<PAGE>
As filed with the Securities and Exchange Commission on June 23, 1998.
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COMMERCE BANCORP, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
New Jersey Commerce Atrium 22-2433468
(State or other jurisdiction of 1701 Route 70 East (I.R.S. Employer
incorporation or organization) Cherry Hill, New Jersey 08034-5400 Identification
(Address of Principal Executive Offices) (Zip Code) Number)
</TABLE>
COMMERCE BANCORP, INC.
1997 EMPLOYEE STOCK OPTION PLAN
1998 STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
(Full title of the plans)
C. Edward Jordan, Jr.
Executive Vice-President
Commerce Atrium
Commerce Bancorp, Inc.
1701 Route 70 East
Cherry Hill, New Jersey 08034-5400
(609) 751-9000
(Name, address, including zip code and
telephone number, including area code,
of agent for service)
Copies of Communications to:
Lawrence R. Wiseman, Esquire
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
(215) 569-5549
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered(1) per share offering price registration fee
------------------- ------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, par value 3,025,000 $51.94(2) $157,118,500(2) $46,350
$1.5625 per share
</TABLE>
(1) In addition, pursuant to Rule 416(a) under the Securities Act of 1933, as
amended, this Registration Statement also covers an indeterminate amount
of shares as may be issued pursuant to stock splits, stock dividends and
certain anti-dilution provisions contained in the Plans.
(2) Pursuant to Rule 457(h) under the Securities Act of 1933, as amended, the
offering price per share is an average based upon (i) an exercise price of
$44.41 per share for previously granted options to purchase 605,745
shares, (ii) an exercise price of $50.15 per share for previously granted
options to purchase 105,000 shares, (iii) an exercise price of $24.50 per
share for previously granted options to purchase 13,166 shares and (iv)
the average high and low sale prices of Commerce Bancorp, Inc. Common
Stock, as reported on the New York Stock Exchange on June 18, 1998 for the
remaining 2,301,089 currently unissued options.
<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participants in the Commerce Bancorp, Inc. 1997
Employee Stock Option Plan and 1998 Stock Option Plan for Non-Employee Directors
(collectively, the "Plans") as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act").
Such documents are not being filed with the Commission, but constitute
(along with the documents incorporated by reference into this Registration
Statement pursuant to Item 3 of Part II hereof) a Prospectus that meets the
requirements of Section 10(a) of the Securities Act.
Item 2. Registrant Information and Employee Plan Annual Information.
The Registrant shall furnish without charge to each person to whom the
Prospectus is delivered, on the written or oral request of such person, a copy
of any and all of the documents incorporated by reference, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference to the information that is incorporated). Requests should be directed
to Commerce Bancorp, Inc., Commerce Atrium, 1701 Route 70 East, Cherry Hill, New
Jersey 08034, Attention: C. Edward Jordan, Jr., Executive Vice-President,
telephone number (609) 751-9000
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The Registrant and the Plans hereby incorporate by reference in this
Registration Statement the following documents filed with the Commission:
(a) Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Annual Report on Form 10-K referred to in (a) above including, but not limited
to, the Company's Quarterly Report on Form 10-Q for the three months ended March
31, 1998; and
(c) The description of the Company's Common Stock which is incorporated
by reference in the Company's Registration Statement on Form S-4 (File No.
333-16263) filed with the Commission on November 15, 1996, and all amendments or
reports filed for the purpose of updating such description.
2
<PAGE>
All reports and other documents subsequently filed by the Company with
the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act, after the date of this Registration Statement but prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold
hereunder, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
All information appearing in this Registration Statement and the
Prospectus is qualified in its entirety by the detailed information, including
financial statements, appearing in the documents incorporated herein or therein
by reference.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Jack R Bershad, a partner in Blank Rome Comisky & McCauley LLP, is a
director of the Company and certain of its subsidiaries. Mr. Bershad and certain
other partners of Blank Rome Comisky & McCauley LLP are shareholders of the
Company.
Item 6. Indemnification of Directors and Officers.
Section 14A:3-5 of the New Jersey Business Corporation Act provides, in
substance, that New Jersey corporations shall have the power, under specified
circumstances, to indemnify their directors, officers, employees and agents in
connection with actions, suits or proceedings brought against them or in the
right of the corporation, by reason of the fact that they were or are such
directors, officers, employees or agents, against expenses incurred in any such
action, suit or proceeding.
Article VI of the Company's By-laws provides for indemnification to the
fullest extent permitted by Section 14A:3-5.
The Company has obtained directors' and officers' liability insurance
which covers certain liabilities, including liabilities to the Company and its
stockholders, in connection with the performance of their duties.
Item 7. Exemption from Registration Claimed.
Not Applicable.
3
<PAGE>
Item 8. Exhibits
The following exhibits are filed as part of this Registration Statement
or, where so indicated, have been previously filed and are incorporated herein
by reference.
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Blank Rome Comisky & McCauley LLP.
10.1 Commerce Bancorp, Inc. 1997 Employee Stock Option
Plan.
10.2 Commerce Bancorp, Inc. 1998 Stock Option Plan for Non-
Employee Directors.
23.1 Consent of Blank Rome Comisky & McCauley LLP
(included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on signature page).
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3 or S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934, as amended, that are
incorporated by reference in the Registration Statement.
4
<PAGE>
(2) That for the purpose of determining any liability under
the Securities Act of 1933, as amended, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934, as amended) that is incorporated
by reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) The undersigned registrant hereby undertakes that, insofar as
indemnification for liabilities arising under the Securities Act of 1933, as
amended, may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment for the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
5
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-8 and has duly caused
this Registration Statement on Form S-8 to be signed on its behalf by the
undersigned, thereunto duly authorized, in Cherry Hill, New Jersey, on this
22nd day of June, 1998.
COMMERCE BANCORP, INC.
By: /s/Vernon W. Hill, II
----------------------------------
Vernon W. Hill, II,
Chairman of the Board and President
Each person whose signature appears below hereby authorizes Vernon W.
