<PAGE>
<PAGE>
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 COMMISSION FILE NO. 1-11792
MERCANTILE BANCORPORATION INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MISSOURI 43-0951744
(STATE OF INCORPORATION) (IRS EMPLOYER
IDENTIFICATION NO.)
P.O. BOX 524 63166-0524
ST. LOUIS, MISSOURI (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 314-418-2525
SECURITIES REGISTERED PURSUANT TO NAME OF EXCHANGE ON WHICH REGISTERED:
SECTION 12(b) OF THE ACT:
(1) COMMON STOCK ($0.01 PAR VALUE) (1) NEW YORK STOCK EXCHANGE
(2) PREFERRED STOCK PURCHASE RIGHTS (2) NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934
DURING THE PRECEDING 12 MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
--- ---
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K. [X]
STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF
THE REGISTRANT AS OF JUNE 17, 1999:
COMMON STOCK, $0.01 PAR VALUE, $7,524,087,509.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES
OF COMMON STOCK, AS OF JUNE 17, 1999:
COMMON STOCK $0.01 PAR VALUE, 158,156,398 SHARES OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE
THE FOLLOWING DOCUMENTS ARE INCORPORATED BY REFERENCE: NOT APPLICABLE.
==============================================================================
<PAGE>
<PAGE>
The "Exhibit Index" as previously filed with the Form 10-K is hereby amended
by inserting the following entries:
No. 2-1 Agreement and Plan of Merger by and between Mercantile
Bancorporation Inc. and Firstar Corporation dated as
of April 30, 1999.<F**>
No. 23-2 Consent of KPMG LLP (relating to report dated June 23,
1999, Mercantile Bancorporation Inc. Horizon
Investment and Savings Plan and Trust Financial
Statements).<F*>
No. 99-1 Report of the Independent Auditors KPMG LLP dated June
23, 1999; Statements of Net Assets Available for Plan
Benefits of Mercantile Bancorporation Inc. Horizon
Investment and Savings Plan and Trust as of December
31, 1998 and 1997; Statements of Changes in Net Assets
Available For Plan Benefits for the years then ended;
and the Notes and Schedules thereto.<F*>
No. 99-2 Stock Option Agreement, dated April 30, 1999, between
Firstar Corporation, a Wisconsin corporation
("Issuer"), and Mercantile Bancorporation Inc., a
Missouri corporation ("Grantee").<F**>
No. 99-3 Stock Option Agreement, dated April 30, 1999, between
Mercantile Bancorporation Inc., a Missouri corporation
("Issuer"), and Firstar Corporation, a Wisconsin
Corporation ("Grantee").<F**>
[FN]
<F*> Filed herewith.
<F**> Filed with the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999 dated May 14, 1999.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by
the undersigned, thereunto duly authorized.
MERCANTILE BANCORPORATION INC.
(Registrant)
Date: June 29, 1999 By: /s/ John W. McClure
---------------------------
John W. McClure
Vice Chairman and Chief
Financial Officer
<PAGE>
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
No. 2-1 Agreement and Plan of Merger by and between
Mercantile Bancorporation Inc. and Firstar
Corporation dated as of April 30, 1999, as filed
as Exhibit 2 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1999,
is incorporated herein by reference.
No. 3-1(a) Restated Articles of Incorporation of the
Registrant, as amended and currently in effect,
filed as Exhibit 3 to Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1997,
are incorporated herein by reference.
No. 3-1(b) Certificate of Designation, Preferences and Rights
of Series B Junior Participating Preferred Stock of
the Registrant filed as Exhibit 3-1(b) to
Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998 (Commission File No.
1-11792), is incorporated herein by reference.
No. 3-2 By-Laws of the Registrant, as amended and currently
in effect, filed as Exhibit 3.2 to Amendment No. 2
to Registrant's Registration Statement on Form 4
(No. 333-17757), are incorporated herein by
reference.
No. 4-1 Form of Indenture Regarding Subordinated Securities
between the Registrant and The First National Bank
of Chicago as Trustee, filed on March 31, 1992 as
Exhibit 4.1 to Registrant's Report on Form 8-K
dated September 24, 1992 (Commission File No.
1-11792), is incorporated herein by reference.
No. 4-2 Rights Agreement dated as of May 20, 1998, between
Registrant and Harris Trust and Savings Bank, as
Rights Agent (including as an exhibit thereto the
form of Rights Certificate) filed as Exhibit 4-2 to
the Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998 (Commission File
No. 1-11792), is incorporated herein by
reference.
No. 4-3 Form of Indenture Regarding Senior Debt Securities,
filed as Exhibit 4.1 to Registrant's Registration
Statement on Form S-3 (No. 333-25775), is
incorporated herein by reference.
No. 4-4 Form of Indenture Regarding Subordinated Debt
Securities, filed as Exhibit 4.2 to Registrant's
Registration Statement on Form S-3 (No. 333-25775),
is incorporated herein by reference.
No. 4-5 Indenture, dated February 4, 1997; First
Supplemental Indenture, dated February 4, 1997, and
Supplemental Indenture of First Supplemental
Indenture, dated May 22, 1997, between the Company,
as issuer, and The Chase Manhattan Bank, as
Indenture Trustee, filed as Exhibits 4.5, 4.6 and
4.12, respectively, to the Company's Registration
Statement on Form S-4 (No. 333-25131), are
incorporated herein by reference.
No. 10-1 The Mercantile Bancorporation Inc. 1987 Stock
Option Plan, as amended, filed as Exhibit 10-3 to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1989 (Commission File No.
1-11792), is incorporated herein by
reference. <F+>
<PAGE>
<PAGE>
No. 10-2 The Mercantile Bancorporation Inc. Amended and
Restated Executive Incentive Compensation Plan,
filed as Annex H to Registrant's definitive Proxy
Statement for the 1997 Annual Meeting of
Shareholders, is incorporated herein by
reference. <F+>
No. 10-3 The Mercantile Bancorporation Inc. Employee Stock
Purchase Plan, filed as Exhibit 10-7 to Registrant's
Annual Report on Form 10-K for the year ended December
31, 1989 (Commission File No. 1-11792), is
incorporated herein by reference. <F+>
No. 10-4 The Mercantile Bancorporation Inc. 1991 Employee
Incentive Plan, filed as Exhibit 10-7 to Registrant's
Annual Report on Form 10-K for the year ended December
31, 1990 (Commission File No. 1-11792), is
incorporated herein by reference. <F+>
No. 10-5 Amendment Number One to the Mercantile Bancorporation
Inc. 1991 Employee Incentive Plan, filed as Exhibit
10-6 to Registrant's Report on Form 10-K for the year
ended December 31, 1994 (Commission File No. 1-11792),
is incorporated herein by reference. <F+>
No. 10-6 The Mercantile Bancorporation Inc. Amended and
Restated Stock Incentive Plan, filed as Annex G to
Registrant's definitive Proxy Statement for the 1997
Annual Meeting of Shareholders (Commission File No.
