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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
CASS COMMERCIAL CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No Fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) 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.:
(3) Filing Party:
(4) Date Filed:
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CASS COMMERCIAL CORPORATION
13001 Hollenberg Drive
Bridgeton, Missouri 63044
PROXY STATEMENT
Annual Meeting of Shareholders
to be held April 19, 1999
This Proxy Statement is being furnished to the common shareholders of
Cass Commercial Corporation (the "Company") on or about March 22, 1999 in
connection with the solicitation of proxies on behalf of the Board of
Directors of the Company for use at the annual meeting of shareholders (the
"Annual Meeting") to be held on April 19, 1999 at the time and place and for
the purposes set forth in the accompanying Notice of Annual Meeting, and at
any adjournment or postponement of that meeting.
Holders of shares of common stock, par value $.50 per share ("Shares"
or the "Common Stock"), of the Company at its close of business on March 5,
1999, (the "Record Date") are entitled to receive notice of and vote at the
Annual Meeting. On the Record Date, 3,873,711 shares of Common Stock were
outstanding. Holders of Common Stock (the "Shareholders") are entitled to
one vote per share of Common Stock they held of record on the Record Date on
each matter that may properly come before the Annual Meeting.
A plurality of the votes of Shareholders cast at the Annual Meeting is
required for the election of each director. Ratification of the selection of
independent accountants requires the affirmative vote of holders of a
majority of the shares of Common Stock voted. The proposed amendment to the
1995 Performance-Based Stock Option Plan requires the affirmative vote of
shareholders holding a majority of the shares of Common Stock voted at the
meeting. Abstentions and broker non-votes are counted in the number of
shares present in person or represented by proxy for purposes of determining
whether a quorum is present, but not for purposes of election of directors,
ratification of the selection of independent accountants or approval of the
proposed amendments to the 1995 Performance-Based Stock Option Plan.
Management of the Company ("Management"), together with members of the
Board of Directors of the Company, in the aggregate, directly or indirectly
controlled approximately 21.5% of the Common Stock outstanding on the Record
Date.
Shareholders of record on the Record Date are entitled to cast their
votes in person or by properly executed proxy at the Annual Meeting. The
presence, in person or by properly executed proxy, of a majority of the
Common Stock outstanding on the Record Date is necessary to constitute a
quorum at the Annual Meeting. If a quorum is not present at the time the
Annual Meeting is convened the Company may adjourn or postpone the Annual
Meeting.
All Common Stock represented at the Annual Meeting by properly executed
proxies received prior to or at the Annual Meeting and not properly revoked
will be voted at the Annual Meeting in accordance with the instructions
indicated in such proxies. If no instructions are indicated, such proxies
will be voted FOR the election of the Board's director nominees, FOR the
--- ---
ratification of the selection of independent accountants and FOR the approval
---
of amendments to the 1995 Performance-Based Stock Option Plan. The Board of
Directors of the Company does not know of any matters, other than the matters
described in the Notice of Annual Meeting attached to this Proxy Statement,
that will come before the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by
(i) filing with the Secretary of the Company, at or before the Annual
Meeting, a written notice of revocation bearing a date later than the date of
the proxy, (ii) duly executing and dating a subsequent proxy relating to the
Common Stock and delivering it to the Secretary of the Company at or before
the Annual Meeting, or (iii) attending the Annual Meeting and voting in
person (although attendance at the Annual Meeting will not in and of itself
constitute a revocation of a proxy). Any written notice revoking a proxy
should be sent to: Corporate Secretary, Cass Commercial Corporation, 13001
Hollenberg Drive, Bridgeton, Missouri 63044 (telephone number (314)
506-5500).
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The proxies are solicited by the Board of Directors of the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or facsimile transmission, by directors, officers or regular
employees of the Company or persons employed by the Company for the purpose
of soliciting proxies. It is contemplated that brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the soliciting material
to the beneficial owners of Common Stock held of record by such persons, and
will be reimbursed by the Company for expenses incurred therewith. The cost
of solicitation of proxies will be borne by the Company.
The Company has two wholly-owned subsidiaries; Cass Commercial Bank
("Cass Bank") and Cass Information Systems, Inc. ("CIS").
The date of this Proxy Statement is March 22, 1999.
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ELECTION OF DIRECTORS
Pursuant to the By-Laws of the Company, the Company's Board of
Directors is divided into three classes of approximately equal numbers of
directors. Each of the 11 directors is elected for a three-year term, and
the term of each class of directors expires in a different year.
Directors who are not officers of the Company receive a $400 monthly
retainer fee, a $600 fee for attendance at each meeting of the Board and a
$400 fee for attendance at each meeting of a Committee of the Board.
The nominees for election to the Board of Directors are: Mr. Chapell,
Mr. Nania, Mr. Vallina and Mr. Woodruff, each of whom is a current director
of the Company. MANAGEMENT OF THE COMPANY RECOMMENDS A VOTE FOR THE NOMINEES
FOR ELECTION TO THE BOARD OF DIRECTORS.
The members of the Company's Board of Directors whose terms will
continue after the meeting, including the nominees for re-election to the
Board, with certain information about each of them, including their principal
occupations for the past five years, are listed below:
Principal Occupation
Director During Past 5 Years
-------- --------------------
Robert J. Bodine Chairman, Bodine
Age: 74 Aluminum, Inc.
Director since 1966 (manufacturer)
Current term expires 2000
Bryan C. Chappell President, Covenant
Age: 44 Theological Seminary
Director since 1998 Mr. Chapell is a nominee for re-election
Current term expires 1999 to the Board of Directors
Lawrence A. Collett Chairman of the Board of the Company &
Age: 56 subsidiaries since 1992;
Director since 1983 Chief Executive Officer of the Company &
Current term expires 2001 subsidiaries since 1990
Thomas J. Fucoloro Consultant
Age: 73
Director since 1986
Current term expires 2000
Harry J. Krieg Consultant to the Company;
Age: 74 Chairman of the Company & subsidiaries,
Chairman Emeritus, since 1992 1975 - 1992
Director since 1962
Current term expires 2000
Howard A. Kuehner Investor
Age: 83
Director since 1966
Current term expires 2000
Jake Nania Investor
Age: 74 Mr. Nania is a nominee for re-election
Director since 1967 to the Board of Directors
Current term expires 1999
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Principal Occupation
Director During Past 5 Years
-------- --------------------
Irving A. Shepard President, Venture
Age: 81 Consultants, Inc.
Director since 1970 (consulting company)
Current term expires 2001
Andrew J. Signorelli Vice President, Andrews Educational
Age: 59 & Research Center; Founder,
Director since 1986 Hope Educational & Research Center
Current term expires 2001
John J. Vallina President of Cass Bank, since 1992
Age: 56 Mr. Vallina is a nominee for re-election
Director since 1992 to the Board of Directors
Current term expires 1999
Bruce E. Woodruff Attorney; of counsel to Armstrong
Age: 68 Teasdale LLP
Director since 1995 Mr. Woodruff is a nominee for re-election
Current term expires 1999 to the Board of Directors
COMMITTEES
The Company's Board of Directors has standing Discount, Audit and
Compliance, and Compensation Committees. The Discount Committee is composed
of Mr. Signorelli, Mr. Fucoloro, Mr. Kuehner, Mr. Collett and Mr. Vallina.
The Audit and Compliance Committee is composed of Mr. Fucoloro, Mr. Kuehner,
Mr. Krieg, Mr. Shepard and Mr. Woodruff. The Compensation Committee is
composed of Mr. Shepard, Mr. Signorelli and Mr. Bodine.
The Discount Committee, which met 24 times during 1998, examines and
approves loans and discounts and exercises the authorization of loans and
discounts.
The Audit and Compliance Committee, which met 4 times during 1998,
recommends to the Board independent auditors to perform audit and non-audit
services, reviews the scope and results of such services, reviews with
management and the independent auditors any recommendations of the auditors
regarding changes and improvements in the Company's accounting procedures and
controls and management's response thereto, and reports to the Board after
each Audit Committee meeting. In addition, the Committee meets with the
Company's Internal Auditors on a quarterly basis to review the scope and
results of such services.
The Compensation Committee, which met 2 times during 1998, reviews and
recommends to the Board the salaries and all other forms of compensation of
the officers of the Company and subsidiaries.
