<PAGE>
As filed with the Securities and Exchange Commission on March 5, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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 number)
Commerce Atrium
1701 Route 70 East
Cherry Hill, NJ 08034-5400
(609) 751-9000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
C. Edward Jordan, Jr.
Executive Vice President
Commerce Bancorp, Inc.
Commerce Atrium
1701 Route 70 East
Cherry Hill, NJ 08034-5400
(609) 751-9000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Lawrence R. Wiseman, Esquire
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
(215) 569-5500
Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after the registration statement becomes
effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |X|
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box, and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------
Title Of Each Class Proposed Maximum Proposed
Of Securities To Amount To Be Offering Price Maximum Amount Of
Be Registered Registered Per Unit Offering Price Registration Fee
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.5625 par 1,000,000 (1) $ 44.3125 (2) $ 44,312,500 (2) $ 12,319
value
- - -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- - ------------------------
(1) In addition, pursuant to Rule 416(a) under the Securities Act, this
registration statement also covers an indeterminate amount of shares as may
be issued pursuant to stock splits and stock dividends.
(2) Based upon the average of the high and low sale prices of the Commerce
Bancorp common stock on the New York Stock Exchange on March 3, 1999,
estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(A) of the
Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(A), may
determine.
<PAGE>
PROSPECTUS
[Commerce Bancorp Logo]
Dividend Reinvestment and Stock Purchase Plan
1,000,000 shares of Common Stock
This prospectus describes the Commerce Bancorp, Inc. Dividend
Reinvestment and Stock Purchase Plan. Commerce Bancorp wanted to amend its
currently existing Dividend Reinvestment and Stock Purchase Plan to modernize it
and provide new enhanced features. The Plan offers holders of Commerce Bancorp
equity securities the following:
o a simple and convenient method of investing cash dividends in
additional shares of Commerce Bancorp common stock; and
o the opportunity to purchase additional shares of Commerce Bancorp
common stock by making voluntary cash payments of $100 to $5,000 per
month.
Some of the significant features of the Plan are as follows:
o participants do not have to pay brokerage commissions or service
charges;
o participants purchase the Commerce Bancorp common stock at a 3%
discount, this 3% discount is subject to change, see page 9;
o holders of shares currently enrolled in Commerce Bancorp's Dividend
Reinvestment and Stock Purchase Plan will automatically be enrolled in
this amended Plan; and
o participation in the Plan is entirely voluntary, and participants may
terminate their participation at any time.
Commerce Bancorp cannot estimate the net proceeds it will receive from
the sale of its common stock in connection with the Plan. The amount of the net
proceeds which Commerce Bancorp will receive will depend upon the following:
o the market price of Commerce Bancorp common stock;
o the extent of shareholder participation in the Plan; and
o other factors.
Commerce Bancorp common stock trades on the New York Stock Exchange
under the symbol "CBH".
The securities offered hereby are not savings accounts, deposits or other
obligations of a bank or savings association and are not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or has passed upon
the accuracy or adequacy of this prospectus. Any representation to the contrary
is a criminal offense.
The date of this prospectus is March [], 1999.
<PAGE>
Table of Contents
Page
Summary................................................................... 1
The Plan.................................................................. 3
Use of Proceeds........................................................... 23
Description of Commerce Bancorp's Capital Stock........................... 23
Dividends................................................................. 27
Legal Matters............................................................. 29
Experts................................................................... 29
Where You Can Find More Information....................................... 30
You should rely only on the information incorporated by reference or provided in
this prospectus. Commerce Bancorp has not authorized anyone else to provide you
with different information. Commerce Bancorp will not make an offer of these
shares in any state where the offer is not permitted. You should not assume that
the information in this prospectus is accurate as of any date other than the
date on the front page of this prospectus.
<PAGE>
Summary
This summary highlights selected information from this prospectus and may
not contain all of the information that is important to you. To understand the
Plan fully, you should read this entire prospectus carefully before you decide
to participate in the Plan.
The Company
Background
Commerce Bancorp is a multi-bank holding company headquartered in Cherry
Hill, New Jersey which operates:
o four nationally chartered bank subsidiaries:
o Commerce Bank, N.A., Cherry Hill, New Jersey,
o Commerce Bank/Pennsylvania, N.A., Devon, Pennsylvania,
o Commerce Bank/Shore, N.A., Toms River, New Jersey, and
o Commerce Bank/Central, N.A., Flemington, New Jersey
o one state chartered bank subsidiary:
o Commerce Bank/North, Ramsey, New Jersey.
