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Exhibit 23(n)
THE COMMERCE FUNDS
(the "Trust")
AMENDED AND RESTATED PLAN
PURSUANT TO RULE 18f-3 FOR OPERATION OF
A MULTI-CLASS SYSTEM
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I. INTRODUCTION
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On February 23, 1995, the Securities and Exchange Commission (the
"Commission") promulgated Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), which permits the creation and operation of a
multi-class distribution structure without the need to obtain an exemptive order
under Section 18 of the 1940 Act. Rule 18f-3, which became effective on April
3, 1995, requires an investment company to file with the Commission a written
plan specifying all of the differences among the classes, including the various
services offered to shareholders, the different distribution arrangements for
each class, the methods for allocating expenses relating to those differences
and any conversion features or exchange privileges. On September 19, 1996, the
Board of Trustees of the Trust authorized the Trust to implement a multi-class
distribution structure in compliance with Rule 18f-3. This Amended and Restated
Plan pursuant to Rule 18f-3 for operation of a multi-class system shall become
effective as of October 25, 2000.
II. ATTRIBUTES OF CLASSES
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A. Generally
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The Trust shall offer two classes of shares - - Service Shares and
Institutional Shares - - in the Short-Term Government Fund, Bond Fund, Balanced
Fund, Growth Fund, MidCap Growth Fund, International Equity Fund, Value Fund,
National Tax-Free Intermediate Bond Fund, Missouri Tax-Free Intermediate Bond
Fund, Kansas Tax-Free Intermediate Bond Fund and Core Equity Fund (each a "Fund"
and collectively, the "Funds").
In general, shares of each class shall be identical except for
different expense variables (which will result in different returns for each
class), certain related rights and certain shareholder services. More
particularly, the Service Shares and the Institutional Shares of each Fund shall
represent interests in the same portfolio of investments of the particular Fund,
and shall be identical in all respects, except for: (a) the impact of (i)
expenses assessed to Service Shares pursuant to the
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Distribution Plan adopted for that class, and (ii) any other incremental
expenses identified from time to time that should be properly allocated to one
class so long as any subsequent changes in expense allocations are reviewed and
approved by a vote of the Board of Trustees, including a majority of the
independent Trustees; (b) the fact that (i) the Service Shares shall vote
separately on any matter submitted to holders of Service Shares that pertains to
the Distribution Plan and the Shareholder Administrative Services Plan adopted
for that class; (ii) the Institutional Shares shall vote separately on any
matter submitted to holders of Institutional Shares that pertains to the
Shareholder Administrative Services Plan adopted for that class; and (iii) each
class shall vote separately on any matter submitted to shareholders that
pertains to the class expenses borne by that class; (c) the exchange privileges
of each class of shares; (d) the designation of each class of shares; and (e)
the different shareholder services relating to a class of shares. In addition,
Service Shares of each Fund bear a sales charge, as described below, whereas
Institutional Shares of each Fund do not bear a sales charge.
B. Distribution Arrangements, Expenses and Sales Charges
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1. Service Shares
Service Shares shall be offered to the general public and to
certain others and shall be subject to a front-end sales charge which shall not
initially exceed 3.50% of the offering price of Service Shares of the Funds
(2.00% of the offering price of Service Shares of the Short-Term Government
Fund, Kansas Tax-Free Intermediate Bond Fund, Missouri Tax-Free Intermediate
Bond Fund and National Tax-Free Intermediate Bond Fund). In addition, for
purchases of $1,000,000 or more where no initial sales charge has been paid,
such shares will be subject to a deferred sales charge of 1.00% on the lesser of
the offering price or the net asset value of the shares on the redemption date
for shares redeemed within 18 months after purchase.
Service Shares shall be further subject to (a) a distribution fee
payable pursuant to a Distribution Plan adopted for the class which shall not
initially exceed 0.25% (on an annual basis) of the average daily net asset value
of the Funds' respective outstanding Service Shares, and (b) a shareholder
servicing fee payable pursuant to a Shareholder Administrative Services Plan
adopted for the class which shall not initially exceed 0.25% of the average
daily net assets attributable to Service Shares of the respective Funds that are
owned of record or beneficially by customers of securities dealers, brokers,
financial institutions and other industry professionals ("Service
Organizations") that provide shareholder administrative support services with
respect to such customers' Service Shares.
