Document:

exv10w3

Exhibit 10.3

AMENDED AND RESTATED

COMMERCE BANCSHARES, INC.

RESTRICTED STOCK PLAN

     This Restricted Stock Plan originally adopted by Commerce Bancshares, Inc. on the 4th day of
October, 1991 is restated with all amendments as of July 24, 2009.

	1.	 	DEFINITIONS.

	 	a.	 	“Company” shall mean Commerce Bancshares, Inc., a Missouri corporation.
	 
	 	b.	 	“Common Stock” shall mean shares of the Company’s $5 par value common stock.
	 
	 	c.	 	“Subsidiary” shall mean any corporation in which the Company owns or hereafter
owns, directly or indirectly, stock possessing not less than 50% of the total combined
voting power of all classes of stock in such corporation.
	 
	 	d.	 	“Restricted Stock Awards” or “Awards” shall mean Awards of Common Stock granted
pursuant to the Plan.
	 
	 	e.	 	“Plan” means the Commerce Bancshares, Inc. Restricted Stock Plan as described
herein.
	 
	 	f.	 	“Committee” shall mean the Compensation and Human Resources Committee
of the Board of Directors of the Company, which shall consist solely of two or
more directors who are “non-employee directors” under Rule 16b-3(b)(3)
promulgated under the Securities Exchange Act of 1934, as amended, or any
successor provision thereto, and “outside directors” within the meaning of
Treasury Regulation 1.162-27(e)(3)(i).
	 
	 	g.	 	“Participant” means individual to whom an Award is granted.
	 
	 	h.	 	“Restriction Period” means the duration of time over which a Restricted Stock
Award is to vest as determined by the Committee.
	 
	 	i.	 	“Qualifying Retirement” shall mean retirement of a Participant who has (i)
attained the age of 60 and (ii) agreed to the terms of the covenant not to compete set
forth in the Agreement.
	 
	 	j.	 	“Agreement” shall mean the Commerce Bancshares, Inc. Restricted Stock Award
Agreement.
	 
	 	k.	 	“Performance Goals” shall mean revenue, earnings, earnings per share, pre-tax
earnings and net profits, stock price, market share, costs, return on equity,
efficiency ratio (non-interest expense, divided by total revenue), asset

 

 

management, asset quality, asset growth and budget achievement. Performance Goals
need not be the same with respect to all Covered Employees and may be established
separately for the Company as a whole or for its various groups, divisions,
subsidiaries and affiliates and may be established as a comparison to peers.

	 	l.	 	“Covered Employees” shall mean individuals who are covered employees
within the meaning of Section 162(m)(3) of the Code.

	2.	 	PURPOSE.

     The purpose of the Plan is to promote the interests of the Company and its shareholders by
providing a means through the grant of Awards hereunder for the Company to retain and attract
personnel who contribute to the growth and development of the Company and its Subsidiaries by
providing additional incentive to such personnel by offering a greater interest in the continued
success of the Company through increased stock ownership.

	3.	 	STOCK SUBJECT TO PLAN.

     Subject to the provisions of Section 7 hereof, the total number of shares of Common Stock
subject to Restricted Stock Awards under the Plan shall not exceed 616,496. Shares subject to
Awards under the Plan may be either authorized and unissued shares or issued shares which are
reacquired by the Company and held in its treasury. Shares which have been awarded but which have
been forfeited pursuant to Section 6(d) hereof shall be added to the shares otherwise available for
Awards under the Plan. The maximum number of shares of Common Stock that may be granted under
Restricted Stock Awards in any one calendar year to any Covered Employee is 50,000.

	4.	 	ADMINISTRATION.

     The Plan shall be administered by the Committee which shall have full authority in its sole
discretion to determine the employees of the Company and its Subsidiaries to whom Awards shall be
granted, the number of shares subject to each such Award, the time or times at which restrictions
relative to such Awards shall otherwise lapse or expire and the time or times when Awards may be
granted. All questions of interpretation and application of the Plan and of any Awards granted
pursuant hereto shall be determined by the Committee. No member of the Committee shall be liable
for any action, determination or interpretation under any provision of the Plan or otherwise if
done in good faith and any decision made or action taken by the Committee arising out of or in
connection with the construction, administration, interpretation and effect of the Plan shall be
within the absolute discretion of the Committee and shall be conclusive and binding upon all
persons.

	5.	 	ELIGIBILITY.

     The Committee may select from among the officers, executives and management personnel of the
Company or its Subsidiaries those individuals to whom an Award shall be granted, giving
consideration to the duties of the respective employees, their contributions to the Company and its
Subsidiaries, and such other factors as the Committee shall deem relevant to

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accomplish the purpose of this Plan. No member of the Committee and no member of the Board of
Directors of the Company, unless such director is also an officer or employee of the Company or any
Subsidiary, shall be eligible to receive any Restricted Stock Award under this Plan.

	6.	 	GRANT OF RESTRICTED STOCK AWARDS.

     Each Restricted Stock Award shall be evidenced by one or more stock certificates registered in
the name of the Participant and an agreement to be entered into by the Participant and the Company,
the terms and conditions of which may include but are not limited to the following:

	 	a.	 	NUMBER OF SHARES: The agreement shall state the total number of shares of
Common Stock to which it pertains.
	 
	 	b.	 	RESTRICTION PERIOD: The Restriction Period for any Award granted under the
Plan shall be determined by the Committee and shall have a duration of not more than
ten years from the date the Award is granted. An Award is considered to be vested when
the restriction period lapses. Upon vesting, the certificate representing such Award
shall be delivered to the Participant together with stock power. Restricted Stock
Awards may have different Restriction Periods and an Award may provide varying
Restriction Periods so as to permit the vesting of an Award in installments in the
discretion of the Committee.
	 
	 	c.	 	TRANSFER RESTRICTIONS: A Participant shall be required to deposit the
certificate or certificates for all shares of Common Stock received pursuant to an
Award together with stock powers or other instruments of transfer appropriately
endorsed in blank with the Secretary of the Company. Such shares shall not be sold,
exchanged, assigned, transferred, discounted, pledged or otherwise disposed of during
the Restriction Period. The shares shall be released from the restrictions described
herein, in whole or in installments, at such date or dates as may be determined by the
Committee at the time of the Award, and a Participant’s right to have an Award released
from the transfer restrictions shall accrue only if the Participant shall have remained
in the continuous employment of the Company since the date of the Award.
	 
	 	d.	 	TERMINATION OF EMPLOYMENT: In the event that a Participant’s employment
terminates by reason of death or the disability (as determined by the Participant
establishing his eligibility to receive Social Security disability benefits) of the
Participant, the Restriction Period shall be deemed to lapse as of the date of death or
disability on that part of the Award which equals the portion of the Restricted Period,
measured in full and partial months, completed before the date of death or disability,
and the shares of Common Stock constituting such portion of the Award shall be
distributed pursuant to subsection (h) hereof in the event of the Participant’s death
or to the Participant in the event of disability. The Committee shall in its sole
discretion determine any effect of approved leaves of absence and all other matters
relating to “continuous employment,” and any such determination shall be final and
conclusive. Employment by the Company shall

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be deemed to include employment by and to continue during any period in which a
Participant is in the employment of a Subsidiary.