These five bank subsidiaries have 81 retail branch offices in New Jersey,
and 17 retail branch offices in Metropolitan Philadelphia. Commerce Bancorp
through its five bank subsidiaries, provides a full range of retail and
commercial banking services for consumers and small and mid-sized companies.
Lending services are focused on commercial real estate, commercial and consumer
loans to local borrowers. Commerce Bancorp's lending and investment activities
are funded principally by retail deposits gathered through its retail branch
office network.
Commerce Bancorp also operates one nonbank subsidiary, Commerce Capital
Markets, Inc., Philadelphia, Pennsylvania which engages in municipal securities
and brokerage activities. In addition, Commerce Bancorp, through Commerce
National Insurance Services, Inc., a nonbank subsidiary of Commerce Bank/North,
operates an insurance brokerage firm concentrating on commercial property,
casualty and surety as well as personal lines of insurance for clients in
multiple states, primarily Delaware, New Jersey and Pennsylvania.
Address and telephone number
Commerce Bancorp's principal executive offices are located at Commerce
Atrium, 1701 Route 70 East, Cherry Hill, New Jersey 08034-5400 and its telephone
number is (609) 751-9000.
Enrollment
If you are already a participant in the Plan, you need not do anything
further; your participation will continue until terminated.
Holders of Commerce Bancorp's equity securities can participate in the Plan
by completing and submitting the authorization card, which is enclosed with this
prospectus, to the plan administrator, ChaseMellon Shareholder Services, at P.O.
Box 3339, South Hackensack, NJ 07606. See pages 6-8.
-1-
<PAGE>
If your shares of Commerce Bancorp stock are held in a brokerage account,
you may either arrange for your broker to be a participant in the Plan or you
may participate directly by transferring registration of some or all of your
shares into your name and submitting a completed authorization card to the plan
administrator. See page 6.
Reinvestment of Dividends
You can reinvest your cash dividends on all or a portion of your shares of
Commerce Bancorp stock toward the purchase of additional shares of Commerce
Bancorp common stock. See page 3.
Fractional Shares
Commerce Bancorp pays dividends on both whole shares and fractional shares
in the Plan and will credit your plan account with dividends on both your whole
and fractional shares. See page 13.
Optional Cash Investments
After you are enrolled in the Plan, you may buy additional shares of
Commerce Bancorp common stock under the Plan. You can invest a minimum of $100
and a maximum of $5,000 per calendar month. You can pay by check or money order
made payable to "Chase Manhattan Bank." See pages 4 and 10-11.
Fees and Purchase Price
You will not have to pay any brokerage commissions or service charges for
any shares of Commerce Bancorp common stock purchased under the Plan. In
addition, you will be able to purchase Commerce Bancorp common stock at a 3%
discount from the market price of Commerce Bancorp common stock. This 3%
discount is subject to change, see page 9.
Safekeeping of Certificates
You can deposit your Commerce Bancorp common stock certificates with the
plan administrator for safekeeping at no cost to you. This feature of the Plan
applies whether or not you are having the dividends on deposited shares
reinvested under the Plan. A certificate for your shares will be sent to you,
free of charge, upon request. However, fractional shares will not be issued. See
pages 4, 13, 14 and 16.
Gifts and Transfers of Shares
You can give or transfer your shares of Commerce Bancorp common stock to
others.
Sell Shares Conveniently
If you choose to have the plan administrator sell your Commerce Bancorp
common stock held in your plan account, you will incur:
o a nominal fee to be deducted from the proceeds of the sale;
o any applicable brokerage commissions; and
o any applicable stock transfer taxes.
See pages 6 and 12.
Tracking Your Investment
You will receive a statement of your plan account confirming purchases of
shares as soon as practicable after purchases are made. Statements provide the
details of such transactions and show the share balance in your plan account.
See page 13.
-2-
<PAGE>
The Plan
The original Dividend Reinvestment and Stock Purchase Plan was adopted
by the board of directors of Commerce Bancorp in April, 1992 and became
effective in November, 1992. The Plan was amended by the board of directors of
Commerce Bancorp in January 1999. Shareholders who do not participate in the
Plan will receive cash dividends, as declared, and paid in the usual matter. The
Plan, which is comprised of a series of questions and answers, is set forth
below.
