<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Mercantile Bancorporation Inc.
----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Mercantile Bancorporation Inc.
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which
the filing fee is calculated and state how it was determined.)
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
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<PAGE> 2
Mercantile P.O. Box 524
Bancorporation St. Louis, MO 63166-0524 MERCANTILE
Inc.
THOMAS H. JACOBSEN
Chairman of the Board, President
and Chief Executive Officer
March 24, 1995
DEAR SHAREHOLDER:
You are cordially invited to attend our Annual Meeting of
Shareholders, which will be held at 10:00 am on Thursday, April 27 in
downtown St. Louis.
The meeting will be in the America's Center, Cervantes Convention
Center Lecture Hall, 801 Convention Plaza, St. Louis, Missouri 63101. A
special card admitting you to the meeting is attached to the proxy
card. Please detach and present it at the door when you arrive.
The Notice of Annual Meeting, proxy statement, and proxy card which
accompany this letter outline the matters on which action is expected
to be taken at this meeting. The Board of Directors respectfully
requests that you vote in favor of each of the nominees for election as
directors, as set forth in the proxy statement.
Whether or not you are able to attend the meeting, we would
appreciate your dating, signing and mailing the enclosed proxy card as
promptly as convenient in the return envelope that is enclosed. If you
do attend the meeting, you may revoke your proxy and vote your shares
in person.
Our Annual Report for 1994 has been mailed to you under separate
cover.
Thank you for your continued support.
Sincerely,
/s/ THOMAS H. JACOBSEN
<PAGE> 3
Notice: Mercantile
Annual Meeting Bancorporation MERCANTILE
of Shareholders Inc.
April 27, 1995
The Annual Meeting of Shareholders of Mercantile Bancorporation Inc.
will be held in the America's Center, Cervantes Convention Center
Lecture Hall, 801 Convention Plaza, St. Louis, Missouri 63101, on
Thursday, April 27, 1995, at 10:00 am, for the following purposes:
1. To elect four directors in Class I for terms of three years
expiring in 1998.
2. To elect one director in Class II for a term of one year expiring
in 1996.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 10,
1995, are entitled to notice of and to vote at the meeting.
THOMAS H. JACOBSEN
Chairman of the Board, President
and Chief Executive Officer
March 24, 1995
3
<PAGE> 4
Proxy Mercantile
Statement Bancorporation MERCANTILE
Inc.
This proxy statement and the form of proxy are furnished, commencing
on March 24, 1995, in connection with the solicitation of proxies by
the Board of Directors of Mercantile Bancorporation Inc. ("Mercantile"
or the "Corporation") to be voted at the Annual Meeting of Shareholders
to be held on Thursday, April 27, 1995, on the matters set forth in the
accompanying Notice of Annual Meeting. Any shareholder giving a proxy
may revoke it at any time prior to its being voted. Revocation may be
made effective by giving a later dated proxy or written notice to the
Secretary or to the voting inspectors for the Annual Meeting of
Shareholders at any time prior to the time the proxy is voted. Unless
so revoked, all shares represented by proxies in the enclosed form that
are properly executed and received in time for the vote will be voted.
Mercantile will bear the entire cost of soliciting proxies in the
enclosed form. Solicitation will be by mail, and directors and officers
of Mercantile and its subsidiaries may solicit proxies personally or by
telephone or other means, but such persons will not be specially
compensated for such services. Mercantile has retained Morrow & Co. to
assist in the solicitation of proxies on its behalf for a fee of
approximately $4,500 plus expenses.
Only shareholders of record at the close of business on March 10,
1995, are entitled to notice of and to vote at the meeting. On that
date there were 45,681,034 shares of Mercantile's Common Stock
outstanding, with each share being entitled to one vote. The election
inspectors will treat abstentions as shares that are present and voting
for purposes of determining the presence of a quorum and the approval
of any matter submitted to the shareholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as
to certain shares to vote on a particular matter, those shares will not
be considered as present and voting with respect to that matter.
Cumulative voting, as required by Mercantile's By-Laws, is applicable
to all elections of directors. In the election of Class I directors,
this means that a shareholder is entitled to cast as many votes as
shall equal the number of shares of Common Stock of Mercantile owned by
such shareholder multiplied by four, the number of directors in Class I
to be elected at this Annual Meeting. A shareholder may cast all votes
for a single candidate or may distribute them among two or more
candidates as the shareholder may decide. Each duly executed proxy in
the form enclosed will be voted for all nominees as listed on such
proxy, unless otherwise directed in the proxy. If a shareholder gives a
proxy in the form enclosed but withholds authority to vote for one or
more of the nominees listed on the proxy, the number of votes
represented by such shareholder's proxy shall be divided equally, to
the extent practicable without creating fractional votes, among the
remaining nominees. Since only one director will be elected in Class II
at this Annual Meeting, cumulative voting will not be possible in that
election.
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<PAGE> 5
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
<TABLE>
The following table sets forth the name and address of each
beneficial owner of five percent or more of Mercantile's Common Stock
known to Mercantile, showing the amount and nature of such beneficial
ownership and percent of class:
<CAPTION>
PERCENT OF
CLASS OF
COMMON
NAME AND ADDRESS AMOUNT AND NATURE STOCK, $5.00 PAR
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP VALUE<F1>
------------------- ----------------------- ----------------
<C> <S> <C>
Mercantile Bank of St. Louis Sole Voting Power..........................3,372,452
National Association<F2> Shared Voting Power..........................345,103
("Mercantile Bank") Sole Investment Power........................894,052
P.O. Box 387 Shared Investment Power....................1,102,435
St. Louis, Missouri 63166 Total....................................4,066,661 8.9%
<FN>
-----
<F1> Based upon 45,681,034 shares outstanding at March 10, 1995.
<F2> Includes shares beneficially owned as of March 10, 1995, by
Mercantile Bank and certain other affiliates of Mercantile.
Mercantile has been advised that the shares held as sole fiduciary
by Mercantile Bank and such affiliates will be voted at the Annual
Meeting for each of the persons nominated by the Board of Directors
for election as a director. Mercantile Bank and such affiliates
will also recommend to all co-trustees and co-executors that they
vote in a similar manner.
</TABLE>
ELECTION OF DIRECTORS
One of the purposes of the meeting is to elect four directors in
Class I to serve for terms of three years expiring in 1998 and one
director in Class II to serve for a term of one year expiring in 1996.
