--------------------------------
OMB APPROVAL
--------------------------------
OMB Number: 3235-0059
Expires: January 31, 2008
Estimated average burden
hours per response . . . . . 14.
--------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
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 ss.240.14a-12
CASS INFORMATION SYSTEMS, 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):
[ ] 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:
--------------------------------------------------------------------------------
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the
form displays a currently valid OMB control number.
SEC 1913(04-05)
[ ] 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:
--------------------------------------------------------------------------------
CASS INFORMATION SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on
April 21, 2008
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Cass Information Systems, Inc. will
be held at the location specified below on Monday, April 21, 2008, at 11:00
a.m. local time, for the following purposes:
1. To elect four directors to serve for a three-year term;
2. To ratify the appointment of KPMG LLP as the independent registered
public accounting firm for 2008; and
3. To act upon such other matters as may properly come before the
meeting.
The close of business on March 5, 2008 has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Annual
Meeting.
This year's Annual Meeting will be held at The Charles F. Knight Executive
Education Center, Room 220, Olin School of Business at Washington University,
One Brookings Drive, St. Louis, Missouri 63130. For your reference, a map is
provided inside the back cover of this Proxy Statement.
Please note that you will be required to present an admission ticket to
attend the Annual Meeting. Your admission ticket is attached to your proxy
card. If your shares are held in the name of a broker, trust, bank or other
nominee, you can request an admission ticket by contacting our Investor
Relations Department at (314) 506-5500.
By Order of the Board of Directors,
/s/ P. Stephen Appelbaum
P. Stephen Appelbaum
Secretary
March 21, 2008
Bridgeton, Missouri
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING.
WHETHER OR NOT YOU INTEND TO BE PRESENT, IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED AND VOTED AT THE ANNUAL MEETING. YOU CAN VOTE YOUR SHARES BY ONE OF
THE FOLLOWING METHODS: VOTE OVER THE INTERNET OR BY TELEPHONE USING THE
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, OR MARK, SIGN, DATE AND PROMPTLY
RETURN THE ENCLOSED PROXY CARD. THE PRESENCE, IN PERSON OR BY PROPERLY EXECUTED
PROXY, OF A MAJORITY OF THE COMMON STOCK OUTSTANDING ON THE RECORD DATE IS
NECESSARY TO CONSTITUTE A QUORUM AT THE ANNUAL MEETING.
CASS INFORMATION SYSTEMS, INC.
13001 Hollenberg Drive
Bridgeton, Missouri 63044
PROXY STATEMENT
Annual Meeting of Shareholders
to be held April 21, 2008
This Proxy Statement is being furnished to the common shareholders of Cass
Information Systems, Inc. (the Company) on or about March 21, 2008 in
connection with the solicitation of proxies on behalf of the Board of Directors
of the Company (the Board) for use at the annual meeting of shareholders (the
Annual Meeting) to be held on April 21, 2008 at the time and place and for the
purposes set forth in the accompanying Notice of Annual Meeting, and at any
adjournment or postponement of that meeting.
Holders of common stock, par value $.50 per share, of the Company at its
close of business on March 5, 2008 (the Record Date) are entitled to receive
notice of and vote at the Annual Meeting. On the Record Date, there were
9,258,732 shares of common stock outstanding and entitled to vote at the Annual
Meeting. Holders of record of common stock are entitled to one vote per share
of common stock they held of record on the Record Date on each matter that may
properly come before the Annual Meeting. Company management and members of the
Board, in the aggregate, directly or indirectly controlled approximately 16% of
the common stock outstanding on the Record Date.
Shareholders of record on the Record Date are entitled to cast their votes
in person or by properly executed proxies at the Annual Meeting. The presence,
in person or by properly executed proxy, of a majority of the shares of common
stock outstanding on the Record Date is necessary to constitute a quorum at the
Annual Meeting. If a quorum is not present at the time the Annual Meeting is
convened, the Company may adjourn or postpone the Annual Meeting.
If a quorum is present, the affirmative vote of a majority of the shares
entitled to vote which are present in person or represented by proxy at the
Annual Meeting is required to elect directors, ratify the appointment of KPMG
LLP as the Company's independent registered public accounting firm for 2008,
and to act on any other matters properly brought before the meeting.
Shareholders may not cumulate their votes in the election of directors.
Shares represented by proxies which are marked or voted (i) "withheld" for
the election of the Board's director nominees, (ii) "abstain" to ratify the
appointment of the Company's independent registered public accounting firm, or
(iii) to deny discretionary authority on other matters will be counted for the
purpose of determining the number of shares represented by proxy at the
meeting. Such proxies will thus have the same effect as if the shares
represented thereby were voted against such nominee or nominees, against the
ratification of the appointment of the Company's independent registered public
accounting firm, and against such other matters, respectively. Shares held by
brokers that do not have discretionary authority to vote on a proposal and have
not received voting instructions from their clients are considered "broker
non-votes." Broker non-votes are considered present or represented for purposes
of determining a quorum but are not counted or deemed present or represented
for determining whether shareholders have approved that proposal. The inspector
of elections appointed for the meeting will separately tabulate and certify
affirmative and negative votes, abstentions and broker non-votes.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company, at or before the Annual Meeting, a written
notice of revocation bearing a date later than the date of the proxy, (ii) duly
executing and dating a subsequent proxy relating to the common stock and
delivering it to the Secretary of the Company at or before the vote is taken at
the Annual Meeting or (iii) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not in and of itself constitute
a revocation of a proxy). Any written notice revoking a proxy, or any
subsequent proxy should be sent to Cass Information Systems, Inc., Attn: P.
Stephen Appelbaum, Secretary, 13001 Hollenberg Drive, Bridgeton, Missouri
63044.
All common stock represented at the Annual Meeting by properly executed
proxies received prior to or at the Annual Meeting and not properly revoked
will be voted at the Annual Meeting in accordance with the instructions
indicated in such proxies. If no instructions are indicated, such proxies will
be voted FOR the election of the Board's director nominees and FOR the
ratification of the appointment of KPMG LLP as the Company's independent
registered public accountants for 2008. The Board does not know of any matters
other than the matters described in the Notice of Annual Meeting attached to
the Proxy Statement that will come before the Annual Meeting.
The Board solicits the proxies. In addition to the use of the mails,
proxies may be solicited personally or by telephone or electronic transmission
by directors, officers or regular employees of the Company. It is contemplated
that brokerage houses, custodians, nominees and fiduciaries will be requested
to forward the soliciting material to the beneficial owners of common stock
held of record by such persons, and will be reimbursed by the Company for
expenses incurred therewith. The cost of solicitation of proxies will be borne
by the Company.
2
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board consists of twelve members and is divided into three
classes of four directors each. Each director is elected for a three-year term,
and the term of each class of directors expires in successive years.
The Board, upon recommendation by the Nominating and Corporate Governance
Committee, has nominated incumbent directors K. Dane Brooksher, Eric H.
Brunngraber, Bryan S. Chapell, and Benjamin F. Edwards, IV for re-election. As
anticipated in last year's proxy statement and in accordance with the Board's
policy for director retirement age, Harry J. Krieg will retire from the Board
effective at this Annual Meeting. The Board does not intend to fill the vacancy
created by Mr. Krieg's retirement at this time, thereby causing a temporary
reduction in the present size of the Board to eleven members. A formal search
for a new director-nominee is currently underway.
The following information is submitted respecting the nominees for
election to the Board, together with the members of the Board whose terms will
continue after the Annual Meeting:
Nominees to serve until 2011:
K. Dane Brooksher ............... Mr. Brooksher, 69, has been a director since 2005. He serves on the Board of
Trustees for ProLogis, a leading provider of distribution services and facilities.
He has been with ProLogis since 1993 and has held the positions of Chairman of
the Board, Chief Operating Officer (COO), Co-Chairman and Chief Executive
Officer (CEO). Prior to joining ProLogis, he spent over 32 years with KPMG
LLP, serving as the managing partner for the Mid-West area and the Chicago
office, as well as serving on the firm's Board of Directors, Management
Committee and as International Development Partner. Mr. Brooksher is
currently a director of Qwest Communications International, Inc. and Pactiv
Corporation. He is director and past chairman of the Board of Sponsors of the
College of William and Mary Mason School of Business Foundation, and is a
member of the Advisory Board of the J. L. Kellogg Graduate School of
Management, Northwestern University.
Eric H. Brunngraber ............. Mr. Brunngraber, 51, has been a director since 2003. Mr. Brunngraber has
served as President and COO of the Company since May 2006. Prior to May
2006, Mr. Brunngraber served as Chief Financial Officer (CFO) of the Company
since 1997. He has held numerous positions with the Company since his
employment began in 1979, including Executive Vice President-Secretary of
Cass Commercial Bank, the Company's bank subsidiary. Mr. Brunngraber is
active in various civic, charitable, professional and church-related organizations
in the St. Louis, Missouri area.
Bryan S. Chapell ................ Dr. Chapell, 53, has been a director since 1998. Dr. Chapell joined the faculty of
Covenant Theological Seminary in 1985, and has served as seminary President
since 1994. Dr. Chapell has obtained degrees from Northwestern University,
Covenant Theological Seminary and Southern Illinois University and has
authored numerous books and publications.
Benjamin F. Edwards, IV ......... Mr. Edwards, 52, has been a director since 2005. He is branch manager of the
Town & Country, Missouri office of A.G. Edwards/Wachovia Securities LLC,
national investment firm. He was a member of the Board of Directors of A.G.
Edwards from 1994 to October 2007. Mr. Edwards' career with A.G. Edwards
began in 1977, where he has held numerous positions including Employment
Manager, Financial Advisor, Associate Branch Manager, Regional Officer,
Director of Sales and Marketing and President. He currently serves on the
Advisory Boards of Sunshine Missions, and Bethesda Hospital and Homes.
The Company's Board recommends a vote FOR the four nominees for election to the
Board of Directors.
