EXHIBIT 10.7

 

UMB SHORT TERM INCENTIVE COMPENSATION PLAN

 

SECTION 1. ESTABLISHMENT OF PLAN

 

UMB Financial Corporation does hereby adopt the UMB Financial Corporation Short
Term Incentive Compensation Plan set forth herein, effective as of January 1,
2005, for the purpose of attracting, motivating and rewarding certain executives
of the Company with performance-based compensation.

 

SECTION 2. DEFINITIONS

 

2.1 Affiliate: Any entity which is wholly owned by the Company or by an
Affiliate.

 

2.2 Associate: A person who is employed by the Company or an Affiliate.

 

2.3 Board: The Board of Directors of the Company.

 

2.4 Bonus: The cash amount payable to any Participant with respect to a Program.

 

2.5 Change in Control: A change in control as that term is defined in Section
11.

 

2.6 Compensation Committee: The Committee described in Section 9.

 

2.7 Company: UMB Financial Corporation.

 

2.8 Designated Executive: An officer of the Company or its Affiliates, who has
been designated, as of the time in question, by the Compensation Committee as an
individual whose compensation is to be fixed exclusively by the Compensation
Committee.

 

2.9 Eligible Employee: A person who is eligible to participate in the Plan in
accordance with Section 5.

 

2.10 Exchange Act: The Securities Exchange Act of 1934, as amended, and the
regulations and interpretations promulgated thereunder.

 

2.11 Executive Committee: The Executive Committee of the Company

 

2.12 Participant: An Eligible Employee who is designated as a Participant in a
Program pursuant to Section 5.

 

2.13 Performance Standard: A Performance Standard as defined in Section 6.

 

2.14 Performance Period: A fiscal year of the Company or such shorter period as
the Compensation Committee may designate in accordance with Section 4 with
respect to which Bonuses may be paid under a Program.

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2.15 Plan: The UMB Financial Corporation Short Term Incentive Compensation Plan,
as amended from time to time.

 

2.16 Program: A cash bonus program established by the Compensation Committee
under the Plan which, among other things, designates Participants, Designated
Executives, Performance Periods, Performance Standards, formulas or procedures
or standards for determining the amounts of Bonuses, and other terms that are to
be covered by, and applicable under, such Programs.

 

SECTION 3. BONUS PROGRAMS

 

The Compensation Committee shall have the authority to establish and administer
one or more Programs pursuant to which Bonuses may be paid to one or more
Participants. Each Program shall identify or specify, among other things, the
following items: (i) those Eligible Employees of the Company and its Affiliates
who will participate in the Program; (ii) Target Awards for each Participant in
a Program; (iii) Performance Standards which will be used in the Program to
determine if a Target Award has been earned by a Participant; (iv) formulas,
procedures, standards and guidelines to be used to determine if the amount of a
Bonus to be paid to a Participant should be greater than, equal to, or less
than, the amount of such Participant’s Target Award; (v) the period of time
which the Program will be in effect, and (vii) other appropriate terms and
conditions, as it sees fit. The Target Awards and Performance Standards may
differ from Level to Level and Participant to Participant within a Program. The
Target Awards, Performance Standards, formulas and procedures may differ from
Program to Program.

 

SECTION 4. PERFORMANCE PERIODS

 

For each Program, the Compensation Committee shall establish a Performance
Period over which each Participant’s performance will be measured to determine
whether, and in what amounts, a Bonus may be payable to such Participant.

 

SECTION 5. ELIGIBILITY, PARTICIPATION AND COVERED EMPLOYEES

 

Each Program shall identify those Eligible Employees who will be Participants in
the Program. An Eligible Employee may be an Associate of the Company or any of
its Affiliates. For each Program, the Compensation Committee may designate as
Participants one or more Eligible

 

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Employees and may establish one or more descriptive categories (“Levels”) of
Eligible Employees. Each Level and each Participant may have a Performance
Standard and Target Award that is different than the Performance Standard and
Target Award applicable to each other Level or Participant. Each Program shall
identify any “Designated Executives” who are to be Participants in the Program.

 

SECTION 6. PERFORMANCE AND CRITERIA

 

Any Bonus payable in accordance with a Program shall be based upon the factors
and criteria (which may be Company-wide or specific to an Affiliate, division,
unit, Level, individual, product, and/or geographic area) established from time
to time by the Compensation Committee. For each Program and for each
Participant, the Compensation Committee shall designate one or more measurable
performance levels or goals based upon such factors and criteria, which the
Participant must achieve in order to earn the right to all, or a portion of, a
Bonus under the Program (“Performance Standards”).

