SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File Number 0-12874
COMMERCE BANCORP, INC.
(Exact name of Registrant as specified in its charter)
New Jersey 22-2433468
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1701 Route 70 East, Cherry Hill, NJ 08034-5400 08034-5400
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 751-9000
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $1.5625 par value
(Title of Class)
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
Indicate by check mark whether the Registrant (i) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (ii) has been subject to such
filing requirements for the past 90 days.
YES X NO
-- --
<PAGE>
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of
Registrant is $963,030,000. (1)
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of stock, as of the latest practicable date.
Common Stock, $1.5625 Par Value 17,985,767
(Title of Class) No. of Shares Outstanding
as of 4/24/98
DOCUMENTS INCORPORATED BY REFERENCE
Parts II and IV incorporate certain information by reference from the
Registrant's Annual Report to Shareholders for the fiscal year ended December
31, 1997 (the "Annual Report").
- - --------
(1) The aggregate dollar amount of the voting stock set forth equals the number
of shares of the Registrant's common stock outstanding, reduced by the amount of
Registrant's common stock held by officers, directors and shareholders owning in
excess of 10% of the Registrant's common stock, multiplied by the last sale
price for the Registrant's common stock on April 24, 1998. The information
provided shall in no way be construed as an admission that any officer, director
or 10% shareholder in the Registrant may be deemed an affiliate of the
Registrant or that he is the beneficial owner of the shares reported as being
held by him, and any such inference is hereby disclaimed. The information
provided herein is included solely for the record-keeping purposes of the
Securities and Exchange Commission.
-2-
<PAGE>
EXPLANATORY NOTE
This Amendment No. 2 to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997, as filed with the Securities and Exchange
Commission on March 30, 1998 and as first amended on April 30, 1997, is being
filed to provide the financial disclosure required by the Securities and
Exchange Commission Form 11-K for the Commerce Bancorp, Inc. 401(K) Retirement
Plan.
Financial Statements
and Supplemental Schedules
Commerce Bancorp, Inc.
401(k) Retirement Plan
Period from April 1, 1997 to December 31, 1997
with Report of Independent Auditors
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Financial Statements
and Supplemental Schedules
Period from April 1, 1997 to December 31, 1997
Contents
Report of Independent Auditors.................................................1
Audited Financial Statements
Statement of Assets Available for Benefits, with Fund Information..............2
Statement of Changes in Assets Available for Benefits,
with Fund Information......................................................3
Notes to Financial Statements..................................................4
Supplemental Schedules
Line 27a--Assets Held for Investment Purposes..................................9
Line 27d--Reportable Transactions.............................................10
<PAGE>
Report of Independent Auditors
The Board of Directors
Commerce Bancorp, Inc.
We have audited the accompanying statement of assets available for benefits of
the Commerce Bancorp, Inc. 401(k) Retirement Plan as of December 31, 1997, and
the related statement of changes in assets available for benefits for the period
from April 1, 1997 to December 31, 1997. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 1997 and the changes in its assets available for benefits for the period
from April 1, 1997 to December 31, 1997, in conformity with generally accepted
accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1997 and reportable
transactions for the period from April 1, 1997 to December 31, 1997, are
presented for purposes of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, and are not a required part of the basic financial
statements. The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the financial statements and, in our opinion,
are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
July 6, 1998
1
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Statement of Assets Available for Benefits, with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
Most
Stable Conser- Moderate Commerce Self-
Value vative Growth Growth Aggressive Stock Directed Loan
Fund Fund Fund Fund Fund Fund Accounts Fund Total
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets Investments at fair
value:
Mutual funds $1,842,692 $527,035 $ 749,477 $1,434,826 $1,163,890 $5,717,920
Commerce Bancorp, Inc.
common stock $ 830,578 $457,024 1,287,602
Other common stock 334,243 334,243
Participant notes receivable $72,315 72,315
----------------------------------------------------------------------------------------------------
Total investments 1,842,692 527,035 749,477 1,434,826 1,163,890 830,578 791,267 72,315 7,412,080
Contributions receivable 359 2,687 8,158 17,146 12,399 5,837 1,158 47,744
----------------------------------------------------------------------------------------------------
Assets available for benefits $1,843,051 $529,722 $ 757,635 $1,451,972 $1,176,289 $ 836,415 $792,425 $72,315 $7,459,824
====================================================================================================
</TABLE>
See accompanying notes.
