<PAGE>
FILED PURSUANT TO RULE NO. 424(b)(2)
REGISTRATION NO.: 333-25775
PROSPECTUS SUPPLEMENT
(To Prospectus Dated May 28, 1997)
MERCANTILE
$200,000,000
MERCANTILE BANCORPORATION INC.
7.30% SUBORDINATED NOTES DUE 2007
The 7.30% Subordinated Notes due 2007 (the "Subordinated Notes") of Mercantile
Bancorporation Inc. ("Mercantile") being offered hereby will mature on June
15, 2007. Interest on the Subordinated Notes is payable semiannually each June
15 and December 15, beginning December 15, 1997. The Subordinated Notes may
not be redeemed prior to their stated maturity and will not be subject to any
sinking fund.
The Subordinated Notes will be unsecured and subordinated to Senior
Indebtedness of Mercantile as described herein. The Subordinated Notes will
rank pari passu with existing subordinated indebtedness of Mercantile. Payment
of the principal of the Subordinated Notes may be accelerated only in the case
of certain events involving the bankruptcy, insolvency or reorganization of
Mercantile or a Principal Constituent Bank. There is no right of acceleration
in the case of a default in the payment of principal of, premium, if any, or
interest on the Subordinated Notes or the performance of any covenant of
Mercantile in the Subordinated Indenture or in the Subordinated Notes. See
"Subordinated Debt Securities--Limited Rights of Acceleration" in the
Prospectus accompanying this Prospectus Supplement.
The Subordinated Notes will be represented by one or more Global Securities
registered in the name of the nominee of The Depository Trust Company ("DTC"),
as Depositary. Beneficial interests in the Global Securities will be shown on,
and transfers thereof will be effected only through, records maintained by DTC
and its direct and indirect participants. Except as described herein,
Subordinated Notes in definitive form will not be issued. Settlement for the
Subordinated Notes will be made in immediately available funds. The
Subordinated Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Subordinated Notes will
therefore settle in immediately available funds. So long as the Subordinated
Notes are represented by the Global Securities, all payments of principal and
interest on the Subordinated Notes will be made by Mercantile in immediately
available funds.
THESE SUBORDINATED NOTES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER
OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF MERCANTILE AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND
OR ANY OTHER GOVERNMENTAL AGENCY.
THE SUBORDINATED NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
- -----------------------------------------------------------------------------------------------------
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY (1)(2)
<S> <C> <C> <C>
Per Subordinated Note....................... 100.000% .650% 99.350%
Total....................................... $200,000,000 $1,300,000 $198,700,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from June 16, 1997 to date of delivery.
(2) Before deduction of expenses payable by Mercantile estimated to be
$200,000.
The Subordinated Notes are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without
notice. It is expected that delivery of the Subordinated Notes will be made in
book-entry form only through the facilities of DTC, on or about June 16, 1997,
against payment therefor in immediately available funds.
SALOMON BROTHERS INC
GOLDMAN, SACHS & CO.
UBS SECURITIES
The date of this Prospectus Supplement is June 11, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SUBORDINATED
NOTES INCLUDING PURCHASES OF THE SUBORDINATED NOTES TO STABILIZE THEIR MARKET
PRICES, PURCHASES OF THE SUBORDINATED NOTES TO COVER ALL OR SOME OF A SHORT
POSITION IN THE SUBORDINATED NOTES MAINTAINED BY THE UNDERWRITERS AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
----------------
CONCURRENT OFFERINGS
Concurrently with the offering of the Subordinated Notes that are the
subject of this Prospectus Supplement, Mercantile is offering $150,000,000 of
its 6.80% Senior Notes due 2001 and $150,000,000 of its 7.05% Senior Notes due
2004 (collectively, the "Senior Securities") pursuant to a separate prospectus
supplement. The offering of the Subordinated Notes is not conditional upon the
offering of the Senior Securities. The proceeds received by Mercantile from
the issuance of the Subordinated Notes and the Senior Securities will be used
for the purposes described in the Prospectus accompanying this Prospectus
Supplement. See "Use of Proceeds."
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth for the years indicated certain selected
historical consolidated financial information for Mercantile. The balance
sheet data and income statement data included in the selected financial data
as of and for the five years ended December 31, 1996 are taken from the
supplemental audited consolidated financial statements of Mercantile as of the
end of and for each such year. The balance sheet data and income statement
data included in the selected financial data as of and for the three months
ended March 31, 1997 and 1996 are taken from the supplemental unaudited
consolidated financial statements as of the end of and for such periods. The
data for each of the above periods include all adjustments which are, in the
opinion of the management of Mercantile, necessary to present a fair statement
of these periods and are of a normal recurring nature. Results for the three
months ended March 31, 1997 are not necessarily indicative of results for the
entire year. The table also sets forth pro forma combined consolidated
financial information as of and for the three months ended March 31, 1997,
reflecting such financial information as if the acquisitions of Roosevelt
Financial Group, Inc., a Delaware corporation and savings and loan holding
company that recently entered into a definitive agreement with Mercantile to
be acquired by Mercantile, and Regional Bancshares, Inc., an Illinois
corporation and bank holding company that was acquired by Mercantile on March
5, 1997, had occurred as of January 1, 1997. The following information should
be read in conjunction with the supplemental consolidated financial statements
of Mercantile, and the related notes thereto, and the unaudited pro forma
combined consolidated financial information, including the notes thereto,
included in documents incorporated herein by reference. See "Incorporation of
Certain Information by Reference" in the accompanying Prospectus.
S-2
<PAGE>
<TABLE>
<CAPTION>
ALL ENTITIES
PRO FORMA
COMBINED
CONSOLIDATED
AS OF OR FOR AS OF OR FOR THE
THE THREE THREE MONTHS
MONTHS ENDED ENDED MARCH 31, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
MARCH 31, ------------------ ----------------------------------------------------------
1997 1997 1996 1996 1995 1994 1993 1992
------------ -------- -------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER COMMON SHARE DATA
Net income(1)........... $ 0.95 $ 0.98 $ 0.21 $ 3.17 $ 3.62 $ 3.10 $ 2.71 $ 2.33
Dividends declared...... 0.43 0.43 0.41 1.64 1.32 1.12 0.99 0.93
Book value at period
end.................... 26.26 24.76 23.98 25.11 24.44 21.71 20.12 18.16
Average shares
outstanding
(thousands)............ 82,575 76,575 78,484 77,292 77,170 74,882 73,445 68,997
EARNINGS (THOUSANDS)
Interest income......... $534,406 $398,462 $381,923 $1,552,863 $1,516,156 $1,311,928 $1,269,680 $1,316,560
Interest expense........ 286,342 186,501 181,385 724,910 715,466 521,542 508,469 628,837
-------- -------- -------- ---------- ---------- ---------- ---------- ----------
Net interest income..... 248,064 211,961 200,538 827,953 800,690 790,386 761,211 687,723
Provision for possible
loan losses............ 19,083 18,443 34,149 73,015 41,533 48,791 70,584 88,238
Other income............ 100,452 88,100 69,795 337,480 311,649 272,368 290,380 264,534
Other expense........... 201,074 165,595 203,696 718,668 640,519 645,011 666,067 616,159
Income taxes............ 49,838 41,028 15,403 128,535 149,898 135,896 114,768 83,773
-------- -------- -------- ---------- ---------- ---------- ---------- ----------
Net income before
extraordinary items.... $ 78,521 $ 74,995 $ 17,085 $ 245,215 $ 280,389 $ 233,056 $ 200,172 $ 164,087
======== ======== ======== ========== ========== ========== ========== ==========
ENDING BALANCE SHEET
(MILLIONS)
Total assets............ $ 29,831 $ 22,078 $ 20,933 $ 22,030 $ 20,883 $ 19,397 $ 18,878 $ 18,398
Earning assets.......... 27,592 20,373 19,284 20,061 18,997 17,904 17,390 16,846
Investment securities... 7,755 4,847 5,103 4,746 4,964 4,895 5,234 5,148
Loans and leases, net of
unearned income........ 19,523 15,213 13,861 14,953 13,703 12,764 11,637 11,183
Deposits................ 22,661 17,354 16,423 17,336 16,172 15,137 15,435 15,295
Long-term debt.......... 1,326 452 328 305 344 351 340 365
Shareholders' equity.... 2,128 1,882 1,883 1,946 1,915 1,643 1,510 1,322
Reserve for possible
loan losses............ 256 231 243 230 232 245 233 224
SELECTED RATIOS
Return on average
assets................. 1.05% 1.38% 0.33% 1.16% 1.39% 1.22% 1.08% 0.93%
Return on average
equity................. 14.45 15.63 3.50 12.95 15.64 14.66 14.06 13.32
Net interest rate
margin(2).............. 3.64 4.36 4.27 4.34 4.38 4.61 4.58 4.36
Equity to assets........ 7.13 8.52 8.99 8.83 9.17 8.47 8.00 7.19
Reserve for possible
loan losses to:
Outstanding loans...... 1.31 1.52 1.75 1.54 1.69 1.92 2.00 2.00
Non-performing loans... 271.59 273.18 271.46 318.99 241.79 552.34 289.13 155.54
Dividend payout ratio... 45.26 43.88 -- 51.74 36.46 36.13 36.53 39.91
</TABLE>
- -------
(1) Based on weighted average common shares outstanding.
(2) Taxable-equivalent basis. Includes tax-equivalent adjustment of
$3,855,000, $4,179,000, $16,353,000, $17,758,000, $17,962,000, $18,598,000
and $17,891,000 for March 31, 1997 and 1996, and December 31, 1996, 1995,
1994, 1993 and 1992, respectively. These adjustments are based upon a
federal tax rate of 35% for all periods except 1992, when a federal tax
rate of 34% was used.
S-3
<PAGE>
DESCRIPTION OF SUBORDINATED NOTES
The following description of the particular terms of the Subordinated Notes
offered hereby supplements, and to the extent inconsistent therewith replaces,
the description of the general terms and provisions of the Subordinated Notes
set forth in the accompanying Prospectus under "Description of Debt
Securities" and "Subordinated Debt Securities," to which description reference
is hereby made. The accompanying Prospectus sets forth the meaning of certain
capitalized terms used herein and not otherwise defined herein.
Because Mercantile is a holding company, its rights and the rights of its
creditors and shareholders, including the holders of the Subordinated Notes,
to participate in the assets of any subsidiary upon its liquidation or
recapitalization will be subject to the prior claims of such subsidiary's
creditors except to the extent that Mercantile may itself be a creditor having
recognized claims against such subsidiary, in which case it will share in such
subsidiary's assets along with other creditors. As a result, the Subordinated
Notes will be effectively subordinated to all existing and future liabilities,
including trade payables, of Mercantile's subsidiaries.