In the event that a Participant’s termination of employment prior to the end of the
Restriction Period constitutes a Qualifying Retirement, and if the Participant
complies with the terms of the covenant not to compete set forth in the Agreement,
then, on the date on which the Restriction Period ends, Participant shall become
fully vested in the part of an Award which equals the portion of the Restriction
Period (measured in full and partial months) completed before the date of Qualifying
Retirement and shares of Common Stock constituting such portion of the Award shall
be delivered to Participant as soon as reasonably practicable thereafter. In such
case, the Participant shall forfeit the remainder of the Award at the time of the
Qualifying Retirement. The sale or transfer restriction shall continue to apply
until the end of the Restriction Period and the portion of the Award that will vest
upon the date the Restriction Period ends shall be forfeited if the Participant
violates the covenant not to compete. If the Participant dies or becomes disabled
(as determined by the Participant establishing his eligibility to receive Social
Security disability benefits) after the date of his Qualifying Retirement, but prior
to end of the Restriction Period, and if Participant has not violated the terms of
the covenant not to compete as set forth in the Agreement, Participant will
immediately vest in the portion that Participant would otherwise receive under this
paragraph and shares of Common Stock constituting such portion shall be distributed
pursuant to subsection (h) hereof in the event of Participant’s death or to
Participant in the event of disability.

Notwithstanding the foregoing, the Committee shall have the authority to provide in
any Award agreement, or to amend any Award agreement to provide, that in the event a
Participant’s termination of employment prior to the end of the Restriction Period
constitutes a Qualifying Retirement, the Participant shall become fully vested in
the Award.

	 	e.	 	ASSIGNABILITY: Except as provided in subsection (h) of this Section, no
benefit payable under or interest in the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge and
any such attempted action shall be void and no such benefit or interest shall be in any
manner liable for or subject to debts, contracts, liabilities, engagements, or torts of
any Participant or beneficiary.
	 
	 	f.	 	RIGHTS AS A STOCKHOLDER: The Participant shall have the right to receive cash
dividends during the Restriction Period, to vote Common Stock subject to an Award and
to enjoy all other stockholder rights except that (i) the Participant shall not be
entitled to delivery of the stock certificate until the Restriction Period shall have
lapsed and (ii) the Participant may not sell, transfer, pledge, exchange, hypothecate
or otherwise dispose of the Stock during the Restriction Period.
	 
	 	g.	 	CHANGE IN CONTROL: Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control the restrictions applicable to any

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Restricted Stock Award shall lapse, and such Restricted Stock Award shall become
free of all restrictions and become fully vested and transferable.

For purposes of the Plan, a “Change in Control” shall mean the happening of any of
the following events:

	 	(i)	 	any Person is or becomes the “beneficial owner” (within the
meaning of Rule 13d-3 promulgated under Section 13 of the Securities Exchange
Act of 1934 (the “Exchange Act”)), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company or its affiliates of a business)
representing 20% or more of either the then outstanding shares of common stock
of the Company or the combined voting power of the Company’s then outstanding
securities; or
	 
	 	(ii)	 	the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on August
2, 1996, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company’s stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on August 2, 1996 or whose appointment, election or
nomination for election was previously so approved; or
	 
	 	(iii)	 	there is consummated a merger or consolidation of the Company
(or any direct or indirect subsidiary of the Company) with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior to such merger
or consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, at least 80%
of the combined voting power of the voting securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such
merger or consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which
no Person is or becomes the beneficial owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned
by such Person any securities acquired directly from the Company or its
subsidiaries other than in connection with the acquisition by the Company or
its subsidiaries of a business) representing 20% or more of either the then
outstanding

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shares of common stock of the Company or the combined voting power of the
Company’s then outstanding securities; or

	 	(iv)	 	the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated a sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, at least 80% of the combined voting power of
the voting securities of which are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to such sale.

For purposes of the above definition of Change in Control, “Person” shall have the
meaning set forth in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its subsidiaries,
(iii) an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock of
the Company.

	 	h.	 	DESIGNATION OF BENEFICIARY: Each Participant who shall be granted a Restricted
Stock Award under the Plan may designate a beneficiary or beneficiaries and may change
such designation from time to time by filing a written designation of beneficiary with
the Secretary of the Company, provided that no such designation shall be effective
unless received prior to the death of such Participant. In the absence of such
designation or if the beneficiary or beneficiaries so designated shall not survive the
Participant, the certificate or certificates evidencing the Award shall be delivered
over to the estate of the Participant.
	 
	 	i.	 	OTHER PROVISIONS: The agreements authorized under this Plan may contain such
other provisions as the Committee shall deem advisable.
	 
	 	j.	 	With respect to Covered Employees, individual Restricted Stock Awards
may qualify as performance-based compensation. In so qualifying awards, the
Committee, in its sole discretion, may set restrictions on the grant of the
Award that are based upon the achievement of Performance Goals. With respect
to each Restricted Stock Award to a Covered Employee which the Committee
determines should qualify as performance-based compensation, the following
requirements shall be met:

(i) Each Performance Goal shall be specifically defined in advance
by the Committee and may include or exclude specified items of an
unusual, non-recurring or extraordinary nature.

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(ii) Each Performance Goal must be sufficiently objective that a
third party having knowledge of the relevant facts could determine
whether the Performance Goal has been met.

(iii) Different Awards may be set by the Committee based on
achievement of certain Performance Goals or specified levels of
achieving the Performance Goals. However, no Restricted Stock Award
shall be paid to any Covered Employee if the applicable minimum
Performance Goal(s) are not achieved.

(iv) Performance Goals shall be set by the Committee no later than
the earlier of (i) 90 days after the commencement of the period of
service to which the Performance Goal relates, or (ii) the end of
the period that constitutes the first twenty-five percent (25%) of
the period of service to which the Performance Goal relates;
provided that the outcome is substantially uncertain at the time the
Committee actually establishes the Performance Goal.

(v) The Committee shall have no discretion to increase the amount of
compensation that otherwise would be due upon attainment of a
Performance Goal, although the Committee may have discretion to deny
an award or to adjust downward the compensation payable pursuant to
a Restricted Stock Award, as, in the Committee’s sole judgment, is
prudent based upon the Committee’s assessment of the Covered
Employee’s performance and the Company’s performance during the
relevant measuring period.

(vi) Notwithstanding the foregoing, no award shall be paid to a
Covered Employee before the Committee certifies in writing that such
Covered Employee met the requirements of the applicable Performance
Goal.

	7.	 	CHANGES IN CAPITAL STRUCTURE.

     The aggregate number of shares of Common Stock on which Awards may be granted to persons
participating under the Plan and the number of shares thereof covered by each outstanding Award
shall be proportionately adjusted for any increase or decrease in the number of issued shares of
Common Stock resulting from a subdivision or consolidation of shares or other capital adjustment or
the payment of a stock dividend or other increase or decrease in such shares effected without
receipt of consideration by the Company; provided, however, that any fractional shares resulting
from such adjustment shall be eliminated and any additional certificates evidencing shares of
Common Stock to be issued pursuant to a stock dividend or other increase in such shares shall be
delivered to and held by the Secretary of the Company subject to the terms of the agreement entered
into by the Participant and the Company.

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	8.	 	RIGHT OF COMPANY TO TERMINATE EMPLOYMENT.

     Neither the establishment of the Plan nor the granting of any Award hereunder shall confer
upon the recipient thereof any right to be continued in the employ of the Company or a Subsidiary,
and the Company and its Subsidiaries expressly reserve the right to discharge any Participant
whenever the interest of the Company or its Subsidiaries may so require without liability to the
Company or its Subsidiaries, the Board of Directors of the Company or its Subsidiaries, or the
Committee.