The persons named on the enclosed form of proxy intend to vote all duly
executed proxies received "FOR" the election to the Board of Directors
of each of the nominees, except as otherwise directed in any proxy. The
four nominees receiving the highest number of votes in the Class I
election will be elected as Class I directors and the nominee receiving
the highest number of votes in the Class II election will be elected as
a Class II director. All nominees are currently directors of
Mercantile.
In the event any nominee declines or is unable to serve, it is
intended that the proxies for the election of such nominee will be
voted for a successor nominee designated by the Board of Directors. The
Board of Directors has no reason to believe that any nominee will
decline or be unable to serve if elected.
The name, age, principal occupation or position and other
directorships with respect to the nominees and the other directors
whose terms of office as directors will continue after the meeting is
set forth below. Each of the directors or nominees has held the
currently listed position or another executive position with the same
employer for more than five years except as set forth beside his name.
CLASS I-TO BE ELECTED FOR A TERM OF THREE YEARS EXPIRING IN 1998
THOMAS A. HAYS, 62-Director beginning in 1984; Deputy Chairman of The
May Department Stores Company, retail stores; Director of The May
Department Stores Company and Union Electric Company.
HARVEY SALIGMAN, 56-Director beginning in 1982; Managing Partner of
Cynwyd Investments, real estate investment company; Director of Union
Electric Company.
PATRICK T. STOKES, 52-Director beginning in 1992; President of
Anheuser-Busch, Inc., brewer of beer and other malt beverages.
JOHN A. WRIGHT, 52-Director beginning in 1986; President and Chief
Executive Officer of Big River Minerals Corp., natural resources
investment firm.
CLASS II-TO BE ELECTED FOR A TERM OF ONE YEAR EXPIRING IN 1996
FRANCIS A. STROBLE, 64-Director beginning in 1986; retired Senior
Vice President and Chief Financial Officer of Monsanto Company,
manufacturer of chemicals; Director of Johnstown America Industries,
Inc.
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<PAGE> 6
CLASS II-TO CONTINUE IN OFFICE UNTIL 1996
RICHARD P. CONERLY, 70-Director beginning in 1975; retired Chairman
of Orion Capital Inc., management company; Director of The Kellwood
Company and LaBarge, Inc.
EARL K. DILLE, 67-Director beginning in 1979; retired President of
Union Electric Company, public utility company; Director of Union
Electric Company.
J. CLIFF EASON, 47-Director beginning in 1993; President, Network
Services of Southwestern Bell Telephone Company, communications
industry company; Director of Reinsurance Group of America, Inc. Mr.
Eason served as President of Southwestern Bell Telephone of the Midwest
from July 1992 to July 1993, as President and Chief Executive Officer
of Metromedia Paging Services, Inc. from May 1991 to June 1992, and for
more than five years prior thereto, in various capacities with other
affiliates of SBC Communications, Inc.
WILLIAM A. HALL, 49-Director beginning in 1993; Assistant to the
Chairman, Hallmark Cards, Inc., manufacturer of greeting cards and
related products; Director of Payless Cashways, Inc. and AgriStar, Inc.
WILLIAM G. HECKMAN, 69-Director beginning in 1979; former Chairman
and Chief Executive Officer of Arch Mineral Corporation, a coal mining
company; Director of Arch Mineral Corporation.
CHARLES H. PRICE II, 64-Director beginning in 1992; Chairman of the
Board of Mercantile Bank of Kansas City since May 1992; Director of The
New York Times Co., Texaco, Inc., Sprint, Inc., Hanson plc and British
Airways plc. Mr. Price served as United States Ambassador to the United
Kingdom of Great Britain and Northern Ireland from 1983 to 1989 and as
Chairman of the Board, President and Chief Executive Officer of
Ameribanc, Inc. from October 1990 until May 1992.
CLASS III-TO CONTINUE IN OFFICE UNTIL 1997
HARRY M. CORNELL, JR., 66-Director beginning in 1991; Chairman and
Chief Executive Officer of Leggett & Platt, Inc., manufacturer of
components used primarily in the furniture and bedding industry;
Director of Leggett & Platt, Inc. and Ennis Business Forms, Inc.
BERNARD A. EDISON, 67-Director beginning in 1971; Director Emeritus
of Edison Brothers Stores, Inc., retail specialty stores; Director of
Anheuser-Busch Companies, Inc., General American Life Insurance Company
and Reinsurance Group of America, Inc.
THOMAS H. JACOBSEN, 55-Director beginning in 1989; Chairman of the
Board, President and Chief Executive Officer of Mercantile; Director of
Union Electric Company and Student Loan Marketing Association.
CRAIG D. SCHNUCK, 46-Director beginning in 1991; Chairman and Chief
Executive Officer of Schnuck Markets, Inc., retail supermarket chain;
Director of Schnuck Markets, Inc. and Edison Brothers Stores, Inc.
ROBERT L. STARK, 61-Director beginning in 1993; Dean of University of
Kansas Regents Center, educational institution, since September 1993;
Director of Packer Plastics Inc. and Century Products Co. Mr. Stark
served as Executive Vice President of Hallmark Cards, Inc. from January
1986 to March 1993.
BOARD OF DIRECTORS AND COMMITTEES
During 1994 there were six meetings of the Board of Directors. All of
the directors attended not less than 75% of the aggregate number of
meetings of the Board of Directors and of the committees on which they
served during the year, except Bernard A. Edison and Patrick T. Stokes.
The standing committees of the Board of Directors include the Audit
Committee, the Community Relations Committee, the Compensation and
Management Development Committee, the Credit Policy Committee, the
Executive Committee and the Nominating and Board Affairs Committee.
The members of the Audit Committee are Messrs. Richard P. Conerly,
Chairman, J. Cliff Eason, William A. Hall, Patrick T. Stokes, Francis
A. Stroble and John A. Wright. The Audit Committee met four times in
1994. The duties of the Audit Committee include meeting with the
independent auditors, management,
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<PAGE> 7
internal auditors and credit review personnel periodically to review
the work of each and ensure that each is properly discharging its
responsibilities.
The members of the Community Relations Committee are Messrs. Earl K.
Dille, Chairman, Craig D. Schnuck and Joseph G. Werner<F1>. The
Community Relations Committee met two times in 1994. The Community
Relations Committee reviews the implementation and administration of
all programs and initiatives intended to meet the credit needs of the
communities served by the Corporation's banking subsidiaries and acts
to ensure compliance by such subsidiaries with the Community
Reinvestment Act and all rules and regulations promulgated pursuant
thereto.
