SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
McDonald & Company Investments, Inc.
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(Name of Issuer)
Common Stock, par value $1.00 per share, of McDonald & Company Investments, Inc.
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(Title of Class of Securities)
580047108
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(CUSIP Number)
Daniel R. Stolzer
Vice President and Associate General Counsel
127 Public Square
Cleveland, Ohio 44114
(216) 689-3000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 15, 1998
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-(f) or 13d-1(g) check the
following box [_].
(Continued on following pages)
(Page 1 of 10 pages)
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CUSIP NO. 580047108 13D Page 2 of 10 Pages
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1. NAME OF REPORTING PERSONS KEYCORP
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) IRS# 34-6542451
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION OHIO
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7. SOLE VOTING POWER 3,723,110*
NUMBER OF
SHARES -----------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH -----------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 3,706,168*
PERSON
WITH -----------------------------------------------------
10. SHARED DISPOSITIVE POWER 12,806
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,832,610*
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.3%**
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14. TYPE OF REPORTING PERSON CO, HC
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* BENEFICIAL OWNERSHIP OF 3,669,088 SHARES OF COMMON STOCK REPORTED
HEREUNDER IS BEING REPORTED SOLELY AS A RESULT OF THE STOCK OPTION
AGREEMENT DESCRIBED IN ITEM 4 HEREOF. THE OPTION GRANTED PURSUANT TO
THE STOCK OPTION AGREEMENT HAS NOT YET BECOME EXERCISABLE. KEYCORP
EXPRESSLY DISCLAIMS BENEFICIAL OWNERSHIP OF SUCH SHARES.
** GIVES EFFECT TO THE ISSUANCE OF COMMON STOCK SUBJECT TO THE STOCK OPTION
AGREEMENT.
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ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, par value $1.00 per share
("Company Common Stock"), of McDonald & Company Investments, Inc., a Delaware
corporation (the "Company"), the principal executive offices of which are
located at 800 Superior Avenue, Cleveland, Ohio 44114.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f) This statement is being filed by KeyCorp, an Ohio
corporation registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended ("KeyCorp"). The principal business offices of KeyCorp
are located at 127 Public Square, Cleveland, Ohio 44114. KeyCorp has one
principal banking subsidiary, KeyBank National Association, the assets of which
currently constitute substantially all of the assets of KeyCorp.
The names of the directors and executive officers of KeyCorp and their
respective business addresses, citizenship and present principal occupations or
employment, as well as the names, principal businesses and addresses of any
corporations and other organizations in which such employment is conducted, are
set forth on Schedule I hereto, which Schedule is incorporated herein by
reference.
(d)-(e) Neither KeyCorp, nor, to the best of its knowledge, any of the
persons listed in Schedule I hereto has during the last five years been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). Neither KeyCorp nor, to the best of its knowledge, any of the
persons listed in Schedule I hereto has during the last five years been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 4, the Company has granted to KeyCorp
an option pursuant to which KeyCorp has the right, upon the occurrence of
certain events (none of which has occurred), to purchase up to 3,669,088 shares
of Company Common Stock (subject to adjustment in certain circumstances) at a
price per share equal to $30.8125 (the "Option"). Certain terms of the Option
are summarized in Item 4.
If the Option were exercisable and KeyCorp were to exercise the Option
on the date hereof, the funds required to purchase the shares of Company Common
Stock issuable upon such exercise would be $113,053,774. It is currently
anticipated that such funds would be derived from working capital.
Subject to market conditions and developments with respect to the
Merger, KeyCorp may purchase shares of Company Common Stock in the open market
or in privately negotiated transactions. It is currently anticipated that any
funds used to make such purchases would be derived from working capital.
ITEM 4. PURPOSE OF THE TRANSACTION.
(a)-(j) KeyCorp is seeking to acquire the entire equity interest in
the Company pursuant to the Merger (as defined below). The transactions reported
hereunder are intended to assist in the achievement of that purpose.
