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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ---------------------- TO ----------------------.
COMMISSION FILE NUMBER 001-12405
--------------------------
MAGNA GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 37-0996453
(STATE OR OTHER JURISDICTION OF INCORPORATION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OR ORGANIZATION)
ONE MAGNA PLACE
1401 SOUTH BRENTWOOD BOULEVARD
ST. LOUIS, MISSOURI 63144-1401
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (314) 963-2500
--------------------------
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<S> <C>
SECURITIES REGISTERED PURSUANT TO
SECTION 12(b) OF THE ACT: NAME OF EACH EXCHANGE ON WHICH REGISTERED:
COMMON STOCK, $2.00 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
7% CONVERTIBLE SUBORDINATED CAPITAL NOTES DUE 1999
--------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of March 12, 1998:
Common Stock, $2.00 par value: $1,795,634,486.
There is no established public trading market for the Registrant's Class B
Voting Preferred Stock, which entitles the holder to one vote per share and of
which non-affiliates hold all 1,981 outstanding shares.
The number of shares outstanding of Registrant's Common Stock, as of
March 12, 1998, was:
Common Stock, $2.00 par value: 32,770,144 shares outstanding.
--------------------------
DOCUMENTS INCORPORATED BY REFERENCE
As provided herein, portions of the documents below are incorporated herein
by reference:
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DOCUMENT PART-FORM 10-K
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NONE
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
Set forth below is certain biographical information furnished to Magna
Group, Inc. ("Magna" or "Registrant") by its directors including James A.
Auffenberg, Jr., C.E. Heiligenstein, Carl G. Hogan, Sr., Ralph F. Korte,
William A. Peck and Frank R. Trulaske, the director nominees for Magna's Class
I directorships of Magna's Board of Directors ("Magna Board") to be elected at
Magna's 1998 Annual Meeting of Stockholders with a term expiring at the earlier
of Magna's 2001 Annual Meeting of Stockholders or upon the effective time (the
"Effective Time") of the acquisition of Magna by Union Planters Corporation
("Union Planters") by way of the merger of Magna with and into a wholly-owned
subsidiary of Union Planters. Messrs. Auffenberg, Heiligenstein, Hogan, Korte,
Peck and Trulaske currently serve as directors of Magna.
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MAGNA
DIRECTOR
NAME, AGE, PRINCIPAL OCCUPATION OR POSITION SINCE
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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>
2
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EXECUTIVE OFFICERS
The following list sets forth, as of April 24, 1998, the names, ages and
positions held by the executive officers of Magna. There is no family
relationship between any of the named individuals.
<TABLE>
<CAPTION>
NAME AGE ALL POSITIONS HELD WITH REGISTRANT
---- --- ----------------------------------
<S> <C> <C>
G. Thomas Andes 55 Chairman of the Board and Chief Executive Officer of Magna since December 1994. President
and Chief Operating Officer of Magna since 1991. Prior thereto, Mr. Andes served as Vice
Chairman of the Board of Magna from 1982 to 1991.
Ronald A. Buerges 36 Senior Executive Vice President of Magna since November 1997. Prior thereto, Mr. Buerges
served as Executive Vice President and Chief Financial Officer of Magna from April 1996 to
November 1997, Acting Chief Financial Officer of Magna from November 1995 to April 1996
and as Senior Vice President, Corporate Finance of Magna from 1993 to 1995. Prior to his
employment by Magna, Mr. Buerges had been a Senior Manager with the accounting firm of
Ernst & Young (now known as Ernst & Young LLP). Mr. Buerges was employed by Ernst & Young
from 1983 to 1993.
Linda K. Fabel 54 Executive Vice President, Retail Banking of Magna since April 1994. Prior thereto, Ms.
Fabel served as Executive Vice President, Management Information Systems of Magna from
1991 to April 1994. Prior to her employment by Magna, Ms. Fabel served in a variety of
senior capacities with IBM Corporation, including General Manager of IBM's St. Louis
trading area during 1991 and Regional Manager from 1990 to 1991.
