<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Commercial Bancshares, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
COMMERCIAL BANCSHARES, INC.
118 SOUTH SANDUSKY AVENUE
UPPER SANDUSKY, OHIO 43351
PROXY STATEMENT
Dated March 5, 1998
For Annual Meeting of Shareholders
to be held Wednesday, April 8, 1998
This Proxy Statement is furnished by the Board of Directors and
Management of Commercial Bancshares, Inc., an Ohio Corporation, (the
"Corporation"); in connection with the solicitation of proxies to be voted at
the Corporation's 1998 Annual Meeting of Shareholders (the "Meeting"), which
will be held at 4:30 p.m. on Wednesday, April 8, 1998 at the main office of The
Commercial Savings Bank (the "Bank"), located at 118 South Sandusky Avenue,
Upper Sandusky, Ohio, 43351.
Any proxy delivered pursuant to this solicitation may be revoked, at
the option of the person executing the proxy, at any time before it is exercised
by delivering a signed revocation to the Corporation, by submitting a
later-dated proxy, or by attending the Meeting in person and instructions
casting a ballot. If proxies are signed and returned without voting
insturctions, the shares represented by the proxies will be voted as recommended
by the Board of Directors.
The cost of soliciting proxies will be borne by the Corporation. In
addition to the use of the mails, proxies may be solicited personally or by
telephone by regular employees of the Corporation. The Corporation does not
expect to pay any compensation for the solicitation of proxies, but may
reimburse brokers and other persons holding stock in their names, or in the
names of nominees, for their expense in sending proxy materials to their
principals and obtaining their proxies. The approximate date on which this Proxy
Statement and enclosed form of proxy has been first mailed to Shareholders is
March 5, 1998.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The close of business on February 17, 1998, has been designated as the
record date for the determination of Shareholders entitled to receive notice of
and to vote at the Meeting. As of that date, 1,043,481 shares of the
Corporation's Common Stock, without par value, were issued and outstanding. Each
Shareholder will be entitled to one vote for each share of Common Stock
registered in his or her name on the books of the Corporation at the close of
business on February 17, 1998, on all matters that come before the Meeting.
To the knowledge of the Corporation's management, the following is a
schedule of Shareholders of the Corporation owning beneficially, directly or
indirectly, five percent (5%) or more of the Corporation's Common Stock as of
January 31, 1998.
1
<PAGE> 3
<TABLE>
<CAPTION>
============================================================================================
NAME AND ADDRESS TITLE OF CLASS BENEFICIAL OWNERSHIP OF PERCENT OF CLASS
OF BENEFICIAL OWNER STOCK
============================================================================================
<S> <C> <C> <C>
Myers Properties Limited Common Stock
Partnership without Par Value 61,716 (1) 5.9%
605 Los Corales Circle
Green Valley, AZ 85614
============================================================================================
</TABLE>
(1) The general partners of Myers Limited Partnership are Barbara K. Emerson,
30062 Morningside Drive, Perrysburg, Ohio 43551, and Marsha S. McClain, 872
Arrowhead Drive, Bucyrus, Ohio 44820. Barbara K. Emerson is the spouse of Edwin
G. Emerson, a Class I Director of the Corporation.
ELECTION OF DIRECTORS
The Corporation's Articles of Incorporation provide for a classified
Board of Directors. The Code of Regulations of the Corporation provides that the
Board of Directors shall consist of not less than nine (9) nor more than fifteen
(15) members, with the number of Directors within such range fixed or changed by
the Shareholders at a meeting for the election of Directors. The number of
Directors has previously been fixed at twelve (12), and no change in such number
is proposed this year.
The Board of Directors proposes the election of four directors at the
1998 Annual Meeting of Shareholders to serve as Class I Directors. The nominees
for Class I Directors, if elected, will each serve a three-year term expiring at
the 2001 Annual Meeting of Shareholders and/or until their successors are duly
elected and qualified.