The Merger Agreement. The Company and KeyCorp have entered into an
Agreement and Plan of Merger, dated as of June 15, 1998 (the "Merger
Agreement"), pursuant to which the Company will be merged with and into KeyCorp
(the "Merger"), with KeyCorp being the surviving corporation (the "Surviving
Corporation"). At the effective time of the Merger (the "Effective Time"), each
outstanding share of Company Common Stock will be converted into the right to
receive $35.00 of the Common Stock, par value $1.00 per share
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("KeyCorp Common Stock"), of KeyCorp, subject to possible adjustments if the
price per share of KeyCorp Common Stock is below $33.00 or above $44.50 per
share at the Effective Time (the "Exchange Ratio"). The Certificate of
Incorporation and Bylaws of KeyCorp as in effect immediately prior to the Merger
will be the Certificate of Incorporation and Bylaws of the Surviving
Corporation.
As a result of the Merger, the Company will cease to exist as a
separate legal entity.
If, after the date of the Merger Agreement but prior to the Effective
Time, the shares of KeyCorp Common Stock issued and outstanding shall, through a
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar change (regardless of the method of
effectuation of any of the foregoing, including by way of a merger or otherwise)
in the capitalization of KeyCorp, increase or decrease in number or be changed
into or exchanged for a different kind or number of securities, then an
appropriate and proportionate adjustment shall be made to the Exchange Ratio. As
of the Effective Time, each share of Company Common Stock held directly by the
Company or one of its subsidiaries, will be canceled, and no exchange or payment
will be made with respect thereto.
The Merger is subject to various regulatory approvals, including the
prior approval of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), the approval of the stockholders of the Company and
the satisfaction of other terms and conditions set forth in the Merger
Agreement.
As a result of the Merger, the Company Common Stock will be eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "Exchange Act"). In addition, the Company Common
Stock will be eligible for delisting from the New York Stock Exchange, where it
has been traded under the symbol "MDD".
The Option Agreement. In connection with the Merger Agreement, KeyCorp
and the Company entered into a Stock Option Agreement, dated as of June 15, 1998
(the "Option Agreement"). The Option Agreement is designed to enhance the
likelihood that the Merger will be successfully consummated in accordance with
the terms contemplated by the Merger Agreement. Pursuant to the Option
Agreement, the Company granted KeyCorp an Option to purchase, subject to
adjustments in certain circumstances, up to 3,669,088 fully paid and
non-assessable shares of Company Common Stock (the "Option Shares") at a price
per share equal to $30.8125.
Subject to applicable law and regulatory restrictions, KeyCorp may
exercise the Option, in whole or in part, if, but only if, both an Initial
Triggering Event (as defined below) and a Subsequent Triggering Event (as
defined below) have occurred prior to the occurrence of an Exercise Termination
Event (as defined below), provided that written notice of such exercise as
required by the Option Agreement is provided within ninety days following such
Subsequent Triggering Event (or such later period as provided in the Option
Agreement).
As defined in the Option Agreement, "Initial Triggering Event" means
any of the following events or transactions occurring on or after the date of
signing the Option Agreement:
(i) The Company or any Company Subsidiary (as defined below),
without having received KeyCorp's prior written consent, shall have
entered into an agreement to engage in an Acquisition Transaction (as
defined below) with any person (the term "person" for purposes of the
Option Agreement having the meaning assigned thereto in Sections
3(a)(9) and 13(d)(3) of the Exchange Act and the rules and regulations
thereunder) other than KeyCorp or any KeyCorp Subsidiary (as defined
below) or the Board of Directors of the Company (the "Company Board")
shall have recommended that the shareholders of the Company approve or
accept any Acquisition Transaction other than as contemplated by the
Merger Agreement. For purposes of the Option Agreement:
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(A) "Acquisition Transaction" shall mean (x) a merger or
consolidation, or any similar transaction, involving the Company
or a Company Subsidiary (other than mergers, consolidations or
similar transactions (1) involving solely the Company and/or one
or more wholly owned Subsidiaries of the Company or (2) in which
the voting securities of the Company outstanding immediately
prior thereto continue to represent (by either remaining
outstanding or being converted into the voting securities of the
surviving entity of any such transaction) at least 50% of the
combined voting power of the voting securities of the Company or
the surviving entity outstanding immediately after the
consummation of such merger, consolidation, or similar
transaction, provided that any such transaction is not entered
into in violation of the terms of the Merger Agreement), (y) a
purchase, lease or other acquisition of 25% or more of the assets
of the Company or a Company Subsidiary, or (z) a purchase or
other acquisition (including by way of merger, consolidation,
share exchange or otherwise) of securities representing 15% or
more of the voting power of the Company or a Company Subsidiary;
(B) "Subsidiary" shall have the meaning set forth in Rule
12b-2 under the Exchange Act;
(C) "Significant Subsidiary" shall have the meaning set
forth in Rule 1-02 of Regulation S-X promulgated by the
Securities and Exchange Commission (the "SEC");
(D) "Company Subsidiary" shall mean any Significant
Subsidiary of the Company; and
(E) "KeyCorp Subsidiary" shall mean any Subsidiary of
KeyCorp.