1-11792), is incorporated herein by reference. <F+>
No. 10-7 The Mercantile Bancorporation Inc. 1994 Stock
Incentive Plan for Non-Employee Directors, filed as
Appendix E to Registrant's definitive Proxy Statement
for the 1994 Annual Meeting of Shareholders
(Commission File No. 1-11792), is incorporated herein
by reference. <F+>
No. 10-8 The Mercantile Bancorporation Inc. Amended and
Restated Voluntary Deferred Compensation Plan, filed
as Exhibit 10.1 to Registrant's Registration Statement
on Form S-8 (File No. 333-47713), is incorporated
herein by reference. <F+>
No. 10-9 Mercantile Bancorporation Inc. Supplemental Retirement
Plan, filed as Exhibit 10-12 to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1992 (Commission File No. 1-11792), is incorporated
herein by reference. <F+>
No. 10-10 Mercantile Bancorporation Inc. Voluntary Deferred
Compensation Plan for Non-Employee Affiliate Directors
and Advisory Directors, filed as Exhibit 10.3 to
Registrant's Registration Statement on Form S-8 (File
No. 333-47713), is incorporated herein by reference. <F+>
No. 10-11 Mercantile Bancorporation Inc. Amended and Restated
Stock Incentive Plan for Non-Employee Directors, filed
as Exhibit 10.2 to Registrant's Registration Statement
on Form S-8 (File No. 333-47713), is incorporated
herein by reference. <F+>
No. 10-12 Employment Agreement for Thomas H. Jacobsen, as
amended and restated, filed as Exhibit 10.9 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997 (Commission File No. 1-11792),
is incorporated herein by reference. <F+>
<PAGE>
<PAGE>
No. 10-13 Form of Change of Control Employment Agreement for
John W. McClure, W. Randolph Adams, John Q. Arnold and
Certain Other Executive Officers, filed as Exhibit 10-
10 to Registrant's Report on Form 10-K for the year
ended December 31, 1989 (Commission File No. 1-11792),
is incorporated herein by reference. <F+>
No. 10-14 Employment Agreement for Alvin J. Siteman, dated
November 18, 1996, filed as Exhibit 10.3 to
Registrant's Report on Form 10-Q for the quarter ended
March 31, 1997 (Commission File No. 1-11792), is
incorporated herein by reference. <F+>
No. 10-15 Employment Agreement for John P. Dubinsky, dated
October 27, 1996, filed as Exhibit 10.4 to
Registrant's Report on Form 10-Q for the quarter ended
March 31, 1997 (Commission File No. 1-11792), is
incorporated herein by reference. <F+>
No. 13 Excerpts from Annual Report of the Registrant to its
Shareholders for the year ended December 31, 1998. <F*>
No. 21 Subsidiaries of the Registrant as of February 26,
1998. <F*>
No. 23-1 Consent of KPMG LLP. <F*>
No. 23-2 Consent of KPMG LLP (relating to report dated June 23,
1999, Mercantile Bancorporation Inc. Horizon
Investment and Savings Plan and Trust Financial
Statements.)
No. 24 Power of Attorney (on signature page). <F*>
No. 27 Financial Data Schedule. <F*>
No. 99-1 Report of the Independent Auditors KPMG LLP dated June
23, 1999; Statements of Net Assets Available for Plan
Benefits of Mercantile Bancorporation Inc. Horizon
Investment and Savings Plan and Trust as of December
31, 1998 and 1997; Statements of Changes in Net Assets
Available For Plan Benefits for the years then ended;
and the Notes and Schedules thereto.
No. 99-2 Stock Option Agreement, dated April 30, 1999, between
Firstar Corporation, a Wisconsin corporation
("Issuer") and Mercantile Bancorporation Inc., a
Missouri corporation ("Grantee"), as filed as Exhibit 99.1
to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999, is incorporated herein by
reference.
No. 99-3 Stock Option Agreement, dated April 30, 1999, between
Mercantile Bancorporation Inc., a Missouri corporation
("Issuer"), and Firstar Corporation, a Wisconsin
Corporation ("Grantee"), as filed as Exhibit 99.2 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999, is incorporated herein by reference.
[FN]
<F*> Filed with the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1998.
<F+> Management contract or compensatory plan or arrangement.
<PAGE>
EXHIBIT 23-2
------------
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Mercantile Bancorporation Inc.:
Plan Administrator
Mercantile Bancorporation Inc.
Horizon Investment and Savings Plan and Trust:
We consent to incorporation by reference in the Registration Statement
(No. 33-35139) on Form S-8 of Mercantile Bancorporation Inc. related to
the Mercantile Bancorporation Inc. Horizon Investment and Savings Plan
and Trust of our report dated June 23, 1999, relating to the statements
of net assets available for plan benefits of the Mercantile
Bancorporation Inc. Horizon Investment and Savings Plan and Trust as of
December 31, 1998 and 1997, and the related statements of changes in net
assets available for plan benefits for the years then ended and the
related schedules, which report appears in the 1998 Annual Report on
Form 10-K/A, of Mercantile Bancorporation Inc.
/s/ KPMG LLP
St. Louis, Missouri
June 28, 1999
<PAGE>
EXHIBIT 99-1
------------
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS
PLAN AND TRUST
Financial Statements and Schedules
December 31, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
<TABLE>
TABLE OF CONTENTS AND DEFINITIONS
<CAPTION>
PAGE
<S> <C>
TABLE OF CONTENTS:
Independent Auditors' Report 1
Statement of Net Assets Available for Plan Benefits, December 31, 1998 2
Statement of Net Assets Available for Plan Benefits, December 31, 1997 3
Statement of Changes in Net Assets Available for Plan Benefits,
Year ended December 31, 1998 4
Statement of Changes in Net Assets Available for Plan Benefits,
Year ended December 31, 1997 5
Notes to Financial Statements, December 31, 1998 and 1997 6
<CAPTION>
SCHEDULE
<S> <C> <C>
Item 27a:
Schedule of Assets Held for Investment Purposes, December 31, 1998 1 13
Schedule of Assets Held for Investment Purposes Which
Were Both Acquired and Disposed of Within the Plan Year <F*>
Item 27b - Schedule of Loans or Fixed Income Obligations <F*>
Item 27c - Schedule of Leases in Default or Classified as Uncollectible <F*>
Item 27d - Schedule of Reportable Transactions, Year ended
December 31, 1998 2 14
Item 27e - Schedule of Nonexempt Transactions <F*>
<FN>
<F*> There were no assets held for investment purposes which were both acquired and disposed of
within the plan year ended December 31, 1998, and no nonexempt transactions during the
year ended December 31, 1998 which require separate disclosure. There were no known loans,
fixed income obligations, or leases in default or classified as uncollectible which have
not been reported during the year ended December 31, 1998.