	9.	 	TAXES.

	 	a.	 	The person entitled to receive shares of Common Stock pursuant to the Award
will be given notice as far in advance as practicable to permit cash payment for
applicable withholding taxes to be made to the Company. The Company may defer making
delivery of the certificate representing the shares until indemnified to its
satisfaction with respect to any such withholding tax.
	 
	 	b.	 	Notwithstanding the foregoing, when an Award shall have vested and a
Participant is required to pay to the Company an amount required to be withheld under
applicable federal, state, local and payroll taxes, the Participant may satisfy this
obligation in whole or in part by electing (the “Election”) to have the Company
withhold shares of Common Stock having a value equal to the amount required to be
withheld. The value of the shares to be withheld shall be based on the last sale price
of the Common Stock as reported by the Automated Quotation System of the National
Association of Securities Dealers on the date that the amount of tax to be withheld
shall be determined (“Tax Date”). Each Election must be made on or prior to the Tax
Date. The Committee may disapprove any Election or may suspend or terminate the right
to make Elections. An Election is irrevocable.

	10.	 	AMENDMENT OF THE PLAN.

     The Board of Directors of the Company may, by resolution, amend or revise the Plan except
that, without shareholder approval, no such amendment shall increase the maximum aggregate number
of shares which may be granted under the Plan except as provided in Section 7 or changes the class
of eligible employees, and no such amendment may without the Participant’s consent amend, suspend
or terminate rights or obligations pursuant to outstanding Restricted Stock Awards.

	11.	 	EFFECTIVE DATE.

     The Plan shall be effective as of October 4, 1991.

8exv10w4

Exhibit 10.4

COMMERCE BANCSHARES, INC.

2005 EQUITY INCENTIVE PLAN

     This 2005 Equity Incentive Plan originally adopted by Commerce Bancshares, Inc. on the 28th
day of January, 2005 is restated with all amendments as of July 24, 2009.

SECTION 1

EFFECTIVE DATE AND PURPOSE

     1.1 Effective Date. The Board of Directors of the Company has adopted the Plan on
January 28, 2005, subject to the approval of the stockholders of the Company within twelve (12)
months of such date.

     1.2 Purpose of the Plan. The Plan is designed to provide a means to attract, motivate
and retain eligible Participants and to further the growth and financial success of the Company by
aligning the interests of Participants through the ownership of Shares and other incentives with
the interests of the Company’s stockholders.

SECTION 2

DEFINITIONS

     2.1 The following words and phrases shall have the following meanings unless a different
meaning is plainly required by the context:

     2.2 “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to a
specific section of the 1934 Act or regulation thereunder shall include such section or regulation,
any valid regulation promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or regulation.

     2.3 “Award” means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Stock-Based Awards, or Stock Appreciation Rights.

     2.4 “Award Agreement” means either (1) the written agreement setting forth the terms
and provisions applicable to each Award granted under the Plan or (2) a statement issued by the
Company to a Participant describing the terms and provisions of such Award.

     2.5 “Board” or “Board of Directors” means the Board of Directors of the
Company.

     2.6 “Cause” means a Participant’s dishonesty, theft, embezzlement from the Company,
willful violation of any rules of the Company pertaining to the conduct of Employees or the
commission of a willful felonious act while an Employee, or violation of any, agreement related to
non-competing, non-solicitation of employees or customers or confidentiality between the Company
and the Participant.

     2.7 “Change in Control” shall have the meaning assigned to such term in Section 14.

     2.8 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

 

     2.9 “Committee” means the Compensation and Human Resources Committee of the Board of
Directors.

     2.10 “Company” means Commerce Bancshares, Inc., a Missouri corporation, or any
successor thereto.

     2.11 “Disability” means a permanent and total disability that qualifies a Participant
for disability benefits under the Social Security Act; provided, however, that with respect to
Restricted Stock Units, “Disability” means “disability” within the meaning of section 409A of the
Code.

     2.12 “Employee” means any employee of the Company or any of its Subsidiaries, whether
such employee is so employed at the time the Plan is adopted or becomes so employed subsequent to
the adoption of the Plan.

     2.13 “Exercise Price” means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option or Stock Appreciation Right.

     2.14 “Fair Market Value” means, as of any given date, (i) the closing sales price of
the Shares on any national securities exchange on which the Shares are listed; (ii) the closing
sales price if the Shares are listed on The Nasdaq Stock Market or other over the counter market;
or (iii) if there is no regular public trading market for such Shares, the fair market value of the
Shares as determined by the Committee.

     2.15 “Fiscal Year” means the fiscal year of the Company.

     2.16 “Grant Date” means, with respect to an Award, the date such Award is granted to a
Participant.

     2.17 “Incentive Stock Option” means an Option to purchase Shares which is designated
as an Incentive Stock Option and is intended to meet the requirements of section 422 of the Code.

     2.18 “Nonqualified Stock Option” means an Option to purchase Shares which is not an
Incentive Stock Option.

     2.19 “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

     2.20 “Participant” means an employee who has an outstanding Award under the Plan.

     2.21 “Performance Goals” shall any or all of the following: mean revenue, earnings,
earnings per share, pre-tax earnings and net profits, stock price, market share, costs, return on
equity, efficiency ratio (non-interest expense, divided by total revenue), asset management, asset
quality, asset growth or budget achievement. Performance Goals need not be the same with respect
to all Participants and may be established separately for the Company as a whole or for its various
groups, divisions, subsidiaries, and may be based on performance in comparison to performance by
unrelated businesses specified by the Committee. All calculations and financial accounting matters
relevant to this Plan shall be determined in accordance with GAAP, except as otherwise directed by
the Committee.

     2.22 “Performance Period” means the time period during which the performance
objectives must be met.

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     2.23 “Performance Share” means an Award granted to a Participant, as described in
Section 9 herein.

     2.24 “Performance Unit” means an Award granted to a Participant, as described in
Section 9 herein.

     2.25 “Period of Restriction” means the period during which Restricted Stock awarded
hereunder is subject to a substantial risk of forfeiture. As provided in Section 7, such
restrictions may be based on the passage of time, the achievement of target levels of performance
or the occurrence of other events as determined by the Committee.

     2.26 “Plan” means the Commerce Bancshares, Inc. 2005 Equity Incentive Plan, as set
forth in this instrument and as hereafter amended from time to time.

     2.27 “Restricted Stock” means an Award granted to a Participant pursuant to Section 7.

     2.28 “Restricted Stock Unit” means an Award granted to a Participant, as described in
Section 7 herein.

     2.29 “Retirement” means a Termination of Service after the Participant attains age 60
and completes 10 years of continuous service, measured from the most recent date of hire.

     2.30 “Section 16 Person” means a person who, with respect to the Shares, is subject to
Section 16 of the 1934 Act, as determined by the Board.

     2.31 “Shares” means the shares of common stock, $5.00 par value, of the Company.

     2.32 “Stock Appreciation Right” means an Award granted to a Participant pursuant to
Section 8.

     2.33 “Subsidiary” means any corporation, partnership, joint venture, limited liability
company, or other entity (other than the Company) in an unbroken chain of entities beginning with
the Company if, at the time of the granting of an Award, each of the entities other than the last
entity in the unbroken chain owns more than fifty percent (50%) of the total combined voting power
in one of the other entities in such chain.

     2.34 “Termination of Service” means a cessation of the employee-employer relationship
between a Participant and the Company or a Subsidiary for any reason but excluding any such
cessation where there is a simultaneous reengagement of the person by the Company or a Subsidiary.

SECTION 3

ELIGIBILITY

     3.1 Participants. Awards may be granted in the discretion of the Committee among
employees of the Company and its Subsidiaries.

     3.2 Non-Uniformity. Awards granted hereunder need not be uniform among eligible
Participants and may reflect distinctions based on title, compensation, responsibility or any other
factor the Committee deems appropriate.