(ii) Any person other than KeyCorp or any KeyCorp Subsidiary
shall have acquired beneficial ownership or the right to acquire
beneficial ownership of 15% or more of the outstanding shares of
Company Common Stock (the term "beneficial ownership" for purposes of
the Option Agreement having the meaning assigned thereto in Section
13(d) of the Exchange Act);
(iii) The shareholders of the Company shall have voted and failed
to approve the Merger Agreement or the Merger at a meeting which has
been held for that purpose or any adjournment or postponement thereof,
or such meeting shall not have been held in violation of the Merger
Agreement or shall have been canceled prior to termination of the
Merger Agreement if, prior to such meeting (or if such meeting shall
not have been held or shall have been canceled, prior to such
termination), it shall have been publicly announced that any person
(other than KeyCorp or any KeyCorp Subsidiary) shall have made, or
disclosed an intention to make, a proposal to engage in an Acquisition
Transaction;
(iv) The Company Board shall have withdrawn or modified (or
publicly announced its intention to withdraw or modify) in any manner
adverse to KeyCorp its recommendation that the shareholders of the
Company approve the transactions contemplated by the Merger Agreement,
or the Company or a Company Subsidiary shall have authorized,
recommended or proposed (or publicly announced its intention to
authorize, recommend or propose) an agreement to engage in an
Acquisition Transaction with any person other than KeyCorp or a
KeyCorp Subsidiary;
(v) Any person other than KeyCorp or any KeyCorp Subsidiary shall
have made a proposal to the Company or its shareholders to engage in
an Acquisition Transaction and such proposal shall have been publicly
announced;
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(vi) Any person other than KeyCorp or any KeyCorp Subsidiary
shall have filed with the SEC a registration statement or tender offer
materials with respect to a potential exchange or tender offer that
would constitute an Acquisition Transaction (or filed a preliminary
proxy statement with the SEC with respect to a potential vote by its
shareholders to approve the issuance of shares to be offered in such
an exchange or tender offer); or
(vii) The Company shall have willfully breached any covenant or
obligation contained in the Merger Agreement after any person other
than KeyCorp or a KeyCorp Subsidiary shall have made a proposal to the
Company or its shareholders to engage in an Acquisition Transaction,
and following such breach KeyCorp would be entitled to terminate the
Merger Agreement (whether immediately or after the giving of notice or
both).
As defined in the Option Agreement, "Subsequent Triggering Event"
means any of the following events or transactions occurring after the date of
signing the Option Agreement:
(i) The acquisition by any person (other than KeyCorp or any
KeyCorp Subsidiary) of beneficial ownership of 25% or more of the then
outstanding Company Common Stock; or
(ii) The occurrence of the Initial Triggering Event described
above, except that the percentage referred to in clause (z) of the
definition of Acquisition Transaction shall be 25%.
As defined in the Option Agreement, "Exercise Termination Event" means
each of the following: (i) the Effective Time of the Merger; (ii) the
termination of the Merger Agreement in accordance with the provisions thereof,
if such termination occurs prior to the occurrence of an Initial Triggering
Event and is not a termination by KeyCorp pursuant to Section 8.01(b) of the
Merger Agreement (breach of Merger Agreement by either party entitles other
party to terminate Merger Agreement) or Section 8.01(e) of the Merger Agreement
(KeyCorp may terminate Merger Agreement if the Company's board of directors
fails to recommend the Merger Agreement to the Company's stockholders, or
withdraws such recommendation, or modifies or changes such recommendation in a
manner adverse in any respect to the interests of KeyCorp); or (iii) the passage
of eighteen (18) months (or such longer period as provided in the Option
Agreement) after termination of the Merger Agreement, if such termination is
concurrent with or follows the occurrence of an Initial Triggering Event or is a
termination by KeyCorp pursuant to Section 8.01(b) or (e) of the Merger
Agreement.