3
Directors to serve until 2010:
Lawrence A. Collett .......... Mr. Collett, 65, has been a director since 1983. He has been the CEO and
Chairman of the Board of the Company since 1990 and 1992, respectively. He
began his career with the Company in 1963 and served as Executive Vice
President from 1974 to 1983 and President from 1983 to 1990. He holds
numerous positions with civic, charitable, and church-related institutions.
Mr. Collett is a current member of the St. Louis Regional Business Council.
Wayne J. Grace ............... Mr. Grace, 67, has been a director since 2003. In November 2005, he retired
from the position of Managing Director of UHY Advisors, Tax and Business
Consultants, a position he held since 2004. He was the founder and Managing
Director of Grace Advisors, Inc. from 1983 to 2004. From 1966 to 1983, he was
the Managing Partner of the St. Louis, Missouri office of Fox & Company,
where he served as a member of the National Consulting Services Steering
Committee. Mr. Grace served on the Board of Managers for the YMCA of the
Ozarks from 1985 to 2005. Mr. Grace became a director of Siegel-Robert, Inc.
in 2006. Mr. Grace is a Certified Public Accountant.
James J. Lindemann ........... Mr. Lindemann, 52, has been a director since 2007. He is Executive Vice
President of Emerson Electric Co., a publicly traded manufacturing company
based in St. Louis, Missouri. Mr. Lindemann joined Emerson in 1977, where he
held a number of increasingly responsible engineering and marketing positions
with its Specialty Motor division. In 1992, he was named President of
Commercial Cam, and in 1995, he was named President of the Emerson
Appliance Motor division. In 1996, Mr. Lindemann was promoted to Chairman
and CEO of the Emerson Motor Co. He was named Senior Vice President of
Emerson in 1999 and Executive Vice President in 2000. Mr. Lindemann has
served on the Emerson Advisory Board since 2000 and has been a board
member of the CEO Forum since 2003.
Andrew J. Signorelli ......... Mr. Signorelli, 68, has been a director since 1986. He currently serves as CEO of
Hope Educational & Research Center, founded in 1972. He has also served as
Administrator for St. Louis University Association from 1963 to 1965 and Faith
Hospital Association from 1965 to 1986. Mr. Signorelli is a member of the
Board of Directors for Hope Educational & Research Centers as well as various
other private corporations located in the St. Louis, Missouri area.
Directors to serve until 2009:
Robert A. Ebel .............. Mr. Ebel, 52, has been a director since 2006. He is a director and CEO of
Universal Printing Company, a privately held printing company headquartered
in St. Louis, Missouri. Mr. Ebel currently serves on the Board of the St. Louis
Graphic Arts Joint Health and Welfare Fund and is active in various civic and
charitable organizations in the St. Louis, Missouri area.
John L. Gillis, Jr. ......... Mr. Gillis, 68, has been a director since 2007. Mr. Gillis serves as senior counsel
to the law firm of Armstrong Teasdale LLP. Mr. Gillis began his career as an
associate with Armstrong Teasdale LLP in 1968 and served as partner with the
firm from 1975 to December 2006. Mr. Gillis is a member of the American Bar
Association, Missouri Bar Association and Bar Association of Metropolitan St.
Louis. Mr. Gillis serves as a director of Siegel-Robert, Inc. He has been active in
various civic and charitable organizations in the St. Louis, Missouri area, and
currently serves as Chairman of the Board of Directors for Aquinas Institute
of Theology.
4
Franklin D. Wicks, Jr. ...... Dr. Wicks, 54, has been a director since 2006. He is President of Fine Chemical
Division of Sigma-Aldrich Corporation, a publicly traded life science and high
technology company located in St. Louis, Missouri. Dr. Wicks has worked for
Sigma-Aldrich since 1982, beginning as a research chemist and subsequently
working in marketing, as President of Sigma Chemical and Vice President of
Worldwide Operations, Sigma-Aldrich. Prior to his current position, he served as
President, Scientific Research Division, Sigma-Aldrich from 1999 to 2002 and
was responsible for operations in 34 countries. After receiving his Ph. D., Dr.
Wicks served four years on the staff of the Navigators at the Air Force Academy
and at the University of Colorado at Boulder before joining Sigma-Aldrich. He
is currently a member of the CEO Forum, and serves as a trustee of Covenant
Theological Seminary.
CORPORATE GOVERNANCE
The Company's Board oversees and guides the Company's management and its
business. Committees support the role of the Board on issues that benefit from
consideration by a smaller, more focused subset of directors. All committee
members are elected by and serve at the pleasure of the Board.
Independence
Based on the independence standards as defined by the marketplace rules of
The Nasdaq Stock Market, Inc. (Nasdaq), the Board has determined in its
business judgment that each of the following directors and director-nominees
are independent, as such term is defined in the Nasdaq listing standards:
Messrs. Brooksher, Chapell, Ebel, Edwards, Gillis, Grace, Krieg, Lindemann,
Signorelli and Wicks. In addition, each of the members of the Audit Committee
meets the heightened independence standards set forth in the Securities and
Exchange Commission (SEC) rules and the Nasdaq listing standards. As further
required by Nasdaq rules, the Board has made a subjective determination as to
each independent director that no relationships exist which, in the opinion of
the Board, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director. In making these
determinations, the directors reviewed and discussed information provided by
the directors and the Company with regard to each director's business and
personal activities as they may relate to the Company and management. In
evaluating and determining Mr. Gillis' independence, the Board considered Mr.
Gillis' relationship with Armstrong Teasdale LLP, a law firm that provides
legal services to the Company. Mr. Gillis was a partner at Armstrong Teasdale
LLP until December 2006. Since January 1, 2007, Mr. Gillis has been employed as
a senior counsel at Armstrong Teasdale.
Board Meetings and Committees of the Board
The Board meets on a quarterly basis in January, April, July and October.
There were four meetings of the Board in 2007. All directors attended at least
75% of the aggregate number of meetings of the Board and committees on which
they served. The Company's directors are encouraged, but not required, to
attend the Company's Annual Meeting. In 2007, seven directors attended the
Annual Meeting.
The following table represents the membership and number of meetings in
2007 (in parentheses) of the standing committees of the Board, each of which is
composed entirely of independent directors, as defined by Nasdaq and SEC rules:
Nominating and Corporate
Audit (5) Governance (7) Compensation (4)
-------------------------- ------------------------- ------------------------
Robert A. Ebel Bryan S. Chapell K. Dane Brooksher*
Wayne J. Grace* Wayne J. Grace Benjamin F. Edwards, IV
Harry J. Krieg Harry J. Krieg* Andrew J. Signorelli
Frank D. Wicks
------------
*Committee Chairman
5
In January 2008, the Board approved the following committee appointments,
effective with the April 2008 Board meeting:
Nominating and Corporate
Audit Governance Compensation
----------------------------- ------------------------- ------------------------
Robert A. Ebel Bryan S. Chapell K. Dane Brooksher*
Wayne J. Grace* Wayne J. Grace Benjamin F. Edwards, IV
John L Gillis, Jr. Frank D. Wicks* James J. Lindemann
Andrew J. Signorelli
------------
*Committee Chairman
Audit Committee
The Audit Committee operates pursuant to a written charter that is
approved by the Board and available on the Company's website at
www.cassinfo.com. The Audit Committee oversees the accounting and financial
reporting processes of the Company and the audits of the Company's financial
statements. The Audit Committee is responsible for appointing, determining
funding for and overseeing the independent registered public accountants for
the Company, and meeting with the independent registered public accountants and
other corporate officers to review matters relating to corporate financial
reporting and accounting procedures and policies. Among other responsibilities,
the Audit Committee reviews financial information provided to shareholders and
others, assesses the adequacy of financial and accounting controls and
evaluates the scope of the audits of the independent registered public
accountants and reports on the results of such reviews to the Board. In
addition, the Audit Committee assists the Board in its oversight of the
performance of the Company's internal auditors. The Audit Committee meets with
the internal auditors on a quarterly basis to review the scope and results of
such services. The Board has determined that Mr. Grace and Mr. Krieg, each of
whom the Board has determined to be independent, qualify as "audit committee
financial experts", as defined by the SEC and in accordance with the Nasdaq
listing rules.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee operates pursuant to a
written charter that is approved by the Board and available on the Company's
website at www.cassinfo.com. The Nominating and Corporate Governance Committee
is responsible for identifying individuals qualified to become members of the
Board, recommending director-nominees and developing and addressing corporate
governance principles and issues applicable to the Company and its
subsidiaries. In recommending director-nominees to the Board, the Nominating
and Corporate Governance Committee solicits candidate recommendations from its
own members, other directors and management. In evaluating candidates, the
Nominating and Corporate Governance Committee takes into consideration such
factors as it deems appropriate, including any legal requirements or listing
standards requirements. The Nominating and Corporate Governance Committee
considers a candidate's judgment, skills, diversity, experience with businesses
and other organizations of comparable size, the interplay of the candidate's
experience with the experience of other Board members, and the extent to which
the candidate would be a desirable addition to the Board and any committees of
the Board. In general, no person who will have reached the age of 80 prior to
election date may be nominated for election or re-election to the Board. It is
also the Board's practice to limit new directors to no more than two per year
in order to maintain Board continuity.
Although the Nominating and Corporate Governance Committee does not
specifically solicit suggestions for possible candidates from shareholders, the
Nominating and Corporate Governance Committee will consider candidates meeting
the criteria set by the Nominating and Corporate Governance Committee, with the
concurrence of the full Board. The criteria will be re-evaluated periodically
and will include those criteria set out in the Nominating and Corporate
Governance Committee's charter. Suggestions, together with a description of the
proposed nominee's qualifications, other relevant biographical information and
an indication of the willingness of the proposed nominee to serve, should be
sent to the Cass Information Systems, Inc., Attn: P. Stephen Appelbaum,
Secretary, 13001 Hollenberg Drive, Bridgeton, Missouri 63044.
6
Compensation Committee
The Compensation Committee operates pursuant to a written charter that is
approved by the Board and available on the Company's website at
www.cassinfo.com. The Compensation Committee discharges the Board's
responsibilities relating to compensation of the Company's directors, CEO and
other executives. The Compensation Committee also has overall responsibility
for approving, evaluating and administering the compensation plans, policies
and programs of the Company.
