As filed with the Securities and Exchange Commission on November 5, 1998
Registration No. 333-____
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
POST-EFFECTIVE AMENDMENT NO. 1
To
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------
UMB FINANCIAL CORPORATION
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri 43-0903811
--------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1010 Grand Avenue
Kansas City, Missouri 64106
(816)860-7000
--------------------------------------------
(Address, including zip code, and telephone
number, including area code, of Registrant's
principal executive offices)
UMB PROFIT SHARING AND 401(K) SAVINGS PLAN
--------------------
(Full title of the plan)
Dennis R. Rilinger, Esq.
UMB Financial Corporation
1010 Grand Avenue
Kansas City, Missouri 64106
--------------------------------------
(Name and address of agent for service)
(816) 860-7000
------------------------------------------------------------
(Telephone number, including area code, of agent for service)
COPY TO:
Victoria R. Westerhaus, Esq.
Shook, Hardy & Bacon L.L.P.
1010 Grand Boulevard, 5th Floor
Kansas City, Missouri 64106
(816)474-6550
<PAGE>
INTRODUCTORY STATEMENT
UMB Financial Corporation (the "Corporation") hereby amends its Registration
Statement on Form S-8 (the "Form S-8") by filing this Post-Effective Amendment
No. 1 respecting Plan interests related to the Corporation's UMB Profit Sharing
and 401(k) Savings Plan (the "Plan").
Attached hereto as Exhibit 99.1 is the text of the Plan to be distributed to
Plan participants.
PART II
ITEM 8. EXHIBITS
No.
4.1* The Company's Articles of Incorporation, filed as Exhibit 3a to the
Company's Form S-4 Registration Statement, filed December 24, 1992 (File No.
33-56450).
4.2* The Company's Bylaws, filed as Exhibit 3b to the Company's Form S-4
Registration Statement, filed December 24, 1992 (File No. 33-56450).
4.3* Description of Company's Common Stock in Amendment No. 1 on Form 8 to its
General Form for Registration of Securities on Form 10, dated March 5, 1993
(File No. 0-4887).
4.4* UMB Profit Sharing and 401(k) Savings Plan, filed concurrently with this
document.
5.1* Opinion of Shook, Hardy & Bacon L.L.P.
23.1* Consent of Shook, Hardy & Bacon L.L.P. (contained in exhibit 5.1).
23.2* Consent of Deloitte & Touche LLP.
24.* Powers of Attorney (contained on signature pages hereto).
99.1 UMB Financial Corporation's UMB Profit Sharing and 401(k) Savings Plan.
____________________
* Previously filed
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, UMB Financial Corporation
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Kansas City, State of Missouri, on November 5, 1998.
UMB FINANCIAL CORPORATION
/s/ R. Crosby Kemper
R. Crosby Kemper,
Chairman of the Board and
Chief Executive Officer
/s/ Timothy M. Connealy
Timothy M. Connealy,
Chief Financial Officer
Date: November 5, 1998
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints R. Crosby Kemper, his true and lawful attorney-in-fact
and agent, with full power of substitution and re-substitution, for him in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
said attorney-in-fact and agent or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Paul D. Barlett, Jr.* Director C.N. Hoffman III* Director
Paul D. Barlett, Jr. C.N. Hoffman III
Thomas E. Beal* Director Alexander C. Kemper* Director
Thomas E. Beal Alexander C. Kemper
H. Alan Bell* Director Daniel N. League, Jr.* Director
H. Alan Bell Daniel N. League, Jr.
David R. Bradley, Jr.* Director Thomas D. Sanders* Director
David R Bradley, Jr. Thomas D. Sanders
Howard R. Fricke* Director Director
Howard R. Fricke William J. McKenna
Newton A. Campbell* Director Director
Newton A. Campbell Roy E. Mayes
William Terry Fuldner* Director Director
William Terry Fuldner John H. Mize, Jr.
Jack T. Gentry* Director Director
Jack T. Gentry Mary Lynn Oliver
Peter J. Genovese* Director W.L. Orschlen* Director
Peter J. Genovese W.L. Orschlen
Robert W. Plaster* Director Director
Robert W. Plaster Herman R. Sutherland
Alan W. Rolley* Director E. Jack Webster, Jr.* Director
Alan W. Rolley E. Jack Webster, Jr.
Director John E. Williams* Director
Joseph F. Ruysser John E. Williams
*/s/ R. Crosby Kemper
R. Crosby Kemper
Attorney-in-Fact for each Director
Date: November 5, 1998
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other person who administers the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Kansas City, State of
Missouri, on November 5, 1998.
UMB PROFIT SHARING AND 401(k) SAVINGS PLAN
/s/ James W. Rawlings
James W. Rawlings,
Chairman of the Administrative
Committee for the Plan
UMB FINANCIAL CORPORATION
FORM S-8
EXHIBIT INDEX
--------------
Sequential
No. Description Page Number
- --- --------- -----------
4.1* The Company's Articles of Incorporation, filed as Exhibit 3a to the
Company's Form S-4 Registration Statement, filed December 24, 1992 (File No.
33-56450).
4.2* The Company's Bylaws, filed as Exhibit 3b to the Company's Form S-4
Registration Statement, filed December 24, 1992 (File No. 33-56450).
4.3* Description of Company's Common Stock in Amendment No. 1 on Form 8 to its
General Form for Registration of Securities on Form 10, dated March 5, 1993
(File No. 0-4887).
4.4* UMB Profit Sharing and 401(k) Savings Plan, filed concurrently with this
document.
5.1* Opinion of Shook, Hardy & Bacon L.L.P.
23.1* Consent of Shook, Hardy & Bacon L.L.P. (contained in exhibit 5.1).
23.2* Consent of Deloitte & Touche LLP.
24.* Powers of Attorney (contained on signature pages hereto).
99.1 UMB Financial Corporation's UMB Profit Sharing and
401(k) Savings Plan.
- -------------------
* Previously Filed
<PAGE>
EXHIBIT 99.1
November 5, 1998
NOTICE TO UMB ASSOCIATES
IN THE UMB PROFIT SHARING AND 401(k) SAVINGS PLAN
Dear UMB Associate:
Earlier this month those of you who are participants in the UMB Retirement Plan
(the "Former Retirement Plan") received a notice regarding the termination of
the Former Retirement Plan. That notice outlined the two distribution options
for your benefit from the Former Retirement Plan: (i) to have your benefit
transferred to the UMB Profit Sharing and 401(k) Savings Plan (the "401(k)
Plan"), or (ii) to have your benefit paid to you at retirement through an
annuity contract purchased from an insurance company.
This followup notice discusses the options available to you if you choose to
transfer your benefit to the 401(k) Plan. This notice also discusses a new
investment option which invests in Common Stock of UMB Financial Corporation
which will be available for all Participants in the 401(k) Plan on December 31,
1998. A special election under the 401(k) Plan enables you to direct the
investment of all or a portion of your account balance in the Former Retirement
Plan into one of eight alternative investment funds in the 401(k) Plan (the
"Transfer"). In conjunction with the Transfer, UMB Financial Company (the
"Company") has established the UMB Financial Corporation Fund (the "Employer
Stock Fund"), which invests primarily in the Company's common stock, par value
$1.00 per share (the "Common Stock"), as an additional investment option under
the 401(k) Plan.
After the Transfer, and in accordance with the terms of the 401(k) Plan, you may
elect to have other proceeds under the 401(k) Plan credited to the Employer
Stock Fund. The attached Prospectus Supplement has been prepared and distributed
to you so that you can make an informed decision regarding your opportunity to
invest all or a portion of your account balance in the Former Retirement Plan
and in the 401(k) Plan in the Employer Stock Fund under the 401(k) Plan. The
Prospectus Supplement provided by the Company is intended to supplement the
401(k) Plan informational brochure, Summary Plan Description, the Company's
Annual Reports, and various other correspondence and newsletters provided to you
regarding the 401(k) Plan (collectively, the "Prospectus").
The other funds in the 401(k) Plan selected by the Benefits Administrative
Committee of the 401(k) Plan in which you may invest your proceeds from the
Former Retirement Plan and proceeds already in the 401(k) Plan include: A.
