     this Agreement in the case of UPC or in Material breach of any covenant or
     other agreement contained in this Agreement) in the event of an inaccuracy
     of any representation or warranty of the other Party contained in this
     Agreement which cannot be or has not been cured within 30 days after the
     giving of written notice to the breaching Party of such inaccuracy and
     which inaccuracy would provide the terminating Party the ability to refuse
     to consummate the Merger under the applicable standard set forth in Section
     9.2(a) of this Agreement in the case of Magna and Section 9.3(a) of this
     Agreement in the case of UPC; or
 
          (c) By the Board of Directors of either Party (provided that the
     terminating Party is not then in breach of any representation or warranty
     contained in this Agreement under the applicable standard set forth in
     Section 9.2(a) of this Agreement in the case of Magna and Section 9.3(a) in
     the case of UPC) in the event of a Material breach by the other Party of
     any covenant or agreement contained in this Agreement which cannot be or
     has not been cured within 30 days after the giving of written notice to the
     breaching Party of such breach; or
 
          (d) By the Board of Directors of either Party in the event (i) any
     Consent of any Regulatory Authority required for consummation of the Merger
     and the other transactions contemplated hereby shall have been denied by
     final nonappealable action of such authority or if any action taken by such
     authority is not appealed within the time limit for appeal or (ii) the
     stockholders of UPC or Magna fail to vote their approval of the matters
     submitted for the approval by such stockholders at the Stockholders'
     Meetings where the transactions were presented to such stockholders for
     approval and voted upon; or
 
          (e) By the Board of Directors of either Party in the event that the
     Merger shall not have been consummated by December 31, 1998, if the failure
     to consummate the transactions contemplated hereby on or before such date
     is not caused by any breach of this Agreement by the Party electing to
     terminate pursuant to this Section 10.1(e); or
 
          (f) By the Board of Directors of either Party (provided that the
     terminating Party is not then in breach of any representation or warranty
     contained in this Agreement under the applicable standard set forth in
     Section 9.2(a) of this Agreement in the case of Magna and Section 9.3(a) of
     this Agreement in the case of UPC or in Material breach of any covenant or
     other agreement contained in this Agreement) in the event that any of the
     conditions precedent to the obligations of such Party to consummate the
     Merger cannot be satisfied or fulfilled by the date specified in Section
     10.1(e) of this Agreement.
 
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<PAGE>   142
 
     10.2  Effect of Termination.  In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement, the Plan of Merger, and the Supplemental Letter shall become void and
have no effect, except that (i) the provisions of this Section 10.2 and Article
11 and Section 8.6(b) of this Agreement shall survive any such termination and
abandonment and (ii) a termination pursuant to Sections 10.1(b), 10.1(c), or
10.1(f) of this Agreement shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation, warranty, covenant, or
agreement giving rise to such termination. The Stock Option Agreement shall be
governed by its own terms.
 
     10.3  Non-Survival of Representations and Covenants.  The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.13 and 8.15 of this Agreement and the
Supplemental Letter.
 
                                   ARTICLE 11
                                 MISCELLANEOUS
 
     11.1  Definitions.
 
          (a) Except as otherwise provided herein, the capitalized terms set
     forth below shall have the following meanings:
 
          "Acquisition Proposal" with respect to a Party shall mean any tender
     offer or exchange offer or any proposal for a merger, acquisition of all of
     the stock or Assets of, or other business combination involving such Party
     or any of its Subsidiaries or the acquisition of a substantial equity
     interest in, or a substantial portion of the Assets of, such Party or any
     of its Subsidiaries.
 
          "Affiliate" of a Person shall mean any other Person directly, or
     indirectly through one or more intermediaries, controlling, controlled by
     or under common control with such Person.
 
          "Agreement" shall mean this Agreement and Plan of Reorganization,
     including the Exhibits hereto (except the Stock Option Agreement) delivered
     pursuant hereto and incorporated herein by reference.
 
          "Articles of Merger" shall mean the Articles of Merger to be executed
     by UPHC and filed with the Secretary of State of the State of Tennessee
     relating to the Merger as contemplated by Section 1.1 of this Agreement.
 
          "Assets" of a Person shall mean all of the assets, properties,
     businesses, and rights of such Person of every kind, nature, character, and
     description, whether real, personal, or mixed, tangible or intangible,
     accrued or contingent, or otherwise relating to or utilized in such
     Person's business, directly or indirectly, in whole or in part, whether or
     not carried on the books and records of such Person, and whether or not
     owned in the name of such Person or any Affiliate of such Person and
     wherever located.
 
          "BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
     amended.
 
          "Certificate of Merger" shall mean the certificate of merger to be
     executed by UPHC and filed with the Secretary of State of the State of
     Delaware, relating to the Merger as contemplated by Section 1.1 of this
     Agreement.
 
          "Confidentiality Agreements" shall mean those certain Confidentiality
     Agreements, entered into prior to the date of this Agreement, between Magna
     and UPC.
 
          "Consent" shall mean any consent, approval, authorization, clearance,
     exemption, waiver, or similar affirmation by any Person pursuant to any
     Contract, Law, Order, or Permit.
 
          "Contract" shall mean any written or oral agreement, arrangement,
     authorization, commitment, contract, indenture, instrument, lease,
     obligation, plan, practice, restriction, understanding, or undertaking of
     any kind or character, or other document to which any Person is a party or
     that is binding on any Person or its capital stock, Assets, or business.
 
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<PAGE>   143
 
          "Default" shall mean (i) any breach or violation of or default under
     any Contract, Order, or Permit, (ii) any occurrence of any event that with
     the passage of time or the giving of notice or both would constitute a
     breach or violation of or default under any Contract, Order, or Permit, or
     (iii) any occurrence of any event that with or without the passage of time
     or the giving of notice would give rise to a right to terminate or revoke,
     change the current terms of, or renegotiate, or to accelerate, increase, or
     impose any Liability under, any Contract, Order, or Permit, where, in any
     such event, such Default is reasonably likely to have, individually or in
     the aggregate, a Material Adverse Effect on a Party.
 
          "DGCL" shall mean the Delaware General Corporation Law.
 
          "Environmental Laws" shall mean all Laws relating to pollution or
     protection of human health or the environment (including ambient air,
     surface water, ground water, land surface, or subsurface strata) and which
     are administered, interpreted, or enforced by the United States
     Environmental Protection Agency and state and local agencies with
     jurisdiction over, and including common law in respect of, pollution or
     protection of the environment, including the Comprehensive Environmental
     Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
     ("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
     U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
     discharges, releases, or threatened releases of any Hazardous Material, or
     otherwise relating to the manufacture, processing, distribution, use,
     treatment, storage, disposal, transport, or handling of any Hazardous
     Material.
 
          "ERISA" shall mean the Employee Retirement Income Security Act of
     1974, as amended.
 
          "Exhibits" 1 through 3, inclusive, shall mean the Exhibits so marked,
     copies of which are attached to this Agreement. Such Exhibits are hereby
     incorporated by reference herein and made a part hereof, and may be
     referred to in this Agreement and any other related instrument or document
     without being attached hereto.
 
          "GAAP" shall mean generally accepted accounting principles,
     consistently applied during the periods involved.
 
          "Hazardous Material" shall mean (i) any hazardous substance, hazardous
     material, hazardous waste, regulated substance, or toxic substance (as
     those terms are defined by any applicable Environmental Laws) and (ii) any
     chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
     (and specifically shall include asbestos requiring abatement, removal, or
     encapsulation pursuant to the requirements of governmental authorities and
     any polychlorinated biphenyls).
 
          "HSR Act" shall mean Section 7A of the Clayton Act, as added by Title
     II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
     and the rules and regulations promulgated thereunder.
 
          "Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
     as amended.
 
          "Joint Proxy Statement" shall mean the joint proxy statement used by
     UPC and Magna to solicit the approval of their respective stockholders of
     the transactions contemplated by this Agreement, which shall include the
     prospectus of UPC relating to the issuance of the UPC Common Stock to
     holders of Magna Common Stock.
 
          "Knowledge" as used with respect to a Person (including references to
     such Person being aware of a particular matter) shall mean the personal
     knowledge of the chairman, president, chief financial officer, chief
     accounting officer, chief credit officer, general counsel, or any executive
     vice president of such Person.
 
          "Law" shall mean any code, law, ordinance, regulation, reporting or
     licensing requirement, rule, or statute applicable to a Person or its
     Assets, Liabilities, or business, including those promulgated, interpreted,
     or enforced by any Regulatory Authority.
 
          "Liability" shall mean any direct or indirect, primary or secondary,
     liability, indebtedness, obligation, penalty, cost, or expense (including
     costs of investigation, collection, and defense), claim,
                                      A-37
<PAGE>   144
 
     deficiency, guaranty, or endorsement of or by any Person (other than
     endorsements of notes, bills, checks, and drafts presented for collection
     or deposit in the ordinary course of business) of any type, whether
     accrued, absolute or contingent, liquidated or unliquidated, matured or
     unmatured, or otherwise.
 
          "Lien" shall mean any conditional sale agreement, default of title,
     easement, encroachment, encumbrance, hypothecation, infringement, lien,
     mortgage, pledge, reservation, restriction, security interest, title
     retention, or other security arrangement, or any adverse right or interest,
     charge, or claim of any nature whatsoever of, on, or with respect to any
     property or property interest, other than (i) Liens for property Taxes not
     yet due and payable and (ii) for depository institution Subsidiaries of a
     Party, pledges to secure deposits, and other Liens incurred in the ordinary
     course of the banking business.
 
          "Litigation" shall mean any action, arbitration, cause of action,
     claim, complaint, criminal prosecution, demand letter, governmental or
     other examination or investigation, hearing, inquiry, administrative or
     other proceeding, or notice (written or oral) by any Person alleging
     potential Liability or requesting information relating to or affecting a
     Party, its business, its Assets (including Contracts related to it), or the
     transactions contemplated by this Agreement, but shall not include regular,
     periodic examinations of depository institutions and their Affiliates by
     Regulatory Authorities.
 
          "Loan Property" shall mean any property owned, leased, or operated by
     the Party in question or by any of its Subsidiaries or in which such Party
     or Subsidiary holds a security or other interest (including an interest in
     a fiduciary capacity), and, where required by the context, includes the
     owner or operator of such property, but only with respect to such property.
 
          "Magna Capital Stock" shall mean, collectively, Magna Common Stock,
     Magna Class B Preferred Stock, and Magna Class C Preferred Stock.
 
          "Magna Class B Preferred Stock" shall mean the $20.00 par value Class
     B Voting Preferred Stock of Magna.
 