Compensation Processes and Procedures
-------------------------------------
As specified in its charter, the Compensation Committee approves the
annual retainer and meeting fees for the Board of Directors and committees of
the Board, and sets the terms and awards of stock compensation for members of
the Board, subject to shareholder approval where appropriate.
The Compensation Committee establishes and administers the Company's
executive compensation programs and benefits. While the Compensation Committee
may seek input and recommendations from the CEO, CFO, COO-President or the Vice
President of Human Resources concerning all elements of executive and director
compensation, and confer with them on compensation philosophies, all
significant matters regarding compensation for executives are independently
considered and decided by the Compensation Committee. The Compensation
Committee annually reviews corporate goals and objectives relative to the CEO's
compensation and determines the CEO's compensation level based on this
evaluation, subject to Board approval. The Compensation Committee is
responsible for recommending to the Board salary levels and incentive stock
compensation for executive officers of the Company, and approves incentive
stock compensation for other members of management as recommended by the CEO.
The responsibility for determining cash bonuses for executive officers other
than himself is delegated to the CEO.
Periodically, the Company uses compensation specialists to assist in
designing or modifying some components of its overall compensation program and
to provide comparison data of compensation levels at other organizations with
which the Company competes for executive management talent. In such
circumstances, the Compensation Committee does not rely solely on survey data
or the consultant's judgment or recommendation, but considers such data when
exercising its judgment in evaluating the Company's compensation program.
Compensation Committee Interlocks and Insider Participation
-----------------------------------------------------------
No member of the Compensation Committee is, or was during the year ended
December 31, 2007, an officer, former officer or employee of the Company or any
of its subsidiaries, or a person having a relationship requiring disclosure by
the Company pursuant to Item 404 of Regulation S-K. No executive officer of the
Company served as a member of (i) the compensation committee of another entity
of which one of the executive officers of such entity served on the Company's
Compensation Committee or (ii) the board of directors of another entity of
which one of the executive officers of such entity served on the Company's
Board, during the year ended December 31, 2007.
Code of Conduct and Business Ethics
The Company has adopted a Code of Conduct and Business Ethics policy,
applicable to all Company directors, executive officers and employees. This
policy is publicly available and can be viewed on the Company's website at
www.cassinfo.com.
Certain Relationships and Related Party Transactions
Some of the directors and executive officers of the Company, and members
of their immediate families and firms and corporations with which they are
associated, have had transactions with the Company's subsidiary bank, including
borrowings and investments in depository accounts. All such loans and
investments have been made in the ordinary course of business, and on
substantially the same terms, including interest rates charged or paid and
collateral required, as those prevailing at the same time for comparable
transactions with unaffiliated persons, and did not involve more than the
normal risk of collectability or present other unfavorable features.
7
As provided by the Audit Committee's charter, the Audit Committee must
review and approve all transactions between the Company and any related person
that are required to be disclosed pursuant to Item 404 of Regulation S-K.
"Related person" and "transaction" shall have the meanings given to such terms
in Item 404 of Regulation S-K, as amended from time to time.
Communications with the Board of Directors
The Board has established a process by which shareholders can communicate
with the Board. Shareholders may communicate with any and all members of the
Board by transmitting correspondence to the following address or fax number:
Cass Information Systems, Inc., Name of Director(s), Attn: P. Stephen Appelbaum,
Secretary, 13001 Hollenberg Drive, Bridgeton, Missouri 63044, (314) 506-5560
(fax).
The Secretary will forward all correspondence to the Chairman of the Board
(the Chairman) or the identified director as soon as practicable. Communications
that are deemed to be inappropriate or present a safety or security concern may
be handled differently. Correspondence addressed to the full Board will be
forwarded to the Chairman, who will present the correspondence to the full
Board or a committee thereof. If a response to the communication is warranted,
the content and method of the response may be coordinated with the Company's
legal counsel.
Director Compensation
Each director of the Company who is not an officer or employee of the
Company receives compensation for his services. The following represents the
fee structure for the year ended December 31, 2007. The Board does not
anticipate any changes to the following fee structure for 2008:
Per Meeting Fees
----------------
Regular Board Meeting .................................... $ 2,500
Board Committee Meeting:
Members ................................................ $ 500
Chairperson ............................................ $ 900
Annual Fees
-----------
Board Member Retainer .................................... $ 8,400
Board Committee Chairperson Retainer:
Audit .................................................. $10,000
Nominating and Corporate Governance .................... $ 7,000
Compensation ........................................... $ 7,000
Restricted Stock Awards
-----------------------
Shares issued upon election to a three year term ......... 900
In 2007, restricted stock awards were made under the Company's 1995
Restricted Stock Bonus Plan. Beginning in 2008, restricted stock awards will be
issued under the Company's 2007 Omnibus Incentive Stock Plan. The shares carry
voting and dividend rights, which are accumulated by the Company and paid upon
vesting. The shares are subject to a three-year vesting schedule, with 1/3 of
the shares vesting each year on the anniversary date of the awards. The grant
date of awards is typically the end of the month in which directors are
elected.
8
Summary Compensation -- Directors
The following table sets forth for each director: (i) the dollar value of
fees earned or paid; (ii) the compensation cost of restricted stock
outstanding; (iii) all other compensation; and (iv) the dollar value of total
compensation for the fiscal year ended December 31, 2007.
Fees Earned or Stock All Other
Paid in Cash Awards Compensation Total
Name (1) ($)(5) ($)(6) ($)(7) ($)
--------------------------------- ---------------- ----------- ------------------ --------
Robert J. Bodine (2) ............ 5,800 2,994 136 8,930
K. Dane Brooksher ............... 28,017 7,600 384 36,001
Bryan S. Chapell ................ 21,900 7,600 384 29,884
Robert A. Ebel .................. 31,900 8,982 136 41,018
Benjamin F. Edwards IV .......... 20,400 7,600 384 28,384
John L. Gillis, Jr. (3) ......... 13,800 6,806 (8) -- 20,606
Wayne J. Grace .................. 45,400 7,997 (8) 276 53,673
Harry J. Krieg .................. 46,200 8,982 10,136 (9) 65,318
James L. Lindemann (3) .......... 13,800 6,806 (8) -- 20,606
Irving A. Shepard (4) ........... 6,300 1,191 276 7,767
Andy J. Signorelli .............. 33,983 7,997 (8) 276 42,256
Franklin D. Wicks, Jr. .......... 21,900 8,982 136 31,018
------------
(1) Messrs. Collett and Brunngraber are named executive officers who are also
directors, and their compensation is set forth in the Executive Officers --
Summary Compensation Table and related tables. They did not receive any
additional compensation for their service as directors.
(2) Retired from the Board of Directors on April 16, 2007.
(3) Inaugural election to the Board of Directors on April 16, 2007.
(4) Term expired on April 16, 2007.
(5) Represents fees paid during 2007 for services including Board Meeting and
Board Committee Meeting attendance, as well as retainers for Board
membership and Board Committee chair. Includes the following fees for
service on the Executive Loan Committee of Cass Commercial Bank, the
Company's bank subsidiary: Mr. Ebel, $11,500; Mr. Grace, $9,500; Mr. Krieg,
$12,000; and Mr. Signorelli (chairman), $12,600. The Executive Loan
Committee held 24 meetings during 2007. Attendance fees are $500 per meeting
for regular members and $600 per meeting for the committee chair.
(6) The aggregate number of shares of restricted stock awards issued under the
Company's 1995 Restricted Stock Bonus Plan and outstanding at December 31,
2007 (restated to reflect the 10% stock dividend paid by the Company in
December 2007) for each director was as follows:
Robert J. Bodine ............... --
K. Dane Brooksher .............. 495
Bryan S. Chapell ............... 495
Robert A. Ebel ................. 660
Benjamin F. Edwards IV ......... 495
Wayne J. Grace ................. 990
John L. Gillis, Jr. ............ 990
Harry J. Krieg ................. 660
James J. Lindemann ............. 990
Irving A. Shepard .............. --
Andy J. Signorelli ............. 990
Franklin D. Wicks, Jr. ......... 660
9
(7) Includes dividends paid on restricted stock awards at the time of vesting.
(8) Includes the compensation costs of restricted stock awarded on April 30,
2007 under the Company's 1995 Restricted Stock Bonus Plan (990 shares when
restated for the 10% stock dividend paid by the Company in December 2007)
with a full grant date fair value of $30,624 and subject to a three-year
vesting period.
(9) Mr. Krieg receives an annual $10,000 non-qualified supplemental retirement
benefit related to prior employment with the Company.
Compensation Discussion and Analysis
Overview of Compensation Philosophy and Objectives
--------------------------------------------------
The Compensation Committee believes that the skill and dedication of
executive officers and other management personnel are critical factors
affecting the Company's long-term success in meeting its objectives and
fostering growth and profitability. In support of this, compensation programs
have been designed to attract and retain a high level of talented leadership,
to reward performance in accordance with results, provide an incentive for
future performance and align Company executives' long-term interests with those
of the shareholders.
The overall compensation program is designed to result in compensation
that is commensurate with Company and individual performance. High levels of
performance should yield cash compensation which is competitive externally and
equitable internally. Incentive stock compensation should combine with cash
compensation to competitively reward high levels of performance, create an
incentive for attainment of longer-term objectives and provide a tool to retain
key management talent.
Executive compensation is comprised of three major components: (i) base
salaries reviewed annually by the Compensation Committee, (ii) cash incentive
bonuses awarded on individual and Company performance, and (iii) long-term
equity incentives awarded annually based on individual and Company performance.
The compensation mix of cash and long-term incentives for the CEO is similar to
that of other executive officers of the Company, and is believed to be
consistent with compensation provided to similar positions at comparable
organizations. The CEO is eligible to participate in all Company benefit
programs including those available to other executive officers, and receives no
additional perquisites beyond those provided to other executive officers, as
described below.