Hill, II or C. Edward Jordan, Jr. to file one or more Amendments, including
Post-Effective Amendments, to this Registration Statement, which Amendments may
make such changes as Vernon W. Hill, II or C. Edward Jordan, Jr. deem
appropriate, and each person whose signature appears below, individually and in
each capacity stated below hereby appoints Vernon W. Hill, II or C. Edward
Jordan, Jr. as attorney-in-fact to execute in his name and on his behalf any
such Amendments to this Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
[SIGNATURES CONTINUED ON NEXT PAGE]
6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE Capacity Date
- ------------------------------------------- ----------------------------------- ------------------------
<S> <C> <C>
/s/ Vernon W. Hill, II Chairman of the Board, June 22, 1998
- --------------------------------- President and Director
Vernon W. Hill, II (Principal Executive Officer)
/s/ C. Edward Jordan, Jr. Executive Vice President and June 22, 1998
- -------------------------------- Director (Principal Financial
C. Edward Jordan, Jr. and Accounting Officer)
/s/ Robert C. Beck Secretary and Director June 22, 1998
- -----------------------------------
Robert C. Beck
/s/ David Baird, IV Director June 22, 1998
- -----------------------------------
David Baird, IV
/s/ Jack R Bershad Director June 22, 1998
- -----------------------------------
Jack R Bershad
/s/ Morton N. Kerr Director June 22, 1998
- ----------------------------------
Morton N. Kerr
/s/ Steven M. Lewis Director June 22, 1998
- ---------------------------------
Steven M. Lewis
/s/ Daniel J. Ragone Director June 22, 1998
- ----------------------------------
Daniel J. Ragone
/s/ William A. Schwartz, Jr. Director June 22, 1998
- ------------------------------
William A. Schwartz, Jr.
/s/ Joseph T. Tarquini, Jr. Director June 22, 1998
- --------------------------------
Joseph T. Tarquini, Jr.
/s/ Joseph E. Buckelew Director June 22, 1998
- -------------------------------
Joseph E. Buckelew
/s/ Frank C. Videon, Sr. Director June 22, 1998
- --------------------------------
Frank C. Videon, Sr.
</TABLE>
7
<PAGE>
EXHIBIT INDEX
*Exhibit No. Description
- ------------ -----------
5.1 Opinion of Blank Rome Comisky & McCauley LLP
10.1 Commerce Bancorp, Inc. 1997 Employee Stock Option Plan
10.2 Commerce Bancorp, Inc. 1998 Stock Option Plan for Non-Employee
Directors
23.2 Consent of Ernst & Young LLP
- ------------------
* All Exhibits are filed herewith electronically.
<PAGE>
EXHIBIT 5.1
June 22, 1998
Commerce Bancorp, Inc.
Commerce Atrium
1701 Route 70 East
Cherry Hill, NJ 08034
Re: Commerce Bancorp, Inc.
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Commerce Bancorp, Inc. (the "Company") in
connection with the Registration Statement on Form S-8 (the "Registration
Statement") filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, relating to the offer and
sale of up to 3,025,000 shares, in the aggregate, of common stock, par value
$1.5625 per share (the "Common Stock"), by the Company pursuant to the Company's
(i) 1997 Employee Stock Option Plan and (ii) 1998 Stock Option Plan for Non-
Employee Directors (collectively, the "Plans"). This opinion is furnished
pursuant to the requirements of Item 601(b)(5) of Regulation S-K.
In rendering this opinion, we have examined only the following
documents: (i) the Company's Articles of Incorporation and By-laws, as amended
and restated since the inception of the Company, (ii) resolutions adopted by the
Company's Board of Directors, (iii) copies of the Plans and (iv) the
Registration Statement. We have not performed any independent investigation
other than the document examination described. Our opinion is therefore
qualified in all respects by the scope of that document examination. We have
assumed and relied, as to questions of fact and mixed questions of law and fact,
on the truth, completeness, authenticity and due authorization of all
certificates, documents and records examined and the genuineness of all
signatures. This opinion is limited to the laws of the State of New Jersey and
the Securities Act of 1933, as amended, and no opinion is expressed as to the
effect of laws of any other jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that the
shares of Common Stock of the Company which are being offered and sold by the
Company pursuant to the Registration Statement and the Plans, when sold in the
manner and for the consideration contemplated by the Registration Statement and
the Plans, will be legally issued, fully paid and non-assessable.
<PAGE>
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement.
Sincerely,
/s/ BLANK ROME COMISKY & MCCAULEY LLP
<PAGE>
EXHIBIT 10.1
COMMERCE BANCORP, INC.
1997 EMPLOYEE STOCK OPTION PLAN
1. Purpose of Plan
The purpose of the 1997 Employee Stock Option Plan (the "Plan") is to
provide additional incentive to officers and other key employees of Commerce
Bancorp, Inc. ("Commerce") and each present or future parent or subsidiary
corporation by encouraging them to invest in shares of common stock, par value
$1.5625 per share ("Common Stock"), of Commerce and thereby acquire a
proprietary interest in Commerce and an increased personal interest in
Commerce's continued success and progress, to the mutual benefit of officers,
employees and shareholders.
2. Aggregate Number of Shares
2,500,000 shares of Commerce Common Stock shall be the aggregate number
of shares which may be issued under this Plan. Notwithstanding the foregoing, in
the event of any change in the outstanding shares of the Common Stock of
Commerce by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Personnel Committee (defined in Section 4(a)), deems in
its sole discretion to be similar circumstances, the aggregate number and kind
of shares which may be issued under this Plan shall be appropriately adjusted in
a manner determined in the sole discretion of the Personnel Committee.
Reacquired shares of Commerce Common Stock, as well as unissued shares, may be
used for the purpose of this Plan. Shares of Commerce Common Stock subject to
options which have terminated unexercised, either in whole or in part, shall be
available for future options granted under this Plan. No individual may receive
options under the Plan for more than 50% of the total number of shares of
Commerce Common Stock authorized for issuance under this Plan.
3. Class of Persons Eligible to Receive Options
All officers and key employees of Commerce and of any present or
future Commerce parent or subsidiary corporation are eligible to receive an
option or options under this Plan. The individuals who shall, in fact, receive
an option or options shall be selected by the Personnel Committee, in its sole
discretion, except as otherwise specified in Section 4 hereof.