Balanced Fund (Pooled Equity/Pooled Debt), B. Pooled Income Fund, C. Pooled
Equity Fund, D. Pooled Debt Fund, E. UMB Scout Regional Fund (Note: your
election may not exceed 50%), F. UMB Scout Worldwide Fund, and G. UMB Scout
Capital Preservation Fund.
<PAGE>
The 401(k) Plan's feature which allows participants the opportunity to direct
the investment of their account balances from the Former Retirement Plan and
monies already in their 401(k) Plan account is intended to satisfy the
requirements of Section 404(c) of the Employee Retirement Income Security Act of
1974 ("ERISA"). The effect of this is two-fold. First, you will not be deemed a
"fiduciary" by virtue of your exercise of investment discretion. Second, no
person who otherwise is a fiduciary (for example, the employer, the 401(k) Plan
administrator, or the 401(k) Plan's trustee) is liable under the fiduciary
responsibility provision of ERISA for any loss which results from your exercise
of control over the assets in your 401(k) Plan account.
Because you will be entitled to invest all or a portion of your account balance
from the Former Retirement Plan and from the 401(k) Plan in the Employer Stock
Fund that will be invested in Common Stock, the regulations under Section 404(c)
of ERISA require that the 401(k) Plan establish procedures that ensure the
confidentiality of your decision to purchase, hold, or sell employer securities,
except to the extent that disclosure of such information is necessary to comply
with federal or state laws not preempted by ERISA. These regulations also
require that your exercise of voting and similar rights with respect to the
Employer Stock Fund be conducted pursuant to procedures that ensure the
confidentiality of your exercise of these rights. Accordingly, the Benefits
Administrative Committee designates Don Bridgforth, Assistant Director of Human
Resources, and Dena Cox, Human Resources Officer, as the persons to whom your
investment instructions should be returned. Each of Mr. Bridgforth and Ms. Cox
will transfer your investment instructions directly to Gail Pomperien, Trust
Officer for the Employer Stock Fund during the Transfer.
UMB Financial Corporation
<PAGE>
Prospectus Supplement
UMB FINANCIAL CORPORATION
PROFIT SHARING AND 401(k) SAVINGS PLAN
This Prospectus Supplement is being provided to participants (the
"Participants") in the UMB Profit Sharing and 401(k) Savings Plan (the "401(k)
Plan") and the UMB Retirement Plan (the "Former Retirement Plan"). As a
Participant, you may direct the trustee of the 401(k) Plan to purchase common
stock, par value $1.00 per share (the "Common Stock"), of UMB Financial
Corporation (the "Company") through the UMB Financial Corporation Fund (the
"Employer Stock Fund") with benefit amounts allocated to your account under the
Former Retirement Plan and under the 401(k) Plan. Because the Employer Stock
Fund actually purchases the Common Stock, you would acquire only a
"participation interest" in the Employer Stock Fund and would not own the shares
of Common Stock directly. This Prospectus Supplement relates to your election to
direct that all or a portion of your account under the Former Retirement Plan
and/or under the 401(k) Plan be invested in the Employer Stock Fund in the
401(k) Plan.
This Prospectus Supplement provided by the Company is intended to supplement the
informational brochure, Summary Plan Description, the Company's annual reports,
and various other correspondence and newsletters previously provided to you
regarding the 401(k) Plan (collectively, the "Prospectus"). This Prospectus
Supplement, which provides information with respect to the Former Retirement
Plan and the 401(k) Plan, should be read only in conjunction with the
Prospectus.
____________________
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY EACH
PARTICIPANT AS TO AN INVESTMENT IN THE COMMON STOCK THROUGH THE EMPLOYER STOCK
FUND, SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS SUPPLEMENT.
_____________________
THE INTERESTS IN THE 401(k) PLAN AND THE OFFERING OF THE COMMON STOCK THROUGH
THE EMPLOYER STOCK FUND HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE OFFICE OF COMPTROLLER OF THE CURRENCY, THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY OTHER FEDERAL OR STATE AGENCY.
NO OFFICE, CORPORATION, COMMISSION, BUREAU OR OTHER AGENCY HAS PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE PARTICIPATION INTERESTS OFFERED HEREBY ARE NOT (1) SAVINGS ACCOUNTS OR
DEPOSITS; (2) FEDERALLY INSURED OR GUARANTEED, OR (3) GUARANTEED BY THE COMPANY
OR THROUGH THE EMPLOYER STOCK FUND. THE 401(k) PLAN'S ENTIRE INVESTMENT IN
COMMON STOCK THROUGH THE EMPLOYER STOCK FUND IS SUBJECT TO LOSS.
The date of this Prospectus Supplement is November 5, 1998.
<PAGE>
TABLE OF CONTENTS
Page
PROSPECTUS SUPPLEMENT......................................... 1
THE OFFERING.................................................. 4
Securities Offered....................................... 4
Election to Purchase Common Stock in the Transfer;
Priorities.......................................... 4
Method of Directing Transfer............................. 4
Time for Directing Transfer.............................. 5
Irrevocability of Transfer Direction..................... 5
Direction to Purchase Common Stock After the Transfer.... 5
Purchase and Sale Price of Common Stock for the
Employer Stock Fund................................. 6
Nature of a Participant's Interest in the Common Stock... 7
Voting Rights of Common Stock............................ 7
Certain Risk Factors Regarding the Common Stock.......... 7
Safe Harbor Statement.................................... 10
SUMMARY DESCRIPTION OF THE 401(k) PLAN........................ 11
Introduction............................................. 11
Employee Retirement Income Security Act.................. 11
Reference to Full Text of 401(k) Plan.................... 11
Eligibility and Participation............................ 12
Contributions Under the 401(k) Plan...................... 12
Limitations on Contributions............................. 13
Investment of Contributions and Account Balances......... 15
Fund Performance......................................... 15
Net Investment Performance for Periods Ended
September 30, 1998.................................. 16
BALANCED FUND................................................. 16
POOLED INCOME FUND............................................ 16
POOLED EQUITY FUND............................................ 16
POOLED DEBT FUND.............................................. 16
UMB SCOUT REGIONAL FUND....................................... 17
UMB SCOUT WORLDWIDE FUND...................................... 17
<PAGE>
TABLE OF CONTENTS Page
UMB SCOUT CAPITAL PRESERVATION FUND........................... 17
UMB FINANCIAL CORPORATION FUND................................ 17
Benefits Under the 401(k) Plan........................... 18
Withdrawals and Distributions From the 401(k) Plan....... 18
Distribution in Kind..................................... 19
Administration of the 401(k) Plan........................ 19
Reports to 401(k) Plan Participants...................... 19
401(k) Plan Administrator................................ 20
Amendment and Termination................................ 20
Merger, Consolidation or Transfer........................ 20
Federal Income Tax Consequences.......................... 21
ERISA and Other Qualifications........................... 24
SEC Reporting and Short-Swing Profit Liability........... 25
Financial Information Regarding 401(k) Plan Assets....... 25
Additional Information................................... 26
<PAGE>
THE OFFERING
Securities Offered
The securities offered hereby are participation interests in the 401(k) Plan.
The Common Stock to be acquired by the 401(k) Plan will be held in the Employer
Stock Fund. The Company is the issuer of the Common Stock. Only employees of the
Company or its subsidiaries may become Participants in the 401(k) Plan.
Information regarding the 401(k) Plan's Employer Stock Fund is contained in this
Prospectus Supplement and information regarding the financial condition, results
of operation and business of the Company is contained in the Prospectus
materials previously distributed to Participants which are intended to, when
taken together, constitute a prospectus that meets the requirements of Section
10(a) of the Securities Act of 1933, as amended. The address of the principal
executive office of the Company is 1010 Grand Boulevard, Kansas City, Missouri
64106. The Company's telephone number is (816) 860-7000.
Election to Purchase Common Stock in the Transfer; Priorities
A special election under the 401(k) Plan will enable you to direct the
investment of your account balance in the Former Retirement Plan into one of
eight alternative investment funds, including the Employer Stock Fund, in the
401(k) Plan (the "Transfer"). The 401(k) Plan also permits each Participant to
direct the investment of his or her 401(k) Plan current account balance among
eight investment alternatives, including the Employer Stock Fund. The Trustee of
the 401(k) Plan will purchase Common Stock in accordance with each Participant's
directions, as received through the 401(k) Plan Transfer. If a Participant fails
to direct the investment of his or her account balance from the Former
Retirement Plan to the 401(k) Plan, the Participant's transferred account
balance will be invested in the investment funds of the 401(k) Plan as
previously directed by the Participant. If a Participant has never made an
investment election, the Participant's account balance will be invested in the
Balanced Fund.