The members of the Compensation and Management Development Committee
are Messrs. Bernard A. Edison, Chairman, Harry M. Cornell, Jr., Thomas
A. Hays, James B. Malloy<F1> and Harvey Saligman. The Compensation and
Management Development Committee, which met three times in 1994,
reviews and approves the salaries of executive officers of the
Corporation and Mercantile Bank, as well as selected subsidiary chief
executive officers, and authorizes all other forms of executive
compensation. The Compensation and Management Development Committee
administers Mercantile's executive incentive plans.
The members of the Credit Policy Committee are Messrs. William G.
Heckman, Chairman, Earl K. Dille, James B. Malloy, Charles H. Price II,
and Robert L. Stark. The Credit Policy Committee met three times in
1994. The Credit Policy Committee reviews the Corporation's position on
credit and credit-related issues and the policies and guidelines
formulated and developed by the Corporation to manage credit risk
levels consistent with such position and with all applicable laws,
rules and regulations.
The members of the Executive Committee are Messrs. Thomas H.
Jacobsen, Chairman, Richard P. Conerly, Earl K. Dille, Bernard A.
Edison, Thomas A. Hays and William G. Heckman. The Executive Committee
may exercise all powers of the Board of Directors which may lawfully be
delegated when the Board of Directors is not in session. The Executive
Committee met four times in 1994.
The members of the Nominating and Board Affairs Committee, which
proposes nominees for election to the Board of Directors, are Messrs.
Thomas A. Hays, Chairman, Thomas H. Jacobsen and Harry M. Cornell, Jr.
The Nominating and Board Affairs Committee will consider written
recommendations of shareholders with regard to potential nominees.
Shareholder recommendations must contain certain information regarding
the potential nominee and comply with certain requirements for
presentation as set forth in Mercantile's By-laws. The Nominating and
Board Affairs Committee met one time in 1994.
[FN]
-----
<F1> Messrs. Werner and Malloy will not stand for reelection to the
Board of Directors of the Corporation and, therefore, their
individual terms as directors will terminate effective as of the
date of the Annual Meeting of Shareholders. Each is expected to
serve the Board in an advisory capacity thereafter.
DIRECTORS' FEES
Directors who are not officers of Mercantile or any of its
subsidiaries are paid an annual retainer of $15,000 ($17,000 for
Committee Chairmen), as well as $1,000 for attendance at each meeting
of the Board of Directors and $500 for attendance at meetings of its
standing committees.
Pursuant to the Mercantile Bancorporation Inc. 1994 Stock Incentive
Plan for Non-Employee Directors (the "Director Plan"), each director
not otherwise employed by Mercantile and its subsidiaries is to receive
stock units ("Stock Units"), each of which is the equivalent of one
share of Mercantile's Common Stock, as an adjunct to their annual
retainer for services rendered or to be rendered as directors. Stock
Units are awarded annually at the time of the annual meeting of
Mercantile's shareholders ("Annual Awards") and quarterly at the time
dividends are payable in respect of Mercantile's Common Stock
("Quarterly Awards"), and credited to accounts (each a "Stock Unit
Account") established by Mercantile for the benefit of each non-
employee director. Annual Awards of Stock Units to each non-employee
director are limited to the lesser of (a) the number determined by
dividing Ten Thousand Dollars ($10,000.00) by the "Fair Market Value"
of Mercantile's Common Stock (as defined in the Director Plan) at the
time of the award, or (b) one hundred fifty (150). Quarterly Awards to
each non-employee director will be in amounts equal to (a) a product of
the per-share dividend payable with respect to Mercantile's Common
Stock on the date of the award, multiplied by the
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<PAGE> 8
number of Stock Units previously credited to such non-employee
director's account, divided by (b) the "Fair Market Value" of a share
of Mercantile's Common Stock on that date. During 1994, non-employee
directors received a total of 2,763.397 stock units in Annual and
Quarterly Awards.
In addition, pursuant to the Director Plan, a non-employee director
can elect to defer until after the termination of services as a
director (or earlier change in control of Mercantile) the receipt of
all or a portion of the retainer and/or meeting fees to which such
director is entitled. Amounts so deferred will be credited, at the
option of the electing non-employee director, to either (a) an
interest-bearing cash account established by Mercantile for the benefit
of such non-employee director (each a "Cash Account") which will be
adjusted for gains or losses based upon an investment index selected by
such non-employee director, or (b) to such director's Stock Unit
Account. Deferred cash amounts credited to Stock Unit Account will be
contemporaneously converted to Stock Units on a fair market value-
equivalent basis.
The total number of Stock Units in a non-employee director's Stock
Unit Account and funds, if any, credited to such director's Cash
Account shall be distributed to the non-employee director in the form
of an equivalent number of shares of Mercantile's Common Stock and in
cash, respectively, following the termination of service of such non-
employee director (or earlier change in control of Mercantile);
provided, however, that no distribution shall be made in respect of
Annual Awards earlier than twelve months following the date of such
grant. In lieu of fractional shares of Mercantile's Common Stock, each
non-employee director entitled to receive payments in respect of Stock
Units will receive cash in an amount determined by multiplying the
fractional share interest to which such director would otherwise be
entitled by the then Fair Market Value thereof.
Pursuant to the Retirement Plan for Directors, Mercantile provides
retirement benefits to non-employee directors who retire from the Board
after attaining 60 years of age and completing five years of service on
the Board of Directors. Benefits are generally paid monthly during such
director's life in the amount of 1/12 of the annual directors'
retainer, for the number of months equalling the number of months such
director served on the Board. Directors who were serving on July 1,
1989 and who remain on the Board until the age of 70 will receive such
monthly benefits during their lifetimes following retirement from the
Board without regard to the number of months or years served.
BENEFICIAL OWNERSHIP OF STOCK BY MANAGEMENT
The following information is furnished as of March 10, 1995, to
indicate beneficial ownership of shares of Mercantile's Common Stock by
each director and by each executive officer named in the Summary
Compensation Table, individually, and all directors and executive
officers as a group. Section 16(a) of the Securities Exchange Act of
1934 requires Mercantile's directors and executive officers ("Reporting
Persons") to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of Mercantile. To Mercantile's
knowledge, based solely on its review of the copies of such reports
furnished to Mercantile and written representations by such directors
and executive officers that no other reports were required, during the
year ended December 31, 1994, all Section 16(a) filing requirements
applicable to Reporting Persons were timely met.
