SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]
Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Commerce Bancorp, Inc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Registrant as Specified In Its Charter)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box)
[X] $125 per Exchange Act Rules -011(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 0-11:1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[ ] Fee previously paid with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0- (a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Filing Party:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Date Filed:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
COMMERCE BANCORP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Commerce Bancorp, Inc. ("Bancorp") will be held at the Commerce University,
17000 Horizon Way at Springdale Road, Mount Laurel, New Jersey, on Tuesday, June
20, 1995, at 5:00 P.M., local time, and at any adjournment or postponement
thereof, to consider and act upon the following matters as more fully described
in the annexed Proxy Statement:
1. The election of Directors;
2. Such other matters as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
You are cordially invited to attend the Annual Meeting in person.
Whether or not you expect to attend the Annual Meeting in person, you are urged
to sign and date the enclosed Proxy and return it promptly in the envelope
provided for that purpose.
The Board of Directors has fixed May 1, 1995 as the record date for
determination of shareholders entitled to vote at the Annual Meeting. Only
shareholders of record at the close of business on that date will be entitled to
notice of, and to vote at, the Annual Meeting.
By Order of the Board of Directors
ROBERT C. BECK,
Secretary
May 15, 1995
<PAGE>
COMMERCE BANCORP, INC.
COMMERCE ATRIUM
1701 ROUTE 70 EAST
CHERRY HILL, NEW JERSEY
PROXY STATEMENT
This Proxy Statement is being furnished to shareholders of Commerce
Bancorp, Inc. ("Bancorp") in conjunction with the solicitation of proxies by the
Board of Directors of Bancorp for use at Bancorp's Annual Meeting of
Shareholders to be held on June 20, 1995, at the Commerce University, 17000
Horizon Way at Springdale Road, Mount Laurel, New Jersey (the "Annual Meeting"),
and at any adjournment or postponement thereof. The approximate date upon which
this Proxy Statement and the accompanying form of Proxy will be first sent,
given or otherwise made available to Bancorp's shareholders is May 15, 1995.
The expense of the proxy solicitation will be borne by Bancorp. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone by directors, officers or employees of Bancorp and its subsidiaries
without additional compensation. Bancorp is required to pay the reasonable
expenses incurred by recordholders of Bancorp Common Stock who are brokers,
dealers, banks or voting trustees, or their nominees, for mailing proxy material
and annual shareholder reports to any beneficial owners of Bancorp Common Stock
they hold of record, upon request of such recordholders.
The Board of Directors of Bancorp has fixed the close of business on
May 1, 1995, as the date for determining holders of record of Bancorp Common
Stock, par value $1.5625 per share (the "Common Stock"), and Bancorp Series C
ESOP Cumulative Convertible Preferred Stock, no par value per share ("Series C
ESOP Preferred Stock"), entitled to notice of, and to vote at, the Annual
Meeting. On that date, there were 10,574,991 shares of Common Stock outstanding
and 417,000 shares of Series C ESOP Preferred Stock outstanding. Each holder of
Common Stock and Series C ESOP Preferred Stock, voting together and not as
separate classes, is entitled to cast one vote for each share held of record on
that date. All Series C ESOP Preferred Stock is held of record by Bancorp's
Employee Stock Ownership Plan Trust ("ESOP Trust"). See "Series C ESOP Preferred
Stock" and "Employee Stock Ownership Plan." The holders of a majority of the
aggregate outstanding shares of Bancorp Common Stock and Series C ESOP Preferred
Stock, present either in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting.
If the enclosed form of Proxy is appropriately marked, signed, and
returned in time to be voted at the Annual Meeting, the shares represented by
the Proxy will be voted in accordance with the instructions marked thereon.
Signed Proxies not marked to the contrary will be voted "FOR" the election of
all nominees for director.
The enclosed Proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the Annual Meeting:
(i) matters which Bancorp does not know, a reasonable time before the proxy
solicitation, are to be presented at the Annual Meeting; (ii) approval of the
minutes of a prior meeting of shareholders if such approval does not amount to
ratification of the action taken at that meeting; (iii) the election of any
person to any office for which a bona fide nominee is named in this Proxy
Statement and such nominee is unable to serve or for good cause will not serve;
(iv) any proposal omitted from this Proxy Statement and
<PAGE>2
Proxy pursuant to Rule 14a-8 or Rule 14a-9 promulgated under the Securities
Exchange Act of 1934; and (v) matters incident to the conduct of the Annual
Meeting. In connection with such matters, the persons named in the enclosed
Proxy will vote in accordance with their best judgment.
Bancorp is not currently aware of any matters which will be brought
before the Annual Meeting (other than procedural matters) which are not referred
to in the enclosed Notice of Annual Meeting.
Any Bancorp shareholder giving a Proxy may revoke it at any time before
it is exercised by giving written notice of such revocation, signed in the same
manner as the Proxy, to Bancorp's Secretary or by executing a new Proxy and
returning it to the Secretary of Bancorp prior to the voting of the first Proxy
at the Annual Meeting. Bancorp shareholders attending the Annual Meeting may
also revoke their Proxies by giving written notice of revocation to Bancorp's
Secretary prior to the voting of the Proxy or by voting by written ballot at the
Annual Meeting.
<PAGE>3
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
Common Stock
The following table sets forth, as of May 1, 1995, the beneficial
ownership of Bancorp Common Stock by each director and nominee for director of
Bancorp, each of the executive officers of Bancorp and by the directors,
nominees for directors, and executive officers of Bancorp as a group. No person
is known by Bancorp to own beneficially more than 5% of Bancorp's outstanding
Common Stock. Unless otherwise specified, all persons listed below have sole
voting and investment power with respect to their shares.
<TABLE>
<CAPTION>
COMMON STOCK
Name of Beneficial Number of Shares
Owner or Beneficially Percent of
Identity of Group Owned(1)(2) Class(2)
<S> <C> <C>
David Baird, IV . . . . . . . . . . . . . . 71,401 (3) *%
Robert C. Beck. . . . . . . . . . . . . . . 109,224 (4) 1.03
Jack R Bershad. . . . . . . . . . . . . . . 38,251 (3)(5) *
Vernon W. Hill, II. . . . . . . . . . . . . 462,340 (6) 4.34
C. Edward Jordan, Jr. . . . . . . . . . . . 156,260 (7) 1.46
Morton N. Kerr. . . . . . . . . . . . . . . 84,742 (3)(8) *
Steven M. Lewis . . . . . . . . . . . . . . 116,716 (3)(9) 1.10
Daniel J. Ragone. . . . . . . . . . . . . . 49,680 (10) *
Joseph T. Tarquini, Jr. . . . . . . . . . . 149,899 (3)(11) 1.42
Peter M. Musumeci, Jr . . . . . . . . . . . 113,390 (12) 1.06
Robert D. Falese, Jr. . . . . . . . . . . . 12,225 (13) *
Dennis M. DiFlorio. . . . . . . . . . . . . 45,773 (14) *
David Wojcik. . . . . . . . . . . . . . . . 47,351 (15) *
All Directors, Nominees for
Directors and Executive Officers
of Bancorp as a Group (13 Persons) 1,368,493(16) 12.49%
- -----------------------------
<FN>
*less than 1%
</FN>
</TABLE>
<PAGE>4
(1) The securities "beneficially owned" are determined in accordance with
the definitions of "beneficial ownership" as set forth in the regulations of the
Securities and Exchange Commission and, accordingly, may include securities
owned by or for, among others, the wife and/or minor children of the individual
and any other relative who has the same residence as such individual as well as
other securities as to which the individual has or shares voting or investment
power or has the right to acquire under outstanding stock options within 60 days
after May 1, 1995. Beneficial ownership may be disclaimed as to certain of the
securities.