As provided in the Option Agreement, in the event KeyCorp is entitled
to and wishes to exercise the Option (or any portion thereof), it shall send to
the Company a written notice (the date of which being hereinafter referred to as
the "Notice Date") specifying (i) the total number of shares it will purchase
pursuant to such exercise and (ii) a place and date not earlier than three
business days nor later than 60 business days from the Notice Date for the
closing of such purchase (the "Closing Date"); provided that, if prior
notification to or approval of the Federal Reserve Board or any other regulatory
or antitrust agency is required in connection with such purchase, KeyCorp is
obligated to file promptly the required notice or application for approval,
notify promptly the Company of such filing, and process expeditiously the same
and the period of time that otherwise would run pursuant to this sentence will
run instead from the date on which any required notification periods have
expired or been terminated or such approvals have been obtained and any
requisite waiting period or periods shall have passed. Any exercise of the
Option will be deemed to occur on the Notice Date relating thereto.
Neither of the parties to the Option Agreement may assign any of its
rights or obligations under the Merger Agreement or the Option created
thereunder to any other person, without the express written consent of the other
party, except that in the event a Subsequent Triggering Event shall have
occurred prior to an Exercise Termination Event, KeyCorp, subject to the express
provisions hereof, may assign in whole or in part its rights and obligations
thereunder following the date of such Subsequent Triggering Event; provided that
until
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the date 15 days following the date on which the Federal Reserve Board has
approved an application by KeyCorp to acquire the shares of Company Common Stock
subject to the Option, KeyCorp may not assign its rights under the Option except
in (i) a widely dispersed public distribution, (ii) a private placement in which
no one party acquires the right to purchase in excess of 2% of the voting shares
of the Company, (iii) an assignment to a single party (e.g., a broker or
investment banker) for the sole purpose of conducting a widely dispersed public
distribution on KeyCorp's behalf, or (iv) any other manner approved by the
Federal Reserve Board.
In addition, subject to certain exceptions, any shares of Company
Common Stock purchased upon the exercise of the Option may be resold by KeyCorp
pursuant to registration rights under the Option Agreement.
In the event of any change in, or distributions in respect of, the
Company Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares of Company Common Stock purchasable
upon exercise of the Option will be appropriately adjusted and proper provision
will be made so that, in the event that any additional shares of Company Common
Stock are to be issued or otherwise become outstanding as a result of any such
change (other than pursuant to an exercise of the Option), the number of shares
of Company Common Stock that remain subject to the Option shall be increased so
that, after such issuance and together with shares of Company Common Stock
previously issued pursuant to the exercise of the Option (as adjusted on account
of any of the foregoing changes in the Company Common Stock), it equals 19.9% of
the number of shares of Company Common Stock then issued and outstanding.
Whenever the number of shares of Company Common Stock purchasable upon exercise
of the Option is adjusted as provided in the Stock Option Agreement, the Option
Price shall be adjusted by multiplying the Option Price immediately prior to the
adjustment by a fraction, the numerator of which shall be equal to the number of
shares of Company Common Stock purchasable prior to the adjustment and the
denominator of which shall be equal to the number of shares of Company Common
Stock purchasable after the adjustment.