<TABLE>
<CAPTION>
AMOUNT BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED<F1>
------------------------ -------------------
<S> <C>
Richard P. Conerly....................................................... 8,857<F2>
Harry M. Cornell, Jr. ................................................... 2,100
Earl K. Dille............................................................ 3,750<F3>
J. Cliff Eason........................................................... 750<F4>
Bernard A. Edison........................................................ 8,500<F5>
William A. Hall.......................................................... 4,438<F6>
Thomas A. Hays........................................................... 5,700<F7>
William G. Heckman....................................................... 35,018<F8>
Thomas H. Jacobsen....................................................... 333,625<F9>
Charles H. Price......................................................... 335,801<F10>
Harvey Saligman.......................................................... 4,490<F11>
Craig D. Schnuck......................................................... 4,250<F12>
8
<PAGE> 9
<CAPTION>
AMOUNT BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED<F1>
------------------------ -------------------
<S> <C>
Robert L. Stark.......................................................... 2,317<F13>
Patrick T. Stokes........................................................ 750
Francis A. Stroble....................................................... 1,573<F14>
John A. Wright........................................................... 1,292<F15>
W. Randolph Adams........................................................ 31,478<F16>
Ralph W. Babb, Jr........................................................ 70,186<F16>
Michael J. Gorman........................................................ 298,488<F16><F17>
Richard C. King.......................................................... 174,792<F16><F18>
Directors and executive officers as a group (29 persons)................. 1,555,035<F16>
<FN>
-----
<F1> Based on 45,681,034 shares outstanding as of March 10, 1995, no
director or executive officer beneficially owned in excess of one
percent of the outstanding Common Stock and all directors and
executive officers as a group beneficially owned 3.3% of the
outstanding Common Stock and outstanding options exercisable
within 60 days of March 10, 1995. Unless otherwise noted, each
individual named has sole voting and investment power with respect
to all shares listed as beneficially owned.
<F2> Mr. Conerly holds all shares included above jointly with his wife.
Mr. Conerly has shared voting and investment power with respect to
these shares.
<F3> Mr. Dille holds 2,250 shares included above in the Martha V. Dille
Trust, of which Martha V. Dille and Earle K. Dille are trustees.
Mr. Dille has shared voting and investment power with respect to
these shares. Mr. Dille holds the remaining 1,500 shares included
above in the Earl K. Dille Trust, a revocable living trust.
<F4> Mr. Eason holds all shares included above in the Joseph C. Eason
Trust, a revocable living trust.
<F5> Mr. Edison disclaims beneficial ownership of 1,000 shares included
above, which are held by his wife and over which he has no voting
or investment power.
<F6> Mr. Hall holds all shares included above in the William Austin
Hall Revocable Trust.
<F7> Mr. Hays holds all shares included above in a revocable trust of
which Mr. Hays is grantor, trustee and beneficiary.
<F8> Mr. Heckman holds 33,500 shares included above in two trusts of
which Mr. Heckman is trustee and beneficiary. Mr. Heckman
disclaims beneficial ownership of the remaining 1,518 shares
included above, which are held in trusts of which he is a
co-trustee. Mr. Heckman has shared voting and investment powers
with respect to said 1,518 shares.
<F9> As of March 10, 1995, Mr. Jacobsen held 24,900 shares included
above that are restricted shares subject to forfeiture by and
reversion back to Mercantile in the event that Mr. Jacobsen
terminates his employment with Mercantile during specified time
periods. Mr. Jacobsen holds 62,550 shares included above in a
trust of which Mr. Jacobsen is trustee. The total set forth in the
table above also includes 240,562 shares subject to stock options
held by Mr. Jacobsen which are either presently exercisable or
which are exercisable within 60 days of March 10, 1995.
<F10> Mr. Price disclaims beneficial ownership of 117,486 shares
included above which are held in a trust of which Mr. Price is
co-trustee and income beneficiary. Mr. Price has shared voting and
investment power with respect to these shares. Mr. Price disclaims
beneficial ownership of 150 shares included above which he holds
as custodian for his granddaughter. The total set forth above also
includes 20,640 shares subject to stock options held by Mr. Price
which are either presently exercisable or which are exercisable
within 60 days of March 10, 1995.
<F11> Mr. Saligman disclaims beneficial ownership of 430 shares included
above which are owned by his wife and 1,623 shares included above
which are owned by his wife as custodian for three children. Mr.
Saligman has no voting or investment power with respect to these
shares.
<F12> Mr. Schnuck holds all of the shares included above jointly with
his wife. Mr. Schnuck has shared voting and investment power with
respect to these shares.
<F13> Mr. Stark holds all of the shares included above in a revocable
trust of which Mr. Stark is grantor, trustee and beneficiary.
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<PAGE> 10
<F14> Mr. Stroble holds 958 shares included above jointly with his wife.
Mr. Stroble has shared voting and investment power with respect to
these shares. An additional 600 shares included above are held in
his wife's revocable trust. Mr. Stroble has no investment or
voting power with regard to said shares and disclaims beneficial
ownership of the same.
<F15> Mr. Wright holds all shares included above jointly with his wife.
Mr. Wright has shared voting and investment power with respect to
these shares.
<F16> As of March 10, 1995, Messrs. Adams, Babb and Gorman and all
directors and executive officers as a group held 7,875, 7,425,
6,465 and 90,540 shares, respectively, included above that are
restricted shares subject to forfeiture by and reversion back to
Mercantile in the event of the termination of the executive
officer's employment with Mercantile during specified time periods
and under certain circumstances. The totals set forth in the table
above also include 18,750, 37,125, 140,649, 7,500, and 585,980
shares subject to stock options held by Messrs. Adams, Babb,
Gorman and King, and all directors and executive officers as a
group, respectively, which are either presently exercisable or
which are exercisable within 60 days of March 10, 1995.
<F17> Mr. Gorman holds 47,989 of the shares included above jointly with
his wife. He has shared voting and investment power with respect
to these shares. In addition, 46,604 of the shares included above
are held by Mr. Gorman's wife. Mr. Gorman has no investment or
voting power with respect to these shares. Mr. Gorman disclaims
beneficial ownership of 738 shares included above which are held
by his daughter. Mr. Gorman has no investment or voting power with
respect to his daughter's shares.
<F18> Mr. King disclaims beneficial ownership of a total of 50,788
shares included above, 16,479 of which are held by a family trust,
17,155 of which are held by his wife as custodian for his
daughter, and 17,154 of which are held in an irrevocable trust for
the benefit of his son.
</TABLE>
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
REPORT TO SHAREHOLDERS REGARDING EXECUTIVE COMPENSATION
OVERALL POLICY
Mercantile's executive compensation program is closely linked to
corporate performance and returns to shareholders. To this end,
Mercantile employs an overall compensation strategy and specific
compensation plans that tie executive compensation to Mercantile's
success in meeting specified performance goals. The overall objectives
in this strategy are to attract and retain the best possible executive
talent, to motivate these executives to achieve the goals contained in
Mercantile's business strategy, to link executive and shareholder
interests through equity-based plans, and to provide a compensation
package that recognizes and rewards individual contributions, including
job performance, as well as overall business results.