CERTAIN TERMS OF THE SUBORDINATED NOTES
The Subordinated Notes, a series of Subordinated Debt Securities described
in the accompanying Prospectus, will be limited to $200,000,000 aggregate
principal amount and will mature on June 15, 2007. The Subordinated Notes are
to be issued under the Indenture Regarding Subordinated Securities to be dated
as of June 16, 1997 (the "Subordinated Indenture") between Mercantile and
Harris Trust and Savings Bank, as trustee (the "Trustee"). Concurrently with
the issuance of the Subordinated Notes, Mercantile is issuing the Senior
Securities as an additional series of Debt Securities. See "Concurrent
Offerings." The Trustee also is the trustee for the Senior Securities.
Reference should be made to the accompanying Prospectus for a detailed summary
of additional provisions of the Subordinated Notes and of the Subordinated
Indenture.
The Subordinated Notes will bear interest at the rate of 7.30% per annum
from June 16, 1997, until the principal amount thereof is paid or made
available for payment. Interest on the Subordinated Notes will be payable
semiannually in arrears on each June 15 and December 15 (each an "Interest
Payment Date"), beginning December 15, 1997, and at maturity. Interest payable
on the Subordinated Notes on any Interest Payment Date will be paid to the
persons in whose names the Subordinated Notes are registered at the close of
business on the first day of the month in which the relevant Interest Payment
Date occurs. Interest on the Subordinated Notes will be computed on the basis
of a 360-day year consisting of twelve 30-day months. Each payment of interest
in respect of an Interest Payment Date will include interest accrued through
the day before such Interest Payment Date. If an Interest Payment Date falls
on a day that is not a Business Day, the interest payment to be made on such
Interest Payment Date will be made on the next succeeding Business Day with
the same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue as a result of such delayed payment. "Business
Day" with respect to the Subordinated Notes means any day other than a
Saturday or Sunday that is neither a legal holiday nor a day on which banking
institutions are authorized or obligated by law or regulation to close in
either The City of New York or the City of Chicago.
The Subordinated Notes may not be redeemed prior to their Stated Maturity
and will not be subject to any sinking fund.
S-4
<PAGE>
SUBORDINATION
The Subordinated Notes will be unsecured and will be subordinated and junior
in right of payment to Mercantile's obligations to the holders of Senior
Indebtedness of Mercantile as described under "Subordinated Debt Securities"
in the accompanying Prospectus. The Subordinated Notes will rank equally and
ratably with all outstanding subordinated indebtedness of Mercantile and will
rank senior in right of payment to Mercantile's Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2027. At March 31, 1997, the
aggregate amount of Senior Indebtedness of Mercantile was approximately
$77,000,000.
LIMITED RIGHTS OF ACCELERATION
Payment of principal of the Subordinated Notes may be accelerated only in
the case of the bankruptcy, insolvency or reorganization of Mercantile or a
Principal Constituent Bank. There is no right of acceleration in the case of a
default in the payment of principal of or interest on the Subordinated Notes
or in the performance of any other covenant of Mercantile in the Subordinated
Indenture or in the Subordinated Notes. See "Subordinated Debt Securities--
Limited Rights of Acceleration" in the accompanying Prospectus.
DELIVERY AND FORM
The Subordinated Notes initially will be represented by global securities
("Global Securities") deposited with DTC and registered in the name of the
nominee of DTC, except as set forth below. The Subordinated Notes will be
available for purchase in denominations of $1,000 and integral multiples
thereof, in book-entry form only. Unless and until certificated Subordinated
Notes are issued under the limited circumstances described below, no
beneficial owner of a Subordinated Note shall be entitled to receive a
definitive certificate representing a Subordinated Note. So long as DTC or any
successor depositary (collectively, the "Depositary") or its nominee is the
registered holder of the Global Securities, the Depositary, or such nominee,
as the case may be, will be considered to be the sole owner or holder of the
Subordinated Notes for all purposes of the Subordinated Indenture.
BOOK-ENTRY SYSTEM
DTC has advised Mercantile that it is a limited-purpose trust company
organized under New York Banking Law, a "banking organization" within the
meaning of New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended. DTC was created to
hold securities for its participating organizations (the "Participants") and
facilitate the clearance and settlement of securities transactions between
Participants through electronic book-entry changes in accounts of its
Participants, thereby eliminating the need for physical movement of securities
certificates. Participants include securities brokers and dealers (including
the Underwriters), banks, trust companies and clearing corporations and may
include certain other organizations, some of which (and/or their
representatives) own the Depositary. Indirect access to the DTC system also is
available to others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly (the "Indirect Participants"). Beneficial owners of the
Subordinated Notes that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or other interest
in, the Subordinated Notes may do so only through Participants and Indirect
Participants.
Payments with respect to the Global Securities will be made by the Paying
Agent to DTC or any successor Depositary, or its nominee. Mercantile expects
that any such Depositary, or its nominee, upon receipt of any payment of
principal of or interest on the Global Securities will credit the accounts
S-5
<PAGE>
of its Participants with payments in amounts proportionate to such
Participants' respective ownership interests in the Global Securities.
Beneficial owners of the Subordinated Notes, directly or indirectly, will
receive distributions of principal and interest in proportion to their
beneficial ownership through the Participants. Consequently, any payments to
beneficial owners of the Subordinated Notes will be subject to the terms,
conditions and time of payment required by the Depositary, the Participants
and Indirect Participants, as applicable. Mercantile expects that such
payments will be governed by standing instructions and customary practices, as
is now the case with securities held for the accounts of customers registered
in "street name." Such payments will be the responsibility of such
Participants and Indirect Participants. Neither Mercantile, the Trustee for
the Subordinated Notes, any Paying Agent nor the Note Registrar for the
Subordinated Notes will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in the Subordinated Notes or for maintaining, supervising or
reviewing any record relating to such beneficial ownership interests.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among
Participants on whose behalf it acts with respect to the Subordinated Notes
and is required to receive and transmit distributions of principal and
interest on the Subordinated Notes. Participants and Indirect Participants
with which beneficial owners of the Subordinated Notes have accounts similarly
are required to make book-entry transfers and receive and transmit such
payments on behalf of their respective beneficial owners of the Subordinated
Notes. Accordingly, although beneficial owners of the Subordinated Notes will
not possess certificated Subordinated Notes, beneficial owners will receive
payments and will be able to transfer their interests.
Since it is anticipated that the only holder of the Subordinated Notes will
be the Depositary or its nominee, beneficial owners of the Subordinated Notes
will not be recognized as holders of the Subordinated Notes under the
Subordinated Indenture unless certificated definitive Subordinated Notes are
issued. So long as the Subordinated Notes are represented by the Global
Securities, beneficial owners of the Subordinated Notes will only be permitted
to exercise the rights of holders of Subordinated Notes indirectly through the
Participants who in turn will exercise such rights through the Depositary.
If the Depositary is at any time unwilling, unable or ineligible to continue
as depositary and a successor depositary is not appointed by Mercantile within
90 days, Mercantile will issue individual Subordinated Notes in definitive
form in exchange for the Global Securities representing the Subordinated
Notes. In addition, Mercantile may at any time and in its sole discretion
determine not to have the Subordinated Notes represented by Global Securities
and, in such event, will issue individual Subordinated Notes in definitive
form in exchange for the Global Securities representing the Subordinated
Notes. In either instance, Mercantile will issue Subordinated Notes in
definitive form equal in aggregate principal amount to the Global Securities,
in such names and in such principal amounts as the Depositary shall request.
Subordinated Notes so issued in definitive form will be issued in
denominations of $1,000 and integral multiples thereof and will be issued in
registered form only without coupons.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Subordinated Notes will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be
made by Mercantile in immediately available funds or the equivalent. The
Subordinated Notes will trade in the Depositary's Same-Day Funds Settlement
System until maturity, and secondary market trading activity in the
Subordinated Notes will therefore be required by the Depositary to settle in
immediately available funds. The effect, if any, of settlement in immediately
available funds on trading activity in the Subordinated Notes has not been
determined.
S-6
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated June 11, 1997 (the "Underwriting Agreement") among Mercantile
and the Underwriters named below (the "Underwriters"), Mercantile has agreed
to sell to each of the Underwriters and each of the Underwriters has severally
but not jointly agreed to purchase from Mercantile the following respective
principal amounts of the Subordinated Notes:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF SUBORDINATED NOTES
------------ ---------------------
<S> <C>
Salomon Brothers Inc................................... $ 66,700,000
Goldman, Sachs & Co.................................... 66,650,000
UBS Securities LLC..................................... 66,650,000
------------
Total.............................................. $200,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
to pay for and accept delivery of the Subordinated Notes are subject to
certain conditions precedent, that the Underwriting Agreement may be
terminated under certain circumstances and that the Underwriters will be
obligated to purchase all of the Subordinated Notes if any are purchased.
Mercantile has been advised by the Underwriters that the Underwriters
propose initially to offer the Subordinated Notes to the public at the public
offering price set forth on the cover page of this Prospectus Supplement and
to certain dealers at such price less a concession not in excess of .400% of
the principal amount of the Subordinated Notes. The Underwriters may allow,
and such dealers may reallow, a concession to certain other dealers not in
excess of .250% of the principal amount of the Subordinated Notes. After the
initial public offering, the public offering price and such concessions may be
changed from time to time.
The Underwriting Agreement provides that Mercantile will indemnify the
several Underwriters against certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended, or contribute to payments that
the Underwriters may be required to make in respect thereof.
The Subordinated Notes are a new issue of securities with no established
trading market. Mercantile does not intend to apply for listing of the
Subordinated Notes on a national securities exchange, but has been advised by
the Underwriters that they presently intend to make a market in the
Subordinated Notes, as permitted by applicable laws and regulations. The
Underwriters are not obligated, however, to make a market in the Subordinated
Notes, and any such market making may be discontinued at any time without
notice at the sole discretion of the Underwriters. Accordingly, no assurance
can be given as to the liquidity of, or the trading market for, the
Subordinated Notes.
The Underwriters and certain of their affiliates and associates may be
customers of, have borrowing relationships with, engage in transactions with,
and/or perform services, including investment banking services, for,
Mercantile and its subsidiaries in the ordinary course of business.