In order to assure that executive compensation is both competitive and
appropriate, the Compensation Committee reviews executive compensation in its
entirety before determining compensation level adjustments to any specific
components. As such, the Compensation Committee considers the value of cash and
incentive stock compensation, as well as non-cash benefits such as perquisites
and the calculated values of any retirement benefits provided under the
Company's defined benefit, defined contribution and supplemental retirement
plans. Gains from prior incentive stock awards are not taken into account, as
these were awards earned and granted based on prior performance.
The Compensation Committee also periodically compares all compensation
components for executive officers with data on similar positions at other
organizations with which the Company competes for talent. When evaluating
external competitiveness, third party survey data, as well as information from
other resources and industry contacts, are considered. In reviewing comparative
data, the Company does not engage in benchmarking for establishing compensation
levels relative to any predetermined point. In the Committee's view, third
party survey data provides insight into external competitiveness, but is not an
appropriate single basis for establishing compensation levels. This is
primarily due to the Company's unique structure, differences in the size of
surveyed companies, and the lack of sufficient appropriate matches to provide
statistical relevance. The Company's preference is that performance, rather
than benchmarking data, drive executive compensation. As such, the processes
used by the Compensation Committee to establish and adjust executive
compensation levels take into consideration external data along with
performance, experience, retention, potential and internal equity.
In 2006, the Committee retained Towers Perrin to provide comparative data
on cash and total executive compensation prior to review and adjustment of
executive management compensation for 2007. Data was
10
provided for the Business and Professional Services, Financial Services and
Payment Processing business segments. Consistent with prior years and the
Company's intent not to engage in benchmarking, the Compensation Committee did
not rely solely on comparative data, but did consider such elements when
exercising its own judgment in determining 2007 compensation. Towers Perrin's
overall conclusion confirmed the Committee's belief that 2007 compensation
levels were appropriate for the Company.
The Compensation Committee determines all compensation adjustments for the
CEO, subject to Board approval. The CEO makes recommendations to the
Compensation Committee concerning performance and related salary and incentive
stock levels for other executive officers, subject to the Compensation
Committee's approval. The CEO has sole responsibility for determining cash
bonus awards for all other executive officers, in accordance with plan
provisions.
Elements of Compensation
------------------------
The key elements in the executive compensation program are base salary,
cash bonus awards and incentive stock compensation. These elements, as well as
benefits plans and perquisites, are described below.
Base Salary
Salaries are established for executive officers by balancing both internal
and external factors. Internal equity is determined through comparison with
other executives within the Company, taking into account the scope of
responsibilities, performance, skills and experience. Similarly, the Company
considers external data to assure competitiveness in the market place. While
considerable weight is given to performance of the individual and their
associated operating unit, taking into account factors such as revenue growth,
cost efficiencies, technological advancements and leadership, specific
individualized targets and quantitative performance measurements are not
utilized. Base salaries are designed to attract and retain high levels of
expertise and talent. The Compensation Committee reviews salaries of the CEO
and other executive officers at the beginning of each fiscal year. The
Compensation Committee determines any adjustments to the CEO's salary and gives
consideration to the CEO's recommendation regarding adjustment to executive
officer salaries, based on the criteria referenced above.
Annual base salary increases for 2007 were warranted based on performance
of individuals and individual operating units, strong corporate earnings,
overall corporate growth over the past several years and competitive forces in
the external market. Base salary increases were as follows: Mr. Collett,
$460,000 to $485,000; Mr. Appelbaum, $205,000 to $211,000; Mr. Brunngraber,
$254,000 to $274,000; Mr. Murray, $215,000 to $225,000; Mr. Langfitt, $150,000
to $165,000 Increases were consistent with those given in prior years.
Cash Incentive Bonus
Cash bonuses are paid to all eligible full and part-time employees
according to the Profit Sharing Plan approved by the Board. Bonuses are based
on subjective assessment of individual performance, based on the same factors
considered with respect to salary adjustments and the level of Company profits.
The purpose of this plan is to facilitate the Company's continued growth and
success by providing rewards that are commensurate with achievement, thereby
creating an incentive for superior performance and improved results for
shareholders.
The bonus plan for all eligible employees is funded with 12.5% of the
Company's net profits before taxes for each semi-annual period of distribution.
Bonus funds available to the CEO are based on return on average equity for the
period as defined by the plan. The CEO would not be eligible for a bonus if the
return on average equity was zero or negative. Bonus funds available to other
executive officers are allocated at the CEO's discretion, giving consideration
to overall individual performance and both non-financial and financial
achievements relative to the Company and the individual position.
Individualized targets are not utilized. Any bonus payment in excess of 40% of
base salary requires Board approval.
Bonuses earned by the CEO in 2007 were paid in August 2007 and February
2008 for the first and second halves of 2007, respectively. Bonus payments were
made in accordance with the Company's Profit Sharing Plan, and were based on
the return on average equity achieved by the Company during the respective
six-month periods. Return on average equity for the first half of 2006 was
19.64%, resulting in a corresponding bonus for
11
the CEO of $95,300, or 19.65% of base salary. Return on average equity for the
second half of 2006 was 19.83%, which yielded the CEO's bonus of $107,500, or
22.2% of base salary.
Bonuses for other named executive officers were also paid in August 2007
and February 2008 for the first and second halves of 2007, respectively, and
were based on increase in net income after taxes achieved by the Company for
the respective six-month periods. Increase in net income after taxes was 11.9%
for the first half of 2006 and 24.3% for the second half of 2007, yielding the
bonuses shown in the Summary Compensation Table included herein. Due to
superior 2007 performance, CEO and executive bonuses were higher than in recent
years. Mr. Langfitt's bonus, in particular, reflected exceptional unit sales
growth for the year.
Incentive Stock Compensation
Incentive stock compensation is awarded to managers deemed to be part of
the executive management team. The key objective for providing incentive stock
compensation is to aid the Company in securing and retaining highly qualified
personnel by offering an ownership interest in the Company and thereby inducing
such personnel to provide service and effort for the Company's growth and
success. The Compensation Committee considers this a significant motivational
tool for executive officers and other management personnel, helping to align
their interests with those of shareholders. It has been the Company's belief
that long-term incentives serve as a retention tool since unvested stock grants
and options are forfeited if the executive leaves the Company.
Incentive stock compensation is awarded based on both objective guidance
and subjective evaluations made by the Compensation Committee.
The Compensation Committee initially establishes maximum levels of stock
compensation available for individual awards by analyzing the Company's
achievement of the following financial goals, averaged over the prior three
fiscal years: (i) return on equity; (ii) increase in diluted earnings per
share; and (iii) increase in processing fee revenues. Each of these financial
goals is weighted equally in determining the incentive stock compensation
payouts.
The Compensation Committee then determines the amount of incentive stock
compensation awarded to each executive officer by using a combination of the
objective measures described above and subjective criteria, including, but not
limited to, an individual officer's level of responsibility within the Company,
prior fiscal year performance, experience, and tenure with the Company. As with
salary determinations, each officer's individual performance is measured based
on his or her contribution to the Company's performance, demonstration of
leadership and management, and overall achievements relative to his or her
position rather than based on specific performance targets. The Committee
relies heavily on recommendations of the CEO when determining incentive stock
compensation awards for all named executive officers other than himself.
Historically, restricted stock awards and performance-based stock option
grants were approved by the Board and issued in accordance with their
respective plans. Restricted stock awards issued under the Company's 1995
Restricted Stock Bonus Plan were for common stock shares carrying voting and
dividend rights, and subject to a three-year vesting schedule with 1/3 of the
shares vesting each year on the anniversary date of the awards.
Performance-based stock option grants issued under the Company's 1995
Performance-Based Stock Option Plan were for shares of common stock, subject to
seven-year vesting with acceleration of vesting if certain financial criteria
are attained. Stock options become eligible for accelerated vesting in the
second calendar year after the option is granted, such that the earliest
possible vesting date for any option shares would be in the third year after
the option is granted. Acceleration factors are return on assets differential
and net after-tax income growth. No more than 30% of the option shares
accelerate in any year.
In 2007, the Board proposed and shareholders approved the 2007 Omnibus
Incentive Stock Plan. The purpose of the plan was to update and expand the
long-term incentive vehicles available to provide incentive opportunities that
align the personal financial interests of directors and eligible employees with
those of the Company's shareholders. To this end, the Board replaced the
Company's current equity incentive plans with this plan for incentive stock
compensation beginning in 2008.
During the transition between plans, 2007 awards were comprised solely of
restricted stock awards, which have been included in the Summary Compensation
and Grants of Plan-Based Awards tables. Awards for 2007
12
were due to the high level of performance achieved during 2004, 2005 and 2006,
and based on the following averages: 15.7% return on equity; 24.95% increase in
diluted earnings per share; and, 12.7% processing fee growth. For a more
detailed discussion on these statistics, please see the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2007. Awards to named
executive officers reflect varying levels of responsibility, with the highest
level of awards going to executives with the most far-reaching
responsibilities. Mr. Appelbaum's award reflects the fact that he joined the
organization mid-year 2006.
The Compensation Committee reserves the right, subject to Board approval,
to issue or refrain from issuing incentive stock compensation on a
discretionary basis. Influencing factors include economic achievement, ethical
standards, financial strength, management effectiveness and external market
forces.
To date, the number of stock options and restricted shares held by the
Company's executive officers is relatively small; therefore, the Compensation
Committee has not considered the overall amount of stock option grants and
restricted stock awards outstanding as a significant factor in determining
additional grants or awards.
The Company does not have a policy to adjust awards in the event that it
would become necessary to restate financial criteria in such a way as to impact
the basis for award of long-term incentives; however, the Compensation
Committee could elect to adjust other elements of compensation or subsequent
year awards if, in their view, it was appropriate.
The Company's policy does not allow the grant of option awards to be timed
with the release of material non-public information such that it would have an
effect on the exercise price that would benefit the executive. Independent
Board members approve the annual incentive stock awards granted to executive
management at the January Board meeting. The grant date set by the Board has
typically been the end of the month to ensure earnings have been previously
released to the public and all administrative requirements have been met. The
exercise price of stock options cannot be less than fair market value as of the
date the option is granted. Stock options and restricted stock awards are not
re-priced, in accordance with the Company's longstanding practice.