Shareholders may vote for up to four (4) nominees, and, if a quorum is
present, the four nominees receiving the highest number of votes shall be
elected as Class I Directors. The Shareholders present in person or by proxy
shall constitute a quorum. Shareholders may not vote cumulatively in the
election of Directors. Votes withheld in respect to the election of Directors
will not be counted in determining the election of Directors. At the Meeting,
the results of Shareholder voting will be tabulated by the inspector(s) of
elections appointed for the Meeting. Under Ohio law and the Corporation's
Articles of Incorporation and Code of Regulations, properly executed proxies
that are marked "abstain" or held in "street name" by brokers and are not voted
on one or more particular items (if otherwise voted on at least one item) will
be counted for purposes of determining whether a quorum has been achieved at the
Meeting.
Edwin G. Emerson, Deborah J. Grafmiller, Michael A. Mastro, and Douglas
C. Smith are currently Class I Directors of the Corporation and are being
nominated by the Board of Directors for reelection as Class I Directors.
The following tables set forth the slate of four (4) nominees proposed
for election as Class I Directors and each continuing Director of the
Corporation together with their respective ages, occupations, and amount and
nature of beneficial ownership of shares of Common Stock as of January 31, 1998.
Proxies received in response to this solicitation will be voted, unless
authority
2
<PAGE> 4
is withheld, in favor of the election of the four nominees. Each nominee
contributes to the breadth of business experience represented on the Board of
Directors and has a longstanding record of service to the Corporation and the
Bank. In the event any of the nominees should be unable to serve, which is not
anticipated, the Proxy Committee, which consists of William T. Gillen, and
Directors Loren Dillon and Hazel Franks, will vote for such other person or
persons for the office of Class I Director as the Board of Directors may
recommend.
THE BOARD OF DIRECTORS AND MANAGEMENT OF THE CORPORATION RECOMMEND THAT
YOU VOTE FOR THE ELECTION OF SUCH NOMINEES AS CLASS I DIRECTORS OF THE
CORPORATION.
<TABLE>
<CAPTION>
CLASS I DIRECTORS
(NOMINEES FOR TERMS EXPIRING IN 2001)
============================================================================================================
Name of Principal Occupation Director Beneficial Ownership Percent
Director Age During Last Five Years Since (1) of Common Stock (2) of Class
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Edwin G. Emerson 59 Attorney, Partner with 1985 2,370 (3) .2%
Shumaker, Loop &
Kendrick, LLP,
Toledo, Ohio
- ------------------------------------------------------------------------------------------------------------
Deborah J. Grafmiller 47 Appraiser, Co-owner of 1997(4) 736 (5) .07%
Certified Appraisal
Service,
Upper Sandusky, Ohio
- ------------------------------------------------------------------------------------------------------------
Michael A. Mastro 41 President of TLM 1995 591 (6) .05%
Management, Inc.,
Marion, Ohio (a restaurant
management company).
- ------------------------------------------------------------------------------------------------------------
Douglas C. Smith 55 President of the boat 1985 15,922 (7) 1.5%
manufacturing firm of Baja
Marine Corporation,
Bucyrus, Ohio.
============================================================================================================
</TABLE>
(1) Directorships were with the Bank alone until April 13, 1995 and with
the Bank and the Corporation since such date.
(2) All shares are held of record with sole voting and investment power
unless otherwise indicated. Beneficial ownership numbers are as of
January 31, 1998.
(3) Includes 930 shares for which Mr. Emerson has shared voting and
investment power. Mr. Emerson's spouse, Barbara K. Emerson, is a
general partner of Myers Properties Limited Partnership (the
"Partnership") which owns 61,716 shares of Common Stock of the
Corporation. Mr. Emerson disclaims beneficial ownership of the
Partnership shares.
(4) Due to the retirement of B.E.Beaston from the Board in August, 1997, a
vacancy was created in the Class I Director classification. Pursuant to
the Corporation's Code of Regulations, this vacancy was filled by the
Board of Directors acting by a majority of the Directors then in
office. Ms. Deborah J. Grafmiller was appointed to the Board on
September 10, 1997, to fill Mr. Beaston's unexpired term.