In connection with this offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Subordinated
Notes. Such transactions may include stabilization transactions effected in
accordance with Rule 104 of Regulation M under the Securities Exchange Act of
1934, as amended, pursuant to which such persons may bid for or purchase
Subordinated Notes for the purpose of stabilizing their market price. The
Underwriters also may create a short position for their respective accounts by
selling more Subordinated Notes in connection with this offering than they are
committed to purchase from Mercantile, and in such case may purchase
Subordinated Notes in the open market following completion of this offering to
cover all or a portion of such short position. In addition, Salomon
S-7
<PAGE>
Brothers Inc, on behalf of the Underwriters, may impose "penalty bids" under
contractual arrangements between the Underwriters whereby it may reclaim from
an Underwriter (or dealer participating in this offering) for the account of
the Underwriters, the selling concession with respect to Subordinated Notes
that are distributed in this offering but subsequently purchased for the
account of the Underwriters in the open market. Any of the transactions
described in this paragraph may result in the maintenance of the price of the
Subordinated Notes at a level above that which might otherwise prevail in the
open market. None of the transactions described in this paragraph is required,
and, if they are undertaken, they may be discontinued at any time.
S-8
<PAGE>
PROSPECTUS
DEBT SECURITIES
LOGO
MERCANTILE BANCORPORATION INC.
Mercantile Bancorporation Inc. ("Mercantile") from time to time may offer its
unsecured debt securities (the "Debt Securities"), which may be either senior
(the "Senior Debt Securities") or subordinated (the "Subordinated Debt
Securities") in priority of payment, up to an amount resulting in proceeds to
Mercantile of approximately $500,000,000. The Debt Securities may be offered
as separate series in amounts, at maturities, at prices and on terms to be
determined at the time of sale as set forth in a supplement or supplements to
this Prospectus (a "Prospectus Supplement"). Mercantile may sell Debt
Securities to or through underwriters, and also may sell Debt Securities
directly to other purchasers or through agents. If Mercantile, directly or
through agents, solicits offers to purchase the Debt Securities, Mercantile
reserves the sole right to accept, and together with its agents, to reject in
whole or in part any proposed purchase of Debt Securities. See "Plan of
Distribution."
The terms of a particular series of Debt Securities, including the specific
designation, aggregate principal amount, denominations, maturity, rate (which
may be fixed or variable) and time of payment of interest, if any,
subordination terms, if any, any terms for redemption at the option of
Mercantile or the holder, any terms for sinking fund payments, the initial
public offering price, the names of, and the principal amounts, if any, to be
purchased by, underwriters and the compensation of such underwriters, and the
other terms in connection with the offering and sale of a particular series of
the Debt Securities in respect of which this Prospectus is being delivered,
will be set forth in a Prospectus Supplement.
THE DEBT SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS OR DEPOSIT
ACCOUNTS, ARE NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR NON-
BANKING AFFILIATE OF MERCANTILE BANCORPORATION INC., ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY AND INVOLVE INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.
----------------
THE DEBT SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is May 28, 1997.
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY MERCANTILE, OR ANY UNDERWRITER,
AGENT OR DEALER. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF MERCANTILE
SINCE THE DATE HEREOF OR THEREOF. THIS PROSPECTUS AND ANY RELATED PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
AVAILABLE INFORMATION
Mercantile is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files with the Securities and Exchange Commission (the
"Commission") reports, proxy statements and other information. Such reports,
proxy statements and other information filed with the Commission by Mercantile
can be inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at Suite 1300, Seven World Trade Center,
New York, New York 10048 and Suite 1400, Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. The Commission maintains an Internet site on
the World Wide Web containing reports, proxy and information statements and
other information filed electronically by Mercantile with the Commission. The
address of the World Wide Web site maintained by the Commission is
http://www.sec.gov. Mercantile Common Stock is listed on the New York Stock
Exchange (the "NYSE"), and such reports, proxy statements and other
information concerning Mercantile are available for inspection and copying at
the offices of the NYSE, 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by Mercantile with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Debt
Securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission,
and reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to Mercantile and the
Debt Securities. Any statements contained herein concerning the provisions of
any document are not necessarily complete, and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission, which may be inspected
without charge at the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C 20549. Each such statement is qualified in its
entirety by such reference. Copies of the Registration Statement may be
obtained from the Commission at the same address upon payment of the
prescribed fees.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS RELATING TO MERCANTILE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. IN ADDITION, THIS
PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS RELATING TO ROOSEVELT FINANCIAL
GROUP, INC. ("ROOSEVELT"), A DELAWARE CORPORATION AND SAVINGS AND LOAN HOLDING
COMPANY, WHICH RECENTLY ENTERED INTO A DEFINITIVE AGREEMENT WITH MERCANTILE TO
BE ACQUIRED BY MERCANTILE. SUCH DOCUMENTS, EXCLUDING EXHIBITS UNLESS
SPECIFICALLY INCORPORATED THEREIN, ARE AVAILABLE
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WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST, TO JON W. BILSTROM, GENERAL COUNSEL AND SECRETARY,
MERCANTILE BANCORPORATION INC., P.O. BOX 524, ST. LOUIS, MISSOURI 63166-0524,
TELEPHONE (314) 425-2525.
The following documents filed with the Commission by Mercantile under the
Exchange Act are incorporated herein by reference:
(i) Annual Report on Form 10-K for the year ended December 31, 1996;
(ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1997;
(iii) Current Reports on Form 8-K dated May 2, 1997 and May 13, 1997 and
Current Report on Form 8-K/A dated May 22, 1997; and
(iv) Registration Statement on Form S-4 (File No. 333-27431), filed on May
20, 1997.
The following documents filed with the Commission by Roosevelt under the
Exchange Act is incorporated herein by reference: Roosevelt's Annual Report on
Form 10-K for the year ended December 31, 1996, as amended on Form 10-K/A on
March 14, 1997 and on Form 10-K/A-2 on April 29, 1997; and Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997.
All documents filed by Mercantile and Roosevelt pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference herein and made a part hereof from the date any such document is
filed. The information relating to Mercantile and Roosevelt contained in this
Prospectus does not purport to be complete and should be read together with
the information in the documents incorporated by reference herein. Any
statement contained herein or in a document incorporated herein by reference
shall be deemed to be modified or superseded for purposes hereof to the extent
that a subsequent statement contained herein or in any other subsequently
filed document incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part hereof. Any
statements contained in this Prospectus involving matters of opinion, whether
or not expressly so stated, are intended as such and not as representations of
fact.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including such documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of
any contract or other document referred to herein do not purport to be
complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respect by
reference to all of the provisions of such contract or other document.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in the sections entitled "Mercantile
Bancorporation Inc." and "Recent Developments" and certain statements
incorporated by reference from documents filed with the Commission by
Mercantile and Roosevelt are or may constitute forward-looking statements (as
such term is defined in the Private Securities Litigation Reform Act of 1995).
Because such statements are subject to risks and uncertainties, actual results
may differ materially from those expressed or implied by such forward-looking
statements.
MERCANTILE BANCORPORATION INC.
Mercantile is a registered bank holding company headquartered in St. Louis,
Missouri and incorporated under the laws of the State of Missouri in 1970. At
March 31, 1997, Mercantile, directly or through its subsidiaries, owned all of
the capital stock of Mercantile Bank National Association, based in St. Louis,
Missouri ("Mercantile Bank") and 27 other commercial banks and one federally
chartered thrift, all of which operate from 467 banking offices and 427
Fingertip Banking automated teller machines located throughout Missouri,
Illinois, Iowa, Arkansas and eastern Kansas (collectively, the "Banking
Subsidiaries").
Mercantile's services concentrate in three major lines of business--
consumer, corporate and trust and investment advisory services. Mercantile
also operates non-banking subsidiaries that provide related financial
services, including investment management, brokerage services and asset-based
lending.
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Mercantile has one acquisition transaction currently pending; the proposed
acquisition of Roosevelt, which is headquartered in St. Louis, Missouri. For
further information regarding the pending acquisition of Roosevelt, see
"Recent Developments."
Mercantile is a legal entity separate and distinct from Mercantile Bank and
Mercantile's other Banking Subsidiaries and affiliates. Because Mercantile is
a holding company, its rights and the rights of its creditors and
shareholders, including the holders of the Debt Securities, to participate in
the assets of any subsidiary upon its liquidation or recapitalization will be
subject to the prior claims of such subsidiary's creditors except to the
extent that Mercantile may itself be a creditor having recognized claims
against such subsidiary, in which case it will share in such subsidiary's
assets along with other creditors. As a result, the Debt Securities will be
effectively subordinated to all existing and future liabilities, including
trade payables, of Mercantile's subsidiaries.
There are various legal and regulatory limitations on the extent to which
Mercantile's Banking Subsidiaries may extend credit, pay dividends or
otherwise supply funds to Mercantile. The approval of the Office of the
Comptroller of the Currency (the "OCC") is required if total dividends
declared by a national bank in any calendar year should exceed net profits for
that year combined with its retained net profits for the preceding two years.
Moreover, banks may not pay dividends in excess of their undivided profits. In
determining whether and to what extent to pay dividends, each Banking
Subsidiary must also consider the effect of dividend payments on applicable
risk-based capital and leverage requirements as well as policy statements of
the federal regulatory agencies to the effect that, generally, banking
organizations should pay dividends out of current operating earnings.
Mercantile's state-chartered Banking Subsidiaries are subject to similar
restrictions under their respective state laws. While the specific standards
vary from state to state, the Banking Subsidiaries are generally permitted to
pay dividends only from net profits, and then, only after first deducting
losses and credit write-offs. All of the applicable state statutes prohibit
the payment of dividends if such a payment would impair capital. In addition,
numerous governmental requirements and regulations affect the activities of
Mercantile and its bank and non-bank subsidiaries. See the discussion in Part
1, Item 1 of Mercantile's Form 10-K for the year ended December 31, 1996 under
the caption "Supervision and Regulation."
The principal executive offices of Mercantile are located at One Mercantile
Center, P.O. Box 524, St. Louis, Missouri 63166-0524 (telephone number (314)
425-2525).
RECENT DEVELOPMENTS
As of March 31, 1997, Mercantile reported, on a restated consolidated basis,
total assets of $22.1 billion, total deposits of $17.4 billion and
shareholders' equity of $1.9 billion compared with total assets of $20.9
billion, total deposits of $16.4 billion and shareholders' equity of $1.9
billion as of March 31, 1996. For the three months ended March 31, 1997,
Mercantile reported, on a restated basis, net income of $0.98 per share,
compared to $0.21 per share (which includes one-time acquisition charges) for
the three months ended March 31, 1996.
During the fourth quarter of 1996, Mercantile announced the execution of a
definitive agreement to acquire Roosevelt, a Delaware corporation and a
savings and loan holding company. The definitive agreement is dated December
23, 1996 and the transaction is expected to close during the third quarter of
1997. Such transaction is subject to prior approval of the stockholders of
Roosevelt and appropriate regulatory approvals.