Purpose
1. What are the purposes of the Plan?
The primary purposes of the Plan are to provide holders of record of
shares of common stock of the Company, par value $1.5625 per share (the "Common
Stock"), and other classes of equity securities of the Company outstanding from
time to time, or both (collectively "Company Stock"), with the opportunity to
have cash dividends on all or any part of their shares of Company Stock
automatically reinvested in additional shares of Common Stock and with a
convenient and simple method of investing voluntary cash payments in additional
shares of Common Stock, in each case without payment of any service charges or
brokerage commissions and at a discount from the Market Price (as defined in
Question 11). Such shares of Common Stock may be newly issued or treasury shares
purchased directly from the Company or may be shares purchased in the open
market.
When newly issued or treasury shares are purchased from the Company,
the Company will receive new equity capital funds available for general
corporate purposes.
The Plan is intended for the benefit of long-term investors, and not
for the benefit of individuals or institutions who engage in short-term trading
activities that could cause aberrations in the composite trading volume of the
Company's Common Stock. From time to time, financial intermediaries may engage
in positioning transactions in order to benefit from the discount from the
Market Price of the shares of Common Stock acquired through the reinvestment of
dividends and voluntary cash payments under the Plan. Such transactions may
cause fluctuations in the trading volume of the Common Stock. The Company
reserves the right to modify, suspend or terminate participation in the Plan by
otherwise eligible holders of Common Stock in order to eliminate practices which
are not consistent with the purposes of the Plan.
Options Available to Participants
2. What options are available to enrolled participants?
-3-
<PAGE>
Dividend Reinvestment Program. Holders of the Company's Stock who wish
to participate in the Plan, whether Record Owners or Beneficial Owners (each a
"Participant"; see also Question 5 regarding the definition of a "Participant")
may elect to have all, a portion or none of their cash dividends paid on their
shares of the Company's Stock automatically reinvested in additional shares of
Common Stock through the Dividend Reinvestment Program. Cash dividends are paid
on the Company's Stock when and as declared by the Company's Board of Directors,
generally on a quarterly basis. Subject to the availability of shares of Common
Stock registered for issuance under the Plan, there is no limitation on the
amount of dividends a Participant may reinvest under the Dividend Reinvestment
Program of the Plan.
Stock Purchase Program. Each month, Participants may also elect to
invest optional cash payments in shares of Common Stock, subject to a minimum
monthly purchase limit of $100 and a maximum monthly purchase limit of $5,000.
Participants may make optional cash payments each month even if no dividend has
been declared. Participants are not required to enroll any shares of Common
Stock purchased through the Stock Purchase Program into the Dividend
Reinvestment Program but may designate all or a portion of such shares for such
participation on the Authorization Form if desired.
Advantages and Disadvantages
3. What are the advantages and disadvantages of the Plan?
Advantages
(a) The Plan provides Participants with the opportunity to reinvest
cash dividends paid on all or a portion of their shares of the Company's Stock
in additional shares of Common Stock without payment of any brokerage
commissions or service charge and at a 3% discount from the Market Price (as
defined in Question 11 and subject to change).
(b) The Plan provides Participants with the opportunity to make monthly
investments of optional cash payments, subject to a minimum and maximum amount,
for the purchase of shares of Common Stock at a 3% discount from the Market
Price (subject to change) and without payment of any brokerage commission or
service charge. The Participant may designate all, a portion or none of such
Plan Shares to be enrolled in the Dividend Reinvestment Program.
(c) All cash dividends paid on Participants' Plan Shares enrolled in
the Dividend Reinvestment Program can be fully invested in additional shares of
Common Stock because the Plan permits fractional shares to be credited to Plan
Accounts. Dividends on such fractional shares, as well as on whole shares, will
also be reinvested in additional shares which will be credited to Plan Accounts.
(d) The Plan Administrator, provides for the safekeeping of stock
certificates for shares credited to each Plan Account. For your convenience,
shares purchased under the Plan will be maintained at no charge by the Plan
Administrator in your name in non-certificated form. You may, however, request a
stock certificate from the Plan Administrator at any time free of charge.