At any time after the occurrence of a Repurchase Event (as defined
below) (i) at the request of the holder of the Option (the "Holder"), delivered
prior to an Exercise Termination Event (or such later period as provided in
Section 10 of the Option Agreement), the Company (or any successor thereto) must
repurchase the Option from the Holder at a price (the "Option Repurchase Price")
equal to (A) the amount by which the market/offer price (as defined below)
exceeds the Option Price (B) multiplied by the number of shares for which the
Option may then be exercised and (2) at the request of the owner of Option
Shares from time to time (the "Owner"), delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10 of the Option
Agreement), the Company (or any successor thereto) must repurchase such number
of the Option Shares from the Owner as the Owner designates at a price (the
"Option Share Repurchase Price") equal to the market/offer price multiplied by
the number of Option Shares so designated. The term "market/offer price" shall
mean the highest of (i) the highest price per share of Company Common Stock paid
by any person that acquires beneficial ownership of 50% or more of the then
outstanding Company Common Stock, (ii) the price per share of Company Common
Stock to be paid by any third party pursuant to an agreement with the Company
entered into after the date hereof and prior to the date the Holder gives notice
of the required repurchase of the Option or the Owner gives notice of the
required repurchase of Option Shares, as the case may be, (iii) the highest last
sale price for shares of Company Common Stock within the six-month period
immediately preceding the date the Holder gives notice of the required
repurchase of the Option or the Owner gives notice of the required repurchase of
Option Shares, as the case may be, or (iv) in the event of a sale of all or any
substantial part of the Company or the Company's Subsidiary's assets or
deposits, the sum of the net price paid in such sale for such assets or deposits
and the current market value of the remaining net assets of the Company or the
Company Subsidiary as determined by a nationally recognized investment banking
firm selected by the Holder or the Owner, as the case may be, and reasonably
acceptable to the Company, divided by the number of shares of Company Common
Stock of the Company outstanding at the time of such sale on a fully-diluted
basis. In determining the market/offer price, the value of consideration other
than cash shall be determined by a nationally
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recognized investment banking firm selected by the Holder or Owner, as the case
may be, and reasonably acceptable to the Company. Neither the Option Repurchase
Price nor the Option Share Repurchase Price in the aggregate shall be less than
the Surrender Price (as defined in Section 11 of the Option Agreement).
A "Repurchase Event" will be deemed to have occurred upon the
occurrence of any of the following events or transactions after the date hereof:
(i) the acquisition by any person (other than KeyCorp or any
KeyCorp Subsidiary) of beneficial ownership of 50% or more of the then
outstanding Company Common Stock; or
(ii) the consummation of any Acquisition Transaction, as
described above, except that the percentage referred to in clause (z)
of the definition of Acquisition Transaction shall be 50%.
In the event that prior to an Exercise Termination Event, the Company
enters into an agreement (i) to consolidate with or merge into any person, other
than KeyCorp or a KeyCorp Subsidiary, or engage in a plan of exchange with any
person, other than KeyCorp or a KeyCorp Subsidiary and the Company is not the
continuing or surviving corporation of such consolidation or merger or the
acquirer in such plan of exchange, (ii) to permit any person, other than KeyCorp
or a KeyCorp Subsidiary, to merge into the Company or be acquired by the Company
in a plan of exchange and the Company is the continuing or surviving or
acquiring corporation, but, in connection with such merger or plan of exchange,
the then outstanding shares of Company Common Stock are changed into or
exchanged for stock or other securities of any other person or cash or any other
property or the then outstanding shares of Company Common Stock will after such
merger or plan of exchange represent less than 50% of the outstanding shares and
share equivalents of the merged or acquiring company, or (iii) to sell or
otherwise transfer all or substantially all of its or the Company Subsidiary's
assets to any person, other than KeyCorp or a KeyCorp Subsidiary, then, and in
each such case, the agreement governing such transaction must make proper
provision so that the Option will, upon the consummation of any such transaction
and upon the terms and conditions set forth in the Option Agreement, be
converted into, or exchanged for, an option (the "Substitute Option"), at the
election of the Holder, of either (A) the Acquiring Corporation (as defined
below) or (B) any person that controls the Acquiring Corporation.
KeyCorp may, at any time following a Repurchase Event and prior to the
occurrence of an Exercise Termination Event (or such later period as provided in
the Option Agreement), surrender the Option (together with any Option Shares
issued to and then owned by KeyCorp or any affiliate of KeyCorp) to the Company
in exchange for a cash fee equal to the Surrender Price; provided, however, that
KeyCorp may not exercise such right if the Company has previously repurchased
the Option (or any portion thereof) or any Option Shares as described above. The
"Surrender Price" will be equal to the sum of (i) $25,000,000 and (ii) if
applicable, the aggregate purchase price previously paid pursuant hereto by
KeyCorp with respect to any Option Shares, minus the sum of (iii) if applicable,
the amount of the net cash profit, if any, received by KeyCorp pursuant to the
arm's-length sale of Option Shares (or any other securities into which such
Option Shares were converted or exchanged) to any party not affiliated with
KeyCorp, and (iv) the amount of any termination fee paid pursuant to Section
8.03 of the Merger Agreement.