Roosevelt, with its executive offices in St. Louis, Missouri, owns Roosevelt
Bank and one Missouri state-chartered bank, all of which operate from 81
locations in Missouri, Kansas and Illinois. As of March 31, 1997, Roosevelt
reported, on a consolidated basis, total assets of $7.5 billion, total
deposits of $5.3 billion and total stockholders' equity of $469.6 million.
Upon consummation of the transaction, Mercantile will issue up to 13 million
shares (which will include up to 7 million reissued treasury shares) of its
common stock at an exchange ratio of .4211 for each share of Roosevelt common
stock, or $22.00 per share in cash, as consideration in the acquisition. The
Roosevelt transaction will be accounted for as a purchase.
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On February 4, 1997, Mercantile issued $150,000,000 of floating-rate debt
through Mercantile Capital Trust I, a Delaware statutory business trust (the
"Capital Trust"). For regulatory purposes, such debt is considered Tier I
capital. Proceeds of this transaction are expected to be utilized for share
repurchases relating to the Roosevelt transaction as well as for general
corporate purposes.
On March 5, 1997, Mercantile completed the acquisition of Regional
Bancshares, Inc. ("Regional"), an Illinois corporation and a bank holding
company. The acquisition was accounted for under the purchase method of
accounting. As of March 5, 1997, Regional reported, on a consolidated basis,
total assets of $172.0 million, total deposits of $135.9 million and
shareholders' equity of $25.0 million.
On April 25, 1997, Mercantile completed the acquisition of Mark Twain
Bancshares, Inc. ("Mark Twain"), a Missouri corporation and bank holding
company. This acquisition was accounted for under the pooling-of-interests
method of accounting. As of March 31, 1997, Mark Twain reported, on a
consolidated basis, total assets of $3.2 billion, total deposits of $2.5
billion and shareholders' equity of $320.4 million.
In connection with the acquisition of Mark Twain, Mercantile restated its
consolidated financial statements as of and for the years ended December 31,
1996, 1995 and 1994 and as of and for the three months ended March 31, 1997
and 1996. Mercantile filed supplemental financial statements as of and for the
years ended December 31, 1996, 1995 and 1994 and as of and for the three
months ended March 31, 1997 and 1996 in a Current Report on Form 8-K dated May
13, 1997, which has been incorporated by reference into this Prospectus.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ----------------------------
1997 1996 1995 1994 1993 1992
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges(1)
Excluding Interest on
Deposits.................. 4.00x 3.75x 3.88x 4.70x 5.40x 4.27x
Including Interest on
Deposits.................. 1.62x 1.51x 1.59x 1.69x 1.60x 1.39x
</TABLE>
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(1) For purposes of calculating the ratio of earnings to fixed charges,
earnings consist of earnings before income taxes plus interest and one-
third of rental expense. Fixed charges, excluding interest on deposits,
consists of interest on indebtedness and one-third of rental expense
(which is deemed representative of the interest factor). Fixed charges,
including interest on deposits, consists of the foregoing items plus
interest on deposits.
USE OF PROCEEDS
Mercantile intends to use the net proceeds from the sale of the Debt
Securities to fund the proposed acquisition of Roosevelt, including the
repurchase of shares to be reissued in connection therewith, and the balance,
if any, for general corporate purposes, including, without limitation, the
reduction of indebtedness, investments in and advances to subsidiaries and
possible future acquisitions of bank and non-bank subsidiaries. Although
Mercantile from time to time evaluates potential acquisitions, it currently
has no understandings, commitments or agreements with respect to any
acquisitions, except with respect to Roosevelt. See "Recent Developments."
Pending such application, the net proceeds will be invested in short-term
investment grade obligations.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will consist of either Senior Debt Securities or
Subordinated Debt Securities. The Senior Debt Securities will be issued under
a senior indenture (the "Senior Indenture") and the Subordinated Debt
Securities will be issued under a subordinated indenture (the "Subordinated
Indenture"). The Senior Indenture and the Subordinated Indenture collectively
are referred to as the "Indentures" and the trustee under the Senior Indenture
(the "Senior Trustee") and the trustee under the Subordinated Indenture (the
"Subordinated Trustee") sometimes are referred to as the "Trustee." The
following description of Debt Securities relates to Debt Securities to be
issued in connection with either a United States Offering or an International
Offering, except, in the case of an International Offering, as otherwise
specified in the Prospectus Supplement relating thereto.
The trustee for a particular series of Debt Securities will be identified in
the Prospectus Supplement for such series, and all references to "Trustee"
shall be deemed to mean the trustee so identified. No Trustee shall be
responsible for the acts, obligations, liabilities or responsibilities of any
other trustee. The following summaries of certain provisions of the Indentures
do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Indentures, including the
definitions therein of certain terms. Wherever particular sections or defined
terms of the Indentures are referred to, it is intended that such sections or
definitions shall be incorporated herein by reference. The following sets
forth certain terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Securities") and the
extent, if any, to which such general provisions may apply to the Debt
Securities so offered, will be described in the Prospectus Supplement relating
to such Offered Securities.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provide that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured obligations of Mercantile. Neither the Indentures nor the Debt
Securities will limit or otherwise restrict the amount of other indebtedness
that may be incurred or other securities that may be issued by Mercantile or
any of its subsidiaries.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Securities for the following terms of such Offered
Securities: (1) the title; (2) any limit on the aggregate principal amount;
(3) whether such Offered Securities are Senior Debt Securities or Subordinated
Debt Securities; (4) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which such Offered Securities will be
issued; (5) the date or dates on which such Offered Securities will mature;
(6) the rate or rates (which may be fixed or floating) per year at which such
Offered Securities will bear interest, if any, or the method of determining
the same; (7) the date from which such interest, if any, on such Offered
Securities will accrue, the dates on which such interest, if any, will be
payable, the date on which payment of such interest, if any, will commence and
the Regular Record Dates for such Interest Payment Dates, if any; (8) the
extent to which any of such Offered Securities will be issuable in the form of
one or more temporary or permanent Global Securities, and, if so, the identity
of the depository for such Global Securities, or the manner in which any
interest payable on temporary or permanent Global Securities will be paid; (9)
the dates, if any, on which, and the price or prices at which, such Offered
Securities will, pursuant to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund or to any purchase fund provisions, be
redeemed by Mercantile, and the other detailed terms and provisions of such
sinking and/or purchase funds; (10) the date, if any, after which, and the
price or prices at which, such Offered Securities may, pursuant to any
optional redemption provisions, be redeemed at the option of Mercantile or of
the holder thereof and the other detailed terms and provisions of such
optional redemption; (11) the denomination or denominations in which such
Offered Securities are authorized to be issued; (12) whether such Offered
Securities will be issued as Registered Securities, Bearer Securities or both
and any limitations on the issuance of such Bearer Securities (including
exchange for Registered Securities of
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the same series); (13) information with respect to book-entry procedures; (14)
each office or agency where, subject to the terms of the applicable Indenture,
such Offered Securities may be presented for registration of transfer or
exchange; and (15) any other terms of such Offered Securities (which will not
be inconsistent with the provisions of the applicable Indenture).
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their principal amount. Any special
considerations relating thereto will be described in the applicable Prospectus
Supplement.
The Debt Securities may be issuable as Registered Securities, Bearer
Securities or both. Unless otherwise indicated in the applicable Prospectus
Supplement, each series of Debt Securities will be issued as Registered
Securities. Debt Securities issued as Bearer Securities shall have interest
coupons attached, unless issued as zero coupon securities. Unless otherwise
indicated in the applicable Prospectus Supplement, Registered Securities will
be issued only in denominations of $1,000 or integral multiples thereof and
Bearer Securities will be issued only in denominations of $5,000 or integral
multiples thereof.
Bearer Securities shall not be offered, sold, resold or delivered in
connection with their original issuance in the United States or to any United
States person (as defined below) other than to offices located outside the
United States of certain United States financial institutions. "United States
person" means any citizen or resident of the United States, any corporation,
partnership or other entity created or organized in or under the laws of the
United States, any estate the income of which is subject to United States
federal income taxation regardless of its source, or a trust if (i) a United
States court is able to exercise primary supervision over the trust's
administration and (ii) one of more United States fiduciaries have the
authority to control all the trust's substantial decisions, and "United
States" means the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction. Purchasers of Bearer Securities will be subject
to certification procedures and may be affected by certain limitations under
United States tax laws. Such procedures and limitations will be described in
the Prospectus Supplement relating to the offering of the Bearer Securities.
The applicable Prospectus Supplement will include a description of the
requirements for certification of ownership by non-United States persons that
will apply prior to (1) the issuance of Bearer Securities or (2) the payment
of interest that occurs prior to the issuance of Bearer Securities.
Unless otherwise indicated in the applicable Prospectus Supplement,
Registered Securities of any series (other than a Global Security (as defined
in the Indentures), except as set forth below) will be exchangeable into an
equal aggregate principal amount of Registered Securities of the same series,
tenor and terms of different authorized denominations and Bearer Securities
may be exchanged for Registered Securities on the terms set forth in the
applicable Prospectus Supplement. In no event will Registered Securities be
exchangeable for Bearer Securities. Unless otherwise indicated in the
applicable Prospectus Supplement, Debt Securities may be presented for
exchange, and Registered Securities (other than a Global Security) may be
presented for registration of transfer, at the offices of the appropriate
Trustee.
No service charge will be made for any registration of transfer or exchange
of the Debt Securities but Mercantile may require payment sufficient to cover
any tax or other governmental charge payable in connection therewith.
PAYMENT AND PAYING AGENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities will be
made at the office of the appropriate Trustee, except that, at the option of
Mercantile, interest may be paid by mailing a check to the address of the
person entitled thereto
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as it appears on the Security Register (as defined in the Indentures) (Section
3.02 of the Senior Indenture; Section 4.02 of the Subordinated Indenture).
Paying Agents (as defined in the Indentures) will be named in the Prospectus
Supplement and may be terminated at any time.
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Securities will be
made, subject to applicable laws and regulations, at such paying agencies
outside the United States as Mercantile may designate from time to time. Any
such payment may be made, at the option of the holder, by check or by transfer
to an account maintained by the payee with a bank located outside the United
States. Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest on Bearer Securities will be made only against surrender
of the coupon relating to the relevant Interest Payment Date (as defined in
the Indentures). No payment with respect to any Bearer Security will be made
at any office or agency of Mercantile in the United States or by check mailed
to any address in the United States or by transfer to an account maintained
with a bank located in the United States.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depository (the "Depository") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless
and until it is exchanged in whole or in part for the individual certificates
evidencing the Debt Securities represented thereby, a Global Security may not
be transferred except as a whole by the Depository for such Global Security to
a nominee of such Depository or by a nominee of such Depository to such
Depository or another nominee of such Depository or by such Depository or any
such nominee to a successor of such Depository or a nominee of such successor.