Gary D. Hemmer 44 Executive Vice President, Financial Markets of Magna since November 1997. Prior thereto,
Mr. Hemmer served as Executive Vice President, Administration of Magna from April 1994 to
November 1997, Executive Vice President, Retail Banking and Administration of Magna from
1991 to April 1994 and as Vice President, Administration of Magna from 1986 to 1991.
Robert S. Kahler 46 Executive Vice President and Chief Financial Officer of Magna since November 1997. Prior
thereto, Mr. Kahler served as Executive Vice President, Financial Markets of Magna from
March 1997 to November 1997. Prior to his employment by Magna, Mr. Kahler served as
Executive Vice President and Chief Financial Officer of Homeland.
Bradford W. Koeneman 40 Executive Vice President, Investor Relations/Marketing of Magna since November 1997. Prior
to his employment by Magna, Mr. Koeneman served in both the equities and fixed income
divisions of Goldman, Sachs & Co., beginning in 1987 and was named Vice President in 1991.
Robert J. Mathias 45 Executive Vice President, Credit Administration of Magna since February 1997. Prior
thereto, Mr. Mathias served in a variety of senior capacities with The Boatmen's National
Bank of St. Louis; most recently as its Executive Vice President and Division Manager of
Corporate Banking.
Robert M. Olson, Jr. 42 Executive Vice President, Operations and Technology of Magna since May 1994. Prior
thereto, Mr. Olson had been a managing director of J. D. Carreker and Associates, Inc., a
management consulting and technology firm, from 1991 to May 1994. Before joining J. D.
Carreker and Associates, Inc. in 1991, Mr. Olson was with Security Pacific, where he held
senior positions with the cash management department of the bank, as well as with the
holding company's automation company.
</TABLE>
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 $2.00 par value
(the "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.
3
<PAGE> 4
ITEM 11. EXECUTIVE COMPENSATION
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.
4
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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.
5
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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>
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(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
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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
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<PAGE> 8
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 Internal Revenue Code of 1986, as amended (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.
8
<PAGE> 9
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
Compensation Committee of the Magna Board (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 $64.125 for 20 consecutive trading
days. Shares of restricted stock subject to the awards will be issued if
such price is reached before the earliest to occur of (i) the
9
<PAGE> 10
date on which the executive's employment with Magna ends, (ii) the date on
which there occurs a Change in Control (as described under "-- Change in
Control and Termination Arrangements") or (iii) December 17, 2001. Shares of
restricted stock issued under the award, if any, will be forfeited if
employment terminates prior to or on the fifth anniversary of the date of
issuance of such shares, other than by reason of retirement, disability or
death, unless a Change in Control has occurred. Such shares will not be
forfeited if a Change in Control has occurred.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values. The following table sets forth information concerning the aggregate
dollar value realized upon exercise of options during 1997, the number of
securities underlying options outstanding at year-end 1997 and the value of
options outstanding at year-end 1997 having an exercise price lower than the
market price of Magna Common Stock ("in-the-money" options), held by the
individuals named in the Summary Compensation Table. As of December 31, 1997, no
SARs were outstanding.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
ON VALUE YEAR-END (#) FISCAL YEAR-END ($)
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
10
<PAGE> 11
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.
11
<PAGE> 12
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
On March 12, 1998, there were 32,770,144 shares of Common Stock and 1,981
shares of Class B Voting Preferred Stock, $20 par value, (the "Class B
Preferred Stock") outstanding. The Common Stock and Class B Preferred Stock
vote as a single class on each matter submitted to the stockholders and each
share is entitled to one vote on such matter. Other than as described below
under "Changes in Control," no person beneficially owned more than 5% of the
shares of Common Stock outstanding on March 12, 1998 (which class of
securities represents approximately 99.9% of Magna's total outstanding Voting
Stock). Of the shares of Class B Preferred Stock outstanding on such date,
there were five stockholders who each owned more than 5% (99 shares or more)
of such securities.
