<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY RULE
14-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
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:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------
(5) Total fee paid:
------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------
(3) Filing Party:
--------------------------------------------------
(4) Date Filed:
----------------------------------------------------
<PAGE> 2
COMMERCIAL BANCSHARES, INC.
118 SOUTH SANDUSKY AVENUE
UPPER SANDUSKY, OHIO 43351
PROXY STATEMENT
TIME, DATE, AND PLACE OF MEETING
The Board of Directors ("We" or "Us") of Commercial Bancshares,
Inc. (the "Company"), an Ohio corporation, is furnishing you with these proxy
materials in connection with the solicitation of proxies to be voted at the
Company's 1999 Annual Meeting of Shareholders (the "Meeting").
You are invited to attend the Meeting which will be held at 4:30 p.m.
on Wednesday, April 14, 1999 at the main office of the Commercial Savings Bank
(the "Bank") located at 118 South Sandusky Avenue, Upper Sandusky, Ohio 43351.
This Proxy Statement and form of proxy are being mailed to shareholders
starting March 12, 1999.
SHAREHOLDERS ENTITLED TO VOTE
Holders of record of shares at the close of business on February 19,
1999 are entitled to receive these proxy materials and to vote their shares at
the Meeting. As of that date, there were 1,049,431 common shares outstanding.
Each common share is entitled to one vote on each matter brought before the
Meeting.
VOTING YOUR SHARES
Your vote is important. You may vote your shares by attending the
Meeting and voting your shares in person or by completing and returning your
form of proxy as follows:
- - Mark your voting preference,
- - Sign and date your proxy form, and
- - Return to the Bank prior to the Meeting. A postage paid envelope is
enclosed for your convenience.
If your shares are held in the name of a bank, broker, or other holder
of record, you must obtain a proxy from the holder of record to be able to vote
at the Meeting.
You may revoke your proxy at any time before it is exercised by:
- - Delivering a signed revocation to the Company,
- - Submitting a later dated proxy, or
- - Attending the Meeting and voting your shares in person.
We are soliciting proxies and will pay the costs involved. Proxies may
be solicited on behalf of the Company by its directors, officers, and employees.
We may solicit proxies personally or by telephone, in addition to the use of the
mails.
MULTIPLE COPIES OF ANNUAL REPORT
Our 1998 Annual Report to Shareholders has been mailed to shareholders.
If more than one copy has been sent to you, we will discontinue mailing of
reports on the accounts you select if you mark the designated box on the
appropriate form of proxy.
You must continue to receive the Annual Report for at least one
account. Your receipt of the other materials in your proxy mailing, and other
mailings throughout the year will not be affected by your election to
1
<PAGE> 3
discontinue future duplicate mailings of the Annual Report.
The shareholders present in person or by proxy will constitute a quorum
for the purpose of considering and acting upon those matters to be brought
before the Meeting or any adjournment thereof.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following is a table reflecting all shareholders, to the best
knowledge of the Company's management, owning beneficially five percent (5%) or
more of the Company's Common Stock as of February 19, 1999.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Name and Address Title of Class Beneficial Ownership Percent of Class
Of Beneficial Owner of 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 Properties Limited Partnership are Barbara K.
Emerson, 30062 Morningside Drive, Perrysburg 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 Company.
BOARD AND COMMITTEE MEMBERSHIP
During 1998, the Board of Directors of the Company met twelve times and had
several ongoing committees. These committees include an Executive Committee,
Executive Compensation Committee, and an Audit Committee. All of our Directors
attended at least eighty-one percent of the meetings of the Board and Board
Committees on which they served in 1998.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Executive
Name Board Audit Compensation Executive
<S> <C> <C> <C> <C>
Mr. Berg X X X
Mr. Deer X
Mr. Loren Dillon X
Mr. Mark Dillon X
Mr. Emerson X X X
Ms. Franks X X*
Ms. Grafmiller X
Mr. Graves X X
Mr. Mastro X X
Mr. Ruse X X
Mr. Sheaffer X* X X X*
Mr. Smith X X*
1998 Meetings 12 4 4 12
* denotes Chairperson
- -------------------------------------------------------------------------
</TABLE>
2
<PAGE> 4
THE AUDIT COMMITTEE
The Audit Committee generally meets quarterly. Its primary duties
include the following:
- - Approve the selection or termination of the independent public
accounting firm to be our outside auditor.
- - Participate in setting the Company and Bank's audit policy and monitor
the operations of the internal audit function.
- - Provide active directorate guidance to the internal audit function.
- - Correct deficiencies and implement audit recommendations.