In 1998 a temporary Y2K Committee was created to monitor the Company's
on-going activities related to the year 2000 project plan being implemented
by Company management. The committee is composed of Mr. Collett, Mr. Krieg
and Mr. Woodruff, met 5 times during 1998 and reports to the Board after each
Y2K Committee meeting.
During 1998, there were 12 meetings of the Board of Directors. Mr.
Kuehner and Mr. Shepard were the only two directors that did not attend at
least 75% or more of the aggregate number of meetings of the Board and
committees on which they served.
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EXECUTIVE OFFICERS
The executive officers of the Company, their ages as of December 31,
1998, and their positions with the Company and subsidiaries are set forth
below. All officers serve at the pleasure of the Company's Board of
Directors.
Name Age Positions
---- --- ---------
Lawrence A. Collett 56 Chairman and Chief Executive Officer of the
Company and subsidiaries; Director of the
Company and subsidiaries
Eric H. Brunngraber 41 Vice President-Secretary; Chief Financial
Officer of the Company
William C. Bouchein 63 Vice President - Treasurer of the Company
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EXECUTIVE COMPENSATION
The following table summarizes compensation earned or awarded for the
three years ended December 31, 1998 to each of the executive officers of the
Company.
Long Term Compensation
--------------------------
Annual Compensation Restricted Securities
Name and ---------------------- Stock, ($) Underlying All Other
Principal Position Year Salary Bonus Awards Options(#) Compensation<F1>
- --------------------------- ---- ------ ----- ---------- ---------- ----------------
Lawrence A. Collett 1998 $266,000 $64,000 -- -- $4,650
Chairman and 1997 241,000 63,700 -- -- 3,720
Chief Executive Officer 1996 230,000 90,000 -- -- 5,373
of the Company and
subsidiaries, Director of the
Company and subsidiaries
Eric H. Brunngraber 1998 $101,600 $28,000 -- -- 2,537
Vice President - Secretary 1997 96,600 26,000 -- 4,000 2,048
Chief Financial Officer 1996 86,000 19,000 -- -- 1,805
of the Company
William C. Bouchein 1998 $130,000 $22,000 -- -- 5,910
Vice President - Treasurer 1997 127,500 22,000 -- -- 5,377
of the Company 1996 125,500 16,500 -- -- 5,500
<FN>
<F1> These amounts represent Company matching contributions paid on behalf
of the executive under the Company's 401(k) Plan (in 1998 contributions
were $2,400 for Mr. Collett, $2,121 for Mr. Brunngraber and $2,400 for
Mr. Bouchein) and the imputed value of group term life premiums paid on
their behalf (in 1998 premiums were $2,250 for Mr. Collett, $416 for
Mr. Brunngraber and $3,510 for Mr. Bouchein).
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STOCK OPTION PLAN / STOCK BONUS PLAN
During May 1995, the Company's Board of Directors established the 1995
Performance-Based Stock Option Plan (the Option Plan) and the 1995 Restricted
Stock Bonus Plan (the Bonus Plan). These plans were adopted to aid the
Company in securing and retaining qualified personnel.
The Option Plan provides for the granting of options on up to 400,000
shares of the Company's common stock. As of December 31, 1998, 95,400, 6,000
and 8,500 options were outstanding at exercise prices of $10.32, $20.36 and
$25.45, respectively. Of these shares 25,960 were exercisable with a
weighted average exercise price of $10.32. These options vest over a period
not to exceed seven years, but the vesting period can be accelerated based on
the Company's attainment of certain financial operating performance criteria.
Shareholders are asked to vote on amendments to the Option Plan at the Annual
Meeting.
The Bonus Plan provides for the issuance of up to 100,000 shares of the
Company's common stock. As of December 31, 1998, an aggregate of 35,000
shares of the Company's common stock had been awarded to six participants.
Interest in the shares of common stock awarded under the Bonus Plan vest over
a three year period. Common stock awarded under the Bonus Plan is accounted
for through the establishment of a contra shareholders' equity account. This
contra shareholders' equity account is amortized against income over the
vesting period of the stock awards.
OPTION GRANTS IN 1998
There were no options granted to any of the above named executive
officers in 1998.
OPTIONS EXERCISED IN 1998 AND YEAR-END OPTION VALUES
The following table summarizes options exercised during 1998, and the
values of options outstanding on December 31, 1998, for the executive
officers named above.
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares Fiscal Year-End Fiscal Year-End
Acquired on Value Exercisable/ Exercisable/
Exercise (#) Realized ($) Unexercisable (#) Unexercisable ($)
------------ ------------ ----------------- -----------------
Mr. Collett -- -- 8,400 / 19,600 $208,950 / $487,550
Mr. Brunngraber -- -- 1,128 / 8,872 $28,059 / $220,691
Mr. Bouchein -- -- 1,800 / 4,200 $44,775 / $104,475
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DEFINED BENEFIT RETIREMENT PLANS
RETIREMENT PLAN FOR EMPLOYEES OF CASS COMMERCIAL CORPORATION
All officers of the Company and subsidiaries are participants in the
Retirement Plan for Employees of Cass Commercial Corporation, which covers
all full-time employees. Upon retirement, participants in the plan will
begin to receive monthly payments equal to one-twelfth of the sum of:
(a) .9% of Final Average Earnings multiplied by the number
of years of participation, plus
(b) .5% of Final Average Earnings in excess of Covered
Compensation multiplied by years of participation.
Final Average Earnings is defined as the average annual total
compensation for the five consecutive years of highest earnings during the
last ten years of employment. Covered Compensation is the average of the
maximum social security taxable wage bases in effect for each calendar year
during the 35-year period ending with the year in which retirement age is
attained under the Social Security Act. Earnings covered by the Plan equal
total compensation as reported in the Summary Compensation Table including
any amounts deferred under the Cass Commercial Corporation 401(k) Plan plus
any noncash compensation reported on Internal Revenue Service Form W-2.
Normal retirement under the Plan commences at age 65. At normal
retirement the years of participation under the Plan for the executive
officers listed in the Compensation Table would be as follows: Mr.
Collett-41; Mr. Brunngraber-41; Mr. Bouchein-13.
The following table shows the estimated annual benefits payable at
retirement, assuming a straight-life annuity with 120 months guaranteed.
ESTIMATED ANNUAL RETIREMENT BENEFIT<F1><F2>
-------------------------------------------
Final Years of Service Credited at Retirement
Average ---------------------------------------
Earnings 10 15 20 25 30 35 40
- ----------------------------------------------------------------------------------------------------------
$125,000 $15,800 $23,600 $31,500 $39,400 $47,300 $55,200 $63,000
150,000 19,300 28,900 38,500 48,200 57,800 67,400 77,000
175,000 20,700 31,000 41,300 51,700 62,000 72,300 82,600
200,000 20,700 31,000 41,300 51,700 62,000 72,300 82,600
<FN>
<F1> Estimated benefit calculation assumes retirement at age 65 in the year
2000 with no increase in the maximum social security taxable wage base
after 1998.
<F2> Estimated benefits would be subject to Internal Revenue Service maximum
retirement limitations in effect at the retirement date. The maximum
compensation that may be recognized for determining benefits in 1998 is
$160,000.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
In addition to the above defined benefit plan, in 1998 the Company
established the Cass Commercial Corporation Supplemental Retirement Plan,
which covers key executive officers of the Company. This supplemental plan
was designed to provide additional retirement benefits to key executives
whose benefits are limited by the Internal Revenue Service under the
Company's qualified plan.
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Upon retirement, participants in the plan will receive monthly payments
equal to one twelfth of 70% of Final Average Earnings and reduced
proportionately for length of service less than 25 years and
reduced by the participant's:
(a) Qualified retirement plan benefit,
(b) Primary social security benefit, and
(c) 401(k) hypothetical annuity
Final Average Earnings, normal retirement age and years of
participation at normal retirement of Mr. Collett, Mr. Brunngraber and Mr.
Bouchein are the same as under the Retirement Plan for Employees of Cass
Commercial Corporation.
The following table shows the estimated annual benefits payable at
retirement, assuming a straight-life annuity with 120 months guaranteed.