</TABLE>
DEFINITIONS:
Plan - Mercantile Bancorporation Inc. Horizon Investment
and Savings Plan and Trust
Trustee - Mercantile Bank N.A.
ERISA - Employee Retirement Income Security Act of 1974
Mercantile (or the
Company) - Mercantile Bancorporation Inc. and subsidiaries
Plan Administrator - Mercantile Employee Benefits Committee
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
Mercantile Employee Benefits Committee
Mercantile Bancorporation Inc.
Horizon Investment and Savings Plan and Trust:
We have audited the accompanying statements of net assets available for
plan benefits of the Mercantile Bancorporation Inc. Horizon Investment
and Savings Plan and Trust as of December 31, 1998 and 1997, and the
related statements of changes in net assets available for plan benefits
for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits as of December 31, 1998 and 1997, and the changes in net assets
available for plan benefits for the years then ended in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information included in Schedules 1 and 2 is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The fund information in
the statements of net assets available for plan benefits and the
statements of changes in net assets available for plan benefits is
presented for purposes of additional analysis rather than to present the
net assets available for plan benefits and the changes in net assets
available for plan benefits of each fund. The supplemental schedules and
fund information have been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG LLP
June 23, 1999
St. Louis, Missouri
<PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Statement of Net Assets Available for Plan Benefits
December 31, 1998
<CAPTION>
PARTICIPANT-DIRECTED FUNDS
----------------------------------------------------------------------
GROWTH GOVERNMENT
GROWTH AND AND MONEY
EQUITY BALANCED INCOME CORPORATE MARKET
FUND FUND FUND BOND FUND FUND
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Assets:
Total noninterest-bearing cash $ -- -- -- -- --
Receivables:
Employer contributions -- -- -- -- --
Participant contributions 28,845 63,845 172,024 24,313 22,415
Accrued income 3,440 56,570 48,772 46,089 54,714
---------- ---------- ---------- ---------- ----------
Total receivables 32,285 120,415 220,796 70,402 77,129
---------- ---------- ---------- ---------- ----------
Investments at fair value:
Interest-bearing cash (including
money market funds) 2,286 1,726 1,707 1,688 14,607,267
Value of interest in registered
investment companies 8,477,318 31,730,033 60,073,362 10,307,920 --
Common stock -- -- -- -- --
Loans to participants -- -- -- -- --
Other -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total investments 8,479,604 31,731,759 60,075,069 10,309,608 14,607,267
---------- ---------- ---------- ---------- ----------
Total assets 8,511,889 31,852,174 60,295,865 10,380,010 14,684,396
Liabilities - accrued expenses 1,173 3,388 6,673 1,166 2,008
---------- ---------- ---------- ---------- ----------
Net assets available
for plan benefits $8,510,716 31,848,786 60,289,192 10,378,844 14,682,388
========== ========== ========== ========== ==========
<CAPTION>
PARTICIPANT-DIRECTED FUNDS
-----------------------------------------
NONPAR-
SMALL CAP MERCANTILE INTER- TICIPANT-
EQUITY STOCK NATIONAL DIRECTED
FUND FUND FUND FUNDS TOTAL
----------- ----------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Total noninterest-bearing cash -- -- -- 12,573 12,573
Receivables:
Employer contributions -- 384,596 -- -- 384,596
Participant contributions 66,329 186,458 30,798 -- 595,027
Accrued income 9 1,516,529 51 46,315 1,772,489
---------- ----------- --------- ---------- -----------
Total receivables 66,338 2,087,583 30,849 46,315 2,752,112
---------- ----------- --------- ---------- -----------
Investments at fair value:
Interest-bearing cash (including
money market funds) 2,057 308,467 1,808 138,446 15,065,452
Value of interest in registered
investment companies 13,333,528 -- 6,866,521 -- 130,788,682
Common stock -- 226,222,830 -- 3,653,192 229,876,022
Loans to participants -- -- -- 8,066,838 8,066,838
Other -- -- -- 13,488 13,488
---------- ----------- --------- ---------- -----------
Total investments 13,335,585 226,531,297 6,868,329 11,871,964 383,810,482
---------- ----------- --------- ---------- -----------
Total assets 13,401,923 228,618,880 6,899,178 11,930,852 386,575,167
Liabilities - accrued expenses 14,213 32,703 994 -- 62,318
---------- ----------- --------- ---------- -----------
Net assets available
for plan benefits 13,387,710 228,586,177 6,898,184 11,930,852 386,512,849
========== =========== ========= ========== ===========
See accompanying notes to financial statements.
</TABLE>
2
<PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Statement of Net Assets Available for Plan Benefits
December 31, 1997
<CAPTION>
PARTICIPANT-DIRECTED FUNDS
----------------------------------------------------------------------
GROWTH GOVERNMENT
GROWTH AND AND MONEY
EQUITY BALANCED INCOME CORPORATE MARKET
FUND FUND FUND BOND FUND FUND
---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Assets:
Total noninterest-bearing cash $ -- 940 470 -- --
Receivables:
Employer contributions -- -- -- -- --
Accrued income 2,485 66,967 81,340 41,481 59,077
Interfund transfers 1,522 124,660 320,245 43,669 42,905
---------- ---------- ---------- --------- ----------
Total receivables 4,007 191,627 401,585 85,150 101,982
---------- ---------- ---------- --------- ----------
Investments at fair value:
Interest-bearing cash (including
money market funds) 9,446 579 5,645 57 13,947,792
Value of interest in registered
investment companies 4,372,071 27,691,361 50,224,411 9,147,640 --
Common stock -- -- -- -- --
Loans to participants -- -- -- -- --
Other -- -- -- -- --
---------- ---------- ---------- --------- ----------
Total investments 4,381,517 27,691,940 50,230,056 9,147,697 13,947,792
---------- ---------- ---------- --------- ----------
Liabilities:
Accrued expenses 341 3,032 2,161 1,573 1,924
Interfund transfers 68,811 -- -- -- --
---------- ---------- ---------- --------- ----------
Total liabilities 69,152 3,032 2,161 1,573 1,924
---------- ---------- ---------- --------- ----------
Net assets available
for plan benefits $4,316,372 27,881,475 50,629,950 9,231,274 14,047,850
========== ========== ========== ========= ==========
<PAGE>
CAPTION>
PARTICIPANT-DIRECTED FUNDS
-----------------------------------------
NONPAR-
SMALL CAP MERCANTILE INTER- TICIPANT-
EQUITY STOCK NATIONAL DIRECTED
FUND FUND FUND FUNDS TOTAL
----------- ----------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Total noninterest-bearing cash -- 470 -- -- 1,880
Receivables:
Employer contributions -- 5,702,174 -- -- 5,702,174
Accrued income 112 1,332,584 85 3,752 1,587,883
Interfund transfers 136,419 422,161 64,063 -- 1,155,644
---------- ----------- --------- ---------- -----------
Total receivables 136,531 7,456,919 64,148 3,752 8,445,701
---------- ----------- --------- ---------- -----------
Investments at fair value:
Interest-bearing cash (including
money market funds) 877 592,932 1,142 1,413,427 15,971,897
Value of interest in registered
investment companies 12,841,759 -- 5,301,944 -- 109,579,186
Common stock -- 285,308,617 -- -- 285,308,617
Loans to participants -- -- -- 8,837,826 8,837,826
Other -- -- -- 13,489 13,489
---------- ----------- --------- ---------- -----------
Total investments 12,842,636 285,901,549 5,303,086 10,264,742 419,711,015
---------- ----------- --------- ---------- -----------
Liabilities:
Accrued expenses 2,088 32,215 821 -- 44,155
Interfund transfers 11,154 -- -- 1,075,679 1,155,644
---------- ----------- --------- ---------- -----------
Total liabilities 13,242 32,215 821 1,075,679 1,199,799
---------- ----------- --------- ---------- -----------
Net assets available
for plan benefits 12,965,925 293,326,723 5,366,413 9,192,815 426,958,797
========== =========== ========= ========== ===========
See accompanying notes to financial statements.