Each year the Compensation and Management Development Committee (the
"Committee") conducts a review of Mercantile's executive compensation
program. This review includes a comprehensive assessment of the
effectiveness of Mercantile's compensation program and a comparison of
Mercantile's executive compensation, corporate performance and total
return to shareholders to the bank holding companies included in the
Keefe, Bruyette and Woods 50 Index (the "KBW 50 Index"), which consists
of 50 of the larger United States bank holding companies, and which
Mercantile has also utilized for the comparison of total cumulative
return to shareholders included in this proxy statement. While the
strongest competitors for executive talent are believed to be regional
bank holding companies with assets of greater than $10 billion located
primarily in the midwestern and southern United States, competitor
companies for certain executive positions may be non-banking companies
and/or may be located outside of the primary geographic recruitment
area.
The Committee determines the compensation of all of the executive
officers who serve on Mercantile's Management Executive Committee,
including the named executive officers whose compensation is detailed
in this proxy statement. The Committee also sets compensation policies
for approximately 220 other officers, comprising the next most highly
compensated officers of Mercantile and its subsidiaries. In reviewing
the individual performance of the executives whose compensation is
detailed in this proxy statement (other than Mr. Jacobsen), the
Committee takes into account the views of Mr. Jacobsen.
The key elements of Mercantile's executive compensation program
consist of base salary, annual performance-based cash incentives, and
stock-based incentives such as stock options, restricted performance
units and restricted stock. Initial employment terms for Mercantile's
executive officers have generally been
10
<PAGE> 11
provided for in employment agreements or other understandings. Such
agreements or understandings have typically established minimum base
salaries and, in certain cases, initial cash and stock-based incentive
awards. Subsequent adjustments to base salaries and subsequent cash and
stock-based incentive awards are determined by the Committee in
accordance with the criteria set forth in this report. The Committee's
policies with respect to each of these elements are discussed below. In
addition, while the elements of compensation described below are
considered separately, the Committee's policies take into account the
total compensation package of each executive officer, including pension
benefits, supplemental retirement benefits, insurance and other
benefits, along with the programs described below.
BASE SALARIES
Base salaries for executive officers who serve on Mercantile's
Management Executive Committee are initially determined by evaluating
the responsibilities of the position held and the skills, knowledge,
and experience of the individual, and by referring to the competitive
marketplace for executive talent, including a comparison of base
salaries for comparable positions at other companies deemed to be
competitors of Mercantile in the hiring of comparable executive
officers. There is a positive correlation between the asset size of
banking institutions and the salaries of executive officers; therefore,
base salaries for 1994 for such officers were targeted by comparison to
average salaries paid for comparable positions with banks included in
the KBW 50 Index on an asset-size adjusted basis.
Salary adjustments in respect of such executive officers are
determined annually by evaluating the competitive marketplace and the
performance of Mercantile and of such executive officer during the
preceding year and, when applicable, taking into account new
responsibilities assigned to the executive officer during the year.
Each such executive officer's performance is, additionally, evaluated
on the basis of achieving specified financial goals, such as annual and
long-term net income, overhead, expense-to-assets ratio and return on
asset goals. While these objective criteria are considered in the final
recommendation of the Committee, subjective evaluations are also
considered. No single criteria predominates in this process. For 1994,
executive officers received base salary increases of up to 4% over
their respective 1993 base salaries.
The base salary paid to Mr. Jacobsen in 1994 is thought by the
Committee to be competitive in the external marketplace on an asset-
size adjusted basis and reflective of Mercantile's success in meeting
its financial goals in 1993, and the assessment by the Committee of Mr.
Jacobsen's individual performance. Mr. Jacobsen's 1994 base salary was
increased by 4% over 1993.
ANNUAL INCENTIVES
Each of Mercantile's executive officers is eligible for an annual
cash incentive award. This cash award is designed to provide an
incentive for the participating executive officers to achieve annual
performance goals which are based on individual, business unit and
corporate measures. For 1994, the target opportunities for the
executive officers expressed as a percent of base salary, were based
upon the median of incentive opportunities for similar positions at the
companies included in the KBW 50 Index. Performance objectives for the
funding of the annual incentive target opportunities were based on
achievement of net income and return on asset goals set by the
Committee at the beginning of 1994. The Corporation met both goals in
1994. Additionally, each executive officer was given specific
objectives with respect to the Corporation, business unit and
individual performance, including, but not limited to, asset growth,
asset quality, deposit growth, and productivity improvement. The named
executives met their objectives in 1994. Mr. Jacobsen participates in
the 1994 Executive Incentive Compensation Plan which was approved by
shareholders at the 1994 Annual Meeting of Shareholders. For 1994, Mr.
Jacobsen's incentive target was based on the Corporation's achievement
of strategic objectives for net income, return on assets and
productivity improvement, which objectives were met.
STOCK-BASED INCENTIVES
Under Mercantile's 1994 Stock Incentive Plan, stock options,
restricted performance units and restricted stock may be granted to
Mercantile's executive officers. The Committee sets guidelines for the
size of stock option, restricted performance unit and restricted stock
awards based on the responsibilities of the position
11
<PAGE> 12
held, the skills, knowledge and experience of the executive officer,
the competitive compensation data from the peer group and the
Corporation's financial performance. Beginning in 1994, stock-based,
long-term incentives are targeted to the 75th percentile practices of
the companies included in the KBW 50 Index. While such stock-based
incentives primarily reflect competitive practices, past incentive
awards are also considered.
Stock options and restricted performance unit awards are designed to
align the interests of executives with those of the shareholders. Stock
options are granted with an exercise price equal to the market price of
Mercantile's Common Stock on the date of grant and vest over four years
beginning one year following the date of grant. Stock option grants in
1994 for Mr. Jacobsen and other members of the Management Executive
Committee were three-year, front-loaded grants. These options will vest
over a six-year period beginning two years following the date of grant.
Restricted performance units granted in 1994 will fully or partially
vest based upon achievement of Mercantile's three-year earnings per
share growth target. Restricted stock is generally granted during the
first year an executive becomes a member of senior management.
Restricted stock awards typically vest over a period of at least five
years beginning three years following the date of grant. This approach
is designed to focus the executives on the creation of shareholder
value over the long term since the full benefit of the compensation
package cannot be realized unless stock price appreciation occurs over
a number of years.