ESTIMATED ANNUAL RETIREMENT BENEFIT<F1>
---------------------------------------
Final Years of Service Credited at Retirement
Average ---------------------------------------
Earnings 10 15 20 25 30 35 40
- ----------------------------------------------------------------------------------------------------------
$125,000 $ -- $ 4,700 $14,300 $23,900 $16,000 $ 8,100 $ 300
150,000 -- 8,400 19,800 31,100 21,500 11,900 2,300
175,000 2,000 16,200 30,400 44,500 34,200 23,900 13,600
200,000 9,000 26,700 44,400 62,000 57,700 41,400 31,100
300,000 37,000 68,700 100,400 132,000 121,700 121,400 101,100
400,000 65,000 110,700 156,400 202,000 141,700 181,400 171,100
<FN>
<F1> Estimated benefit calculation assumes retirement at age 65 in the year
2000.
DEFINED CONTRIBUTION SAVINGS PLAN
All full-time employees of the Company and subsidiaries are eligible to
participate in the Cass Commercial Corporation 401(k) Plan. Employees may
voluntarily defer up to 15% of pre-tax earnings subject to the IRS maximum
limitation which was $10,000 for 1998. Voluntary deferrals contributed to
the 401(k) Plan by the Executive Officers are included in Annual Salary
Compensation in the Summary Compensation Table. The Company matches 50% of
the first 3% of employee contributions, subject to IRS limitations. Amounts
contributed to the Plan in 1998, for the benefit of the Executive Officers,
are included in Other Compensation in the Summary Compensation Table. Each
Executive Officer is fully vested in Company contributions.
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BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
is composed of three independent directors, one of which serves as chairman
of the Committee. The Committee administers the Executive Compensation
Program of the Company and none of the members have been or are an employee
of the Company or of any of its subsidiaries. All material items relative to
Executive Compensation or any benefit compensation for the entire Company
must be analyzed, reviewed and approved by the Compensation Committee. While
the Committee may seek input occasionally from the Chief Executive Officer,
the Chief Financial Officer or the Director of Human Resources, all matters
are independently resolved and decided without the presence or voting of any
officer of the Company or its subsidiaries. The Compensation Committee of the
Board is also responsible for recommending salary levels for executive
officers to the Board of Directors of the Company and recommending the
overall levels of salary compensation for the entire corporation.
The Committee's philosophy with regard to executive compensation has
been to seek to provide programs which will allow the Company to acquire and
maintain competent executive officers and to attract and maintain other
management personnel with the capabilities and requirements determined
necessary to continue to lead the Company in meeting its objectives and in
furthering its growth and profitability. It is further the philosophy of the
Committee to constantly upgrade the caliber of performance of the Company's
staff and reward its people in accordance with the results that are
accomplished. The Committee believes that total compensation should be
related to profits and to the performance of the Company. For this reason, a
significant component of the compensation of the Company's executives is tied
to an incentive bonus plan that is directly related to the Company's pre-tax
earnings. Most of the executives received increases in 1998 bonuses due to
the improved level of profits achieved.
The Committee generally seeks to maintain salaries at the mid-point
levels of competitive peer groups. Bonuses are available to all personnel in
the Company based upon the level of profits before taxes achieved by the
Company. These bonuses are distributed on the basis of merit. Performance
is measured on the basis of several factors deemed relevant to performance
and bonuses are distributed on the basis of these evaluations. The
determination of bonuses for the Company's executive officers is a subjective
process which utilizes no specific performance criteria, but which does
consider growth in the Company's profits, resources, and the quality of the
Company's operations, as well as adherence to regulatory requirements.
The Committee utilizes the services of Peter R. Johnson & Company of
West Chester, Pennsylvania in determining the levels of peer compensation
within its industry. Additionally, the Committee utilizes the services of
Towers Perrin for evaluation of the compensation of its three top executive
positions. The Committee considers stock options and grants to be a
significant motivational tool for rewarding its executive officers and senior
management. Stock awards provided under the Company's stock option plan are
granted primarily on the basis of performance of the Company, performance of
the individual operating subsidiaries, the relationship of the Company's
performance to other companies in its peer group, and the recommendation of
the CEO. No new stock incentive programs were provided in 1998. The company
utilizes the services of Towers Perrin in determining appropriate stock
incentive and compensation and annually reviews information from other
compensation sources for other bank holding companies and companies
performing in industries similar to those of its operating subsidiaries.
Irving A. Shepard, Chairman
Robert J. Bodine
Andrew J. Signorelli
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PERFORMANCE GRAPH
The following graph compares the percentage change in the Company's
cumulative total shareholder return on Common Stock as quoted on the NASDAQ
National Market System beginning with July 1, 1996, which was the initial
date the Company's shares were so quoted, with the cumulative total return,
including all dividends, of (i) the NASDAQ Stock Market Index for United
States companies, and (ii) the NASDAQ Bank Stocks Index.
COMPARISON OF CUMULATIVE TOTAL RETURNS
PERFORMANCE SINCE DATE FIRST QUOTED ON NASDAQ STOCK MARKET (7/1/96)
CASS COMMERCIAL CORPORATION
[GRAPH]
7/1/96 7/31/96 8/31/96 9/30/96 10/31/96 11/30/96 12/31/96 1/31/97
Nasdaq Stock Market (US) 100 90.14 95.19 102.47 101.34 107.6 107.5 115.14
Nasdaq Bank Stocks 100 98.29 105.1 110.13 115.01 123.6 124.36 131.28
Cass Commercial Corporation 100 100 100 103.72 104.75 105.77 108.508 111.28
Index Level 100 100 100 100 100 100 100 100
2/28/97 3/31/97 4/30/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97
Nasdaq Stock Market (US) 108.78 101.68 104.86 118.74 120.31 133.02 132.81 140.67
Nasdaq Bank Stocks 138.67 133.67 136.67 145.21 155.54 167.47 166.11 183.44
Cass Commercial Corporation 116.48 126.58 123.1 114.06 152.57 139.28 138.58 140.7
Index Level 100 100 100 100 100 100 100 100
10/31/97 11/30/97 12/31/97 1/30/98 2/27/98 3/31/98 4/30/98 5/29/98
Nasdaq Stock Market (US) 133.36 134.02 131.92 136.042 148.815 154.311 156.931 148.317
Nasdaq Bank Stocks 184.36 191.79 210.09 199.08 210.068 220.118 222.953 215.469
Cass Commercial Corporation 140.7 141.4 140.01 197.994 197.64 194.751 184.8 172.006
Index Level 100 100 100 100 100 100 100 100
6/30/98 7/31/98 8/31/98 9/30/98 10/30/98 11/30/98 12/31/98
Nasdaq Stock Market (US) 158.779 157.102 126.3 143.744 149.619 164.358 185.392
Nasdaq Bank Stocks 215.912 209.391 170.735 182.1 195.094 201.357 206.242
Cass Commercial Corporation 171.945 171.587 164.438 144.628 146.787 146.787 144.215
Index Level 100 100 100 100 100 100 100
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the directors and officers of the Company and of the Bank, and
members of their immediate families and firms and corporations with which
they are associated, have had transactions with the Bank, including borrowing
and investments in depository accounts. All such loans and investments have
been made in the ordinary course of business, have been made on substantially
the same terms, including interest rates paid or charged and collateral
required, as those prevailing at the same time for comparable transactions
with unaffiliated persons, and did not involve more than the normal risk of
collectibility or present other unfavorable features. As of December 31,
1998, the aggregate amount of all loans and available credit to officers and
directors of the Company and to firms and corporations in which they have at
least a 10% beneficial interest was approximately $3.4 million, which
represented approximately 5.9% of the Company's consolidated shareholders'
equity at that date.
Bruce E. Woodruff, a director and shareholder of the Company, is of
counsel to the law firm of Armstrong Teasdale LLP, counsel to the Company and
subsidiaries.
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PRINCIPAL SHAREHOLDERS
The following table contains information with respect to beneficial ownership
of the Company's outstanding common stock by the directors and executive
officers of the Company named in the Summary Compensation Table, as of March
5, 1998. Unless otherwise indicated, the named person has sole voting and
dispositive rights with respect to such shares.