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Shareholder administrative support services provided under the
Shareholder Administrative Services Plan may include, but are not limited to,
(i) establishing and maintaining accounts and records relating to customers that
invest in Service Shares; (ii) aggregating and processing purchase, redemption
and exchange requests for Service Shares from customers and placing net
purchase, redemption and exchange orders with the Trust's distributor; (iii)
providing customers with a service that invests the assets of their accounts in
Service Shares pursuant to specific or pre-authorized instructions; (iv)
processing dividend and distribution payments from the Trust on behalf of
customers; (v) providing information periodically to customers showing their
positions in Service Shares; (vi) arranging for bank wires; (vii) responding to
routine inquiries from customers concerning their investments in Service Shares;
(viii) responding to customer inquiries relating to the services performed by
the Service Organization; (ix) providing subaccounting with respect to Service
Shares beneficially owned by customers of the Service Organization or providing
the information to the Trust necessary for subaccounting; (x) if required by
law, forwarding shareholder communications from the Trust (such as proxies,
shareholder reports, annual and semi-annual financial statements and dividend,
distribution and tax notices) to customers; and (xi) assisting customers of the
Service Organization in changing dividend options, account designations and
addresses.
2. Institutional Shares
Institutional Shares shall be offered to investors maintaining
qualified accounts in the trust departments of affiliated and correspondent
banks of Commerce Bancshares, Inc. ("Institutions"), to participants in
employer-sponsored defined contribution plans administered by Institutions, to
shareholders who have existing accounts in Institutional Shares of the Funds on
the Effective Date and to bank employees.
Institutional Shares of the Short-Term Government, Bond,
Balanced, Growth, Value, MidCap Growth, International Equity, National Tax-Free
Intermediate Bond, Missouri Tax-Free Intermediate Bond, Kansas Tax-Free
Intermediate Bond and Core Equity Funds shall not bear a sales charge.
Institutional Shares shall be subject to a fee payable pursuant
to a Shareholder Administrative Services Plan which shall not initially exceed
0.25% of the average daily net assets attributable to Institutional Shares of
the respective Funds that are owned of record or beneficially by Service
Organizations that provide shareholder administrative support services with
respect to such customers' Institutional Shares.
Shareholder administrative services provided under the
Shareholder Administrative Services Plan may include, but are not limited to,
(i) establishing and maintaining accounts and
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records relating to customers that invest in Institutional Shares; (ii)
aggregating and processing purchase, redemption and exchange requests for
Institutional Shares from customers and placing net purchase, redemption and
exchange orders with the Trust's distributor; (iii) providing customers with a
service that invests the assets of their accounts in Institutional Shares
pursuant to specific or pre-authorized instructions; (iv) processing dividend
and distribution payments from the Trust on behalf of customers; (v) providing
information periodically to customers showing their positions in Institutional
Shares; (vi) arranging for bank wires; (vii) responding to routine inquiries
from customers concerning their investments in Institutional Shares; (viii)
responding to customer inquiries relating to the services performed by the
Service Organization; (ix) providing subaccounting with respect to Institutional
Shares beneficially owned by customers or providing the information to the Trust
necessary for subaccounting; (x) if required by law, forwarding shareholder
communications from the Trust (such as proxies, shareholder reports, annual and
semi-annual financial statements and dividend, distribution and tax notices) to
customers; and (xi) assisting customers in changing dividend options, account
designations and addresses.
C. Exchange Privileges
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Service Shares
Holders of Service Shares generally shall be permitted to
exchange their shares for Service Shares of another Fund of the Trust. Exchanges
may also be made to or from the Service Class of the Goldman Sachs Institutional
Liquid Assets Prime Obligation Portfolio. No additional sales charge will be
incurred when exchanging Service Shares of a Fund for Service Shares of another
Fund offered by the Trust.
Institutional Shares
Holders of Institutional Shares generally shall be permitted to
exchange their shares for Institutional Shares of another Fund or portfolio of
the Trust. Exchanges may also be made to or from the Service Class of the
Goldman Sachs Institutional Liquid Assets Prime Obligation Portfolio. No sales
charge will be incurred when exchanging Institutional Shares of a Fund for
Institutional Shares of another Fund or portfolio offered by the Trust.