(2) The figures in these columns do not reflect the shares of Common
Stock issuable upon conversion of the Series C ESOP Preferred Stock. As of May
1, 1995, each share of Series C ESOP Preferred Stock was convertible into 1.3401
shares of Common Stock.
(3) Includes 6,093 shares of Common Stock issuable upon the exercise of
stock options granted under Bancorp's 1989 Stock Option Plan for Non-Employee
Directors.
(4) Includes 3,601 shares of Common Stock issuable upon the exercise of
stock options granted under Bancorp's 1989 Stock Option Plan for Non-Employee
Directors.
(5) Includes 16,167 shares of Common Stock held by Mr. Bershad's wife.
(6) Includes 35,329 shares held by Site Development Inc., 11,041 shares
held by the wife of Mr. Hill, 45,618 shares held by S. J. Dining, Inc., 43,141
shares held by U.S. Restaurants, Inc., 42,022 shares held by J.V. Properties,
11,206 shares held by Business Interiors, Inc., 29,646 shares held by the Hill
Family Trust and 4,029 shares allocated to Mr. Hill by Bancorp's ESOP. Mr. Hill
is the Chairman of the Board of Site Development, Inc., a shareholder of S. J.
Dining, Inc., a shareholder of U.S. Restaurants, Inc., a partner in J.V.
Properties, a co-trustee and beneficiary of the Hill Family Trust and a
co-trustee and beneficiary of Bancorp's ESOP Trust. Business Interiors, Inc. is
a company owned by Mr. Hill's wife. This amount also includes 79,692 shares of
Common Stock issuable upon the exercise of stock options granted to Mr. Hill
under Bancorp's 1984 and 1994 Stock Option Plans. This amount does not include
1,759 shares of Series C ESOP Preferred Stock allocated to Mr. Hill by the
Bancorp ESOP nor does it include any unallocated shares of Common Stock or
Series C ESOP Preferred Stock held by the Bancorp ESOP.
(7) Includes 96,795 shares of Common Stock issuable upon the exercise of
stock options granted to Mr. Jordan under Bancorp's 1984 and 1994 Stock Option
Plans, 2,783 shares allocated to Mr. Jordan by Bancorp's ESOP, of which Mr.
Jordan is a co-trustee and beneficiary, 400 shares held by Mr. Jordan's wife and
462 shares held in trust for Mr. Jordan's minor children. This amount does not
include 1,460 shares of Series C ESOP Preferred Stock allocated to Mr. Jordan by
the Bancorp ESOP nor does it include any unallocated shares of Common Stock or
Series C ESOP Preferred Stock held by the Bancorp ESOP.
(8) Includes 134 shares of Common Stock held by Mr. Kerr's wife and
77,947 shares held by the Markeim-Chalmers, Inc. Pension Plan. Markeim-Chalmers,
Inc. is a company owned by Mr. Kerr.
(9) Includes 45,618 shares held by S. J. Dining, Inc. and 43,141 shares
held by U.S. Restaurants, Inc. Mr. Lewis is President of S. J. Dining, Inc. and
President of U.S. Restaurants, Inc. This amount also includes 850 shares held in
trust for Mr. Lewis' minor children.
<PAGE>5
(10) Includes 12,859 shares held by Mr. Ragone's wife.
(11) Includes 13,858 shares held by The Tarquini Organization Profit
Sharing Plan and 2,100 shares held by The Tarquini Foundation. Mr. Tarquini is
President of The Tarquini Organization.
(12) Includes 87,684 shares of Common Stock issuable upon the exercise of
stock options granted to Mr. Musumeci under Bancorp's 1984 and 1994 Stock Option
Plans and 274 shares held in trust for Mr. Musumeci's minor child. This amount
also includes 2,577 shares of Common Stock allocated to Mr. Musumeci under
Bancorp's ESOP but does not include 1,618 shares of Series C ESOP Preferred
Stock allocated to Mr. Musumeci by Bancorp's ESOP.
(13) Includes 9,200 shares of Common Stock issuable upon the exercise of
stock options granted to Mr. Falese under Bancorp's 1984 and 1994 Stock Option
Plans and 2,312 shares held by Mr. Falese's wife in trust for their minor
daughter.
(14) Includes 37,510 shares of Common Stock issuable upon the exercise of
stock options granted to Mr. DiFlorio under Bancorp's 1984 and 1994 Stock Option
Plans and 513 shares of Common Stock allocated to Mr. DiFlorio under Bancorp's
ESOP. It does not include 798 shares of Series C ESOP Preferred Stock allocated
to Mr. DiFlorio under Bancorp's ESOP.
(15) Includes 37,882 shares of Common Stock issuable upon the exercise of
stock options granted to Mr. Wojcik under Bancorp's 1984 and 1994 Stock Option
Plans, 116 shares held in trust for Mr. Wojcik's minor children and 449 shares
held by Mr. Wojcik's wife. This amount also includes 507 shares of Common Stock
allocated to Mr. Wojcik under Bancorp's ESOP but does not include 841 shares of
Series C ESOP Preferred Stock allocated to Mr. Wojcik by Bancorp's ESOP.
(16) Includes an aggregate of 382,829 shares of Common Stock issuable
upon the exercise of stock options granted to directors and certain executive
officers of Bancorp under Bancorp's stock option plans.
Series C ESOP Preferred Stock
As of May 1, 1995, all of the 417,000 shares of the Series C ESOP
Preferred Stock outstanding were held of record by Bancorp's ESOP Trust.
Additionally, as of such date, the ESOP Trust held of record 72,699 shares of
Common Stock. As of May 1, 1995, 86,217 shares of Series C ESOP Preferred Stock,
and 61,790 shares of Common Stock held by the ESOP Trust were allocated to
individual participant accounts. See "Employee Stock Ownership Plan". If all of
the unallocated shares of Series C ESOP Preferred Stock held of record by the
ESOP Trust as of May 1, 1995, were converted into Common Stock, the unallocated
shares of Common Stock the ESOP Trust would hold of record would be 4.08% of the
Common Stock.
THE BOARD OF DIRECTORS
During 1994, there were twelve meetings of the Board of Directors of
Bancorp. The Board of Directors of Bancorp has established an Audit and
Compliance Committee and a Personnel Committee but does not have a standing
Nominating Committee. In addition, each of Bancorp's three subsidiary banks,
Commerce Bank, N.A., Cherry Hill, New Jersey ("Commerce NJ"),
<PAGE>6
Commerce Bank/Pennsylvania, N.A., Philadelphia, Pennsylvania ("Commerce PA") and
Commerce Bank/Shore, N.A. ("Commerce Shore") has various committees of their
respective boards.