-4-
<PAGE>
(e) A Participant may also elect to deposit with the Plan Administrator
certificates for the stockholder's other shares of the Company's Stock
registered in his or her name for safekeeping without charge. Because the
Participant bears the risk of loss in sending certificates to the Plan
Administrator, certificates should be sent by registered mail, return receipt
requested, and properly insured to the address specified below:
ChaseMellon Shareholder Services
P.O. Box 3340
South Hackensack, NJ 07606-1940
If certificates are later issued either upon request of the Participant or upon
termination of participation in the Plan, new, differently numbered certificates
will be issued.
(f) Periodic statements reflecting all current activity, including Plan
Share purchases and the most recent Plan Account balance, simplify Participants'
record keeping. See Question 22 for information concerning reports to
Participants.
Disadvantages
(a) No interest will be paid by the Company or the Plan Administrator
on dividends or optional cash payments held pending reinvestment or investment.
See Question 17. In addition, optional cash payments of less than $100 and that
portion of any optional cash payments which exceed the maximum monthly purchase
limit of $5,000, are subject to return to the Participant without interest.
(b) With respect to shares acquired from the Company, the actual number
of shares to be issued to the Participant or the Participant's Plan Account will
not be determined until after the end of the relevant Pricing Period (as defined
in Question 11). Therefore, during the Pricing Period, Participants will not
know the actual price per share or the number of shares they have purchased.
(c) With respect to shares acquired from the Company, while the Plan
currently provides for a 3% discount from the Market Price (subject to change)
during the Pricing Period, the Market Price, as so discounted, may exceed the
price at which shares of the Common Stock are trading on the Investment Date (as
defined in Question 13) when the shares are issued or thereafter. The trading
price on the Investment Date generally governs the amount of taxable income to
shareholders. See Question 34.
(d) Because optional cash payments must be received by the Plan
Administrator by the Optional Cash Payment Due Date (as defined in Question 13),
such payments may be exposed to changes in market conditions for a longer period
of time than in the case of typical secondary market transactions. See Questions
13 and 14 through 18.
-5-
<PAGE>
(e) Resales of shares of Common Stock credited to a Participant's Plan
Account will involve a nominal fee per transaction to be deducted from the
proceeds of the sale by the Plan Administrator (if such resale is made by the
Plan Administrator at the request of a Participant), plus any brokerage
commission and any applicable stock transfer taxes on the resales. See Questions
19 and 20.
Administration
4. Who administers the Plan?
The Company has retained Chase Manhattan Bank, N.A. as plan
administrator (the "Plan Administrator"), to administer the Plan. Certain
administrative support will be provided to the Plan Administrator by Chase
Mellon Shareholder Services, L.L.C., a registered transfer agent. See Question
22 for information concerning reports to Participants. If the Plan Administrator
resigns or otherwise ceases to act as plan administrator, the Company will
appoint a new plan administrator to administer the Plan.
Participation
5. Who is eligible to participate?
All Registered shareholders are eligible for participation in the Plan.
If your shares of Company Stock are registered in a name other than
your own (e.g., in the name of a broker, bank or nominee) and you want to
participate, you must either make appropriate arrangements for your broker, bank
or nominee to become a Participant or you must become a shareholder of record by
having a part or all of your shares transferred to your own name. To have shares
of which you are the beneficial owner re-registered in your name, you must
request your broker, bank or nominee to send you a certificate representing such
shares.
If you are already a Participant in the Plan, you need not do anything
further; your participation will continue until terminated. (See Question 28).
6. How does an eligible shareholder participate?
An eligible holder of shares of Company Stock may enroll in the Plan by
signing an Authorization Card and returning it to the Plan Administrator:
Chase Manhattan Bank
c/o Chase Mellon Shareholder Services
P.O. Box 3339
South Hackensack, NJ 07606-1939
-6-
<PAGE>
An Authorization Card and a return envelope are enclosed with this Prospectus
for this purpose. Additional Authorization Cards and copies of this Prospectus
may be obtained at any time by contacting the Plan Administrator at the above
address or by telephoning the Plan Administrator at (888) 877-2882.
7. When may a shareholder join the Plan?
An eligible shareholder may join the Plan at any time.
If an Authorization Card specifying reinvestment of dividends is
received by the Plan Administrator on or prior to two business days before the
record date established for a particular cash dividend, reinvestment will
commence with that cash dividend. With respect to its Common Stock, the Company
expects that dividend record dates will normally fall on or about the latter
part of December, March, June and September, and that dividend payment dates
will normally fall on or about 21 days after the record dates.