          "Magna Class C Preferred Stock" shall mean the $.10 par value Class C
     Non-Voting Preferred Stock of Magna.
 
          "Magna Common Stock" shall mean the $2.00 par value common stock of
     Magna.
 
          "Magna Companies" shall mean, collectively, Magna and all Magna
     Subsidiaries.
 
          "Magna Disclosure Memorandum" shall mean the written information
     entitled "Magna Disclosure Memorandum" delivered prior to the execution of
     this Agreement to UPC describing in reasonable detail the matters contained
     therein and, with respect to each disclosure made therein, specifically
     referencing each Section or subsection of this Agreement under which such
     disclosure is being made.
 
          "Magna Financial Statements" shall mean (i) the consolidated
     statements of condition (including related notes and schedules, if any) of
     Magna as of September 30, 1997, and as of December 31, 1996 and 1995, and
     the related statements of income, changes in stockholders' equity, and cash
     flows (including related notes and schedules, if any) for the nine months
     ended September 30, 1997, and for each of the three years ended December
     31, 1996, 1995, and 1994, as filed by Magna in SEC Documents and (ii) the
     consolidated statements of condition of Magna (including related notes and
     schedules, if any) and related statements of income, changes in
     stockholders' equity, and cash flows (including related notes and
     schedules, if any) included in SEC Documents filed with respect to periods
     ended subsequent to September 30, 1997.
 
          "Magna Rights Agreement" shall mean that certain Rights Agreement,
     dated November 11, 1988, between Magna and Magna Trust Company, as Rights
     Agent.
 
          "Magna Stock Plans" shall mean the existing stock option and other
     stock-based compensation plans of Magna.
 
          "Magna Subsidiaries" shall mean the Subsidiaries of Magna, which shall
     include the Magna Subsidiaries described in Section 5.4 of this Agreement
     and any corporation, bank, savings association, or
 
                                      A-38
<PAGE>   145
 
     other organization acquired as a Subsidiary of Magna in the future and
     owned by Magna at the Effective Time.
 
          "Material" for purposes of this Agreement shall be determined in light
     of the facts and circumstances of the matter in question; provided that any
     specific monetary amount stated in this Agreement shall determine
     materiality in that instance.
 
          "Material Adverse Effect" on a Party shall mean an event, change, or
     occurrence which, individually or together with any other event, change, or
     occurrence, has a Material adverse impact on (i) the financial condition,
     results of operations, or business of such Party and its Subsidiaries,
     taken as a whole or (ii) the ability of such Party to perform its
     obligations under this Agreement or to consummate the Merger or the other
     transactions contemplated by this Agreement, provided that "Material
     Adverse Effect" shall not be deemed to include the impact of (a) changes in
     banking and similar Laws of general applicability or interpretations
     thereof by courts or governmental authorities, (b) changes in GAAP or
     regulatory accounting principles generally applicable to banks and their
     holding companies, (c) actions and omissions of a Party (or any of its
     Subsidiaries) taken with the prior informed consent of the other Party in
     contemplation of the transactions contemplated hereby, and (d) the Merger
     and compliance with the provisions of this Agreement (including the expense
     associated with the vesting of benefits under the various employee benefit
     plans of Magna as a result of the Merger constituting a change of control)
     on the operating performance of the Parties.
 
          "NYSE" shall mean the New York Stock Exchange, Inc.
 
          "1933 Act" shall mean the Securities Act of 1933, as amended.
 
          "1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
 
          "Order" shall mean any administrative decision or award, decree,
     injunction, judgment, order, quasi-judicial decision or award, ruling, or
     writ of any federal, state, local, or foreign or other court, arbitrator,
     mediator, tribunal, administrative agency, or Regulatory Authority.
 
          "Participation Facility" shall mean any facility or property in which
     the Party in question or any of its Subsidiaries participates in the
     management (including, but not limited to, participating in a fiduciary
     capacity) and, where required by the context, said term means the owner or
     operator of such facility or property, but only with respect to such
     facility or property.
 
          "Party" shall mean either Magna or UPC, and "Parties" shall mean both
     Magna and UPC.
 
          "Permit" shall mean any federal, state, local, and foreign
     governmental approval, authorization, certificate, easement, filing,
     franchise, license, notice, permit, or right to which any Person is a party
     or that is or may be binding upon or inure to the benefit of any Person or
     its securities, Assets, or business.
 
          "Person" shall mean a natural person or any legal, commercial, or
     governmental entity, such as, but not limited to, a corporation, general
     partnership, joint venture, limited partnership, limited liability company,
     trust, business association, group acting in concert, or any person acting
     in a representative capacity.
 
          "Plan of Merger" shall mean the plan of merger providing for the
     Merger, in substantially the form of Exhibit 2.
 
          "Preferred Stock Cash Payment Amount" shall mean an amount in cash
     equal to $20.00, plus any accrued but unpaid dividends at the Effective
     Time.
 
          "Preferred Stock Purchase Rights" shall mean the preferred stock
     purchase rights issued pursuant to the Magna Rights Agreement.
 
          "Registration Statement" shall mean the Registration Statement on Form
     S-4, or other appropriate form, including any pre-effective or
     post-effective amendments or supplements thereto, filed with the SEC by UPC
     under the 1933 Act with respect to the shares of UPC Common Stock to be
     issued to the stockholders of Magna in connection with the transactions
     contemplated by this Agreement.
                                      A-39
<PAGE>   146
 
          "Regulatory Authorities" shall mean, collectively, the Federal Trade
     Commission, the United States Department of Justice, the Board of the
     Governors of the Federal Reserve System, the Office of the Comptroller of
     the Currency, the Federal Deposit Insurance Corporation, the Office of
     Thrift Supervision, all state regulatory agencies having jurisdiction over
     the Parties and their respective Subsidiaries, the NASD, and the SEC.
 
          "Representative" shall mean any investment banker, financial advisor,
     attorney, accountant, consultant, or other representative of a Person.
 
          "Rights" shall mean all arrangements, calls, commitments, Contracts,
     options, rights to subscribe to, scrip, understandings, warrants, or other
     binding obligations of any character whatsoever relating to, or securities
     or rights convertible into or exchangeable for, shares of the capital stock
     of a Person or by which a Person is or may be bound to issue additional
     shares of its capital stock or other Rights.
 
          "SEC" shall mean the United States Securities and Exchange Commission.
 
          "SEC Documents" shall mean all forms, proxy statements, registration
     statements, reports, schedules, and other documents filed, or required to
     be filed, by a Party or any of its Subsidiaries with any Regulatory
     Authority pursuant to the Securities Laws.
 
          "Securities Laws" shall mean the 1933 Act, the 1934 Act, the
     Investment Company Act of 1940, as amended, the Investment Advisors Act of
     1940, as amended, the Trust Indenture Act of 1939, as amended, and the
     rules and regulations of any Regulatory Authority promulgated thereunder.
 
          "Stock Option Agreement" shall mean the stock option agreement by and
     between Magna and UPC, in substantially the form of Exhibit 1.
 
          "Stockholders' Meetings" shall mean the respective meetings of the
     stockholders of UPC and Magna to be held pursuant to Section 8.1 of this
     Agreement, including any adjournment or adjournments thereof.
 
          "Subsidiaries" shall mean all those corporations, banks, associations,
     or other entities of which the entity in question owns or controls 50% or
     more of the outstanding equity securities either directly or through an
     unbroken chain of entities as to each of which 50% or more of the
     outstanding equity securities is owned directly or indirectly by its
     parent; provided, there shall not be included any such entity acquired
     through foreclosure or any such entity the equity securities of which are
     owned or controlled in a fiduciary capacity.
 
          "Supplemental Letter" shall mean the supplemental letter of even date
     herewith between the Parties relating to certain understandings and
     agreements in addition to those included in this Agreement.
 
          "Surviving Corporation" shall mean UPHC as the surviving corporation
     resulting from the Merger.
 
          "Tax" or "Taxes" shall mean all federal, state, local, and foreign
     taxes, charges, fees, levies, imposts, duties, or other assessments,
     including income, gross receipts, excise, employment, sales, use, transfer,
     license, payroll, franchise, severance, stamp, occupation, windfall
     profits, environmental, federal highway use, commercial rent, customs
     duties, capital stock, paid-up capital, profits, withholding, Social
     Security, single business and unemployment, disability, real property,
     personal property, registration, ad valorem, value added, alternative or
     add-on minimum, estimated, or other tax of any kind whatsoever, imposed or
     required to be withheld by the United States or any state, local, or
     foreign government or subdivision or agency thereof, including any
     interest, penalties, or additions thereto.
 
          "Taxable Period" shall mean any period prescribed by any governmental
     authority, including the United States or any state, local, or foreign
     government or subdivision or agency thereof for which a Tax Return is
     required to be filed or Tax is required to be paid.
 
          "Tax Return" shall mean any report, return, information return, or
     other information required to be supplied to a taxing authority in
     connection with Taxes, including any return of an affiliated or combined or
     unitary group that includes a Party or its Subsidiaries.
 
                                      A-40
<PAGE>   147
 
          "TBCA" shall mean the Tennessee Business Corporation Act.
 
          "UPC Capital Stock" shall mean, collectively, the UPC Common Stock,
     the UPC Preferred Stock and any other class or series of capital stock of
     UPC.
 
          "UPC Charter Amendment" shall mean the proposal to amend UPC's
     Restated Charter of Incorporation to increase the number of authorized
     shares of UPC Common Stock by not less than 100,000,000, which may be
     submitted to the stockholders of UPC for consideration and approval at the
     UPC Stockholders' Meeting or the 1998 annual meeting of stockholders of
     UPC.
 
          "UPC Common Stock" shall mean the $5.00 par value common stock of UPC.
 
          "UPC Financial Statements" shall mean (i) the consolidated balance
     sheets (including related notes and schedules, if any) of UPC as of
     September 30, 1997, and as of December 31, 1996 and 1995, and the related
     statements of earnings, changes in stockholders' equity, and cash flows
     (including related notes and schedules, if any) for the nine months ended
     September 30, 1997 and for each of the three years ended December 31, 1996,
     1995 and 1994, as filed by UPC in SEC Documents and (ii) the consolidated
     balance sheets of UPC (including related notes and schedules, if any) and
     related statements of earnings, changes in stockholders' equity, and cash
     flows (including related notes and schedules, if any) included in SEC
     Documents filed with respect to periods ended subsequent to September 30,
     1997.
 
          "UPC Preferred Stock" shall mean the no par value preferred stock of
     UPC and shall include the (i) Series A Preferred Stock and (ii) Series E 8%
     Cumulative, Convertible Preferred Stock, of UPC ("UPC Series E Preferred
     Stock").
 