</TABLE>
3
<PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1998
<CAPTION>
PARTICIPANT-DIRECTED FUNDS
----------------------------------------------------------------------
GROWTH GOVERNMENT
GROWTH AND AND MONEY
EQUITY BALANCED INCOME CORPORATE MARKET
FUND FUND FUND BOND FUND FUND
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Additions:
Contributions from:
Employer $ -- -- -- -- --
Participants 552,839 1,781,041 4,902,030 706,532 632,157
---------- ---------- ---------- ---------- ----------
Total contributions 552,839 1,781,041 4,902,030 706,532 632,157
---------- ---------- ---------- ---------- ----------
Earnings (loss) on investments:
Interest:
Interest-bearing cash (including money market
funds) 1,550 2,926 6,162 1,091 680,060
Loans to participants -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total interest 1,550 2,926 6,162 1,091 680,060
Common stock dividends -- -- -- -- --
Net appreciation (depreciation) in fair value of
investments in common stock -- -- -- -- --
Net investment appreciation (depreciation) in fair
value of investments in registered investment
companies 1,746,727 3,201,171 6,689,048 812,241 --
Other income 3 18 32 6 9
---------- ---------- ---------- ---------- ----------
Total earnings (loss) on investments 1,748,280 3,204,115 6,695,242 813,338 680,069
---------- ---------- ---------- ---------- ----------
Total additions 2,301,119 4,985,156 11,597,272 1,519,870 1,312,226
---------- ---------- ---------- ---------- ----------
Deductions:
Administrative expenses 4,483 17,260 38,864 5,071 7,781
Benefit payments to participants or beneficiaries 879,858 2,557,634 5,079,363 1,091,397 4,231,691
---------- ---------- ---------- ---------- ----------
Total deductions 884,341 2,574,894 5,118,227 1,096,468 4,239,472
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net assets
available for plan benefits prior to
transfers 1,416,778 2,410,262 6,479,045 423,402 (2,927,246)
Transfers to the Plan 1,267,469 1,117,321 3,321,247 374,649 4,108,574
Interfund transfers, net 1,510,097 439,728 (141,050) 349,519 (546,790)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net assets
available for plan benefits 4,194,344 3,967,311 9,659,242 1,147,570 634,538
Net assets available for plan benefits:
Beginning of year 4,316,372 27,881,475 50,629,950 9,231,274 14,047,850
---------- ---------- ---------- ---------- ----------
End of year $8,510,716 31,848,786 60,289,192 10,378,844 14,682,388
========== ========== ========== ========== ==========
<PAGE>
<CAPTION>
PARTICIPANT-DIRECTED FUNDS
-----------------------------------------
NONPAR-
SMALL CAP MERCANTILE INTER- TICIPANT-
EQUITY STOCK NATIONAL DIRECTED
FUND FUND FUND FUNDS TOTAL
----------- ----------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Additions:
Contributions from:
Employer -- 9,894,517 -- -- 9,894,517
Participants 2,019,403 6,370,038 900,829 6,117 17,870,986
---------- ----------- --------- ---------- -----------
Total contributions 2,019,403 16,264,555 900,829 6,117 27,765,503
---------- ----------- --------- ---------- -----------
Earnings (loss) on investments:
Interest:
Interest-bearing cash (including money market
funds) 2,043 62,187 1,171 107,831 865,021
Loans to participants -- -- -- 825,785 825,785
---------- ----------- --------- ---------- -----------
Total interest 2,043 62,187 1,171 933,616 1,690,806
Common stock dividends -- 5,988,124 -- 47,114 6,035,238
Net appreciation (depreciation) in fair value of
investments in common stock -- (72,727,821) -- 574,558 (72,153,263)
Net investment appreciation (depreciation) in fair
value of investments in registered investment
companies (1,244,531) -- 950,677 -- 12,155,333
Other income 9 -- 4 102,353 102,434
---------- ----------- --------- ---------- -----------
Total earnings (loss) on investments (1,242,479) (66,677,510) 951,852 1,657,641 (52,169,452)
---------- ----------- --------- ---------- -----------
Total additions 776,924 (50,412,955) 1,852,681 1,663,758 (24,403,949)
---------- ----------- --------- ---------- -----------
Deductions:
Administrative expenses 22,689 193,088 5,345 3,177 297,758
Benefit payments to participants or beneficiaries 1,303,886 31,896,939 571,646 11,577,200 59,189,614
---------- ----------- --------- ---------- -----------
Total deductions 1,326,575 32,090,027 576,991 11,580,377 59,487,372
---------- ----------- --------- ---------- -----------
Net increase (decrease) in net assets
available for plan benefits prior to
transfers (549,651) (82,502,982) 1,275,690 (9,916,619) (83,891,321)
Transfers to the Plan 818,300 17,129,897 234,375 15,073,541 43,445,373
Interfund transfers, net 153,136 632,539 21,706 (2,418,885) --
---------- ----------- --------- ---------- -----------
Net increase (decrease) in net assets
available for plan benefits 421,785 (64,740,546) 1,531,771 2,738,037 (40,445,948)
Net assets available for plan benefits:
Beginning of year 12,965,925 293,326,723 5,366,413 9,192,815 426,958,797
---------- ----------- --------- ---------- -----------
End of year 13,387,710 228,586,177 6,898,184 11,930,852 386,512,849
========== =========== ========= ========== ===========
See accompanying notes to financial statements.