Method of Directing Transfer
Each Participant will receive a form (the "Transfer Form") that allows the
Participant to direct that all or a portion of his or her beneficial interest in
the Former Retirement Plan be transferred to one or more of the funds available
under the 401(k) Plan, including the Employer Stock Fund. If a Participant
wishes to invest all or part of his or her beneficial interest in the assets of
the Former Retirement Plan in the purchase of interests in the Employer Stock
Fund or other funds available under the 401(k) Plan, he or she should indicate
that decision on the Transfer Form. The Transfer Form relates only to the
transfer of proceeds from the Former Retirement Plan to the 401(k) Plan. This
election will NOT apply to the Participant's existing election under the 401(k)
Plan or to any future contributions to the 401(k) Plan. Any such direction of
proceeds already in the 401(k) Plan, including investment in the Employer Stock
Fund, must be made in accordance with the terms of the 401(k) Plan, as described
below.
<PAGE>
Time for Directing Transfer
Directions to transfer amounts to the Employer Stock Fund and other funds
available under the 401(k) Plan from the Former Retirement Plan must be returned
to the Human Resources Department at the Company in Kansas City, Missouri, no
later than 5 p.m. on November 9, 1998.
Irrevocability of Transfer Direction
After the distribution of this Prospectus Supplement, a Participant's direction
to transfer amounts credited to such Participant's Former Retirement Plan
account to the Employer Stock Fund and/or other funds available under the 401(k)
Plan is irrevocable. Participants, however, will be able to direct the
investment of their existing accounts and future contributions under the 401(k)
Plan, as explained below.
Direction to Purchase Common Stock After the Transfer
After the Transfer, a Participant will continue to be able to direct that a
certain percentage of his or her interest in the 401(k) Plan be transferred (i)
to the Employer Stock Fund and invested in Common Stock, or (ii) to the other
investment funds available under the 401(k) Plan. The other investment funds
available under the 401(k) Plan are:
- -- Balance Fund (Pooled Equity/Pooled Debt)
- -- Pooled Income Fund
- -- Pooled Equity Fund
- -- Pooled Debt Fund
- -- UMB Scout Regional Fund (Election may not exceed 50%)
- -- UMB Scout Worldwide Fund
- -- UMB Scout Capital Preservation Fund
(Such funds, together with the Employer Stock Fund, collectively are referred to
herein as the "401(k) Plan Funds"). Participants are permitted to direct that
future contributions made to the 401(k) Plan by or on their behalf will be
invested among any of the 401(k) Plan Funds. The allocation of a Participant's
interest in a Plan Fund may be changed not more often than once per month, as
noted herein. Please note that the election to invest in the 401(k) Plan Funds
during the Transfer will not be considered to be the Participant's monthly
allocation election, and that special restrictions may apply to transfers
directed to and from the Employer Stock Fund by those Participants who are
officers, directors and principal shareholders of the Company who are subject to
the provisions of Section 16(b) of the Securities and Exchange Act of 1934, as
amended (the "1934 Act"). Please contact the Company's Human Resources
Department in Kansas City for additional information.
<PAGE>
Purchase and Sale Price of Common Stock for the Employer Stock Fund
The proceeds transferred to the Employer Stock Fund for the purchase of Common
Stock in connection with the Transfer will be used by the Employer Stock Fund
Trustee to purchase shares of Common Stock. The Employer Stock Fund Trustee
intends to purchase shares of Common Stock in one or more private transactions,
involving either the Company and/or the ESOP of UMB, which are parties in
interest to the 401(k) Plan. After the Transfer, the Employer Stock Fund Trustee
also may purchase shares of Common Stock on the open market or from shares held
in the Employer Stock Fund. If purchased from a party in interest, the price
paid for such shares of Common Stock will be the average of the closing bid and
ask price, as reported by the NASDAQ system, on the date of the purchase by the
Employer Stock Fund Trustee.
In any case (whether acquired on the open market, from a party in interest or
from the Employer Stock Fund), the shares of Common Stock to be purchased may be
acquired in more than one transaction, in which case the shares of Common Stock
will be deemed to be acquired at the average purchase price of the shares of
Common Stock during the investment period. The prices paid by the Employer Stock
Fund Trustee for shares of Common Stock will not exceed "adequate consideration"
as defined in Section 3(18) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
The shares of Common Stock held by the Employer Stock Fund may be sold on the
open market or may be sold in a private transaction, which may involve a party
in interest to the 401(k) Plan, including the Company or the ESOP of UMB. After
the Transfer, participation interests in shares of Common Stock also may be
transferred to the accounts of other Participants who elect at that time to have
a portion of their 401(k) Plan account balances invested in the Employer Stock
Fund.
If sold to a party in interest, the price received by the Participant for his or
her participation interest in such shares of Common Stock through the Employer
Stock Fund will be the average of the closing bid and ask price, as reported by
NASDAQ system on the date of sale by the Employer Stock Fund Trustee. In any
case (whether the shares are sold on the open market, to a party in interest or
through participation interests to another Participant), the shares to be sold
may be sold in more than one transaction by the Employer Stock Fund Trustee, in
which case the shares will be considered sold at the average price of the shares
sold for that investment period. The prices received by the Employer Stock Fund
Trustee for the shares of Common Stock will not be less than "adequate
consideration" as defined in Section 3(18) of ERISA.
Nature of a Participant's Interest in the Common Stock
The Common Stock will be held in the name of the Employer Stock Fund Trustee. A
participation interest in shares of Common Stock acquired at the direction of a
Participant will
<PAGE>
be allocated to the Participant's account under the 401(k)
Plan. Therefore, earnings with respect to a Participant's account should not be
affected by the investment designations (including investments in Common Stock)
of other Participants.
Voting Rights of Common Stock
The Employer Stock Fund Trustee generally will exercise voting rights
attributable to all Common Stock held by the Employer Stock Fund as directed by
Participants with participation interests in the Employer Stock Fund. With
respect to each matter as to which holders of Common Stock have a right to vote,
each Participant will be allocated voting instruction rights reflecting such
Participant's proportionate interest in the Employer Stock Fund. The number of
shares of Common Stock held in the Employer Stock Fund that are voted in the
affirmative and negative on each matter shall be proportionate to the number of
voting instruction rights exercised by Participants in the affirmative and
negative respectively. Any unallocated shares of Common Stock will be voted by
the Employer Stock Fund Trustee in its discretion.
Certain Risk Factors Regarding the Common Stock
In addition to the other information in the Prospectus, you should carefully
consider the following risk factors in evaluating an investment in the Common
Stock through the Employer Stock Fund.
Competition. The banking industry is highly competitive. Numerous commercial
banks and savings institutions have branches in the immediate vicinity of the
Company's branches. The Company's primary competitors include savings
institutions, commercial banks, mortgage banking companies, mortgage brokers,
nonbanking financial institutions and financial service companies. Trends toward
the consolidation of the financial institutions industry and removal of
restrictions on interstate banking and branching may make it more difficult for
the Company to compete effectively with large national banking institutions.
Proposed legislation that will allow the control or ownership of banks by
organizations engaged in other lines of business may allow other entities into
the banking industry. Such competition may have an adverse effect on the
Company's growth and profitability in the future.
Impact of Future Sales. No prediction can be made as to the effect, if any, that
future sales of shares of Common Stock, or the availability of such shares for
future sale, will have on the market price of the Common Stock prevailing from
time to time.
Possible Effect of Economic Developments. Interest rate fluctuations, economic
recession and customers' business cycles are economic factors over which the
Company has little or no control. Economic recession or a downturn in customers'
business cycles could have a materially adverse effect on the Company's
operating results and the price of the Common Stock.
Diversification. An investment in the Employer Stock Fund is not diversified, as
investments are only in Common Stock of the Company. In addition, the
Participant should
<PAGE>
consider his or her interest in the ESOP of UMB, which also
is invested in Common Stock of the Company.
"Year 2000" Readiness. The Year 2000 readiness issue is the result of computer
programs that have been coded to define a year using two digits rather than
four. For example, a substantial number of programs have date sensitive coding
which may recognize a date using "00" as 1900 rather than 2000. This could
result in system failures or miscalculations causing disruptions to the
Company's operations.