          "UPC Rights" shall mean the preferred stock purchase rights issued
     pursuant to the UPC Rights Agreement.
 
          "UPC Rights Agreement" shall mean that certain Rights Agreement, dated
     January 19, 1989, between UPC and Union Planters Bank, National
     Association, as Rights Agent.
 
          "UPC Subsidiaries" shall mean the Subsidiaries of UPC and any
     corporation, bank, or other organization acquired as a Subsidiary of UPC in
     the future and owned by UPC at the Effective Time.
 
          "UPHC" shall mean the wholly-owned subsidiary of UPC organized under
     the Laws of the State of Tennessee.
 
          "UPHC Common Stock" shall mean the $1.00 par value common stock of
     UPHC.
 
                                      A-41
<PAGE>   148
 
          (b) The terms set forth below shall have the meanings ascribed thereto
     in the referenced sections:
 
<TABLE>
       <S>                      <C>
       Charter................  Section 7.2(f)
       Charter Agreement......  Section 7.2(f)
       Closing................  Section 1.2
       Effective Time.........  Section 1.3
       Exchange Agent.........  Section 4.1
       Exchange Ratio.........  Section 3.1(c)
       Indemnified Party......  Section 8.15
       Magna Benefit Plans....  Section 5.13(a)
       Magna Contracts........  Section 5.14
       Magna ERISA
         Affiliate............  Section 5.13(e)
       Magna ERISA Plan.......  Section 5.13(a)
       Magna Rights...........  Section 3.6(a)
       Magna Pension Plan.....  Section 5.13(a)
       Magna SEC Reports......  Section 5.5(a)
       Merger.................  Section 1.1
       Takeover Laws..........  Section 5.19
       Tax Opinion............  Section 9.1(g)
       UPC ERISA Affiliate....  Section 6.17
       UPC SEC Reports........  Section 6.5(a)
</TABLE>
 
          (c) Any singular term in this Agreement shall be deemed to include the
     plural, and any plural term the singular. Whenever the words "include,"
     "includes," or "including" are used in this Agreement, they shall be deemed
     followed by the words "without limitation."
 
     11.2 Expenses.
 
          (a) Except as otherwise provided in this Section 11.2, each of the
     Parties shall bear and pay all direct costs and expenses incurred by it or
     on its behalf in connection with the transactions contemplated hereunder,
     including filing, registration, and application fees, printing fees, and
     fees and expenses of its own financial or other consultants, investment
     bankers, accountants, and counsel, except that each of the Parties shall
     bear and pay one-half of the printing costs incurred in connection with the
     printing of the Registration Statement and the Joint Proxy Statement.
 
          (b) Nothing contained in this Section 11.2 shall constitute or shall
     be deemed to constitute liquidated damages for the willful breach by a
     Party of the terms of this Agreement or otherwise limit the rights of the
     nonbreaching Party.
 
     11.3  Brokers and Finders.  Except for Donaldson, Lufkin & Jenrette as to
Magna and except for Stifel Nicolaus & Co. as to UPC, each of the Parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions, or finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon his, her, or its representing or being retained by or
allegedly representing or being retained by Magna or UPC, each of Magna and UPC,
as the case may be, agrees to indemnify and hold the other Party harmless of and
from any Liability in respect of any such claim.
 
     11.4  Entire Agreement.  Except as otherwise expressly provided herein,
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (including any provision of
the Confidentiality Agreements which would act to preclude UPC (or any Holder as
defined in the Stock Option Agreement from exercising its rights under the Stock
Option Agreement) to the extent that the Stock Option Agreement is in force and
effect, but excluding the Supplemental Letter). Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
                                      A-42
<PAGE>   149
 
liabilities under or by reason of this Agreement, other than as provided in
Sections 8.13 and 8.15 of this Agreement.
 
     11.5  Amendments.  To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties, whether before or after
stockholder approval of this Agreement has been obtained; provided, that the
provisions of this Agreement relating to the manner or basis in which shares of
Magna Common Stock will be exchanged for UPC Common Stock shall not be amended
after the Stockholders' Meetings without the requisite approval of the holders
of the issued and outstanding shares of UPC Common Stock and Magna Common Stock,
as the case may be, entitled to vote thereon.
 
     11.6  Waivers.
 
          (a) Prior to or at the Effective Time, UPC, acting through its Board
     of Directors, chief executive officer, chief financial officer, or other
     authorized officer, shall have the right to waive any Default in the
     performance of any term of this Agreement by Magna, to waive or extend the
     time for the compliance or fulfillment by Magna of any and all of its
     obligations under this Agreement, and to waive any or all of the conditions
     precedent to the obligations of UPC under this Agreement, except any
     condition which, if not satisfied, would result in the violation of any
     Law. No such waiver shall be effective unless in writing signed by a duly
     authorized officer of UPC.
 
          (b) Prior to or at the Effective Time, Magna, acting through its Board
     of Directors, chief executive officer, chief financial officer, or other
     authorized officer, shall have the right to waive any Default in the
     performance of any term of this Agreement by UPC, to waive or extend the
     time for the compliance or fulfillment by UPC of any and all of its
     obligations under this Agreement, and to waive any or all of the conditions
     precedent to the obligations of Magna under this Agreement, except any
     condition which, if not satisfied, would result in the violation of any
     Law. No such waiver shall be effective unless in writing signed by a duly
     authorized officer of Magna.
 
          (c) The failure of any Party at any time or times to require
     performance of any provision hereof shall in no manner affect the right of
     such Party at a later time to enforce the same or any other provision of
     this Agreement. No waiver of any condition or of the breach of any term
     contained in this Agreement in one or more instances shall be deemed to be
     or construed as a further or continuing waiver of such condition or breach
     or a waiver of any other condition or of the breach of any other term of
     this Agreement.
 
     11.7  Assignment.  Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.
 
     11.8  Notices.  All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other
 
                                      A-43
<PAGE>   150
 
address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:
 
<TABLE>
<S>                                   <C>
Magna:                                Magna Group, Inc.
                                      One Magna Place
                                      1401 South Brentwood Boulevard
                                      St. Louis, Missouri 63144-1401
                                      Telecopy Number: (314) 963-2581
                                      Attention:  G. Thomas Andes Chairman, President, and
                                                  Chief Executive Officer
 
Copy to Counsel:                      Wachtell Lipton Rosen & Katz
                                      51 West 52nd Street
                                      New York, New York 10019
                                      Telecopy Number: (212) 403-2000
                                      Attention:  Edward D. Herlihy
 
UPC:                                  Union Planters Corporation
                                      7130 Goodlett Farms Parkway
                                      Memphis, Tennessee 38018
                                      Telecopy Number: (901) 580-2939
                                      Attention:  Jackson W. Moore President and Chief
                                                  Operating Officer
 
Copy to Counsel:                      Union Planters Corporation
                                      7130 Goodlett Farms Parkway
                                      Memphis, Tennessee 38018
                                      Telecopy Number: (901) 580-2939
                                      Attention:  E. James House, Jr.
 
                                      Alston & Bird LLP
                                      601 Pennsylvania Avenue, N.W.
                                      North Building, Suite 250
                                      Washington, D.C. 20004
                                      Telecopy Number: (202) 508-3333
                                      Attention:  Frank M. Conner III
</TABLE>
 
     11.9  Governing Law.  This Agreement shall be governed by and construed in
accordance with the Laws of the State of Tennessee, without regard to any
applicable conflicts of Laws, except to the extent that the Laws of the State of
Delaware relate to the consummation of the Merger.
 
     11.10 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
 
     11.11  Captions.  The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
 
     11.12  Interpretations.  Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of the
Parties.
 
     11.13  Enforcement of Agreement.  The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms
 
                                      A-44
<PAGE>   151
 
or was otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
 
     11.14  Severability.  Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
 
     IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
 
<TABLE>
<S>                                                         <C>
ATTEST:                                                     MAGNA GROUP, INC.
 
By: /s/ CAROLYN B. RYSEFF                                   By: /s/ G. THOMAS ANDES
                                                            -----------------------------------------------------
- -----------------------------------------------------           G. Thomas Andes
    Carolyn B. Ryseff                                           Chairman, President, and
    Secretary                                                     Chief Executive Officer
</TABLE>
 
[CORPORATE SEAL]
 
<TABLE>
<S>                                                         <C>
ATTEST:                                                     UNION PLANTERS CORPORATION
 
By: /s/ E. JAMES HOUSE, JR.
                                                            By: /s/ BENJAMIN W. RAWLINS, JR.
- -----------------------------------------------------       -----------------------------------------------------
    E. James House, Jr.                                         Benjamin W. Rawlins, Jr.
    Secretary                                                   Chairman and Chief Executive Officer
</TABLE>
 
[CORPORATE SEAL]
 
                                      A-45
<PAGE>   152
 
                                                                      APPENDIX B
 
                                 PLAN OF MERGER
 
                                       OF
 
                               MAGNA GROUP, INC.
 
                                 INTO AND WITH
 
                       UNION PLANTERS HOLDING CORPORATION
 
     Pursuant to this Plan of Merger ("Plan of Merger"), MAGNA GROUP, INC.
("Magna"), a corporation organized and existing under the Laws of the State of
Delaware, shall be merged into and with UNION PLANTERS HOLDING CORPORATION
("UPHC"), a corporation organized and existing under the laws of the State of
Tennessee and a wholly-owned subsidiary of UNION PLANTERS CORPORATION, a
corporation organized and existing under the laws of the State of Tennessee
("UPC").
 
                                   ARTICLE 1
                                  DEFINITIONS
 
     Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:
 
     1.1  "Articles of Merger" shall mean the Articles of Merger to be executed
by UPHC and filed with the Secretary of State of the State of Tennessee relating
to the Merger as contemplated by Section 2.1 of this Plan of Merger.
 
     1.2  "Certificate of Merger" shall mean the Certificate of Merger to be
executed by UPHC and filed with the Secretary of State of the State of Delaware
relating to the Merger as contemplated by Section 2.1 of this Plan of Merger.
 
     1.3  "Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
 
     1.4  "DGCL" shall mean the Delaware General Corporation Law.
 
     1.5  "Effective Time" shall mean the date and time on which the Merger
becomes effective pursuant to the Laws of the State of Delaware as defined in
Section 2.2 of this Plan of Merger.
 
     1.6  "Exchange Agent" shall mean the exchange agent selected by UPC.
 
     1.7  "Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
 
     1.8  "Law" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a person or its assets,
liabilities, or business, including those promulgated, interpreted, or enforced
by any Regulatory Authority.
 
     1.9  "Magna Capital Stock" shall mean, collectively, Magna Common Stock,
Magna Class B Preferred Stock, and Magna Class C Preferred Stock.
 