(5) Includes 516 shares for which Ms. Grafmiller has shared voting and
investment power.
(6) Includes 405 shares for which Mr. Mastro has shared voting and
investment power.
(7) Includes 13,800 shares for which Mr. Smith has shared voting and
investment power.
3
<PAGE> 5
<TABLE>
<CAPTION>
CLASS II DIRECTORS
(TERMS EXPIRE IN 1999)
============================================================================================================
Name of
Director Principal Occupation Director Beneficial Ownership Percent
Nominee Age During Last Five Years Since (1) of Common Stock (2) of Class
============================================================================================================
<S> <C> <C> <C> <C> <C>
Daniel Berg 43 Ohio Unit Business Leader, 1990 1,386 (3) .1%
Tower Automotive, Upper
Sandusky/Bluffton, Ohio.
(manufacturer of automotive
products)
- ------------------------------------------------------------------------------------------------------------
Loren Dillon 64 President and General 1990 1,074 (4) .1%
Manager, Crow Motor Sales,
Inc., Upper Sandusky, Ohio.
- ------------------------------------------------------------------------------------------------------------
Mark Dillon 44 President, Fairborn U.S.A., 1990 3,630 .3%
Upper Sandusky, Ohio
(manufacturer of loading
dock enclosures)
- ------------------------------------------------------------------------------------------------------------
William E. Ruse 63 President, Blanchard Valley 1998 (5) 0 0%
Health Services, Findlay,
Ohio
============================================================================================================
</TABLE>
(1) Directorships were with the Bank alone until April 13, 1995 and with
the Bank and the Corporation since such date.
(2) All shares are held of record with sole voting and investment power
unless otherwise indicated. Beneficial ownership numbers are as of
January 31, 1998.
(3) Includes 9 shares for which Mr. Berg has shared voting and investment
power.
(4) Includes 114 shares for which Mr. Loren Dillon has shared voting and
investment power.
(5) Due to the retirement of William T. Gillen from the Board in September,
1997, a vacancy was created in the Class II Director classification.
Pursuant to the Corporation's Code of Regulations, this vacancy was
filled by the Board of Directors acting by a majority of the Directors
then in office. Mr. William E. Ruse was appointed to the Board on
February 11, 1998, to fill Mr. Gillen's unexpired term.
4
<PAGE> 6
<TABLE>
<CAPTION>
CLASS III DIRECTORS
(TERMS EXPIRE IN 2000)
============================================================================================================
Name of Principal Occupation Director Beneficial Ownership Percent
Director Age During Past Five Years Since (1) of Common Stock (2) of Class
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
James A. Deer 44 Secretary/Treasurer of 1996 6,132(3) .5%
Commercial Bancshares,
Inc. and Executive
Vice-President of The
Commercial Savings Bank
- ------------------------------------------------------------------------------------------------------------
Hazel Franks 77 Retired trucking firm 1985 8,610 .8%
owner, Upper Sandusky,
Ohio.
- ------------------------------------------------------------------------------------------------------------
Raymond E. Graves 45 President and CEO, 1986 6,924 (4) .6%
Commercial Bancshares,
Inc. and The Commercial
Savings Bank, Upper
Sandusky, Ohio.
- ------------------------------------------------------------------------------------------------------------
Richard Sheaffer 55 President, R.A. Sheaffer, 1976 3,347 (5) .3%
Inc. (a family farming
corporation).
============================================================================================================
</TABLE>
(1) Directorships were with the Bank alone until April 13, 1995 and with
the Bank and the Corporation since such date.
(2) All shares are held of record with sole voting and investment power
unless otherwise indicated. Beneficial ownership numbers are as of
January 31, 1998.
(3) Includes 1,185 shares for which Mr. Deer has shared voting and
investment power, and 3,750 shares covered by exercisable options for
which Mr. Deer has shared investment power, but not shared voting
power.
(4) Includes 1,467 shares for which Mr. Graves has shared voting and
investment power, and 3,000 shares covered by exercisable options for
which Mr. Graves has shared investment power, but not shared voting
power.