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to
such series. Mercantile anticipates that the following provisions will apply
to all depository arrangements although no assurance can be given that such
will be the case.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Debt Securities
represented by such Global Security to the accounts of institutions that have
accounts with such Depository ("participants"). The accounts to be credited
shall be designated by the underwriters or agents of such Debt Securities or
by Mercantile if such Debt Securities are offered and sold directly by
Mercantile. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through
participants. Ownership of such beneficial interests will be shown on, and the
transfer of that ownership will be effected only through, records maintained
by the Depository or its nominee for such Global Security (with respect to
interests of participants) and the records of participants (with respect to
interests of persons other than participants). The laws of some states require
that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
owner of such Global Security, such Depository or such nominee, as the case
may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture
governing such Debt Securities. Except as set forth below, owners of
beneficial interests in a Global Security registered in their names will not
receive or be entitled to receive physical delivery of Debt Securities of such
series in definitive form and will not be considered the owners or holders
thereof under the Indenture governing such Debt Securities.
Payments of principal of and any premium and interest on Debt Securities
registered in the name of or held by a Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner
or the holder of the Global Security representing such Debt Securities. None
of Mercantile, the Trustee for such Debt Securities or any Paying Agent or the
Security Registrar for such Debt Securities will
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have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in a Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Mercantile expects that the Depository for Debt Securities of a series, upon
receipt of any payment of principal, premium or interest in respect of a
permanent Global Security, immediately will credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of such
Depository or its nominee. Mercantile also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in street name, and will be the
responsibility of such participants.
If the Depository for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as Depository and a successor Depository is
not appointed by Mercantile within 90 days, Mercantile will issue Debt
Securities of such series in definitive form in exchange for the Global
Security or Securities representing the Debt Securities of such series. In
addition, Mercantile at any time and in its sole discretion, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities, may determine not to have any Debt Securities of a series
represented by one or more Global Securities and, in such event, will issue
Debt Securities of such series in definitive form in exchange for the Global
Security or Securities representing such Debt Securities. Further, if
Mercantile so specifies with respect to the Debt Securities of a series, an
owner of a beneficial interest in a Global Security representing Debt
Securities of such series may receive, on terms acceptable to Mercantile and
the Depository for such Global Security, Debt Securities of such series in
definitive form in exchange for such beneficial interest, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form of
Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name (if the Debt Securities of such series are issuable as
Registered Securities). Debt Securities of such series so issued in definitive
form will be issued (a) as Registered Securities in denominations, unless
otherwise specified by Mercantile, of $1,000 or integral multiples thereof if
the Debt Securities of such series are issuable as Registered Securities, (b)
as Bearer Securities in denominations, unless otherwise specified by
Mercantile, of $5,000 or integral multiples thereof if the Debt Securities of
such series are issuable as Bearer Securities or (c) as either Registered or
Bearer Securities, if the Debt Securities of such series are issuable in
either form.
CERTAIN COVENANTS OF MERCANTILE
Restrictions on Certain Dispositions of Voting Stock and Assets. Except as
described below under "Consolidation, Merger and Sale of Assets," the Senior
Indenture prohibits the sale or other disposition by Mercantile or any
Principal Constituent Bank (as defined below) of shares of, or securities
convertible into or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of a Principal Constituent Bank, the merger or
consolidation of any Principal Constituent Bank with any other corporation
(other than Mercantile or a Controlled Subsidiary), and the lease, sale or
other disposition of all or substantially all the assets of any Principal
Constituent Bank if, after giving effect to the transaction and to the
issuance of Voting Stock issuable to Persons other than Mercantile or any
Controlled Subsidiary (as defined below) upon the conversion or exercise of
all such convertible securities, options, warrants or rights, Mercantile would
no longer own (directly or indirectly) more than 80% of the shares of voting
stock of such Principal Constituent Bank or its successor. Neither Indenture,
however, prohibits any such sale or disposition of shares or securities, any
such merger or consolidation or any such lease, sale or disposition of assets
(i) if required by law or (ii) as a condition imposed by law to the
acquisition by Mercantile or any Controlled Subsidiary, directly or
indirectly, of any other corporation or entity if, thereafter, (a) Mercantile
and/or its Controlled Subsidiaries would own more than 80% of the Voting Stock
of such other corporation or entity (after giving effect to any potential
dilution from exercise or conversion of securities owned by parties other than
Mercantile and its Controlled Subsidiaries), (b) the
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Consolidated Net Banking Assets of Mercantile would not be decreased and (c)
Mercantile would still own more than 80% of the voting stock of such Principal
Constituent Bank (Section 3.06 of the Senior Indenture). "Principal
Constituent Bank" means Mercantile Bank and any other Subsidiary of Mercantile
that is a bank, including savings associations and other United States
depository institutions, the total assets of which equal more than 20% of the
total assets of all Subsidiaries of Mercantile that are banks (Section 1.01).
As of the date of this Prospectus, Mercantile's only Principal Constituent
Bank was Mercantile Bank. "Controlled Subsidiary" means any Subsidiary of
which more than 80% of the aggregate voting power of the outstanding shares of
the Voting Stock is at the time owned directly or indirectly by Mercantile or
by one or more Controlled Subsidiaries or by Mercantile and one or more
Controlled Subsidiaries, after giving effect to the issuance to any Person
other than Mercantile or any Controlled Subsidiary of Voting Stock of the
Subsidiary issuable on exercise of options, warrants or rights to subscribe
for such Voting Stock or on conversion of securities convertible into such
Voting Stock.
Restrictions on Liens. The Senior Indenture provides that Mercantile will
not create, assume, incur or suffer to exist any pledge, encumbrance or lien,
as security for indebtedness for borrowed money, upon any shares of, or
securities convertible into, or options, warrants or rights to subscribe for
or purchase shares of, Voting Stock of any Principal Constituent Bank owned by
Mercantile, directly or indirectly, if, treating the pledge, encumbrance or
lien as a transfer to the secured party, and after giving effect to any
potential dilution referred to above, Mercantile would no longer own (directly
or indirectly) more than 80% of the shares of Voting Stock of such Principal
Constituent Bank (Section 3.07 of the Senior Indenture). The Subordinated
Indenture does not contain a similar provision.
MODIFICATION OF THE INDENTURES; WAIVER OF COVENANTS
Each Indenture contains provisions permitting Mercantile and the Trustee to
modify the Indenture with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding Debt Securities of
each series affected thereby, except that, without the consent of the holder
of each Debt Security affected thereby, no such modification may, among other
things: (a) change the stated maturity date of the principal of, or any
installment of principal or interest on, any Outstanding Security; (b) reduce
the principal amount of, or any premium or interest on, any Outstanding
Security; (c) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the maturity thereof; (d) change the
place of payment of principal of, or any premium or interest on, any
Outstanding Security; (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Outstanding Security; (f)
reduce the percentage in principal amount of Outstanding Securities of any
series the consent of whose holders is required for modification or amendment
of the Indenture or for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults; or (g) in the case of the
Subordinated Indenture, make any change in the subordination provisions that
adversely affects the rights of any holder of Subordinated Debt Securities.
Prior to any acceleration of the Debt Securities of any series, the holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of such series may waive any past default or Event of Default under the
applicable Indenture, except a default under a covenant that cannot be
modified without the consent of each holder of a Debt Security of the series
affected thereby (Section 4.07(b) of the Senior Indenture; Section 5.07(b) of
the Subordinated Indenture). In addition, the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of any series
may rescind a declaration of acceleration of the Debt Securities of any series
before any judgment has been obtained if (i) Mercantile pays the Trustee
certain amounts due to the Trustee plus all matured installments of principal
of and any premium and interest on the Debt Securities of such series (other
than installments due by acceleration) and interest on the overdue
installments to the extent provided in the applicable Indenture and (ii) all
other defaults with respect to Debt Securities of that series under the
applicable Indenture have been cured or waived (Section 4.01 of the Senior
Indenture; Section 5.01 of the Subordinated Indenture).
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each Indenture provides that Mercantile may not consolidate with or merge
into, or convey, transfer or lease its properties and assets substantially as
an entirety to, any Person unless: (a) the successor is organized under
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the laws of any domestic jurisdiction and assumes Mercantile's obligations on
the Debt Securities and under the applicable Indenture; (b) after giving
effect to the transaction, no Event of Default, and no event which, after
notice or lapse of time, would become an Event of Default, has occurred and is
continuing; and (c) certain other conditions are met (Section 9.01 of the
Senior Indenture; Section 10.01 of the Subordinated Indenture). In that event,
the successor will be substituted for Mercantile and except in the case of a
lease, Mercantile will be relieved of its obligations under the applicable
Indenture and the Debt Securities of each series (Section 9.02 of the Senior
Indenture; Section 10.02 of the Subordinated Indenture).
THE TRUSTEE
Mercantile will have no material relationship with the Trustee other than as
Trustee. Mercantile Bank may transact business with the Trustee in the
ordinary course.
The Indenture, under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), is deemed to contain certain limitations on the right of the
Trustee, as a creditor of Mercantile, to obtain payment of claims in certain
cases or to realize on certain property received in respect of any such claim,
as security or otherwise. The Trustee will be permitted to engage in
transactions with Mercantile. The occurrence of a default under either
Indenture with respect to Subordinated Debt Securities or Senior Debt
Securities could create a conflicting interest for the Trustee under the Trust
Indenture Act. If the default has not been cured or waived within 90 days
after the Trustee has or acquires a conflicting interest, the Trustee
generally is required by the Trust Indenture Act to eliminate such conflicting
interest or resign as Trustee with respect to the Subordinated Debt Securities
or the Senior Debt Securities. In the event of the Trustee's resignation,
Mercantile shall promptly appoint a successor trustee with respect to the
affected securities.
INTERNATIONAL OFFERING
If specified in the applicable Prospectus Supplement, Mercantile may issue
Offered Securities in an International Offering. Such Offered Securities may
be issued as Bearer Securities, Registered Securities or both and will be
described in the applicable Prospectus Supplement.
In connection with any such International Offering, Mercantile will
designate paying agents, registrars or other agents with respect to the
Offered Securities as specified in the applicable Prospectus Supplement.
Offered Securities issued in an International Offering may be subject to
certain selling restrictions which will be described in the applicable
Prospectus Supplement. Such Offered Securities may be listed on one or more
foreign stock exchanges as described in the applicable Prospectus Supplement.
Special United States tax and other considerations, if any, applicable to an
International Offering will be described in the applicable Prospectus
Supplement.
SENIOR DEBT SECURITIES
The Senior Debt Securities will be direct, unsecured obligations of
Mercantile and will rank equally and ratably with all outstanding unsecured
and unsubordinated indebtedness of Mercantile.
