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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by a Party other than the Registrant o | |
Check the appropriate box: |
o Preliminary Proxy Statement | |
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
x Definitive Proxy Statement | |
o Definitive Additional Materials | |
o Soliciting Material Pursuant to §240.14a-12 |
Commerce Bancshares, Inc.
(Name of Registrant as Specified In Its Charter)
Commerce Bancshares, Inc.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required. | |
o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
1) Title of each class of securities to which transaction applies: |
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o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) Amount Previously Paid: |
2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (02-02) | Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
(1) To elect four directors to the 2009 Class for a term of three years; | |
(2) To ratify the selection of KPMG LLP as the Company’s audit and accounting firm; and | |
(3) To transact such other business as may properly come before the meeting or any adjournment or postponement thereof. |
By Order of the Board of Directors | |
J. Daniel Stinnett,Secretary |
Number of | Percent | ||||||||
Name and Address of Beneficial Owner | Shares | of Class | |||||||
Giorgio Balzer | 9,369 | * | |||||||
Bernardsville, New Jersey | |||||||||
Kevin G. Barth | 35,927 | * | |||||||
Leawood, Kansas | 69,159 | (2) | |||||||
John R. Capps | 6,174 | * | |||||||
St. Louis, Missouri | |||||||||
W. Thomas Grant, II | 3,516 | * | |||||||
Shawnee Mission, Kansas | |||||||||
James B. Hebenstreit | 35,228 | * | |||||||
Kansas City, Missouri | 44,122 | (6) | |||||||
David W. Kemper | 1,065,294 | ||||||||
Ladue, Missouri | 123,386 | (1) | |||||||
271,691 | (2) | ||||||||
150,709 | (3) | ||||||||
913,805 | (4) | ||||||||
2,102,689 | (5) | 6.7 | |||||||
Jonathan M. Kemper | 68,477 | ||||||||
Kansas City, Missouri | 443,103 | (1) | |||||||
312,244 | (2) | ||||||||
150,709 | (3) | ||||||||
913,805 | (4) | ||||||||
987,785 | (5) | 4.2 | |||||||
Charles G. Kim | 25,497 | ||||||||
Chesterfield, Missouri | 117,611 | (2) | |||||||
Seth M. Leadbeater | 41,776 | * | |||||||
St. Louis, Missouri | 93,871 | (2) | |||||||
Thomas A. McDonnell | 13,616 | * | |||||||
Kansas City, Missouri | |||||||||
Terry O. Meek | 31,463 | * | |||||||
Springfield, Missouri | |||||||||
Benjamin F. Rassieur, III | 7,581 | * | |||||||
St. Louis, Missouri | |||||||||
Andrew C. Taylor | 18,170 | * | |||||||
St. Louis, Missouri | |||||||||
Mary Ann Van Lokeren | 10,130 | * | |||||||
St. Louis, Missouri | |||||||||
Robert H. West | 18,411 | * | |||||||
Kansas City, Missouri | |||||||||
All 22 directors, nominees and executive officers as a group (including those listed above) | 7,224,770 | ||||||||
1,282,663 | (2) | 10.5 |
(1) | Shared voting power and investment power. |
(2) | Shares which could be acquired within 60 days by exercise of options. |
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(3) | Owned by a corporation for which Messrs. David W. Kemper and Jonathan M. Kemper serve as directors. Messrs. David W. Kemper and Jonathan M. Kemper disclaim beneficial ownership as to such shares. |
(4) | Mr. Jonathan M. Kemper has sole investment power, but shares voting power with Mr. David W. Kemper. |
(5) | Shared voting power. |
(6) | Owned by a corporation for which Mr. Hebenstreit serves as President. Mr. Hebenstreit disclaims beneficial ownership in these shares. |
* | Less than 1%. |
Name and Age | Periods Served as Director and Business Experience During Past 5 Years | |
2009 Class: | ||
Jonathan M. Kemper, 52 | Elected a director in January, 1997. Mr. Kemper is Vice Chairman of the Company and Vice Chairman of Commerce Bank, N.A., a subsidiary of the Company. He is a non-executive Chairman (since April, 2005) of Tower Properties Company. Mr. Jonathan Kemper is the brother of David W. Kemper. | |
Seth M. Leadbeater, 55 | Mr. Leadbeater is Vice Chairman of the Company (since January, 2004). From October, 1998 to January, 2004, he served as Executive Vice President of the Company. He is Vice Chairman of Commerce Bank, N.A., a subsidiary of the Company. | |
Terry O. Meek, 62 | Elected a director in April, 1989. Mr. Meek is President of Meek Lumber Yard, Inc., which operates a chain of builders’ materials centers under the name Meeks Building Centers. He has served as a director of Commerce Bank, N.A., a subsidiary of the Company. |