In 1994, Mr. Jacobsen received options to purchase 108,000 shares
with an exercise price of $32.50 per share and 12,000 restricted
performance units.
EXECUTIVE STOCK OWNERSHIP GUIDELINES
In 1994 Mercantile adopted stock ownership guidelines for its
executive officers. Executives who were members of the Management
Executive Committee as of January 1, 1994, have until December 31,
1998, to acquire the specified number of shares of Mercantile's Common
Stock. Those executives who join the Management Executive Committee
after that date have five years from the date they become a member of
the Management Executive Committee to acquire the specified shares. The
guidelines for Mr. Jacobsen and line and staff Management Executive
Committee members are 78,750, 19,800 and 10,800 shares respectively.
DEDUCTIBILITY OF EXECUTIVE OFFICER COMPENSATION
The Committee's policy with respect to the tax deductibility of
executive compensation in excess of $1 million is to structure benefit
plans in such a manner that permits the deductibility of such
compensation under Section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code") when Mercantile can do so without material
change to its overall compensation program.
THE COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE
BERNARD A. EDISON
(CHAIRMAN)
HARRY M. CORNELL, JR. THOMAS A. HAYS
JAMES B. MALLOY HARVEY SALIGMAN
12
<PAGE> 13
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation of the named
executive officers for each of the last three years:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------------------------------------
OTHER RESTRICTED SECURITIES ALL OTHER
ANNUAL STOCK UNDERLYING COMPEN-
SALARY BONUS COMPENSATION AWARDS<F1> OPTIONS SATION<F2>
NAME & PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
------------------------- ---- ------ ----- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas H. Jacobsen 1994 $546,300 $477,944 $46,099 $ 0 108,000 $83,530
Chairman, President and 1993 525,300 392,662 32,869 0 150,000 92,828
Chief Executive Officer 1992 510,000 331,500 31,856 0 30,750 44,618
Richard C. King<F3> 1994 260,000 136,481 7,476 0 24,750 33,925
President and Chief 1993 250,000 115,000 3,362 0 15,000 40,771
Executive Officer, 1992 N/A N/A N/A N/A N/A N/A
Mercantile Bank of
Kansas City
Michael J. Gorman<F4> 1994 250,000 139,980 0 240,013 0 13,255
Chairman, Mercantile 1993 N/A N/A N/A N/A N/A N/A
Bank of St. Louis 1992 N/A N/A N/A N/A N/A N/A
National Association
Ralph W. Babb, Jr. 1994 238,500 139,105 5,287 0 33,750 26,794
Vice Chairman 1993 229,300 141,593 4,782 0 37,500 31,750
1992 222,600 122,430 3,468 0 7,500 18,383
W. Randolph Adams 1994 230,000 145,348 6,840 0 33,750 26,983
Executive Vice President and 1993 194,500 109,406 5,317 0 30,000 26,360
Chief Financial Officer 1992 189,000 91,000 4,396 276,500 0 16,695
<FN>
-----
<F1> Restricted stock awarded to Mr. Adams vests at the rate of 25% of
total shares after three years from the date of grant, an
additional 25% after four years from the date of grant and the
balance of the shares after five years from the date of grant.
Restricted stock awarded to Mr. Gorman vests on January 31, 1996,
or, if earlier, the date his employment is terminated either
involuntarily other than for cause or voluntarily for good reason.
As of December 31, 1994, Messrs. Jacobsen, Gorman, Babb and Adams
held an aggregate of 37,350, 6,465, 11,137 and 10,500 shares of
restricted stock, respectively (including the restricted stock
awards referred to in the table), having an aggregate value on such
date of $1,167,188, $202,031, $348,031 and $328,125 respectively.
Holders of shares of restricted stock receive dividends on such
shares during the period of restriction.
<F2> Included in the totals set forth in this column in respect of
Messrs. Jacobsen, King, Gorman, Babb and Adams are the profit
sharing and/or matching contributions of $46,327, $22,450, $13,255,
$19,764 and $17,569 for their respective accounts under
Mercantile's Savings and Incentive Plan, Supplemental Savings Plan
and Stock Purchase Plan, and premiums of $37,203, $11,475, $0,
$7,030 and $9,414 paid by Mercantile on non-split dollar life
insurance policies for such officers, respectively, under
Mercantile's Management Life Insurance Plan.
<F3> Mr. King's employment with Mercantile commenced on January 4, 1993.
<F4> Mr. Gorman's employment with Mercantile commenced on February 1, 1994.
</TABLE>
13
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
The following table sets forth information concerning stock option
grants made in the fiscal year ended December 31, 1994, to the
individuals named in the Summary Compensation Table:
<CAPTION>
GRANT DATE
INDIVIDUAL GRANT VALUES VALUE
-------------------------------------------------------------------- ----------
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS GRANT DATE
OPTIONS GRANTED EXERCISE OR PRESENT
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION VALUE<F2>
NAME <F1>(#) FISCAL YEAR ($/SH) DATE ($)
---- ---------- ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Thomas H. Jacobsen................. 108,000 15.03% $32.50 1/18/04 $ 642,470
Richard C. King.................... 24,750 3.44 32.50 1/18/04 147,233
Michael J. Gorman.................. 0 0 N/A N/A N/A
Ralph W. Babb, Jr.................. 33,750 4.70 32.50 1/18/04 200,772
W. Randolph Adams.................. 33,750 4.70 32.50 1/18/04 200,772
All Optionees...................... 718,489 100.00 32.43<F3> Various 3,187,027
<FN>
-----
<F1> The exercise price may be paid in cash or by such other method
permitted by the Compensation and Management Development Committee,
including (a) tendering (either actually or by attestation) shares
of Mercantile's Common Stock already owned having a fair market
value equal to the cash exercise price of the option being
exercised, (b) surrendering another Mercantile Stock award having a
fair market value on the date of exercise equal to the cash
exercise price of the option being exercised, or (c) any
combination of the foregoing. Options generally terminate on the
earlier of: ten years after grant; immediately on involuntary
termination of employment for cause or voluntary termination of
employment without written consent of Mercantile; twelve months
after termination of employment for disability; eighteen months
after termination by reason of death; thirty-six months after
termination by reason of retirement; or three months after
termination for any other reason. Upon a change of control of
Mercantile, all options become fully exercisable and include
optional SARs for six months and one week following the change of
control, whereby the optionee may elect to receive in cash the
spread between the exercise price of the optionee's option and the
fair market value of Mercantile's Common Stock (or the equivalent
securities of the acquiring company) on the date of surrender.