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SECTION 4

ADMINISTRATION

     4.1 The Committee. The Plan will be administered by the Committee, which, to the
extent deemed necessary or appropriate by the Board, will consist of two or more persons who
satisfy the requirements for a “non-employee director” under Rule 16b-3 promulgated under the 1934
Act and/or the requirements for an “outside director” under section 162(m) of the Code. The members
of the Committee shall be appointed from time to time by, and shall serve at the pleasure of, the
Board of Directors. In the absence of such appointment, the Board of Directors shall serve as the
Committee and shall have all of the responsibilities, duties, and authority of the Committee set
forth herein.

     4.2 Authority of the Committee. The Committee shall have the exclusive authority to
administer and construe the Plan in accordance with its provisions. The Committee’s authority
shall include, without limitation, the power to (a) determine persons eligible for Awards, (b)
prescribe the terms and conditions of the Awards, (c) interpret the Plan and the Awards, (d) adopt
rules for the administration, interpretation and application of the Plan as are consistent
therewith, and (e) interpret, amend or revoke any such rules. With respect to any Award that is
intended to qualify as “performance-based compensation” within the meaning of section 162(m) of the
Code, the Committee shall have no discretion to increase the amount of compensation that otherwise
would be due upon attainment of a Performance Goal, although the Committee may have discretion to
deny an Award or to adjust downward the compensation payable pursuant to an Award, as the Committee
determines in its sole judgment.

     4.3 Delegation by the Committee. The Committee, in its sole discretion and on such
terms and conditions as it may provide, may delegate all or any part of its authority and powers
under the Plan to one or more officers of the Company; provided, however, that the Committee may
not delegate its authority and powers in any way which would jeopardize the Plan’s qualification
under Rule 16b-3 and may not delegate its authority and powers with respect to any Award that is
intended to qualify as performance-based compensation.

     4.4 Factors to Consider for Granting Awards. In making the determination as to the
persons to whom an Award shall be granted, the Committee or any delegate may take into account such
individual’s salary and tenure, duties and responsibilities, their present and potential
contributions to the success of the Company, the recommendation of supervisors, and such other
factors as the Committee or any delegate may deem important in connection with accomplishing the
purposes of the Plan.

     4.5 Decisions Binding. All determinations and decisions made by the Committee and any
of its delegates pursuant to Section 4.3 shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.

SECTION 5

SHARES SUBJECT TO THE PLAN

     5.1 Number of Shares. Subject to adjustment as provided in Section 5.3, the total
number of Shares available for grant under the Plan shall not exceed 4,000,000 Shares. Shares
granted under the Plan may be either authorized but unissued Shares or treasury Shares, or any
combination thereof. No more than 800,000 Shares may be granted as Restricted Stock, Restricted
Stock Units, Performance Shares and Stock-Based Awards.

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     5.2 Lapsed Awards. Unless determined otherwise by the Committee, Shares related to
Awards that are forfeited, terminated or expire unexercised, shall be available for grant under the
Plan. Shares that are tendered by a Participant to the Company in connection with the exercise of
an Award, withheld from issuance in connection with a Participant’s payment of tax withholding
liability, settled in cash in lieu of Shares, or settled in such other manner so that a portion or
all of the Shares included in an Award are not issued to a Participant shall not be available for
grant under the Plan.

     5.3 Adjustments in Awards and Authorized Shares. In the event of a stock dividend or
stock split, the number of Shares subject to outstanding Awards and the numerical limits of
Sections 5.1 and 6.1 shall automatically be adjusted to prevent the dilution or diminution of such
Awards, except to the extent directed otherwise by the Committee. In the event of a merger,
reorganization, consolidation, recapitalization, separation, liquidation, combination, or other
similar change in the corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares which may be delivered under the Plan, the number, class and
price of Shares subject to outstanding Awards, and the numerical limits of Sections 5.1 and 6.1 in
such manner as the Committee shall determine to be advisable or appropriate to prevent the dilution
or diminution of such Awards. Any such numerical limitations shall be subject to adjustment under
this Section only to the extent such adjustment will not affect the status of any Award intended to
qualify as “performance-based compensation” under section 162(m) of the Code or the ability to
grant or the qualification of Incentive Stock Options under the Plan. In addition, other than with
respect to Options, Stock Appreciation Rights, and Awards intended to constitute “performance-based
compensation” under section 162(m) of the Code, the Committee is authorized to make adjustments to
the terms and conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events affecting the Company, or in response to changes in applicable laws,
regulations, or accounting principles. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on all Participants.

     5.4 Repurchase Option. To the extent consistent with the requirements of section 409A
of the Code, the Committee may include in the terms of any Award Agreement, other than an Award
Agreement with respect to Stock Appreciation Rights, that the Company shall have the option to
repurchase Shares of any Participant acquired pursuant to the Award granted under the Plan upon a
Participant’s Termination of Service. The terms of such repurchase right shall be set forth in the
Award Agreement.

     5.5 Buy-Out Provision. To the extent consistent with the requirements of section 409A
of the Code, the Committee may at any time offer on behalf of the Company to buy-out, for a payment
in cash or Shares, an Award previously granted, based on such terms and conditions as the Committee
shall establish and communicate to the Participants at the time such offer is made; provided,
however, to the extent Sections 13(e) and/or 14(e) of the 1934 Act and the rules and regulations
thereunder are applicable to any such offer, the Company shall comply with the requirements of such
sections.

     5.6 Restrictions on Share Transferability. The Committee may impose such restrictions
on any Award of Shares or Shares acquired pursuant to the exercise of an Award as it may deem
advisable or appropriate, including, but not limited to, restrictions related to applicable Federal
securities laws, the requirements of any national securities exchange or system upon which Shares
are then listed or traded, and any blue sky or state securities laws.

     5.7 Minimum Vesting. Except for Awards with a value of less than $10,000 at the Grant
Date, no more than 25% of an Award may be vested prior to the first anniversary of the Grant Date;
provided, that an Award may become fully vested prior to the first anniversary of the Grant Date in
the event of a Termination of Service due to death, Disability or Retirement.

5

 

SECTION 6

STOCK OPTIONS

     6.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be
granted to Participants at any time and from time to time as determined by the Committee. The
Committee shall determine the number of Shares subject to each Option. The Committee may grant
Incentive Stock Options, Nonqualified Stock Options, or any combination thereof. No more than
4,000,000 Shares may be issued as Incentive Stock Options under the Plan. The maximum aggregate
number of Shares that may be granted in the form of Options in any one Fiscal Year to a Participant
shall be 250,000.

     6.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that shall
specify the Exercise Price, the expiration date of the Option, the number of Shares to which the
Option pertains, any conditions to exercise of the Option and such other terms and conditions as
the Committee shall determine. The Award Agreement shall also specify whether the Option is
intended to be an Incentive Stock Option or a Nonqualified Stock Option.

     6.3 Exercise Price. Subject to the provisions of this Section 6.3, the Exercise Price
for each Option shall be determined by the Committee and shall be provided in each Award Agreement.

     6.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock Option,
the Exercise Price shall not be less than one hundred percent (100%) of the Fair Market
Value of a Share on the Grant Date; provided, however, in no case shall the Exercise Price
be less than the par value of such Share.

     6.3.2 Incentive Stock Options. In the case of an Incentive Stock Option, the
Exercise Price shall be not less than one hundred percent (100%) of the Fair Market Value of
a Share on the Grant Date; or one hundred ten percent (110%) of the Fair Market Value of a
Share if the Participant (together with persons whose stock ownership is attributed to the
Participant pursuant to section 424(d) of the Code) owns on the Grant Date stock possessing
more than 10% of the total combined voting power of all classes of stock of the Company or
any of its Subsidiaries; provided, however, in no case shall the Exercise Price be less than
the par value of such Share.