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Name and Age | Periods Served as Director and Business Experience During Past 5 Years | |
Mary Ann Van Lokeren, 58 | Elected a director in April, 1996. Ms. Van Lokeren is the Chief Executive Officer of Krey Distributing Company. Krey Distributing Company is the exclusive Anheuser Busch wholesaler for St. Charles and Lincoln counties in Missouri. She is also a director of Laclede Gas Company and Masco Corporation. She has served as a director of Commerce Bank, N.A., a subsidiary of the Company. |
2008 Class: | ||
John R. Capps, 55 | Elected a director in January, 2000. Mr. Capps has served as the President and Chief Executive Officer of Plaza Motor Company since 1981. Plaza Motor Company is a retail dealership for eight luxury automobile franchises. Mr. Capps is a director of Whitfield School (since 1995), St. Louis Priory School (since 1988), Muny Opera (since 1999), St. Louis Art Museum (since October, 2001), Contemporary Art Museum (since January, 2003), and Forest Park Forever (since January, 2006). He is Past Chairman of the Regional Business Council. He also served as a director of Commerce Bank, N.A., a subsidiary of the Company. | |
W. Thomas Grant, II, 55 | Elected a director in June, 1983. Mr. Grant is Sr. Vice President of Quest Diagnostics, Inc. (since November, 2005). He was Chairman, President and Chief Executive Officer of LabOne, Inc. from October, 1995 to November, 2005. Quest Diagnostics, Inc. is a national provider of diagnostic testing, information and services. | |
James B. Hebenstreit, 60 | Elected a director in October, 1987. Mr. Hebenstreit has been President of Bartlett and Company since January, 1992. Bartlett and Company is engaged in grain merchandising and storage, flour and feed milling and cattle feeding. Mr. Hebenstreit is Chairman of the Company’s Committee on Governance/Directors. | |
David W. Kemper, 55 | Elected a director in February, 1982. Mr. Kemper is Chairman of the Board (since November, 1991), President and Chief Executive Officer of the Company and is Chairman of the Board, President, and Chief Executive Officer of Commerce Bank, N.A., a subsidiary of the Company. He is also a director of Ralcorp Holdings, Inc., and Tower Properties Company. Mr. David Kemper is the brother of Jonathan M. Kemper. |
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Name and Age | Periods Served as Director and Business Experience During Past 5 Years | |
2007 Class: | ||
Thomas A. McDonnell, 60 | Elected a director in April, 2001. Mr. McDonnell is the President and Chief Executive Officer of DST Systems, Inc. DST Systems is a provider of computer software solutions to the financial services and other industries. He has been employed by DST since 1969 and has served as President since January, 1973 (except for a 30-month period from October, 1984 to April, 1987). He is a director of DST Systems, Inc., Blue Valley Ban Corp, Euronet Worldwide, Inc., Garmin, LTD, Kansas City Southern and Asurion Corporation (since January, 2006). | |
Benjamin F. Rassieur, III, 51 | Elected a director in August, 1997. Mr. Rassieur is President of Paulo Products Company. Paulo Products is engaged in commercial heat-treating, electroplating, and furnace brazing services. Mr. Rassieur has served as a director of Commerce Bank, N.A., a subsidiary of the Company. | |
Andrew C. Taylor, 58 | Elected a director in February, 1990. Mr. Taylor is Chairman and Chief Executive Officer of Enterprise Rent-A-Car Company (formerly Enterprise Leasing Co.) which is engaged in automobile leasing, rental and related services. He is also a director of Anheuser-Busch Companies. Mr. Taylor has served as a director of Commerce Bank, N.A., a subsidiary of the Company. Mr. Taylor is Chairman of the Company’s Compensation and Human Resources Committee. | |
Robert H. West, 67 | Elected a director in October, 1985. Mr. West retired as Chairman of the Board of Butler Manufacturing Company and from its board of directors on July 1, 1999. He is a director of Great Plains Energy, Inc. and Burlington Northern Santa Fe Corporation. Mr. West has also served as a director of Commerce Bank, N.A., a subsidiary of the Company. Mr. West is Chairman of the Company’s Audit Committee and designated as that Committee’s financial expert. |
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Long Term Compensation | |||||||||||||||||||||||||||||||||