If the Authorization Card is received after the record date established
for a particular cash dividend, then the reinvestment of dividends will not
begin until the cash dividend payment date following the next record date. (See
Questions 14-18 for information concerning the investment of voluntary cash
payments). Additionally, for Participants wishing to make optional cash payments
to purchase shares under the Stock Purchase Program, full payment must be
received by the Plan Administrator by the Optional Cash Due Date. (See Questions
13 and 14 ).
8. What does the Authorization Card provide?
The Authorization Cards provide for the purchase of additional shares
of Common Stock through the following investment options:
(a) Full Dividend Reinvestment directs the investment in
accordance with the Plan of all of your cash dividends on all of the
shares of Company Stock then or subsequently registered in your name
and also permits you to make voluntary cash payments for the purchase
of additional shares in accordance with the Plan.
(b) Partial Dividend Reinvestment directs the investment in
accordance with the Plan of the cash dividends on that number of shares
of Company Stock registered in your name which are designated in the
appropriate space on the Authorization Card and reinvest cash dividends
on all other shares of Company Stock now or hereafter held for you by
the Plan Administrator, and also permits you to make voluntary cash
payments for the purchase of additional shares in accordance with the
Plan.
-7-
<PAGE>
You may select either of the above investment options for your Company
Stock. An eligible shareholder may not elect to make only voluntary cash
payments under the Plan. Participation in the Plan is limited to shareholders
who direct the Plan Administrator to reinvest dividends on shares of Company
Stock held of record by them to the purchase of additional shares of Common
Stock. Once so enrolled, a shareholder may elect to make voluntary cash
payments.
Any Participant who returns a properly executed Authorization Card to
the Plan Administrator without electing a dividend reinvestment option will be
enrolled as having selected the Full Dividend Reinvestment Option.
Common Shares purchased with reinvested dividends or voluntary cash
payments (and shares of Company Stock deposited with the Plan Administrator)
will be held by the Plan Administrator in your name for your account. The cash
dividends on all of the shares of Common Stock credited to Plan Accounts
(whether the related share certificates are held by the Plan Administrator or by
the Participant) will be reinvested in accordance with the Plan. You may elect
to receive cash dividends on shares of Common Stock credited to your Plan
Account only by submitting to the Plan Administrator an Authorization Card which
either elects the Partial Dividend Reinvestment option or modifies your then
current Partial Dividend Reinvestment Option with respect to Company Stock.
9. How may a Participant change options under the Plan?
As a Participant, you may change investment options or modify the
number of shares of Company Stock designated under the Partial Dividend
Reinvestment option at any time by completing a new Authorization Card and
returning it to the Plan Administrator at the address set forth on the
Authorization Card. Any such change will become effective as of the cash
dividend record date following the date the Authorization Card is received by
the Plan Administrator.
Purchases Under the Plan
10. How are shares acquired under the Plan?
A total of 1,000,000 shares of Common Stock are being offered under the
Plan. The Plan Administrator uses cash dividends and voluntary cash payments to
acquire shares of Common Stock directly from the Company for the account of
Participants. If the Company deems it advisable for shares to be acquired in the
open market (rather than directly from the Company) or if newly issued or
treasury shares are not available, the Plan Administrator, as agent for the
Participants, will arrange for the purchase of shares in the open market with
cash dividends and voluntary cash payments. Purchases of shares in the open
market will be effected through brokerage transactions and may be made in the
over-the-counter market or in negotiated transactions, which transactions may
include situations in which the broker is selling as a principal or an agent. To
the extent the Plan makes purchases from brokerage firms as principals, the
purchase price of shares may include a retail mark-up. If the shares are traded
on a securities exchange, they may be purchased on such exchange. The Company's
Common Stock currently is traded on the NYSE. Shares will be acquired in the
open market with cash dividends and voluntary cash payments at such times as are
described in Question 13.
-8-
<PAGE>
Neither the Company nor any Participant shall have any authorization or
power to direct the time or price as which shares will be purchased or the
selection of the broker or dealer through or from whom purchases are to be made
by the Plan Administrator. However, when open market purchases are made by the
Plan Administrator, the Plan Administrator shall use its best efforts to
purchase the shares at the lowest possible price.
