EXHIBIT 10(J)
TRUST AGREEMENT
FOR THE
COMMERCE BANCSHARES, INC.
EXECUTIVE INCENTIVE COMPENSATION PLAN
TABLE OF CONTENTS
Page
SECTION 1 ESTABLISHMENT OF TRUST 1
SECTION 2 PAYMENTS TO PLAN PARTICIPANTS AND THEIR
BENEFICIARIES 2
SECTION 3 TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT 2
SECTION 4 PAYMENTS TO COMPANY 3
SECTION 5 INVESTMENT AUTHORITY 3
SECTION 6 DISPOSITION OF INCOME 4
SECTION 7 ACCOUNTING BY TRUSTEE 4
SECTION 9 COMPENSATION AND EXPENSES OF TRUSTEE 5
SECTION 10 RESIGNATION AND REMOVAL OF TRUSTEE 5
SECTION 11 APPOINTMENT OF SUCCESSOR 6
SECTION 12 AMENDMENT OR TERMINATION 6
SECTION 13 MISCELLANEOUS 6
SECTION 14 EFFECTIVE DATE 6
TRUST AGREEMENT
FOR THE COMMERCE BANCSHARES, INC.
EXECUTIVE INCENTIVE COMPENSATION PLAN
THIS AGREEMENT made this 31st day of December 1999, by and
between Commerce Bancshares, Inc.(the "Company") and Commerce
Bank, N.A. (the "Trustee").
WHEREAS, Company has amended the Commerce Bancshares, Inc.
Executive Incentive Compensation Plan ("Plan") to allow a rabbi
trust; and
WHEREAS, Company has incurred or expects to incur liability
under the terms of such Plan with respect to the individuals
participating in such Plan; and
WHEREAS, Company wishes to establish a trust (hereinafter
called "Trust") and to contribute to the Trust assets that shall
be held therein, subject to the claims of Company's creditors in
the event of Company's Insolvency, as herein defined, until paid
to Plan participants and their beneficiaries in such manner and
at such times as specified in the Plan; and
WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect the
status of the Plan as an unfunded plan maintained for the purpose
of providing deferred compensation for a select group of
management or highly compensated employees for purposes of Title
I of the Employee Retirement Income Security Act of 1974; and
WHEREAS, it is the intention of Company to make
contributions to the Trust to provide itself with a source of
funds to assist it in the meeting of its liabilities under the
Plan;
NOW, THEREFORE, the parties do hereby establish the Trust
and agree that the Trust shall be comprised, held and disposed of
as follows:
Section 1. ESTABLISHMENT OF TRUST
(a) Company hereby deposits with Trustee in trust $1.00,
which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in this Trust
Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which
Company is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Internal Revenue Code
of 1986, as amended, and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon
shall be held separate and apart from other funds of Company and
shall be used exclusively for the uses and purposes of Plan
participants and general creditors as herein set forth. Plan
participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets
of the Trust. Any rights created under the Plan and this Trust
Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against Company. Any assets
held by the Trust will be subject to the claims of Company's
general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or
from time to time, make additional deposits of cash or other
property in Trust with Trustee to augment the principal to be
held, administered and disposed of by Trustee as provided in this
trust agreement. Neither Trustee nor any plan participant or
beneficiary shall have any right to compel such additional
deposits.
Section 2. PAYMENTS TO PLAN PARTICIPANTS
AND THEIR BENEFICIARIES
(a) Company shall deliver to Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in respect
of each Plan participant (and his or her beneficiaries), that
provides a formula or other instructions acceptable to Trustee
for determining the amounts so payable, the form in which such
amount is to be paid (as provided for or available under the
Plan), and the time of commencement for payment of such amounts.
Except as otherwise provided herein, Trustee shall make payments
to the Plan participants and their beneficiaries in accordance
with such Payment Schedule. The Trustee shall make provision for
the reporting and withholding of any federal, state or local
taxes that may be required to be withheld with respect to the
payment of benefits pursuant to the terms of the Plan and shall
pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and paid
by Company.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by
Company or such party as it shall designate under the Plan, and
any claim for such benefits shall be considered and reviewed
under the procedures set out in the Plan.
(c) Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the
terms of the Plan. Company shall notify Trustee of its decision
to make payment of benefits directly prior to the time amounts
are payable to participants or their beneficiaries. In addition,
if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the
terms of the Plan, Company shall make the balance of each such
payment as it falls due. Trustee shall notify Company where
principal and earnings are not sufficient.
Section 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT
(a) Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is Insolvent.
Company shall be considered "Insolvent" for purposes of this
Trust Agreement if (i) Company is unable to pay its debts as they
become due, or (ii) Company is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code.
2
(b) At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of the
Trust shall be subject to claims of general creditors of Company
under federal and state law as set forth below.
(1) The Board of Directors and the Chief Executive Officer
of Company shall have the duty to inform Trustee in
writing of Company's Insolvency. If a person claiming
to be a creditor of Company alleges in writing to
Trustee that Company has become Insolvent, Trustee
shall determine whether Company is Insolvent and,
pending such determination, Trustee shall discontinue
payment of benefits to Plan participants or their
beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a
person claiming to be a creditor alleging that Company
is Insolvent, Trustee shall have no duty to inquire
whether Company is Insolvent. Trustee may in all events
rely on such evidence concerning Company's solvency as
may be furnished to Trustee and that provides Trustee
with a reasonable basis for making a determination
concerning Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the
assets of the Trust for the benefit of Company's
general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Plan
participants or their beneficiaries to pursue their
rights as general creditors of Company with respect to
benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with
Section 2 of this Trust Agreement only after Trustee
has determined that Company is not Insolvent (or is no
longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to
Section 3(b) hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the
aggregate amount of all payments due to Plan participants or
their beneficiaries under the terms of the Plan for the period of
such discontinuance, less the aggregate amount of any payments
made to Plan participants or their beneficiaries by Company in
lieu of the payments provided for hereunder during any such
period of discontinuance.