(5) Includes 2,573 shares for which Mr. Sheaffer has shared voting and
investment power.
<TABLE>
<CAPTION>
CUMULATIVE SHARE OWNERSHIP
============================================================================================================
Name of Principal Occupation Director Beneficial Ownership Percent
Director Age During Last Five Years Since of Common Stock (1) of Class
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
All Directors and -- -- -- 57,681 (3) 5.5%
Executive Officers as
a Group (15 persons)
(2)
============================================================================================================
</TABLE>
(1) All shares are held of record with sole voting and investment power
unless otherwise indicated. Beneficial ownership numbers are as of
January 31, 1998.
(2) Includes all executive officers of the Corporation and all executive
officers of the Bank.
(3) Includes 12,975 shares covered by stock options now exercisable or
exercisable within the next 60 days.
5
<PAGE> 7
No family relationships exist between the Corporation's Directors,
nominees and executive officers except that Mark Dillon and Loren Dillon,
current Directors, are second cousins. There are no arrangements or
understandings between any Director or nominee and any other person concerning
service or nomination as a Director.
Rules and regulations promulgated under the Securities Act of 1933 (the
"Securities Act"), as amended, and the Securities and Exchange Act of 1934 (the
"Exchange Act"), as amended, require that a Director disclose information
concerning certain legal proceedings that have occurred during the last five (5)
years. In 1994, Director Douglas C. Smith was the Chief Executive Officer and a
Director of Baja Boats, Inc. ("Baja"), an Ohio corporation that manufactures
recreational power boats. On February 2, 1994, Baja filed for reorganization and
protection from creditors under Chapter 11 of the Bankruptcy Code. Baja has no
outstanding loans with the Bank.
The Board of Directors met twelve (12) times during 1997. Each Director
attended at least seventy-five percent (75%) of the total number of Board
meetings and meetings held by the committees of the Board on which he or she
served. The Board has a standing Audit Committee and a Compensation Committee.
The Corporation's Audit Committee, which consisted of Chairman Hazel Franks,
Michael Mastro, and Richard Sheaffer, met eight (8) times during 1997. The Audit
Committee's primary responsibility is overseeing the activities of the
Corporation's external auditors. The Compensation Committee, which consisted of
Chairman Douglas Smith, Edwin Emerson, Raymond Graves, and Richard Sheaffer met
three (3) times during 1997. The function of the Compensation Committee is to
review Executive Management's past performance and thereby formulate salary
recommendations of Executive Management for the ensuing year for the
consideration of the full Board of Directors. The Board of Directors does not
have a standing nominating committee, nor a committee performing a similar
function.
During 1997, the Directors of the Bank received Director's fees at the
rate of $400 per Board meeting attended and $200 per committee meeting attended,
with the exception of Chairman of the Board, Richard Sheaffer, who received $500
per board meeting. Directors who are also officers of the Corporation or the
Bank do not receive compensation for attendance at any committee meetings, but
receive fees at the rate of $400 per Board meeting attended.
6
<PAGE> 8
EXECUTIVE OFFICERS
The following information is furnished concerning Executive Officers of the
Corporation and the Bank:
<TABLE>
<CAPTION>
Name Age Position and Business Background
---- --- --------------------------------
<S> <C> <C>
Richard Sheaffer 55 Mr. Sheaffer is Chairman of the Board of Directors of the
Corporation and the Bank and has served in such position
since 1990. He was first elected as a Director of the Bank
in 1976.
Raymond E. Graves 45 Mr. Graves is President and Chief Executive Officer of the
Corporation and the Bank and has served in such position
since 1986. He joined the Bank in 1985 as Executive Vice-
President.
James A. Deer 44 Mr. Deer has served as Executive Vice-President of the
Bank since 1993 and also serves as Secretary/Treasurer of
the Corporation. He joined the Bank in 1985 and served as
a real estate loan officer from 1985 to 1987 and as
Cashier/CFO from 1987 to 1993.