     1.10  "Magna Class B Preferred Stock" shall mean the $20.00 par value Class
B Voting Preferred Stock of Magna.
 
     1.11  "Magna Class C Preferred Stock" shall mean the $.10 par value Class C
Non-Voting Preferred Stock of Magna.
 
     1.12  "Magna Common Stock" shall mean the $2.00 par value common stock of
Magna.
 
     1.13  "Magna Companies" shall mean, collectively, Magna and all Magna
Subsidiaries.
 
                                       B-1
<PAGE>   153
 
     1.14  "Magna Rights Agreement" shall mean that certain Rights Agreement,
dated November 11, 1988, between Magna and Magna Trust Company, as Rights Agent.
 
     1.15  "Magna Stock Plans" shall have the meaning set forth in the Merger
Agreement.
 
     1.16  "Merger" shall mean the merger of Magna into and with UPHC as
provided in Section 2.1 of this Plan of Merger.
 
     1.17  "Merger Agreement" shall mean the Agreement and Plan of
Reorganization, dated as of February 22, 1998, by and between UPC and Magna.
 
     1.18  "NYSE" shall mean the New York Stock Exchange, Inc.
 
     1.19  "Preferred Stock Cash Payment Amount" shall mean an amount in cash
equal to $20.00, plus any accrued but unpaid dividends at the Effective Time.
 
     1.20  "Preferred Stock Purchase Rights" shall mean the preferred stock
purchase rights issued pursuant to the Magna Rights Agreement.
 
     1.21  "Regulatory Authorities" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the Governors
of the Federal Reserve System, the Office of the Comptroller of the Currency,
the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, all
state regulatory agencies having jurisdiction over the Parties and their
respective Subsidiaries, the NYSE, and the SEC.
 
     1.22  "SEC" shall mean the United States Securities and Exchange
Commission.
 
     1.23  "Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent; provided, there
shall not be included any such entity acquired through foreclosure or any such
entity the equity securities of which are owned or controlled in a fiduciary
capacity.
 
     1.24  "Surviving Corporation" shall refer to UPHC as the surviving
corporation resulting from the Merger.
 
     1.25  "TBCA" shall mean the Tennessee Business Corporation Act, as in
effect at the Effective Time.
 
     1.26  "UPC Capital Stock" shall mean, collectively, the UPC Common Stock,
the UPC Preferred Stock, and any other class or series of capital stock of UPC.
 
     1.27  "UPC Common Stock" shall mean the $5.00 par value common stock of
UPC.
 
     1.28  "UPC Companies" shall mean, collectively, UPC and all UPC
Subsidiaries.
 
     1.29  "UPC Preferred Stock" shall mean the no par value preferred stock of
UPC and shall include the (i) Series A Preferred Stock and (ii) Series E, 8%
Cumulative, Convertible Preferred Stock, of UPC.
 
     1.30  "UPC Rights" shall mean the preferred stock purchase rights issued
pursuant to the UPC Rights Agreement.
 
     1.31  "UPC Rights Agreement" shall mean that certain Rights Agreement,
dated January 19, 1989, between UPC and Union Planters Bank, National
Association, as Rights Agent.
 
     1.32  "UPHC Common Stock" shall mean the $1.00 par value common stock of
UPHC.
 
     Any capitalized term not defined herein shall have the meaning ascribed to
it in the Merger Agreement.
 
                                       B-2
<PAGE>   154
 
                                   ARTICLE 2
                        TRANSACTIONS AND TERMS OF MERGER
 
     2.1  Merger.  Subject to the terms and conditions of this Plan of Merger,
at the Effective Time, Magna shall be merged with and into UPHC in accordance
with the provisions of Section 252 of the DGCL and with the effect provided in
Section 259 of the DGCL and in accordance with the provisions of Section
48-21-109 of the TBCA and with the effect provided in Section 48-21-108 of the
TBCA (the "Merger"). UPHC shall be the Surviving Corporation resulting from the
Merger and shall continue to be governed by the Laws of the State of Tennessee.
 
     2.2  Effective Time.  The Merger and the other transactions contemplated by
this Plan of Merger shall become effective on the date and at the time the
Certificate of Merger shall become effective with the Secretary of State of the
State of Delaware and the Articles of Merger shall become effective with the
Secretary of State of the State of Tennessee (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the duly authorized officers of each Party, the Parties shall use
their reasonable efforts to cause the Effective Time to occur on or before the
15th business day (as designated by UPC) following the last to occur of (i) the
effective date (including expiration of any applicable waiting period) of the
last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger, and (ii) the date on which the stockholders
of UPC and Magna approve the matters relating to this Plan of Merger required to
be approved by such stockholders by applicable Law.
 
     2.3  Charter.  The Charter of UPHC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
 
     2.4  Bylaws.  The Bylaws of UPHC in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
 
     2.5  Directors and Officers.  The directors of UPHC in office immediately
prior to the Effective Time, together with such additional individuals
thereafter elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of UPHC in office immediately prior to the Effective
Time, together with such additional individuals thereafter elected, shall serve
as the officers of the Surviving Corporation from and after the Effective Time
in accordance with the Bylaws of the Surviving Corporation.
 
                                   ARTICLE 3
                          MANNER OF CONVERTING SHARES
 
     3.1  Conversion of Shares.  Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of UPC or Magna, or the stockholders of either of the foregoing, the shares of
the constituent corporations shall be converted as follows:
 
          (a) Each share of UPC Common Stock issued and outstanding immediately
     prior to the Effective Time shall remain issued and outstanding from and
     after the Effective Time.
 
          (b) Each share of UPHC Common Stock issued and outstanding immediately
     prior to the Effective Time shall remain issued and outstanding from and
     after the Effective Time.
 
          (c) Each share of Magna Common Stock (including any associated
     Preferred Stock Purchase Rights, but excluding shares held by any Magna
     Company or any UPC Company, in each case other than in a fiduciary capacity
     or as a result of debts previously contracted) issued and outstanding at
     the Effective Time shall be converted into .9686 of a share of UPC Common
     Stock (the "Exchange Ratio"). Pursuant to the UPC Rights Agreement, each
     share of UPC Common Stock issued in connection with the Merger upon
     conversion of Magna Common Stock shall be accompanied by a UPC Right.
 
          (d) Each share of Magna Class B Preferred Stock (excluding any shares
     held by any Magna Company or any UPC Company, in each case other than in a
     fiduciary capacity as a result of debts
 
                                       B-3
<PAGE>   155
 
     previously contracted) issued and outstanding at the Effective Time, shall
     be converted into the right to receive a check from UPC in the amount of
     the Preferred Stock Cash Payment Amount.
 
     3.2  Anti-Dilution Provisions.  In the event Magna changes the number of
shares of Magna Common Stock or Magna Class B Preferred Stock issued and
outstanding prior to the Effective Time as a result of a stock split, stock
dividend, recapitalization, or similar transaction with respect to such stock,
the Exchange Ratio and the Preferred Stock Cash Payment Amount, as the case may
be, shall be proportionately adjusted. In the event UPC changes the number of
shares of UPC Common Stock issued and outstanding prior to the Effective Time as
a result of a stock split, stock dividend, recapitalization, or similar
transaction with respect to such stock and the record date therefor (in the case
of a stock dividend) or the effective date thereof (in the case of a stock split
or similar recapitalization for which a record date is not established) shall be
prior to the Effective Time, the Exchange Ratio shall be proportionately
adjusted.
 
     3.3  Shares Held by Magna or UPC.  Each of the shares of Magna Capital
Stock held by any Magna Company or by any UPC Company, in each case other than
in a fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time and no consideration shall be issued
in exchange therefor.
 
     3.4  Dissenting Stockholders.  Any holder of shares of Magna Class B
Preferred Stock who perfects such holder's dissenters' rights of appraisal in
accordance with and as contemplated by Section 262 of the DGCL shall be entitled
to receive the value of such shares in cash as determined pursuant to such
provision of Law; provided, however, that no such payment shall be made to any
dissenting stockholder unless and until such dissenting stockholder has complied
with the applicable provisions of the DGCL and surrendered to Magna the
certificate or certificates representing the shares for which payment is being
made. In the event that after the Effective Time a dissenting stockholder of
Magna fails to perfect, or effectively withdraws or loses, such holder's right
to appraisal of and payment for such holder's shares, UPC shall issue and
deliver the consideration to which such holder of shares of Magna Class B
Preferred Stock is entitled under this Article 3 (without interest) upon
surrender by such holder of the certificate or certificates representing shares
of Magna Class B Preferred Stock held by such holder. Magna will establish an
escrow account with an amount sufficient to satisfy the maximum aggregate
payment that may be required to be paid to dissenting stockholders. Upon
satisfaction of all claims of dissenting stockholders, the remaining escrowed
amount, reduced by payment of the fees and expenses of the escrow agent, will be
returned to the Surviving Corporation.
 
     3.5  Fractional Shares.  Notwithstanding any other provision of this Plan
of Merger, each holder of shares of Magna Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of UPC Common Stock (after taking into account all certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of UPC Common Stock multiplied
by the market value of one share of UPC Common Stock at the Effective Time. The
market value of one share of UPC Common Stock at the Effective Time shall be the
last sale price of UPC Common Stock on the NYSE-Composite Transactions List (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by UPC) on the last trading day preceding the
Effective Time. No such holder will be entitled to dividends, voting rights, or
any other rights as a stockholder in respect of any fractional shares.
 
     3.6  Conversion of Stock Rights.
 
     (a) At the Effective Time, each award, option, or other right to purchase
or acquire shares of Magna Common Stock pursuant to stock options, stock
appreciation rights, or stock awards ("Magna Rights") granted by Magna under the
Magna Stock Plans, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to UPC
Common Stock, and UPC shall assume each Magna Right, in accordance with the
terms of the Magna Stock Plan and stock option agreement by which it is
evidenced, except that from and after the Effective Time, (i) UPC and its Salary
and Benefits Committee shall be substituted for Magna and the Committee of
Magna's Board of Directors (including, if applicable, the entire Board of
Directors of Magna) administering such Magna Stock Plan, (ii) each Magna Right
assumed by UPC may be exercised solely for shares of UPC Common Stock (or cash
in the case of
                                       B-4
<PAGE>   156
 
stock appreciation rights), (iii) the number of shares of UPC Common Stock
subject to such Magna Right shall be equal to the number of shares of Magna
Common Stock subject to such Magna Right immediately prior to the Effective Time
multiplied by the Exchange Ratio and rounded down to the nearest whole share,
and (iv) the per share exercise price (or similar threshold price, in the case
of stock awards) under each such Magna Right shall be adjusted by dividing the
per share exercise (or threshold) price under each such Magna Right by the
Exchange Ratio and rounding up to the nearest cent. Notwithstanding the
provisions of clauses (iii) and (iv) of the first sentence of this Section 3.6,
each Magna Right which is an "incentive stock option" shall be adjusted as
required by Section 424 of the Internal Revenue Code, so as not to constitute a
modification, extension, or renewal of the option, within the meaning of Section
424(h) of the Internal Revenue Code. UPC agrees to take all necessary steps to
effectuate the foregoing provisions of this Section 3.6.
 