Name of Number of Shares Percent
Beneficial Owner Beneficially Owned of Class
- ---------------- ------------------ --------
Robert J. Bodine 84,084 <F1> 2.17%
William C. Bouchein 30,220 <F2> <F*>
Eric H. Brunngraber 600 <F3> <F*>
Bryan C. Chapell -- <F*>
Lawrence A. Collett 55,094 <F3> 1.42
Thomas J. Fucoloro -- <F4> <F*>
Harry J. Krieg 50,588 <F5> 1.31
Howard A. Kuehner 104,054 <F6> 3.62
Jake Nania 343,766 <F6> 8.87
Irving A. Shepard 9,806 <F8> <F*>
A. J. Signorelli 109,310 <F9> 2.82
John J. Vallina 6,370 <F10> <F*>
Bruce E. Woodruff 5,000 <F7> <F*>
All executive officers and directors -------
as a group 834,892 21.55%
-------
Other beneficial owners:
David L. Babson and Company, Inc. 257,400 6.64%
<FN>
- -------------------------------
<F*> Less than 1% of class.
<F1> Excludes 8,784 shares held in a trust as to which Mr. Bodine's spouse
has sole voting and dispositive power.
<F2> These shares are held in a trust with the named shareholder having sole
voting and dispositive power.
<F3> These shares are owned jointly with his wife.
<F4> Excludes 200 shares held in a trust as to which Mr. Fucoloro's spouse
has sole voting and dispositive powers.
<F5> Of these shares, 40,000 are in trust with Mr. Krieg having shared
voting and dispositive powers. Excludes 51,211 shares owned by his
wife.
<F6> Of these shares, 78,430 are in a trust with Mr. Kuehner having shared
voting and dispositive powers. Excludes 106,988 shares owned by his
wife.
<F7> These shares are in a trust with the named shareholder having sole
voting and dispositive power.
<F8> Excludes 7,600 shares owned by his wife.
<F9> Of these shares, 63,072 are held in trust with his sister and 46,238
are owned jointly with his wife. Excludes 2,656 shares owned by his
wife.
<F10> These shares are held in trust with Mr. Vallina having shared voting
and dispositive power.
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SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
To the Company's knowledge, based solely on review of copies of such
reports furnished to the Company and written representations that no other
reports were required, during 1998 all Section 16(a) filing requirements were
complied with by all persons who, during the year, were directors, officers
or holders of 10% or more of the Company's shares.
AMENDMENTS TO THE COMPANY'S 1995
PERFORMANCE-BASED STOCK OPTION PLAN
Subject to shareholder approval, the Company's Board of Directors
amended the Cass Commercial Corporation 1995 Performance-Based Stock Option
Plan effective January 19, 1999, to permit the granting of incentive stock
options under the Option Plan in addition to the non-qualified stock options
previously provided under the Option Plan.
The purposes of the Option Plan are to aid the Company and its
subsidiaries, Cass Commercial Bank and Cass Information Systems, Inc. in
securing and retaining qualified personnel by making it possible to offer
them an increased incentive, in the form of a proprietary interest in the
Company, to join or continue in the service of the Company or its
subsidiaries and increase their efforts for its welfare. The Board of
Directors believes stock options have played a critical role in recent years
in motivating Company management to build a growing, highly competitive
business, while also delivering a consistently strong financial performance
record with corresponding stock appreciation.
The Option Plan was originally approved by the Company's shareholders
on April 22, 1996. As originally adopted, the Option Plan permitted the
granting of only non-qualified stock options. A holder of a non-qualified
stock option who exercises the option recognizes ordinary income at the time
of exercise, in an amount equal to the fair value of the shares at the time
of exercise less the exercise price, and the Company receives a corresponding
tax deduction. Therefore, to exercise a non-qualified option, the holder
must not only pay the exercise price of the shares but a significant amount
of income tax. The tax cost to an employee who exercises a non-qualified
stock option significantly reduces the benefit of the option to the employee.
The amendments permit the Compensation Committee to grant incentive
stock options under the Option Plan as an alternative to non-qualified stock
options. An optionee does not realize any income upon the exercise of an
incentive stock option, nor does the company receive any deduction. If the
stock is not sold or gifted for at least two years after the option grant and
at least one year after the exercise, no ordinary income is realized with
respect to the disposition. The Optionee's tax basis in the shares is the
exercise price, and any gain or loss to the Optionee is a capital gain or
loss. However, if the stock is disposed of before then, the tax effects of
the exercise and sale are similar to what they would be if the option had
been a non-qualified option.
Because of the favorable tax treatment to the optionee, the Board of
Directors believes that being able to grant incentive stock options as an
alternative to non-qualified stock options gives the Compensation Committee
more flexibility in offering options as incentives, and also believes that
the increased incentive to the Company's employees outweighs the loss of tax
benefits to the Company.
The amendments also permit directors of the Company, as well as
employees, to be granted non-qualified stock options under the Option Plan.
Previously, directors who were not also employees of the Company were not
eligible to participate in the Option Plan. By law, directors who are not
employees are not eligible to receive incentive stock options. The Board
believes that permitting directors to receive options under the Option Plan
will tend to align their interests more closely with the interests of the
shareholders and provide an additional incentive for Board members.
The full text of the Option Plan as amended is attached to this Proxy
Statement as Exhibit I.
MANAGEMENT OF THE COMPANY RECOMMENDS VOTING FOR APPROVAL OF THE
AMENDMENTS TO THE OPTION PLAN.
-14-
16
SELECTION OF AUDITORS
KPMG LLP were the auditors of the Company during the year ended
December 31, 1998 and also have been selected by the Board of Directors to
serve as auditors for the present year. The Board of Directors recommends to
the Shareholders their ratification of its selection of KPMG LLP as
independent auditors to audit the accounts of the Company and its
subsidiaries for 1999.
KPMG LLP has served as the Company's independent auditors since 1983.
A representative of KPMG LLP is expected to be present at the Meeting,
will have an opportunity to make a statement if he or she desires to do so,
and is expected to be available to respond to appropriate questions of
Shareholders.
MANAGEMENT OF THE COMPANY RECOMMENDS VOTING FOR THE RATIFICATION OF THE
SELECTION OF KPMG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR 1999.
OTHER MATTERS
Management does not intend to present to the Annual Meeting any
business other than the items stated in the "Notice of Meeting of
Shareholders" and does not know of any matters to be brought before the
Meeting other than those referred to above. If, however, any other matters
properly come before the Meeting, the persons designated as proxies will vote
on each such matter in accordance with their best judgment.
Whether or not you expect to be at the Meeting in person, please sign,
date and return promptly the enclosed Proxy. No postage is necessary if the
Proxy is mailed in the United States.
SHAREHOLDER PROPOSALS
Any proposal to be presented at next year's Annual Meeting must be
received at the principal executive offices of the Company not later than
November 23, 1999. Any such proposals should be directed to the attention of
the Secretary for consideration for inclusion in the Company's Proxy
Statement and Form of Proxy relating to the next Annual Meeting. Any such
proposals must comply in all respects with the rules and regulations of the
Securities and Exchange Commission. The Company's form of proxy for next
year's Annual Meeting may permit the representatives named in the proxy to
vote in their discretion on any other shareholder proposal of which notice
has not been given to the Company by February 6, 2000. It is suggested that
proponents of any proposals submit such proposals to the Company sufficiently
in advance of the deadline by Certified Mail-Return Receipt Requested.
By Order of the Board of Directors
Eric H. Brunngraber
Vice President-Secretary
-15-
17
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18
EXHIBIT I
CASS COMMERCIAL CORPORATION
---------------------------
1995 PERFORMANCE-BASED STOCK OPTION PLAN
----------------------------------------
(As amended through January, 1999)
1. PURPOSE OF PLAN.
---------------
The purpose of this 1995 Performance-Based Stock Option Plan is to aid
the Company and its subsidiaries in securing and retaining qualified
personnel by making it possible to offer such personnel an increased
incentive, in the form of a proprietary interest in the Company, to join or
continue in the service of the Company or its subsidiaries and to increase
their efforts for its welfare.
2. DEFINITIONS.
-----------
As used in this Plan, the following terms when capitalized shall have
the meanings indicated:
"Board" means the board of directors of the Company.
"Business Day" means a day on which the main office of the Company is
open for business, which shall be deemed to end at the regularly
scheduled closing time of the Company's main office on such day.
"Cass Bank" means Cass Commercial Bank (formerly Cass Bank & Trust
Company).