- - Review results of internal audits conducted and action taken by
management.
EXECUTIVE COMPENSATION COMMITTEE
This committee is responsible for the establishment of annual and
long-term goals for the executive management team. The duties of this Committee
include:
- - Review executive management's past performance in order to formulate
salary recommendations for the upcoming year;
- - Make recommendations to the Board of Directors for the granting of
stock options to eligible officers under the Company's 1997 Stock Plan.
EXECUTIVE COMMITTEE
The Executive Committee performs such duties as are delegated to them by the
Board of Directors.
NOMINATING COMMITTEE
The Board of Directors does not have a standing nominating committee or
a committee performing a similar function.
COMPENSATION OF DIRECTORS
In 1998, non-officer directors of the Bank received $10,000 for service
on the Board and Board Committees. Mr. Sheaffer, the Board's Chairman received
$13,500 for service on the Board and Board Committees. Directors who were also
officers of the Company received $5,600 for service on the Board and Board
Committees.
FAMILY RELATIONSHIPS
Directors Mark Dillon and Loren H. Dillon are second cousins. No other
relationships exist among the Company's directors and executive officers.
INVOLVEMENT IN LEGAL PROCEEDINGS
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 United States Bankruptcy Code.
Baja has no outstanding loans with the Bank.
RELATED TRANSACTIONS
The Bank has had and expects to continue banking relationships in the
ordinary course of business with directors, officers, and principal shareholders
of the Company and the Bank. These relationships are carried out on
substantially the same terms as those available for other loan customers of the
Bank. As of December 31, 1998, loans extended to directors and executive
officers of the Company and Bank, including their immediate families and
companies in which they are principal owners, totaled $1,362,046, or 7.9% of
total shareholder equity.
3
<PAGE> 5
From time to time in 1998, we consulted with Shumaker, Loop & Kendrick,
LLP, a law firm located in Toledo, Ohio, for certain legal matters. Director
Edwin G. Emerson is a partner with that law firm. We also engaged the services
of Certified Appraisal Service, an appraisal firm in which Director Deborah J.
Grafmiller is a co-owner. The Bank used this firm mainly for obtaining
appraisals of real estate for real estate secured loans made to borrowers in the
ordinary course of the Bank's business.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes of four directors
each. The terms of each class expire at successive annual meetings. The term of
Class II Directors of the Company expire this year.
You may vote for up to four nominees to serve as Class II Directors
with terms expiring at the 2002 Annual Meeting of Shareholders. The Board
proposes the following nominees for election:
- - Daniel E. Berg
- - Loren H. Dillon
- - Mark Dillon
- - William E. Ruse
If you return the enclosed proxy form properly executed without an
indication that your vote should be withheld for any or all of the nominees, the
persons named on the enclosed proxy form will vote your proxy for the election
of the above-mentioned nominees for Class II Directors.
We expect that each nominee for election as a Class II Director will be
able to serve if elected. However, if any nominee is unable to serve, proxies
will be voted for the remaining nominees and may be voted for substitute
nominees that the Board may recommend.
THE BOARD OF DIRECTORS RECOMMEND THAT YOU VOTE FOR THE ELECTION OF
THESE NOMINEES AS CLASS II DIRECTORS OF THE COMPANY.
INFORMATION RELATING TO NOMINEES AND OTHER DIRECTORS
The following tables set forth certain information relating to the
Nominees and other members of the Board of Directors whose terms of office
continue after the Meeting. This information includes the age, principal
occupation, and beneficial ownership of the Company's voting securities.
4
<PAGE> 6
<TABLE>
CLASS II DIRECTORS
(NOMINEES FOR TERMS EXPIRING IN 2002)
<CAPTION>
- -----------------------------------------------------------------------------------------------
Name of Beneficial
Director Principal Occupation Director Ownership of Percent
Nominee Age During Last Five Years Since (1) Common Stock (2) of Class
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Daniel Berg 44 Ohio Unit Business Leader, 1990 1,643 (3) .2%
Tower Automotive, Upper
Sandusky/Bluffton, Ohio.
(manufacturer of automotive
products)
- -----------------------------------------------------------------------------------------------
Loren Dillon 65 President and General 1990 1,074 (4) .1%
Manager, Crow Motor Sales,
Inc., Upper Sandusky, Ohio.
- -----------------------------------------------------------------------------------------------
Mark Dillon 45 President, Fairborn U.S.A., 1990 3,630 .3%
Upper Sandusky, Ohio
(manufacturer of loading
dock enclosures)
- -----------------------------------------------------------------------------------------------
William E. Ruse 64 President, Blanchard Valley 1998 (5) 100 (6) .01%
Health Services, Findlay,
Ohio
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Directorships were with the Bank alone until April 13, 1995 and with
the Bank and the Company 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
February 19, 1999.