Information with respect to the committees of the Board of Directors of
Bancorp is set forth below.
Audit and Compliance Committee
The Audit and Compliance Committee reviews Bancorp's and its wholly-owned
subsidiary banks' financial statements, accounting procedures and methods
employed in connection with audit programs. It serves as the principal liaison
between the Board of Directors and Bancorp's independent certified public
accountants. In addition, this committee makes recommendations to the Board of
Directors concerning the selection of Bancorp's independent certified public
accountants. Robert C. Beck, Daniel J. Ragone, Joseph T. Tarquini, Jr., Thomas
J. Maher (a director of Commerce PA) and Daniel M. Monroe (a director of
Commerce Shore) are the current members of the Audit and Compliance Committee.
During 1994, there were six meetings of the Audit and Compliance Committee.
Personnel Committee
The Personnel Committee reviews and recommends the levels of compensation
of Commerce NJ's, Commerce PA's and Commerce Shore's executive officers and
administers Bancorp's 1984 and 1994 Stock Option Plans. Morton N. Kerr, Daniel
J. Ragone and Jack R Bershad are the current members of the Personnel Committee.
During 1994, there was one meeting of the Personnel Committee. The report of the
Personnel Committee with respect to 1994 compensation is set forth on page 14 of
this Proxy Statement.
Attendance
In 1994, each of Bancorp's directors and nominees for directors attended
more than 75% of the aggregate of the total number of meetings of the Board of
Directors and all committees of which they were members of Bancorp, Commerce NJ,
Commerce PA and Commerce Shore, as the case may be.
ELECTION OF DIRECTORS
The Bylaws of Bancorp provide that Bancorp's business shall be managed by
a Board of not less than five nor more than twenty-five directors and that
within these limits the number of directors shall be as established by
resolution of a majority of the full Board of Directors. The Board of Directors
by resolution has set the number of persons to be elected to the Board of
Directors at the Annual Meeting at nine. The election of directors will be
determined by a plurality vote and the nine nominees receiving the most "FOR"
votes will be elected.
The Board of Directors has designated the persons listed below to be
nominees for election as directors. All of the nominees are currently members of
the Board, and each of them has consented to serve if elected. Bancorp has no
reason to believe that any of the nominees will be unavailable for election;
however, if any nominee becomes unavailable for any reason, the Board of
<PAGE>7
Directors may designate a substitute nominee, or the number of directors to be
elected at the Annual Meeting will be reduced accordingly. Directors of Bancorp
hold office for one year and until their successors have been duly elected.
The following information regarding Bancorp's nominees is based, in part,
on information furnished by these individuals.
<TABLE>
<CAPTION>
Name Age Positions with Bancorp and Subsidiaries
<S> <C> <C>
Vernon W. Hill, II 49 Chairman and President of Bancorp; Chairman and President of Commerce
NJ; Chairman and President of Commerce PA; Chairman of Commerce
Shore
C. Edward Jordan, Jr. 51 Executive Vice President and Director of Bancorp; Executive Vice
President and Director of Commerce NJ
Robert C. Beck 59 Secretary and Director of Bancorp; Secretary and Director of
Commerce NJ
David Baird, IV 58 Director of Bancorp and Commerce NJ
Jack R Bershad 64 Director of Bancorp, Commerce NJ and
Commerce PA
Morton N. Kerr 64 Director of Bancorp and Commerce NJ
Steven M. Lewis 45 Director of Bancorp, Commerce NJ and
Commerce PA
Daniel J. Ragone 67 Director of Bancorp and Commerce NJ
Joseph T. Tarquini, Jr. 59 Director of Bancorp and Commerce NJ
</TABLE>
Mr. Hill, a director of Commerce NJ since 1973 and Bancorp since 1982,
has been Chairman and/or President of Commerce NJ since 1973 and Chairman and
President of Bancorp since 1982. Mr. Hill has been Chairman of the Board and/or
President of Site Development, Inc., Cherry Hill, New Jersey, a developer of
real estate, since 1968. Mr. Hill has been Chairman of the Board of Directors of
Commerce PA from June 1984 to June 1986 and from January 1987 to the present, a
director of Commerce Bank/Harrisburg, Camp Hill, Pennsylvania since 1985, and
the Chairman of Commerce Shore since January, 1989.
Mr. Jordan, a director of Commerce NJ since 1974 and Bancorp since
1982, has been Executive Vice President of Commerce NJ since 1974 and Executive
Vice President of Bancorp since 1982.
Mr. Beck, a director of Commerce NJ since 1973 and Bancorp since 1982,
has been Secretary of Commerce NJ since 1973 and Secretary of Bancorp since
1982. Mr. Beck has been a partner of the law firm of Parker, McCay & Criscuolo,
Marlton, New Jersey since 1987.
<PAGE>8
Mr. Baird, a director of Bancorp and Commerce NJ since 1988, has been
President of Haddonfield Lumber Company, Inc., Cherry Hill, New Jersey since
1962.
Mr. Bershad, a director of Commerce PA since 1984 and Bancorp and
Commerce NJ since 1987, has been a partner of the law firm of Blank, Rome,
Comisky & McCauley, Philadelphia, Pennsylvania and Cherry Hill, New Jersey,
since 1964 and its Chairman since 1990.
Mr. Kerr, a director of Commerce NJ since 1973 and Bancorp since 1982,
has been President of Markeim-Chalmers, Inc., Realtors, Cherry Hill, New Jersey,
since 1965.
Mr. Lewis, a director of Commerce PA since 1984 and a director of
Bancorp and Commerce NJ since 1988, has been President of U.S. Restaurants,
Inc., Blue Bell, Pennsylvania since 1985 and President of S. J. Dining, Inc.
since 1986.
Mr. Ragone, a director of Commerce NJ since 1981 and Bancorp since
1982, has been Chairman of the Board and President of Raible, Lacatena & Beppel,
C.P.A., Haddonfield, New Jersey, or its predecessor firms, since 1960.
Mr. Tarquini, a director of Commerce NJ since 1973 and Bancorp since
1982, has been President of The Tarquini Organization, A.I.A., Camden, New
Jersey, since 1980. Prior thereto, he had been a partner in its predecessor
firms.
<PAGE>9
EXECUTIVE OFFICERS
The executive officers of Bancorp and its banking subsidiaries, as of
May 1, 1995, are set forth below.
<TABLE>
<CAPTION>
Position with Bancorp, Commerce NJ,
Commerce PA, and Commerce Shore;
Name Age Principal Occupation
<S> <C> <C>
Vernon W. Hill, II 49 Chairman and President of Bancorp since 1982;
Chairman and/or President of Commerce NJ since
1973; Chairman of Commerce PA from June 1984 to
June 1986 and from January 1987 to present;
Chairman of Commerce Shore since 1989.
C. Edward Jordan, Jr. 51 Executive Vice President and Director of Bancorp
since 1982; Executive Vice President and Director
of Commerce NJ since 1974.