</TABLE>
4
<PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1997
<CAPTION>
PARTICIPANT-DIRECTED FUNDS
---------------------------------------------------------------------
GROWTH GOVERNMENT
GROWTH AND AND MONEY
EQUITY BALANCED INCOME CORPORATE MARKET
FUND FUND FUND BOND FUND FUND
--------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Additions:
Contributions from:
Employer $ -- -- -- -- --
Participants 2,387 1,755,877 4,354,171 571,115 888,576
---------- ---------- ---------- --------- ----------
Total contributions 2,387 1,755,877 4,354,171 571,115 888,576
---------- ---------- ---------- --------- ----------
Earnings on investments:
Interest:
Interest-bearing cash (including money market
funds) 411 2,600 4,664 1,436 586,842
Certificates of deposit -- -- -- -- 737
Loans to participants -- -- -- -- --
---------- ---------- ---------- --------- ----------
Total interest 411 2,600 4,664 1,436 587,579
Common stock dividends -- -- -- -- --
Net appreciation in fair value of
investments in common stock -- -- -- -- --
Net investment appreciation (depreciation) in fair
value of investments in registered investment
companies (25,404) 4,169,602 10,259,961 672,878 --
Other income -- 5,648 17,772 59 --
---------- ---------- ---------- --------- ----------
Total earnings on investments (24,993) 4,177,850 10,282,397 674,373 587,579
---------- ---------- ---------- --------- ----------
Total additions (22,606) 5,933,727 14,636,568 1,245,488 1,476,155
---------- ---------- ---------- --------- ----------
Deductions:
Administrative expenses 341 22,307 36,355 8,455 11,021
Benefit payments to participants or beneficiaries 325,072 2,486,574 3,080,210 812,541 1,867,589
---------- ---------- ---------- --------- ----------
Total deductions 325,413 2,508,881 3,116,565 820,996 1,878,610
---------- ---------- ---------- --------- ----------
Net increase (decrease) in net assets
available for plan benefits prior to
transfers (348,019) 3,424,846 11,520,003 424,492 (402,455)
Transfers to the Plan 4,331,323 1,215,320 2,516,976 546,464 3,943,976
Interfund transfers, net 333,068 (571,526) (389,861) 218,695 554,764
---------- ---------- ---------- --------- ----------
Net increase in net assets
available for plan benefits 4,316,372 4,068,640 13,647,118 1,189,651 4,096,285
Net assets available for plan benefits:
Beginning of year -- 23,812,835 36,982,832 8,041,623 9,951,565
---------- ---------- ---------- --------- ----------
End of year $4,316,372 27,881,475 50,629,950 9,231,274 14,047,850
========== ========== ========== ========= ==========
<PAGE>
<CAPTION>
PARTICIPANT-DIRECTED FUNDS
-----------------------------------------
NONPAR-
SMALL CAP MERCANTILE INTER- TICIPANT-
EQUITY STOCK NATIONAL DIRECTED
FUND FUND FUND FUNDS TOTAL
----------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Additions:
Contributions from:
Employer -- 10,821,114 -- 3,799 10,824,913
Participants 1,959,909 4,146,377 961,615 848 14,640,875
---------- ----------- --------- --------- -----------
Total contributions 1,959,909 14,967,491 961,615 4,647 25,465,788
---------- ----------- --------- --------- -----------
Earnings on investments:
Interest:
Interest-bearing cash (including money market
funds) 2,040 39,606 1,250 152,038 790,887
Certificates of deposit -- -- -- -- 737
Loans to participants -- -- -- 783,730 783,730
---------- ----------- --------- --------- -----------
Total interest 2,040 39,606 1,250 935,768 1,575,354
Common stock dividends -- 4,704,859 -- 32,515 4,737,374
Net appreciation in fair value of
investments in common stock -- 113,817,305 -- 1,561,769 115,379,074
Net investment appreciation (depreciation) in fair
value of investments in registered investment
companies 2,121,670 -- 156,711 493,317 17,848,735
Other income 2,905 1 883 208,342 235,610
---------- ----------- --------- --------- -----------
Total earnings on investments 2,126,615 118,561,771 158,844 3,231,711 139,776,147
---------- ----------- --------- --------- -----------
Total additions 4,086,524 133,529,262 1,120,459 3,236,358 165,241,935
---------- ----------- --------- --------- -----------
Deductions:
Administrative expenses 10,733 145,745 3,914 5,285 244,156
Benefit payments to participants or beneficiaries 789,301 15,883,396 349,836 3,767,103 29,361,622
---------- ----------- --------- --------- -----------
Total deductions 800,034 16,029,141 353,750 3,772,388 29,605,778
---------- ----------- --------- --------- -----------
Net increase (decrease) in net assets
available for plan benefits prior to
transfers 3,286,490 117,500,121 766,709 (536,030) 135,636,157
Transfers to the Plan 640,946 41,887,472 518,459 74,300 55,675,236
Interfund transfers, net (1,006,118) (927,908) 74,924 1,713,962 --
---------- ----------- --------- --------- -----------
Net increase in net assets
available for plan benefits 2,921,318 158,459,685 1,360,092 1,252,232 191,311,393
Net assets available for plan benefits:
Beginning of year 10,044,607 134,867,038 4,006,321 7,940,583 235,647,404
---------- ----------- --------- --------- -----------
End of year 12,965,925 293,326,723 5,366,413 9,192,815 426,958,797
========== =========== ========= ========= ===========
See accompanying notes to financial statements.
</TABLE>
5
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998 and 1997
(1) DESCRIPTION OF THE PLAN
The following description of the Plan provides only general
information. Interested parties should refer to the plan document
for a more complete description of the Plan's provisions.
GENERAL
The Plan, which was adopted in 1969, is a defined
contribution plan which covers all employees of Mercantile
who have completed one year of eligible service or employees
with an account balance resulting from a qualified rollover.
The Plan is subject to the provisions of ERISA and
structured to incorporate the provisions available under
Section 401(k) of the Internal Revenue Code, which allows
member and sponsor contributions to be excluded from federal
and state income taxation within certain prescribed limits.
The Plan Administrator, appointed by the Mercantile Board of
Directors, manages and directs the operation of the Plan.
CONTRIBUTIONS
Each participant may contribute 1% to 15% of their annual
compensation (subject to federal limits) and may elect to
have their contributions invested and allocated earnings
reinvested to their account in the following separate
investment funds within the Plan:
* Growth Equity Fund, which invests in the Arch Growth
Equity Portfolio. The Arch Growth Equity Portfolio is
a mutual fund that invests in common stocks of proven
mid-to-large-sized companies.