     (b) As soon as reasonably practicable after the Effective Time, UPC shall
deliver to the participants in each Magna Stock Plan an appropriate notice
setting forth such participant's rights pursuant thereto and the grants pursuant
to such Magna Stock Plan shall continue in effect on the same terms and
conditions (subject to the adjustments required by Section 3.6(a) after giving
effect to the Merger), and UPC shall comply with the terms of each Magna Stock
Plan to ensure, to the extent required by, and subject to the provisions of,
such Magna Stock Plan, that Magna Rights which qualified as incentive stock
options prior to the Effective Time continue to qualify as incentive stock
options after the Effective Time. At or prior to the Effective Time, UPC shall
take all corporate action necessary to reserve for issuance sufficient shares of
UPC Common Stock for delivery upon exercise of Magna Rights assumed by it in
accordance with this Section 3.6. As soon as reasonably practicable after the
Effective Time, UPC shall file a registration statement on Form S-3 or Form S-8,
as the case may be (or any successor or other appropriate forms), with respect
to the shares of UPC Common Stock subject to such options and shall use its
reasonable efforts to maintain the effectiveness of such registration statements
(and maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the 1934 Act, where applicable, UPC shall
administer the Magna Stock Plan assumed pursuant to this Section 3.6 in a manner
that complies with Rule 16b-3 promulgated under the 1934 Act.
 
     (c) All restrictions or limitations on transfer with respect to Magna
Common Stock awarded under the Magna Stock Plans or any other plan, program, or
arrangement of any Magna Company, to the extent that such restrictions or
limitations shall not have already lapsed, and except as otherwise expressly
provided in such plan, program, or arrangement, shall remain in full force and
effect with respect to shares of UPC Common Stock into which such restricted
stock is converted pursuant to Section 3.1 of this Plan of Merger.
 
                                   ARTICLE 4
                               EXCHANGE OF SHARES
 
     4.1  Exchange Procedures.  Promptly after the Effective Time, UPC and Magna
shall cause the exchange agent selected by UPC (the "Exchange Agent") to mail to
the former stockholders of Magna appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of Magna Capital Stock shall pass,
only upon proper delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of Magna Capital Stock (other than shares
to be canceled pursuant to Section 3.3 of this Plan of Merger or as to which the
holder thereof has perfected dissenters' rights of appraisal as contemplated by
Section 3.4 of this Plan of Merger) issued and outstanding at the Effective Time
shall surrender the certificate or certificates representing such shares to the
Exchange Agent and shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 3.1 of this Plan of Merger,
together with all undelivered dividends or distributions in respect of such
shares (without interest thereon) pursuant to Section 4.2 of this Plan of
Merger. To the extent required by Section 3.5 of this Plan of Merger, each
holder of shares of Magna Common Stock issued and outstanding at the Effective
Time also shall receive, upon surrender of the certificate or certificates
representing such shares, cash in lieu of any fractional share of UPC Common
Stock to which such holder may be otherwise entitled (without interest). UPC
shall not be obligated to deliver the
                                       B-5
<PAGE>   157
 
consideration to which any former holder of Magna Capital Stock is entitled as a
result of the Merger until such holder surrenders such holder's certificate or
certificates representing the shares of Magna Capital Stock for exchange as
provided in this Section 4.1. The certificate or certificates of Magna Capital
Stock so surrendered shall be duly endorsed as the Exchange Agent may require.
Any other provision of this Plan of Merger notwithstanding, neither the
Surviving Corporation nor the Exchange Agent shall be liable to a holder of
Magna Capital Stock for any amounts paid or property delivered in good faith to
a public official pursuant to any applicable abandoned property Law.
 
     4.2  Rights of Former Magna Stockholders.  At the Effective Time, the stock
transfer books of Magna shall be closed as to holders of Magna Capital Stock
immediately prior to the Effective Time and no transfer of Magna Capital Stock
by any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Plan of
Merger, each certificate theretofore representing shares of Magna Capital Stock
(other than shares to be canceled pursuant to Section 3.3 of this Plan of Merger
or as to which the holder thereof has perfected dissenters' rights of appraisal
as contemplated by Section 3.4 of this Plan of Merger) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Sections 3.1 and 3.5 of this Plan of Merger in
exchange therefor, subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions with a record date prior to
the Effective Time which have been declared or made by Magna in respect of such
shares of Magna Capital Stock in accordance with the terms of this Plan of
Merger and which remain unpaid at the Effective Time. To the extent permitted by
Law, former stockholders of record of Magna shall be entitled to vote after the
Effective Time at any meeting of UPC stockholders the number of whole shares of
UPC Common Stock into which their respective shares of Magna Common Stock are
converted, regardless of whether such holders have exchanged their certificates
representing Magna Common Stock for certificates representing UPC Common Stock
in accordance with the provisions of this Plan of Merger. Whenever a dividend or
other distribution is declared by UPC on the UPC Common Stock, the record date
for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares issuable pursuant to this Plan of
Merger, but beginning 30 days after the Effective Time no dividend or other
distribution payable to the holders of record of UPC Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Magna Common Stock issued and outstanding at
the Effective Time until such holder surrenders such certificate for exchange as
provided in Section 4.1 of this Plan of Merger. However, upon surrender of such
Magna Common Stock certificate, both the UPC Common Stock certificate (together
with all such undelivered dividends or other distributions without interest) and
any undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
 
                                   ARTICLE 5
                                 MISCELLANEOUS
 
     5.1  Conditions Precedent.  Consummation of the Merger by UPHC shall be
conditioned on the satisfaction of, or waiver by UPC of the conditions precedent
to the Merger set forth in Sections 9.1 and 9.2 of the Merger Agreement.
Consummation of the Merger by Magna shall be conditioned on the satisfaction of,
or waiver by Magna of, of the conditions precedent to the Merger set forth in
Sections 9.1 and 9.3 of the Merger Agreement.
 
     5.2  Termination.  This Plan of Merger may be terminated at any time prior
to the Effective Time by the parties hereto as provided in Article 10 of the
Merger Agreement.
 
     5.3  Counterparts.  This Plan of Merger may be executed in counterparts,
each of which shall be an original; but all of such counterparts together shall
constitute one and the same instrument.
 
                                       B-6
<PAGE>   158
 
     IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Plan of Merger as of the date first above written.
 
<TABLE>
<S>                                              <C>
                                                 MAGNA GROUP, INC.
 
ATTEST: ------------------------------           By:
           Carolyn B. Ryseff                     --------------------------------------------------------
           Secretary                                 G. Thomas Andes
                                                     Chairman, President, and
                                                       Chief Executive Officer
 
                                                 UNION PLANTERS HOLDING CORPORATION
 
ATTEST: ------------------------------           By:
           E. James House, Jr.                   --------------------------------------------------------
           Secretary                                 Jackson W. Moore
                                                     President
</TABLE>
 
                                       B-7
<PAGE>   159
 
                                                                      APPENDIX C
 
      [LETTERHEAD OF DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION]
 
                                          [                    ], 1998
 
Board of Directors
Magna Group, Inc.
One Magna Place
1401 South Brentwood Boulevard
St. Louis, MO 63144-1401
 
Members of the Board:
 
     You have requested our opinion as to the fairness from a financial point of
view to the holders of the outstanding shares of common stock, par value $2.00
per share (the "Magna Common Stock"), of Magna Group, Inc. ("Magna" or the
"Company") of the "Exchange Ratio" (as defined below) set forth in the Agreement
and Plan of Reorganization, dated as of February 22, 1998 (the "Agreement"), by
and between the Company and Union Planters Corporation ("UPC") pursuant to which
Magna will be merged (the "Merger") with and into Union Planters Holding
Corporation, a wholly owned subsidiary of UPC organized under the laws of the
State of Tennessee.
 
     Pursuant to the Agreement, each share of Magna Common Stock will be
converted into the right to receive 0.9686 shares (the "Exchange Ratio") of
common stock, $5 par value per share, of UPC (the "UPC Common Stock"). We
understand that the Merger is conditioned upon, among other things, receipt of
opinions to the effect that the Merger will qualify for treatment as a tax-free
reorganization and as a pooling of interests for accounting purposes. In
connection with the Merger, the parties have also proposed to enter into an
agreement (the "Stock Option Agreement") pursuant to which Magna will
irrevocably grant UPC an option to purchase a number of shares representing up
to 19.9% of the outstanding shares of Magna Common Stock, at a price and on
terms and conditions set forth in the Stock Option Agreement.
 
     In arriving at our opinion, we have reviewed the financial terms and
provisions of the Agreement and the exhibits thereto, and the Stock Option
Agreement. We also have reviewed financial and other information that was
publicly available or furnished to us by Magna and UPC including information
provided during discussions with their respective managements. Included in the
information provided during discussions with the respective managements were
certain financial projections of the Company for the period beginning January 1,
1998 and ending December 31, 2002 prepared by the management of the Company and
certain financial projections of UPC for the period beginning January 1, 1998
and ending December 31, 2000 prepared by the management of UPC. We have also
reviewed certain pro forma financial statements prepared by the management of
the Company and UPC reflecting the Merger and certain operating synergies
expected to result therefrom. In addition, we have compared certain financial
and securities data of the Company and UPC with various other companies whose
securities are traded in public markets, reviewed the historical stock prices
and trading volumes of Magna Common Stock and UPC Common Stock, reviewed prices
and premiums paid in certain other business combinations and conducted such
other financial studies, analyses and investigations as we deemed appropriate
for purposes of this opinion.
 
     In rendering our opinion, we have relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available to
us from public sources, that was provided to us by the Company and UPC or their
respective representatives, or that was otherwise reviewed by us. In particular,
we have relied upon the estimates of the management of the Company and UPC of
the operating synergies achievable as a result of the Merger and upon our
discussion of such synergies with the management of the Company and UPC. With
respect to the financial projections used in our analysis, we have assumed that
they have been reasonably prepared on the basis reflecting the best currently
available estimates and judgments of
 
                                       C-1
<PAGE>   160
 
the management of the Company and UPC as to the future operating and financial
performance of the Company and UPC, respectively.
 