401(k) Defined Contribution Plan
All employees of the Company and its subsidiaries, other than those
classified as off-site employees, are eligible to participate in the Cass
Information Systems, Inc. 401(k) Plan. Beginning in 2007, eligibility
requirements were shortened to allow for monthly entry into the plan after one
month of service, thereby providing increased employee access to this
retirement benefit. Employees may voluntarily defer the maximum level allowed
by the Internal Revenue Service (IRS), which was $15,500 for 2007, plus an
additional $5,000 catch-up contribution for employees age 50 or older. The
Company matches 50% of the first 3% of employee contributions, subject to IRS
limitations. All employee contributions vest immediately. Company contributions
are subject to a three-year vesting period.
Defined Benefit Retirement Plan
All employees of the Company and subsidiaries, other than those classified
as off-site employees, become participants in the Retirement Plan for Employees
of Cass Information Systems, Inc. at the next semi-annual entry period
immediately following completion of one year of service. Upon retirement,
participants in this qualified plan will begin to receive monthly payments
equal to 1/12 of the sum of:
(i) .9% of Final Average Earnings multiplied by the number of years of
service, plus
(ii) .5% of Final Average Earnings in excess of Covered Compensation
multiplied by years of service.
Final Average Earnings is the average annual total compensation for the
five consecutive years of highest earnings during the last ten years of
employment. Covered Compensation is the average of the maximum social security
taxable wage bases in effect for each calendar year during the 35-year period,
ending with the year in which retirement age is attained under the Social
Security Act. Earnings covered by the plan equal W-2 earnings up to the maximum
IRS limit ($225,000 in 2007). Service for benefit accrual purposes is the
period beginning on the date of participation in the plan and ending on the
severance date.
13
Normal retirement age under the plan is 65 with five years of vesting
service. Early retirement eligibility is age 55 with five years of vesting
service. Benefits for early retirement under the defined benefit pension plan
would be calculated under the formula described above based on final average
earnings and years of service as of the date of retirement, reduced by (i) 5/9%
of 1% for each month by which the early retirement date or the first day of the
month coinciding with or next following the 60th birthday, whichever is later,
precedes the normal retirement date, and (ii) 5/18% of 1% for each month, if
any, by which the early retirement date precedes the first day of the month
coinciding with or next following the 60th birthday. Postponed retirement
benefits are an amount equal to the greater of (i) the normal retirement
benefit determined in accordance with the above formula using service and final
average earnings through the postponed retirement date, or (ii) the actuarial
equivalent of the normal retirement benefit on the postponed retirement date.
The normal form of benefit is a straight-life annuity with 120 months
guaranteed.
Supplementary Executive Retirement Program
The Company's benefits program also provides for the Cass Information
Systems, Inc. Supplemental Executive Retirement Plan (the SERP). The SERP was
designed to provide additional retirement benefits to key executives whose
benefits are limited by the IRS under the Company's qualified plan.
Upon retirement, participants in the SERP will receive monthly payments
equal to 1/12 of 70% of the Final Average Earnings, reduced proportionately for
length of service less than 25 years. Such amount is further reduced by the
participant's: (i) qualified retirement plan benefit, (ii) primary social
security benefit, and (iii) 401(k) hypothetical annuity.
Final Average Earnings, normal and early retirement age, years of service
and normal form of payment are the same as under the Retirement Plan for
Employees of Cass Information Systems, Inc., as described above.
Early retirement benefits under the SERP are calculated to be an annual
amount equal to 70% of the final average earnings multiplied by the number of
full years of service divided by 25% (not to exceed 100%), less the sum of the
defined pension plan benefit, primary social security benefit and 401(k)
hypothetical annuity, reduced by 1/180 for each of the first 60 calendar months
and 1/360 for each of the next 60 calendar months by which commencement of
benefits precedes normal retirement date. Benefits are not increased if payment
of benefits commences after the normal retirement date.
Gains or losses from stock options or restricted stock awards are not
considered in the calculation of retirement benefits, for either the defined
benefit plan or the SERP.
Employees are generally not eligible for benefits under the SERP if they
leave the Company prior to reaching age 55, and they receive a significant
increase in benefits if they remain with the Company until age 65; therefore,
the Compensation Committee believes that the SERP is an effective executive
retention tool.
Perquisites and Other Benefits
The Company provides executive officers with perquisites that the
Compensation Committee believes are reasonable and competitive based on the
Compensation Committee's knowledge of other companies with which the Company
competes for talent. For 2007, these perquisites included an automobile
allowance and, where deemed appropriate, a country club membership allowance.
Historically, the Company has not benchmarked or set targets for this
compensation component. The perquisites' value to the executive, as well as the
incremental cost to the Company, is considered when establishing compensation
levels; however, the value of this component of compensation is modest and has
not been given significant weight by the Compensation Committee when
establishing overall levels of executive compensation. Executive officers are
eligible to receive the same health, dental, disability and life insurance
benefits as are available to all other full-time employees of the Company and
its subsidiaries.
14
Post-Employment Payments
Executives of the Company do not have employment agreements, nor are there
any provisions for payments following or in connection with any termination or
change-in-control, other than for provisions that allow for SERP benefits,
stock options and restricted stock awards to vest upon a change in control or
in some circumstances, upon disability, in accordance with their respective
plans.
Federal Income Tax Deductibility Limitations
--------------------------------------------
The Compensation Committee takes into consideration the tax consequences
to employees and the Company when considering types and levels of awards and
other compensation granted to executives and directors.
The Compensation Committee also considers the potential impact of Section
162(m) of the Internal Revenue Code. Section 162(m) disallows a tax deduction
for any publicly held corporation for individual compensation exceeding $1
million in any taxable year for the CEO and the other senior executive
officers, other than compensation that is performance-based under a plan that
is approved by the shareholders of the Company and that meets certain other
technical requirements. Based on these requirements, the Compensation Committee
has determined that for 2007 Section 162(m) will not prevent the Company from
receiving a tax deduction for any of the compensation paid to executive
officers.
Post-Fiscal Year Compensation Actions
-------------------------------------
Succession
Mr. Collett has announced plans to retire from his position as CEO in
mid-2008 while retaining his position as Chairman of the Board of Directors. To
ensure a smooth management transition, the Board intends to offer Mr. Collett a
compensation package that is expected to include the following: (i) an annual
retainer of $150,000, pro-rated for the first year, for Mr. Collett's services
as Chairman of the Board, (ii) applicable director compensation, as outlined in
the section titled "Director Compensation" herein, (iii) continuation of
automobile and country club membership allowances, and (iv) retention of
outstanding restricted stock, option and stock appreciation rights awards
granted prior to his retirement, with the opportunity to acquire the restricted
stock and exercise the options and stock appreciation rights on the vesting and
exercise terms set forth in his award agreements. The Board has approved Mr.
Collett's participation in the incentive bonus program and profit sharing plan
for the period of January 1, 2008 through June 30, 2008, during which time Mr.
Collett will remain the Company's CEO. Upon the effective date of his
retirement, Mr. Collett will no longer participate in such program and plan or
receive health and life insurance benefits. The Company and Mr. Collett will
each have the right to terminate this arrangement at any time, with or without
cause.
During 2008, Mr. Collett will not serve on any committees of the Board, but
does intend to serve on the Executive Loan Committee of Cass Commercial Bank,
the Company's bank subsidiary. Mr. Brunngraber, who was promoted to
COO-President in 2006 as part of a long-range transition plan, will succeed Mr.
Collett as CEO.
Executive Compensation Comparative Data
During 2007, the Compensation Committee retained Towers Perrin to provide
comparative data on cash and total executive compensation prior to review and
adjustment of executive management compensation for 2008. Data was provided for
the Business and Professional Services, Financial Services and Payment
Processing business segments. Consistent with prior years and the Company's
intent not to engage in benchmarking, the Compensation Committee did not rely
solely on comparative data, but did consider such elements when exercising its
own judgment in determining 2008 compensation.
Base Salary
In January 2008, salaries were increased for the named executive officers
based on overall performance of individuals (based on the factors discussed
herein) and individual operating units, strong corporate earnings, and overall
corporate growth over the past several years. Base salary increases from 2007
to 2008 were as follows: Mr. Appelbaum, $211,000 to $219,000; Mr. Brunngraber,
$274,000 to $300,000; Mr. Murray, $225,000 to
15
$235,000; Mr. Langfitt, $165,000 to $180,000. These increases are consistent
with those given in prior years. Mr. Collett did not receive a salary increase
for 2008 due to his planned retirement and transition to Chairman of the Board
later in the year.
Long-Term Incentives
Long-term incentive stock compensation awards made in 2008 were
administered in accordance with the 2007 Omnibus Incentive Stock Plan. Awards
were comprised of 50% restricted stock award and 50% stock appreciation rights.
The grant date of the awards was the Board approval date. Awards were valued at
that day's closing stock price for restricted stock as reported on Nasdaq and
the equivalent Black Sholes value for stock appreciation rights. Awards were
determined using the methodology described above under Elements of Compensation
and were based on 2007 financial results averaged with the prior two years'
results. The awards for 2008 are shown below. The restricted stock awards for
2008 have also been included in the beneficial ownership numbers reported in
the Principal Shareholders table included herein.
Restricted Stock Stock Appreciation
Name Bonus Awards Rights
--------------------------------- ------------------ --------------------
Lawrence A. Collett .......... 8,065 29,950
P. Stephen Appelbaum ......... 2,105 7,818
Eric H. Brunngraber .......... 4,556 16,920
Harry M. Murray .............. 2,806 10,421
Gary B. Langfitt ............. 2,058 7,642
Report of the Compensation Committee
In the performance of its oversight function for the year ended December
31, 2007, the Compensation Committee reviewed and discussed with management the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K.
Based upon such review and discussions, the Compensation Committee has
recommended to the Board that the Compensation Discussion and Analysis be
included in this Proxy Statement.
K. Dane Brooksher, Chairman
Benjamin F. Edwards, IV
Andy J. Signorelli
16
EXECUTIVE OFFICERS
The following table lists the Company's principal executive officer,
principal financial officer and three other most highly compensated executive
officers as of December 31, 2007 (named executive officers), their ages and
their position(s) with the Company. No executive officers have employment
agreements with the Company.