2
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Statement of Changes in Assets Available for Benefits, with Fund Information
Period from April 1, 1997 to December 31, 1997
<TABLE>
<CAPTION>
Most
Stable Conser- Moderate Commerce Self-
Value vative Growth Growth Aggressive Stock Directed Loan
Fund Fund Fund Fund Fund Fund Accounts Fund Total
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to assets
attributed to:
Contributions:
Participants $ 7,022 $ 63,547 $ 170,830 $ 356,977 $ 288,195 $144,389 $ 32,959 $ 1,063,919
Transfers in from other plans 6,236,242 $ 74,446 6,310,688
Investment income:
Net realized and unrealized
appreciation (depreciation)
in fair value of investments (894) (16,792) (37,947) (54,045) 200,022 102,811 193,155
Interest and dividends 64,610 3,675 7,993 17,834 15,612 1,706 1,747 955 114,132
Deductions from assets
attributed to:
Benefits paid to participants (142,916) (5,639) (22,538) (22,418) (17,158) (11,401) (222,070)
--------------------------------------------------------------------------------------------------
Net increase prior to interfund
transfers 6,164,958 60,689 139,493 314,446 232,604 334,716 137,517 75,401 7,459,824
Interfund transfers (net) (4,321,907) 469,033 618,142 1,137,526 943,685 501,699 654,908 (3,086)
--------------------------------------------------------------------------------------------------
Net increase 1,843,051 529,722 757,635 1,451,972 1,176,289 836,415 792,425 72,315 7,459,824
Assets available for benefits:
Beginning of period
--------------------------------------------------------------------------------------------------
End of period $1,843,051 $529,722 $ 757,635 $1,451,972 $1,176,289 $836,415 $792,425 $ 72,315 $7,459,824
==================================================================================================
</TABLE>
See accompanying notes.
3
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Notes to Financial Statements
Period from April 1, 1997 to December 31, 1997
1. Description of Plan
The following description of the Commerce Bancorp, Inc. 401(k) Retirement Plan
(the "Plan") provides only general information. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
General
The Plan, established April 1, 1997, is a defined contribution plan covering all
eligible employees of Commerce Bancorp, Inc. (the "Company") who have at least
one year of service and are age twenty-one or older. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA). On
February 12, 1998, the Plan filed for qualification status with the Internal
Revenue Service.
Participants of four employee benefit plans became eligible to participate in
the Plan as a result of the acquisitions by the Company of Independence Bancorp,
Inc., Keystone National Companies, Inc., Morales, Potter & Buckelew, Inc. t/a
Buckelew & Associates, Inc., and Chesley & Cline, Inc. The net assets of the
following plans were transferred into the Plan in 1997:
Independence Bancorp, Inc. Salary Savings Plan $ 1.2 million
Keystone National Companies, Inc. Savings & Investment Plan .5 million
Buckelew & Associates Retirement Savings Plan 1.7 million
Chesley & Cline, Inc. Incentive/Savings Plan 2.9 million
Contributions
Each Period, participants may contribute up to 15% of pretax annual compensation
(maximum $9,500 for 1997), as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified retirement
plans. The Company may, but is not obligated to, contribute a matching
contribution for the plan year as determined by the Board of Directors of
Commerce Bancorp, Inc. The Company did not contribute to the Plan during the
period ended December 31, 1997.
At the inception of the Plan, due to administrative delays on the part of the
Plan's Trustee and administrative service provider, participant contributions
for two payroll periods were not segregated timely as required by Department of
Labor Regulation 2510.3-102. The Company does not believe these delays resulted
in a prohibited use of Plan assets, as defined by ERISA.
4
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Participant Accounts
Each participant's account is credited with the participant's contributions and
Plan earnings and is charged with an allocation of administrative expenses if
any costs are paid by the Plan. Allocations are based on participant earnings or
account balances, as defined. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's account.
Vesting
Participants are immediately vested in their contributions and all investment
earnings thereon that have been allocated to their accounts.
Participants vest in the Company matching contributions (if any) based on the
following:
Participant's Years of Service Vested Percentage
----------------------------------------------------------------------
Less than 3 None
3 but fewer than 4 20%
4 but fewer than 5 40
5 but fewer than 6 60
6 but fewer than 7 80
7 years or more 100%
Loans
Participants may borrow funds from the Plan subject to requirements of the Plan.