     We are not experts in the evaluation of loan portfolios or allowances for
loan and real estate owned losses and, upon advice of management of the Company,
we have not independently verified and have assumed that the aggregate
allowances for loan losses set forth in the balance sheets of each of Magna and
UPC at December 31, 1997 are adequate to cover such losses and complied fully
with applicable law, regulatory policy and sound banking practice as of the date
of such financial statements. We were not retained to and we did not conduct a
physical inspection of any of the properties or facilities of Magna or UPC, and
we did not make any independent evaluation or appraisal of the assets,
liabilities or prospects of Magna or UPC, were not furnished with any such
evaluation or appraisal, and did not review any individual credit files. In
rendering our opinion, we have been advised by Magna and UPC and have assumed
that there are no other factors that would delay or subject to adverse
conditions any necessary regulatory or governmental approval for the Merger, and
we have assumed that all conditions to the Merger will be satisfied and not
waived. We have relied as to certain legal matters on advice of counsel to the
Company.
 
     Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as of,
the date of this letter. It should be understood that, although subsequent
developments may affect this opinion, we do not have any obligation to update,
revise or reaffirm this opinion. We are expressing no opinion herein as to the
prices at which shares of UPC Common Stock will actually trade at any time. Our
opinion does not constitute a recommendation to any stockholder as to how such
stockholder should vote with respect to the Agreement.
 
     Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), as part of its
investment banking services, is regularly engaged in the valuation of businesses
and securities in connection with mergers, acquisitions, underwritings, sales
and distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. DLJ has performed investment
banking and other services for the Company in the past and has been compensated
for such services. In the ordinary course of our business we actively trade the
debt and equity securities of companies, including Magna and UPC, for our own
account and for the accounts of customers and may hold a long or short position
in such securities at any time.
 
     Based upon the foregoing and such other factors as we deem relevant, we are
of the opinion that the Exchange Ratio is fair to the holders of Magna Common
Stock from a financial point of view.
 
                                          Very truly yours,
 
                                          DONALDSON, LUFKIN & JENRETTE
                                          SECURITIES CORPORATION
 
                                          By:
                                            ------------------------------------
                                            David D. Olson
                                            Managing Director
 
                                       C-2
<PAGE>   161
 
                                                                      APPENDIX D
 
                                 [LETTERHEAD OF
                   STIFEL, NICOLAUS & COMPANY, INCORPORATED]
 
                                                                          , 1998
 
Board of Directors
Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
 
Members of the Board:
 
     You have requested our opinion as to the fairness from a financial point of
view to the shareholders of Union Planters Corporation ("UPC") of the exchange
ratio (the "Exchange Ratio") of .9686 of a share of common stock, par value
$5.00 per share, of UPC (the "UPC Common Stock") to be exchanged for each share
of common stock, par value $2.00 per share, of Magna Group, Inc. ("Magna")
pursuant to the terms of the Agreement and Plan of Reorganization, dated as of
February 22, 1998, by and between Magna and UPC (the "Agreement"). For the
purposes of our opinion, we have assumed that the merger of Magna with a
subsidiary of UPC pursuant to the Agreement (the "Merger") will constitute a
tax-free reorganization as contemplated by the Agreement and the Merger will
qualify as a pooling of interests for accounting purposes. We have also assumed
that no securities will be issued under the option agreement between UPC and
Magna.
 
     Stifel, Nicolaus & Company, Incorporated ("Stifel"), as part of its
investment banking services, is regularly engaged in the independent valuation
of businesses and securities in connection with mergers, acquisitions,
underwritings, sales and distributions of listed and unlisted securities,
private placements and valuations for estate, corporate and other purposes. We
are familiar with UPC and Magna and have completed our financial analysis of
this transaction. In the ordinary course of its business, Stifel actively trades
equity securities of UPC and Magna for its own account and for the accounts of
its customers and, accordingly, may at any time hold a long or short position in
such securities.
 
     In rendering our opinion, we have reviewed, among other things: the
Agreement; the financial statements of UPC and Magna included in their
respective Annual Reports on Form 10-K for the five years ended December 31,
1996 and their respective Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1996 and June 30, 1996; certain internal financial analyses and
forecasts for UPC and Magna prepared by their respective managements; and
certain internal financial forecasts for UPC and Magna on a combined basis,
giving effect to the Merger, prepared by the management of UPC. We have
conducted conversations with UPC's senior management regarding recent
developments and management's financial forecasts for UPC and Magna. In
addition, we have spoken to members of UPC's senior management and Magna's
senior management regarding factors which affect each entity's business. We have
also compared certain financial and securities data of UPC and Magna with
various other companies whose securities are traded in public markets, reviewed
the historical stock prices and trading volumes of the common stock of UPC and
Magna, reviewed the financial terms of certain other business combinations and
conducted such other financial studies, analyses and investigations as we deemed
appropriate for purposes of this opinion. We also took into account our
assessment of general economic, market and financial conditions and our
experience in other transactions, as well as our experience in securities
valuations and our knowledge of the commercial banking industry generally.
 
     In rendering our opinion, we have relied upon and assumed, without
independent verification, the accuracy and completeness of all of the financial
and other information that was provided to us or that was otherwise reviewed by
us and have not assumed any responsibility for independently verifying any of
such information. With respect to the financial forecasts supplied to us
(including without limitation, projected cost savings and operating synergies
resulting from the Merger), we have assumed with your consent that they were
reasonably prepared on the basis reflecting the best currently available
estimates and judgments of UPC and Magna as to the future operating and
financial performance of UPC and Magna, that they would be realized in the
amounts and time periods estimated and that they provided a reasonable basis
upon which we
 
                                       D-1
<PAGE>   162
 
could form our opinion. We also assumed that there were no material changes in
the assets, liabilities, financial condition, results of operations, business or
prospects of either UPC or Magna since the date of the last financial statements
made available to us. We have also assumed, without independent verification and
with your consent, that the aggregate allowances for loan losses set forth in
the financial statements of UPC and Magna are in the aggregate adequate to cover
all such losses. We did not make or obtain any independent evaluation, appraisal
or physical inspection of UPC's or Magna's assets or liabilities, the collateral
securing any of such assets or liabilities, or the collectibility of any such
assets nor did we review loan or credit files of UPC or Magna. We relied on
advice of counsel to UPC as to all legal matters with respect to UPC, the
Agreement and the transactions and other matters contained or contemplated
therein. We have assumed, with your consent, that there are no factors that
would delay or subject to any adverse conditions any necessary regulatory or
governmental approval and that all conditions to the Merger will be satisfied
and not waived.
 
     Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as of,
the date of this letter. Our opinion is directed to the Board of Directors of
UPC for its information and assistance in connection with its consideration of
the financial terms of the transaction contemplated by the Merger and does not
constitute a recommendation to any shareholder as to how such shareholder should
vote on the proposed transaction, nor have we expressed any opinion as to the
prices at which any securities of UPC or Magna might trade in the future. Except
as required by applicable law, including without limitation federal securities
laws, our opinion may not be published or otherwise used or referred to, nor
shall any public reference to Stifel be made, without our prior written consent.
 
     Based upon the foregoing and such other factors as we deem relevant, we are
of the opinion, as of the date hereof, that the Exchange Ratio pursuant to the
Agreement is fair to the holders of UPC Common Stock from a financial point of
view.
 
                                          Very truly yours,
 
                                          STIFEL, NICOLAUS & COMPANY,
                                          INCORPORATED
 
                                       D-2
<PAGE>   163
 
                                                                      APPENDIX E
 
              DELAWARE STATUTORY LAW RELATING TO APPRAISAL RIGHTS
 
                               SECTION 262 OF THE
                        DELAWARE GENERAL CORPORATION LAW
 
     262 Appraisal Rights.  (a) Any shareholder of a corporation of this State
who holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation, who
has otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to 228 of this title shall be entitled to an appraisal by the Court of
Chancery of the fair value of his shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "shareholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
 
     (b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to 251 (other than a merger effected pursuant to 251(g) of
this title), 252, 254, 257, 258, 263 or 264 of this title:
 
          (1) Provided, however, that no appraisal rights under this section
     shall be available for the shares of any class or series of stock, which
     stock, or depository receipts in respect thereof, at the record date fixed
     to determine the shareholders entitled to receive notice of and to vote at
     the meeting of shareholders to act upon the agreement of merger or
     consolidation, were either (i) listed on a national securities exchange or
     designated as a national market system security on an interdealer quotation
     system by the National Association of Securities Dealers, Inc. or (ii) held
     of record by more than 2,000 holders; and further provided that no
     appraisal rights shall be available for any shares of stock of the
     constituent corporation surviving a merger if the merger did not require
     for its approval the vote of the holder of the surviving corporation as
     provided in subsection (f) of 251 of this title.
 
          (2) Notwithstanding paragraph (1) of this subsection, appraisal rights
     under this section shall be available for the shares of any class or series
     of stock of a constituent corporation if the holders thereof are required
     by the terms of an agreement of merger or consolidation pursuant to 251,
     252, 254, 257, 258, 263 and 264 of this title to accept for such stock
     anything except:
 
             a. Shares of stock of the corporation surviving or resulting from
        such merger or consolidation, or depository receipts in respect thereof;
 
             b. Shares of stock of any other corporation, or depository receipts
        in respect thereof, which shares of stock (or depository receipts in
        respect thereof) or depository receipts at the effective date of the
        merger or consolidation will be either listed on a national securities
        exchange or designated as a national market system security on an
        interdealer quotation system by the National Association of Securities
        Dealers, Inc. or held of record by more than 2,000 holders;
 
             c. Cash in lieu of fractional shares or fractional depository
        receipts described in the foregoing subparagraphs a. and b. of this
        paragraph; or
 
             d. Any combination of the shares of stock, depository receipts and
        cash in lieu of fractional shares or fractional depository receipts
        described in the foregoing subparagraphs a., b. and c. of this
        paragraph.
 
                                       E-1
<PAGE>   164
 
          (3) In the event all of the stock of a subsidiary Delaware corporation
     party to a merger effected under 253 of this title is not owned by the
     parent corporation immediately prior to the merger, appraisal rights shall
     be available for the shares of the subsidiary Delaware corporation.
 