Lawrence A. Collett .......... Information on Mr. Collett can be found in the section "Election of Directors."
Eric H. Brunngraber .......... Information on Mr. Brunngraber can be found in the section "Election of
Directors."
P. Stephen Appelbaum ......... Mr. Appelbaum, 50, joined the Company in May 2006, assuming the positions
of CFO and Secretary, as previously held by Mr. Brunngraber. Prior to joining
the Company, he was a Senior Vice President at US Bank (St. Louis, Missouri),
where he spent 16 years holding various positions in the areas of accounting,
financial reporting, risk management, and merger and acquisition integration.
Before his tenure with US Bank, he was a Senior Manager with KPMG, where
he spent 10 years specializing in bank accounting and auditing. Mr. Appelbaum
is a Certified Public Accountant.
Harry M. Murray .............. Mr. Murray, 54, has served as Executive Vice President since 2003. He has held
various positions with the Company since his initial employment in 1982,
including Executive Vice President -- Operations from 1995 to 2000 and
COO -- Utility Information Services from 2000 to 2003.
Gary B. Langfitt ............. Mr. Langfitt, 52, has served as COO -- Utility Information Services since 2003.
Prior to that, he was Vice President, Sales and Marketing -- Utility Information
Services since joining the Company in 1999.
Summary Compensation -- Executive Officers
The following table sets forth for each respective fiscal year and each
named executive officer: (i) the dollar value of base salary and bonus earned;
(ii) the compensation cost of restricted stock and option awards outstanding;
(iii) the change in pension value and nonqualified deferred earnings; (iv) all
other compensation; and (v) the dollar value of total compensation.
Change in
Stock Option Pension All Other
Name and Salary Bonus Awards Awards Value Compensation Total
Principal Position Year ($) ($) ($)(1) ($)(1) ($)(2) ($)(3) ($)
--------------------------------------------------------------------------------------------------------------
Lawrence A. Collett 2007 482,977 202,800 171,719 16,170 467,555 34,041 1,375,262
Chairman, CEO 2006 459,167 171,000 54,525 14,219 416,697 28,023 1,143,631
--------------------------------------------------------------------------------------------------------------
P. Stephen Appelbaum 2007 210,550 41,000 56,424 -- 5,560 13,600 327,134
CFO, Secretary 2006 128,913 23,000 19,444 -- -- 310 171,667
--------------------------------------------------------------------------------------------------------------
Eric H. Brunngraber 2007 272,393 120,000 88,062 5,977 232,292 30,906 749,630
COO, President 2006 252,750 97,000 21,057 5,243 52,291 29,275 457,616
--------------------------------------------------------------------------------------------------------------
Harry M. Murray 2007 224,217 86,000 51,974 2,699 196,799 13,374 575,063
Executive Vice President 2006 214,167 77,000 9,295 2,393 50,593 17,875 371,323
--------------------------------------------------------------------------------------------------------------
Gary B. Langfitt
COO, Utility 2007 163,800 140,750 36,051 1,259 17,816 13,514 373,190
Information Services 2006 149,167 90,286 5,043 1,104 18,613 12,806 277,019
------------
(1) The amounts reflect the financial statement expense under FAS 123R related
to awards made in prior years and do not correspond to the actual amount
that will be realized upon exercise by the named executive officers. See
Note 13 to the Company's fiscal year 2007 financial statements in the
Company's Annual Report on Form 10-K for a discussion of the valuation of
these amounts under FAS 123R.
(2) Represents the aggregate change in actuarial present value of accumulated
benefits under the Company's defined benefit pension plan and supplemental
executive retirement plan based on a five-year average of current pay. See
Note 12 to the Company's fiscal year 2007 financial statements in the
Company's Annual
17
Report on Form 10-K for a complete description of the material assumptions
applied in quantifying the present value of accumulated benefits.
(3) Consists of the Company's incremental cost on perquisite benefits, dividends
paid on restricted stock awards at the time of vesting, the Company's
matching contributions paid to the Company's 401(k) Plan on behalf of each
executive, and the imputed value of group term life premiums paid on behalf
of each executive. Perquisite benefits provided to the named executive
officers in 2007 consist of an allowance for personal automobile usage and
country club membership (for Mr. Collett and Mr. Brunngraber only).
Grants of Plan-Based Awards
The following table sets forth information regarding all equity based
incentive plan awards that were made to the named executive officers during
2007. Disclosure is provided on a separate line for each grant or award made
during the year. The information supplements the compensation costs of stock
and option awards in the Summary Compensation table above.
Estimated Future Payouts
Under Equity Exercise or
Incentive Plan Awards Base Price Grant Date
-------------------------- of Option Fair Value
Grant Board Threshold Target Max Awards of Stock and
Name Date Action Date (#) (#) (#) ($/Sh) Option Awards ($)
--------------------------------------------------------------------------------------------------------------
Lawrence A. Collett 01/31/07 01/16/07 0 12,507 (1) 0 -- $424,101
--------------------------------------------------------------------------------------------------------------
P. Stephen Appelbaum 01/31/07 01/16/07 0 2,228 (1) 0 -- 75,570
--------------------------------------------------------------------------------------------------------------
Eric H. Brunngraber 01/31/07 01/16/07 0 6,905 (1) 0 -- 234,169
--------------------------------------------------------------------------------------------------------------
Harry M. Murray 01/31/07 01/16/07 0 4,384 (1) 0 -- 148,678
--------------------------------------------------------------------------------------------------------------
Gary B. Langfitt 01/31/07 01/16/07 0 3,059 (1) 0 -- 103,731
Note: All share information has been restated to reflect the 10% stock dividend
paid by the Company in December 2007.
------------
(1) Represents restricted stock bonus awards issued pursuant to the terms of the
Company's 1995 Restricted Stock Bonus Plan. Restricted stock awards are
subject to a three-year vesting schedule, with 1/3 of the shares vesting
each year on the anniversary of the grant date of the awards. Dividends
earned on restricted stock awards are paid upon vesting. The 2007 awards
were based on criteria further described in the Compensation Discussion and
Analysis section contained herein.
18
Outstanding Equity Awards At Fiscal Year-End
The following table sets forth information on outstanding options and
stock awards held by the named executive officers on December 31, 2007,
including the number of shares underlying both exercisable and unexercisable
portions of each stock option as well as the exercise price and the expiration
date of each outstanding option, and the market value of stock awards.
Option Awards Stock Awards
----------------------------------------------------------- -----------------------------------
Number of Number of
Securities Securities Number of Market Value
Underlying Underlying Shares or Units of Shares or
Unexercised Unexercised Option of Stock That Units of Stock
Options Options Exercise Option Have Not That Have Not
(#)(1) (#)(1) Price Expiration Vested Vested
Name Exercisable Unexercisable ($) Date(1) (#)(2) ($)(3)
---------------------- ------------- --------------- ---------- ------------ ----------------- ---------------
Lawrence A. Collett 470 -- 8.83 1/2/2009 16,193 541,008
8,335 14,014 9.09 1/4/2010
3,163 7,381 12.23 1/4/2011
-- 5,764 14.75 1/3/2012
-- 13,719 20.67 1/2/2013
--------------------------------------------------------------------------------------------------------------------------
P. Stephen Appelbaum -- -- -- -- 4,428 147,939
--------------------------------------------------------------------------------------------------------------------------
Eric H. Brunngraber 2,740 4,610 9.09 1/4/2010 8,354 279,107
1,195 2,790 12.23 1/4/2011
-- 2,200 14.75 1/3/2012
-- 5,425 20.67 1/2/2013
--------------------------------------------------------------------------------------------------------------------------
Harry M. Murray 1,350 2,494 10.00 1/4/2010 4,899 163,676
393 918 14.51 1/4/2011
-- 1,251 14.44 1/3/2012
-- 1,700 20.67 1/2/2013
--------------------------------------------------------------------------------------------------------------------------
Gary B. Langfitt 254 594 14.51 1/4/2011 3,401 113,627
-- 834 14.44 1/3/2012
-- 1,133 20.67 1/2/2013
Note: All share information has been restated to reflect the 10% stock dividend
paid by the Company in December 2007.
------------
(1) Represents stock option grants issued pursuant to the Company's 1995
Performance-Based Stock Option Plan. The vesting date for option awards is
equivalent to the option expiration date, which is the first business day of
the seventh calendar year following the grant date of the option award. The
vesting date can be accelerated based on the Company's attainment of certain
financial operating performance criteria.
(2) Represents restricted stock bonus awards issued pursuant to the Company's
1995 Restricted Stock Bonus Plan. The shares are subject to a three-year
vesting schedule, with 1/3 of the shares vesting each year on the
anniversary of the grant date of the awards. The vesting dates for such
shares are as follows:
Name Vesting Date Number of Shares
------------------------------ -------------- -----------------
Lawrence A. Collett .......... 1/31/2008 5,693
2/15/2008 639
1/31/2009 5,692
1/31/2010 4,169
19
Name Vesting Date Number of Shares
------------------------------ -------------- -----------------
P. Stephen Appelbaum ......... 1/31/2008 742
5/15/2008 1,100
1/31/2009 743
5/15/2009 1,100
1/31/2010 743
Eric H. Brunngraber .......... 1/31/2008 2,904
2/15/2008 244
1/31/2009 2,904
1/31/2010 2,302
Harry M. Murray .............. 1/31/2008 1,789
1/31/2009 1,649
1/31/2010 1,461
Gary B. Langfitt ............. 1/31/2008 1,238
1/31/2009 1,144
1/31/2010 1,019
(3) Value based on $33.41 per share, which was the closing market price of the
Company's common stock reported on The Nasdaq Stock Market on December 31,
2007.
Options Exercised and Stock Vested
The following table sets forth the exercise of stock options and vesting
of restricted stock during 2007 for the named executive officers.