<F2> Option values are based upon the Black-Scholes option pricing
model. Such model assumes: (a) an option term of 10 years; (b) an
expected risk-free rate of 6.18%; (c) a time weighted volatility of
0.186, calculated using stock prices for the five years (20
quarters) prior to the grant date; (d) a time weighted dividend
yield of 3.95%, also based on the five-year quarterly data prior to
the grant; and (e) a cumulative vesting restrictions discount of
9.86% on a weighted basis (3% for each year the options remain
unvested).
<F3> Weighted Average.
</TABLE>
14
<PAGE> 15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
The following table sets forth information concerning option
exercises in the fiscal year ended December 31, 1994, and options
remaining unexercised at December 31, 1994, by the individuals named in
the Summary Compensation Table.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT FISCAL
FISCAL YEAR-END(#) YEAR-END<F1> ($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE ($) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ------------------ ---------------------- --------------------
<S> <C> <C> <C> <C>
Thomas H. Jacobsen................. 0 0 195,374/ $2,007,467/
235,876 75,599
Richard C. King.................... 0 0 3,750/ -0-/
36,000 -0-
Michael J. Gorman.................. 0 0 150,649/ 3,718,289/
-0- -0-
Ralph W. Babb, Jr.................. 0 0 25,875/ 219,000/
65,625 18,438
W. Randolph Adams.................. 0 0 9,375/ 25,781/
58,125 25,781
<FN>
-----
<F1> Based on a price per share of $31.25, being the last closing sale
before the 1994 fiscal year end.
</TABLE>
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
The following table sets forth information concerning stock-based
awards granted to the individuals named in the Summary Compensation
Table in the fiscal year ended December 31, 1994 under the Mercantile
1994 Stock Incentive Plan.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
SHARES, UNITS OTHER PERIOD ------------------------------
OR OTHER UNTIL MATURATION MINIMUM MAXIMUM
NAME RIGHTS (#)<F1> OR PAYOUT (#) (#)
---- -------------- ---------------- ------- -------
<S> <C> <C> <C> <C>
Thomas H. Jacobsen................. 12,000 1/94 - 12/96 4,800 12,000
Richard C. King.................... 3,000 1/94 - 12/96 1,200 3,000
Michael J. Gorman.................. N/A N/A N/A N/A
Ralph W. Babb, Jr.................. 3,900 1/94 - 12/96 1,560 3,900
W. Randolph Adams.................. 3,900 1/94 - 12/96 1,560 3,900
<FN>
-----
<F1> The named individuals were granted Restricted Performance Units
under the terms of the Mercantile 1994 Stock Incentive Plan. Such
Restricted Performance Units are convertible into an equal number
of shares of Mercantile's Common Stock upon the achievement of
specified earnings per share growth targets. The executives will
vest in 40% of the units if stated minimum performance is achieved
with incremental increases in the percentage of units vesting up to
100% or the maximum amount of the grant in the event that the
stated maximum performance is achieved. Failure to achieve the
minimum performance target will result in forfeiture of the award.
In the event of a change of control of Mercantile, as that term is
defined in the 1994 Stock Incentive Plan, Restricted Performance
Units are convertible into shares of Mercantile's Common Stock in
proportion to the time elapsed between the beginning of the
performance period to the change of control date as related to the
entire performance period; the remainder would be converted into
restricted stock on which restrictions would lapse on the date the
performance period is scheduled to end.
</TABLE>
EMPLOYMENT ARRANGEMENTS
All executive officers named in the Summary Compensation Table (other
than Mr. King), and certain other executive officers are parties to
individual employment agreements with Mercantile. These agreements
define each such executive officer's employment arrangement with
Mercantile prior to a change of control of Mercantile. Terms of such
employment agreements for all affected executive officers other than
Mr. Jacobsen
15
<PAGE> 16
and Mr. Gorman expire on June 30, 1995. The agreements further provide
that if the employment of the executive officer is terminated prior to
the end of the term of the agreement by the executive officer for good
reason or by Mercantile for any reason other than death, disability or
cause, Mercantile will be obligated to continue the then-current base
salary of the executive officer and all benefits for the remaining term
of the agreement.
Each of the executive officers named in the Summary Compensation
Table (other than Mr. Gorman) and certain other executive officers are
also protected by substantively similar contractual provisions from a
decrease in compensation, benefits, title or duties for a period of
three years after a change of control of Mercantile. Under such
provisions, the executive officer will be entitled to receive an amount
equal to the executive officer's then-current annual base salary and
annual bonus in the event that the executive officer remains employed
with Mercantile through the first anniversary of the change of control.
Such agreements additionally provide that if there is a decrease in
compensation and responsibilities of the executive officer or if the
executive officer's employment is terminated for any reason other than
good cause or if the officer resigns for good reason (or in the case of
Mr. Jacobsen, if Mr. Jacobsen resigns for any reason within 13 months)
after a change of control, Mercantile will be obligated to pay a lump-
sum amount equal to twice the executive officer's then-current annual
base salary and annual bonus, plus the value of certain other
retirement benefits and other payments foregone due to the termination,
and to continue all employee benefits through the remaining term of the
agreement. If it is determined that any payments made to an executive
officer pursuant to this agreement would subject the executive officer
to an excise tax pursuant to Section 4999 of the Code, Mercantile will
also be obligated to pay to the executive officer an additional amount
sufficient to put the executive officer in the same after-tax position
as he would have been in had no excise tax been imposed on such
payment.
RETIREMENT PLANS
The following table shows the estimated annual pension benefit
payable to a covered participant at normal retirement age (65) under
Mercantile's qualified Retirement Plan and Trust (the "Retirement
Plan") as well as Mercantile's nonqualified Supplemental Retirement
Plan (the "Supplemental Plan"). The Supplemental Plan provides benefits
to certain participants that would otherwise be denied them by reason
of certain Code limitations on Retirement Plan benefits.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
YEARS OF SERVICE<F1><F2>
-------------------------------------------------------------------------------------
FINAL AVERAGE
SALARY 10 15 20 25 30
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 250,000...................... $ 40,709 $ 61,063 $ 81,417 $101,772 $122,126
450,000...................... 74,209 111,313 148,417 185,522 222,626
650,000...................... 107,709 161,563 215,417 269,272 323,126
850,000...................... 141,209 211,813 282,417 353,022 423,626
1,050,000...................... 174,709 262,063 349,417 436,772 524,126
1,250,000...................... 208,209 312,313 416,417 520,522 624,626
<FN>
-----
<F1> The credited years of service for the five individuals listed in
the Summary Compensation Table have been determined to be 12 for
Mr. Jacobsen, 2 for Mr. King, 1 for Mr. Gorman, 15 for Mr. Babb,
and 3 for Mr. Adams.