The Company has been actively working on this issue since 1996. A plan was
developed in which Year 2000 issues are divided into two areas - those involving
mission critical functions and those involving non-critical functions. Within
these two areas, applications were further divided into those over which the
Company had control and those which were controlled by outside vendors.
A five-step plan was then developed involving 1) inventory, 2) solution
planning, 3) renovation, 4) testing, and 5) implementation. The approximate
percentage of each type of mission critical application for which the Company
has completed the respective step of the five-step plan is set forth below:
Company-Controlled Vendor-Controlled
Mission Critical Mission Critical
Inventory 99% 99%
Solution Planning 99% 99%
Renovation 99% 83%
Testing 99% 81%
Implementation 90% 77%
The Company also has made significant steps toward assessing its hardware and is
making substantial progress toward replacing necessary equipment. All mainframe
and mid-range systems are in place, and an inventory of personal computers is
under way. The Company's five-step plan also applies to all identified
non-information technology assets such as equipment containing embedded chips.
The Company estimates that the total cost of its Year 2000 project will be
approximately $24 million dollars. Of this amount, $10 million was spent in
1997; approximately $12 million will be spent in 1998, and the remaining $2
million is projected for 1999. While these numbers are substantial, they include
the cost of a significant number of system replacements that would have been
required in the near future regardless of the Year 2000 issue. These costs are
being funded through operating cash flows. Financial institutions are heavily
dependent on technology, and the cost of Year 2000 efforts should be viewed in
its context as a significant portion of the Company's annual Information
Technology budget.
The Company has in place a program to investigate and quantify the Year 2000
issues arising from its relationships with third parties such as borrowers,
vendors, counterparties, issuers
<PAGE>
of debt and equity securities in which the trust department of its subsidiary
banks may invest, and service providers (e.g. the federal reserve system,
telecommunications providers and electric utilities). Interfaces and
connectivity with these parties and systems also present significant issues.
A failure of counterparties, significant suppliers, customers with substantial
relationships, or failures in the payment system could have a substantial
negative impact on the Company. In addition, the Company could face significant
disruptions of business and financial losses if there were failures of
telecommunications systems, utility systems, security clearing systems or other
elements of the financial industry infrastructure.
All of the foregoing is based on management's current assessment of the
situation using information available to it. Other factors that might cause
material changes include, but are not limited to, the loss of key personnel and
the ability to respond to unforeseen complications. Because the Company's
remediation process is not complete and due to the reliance on business
partners, vendors, customers, utilities, telecommunications providers and
others, the outcome of Year 2000 readiness is uncertain and such issues may have
a material adverse effect on the Company's future financial condition and future
operating results. At this point it is impossible to assess a "worst case"
scenario.
The Company continues to develop contingency plans to cover failures due to Year
2000 issues relating to its operations, physical locations, products, suppliers,
public infrastructure and customers. Contingency planning is expected to be
substantially complete by year end.
Safe Harbor Statement
Certain of the statements contained in this Prospectus Supplement, including,
without limitation, statements as to management expectations and beliefs
presented above, are forward-looking statements. Forward-looking statements are
made based upon management's expectations and belief concerning future
developments and their potential effect upon the Company. There can be no
assurance that future developments will be in accordance with management's
expectations or that the effect of future developments on the Company will be
those anticipated by management.
The Company wishes to caution readers that the assumptions which form the basis
for forward-looking statements with respect to or that may impact earnings on
the Common Stock include many factors that are beyond the Company's ability to
control or estimate precisely. These risks and uncertainties include, but are
not limited to, the impact of competition in the banking and financial services
industry; changes in the pricing of the services of the Company or its
competitors; the loss of a significant customer or supplier; disruptions in
operations due to failures of telecommunications systems, utility systems,
security clearing systems, or other elements of the financial industry
infrastructure; the unanticipated costs and disruption in operations due to Year
2000 non-compliance; the costs and other effects of complying with regulatory
requirements; the cost and other effects of legal and administrative cases and
<PAGE>
proceedings, settlements and investigations; and changes in U.S. or
international economic or political conditions, such as inflation or
fluctuations in interest or foreign exchange rates.
While the Company periodically reassesses material trends and uncertainties
affecting the Company's results of operations and financial condition in
connection with its preparation of management's discussion and analysis
contained in its annual and quarterly reports, the Company does not intend to
review or revise any particular forward-looking statement referenced herein in
light of future events.
SUMMARY DESCRIPTION OF THE 401(k) PLAN
Introduction
The 401(k) Plan is a profit sharing plan with a cash or deferred compensation
feature established in accordance with the requirements under Section 401(a) and
Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code").
The 401(k) Plan is qualified under Section 401(a) of the Code, and its related
trust is qualified under Section 501(a) of the Code.
The Company intends that the 401(k) Plan, in operation, will comply with the
requirements under Section 401(a) and Section 401(k) of the Code. The Company
will adopt any amendments to the 401(k) Plan that may be necessary to ensure the
qualified status of the 401(k) Plan under the Code and applicable Treasury
Regulations.
Employee Retirement Income Security Act
The 401(k) Plan is an "individual account plan" other than a "money purchase
pension plan" within the meaning of ERISA. As such, the 401(k) Plan is subject
to all of the provisions of Title I (Protection of Employee Benefit Rights) and
Title II (Amendments to the Internal Revenue Code Relating to Retirement Plans)
of ERISA, except the funding requirements contained in Part 3 of Title I of
ERISA which by their terms do not apply to an individual account plan (other
than a money purchase plan). The 401(k) Plan is not subject to Title IV (Plan
Termination Insurance) of ERISA. The funding requirements contained in Title IV
of ERISA are not applicable to Participants (as defined below) or beneficiaries
under the 401(k) Plan.
Reference to Full Text of 401(k) Plan
The following statements are summaries of certain provisions of the 401(k) Plan.
They are not complete and are qualified in their entirety by the full text of
the 401(k) Plan. Words capitalized but not defined in the following discussion
have the same meaning as set forth in the 401(k) Plan. Copies of the 401(k) Plan
are available to all employees by filing a request with the 401(k) Plan
Administrative Committee, c/o UMB Financial Corporation, Attention: Don
Bridgforth. Each employee is urged to read carefully the full text of the 401(k)
Plan.
<PAGE>
Eligibility and Participation
Any employee of the Company who normally works in a benefits eligible
classification is eligible to participate in the salary deferral portion of the
401(k) Plan on the first day of any calendar month following commencement of
employment. The plan year is January 1 to December 31 (the "Plan Year"). All
other employees may participate in the salary deferral portion of the 401(k)
Plan and in the profit-sharing portion of the 401(k) Plan as of January 1 or
July 1 following one Year of Service.
Contributions Under the 401(k) Plan
Salary Deferrals. Each Participant in the 401(k) Plan is permitted to elect to
defer such Participant's compensation (as defined below) on a pre-tax basis up
to the lesser of 15% of annual Compensation (expressed in terms of whole
percentages or dollar amounts) or the applicable limit under the Code (for 1998
and 1999, the applicable limit is $10,000) and subject to certain other
restrictions imposed by the Code, and to have that amount contributed to the
401(k) Plan on such Participant's behalf. For purposes of the 401(k) Plan,
"Compensation" means, generally, a Participant's wages, salaries, and other
amounts received for services actually rendered in the course of employment with
the Company and shall include all overtime payments, production and accuracy
bonuses to proof machine operators, amounts redirected pursuant to a cafeteria
plan under Section 125 of the Code, including any flex dollar plan or flexible
benefits plan, or a qualified transportation plan under Section 132(f) of the
Code, amounts deferred pursuant to a salary deferral agreement in accordance
with Section 401(k) of the Code, and with respect to any Participant who, in
accordance with the terms of the Participant's employment arrangement
customarily receives a substantial portion of the Participant's earnings in the
form of special bonuses or commissions, all such special bonuses or commissions.
A Participant may elect to modify the amount contributed to the 401(k) Plan by
providing written notice to the 401(k) Plan Administrator prior to the first day
of any payroll period. However, special restrictions apply to persons subject to
Section 16 of the 1934 Act.
Matching Contributions. The Company may make matching contributions to the
401(k) Plan. Currently, the match equals 50% of the Participant's salary
deferral up to 4% of compensation, for a total matching contribution of 2% of
compensation. The matching contribution may be changed or eliminated by the
Company at any time.