Awards | Payout | ||||||||||||||||||||||||||||||||
Annual Compensation | (g) | ||||||||||||||||||||||||||||||||
(f) | Securities | ||||||||||||||||||||||||||||||||
(e) | Restricted | Underlying | (h) | (i) | |||||||||||||||||||||||||||||
(c) | (d) | Other Annual | Stock | Options/ | LTIP | All Other | |||||||||||||||||||||||||||
(a) | (b) | Salary | Bonus | Compensation | Awards(2) | SARs | Payouts | Compensation(1) | |||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($) | ($) | (#) | ($) | ($) | |||||||||||||||||||||||||
David W. Kemper | 2005 | 754,294 | 575,500 | 0 | 191,155 | 89,250 | 0 | 177,734 | |||||||||||||||||||||||||
Chairman, President & CEO | 2004 | 726,040 | 558,600 | 0 | 165,967 | 93,712 | 0 | 325,578 | |||||||||||||||||||||||||
Commerce Bancshares, Inc. | 2003 | 691,150 | 520,000 | 0 | 158,839 | 98,397 | 0 | 78,527 | |||||||||||||||||||||||||
Jonathan M. Kemper | 2005 | 390,750 | 205,000 | 0 | 68,449 | 37,800 | 0 | 105,025 | |||||||||||||||||||||||||
Vice Chairman | 2004 | 376,094 | 200,000 | 0 | 57,445 | 39,690 | 0 | 7,392 | |||||||||||||||||||||||||
Commerce Bancshares, Inc. | 2003 | 359,000 | 180,000 | 0 | 55,501 | 41,674 | 0 | 12,621 | |||||||||||||||||||||||||
Seth M. Leadbeater | 2005 | 306,475 | 152,000 | 0 | 47,879 | 18,900 | 0 | 32,670 | |||||||||||||||||||||||||
Vice Chairman | 2004 | 289,375 | 140,000 | 0 | 292,545 | 19,845 | 0 | 7,211 | |||||||||||||||||||||||||
Commerce Bancshares, Inc. | 2003 | 270,000 | 135,000 | 0 | 41,828 | 19,679 | 0 | 8,355 | |||||||||||||||||||||||||
Charles G. Kim | 2005 | 282,500 | 135,000 | 0 | 44,824 | 15,750 | 0 | 25,194 | |||||||||||||||||||||||||
Executive Vice President | 2004 | 241,833 | 131,000 | 0 | 281,122 | 16,537 | 0 | 6,414 | |||||||||||||||||||||||||
Commerce Bancshares, Inc. | 2003 | 224,750 | 112,700 | 0 | 34,469 | 17,363 | 0 | 7,024 | |||||||||||||||||||||||||
Kevin G. Barth | 2005 | 282,500 | 150,000 | 0 | 41,052 | 15,750 | 0 | 28,149 | |||||||||||||||||||||||||
Executive Vice President | 2004 | 245,667 | 120,000 | 0 | 280,551 | 16,537 | 0 | 6,532 | |||||||||||||||||||||||||
Commerce Bancshares, Inc. | 2003 | 226,875 | 111,000 | 0 | 34,739 | 16,206 | 0 | 9,493 |
(1) | All Other Compensation (i) mainly includes the total of the amounts allocated or contributed by the Company to the Company’s 401(k) Plan, the Commerce Executive Retirement Plan (“CERP”) and the Group Term Insurance Plan of the Company. The CERP is a non-qualified plan established to provide benefits on compensation in excess of the allowable benefits of the Company’s pension and 401(k) plans. In 2005 for the Company’s 401(k) Plan, contributions made to the Plan were based on a maximum of 1.2% of salary in column (c). For 2005, those amounts for CERP, 401(k) and group term insurance were: |
CERP | 401(k) | Group Term | ||||||||||
Plan | Plan | Insurance | ||||||||||
David W. Kemper | 160,659 | 14,000 | 2,322 | |||||||||
Jonathan M. Kemper | 89,030 | 14,000 | 1,242 | |||||||||
Seth M. Leadbeater | 16,553 | 14,000 | 2,117 | |||||||||
Charles G. Kim | 14,245 | 10,500 | 449 | |||||||||
Kevin G. Barth | 13,475 | 14,000 | 674 |
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(2) | As of December 31, 2005, the total number of shares and their market value (based on the closing market price at December 31, 2005) of restricted stock held by each of the named executive officers were as follows: |
# Share | Market Value at 12/31/05 | |||||||
David W. Kemper | 21,540 | $ | 1,122,665 | |||||
Jonathan M. Kemper | 7,598 | 396,008 | ||||||
Seth M. Leadbeater | 10,846 | 565,294 | ||||||
Charles G. Kim | 10,261 | 534,803 | ||||||
Kevin G. Barth | 9,905 | 516,249 |
Individual Grants | Potential Realizable | |||||||||||||||||||||||
Value at Assumed | ||||||||||||||||||||||||
(b) | Annual Rates of Stock | |||||||||||||||||||||||
Number of | (c) | Price Appreciation for | ||||||||||||||||||||||
Securities | % of Total | Option Term | ||||||||||||||||||||||
Underlying | Options/SARs | (d) | ||||||||||||||||||||||
Options/SARs | Granted to | Exercise or | (e) | (f) | (g) | |||||||||||||||||||
(a) | Granted | Employees in | Base Price | Expiration | 5% | 10% | ||||||||||||||||||
Name | (#) | Fiscal Year | ($/Sh) | Date | ($) | ($) | ||||||||||||||||||
David W. Kemper | 89,250 | 18.58 | % | 44.9143 | 1/28/2015 | 2,520,987 | 6,388,676 | |||||||||||||||||
Jonathan M. Kemper | 37,800 | 7.87 | % | 44.9143 | 1/28/2015 | 1,067,712 | 2,705,792 | |||||||||||||||||