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<F1><F2>
------------------------ -------------------
<S> <C>
G. Thomas Andes<F3>......................................... 360,210
James A. Auffenberg, Jr.<F4>................................ 10,672
Ronald A. Buerges<F5>....................................... 59,276
Wayne T. Ewing<F6>.......................................... 23,372
Linda K. Fabel<F7>.......................................... 77,261
Donald P. Gallop<F8>........................................ 34,389
Randall E. Ganim<F9>........................................ 33,393
C. E. Heiligenstein<F10>.................................... 249,972
John G. Helmkamp, Jr.<F11>.................................. 304,824
Carl G. Hogan, Sr.<F12>..................................... 40,681
Franklin A. Jacobs<F13>..................................... 147,758
S. Lee Kling<F14>........................................... 251,021
Ralph F. Korte<F15>......................................... 61,091
Roger J. Lowery............................................. 821
Robert J. Mathias<F16>...................................... 20,919
Robert M. Olson, Jr.<F17>................................... 58,653
William A. Peck<F18>........................................ 500
Erl A. Schmiesing<F19>...................................... 36,703
Douglas K. Shull<F20>....................................... 5,053
Frank R. Trulaske<F21>...................................... 40,227
George T. Wilkins, Jr.<F22>................................. 182,007
All current directors and executive officers as a group (24
persons)<F23>............................................. 2,114,115
- -----------------
<F1> Except as otherwise noted, each director or executive officer has sole
voting and investment power over the shares listed beside his or her name.
<F2> No director or executive officer beneficially owned more than one percent
of the total outstanding shares of Magna Common Stock on such date.
<F3> Includes 3,375 shares that Mr. Andes owns jointly with his spouse, 724
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 40,000
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.
<F4> 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 2,507 shares
subject to options exercisable currently or within 60 days after March 12,
1998.
<F5> Includes 24,050 shares subject to options exercisable currently or within
60 days after March 12, 1998 and 16,000 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.
12
<PAGE> 13
<F6> Includes 1,051 shares that are owned by Mr. Ewing's spouse, as to which
shares Mr. Ewing has shared voting and investment power, and 6,605 shares
subject to options exercisable currently or within 60 days after March 12,
1998.
<F7> 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.
<F8> 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 6,605 shares subject to options exercisable
currently or within 60 days after March 12, 1998.
<F9> 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 1,266 shares
subject to options exercisable currently or within 60 days after March 12,
1998.
<F10> Includes 4,691 shares owned by Mr. Heiligenstein's spouse, as to which
shares Mr. Heiligenstein has shared voting and investment power, and 2,507
shares subject to options exercisable currently or within 60 days after
March 12, 1998.
<F11> 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 2,873 shares
subject to options exercisable currently or within 60 days after March
12, 1998.
<F12> Includes 2,507 shares subject to options exercisable currently or within 60
days after March 12, 1998.
<F13> Includes 4,741 shares subject to options exercisable currently or within 60
days after March 12, 1998.
<F14> Includes 107 shares that are owned as custodian by Mr. Kling's spouse, as
to which shares Mr. Kling disclaims beneficial ownership. Also includes
9,136 shares subject to options exercisable currently or within 60 days
after March 12, 1998.
<F15> Includes 6,272 shares subject to options exercisable currently or within 60
days after March 12, 1998.
<F16> Includes 10,825 shares subject to options exercisable currently or within
60 days after March 12, 1998 and 8,000 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.
<F17> Includes 38,085 shares subject to options exercisable currently or within
60 days after March 12, 1998 and 4,000 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.
<F18> These shares are owned by Dr. Peck jointly with his spouse, as to which
shares Dr. Peck has shared voting and investment power.
<F19> Includes 1,266 shares subject to options exercisable currently or within 60
days after March 12, 1998.
<F20> Includes 1,266 shares subject to options exercisable currently or within 60
days after March 12, 1998.
<F21> 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 3,679 shares subject to options exercisable currently or within 60 days
after March 12, 1998.
<F22> 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 6,272
shares subject to options exercisable currently or within 60 days after
March 12,1998.
<F23> This amount represents 6% of the outstanding shares of Magna Common Stock
on March 12, 1998. This amount includes 386,896 shares subject to options
exercisable currently or within 60 days after March 12, 1998, and 84,000
shares of restricted stock issuable if certain target prices for Magna
Common Stock are attained within 60 days after March 12, 1998.