Peter M. Musumeci, Jr. 44 Executive Vice President and Senior Credit Officer
since 1986 and Treasurer and Assistant Secretary
since 1984 of Bancorp; Executive Vice President of
Commerce NJ since 1986; Director of Commerce PA
since 1987 and Commerce Shore since 1989.
Robert D. Falese, Jr. 48 Executive Vice President and Senior Loan Officer of
Commerce NJ since 1992. From 1990 to 1992, Mr.
Falese was President and Chief Executive Officer of
Sterling Bank, Mount Laurel, New Jersey. Prior
thereto, Mr. Falese was an Executive Vice President
and Senior Lending Officer at the Fidelity Bank,
Philadelphia, Pennsylvania for more than five years.
David Wojcik 42 Senior Vice President of Bancorp since 1988.
Dennis M. DiFlorio 41 Senior Vice President of Commerce NJ since 1988.
</TABLE>
<PAGE>10
EXECUTIVE COMPENSATION
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, Bancorp's chief executive officer
and each of Bancorp's other four most highly compensated executive officers (the
"named executives") during each of the last three fiscal years.
<TABLE>
<CAPTION>
Long Term
Other Compensation All
ANNUAL COMPENSATION Annual Stock Option Other
Name/Title Year Salary Bonus Compensation(1) Grants(2) Compensation
<S> <C> <C> <C> <C> <C> <C>
Vernon W. Hill, II 1994 $ 390,000 $150,000 $50,244 - 0 - $ 30,854(3)
Chairman of the Board, 1993 316,000 125,000 50,564 62,843 33,005
Chief Executive Officer and 1992 290,000 125,000 -- 11,278 18,597
President of Bancorp;
Chairman of the Board,
Chief Executive Officer and
President of Commerce NJ
C. Edward Jordan, Jr. 1994 $ 215,000 $ 75,000 -- - 0 - $ 23,069(3)
Executive Vice President of 1993 190,000 75,000 -- 48,235 22,916
Bancorp; Executive Vice 1992 170,000 75,000 -- 7,293 18,092
President of Commerce NJ
Peter M. Musumeci, Jr.
Executive Vice President, 1994 $ 200,000 $ 75,000 -- - 0 - $ 18,964(3)
Treasurer and Assistant 1993 185,000 50,000 -- 48,235 27,072
Secretary of Bancorp; 1992 170,000 35,000 -- 6,946 14,293
Executive Vice President
of Commerce NJ
Robert D. Falese, Jr.(4) 1994 $ 200,000 $ 75,000 -- - 0 - $ 8,242(3)
Executive Vice President of 1993 175,000 50,000 -- 36,659 2,083
Commerce NJ 1992 52,308 5,000 -- - 0 - 116
Dennis M. DiFlorio 1994 $ 140,000 $ 60,000 -- - 0 - $ 2,742(3)
Senior Vice President of 1993 100,000 25,000 -- 23,483 7,970
Commerce NJ 1992 85,000 15,000 -- 3,647 7,078
</TABLE>
<PAGE>11
- ------------------------
(1) The total in this column reflects personal use of a company car (1994,
$5,389; 1993, $5,449), expense allowances (1994, $36,600; 1993,
$32,600) and country club dues (1994, $8,255; 1993, $12,515). The value
of such other annual compensation did not exceed the lesser of $50,000
or 10% of salary and bonus for any individual in any year except Mr.
Hill in 1993 and 1994.
(2) The stock option grants reflected in this column have been adjusted for
the 5% stock dividends declared on December 13, 1994, January 19, 1994,
January 19, 1993 and January 22, 1992. The original grant was adjusted
based on the unexercised option shares outstanding on the date of the
stock dividend.
(3) The totals in this column reflect premiums on life insurance (Mr. Hill,
$26,116; Mr. Jordan, $19,089; Mr. Musumeci, $14,471); and long-term
disability (Mr. Hill, $4,738; Mr. Jordan, $3,980; Mr. Musumeci, $4,223;
Mr. Falese, $8,242; and Mr. DiFlorio, $2,742) policies and
contributions to Bancorp's ESOP. Allocations to participants' accounts
for the 1994 ESOP plan year have not yet been completed and are
therefore not included in 1994.
(4) Mr. Falese commenced employment in September 1992. The 1992 annual
compensation represents compensation for the period from his hire date
through the end of the year. Mr. Falese was not eligible for a
contribution from Bancorp's ESOP in 1992 or 1993.
Employment Agreements
At the recommendation of Bancorp's Personnel Committee, the Board of
Directors of Bancorp approved Employment Agreements for Messrs. Hill, Jordan and
Musumeci.
Mr. Hill's Employment Agreement provides that he will be employed by
Bancorp and Commerce NJ as Chairman of the Board, President and Chief Executive
Officer for a term of five years effective January 1, 1992, provided that on
each January 1 thereafter the Employment Agreement shall be automatically
renewed and extended for a new five year term unless either Bancorp or Hill
gives the other at least ninety days prior written notice of their desire to
terminate the Agreement, in which event the term will have four years remaining.
Under the terms of the Employment Agreement, Mr. Hill's "base salary"
shall not be less than $440,000 per year subject to upward adjustment by
Bancorp's Board of Directors. The Employment Agreement provides that Mr. Hill
will participate in any benefit or compensation programs in effect which are
generally made available from time to time to executive officers of Bancorp and
provides for all other fringe benefits as in effect from time to time which are
generally available to Bancorp's salaried officers including, without
limitation, medical and hospitalization coverage, life insurance coverage and
disability coverage.
The Employment Agreement requires Bancorp to compensate Mr. Hill for
the balance of the term of the Employment Agreement at a rate equal to seventy
percent of his annual base salary if he becomes permanently disabled (as defined
in the Employment Agreement) during the term and to pay Mr. Hill's designated
beneficiary a lump sum death benefit if he dies during the term in
<PAGE>12
an amount equal to three times his average annual base salary in effect during
the twenty-four months immediately preceding his death.
The Employment Agreement allows Mr. Hill to terminate his employment
with Bancorp upon a change in control of Bancorp (as defined in the Employment
Agreement) and if within three years of such change in control, without Mr.
Hill's consent, among other things, the nature and scope of his authority with
Bancorp or a surviving or acquiring person are materially reduced to a level
below that which he enjoyed on January 1, 1992. If Mr. Hill terminates his
employment because of a change in control, he will be entitled to a lump sum
severance payment equal to four times his average annual base salary in effect
during the twenty-four month period immediately preceding such termination
(provided that such payment does not constitute a "parachute payment" under
Section 280G of the Internal Revenue Code of 1986, as amended, and in the event
such payment would constitute a "parachute payment", such lump sum severance
payment shall be reduced so as to not constitute a "parachute payment"), and the
continuation of certain benefits including medical, hospitalization and life
insurance. The Employment Agreement contains a non-competition covenant for Mr.
Hill should his employment with Bancorp be terminated under certain
circumstances.