The loans are secured by the balance in the participant's account and bear
interest at a rate commensurate with local prevailing rates as determined by the
Plan administrator. Principal and interest is paid ratably through payroll
deductions.
Payment of Benefits
Benefits are payable upon retirement, death, disability, or termination of
employment. Benefits are distributed to the participant or beneficiary in a
lump-sum payment as provided in the provisions of the Plan. Included in assets
available for benefits at December 31, 1997 is $42,023, which represents amounts
due to participants who have requested withdrawals.
5
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Investment Options
The Mentor Trust Company (Wheat First Union) serves as Trustee for the Plan.
Participants may direct employer and employee contributions in any of six
investment fund options offered by the Plan or they may elect to open accounts
that allow participant-directed investments. The available fund options are as
follows;
A. Stable Value Fund invests in Dreyfus Certus Stable Value Fund;
B. Most Conservative Fund invests in T. Rowe Price New Income Fund, Vanguard
Bond Index Fund: Total Bond Market Portfolio, Vanguard US Growth Portfolio,
Neuberger & Berman Guardian Fund, MFS Emerging Growth Fund A, Royce Fund:
Premier Fund, Scudder International Fund, and T. Rowe Price International
Fund: Stock Fund;
C. Moderate Growth Fund invests in T. Rowe Price New Income Fund, Vanguard
Bond Index Fund: Total Bond Market Portfolio, Dreyfus Appreciation Fund,
Vanguard US Growth Portfolio, MAS Funds: Value Portfolio/Institutional,
Neuberger & Berman Guardian Fund, MFS Emerging Growth Fund A, Royce Fund:
Premier Fund, Scudder International Fund, and T. Rowe Price International
Fund: Stock Fund;
D. Growth Fund invests in T. Rowe Price New Income Fund, Vanguard Bond Index
Fund: Total Bond Market Portfolio, Dreyfus Appreciation Fund, Vanguard US
Growth Portfolio, MAS Funds: Value Portfolio/Institutional, Neuberger &
Berman Guardian Fund, MFS Emerging Growth Fund A, Royce Fund: Premier Fund,
Scudder International Fund, and T. Rowe Price International Fund: Stock
Fund;
E. Aggressive Fund invests in Dreyfus Appreciation Fund, MAS Funds: Value
Portfolio/Institutional, Vanguard US Growth Portfolio, Neuberger & Berman
Guardian Fund, Alliance Quasar Fund/Advisor, MFS Emerging Growth Fund A,
Kemper-Dreman Small Cap Value Fund A, Royce Fund: Premier Fund, Scudder
International Fund, and T. Rowe Price International Fund: Stock Fund;
F. Commerce Stock Fund invests in common stock of Commerce Bancorp, Inc.
6
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in previously unvested Company
contributions.
Administrative Costs
Administrative costs of the Plan are paid by the Company, unless the Company
elects to have such costs paid by the Plan.
2. Summary of Significant Accounting Policies
Investment Valuation
The Plan's investments are stated at fair value which is based on net asset
value of shares at the end of the period for mutual funds and the last available
quoted market price for shares of common stock. The participant notes receivable
are valued at their outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. The cost
of investments sold is determined on an average historical cost basis. Interest
income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
7
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Notes to Financial Statements (continued)
3. Investments
The Plan's investments are held by Mentor Trust Company (Wheat First Union).
During the period, the Plan's investments appreciated (depreciated) in fair
value as follows:
Net Appreciation
(Depreciation)
Fair Value at In Fair Value During
December 31, 1997 the Period
-------------------------------------------------------------------------
*Stable Value Fund $1,842,692 $ --
*Most Conservative Fund 527,035 (894)
*Moderate Growth Fund 749,477 (16,792)
*Growth Fund 1,434,826 (37,947)
*Aggressive Fund 1,163,890 (54,045)
*Commerce Stock Fund 830,578 200,022
*Self-Directed Accounts 791,267 102,811
Loan Fund 72,315 --
-----------------------------------
$7,412,080 $ 193,155
===================================
* Indicates an investment which represents 5% or more of the fair value of
assets available for benefits at period end.
