AMENDED AND RESTATED
COMMERCE BANCSHARES, INC.
INCENTIVE STOCK OPTION PLAN
This Incentive Stock Option Plan (hereinafter the "Plan")
originally adopted by Commerce Bancshares, Inc. (hereinafter the
"Company") on the 7th day of February, 1986 is restated with all
amendments as of October 4, 1996.
SECTION I
DEFINITIONS
As used herein, the following definitions shall apply:
1.1 "Board" shall mean the Board of Directors of the
Company.
1.2 "Carryover Amount" shall mean one-half (1/2) of the
amount by which $100,000 exceeds the fair market value
(determined as of the date the Option is granted) of shares for
which an Employee was granted Options under the Plan in any
calendar year.
1.3 "Common Stock" shall mean the Common Stock, $5 Par
Value per share of the Company.
1.4 "Committee" shall mean the committee appointed by the
Board in accordance with Section IV of the Plan.
1.5 "Employee" shall mean officers and other key employees
employed by the Company, or any subsidiary of the Company which
now exists, is hereafter organized, or is acquired by the
Company.
1.6 "Option" shall mean a stock option granted pursuant to
the Plan.
1.7 "Optionee" shall mean any employee who is granted an
option under the Plan.
1.8 "Share" shall mean the common stock of the Company as
adjusted in accordance with Section VII of the Plan.
SECTION II
ELIGIBILITY
2.1 Options may be granted only to Employees.
2.2 No director while a member of the Committee shall be
eligible to receive an Option under the Plan.
SECTION III
LIMITS ON OPTIONS AND SHARES
3.1 The total number of Shares for which Options may be
granted under this Plan shall not exceed 250,000 Shares, subject
to the provisions of Section VII. Such Shares may be authorized
but unissued or may be Treasury Shares.
3.2 If an Option should expire or terminate without having
been exercised in full, the Shares allocable to the unexercised
portion of such Option shall become available for other Options
under the Plan unless the Plan shall have been terminated.
3.3 The aggregate fair market value (determined as of the
date the Option is granted) of the Shares as to which an Employee
may be granted one (1) or more Options in any calendar year shall
not exceed $100,000 plus any unused Carryover Amount. Any unused
Carryover Amount may be carried forward for three (3) successive
years, but only to the extent the same has not been used in any
earlier calendar year. Options granted to an Employee in any
year
shall be applied first to the $100,000 limitation and then to
Carryover Amounts applied in the order of the calendar years in
which they arose.
3.4 No Option shall be granted under the Plan to an
Employee
who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company.
SECTION IV
ADMINISTRATION OF PLAN AND GRANTING OF OPTIONS
4.1 The Compensation Committee of the Board, which consists
of three (3) members of the Board, shall administer the Plan.
The
Board may from time to time remove members from or add members to
the Committee. Vacancies on the Committee, howsoever caused,
shall be filled by the Board.
4.2 The Committee shall hold meetings at such times and
places as it may determine and a majority of the Committee at
which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be
the valid acts of the Committee.
4.3 Subject to the provisions of the Plan, the Committee
shall have authority:
(a) To determine the Employees to whom and the time or
times
at which Options shall be granted and the number of
Shares to be represented by each Option;
(b) To interpret the Plan;
(c) To prescribe, amend, and rescind rules and regulations
relating to the Plan;
(d) To authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant
of an Option granted by the Committee; and
(e) To make all other determinations deemed necessary or
advisable for the administration of the Plan.
4.4 The decisions, determinations, and interpretations of
the Committee shall be final and binding on all Optionees and any
other holders of any Option granted under the Plan. No member of
the Committee shall be liable for any action or determination
made
in good faith with respect to the Plan or any Option granted
under
the Plan.
SECTION V
TERMS OF STOCK OPTIONS
5.1 The Option price for Shares to be issued pursuant to
any
Option granted under the Plan shall be last sale price as
reported
by the Automated Quotation System of the National Association of
Securities Dealers on the date of the grant. In the event a sale
shall not have been effected on the date of the grant, the last
sale price first reported prior to the date of grant shall be
used.
5.2 The date of grant of an Option under the Plan shall,
for
all purposes, be the date on which the Committee makes a
determination granting such Option. Notice of the determination
shall be given to each Employee to whom an Option is so granted
within a reasonable time after the date of such grant.
5.3 The Committee shall fix the term or duration of all
Options under this Plan provided that no term shall exceed five
(5) years after the date on which the Option was granted. Options
granted under the Plan shall not be transferable other than by
will or the laws of descent and distribution and shall be
exercisable during the Optionee's lifetime only by the Optionee.
5.4 In the event that an Optionee should cease to be
employed by the Company for any reason other than death or
permanent disability, the Optionee shall have the right to
exercise the Option to the extent the Option was then exercisable
at any time within three (3) months after termination of
employment; provided, however, if an Optionee's employment is
terminated voluntarily by the Optionee or is terminated because
of the Optionee's dishonesty, theft, embezzlement from the
Company, willful violation of any rules of the Company pertaining
to the conduct of Employees or the commission of a willful
felonious act while an Employee, then any Option or unexercised
portion thereof granted to said Optionee shall expire upon
termination of employment.