</TABLE>
13
<PAGE> 14
CHANGES IN CONTROL
Magna, a corporation organized and existing under the laws of the State of
Delaware, and Union Planters, a corporation organized and existing under the
laws of the State of Tennessee, each registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended, entered into an Agreement
and Plan of Reorganization on February 22, 1998 (the "Merger Agreement"),
pursuant to which Magna will be merged with and into Union Planters Holdings
Corporation, a wholly-owned subsidiary of Union Planters organized under the
laws of the State of Tennessee (the "Merger"). The Board of Directors of Magna
and the Board of Directors of Union Planters approved the Merger at their
meetings held on February 22, 1998 and February 19, 1998, respectively.
In accordance with the terms of the Merger Agreement, (i) each share of
Magna Common Stock, and the associated preferred share purchase rights under
Magna's Rights Agreement, dated November 11, 1998, between Magna and Magna
Bank, N.A., as Rights Agent (together, the "Magna Common Stock"), outstanding
immediately prior to the Effective Time will be converted into the right to
received 0.9686 of a share of Union Planters common stock, par value $5.00 per
share, and the associated preferred share purchase rights under Union Planters'
Rights Agreement, dated January 19, 1989, between Union Planters and Union
Planters National Bank, as Rights Agent (together, the "Union Planters Common
Stock"), and (ii) each share of Magna Class B Preferred Stock outstanding
immediately prior to the Effective Time will be converted into the right to
receive a check from Union Planters in the amount of par plus any accrued but
unpaid dividends.
In addition, at the Effective Time, all rights with respect to Magna
Common Stock pursuant to stock options outstanding at the Effective Time,
whether or not then exercisable, shall be converted into and shall become
rights with respect to Union Planters Common Stock.
The Merger is intended to constitute a tax-free reorganization under the
Code and to be accounted for as a pooling of interests.
Consummation of the Merger is subject to various conditions, including:
(i) approval of the Merger Agreement and the Merger by the shareholders of each
of the parties thereto; (ii) receipt of requisite regulatory approvals from the
Board of Governors of the Federal Reserve System and other federal and state
regulatory authorities as necessary; (iii) receipt by each of Magna and Union
Planters of an opinion of counsel in reasonably satisfactory form as to the tax
treatment of certain aspects of the Merger; (iv) the registration pursuant to
the Securities Act of 1933, as amended (the "Act"), of the shares of Union
Planters Common Stock to be issued in the Merger; (v) receipt by each of Magna
and Union Planters of a letter from each of KPMG Peat Marwick LLP, Union
Planters' independent public accountants, and Ernst & Young LLP, Magna's
independent public accountants, to the effect that the Merger will qualify the
pooling-of-interests accounting treatment; (vi) receipt by Union Planters of
letters from affiliates of Magna related to the sale of Union Planters Common
Stock and (vii) satisfaction of certain other conditions.
Also in connection with the Merger Agreement, Magna and Union Planters
entered into a Stock Option Agreement, dated February 22, 1998 (the "Stock
Option Agreement"), pursuant to which Magna granted to Union Planters an
irrevocable option to purchase, under certain circumstances, up to 6,497,180
authorized and unissued shares of Magna Common Stock at a price, subject to
certain adjustments, equal to the first closing price per share of Magna Common
Stock following public announcement of the execution of the Merger Agreement
as reported on the NYSE-Composite Transactions List (the "Union Planters
Option"). The Union Planters Option, if exercised, would equal, before giving
effect to the exercise of the Union Planters Option, 19.9% of the total number
of shares of Magna Common Stock outstanding. The Union Planters Option was
granted by Magna as a condition and inducement to Union Planters' willingness
to enter into Merger Agreement. Under certain circumstances, Magna may be
required to repurchase the Union Planters Option or the shares acquired pursuant
to the exercise of the Union Planters Option.
14
<PAGE> 15
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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
supplemental retirement payments of $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.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MAGNA GROUP, INC.
Date: April 24, 1998
By /s/ Robert S. Kahler
----------------------------
Robert S. Kahler
Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
<F*> Chairman of the Board, Chief Executive April 24, 1998
- ------------------------------------------ Officer and Director (Principal Executive
G. Thomas Andes Officer)
/s/ Robert S. Kahler Executive Vice President and Chief Financial April 24, 1998
- ------------------------------------------ Officer (Principal Financial and Accounting
Robert S. Kahler Officer)
Director
- ------------------------------------------
James A. Auffenberg, Jr.