Seth M. Leadbeater | 18,900 | 3.93 | % | 44.9143 | 1/28/2015 | 533,856 | 1,352,896 | |||||||||||||||||
Charles G. Kim | 15,750 | 3.28 | % | 44.9143 | 1/28/2015 | 444,880 | 1,127,413 | |||||||||||||||||
Kevin G. Barth | 15,750 | 3.28 | % | 44.9143 | 1/28/2015 | 444,880 | 1,127,413 |
(d) | (e) | |||||||||||||||
(b) | Number of Securities | Value of Unexercised | ||||||||||||||
Shares | (c) | Underlying Unexercised | In-the-Money | |||||||||||||
Acquired | Value | Options/SARs at FY-End | Options/SARs at FY-End | |||||||||||||
(a) | on Exercise | Realized | (#) | ($) | ||||||||||||
Name | (#) | ($) | Exercisable/Unexercisable | Exercisable/Unexercisable | ||||||||||||
David W. Kemper | 93,167 | 1,889,633 | 249,379 | 3,804,531 | ||||||||||||
138,394 | 1,295,369 | |||||||||||||||
Jonathan M. Kemper | 45,223 | 1,668,976 | 302,794 | 6,814,224 | ||||||||||||
58,615 | 548,636 | |||||||||||||||
Seth M. Leadbeater | 63,482 | 1,577,618 | 89,146 | 1,591,480 | ||||||||||||
29,018 | 268,538 | |||||||||||||||
Charles G. Kim | 13,620 | 470,512 | 113,674 | 2,379,988 | ||||||||||||
24,423 | 228,596 | |||||||||||||||
Kevin G. Barth | 30,015 | 736,791 | 65,222 | 1,202,039 | ||||||||||||
24,134 | 222,825 |
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(c) | ||||||||||||
Number of | ||||||||||||
Common Shares | ||||||||||||
Remaining Available | ||||||||||||
(a) | for Future Issuance | |||||||||||
Number of Common | (b) | Under Equity | ||||||||||
Shares to be Issued | Weighted Average | Compensation Plans | ||||||||||
upon Exercise of | Exercise Price of | (Excluding Shares | ||||||||||
Outstanding Options, | Outstanding Options, | Reflected in | ||||||||||
Plan category | Warrants and Rights | Warrants and Rights | Column (a)) | |||||||||
Equity compensation plans approved by shareholders | 3,497,371 | (1) | $ | 33.86 | (2) | 4,456,733 | (3) | |||||
Equity compensation plans not approved by shareholders | — | — | — | |||||||||
Total | 3,497,371 | $ | 33.86 | 4,456,733 | ||||||||
(1) | Includes an aggregate of 3,412,808 common shares issuable upon exercise of options granted under the option plans and 84,563 common shares allocated to participants’ accounts under the deferred compensation plan. |
(2) | Represents the weighted average exercise price of outstanding options under the option plans. |
(3) | Includes 4,200,000 common shares remaining available under the 2005 Equity Incentive Plan, 129,856 shares available under the directors stock purchase plan, and 126,877 shares under the deferred compensation plan. |
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2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||
Commerce CBSH | 100.00 | 97.95 | 105.22 | 140.35 | 153.81 | 170.83 | ||||||||||||||||||
NASDAQ Financial | 100.00 | 109.84 | 113.11 | 152.98 | 178.59 | 182.70 | ||||||||||||||||||
S&P 500 | 100.00 | 88.12 | 68.64 | 88.33 | 97.94 | 102.75 | ||||||||||||||||||
Assumes $100 invested 12/31/00 with dividends reinvested on a Total Return basis with Commerce (CBSH) compared to the above named indices. |
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• | Align the senior executives’ interests with the long-term interests of shareholders; | |
• | Provide total compensation programs that are competitive with bank holding companies in geographic proximity, comparable asset size and considered a direct competitor; | |
• | Provide reward systems that are credible and consistent with the core values of the Company; | |
• | Reward for results rather than on the basis of seniority, tenure, or other entitlement; and | |
• | Encourage retention of top performers to ensure the long-term success of the Company. |
(1) Base Pay. Base pay reflects the external market value of a particular role as well as the experiences and qualifications that an individual brings to the role. As they are for all officers of the Company base pay levels for senior executives are reviewed annually against national salary survey data and competitor data to determine whether a particular role is at an appropriate level. Base pay is generally targeted to the median of the base pay paid by companies included in the salary surveys that best compare to positions at the Company. Factors included in the comparison are relative size of companies, the financial performance, both currently and over a period of time, and the experience and responsibility of the individuals. In establishing base pay increases the Committee does not assign any weight to any particular factor. In addition, the Committee reviews individual performance ratings, being the result of reviews conducted by an officer’s superior. In the case of the Chief Executive Officer, the Committee meets to review performance against previously outlined objectives and after completing the review, assigns a rating and makes a base pay recommendation for full Board approval. | |