5.5 If an Optionee shall die while an Employee and shall
not have fully exercised the Option, an Option may be exercised
to the extent that the Optionee's right to exercise such Option
had accrued at the time of his death and had not previously been
exercised, at any time within one (1) year after the Optionee's
death by the executors or administrators of the Optionee or by
any person or persons who shall have acquired the Option directly
from the Optionee by bequest or inheritance.
5.6 If an Optionee shall cease to be an Employee by reason
of a permanent disability (as determined by the Optionee
officially establishing his eligibility to receive Social
Security
disability benefits), an Option may be exercised to the extent
that the Optionee's right to exercise such Option had accrued
immediately prior to said disability, and had not previously been
exercised, at any time within one (1) year from the date such
Optionee ceased being an Employee.
5.7 No Option granted under the Plan shall be exercisable
while there is outstanding any other Option granted to the
Optionee at an earlier date. For this purpose, an Option which
has not been exercised in full is outstanding until the
expiration of the period which under its initial terms could have
been exercised. The cancellation of an earlier Option will not
enable a subsequent Option to be exercised any sooner.
SECTION VI
EXERCISE OF OPTION
6.1 An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to
exercise the Option and full payment of the shares with respect
to
which the Option is exercised has been received by the Company.
Until the issuance of the stock certificates, no right to vote or
receive dividends or any other rights as a shareholder shall
exist
with respect to the Shares with respect to which the Option has
been exercised. No adjustment will be made for a dividend or
other rights for which a record date is established prior to the
date the stock certificates are issued, except as provided in
Section VII of the Plan.
SECTION VII
REORGANIZATION OF THE COMPANY
7.1 In the event of any stock dividend, stock split,
combination of shares, or other change in the capitalization of
the Company, appropriate adjustment shall be made in the number
and kind of shares as to which Options may be granted and as to
which Options or portions thereof then outstanding and
unexercised
shall be exercisable and in the Option price thereof.
7.2 Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control, Options
outstanding
as of the date of such Change in Control and not then exercisable
and vested shall become fully exercisable and vested.
For purposes of the Plan, a "Change in Control" shall mean
the happening of any of the following events:
(a) any Person is or becomes the "beneficial owner" (within
the meaning of Rule 13d-3 promulgated under Section 13
of the Securities Exchange Act of 1934 (the "Exchange
Act")), directly or indirectly, of securities of the
Company (not including in the securities beneficially
owned by such Person any securities acquired directly
from the Company or its affiliates other than in
connection with the acquisition by the Company or its
affiliates of a business) representing 20%
or more of either the then outstanding shares of common
stock of the Company or the combined voting power of
the
Company's then outstanding securities; or
(b) the following individuals cease for any reason to
constitute a majority of the number of directors then
serving: individuals who, on August 2, 1996,
constitute
the Board and any new director (other than a director
whose initial assumption of office is in connection
with
an actual or threatened election contest, including but
not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment
or election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in
office who either were directors on August 2, 1996 or
whose appointment, election or nomination for election
was previously so approved; or
(c) there is consummated a merger or consolidation of the
Company (or any direct or indirect subsidiary of the
Company) with any other corporation, other than (i) a
merger or consolidation which would result in the
voting securities of the Company outstanding
immediately prior to such merger or consolidation
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity or any parent
thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, at least 80%
of the combined voting power of the voting securities
of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization of the Company
(or similar transaction) in which no Person is or
becomes the beneficial owner, directly or indirectly,
of securities of the Company (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Company or its
subsidiaries other than in connection with the
acquisition by the Company or its subsidiaries of a
business) representing 20% or more of either the then
outstanding shares of common stock of the Company or
the combined voting power of the Company's then
outstanding securities; or
(d) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or
there is consummated a sale or disposition by the
Company of all or substantially all of the Company's
assets, other than a sale or disposition by the Company
of all or substantially all of the Company's assets to
an entity, at least 80% of the combined voting power of
the voting securities of which are owned by Persons in
substantially the same proportions as their ownership
of the Company immediately prior to such sale.
For purposes of the above definition of Change in Control,
"Person" shall have the meaning set forth in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of
the Company or any of its subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
SECTION VIII
AMENDMENT AND TERMINATION OF PLAN
8.1 The Board may amend the Plan from time to time as it
deems desirable and shall make any amendments which may be
required so that Options intended to be incentive stock options
shall at all times continue to be incentive stock options for
purposes of the Internal Revenue Code of 1954, as amended.
8.2 This Plan shall terminate on February 1, 1996, provided
that the Board may in its discretion terminate this Plan at any
time prior thereto.
8.3 Any amendment to or the termination of the Plan shall
not
affect Options already granted and such Options shall remain in
full force and effect as if this Plan had not been amended or
terminated.
8.4 This Plan is effective on February 7, 1986, and Options
hereunder may be granted at any time subject to the terms of the
Plan on and after that date. No Option may be exercised unless
this Plan is approved by a vote of the holders of a majority of
the outstanding shares at a meeting of shareholders of the
Company
held within twelve (12) months following the effective date.
8.5 This Plan shall be interpreted and construed in
accordance with the laws of the State of Missouri.