* Balanced Fund, which invests in the Arch Balanced
Portfolio. The Arch Balanced Portfolio is a mutual
fund that invests in fixed-income securities and
equity securities.
* Growth and Income Fund, which invests in the Arch
Growth and Income Equity Portfolio. The Arch Growth
and Income Equity Portfolio is a mutual fund that
primarily invests in broadly diversified equity
securities.
* Government and Corporate Bond Fund, which invests in
the Arch Government and Corporate Bond Portfolio. The
Arch Government and Corporate Bond Portfolio is a
mutual fund that primarily invests in debt obligations
with maturity dates of one year or more.
* Money Market Fund, which invests in the Arch Money
Market Portfolio Trust Shares. The Arch Money Market
Portfolio Trust Shares is a mutual fund that primarily
invests in fixed income obligations with maturity
dates of less than one year.
* Small Cap Equity Fund which invests in the Arch Small
Cap Equity Portfolio. The Arch Small Cap Equity
Portfolio is a mutual fund that invests in common
stocks of emerging or established small-to-medium-
sized companies.
* Mercantile Stock Fund, which invests in the common
stock of Mercantile.
6 (Continued)
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998 and 1997
* International Fund, which invests in the Arch
International Equity Portfolio. The Arch International
Equity Portfolio is a mutual fund that invests in a
diversified portfolio of international stocks.
Subject to the provisions of the Plan prior to January 1,
1998, each participant is eligible to receive employer
contributions. Mercantile's contribution has both a matching
and incentive component. As a matching component, Mercantile
contributes 50% of a participant's contribution up to a
maximum employer contribution equal to 3% of a participant's
salary. Mercantile's incentive contribution is based on a
formula using a return-on-assets ratio. Incentive
contributions cannot exceed 6% of the total compensation
paid to participants during a plan year. Both the matching
and the incentive contributions are invested in the
Mercantile Stock Fund. The plan document was amended and
restated effective January 1, 1998. Beginning January 1,
1998, Mercantile contributes 100% of a participant's
contribution up to an employer contribution equal to 3% of a
participant's salary plus 50% of a participant's
contribution up to an employer contribution equal to the
next 3% of a participant's salary. Mercantile's incentive
component is no longer applicable effective January 1, 1998.
PARTICIPANT ACCOUNTS
Each participant account is credited with the participant's
contribution, an allocation of employer contributions, and
an allocation of plan earnings net of administrative
expenses. Allocations are based on participant compensation
or account balances, as defined in the plan document. The
benefit to which a participant is entitled is the benefit
that can be provided from the participant's account.
NONPARTICIPANT-DIRECTED FUNDS
Included in nonparticipant-directed funds are a Loan Fund,
Insurance Fund, several temporary funds, and Suspense Fund.
The Loan Fund allows participating employees to borrow
money, within specified limits, in the form of interest-
bearing promissory notes from the Plan to be repaid over a
period not to exceed five years for general loans or 10
years for mortgage loans. The Insurance Fund relates only to
certain employees who were merged into the Plan via
acquisition activity. The Insurance Fund provides for the
payment of a participant's life insurance premiums via pre-
tax contributions. The temporary funds capture and
distribute assets received from plans merged into the Plan.
The Suspense Fund captures and distributes contributions,
administrative expenses, and benefit payments to
participants or beneficiaries.
VESTING
Participants are fully vested in their account balances,
including employer matching and incentive contributions.
BENEFIT PAYMENTS
Upon termination of employment, participants with an account
balance less than $5,000 are paid in a lump sum. Participants
with an account balance of $5,000 or more, upon
7 (Continued)
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998 and 1997
termination of employment, may elect to be paid the balance
of their account, either immediately or upon retirement, in
a lump sum or installments over a period not to exceed 10
years in accordance with plan provisions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on
an accrual basis, with the exception of benefits which are
recorded when paid, and present the net assets available for
plan benefits and changes in those assets. The preparation
of the accompanying financial statements in conformity with
generally accepted accounting principles requires the Plan's
management to make estimates and assumptions that affect the
reported amounts in the financial statements. Actual results
could differ from those estimates.
VALUATION OF INVESTMENTS
The Plan's investments are stated at current (or fair)
value. Securities traded on a national securities exchange,
including Mercantile Bancorporation Inc. common stock, are
valued at the last reported sales price on the last business
day of the plan year.
Interest in registered investment companies represents units
of participation in Arch Mutual Funds (subsequently renamed
the Mercantile Mutual Funds effective March 31, 1999).
Interest-bearing cash represents units of participation in
the Arch Money Market Portfolio Trust Shares. Units of Arch
Mutual Funds and Arch Money Market Portfolio Trust Shares
are valued at quoted market prices which represent the net
asset value of shares held by the Plan as provided by BYSIS
Fund Services, the administrator of Arch Funds, Inc.
Loans to participants represent the unpaid principal of
employee loans and are valued at cost which approximates
fair value.
INVESTMENT TRANSACTIONS
Investment purchases and sales are recorded on a trade-date
basis (date the order to buy or sell is executed). The
realized gains or losses on investments are determined
principally using the average cost of the individual
security issue as a basis. Average cost is based on the
market value of the security at the beginning of the year
and the acquisition cost of any purchases made during the
year.
Interest income is recorded on the accrual basis. Dividends
are recorded on the ex-dividend date. Uninvested moneys
within each fund are temporarily invested in the Arch Money
Market Portfolio Trust Shares.
COSTS OF PLAN ADMINISTRATION
Fees and expenses incurred by the Trustee and the Plan's
management in the administration of the Plan are paid by
Mercantile and from plan assets. Expenses solely
attributable to the investment of plan funds are paid from
plan assets.