The Employment Agreements for Messrs. Jordan and Musumeci are
substantially similar to that of Mr. Hill's except that: Mr. Jordan will serve
as Executive Vice President/Chief Financial Officer of Bancorp and Commerce NJ,
and Mr. Musumeci will serve as Executive Vice President/Senior Credit Officer of
Bancorp and Commerce NJ. The term of each Employment Agreement is three years
and the lump sum death benefit is each equal to two times their respective
average annual base salary in effect during the twenty-four month period
preceding death. Mr. Jordan's "base salary" under the Employment Agreement is
$225,000 and Mr. Musumeci's "base salary" under his Employment Agreement is
$225,000.
Director Compensation
Directors of Bancorp and Commerce NJ were paid an annual fee of $10,000
plus $600 for each meeting of the Board of Directors attended in 1994 and will
be paid an annual fee of $10,000 plus $600 for each meeting of the Board of
Directors attended in 1995. When meetings of the Board of Directors of Bancorp
and Commerce NJ occur on the same day, only one fee is paid. Committee members
received a fee of $600 for each meeting attended in 1994 and will receive a fee
of $600 for each meeting attended in 1995. Directors of Commerce PA are paid a
fee of $300 for each meeting of the Board of Directors and committee meeting
attended. Directors of Commerce Shore are paid a fee of $400 for each meeting of
the Board of Directors and committee meeting attended. No fees are paid to
directors who are also operating officers of Bancorp, Commerce NJ, Commerce PA
or Commerce Shore. Each director of Bancorp is provided with $100,000 of
permanent life insurance.
A retirement plan for outside directors, i.e., directors who are not
officers or employees of Bancorp on the date their service as a Bancorp director
ends, provides that outside directors with five or more years of service as a
Bancorp director are entitled to receive annually, for ten years or the number
of years served as a director, whichever is less, commencing upon such
director's attainment of age 65 and retirement from the Bancorp Board or upon
such director's disability, payments equal to the highest retainer in effect at
any time during the five year period immediately preceding such director's
retirement or, if earlier, death or disability. This plan further provides that,
in the event a director dies before receiving all benefits to which he or she is
entitled, such
<PAGE>13
director's surviving spouse is entitled to receive all benefits not received by
the deceased director commencing upon such director's death. Upon a change in
control of Bancorp, the plan provides that each director then sitting on the
Bancorp Board, notwithstanding the length of time served as a director, becomes
entitled to receive annually, for ten years, or twice the number of years served
as a director, whichever is less, payments equal to the higher of the director's
retainer at the time of the director's termination of Board service and the
highest retainer in effect at any time during the five year period immediately
preceding the change in control commencing on the latest to occur of the
termination of the director's Board service, attainment of age 65 or any date
designated by the director at any time and from time to time. The definition of
"change in control" for purposes of this plan parallels the definition of that
term contained in the Employment Agreements discussed on page 12 of this Proxy
Statement. This plan became effective January 1, 1993.
1989 Stock Option Plan For Non-Employee Directors
Effective April 24, 1989 (and as amended in 1994), Bancorp adopted the
1989 Stock Option Plan for Non-Employee Directors (the "1989 Plan") which
provides for the purchase of a total of not more than 201,015 shares of Bancorp
Common Stock by members of the Boards of Directors of Bancorp and its subsidiary
corporations. Options granted pursuant to the 1989 Plan may be exercised
beginning on the earlier to occur of (i) one year after the date of their grant
or (ii) a "change in control" of Bancorp, as such term is defined in the 1989
Plan.
Each non-employee director of Bancorp or any Bancorp subsidiary
corporation who on or after May 1, 1989 is elected or reelected as a director of
Bancorp or any subsidiary corporation at any annual or special meeting of
shareholder(s) of Bancorp or any Bancorp subsidiary corporation will, as of the
date of such election or reelection, automatically be granted an option to
purchase 500 shares of Bancorp's Common Stock; however, no non-employee director
may receive an option or options to purchase more than 1,000 shares of Common
Stock in any one calendar year. The maximum number of shares of Bancorp Common
Stock as to which options may be granted to any non-employee director under the
1989 Plan is 10,000 shares.
The 1989 Plan is administered by the Board of Directors of Bancorp,
including non-employee directors. Options granted under the 1989 Plan are not
"incentive stock options" as defined in Section 422 of the Internal Revenue Code
of 1986, as amended. Option prices are intended to equal 100% of the fair market
value of Bancorp's Common Stock on the date of the election or re-election of
the non-employee directors.
For the year ended December 31, 1994, Messrs. Baird, Beck, Bershad,
Kerr, Lewis, Ragone and Tarquini each received options under the Plan to
purchase 1,050 shares of Bancorp Common Stock (as adjusted to reflect the 5%
stock dividend declared on December 13, 1994). Such options were not exercisable
in 1994.
<PAGE>14
REPORT OF THE PERSONNEL COMMITTEE
The Personnel Committee of the Board of Directors of Bancorp is
composed of outside non-employee directors. Bancorp's compensation package for
its executive officers consists of base salary, annual performance bonus, annual
stock option grants and various broad based employee benefits including
contributions under Bancorp's ESOP. Management recommendations of base salary
levels, annual performance bonuses and stock option grants are reviewed by the
Personnel Committee and submitted to the full Board of Directors for approval.
The objective of Bancorp's executive compensation is to enhance
Bancorp's long-term profitability by providing compensation that will attract
and retain superior talent, reward performance and align the interests of the
executive officers with the long term interests of the shareholders of Bancorp.
The Company has employment agreements with Messrs. Hill, Jordan and
Musumeci which were effective January 1, 1992. See, "EXECUTIVE COMPENSATION -
Employment Agreements."
Base salary levels for Bancorp's executive officers are competitively
set relative to companies in peer businesses. In reviewing base salaries, the
Committee also takes into account individual experience and performance.
Bancorp's annual performance bonuses are intended to provide a direct
cash incentive to executive officers and other key employees to maximize
Bancorp's profitability. Financial performance is compared against budgets as
well as peer businesses.
Stock options are intended to encourage officers and other key
employees to remain employed by Bancorp by providing them with a long term
interest in Bancorp's overall performance as reflected by the performance of the
market of Bancorp's Common Stock. In granting stock options, the Personnel
Committee takes into account prior stock option grants and considers the
executive's level of compensation and past contributions to Bancorp.
Vernon W. Hill, II was Bancorp's Chairman, President and Chief
Executive Officer for 1994. Mr. Hill's base salary is set competitively relative
to other chief executive officers in financial service companies in Bancorp's
market area. In determining Mr. Hill's base salary as well as annual performance
bonus, the Committee reviewed independent compensation data and Bancorp's
performance as compared against budgets and peer businesses. As with Bancorp's
other executive officers, Mr. Hill's total compensation involves certain
subjective judgments and is not based solely upon any specific objective
criteria or weighting.
The Personnel Committee and Bancorp are considering the future impact
on executive compensation, and whether certain changes should be made as a
result, of Section 162(m) of the Internal Revenue Code of 1986, as amended,
which became effective January 1, 1994. This provision generally denies a
deduction for Federal income tax purposes for compensation in excess of $1
million for persons named in the Proxy Statement, except for compensation that
is performance-based and for compensation that is paid pursuant to certain
contracts entered into prior to February, 1993. Bancorp believes that the
limitation will have no effect on it in 1995.