4. Administration of Plan
(a) This Plan shall be administered by the Personnel Committee
("Committee") appointed by Commerce's Board of Directors provided, however, that
at the option of the Board of Directors, the Plan may be administered by the
Board of Directors of Commerce at any time and from time to time. The Committee
shall consist of a minimum of three members of the Board of Directors, each of
whom shall be a "Non-Employee Director" within the meaning of Rule 16b-3(b)(3)
under the Securities Exchange Act of 1934, as amended or any future
corresponding rule, except that the failure of the Committee or of the Board of
Directors for any reason to be composed solely of Non-Employee Directors shall
not prevent an option from being considered granted under this Plan. The
Committee, in addition to its other authority and subject to the provisions of
this Plan, shall determine which
<PAGE>
individuals shall be granted an option or options, whether the option shall be
an Incentive Stock Option or a Non-Qualified Stock Option (as such terms are
defined in Section 5(a)), the number of shares to be subject to each of the
options, the time or times at which the options shall be granted, the rate of
option exercisability, and, subject to Section 5 hereof, the price at which each
of the options is exercisable and the duration of the option. The term
"Committee," as used in this Plan and the options granted hereunder, refers to
the Committee or to the Board of Directors, if the Board elects to administer
the Plan as provided above.
(b) The Committee shall adopt such rules for the conduct of its
business and administration of this Plan as it considers desirable. A majority
of the members of the Committee shall constitute a quorum for all purposes. The
vote or written consent of a majority of the members of the Committee on a
particular matter shall constitute the act of the Committee on such matter. The
Committee shall have the right to construe the Plan and the options issued
pursuant to it, to correct defects and omissions and to reconcile
inconsistencies to the extent necessary to effectuate the Plan and the options
issued pursuant to it, and such action shall be final, binding and conclusive
upon all parties concerned. No member of the Committee or the Board of Directors
shall be liable for any act or omission (whether or not negligent) taken or
omitted in good faith, or for the exercise of any authority or discretion
granted in connection with the Plan to the Committee or the Board of Directors,
or for the acts or omissions of any other members of the Committee or the Board
of Directors. Subject to the numerical limitations on Committee membership set
forth in Section 4(a) hereof, the Board of Directors may at any time appoint
additional members of the Committee and may at any time remove any member of the
Committee with or without cause. Vacancies in the Committee, however caused, may
be filled by the Board of Directors, if it so desires.
5. Incentive Stock Options and Non-Qualified Stock Options
(a) Options issued pursuant to this Plan may be either Incentive Stock
Options granted pursuant to Section 5(b) hereof or Non-Qualified Stock Options
granted pursuant to Section 5(c) hereof, as determined by the Committee. An
"Incentive Stock Option" is an option which satisfies all of the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations thereunder, and a "Non-Qualified Stock Option" is an option
which either does not satisfy all of those requirements or the terms of the
option provide that it will not be treated as an Incentive Stock Option. The
Committee may grant both an Incentive Stock Option and a Non-Qualified Stock
Option to the same person, or more than one of each type of option to the same
person. The option price for Incentive Stock Options issued under this Plan
shall be equal at least to the fair market value (as defined below) of
Commerce's Common Stock on the date of the grant of the option as determined by
the Committee in accordance with its interpretation of the requirements of
Section 422 of the Code and the regulations thereunder. The option price for
Non-Qualified Stock Options issued under this Plan shall also be equal to at
least the fair market value (as defined below) of Commerce's Common Stock on the
date of the grant of the option as determined by the Committee. If an Incentive
Stock Option is granted to an individual who, at the time the option is granted,
owns stock possessing more than 10 percent of the total combined voting power of
all shares of stock of Commerce or any parent or subsidiary corporation of
Commerce (a "10% Shareholder"), the option price shall not be less than 110
percent of the fair market value of Commerce's Common Stock on the date of grant
of the option and such option shall not be exercisable after the expiration of
five years from the date the option is granted, all as more fully set forth in
Section 422 of the Code and the regulations promulgated thereunder. The fair
market value of Commerce's Common Stock on any particular date shall mean the
last reported sale price of a share of Commerce's Common Stock on any stock
exchange on which such stock is then listed or admitted to trading, or on the
NASDAQ National Market System, on such
<PAGE>
date, or if no sale took place on such day, the last such date on which a sale
took place, or if the Common Stock is not then quoted on the NASDAQ National
Market System, or listed or admitted to trading on any stock exchange, the
average of the bid and asked prices in the over-the-counter market on such date,
or if none of the foregoing, a price determined in good faith by the Committee
to equal the fair market value per share of the Common Stock.
(b) Subject to the authority of the Committee set forth in Section 4(a)
hereof, Incentive Stock Options issued pursuant to this Plan shall be issued
substantially in the form set forth in Appendix I hereof, which form is hereby
incorporated by reference and made a part hereof, and shall contain
substantially the terms and conditions set forth therein. Incentive Stock
Options shall not be exercisable after the expiration of ten years (five years
in the case of 10% Shareholders) from the date such options are granted, unless
terminated earlier under the terms of the option. At the time of the grant of an
Incentive Stock Option hereunder, the Committee may, in its discretion, modify
or amend any of the option terms contained in Appendix I for any particular
optionee, provided that the option as modified or amended satisfies the
requirements of Section 422 of the Code and the regulations thereunder. Each of
the options granted pursuant to this Section 5(b) is intended, if possible, to
be an "Incentive Stock Option" as that term is defined in Section 422 of the
Code and the regulations thereunder. In the event this Plan or any option
granted pursuant to this Section 5(b) is in any way inconsistent with the
applicable legal requirements of the Code or the regulations thereunder for an
Incentive Stock Option, this Plan and such option shall be deemed automatically
amended as of the date hereof to conform to such legal requirements, if such
conformity may be achieved by amendment.
(c) Subject to the authority of the Committee set forth in Section 4(a)
hereof, Non-Qualified Stock Options issued pursuant to this Plan shall be issued
substantially in the form set forth in Appendix II hereof, which form is hereby
incorporated by reference and made a part hereof, and shall contain
substantially the terms and conditions set forth therein. Non-Qualified Stock
Options shall expire ten years after the date they are granted, unless
terminated earlier under the option terms. At the time of granting a
Non-Qualified Stock Option hereunder, the Committee may, in its discretion,
modify or amend any of the option terms contained in Appendix II for any
particular optionee, including, without limitation, the extent of the
assignability and/or transferability of such option.