8
<PAGE>
Supplemental Schedules
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Line 27a--Assets Held for Investment Purposes
December 31, 1997
Shares
Identity of Issue or Units Average Cost Fair Value
- --------------------------------------------------------------------------------
Stable Value Fund* $ 1,842,692 $ 1,842,692
Most Conservative Fund* 529,340 527,035
Moderate Growth Fund* 767,568 749,477
Growth Fund* 1,472,403 1,434,826
Aggressive Fund* 1,218,266 1,163,890
Commerce Stock Fund*+ 630,555 830,578
CRT Government Securities 95,478 95,478 95,478
Commerce Bancorp, Inc.*+ 8,961 294,602 457,024
Intel Corp. 350 28,658 24,588
Campbell Soup 156 8,516 9,068
Home Depot 167 9,952 9,831
Johnson & Johnson 155 10,014 10,211
Merck & Co. 102 9,879 10,812
ADC Telecomm, Inc. 50 1,695 2,088
Citicorp 21 2,690 2,655
Compaq Computer Corp. 100 3,224 2,825
Invacare Corporation 100 2,361 2,175
MBNA Corp. 100 2,680 2,731
Air Products & Chemicals, Inc. 400 15,686 16,450
American International Group, Inc. 200 20,949 21,750
General Electric Company 200 14,761 14,675
Microsoft Corp. 710 50,835 45,884
Travelers Group, Inc. 200 10,736 10,775
Circus Circus Enterprise, Inc. 400 8,586 8,200
Nike, Inc. Class B 350 16,158 13,672
RJR Nabisco Holdings 450 16,349 16,875
Selective Insurance Group 500 13,411 13,500
Loans receivable from participants, with
interest rates ranging from 6.9% to 10.0% -- 72,315
------------------------
$ 7,098,044 $7,412,080
========================
* Indicates an investment which represents 5% or more of the fair value of
assets available for benefits at period end.
+ Represents party-in-interest to the Plan.
9
<PAGE>
Commerce Bancorp, Inc.
401(k) Retirement Plan
Line 27d--Reportable Transactions
Period ended December 31, 1997
<TABLE>
<CAPTION>
Identity of Parties Purchase Selling Cost of Net Gain
Involved Description of Assets Price Price Assets Sold (Loss)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Category I - Individual transactions in excess of 5% of plan assets
Stable Value Fund Purchased interest in
Stable Value Fund $ 4,033,205 $ -- $ -- $ --
Stable Value Fund Purchased interest in
Stable Value Fund 1,756,988 -- -- --
Stable Value Fund Sold interest in Stable
Value Fund -- 3,121,819 3,121,819 --
Stable Value Fund Sold interest in Stable
Value Fund -- 2,829,518 2,829,518 --
Stable Value Fund Purchased interest in
Stable Value Fund 1,111,636 -- -- --
Stable Value Fund Purchased interest in
Stable Value Fund 803,114 -- -- --
Category III--A series of transactions in a security issue aggregating in excess
of 5% of plan assets
Stable Value Fund 47 purchase transactions;
15 sales transactions 8,414,863 6,571,263 -- --
Most Conservative Fund 219 purchase transactions;
40 sales transactions 689,945 155,949 154,538 1,411
Moderate Growth Fund 270 purchase transactions;
47 sales transactions 957,977 174,241 172,942 1,299
Growth Fund 286 purchase transactions;
52 sales transactions 1,665,412 142,862 143,232 (370)
Aggressive Fund 259 purchase transactions;
50 sales transactions 1,335,028 88,405 88,073 332
Commerce Stock Fund 21 purchase transactions 586,364 -- -- --
Commerce Bancorp, Inc.
Common Stock 9 purchase transactions 209,758 -- -- --
There were no category II or IV transactions during the period.
* Indicates party-in-interest to the plan.
</TABLE>
10
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange of 1934, the Registrant has duly caused this Amendment No. 2 to its
Annual Report of Form 10-K for the year ended December 31, 1997 to be signed on
its behalf by the undersigned thereunto duly authorized.
COMMERCE BANCORP, INC.
Date: July 13, 1998 By: /s/ Douglas J. Pauls
-----------------------------
Douglas J. Pauls
Vice President and Controller
Consent of Independent Auditors
We consent to the use of our report dated January 26, 1998, included in the
Annual Report on Form 10-K of Commerce Bancorp, Inc. and Subsidiaries for the
year ended December 31, 1997, with respect to the consolidated financial
statements, and to the use of our report dated July 6, 1998, with respect to the
financial statements and supplemental schedules of the Commerce Bancorp, Inc.
401(k) Retirement Plan, included in this Form 10-K/A.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
July 10, 1998