"Change in Control" means any one or more of the following
occurrences:
(i) Any individual, corporation (other than the Company),
partnership, trust, association, pool, syndicate, or any other entity
or any group of persons acting in concert becomes the beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934) of securities of the Company possessing more than one-third of
the voting power for the election of directors of the Company;
(ii) There shall be consummated any consolidation, merger, or
other business combination involving the Company or the securities of
the Company in which holders of voting securities of the Company
immediately prior to such consummation own, as a group, immediately
after such consummation, voting securities of the Company (or, if the
Company does not survive such transaction, voting securities of the
entity surviving such transaction) having less than two-thirds of the
total voting power in an election of directors of the Company (or such
other surviving corporation);
(iii) During any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
directors of the Company cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election
by the Company's shareholders, of each new director of the Company was
approved by a vote of at least two-thirds (2/3) of the directors of
the Company then still in office who were directors of the Company at
the beginning of any such period; or
(iv) There shall be consummated any sale, lease, exchange, or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the
Company (on a consolidated basis) to a party which is not controlled
by or under common control with the Company.
"CIS" means Cass Information Systems, Inc.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock of the Company.
"Company" means Cass Commercial Corporation.
"Compensation Committee" means the Compensation Committee of the
Board.
"Exercise Price" means the price per share which must be paid to the
Company by an Optionee to purchase Option Shares, exclusive of any required
reimbursement to the Company for federal and state withholding taxes payable
by the Company as a result of such purchase.
"Expiration Date" with respect to Option Shares means the first
Business Day in January of the seventh (7th) calendar year after the year in
which the Option is granted; except that if the Option is a Nonqualified
Stock Option, then with respect to any Option Shares (and only those Option
Shares) for which the Vesting Date shall have been accelerated as provided in
paragraph 5.4 of this Plan, "Expiration Date" means the first Business Day in
January of the tenth (10th) calendar year after the year in which the Option
is granted.
"Fair Market Value" of a share of Common Stock means (i) the mean
between the highest and lowest quoted selling prices for a share of Common
Stock on the day prior to the date Fair Market Value is determined, or (ii)
if no sale took place on such day then such mean for the last previous day on
which a sale took place, provided that if the Compensation Committee finds
that such mean does not appropriately reflect fair market value, it may
determine fair market value in such other manner as it may deem appropriate
in its sole discretion.
"Incentive Stock Option" means an option which meets the requirements
of Section 422 of the Code and is designated as such.
"NI Growth" with respect to the Company means one-third of the
percentage growth in the Company's net after-tax income between the fourth
calendar year preceding the year in which NI Growth is calculated and the
calendar year immediately preceding the year in which NI Growth is
calculated; "NI Growth" with respect to Cass Bank means a percentage
calculated in the same manner using Cass Bank's net after-tax income for the
applicable periods; and "NI Growth" with respect to CIS means a percentage
calculated in the same manner using CIS's net after-tax income for the
applicable periods.
"Nonqualified Stock Option" means an option granted under the Plan
other than an Incentive Stock Option.
"Option" means a right granted to purchase up to a specified number of
shares of Common Stock pursuant to this Plan.
19
"Option Agreement" means a contract between the Company and an
Optionee, substantially in the form of Exhibit A hereto, setting forth the
specific terms and conditions of an Option.
"Option Shares" means shares of Common Stock which are subject to
issuance upon full or partial exercise of an Option.
"Optionee" means a person to whom an Option has been granted and who
has entered into an Option Agreement.
"Performance Matrix" means, as the case may be, Schedule I (the "CCC
----------
Performance Matrix"), Schedule II (the "Cass Bank Performance Matrix") or
-----------
Schedule III (the "CIS Performance Matrix") attached hereto.
- ------------
"Plan" means this 1995 Performance-Based Stock Option Plan.
"ROA Differential" with respect to the Company means the Company's
average annual percentage return on assets for the three calendar years
immediately preceding the year in which the calculation is made, less the
average annual percentage return on assets for bank holding companies in the
Company's national peer group for the same period; "ROA Differential" with
respect to Cass Bank means Cass Bank's average annual percentage return on
assets for the three calendar years immediately preceding the year in which
the calculation is made, less the average annual percentage return on assets
for banks in Cass Bank's Eighth Federal Reserve District peer group for the
same period.
"Vesting Date" with respect to Option Shares means the first Business
Day in January of the seventh (7th) calendar year after the year in which the
Option is granted, subject to acceleration as to all or any portion of the
Option Shares as provided in paragraphs 5.4 and 5.5 of this Plan.
3. GRANTING OF OPTIONS.
-------------------
3.1 The Board may from time to time grant Options to directors,
executive officers and other management employees of the Company, Cass Bank
or CIS upon the recommendation of the Company's chief executive officer and
the Compensation Committee.
3.2 The Board may from time to time grant Options to the Company's
chief executive officer upon the recommendation of the Compensation
Committee.
3.3 The grant of Options to employees of Cass Bank or CIS shall
also be subject to the adoption of this Plan by the board of directors of
such subsidiary and to the approval of either the board of directors of such
subsidiary or an individual or committee to which approval authority has been
delegated by the subsidiary's board of directors.
3.4 Subject to the limitations set forth in the Plan, any option
may be designated in whole or in part as either an Incentive Stock Option or
a Nonqualified Stock Option, except that an Incentive Stock Option may not be
granted to a director who is not an employee, or to any person who owns
(within the meaning of Section 424(d) of the Code) stock of the Company
possessing more than 10% of the total combined voting power of all classes of
stock of the Company. Any option intended to constitute an Incentive Stock
Option shall comply with the following requirements in addition to the other
requirements of the Plan:
(i) The aggregate Fair Market Value of the underlying Common
Stock at the time of grant as to which Incentive Stock Options
under the Plan may first be exercised by a participant in any
calendar year shall not exceed $100,000; to the extent that an
option intended to constitute an Incentive Stock Option shall
exceed the $100,000 limitation, the portion of the option that
exceeds such limitation shall be treated as a Nonqualified
Stock Option); and
(ii) Notwithstanding any contrary provision of the Option
Agreement, an Incentive Stock Option shall not be exercisable
after the 10th anniversary of the date of grant.
4. MAXIMUM NUMBER OF OPTION SHARES.
-------------------------------
4.1 Options may not be granted aggregating more than 400,000<F1>
Option Shares; provided that if any Option shall expire without being fully
exercised, the unissued Option Shares shall again become available for option
under this Plan.
4.2 In the event of any stock dividend on, reclassification,
splitup or combination of, or other change in, the Common Stock, then the
number or kind of shares for which Options may be granted hereunder shall be
correspondingly added to, reclassified, increased, diminished or changed
proportionately.
4.3 The Company shall at all times reserve a number of shares of
Common Stock for issuance hereunder equal to the number of Option Shares for
which Options are then outstanding, which reserved shares may consist of
previously-unissued shares or treasury shares or any combination thereof.
5. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------
5.1 Option Agreement. No person shall have any rights under any
Option unless and until he or she shall have entered into an Option Agreement
with respect to such Option substantially in the form of Exhibit A, if a
---------
Nonqualified Stock Option, or Exhibit B, if an Incentive Stock Option, the
---------
terms and conditions of which forms are hereby incorporated into this Plan.
5.2 Exercise Price. The Exercise Price of each Option shall be
determined by the Compensation Committee, but shall not be less than Fair
Market Value as of the date the Option is granted. The Option Agreement may
permit the Exercise Price to be paid in shares of Common Stock, valued for
this purpose at their Fair Market Value on the date of exercise.
5.3 Dates of Exercise of Options. Except as otherwise expressly
provided in the Option Agreement, an Option may be exercised as to any Option
Shares only (i) on or after the Vesting Date with respect to such Option
Shares and (ii) on or before the Expiration Date with respect to such Option
Shares.
[FN]
- -------------------------------
<F1> Increased from 200,000 shares pursuant to 2:1 stock split in the
form of a stock dividend, March 15, 1997.
2
20
5.4 Possibility of Accelerated Vesting. The Vesting Date with
respect to all Option Shares shall be subject to acceleration as follows:
(i) Each Option shall be eligible to be considered for
accelerated vesting beginning with the annual determinations of NI
Growth and ROA Differential made in the second calendar year after the
Option is granted, so that the earliest possible Vesting Date for any
Option Shares shall be the first Business Day in January of the third
year after it is granted.