(d) Neither Commerce nor any of its current or future parent,
subsidiaries or affiliates, nor their officers, directors, shareholders, stock
option plan committees, employees or agents shall have any liability to any
optionee in the event: (i) an option granted pursuant to Section 5(b) hereof
does not qualify as an "Incentive Stock Option" as that term is used in Section
422 of the Code and the regulations thereunder; (ii) any optionee does not
obtain the tax treatment pertaining to an Incentive Stock Option; or (iii) any
option granted pursuant to Section 5(c) hereof is an "Incentive Stock Option."
6. Modification, Amendment, Suspension and Termination
Options shall not be granted pursuant to this Plan after the expiration
of ten years from the date the Plan is adopted by the Board of Directors of
Commerce. The Board of Directors reserves the right at any time, and from time
to time, to modify or amend this Plan in any way, or to suspend or terminate it,
effective as of such date, which date may be either before or after the taking
of such action, as may be specified by the Board of Directors; provided,
however, that such action shall not affect options granted under the Plan prior
to the actual date on which such action occurred. If a modification or amendment
of this Plan is required by the Code or the regulations thereunder to be
approved by the shareholders of Commerce in order to permit the granting of
"Incentive Stock Options" (as that term is defined in Section 422 of the Code
and regulations thereunder) pursuant to the modified or amended
<PAGE>
Plan, such modification or amendment shall also be approved by the shareholders
of Commerce in such manner as is prescribed by the Code and the regulations
thereunder. If the Board of Directors voluntarily submits a proposed
modification, amendment, suspension or termination for shareholder approval,
such submission shall 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.
7. Effectiveness of Plan
This Plan shall become effective on the date of its adoption by
Commerce's Board of Directors, subject however to approval by the holders of
Commerce Common Stock in the manner as prescribed in the Code and the
regulations thereunder. Options may be granted under this Plan prior to
obtaining shareholder approval, provided such options shall not be exercisable
before such shareholder approval is obtained.
8. General Conditions
(a) Nothing contained in this Plan or any option granted pursuant to
this Plan shall confer upon any employee the right to continue in the employ of
Commerce or any present or future parent, affiliated or subsidiary corporation
or interfere in any way with the rights of Commerce or any present or future
parent, affiliated or subsidiary corporation to terminate his employment in any
way.
(b) Corporate action constituting an offer of stock for sale to any
employee under the terms of the options to be granted hereunder shall be deemed
complete as of the date when the Committee authorizes the grant of the option to
the employee, regardless of when the option is actually delivered to the
employee or acknowledged or agreed to by him.
(c) The terms "parent corporation" and "subsidiary corporation" as used
throughout this Plan, and the options granted pursuant to this Plan, shall
(except as otherwise provided in the option form) have the respective meanings
ascribed to such terms when contained in Section 422(b) of the Code and the
regulations thereunder, and Commerce shall be deemed to be the grantor
corporation for purposes of applying such meanings.
(d) References in this Plan to the Code shall be deemed to also refer
to the corresponding provisions of any future United States revenue law.
(e) The use of the masculine pronoun shall include the feminine gender
whenever appropriate.
<PAGE>
APPENDIX I
INCENTIVE STOCK OPTION
To:
--------------------------------------------------------------------
Name
--------------------------------------------------------------------
Address
Date of Grant:
---------------------------------------------------------
You are hereby granted an option, effective as of the date hereof, to
purchase ______ shares of Common Stock, par value $1.5625 per share, ("Common
Stock") of Commerce Bancorp, Inc. ("Commerce") at a price of _____ per share
pursuant to the Commerce 1997 Employee Stock Option Plan (the "Plan") adopted by
the Commerce Board of Directors effective __________, 1997. Your option price is
intended to equal at least the fair market value of Commerce Common Stock as of
the date hereof; provided, however, that if, at the time this option is granted,
you own stock possessing more than 10% of the total combined voting power of all
shares of stock of Commerce or any parent or subsidiary corporation of Commerce
(a "10% Shareholder"), your option price is intended to be at least 110% of the
fair market value of Commerce Common Stock as of the date hereof.
Except as provided below, no option may be exercised within one year
from the date of grant. Options held more than one year may be exercised based
upon years of service or option holding period, whichever is sooner, pursuant to
the following schedule:
<TABLE>
<CAPTION>
Years of Service Option Holding Period
---------------- ---------------------
<S> <C>
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 four years - 100%
</TABLE>
This option shall terminate and is not exercisable after the expiration
of ten years from the date of its grant (five years from the date of grant if,
at the time of the grant, you are a 10% Shareholder) (the "Scheduled Termination
Date"), except as hereafter provided. To the extent this option does not quality
as an incentive stock option for any reason, it shall be considered a
non-qualified stock option.
In the event of a "change of control" (as hereafter defined) of
Commerce, your option may, from and after the date of the change of control (but
in no event later than the Scheduled Termination Date), and notwithstanding the
second paragraph of this option, be exercised for up to 100% of the
<PAGE>
total number of shares then subject to the option minus the number of shares
previously purchased upon exercise of the option (as adjusted for any changes in
the outstanding Commerce Common Stock by reason of a stock dividend, stock
split, combination of shares, recapitalization, merger, consolidation, transfer
of assets, reorganization, conversion or what the Committee deems in its sole
discretion to be similar circumstances).
A "change of control" shall be deemed to have occurred upon the
happening of any of the following events:
1. A change within a twelve-month period in a majority of
the members of the board of directors of Commerce;
2. A change within a twelve-month period in the holders of
more than 50% of the outstanding voting stock of Commerce; or
3. Any other event deemed to constitute a "change in
control" by the Board of Directors.
You may exercise your option by giving written notice to the Secretary
of Commerce on forms supplied by Commerce at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check and includes cash
received from a stock brokerage firm in a so-called "cashless exercise"; (b)
(unless prohibited by the Committee) certificates representing shares of Common
Stock of Commerce, which will be valued by the Secretary of Commerce at the fair
market value per share of Commerce Common Stock (as determined in accordance
with the Plan) on the last trading day immediately preceding the date of
delivery of such certificates to Commerce, accompanied by an assignment of the
stock to Commerce; or (c) (unless prohibited by the Committee) any combination
of cash and Common Stock of Commerce valued as provided in clause (b). Any
assignment of stock shall be in a form and substance satisfactory to the
Secretary of Commerce, including guarantees of signature(s) and payment of all
transfer taxes if the Secretary deems such guarantees necessary or desirable or
determines that such taxes are due and payable.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by Commerce or a
Commerce parent or subsidiary corporation is terminated, whether such
termination is voluntary or not, other than by reason of disability as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder, or death, in which case your option
will terminate one year from the date of termination of employment due to
disability or death (but in no event later than the Scheduled Termination Date).