<F2> The maximum amount payable under the Retirement Plan is limited by
the Code to $118,800 annually, subject to cost of living increases
after 1994, certain transition rules applicable to benefits accrued
before July 1, 1982, and reduction by reason of contributions under
tax-qualified defined contribution plans maintained by Mercantile.
To the extent benefits under the Retirement Plan are limited by the
Code, they will be paid under the Supplemental Plan.
</TABLE>
Under these plans, eligible employees receive annual retirement
benefits based upon the highest "Average Annual Salary" received for
any period of 60 consecutive months preceding the date of termination
of employment (the "Final Average Salary"). "Average Annual Salary" is
defined as all compensation received
16
<PAGE> 17
by a participant for personal services performed for Mercantile or a
subsidiary as an employee (other than compensation pursuant to plans,
which is specifically excluded by the terms of the Retirement Plan and
the Supplemental Plan). The compensation covered by the definition of
"Average Annual Salary" for each of the five individuals named in the
Summary Compensation Table is equal to the sum of the "Salary" and
"Bonus" columns of the Summary Compensation Table with respect to each
individual. The table above presents annual retirement benefits payable
as a single life annuity under both plans combined. Such retirement
benefits are not subject to reductions for Social Security benefits or
other offset amounts.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
The officers and directors of Mercantile are at present, as in the
past, customers of one or more of Mercantile's subsidiary banks and
have had and expect to have transactions with such banks in the
ordinary course of business. In addition, certain of the officers and
directors of Mercantile are at present, as in the past, also officers,
directors or principal shareholders of corporations which are customers
of such banks and which have had and expect to have transactions with
such banks in the ordinary course of business. All such transactions
were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other
persons, and did not involve more than normal risk of collectibility or
present other unfavorable or unusual features.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG MERCANTILE, S&P 500 AND KBW 50 INDICES
The following graph compares quarterly cumulative five-year
shareholder returns (including reinvestment of dividends) on an indexed
basis with the S&P 500 Stock Index and the Keefe, Bruyette & Woods 50
Index, which is composed of 50 of the nation's larger banking
companies, including all money-center and most major regional banks.
[GRAPH]
<TABLE>
<CAPTION>
Measurement Period Mercantile ("MTL") S&P 500 KBW 50
------------------ ------------------ ------- ------
(Fiscal Year Covered)
---------------------
<S> <C> <C> <C>
Measurement Pt - 12/31/89 $100.0 $100.0 $100.0
FYE 12/31/90 86.0 96.9 75.5
FYE 12/31/91 160.8 126.3 123.8
FYE 12/31/92 213.1 135.9 163.7
FYE 12/31/93 205.4 149.5 178.1
FYE 12/31/94 220.6 151.5 170.9
</TABLE>
17
<PAGE> 18
INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick has been selected as Mercantile's
independent auditors for 1995. They were also Mercantile's independent
auditors for 1994. A representative of KPMG Peat Marwick is expected to
be present at the Annual Meeting of Shareholders. The representative
shall have an opportunity to make a statement, if such representative
desires to do so, and will be available to respond to appropriate
questions.
SHAREHOLDER PROPOSALS
All proposals of shareholders, including nominations of directors,
intended to be presented at the 1996 Annual Meeting of Shareholders
must be received in writing by the Corporate Secretary at Mercantile
Bancorporation Inc., P.O. Box 524, St. Louis, Missouri 63166-0524, by
November 25, 1995, in order to be considered for inclusion in
Mercantile's proxy statement and proxy for the 1996 meeting.
DISCRETIONARY AUTHORITY
The Board of Directors does not intend to present at the Annual
Meeting of Shareholders any business other than that referred to in the
accompanying Notice of Annual Meeting. It was not aware, as of a
reasonable time before this solicitation of proxies, of any other
matters which may properly be presented for action at the meeting. If
any other matters should properly come before the meeting, the persons
named in the enclosed form of proxy will have discretionary authority
to vote the proxies in accordance with their best judgment in the
interest of Mercantile.
March 24, 1995
A COPY OF THE 1994 ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BY MERCANTILE MAY BE OBTAINED BY
ANY SHAREHOLDER, WITHOUT CHARGE, UPON WRITTEN REQUEST TO JON W.
BILSTROM, GENERAL COUNSEL AND SECRETARY, MERCANTILE BANCORPORATION
INC., P.O. BOX 524, ST. LOUIS, MISSOURI 63166-0524.
18
<PAGE> 19
MERCANTILE BANCORPORATION INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
April 27, 1995
The undersigned hereby appoint(s) T.H. JACOBSEN, R.W.
BABB, JR. and J.W. BILSTROM, and each of them, with or without
the others, proxies, with full power of substitution to vote on
the following matters as directed hereon and in their discretion
upon such other business as may properly come before the meeting,
all shares of stock of Mercantile Bancorporation Inc. (the
"Corporation") that the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Corporation to be held in
the America's Center, Cervantes Convention Center Lecture Hall,
801 Convention Plaza, St. Louis, Missouri, on Thursday, April 27,
1995, at 10:00 A.M., local time, and all adjournments thereof,
all in accordance with and as more fully described in the Notice
and accompanying Proxy Statement for such meeting, receipt of
which is hereby acknowledged.
1. Election of Class I Directors
Election of four Class I directors to hold office for terms
of three years expiring in 1998 or until their successors
shall have been duly elected and qualified.
NOMINEES: THOMAS A. HAYS, HARVEY SALIGMAN, PATRICK T.
STOKES AND JOHN A. WRIGHT
2. Election of Class II Director
Election of Francis A. Stroble as a Class II director to
hold office for a term of one year expiring in 1996 or until
his successor shall have been duly elected and qualified.
3. In their discretion, upon any other business which may
properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
ALL NOMINEES LISTED. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS
YOU SIGN AND RETURN THIS CARD.
SEE REVERSE SIDE
<PAGE> 20
1. Election of Class I Directors (see reverse)
/ / FOR / / WITHHELD
For, except vote withheld from the following nominee(s):
-------------------------------------------------------
2. Election of Class II Director (see reverse)
/ / FOR / / WITHHELD
3. In their discretion, upon any other business which may
properly come before the meeting
(change of address)
------------------------------
------------------------------
------------------------------
If you have written in the above space, please mark the
corresponding box on this card.
4. / / Check here if address change is noted above
5. / / Check here if you will attend meeting
SIGNATURE(S): -------------------------- DATE: -------------------
SIGNATURE(S): -------------------------- DATE: -------------------
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
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