Options Awards Stock Awards
-------------------------------------------- ----------------------------------------------
Number of Shares Value Realized on Number of Shares Value Realized on
Acquired on Exercise Exercise Acquired on Vesting (1) Vesting(1)
Name (#) ($) (#) ($)
------------------------------ ---------------------- ------------------- ------------------------- ------------------
Lawrence A. Collett .......... -- -- 3,334 $108,700
P. Stephen Appelbaum ......... -- -- 1,100 33,011
Eric H. Brunngraber .......... -- -- 1,287 41,995
Harry M. Murray .............. -- -- 474 15,235
Gary B. Langfitt ............. -- -- 314 10,096
------------
(1) Value is determined by applying the market value of the stock on the vesting
date to the number of shares vested. All share information has been restated
to reflect the 10% stock dividend paid by the Company in December 2007.
20
Pension Benefits
The following table sets forth for fiscal year ended December 31, 2007 the
actuarial present value of each named executive officer's accumulated benefit
under defined benefit plans of the Company, the number of years of credited
service under each plan, and the amount of pension benefits paid to each named
executive officer.
Number of Present
Years of Value of Payments
Credited Accumulated During Last
Name Plan Name Service (#) Benefit ($)(2) Fiscal Year ($)
------------------------- ---------------------------------- ------------- ---------------- ----------------
Lawrence A. Collett (1) Retirement Plan for Employees of 40.91 1,153,114 0
Cass Information Systems, Inc.
Cass Information Systems SERP 40.91 2,220,376 0
--------------------------------------------------------------------------------------------------------------------
P. Stephen Appelbaum Retirement Plan for Employees of .05 5,560 0
Cass Information Systems, Inc.
Cass Information Systems SERP .05 0 0
--------------------------------------------------------------------------------------------------------------------
Eric H. Brunngraber Retirement Plan for Employees of 27.08 299,326 0
Cass Information Systems, Inc.
Cass Information Systems SERP 27.08 228,895 0
--------------------------------------------------------------------------------------------------------------------
Harry M. Murray Retirement Plan for Employees of 24.08 345,460 0
Cass Information Systems, Inc.
Cass Information Systems SERP 24.08 169,408 0
--------------------------------------------------------------------------------------------------------------------
Gary B. Langfitt Retirement Plan for Employees of 7.50 83,600 0
Cass Information Systems, Inc.
Cass Information Systems SERP 7.50 3,869 0
------------
(1) Mr. Collett was the only named executive officer eligible for early
retirement benefits under the Company's defined benefit pension plan and
supplemental executive retirement plan as of December 31, 2007.
(2) Represents the actuarial present value of accumulated benefit under the
Company's defined benefit pension plan based on a five-year average of
current pay. See Note 12 to the Company's fiscal year 2007 financial
statements in the Company's Annual Report on Form 10-K for complete
description of the material assumptions applied in quantifying the present
value of accumulated benefits.
All named executive officers were participants in the Retirement Plan for
Employees of Cass Information Systems, Inc. and the Cass Information Systems,
Inc. Supplemental Executive Retirement Plan at December 31, 2007. Details of
the plans are further defined in the Compensation Discussion and Analysis
above.
21
Principal Shareholders
The following table contains information with respect to beneficial
ownership of the Company's outstanding common stock as of March 5, 2008, by:
(i) each person known to the Company to be the beneficial owner of more than 5%
of common stock, (ii) each director and nominee for director and (iii) each
named executive officer. The address of each director and executive officer is
c/o Cass Information Systems, Inc., 13001 Hollenberg Drive, Bridgeton, Missouri
63044. Unless otherwise indicated, the named person has sole voting and
investment rights with respect to such shares.
Name of Beneficial Owner
(and address for Beneficial Owners over 5%) Amount of Shares Percent of
----------------------------------------------------------------------- Beneficially Owned (1) Class
Jake Nania ......................................................... 984,405 10.63%
1700 S. Ocean Blvd.
Lauderdale by the Sea, FL
Howard A. Kuehner .................................................. 524,381 5.66
1 Woodbridge Manor Rd.
St. Louis, MO
P. Stephen Appelbaum ............................................... 7,633 (2) *
Robert J. Bodine ................................................... 270,834 (3) 2.93
K. Dane Brooksher .................................................. 4,235 (4) *
Eric H. Brunngraber ................................................ 45,706 (5) *
Bryan S. Chapell ................................................... 4,090 (6) *
Lawrence A. Collett ................................................ 211,425 (7) 2.28
Robert A. Ebel ..................................................... 2,090 (8) *
Benjamin F. Edwards IV ............................................. 5,290 (9) *
John L. Gillis, Jr. ................................................ 990 (10) *
Wayne J. Grace ..................................................... 20,556 (11) *
Harry J. Krieg ..................................................... 266,025 (12) 2.87
Gary B. Langfitt ................................................... 12,529 (13) *
James J. Lindemann ................................................. 990 (14) *
Harry M. Murray .................................................... 41,190 (15) *
Irving A. Shepard .................................................. 50,502 (16) *
Andy J. Signorelli ................................................. 538,373 (17) 5.81
Franklin D. Wicks, Jr. ............................................. 1,540 (18) *
-------------
All directors (including nominees) and all executive officers
as a group (including executive officers not named herein) ......... 1,522,261 (19) 16.42%
------------
* Less than 1% of class.
(1) Shares shown as beneficially owned include shares of common stock that
directors and executive officers have the right to acquire within 60 days
of March 5, 2008 pursuant to the exercise of stock options.
(2) Include 1,843 shares owned jointly with his spouse. Includes 5,790 shares
of restricted stock subject to forfeiture; Mr. Appelbaum has voting but no
investment rights.
(3) Includes 243,004 shares held in trust or limited partnership of which Mr.
Bodine has shared voting and investment rights. Includes 27,830 shares
owned by Mr. Bodine's spouse.
(4) Includes 2,750 shares held in trust of which Mr. Brooksher has shared
voting and investment rights. Includes 495 shares of restricted stock
subject to forfeiture; Mr. Brooksher has voting but no investment rights.
22
(5) Includes 27,950 shares owned jointly with his spouse. Includes 9,760 shares
of restricted stock subject to forfeiture; Mr. Brunngraber has voting but
no investment rights. Includes 7,996 shares issuable upon the exercise of
stock options that are exercisable within 60 days.
(6) Includes 2,605 shares owned jointly with his spouse. Includes 495 shares of
restricted stock subject to forfeiture; Mr. Chapell has voting but no
investment rights.
(7) Includes 63,154 shares owned jointly with his spouse. Includes 17,926
shares of restricted stock subject to forfeiture; Mr. Collett has voting
but no investment rights.
(8) Includes 1,100 shares held in trust of which Mr. Ebel has shared voting and
investment rights. Includes 660 shares of restricted stock subject to
forfeiture; Mr. Ebel has voting but no investment rights.
(9) Includes 220 shares Mr. Edwards holds as custodian for his minor children.
Includes 495 shares of restricted stock subject to forfeiture; Mr. Edwards
has voting but no investment rights.
(10) Shares consist of restricted stock subject to forfeiture; Mr. Gillis has
voting but no investment rights.
(11) Includes 14,547 shares held in trust of which Mr. Grace has voting and
investment rights. Includes 5,019 shares owned by Mr. Grace's spouse. Also
includes 990 shares of restricted stock subject to forfeiture; Mr. Grace
has voting but no investment rights.
(12) Includes 120,211 shares held in trust of which Mr. Krieg has voting and
investment rights. Includes 145,154 shares owned by Mr. Krieg's spouse.
Also includes 660 shares of restricted stock subject to forfeiture; Mr.
Krieg has voting but no investment rights.
(13) Includes 4,223 shares of restricted stock subject to forfeiture; Mr.
Langfitt has voting but no investment rights. Includes 758 shares issuable
upon the exercise of stock options that are exercisable within 60 days.
(14) Shares consist of restricted stock subject to forfeiture; Mr. Lindemann has
voting but no investment rights.
(15) Includes 31,412 shares owned jointly with his spouse. Also includes 5,918
shares of restricted stock subject to forfeiture; Mr. Murray has voting but
no investment rights. Includes 3,860 shares issuable upon the exercise of
stock options that are exercisable within 60 days.
(16) Includes 50,005 shares held in family partnerships with shared voting and
investment rights.
(17) Includes 537,383 shares held in trust of which Mr. Signorelli has shared
voting and investment rights. Includes 990 shares of restricted stock
subject to forfeiture; Mr. Signorelli has voting but no investment rights.
Includes 25,530 shares pledged as security on an outstanding loan with the
Company.
(18) Includes 880 shares held in trust of which Mr. Wicks has voting and
investment rights. Includes 660 shares of restricted stock subject to
forfeiture; Mr. Wicks has voting but no investment rights.
(19) Includes 13,627 shares issuable upon the exercise of stock options that are
exercisable within 60 days.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers, directors and persons who own more than 10% of the Company's common
stock to file reports of ownership and changes in ownership with the SEC and
Nasdaq. Executive officers, directors and greater than 10% shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based on a review solely of copies of such forms received and written
representation from certain reporting persons, the Company believes that all
Section 16(a) filing requirements applicable to 2007 for executive officers,
directors, and greater than 10% beneficial owners were complied with in a
timely manner except as follows: Messrs. Gillis, Lindemann, Signorelli, Grace,
Collett and Murray each did not file a Form 4 within the required period of two
business days to report one transaction.
23
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP has served as the Company's independent registered public
accounting firm since 1983, and for the year ended December 31, 2007. The Audit
Committee of the Board has selected KPMG to serve as such firm for 2008. A
representative of KPMG LLP is expected to be present at the Annual Meeting,
have an opportunity to make a statement and be available to respond to
appropriate questions of shareholders.
Fees Incurred For Services Performed by the Independent Registered Public
Accountants
For the years ended December 31, 2007 and 2006, the Company incurred the
following fees for services performed by KPMG LLP:
2007 2006
-------- --------
Audit Fees (1) .............. $260,000 $255,000
Audit-related Fees .......... 5,000(3) --
Tax Fees (2) ................ 73,437 86,136
All Other Fees .............. -- --
-------- --------
Total ...................... $338,437 $341,136
-------- --------
------------
(1) Represents fees for the quarterly review of financial statements and annual
audit of the Company's consolidated financial statements and internal
controls over financial reporting. All such fees were pre-approved by the
Audit Committee.