After the date your employment is terminated, as aforesaid, you may exercise
this option only for the number of shares which you had a right to purchase and
did not purchase on the date your employment terminated. If you are employed by
a Commerce subsidiary corporation, your employment shall be deemed to have
terminated on the date your employer ceases to be a Commerce subsidiary
corporation, unless you are on that date transferred to Commerce or another
Commerce subsidiary corporation. Your employment shall not be deemed to have
terminated if you are transferred from Commerce to a Commerce subsidiary
corporation, or vice versa, or from one Commerce subsidiary corporation to
another Commerce subsidiary corporation.
<PAGE>
Anything in this option to the contrary notwithstanding, your option
will terminate immediately if your employment is terminated for cause (as
determined by Commerce in its sole and absolute discretion). Your employment
shall be deemed to have been terminated for cause if you are terminated due to,
among other reasons, (i) your willful misconduct or gross negligence, (ii) your
material breach of any agreement with Commerce or (iii) your failure to render
satisfactory services to Commerce.
If you die while employed by Commerce or a Commerce parent or
subsidiary corporation, your legatee(s), distributee(s), executor(s) or
administrator(s), as the case may be, may, at any time within one year after the
date of your death (but in no event later than the Scheduled Termination Date),
exercise the option as to any shares which you had a right to purchase and did
not purchase during your lifetime. If your employment with Commerce or a
Commerce parent or subsidiary corporation is terminated by reason of your
becoming disabled (within the meaning of Section 22(e)(3) of the Code and the
regulations thereunder), you or your legal guardian or custodian may at any time
within one year after the date of such termination (but in no event later than
the Scheduled Termination Date), exercise the option as to any shares which you
had a right to purchase and did not purchase prior to such termination. Your
legatee, distributee, executor, administrator, guardian or custodian must
present proof of his authority satisfactory to Commerce prior to being allowed
to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of Commerce by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Committee deems in its sole discretion to
be similar circumstances, the number and kind of shares subject to this option
and the option price of such shares shall be appropriately adjusted in a manner
to be determined in the sole discretion of the Committee.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a shareholder of Commerce. Commerce reserves the right
not to deliver to you the shares purchased by virtue of the exercise of this
option during any period of time in which Commerce deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the shareholders of Commerce in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as Commerce may deem necessary or desirable;
or
(c) During any period of time in which Commerce deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may cause Commerce to be
legally obligated to issue or sell more shares than Commerce is legally
entitled to issue or sell.
<PAGE>
(d) Until you have paid or made suitable arrangements to pay
(which may include payment through the surrender of Common Stock, unless
prohibited by the Committee) (i) all federal, state and local income tax
withholding required to be withheld by Commerce in connection with the option
exercise and (ii) the employee's portion of other federal, state and local
payroll and other taxes due in connection with the option exercise.
(e) Until Commerce has registered its Common Stock under the
Securities Exchange Act of 1934, as amended.
The following two paragraphs shall be applicable if, on the
date of exercise of this option, the Common Stock to be purchased pursuant to
such exercise has not been registered under the Securities Act of 1933, as
amended, and under applicable state securities laws, and shall continue to be
applicable for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to Commerce to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgements and agreements as
Commerce may, in its sole discretion, deem advisable to avoid any violation of
federal, state, local or securities exchange rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under
the Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to Commerce that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to Commerce that said
registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
<PAGE>
It is the intention of Commerce and you that this option shall, if
possible, be an "Incentive Stock Option" as that term is used in Section 422 of
the Code and the regulations thereunder. In the event this option is in any way
inconsistent with the legal requirements of the Code or the regulations
thereunder for an "Incentive Stock Option," this option shall be deemed
automatically amended as of the date hereof to conform to such legal
requirements, if such conformity may be achieved by amendment.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between Commerce and you with respect to the subject matter hereof
and no amendment, modification or waiver of this option, in whole or in part,
shall be binding upon Commerce unless in writing and signed by the President of
Commerce. This option and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the State of New
Jersey.
Please sign the copy of this option and return it to Commerce's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
COMMERCE BANCORP, INC.
By:
----------------------------------
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it, hereby signify my understanding of, and my agreement with,
its terms and conditions.
- --------------------------------------- ----------------
(Signature) (Date)
<PAGE>
APPENDIX II
NON-QUALIFIED STOCK OPTION
To:
---------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------
Address
Date of Grant:
------------------------------------
You are hereby granted an option, effective as of the date hereof, to
purchase ______ shares of Common Stock, par value $1.5625 per share ("Common
Stock"), of Commerce Bancorp, Inc. ("Commerce") at a price of _____ per share
pursuant to the Commerce 1997 Employee Stock Option Plan (the "Plan") adopted by
the Commerce Board of Directors effective __________, 1997.
Except as provided below, no option may be exercised within one year
from the date of grant. Options held more than one year may be exercised based
upon years of service or option holding period, whichever is sooner, pursuant to
the following schedule:
<TABLE>
<CAPTION>
Years of Service Option Holding Period
---------------- ---------------------
<S> <C>
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 four years - 100%
</TABLE>
This option shall terminate and is not exercisable after the expiration
of ten years from the date of its grant (the "Scheduled Termination Date"),
except as hereafter provided.
In the event of a "change of control" (as hereafter defined) of
Commerce, your option may, from and after the date of the change of control
(but in no event later than the Scheduled Termination Date), and
notwithstanding the second paragraph of this option, be exercised for up to
100% of the total number of shares then subject to the option minus the number
of shares previously purchased upon exercise of the option (as adjusted for
any changes in the outstanding Commerce Common Stock by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances).
<PAGE>
A "change of control" shall be deemed to have occurred upon the
happening of any of the following events:
1. A change within a twelve-month period in a majority of
the members of the board of directors of Commerce;
2. A change within a twelve-month period in the holders of
more than 50% of the outstanding voting stock of Commerce; or
3. Any other event deemed to constitute a "change in
control" by the Board of Directors.