Director
- ------------------------------------------
Wayne T. Ewing
<F*> Director April 24, 1998
- ------------------------------------------
Donald P. Gallop
<F*> Director April 24, 1998
- ------------------------------------------
Randall E. Ganim
16
<PAGE> 17
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
<F*> Director April 24, 1998
- ------------------------------------------
C.E. Heiligenstein
Director
- ------------------------------------------
John G. Helmkamp, Jr.
<F*> Director April 24, 1998
- ------------------------------------------
Carl G. Hogan, Sr.
Director
- ------------------------------------------
Franklin A. Jacobs
<F*> Director April 24, 1998
- ------------------------------------------
S. Lee Kling
Director
- ------------------------------------------
Ralph F. Korte
<F*> Director April 24, 1998
- ------------------------------------------
Roger J. Lowery
<F*> Director April 24, 1998
- ------------------------------------------
William A. Peck
<F*> Director April 24, 1998
- ------------------------------------------
Erl A. Schmiesing
<F*> Director April 24, 1998
- ------------------------------------------
Douglas K. Shull
Director
- ------------------------------------------
Frank R. Trulaske
<F*> Director April 24, 1998
- ------------------------------------------
George T. Wilkins, Jr.
<FN>
<F*>By /s/ Robert S. Kahler
----------------------------
Robert S. Kahler
Robert S. Kahler, by signing his name hereto, does sign this document on behalf
of the persons named above, pursuant to a power of attorney duly executed by
such persons and previously filed.
</TABLE>
17
<PAGE> 18
<TABLE>
EXHIBIT INDEX
<C> <S>
2.1 Agreement and Plan of Reorganization, dated as of February 22, 1998, by and
between Magna and Union Planters (filed as Exhibit 2.1 to Magna's Current Report
on Form 8-K, dated February 27, 1998 (File No. 001-12405) and incorporated herein
by reference)
2.2 Form of Affiliate Agreement, dated as of February 22, 1998, by and between Union
Planters and the affiliates of Magna (filed as Exhibit 2.2 to Magna's Current
Report on Form 8-K, dated February 27, 1998 (File No. 001-12405) and
incorporated herein by reference)
2.3 Stock Option Agreement, dated as of February 22, 1998, by and between Magna and
Union Planters (filed as Exhibit 2.3 to Magna's Current Report on Form 8-K,
dated February 27, 1998 (File No. 001-12405) and incorporated herein by
reference)
3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1 to Magna's Quarterly
Report on Form 10-Q for the period ended June 30, 1997 (File No. 001-12405) and
incorporated herein by reference)
3.2 By-laws, as amended (filed as Exhibit 3.2 to Magna's Quarterly Report on Form
10-Q for the period ended June 30, 1997 (File No. 001-12405) and incorporated
herein by reference)
4.1 Form of Indenture, including form of Note, between Magna and Mark Twain Bank, as
trustee, dated August 1, 1987 for the 7% Convertible Subordinated Capital Notes
due 1999 (filed as Exhibit 1 to Magna's Registration Statement on Form 8-A dated
June 15, 1988 (File No. 001-12405) and incorporated herein by reference)
4.2 Indenture dated as of November 1, 1986 between Landmark and Centerre Trust Company of
St. Louis, regarding the issuance of $17,250,000 principal amount of Landmark's 8-3/4%
Convertible Subordinated Debentures due November 1, 1998 (filed as Exhibit 4(c) to
Landmark's Annual Report on Form 10-K for the year ended December 31, 1986 (File
No. 1-8810) and incorporated herein by reference)
4.3 First Supplemental Indenture dated December 20, 1991 among Magna, Magna Acquisi-
tion Corporation and Boatmen's National Bank of St. Louis as successor to
Centerre Trust Company of St. Louis, Trustee, assuming the obligations of
Landmark under the Indenture dated November 1, 1986 (filed as Exhibit 4.2 to
Magna's Current Report on Form 8-K dated December 20, 1991 (File No. 001-12405)
and incorporated herein by reference)
4.4 Rights Agreement, including form of Right Certificate, dated as of November 11,
1988 between Magna and Magna Trust Company, Trustee (filed as Exhibits 1 and 2
to Magna's Registration Statement on Form 8-A dated November 11, 1988 (File No.