(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.
(6) Includes 100 shares for which Mr. Ruse has shared voting and investment
power.
5
<PAGE> 7
<TABLE>
CLASS III DIRECTORS
(TERMS EXPIRE IN 2000)
<CAPTION>
- -----------------------------------------------------------------------------------------------
Beneficial
Name of Principal Occupation Director Ownership of Percent
Director Age During Last Five Years Since (1) Common Stock (2) of Class
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
James A. Deer 45 Secretary/Treasurer of 1996 6,132 (3) .6%
Commercial Bancshares, Inc.
and Executive
Vice-President of The
Commercial Savings Bank
- -----------------------------------------------------------------------------------------------
Hazel Franks 78 Retired trucking firm 1985 8,700 .8%
owner, Upper
Sandusky, Ohio.
- -----------------------------------------------------------------------------------------------
Raymond E. Graves 46 President and CEO, 1986 5,809 (4) .6%
Commercial Bancshares,
Inc. and The Commercial
Savings Bank, Upper
Sandusky, Ohio.
- -----------------------------------------------------------------------------------------------
Richard Sheaffer 56 President, R.A. Sheaffer, 1976 3,541 (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 Company 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
February 19, 1999.
(3) Includes 1,491 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 2,767 shares for which Mr. Sheaffer has shared voting and
investment power.
6
<PAGE> 8
<TABLE>
CLASS I DIRECTORS
(TERMS EXPIRING IN 2001)
<CAPTION>
- -----------------------------------------------------------------------------------------------
Beneficial
Name of Principal Occupation Director Ownership of Percent
Director Age During Last Five Years Since (1) Common Stock (2) of Class
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Edwin G. Emerson 60 Attorney, Partner with 1985 2,370 (3) .2%
Shumaker, Loop &
Kendrick, LLP
Toledo, Ohio
- -----------------------------------------------------------------------------------------------
Deborah J. 48 Appraiser, Co-owner of 1997 746 (4) .07%
Grafmiller Certified Appraisal
Service,
Upper Sandusky, Ohio
- -----------------------------------------------------------------------------------------------
Michael A. Mastro 42 President of TLM 1995 591 (5) .06%
Management, Inc., Marion,
Ohio (a restaurant
management company).
- -----------------------------------------------------------------------------------------------
Douglas C. Smith 56 Senior Executive of the 1985 15,922 (6) 1.5%
boat 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 Company 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
February 19, 1999.
(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 Company.
Mr. Emerson disclaims beneficial ownership of the Partnership shares.
(4) Includes 526 shares for which Ms. Grafmiller has shared voting and
investment power.
(5) Includes 405 shares for which Mr. Mastro has shared voting and
investment power.
(6) Includes 13,800 shares for which Mr. Smith has shared voting and
investment power.
<TABLE>
CUMULATIVE SHARE OWNERSHIP
<CAPTION>
- -----------------------------------------------------------------------------------------------
Beneficial
Name of Principal Occupation Director Ownership of Percent
Director Age During Last Five Years Since (1) Common Stock (2) of Class
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
All Directors
and Executive -- -- -- 52,031 (3) 5.0%
Officers as
a Group
(17 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
February 19, 1999.
(2) Includes all executive officers of the Company and all executive
officers of the Bank.
(3) Includes 7,325 shares covered by stock options now exercisable or
exercisable within the next 60 days.
7
<PAGE> 9
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 56 Mr. Sheaffer is Chairman of the Board of Directors
of the Company 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 46 Mr. Graves is President and Chief Executive Officer
of the Company and the Bank and has served in
such position since 1986. He joined the Bank in 1985
as Executive Vice-President.
James A. Deer 45 Mr. Deer has served as Executive Vice-President of
the Bank since 1993 and also serves as Secretary/
Treasurer of the Company. 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 39 Mr. Kinley serves as Vice-President of the
Company and 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 47 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.
</TABLE>
8
<PAGE> 10
<TABLE>
<S> <C> <C>
Ronald M. Wilson 39 Mr. Wilson joined the Bank during 1998 as Senior
Vice-President. His responsibilities include
management of all lending divisions along with high
level supervision of the retail division of the Bank.
His prior banking experience includes ten years
employment with a large central Ohio bank serving as
Senior Vice-President of commercial lending and
retail services.