You may exercise your option by giving written notice to the Secretary
of Commerce on forms supplied by Commerce at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check and includes cash
received from a stock brokerage firm in a so-called "cashless exercise"; (b)
(unless prohibited by the Committee) certificates representing shares of Common
Stock of Commerce, which will be valued by the Secretary of Commerce at the fair
market value per share of Commerce's Common Stock (as determined in accordance
with the Plan) on the last trading day immediately preceding the date of
delivery of such certificates to Commerce, accompanied by an assignment of the
stock to Commerce; or (c) (unless prohibited by the Committee) any combination
of cash and Common Stock of Commerce valued as provided in clause (b). Any
assignment of stock shall be in a form and substance satisfactory to the
Secretary of Commerce, including guarantees of signature(s) and payment of all
transfer taxes if the Secretary deems such guarantees necessary or desirable or
determines that such taxes are due and payable.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by Commerce or a
Commerce parent or subsidiary corporation is terminated, whether such
termination is voluntary or not, other than by reason of disability as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder, or death, in which case your option
will terminate one year from the date of termination of employment due to
disability or death (but in no event later than the Scheduled Termination Date).
After the date your employment is terminated, as aforesaid, you may exercise
this option only for the number of shares which you had a right to purchase and
did not purchase on the date your employment terminated. If you are employed by
a Commerce subsidiary corporation, your employment shall be deemed to have
terminated on the date your employer ceases to be a Commerce subsidiary
corporation, unless you are on that date transferred to Commerce or another
Commerce subsidiary corporation. Your employment shall not be deemed to have
terminated if you are transferred from Commerce to a Commerce subsidiary
corporation, or vice versa, or from one Commerce subsidiary corporation to
another Commerce subsidiary corporation.
<PAGE>
Anything in this option to the contrary notwithstanding, your option
will terminate immediately if your employment is terminated for cause (as
determined by Commerce in its sole and absolute discretion). Your employment
shall be deemed to have been terminated for cause if you are terminated due to,
among other reasons, (i) your willful misconduct or gross negligence, (ii) your
material breach of any agreement with Commerce or (iii) your failure to render
satisfactory services to Commerce.
If you die while employed by Commerce or a Commerce parent or
subsidiary corporation, your legatee(s), distributee(s), executor(s) or
administrator(s), as the case may be, may, at any time within one year after the
date of your death (but in no event later than the Scheduled Termination Date),
exercise the option as to any shares which you had a right to purchase and did
not purchase during your lifetime. If your employment with Commerce or a
Commerce parent or subsidiary corporation is terminated by reason of your
becoming disabled (within the meaning of Section 22(e)(3) of the Code and the
regulations thereunder), you or your legal guardian or custodian may at any time
within one year after the date of such termination (but in no event later than
the Scheduled Termination Date), exercise the option as to any shares which you
had a right to purchase and did not purchase prior to such termination. Your
legatee, distributee, executor, administrator, guardian or custodian must
present proof of his authority satisfactory to Commerce prior to being allowed
to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of Commerce by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Committee deems in its sole discretion to
be similar circumstances, the number and kind of shares subject to this option
and the option price of such shares shall be appropriately adjusted in a manner
to be determined in the sole discretion of the Committee.
Unless specifically authorized by the Committee, this option is not
transferable otherwise than by will or the laws of descent and distribution, and
is exercisable during your lifetime only by you, including, for this purpose,
your legal guardian or custodian in the event of disability. Until the option
price has been paid in full pursuant to due exercise of this option and the
purchased shares are delivered to you, you do not have any rights as a
shareholder of Commerce. Commerce reserves the right not to deliver to you the
shares purchased by virtue of the exercise of this option during any period of
time in which Commerce deems, in its sole discretion, that such would violate a
federal, state, local or securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the shareholders of Commerce in the manner prescribed by the Code
and the regulations thereunder;
<PAGE>
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as Commerce may deem necessary or desirable;
or
(c) During any period of time in which Commerce deems that the
exercisability of this option, the offer to sell the shares optioned hereunder,
or the sale thereof, may violate a federal, state, local or securities exchange
rule, regulation or law, or may cause Commerce to be legally obligated to issue
or sell more shares than Commerce is legally entitled to issue or sell.
(d) Until you have paid or made suitable arrangements to pay
(which may include payment through the surrender of Common Stock, unless
prohibited by the Committee) (i) all federal, state and local income tax
withholding required to be withheld by Commerce in connection with the option
exercise and (ii) the employee's portion of other federal, state and local
payroll and other taxes due in connection with the option exercise.
(e) Until Commerce has registered its Common Stock under the
Securities Exchange Act of 1934, as amended.
The following two paragraphs shall be applicable if, on the
date of exercise of this option, the Common Stock to be purchased pursuant to
such exercise has not been registered under the Securities Act of 1933, as
amended, and under applicable state securities laws, and shall continue to be
applicable for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to Commerce to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgements and agreements as
Commerce may, in its sole discretion, deem advisable to avoid any violation of
federal, state, local or securities exchange rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement
under the Securities Act of 1933, as amended, and under any
applicable state securities laws or an opinion of counsel acceptable
to Commerce that the proposed transaction will be exempt from such
registration."
<PAGE>
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to Commerce that said
registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of Commerce and you that this option shall not be
an "Incentive Stock Option" as that term is used in Section 422 of the Code and
the regulations thereunder.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between Commerce and you with respect to the subject matter hereof
and no amendment, modification or waiver of this option, in whole or in part,
shall be binding upon Commerce unless in writing and signed by the President of
Commerce. This option and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the State of New
Jersey.
Please sign the copy of this option and return it to Commerce's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
COMMERCE BANCORP, INC.
By:
--------------------------------------------
I hereby acknowledge receipt of a copy of the foregoing stock option and, having
read it, hereby signify my understanding of, and my agreement with, its terms
and conditions.
- ----------------------------- ------------------------
(Signature) (Date)
<PAGE>
EXHIBIT 10.2
COMMERCE BANCORP, INC.
1998 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose of Plan:
The purpose of the 1998 Stock Option Plan for Non-Employee Directors
(the "Plan") contained herein is to enhance the ability of Commerce Bancorp,
Inc. and its current and future subsidiaries (collectively the "Companies") to
attract, retain and motivate members of their respective Boards of Directors and
to provide additional incentive to members of their respective Boards of
Directors by encouraging them to invest in shares of Commerce Bancorp, Inc. (the
"Company") common stock and thereby acquire a proprietary interest in the
Company and an increased personal interest in the Companies' continued success
and progress, to the mutual benefit of directors, employees and stockholders.