 

SECTION 7. AMOUNT OF BONUS

 

For each Program, the Compensation Committee shall specify Target Awards by
designating an objective formula or standard for determining the potential
dollar amount of each Participant’s Bonus. The Compensation Committee may also
adopt and approve formulas, procedures, standards and guidelines to be used in
determining the amounts of Bonuses that will be actually paid under a Program,
and such formulas, procedures, standards and guidelines may provide that such
amounts are in a range that extends below, and rises above, the respective
Target Awards of the Participants. The formulas, procedures, standards and
guidelines need not be uniformly applied to participants in a Program, at the
Compensation Committee’s discretion. Notwithstanding a failure to satisfy
applicable Performance Standard(s), and notwithstanding the application of any
applicable formulas, procedures, standards and guidelines, the Compensation
Committee (or its delegatee) shall have the discretion to increase the amount of
any Participant’s Bonus above the otherwise-applicable amount, to reflect
individual performance and/or unanticipated factors. The Compensation Committee
or its permitted delegate shall also have the discretion to reduce the amount of
any Participant’s Bonus below the otherwise-applicable amount to reflect
individual performance and/or unanticipated factors.

 

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SECTION 8. PAYMENT OF BONUSES

 

After the close of each Performance Period, the Compensation Committee shall
certify in writing any achievement of the applicable Performance Standard(s),
all calculations and adjustments under any formulas, procedures, standards and
guidelines applicable to the Program, the amount of any discretionary
adjustments, and the amount of any Bonuses payable to Participants. Bonuses
shall be paid as soon as practicable after the end of the Performance Period,
but no later than two and one-half months after the end of such period. The
Company shall withhold from any amount payable under the Plan, all taxes and
other amounts required to be withheld by any federal, state or local government.

 

SECTION 9. ADMINISTRATION BY COMMITTEE

 

A committee established by the Board (the “Compensation Committee”) shall
administer the Plan. Until changed by the Board, the members of the Officers
Salary and Stock Option Committee shall serve as the members of such committee.
The Compensation Committee shall have full power, authority and discretion to:
(a) administer and interpret the Plan and to adopt such rules, regulations,
agreements, formulas, procedures, guidelines and standards for the
administration of the Plan and for the conduct of its business as the
Compensation Committee deems necessary or advisable, (b) adopt and administer
such Programs, for such period(s) of time, and with respect to such
Participants, as the Compensation Committee may determine appropriate or useful
in promoting and advancing the purposes and goals of the Company and its
Affiliates, (c) establish for each such Program, Performance Standards,
Performance Periods, formulas, procedures, criteria, rules, standards or
guidelines for the determination of Bonuses, and such other conditions, terms,
elements as the Compensation Committee deems appropriate; and (d) administer,
and from time to time amend, such Programs. To the extent provided in Section
10, the Compensation Committee may delegate the above power, authority and
discretion to the Executive Committee.

 

SECTION 10. DELEGATION BY COMPENSATION COMMITTEE

 

The Compensation Committee shall have the authority to delegate to the Executive
Committee, the power and authority to administer any Program in such manner as
the Executive Committee deems beneficial to the Company from time to time,
including the authority to designate

 

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Participants (other than Designated Executives) in a Program, and to establish
Performance Standards, Target Awards and formulas for determining Bonuses for
such Participants, and to make discretionary adjustments to the Bonuses
otherwise awardable to Participants, and to otherwise administer such
Participants’ participation in, and rights under, the Program. Notwithstanding
the foregoing delegation however, the Compensation Committee shall not have the
authority to delegate to the Executive Committee, and only the Compensation
Committee shall have, the authority, to designate any Designated Executive as a
Participant in any Program or to fix or establish any Target Awards or
Performance Standards or Bonuses for a Designated Executive, or to otherwise
grant any Bonuses to a Designated Executive or make discretionary adjustments to
a Bonus otherwise awardable to a Designated Executive, or to otherwise
administer a Program with respect to a Designated Executive.

 

SECTION 11. CHANGE IN CONTROL

 

11.1 Change in Control Defined. For purposes of this Plan, a “Change in Control”
shall occur if:

 

  (a) Any Person (as defined herein) becomes the beneficial owner directly or
indirectly (within the meaning of Rule 13d-3 under the Exchange Act) of more
than 50% of the Company’s then outstanding voting securities (measured on the
basis of voting power);

 

  (b) The shareholders of the Company approve a definitive agreement to merge or
consolidate the Company with any other corporation or entity, and the
transaction contemplated by such agreement is consummated, other than an
agreement providing for (i) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity), in combination with the
ownership of any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, at least 50% of the combined voting power of the
voting securities of the Company or such surviving entity 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 acquires more than 50% of the combined
voting power of the Company’s then outstanding securities;

 

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  (c) A change occurs in the composition of the Board during any period of
twelve consecutive months such that individuals who at the beginning of such
period were members of the Board cease for any reason other than resignation to
constitute at least a majority thereof at the end of such twelve-month period,
unless the election, or the nomination for election by the Company’s
shareholders, of each new director elected during such twelve-month period was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved; or

 

  (d) The shareholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company’s assets, and the transaction contemplated by such
plan or agreement is consummated.

 

For purposes of this paragraph, “Person” shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof; however, a Person shall not include (w) the Company or any of its
subsidiaries, (x) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (y) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (z) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of Company stock.