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D. Shareholder Services
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1. Retirement Plans
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Service Shares
The Trust shall make (1) individual retirement accounts ("IRAs"),
including IRAs set up under a Simplified Employee Pension Plan ("SEP-IRAs") or
as Roth or SIMPLE IRAs; (2) Keogh plans; (3) corporate retirement plans; (4)
public employer deferred compensation plans; and (5) profit sharing plans
(including 401(k) plans) and money-purchase plans available to the holders of
Service Shares.
Institutional Shares
The Trust shall offer the following plans which are administered
by affiliates of Commerce Bancshares, Inc. and non-affiliates of Commerce
Bancshares, Inc. which have existing accounts in the Institutional Shares: (1)
IRAs, including IRAs set up under SEP-IRAs or as Roth or SIMPLE IRAs; (2) Keogh
plans; (3) corporate retirement plans; (4) public employer deferred compensation
plans; and (5) profit sharing plans (including 401(k) plans) and money-purchase
plans.
2. Telephone Transaction Privilege
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Service and Institutional Shares
The Trust shall offer a telephone transaction privilege to
holders of Service and Institutional Shares of the Funds whereby a shareholder
may make additional investments in or redeem shares from an established account
by telephone.
3. Dividend Reinvestment
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Service and Institutional Shares
The Trust shall offer a dividend reinvestment option whereby
holders of Service or Institutional Shares may elect to have their dividends,
capital gain distributions, or both received from a non-retirement Fund account
automatically invested in additional Service or Institutional Shares, as the
case may be, of any other Fund or portfolio of the Trust in which they currently
maintain an open non-retirement account.
4. Automatic Withdrawal Feature
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Service and Institutional Shares
The Trust shall offer an automatic withdrawal feature whereby an
investor may automatically redeem Service and/or Institutional Shares on a
monthly, quarterly, semi-annual or annual basis.
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5. Automatic Investment Program
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Service and Institutional Shares
The Trust shall offer an automatic investment program whereby an
investor generally may purchase Service and/or Institutional Shares of a Fund on
a regular basis by having a specific amount of money debited from his/her
account at a financial institution.
6. Minimum Purchase Requirements
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Service and Institutional Shares
The minimum initial investment in the Funds shall be: for regular
accounts, $1,000; for automatic investment accounts, $500; for individual
retirement accounts, Keogh plans, corporate retirement plans, public employer
deferred plans, profit sharing plans and 401(k) plans, $1,000; and for SEP and
SIMPLE IRAs, $50.
The minimum additional investment in the Funds shall be: for
regular accounts, $250; for automatic investment accounts, $50/month; for
individual retirement accounts, Keogh plans, corporate retirement plans, public
employer deferred plans, profit sharing plans and 401(k) plans, $250; and for
SEP and SIMPLE IRAs, $50/month.
The minimum initial investment in the Funds for employees of
Commerce Bancshares or other Commerce Funds service providers shall be: for
regular accounts, $250; for automatic investment accounts, $100; and for all
individual retirement accounts and Keogh plans, $100.
The minimum additional investment in the Funds for employees of
Commerce Bancshares or other Commerce Funds service providers shall be: for
regular accounts, $100; for automatic investment accounts, $25/quarter; and for
all individual retirement accounts and Keogh plans, $25/quarter.
E. Methodology for Allocating Expenses Between Classes; Payment of Dividends
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1. Income, realized gains and losses, unrealized appreciation and
depreciation and Fundwide Expenses are allocated to each class of shares based
on the net assets of that class in relation to the net assets of the Fund.
"Fundwide Expenses" means expenses of a Fund not allocated to a particular class
under the foregoing sentence, such as transfer agency and custodian expenses.
2. The Trust shall use the record share method as its dividend payment
methodology. Under the record share method, the
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sum of net investment income available for all classes after deduction of
allocated expenses but before consideration of expenses unique to any class (or
expenses, if any, incrementally higher for any class), is divided by the total
record date shares for all classes combined to arrive at a gross dividend rate
for all shares. From this gross rate, an amount per share for each class (which
represents the unique and incrementally higher, if any, expenses accrued during
the period to that class divided by the record date shares outstanding for that
class) is subtracted.
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