Limitations on Contributions
Limitation on Employee Salary Deferrals. The annual amount of deferred
Compensation of a Participant (when aggregated with any elective deferrals of
the Participant under a simplified employee pension plan or a tax-deferred
annuity) may not exceed the limitation contained in Section 402(g) of the Code,
adjusted for increases in the cost of living as permitted by the Code (the
limitation for 1998 and 1999 is $10,000). Contributions in excess of this
limitation ("excess deferrals") will be included in the Participant's gross
income for federal income tax purposes in the year they are made. In addition,
any such excess deferral will again be subject to federal income tax when
distributed by the 401(k) Plan to the Participant, unless the excess deferral
<PAGE>
(together with any income allocable thereto) is distributed to the Participant
not later than the first April 15th following the close of the taxable year in
which the excess deferral is made. Any income on the excess deferral that is
distributed not later than such date shall be treated, for federal income tax
purposes, as earned and received by the Participant in the taxable year in which
the distribution is made.
Limitations on Annual Additions and Benefits. Pursuant to the requirements of
the Code, the 401(k) Plan provides that the amount of contributions and
forfeitures allocated to each Participant's account during any Plan Year may not
exceed the lesser of $30,000 or 25% of the Participant's Compensation for the
Plan Year. In addition, annual additions are limited to the extent necessary to
prevent contributions on behalf of any employee from exceeding the employee's
combined plan limit, i.e., a limit that takes into account the contributions and
benefits made on behalf of an employee to all plans of the Company.
Limitation on 401(k) Plan Contributions for Highly Compensated Employees.
Sections 401(k) and 401(m) of the Code limit the amount of salary deferral
contributions and matching contributions that may be made to the 401(k) Plan in
any Plan Year on behalf of Highly Compensated Employees (defined below) in
relation to the amount of salary deferral contributions made by or on behalf of
all other employees eligible to participate in the 401(k) Plan. Specifically,
the "actual deferral percentage" ("ADP") (i.e., the average of the actual
deferral ratios, expressed as a percentage, of each Eligible Employee's salary
deferral contribution if any, for the Plan Year over the employee's
Compensation), of the Highly Compensated Employees must meet either of the
following tests: (i) the ADP of the eligible Highly Compensated Employees is not
more than 125% of the ADP of all other Eligible Employees, or (ii) the ADP of
the eligible Highly Compensated Employees is not more than 200% of the ADP of
all other Eligible Employees, and the excess of the ADP for the eligible Highly
Compensated Employees over the ADP of all other Eligible Employees is not more
than two percentage points. Similarly, the actual contribution percentage
("ACP") (i.e., the average of the actual contribution ratios, expressed as a
percentage, of each Eligible Employee's matching contributions, if any, for the
Plan Year over the employee's Compensation) of the Highly Compensated Employees
must meet either of the following tests: (i) the ACP of the eligible Highly
Compensated Employees is not more than 125% of the ACP of all other Eligible
Employees, or (ii) the ACP of the eligible Highly Compensated Employees is not
more than 200% of the ACP of all other Eligible Employees, and the excess of the
ACP for the eligible Highly Compensated Employees over the ACP of all other
employees is not more than two percentage points.
In general, for Plan Years beginning in 1998, a Highly Compensated Employee
includes any employee, who, (1) during the Plan Year or the preceding Plan Year,
was at any time a 5% owner (i.e., owns directly or indirectly more than 5% of
the stock of an employer, or stock possessing more than 5% of the total combined
voting power of all stock of an employer), or (2) for the preceding Plan Year,
received Compensation from an employer in excess of $80,000 (in 1998), and (if
the employer elects for a Plan Year) was in the group consisting of the top 20%
of employees when ranked on the basis of Compensation paid during the Plan Year.
The dollar amounts set forth above are adjusted annually to reflect increases in
the cost of living.
In order to prevent the disqualification of the 401(k) Plan, any amounts
contributed by Highly Compensated Employees that exceed the ADP limitation in
any Plan Year ("excess aggregate contributions"), together with any income
allocable thereto, must be distributed to such
<PAGE>
Highly Compensated Employees before the close of the following Plan Year.
Moreover, the Company will be subject to a 10% excise tax on any excess
contributions unless such excess contributions, together with any income
allocable thereto, either are re-characterized or are distributed before the
close of the first 2-1/2 months following the Plan Year to which such excess
contributions relate. In addition, in order to avoid disqualification of the
401(k) Plan, any after-tax contributions by Highly Compensated Employees and
matching contributions that exceed the average contribution limitation in any
Plan Year ("excess aggregate contributions") together with any income allocable
thereto, must be distributed to such Highly Compensated Employees and before the
close of the following Plan Year. However, the 10% excise tax will be imposed on
the Company with respect to any excess aggregate contributions, unless such
amounts, plus any income allocable thereto, are distributed within 2-1/2 months
following the close of the Plan Year in which they accrued.
Investment of Contributions and Account Balances
All amounts credited to Participants' accounts under the 401(k) Plan are held in
the Plan Trust (the "Trust") which is held by the 401(k) Plan Trustee appointed
by the Company's Board of Directors.
Prior to the Transfer, Participants have been provided the opportunity to direct
the investment of their accounts into one or more of the following 401(k) Plan
Funds:
A. Balanced Fund (Pooled Equity/Pooled Debt)
B. Pooled Income Fund
C. Pooled Equity Fund
D. Pooled Debt Fund
E. UMB Scout Regional Fund (Election may not exceed 50%)
F. UMB Scout Worldwide Fund
G. UMB Scout Capital Preservation Fund
The 401(k) Plan now provides that in addition to the funds specified above, a
Participant may direct the Trustee to invest all or a portion of the
Participant's account in the Employer Stock Fund. A Participant may elect to
have both past contributions (and earnings), and future contributions to the
Participant's accounts invested in either the Employer Stock Fund or among the
401(k) Plan Funds listed above. Changes in investment elections may be made
monthly by completion and submission of an investment election change form to
the Human Resources Department in Kansas City by the second to last day of the
month preceding the month in which the election is to take effect. Any amounts
credited to a Participant's accounts for which investment directions are not
given will be invested in the Balanced Fund.
The net gain (or loss) of the 401(k) Plan Funds from investments (including
interest payments, dividends, realized and unrealized gains and losses on
securities, and expenses paid from the Trust) will be allocated monthly. For
purposes of such allocations, all assets of the Trust are valued at fair market
value.
<PAGE>
Fund Performance
Prior to the Transaction, contributions under the 401(k) Plan have been invested
in the seven funds specified above. The following table provides performance
data with respect to the investment funds available under the 401(k) Plan, based
on information provided to the Company.