8 (Continued)
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998 and 1997
(3) INVESTMENTS
The Plan's investments are maintained in a trust fund managed by
the Trustee on behalf of the Plan. The investments and changes
therein of this trust fund have been reported to the Plan by the
Trustee. The following table presents the fair value of
investments at December 31, 1998 and 1997. Investments that
represent 5% or more of the Plan's assets are separately
identified:
<TABLE>
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Investments at fair value as determined by quoted
market price:
Cash equivalents $ 15,065,452 15,971,897
Interest in registered investment companies:
Arch Balanced Portfolio 31,730,033 27,691,361
Arch Growth and Income Equity Portfolio 60,073,362 50,224,411
Other 38,985,287 31,663,414
Common stocks -
Mercantile Bancorporation Inc., 4,983,762
and 4,639,165 shares, respectively 229,876,022 285,308,617
------------ -----------
375,730,156 410,859,700
Investments at estimated fair value 8,080,326 8,851,315
------------ -----------
Total investments $383,810,482 419,711,015
============ ===========
</TABLE>
During 1998 and 1997, the Plan's investments, exclusive of
investments in registered investment companies, appreciated
(depreciated) in fair value as follows:
<TABLE>
<CAPTION>
1998 1997
-------------------------- -----------------------
REALIZED UNREALIZED REALIZED UNREALIZED
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Net appreciation (depreciation)
in fair value of investments
- investments at fair value
as determined by quoted
market price - common
stocks $(3,455,111) (68,698,152) 3,134,261 112,244,813
=========== =========== ========= ===========
</TABLE>
9 (Continued)
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998 and 1997
(4) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan
benefits per the financial statements to Form 5500:
<TABLE>
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Net assets available for plan benefits per the
financial statements $386,512,849 426,958,797
Amounts allocated to withdrawing participants (9,558,213) (11,122,033)
------------ -----------
Net assets available for plan benefits per the
Form 5500 $376,954,636 415,836,764
============ ===========
</TABLE>
The following is a reconciliation of benefits paid to participants
per the financial statements to Form 5500:
<TABLE>
<CAPTION>
1998 1997
----------- ----------
<S> <C> <C>
Benefits paid to participants per the financial
statements $59,189,614 29,361,622
Add amounts allocated to withdrawing participants at
December 31, current year 9,558,213 11,122,033
Less amounts allocated to withdrawing participants at
December 31, prior year (11,122,033) (2,688,173)
----------- ----------
Benefits paid to participants per the Form 5500 $57,625,794 37,795,482
=========== ==========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the
Form 5500 for benefit claims that have been processed and approved
for payment prior to December 31 but not yet paid as of that date.
10 (Continued)
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998 and 1997
(5) TRANSFERS TO THE PLAN
During 1998 and 1997, the following plans merged into the Plan.
The mergers were related to Mercantile's corporate acquisitions:
<TABLE>
<CAPTION>
EFFECTIVE TOTAL
DATE PLAN ASSETS
----------------- -----------
<S> <C> <C>
1998 plan mergers:
Horizon Bancorp, Inc. Employee Stock
Ownership & Savings Plan November 18, 1998 $16,371,803
Roosevelt Bank Employees' Savings & Profit Sharing Plan January 1, 1998 22,335,458
Kirksville Federal Savings Bank 401(k)
Plan January 1, 1998 2,788,651
Homecorp, Inc. Employee Stock Ownership
& 401(k) Plan July 1, 1998 1,949,461
-----------
Total transfers to the Plan $43,445,373
===========
1997 plan mergers:
First Financial Corporation of America
Profit Sharing Trust January 1, 1997 $1,718,501
Peoples State Bank Employee Savings and
Profit Sharing Plan January 1, 1997 1,074,608
Today's Bancorp, Inc. Employees Stock
Ownership Plan March 3, 1997 3,845,310
Regional Bancshares, Inc. 401(k) Plan July 1, 1997 969,953
First City National Bank 401(k) Plan July 3, 1997 112,434
Mark Twain Bancshares, Inc. Savings
Challenge Plan November 5, 1997 47,954,430
-----------
Total transfers to the Plan $55,675,236
===========
</TABLE>
(6) RELATED PARTY TRANSACTIONS
On various dates during 1997, the Plan purchased and sold shares
of Mercantile common stock at fair value for investment in the
Plan's Mercantile Stock Fund.
Certain plan investments are shares of mutual funds managed by
Mercantile Bank N.A., a wholly owned subsidiary of Mercantile.
Mercantile Bank N.A. is the trustee of the Plan and, therefore,
these transactions qualify as party-in-interest transactions.
11 (Continued)
<PAGE>
<PAGE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998 and 1997
(7) INCOME TAX STATUS
The Internal Revenue Service has determined and informed
Mercantile by a letter dated August 7, 1996, that the Plan and
related trust are designed in accordance with applicable sections
of the Internal Revenue Code (IRC) and, therefore, are exempt from
federal income taxes. The Plan has been amended and restated
since receiving the tax determination letter. However, the Plan
Administrator and the Plan's tax counsel believe that the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC.
(8) PLAN TERMINATION
While Mercantile has not expressed any intent to terminate the
Plan or discontinue contributions, it may do so at any time,
subject to the provisions set forth in ERISA.
(9) SUBSEQUENT EVENTS (UNAUDITED)
In September 1998, Mercantile acquired First Financial
Bancorporation. In conjunction with the acquisition, the First
National Bank Iowa Salary Reduction Profit Sharing Plan merged
into the Plan effective January 1999. The fair value of the assets
merged into the Plan was approximately $6,620,000.
In August 1998, Mercantile acquired Financial Services Corporation
of the Midwest. In conjunction with the acquisition, the Rock
Island Bank Saving Trust Plan merged into the Plan effective
January 1999. The fair value of the assets merged into the Plan
was approximately $5,614,000.
In July 1998, Mercantile acquired CBT Corporation. In conjunction
with the acquisition, the CBT Savings and Profit Sharing Plan and
CBT Money Purchase Pension Plan merged into the Plan effective
January 1999. The fair value of the assets merged into the Plan
was approximately $11,306,000 and $1,863,000, respectively.
Also in July 1998, Mercantile acquired Firstbank of Illinois Co.
In conjunction with the acquisition, the First Bank of Illinois
Profit Sharing Plan, Central Bank Profit Sharing Plan, and Central
Bank Frozen 401(k) Plan merged into the Plan effective January
1999. The fair value of the assets merged into the Plan was
approximately $54,916,000, $4,617,000, and $361,000, respectively.
On April 30, 1999, a definitive Agreement and Plan of Merger by
and between Mercantile and Firstar Corporation (Firstar) was
signed. Mercantile will merge with and into Firstar in a
transaction intended to be a tax-free reorganization. Firstar,
headquartered in Milwaukee, is a $38 billion-asset bank holding
company with approximately 720 full-service banking offices in
Ohio, Wisconsin, Kentucky, Illinois, Indiana, Iowa, Minnesota,
Tennessee, and Arizona. The transaction is expected to close in
the fourth quarter of 1999.
12
<PAGE>
<PAGE>
SCHEDULE 1
<TABLE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Item 27a -- Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
SHARES OR CURRENT
UNITS COST VALUE
-------------- ------------ -----------
<S> <C> <C> <C>
Cash equivalents - Arch Money Market Portfolio
15,065,452<F*> Trust Shares $ 15,065,452 15,065,452
------------ -----------
Registered investment companies:
531,876<F*> Arch International Equity Portfolio 6,217,130 6,866,521
1,049,058<F*> Arch Small Cap Equity Portfolio 13,361,561 13,333,528
978,910<F*> Arch Government and Corporate Bond Portfolio 10,087,987 10,307,921
2,639,770<F*> Arch Balanced Portfolio 29,558,414 31,730,033
3,252,483<F*> Arch Growth and Income Equity Portfolio 53,024,965 60,073,362
437,426<F*> Arch Growth Equity Portfolio 7,586,924 8,477,317
------------ -----------
119,836,981 130,788,682
------------ -----------
4,983,762<F*> Mercantile Bancorporation Inc. common stock 106,083,292 229,876,022
Loans to participants -- general purpose and residential
8,066,838 loans (interest rates range from 6.25% to 10.50%) 8,066,838 8,066,838
150,023 Equitable Life Insurance 7,390 13,488
------------ -----------
Total assets held for investment purposes $249,059,953 383,810,482
============ ===========
<FN>
<F*>Represents party-in-interest transaction allowable under ERISA regulations.