EVENTS OF DEFAULT
The Senior Indenture defines an Event of Default with respect to any
particular series of Senior Debt Securities as being any one of the following
events unless it is either inapplicable to a particular series or specifically
deleted or modified for the Senior Debt Securities of such series: (a) default
for 30 days in the payment of any interest upon any of the Senior Debt
Securities of that series; (b) default in the payment of the principal or any
premium on any of the Senior Debt Securities of that series when due; (c)
default in the payment of any sinking fund installment or analogous obligation
with respect to any of the Senior Debt Securities of that
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series when due; (d) a default or event of default under any instrument under
which there may be issued, or by which there may be secured or evidenced, any
indebtedness of Mercantile (other than the Senior Debt Securities of such
series or indebtedness to a Subsidiary) or any Subsidiary (other than
indebtedness of any Subsidiary owing to Mercantile or to another Subsidiary)
shall happen and not less than $20,000,000 of such indebtedness shall be past
due, or become due by acceleration, and such indebtedness or acceleration is
not discharged or rescinded within 30 days after notice by the Senior Trustee
or holders of at least 25% in aggregate principal amount of the outstanding
Senior Debt Securities of that series (calculated in accordance with the
formula set forth in such series in the case of a series of Senior Debt
Securities issued at an Original Issue Discount (as defined in the Senior
Indenture)); (e) final judgment(s) or order(s) for the payment of money in
excess of $20,000,000 is entered against Mercantile or a Principal Constituent
Bank and within 90 days of entry is not discharged or the execution thereof is
not stayed pending appeal, or within 90 days after the expiration of the stay
the judgment(s) or order(s) is not discharged; (f) default in the observance
or performance of any other covenant in the Senior Debt Securities of such
series or the Senior Indenture for 90 days after notice by the Senior Trustee
or holders of at least 25% in aggregate principal amount of the outstanding
Senior Debt Securities of the series (calculated in accordance with the
formula set forth in such series in the case of a series of Senior Debt
Securities issued at an Original Issue Discount); or (g) certain events of
bankruptcy, insolvency or reorganization of Mercantile or a Principal
Constituent Bank (Section 4.01).
In case an Event of Default with respect to the Senior Debt Securities of
any series shall occur and be continuing, the Senior Trustee or the holders of
not less than 25% in aggregate principal amount (in the case of a series of
Senior Debt Securities issued at an Original Issue Discount, calculated in
accordance with the formula set forth in such series) of all the outstanding
Senior Debt Securities of such series may declare the principal (or in the
case of a series of Senior Debt Securities issued at an Original Issue
Discount, the amount calculated in accordance with the formula set forth in
such series of Senior Debt Securities) of all the Securities of such series to
be due and payable (Section 4.01). The Senior Indenture provides that the
Senior Trustee, within 90 days after the occurrence of a default with respect
to Senior Debt Securities of any series under the Senior Indenture, shall mail
to the holders of the Senior Debt Securities of such series notice of all
uncured defaults known to it that have not been waived (the term defaults to
include events specified above which, after notice or lapse of time or both
would become an Event of Default); provided that, except in the case of
default in the payment of principal of or any premium or interest on any of
the Senior Debt Securities of that series or in the making of any sinking fund
payment with respect to the Senior Debt Securities of such series, the Senior
Trustee may withhold such notice if it in good faith determines that
withholding such notice is in the interest of the holders of the Securities of
that series (Section 4.08).
Subject to the provisions of the Senior Indenture relating to the duties of
the Senior Trustee in case an Event of Default shall occur and be continuing,
the Senior Trustee is under no obligation to exercise any of the rights or
powers under the Senior Indenture at the request, order or direction of any of
the holders of the Senior Debt Securities, unless such holders offer to the
Senior Trustee reasonable security or indemnity (Section 5.02(d)). Subject to
certain limitations contained in the Senior Indenture (including among other
limitations that the Senior Trustee will not be exposed to personal
liability), the holders of a majority in aggregate principal amount of the
outstanding Senior Debt Securities of all series affected (voting as one
class) have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Senior Trustee, or exercising any
trust or power conferred on the Senior Trustee (Section 4.07).
No holder of any Senior Debt Security of any series will have any right to
institute any proceeding with respect to the Senior Indenture or for any
remedy thereunder, unless such holder previously shall have given to the
Senior Trustee written notice of a continuing Event of Default with respect to
Senior Debt Securities of that series and unless also the holders of not less
than 25% in aggregate principal amount (in the case of a series of Senior Debt
Securities issued at an Original Issue Discount, calculated in accordance with
the formula set forth in such series) of the outstanding Senior Debt
Securities of that series shall have made written request, and offered
reasonable indemnity, to the Senior Trustee to institute such proceeding as
Senior Trustee, and the Senior Trustee shall not have received from the
holders of a majority in principal amount of the outstanding Senior
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Debt Securities of that series a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days (Section 4.04).
However, the holder of any Senior Debt Security will have an absolute right to
receive payment of the principal of and any premium and interest if any, on
such Senior Debt Security on or after the due dates expressed in such Senior
Debt Security and to institute suit for the enforcement of any such payment
(Section 4.04).
Mercantile is obligated to furnish annually to the Senior Trustee a
statement as to the performance by Mercantile of its obligations under the
Senior Indenture and as to any default in such obligations (Section 3.04).
DEFEASANCE
Mercantile may terminate certain of its obligations under the Senior
Indenture with respect to the Senior Debt Securities of any series on the
terms and subject to the conditions contained in the Senior Indenture, by (a)
depositing irrevocably with the Senior Trustee as trust funds in trust (i)
U.S. dollars or U.S. Government Obligations (as defined below) in an amount
which through the payment of interest, principal or premium, if any, in
respect thereof in accordance with their terms will provide (without any
reinvestment of such interest, principal or premium), not later than one
business day before the due date of any payment, money sufficient to pay the
principal of and any premium and interest on the Senior Debt Securities of
such series as such are due or (ii) a combination of money and U.S. Government
Obligations sufficient to pay the principal of and any premium and interest on
the Senior Debt Securities of such series as such are due and (b) satisfying
certain other conditions precedent specified in the Senior Indenture. Such
deposit and termination is conditioned among other things upon Mercantile's
delivery of an opinion of independent counsel that the holders of the Senior
Debt Securities of such series will have no federal income tax consequences as
a result of such deposit and termination. Such termination will not relieve
Mercantile of its obligation to pay when due the principal of and premium and
interest on the Senior Debt Securities of such series if the Senior Debt
Securities of such series are not paid from the money or U.S. Government
Obligations held by the Senior Trustee for payment thereof (Section 13.05).
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof.
SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be direct, unsecured obligations of
Mercantile and will rank equally and ratably with all outstanding subordinated
indebtedness of Mercantile and will rank superior in right of payment to
Mercantile's Floating Rate Junior Subordinated Deferrable Interest Debentures
due 2027.
SUBORDINATION
The obligation of Mercantile to make any payment of principal, premium or
interest on the Subordinated Debt Securities, to the extent set forth in the
Subordinated Indenture, will be subordinated in right of payment to the prior
payment in full of all existing and future Senior Indebtedness (as defined
below). Upon any distribution of assets of Mercantile in any dissolution,
winding up, liquidation or reorganization of Mercantile, the holders of Senior
Indebtedness are entitled to receive payment in full of principal and any
premium and interest before the holders of the Subordinated Debt Securities
are entitled to receive any payment on account of the principal of and any
premium or interest on the Subordinated Debt Securities, except holders of the
Subordinated Debt Securities, in a reorganization or readjustment of
Mercantile, may receive securities of Mercantile or any other corporation
subordinated to both Senior Indebtedness and any securities received in the
reorganization or readjustment by holders of Senior Indebtedness (except to
the extent that any securities so received are by their terms expressly not
superior in right of payment to the Subordinated Debt Securities) (Section
3.03). The
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dissolution, winding up, liquidation or reorganization of Mercantile following
a conveyance, transfer or lease of its properties and assets substantially as
an entirety in compliance with the terms described above under "Description of
Debt Securities--Consolidation, Merger and Sale of Assets" will not be deemed
to be a dissolution, winding up, liquidation or reorganization for this
purpose (Section 3.03(d)). In addition, Mercantile may not pay principal of
and any premium or interest on the Subordinated Debt Securities and may not
acquire any Subordinated Debt Securities for cash or property other than
capital stock of Mercantile if: (1) a default on Senior Indebtedness occurs
and is continuing that permits holders of such Senior Indebtedness to
accelerate its maturity; and (2) such default is the subject of judicial
proceedings or Mercantile receives written notice of such default from a
representative of all holders of such Senior Indebtedness. If Mercantile
receives any such notice, a similar notice received within 360 days thereafter
relating to the same default on the same issue of Senior Indebtedness shall
not be effective for such purpose. Mercantile may resume payments on the
Subordinated Debt Securities and may acquire them when: (i) such default is
cured or waived or shall have ceased to exist or the Senior Indebtedness to
which such default relates shall have been paid in full in cash or cash
equivalent; or (ii) if such default is not the subject of judicial
proceedings, 120 days pass after such written notice is received by Mercantile
(Section 3.02(b)).
By reason of this subordination, holders of Senior Indebtedness may receive
more, ratably, and holders of the Subordinated Debt Securities may receive
less, ratably, than other creditors of Mercantile in the event of Mercantile's
insolvency. However, such subordination will not prevent the occurrence of any
Event of Default (Section 3.12).
The Subordinated Indenture does not restrict the incurrence of additional
Senior Indebtedness.
"Senior Indebtedness" means the principal of and any premium and interest on
the following, whenever incurred: (a) indebtedness of Mercantile for money
borrowed by Mercantile (including purchase money obligations with an original
maturity in excess of one year) or evidenced by debentures, notes or other
corporate debt securities or similar instruments issued by Mercantile (other
than the Subordinated Debt Securities); (b) indebtedness or obligations of
Mercantile as lessee under any leases of real or personal property required to
be capitalized under generally accepted accounting principles at the time; (c)
indebtedness or obligations incurred or assumed by Mercantile in connection
with the acquisition by Mercantile or any Subsidiary of any property,
including any business; (d) obligations under any agreement in respect of any
interest rate or currency swap, interest rate cap, floor or collar, interest
rate future, currency exchange or forward currency transaction that relates to
Senior Indebtedness; (e) indebtedness or obligations of Mercantile
constituting a guarantee of indebtedness or of obligations of others of the
type referred to in the preceding clauses; or (f) renewals, extensions or
refundings of any of the indebtedness or obligations referred to in the
preceding clauses; except Senior Indebtedness does not include any particular
indebtedness or obligation, renewal, extension or refunding if the express
provisions of the instrument creating or evidencing the same, or pursuant to
which the same is outstanding, provide that it is not superior in right of
payment to the Subordinated Debt Securities, and provided further that the
Subordinated Debt Securities are senior in right of payment to Mercantile's
Floating Rate Junior Subordinated Deferrable Interest Debentures due 2027
(Section 1.01).