Philip Kinley 38 Mr. Kinley serves as Vice-President of the Corporation and
Vice-President/Chief Financial Officer of the Bank. He
joined the Bank in 1984 and served as a loan officer. In
1989 he became the Bank's Branch Administrator and
Personnel Director. He was named Vice-President/Cashier
in 1992 until 1995 when he assumed his present position.
Bruce J. Beck 46 Mr. Beck, an attorney licensed to practice in the States of
Ohio and Arizona, serves as Senior Vice-President in charge
of the loan department of the Bank, having joined the Bank
in that capacity in 1995. Prior thereto, he was the Bank's
outside legal counsel and a partner in the law firm of Burson
and Beck, Carey, Ohio.
James June 56 Mr. June joined the Bank as an Assistant Vice-President in
1994 and in 1995 became a Vice-President in charge of
Branch Administration and Retail Products. Prior to 1994,
he served as a branch manager for the Tiffin Avenue office
of Society National Bank in Findlay, Ohio.
</TABLE>
7
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth information as to the compensation paid
or accrued by the Corporation or the Bank during 1995, 1996 and 1997 for Mr.
Raymond E. Graves, President and Chief Executive Officer of the Corporation. No
other executive officer of the Corporation or the Bank received compensation for
services to the Corporation or the Bank during 1997 in excess of $100,000.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------
Long Term Compensation
Annual Compensation Awards Payouts
------------------- ------ -------
- ------------------------------------------------------------------------------------------------
Name and Principal Year Salary ($)(1) Bonus ($) Securities All Other
Position Underlying Compensation
Options/SARs ($) (2)
(#)
<S> <C> <C> <C> <C> <C>
Raymond E. Graves, 1997 125,377.97 12,635.00 18,000 3,898.21
President and Chief 1996 117,290.63 17,039.96 N/A 3,354.02
Executive Officer 1995 112,091.77 17,961.15 N/A 3,852.58
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Graves salary includes fees received by him for services as a Director
of the Corporation in 1997 and 1996 and as a Director for the Bank in 1995 of
$4,800; $4,800; and $4,800 respectively.
(2) Amount includes the Bank's matching contributions made under the Bank's 401K
program and the reportable economic value to Mr. Graves of the Bank's
supplementary executive retirement plan described below.
SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN
In an effort to attract, reward, motivate and retain the most qualified
people available, the Bank has provided certain executive officers with a
retirement and death benefit plan that will supplement those benefits available
under the Bank's qualified retirement plans. This plan was adopted in 1995 and
was designed to provide the following executives with annual retirement benefits
initially equal to seventy percent (70%) of final annual pay, including within
this seventy percent (70%), social security and other retirement benefits
provided by the Bank. Benefits under the plan are payable for life. The amount
of each annual benefit is indexed to the financial performance of an insurance
policy over a selected opportunity rate and is designed to increase each year.
Name of Executive Position
----------------- --------
Raymond E. Graves President and Chief Executive Officer
James A. Deer Executive Vice-President
Philip Kinley Vice-President/Chief Financial Officer
8
<PAGE> 10
The plan is zero percent vested until the 6th year of employment, and
vesting increases 20% annually thereafter, reaching 100% vesting after 10 full
years of continuous employment. The Bank's obligations under this plan are
unfunded; however, the Bank has purchased life insurance policies on each
executive that are actuarially designed to offset the annual expenses associated
with the plan and will, given reasonable actuarial assumptions, provide a
complete recovery of all plan costs. All three above named executives are
presently 100% vested in the plan.
The death benefit for each executive is an endorsement of 80% of the
net-at-risk life insurance portion of each of the life insurance policies
purchased to recover the retirement plan's costs.
For the year 1997, expenses of $9,128.58 were accrued by the Bank to
account for this obligation
EXECUTIVE INCENTIVE STOCK OPTION PLAN
The Shareholders of the Corporation approved the 1997 Commercial
Bancshares, Inc. Stock Option Plan (the "Plan") at the 1997 Annual Meeting of
Shareholders held April 9, 1997. The general purpose of the Plan is to attract,
motivate, reward, and retain key management personnel upon whom the continued
success of the Corporation and the Bank depends. The Plan affords to certain
executive officers of the Bank and Corporation an opportunity to acquire or
increase their proprietary interest in the Corporation by grants to such persons
of options to purchase common stock of the Corporation.