See accompanying independent auditors' report.
</TABLE>
13
<PAGE>
<PAGE>
SCHEDULE 2
<TABLE>
MERCANTILE BANCORPORATION INC.
HORIZON INVESTMENT AND SAVINGS PLAN AND TRUST
Item 27d -- Schedule of Reportable Transactions
Year ended December 31, 1998
<CAPTION>
EXPENSES
INCURRED
IDENTITY OF PURCHASE SELLING LEASE WITH
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE RENTAL TRANSACTION
- ------------------------------- -------------------------------------- ------------ ------------ ------ -----------
<S> <C> <C> <C> <C> <C>
Arch Money Market
Portfolio Trust Shares <F*> Purchases of Arch Money Market
Portfolio Trust Shares $108,707,611 -- -- --
Arch Money Market
Portfolio Trust Shares <F*> Sales of Arch Money Market
Portfolio Trust Shares -- 109,644,667 -- --
MTC Master Money Market
Account <F*> Purchases of MTC Master Money
Market Account 1,071,095 -- -- --
MTC Master Money Market
Account <F*> Sales of MTC Master Money Market
Account -- 1,071,095 -- --
Mercantile Bancorporation
Inc. <F*> Purchases of Mercantile Bancorporation
Inc. common stock 19,454,589 -- -- 22,696
Mercantile Bancorporation
Inc. <F*> Sales of Mercantile Bancorporation
Inc. common stock -- 2,208,128 -- 3,022
Arch Balanced Portfolio <F*> Purchases of Arch Balanced Portfolio
shares 6,426,903 -- -- --
Arch Balanced Portfolio <F*> Sales of Arch Balanced Portfolio
shares -- 2,715,462 -- --
Arch Small Capital Equity
Portfolio <F*> Purchases of Arch Small Cap Equity
Portfolio shares 2,974,451 -- -- --
Arch Small Capital Equity
Portfolio <F*> Sales of Arch Small Cap Equity Portfolio
shares -- 1,184,700 -- --
Arch Government and
Corporate Bond
Portfolio <F*> Purchases of Arch Government and
Corporate Bond Portfolio shares 2,631,410 -- -- --
Arch Government and
Corporate Bond
Portfolio <F*> Sales of Arch Government and Corporate
Bond Portfolio shares -- 1,560,300 -- --
Arch International
Equity Portfolio
shares <F*> Purchases of Arch International Equity
Portfolio shares 1,927,996 -- -- --
Arch International
Equity Portfolio
shares <F*> Sales of Arch International Equity
Portfolio shares -- 912,800 -- --
Arch Growth and Income
Equity Portfolio <F*> Purchases of Arch Growth and Income
Equity Portfolio shares 13,470,853 -- -- --
Arch Growth and Income
Equity Portfolio <F*> Sales of Arch Growth and Income
Equity Portfolio shares -- 5,560,418 -- --
Arch Growth Equity
Portfolio <F*> Purchases of Arch Growth Equity
Portfolio shares 3,742,849 -- -- --
Arch Growth Equity
Portfolio <F*> Sales of Arch Growth Equity
Portfolio shares -- 600,500 -- --
============ =========== ==== =======
<PAGE>
<CAPTION>
CURRENT VALUE
COST OF ASSET ON
IDENTITY OF OF TRANSACTION NET GAIN
PARTY INVOLVED DESCRIPTION OF ASSET ASSETS DATE OR (LOSS)
- ------------------------------- -------------------------------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Arch Money Market
Portfolio Trust Shares <F*> Purchases of Arch Money Market
Portfolio Trust Shares 108,707,611 108,707,611 --
Arch Money Market
Portfolio Trust Shares <F*> Sales of Arch Money Market
Portfolio Trust Shares 109,644,667 109,644,667 --
MTC Master Money Market
Account <F*> Purchases of MTC Master Money
Market Account 1,071,095 1,071,095 --
MTC Master Money Market
Account <F*> Sales of MTC Master Money Market
Account 1,071,095 1,071,095 --
Mercantile Bancorporation
Inc. <F*> Purchases of Mercantile Bancorporation
Inc. common stock 19,454,589 19,454,589 --
Mercantile Bancorporation
Inc. <F*> Sales of Mercantile Bancorporation
Inc. common stock 242,365 2,208,128 1,965,763
Arch Balanced Portfolio <F*> Purchases of Arch Balanced Portfolio
shares 6,426,903 6,426,903 --
Arch Balanced Portfolio <F*> Sales of Arch Balanced Portfolio
shares 2,461,992 2,715,462 253,470
Arch Small Capital Equity
Portfolio <F*> Purchases of Arch Small Cap Equity
Portfolio shares 2,974,451 2,974,451 --
Arch Small Capital Equity
Portfolio <F*> Sales of Arch Small Cap Equity Portfolio
shares 1,249,440 1,184,700 (64,740)
Arch Government and
Corporate Bond
Portfolio <F*> Purchases of Arch Government and
Corporate Bond Portfolio shares 2,631,410 2,631,410 --
Arch Government and
Corporate Bond
Portfolio <F*> Sales of Arch Government and Corporate
Bond Portfolio shares 1,520,335 1,560,300 39,965
Arch International
Equity Portfolio
shares <F*> Purchases of Arch International Equity
Portfolio shares 1,927,996 1,927,996 --
Arch International
Equity Portfolio
shares <F*> Sales of Arch International Equity
Portfolio shares 810,465 912,800 102,335
Arch Growth and Income
Equity Portfolio <F*> Purchases of Arch Growth and Income
Equity Portfolio shares 13,470,853 13,470,853 --
Arch Growth and Income
Equity Portfolio <F*> Sales of Arch Growth and Income
Equity Portfolio shares 4,850,731 5,560,418 709,687
Arch Growth Equity
Portfolio <F*> Purchases of Arch Growth Equity
Portfolio shares 3,742,849 3,742,849 --
Arch Growth Equity
Portfolio <F*> Sales of Arch Growth Equity
Portfolio shares 555,926 600,500 44,574
=========== =========== =========
<FN>
<F*> Represents party-in-interest transaction allowable under ERISA regulations.
See accompanying independent auditors' report.
</TABLE>
14