(2) Annual Cash Bonus. The annual cash bonus plan is a short-term incentive plan to reward the senior executives for achieving annual performance goals. In awarding bonus payments, factors considered by the Committee include: (i) the Company’s financial performance compared to the annual budget for categories such as earnings per share, efficiency ratio, and profitability of an individual’s market or division responsibility; (ii) the value created for shareholders in both the most recent year and over the latest five-year period as determined by market price of the Company stock compared to the NASDAQ financial indices; and (iii) the performance of individuals, to the extent measurable, in meeting annual goals and objectives as defined in their performance review. Performance of the Company in relation to competitors’ performance is considered but not weighted in the granting of a bonus. The Chief Executive Officer is also subject to the previous measurements. Bonuses earned as a percentage of base pay for the senior executives for 2005 performance ranged from 75.6% (in the case of the Chief Executive Officer) to 47.4%. | |
(3) Long-Term Incentive Program. Stock Options and Restricted Stock grants have historically been awarded to provide senior executives with long-term incentives for profitable growth and to more closely align the Company’s senior executives with the interest of the Company’s shareholders. The 2005 Equity Incentive Plan approved by the stockholders provides for the issuance of stock options, stock appreciation rights, restricted stock and restricted stock units, performance shares and performance units. Commencing in 2006 the Company plans to begin issuing stock appreciation rights (“SAR”) in lieu of stock options. Retention and long-term reward are both factors considered in granting stock options, restricted stock or SAR (collectively “Awards”). The Company has implemented targeted guidelines in determining Awards to senior executives. Targeted percents range from 25% to 600% of base pay |
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depending on the salary grade of the individual senior executive. Targeted percents may be exceeded when a senior executive’s individual performance exceeds expectations. The Company also utilizes restricted stock to reward and retain key managers. The awarding of restricted stock is based on the three-year average performance of the Company. |
Andrew C. Taylor | Giorgio Balzer | Mary Ann Van Lokeren | Terry O. Meek |
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Robert H. West | James B. Hebenstreit | Benjamin F. Rassieur, III | Thomas A. McDonnell | John R. Capps |
Fees Paid to KPMG LLP |
2005 | 2004 | ||||||||
Audit fees | $ | 585,480 | $ | 624,723 | |||||
Audit related fees | 84,295 | 44,695 | |||||||
Tax fees | 250,351 | 237,860 | |||||||
All other fees | — | — | |||||||
Total | $ | 920,126 | $ | 907,278 |
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By Order of the Board of Directors | |
J. Daniel Stinnett | |
Secretary |
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(1) the internal control over financial reporting of Commerce Bancshares, Inc. (the “Company”) and the audits of its financial statements; | |
(2) the independent auditor’s qualifications and independence; | |
(3) the performance of the Company’s internal audit function and independent auditors; and | |
(4) the compliance by the Company with legal and regulatory requirements. |
A-1
1. | Review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management’s discussion and analysis, and recommend to the Board whether the audited financial statements should be included in the Company’s Form 10-K. |
2. | Discuss with management and the independent auditor the Company’s quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditor’s review of the quarterly financial statements. |
3. | Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles, any major issues as to the adequacy of the Company’s internal controls and any special steps adopted in light of material control deficiencies. |