001-12405) and incorporated herein by reference)
4.5 Amendment to Rights Agreement (filed as Exhibit 2.1 to Magna's Form 8-A/A Amend-
ment to Registration Statement on Form 8-A (File No. 001-12405) and incorporated
herein by reference)
10.1 Agreement and Plan of Reorganization, dated as of August 30, 1996, by and
between Magna and Homeland (filed as Exhibit 2 to Magna's Current Report on Form
8-K (File No. 001-12405) dated August 30, 1996 and incorporated herein by
reference)
10.2 Stock Option Agreement, dated August 30, 1996, between Magna and Homeland (filed
as Exhibit 99.1 to Magna's Current Report on Form 8-K (File No. 001-12405) dated
August 30, 1996 and incorporated herein by reference)
10.3 Amendment to Agreement and Plan of Reorganization, dated as of November 19,
1996, by and between Magna and Homeland (filed as Exhibit 2.3 to Magna's
Registration Statement on Form S-4 (Reg. No. 333-17797) and incorporated herein
by reference)
18
<PAGE> 19
EXHIBIT INDEX--(CONTINUED)
10.4 Form of Stock Option Agreement under Landmark's 1982 Capital Accumulation Plan,
assumed by Magna as to outstanding obligations pursuant to the acquisition of
Landmark (filed as Exhibit 10.1 to Magna's Annual Report on Form 10-K for the
year ended December 31, 1991 (File No. 001-12405) and incorporated herein by
reference)<F1>
10.5 Form of Stock Option Agreement under Landmark's 1986 Non-Qualified Stock Option
Plan, assumed by Magna as to outstanding obligations pursuant to the acquisition
of Landmark (filed as Exhibit 10.2 to Magna's Annual Report on Form 10-K for the
year ended December 31, 1991 (File No. 001-12405) and incorporated herein by
reference)<F1>
10.6 1987 Stock Option Plan of Magna (filed as Exhibit 10.2 to Magna's Registration
Statement on Form S-4 (Reg. No. 33-15463) and incorporated herein by refer-
ence)<F1>
10.7 Landmark's Amended and Restated Supplemental Retirement Plan (filed as Exhibit
10(ff) to Landmark's Annual Report on Form 10-K for the year ended December 31,
1989 (File No. 1-8810) and incorporated herein by reference)<F1>
10.8 Amended and Restated Employment Agreement between Magna and G. Thomas Andes
effective January 1, 1995 and amended and restated June 6, 1996 and as of May
27, 1997 (filed as Exhibit 10.1 to Magna's Quarterly Report on Form 10-Q for the
period ended June 30, 1997 (File No. 001-12405) and incorporated herein by
reference)<F1>
10.9 Agreement effective March 1, 1997 between Magna and Linda K. Fabel (filed as
Exhibit 10.9 to Magna's Annual Report on Form 10-K for the year ended December
31, 1996 (File No. 001-12405) and incorporated herein by reference)<F1>
10.10 Agreement effective March 1, 1997 between Magna and Robert J. Mathias (filed as
Exhibit 10.10 to Magna's Annual Report on Form 10-K for the year ended December
31, 1996 (File No. 001-12405) and incorporated herein by reference)<F1>
10.11 Agreement effective March 1, 1997 between Magna and Gary D. Hemmer (filed as
Exhibit 10.11 to Magna's Annual Report on Form 10-K for the year ended December
31, 1996 (File No. 001-12405) and incorporated herein by reference)<F1>
10.12 Agreement dated January 8, 1998 between Magna and Ronald A. Buerges<F1><F2>
10.13 Agreement effective March 1, 1997 between Magna and Robert M. Olson, Jr. (filed
as Exhibit 10.13 to Magna's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. 001-12405) and incorporated herein by reference)<F1>