<PAGE>15
PERSONNEL COMMITTEE
Morton N. Kerr
Daniel J. Ragone
Jack R Bershad
Personnel Committee Interlocks and Insider Participation
The Personnel Committee members are Morton N. Kerr, Daniel J. Ragone
and Jack R Bershad.
Mr. Kerr, a director and nominee for director of Bancorp, is the
President of Markeim-Chalmers, Inc. which in 1994 received $264,000 in fees for
real estate related services, primarily real estate appraisals.
Mr. Bershad, a director and nominee for director of Bancorp, is a
member of a law firm which Bancorp and its subsidiaries have retained during
Bancorp's last fiscal year and which Bancorp and its subsidiaries intend to
retain during its current fiscal year. See "Certain Transactions."
Financial Performance
The graph below summarizes cumulative return experienced by Bancorp's
shareholders over the years 1989 through 1994, compared to the Nasdaq Bank Index
and Nasdaq Composite Index assuming an investment in each of $100 at December
31, 1989 and the reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Commerce Bancorp, Nasdaq Bank Index, Nasdaq Composite
Year-End 1989 to Year-End 1994
The points presented on the Performance Graph, in dollars, are as follows:
<TABLE>
<CAPTION>
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Commerce Bancorp 100.0 51.0 84.1 150.7 171.2 233.3
Nasdaq Bank Index 100.0 73.2 120.2 174.9 199.3 198.7
Nasdaq Composite Index 100.0 84.9 136.3 158.6 180.9 176.9
</TABLE>
1984 Incentive Stock Option Plan
Effective April 14, 1984, Bancorp adopted the Bancorp Incentive Stock
Option Plan (the "1984 Plan") which provided for the purchase of a total of not
more than 1,222,868 shares of Bancorp Common Stock (as adjusted for all stock
splits and stock dividends through May 1, 1995) by key employees. Options may
not be granted under the 1984 Plan after December 31, 1993. The purpose of the
1984 Plan was to enable Bancorp to continue to compete successfully in
attracting and retaining key employees. Key executive and other employees of
Bancorp and its subsidiaries
<PAGE>16
were eligible to receive options under the 1984 Plan. No further options may be
granted under the 1984 Plan.
Options granted pursuant to the 1984 Plan were not exercisable until
one year after the date of grant and then were exercisable pursuant to a
schedule based on years of service or option holding period. Options granted
under the 1984 Plan were intended to constitute "incentive stock options" as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). Option prices were intended to equal 100% of the fair market value of
Bancorp's Common Stock on the date of grant. Recipients of options under the
1984 Plan were determined by the Personnel Committee.
There was no limit on the number of shares for which options may be
granted to any single employee under the 1984 Plan, except that incentive stock
options first exercisable by an employee in any one year under the 1984 Plan
(and all other Plans of Bancorp) may not exceed $100,000 in value (determined at
the time of grant). Payment of the option price on excise of options under the
1984 Plan may be made in cash, shares of Bancorp Common Stock or a combination
of both.
Options granted under the 1984 Plan are not transferable other than by
will or by the laws of descent and distribution. The Board of Directors or a
committee thereof fixed the term (which may not be more than ten years) of the
options, but the options are subject to earlier termination in the event of
termination of employment, death, or disability. The 1984 Plan provided that
during the lifetime of an optionee, his option is exercisable only by him and
only while employed by Bancorp or a subsidiary or within (i) three months after
his retirement, or (ii) three months after he otherwise ceases to be so
employed, to the extent the option was exercisable on the last day of
employment. For these purposes, retirement means termination of employment by an
optionee who has attained age 65. If an optionee retires due to disability, his
options may be exercised within twelve months of his retirement date. If an
optionee dies within a period during which his option could have been exercised
by him, his option may be exercised within one year of his death (unless the
option earlier terminates) by those entitled under his will or the laws of
descent and distribution, but only to the extent the option was exercisable by
him immediately prior to his death.
1994 Employee Stock Option Plan
Effective May 24, 1994, Bancorp adopted the Bancorp 1994 Employee Stock
Option Plan (the "Employee Stock Option Plan" or "Plan"). Pursuant to the
Employee Stock Option Plan, stock options may be granted which qualify under the
Internal Revenue Code as incentive stock options as well as stock options that
do not qualify as incentive stock options. All officers and key employees of
Bancorp or any current or future subsidiary corporation are eligible to receive
options under the Employee Stock Option Plan. As of May 1, 1995, 232,155 options
had been granted under the Plan. The Plan replaced the 1984 Plan which expired
on December 31, 1993.
The purpose of the Employee Stock Option Plan is to provide additional
incentive to employees of Bancorp by encouraging them to invest in Bancorp's
Common Stock and thereby acquire a proprietary interest in Bancorp and an
increased personal interest in Bancorp's continued success and progress. The
Employee Stock Option Plan is administered by the Personnel Committee
("Committee") which is appointed by the Board of Directors and consists only of
Directors who are not eligible to receive options under the Employee Stock
Option Plan. The Committee determines, among other things, which officers and
key employees receive an option or
<PAGE>17
options under the Employee Stock Option Plan, the type of option (incentive
stock options or non-qualified stock options, or both) to be granted, the number
of shares subject to each option, the rate of option exercisability, and,
subject to certain other provisions to be discussed below, the option price and
duration of the option. No individual may be granted, in any calendar year, a
number of options that is more than 100,000 and incentive stock options first
exercisable by an employee in any one year under the Plan (and all other plans
of Bancorp) may not exceed $100,000 in value (determined at the time of grant).
The Committee may, in its discretion, modify or amend any of the option terms
hereafter described, provided that if an incentive option is granted under the
Plan, the option as modified or amended continues to be an incentive stock
option.
The aggregate number of shares which may be issued upon the exercise of
options under the Employee Stock Option Plan is 1,050,000 shares of Common Stock
(as adjusted for all stock splits and stock dividends through May 1, 1995). In
the event of any change in the capitalization of Bancorp, such as by stock
dividend, stock split or what the Board of Directors deems in its sole
discretion to be similar circumstances, the aggregate number and kind of shares
which may be issued under the Plan will be appropriately adjusted in a manner
determined in the sole discretion of the Board of Directors. Reacquired shares
of Bancorp's Common Stock, as well as unissued shares, may be used for the
purpose of the Plan. Common Stock of Bancorp subject to options which have
terminated unexercised, either in whole or in part, will be available for future
options granted under the Plan. The option price for options issued under the
Employee Stock Option Plan must be at least equal to 100% of the fair market
value of the Common Stock as of the date the option is granted.
Payment of the option price on exercise of options granted under the
Plan may be made in (a) cash, (b) Bancorp Common Stock which will be valued by
the Secretary of Bancorp at its fair market value or (c) any combination of cash
and Common Stock of Bancorp valued as provided in clause (b).