Net Investment Performance for Periods Ended September 30, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
Performance of Investment Options
====================================================================================================================================
Latest Month Latest Year to Date 1 Year 5 Year 10 Year
UMB Profit Sharing and 401(k) Savings Plan (8/31/98 to Quarter (12/31/97 to (9/30/97 (9/30/93 (9/30/98 to
For Periods Ended September 30, 1998 9/30/98) (6/30/98 to 9/30/98) to 9/30/98) to 9/30/98) 9/30/98)
9/30/98)
- -------------------------------------------------- -------------- ------------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Fund A: Balanced Fund (Pooled Equity/Pooled Debt) 4.20% -0.52% 3.39% 4.99% 9.46% 10.50%
S&P 500 & Lehman Bros. Gov't/Corp. 4.46% -2.62% 7.59% 10.34% 13.28% 13.05%
Intermediate3 4.32% -5.79% 3.16% 4.66% 11.59% 12.28%
Lipper Balanced Fund Index3 0.12% 0.37% 1.43% 1.49% 2.43% 3.17%
Consumer Price Index
- -------------------------------------------------- -------------- ------------- -------------- ------------ ------------ -----------
Fund B: Pooled Income 0.52% 1.53% 4.43% 5.93% 5.47% 6.00%
90-Day Treasury Bills 0.41% 1.26% 3.87% 5.22% 5.03% 5.52%
Lipper Money Market Fund Index3 0.42% 1.28% 3.85% 5.19% 4.79% 5.41%
- -------------------------------------------------- -------------- ------------- -------------- ------------ ------------ -----------
Fund C: Pooled Equity 6.25% -6.53% -2.78% -2.06% 11.51% 11.61%
S&P 5003 6.41% -9.95% 6.00% 9.05% 19.91% 17.28%
Lipper Growth Fund Index3 6.67% -11.41% 2.39% 3.07% 15.52% 15.01%
- -------------------------------------------------- -------------- ------------- -------------- ------------ ------------ -----------
Fund D: Pooled Debt 2.94% 5.16% 9.14% 11.83% 6.91% 8.92%
Lehman Bros. Gov't/Corp. Intermediate3 2.51% 4.49% 8.12% 10.43% 6.57% 8.55%
Lipper Intermediate Investment Grade Fund 2.23% 3.82% 7.62% 10.14% 6.41% N.A
Index3
- -------------------------------------------------- -------------- ------------- -------------- ------------ ------------ -----------
Fund E: UMB Scout7 WorldWide Fund (UMBHX)1 3.93% -13.72% -11.47% -12.29% 8.75% 7.00%
Value Line Composite3 6.54% -17.80% -13.42% -15.26% 8.34% 7.66%
Lipper Small Company Fund Index3 5.41% -21.35% -16.68% -21.21% 8.05% 11.24%
- -------------------------------------------------- -------------- ------------- -------------- ------------ ------------ -----------
Fund F: UMB Scout7 WorldWide Fund (UMBWX)1 2 -1.11% -13.27% 1.92% -0.94% 12.37% N.A
MSCI EAFE Index3 -3.04% -14.15% -0.34% -8.08% 5.51% 5.17%
Lipper Global Fund Index3 0.06% -14.47% -2.20% -7.07% 9.72% 10.52%
- -------------------------------------------------- -------------- ------------- -------------- ------------ ------------ -----------
Fund G: UMB Scout7 Capital Preservation Fund4 14.56% -4.52% N.A N.A N.A N.A
Goldman Sachs Commodity Index3 10.22% -4.44% -21.90% -32.55% 0.46% 2.45%
Consumer Price Index3 0.12% 0.37% 1.43% 1.49% 2.43% 3.17%
Producer Price Index - Finished3 0.31% 0.15% -0.61% -0.91% 1.03% 1.82%
- -------------------------------------------------- -------------- ------------- -------------- ------------ ------------ -----------
</TABLE>
1 Option started 7/1/93; data prior to that date are for information only. UMB
Scout Regional Fund 10-Year return includes performance prior to objective
change on 8/16/93. UMB Scout WorldWide Fund average annual compound total return
since inception on 9/14/93 is 12.32%.
2 Along with the potential for higher returns, international investments carry
some additional risks from currency fluctuation, economic and political factors,
as well as differences in accounting.
3 Unmanaged index of stocks, bonds, mutual funds or commodities.
4 Option started 3/31/98; fund inception date is 2/23/98.
The timing of purchases within the plan will have an impact on the investment
option returns, and therefore the investment option returns will vary from
published fund returns. Performance data contained in this report are for past
periods only. Past performance is not predictive of future results. Investment
return and share value will fluctuate and redemption value may be more or less
than original cost.
Shares of the UMB Scout7 Funds and other investment funds are not deposits or
obligations of, nor guaranteed by, UMB Bank, n.a., or any other banking
institution; nor are they insured by the Federal Deposit Insurance Corporation
("FDIC"). These shares involve investment risks, including the possible loss of
the principal invested.
<PAGE>
The following is a description of each of the 401(k) Plan's investment funds:
BALANCED FUND (Pooled Equity/Pooled Debt)
The objective of this fund is long-term capital growth and income. The fund
utilizes a balanced approach investing both in equities for growth and bonds for
income. The fund seeks higher potential returns than a bond fund and potentially
less volatility than stock funds. Asset allocation within the fund will be
balanced (50% equity and 50% fixed income) unless economic fundamentals or
market conditions necessitate a more liberal or conservative asset allocation.
Investments generally are made in the UMB Pooled Equity and Pooled Debt funds.
POOLED INCOME FUND
The objective of this fund is current income consistent with security of
principal and ready marketability. The fund may be invested in short term
maturities of direct, or guaranteed obligations of the U.S. government or
agencies thereof, debt securities of corporations, certificates of deposit
(other than UMB) and money market instruments. Investments generally are made
using the UMB Pooled Income Fund.
POOLED EQUITY FUND
The object of this fund is long-term capital growth with some income from
dividends. The fund seeks appreciation through investment in securities that are
undervalued by the marketplace. The fund invests primarily in U.S. common stocks
having large to medium capitalizations. The fund is broadly diversified by
industry and economic sector. Investments generally are made using the UMB
Pooled Equity Fund.
POOLED DEBT FUND
The objective of this fund is high current income. The fund is invested
primarily in investment grade fixed income securities with an intermediate term
average maturity. The fund generally has less fluctuation of principal than
long-term bond funds and provides higher potential income than short term bond
funds having similar quality characteristics. The fund is invested in U.S.
government, federal agency and corporate fixed income obligations. Investments
generally are made using the UMB Pooled Debt Fund.
UMB SCOUT REGIONAL FUND (NOTE: Your election may not exceed 50%)
The object of this fund is capital growth. The fund seeks appreciation through
investment in undervalued or rapidly growing small capitalization companies
located in the eight state midwest area. The fund is broadly diversified by
company and industry. While the fund primarily invests in companies with market
capitalizations of one billion dollars or less, it may own some large
capitalization companies. Investments generally are made using the UMB Scout
Regional Fund.
<PAGE>
UMB SCOUT WORLDWIDE FUND
The objective of this fund is long-term capital growth. The fund offers the
opportunity to diversity by investing in established international companies. At
least 75% of the fund assets will be invested in foreign companies with no more
than 20% invested in any single foreign country. The fund is diversified by
company, industry and country. Investment in the stocks of emerging countries
will be minimal. Investments generally are made using the UMB Scout Worldwide
Fund.
UMB SCOUT CAPITAL PRESERVATION FUND
The objective of this fund is long-term capital growth. The fund will invest in
equity securities of companies whose business is related to the production and
distribution of raw materials. Investments generally are made using the UMB
Scout Capital Preservation Fund.
UMB FINANCIAL CORPORATION FUND
The objective of this fund is long-term capital growth. The fund invests
primarily in Common Stock of the Company. This fund is not diversified as it
invests primarily in the stock of a single corporation.
The Employer Stock Fund will consist of investments in Common Stock made on and
after the completion of the Transfer. After the Transfer, the Employer Stock
Fund Trustee will, to the extent practicable, use all amounts held by it in the
Employer Stock Fund, including cash dividends paid on Common Stock held in the
Employer Stock Fund, to purchase shares of Common Stock of the Company. All
purchases will be made at prevailing market prices. Under certain circumstances,
the Trustee may be required to limit the daily volume of shares purchased.
Pending investment in Common Stock, assets held in the Employer Stock Fund may
be placed in short-term investments.
A Participant's account will be adjusted to reflect changes in the value of
shares of Common Stock resulting from stock dividends, stock splits and similar
changes. Performance will be dependent upon a number of factors, including the
financial condition and profitability of the Company and market conditions for
the Common Stock generally.
INVESTMENT IN THE EMPLOYER STOCK FUND MAY INVOLVE CERTAIN SPECIAL RISKS IN
INVESTMENT IN COMMON STOCK OF THE COMPANY. FOR A DISCUSSION OF THESE RISKS
FACTORS, SEE RISK FACTORS, PAGE 7 HEREOF. NEITHER THE COMPANY NOR THE 401(k)
PLAN GUARANTEE THE PERFORMANCE OF THE EMPLOYER STOCK FUND (OR ANY OTHER 401(k)
PLAN FUNDS) NOR ARE THE AMOUNTS IN THE EMPLOYER STOCK FUND OR ANY OF THE 401(k)
PLAN FUNDS INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION.
<PAGE>
Benefits Under the 401(k) Plan
Vesting. A Participant, at all times, has a fully vested, nonforfeitable
interest in his or her salary deferral account under the 401(k) Plan. A
Participant has a fully vested, nonforfeitable interest in his or her match and
profit-sharing accounts after completion of five years of service with the
Company.