10.14 Agreement dated October 20, 1997, between Magna and Robert S. Kahler (filed as
Exhibit 10.2 to Magna's Quarterly Report on Form 10-Q for the period ended
September 30, 1997 (File No. 001-12405) and incorporated herein by
reference)<F1>
10.15 Agreement dated October 17, 1997, between Magna and Bradford W. Koeneman (filed
as Exhibit 10.3 to Magna's Quarterly Report on Form 10-Q for the period ended
September 30, 1997 (File No. 001-12405) and incorporated herein by
reference)<F1>
10.16 Supplemental Senior Executive Retirement Plan of Magna dated May 27, 1997 (filed
as Exhibit 10.2 to Magna's Quarterly Report on Form 10-Q for the period ended
June 30, 1997 (File No. 001-12405) and incorporated herein by reference)<F1>
10.17 Supplemental Executive Retirement Plan of Magna dated October 1997 (filed as Ex-
hibit 10.1 to Magna's Quarterly Report on Form 10-Q for the period ended
September 30, 1997 (File No. 001-12405) and incorporated herein by
reference)<F1>
10.18 Second Amendment to Second Restated Employment Agreement between Magna and S.
Lee Kling (filed as Exhibit 10.24 to Magna's Quarterly Report on Form 10-Q for
the period ended June 30, 1994 (File No. 001-12405) and incorporated herein by
reference)<F1>
10.19 Second Restated Employment Agreement dated as of October 20, 1990, as amended by
Letter Agreement dated August 29, 1991, between Landmark and S. Lee Kling (filed
as Exhibit 10.9 to Magna's Annual Report on Form 10-K for the year ended
December 31, 1991 (File No. 001-12405) and incorporated herein by reference)<F1>
19
<PAGE> 20
EXHIBIT INDEX--(CONTINUED)
10.20 Directors' Survivor Benefit Plan (filed as Exhibit 10.11 to Magna's Annual
Report on Form 10-K for the year ended December 31, 1991 (File No. 001-12405)
and incorporated herein by reference)<F1>
10.21 Directors' Deferred Compensation Plan (filed as Exhibit 10.12 to Magna's Annual
Report on Form 10-K for the year ended December 31, 1991 (File No. 001-12405)
and incorporated herein by reference)<F1>
10.22 Board of Directors Retirement Plan of Magna (filed as Exhibit 10.16 to Magna's
Annual Report on Form 10-K for the year ended December 31, 1994 (File No.
001-12405) and incorporated herein by reference)<F1>
10.23 Magna Directors' Deferred Plan (filed as Exhibit 10.1 to Magna's Quarterly
Report on Form 10-Q for the period ended September 30, 1996 (File No. 001-12405)
and incorporated herein by reference)<F1>
10.24 Magna Directors' Deferred Compensation Plan (filed as Exhibit 10.2 to Magna's
Quarterly Report on Form 10-Q for the period ended September 30, 1996 (File No.
001-12405) and incorporated herein by reference)<F1>
10.25 First Amendment to Magna Board of Directors Retirement Plan (filed as Exhibit
10.3 to Magna's Quarterly Report on Form 10-Q for the period ended September 30,
1996 (File No. 001-12405) and incorporated herein by reference)<F1>
10.26 Executive Supplemental Deferral Plan (filed as Exhibit 10.12 to Magna's Annual
Report on Form 10-K for the year ended December 31, 1987 (File No. 001-12405)
and incorporated herein by reference)<F1>
10.27 Form of Director Indemnification Agreement dated as of May 30, 1991 between
Landmark and Donald P. Gallop, Carl G. Hogan, Sr., Franklin A. Jacobs and Ralph
F. Korte, respectively, and Consent dated May 24, 1991 of Magna to Director
Indemnification Agreements dated May 30, 1991 assuming Landmark's obligations
thereunder upon effectiveness of the acquisition (filed as Exhibit 10.14 to
Magna's Annual Report on Form 10-K for the year ended December 31, 1991 (File
No. 001-12405) and incorporated herein by reference)<F1>
10.28 Magna Amended and Restated Directors' Stock Option Plan (filed as Exhibit 10.33
to Magna's Registration Statement on Form S-4 (Reg. No. 333-17797) and
incorporated herein by reference)<F1>