LIMITED RIGHTS OF ACCELERATION
Unless otherwise specified in the Prospectus Supplement relating to any
series of Subordinated Debt Securities, payment of principal of the
Subordinated Debt Securities may be accelerated only in the case of an
"Acceleration Event" which is defined in the Indenture as any of the
bankruptcy, insolvency or reorganization events with respect to Mercantile or
a Principal Constituent Bank that constitute an Event of Default (as defined
below). There is no right of acceleration in the case of a default in the
payment of principal of or any premium or interest on the Subordinated Debt
Securities or the performance of any other covenant of Mercantile in the
Subordinated Indenture.
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EVENTS OF DEFAULT
The Subordinated Indenture defines an Event of Default with respect to any
particular series of Subordinated Debt Securities as being any one of the
following events unless it is either inapplicable to a particular series or
specifically deleted or modified for the Subordinated Debt Securities of such
series: (a) default for 30 days in the payment of any interest on any of the
Subordinated Debt Securities of that series; (b) default in the payment of the
principal or any premium on any of the Subordinated Debt Securities of that
series when due; (c) default in the payment of any sinking fund installment or
analogous obligation with respect to that series when due; (d) default in the
observance or performance of any other covenant or agreement in the
Subordinated Debt Securities of such series or the Subordinated Indenture for
90 days after notice by the Trustee or holders of at least 25% in aggregate
principal amount (in the case of a series of Subordinated Debt Securities
issued at an Original Issue Discount, calculated in accordance with the
formula set forth in such series, of the outstanding Subordinated Debt
Securities of the series); or (e) certain events of bankruptcy, insolvency or
reorganization of Mercantile or a Principal Constituent Bank (Section 5.01).
Rights of acceleration in case an Event of Default occurs are limited. See
"Limited Rights of Acceleration."
In case an Acceleration Event shall have occurred and be continuing, the
Subordinated Trustee or the holders of not less than 25% in aggregate
principal amount (in the case of a series of Subordinated Debt Securities
issued at an Original Issue Discount, calculated in accordance with the
formula set forth in such series) of the outstanding Subordinated Debt
Securities of such series may declare the principal (or, in the case of a
series of Subordinated Debt Securities issued at an Original Issue Discount,
the amount calculated in accordance with the formulas set forth in such series
of Subordinated Debt Securities) of all the Subordinated Debt Securities of
such series to be due and payable (Section 5.01). The Subordinated Indenture
provides that the Subordinated Trustee within 90 days after the occurrence of
a default with respect to Subordinated Debt Securities of any series under the
Subordinated Indenture, shall mail to the holders of the Subordinated Debt
Securities of such series notice of all uncured defaults known to it that have
not been waived (the term defaults to include events specified above which,
after notice or lapse of time or both, would become an Event of Default);
provided that, except in the case of default in the payment of principal of or
any premium or interest on any of the Subordinated Debt Securities of that
series or in the making of any sinking fund payment with respect to the
Subordinated Debt Securities of such series, the Subordinated Trustee may
withhold such notice if it in good faith determines that withholding such
notice is in the interest of the holders of the Subordinated Debt Securities
of that series (Section 5.08).
Subject to the provisions of the Subordinated Indenture relating to the
duties of the Subordinated Trustee in case an Event of Default shall occur and
be continuing, the Subordinated Trustee is under no obligation to exercise any
of the rights or powers under the Subordinated Indenture at the request, order
or direction of any of the holders of the Subordinated Debt Securities, unless
such holder offers to the Subordinated Trustee reasonable security or
indemnity (Section 6.02(d)). Subject to certain limitations contained in the
Subordinated Indenture (including among other limitations that the
Subordinated Trustee will not be exposed to personal liability), the holders
of a majority in aggregate principal amount of the outstanding Subordinated
Debt Securities of all series affected (voting as one class) have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Subordinated Trustee, or exercising any trust or power
conferred on the Subordinated Trustee (Section 5.07).
No holder of any Subordinated Security of any series will have any right to
institute any proceeding with respect to the Subordinated Indenture or for any
remedy thereunder unless such holder previously shall have given to the
Subordinated Trustee written notice of a continuing Event of Default with
respect to Subordinated Debt Securities of that series and unless also the
holders of not less than 25% in aggregate principal amount (in the case of a
series of Subordinated Debt Securities issued at an Original Issue Discount,
calculated in accordance with the formula set forth in such series) of the
outstanding Subordinated Debt Securities of that series shall have made
written request, and offered reasonable indemnity, to the Subordinated Trustee
to institute such proceeding as trustee, and the Subordinated Trustee shall
not have received from the holders of a majority in principal amount of the
outstanding Subordinated Debt Securities of that series a direction
inconsistent with such
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request and shall have failed to institute such proceeding within 60 days
(Section 5.04). However, the holder of any Subordinated Security will have an
absolute right to receive payment of the principal of and any premium and
interest on such Subordinated Security on or after the due dates expressed in
such Subordinated Security and to institute suit for the enforcement of any
such payment (Section 5.04).
Mercantile is obligated to furnish to the Subordinated Trustee annually a
statement as to the performance by Mercantile of its obligations under the
Subordinated Indenture and as to any default in such obligations (Section
4.04).
PLAN OF DISTRIBUTION
Mercantile may offer and sell the Debt Securities to or through
underwriters, acting as principals for their own accounts or as agents, to or
through dealers and also may offer and sell Debt Securities directly to other
purchasers. Any underwriters in connection with Offered Securities will be
named in the related Prospectus Supplement and any underwriting discounts and
other items constituting underwriters' compensation paid to such underwriters
will be set forth therein. Such underwriters may include Salomon Brothers Inc
acting alone or a group of underwriters represented by Salomon Brothers Inc.
The Prospectus Supplement will additionally set forth the name or names of any
dealers or agents, the purchase price of the Debt Securities and the proceeds
to Mercantile from such sale, any delayed delivery arrangements, the initial
public offering price, any discounts or concessions allowed or re-allowed or
paid to dealers and any securities exchange on which the Debt Securities may
be listed.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Underwriters, dealers and agents that participate in the distribution of the
Offered Securities may be deemed to be underwriters and any discounts,
commissions or concessions received by them, as well as any profit realized on
resale of the Offered Securities may be deemed to be underwriting discounts or
commissions under the Securities Act.
If underwriters are used in any sale, the Offered Securities will be
acquired by the underwriters for their own accounts and may be resold from
time to time in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time
of sale. The Debt Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more underwriters. Unless otherwise set forth in the
applicable Prospectus Supplement, the obligations of the underwriters to
purchase the Offered Securities will be subject to certain conditions
precedent, the underwriters will be obligated to purchase all of such Offered
Securities if any are purchased, and Mercantile will have agreed to indemnify
the underwriters against certain civil liabilities, including liabilities
under the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make in respect thereof.
The initial public offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, Mercantile will sell such Debt Securities
to the dealer as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale. The name of the dealer and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Debt Securities may be sold directly by Mercantile or through agents
designated by Mercantile from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent
involved in the offer or sale of the Debt Securities with respect to which
this Prospectus is delivered will be named, and any commissions payable by
Mercantile to such agent will be set forth, in the Prospectus Supplement
relating thereto. Unless otherwise indicated in the Prospectus Supplement, any
such agent will be acting on a best efforts basis for the period of its
appointment.
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If so indicated in the Prospectus Supplement, Mercantile will authorize
underwriters, dealers or other persons acting as Mercantile's agents to
solicit offers by certain institutions to purchase Debt Securities from
Mercantile pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all
cases such institutions must be approved by Mercantile. The obligations of any
purchaser under any such contract will not be subject to any conditions except
that (i) the purchase of the Offered Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject and (ii) if the Offered Securities also are being sold to
underwriters, Mercantile shall have sold to such underwriters the Offered
Securities not sold for delayed delivery. The dealers and such other persons
will not have any responsibility in respect of the validity or performance of
such contracts. The Prospectus Supplement will set forth the commission
payable for solicitation of such contracts.
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a summary of certain United States federal income and
estate tax considerations relating to the purchase, ownership and disposition
of Debt Securities, but does not purport to be a complete analysis of all the
potential tax considerations relating thereto. This summary is based on laws,
regulations, rulings and decisions now in effect, all of which are subject to
change. This summary deals only with holders that will hold Debt Securities as
capital assets and does not address tax considerations applicable to investors
that may be subject to special tax rules, such as banks, tax exempt
organizations, insurance companies, dealers in securities or currencies,
persons that will hold the Debt Securities as part of an integrated investment
(including a "straddle") comprised of Debt Securities and one or more other
positions, persons having a "functional currency," other than the United
States Dollar or holders of Debt Securities that did not acquire the Debt
Securities in the initial distribution thereof at their original issue price.
INVESTORS CONSIDERING THE PURCHASE OF DEBT SECURITIES SHOULD CONSULT THEIR
OWN TAX ADVISORS REGARDING THE APPLICATION OF THE UNITED STATES FEDERAL INCOME
TAX AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX
CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING
JURISDICTION, OR UNDER ANY APPLICABLE TAX TREATY.
UNITED STATES HOLDERS
As used herein, the term "United States Holder" means the beneficial owner
of a Debt Security who or that is for United States federal income tax
purposes (i) a citizen or resident of the United States, (ii) a domestic
corporation or (iii) otherwise subject to United States federal income
taxation on a net income basis in respect of the Debt Securities.
PAYMENTS OF INTEREST
Payments of "qualified stated interest" (as defined below under "Original
Issue Discount") on a Debt Security will be taxable to a United States Holder
as ordinary income at the time that such interest is received or accrued, in
accordance with such holder's method of accounting for United States federal
income tax purposes.
SALE, EXCHANGE OR REDEMPTION OF THE DEBT SECURITIES
Except as discussed below with respect to Short-Term Debt Securities, upon
the sale, exchange or redemption of a Debt Security, a United States Holder
generally will recognize capital gain or loss equal to the difference between
(i) the amount of cash proceeds and the fair market value of any property
received on the sale, exchange or redemption (except to the extent such amount
is attributable to accrued qualified stated interest) and (ii) such holder's
adjusted basis in the Debt Security. A United States Holder's tax basis in a
Debt Security will equal the cost of such Debt Security to such holder,
increased by any amounts includible in income by the holder as original issue
discount and reduced by any payments other than payments of qualified stated
interest made on such Debt Security.