In the event that the number of shares purchased for the account of any
Participant in the Plan is not a whole number of shares, the Participant's
account will be credited with the full number of shares and/or fractional shares
computed to four decimal places.
11. At what price will shares be purchased under the Plan with reinvested
dividends?
Shares of Common Stock purchased through the Plan directly from the
Company, whether issued by the Company out of legally authorized but unissued
shares of Common Stock or out of treasury shares, will be purchased at a
discount of 3% from the average of the high and low sale prices of the Common
Stock as reported on the NYSE on the trading day immediately preceding the
particular Investment Date (as defined in Question 13) or the closest preceding
date if there are no high and low sale prices available on that date. If there
are no high and low sale prices available for the Common Stock for the ten
trading days preceding the applicable Investment Date, then the Company's Board
of Directors shall make the determination of the purchase price on the basis of
such information as it considers best reflects current market value.
The purchase price for shares of Common Stock purchased through the
Plan in the open market shall be at a discount of 3% from the weighted average
purchase price of all shares purchased for the Plan in the open market on the
relevant Investment Date. In making purchases for the Participant's account in
the open market, the Plan Administrator may commingle the Participant's funds
with those of other shareholders of the Company participating in the Plan.
The average price described above is referred to herein as "Market
Price" and the purchase price, as discounted from the Market Price, is referred
to herein as the "Discounted Purchase Price." The discount is subject to change
from time to time (but will not vary from the range of 0% to 3%) and is also
subject to discontinuance at the Company's discretion after a review of current
market conditions, the level of participation in the Plan and the Company's
current and projected capital needs. The Company will provide Participants with
written notice of a change in the applicable discount at least 30 days prior to
the relevant record date or via an appropriate press release for the relevant
Optional Cash Payment Due Date.
12. At what price will shares be purchased under the Plan with
voluntary cash payments?
Shares purchased under the Plan with voluntary cash payments will be
acquired by Participants at a price determined as described in Question 11.
-9-
<PAGE>
13. When will the Plan purchase shares of Common Stock?
Except as otherwise provided in this Prospectus, dates on which shares
are purchased with reinvested dividends or with voluntary cash payments are
referred to in this Prospectus as "Investment Dates."
The Investment Date with respect to the Common Stock acquired pursuant
to dividend reinvestments will be (i) if acquired directly from the Company, the
quarterly dividend payment date declared by the Board of Directors or (ii) in
the case of open market purchases, the date or dates of actual investment, but
no later than 10 business days following the dividend payment date.
Purchases of Common Stock directly from the Company with voluntary cash
payments will occur every month on the related Investment Date. The Optional
Cash Payment Due Date is three business days prior to the commencement of the
related Investment Date and the Investment Date is on or about the last day of
each month or, in the case of open market purchases, no later than the last
business day of each month. Checks or other drafts must clear prior to the
Investment Date on which the investment is to be made. Please allow sufficient
time for your check to clear.
Purchases of Common Stock in the open market may occur over one or more
trading days and will commence on the same days as specified above for purchases
made directly from the Company. For a number of reasons including observance of
the Rules and Regulations of the Securities and Exchange Commission requiring
temporary curtailment or suspension of purchases, it is possible that the whole
amount of funds available in a Participant's account for the purchase of shares
of the Company might not be applied to the purchase of such shares on or before
the next ensuing Investment Date. Neither the Company nor the Plan Administrator
shall be liable to any shareholder when such conditions prevent the purchase of
shares or interfere with the timing of such purchases.
-10-
<PAGE>
Voluntary Cash Payments
14. How does a Participant make voluntary cash payments?
Eligible shareholders enrolling in the Plan may make an initial
voluntary cash payment by mailing a check or money order with an executed
Authorization Card to the Plan Administrator at the address set forth in
Question 6. After an Authorization Card has been received by the Plan
Administrator, voluntary cash payments may be made by mailing a check or money
order together with a properly executed copy of the form for such purpose which
will accompany the account statement sent to Participants. All checks and money
orders must be payable to "Chase Manhattan Bank." Do not send cash. Voluntary
cash payments must be received on or before the third business day prior to the
particular Investment Date, and checks or other drafts must clear prior to such
Investment Date, for a voluntary cash payment to be invested on such Investment
Date.