     (c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
 
     (d) Appraisal rights shall be perfected as follows:
 
          (1) If a proposed merger or consolidation for which appraisal rights
     are provided under this section is to be submitted for approval at a
     meeting of shareholders, the corporation, not less than 20 days prior to
     the meeting, shall notify each of its shareholders who has such on the
     record date for such meeting with respect to shares for which appraisal
     rights are available pursuant to subsections (b) or (c) hereof that
     appraisal rights are available for any or all of the shares of the
     constituent corporations, and shall include in such notice a copy of this
     section. Each shareholder electing to demand the appraisal of such holder's
     shares shall deliver to the corporation, before the taking of the vote on
     the merger or consolidation, a written demand for appraisal of such
     holder's shares. Such demand will be sufficient if it reasonably informs
     the corporation of the identity of the shareholder and that the shareholder
     intends thereby to demand the appraisal of such holder's shares. A proxy or
     vote against the merger or consolidation shall not constitute such a
     demand. A shareholder electing to take such action must do so by a separate
     written demand as herein provided. Within 10 days after the effective date
     of such merger or consolidation, the surviving or resulting corporation
     shall notify each shareholder of each constituent corporation who has
     complied with this subsection and has not voted in favor of or consented to
     the merger or consolidation of the date that the merger or consolidation
     has become effective; or
 
          (2) If the merger or consolidation was approved pursuant to 228 or 253
     of this title, each constituent corporation, either before the effective
     date of the merger or consolidation or within 10 days thereafter, shall
     notify each of the holders of any class or series of stock of such
     constituent corporation who are entitled to appraisal rights of the
     approval of the merger or consolidation and that appraisal rights are
     available for any or all shares of such class or series of stock of such
     constituent corporation, and shall include in such notice a copy of this
     section; provided that, if the notice is given on or after the effective
     date of the merger or consolidation, such notice shall be given by the
     surviving or resulting corporation to all such holders of any class or
     series of stock of a constituent corporation that are entitled to appraisal
     rights. Such notice may, and, if given on or after the effective date of
     the merger or consolidation, shall, also notify such shareholders of the
     effective date of the merger or consolidation. Any shareholder entitled to
     appraisal rights may, within 20 days after the date of mailing of the
     notice, demand in writing from the surviving or resulting corporation the
     appraisal of such holder's shares. Such demand will be sufficient if it
     reasonably informs the corporation of the identity of the shareholder and
     that the shareholder intends thereby to demand the appraisal of such
     holder's shares. If such notice did not notify shareholders of the
     effective date of the merger or consolidation, either (i) each such
     constituent corporation shall send a second notice before the effective
     date of the merger or consolidation notifying each of the holders of any
     class or series of stock of such constituent corporation that are entitled
     to appraisal rights of the effective date of the merger or consolidation or
     (ii) the surviving or resulting corporation shall send such a second notice
     to all such holders on or within 10 days after such effective date;
     provided, however, that if such second notice is sent more than 20 days
     following the sending of the first notice, such second notice need only be
     sent to each shareholder who is entitled to appraisal rights and who has
     demanded appraisal of such holder's shares in accordance with this
     subsection. An affidavit of the secretary or assistant secretary or of the
     transfer agent of the corporation that is required to give either notice
     that such notice has been given shall, in the absence of fraud, be prima
     facie evidence of the facts stated therein. For purposes of determining the
     shareholders entitled to receive either notice, each constituent
     corporation may fix, in advance, a record date that shall be not more than
     10 days prior to the
                                       E-2
<PAGE>   165
 
     date the notice is given, provided, that if the notice is given on or after
     the effective date of the merger or consolidation, the record date shall be
     such effective date. If no record date is fixed and the notice is given
     prior to the effective date, the record date shall be the close of business
     on the day next preceding the day on which the notice is given.
 
     (e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any shareholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such shareholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any shareholder shall have the right to
withdraw such holder's demand for appraisal and to accept the terms offered upon
the merger or consolidation. Within 120 days after the effective date of the
merger or consolidation, any shareholder who has complied with the requirements
of subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the shareholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
 
     (f) Upon the filing of any such petition by a shareholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all shareholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the shareholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
 
     (g) At the hearing on such petition, the Court shall determine the
shareholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the shareholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any shareholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such shareholder.
 
     (h) After determining the shareholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining the fair rate of
interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any shareholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the shareholder entitled to an appraisal. Any
shareholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
 
                                       E-3
<PAGE>   166
 
     (i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
shareholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such shareholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
 
     (j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a shareholder, the Court may order all or a portion of the
expenses incurred by any shareholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and the fees and expenses of experts, to be charged pro rata against the
value of all the shares entitled to an appraisal.
 
     (k) From and after the effective date of the merger or consolidation, no
shareholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to shareholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such shareholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of his section or thereafter with the written approval of the
corporation, then the right of such shareholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any shareholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.
 
     (l) The shares of the surviving or resulting corporation to which the
shares of such objecting shareholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
 
                                       E-4
<PAGE>   167

                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         The Restated Charter of the Registrant provides as follows:

         TWELFTH:    INDEMNIFICATION OF CERTAIN PERSONS:

                  To the fullest extent permitted by Tennessee law, the
         Corporation may indemnify or purchase and maintain insurance to
         indemnify any of its directors, officers, employees or agents and any
         persons who may serve at the request of the Corporation as directors,
         officers, employees, trustees or agents of any other corporation, firm,
         association, national banking association, state-chartered bank, trust
         company, business trust, organization or any other type of entity
         whether or not the Corporation shall have any ownership interest in
         such entity. Such indemnification(s) may be provided for in the Bylaws,
         or by resolution of the Board of Directors or by appropriate contract
         with the person involved.

         Article V, INDEMNIFICATION, of the Registrant's Amended and Restated
         Bylaws provides as follows:

                  The Corporation does hereby indemnify its directors and
         officers to the fullest extent permitted by the laws of the State of
         Tennessee and by ARTICLE TWELFTH of its Charter. The Corporation may
         indemnify any other person to the extent permitted by the Charter and
         by applicable law.

                  Indemnification of corporate directors and officers is
         governed by Sections 48-18-501 through 48-18-509 of the Tennessee
         Business Corporation Act (the "Act"). Under the Act, a person may be
         indemnified by a corporation against judgments, fines, amounts paid in
         settlement and reasonable expenses (including attorneys' fees) actually
         and necessarily incurred by him in connection with any threatened or
         pending suit or proceeding or any appeal thereof (other than an action
         by or in the right of the corporation), whether civil or criminal, by
         reason of the fact that he is or was a director or officer of the
         corporation or is or was serving at the request of the corporation as a
         director or officer, employee or agent of another corporation of any
         type or kind, domestic or foreign, if such director or officer acted in
         good faith for a purpose which he reasonably believed to be in the best
         interest of the corporation and, in criminal actions or proceedings
         only, in addition, had no reasonable cause to believe that his conduct
         was unlawful. A Tennessee corporation may indemnify a director or
         officer thereof in a suit by or in the right of the corporation against
         amounts paid in settlement and reasonable expenses, including
         attorneys' fees, actually and necessarily incurred as a result of such
         suit unless such director or officer did not act in good faith or with
         the degree of diligence, care and skill which ordinarily prudent men
         exercise under similar circumstances and in like positions.

                  A person who has been wholly successful, on the merits or
         otherwise, in the defense of any of the foregoing types of suits or
         proceedings is entitled to indemnification for the foregoing amounts. A
         person who has not been wholly successful in any such suit or
         proceeding may be indemnified only upon the order of a court or a
         finding that the director or officer met the required statutory
         standard of conduct by (i) a majority vote of a disinterested quorum of
         the Board of Directors, (ii) the Board of Directors based upon the
         written opinion of independent legal counsel to such effect, or (iii) a
         vote of the shareholders.


                                      II-1
<PAGE>   168


ITEM 21. EXHIBITS.

                  The following exhibits are filed herein or have been, as
noted, previously filed:

Exhibit No.                              Description
- ------------    ----------------------------------------------------------------

    2.1         Agreement and Plan of Reorganization, dated as of February 22,
                1998, by and between Union Planters Corporation and Magna Group,
                Inc. (Included as Appendix A to the Joint Proxy Statement
                included as part of this Registration Statement.)

    2.2         Plan of Merger of Magna Group, Inc. into and with Union Planters
                Holding Corporation. (Included as Appendix B to the Joint Proxy
                Statement included as part of this Registration Statement.)

    2.3         Stock Option Agreement, dated as of February 22, 1998, by and
                between Magna Group, Inc. and Union Planters Corporation.
                (Incorporated by reference to Exhibit 2 to the Schedule 13D
                filed by Union Planters Corporation with the SEC on March 4,
                1998.)

    4.1         Restated Charter of Union Planters Corporation. (Incorporated by
                reference to Exhibit 3(a) to the Annual Report on Form 10-K of
                UPC for the fiscal year ended December 31, 1996.)

    4.2         Amended and Restated Bylaws of Union Planters Corporation.
                (Incorporated by reference to exhibit 3(d) to the Annual Report
                on Form 10-K of UPC for the fiscal year ended December 31, 1996
                (File No. 0-6919).)

    5.1         Opinion of E. James House, Jr., Secretary and Manager of the
                Legal Department of Union Planters Corporation, as to the
                validity of the shares of UPC Common Stock. (To be filed by
                amendment.)

    8.1         Opinion of Alston & Bird LLP as to federal income tax
                consequences. (To be filed by amendment.)

    8.2         Opinion of Wachtell, Lipton, Rosen & Katz as to federal income
                tax consequences. (To be filed by amendment.)

   23.1         Consent of Price Waterhouse LLP.

   23.2         Consent of Ernst & Young LLP, independent auditors for Magna
                Group, Inc.

   23.4         Consent of E. James House, Jr., Secretary and Manager of the
                Legal Department of Union Planters Corporation (included in
                Exhibit 5.1).

   23.4         Consent of Alston & Bird LLP (included in Exhibit 8.1).

   23.5         Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit
                8.2).

   23.6         Consent of Donaldson, Lufkin & Jenrette Securities Corporation.
                (To be filed by amendment.)

   23.7         Consent of Stifel, Nicolaus & Company, Incorporated. (To be
                filed by amendment.)

   24.1         Power of Attorney (contained on the signature page hereof).

   99.1         Form of Proxy of Magna Group, Inc.

   99.2         Form of Proxy of Union Planters Corporation.


                                      II-2
<PAGE>   169


ITEM 22. UNDERTAKINGS.

         The undersigned Registrant hereby undertakes:

         (1)    That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (2)    That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.

         (3)    That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

         (4)    Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

         (5)    To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form
S-4, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.

         (6)    To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.

         (7)    That prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.

         (8)    That every prospectus: (i) that is filed pursuant to Paragraph
(7) immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.


                                      II-3
<PAGE>   170


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Memphis,
State of Tennessee on this the 19th day of February, 1998.