Section 4. PAYMENTS TO COMPANY
Except as provided in Section 3 hereof, after the Trust has
become irrevocable, Company shall have no right or power to
direct Trustee to return to Company or to divert to others any of
the Trust assets before all payment of benefits have been made to
Plan participants and their beneficiaries pursuant to the terms
of the Plan.
Section 5. INVESTMENT AUTHORITY
(a) Subject to any Company direction as set forth below,
Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by Company;
3
regulated, mutual or collective investment funds created, maintained,
or advised by Company; or any bank accounts of Company. All rights
associated with assets of the Trust shall be exercised by Trustee
or the person designated by Trustee, and shall in no event be
exercisable by or rest with Plan Participants.
(b) Company shall have the right at anytime, and from time
to time in its sole discretion, to direct the Trustee with
respect to the investment of Trust assets, and may substitute
assets of equal fair market value for any asset held by the
Trust. The right of substitution is exercisable by Company in a
non-fiduciary capacity without the approval or consent of any
person in a fiduciary capacity.
Section 6. DISPOSITION OF INCOME
During the term of this trust, all income received by the Trust,
net of expenses and taxes, shall be accumulated and reinvested.
Section 7. ACCOUNTING BY TRUSTEE
Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions
required to be made, including such specific records as shall be
agreed upon in writing between Company and Trustee. Within 90
days following the close of each calendar year and within 90 days
after the removal or resignation of Trustee, Trustee shall
deliver to Company a written account of its administration of the
Trust during such year or during the period from the close of the
last preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all
securities and investments purchased and sold with the cost or
net proceeds of such purchases or sales (accrued interest paid or
receivable being shown separately), and showing all cash,
securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as
the case may be.
Section 8. RESPONSIBILITY OF TRUSTEE
(a) Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and
with like aims, provided, however, that Trustee shall incur no
liability to any person for any action taken pursuant to a
direction, request or approval given by Company which is
contemplated by, and in conformity with, the terms of the Plan or
this Trust and is given in writing by Company. In the event of a
dispute between Company and a party, Trustee may apply to a court
of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising
in connection with this Trust, Company agrees to indemnify
Trustee against Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses)
relating thereto and to be primarily liable for such payments.
If Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the
Trust.
4
(c) Trustee may consult with legal counsel (who may also be
counsel for Company generally) with respect to any of its duties
or obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other professionals
to assist it in performing any of its duties or obligations
hereunder.
(e) Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law, unless expressly
provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, Trustee shall
have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or
to loan to any person the proceeds of any borrowing against such
policy.
(f) However, notwithstanding the provisions of section 8(e)
above, Trustee may loan to Company the proceeds of any borrowing
against an insurance policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to Trustee pursuant
to this Trust Agreement or to applicable law, Trustee shall not
have any power that could give this Trust the objective of
carrying on a business and dividing the gains therefrom, within
the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
Section 9. COMPENSATION AND EXPENSES OF TRUSTEE
Company shall pay all administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid
from the Trust.
Section 10. RESIGNATION AND REMOVAL OF TRUSTEE
(a) Trustee may resign at any time by written notice to
Company, which shall be effective 90 days after receipt of such
notice unless Company and Trustee agree otherwise.
(b) Trustee may be removed by Company on 30 days notice or
upon shorter notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment
of a successor Trustee, all assets shall subsequently be
transferred to the successor Trustee. The transfer shall be
completed within 90 days after receipt of notice of resignation,
removal or transfer, unless Company extends the time limit.
(d) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective
date of resignation or removal under paragraph(s) (a) or (b) of
this section. If no such appointment has been made, Trustee may
apply to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative
expenses of the Trust.
5
Section 11. APPOINTMENT OF SUCCESSOR
(a) If Trustee resigns or is removed in accordance with
section 10(a) or (b) hereof, Company may appoint any third party,
such as a bank Trust department or other party that may be
granted corporate Trustee powers under state law, as a successor
to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the new Trustee,
who shall have all of the rights and powers of the former
Trustee, including ownership rights in the Trust assets. The
former Trustee shall execute any instrument necessary or
reasonably requested by Company or the successor Trustee to
evidence the transfer.
(b) The successor trustee need not examine the records and
acts of any prior trustee and may retain or dispose of existing
Trust assets, subject to Sections 7 and 8 hereof. The successor
trustee shall not be responsible for and Company shall indemnify
and defend the successor trustee from any claim or liability
resulting from any action or inaction of any prior trustee or
from any other past event, or any condition existing at the time
it becomes successor trustee.
Section 12. AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended by a written
instrument executed by Trustee and Company. Notwithstanding the
foregoing, no such amendment shall conflict with the terms of the
Plan or shall make the Trust revocable after it has become
irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which
Plan participants and their beneficiaries are no longer entitled
to benefits pursuant to the terms of the Plan. Upon termination
of the Trust any assets remaining in the Trust shall be returned
to Company.
Section 13. MISCELLANEOUS
(a) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
(b) Benefits payable to Plan participants and their
beneficiaries under this Trust Agreement may not be anticipated,
assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed
in accordance with the laws of the State of Missouri.
Section 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be December
31, 1999.
COMMERCE BANCSHARES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
-------------------------------
COMMERCE BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
6