2. Aggregate Number of Shares:
400,000 shares of the Company's common stock, par value $1.5625 per
share ("Common Stock"), shall be the aggregate number of shares which may be
issued under this Plan. Notwithstanding the foregoing, in the event of any
change in the capitalization of the Company, such as by stock dividend, stock
split, combination of shares, recapitalization, merger, consolidation, transfer
of assets, reorganization, conversion or what the Board of Directors of the
Company deems in its sole discretion to be similar circumstances, the aggregate
number and kind of shares which may be issued under this Plan shall be
appropriately adjusted in a manner determined in the sole discretion of the
Board of Directors of the Company. Reacquired shares of the Company's Common
Stock, as well as unissued shares, may be used for the purpose of this Plan.
Common Stock of the Company subject to options which have terminated
unexercised, either in whole or in part, shall be available for future options
granted under this Plan.
3. Participation:
The Board of Directors of the Company, in their sole discretion, may
grant options to purchase shares of the Company's Common Stock to Directors who
at the time of such grant are not an employee of the Company or any Company
subsidiary corporation. The Board of Directors shall, in addition to its other
authority and subject to the provisions of this Plan, determine the number of
shares to be subject to each option granted pursuant to this Section 3, the time
or times at which such options shall be granted and subject to Section 5 hereof,
the price at which each of the options is exercisable.
4. Administration of Plan:
This Plan shall be administered by the Board of Directors of the
Company. The Board of Directors of the Company shall adopt such rules for the
conduct of its business and administration
<PAGE>
of this Plan as it considers desirable. A majority of the members of the Board
of Directors of the Company shall constitute a quorum for all purposes. The vote
or written consent of a majority of the members of the Board of Directors of the
Company on a particular matter shall constitute the act of the Board of
Directors of the Company on such matter. The Board of Directors of the Company
shall have the exclusive right to construe the Plan and the options issued
pursuant to it, to correct defects and omissions and to reconcile
inconsistencies to the extent necessary to effectuate the purpose of this Plan
and the options issued pursuant to it, and such action shall be final, binding
and conclusive upon all parties concerned. No member of the Board of Directors
of the Company shall be liable for any act or omission (whether or not
negligent) taken or omitted in good faith, or for the exercise of any authority
or discretion granted in connection with the Plan to the Board of Directors, or
for the acts or omissions of any other members of the Board of Directors.
5. Non-Qualified Stock Options, Option Price and Term:
(a) Options issued pursuant to this Plan shall be non-qualified stock
options. A non-qualified stock option is an option which does not satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). The option price for the non-qualified stock options issued under
this Plan shall be equal to the fair market value, as determined in good faith
by the Board of Directors of the Company, of the Company's Common Stock on the
date of the grant of the option.
(b) Options issued pursuant to this Plan shall be issued substantially
in the form set forth in Appendix I hereof, which form is hereby incorporated by
reference and made a part hereof, and shall contain substantially the terms and
conditions set forth therein. At the time of granting a non-qualified stock
option hereunder, the Board of Directors may, in its discretion, amend or
supplement any of the option terms contained in Appendix I for a particular
optionee including, without limitation, the extent of the assignability and/or
transferability of such option. Options shall expire ten years after the date
they are granted, unless terminated earlier as provided herein.
6. Modification, Amendment, Suspension and Termination:
Options shall not be granted pursuant to this Plan after the expiration
of five years from and after the date this Plan is approved by the stockholders
of the Company. The Board of Directors of the Company reserves the right at any
time, and from time to time, to modify or amend this Plan in any way, or to
suspend or terminate it, effective as of such date, which date may be either
before or after the taking of such action, as may be specified by the Board of
Directors of the Company; provided, however, that such action shall not affect
options granted under the Plan prior to the actual date on which such action
occurred. If the Board of Directors voluntarily submits a proposed modification,
amendment, suspension or termination for stockholder approval, such submission
shall not require any future modifications, amendments (whether or not relating
to the same provision or subject matter), suspensions or terminations to be
similarly submitted for stockholder approval.
7. Effectiveness of Plan:
This Plan shall become effective on the date of its adoption by the
Company's Board of Directors, subject however to approval by the holders of
the Company's Common Stock. Options may be granted under this Plan prior to
obtaining stockholder approval, provided such options shall not be exercisable
until stockholder approval is obtained.
<PAGE>
8. General Conditions:
(a) Nothing contained in this Plan or any option granted pursuant to
this Plan shall confer upon any director the right to continue as a director of
any of the Companies or interfere in any way with the rights of the Companies to
terminate him as a director.
(b) Corporate action constituting an offer of stock for sale to any
director under the terms of the options to be granted hereunder shall be deemed
complete as of the date when the actions of the stockholder(s) in electing or
reelecting a non-employee director are completed or when the Board of Directors
authorizes the grant of the option to such non-employee director, as the case
may be, regardless of when the option is actually delivered to the non-employee
director or acknowledged or agreed to by him.
(c) The term "subsidiary corporation" as used throughout this Plan
shall mean a corporation in which the Company owns, directly or indirectly,
shares of stock representing fifty percent or more of the outstanding voting
power of all classes of stock of such corporation at the time of the granting of
an option under this Plan.
(d) The use of the masculine pronoun shall include the feminine gender
whenever appropriate.
<PAGE>
APPENDIX I
NON-QUALIFIED STOCK OPTION
To:
--------------------------------------------------------------------------
Name
--------------------------------------------------------------------------
Address
Date:
--------------------
You are hereby granted an option, effective as of the date hereof, to
purchase ______ shares of common stock (par value $1.5625 per share) ("Common
Stock") of Commerce Bancorp, Inc. (the "Company") at a price of $______ per
share pursuant to the Company's 1998 Stock Option Plan for Non-Employee
Directors (the "Plan").
Your option may first be exercised on and after the earlier to occur of
(i) one year from the date of its grant or (ii) a "change in control" of the
Company, as hereinafter defined, but not before that time. On and after the
earlier to occur of (i) one year from the date your option is granted or (ii) a
"change in control" of the Company, and prior to ten years from the date of its
grant, your option may be exercised in whole, or from time to time in part, for
up to the total whole number of shares then subject to the option minus the
number of shares previously purchased by exercise of the option (as
appropriately adjusted for stock dividends, stock splits, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion and what the Board of Directors of the Company deems in its sole
discretion to be similar circumstances). No fractional shares shall be issued or
delivered. This option shall terminate and is not exercisable after the
expiration of ten years from the date of its grant, except if terminated earlier
as hereafter provided.