Except as otherwise described below, none of the options granted under
the Employee Stock Option Plan may be exercised during the first year after the
date granted. Thereafter, each optionee may exercise options held more than one
year based upon years of service or option holding period, whichever is sooner,
pursuant to the following schedule:
Option Holding
Years of Service Period
Less than 3 years 25% 0-1 year 0%
More than 3 years and less
than 6 years 50% 1-2 years 25%
More than 6 years and less
than 8 years 75% 2-3 years 50%
3-4 years 75%
More than 8 years 100% More than 4 years 100%
<PAGE>18
In the event of a "change in control" of Bancorp, as defined in the
Employee Stock Option Plan, each optionee may exercise the total number of
shares then subject to the option. The Committee has the authority to provide
for a different rate of option exercisability for any optionee.
Unless terminated earlier by the option's terms, incentive stock
options expire ten years after the date they are granted and non-qualified stock
options expire ten years after the date they are granted. Options terminate
three months after the date on which employment is terminated (whether such
termination be voluntary or involuntary), other than by reason of death or
disability. The option terminates one year from the date of termination due to
death or disability (but not later than the scheduled termination date). Options
granted pursuant to the Plan are not transferable, except by the will or the
laws of descent and distribution in the event of death. During an optionee's
lifetime, the option is exercisable only by the optionee, including, for this
purpose, the optionee's legal guardian or custodian in the event of disability.
Bancorp's Board of Directors has the right at any time, and from time
to time, to modify, amend, suspend or terminate the Plan, without shareholder
approval, except to the extent that shareholder approval of the Plan
modification or amendment is required by the Code, to permit the granting of
incentive stock options under the Plan. Any such action will not affect options
previously granted. If the Board of Directors voluntarily submits a proposed
modification, amendment, suspension or termination for shareholder approval,
such submission will not require any future modifications, amendments,
suspensions or terminations (whether or not relating to the same provision or
subject matter) to be similarly submitted for shareholder approval.
Stock Options
No grants of options to purchase Bancorp's Common Stock were made to
the named executives in 1994.
The following table sets forth certain information regarding individual
exercises of stock options during 1994 by each of the named executives in 1994.
AGGREGATED STOCK OPTION EXERCISES IN 1994 AND YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised in the
Acquired on Value Stock Options at Money Stock Options
Name Exercise Realized Year-End 1994 (1) at Year-End 1994
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Vernon W. Hill, II 10,057 $ 58,398 108,555 0 $ 664,392 $ 0
C. Edward Jordan, Jr. 0 0 96,795 0 640,531 0
Peter M. Musumeci, Jr. 2,290 28,808 87,684 0 541,575 0
Robert D. Falese, Jr. 1,378 12,760 9,200 26,011 44,793 125,136
Dennis M. DiFlorio 5,000 81,750 37,510 6,783 266,298 39,606
- -------------------------
<FN>
(1) The stock options reflected in this column have been adjusted for the 5%
stock dividend declared on December 13, 1994.
</FN>
</TABLE>
<PAGE>19
Employee Stock Ownership Plan
Effective January 1, 1989, Bancorp's Board of Directors established the
Commerce Bancorp, Inc. Employee Stock Ownership Plan ("ESOP") as a restatement
of Bancorp's Stock Bonus Plan. Employees of Bancorp and its subsidiaries are
eligible to participate in the ESOP if they are at least 21 years of age and
have completed at least 1,000 hours of service to Bancorp or its subsidiaries
during the twelve-month period beginning on the date of hire or during any
subsequent calendar year. Participants are 100% vested in their accounts under
the ESOP upon death, total disability, a complete discontinuance of
contributions by Bancorp, termination of the ESOP, and a partial termination of
the ESOP where a participant is involved in that termination. Except as provided
above, generally, participants are 20% vested after 3 years of credited service,
increasing by 20% for each additional year of credited service so that
participants are 100% vested in their accounts under the ESOP after seven years
of credited service with Bancorp or a subsidiary.
Subject to limitations contained in the Code, contributions by Bancorp
to the ESOP are deductible for federal income tax purposes. Except as described
below, such contributions are determined annually by Bancorp's Board of
Directors at its discretion. Contributions may consist either of shares of
Bancorp's stock, or cash, which may be invested by the trustees of the ESOP's
trust in shares of Bancorp's stock or to provide funds to pay principal or
interest on any indebtedness incurred by the ESOP in purchasing shares.
Contributions by Bancorp are allocated as of the close of each plan year among
accounts of participants in the ESOP. Each participant's account is credited
with that portion of contributions by Bancorp as such participant's compensation
(as defined in the ESOP) bears to all participants' compensation.
In January 1990, the ESOP Trust purchased 417,000 shares of Series C
ESOP Preferred Stock ("ESOP Shares") from Bancorp for an aggregate purchase
price of $7,500,000. The ESOP Trust borrowed the purchase price for the ESOP
Shares from an unaffiliated bank which loan was refinanced with another
unaffiliated bank in 1994 (the "Loan"). The Loan is guaranteed by Bancorp and
its subsidiaries, and is secured by the pledge of the ESOP Shares obtained with
the proceeds of the Loan. Bancorp has agreed to contribute to the ESOP amounts
sufficient to permit the ESOP to make principal and interest payments on the
Loan. Pursuant to the loan agreement with the ESOP's bank lender, a portion of
the ESOP Shares pledged by the ESOP for repayment of the Loan will be released
from the pledge according to a formula based on the portion of principal and
interest which has been repaid each year. As of December 31, 1994, the
outstanding principal balance on the Loan was $5,385,000.
The co-trustees of the ESOP are Vernon W. Hill, II and C. Edward Jordan,
Jr. Each participant may direct the trustees of the ESOP's trust as to the
manner in which shares of voting stock allocated to his account are to be voted.
Each participant in the ESOP will become entitled to direct the trustees as to
the voting of the ESOP Shares which are released from the pledge and which are
allocated to his account under the ESOP. The enclosed form of Proxy also serves
as the voting instruction card for the trustees of the ESOP with respect to the
shares of Common Stock and ESOP Shares which have been allocated to the accounts
of participants under the ESOP. Shares which have not been allocated to the
account of any participant will be voted by the co-trustees in accordance with
such procedures as Bancorp, as the Plan Administrator, shall direct. Shares
which have been allocated to the accounts of participants but for which no
voting directions are received will be voted as the trustees direct in the
exercise of their independent judgment. See "Series C ESOP Preferred Stock."
<PAGE>20
For the plan year ended December 31, 1994, Bancorp contributed $648,000
to the ESOP. Allocations to participants' accounts for such plan year have not
yet been completed.
Supplemental Executive Retirement Plan
Effective January 1, 1992, Bancorp established a Supplemental Executive
Retirement Plan ("SERP") for certain designated executives in order to provide
supplemental retirement income if Bancorp's ESOP and Social Security retirement
benefits fall below sixty percent of average annual compensation at the time of
retirement. Average annual compensation is defined as the average of the actual
annual compensation paid to the executive by Bancorp during the period of three
consecutive years which produces the highest such average during the ten year
period ending with termination of employment. The SERP is unfunded, is not a
qualified plan under the Code and benefits are paid directly by Bancorp. Messrs.
Hill, Jordan, Musumeci, Falese and DiFlorio have been designated to participate
in the SERP.