     6.3.3 Substitute Options. Notwithstanding the provisions of Sections 6.3.1 and
6.3.2, in the event that the Company consummates a transaction described in section 424(a)
of the Code, persons who become Participants on account of such transaction may be granted
Options in substitution for options granted by such former employer or recipient of
services. If such substitute Options are granted, the Committee, consistent with section
424(a) of the Code, may determine that such substitute Options shall have an exercise price
less than one hundred (100%) of the Fair Market Value of the Shares on the Grant Date.

     6.4 Expiration of Options.

     6.4.1 Expiration Dates. Except as provided in Section 6.7.3 regarding
Incentive Stock Options, each Option shall terminate upon the earliest to occur of the
following events:

	 	(a)	 	The date(s) for termination of the
Option set forth in the Award Agreement;

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	 	(b)	 	The date determined under Section 6.8
regarding Termination of Service; or
	 
	 	(c)	 	The expiration of ten (10) years from
the Grant Date.

     6.4.2 Committee Discretion. Subject to the limits of Section 6.4.1, the
Committee shall provide in each Award Agreement when each Option expires and becomes
unexercisable.

     6.5 Exercisability of Options. Options granted under the Plan shall be exercisable at
such times and be subject to such restrictions and conditions as the Committee shall determine.
After an Option is granted, the Committee may accelerate or waive any condition constituting a
substantial risk of forfeiture applicable to the Option. The Committee may not, after an Option is
granted, extend the maximum term of the Option.

     6.6 Payment. Options shall be exercised by a Participant’s delivery of a written
notice of exercise to the Secretary of the Company (or its designee), setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by full payment for the
Shares.

     Upon the exercise of an Option, the Exercise Price shall be payable to the Company in full in
cash or its equivalent. The Committee may also permit exercise (a) by tendering previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to the total Exercise
Price, or (b) by any other means which the Committee determines to provide legal consideration for
the Shares, and to be consistent with the purposes of the Plan.

     As soon as practicable after receipt of a written notification of exercise and full payment
for the Shares purchased, the Company shall deliver to the Participant, Share certificates (which
may be in book entry form) representing such Shares. Until the issuance of the stock certificates,
no right to vote or receive dividends or any other rights as a shareholder shall exist with respect
to the Shares as to which the Option has been exercised. No adjustment will be made for a dividend
or other rights for which a record date is established prior to the date the certificates are
issued.

     6.7 Certain Additional Provisions for Incentive Stock Options.

     6.7.1 Exercisability. The aggregate Fair Market Value (determined on the Grant
Date(s)) of the Shares with respect to which Incentive Stock Options are exercisable for the
first time by any Participant during any calendar year (under all plans of the Company and
its Subsidiaries) shall not exceed $100,000.

     6.7.2 Company and Subsidiaries Only. Incentive Stock Options may be granted
only to Participants who are employees of the Company or a subsidiary corporation (within
the meaning of section 424(f) of the Code) on the Grant Date.

     6.7.3 Expiration. No Incentive Stock Option may be exercised after the
expiration of ten (10) years from the Grant Date; provided, however, that if the Option is
granted to an employee who, together with persons whose stock ownership is attributed to the
employee pursuant to section 424(d) of the Code, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the Option may not be exercised after the expiration of five (5) years from
the Grant Date.

     6.8 Termination of Service.

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     6.8.1 Termination for Cause. Unless otherwise specifically provided in the
Award Agreement, an Option may not be exercised after a Participant’s Termination of Service
by the Company or a Subsidiary for Cause.

     6.8.2 Termination Due To Death. Unless otherwise specifically provided in the
Award Agreement, an Option may not be exercised more than one (1) year after a Participant’s
Termination of Service due to death, but in no event after the expiration of the term of the
Option.

     6.8.3 Termination Due to Disability. Unless otherwise specifically provided in
the Award Agreement, an Incentive Stock Option may not be exercised more than one year from
the date of Termination of Service due to Disability, and a Nonqualified Stock Option may
not be exercised more than 36 months from the date of Termination of Service due to
Disability, but in no event after the expiration of the term of the Option.

     6.8.4 Termination Due to Retirement. Unless otherwise specifically provided in
the Award Agreement, an Incentive Stock Option may not be exercised more than three months
after a Termination of Service due to Retirement, and a Nonqualified Stock Option may not be
exercised more than 36 months from the date of Termination of Service due to Retirement, but
in no event after the expiration of the term of the Option.

     6.8.5 Other Voluntary Terminations. Unless otherwise specifically provided in
the Award Agreement, an Option may not be exercised after the date of Termination of
Service due to voluntary termination other than for Retirement.

     6.8.6 Termination For Other Reasons. Unless otherwise specifically provided in
the Award Agreement, an Option may not be exercised more than three months after a
Participant’s Termination of Service for any reason other than described in Section 6.8.1
through 6.8.5, but in no event after the expiration of the term of the Option.

     6.8.7 Leave of Absence. The Committee may make such provision as it deems
appropriate with respect to Participants on a leave of absence.

     6.9 Restriction on Option Transfer. Except as otherwise determined by the Committee
and set forth in the Award Agreement, no Option may be transferred, gifted, bequeathed, pledged,
assigned, or otherwise alienated or hypothecated, voluntarily or involuntarily, except that the
Committee may permit a transfer, upon the Participant’s death, to beneficiaries designated by the
Participant as provided in Section 11.6.

     6.10 Repricing of Options. The Company may not reprice, replace or regrant an
outstanding Option either in connection with the cancellation of such Option or by amending an
Award Agreement to lower the exercise price of such Option.

SECTION 7

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

     7.1 Grant of Restricted Stock/Units. Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or
Restricted Stock Units to Participants in such amounts as the Committee shall determine. The
Committee shall determine the number of Shares to be granted to each Participant. Restricted Stock
Units shall be similar to Restricted Stock except that no Shares are actually awarded to the
Participant on the date of grant. No

8

 

more than 50,000 shares of Restricted Stock and/or Restricted Stock Units may be granted to
any one Participant in any one Fiscal Year.

     7.2 Restricted Stock Agreement. Each Award of Restricted Stock and/or Restricted
Stock Units shall be evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares of Restricted Stock (or the number of Restricted Stock Units) granted, and
such other terms and conditions as the Committee shall determine.

     7.3 Transferability. Except as otherwise determined by the Committee and set forth in
the Award Agreement, Shares of Restricted Stock and/or Restricted Stock Units may not be sold,
transferred, gifted, bequeathed, pledged, assigned, or otherwise alienated or hypothecated,
voluntarily or involuntarily, until the end of the applicable Period of Restriction.

     7.4 Other Restrictions. The Committee may impose such other restrictions on Shares of
Restricted Stock or Restricted Stock Units as it may deem advisable or appropriate in accordance
with this Section 7.4.

     7.4.1 General Restrictions. The Committee may set restrictions based upon (a)
the achievement of specific Performance Goals, (b) other performance objectives
(Company-wide, divisional or individual), (b) applicable Federal or state securities laws,
(c) time-based restrictions, or (d) any other basis determined by the Committee.

     7.4.2 Section 162(m) Performance Restrictions. For purposes of qualifying
grants of Restricted Stock or Restricted Stock Units as “performance-based compensation”
under Section 162(m) of the Code, the Committee, in its sole discretion, may set
restrictions based upon the achievement of Performance Goals. The Performance Goals shall
be set by the Committee on or before the latest date permissible to enable the Restricted
Stock or Restricted Stock Units to qualify as “performance-based compensation” under section
162(m) of the Code. In granting Restricted Stock or Restricted Stock Units that are intended
to qualify under section 162(m) of the Code, the Committee shall follow any procedures
determined by it in its sole discretion from time to time to be necessary, advisable or
appropriate to ensure qualification of the Restricted Stock under section 162(m) of the
Code.