Withdrawals and Distributions From the 401(k) Plan
Applicable federal law requires the 401(k) Plan to impose substantial
restrictions on the right of a 401(k) Plan Participant to withdraw amounts held
for his or her benefit under the 401(k) Plan prior to the Participant's
termination of employment with the Company. A substantial federal tax penalty
may also be imposed on withdrawals made prior to the Participant's attainment of
age 59-1/2, regardless of whether such a withdrawal occurs during his or her
employment with the Company or after termination of employment.
Withdrawals Prior to Termination of Employment. A Participant who has five or
more years of participation may make a withdrawal from his or her salary
deferred contribution accounts after age 59-1/2 for any reason. A Participant
may make a withdrawal from his or her accounts prior to termination of
employment before age 59-1/2 only in the event of financial hardship, subject to
the hardship distribution rules under the 401(k) Plan. These requirements insure
that Participants have a true financial need before a withdrawal may be made.
Distribution Upon Termination of Employment or Death. Distributions are
generally available for the 401(k) Plan in the following forms: lump sum, single
life annuity, joint and survivor annuity, period certain not extending beyond
the life expectancy of the Participant, a period certain not extending beyond
the joint life and last survivor of the Participant and his/her designated
beneficiary, a monthly income payable for the lifetime of the Participant, with
a monthly income thereafter to the Participant's spouse in (i) the same amount,
(ii) three-fourths (3/4), or (iii) two-thirds (2/3) or one-half (') of the
amount paid to the Participant or a monthly income payable for the Participant's
lifetime with sixty (60) monthly payments guaranteed.
See the Summary Plan Description previously provided to you for an explanation
of when you may receive a distribution under the Plan.
Nonalienation of Benefits. Except with respect to income tax withholding and as
provided with respect to a qualified domestic relations order (as defined in the
Code), benefits payable under the 401(k) Plan shall not be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution, or levy of any kind, either voluntary or
involuntary, and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any rights to benefits payable
under the 401(k) Plan shall be void.
<PAGE>
Distribution in Kind
You may receive either Common Stock or the cash equivalent of the fair market
value of the Common Stock credited to your account, with such value to be
determined as of the monthly valuation date preceding distribution. Fractional
shares will be distributed as cash.
Administration of the 401(k) Plan
The Benefits Administrative Committee with respect to the 401(k) Plan is the
named fiduciary of the 401(k) Plan for purposes of Section 402 of ERISA. The
401(k) Plan Trustee is appointed by the Board of Directors of the Company to
serve at its pleasure. UMB Bank, NA is the Trustee of the 401(k) Plan.
The Trustee receives and holds the contributions to the 401(k) Plan in trust and
distributes the account balances to Participants and beneficiaries in accordance
with the terms of the 401(k) Plan and the directions of the 401(k) Plan
Administrator. The Trustee is responsible for investment of the assets of the
Trust.
Reports to 401(k) Plan Participants
The Trustee will furnish to each Participant a statement quarterly showing (i)
the balance in the Participant's accounts as of the end of that period, (ii) the
amount of contributions allocated to such Participant's accounts for that
period, and (iii) the adjustments to such Participant's accounts to reflect
earnings or losses (if any).
401(k) Plan Administrator
Pursuant to the terms of the 401(k) Plan, the 401(k) Plan is administered by the
plan administrator (the "401(k) Plan Administrator"). The Company is the 401(k)
Plan Administrator and has designated James Rawlings as Chairman of the
Administrative Committee for 401(k) Plan to supervise its responsibilities as
such. The address and telephone number of the 401(k) Plan Administrator is 1010
Grand Boulevard, Kansas City, Missouri 64106 (816) 860-7000. The 401(k) Plan
Administrator is responsible for the administration of the 401(k) Plan,
interpretation of the provisions of the 401(k) Plan, prescribing procedures for
filing applications for benefits, preparation and distribution of information
explaining the 401(k) Plan, maintenance of 401(k) Plan records, books of account
and all other data necessary for the proper administration of the 401(k) Plan,
and preparation and filing of all returns and reports relating to the 401(k)
Plan which are required to be filed with the U.S. Department of Labor and the
IRS, and for all disclosures required to be made to Participants, beneficiaries,
and others under Sections 104 and 105 of ERISA.
<PAGE>
Amendment and Termination
The Company may terminate the 401(k) Plan at any time. If the 401(k) Plan is
terminated in whole or in part, then regardless of other provisions in the
401(k) Plan, each employee affected by such termination shall have a fully
vested interest in his or her accounts. The 401(k) Plan can also be modified by
the Board of Directors of the Company at any time, provided that the amendment
does not (i) vest or revest in any Participant any interest in the assets of the
401(k) Plan; (ii) make possible the diversion of any part of the funds of the
401(k) Plan for any purpose; (iii) reduce the amount credited to any
Participant's account; (iv) change the Trustee's rights, duties, or
responsibilities without the Trustee's consent; or (v) have the effect of
reducing or eliminating any protected benefit described in Section 411(d)(6) of
the Code. Written notice of each modification will be given to the
Administrative Committee, the Company and to each Participant.
Merger, Consolidation or Transfer
In the event of the merger or consolidation of the 401(k) Plan with another
plan, or the transfer of the assets to another plan, the 401(k) Plan requires
that each Participant would (if either the 401(k) Plan or the other plan then
terminated) receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he or she would have been
entitled to receive immediately before the merger, consolidation or transfer (if
the 401(k) Plan had then terminated).
Federal Income Tax Consequences
The following is only a brief summary of certain federal income tax aspects of
the 401(k) Plan which are of general application under the Code and is not
intended to be a complete or definitive description of the federal income tax
consequences of participating in or receiving distributions from the 401(k)
Plan. The summary is necessarily general in nature and does not purport to be
complete. Moreover, statutory provisions are subject to change, as are their
interpretations, and their application may vary in individual circumstances.
Finally, the consequences under applicable state and local income tax laws may
not be the same as under the federal income tax laws. Participants are urged to
consult their tax advisors with respect to any distribution from the 401(k) Plan
and transactions involving the 401(k) Plan.
The 401(k) Plan is qualified under Section 401(a) and 401(k) of the Code and the
related Trust is exempt from tax under Section 501(a) of the Code. A plan that
is qualified under these sections of the Code is afforded special tax treatment
which include the following: (1) the Company is allowed an immediate tax
deduction for the amount contributed to the 401(k) Plan each year; (2)
Participants pay no current income tax on amounts contributed by the Company on
their behalf; and (3) Earnings of the 401(k) Plan are tax-exempt thereby
permitting the tax-free accumulation of income and gains on investments. The
401(k) Plan will be administered to comply in operation with the requirements of
the Code as of the applicable effective date of any
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change in the law. The Company expects to timely adopt any amendments to the
401(k) Plan that may be necessary to maintain the qualified status of the 401(k)
Plan under the Code.
Assuming that the 401(k) Plan is administered in accordance with the
requirements of the Code, participation in the 401(k) Plan under existing
federal income tax laws will have the following effects:
(a) Amounts contributed to a Participant's account and the investment earnings
on the account are not includable in a Participant's federal taxable income
until such contributions or earnings are actually distributed or withdrawn from
the 401(k) Plan. Special tax treatment may apply to the taxable portion of any
distribution that includes Common Stock or qualifies as a Lump Sum Distribution
(as described below).
(b) Income earned on assets held by the Trust will not be taxable to the Trust.
Lump Sum Distribution. A distribution from the 401(k) Plan to a Participant or
the beneficiary of a Participant will qualify as a lump sum distribution ("Lump
Sum Distribution") if it is made: (i) within one taxable year of the Participant
or beneficiary; (ii) on account of the Participant's death, disability or
separation from service, or after the Participant attains age 59- '; and (ii)
consists of the balance to the credit of the Participant under this 401(k) Plan
and all other profit sharing plans, if any, maintained by the Company. The
portion of any Lump Sum Distribution that is required to be included in the
Participant's or beneficiary's taxable income for federal income tax purposes
(the "total taxable amount") consists of the entire amount of such Lump Sum
Distribution less the amount of after-tax contributions, if any, made by the
Participant.