Alicia A. Wagenblast 32 Ms. Wagenblast rejoined the Bank in 1998 and serves
as Chief Financial Officer of the Company and the
Bank. Her prior banking experience includes
positions at the Bank as Internal Auditor in 1993 and
Controller from August 1994 through her departure
October, 1995. Prior to rejoining the Bank, she
served as Staff Accountant at a packaging company
and as Controller at an agricultural equipment
dealership. She has passed the Certified Public
Accountant examination.
Susan E. Brown 52 Ms. Brown joined the Bank during 1998 as Vice-
President of Retail Banking Services. Her prior
banking experience covers 32 years, including serving
as District Retail Manager for a large central Ohio
bank for six years.
</TABLE>
<TABLE>
OTHER SIGNIFICANT EMPLOYEES
<CAPTION>
<S> <C> <C>
Steven W. Huffman 47 Mr. Huffman joined the Bank during 1995 as
Assistant Vice President of the Secondary Market
Mortgage Department. He was promoted to Vice-
President during 1998. Prior to joining the Bank, he
was a Special Agent with an insurance company.
His duties included counseling clients in financial
planning matters and the sale of insurance and
annuity products. His prior banking experience
includes positions as Residential Mortgage Loan
Representative and Vice-President/ Secondary
Marketing Mortgage Department.
</TABLE>
9
<PAGE> 11
EXECUTIVE COMPENSATION
The Company offers several compensation plans and programs to certain
executive officers of the Bank and Company. The purpose of these plans is to
attract, reward, motivate, and retain the most qualified people available.
The Company is providing the following information to help you better
understand the compensation plans and programs of the Company. Certain
information is presented in tabular format. The information contained in the
Summary Compensation and Stock Option tables which follow is disclosed for those
executive officers whose compensation for 1998 exceeded $100,000.00.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
------------------- ------ -------
Name and Principal Year Salary ($)(1) Bonus ($) Securities All Other
Position Underlying Compensation
Options/SARs ($) (2)
(#)
<S> <C> <C> <C> <C> <C>
Raymond E. Graves, 1998 122,289.46 21,700.00 9,000 3,768.22
President and Chief 1997 120,202.02 12,635.00 18,000 3,898.21
Executive Officer 1996 117,290.63 17,039.96 N/A 3,354.02
</TABLE>
(1) Mr. Graves salary includes fees received by him for services as a Director
of the Company in 1998 ($5,600), 1997 ($4,800), and 1996 ($4,800).
(2) Amount includes the Bank's matching contributions made under the Bank's
Section 401K Plan and the reportable economic value to Mr. Graves of the Bank's
supplementary executive retirement plan described below.
SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN
This Plan was adopted in 1995 to provide certain executive officers with
annual retirement benefits that will supplement those benefits available under
the Bank's qualified retirement plans. The goal of the Plan is to provide
participants with benefits initially equaling seventy percent (70%) of the
participant's final annual pay. Other income of the participant, such as social
security and other retirement benefits provided by the Company and Bank, are
included in calculating the goal percentage. Annual benefits are indexed to the
financial performance of an insurance policy and are designed to increase each
year.
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 has purchased life insurance policies
on each executive that are actuarially designed to offset the annual expenses
associated with the Plan. The Bank will, given reasonable actuarial assumptions,
completely recover all Plan costs. All three of the current participants in the
Plan are 100% vested.
10
<PAGE> 12
The following officers are participants in the Company's Supplementary
Executive Retirement Plan:
Name of Executive Position
- ----------------- --------
Raymond E. Graves President and C.E.O.
James A. Deer Executive V.P.
Philip W. Kinley Vice President
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 1998, expenses of $11,760.00 were accrued by the Bank to
account for this obligation
DEFERRED COMPENSATION PLAN
The Bank adopted the Commercial Savings Bank Deferred Compensation Plan,
a nonqualified deferred compensation plan on December 8, 1998, effective as of
January 1, 1999. All executive officers and directors of the Bank are eligible
to participate. The purpose of the Plan is to permit participating directors and
executive officers to voluntarily defer receipt of designated percentages or
amounts of their compensation and/or director's fees, and therefore defer
taxation of deferred amounts. The deferred compensation will be deposited in an
irrevocable grantor trust and invested in common stock of the Company. The
trustee will purchase shares of the Company's common stock on a quarterly basis.
The price to be paid per share is the average of the high and low prices of the
Company's stock for the month prior to the date of purchase as quoted on the
Over-the-Counter Bulletin Board. The trustee shall attempt to purchase the
common stock on the open market at the determined price. Should the trustee be
unable to purchase sufficient shares in the open market, authorized but unissued
common stock of the Company may be purchased by the trust. No compensation was
deferred under the Plan during the calendar year ended December 31, 1998.