(ii) As early in each calendar year as the necessary
information is available, the Compensation Committee shall calculate
NI Growth and ROA Differential for each entity required, calculating
the percentages in each case to two decimal places (i.e. 1/100 of 1%).
(iii) Using the applicable Performance Matrix, the Compensation
Committee shall then determine, for each Option eligible for
accelerated vesting, the percentage (if any) of Option Shares which
shall be subject to an accelerated Vesting Date, calculating such
percentage to one decimal place (i.e. 1/10 of 1%). The applicable
Performance Matrix shall be the Performance Matrix for the Optionee's
employer, except that (A) in the case of Options granted to employees
of CIS, the CCC Performance Matrix and the CIS Performance Matrix
shall both be used, and the two resulting percentages shall be
averaged, and (B) in the case of Options granted to employees of Cass
Bank, the CCC Performance Matrix and the Cass Bank Performance Matrix
shall both be used, and the two resulting percentages shall be
averaged. No more than 30% of the Option Shares shall be subject to
accelerated vesting in any year.
(iv) The percentages so obtained shall be multiplied by the
total original number of Option Shares, and the Vesting Date for the
resulting number of Option Shares shall be accelerated from the
original Vesting Date to the first Business Day in January of the
calendar year following the year in which the determination was made.
(v) The Compensation Committee shall promptly notify each
Optionee of the percentage and number of Option Shares as to which the
Vesting Date shall have been accelerated, and the resulting Vesting
Date for such Option Shares.
(Example of timing: With respect to Options granted in 1995,
-----------------
the first calculations shall be made in 1997, with NI Growth
calculated on net income growth from 1993 to 1996 and ROA
Differential calculated over the years 1994 through 1996; the
Vesting Date for the resulting number of Option Shares shall be
accelerated from January 2, 2002 to January 2, 1998.)
5.5 Automatic Acceleration of Vesting in the Event of a Change in
Control. The Vesting Date shall be automatically accelerated, and all
Options then outstanding under this Plan shall become immediately exercisable
in full upon the first to occur of (i) a Change in Control, or (ii) the
approval by the Board of a Change in Control, or (iii) 10 days before the
record date, if any, for determining the shareholders of the Company eligible
to vote on a proposed Change in Control, or (iv) 10 days before the last date
for determining the shareholders of the Company eligible to participate in
any Change in Control in which the Company's common stock would be sold,
exchanged or converted for or into cash, property or other securities;
provided that if (A) the Company remains in existence and continues to carry
on its business following the Change in Control, and (B) the Common Stock
continues to be listed for trading with the Nasdaq Stock Market after the
Change in Control, and (C) after the Change in Control, no person or group of
persons acting in concert possesses more than a majority of the voting power
for the election of directors of the Company, then such acceleration of the
Vesting Date shall occur only if and to the extent that acceleration of the
Vesting Date is provided for in an individual Option Agreement. A Change in
Control shall not extend the Expiration Date of an Option except as provided
in an individual Option Agreement.
6. DURATION OF PLAN.
----------------
Options may be granted under this Plan from the date of its adoption
by the Board until the effective date of its termination by the Board, but
Options granted prior to termination of this Plan shall remain effective
thereafter in accordance with their terms. However, no Incentive Stock
Option may be granted more than ten years after the date the Plan was
originally adopted by the Board.
7. ADMINISTRATION OF PLAN.
----------------------
7.1 The Compensation Committee shall have the power to interpret
the Plan and to make rules and establish procedures for making the various
calculations called for hereunder and otherwise for carrying out the Plan.
Any such interpretations, rules or procedures, and any decisions by the
Compensation Committee or the Board as to the persons eligible to receive
Options and the terms thereof, shall be conclusive on the Company, its
subsidiaries and their respective successors and assigns, and on the Optionee
and his or her heirs, personal and legal representatives and assigns.
7.2 The Board may amend or terminate the Plan at any time, or
modify the terms of any individual Option Agreement, in its discretion;
however, no amendment or termination shall adversely affect the rights of an
Optionee under any Option then in effect, except as the Company and the
Optionee may otherwise agree.
* * * * *
ATTACHMENTS:
- -----------
Exhibit A - Nonqualified Stock Option Agreement Form
---------
Exhibit B - Incentive Stock Option Agreement Form
---------
Schedule I - CCC Performance Matrix: NI Growth / ROA Differential
----------
Schedule II - Cass Bank Performance Matrix: NI Growth / ROA
----------- Differential
Schedule III - CIS Performance Matrix: NI Growth
------------
3
21
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22
Exhibit A
---------
CASS COMMERCIAL CORPORATION
---------------------------
1995 PERFORMANCE-BASED STOCK OPTION PLAN
----------------------------------------
NONQUALIFIED STOCK OPTION AGREEMENT
-----------------------------------
THIS NONQUALIFIED STOCK OPTION AGREEMENT is entered into as of
- -------------, 19--, between Cass Commercial Corporation, a Missouri
corporation (the "Company"), and
-------------------------- (the "Optionee").
WHEREAS, the Company has deemed it to be in its best interests to
promote the loyalty and facilitate the retention of its employees and the
employees of its subsidiaries in the service of the Company and its
subsidiaries, by offering such employees an increased incentive to continue
in the service of the Company and its subsidiaries and increase their efforts
for its welfare, and
WHEREAS, in furtherance of the above purposes the Optionee's employer
has adopted the Company's 1995 Performance-Based Stock Option Plan, and has
determined to afford the Optionee an opportunity to purchase shares of common
stock of the Company pursuant to the Plan as hereafter described,
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the parties hereto do hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein
-----------
shall have the same meanings as they are given in the Plan.
2. Grant of Option. The Company hereby grants to the Optionee an
---------------
Option to purchase all or any part of the number of shares of its Common
Stock set forth below (the "Option Shares"), at the purchase price set forth
below and on the other terms and conditions herein set forth.
TOTAL NUMBER OF OPTION SHARES: --------
PURCHASE PRICE PER OPTION SHARE: $-----
3. Dates When Option Exercisable.
-----------------------------
(a) Except to the extent vesting is accelerated as provided in the
Plan or this Option Agreement, the Option shall vest and first become
exercisable on the following date:
INITIAL VESTING DATE: JANUARY --, ----;
(b) Except to the extent expiration is extended as provided in the
Plan, the Option shall expire, to the extent it has not already been
exercised, at the regularly scheduled closing time of the Company's main
business office on the following date:
INITIAL EXPIRATION DATE: JANUARY --, ----;
(c) The Company will notify the Optionee of any acceleration of the
Vesting Date or any extension of the Expiration Date as provided in the Plan,
and the reason therefor.
(d) Except as provided in paragraphs 3(e) and 3(f), the Option may
be exercised only if the Optionee shall have continuously served as an
employee of the Company or any of its subsidiaries from the date hereof to
and including the date of exercise. It is expressly understood and agreed
that nothing herein is intended or shall be construed as an employment
contract or as implying any obligation on the part of the Optionee's employer
to continue the Optionee's employment for any period of time after the date
hereof. If the Optionee is a director who is not an employee of the Company,
Cass Bank or CIS on the date of grant, then for purposes of this paragraph
and paragraphs 3(e) and 3(f), employment shall include service as a director
and termination of employment shall include the expiration of the Optionee's
term as director unless the Optionee has been reelected to a successive term.
(e) Notwithstanding paragraphs 3(b) and 3(d), in the event of the
death of the Optionee or termination of the Optionee's employment by reason
of his or her disability or incapacity, the Option may be exercised (but only
to the extent it was exercisable on the date of the Optionee's death or of
such termination of employment), by the Optionee's personal representative,
heir, legatee, trustee, conservator (if any) or guardian (if any),
respectively, in the manner set forth below, for a period of six (6) months
after the date of the Optionee's death or of such termination of employment.