Averaging Rules. The portion of the total taxable amount of a Lump Sum
Distribution that is attributable to participation after 1973 in the 401(k) Plan
or in any other profit-sharing plan maintained by the Company (the "ordinary
income portion") will be taxable generally as ordinary income for federal income
tax purposes. However, a Participant who has completed at least five years of
participation in the 401(k) Plan before the taxable year in which the
distribution is made, or a beneficiary who receives a Lump Sum Distribution on
account of the Participant's death (regardless of the period of the
Participant's participation in the 401(k) Plan or any other profit-sharing plan
maintained by the Company), may elect to have the ordinary income portion of
such Lump Sum Distribution taxed according to a special averaging rule
("five-year averaging"). The election of the special averaging rules may apply
only to one Lump Sum Distribution received by the Participant or beneficiary,
provided such amount is received on or after the Participant turns 59-1/2 and
the recipient elects to have any other Lump Sum Distribution from a qualified
plan received in the same taxable year taxed under the special averaging rule.
Under a special grandfather rule, individuals born before January 1, 1936, may
elect to have their Lump Sum Distribution taxed under either the five-year
averaging rule or under the prior law ten-year averaging rule. The ability to
utilize five-year averaging ends in 1999.
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Common Stock Included in Lump Sum Distribution. If a Lump Sum Distribution
includes Common Stock, the distribution generally will be taxed in the manner
described above, except that the total taxable amount will be reduced by the
amount of any net unrealized appreciation with respect to such Common Stock,
i.e., the excess of the value of such Common Stock at the time of the
distribution over its cost to the 401(k) Plan. The tax basis of such Common
Stock to the Participant or beneficiary for purposes of computing gain or loss
on its subsequent sale will be the value of the Common Stock at the time of
distribution less the amount of net unrealized appreciation. Any gain on a
subsequent sale or other taxable disposition of such Common Stock, to the extent
of the amount of net unrealized appreciation at the time of distribution, will
be considered long-term capital gain regardless of the holding period of such
Common Stock. Any gain on a subsequent or other taxable disposition of the
Common Stock in excess of the amount of net unrealized appreciation at the time
of distribution will be considered either short-term capital gain or long-term
capital gain depending upon the length of the holding period of the Common
Stock. The recipient of a distribution may elect to include the amount of any
net unrealized appreciation in the total taxable amount of such distribution to
the extent allowed by the regulations to be issued by the IRS.
Contribution to Another Qualified Plan or to an IRA. A Participant may defer
federal income taxation of all or any portion of the total taxable amount of a
Lump Sum Distribution (including the proceeds from the sale of any Common Stock
included in the Lump Sum Distribution) to the extent that such amount, or a
portion thereof, is contributed, within 60 days after the date of its receipt by
the Participant, to another qualified plan or to an individual retirement
account ("IRA"). If less than the total taxable amount of a Lump Sum
Distribution is contributed to another qualified plan or to an IRA within the
applicable 60-day period, the amount not so contributed must be included in the
Participant's income for federal income tax purposes and will not be eligible
for the special averaging rules or for capital gains treatment. Additionally, a
Participant may defer the federal income taxation of any portion of an amount
distributed from the 401(k) Plan on account of the Participant's disability or
separation from service, generally, if the amount is distributed within one
taxable year of the Participant, and such amount is contributed, within 60 days
after the date of its receipt by the Participant, to an IRA.
Participants have the right to elect to have the Trustee transfer all or any
portion of an "eligible rollover distribution" directly to another plan
qualified under Section 401(a) of the Code or to an IRA. If the Participant does
not elect to have an "eligible rollover distribution" transferred directly to
another qualified plan or to an IRA, the distribution will be subject to a
mandatory federal withholding tax equal to 20% of the taxable distribution. An
"eligible rollover distribution" means any amount distributed from the 401(k)
Plan except: (1) a distribution that is (a) one of a series of substantially
equal periodic payments made (not less frequently than annually ) over the
Participant's life or the joint life of the Participant and the Participant's
designated beneficiary, or (b) for a specified period of ten years or more; (2)
any amount that is required to be distributed under the minimum distribution
rules; and (3) any other distributions excepted under applicable federal law.
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The beneficiary of a Participant who is the Participant's surviving spouse also
may defer federal income taxation of all or any portion of a distribution from
the 401(k) Plan to the extent that such amount, or a portion thereof, is
contributed within 60 days after the date of its receipt by the surviving
spouse, to an IRA. If all or any portion of the total taxable amount of a Lump
Sum Distribution is contributed by the surviving spouse of a Participant to an
IRA within the applicable 60-day period, any subsequent distribution from the
IRA will not be eligible for the special averaging rules or for capital gains
treatment. Any amount received by the Participant's surviving spouse that is not
contributed to another qualified plan or to an IRA within the applicable 60-day
period, and any amount received by a nonspouse beneficiary will be included in
such beneficiary's income for federal tax purposes in the year in which it is
received.
Additional Tax on Early Distributions. A Participant who receives a distribution
from the 401(k) Plan prior to attaining age 59' will be subject to an additional
income tax equal to 10% of the taxable amount of the distribution. The 10%
additional income tax will not apply, however, to the extent the distribution is
rolled over into an IRA or another qualified plan or the distribution is (i)
made to a beneficiary (or to the estate or a Participant) on or after the death
of the Participant, (ii) attributable to the Participant's being disabled within
the meaning of Section 72(m)(7) of the Code, (iii) part of a series of
substantially equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the Participant or the joint lives (or
joint life expectancies) of the Participant and his beneficiary, (iv) made to
the Participant after separation from service on account of early retirement
under the 401(k) Plan after attainment of age 55, (v) made to pay medical
expenses to the extent deductible for federal income tax purposes, (vi) payments
made to an alternate payee pursuant to a qualified domestic relations order, or
(vii) made to effect the distribution of excess contributions or excess
deferrals.
ERISA and Other Qualifications
As noted above, the 401(k) Plan is subject to certain provisions of the ERISA
and has received a favorable determination
that it is qualified under Section 401(a) of the Code.
The foregoing is only a brief summary of certain federal income tax aspects of
the 401(k) Plan which are of general application under the Code and is not
intended to be a complete or definitive description of the federal income tax
consequences of participating in or receiving distributions from the 401(k)
Plan. Accordingly, each Participant is urged to consult a tax advisor concerning
the federal, state and local tax consequences of participating in and receiving
distributions from the 401(k) Plan.
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SEC Reporting and Short-Swing Profit Liability
Section 16 of the 1934 Act imposes reporting and liability requirements on
officers, directors, and persons beneficially owning more than 10% of the equity
securities (such as the Common Stock) of public companies. Section 16(a) of the
1934 Act requires the filing of reports of beneficial ownership. Within 10 days
of becoming a person subject to the reporting requirements of Section 16(a), a
Form 3 reporting initial beneficial ownership must be filed with the Securities
and Exchange Commission ("SEC"). Certain changes in beneficial ownership, such
as purchases, sales and gifts must be reported periodically, either on a Form 4
within 10 days after the end of the month in which a change occurs, or annually
on a Form 5 within 45 days after the close of the Company's fiscal year. Certain
discretionary transactions in and beneficial ownership of the Common Stock
through the Employer Stock Fund of the 401(k) Plan by officers, directors and
persons beneficially owning more than 10% of the Common Stock must be reported
to the SEC by such individuals.
In addition to the reporting requirements described above, Section 16(b) of the
1934 Act provides for the recovery by the Company of profits realized by an
officer, director or any person beneficially owning more than 10% of the Common
Stock ("Section 16(b) Persons") resulting from non-exempt purchases and sales of
the Common Stock within any six-month period.
The SEC has adopted rules that provide exemption from the profit recovery
provisions of Section 16(b) for Participant-directed employer security
transactions within an employee benefit plan, such as the 401(k) Plan, provided
certain requirements are met. These requirements generally involve restrictions
upon the timing of elections to acquire or dispose of employer securities for
the accounts of Section 16(b) persons.
Except for distributions of Common Stock due to death, disability, retirement,
termination of employment or under a qualified domestic relations order, under
the 401(k) Plan, Section 16(b) Persons are required to hold shares of Common
Stock distributed from the 401(k) Plan for six months following such
distribution and are prohibited from directing additional purchases of units
within the Employer Stock Fund for six months after receiving such a
distribution.
Financial Information Regarding 401(k) Plan Assets
Financial statements representing the net assets available for 401(k) Plan
benefits at December 31, 1997 are attached to this Prospectus Supplement.
Additional Information
If you have questions or need additional copies of Prospectus documents, please
contact the Company's Human Resource Department in Kansas City, Missouri.