(2) Represents fees for tax compliance and preparation services, all of which
were pre-approved by the Audit Committee.
(3) Represents fees for services rendered in connection with the Company's Form
S-8 filing on May 31, 2007 for the 2007 Omnibus Incentive Stock Plan. Such
fees were pre-approved by the Audit Committee.
The Audit Committee pre-approves all auditing services, internal
control-related services and permitted non-audit services (including the fees
and terms thereof) to be performed for the Company by its independent auditors,
subject to the de minimis exception for non-audit services that are approved by
the Audit Committee prior to the completion of the audit. The Audit Committee
may delegate to one or more members the authority to grant pre-approvals of
audit and permitted non-audit services, provided such decisions to grant
pre-approvals are presented to the full Audit Committee at its next scheduled
meeting.
The Company's Board recommends a vote FOR the ratification of KPMG LLP as the
Company's independent registered public accounting firm for 2008.
24
Report of the Audit Committee
The Audit Committee, composed entirely of independent directors, as
defined by the Nasdaq listing standards, assists the Board in its oversight of
(i) the integrity of the financial statements of the Company, (ii) the
independent registered public accountants' qualifications and independence
(iii) the performance of the independent registered public accountants and the
Company's internal audit function, and (iv) the compliance by the Company with
legal and regulatory requirements. The Audit Committee operates pursuant to a
written charter that is reviewed and approved annually.
In the performance of its oversight function for the year ended December
31, 2007 the Audit Committee reviewed and discussed the audited consolidated
financial statements and the Company's internal controls over financial
reporting with management and the independent registered public accountants.
The Audit Committee also discussed with the independent registered public
accountants the matters required by Statement on Auditing Standards No. 114,
The Auditor's Communication With Those Charged With Governance, as currently in
effect. The Audit Committee has also received the written disclosures and the
letter from the independent registered public accounting firm required by
Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committees, as currently in effect, and has discussed with the
independent registered public accounting firm its independence.
Based upon these reviews and discussions, the Audit Committee recommended
to the Board that the Company's audited consolidated financial statements be
included in its Annual Report on Form 10-K for the year ended December 31, 2007
filed with the SEC.
Wayne J. Grace, Chairman
Robert A. Ebel
Harry J. Krieg
25
SHAREHOLDER PROPOSALS
In order for a shareholder to bring any business before a meeting of
shareholders, the shareholder must have given timely notice thereof in writing
to the Company's Secretary and comply with the other notice requirements set
forth in the Company's bylaws. To be timely, a shareholder's notice must be
delivered to or mailed and received at the Company's principal executive
offices not less than 60 days nor more than 90 days prior to the first
anniversary of the preceding year's Annual Meeting. For the 2009 Annual
Meeting, shareholders must submit proposals no earlier than January 21, 2009
and no later than February 20, 2009.
If, however, the date of the meeting is changed by more than 30 days
before or after such anniversary date, the notice must be received not later
than the tenth day following the day on which such notice of the date of the
Annual Meeting was mailed or such public disclosure was made. A shareholder's
notice to the Secretary must set forth as to each matter the shareholder
proposes to bring before the Annual Meeting:
o a brief description of the business desired to be brought before the
Annual Meeting and the reasons for conducting the business at the
Annual Meeting,
o the name and address, as they appear on the Company's books, of the
proposing shareholder,
o the class and number of shares which are beneficially owned by the
shareholder, and
o any material interest of the shareholder in such business.
The requirements contained in the Company's bylaws and summarized above
are separate from and in addition to the SEC requirements that a shareholder
must meet to have a proposal included in the Company's Proxy Statement. Any
shareholder proposal to be considered for inclusion in the Company's Proxy
Statement and form of proxy for its next Annual Meeting, which is expected to
be held on April 20, 2009, must be received by the Company no later than
November 15, 2008 at the following address: Cass Information Systems, Inc.,
Attn: P. Stephen Appelbaum, Secretary, 13001 Hollenberg Drive, Bridgeton,
Missouri 63044.
OTHER MATTERS AND HOUSEHOLDING
Management does not intend to present to the Annual Meeting any business
other than the items stated in the Notice of Annual Meeting of Shareholders and
does not know of any matters to be brought before the Annual Meeting other than
those referred to above. If, however, any other matters properly come before
the Annual Meeting, the persons designated as proxies will vote on each such
matter in accordance with their best judgment.
The Company may and some banks, brokers and other nominee record holders
may be participating in the practice of householding proxy statements and
annual reports. This means that only one copy of this proxy statement may have
been sent to multiple shareholders in your household unless you provide us with
contrary instructions. A separate copy of this proxy statement or the annual
report will be delivered to you if you write to: Cass Information Systems,
Inc., Attn: P. Stephen Appelbaum, Secretary, 13001 Hollenberg Drive, Bridgeton,
Missouri 63044, or call (314) 506-5500.
By Order of the Board of Directors
P. Stephen Appelbaum, Secretary
26
Charles F. Knight Executive Education Center
John M. Olin School of Business at Washington University in St. Louis
Knight Center Reception Desk (314) 933-9400
[GRAPHIC OF MAP]
From I-70 (or Lambert International Airport)
--------------------------------------------
Go south on I-170 to the Forest Park Parkway exit.
Go east on Forest Park Parkway through Clayton, past Big Bend Boulevard to
Throop Drive (1st stoplight after Big Bend).
Turn right (south) onto Throop Drive.
The Charles F. Knight Center is located across from the parking garage on the
south side of Throop Drive.
Please park in the parking garage and proceed into the main entrance of the
Charles F. Knight Center to Room 220.
--------
From I-64 (Hwy 40), heading west (from downtown St. Louis)
----------------------------------------------------------
Take the Skinker/Clayton Road exit and turn right onto Skinker Boulevard (the
cross street at the end of the exit ramp).
Go north on Skinker Boulevard for approximately .9 miles.
Turn left (west) onto Forest Park Parkway (Millbrook Boulevard).
Continue on Forest Park Parkway to Throop Drive (3rd stoplight). Turn left
(south) onto Throop Drive.
The Charles F. Knight Center is located across from the parking garage on the
south side of Throop Drive.
Please park in the parking garage and proceed into the main entrance of the
Charles F. Knight Center to Room 220.
--------
From I-64 (Hwy 40), heading east (from west county)
---------------------------------------------------
Take the North Hanley Road exit and go north on Hanley Road.
Continue on Hanley Road to Clayton Road. Turn right (east) onto Clayton Road.
Continue on Clayton to Big Bend Boulevard. Turn left (north) onto Big Bend
Boulevard.
Stay on Big Bend Boulevard to Forest Park Parkway (Millbrook Boulevard). Turn
right (east) on Forest Park Parkway.
Continue on Forest Park Parkway to Throop Drive (1st stoplight). Turn right
(south) onto Throop Drive.
The Charles F. Knight Center is located across from the parking garage on the
south side of Throop Drive.
Please park in the parking garage and proceed into the main entrance of the
Charles F. Knight Center to Room 220.
--------
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE PROPOSALS.
Please [ ]
Mark Here
for Address
Change or
Comments
SEE REVERSE SIDE
FOR WITHHELD
FOR ALL FOR AGAINST ABSTAIN
1. Election of Directors [ ] [ ] 2. Ratification of appointment of KPMG [ ] [ ] [ ]
Nominees: LLP as independent registered public
accounting firm.
01 K. Dane Brooksher
02 Eric H. Brunngraber I/We plan to attend the meeting. (Please [ ]
03 Bryan S. Chapell detach admittance card below and bring
04 Benjamin F. Edwards, IV to the meeting.)
Withheld for the nominee you list below (Write that nominee's name in the space
provided below:)
--------------------------------------------
-----
|
|
Signature _______________________ Signature ______________________ Date _______
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING.
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
--------------------------------------- -------------------------------------
| INTERNET | | TELEPHONE |
| http://www.proxyvoting.com/cass | | 1-866-540-5760 |
| Use the Internet to vote your proxy. | OR | Use any touch-tone telephone to |
| Have your proxy card in hand | | vote your proxy. Have your proxy |
| when you access the web site. | | card in hand when you call. |
--------------------------------------- -------------------------------------
If you vote your proxy by Internet or by telephone, you do NOT need to mail back
your proxy card. To vote by mail, mark, sign and date your proxy card and return
it in the enclosed postage-paid envelope.
------------------------------------------------------------------------------
Choose MLink(SM) for fast, easy and secure 24/7 online access to your future
proxy materials, investment plan statements, tax documents and more. Simply
log on to Investor ServiceDirect(R) at www.bnymellon.com/shareowner/isd where
step-by-step instructions will prompt you through enrollment.
------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
CASS INFORMATION SYSTEMS, INC.
The undersigned hereby appoints Lawrence A. Collett and P. Stephen Appelbaum,
and each of them, with power to act without the other and with power of
substitution, as proxies and attorneys-in-fact and hereby authorizes them to
represent and vote, as provided on the other side, all the shares of Cass
Information Systems, Inc. Common Stock which the undersigned is entitled to
vote, and, in their discretion, to vote upon such other business as may properly
come before the Annual Meeting of Shareholders of the Company to be held April
21, 2008 or at any adjournment or postponement thereof, with all powers which
the undersigned would possess if present at the Meeting.
(Continued and to be marked, dated and signed, on the other side)
------------------------------------------------------------------------------
| Address Change/Comments (Mark the corresponding box on the reverse side) |
|------------------------------------------------------------------------------|
| |
| |
| |
| |
| |
------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
ADMISSION TICKET
CASS INFORMATION SYSTEMS, INC.
2008 Annual Meeting of Shareholders
Monday, April 21, 2008
11:00 A.M. Local Time
The Charles F. Knight Executive Education Center
Olin School of Business at Washington University
One Brookings Drive
St. Louis, Missouri 63130
For your reference, a map is provided inside the
back cover of the Proxy Statement.