The following table lists the name of each named executive officer to
whom options were granted, the number of shares of the Corporation's common
stock underlying the options which were granted, the percentage of the total
options granted for each executive officer, the exercise price of the options,
and the expiration date of the options. The information contained in the table
includes only those executive officers whose compensation for 1997 exceeded
$100,000.
9
<PAGE> 11
<TABLE>
<CAPTION>
OPTION /SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
=====================================================================================================
Number of Percent of Total
Name Securities Options/SARs
Underlying Granted To Exercise Or
Options/SARs Employees In Base Price
Granted Fiscal Year ($/Sh) Expiration Date
(#)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Raymond E. Graves,
President and Chief Executive 9,000(1) 30 $19.33 January 1, 2007
Officer
- -----------------------------------------------------------------------------------------------------
9,000 30 $26.00 January 1, 2008
=====================================================================================================
</TABLE>
(1) The Plan provisions state that unless the Committee determines otherwise at
the time options are granted, options generally will not be exercisable for a
period of up to five years from the date of grant. The Board determined for each
of the grants made during 1997, that one-half of the options granted will
immediately become exercisable upon a 50% increase in the fair market value of
the Corporation's common stock from such value at the date of the grant. On
November 4, 1997, this exception to the vesting schedule was triggered resulting
in one-half of the original 9,000 option grant, or 4,500 options becoming
immediately exercisable.
No options granted to executive officers of the Corporation during the
fiscal year ended December 31, 1997, were exercised on or prior to that date.
The following table sets forth certain information relating to the number and
value of exercised and unexercised options. The table includes only those named
executive officers whose compensation for 1997 exceeded $100,000.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
=============================================================================================================
Number of
Securities Value Of
Underlying Unexercised
Shares Unexercised In-The-Money
Acquired Options/SARs Options/SARs
On Value At Fiscal Year-End (#) At Fiscal Year-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable (1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Raymond E. Graves, President and 0 0 4,500/13,500 $30,015 / $30,015
Chief Executive Officer
=============================================================================================================
</TABLE>
(1) Calculated based on the market value of the Corporation's common stock at
the end of 1997, multiplied by the number of shares covered by in-the-money
options, less the total exercise price for such options.
10
<PAGE> 12
INDEBTEDNESS OF AND TRANSACTIONS WITH OFFICERS AND DIRECTORS
The Bank has had and expects to have transactions in the ordinary
course of business with Directors, officers and principal shareholders of the
Corporation and the Bank and associates of such persons on substantially the
same terms as those prevailing at the same time for comparable transactions with
others. The Bank, in 1997, did consult the law firm of Shumaker, Loop &
Kendrick, LLP, in which Director Edwin Emerson is a partner, on a case by case
basis. The Bank has also utilized the services of Certified Appraisal Service on
a case by case basis. Certified Appraisal Service is co-owned by Director
Deborah J. Grafmiller.
The Bank has had and expects to have banking transactions in the
ordinary course of business with directors, officers and principal shareholders
of the Corporation and the Bank and associates of such persons on substantially
the same terms, including interest rates and collateral, as those prevailing at
the same time for comparable transactions with other persons and that do not
involve more than normal risk of collectability or present other unfavorable
features. Loans to Directors and executive officers, including their immediate
families and companies in which they are principal owners, totaled $1,425,310 or
9.15% of total shareholders' equity at December 31, 1997. The nature and amount
of such indebtedness and transactions during 1997 is such that no disclosure is
required for any individual items.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Corporation has engaged the firm of Crowe, Chizek and Company, LLP,
Independent Certified Public Accountants, Columbus, Ohio to report upon the
consolidated financial statements included in the Annual Report submitted
herewith. A representative from said firm will be in attendance at the Annual
Meeting, will have the opportunity to make a statement if desired, and will be
available to respond to any questions from those in attendance. The Corporation
has not yet selected an accounting firm to report upon its 1998 financial
statements, although it intends to again engage Crowe, Chizek and Company, LLP
for such purpose.