23
(f) Notwithstanding paragraph 3(d), if the Optionee's employment is
terminated by the Company other than for Cause during the period beginning
upon the first to occur of (i) a Change in Control, or (ii) the approval by
the Board of a Change in Control, or (iii) 10 days before the record date, if
any, for determining the shareholders of the Company eligible to vote on a
proposed Change in Control, or (iv) 10 days before the last date for
determining the shareholders of the Company eligible to participate in any
Change in Control in which the Company's common stock would be sold,
exchanged or converted for or into cash, property or other securities, and
ending upon the first to occur of (A) two (2) years after such Change in
Control is effected, or (B) the date such proposed Change in Control is
abandoned by the parties, then (I) to the extent the Option was not
theretofore exercisable, the Vesting Date shall be accelerated as to all
Option Shares and the Option shall be exercisable in full, and (II) the
Option may be exercised (but only to the extent it was exercisable on the
date of termination of the Optionee's employment) by the Optionee or the
Optionee's personal representative, trustee, conservator (if any) or guardian
(if any), respectively, in the manner set forth below, for a period of six
(6) months after the date of such termination of employment; and if such
Change in Control or any subsequent event has resulted in the sale, exchange
or conversion of the Common Stock for or into cash, property or other
securities, then upon exercise the Optionee shall receive in lieu of Common
Stock the cash, property or other securities which the Optionee would have
received had the Optionee exercised the Option in full 10 days before the
last date for determining the shareholders of the Company eligible to
participate in such Change in Control. For purposes of this paragraph,
"Cause" means only conduct which is finally adjudged to be knowingly
fraudulent, deliberately dishonest or intentional misconduct. The
Compensation Committee shall make the determination of whether Cause exists
in any particular case, and if it believes that Cause may exist it shall
provide the Optionee with notice of the reasons the Committee believes Cause
may exist and shall give the Optionee the opportunity to respond to the
allegation that Cause exists.
4. Method of Exercising Option. The Optionee, or his or her
---------------------------
representative as permitted by paragraph 3(e) above, may exercise the Option
hereby granted on one or more occasions at his or her discretion, on each
occasion for all or any part of the Shares for which the Option is then
exercisable, by each time delivering to the main business office of the
Company, addressed to the attention of its Chief Executive Officer or
Secretary, (i) a written notice stating his or her election to exercise the
Option and the number of Option Shares to be purchased, together with (ii)
any combination of (A) cash or (B) check or (C) shares of Common Stock with
such endorsements or other transfer documentation as the Company may require,
aggregating full payment of the purchase price of the Option Shares then
being purchased plus the amount of any Federal and state withholding taxes
payable by the Company or any of its subsidiaries as a result of such
exercise; provided that shares of Common Stock may not be used in payment of
withholding taxes. Shares of Common Stock used to exercise an Option shall
be valued at their Fair Market Value on the date of exercise. The Option
shall be deemed to be exercised only upon receipt of such notice and payment.
The Company will advise the Optionee, upon the Optionee's reasonable prior
request, of the required amount of such taxes.
5. Non-Transferability of Option. The Option may be exercised
-----------------------------
only by the Optionee, or as permitted by paragraph 3(e) above. The rights
granted by this Option may not be assigned, transferred, pledged or
hypothecated in any way, other than by will or by operation of law, and shall
not be subject to execution, attachment or similar process. In the event of
the bankruptcy of the Optionee, or in the event of any prohibited assignment,
transfer, pledge, hypothecation or other disposition of the Option, or in the
event of the levy of any execution, attachment or similar process upon the
Option, the Option shall automatically expire and shall be null and void.
Notwithstanding the foregoing, however, with prior notice to the Company the
rights granted by this Option may be transferred between the Optionee in his
or her personal capacity and the Optionee as trustee of a trust (A) of which
the Optionee is both sole trustee and sole beneficiary during his or her
lifetime, and (B) all of which is treated under subpart E of Part I of
Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986,
as amended, as owned by the Optionee.
6. Share Adjustments. In the event of any stock dividend on,
-----------------
reclassification, splitup or combination of, or other change in, the
Company's common stock, then the number or kind of Option Shares shall be
correspondingly added to, reclassified, increased, diminished or changed
proportionately, without increase or decrease in the aggregate purchase price
of all Option Shares.
7. No Rights of Optionee as Shareholder. The Optionee shall have
------------------------------------
no rights respecting this Option or the Option Shares except as expressly set
forth herein or in the Plan, a copy of which the Optionee hereby acknowledges
having received; and the Optionee shall have no rights as a shareholder with
respect to any Option Shares until this Option has been duly exercised as to
such Option Shares in accordance with the terms hereof. The grant of this
Option shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its common
stock or its capital or business structure, or to merge or to consolidate, or
to dissolve or liquidate, or to sell or transfer any or all of its business
or assets.
8. General. The Company shall at all times during the term of
-------
this Option reserve and keep available a number of shares of common stock
equal to the number of Option Shares, and shall pay any original issue or
transfer taxes with respect to
-2-
24
the issue of Option Shares pursuant hereto and all other fees and expenses
necessarily incurred by the Company incurred in connection therewith.
IN WITNESS WHEREOF, the parties have executed this Nonqualified Stock Option
Agreement as of the date first above written.
Company: CASS COMMERCIAL CORPORATION
By: ----------------------------
Title: -------------------------
Optionee: --------------------------------
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26
Exhibit B
---------
CASS COMMERCIAL CORPORATION
---------------------------
1995 PERFORMANCE-BASED STOCK OPTION PLAN
----------------------------------------
INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
THIS INCENTIVE STOCK OPTION AGREEMENT is entered into as of
- --------------, 19--, between Cass Commercial Corporation, a Missouri
corporation (the "Company"), and
---------------------------- (the "Optionee").
WHEREAS, the Company has deemed it to be in its best interests to promote
the loyalty and facilitate the retention of its employees and the employees of
its subsidiaries in the service of the Company and its subsidiaries, by
offering such employees an increased incentive to continue in the service of
the Company and its subsidiaries and increase their efforts for its welfare,
and
WHEREAS, in furtherance of the above purposes the Optionee's employer has
adopted the Company's 1995 Performance-Based Stock Option Plan, and has
determined to afford the Optionee an opportunity to purchase shares of common
stock of the Company pursuant to the Plan as hereafter described,
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the parties hereto do hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein
-----------
shall have the same meanings as they are given in the Plan.
2. Grant of Option. The Company hereby grants to the Optionee an
---------------
Option to purchase all or any part of the number of shares of its Common Stock
set forth below (the "Option Shares"), at the purchase price set forth below
and on the other terms and conditions herein set forth. This Option is
intended to qualify and be treated as an Incentive Stock Option, but if and to
the extent it does not so qualify, it shall be treated as a Nonqualified Stock
Option.
TOTAL NUMBER OF OPTION SHARES: --------
PURCHASE PRICE PER OPTION SHARE: $-----
3. Dates When Option Exercisable.
-----------------------------
(a) Except to the extent vesting is accelerated as provided in the
Plan or this Option Agreement, the Option shall vest and first become
exercisable on the following date:
INITIAL VESTING DATE: JANUARY --, ----;
(b) The Option shall expire, to the extent it has not already been
exercised, at the regularly scheduled closing time of the Company's main
business office on the following date:
EXPIRATION DATE: JANUARY --, ----;
(c) The Company will notify the Optionee of any acceleration of the
Vesting Date and the reason therefor.
(d) Except as provided in paragraphs 3(e), 3(f) and 3(g), the Option
may be exercised only by the Optionee and only if the Optionee shall have
continuously served as an employee of the Company or any of its subsidiaries
from the date hereof to and including the date of exercise. It is expressly
understood and agreed that nothing herein is intended or shall be construed as
an employment contract or as implying any obligation on the part of the
Optionee's employer to continue the Optionee's employment for any period of
time after the date hereof.
(e) Notwithstanding paragraph 3(d), in the event of the death of the
Optionee the Option may be exercised (but only to the extent it was exercisable
on the date of the Optionee's death) by the Optionee's personal representative,
heir or legatee for a period of six (6) months after the date of the Optionee's
death; but in no event shall the Option be exercisable after the expiration
date set forth above.
27
(f) Notwithstanding paragraph 3(d), in the event of the termination
of the Optionee's employment by reason of his or her disability the Option may
be exercised (but only to the extent it was exercisable on the date of such
termination of employment) by the Optionee or the Optionee's duly appointed
conservator or guardian for a period of three (3) months after the date of such
termination of employment; except that in the event of the termination of the
Optionee's employment by reason of his or her permanent and total disability as
defined in Section 22(e)(3) of the Code, the exercise period will be six (6)
months after the date of such termination of employment; but in no event shall
the Option be exercisable after the expiration date set forth above.