EXECUTIVE INCENTIVE STOCK OPTION PLAN
The Shareholders of the Company approved the 1997 Commercial Bancshares,
Inc. Stock Option Plan (the "Plan") at the 1997 Annual Meeting of Shareholders
held April 9, 1997. The Plan permits eligible executive officers of the Bank and
Company an opportunity to acquire or increase their share ownership in the
Company by granting them options to purchase common stock of the Company.
The following table lists the number of shares of the Company's common
stock underlying the options which were granted, the percentage of the total
options granted, the exercise price of the options, and the expiration date of
the options.
11
<PAGE> 13
<TABLE>
OPTION /SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
<CAPTION>
- --------------------------------------------------------------------------------------
Number of Percent of
Name Securities Total
Underlying Options/SARs Exercise Or
Options/SARs Granted To Base Price
Granted Employees ($/Sh) Expiration Date
(#) In Fiscal Year
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Raymond E. Graves,
President and Chief 9,000(1) 30 $26.00 January 1, 2008
Executive Officer
- --------------------------------------------------------------------------------------
</TABLE>
(1) The Plan provisions state that unless the Committee determines otherwise at
the time options are granted, options generally will not be exercisable for
a period of up to five years from the date of grant.
No options granted to executive officers of the Corporation during the
fiscal year ended December 31, 1998, were exercised on or prior to that date.
The following table sets forth certain information relating to the number and
value of exercised and unexercised options.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Number of
Securities Value Of
Underlying Unexercised
Shares Unexercised In-The-Money
Acquired Options/SARs Options/SARs
On Value At Fiscal Year-End (#) At Fiscal Year-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable (1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Raymond E. Graves, President 1,500 $10,500 3,000/22,500 $36,510 / $104,265
and Chief Executive Officer
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated based on the market value of the Corporation's common stock at
the end of 1998, multiplied by the number of shares covered by in-the-money
options, less the total exercise price for such options.
12
<PAGE> 14
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 shall vote the shares represented thereby in accordance with
their best judgment.
SHAREHOLDER PROPOSALS FOR PRESENTATION AT THE 2000 ANNUAL MEETING
The Board of Directors requests that any shareholder proposals intended
for presentation at the 2000 Annual Meeting be submitted in writing to Raymond
E. Graves, President, at the Company's office located at 118 South Sandusky
Avenue, Upper Sandusky, Ohio 43351, by no later than November 13, 1999 for
consideration for inclusion in the Company's proxy materials for such meeting.
For proposals that a shareholder wishes to present at the 2000 Annual
Meeting, but does not seek to include in the proxy statement, the Board of
Directors requests that the proposal be submitted in writing to Raymond E.
Graves, President, at the Company's office located at 118 South Sandusky Avenue,
Upper Sandusky, Ohio 43351, by no later than January 25, 2000.
A copy of the Company's 1998 Annual Report is being delivered with this
Proxy Statement.
By Order of the Board of Directors
/s/ James A. Deer
James A. Deer
Secretary / Treasurer
Dated March 12, 1999
TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY.
<PAGE> 15
COMMERCIAL BANCSHARES, INC.
118 SOUTH SANDUSKY AVENUE
UPPER SANDUSKY, OHIO 43351
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
APRIL 14, 1999. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned, having received notice of the Annual Meeting (the
"Meeting") of Shareholders of Commercial Bancshares, Inc., an Ohio corporation
(the "Company") to be held at 4:30 p.m. local time on Wednesday, April 14, 1999,
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 Company held of record by the
undersigned on February 19, 1999, such proxies being directed to vote as
specified below and in their discretion on any other business that may properly
come before the Meeting or any adjournment thereof.
1. ELECTION OF DIRECTORS. To elect the following four (4) nominees as
Class II Directors: DANIEL BERG, LOREN DILLON, MARK DILLON, WILLIAM E. RUSE.
FOR ALL NOMINEES (EXCEPT AS MARKED BELOW)
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WITHHOLD AUTHORITY FOR ALL NOMINEES
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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 Company at any time prior to the Meeting,
by submitting a later-dated Proxy, or by attending the Meeting and voting in
person. The undersigned hereby revokes any proxy previously given to vote such
shares at the Meeting.
Please sign the 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.
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
(if held jointly)
______ Please mark this line if you are receiving multiple copies of the Annual
Report and wish us to discontinue mailing the Annual Report for this account.
PLEASE COMPLETE, SIGN, DATE, AND RETURN THIS PROXY.