     7.4.3 Legend on Certificates. The Committee may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions. For example,
the Committee may determine that some or all certificates representing Shares of Restricted
Stock shall bear the following legend:

“THE SALE OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS
CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY, OR BY OPERATION OF LAW, IS
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN THE COMMERCE
BANCSHARES, INC. 2005 EQUITY INCENTIVE PLAN, AND IN A RESTRICTED STOCK
AGREEMENT. A COPY OF THE PLAN AND SUCH RESTRICTED STOCK AGREEMENT MAY BE
OBTAINED FROM THE SECRETARY OF THE COMPANY.”

     7.4.4 Retention of Certificates. To the extent deemed appropriate by the
Committee, the Company may retain the certificates representing Shares of Restricted Stock
in the Company’s possession until such time as all conditions and restrictions applicable to
such Shares have been satisfied or lapse.

9

 

     7.5 Removal of Restrictions. With respect to Awards of Restricted Stock, the
Committee may accelerate the time at which any restrictions shall lapse and remove any
restrictions. With respect to Awards of Restricted Stock Units, the Committee may accelerate or
waive any condition constituting a substantial risk of forfeiture applicable to the Restricted
Stock Units. However, in no event may the restrictions on Shares granted to a Section 16 Person
lapse until at least six months after the grant date (or such shorter period as may be permissible
while maintaining compliance with Rule 16b-3). After the end of the Period of Restriction, the
Participant shall be entitled to have any legend or legends under Section 7.4.3 removed from his or
her Share certificate, and the Shares shall be freely transferable by the Participant, subject to
any other restrictions on transfer which may apply to such Shares. Restricted Stock Units shall be
paid in cash, Shares, or a combination of cash and Shares as the Committee, in its sole discretion,
shall determine, as set forth in the Award Agreement.

     7.6 Voting Rights. Except as otherwise determined by the Committee and set forth in
the Award Agreement, Participants holding Shares of Restricted Stock granted hereunder shall have
voting rights during the Period of Restriction. A Participant shall have no voting rights with
respect to any Restricted Stock Units granted hereunder.

     7.7 Dividends and Other Distributions. Except as otherwise determined by the Committee
and set forth in the Award Agreement, Participants holding Shares of Restricted Stock or Restricted
Stock Units shall be entitled to receive all dividends and other distributions paid with respect to
the underlying Shares or dividend equivalents during the Period of Restriction; provided, however,
that with respect to Restricted Stock Units a date shall be set each year to pay dividend
equivalents earned during the preceding 12 months. If any such dividends or distributions are paid
in Shares, the Shares shall be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they were paid.

     7.8 Return of Restricted Stock to Company. On the date set forth in the applicable
Award Agreement, the Restricted Stock for which restrictions have not lapsed shall revert to the
Company and thereafter shall be available for grant under the Plan.

     7.9 Section 83(b) Election. The Committee may provide in an Award Agreement that the
Award of Restricted Stock is conditioned upon the Participant making or refraining from making an
election with respect to the Award under section 83(b) of the Code. If a Participant makes an
election pursuant to section 83(b) of the Code concerning a Restricted Stock Award, the Participant
shall be required to promptly file a copy of such election with the Company.

SECTION 8

STOCK APPRECIATION RIGHTS

     8.1 Grant of Stock Appreciation Rights. Subject to the terms and provisions of the
Plan, if Shares are traded on an established securities market, Stock Appreciation Rights may be
granted to Participants at any time and from time to time as determined by the Committee. The
Committee shall determine the number of Shares subject to each Stock Appreciation Right, provided
that during any Fiscal Year, no Participant may be granted Stock Appreciation Rights covering more
than 250,000 Shares.

     8.2 Award Agreement. Each Stock Appreciation Right shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the Stock Appreciation
Right, the number of Shares to which the Stock Appreciation Right pertains, any conditions to
exercise of the Stock Appreciation Right and such other terms and conditions as the Committee shall
determine.

10

 

     8.3 Exercise Price. The Exercise Price for each Stock Appreciation Right shall be
determined by the Committee and shall be provided in each Award Agreement; provided, however, the
Exercise Price for each Stock Appreciation Right may not be less than one hundred percent (100%) of
the Fair Market Value of a Share on the Grant Date.

     8.4 Expiration of Stock Appreciation Rights.

     8.4.1 Expiration Dates. Each Stock Appreciation Right shall terminate upon the
earliest to occur of the following events:

	 	(a)	 	The date(s) for termination of the
Stock Appreciation Right set forth in the Award Agreement;
	 
	 	(b)	 	The date determined under Section 8.7
regarding Termination of Service; or
	 
	 	(c)	 	The expiration of ten (10) years from
the Grant Date.

     8.4.2 Committee Discretion. Subject to the limits of Section 8.4.1, the
Committee shall provide in each Award Agreement when each Stock Appreciation Right expires
and becomes unexercisable.

     8.5 Exercisability of Stock Appreciation Rights. Stock Appreciation Rights granted
under the Plan shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall determine. After a Stock Appreciation Right is granted, the
Committee may accelerate or waive any restrictions constituting a substantial risk of forfeiture on
the exercisability of the Stock Appreciation Right.

     8.6 Payment of Stock Appreciation. Upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive payment from the Company in an amount determined by
multiplying:

     8.6.1 The difference between the Fair Market Value of a Share on the date of exercise
over the Exercise Price; by

     8.6.2 The number of Shares with respect to which the Stock Appreciation Right is
exercised.

Such payment shall be in Shares of equivalent value.

     8.7  Termination of Service.

     8.7.1 Termination for Cause. Unless otherwise specifically provided in the
Award Agreement, a Stock Appreciation Right may not be exercised after a Participant’s
Termination of Service by the Company or a Subsidiary for Cause.

     8.7.2 Termination Due To Death, Disability, or Retirement. Unless otherwise
specifically provided in the Award Agreement, a Stock Appreciation Right may not be
exercised more than one (1) year after a Participant’s Termination of Service due to death
or more than three (3) years after a Participant’s Termination of Service due to Disability
or Retirement.

11

 

     8.7.3 Other Voluntary Terminations. Unless otherwise specifically provided in
the Award Agreement, a Stock Appreciation Right may not be exercised after a Participant’s
voluntary Termination of Service for any reason other than Retirement.

     8.7.4 Termination For Other Reasons. Unless otherwise specifically provided in
the Award Agreement, an Stock Appreciation Right may not be exercised more than ninety (90)
days after a Participant’s Termination of Service for any reason other than described in
Section 8.7.1 through 8.7.3.

     8.8 Restriction on Transfer. No Stock Appreciation Right may be transferred, gifted,
bequeathed, pledged, assigned, or otherwise alienated or hypothecated, voluntarily or
involuntarily, except that the Committee may permit a transfer, upon the Participant’s death, to
beneficiaries designated by the Participant as provided in Section 11.6.

     8.9 Voting Rights. Participants holding Stock Appreciation Rights granted hereunder
shall have no voting rights.

SECTION 9

PERFORMANCE UNITS/PERFORMANCE SHARES

     9.1 Grant of Performance Units/Shares. Subject to the terms of the Plan, Performance
Units and/or Performance Shares may be granted to Participants in such amounts and upon such terms,
and at any time and from time to time, as shall be determined by the Committee. The Committee
shall have complete discretion in determining the number of Performance Units and Performance
Shares granted to any Participant; provided, however, that during any Fiscal Year, (a) no
Participant shall receive Performance Units having an initial value greater than $2,500,000, and
(b) no Participant shall receive more than 50,000 Performance Shares.

     9.2 Value of Performance Units/Shares. Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant. Each Performance Share shall have
an initial value equal to the Fair Market Value of a Share on the date of grant. The Committee
shall set performance goals or Performance Measures in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of Performance Units/Shares
that will be paid out to the Participant.