                                   REGISTRANT

                                   UNION PLANTERS CORPORATION

                                   By:/s/ Benjamin W. Rawlins, Jr.
                                      ------------------------------------------
                                      Benjamin W. Rawlins, Jr.
                                      Chairman of the Board and Chief Executive
                                      Officer

         We, the undersigned directors and officers of Union Planters
Corporation do hereby constitute and appoint E. James House, Jr. and M. Kirk
Walters, and each of them, our true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for us and in our name,
place and stead, in any and all capacities, to sign any and all amendments to
this Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and we do hereby ratify and confirm all that said attorneys-in-fact
and agents, or their substitutes, may lawfully do or cause to be done by virtue
hereof.

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and at the dates indicated.

<TABLE>
<CAPTION>
         SIGNATURES                                 TITLE                                        DATE
         ----------                                 -----                                        ----
<S>                                       <C>                                            <C>
/s/ Benjamin W. Rawlins, Jr.              Chairman of the Board, Chief Executive         February 19, 1998
- ------------------------------------        Officer, Director (Principal
      Benjamin W. Rawlins, Jr.              Executive Officer)


/s/ Jackson W. Moore                      President, Chief Operating Officer,            February 19, 1998
- ------------------------------------        Director
          Jackson W. Moore


/s/ John W. Parker                        Executive Vice President and                   February 19, 1998
- ------------------------------------        Chief Financial Officer
           John W. Parker                   (Principal Financial Officer)


/s/ M. Kirk Walters                       Senior Vice President, Treasurer,              February 19, 1998
- ------------------------------------        and Chief Accounting Officer
           M. Kirk Walters


/s/ Edgar H. Bailey                       Vice Chairman of the Board                     February 19, 1998
- ------------------------------------        and Director
           Edgar H. Bailey
</TABLE>


                                      II-4
<PAGE>   171


<TABLE>
<CAPTION>
         SIGNATURES                                 TITLE                                        DATE
         ----------                                 -----                                        ----
<S>                                       <C>                                            <C>
/s/ Albert M. Austin                               Director                              February 19, 1998
- ------------------------------------
         Albert M. Austin


/s/ Marvin E. Bruce                                Director                              February 19, 1998
- ------------------------------------
           Marvin E. Bruce


/s/ George W. Bryan                                Director                              February 19, 1998
- ------------------------------------
           George W. Bryan


/s/ James E. Harwood                               Director                              February 19, 1998
- ------------------------------------
          James E. Harwood


/s/ Parnell S. Lewis, Jr.                          Director                              February 19, 1998
- ------------------------------------
        Parnell S. Lewis, Jr.


/s/ C. J. Lowrance, III                            Director                              February 19, 1998
- ------------------------------------
         C. J. Lowrance, III


/s/ Stanley D. Overton                             Director                              February 19, 1998
- ------------------------------------
         Stanley D. Overton


/s/ Dr. V. Lane Rawlins                            Director                              February 19, 1998
- ------------------------------------
         Dr. V. Lane Rawlins


/s/ Donald F. Schuppe                              Director                              February 19, 1998
- ------------------------------------
          Donald F. Schuppe


/s/ Mike P. Sturdivant                             Director                              February 19, 1998
- ------------------------------------
         Mike P. Sturdivant


/s/ David M. Thomas                                Director                              February 19, 1998
- ------------------------------------
           David M. Thomas


                                                   Director                              _________, 1998
- ------------------------------------
      Richard A. Trippeer, Jr.


                                                   Director                              _________, 1998
- ------------------------------------
         Spence L. Wilson
</TABLE>


                                      II-5
<PAGE>   172


                                  EXHIBIT INDEX

                  The following exhibits are filed herein:

Exhibit No.                              Description
- ------------    ----------------------------------------------------------------

    2.1         Agreement and Plan of Reorganization, dated as of February 22,
                1998, by and between Magna Group, Inc. and Union Planters
                Corporation. (Included as Appendix A to the Joint Proxy
                Statement included as part of this Registration Statement.)

    2.2         Plan of Merger of Magna Group, Inc. into and with Union Planters
                Holding Corporation. (Included as Appendix B to the Joint Proxy
                Statement included as part of this Registration Statement.)

   23.1         Consent of Price Waterhouse LLP.

   23.2         Consent of Ernst & Young LLP, independent auditors for Magna
                Group, Inc.

   24.1         Power of Attorney (contained on the signature page hereof).

   99.1         Form of Proxy of Magna Group, Inc.

   99.2         Form of Proxy of Union Planters Corporation.



<PAGE>   1


                                                                    EXHIBIT 23.1

                         CONSENT OF PRICE WATERHOUSE LLP
                             INDEPENDENT ACCOUNTANTS
                         FOR UNION PLANTERS CORPORATION

         We hereby consent to the incorporation by reference in the Joint Proxy
Statement/Prospectus constituting part of this Registration Statement on Form
S-4 of Union Planters Corporation of our report dated January 15, 1998, except
as to Note 2 which is as of March 3, 1998, which appears on page 41 of Union
Planters Corporation's 1997 Annual Report to Shareholders, which is incorporated
by reference in its Annual Report on Form 10-K of the year ended December 31,
1997. We also consent to the reference to us under the heading "EXPERTS" in such
Joint Proxy Statement/Prospectus.

/s/ PRICE WATERHOUSE LLP

Memphis, Tennessee
April 7, 1998



<PAGE>   1


                                                                    EXHIBIT 23.2

                          CONSENT OF ERNST & YOUNG LLP

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of Union Planters 
Corporation for the registration of 36,716,861 shares of its common 
stock and to the incorporation by reference therein of our report dated January 
21, 1998, except for Note 24, as to which the date is February 22, 1998, with 
respect to the consolidated financial statements of Magna Group, Inc. included 
in its Annual Report (Form 10-K) for the year ended December 31, 1997, filed 
with the Securities and Exchange Commission. 

                                      /s/ Ernst & Young LLP

St. Louis, Missouri
April 6, 1998



<PAGE>   1


                                                                    EXHIBIT 99.1

                                MAGNA GROUP, INC.

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

         The undersigned hereby appoints G. Thomas Andes and Carolyn B. Ryseff,
or either of them in case the other is unable or unwilling to act, as Proxies,
each with the power to appoint his/her substitute, and hereby authorizes them to
represent and to vote, as designated below, all of the shares of voting stock of
Magna Group, Inc. held of record by the undersigned on ________________, 1998,
at the Annual Meeting of Stockholders to be held on _________, 1998 or any
adjournments thereof.

<TABLE>
<S>    <C>
   1.  Approval of the Agreement and Plan of Reorganization, dated as of
       February 22, 1998, by and between Union Planters Corporation and Magna
       Group, Inc., and the related Plan of Merger, by and between Magna Group,
       Inc. and Union Planters Holding Corporation.

          [ ]  FOR                 [ ]  AGAINST                [ ]  ABSTAIN

   2.  ELECTION OF DIRECTORS:

       [ ] FOR all nominees listed below                [ ] WITHHELD AUTHORITY
           (except as marked to the contrary below)         (to vote for all nominees listed below)

       (INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE NOMINEE'S
       NAME IN THE LIST BELOW. FAILURE TO FOLLOW THIS PROCEDURE TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
                WILL RESULT IN THE GRANTING OF AUTHORITY TO VOTE FOR THE ELECTION OF SUCH NOMINEE.)

       CLASS I (three-year term)

       James A. Auffenberg, Jr.   C.E. Heiligenstein   Carl G. Hogan, Sr.   Ralph F. Korte   William A. Peck   Frank R. Trulaske

   3.  In their discretion, the Proxies are authorized to vote upon such other
       business as may properly come before the meeting or any adjournments
       thereof.
</TABLE>

   THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
   HEREIN BY THE UNDERSIGNED SHAREHOLDER, IF NO DIRECTION IS MADE THIS PROXY
   WILL BE VOTED FOR PROPOSALS 1, 2, AND 3.

<TABLE>
<S>                                                       <C>
       DATED:  ___________________________, 1998

                                                          --------------------------------------------------------
                                                                                  Signature

                                                          --------------------------------------------------------
                                                                          Signature, if held jointly

                                                           Please sign exactly as name appears on this Proxy Card.
                                                           When shares are held by joint tenants, both should sign.
                                                           When signing as attorney-in-fact, executor, administrator,
                                                           personal representative, trustee or guardian, please give
                                                           full title as such. If a corporation, please sign in full
                                                           corporate name by President or other authorized officer.
                                                           If a partnership, please sign in partnership name by
                                                           authorized person
</TABLE>

      PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE
                               ENCLOSED ENVELOPE.



<PAGE>   1


                                                                    EXHIBIT 99.2

                          UNION PLANTERS CORPORATION

            The undersigned hereby constitutes and appoints _________________
and ____________, or either of them, as proxies, each with full power of
substitution, to vote the number of shares of common stock of Union Planters
Corporation ("UPC") which the undersigned would be entitled to vote if
personally present at the Annual Meeting of UPC shareholders to be held at Union
Planters Administrative Center, 7130 Goodlett Farms Parkway, Memphis, Tennessee,
at ____ __.m., local time, on ______________, 1998, and at any adjournment or
postponement thereof (the "UPC Special Meeting"), upon the proposals described
in the Joint Proxy Statement/Prospectus and the Notice of UPC Special Meeting of
Shareholders, both dated ______________, 1998, the receipt of which is
acknowledged in the manner specified below. The undersigned hereby revokes all
prior proxies given to vote shares of common stock at the UPC Annual Meeting.

   1.  ISSUANCE OF SHARES OF UPC COMMON STOCK IN CONNECTION WITH THE MERGER. To
       consider and vote upon a proposal to approve the issuance of shares of
       the $5.00 par value common stock of UPC (together with the associated
       Preferred Share Rights (as defined in the Joint Proxy 
       Statement/Prospectus), "UPC Common Stock"), in connection with the
       proposed acquisition of Magna Group, Inc., a Delaware corporation
       ("Magna"), by UPC in accordance with the Agreement and Plan of
       Reorganization (the "Agreement"), dated as of February 22, 1998, by and
       between Magna and UPC, and the related Plan of Merger (the "Plan of
       Merger"), by and between Magna and Union Planters Holding Corporation, a
       Tennessee corporation and wholly-owned subsidiary of UPC.

           FOR       [ ]          AGAINST      [ ]          ABSTAIN      [ ]

   2.  OTHER BUSINESS. In their discretion, the proxies are authorized to vote
       upon such other business as may properly come before the UPC Annual
       Meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1 ABOVE.

Please sign exactly as name appears below. When shares are held jointly, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.

                                     DATED: ____________________, 1998


                                     -------------------------------------------
                                     Signature

                                     -------------------------------------------
                                     Signature if held jointly

              THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
                           UNION PLANTERS CORPORATION
                    AND MAY BE REVOKED PRIOR TO ITS EXERCISE.



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