(g) Notwithstanding paragraph 3(d), if the Optionee's employment is
terminated by the Company other than for Cause during the period beginning upon
the first to occur of (i) a Change in Control, or (ii) the approval by the
Board of a Change in Control, or (iii) 10 days before the record date, if any,
for determining the shareholders of the Company eligible to vote on a proposed
Change in Control, or (iv) 10 days before the last date for determining the
shareholders of the Company eligible to participate in any Change in Control in
which the Company's common stock would be sold, exchanged or converted for or
into cash, property or other securities, and ending upon the first to occur of
(A) two (2) years after such Change in Control is effected, or (B) the date
such proposed Change in Control is abandoned by the parties, then (I) to the
extent the Option was not theretofore exercisable, the Vesting Date shall be
accelerated as to all Option Shares and the Option shall be exercisable in
full, and (II) the Option may be exercised (but only to the extent it was
exercisable on the date of termination of the Optionee's employment) by the
Optionee for a period of three (3) months after the date of such termination of
employment, but in no event shall the Option be exercisable after the
expiration date set forth above; and if such Change in Control or any
subsequent event has resulted in the sale, exchange or conversion of the Common
Stock for or into cash, property or other securities, then upon exercise the
Optionee shall receive in lieu of Common Stock the cash, property or other
securities which the Optionee would have received had the Optionee exercised
the Option in full 10 days before the last date for determining the
shareholders of the Company eligible to participate in such Change in Control.
For purposes of this paragraph, "Cause" means only conduct which is finally
adjudged to be knowingly fraudulent, deliberately dishonest or intentional
misconduct. The Compensation Committee shall make the determination of whether
Cause exists in any particular case, and if it believes that Cause may exist it
shall provide the Optionee with notice of the reasons the Committee believes
Cause may exist and shall give the Optionee the opportunity to respond to the
allegation that Cause exists.
4. Method of Exercising Option. The Optionee, or his or her
---------------------------
representative as permitted by paragraph 3(e) or 3(f) above, may exercise the
Option hereby granted on one or more occasions at his or her discretion, on
each occasion for all or any part of the Shares for which the Option is then
exercisable, by each time delivering to the main business office of the Company,
addressed to the attention of its Chief Executive Officer or Secretary, (i) a
written notice stating his or her election to exercise the Option and the number
of Option Shares to be purchased, together with (ii) any combination of (A)
cash or (B) check or (C) shares of Common Stock with such endorsements or other
transfer documentation as the Company may require, aggregating full payment of
the purchase price of the Option Shares then being purchased. Shares of Common
Stock used to exercise an Option shall be valued at their Fair Market Value on
the date of exercise. The Option shall be deemed to be exercised only upon
receipt of such notice and payment.
5. Non-Transferability of Option. The Option may be exercised only
-----------------------------
by the Optionee, or as permitted by paragraph 3(e) or 3(f) above. The rights
granted by this Option may not be assigned, transferred, pledged or
hypothecated in any way, other than by will or the laws of descent and
distribution, and shall not be subject to execution, attachment or similar
process. In the event of the bankruptcy of the Optionee, or in the event of
any prohibited assignment, transfer, pledge, hypothecation or other disposition
of the Option, or in the event of the levy of any execution, attachment or
similar process upon the Option, the Option shall automatically expire and
shall be null and void.
6. Share Adjustments. In the event of any stock dividend on,
-----------------
reclassification, splitup or combination of, or other change in, the Company's
common stock, then the number or kind of Option Shares shall be correspondingly
added to, reclassified, increased, diminished or changed proportionately,
without increase or decrease in the aggregate purchase price of all Option
Shares.
7. No Rights of Optionee as Shareholder. The Optionee shall have no
------------------------------------
rights respecting this Option or the Option Shares except as expressly set forth
herein or in the Plan, a copy of which the Optionee hereby acknowledges having
received; and the Optionee shall have no rights as a shareholder with respect to
any Option Shares until this Option has been duly exercised as to such Option
Shares in accordance with the terms hereof. The grant of this Option shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its common stock or its capital
or business structure, or to merge or to consolidate, or to dissolve or
liquidate, or to sell or transfer any or all of its business or assets.
-2-
28
8. General. The Company shall at all times during the term of this
-------
Option reserve and keep available a number of shares of common stock equal to
the number of Option Shares, and shall pay any original issue or transfer taxes
with respect to the issue of Option Shares pursuant hereto and all other fees
and expenses necessarily incurred by the Company incurred in connection
therewith.
IN WITNESS WHEREOF, the parties have executed this Incentive Stock Option
Agreement as of the date first above written.
Company: CASS COMMERCIAL CORPORATION
By: -----------------------------
Title: --------------------------
Optionee:---------------------------------
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29
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30
SCHEDULE I
CCC PERFORMANCE MATRIX
NI GROWTH/ROA DIFFERENTIAL
[GRAPH]
31
SCHEDULE II
CBT PERFORMANCE MATRIX
NI GROWTH
[GRAPH]
32
SCHEDULE III
CIS PERFORMANCE MATRIX
NI GROWTH
[GRAPH]
33
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL Please mark
OF THE FOLLOWING PROPOSALS: your votes as /X/
indicated in
this example
1. Election of four directors to serve until the
year 2002, or until their successors are elected
and qualified.
FOR all WITHHOLD Term expiring 2002: Messrs.
nominees listed AUTHORITY Jake Nania, John J. Vallina,
(except as indicated to vote for all Bruce E. Woodruff, and
to the contrary) nominees listed Bryan C. Chapell
/ / / /
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR AN
INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE
LINE BELOW.)
----------------------------
2. To approve certain amendments to the
1995 Performance-Based Stock Option
Plan to permit the granting of incentive
stock options under the Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. Ratification of the selection of KPMG
LLP as independent public accountants
for 1999.
FOR AGAINST ABSTAIN
/ / / / / /
WHEN PROPERLY EXECUTED AND RETURNED, THIS PROXY WILL BE VOTED IN THE MANNER
SPECIFIED THEREON, AND IN THE BEST JUDGEMENT OF THE PROXIES ON ANY OTHER
BUSINESS WHICH PROPERLY COMES BEFORE THE MEETING. IF NO MANNER IS SPECIFIED,
THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
- ------------------------------------------------------------/--------, 1999
SIGNATURE OF SHAREHOLDER
- ------------------------------------------------------------/--------, 1999
SIGNATURE OF SHAREHOLDER
NOTE: Please sign as your name appears hereon. If shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give your full name as such. If a corporation,
please sign in full corporate name by an authorized officer. If a partnership,
please sign in full partnership name by authorized person.
- --------------------------------------------------------------------------------
[ARROW] FOLD AND DETACH HERE [ARROW]
[CASS LOGO]
March 22, 1999
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of Cass Commercial Corporation will be
held at the offices of Cass Commercial Corporation located at 13001 Hollenberg
Drive, Bridgeton, Missouri on Monday, April 19, 1999, at 11:00 a.m., for the
following purposes:
1. To elect directors for three year terms and until the 2002 Annual
Meeting.
2. To approve certain amendments to the 1995 Performance-Based Stock
Option Plan to permit the granting of incentive stock options under
the Option Plan.
3. Ratification of the selection of KPMG LLP as independent public
accountants for 1999.
4. To act upon such other matters as may properly come before the meeting.
The close of business on March 5, 1999, has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Meeting.
By order of the Board of Directors,
Eric H. Brunngraber
Vice President - Secretary
Chief Financial Officer
34
CASS COMMERCIAL CORPORATION
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Lawrence A. Collett, and
Eric H. Brunngraber, and either of them, attorneys with full power of
substitution, with the powers the undersigned would possess if personally
present, to vote all shares of Common Stock of the undersigned in CASS
COMMERCIAL CORPORATION at the Annual Meeting of Shareholders to be held at
11:00 a.m., April 19, 1999, and at any adjournments thereof on all matters
properly before the meeting.
(Continued and To Be Signed On Other Side.)
- -------------------------------------------------------------------------------
[ARROW] FOLD AND DETACH HERE [ARROW]
35
Appendix
Page 11 of the printed proxy contains a Comparison of Cumulative Total
Returns Graph. The information contained in the graph has been presented in a
format that may be processed by the EDGAR system.