10.29 Magna Amended and Restated 1996 Directors' Stock Option Plan (filed as Exhibit
10.34 to Magna's Registration Statement on Form S-4 (Reg. No. 333-17797) and
incorporated herein by reference)<F1>
10.30 Magna Amended and Restated 1992 Long Term Performance Plan (filed as Exhibit
10.35 to Magna's Registration Statement on Form S-4 (Reg. No. 333-17797) and
incorporated herein by reference)<F1>
10.31 Magna Amended and Restated 1996 Long Term Performance Plan (filed as Exhibit
10.36 to Magna's Registration Statement on Form S-4 (Reg. No. 333-17797) and
incorporated herein by reference)<F1>
10.32 Amendment to Supplemental Executive Retirement Plan of Magna (filed as Exhibit
10.25 to Magna's Quarterly Report on Form 10-Q for the period ended June 30,
1994 (File No. 001-12405) and incorporated herein by reference)<F1>
10.33 Supplemental Executive Retirement Plan of Magna (filed as Exhibit 10.15 to
Magna's Annual Report on Form 10-K for the year ended December 31, 1993 (File
No. 001-12405) and incorporated herein by reference)<F1>
10.34 Magna Executive Incentive Compensation Plan (MEICP) 1998<F1><F2>
20
<PAGE> 21
EXHIBIT INDEX--(CONTINUED)
10.35 Amended and Restated Retirement and Consulting Agreement dated December 30, 1994
between Magna and William S. Badgley (filed as Exhibit 10.24 to Magna's Annual
Report on Form 10-K for the year ended December 31, 1994 (File No. 001-12405)
and incorporated herein by reference)
10.36 Lease between Magna as successor in interest to Landmark, and St. Louis
Brentwood Associates, L.P., dated December 19, 1986, relating to Magna Place, as
amended by the First Amendment dated November 17, 1987, the Addendum dated
February 1, 1990 and the Letter Agreement dated January 9, 1992 (filed as
Exhibit 10.17 to Magna's Annual Report on Form 10-K for the year ended December
31, 1991 (File No. 001-12405) and incorporated herein by reference)
10.37 Amendment to Lease Agreement between Magna, as successor in interest to Landmark
and St. Louis Brentwood Associates, L.P., dated August 28, 1997, relating to
Magna Place.<F2>
10.38 Stock Purchase Agreement dated March 27, 1992, by and among Capital Bancorpora-
tion, Inc., Magna and Landmark Acquisition Corporation, and amendment thereto
(filed as Exhibit 2.1 to Magna's Registration Statement on Form S-3 (Reg. No.
33-48918) and incorporated herein by reference)
10.39 Supplemental Agreement dated February 29, 1996, between Magna and John G.
Helmkamp, Jr. (filed as Exhibit 10.26 to Magna's Annual Report on Form 10-K for
the year ended December 31, 1995 (File No. 001-12405) and incorporated herein by
reference)<F1>
10.40 Severance Agreement dated March 5, 1997 between Magna and Erl A. Schmiesing
(filed as Exhibit 10.35 to Magna's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. 001-12405) and incorporated herein by reference)<F1>
10.41 Loan Agreement dated as of December 30, 1996, between Magna and unaffiliated
lender (filed as Exhibit 10.36 to Magna's Annual Report on Form 10-K for the
year ended December 31, 1996 (File No. 001-12405) and incorporated herein by
reference)
10.42 First Amendment to Loan Agreement dated as of March 5, 1997 among Magna and
unaffiliated lenders (filed as Exhibit 10.37 to Magna's Annual Report on Form
10-K for the year ended December 31, 1996 (File No. 001-12405) and incorporated
herein by reference)
11.1 Computation of Net Income Per Share (shown in "Notes to Consolidated Financial
Statements--19 Net Income Per Share" and incorporated herein by reference)
21.1 Subsidiaries of Magna Group, Inc.<F2>
23.1 Consent of Independent Auditors<F2>
24.1 Power of Attorney (included on signature page hereto)<F2>
27.1 Financial Data Schedule<F2>
<FN>
- --------
<F1>Management contract or compensatory plan
<F2>Previously filed on Magna's Annual Report on Form 10-K for the year
ended December 31, 1997
</TABLE>
21