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ORIGINAL ISSUE DISCOUNT
United States Holders of Original Issue Discount Securities generally will
be subject to the special tax accounting rules for obligations issued with
original issue discount ("OID") provided by the Internal Revenue Code of 1986,
as amended (the "Code"), and certain regulations promulgated thereunder (the
"OID Regulations"). United States Holders of such Debt Securities should be
aware that, as described in greater detail below, they generally must include
OID in ordinary gross income for United States federal income tax purposes as
it accrues, in advance of the receipt of cash attributable to that income.
In general, each United States Holder of an Original Issue Discount
Security, whether such holder uses the cash or the accrual method of tax
accounting, will be required to include in ordinary income the sum of the
"daily portions" of OID on the Debt Security for all days during the taxable
year that the United States Holder owns the Debt Security. The daily portions
of OID on an Original Issue Discount Security are determined by allocating to
each day in any accrual period a ratable portion of the OID allocable to that
accrual period. Accrual periods may be any length and may vary in length over
the term of an Original Issue Discount Security, provided that no accrual
period is longer than one year and each scheduled payment of principal or
interest occurs on either the final day or the first day of an accrual period.
The amount of OID on an Original Issue Discount Security allocable to each
accrual period is determined by (a) multiplying the "adjusted issue price" (as
defined below) of the Original Issue Discount Security at the beginning of the
accrual period by the yield to maturity of such Original Issue Discount
Security (appropriately adjusted to reflect the length of the accrual period)
and (b) subtracting from that product the amount (if any) of qualified stated
interest (as defined below) allocable to that accrual period. The yield to
maturity of a Debt Security is the discount rate that causes the present value
of all payments on the Debt Security as of its original issue date to equal
the issue price of such Debt Security. The "adjusted issue price" of an
Original Issue Discount Security at the beginning of any accrual period will
generally be the sum of its issue price (generally including accrued interest,
if any) and the amount of OID allocable to all prior accrual periods, reduced
by the amount of all payments other than payments of qualified stated interest
(if any) made with respect to such Debt Security in all prior accrual periods.
The term "qualified stated interest" generally means stated interest that is
unconditionally payable in cash or property (other than debt instruments of
the issuer) at least annually during the entire term of an Original Issue
Discount Security at a single fixed rate of interest or, subject to certain
conditions, based on one or more interest indices. In the case of an Original
Issue Discount Security that bears a floating rate of interest (a "Floating
Rate Security"), both the "yield to maturity" and "qualified stated interest"
will generally be determined for these purposes as though the Original Issue
Discount Security will bear interest in all periods at a fixed rate generally
equal to the rate that would be applicable to the interest payments on the
Debt Security on its date of issue or, in the case of certain Floating Rate
Securities, the rate that reflects the yield that is reasonably expected for
the Debt Security. (Additional rules may apply if interest on a Floating Rate
Security is based on more than one interest index.) As a result of this
"constant-yield" method of including OID in income, the amounts includible in
income by a United States Holder in respect of an Original Issue Discount
Security are lesser in the early years and greater in the later years than the
amounts that would be includible on a straight-line basis.
A United States Holder generally may make an irrevocable election to include
in its income its entire return on a Debt Security (i.e., the excess of all
remaining payments to be received on the Debt Security, including payments of
qualified stated interest, over the amount paid by such United States Holder
for such Debt Security) under the constant-yield method described above.
SHORT-TERM DEBT SECURITIES
The rules set forth above will also generally apply to Debt Securities
having maturities of not more than one year ("Short-Term Debt Securities"),
but with certain modifications.
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First, the OID Regulations treat none of the interest on a Short-Term Debt
Security as qualified stated interest (but instead treat such interest
payments as part of the Short-Term Debt Security's stated redemption price at
maturity, thereby giving rise to OID). Thus, all Short-Term Debt Securities
will be Original Issue Discount Securities. OID will be treated as accruing on
a Short-Term Debt Security ratably, or at the election of a United States
Holder, under a constant-yield method.
Second, a United States Holder of a Short-Term Debt Security that uses the
cash method of tax accounting and is not a bank, securities dealer, regulated
investment company or common trust fund, and does not identify the Short-Term
Debt Security as part of a hedging transaction, will generally not be required
to include OID in income on a current basis. Such a United States Holder may
not be allowed to deduct all of the interest paid or accrued on any
indebtedness incurred or maintained to purchase or carry such Debt Security
until the maturity of the Debt Security or its earlier disposition in a
taxable transaction. In addition, such a United States Holder will be required
to treat any gain realized on a sale, exchange or retirement of the Debt
Security as ordinary income to the extent such gain does not exceed the OID
accrued with respect to the Debt Security during the period the United States
Holder held the Debt Security. Notwithstanding the foregoing, a cash-basis
United States Holder of a Short-Term Debt Security may elect to accrue
original issue discount into income on a current basis (in which case the
limitation on the deductibility of interest described above will not apply). A
United States Holder using the accrual method of tax accounting and certain
cash-basis United States Holders (including banks, securities dealers,
regulated investment companies and common trust funds) generally will be
required to include original issue discount on a Short-Term Debt Security in
income on a current basis.
Certain of the Debt Securities may be subject to special redemption
features. These features may affect the determination of whether a Debt
Security has a maturity of not more than one year and thus is a Short-Term
Debt Security. Purchasers of Debt Securities with such features should
carefully examine the applicable Prospectus Supplement and should consult
their own tax advisors with respect to such features.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Trustee or any Paying Agent, as the case may be, will be required to
file information returns with the Internal Revenue Service with respect to
payments made to certain United States Holders of Debt Securities. In
addition, certain United States Holders may be subject to a 31 percent backup
withholding tax in respect of such payments if they do not provide their
taxpayer identification numbers to such Trustee or Paying Agent. Persons
holding Debt Securities who are not United States Holders may be required to
comply with application certification procedures to establish that they are
not United States Holders in order to avoid the application of such
information reporting requirements and backup withholding tax.
NON-UNITED STATES HOLDERS
Subject to the discussion of backup withholding below, payments of interest
on the Debt Securities to, or on behalf of, any beneficial owner of a Debt
Security that is not a United States Holder (a "Non-U.S. Holder") will not be
subject to United States federal income or withholding taxes, provided that
(i) such Non-U.S. Holder does not actually or constructively own 10 percent of
more of the total combined voting power of all classes of stock of Mercantile,
(ii) such Non-U.S. Holder is not a controlled foreign corporation for United
States tax purposes that is related to Mercantile actually or constructively
through stock ownership and (iii) the Non-U.S. Holder certifies, under
penalties of perjury, that it is not a United States person and provides its
name and address in compliance with applicable requirements.
Any capital gain realized on the sale, exchange, redemption or other
disposition of Debt Securities by a Non-U.S. Holder will not be subject to
United States federal income or withholding taxes unless, in the case of an
individual, such holder is present in the United States for 183 days or more
in the taxable year of the sale, exchange, redemption, or other disposition or
receipt and certain other conditions are met.
Payments made on a Debt Security and proceeds from the sale of a Debt
Security received by a Non-U.S. Holder will not be subject to a backup
withholding tax of 31 percent or to information reporting requirements
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unless, in general, the holder fails to comply with certain reporting
procedures or otherwise fails to establish an exemption from such tax or
reporting requirements under applicable provisions of the Code.
On April 15, 1996, the Internal Revenue Service released proposed revisions
(the "Proposed Regulations") to the regulations interpreting the withholding
tax, information reporting and backup withholding tax rules described above.
In general the Proposed Regulations would require certain Non-U.S. Holders to
provide additional information in order to establish an exemption from or
reduce the rate of withholding tax or backup withholding tax, and in
particular would require that foreign partnerships and partners of a foreign
partnership provide certain information and comply with certain certification
requirements not required under existing law. The Proposed Regulations are
proposed generally to be effective for payments made after December 31, 1997.
It is not possible to predict whether, or in what form, the Proposed
Regulations ultimately will be adopted.
Debt Securities will not be subject to United States federal estate tax as a
result of the death of a holder who is not a citizen or resident of the United
States at the time of death, unless such holder at the time of death actually
or constructively owns 10 percent or more of the combined voting power of all
classes of stock of Mercantile or, at the time of such holder's death,
payments of interest on such Debt Securities are effectively connected with
the conduct by such holder of a trade or business in the United States.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Debt Securities
offered hereby will be passed upon for Mercantile by Thompson Coburn, St.
Louis, Missouri. If the Debt Securities are distributed in an underwritten
offering, certain legal matters will be passed upon for the underwriters by
Cleary, Gottlieb, Steen & Hamilton, New York, New York.
EXPERTS
The consolidated financial statements of Mercantile as of December 31, 1996,
1995 and 1994, and for each of the years in the three-year period ended
December 31, 1996, incorporated by reference in Mercantile's Annual Report on
Form 10-K for the year ended December 31, 1996, and the supplemental
consolidated financial statements of Mercantile as of December 31, 1996, 1995
and 1994, and for each of the years in the three-year period ended December
31, 1996, contained in Mercantile's Current Report on Form 8-K dated May 13,
1997, have been incorporated by reference herein in reliance upon the reports
of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
The consolidated financial statements of Roosevelt as of December 31, 1996
and 1995 and for each of the years in the three-year period ended December 31,
1996, included in Roosevelt's Annual Report on Form 10-K/A-2 for the year
ended December 31, 1996, have been incorporated by reference herein in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION, OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH IN-
FORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY MERCANTILE OR BY THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AF-
FAIRS OF MERCANTILE SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURIS-
DICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY-
ONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Concurrent Offerings....................................................... S-2
Selected Consolidated Financial Data....................................... S-2
Description of Subordinated Notes.......................................... S-4
Underwriting............................................................... S-7
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Information by Reference.......................... 2
Cautionary Statement Regarding Forward-Looking Statements.................. 3
Mercantile Bancorporation Inc.............................................. 3
Recent Developments........................................................ 4
Ratio of Earnings to Fixed Charges......................................... 5
Use of Proceeds............................................................ 5
Description of Debt Securities............................................. 6
Senior Debt Securities..................................................... 11
Subordinated Debt Securities............................................... 13
Plan of Distribution....................................................... 16
Certain United States Federal Tax Consequences............................. 17
Legal Matters.............................................................. 20
Experts.................................................................... 20
</TABLE>
$200,000,000
MERCANTILE
BANCORPORATION INC.
7.30% SUBORDINATED NOTES
DUE 2007
MERCANTILE
SALOMON BROTHERS INC
GOLDMAN, SACHS & CO.
UBS SECURITIES
PROSPECTUS SUPPLEMENT
DATED JUNE 11, 1997