Certain Transactions
Certain directors and executive officers of Bancorp, Commerce NJ,
Commerce PA and Commerce Shore, certain of their immediate family members and
certain corporations or organizations with which they are affiliated have had
and expect to continue to have loan and other banking transactions with Commerce
NJ, Commerce PA and Commerce Shore. All such loans and other banking
transactions were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions for unrelated parties, and
did not involve more than the normal risk of uncollectibility or present other
unfavorable features.
The Board of Directors of Bancorp approves all transactions in which an
officer or director of Bancorp or any of its subsidiaries has an interest. In
the case of a transaction involving a director of Bancorp, such director does
not vote on the transaction.
Mr. Kerr, a director and nominee for director of Bancorp, is the
President of Markeim-Chalmers, Inc. which in 1994 received $264,000 in fees for
real estate related services, primarily real estate appraisals.
Messrs. Beck and Bershad, directors and nominees for directors of
Bancorp, are members of law firms which Bancorp and its subsidiaries have
retained during Bancorp's last fiscal year and which Bancorp and its
subsidiaries intend to retain during its current fiscal year.
Commerce NJ leases the ground for five of its branch offices from
limited partnerships in which Mr. Hill is a partner or in which a corporation
owned by Mr. Hill is a partner. Pursuant to the terms of the ground leases,
Commerce NJ has constructed its own buildings and pays annual rent from $24,000
to $60,000 per lease for the first five years increasing to $30,000 to $91,253
for the last five years of each lease. These leases which have expiration dates
of 2004 to 2010, are each renewable for four additional terms of five years
each.
Bancorp leases land to a limited partnership partially comprised of the
directors of Commerce PA and Bancorp including Messrs. Bershad, Hill and Lewis
and a corporation owned by Mr. Hill. The term of the lease is 25 years. The
minimum annual lease payments to be received by Bancorp are $51,700 for the
first five years, $53,300 for years 6-10, $55,300 for years 11-15, $57,300 for
years
<PAGE>21
16-20 and $59,300 for years 21-25. The limited partnership has constructed an
office building on the site, and Commerce PA has leased part of the building for
15 years for a branch office, with options to renew for three successive
five-year periods. The annual rent for that portion of the building is $91,000
for years 1-5, $100,000 for years 6-10, and $110,000 for years 11-15.
Management believes that the rental paid or received for each of the
foregoing leases is comparable to the rental which they would have to pay to or
would have received from, as the case may be, and that the option prices are
comparable to or more favorable than those that could have been obtained or
received from, non-affiliated parties in similar commercial transactions for
similar locations, assuming that such locations were available.
During 1994, Commerce NJ, Commerce PA and Commerce Shore obtained
interior design and facilities management services in the amount of $468,000
from a business corporation of which Shirley Hill, wife of Vernon W. Hill, II,
is a principal shareholder and the president. Additionally, during 1994 the
business received commissions of $962,000 on furniture and facility purchases
made directly by Commerce NJ, Commerce PA and Commerce Shore. These expenditures
related primarily to the furnishing and related design services of the opening
and/or refurbishing of certain offices during the period. In the opinion of
management, such expenses were substantially equivalent to those that would have
been paid to unaffiliated companies for similar furniture and services.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires Bancorp's directors and
executive officers, and persons who own more than 10% of a registered class of
Bancorp's equity securities, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of Bancorp. Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish Bancorp with copies of
all Section 16(a) forms they file.
To Bancorp's knowledge, based solely on review of the copies of such
reports furnished to Bancorp and written representations that no other reports
were required during the fiscal year ended December 31, 1994, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial owners were complied with.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANT
Bancorp's independent public accountants during the most recent year
were Ernst & Young, 2001 Market Street, Philadelphia, PA 19103. Based upon the
recommendation of the Audit Committee, the Board of Directors has selected Ernst
& Young to be Bancorp's independent public accountants for 1995. The selection
of Bancorp's independent public accountants is not being submitted to
shareholders because there is no legal requirement to do so. A representative of
Ernst & Young is expected to be present at the Annual Meeting and to have the
opportunity to make a statement, if he desires to do so, and to be available to
respond to appropriate questions.
<PAGE>22
SHAREHOLDER PROPOSALS
Proposals from shareholders intended to be presented at the 1996 Annual
Meeting must be received by Bancorp for inclusion in Bancorp's proxy statement
by January 15, 1996.
A COPY OF BANCORP'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994 WILL BE FURNISHED
WITHOUT CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST TO C. EDWARD JORDAN, JR.,
EXECUTIVE VICE PRESIDENT, COMMERCE BANCORP, INC., COMMERCE ATRIUM, 1701 ROUTE 70
EAST, CHERRY HILL, NEW JERSEY, 08034-5400.
By Order of the Board of Directors
ROBERT C. BECK
Secretary
<PAGE>
PROXY
This Proxy is solicited on behalf of the Board of Directors
COMMERCE BANCORP, INC.
The undersigned hereby appoints Morton N. Kerr and Daniel J. Ragone and
each of them, as proxies of the undersigned, each with power to act without the
other and with power of substitution, and hereby authorizes each of them to
represent and vote, as designated on the other side, all the shares of stock of
Commerce Bancorp, Inc. (the "Company") which the undersigned is entitled to
vote, standing in the name of the undersigned with all powers which the
undersigned would possess if present, at the Annual Meeting of Shareholders of
the Company to be held on June 20, 1995 or any postponement or adjournment
thereof. The undersigned hereby directs the Proxy to be voted as indicated on
the reverse side.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED
BELOW. DISCRETIONARY AUTHORITY IS CONFERRED HEREBY AS TO CERTAIN MATTERS
DESCRIBED IN THE COMPANY'S PROXY STATEMENT.
1. FOR the election of the following nominees to the Board of Directors
for the ensuing year: Vernon W. Hill, II, David Baird, IV, Robert C.
Beck, Jack R Bershad, C. Edward Jordan, Jr., Morton N. Kerr, Steven M.
Lewis, Daniel J. Ragone and Joseph T. Tarquini, Jr.
FOR all nominees listed above (except as marked to the contrary)
WITHHOLD AUTHORITY to vote for all nominees listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
-------------------------------------------------------
2. In their discretion, upon such other matters as may properly come
before the meeting or any postponements or adjournments thereof.
A majority of such attorneys and
proxies, or their substitutes at the
meeting, or any postponements or
adjournments thereof, may exercise all
of the powers hereby given. Any proxy to
vote any of the shares, with respect to
which the undersigned is or would be
entitled to vote, heretofore given to
any person or persons other than the
persons named above, is revoked.
IN WITNESS WHEREOF, the undersigned has
signed and sealed this proxy and hereby
acknowledges receipt of the Company's
Annual Report to Shareholders and a copy
of the notice of such meeting and proxy
statement in reference thereto both
dated in May, 1995.
Dated: ____________________, 1995
__________________________
(Shareholder(s) Signature)
__________________________(L.S.)
Printed Name of Shareholder
__________________________(L.S.)
Printed Name of Shareholder
NOTE: Signature should correspond with
name appearing on stock certificate(s).
When signing in a fiduciary or
representative capacity, sign full title
as such. Where more than one owner, each
should sign.
Please sign, date and return this proxy
card promptly using the enclosed
envelope.