4. | Review and discuss annually reports from the independent auditors on: |
(a) | All critical accounting policies and practices to be used. |
(b) | All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor. |
(c) | Other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences. |
5. | Discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company’s financial statements. |
6. | Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management. |
7. | Review disclosures made to the Audit Committee by the Company’s CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal control over financial reporting or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal control over financial reporting. |
8. | Review and approve all related party transactions. |
9. | Ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law. |
10. | Meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit. |
11. | The independent auditor shall submit to the audit committee annually a formal written statement delineating all relationships between the independent auditor and the Company (“Statement as to Independence”), addressing each non-audit service provided to the Company and at least the matters set forth in Independence Standards Board No. 1. |
A-2
12. | Review the appointment and replacement of the internal audit director. |
13. | Review the significant reports to management prepared by the internal audit department together with management’s responses andfollow-up to these reports. |
14. | Discuss with the independent auditor and management internal audit department responsibilities, budget, qualifications and staffing and any recommended changes in the planned scope of the internal audit department. |
15. | Review for completion of annual regulatory requirements such as FDICIA, 12 CFR 9 (trust audits), corporate insurance coverage, and business continuity. |
16. | Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act (communication of illegal acts) has not been implicated. |
17. | Obtain reports from management, the Company’s internal audit director and the independent auditor that the Company is in conformity with applicable legal requirements and the Company’s Code of Ethics. Review reports and disclosures of insider and affiliated party transactions. Advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations and with the Company’s Code of Ethics. |
18. | Obtain reports from management relating to issues resulting from procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. |
19. | Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports, which raise material issues regarding the Company’s financial statements or accounting policies. |
20. | Discuss with the Company’s General Counsel legal matters that may have a material impact on the financial statements or the Company’s compliance policies. |
A-3
Commerce Bancshares, Inc.
MR A SAMPLE
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C 1234567890 JNT
Annual Meeting Proxy Card | ||||||||||
A | Election of Directors | PLEASE REFER TO THE REVERSE SIDE FOR TELEPHONE AND INTERNET VOTING INSTRUCTIONS. |
For | Withhold | For | Withhold | |||||||
01 — Jonathan M. Kemper | o | o | 03 — Mary Ann Van Lokeren | o | o | |||||
02 — Terry O. Meek | o | o | 04 — Seth M. Leadbeater | o | o |
B | Issues |
For | Against | Abstain | ||||||||
2. | Ratify KPMG LLP as audit and accounting firm | o | o | o | ||||||
Mark this box with an X if you plan to attend the Annual Meeting. | o | |||||||||
(Marking this box does not affect your vote on this proxy.) |
Please mark this box with an X if your address has changed and print the new address below. | o | |
Mark this box with an X if you have made comments below. | o | |
C | Authorized Signatures — Sign Here — This section must be completed for your instructions to be executed. |
Signature 1 — Please keep signature within the box | Signature 2 — Please keep signature within the box | Date (mm/dd/yyyy) | ||
/ / | ||||
IUPX | C O Y | + |
Proxy | ||||||||||
• | Call toll free 1-800-652-VOTE (8683) in the United States or Canada any time on a touch tone telephone. There isNO CHARGEto you for the call. | |
• | Follow the simple instructions provided by the recorded message. |
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• | Enter the information requested on your computer screen and follow the simple instructions. |
Proxies submitted by telephone or the Internet must be received by 11:00 p.m., Central Time, on April 18, 2006.
THANK YOU FOR VOTING