Copies of the Merger Agreement (excluding Annexes and Schedules
thereto) and the Option Agreement were filed as Exhibits 2.1 and 10.1,
respectively, to the Company's Current Report on Form 8-K/A-1, dated June 17,
1998, and are incorporated herein by reference and as Exhibits 1 and 2 hereto,
respectively. The foregoing summaries are not intended to be complete and are
qualified in their entirety by reference to such exhibits.
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Purchase of Company Common Stock. Subject to market conditions and
developments with respect to the Merger, KeyCorp may purchase shares of Company
Common Stock in the open market or in privately negotiated transactions.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY.
(a)-(b) KeyCorp may be deemed to be the beneficial owner of the Option
Shares. As provided in the Option Agreement, KeyCorp may exercise the Option
only upon the happening of one or more events, none of which has occurred. See
Item 4 hereof. If the Option were exercised in full, the Option Shares would
represent approximately 19.9% of the currently outstanding Company Common Stock
(or approximately 16.6% after giving effect to the issuance of such Option
Shares). KeyCorp has no right to vote or dispose of the shares of Company Common
Stock subject to the Option unless and until such time as the Option is
exercised. To the best knowledge of KeyCorp, none of the persons listed in
Schedule I hereto beneficially owns any shares of Company Common Stock. If
KeyCorp were to exercise the Option, it would have sole power to vote and,
subject to the terms of the Option Agreement, sole power to direct the
disposition of the shares of Company Common Stock covered thereby. KeyCorp
expressly disclaims beneficial ownership of the Option Shares because the Option
is exercisable only in the circumstances described under Item 4, none of which
has occurred as of the date hereof.
As of June 18, 1998, Key Trust Company of Ohio National Association, a
wholly owned bank subsidiary of KeyCorp ("KTC") held 163,522 shares of Company
Common Stock in a fiduciary capacity for third parties (the "Fiduciary Shares")
and may be deemed the beneficial owner of the Fiduciary Shares. KTC has sole
voting power with respect to 20,022 of the Fiduciary Shares, shared voting power
with respect to none of the Fiduciary Shares, sole dispositive power with
respect to 3,080 of the Fiduciary Shares and shared dispositive power with
respect to 12,806 of the Fiduciary Shares.
As of June 18, 1998, Victory Ohio Regional Stock Fund, a mutual fund
which is advised by Key Asset Management, Inc. ("KAMI"), an affiliate of
KeyCorp, held 34,000 shares of Company Common Stock (the "Mutual Fund Shares")
with respect to which KAMI had sole voting power and sole dispositive power.
(c) KeyCorp acquired the Option in connection with the Merger
Agreement. See Item 4 hereof. Other than the acquisition of the Option by
KeyCorp, none of KeyCorp, KAMI, KTC or any other affiliate of KeyCorp has
effected any transactions in Company Common Stock during the past 60 days. To
the best knowledge of KeyCorp, none of the persons listed in Schedule I hereto
has effected any transactions in Company Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE COMPANY.
Except as described in Item 4 and Item 5 hereof, neither KeyCorp nor,
to the best of its knowledge, any of the persons listed on Schedule I hereto,
has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company, including the transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
losses, or the giving or withholding of proxies.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Description
- ----------- -----------
1 Agreement and Plan of Merger, dated as of June 15, 1998, between
KeyCorp and McDonald & Company Investments, Inc. (incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form
8-K/A-1, dated June 17, 1998).
2 Stock Option Agreement, dated as of June 15, 1998, between
KeyCorp and McDonald & Company Investments, Inc. (incorporated
by reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K/A-1, dated June 17, 1998).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
hereby certify that the information set forth in this statement is true,
complete and correct.
Dated: June 24, 1998
KEYCORP
By: /s/ Daniel R. Stolzer
--------------------------------
Name: Daniel R Stolzer
Title: Vice President and
Associate General Counsel
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
KEYCORP
The names, business addresses and present principal occupations of the
directors and executive officers of KeyCorp are set forth below. If no business
address is given, the director's or officer's business address is 127 Public
Square, Cleveland, Ohio 44114. The business address of each of the directors of
KeyCorp is also the business address of such director's employer, if any.
Directors of KeyCorp are identified by an asterisk. Unless otherwise indicated,
all directors and officers listed below are citizens of the United States.
Name Present Principal Occupation or Employment and Address
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Gary R. Allen Senior Executive Vice President and Chief Banking
Officer of KeyCorp.