     9.3 Performance Objectives and Other Terms. The Committee shall set performance
objectives in its sole discretion which, depending on the extent to which they are met, will
determine the number or value of Performance Units or Performance Shares, or both, that will be
paid out to the Participants. The time period during which the performance objectives must be met
shall be called the “Performance Period”. Performance Periods of Awards granted to Section 16
Persons shall, in all cases, exceed six (6) months in length (or such shorter period as may be
permissible while maintaining compliance with Rule 16b-3). Each Award of Performance Units or
Performance Shares shall be evidenced by an Award Agreement that shall specify the Performance
Period, and such other terms and conditions as the Committee, in its sole discretion, shall
determine.

     9.3.1 General Performance Objectives. The Committee may set performance
objectives based upon (a) the achievement of Company-wide, divisional or individual goals,
(b) applicable Federal or state securities laws, or (c) any other basis determined by the
Committee in its discretion.

12

 

     9.3.2 Section 162(m) Performance Objectives. For purposes of qualifying grants
of Performance Units or Performance Shares as “performance-based compensation” under section
162(m) of the Code, the Committee, in its sole discretion, may determine that the
performance objectives applicable to Performance Units or Performance Shares, as the case
may be, shall be based on the achievement of Performance Goals. The Performance Goals shall
be set by the Committee on or before the latest date permissible to enable the Performance
Units or Performance Shares, as the case may be, to qualify as “performance-based
compensation” under section 162(m) of the Code. In granting Performance Units or
Performance Shares which are intended to qualify under section 162(m) of the Code, the
Committee shall follow any procedures determined by it from time to time to be necessary or
appropriate in its sole discretion to ensure qualification of the Performance Units or
Performance Shares, as the case may be, under section 162(m) of the Code (e.g., in
determining the Performance Goals).

     9.4 Earning of Performance Units/Shares. Subject to the terms of this Plan, after the
applicable Performance Period has ended, the holder of Performance Units/Shares shall be entitled
to receive payout on the number and value of Performance Units/Shares earned by the Participant
over the Performance Period, to be determined as a function of the extent to which the
corresponding performance goals or Performance Measures have been achieved.

     9.5 Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares shall be as determined by the Committee and as evidenced in the Award
Agreement. Subject to the terms of the Plan the Committee, in its sole discretion, may pay earned
Performance Units/Shares in the form of cash or in Shares (or in a combination thereof) equal to
the value of the earned Performance Units/Shares at the close of the applicable Performance Period.
Any Shares may be granted subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards shall be set forth
in the Award Agreement pertaining to the grant of the Award. Awards shall be paid no later than
the last date permitted in order for the payment to be exempted from the definition of deferred
compensation under section 409A of the Code.

     9.6 Dividends and Other Distributions. At the discretion of the Committee,
Participants holding Performance Units/Shares may be entitled to receive dividend equivalents with
respect to dividends declared with respect to the Shares. Such dividends may be subject to the
accrual, forfeiture, or payout restrictions as determined by the Committee in its sole discretion.

     9.7 Termination of Employment/Service Relationship. In the event of a Participant’s
Termination of Service, all Performance Units/Shares shall be forfeited by the Participant unless
determined otherwise by the Committee, as set forth in the Participant’s Award Agreement. Any such
provisions shall be determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among all Performance
Units/Shares issued pursuant to the Plan, and may reflect distinctions based on the reasons for
termination.

     9.8 Nontransferability. Except as otherwise provided in a Participant’s Award
Agreement, Performance Units/Shares may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and distribution.

SECTION 10

STOCK-BASED AWARDS

13

 

     10.1 Stock-Based Awards. The Committee may grant other types of equity-based or
equity-related Awards (including the grant or offer for sale of unrestricted Shares) in such
amounts and subject to such terms and conditions, as the Committee shall determine. The Committee
shall have complete discretion in determining the amount of Stock-Based Awards granted to any
Participant; provided, however, that during any Fiscal Year, no Participant shall receive
Stock-Based Awards that are based on more than 50,000 Shares or on the initial value of 50,000
Shares.

     10.2 Performance Objectives and Other Terms. The Committee shall set performance
objectives in its sole discretion which, depending on the extent to which they are met, will
determine the number or value of Stock-Based Awards that will be paid out to the Participants.
Performance Periods of Awards granted to Section 16 Persons shall, in all cases, exceed six (6)
months in length (or such shorter period as may be permissible while maintaining compliance with
Rule 16b-3). Each Award of Stock-Based Awards shall be evidenced by an Award Agreement that shall
specify the Performance Period, and such other terms and conditions as the Committee, in its sole
discretion, shall determine.

     10.2.1 General Performance Objectives. The Committee may set performance
objectives based upon (a) the achievement of Company-wide, divisional or individual goals,
(b) applicable Federal or state securities laws, or (c) any other basis determined by the
Committee in its discretion.

     10.2.2 Section 162(m) Performance Objectives. For purposes of qualifying
grants of Stock-Based Awards as “performance-based compensation” under section 162(m) of the
Code, the Committee, in its sole discretion, may determine that the performance objectives
applicable to Stock-Based Awards, as the case may be, shall be based on the achievement of
Performance Goals. The Performance Goals shall be set by the Committee on or before the
latest date permissible to enable the Stock-Based Awards to qualify as “performance-based
compensation” under section 162(m) of the Code. In granting Stock-Based Awards which are
intended to qualify under section 162(m) of the Code, the Committee shall follow any
procedures determined by it from time to time to be necessary or appropriate in its sole
discretion to ensure qualification of the Stock-Based Awards under section 162(m) of the
Code (e.g., in determining the Performance Goals).

     10.3 Earning of Stock-Based Awards. Subject to the terms of this Plan, the holder of
Stock-Based Awards shall be entitled to receive payout on the number and value of Stock-Based
Awards earned by the Participant, to be determined as a function of the extent to which the
corresponding performance goals have been achieved.

     10.4 Payment of Awards. Payment of earned Stock-Based Awards shall be as determined
by the Committee and as evidenced in the Award Agreement. Subject to the terms of the Plan, the
Committee, shall pay earned Stock-Based Awards in Shares. Such Shares may be granted subject to
any restrictions deemed appropriate by the Committee. Awards shall be paid no later than the last
date permitted in order for the payment to be exempted from the definition of deferred compensation
under section 409A of the Code.

     10.5 Termination of Employment/Service Relationship. In the event of a Participant’s
Termination of Service, all Stock-Based Awards to the extent not vested shall be forfeited by the
Participant to the Company unless determined otherwise by the Committee, as set forth in the
Participant’s Award Agreement. Any such provisions shall be determined in the sole discretion of
the Committee, shall be included in the Award Agreement entered into with each Participant, need
not be uniform among all Stock-Based Awards issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.

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     10.6 Nontransferability. Except as otherwise provided in a Participant’s Award
Agreement, Stock-Based Awards may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and distribution.

SECTION 11

MISCELLANEOUS

     11.1 Deferrals. To the extent consistent with the requirements of section 409A of the
Code, the Committee may provide in an Award Agreement or another document that a Participant is
permitted to defer receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant under an Award. Any such deferral election shall be subject to such rules
and procedures as shall be determined by the Committee.

     11.2 No Effect on Employment or Service. Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any Subsidiary to terminate any Participant’s
employment or service at any time, with or without Cause. Employment with the Company or any
Subsidiary is on an at-will basis only, unless otherwise provided by an applicable employment or
service agreement between the Participant and the Company or any Subsidiary, as the case may be.

     11.3 Participation. No Participant shall have the right to be selected to receive an
Award under the Plan, or, having been so selected, to be selected to receive a future Award.