A "change of control" shall be deemed to have occurred upon the
happening of any of the following events:
1. A change within a twelve-month period in a majority of
the members of the Board of Directors of the Company;
2. A change within a twelve-month period in the holders of
more than 50% of the outstanding voting stock of the Company; or
3. Any other event deemed to constitute a "change in control"
by the Board of Directors.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (i) cash which may be evidenced by a check and includes cash
received from a stock brokerage firm in a so-called "cashless exercise"; (ii)
(unless prohibited by the Board of Directors) certificates representing Common
Stock of the Company which will be valued
<PAGE>
by the Secretary of the Company at the last sale price of a share of the
Company's Common Stock in trading as reported by the New York Stock Exchange on
the last trading day immediately preceding the delivery of such certificates to
the Company or as may be otherwise made available, accompanied by an assignment
of the stock to the Company; or (iii) (unless prohibited by the Board of
Directors) any combination of cash and Common Stock of the Company valued as
provided in clause (ii). Any assignment of stock shall be in a form and
substance satisfactory to the Secretary of the Company, including guarantees of
signature(s) if he deems such guarantees necessary or desirable and payment of
all transfer taxes.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which you cease to be a director of the
Company or a subsidiary corporation by death, disability, resignation or removal
(whether for cause or otherwise), but in no event later than ten years from the
date this option is granted, whether such termination be voluntary or not. After
the date you cease to be a director, you may exercise this option only for the
number of shares which you had a right to purchase and did not purchase on the
date you ceased to be a director. If you are a director of a Company subsidiary
corporation, your directorship shall be deemed to have terminated on the date
such company ceases to be a Company subsidiary corporation, unless you are also
a director of the Company or another Company subsidiary corporation, or on that
date became a director of the Company or another Company subsidiary corporation.
Your directorship shall not be deemed to have terminated if you cease being a
director of the Company or a Company subsidiary corporation but are or
concurrently therewith become a director of the Company or another Company
subsidiary corporation.
Unless specifically authorized by the Board of Directors, this option
is not transferable by you otherwise than by will or the laws of descent and
distribution and is exercisable, during your lifetime, only by you. If you die
while a director of the Company or a Company subsidiary corporation, your
legatee(s), distributee(s), executor or administrator, as the case may be, may,
at any time within three months after the date of your death (but in no event
later than ten years from the date this option is granted), exercise the option
as to any shares which you had a right to purchase and did not purchase during
your lifetime. If your directorship with the Company or a Company subsidiary
corporation is terminated by reason of your becoming disabled, you or your legal
guardian or custodian may at any time within three months after the date of such
termination (but in no event later than 10 years from the date this option is
granted), exercise the option as to any shares which you had a right to purchase
and did not purchase prior to such termination. Your executor, administrator,
guardian or custodian must present proof of his authority satisfactory to the
Company prior to being allowed to exercise this option.
In the event of any change in the capitalization of the Company, such
as by stock dividend, stock split, combination of shares, recapitalization,
merger, consolidation, transfer of assets, reorganization, conversion or what
the Board of Directors of the Company deems in its sole discretion to be similar
circumstances, the number and kind of shares subject to this option and the
option price for such shares will be appropriately adjusted in a manner to be
determined in the sole discretion of the Board of Directors of the Company.
Until the option price has been paid in full pursuant to due exercise
of this option and the purchased shares are delivered to you, you do not have
any rights as a stockholder of the Company. The Company reserves the right not
to deliver to you the shares purchased by virtue of exercise of this
<PAGE>
option during any period of time in which the Company deems, in its sole
discretion, that such delivery may not be consummated without violating a
federal, state, local or securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(1) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies
or agencies and securities exchanges as the Company may deem necessary
or desirable.
(2) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares
optioned hereunder, or the sale thereof, may violate a federal, state,
local or securities exchange rule, regulation or law, or may cause the
Company to be legally obligated to issue or sell more shares than the
Company is legally entitled to issue or sell.
(3) Until you have paid or made suitable arrangements to pay
(which may include payment through the surrender of Common Stock), (i)
all federal, state and local income tax withholding required to be
withheld by the Company in connection with the option exercise and (ii)
your portion of other federal, state and local payroll and other taxes
due in connection with the option exercise.
The following two paragraphs shall be applicable if, on the date of
exercise of this option, the Common Stock to be purchased pursuant to such
exercise has not been registered under the Securities Act of 1933, as amended,
and under applicable state securities laws, and shall continue to be applicable
for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own
account for investment purposes only, and not with a view to, or in
connection with, any resale or other distribution of any of such
shares, except as hereafter permitted. The optionee further agrees that
he will not at any time make any offer, sale, transfer, pledge or other
disposition of such Common Stock to be issued hereunder without an
effective registration statement under the Securities Act of 1933, as
amended, and under any applicable state securities laws or an opinion
of counsel acceptable to the Company to the effect that the proposed
transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgments and
agreements as the Company may, in its sole discretion, deem advisable
to avoid any violation of federal, state, local or securities exchange
rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
<PAGE>
"The shares represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or under applicable state securities laws. The shares have
been acquired for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of without an
effective registration statement under the Securities Act of
1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such
registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Company that
said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall not
be an "Incentive Stock Option" as that term is used in Section 422 of the Code
and the regulations thereunder.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, modification or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing and signed by the
Chief Executive Officer of the Company. This option and the performances of the
parties hereunder shall be construed in accordance with and governed by the laws
of the State of New Jersey.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
COMMERCE BANCORP, INC.
(SEAL) By:
------------------------------------
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it hereby signify my understanding of, and my agreement with,
its terms and conditions.
- -------------------------------------- ------------------------
(Signature) (Date)
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-________) pertaining to the 1997 Employee Stock Option Plan
and the 1998 Stock Option Plan for Non-Employee Directors of Commerce Bancorp,
Inc. of our report dated January 26, 1998 with respect to the consolidated
financial statements of Commerce Bancorp, Inc. and Subsidiaries included in its
Annual Report (Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Philadelphia, Pennsylvania
June 17, 1998