*Cecil D. Andrus Chairman, Andrus Center for Public
Policy. 1910 University Drive, Boise State
University, Boise, Idaho, 83725.
*William G. Bares Chairman, President and Chief Executive Officer,
The Lubrizol Corporation. 29400 Lakeland Blvd. M/S
021A, Wickliffe, Ohio, 44092.
James E. Bennett Senior Executive Vice President of KeyCorp.
*Albert C. Bersticker Chairman and Chief Executive Officer, Ferro
Corporation. 1000 Lakeside Avenue, Cleveland, Ohio,
44114-1183.
James S. Bingay Executive Vice President of KeyCorp.
*Dr. Carol A. Cartwright President, Kent State University. Executive
Offices, Second Floor - Library Kent, Ohio,
44242-0001.
*Thomas A. Commes President and Chief Operating Officer, The
Sherwin-Williams Company. 101 Prospect Avenue, 12th
Floor, Cleveland, Ohio, 44115.
*Kenneth M. Curtis Principal, Curtis Thaxter Stevens Broder & Micoleau
LLC, P.A. One Canal Plaza, 10th Floor, Portland,
Maine, 04112.
*John C. Dimmer President, Firs Management Corporation. 1019
Pacific Avenue, Suite 1408, Tacoma, Washington,
98402-4411.
James A. Fishell Executive Vice President of KeyCorp.
*Robert W. Gillespie Chairman and Chief Executive Officer of KeyCorp.
Allen J. Gula Executive Vice President of KeyCorp.
*Stephen R. Hardis Chairman and Chief Executive Officer, Eaton
Corporation. 1111 Superior Avenue, Cleveland, Ohio,
44114.
Robert B. Heisler Executive Vice President of KeyCorp.
Thomas E. Helfrich Executive Vice President of KeyCorp.
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*Henry S. Hemingway President, Town & Country Life Insurance. 50 S.
Main Street, Suite 1220 Salt Lake City, Utah 84144.
*Charles R. Hogan President, Citation Management Group, Inc. 5312
Pacific Highway East Fife, Washington, 98424.
Lee Irving Executive Vice President and Chief Accounting
Officer of KeyCorp.
*Henry L. Meyer III President and Chief Operating Officer of KeyCorp.
*Douglas J. McGregor Chairman and Chief Executive Officer, M.A. Hanna
Company. 200 Public Square, Suite 36-5000,
Cleveland, Ohio 44114-1306
*Steven A. Minter Executive Director and President, The Cleveland
Foundation. 1400 Hanna Building, 1422 Euclid
Avenue, Cleveland, Ohio, 44115-2001.
*M. Thomas Moore Retired Chairman and Chief Executive Officer,
Cleveland-Cliffs Inc. 1100 Superior Avenue, Suite
1800, Cleveland, Ohio 44114-2589.
*Richard W. Pogue Senior Advisor, Dix & Eaton. Erieview Tower, Suite
1300, 1301 East 9th Street, Cleveland, Ohio, 44114.
K. Brent Somers Senior Executive Vice President and Chief Financial
Officer of KeyCorp.
*Ronald B. Stafford Senator, Stafford, Trombley, Purcell, Lahtinen,
Owens & Curtin, P.C. 1 Cumberland Avenue, P.O. Box
2947, Plattsburgh, New York, 12901.
Thomas C. Stevens Senior Executive Vice President, General Counsel
and Secretary of KeyCorp.
*Dennis W. Sullivan Executive Vice President, Parker-Hannifin
Corporation, 6035 Parkland Boulevard, Cleveland,
Ohio, 44124-4141.
*Peter G. Ten Eyck, II President, Indian Ladder Farms. 219 Tygert Road,
Voorheesville, New York, 12186.
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Exhibit Index
Exhibit No. Description
----------- -----------
1 Agreement and Plan of Merger, dated as of June 15, 1998,
between KeyCorp and McDonald & Company Investments, Inc.
(incorporated by reference to Exhibit 2.1 to the Company's
Current Report on Form 8-K/A-1, dated June 17, 1998).
2 Stock Option Agreement, dated as of June 15, 1998, between
KeyCorp and McDonald & Company Investments, Inc.
(incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K/A-1, dated June 17, 1998).