 

11.2

Acceleration Upon Change in Control. On the date a Change in Control occurs,
notwithstanding anything else to the contrary herein, (i) all Bonuses with
respect to a completed Performance Period shall be immediately payable in cash,
(ii) with respect to a Performance Period not yet completed, such Performance
Period shall be deemed to have ended and the applicable Performance Standard(s)
or standard(s) shall be appropriately adjusted to reflect the length of such
Performance Period in comparison to the originally established Performance
Period, and all Bonuses for such Performance Period shall be immediately payable
in cash on a pro-rated basis, (iii) the Compensation

 

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Committee shall not have the discretion provided in Section 7 to reduce the
amount of any Participant’s Bonus below the amount which would otherwise have
been payable to the Participant under the applicable formula or standard and
under this Section 11, and (iv) the provisions of this Section 11 may not be
amended adversely to any Participant without the written consent of such
Participant. If by reason of this Section 11 an excise or other special tax
(“Excise Tax”) is imposed on any payment under the Plan (a “Required Payment”),
the amount of each Required Payment shall be increased by an amount which, after
payment of income taxes, payroll taxes and Excise Tax thereon, will equal such
Excise Tax on the Required Payment.

 

SECTION 12. AMENDMENT AND TERMINATION

 

Subject to the provisions of Section 11.2 above, the Board reserves the right to
amend or terminate the Plan or Program in whole or in part at any time and the
Compensation Committee may amend the Program in any way if the Compensation
Committee determines that such amendment may be made without shareholder
approval.

 

SECTION 13. UNFUNDED

 

Any obligation of the Company to pay Bonuses under any Program established
pursuant to this Plan is unfunded and no Program Participant shall have any
rights to any specific asset or assets of the Company on account of any such
obligation, even if the Company purchases any investment or investments to
provide a source of funds for payment. All payments of Bonuses pursuant to a
Program established in accordance with this Plan shall be out of the general
assets of the Company. Any investment or investments that the Company might
purchase for the purpose of providing a source of payment for such Bonuses shall
be subject to the claims of the creditors of the Company, and a Participant
shall have the status of an unsecured creditor of the Company.

 

SECTION 14. MISCELLANEOUS

 

14.1 Effective Date. The Plan shall become effective as of January 1, 2005.

 

14.2 No Guarantee of Employment or Compensation. Nothing contained in this Plan
or in any Program established hereunder shall be construed as a contract of
employment

 

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between the Company and any Participant, or as a right of any Participant to be
continued in the employment of the Company, or as a limitation of the right of
the Company to discharge any of its employees, with or without cause. Neither
the Plan nor any Program established hereunder shall restrict the Company or any
Affiliate from discharging an Eligible Employee or a Participant from
employment, restrict any Eligible Employee or Participant from resigning from
such employment, or restrict the Company or any Affiliate from increasing or
decreasing the compensation of any Eligible Employee or Participant.

 

14.3 Claims. All decisions of the Compensation Committee or its permitted
delegate hereunder shall be final and binding on all parties. Except in the case
of a Change in Control, no person shall have any claim to any Bonus. In the
event that a Participant disagrees with the amount of Bonus determined by the
Compensation Committee or its permitted delegate, or believes that a Bonus is
due when none is declared, that person shall have the right to request the
Compensation Committee or its permitted delegate to review the determination
which was made. Upon the conclusion of such review, the Participant shall be
informed of the final decision regarding the payment and amount of a Bonus, and
shall have no further right to review or appeal. There is no obligation for
uniformity of treatment of Participants.

 

14.4 No Alienation. Except as required by law, amounts payable under any Program
established in accordance with this Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution, or levy of any kind, either voluntary or
involuntary. No Participant in any Program established under this Plan shall,
under any circumstances, receive anything of present or exchangeable value from
the Company in anticipation of or prior to the actual payment of any amount due
under any such Program. A Participant’s interest in any amount due under any
such Program shall be non-assignable and non-transferable and the Participant
shall not have any right to anticipate, pledge, hypothecate or create any lien
upon such interest.

 

14.5 Other Incentive Plans. Nothing contained in the Plan shall prohibit the
Company from granting other performance awards to employees (including Eligible
Employees) under such conditions, and in such form and manner, as it sees fit.
The adoption of the Plan does not preclude the adoption of any other bonus or
incentive plan for employees.

 

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14.6 Governing Law. Subject to the provisions of applicable federal law, the
Plan shall be administered, construed and enforced according to the laws of the
State of Missouri and in Courts situated in that State.

 

14.7 Severability. The invalidity of any particular clause, provision or
covenant herein shall not invalidate all or any part of the remainder of the
Plan, but such remainder shall be and remain valid in all respects as fully as
the law will permit.

 

14.8 Binding Successors This document shall be binding on the parties hereto,
their heirs, successors and assigns.

 

CERTIFICATE

 

The undersigned, as secretary of UMB Financial Corporation, hereby certifies
that the above Plan was approved and adopted by the UMB Financial Corporation
Board of Directors on October 28, 2004.

 

 

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Secretary

 

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