     11.4 Indemnification. Each person who is or shall have been a member of the
Committee, or of the Committee, to the extent permitted under state law, shall be indemnified and
held harmless by the Company against and from (a) any loss, cost, liability or expense (including
attorneys’ fees) that may be imposed upon or reasonably incurred by him or her in connection with
or resulting from any claim, action, suit or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act under the Plan or
any Award Agreement, and (b) from any and all amounts paid by him or her in settlement thereof,
with the Company’s prior written approval, or paid by him or her in satisfaction of any judgment in
any such claim, action, suit or proceeding against him or her; provided, however, that he or she
shall give the Company an opportunity, at its own expense, to handle and defend the same before he
or she undertakes to handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a
matter of law or otherwise, or under any power that the Company may have to indemnify them or hold
them harmless.

     11.5 Successors. All obligations of the Company under the Plan, with respect to
Awards granted hereunder, shall be binding on any successor to the Company, whether the existence
of such successor is the result of a direct or indirect purchase, merger, consolidation or
otherwise, of all or substantially all of the business or assets of the Company.

     11.6 Beneficiary Designations. If permitted by the Committee, a Participant under the
Plan may name a beneficiary or beneficiaries to whom any vested but unpaid Award shall be paid in
the event of the Participant’s death. Each such designation shall revoke all prior designations by
the Participant and shall be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, any vested benefits remaining unpaid at the
Participant’s death shall be paid to the Participant’s estate and, subject to the terms of the Plan
and of the applicable Award Agreement, any unexercised vested Award may be exercised by the
administrator, executor or the personal representative of the Participant’s estate.

15

 

     11.7 No Rights as Stockholder. Except to the limited extent provided in Sections 7.6
and 7.7, no Participant (nor any beneficiary thereof) shall have any of the rights or privileges of
a stockholder of the Company with respect to any Shares issuable pursuant to an Award (or the
exercise thereof), unless and until certificates representing such Shares shall have been issued,
recorded on the records of the Company or its transfer agents or registrars, and delivered to the
Participant (or his or her beneficiary).

     11.8 Investment Representation. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

     11.9 Uncertificated Shares. To the extent that the Plan provides for issuance of
certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a
noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock
exchange.

     11.10 Fractional Shares. No fractional Shares shall be issued or delivered pursuant
to the Plan or any Award. The Committee shall determine whether cash, or Awards, or other property
shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any
rights thereto shall be forfeited or otherwise eliminated.

SECTION 12

AMENDMENT, TERMINATION, AND DURATION

     12.1 Amendment, Suspension, or Termination. The Board, in its sole discretion, may
amend or terminate the Plan, or any part thereof, at any time and for any reason; provided,
however, that if and to the extent required by law or to maintain the Plan’s compliance with the
Code, the rules of any national securities exchange (if applicable), or any other applicable law,
any such amendment shall be subject to stockholder approval; and further provided, that no
amendment shall permit the repricing, replacing or regranting of an Option either in connection
with the cancellation of such Option or by amending an Award Agreement to lower the exercise price
of such Option. The amendment, suspension or termination of the Plan shall not, without the
consent of the Participant, alter or impair any rights or obligations under any Award theretofore
granted to such Participant. No Award may be granted during any period of suspension or after
termination of the Plan.

     12.2 Duration of the Plan. The Plan shall become effective in accordance with Section
1.1, and subject to Section 12.1 shall remain in effect until the tenth anniversary of the
effective date of the Plan.

SECTION 13

TAX WITHHOLDING

     13.1 Withholding Requirements. Prior to the delivery of any Shares or cash pursuant
to an Award (or the exercise thereof), the Company shall have the power and the right to deduct or
withhold from any amounts due to the Participant from the Company, or require a Participant to
remit to the Company, an amount sufficient to satisfy Federal, state and local taxes (including the
Participant’s FICA obligation) required to be withheld with respect to such Award (or the exercise
thereof).

     13.2 Withholding Arrangements. The Committee, pursuant to such procedures as it may
specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in
whole or

16

 

in part, by (a) electing to have the Company withhold otherwise deliverable Shares, or (b)
delivering to the Company Shares then owned by the Participant having a Fair Market Value equal to
the amount required to be withheld. The amount of the withholding requirement shall be deemed to
include any amount that the Committee agrees may be withheld at the time any such election is made,
not to exceed the amount determined by using the maximum federal, state or local marginal income
tax rates applicable to the Participant with respect to the Award on the date that the amount of
tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or
delivered shall be determined as of the date that the taxes are required to be withheld.

SECTION 14

CHANGE IN CONTROL

     14.1 Change in Control. Except with respect to Restricted Stock Unit Awards or any
other Award that constitutes “deferred compensation” within the meaning of section 409A of the
Code, an Award Agreement may provide or be amended by the Committee to provide that Awards granted
under the Plan that are outstanding and not then exercisable or are subject to restrictions at the
time of a Change in Control shall become immediately exercisable, and all restrictions shall be
removed, as of such Change in Control, and shall remain as such for the remaining life of the Award
as provided herein and within the provisions of the related Award Agreements or that Awards may
terminate upon a Change in Control. For purposes of the Plan, a Change in Control means any of the
following:

     (a) any Person is or becomes the “beneficial owner” (within the meaning of Rule 13d-3
promulgated under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”)), directly
or indirectly, of securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company or its affiliates of a business) representing 20% or
more of either the then outstanding shares of common stock of the Company or the combined voting
power of the Company’s then outstanding securities; or

     (b) the following individuals cease for any reason to constitute a majority of the number of
directors then serving: individuals who, on January 28, 2005, constitute the Board and any new
director (other than a director whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a consent solicitation, relating to
the election of directors of the Company) whose appointment or election by the Board or nomination
for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors on January 28, 2005 or whose
appointment, election or nomination for election was previously so approved; or

     (c) there is consummated a merger or consolidation of the Company (or any direct or indirect
subsidiary of the Company) with any other corporation, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof), in combination
with the ownership of any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, at least 80% of the combined voting power of the voting securities of the
Company or such surviving entity or any parent thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the beneficial owner, directly or
indirectly, of securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its subsidiaries other than in
connection with the acquisition by the Company or its subsidiaries of a

17

 

business) representing 20% or more of either the then outstanding shares of common stock of
the Company or the combined voting power of the Company’s then outstanding securities; or

     (d) the stockholders of the Company approve a plan of complete liquidation or dissolution of
the Company or there is consummated a sale or disposition by the Company of all or substantially
all of the Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least 80% of the combined voting power
of the voting securities of which are owned by Persons in substantially the same proportions as
their ownership of the Company immediately prior to such sale.

     For purposes of the above definition of Change in Control, “Person” shall have the meaning set
forth in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of the Company or any
of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the Company.

     14.2 Other Awards. An Award Agreement with respect to a Restricted Stock Unit Award or
any other Award that constitutes “deferred compensation” within the meaning of section 409A of the
Code may provide that the Award shall vest upon a “change in control” as defined in section 409A of
the Code.

SECTION 15

LEGAL CONSTRUCTION

     15.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall include the singular,
and the singular shall include the plural.

     15.2 Severability. In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not
been included.

     15.3 Requirements of Law. The grant of Awards and the issuance of Shares under the
Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required from time to time.

     15.4 Securities Law Compliance. To the extent any provision of the Plan, Award
Agreement or action by the Committee fails to comply with any applicable federal or state
securities law, it shall be deemed null and void, to the extent permitted by law and deemed
advisable or appropriate by the Committee.

     15.5 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Missouri.

     15.6 Captions. Captions are provided herein for convenience of reference only, and
shall not serve as a basis for interpretation or construction of the Plan.

18

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