OTHER BUSINESS
Management of the Corporation does not know of any other business that
may be presented at the Annual Meeting. If any matter not described herein
should be presented for shareholder action at the Meeting, the persons named in
the enclosed Proxy will vote the shares represented thereby in accordance with
their best judgment.
SHAREHOLDER PROPOSALS FOR PRESENTATION AT THE 1998 ANNUAL MEETING
The Board of Directors requests that any shareholder proposals intended
for presentation at the 1999 Annual Meeting be submitted in writing to Raymond
E. Graves, President, at the Corporation's office located at 118 South Sandusky
Avenue, Upper Sandusky, Ohio 43351, by
11
<PAGE> 13
no later than November 13, 1998 for consideration for inclusion in the
Corporation's proxy materials for such meeting.
A copy of the Corporation's 1997 Annual Report is being delivered with
this Proxy Statement.
By Order of the Board of Directors
Dated: March 5, 1998 James A. Deer
Secretary/Treasurer
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY FOR WHICH A RETURN ENVELOPE IS
PROVIDED.
12
<PAGE> 14
COMMERCIAL BANCSHARES, INC.
118 SOUTH SANDUSKY AVENUE
UPPER SANDUSKY, OHIO 43351
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
APRIL 8, 1998. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned, having received notice of the Annual Meeting of
Shareholders of Commercial Bancshares, Inc., an Ohio Corporation (the
"Corporation") to be held at 4:30 p.m. local time on Wednesday, April 8, 1997,
hereby designates and appoints Loren H. Dillon, Hazel D. Franks, and William T.
Gillen, and each of them with authority to act without the others, as attorneys
and proxies for the undersigned, with full power of substitution, to vote all
shares of Common Stock, without par value, of the Corporation that the
undersigned would possess if personally present, such proxies being directed to
vote as specified below and in their discretion on any other business that may
properly come before the Meeting.
1. ELECTION OF DIRECTORS. To elect the following four (4) nominees as
Class I Directors: EDWIN G. EMERSON, DEBORAH J. GRAFMILLER, MICHAEL A. MASTRO,
AND DOUGLAS C. SMITH.
FOR ALL NOMINEES (EXCEPT AS MARKED BELOW)
-----
WITHHOLD AUTHORITY FOR ALL NOMINEES
-----
IF YOU WISH TO WITHHOLD AUTHORITY FOR INDIVIDUAL NOMINEE(S), ENTER THE NAME(S)
ON THIS LINE :
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THE BOARD OF DIRECTORS AND MANAGEMENT UNANIMOUSLY RECOMMENDS A VOTE FOR
ELECTION OF THE NAMED NOMINEES.
THIS PROXY WILL BE VOTED: (1) AS DIRECTED ON THE MATTERS LISTED ABOVE;
(2) IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATION WHERE A CHOICE IS NOT
SPECIFIED; AND (3) IN ACCORDANCE WITH THE JUDGMENT OF THE PROXIES ON ANY OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
The undersigned reserves the right to revoke this Proxy at any time
prior to the Proxy being voted at the Meeting. The Proxy may be revoked by
delivering a signed revocation to the Corporation at any time prior to the
Meeting, by submitting a later-dated Proxy, or by attending the Meeting in
person and casting a ballot. The undersigned hereby revokes any proxy previously
given to vote such shares at the Meeting.
Dated:
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Number of Shares
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Printed Name of Shareholder
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Signature of Shareholder
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Signature of Shareholder
Please sign Proxy as your name appears on your stock certificate(s). JOINT
OWNERS SHOULD EACH SIGN PERSONALLY. When signing as attorney, executor,
administrator, trustee, guardian, or corporate officer, please give your full
title as such.
PLEASE COMPLETE, SIGN, DATE, AND MAIL THIS PROXY IN THE ENCLOSED ENVELOPE.