Shares purchased with voluntary cash payments will be held by the Plan
Administrator and credited to a Participant's account under the Plan.
Thereafter, dividends on such shares automatically will be fully reinvested in
additional shares unless such shares are withdrawn from the Plan (see Question
28).
15. What are the limitations on the amount of voluntary cash payments?
Voluntary cash payments may not be less than $100 per payment nor may
they total more than $5,000 per monthly investment period. Each monthly
investment period begins on the first day of each month and ends on the last day
of each month.
The same amount of money need not be sent each time and there is no
obligation to make a voluntary cash payment.
16. May a participant elect to make only voluntary cash payments under the Plan?
No. Participants who do not otherwise elect to apply all or a portion
of dividends on Company Stock held of record by them to the purchase of
additional shares of Common Stock under the Plan may not elect to participate in
the Plan by making only voluntary cash payments under the Plan.
17. When are voluntary cash payments invested?
Voluntary cash payments will be invested at the times described in
Question 13. NO INTEREST WILL BE PAID BY THE COMPANY OR THE PLAN ADMINISTRATOR
ON CASH DIVIDENDS OR VOLUNTARY CASH PAYMENTS HELD BY THE PLAN ADMINISTRATOR
PRIOR TO THE DATE OF INVESTMENT. For that reason, the Company recommends that
shareholders mail their voluntary cash payments so that they are received by the
Plan Administrator prior to, but as close as possible to, three business days
prior to an Investment Date.
18. Under what circumstances will voluntary cash payments be returned?
Participants may obtain refunds of voluntary cash payments provided
that a written request for refund is received by the Plan Administrator on or
before not less than five business days prior to the Investment Date for such
voluntary cash payment. Once the check in payment of the voluntary cash payment
has cleared, the Plan Administrator will promptly honor any timely request for a
refund.
-11-
<PAGE>
Costs
19. Are there any expenses to Participants in connection with the Plan?
Participants incur no service charges or brokerage commissions for
purchases made under the Plan. All costs of administration of the Plan are paid
by the Company. Participants may elect to send the certificates for their other
shares of the Company's Stock to the Plan Administrator for safekeeping, and
there is no fee for this service. However, Participants who request that the
Plan Administrator sell all or any portion of their shares must pay a nominal
fee per transaction to the Plan Administrator, any related brokerage commissions
and applicable stock transfer taxes.
20. What fees will a Plan Participant be responsible for?
Dividend Reinvestment No Charge
Optional Purchases No Charge
Sales Fee* $15.00
Proceeds Via Wire* $25.00
Fee for Returned Checks $25.00
Duplicate Statements
Current Year No Charge
Prior Years $20.00
* Plus a $.12 per share trading fee.
The Plan Administrator will deduct the applicable fees from proceeds
due from a sale, funds received for investment or the payment of dividends.
Administration
21. What are the functions of the Plan Administrator?
The Plan Administrator administers the Plan by automatically
reinvesting dividends and investing voluntary cash payments of Participants in
additional shares of Common Stock in accordance with the investment option
selected by Participants. Additionally, the Plan Administrator keeps records,
sends statements of account to Participants and performs other administrative
duties relating to the Plan.
Certain administrative support services will be provided by ChaseMellon
Shareholder Services, L.L.C., the Company's registered transfer agent.
-12-
<PAGE>
Participants' Accounts and Reports
22. What kind of accounts are maintained for Participants and what reports on
those Accounts do they receive?
The Plan Administrator maintains a separate account for each
Participant. All shares purchased for a Participant under the Plan will be
credited to the Participant's account. The Plan Administrator will mail to each
Participant a statement of account confirming purchases of shares as soon as
practicable after purchases are made for a Participant's Plan Account.
Statements of account should be retained for income tax purposes.
In addition, each Participant will receive copies of the Company's
annual and quarterly reports to shareholders, proxy statements and dividend
income information for tax purposes.
Dividends
23. Will Participants be credited with dividends on shares credited to their
Accounts under the Plan?
Yes. The Plan Administrator, as agent, will receive dividends for all
shares of Company Stock credited to each Participant's Plan Account on the cash
dividend record date, will credit such cash dividends to each such Participant's
account on the basis of full and fractional shares held in such account (each
Participant's cash dividend will equal the number of whole and fractional shares
in his or her account times the cash dividend rate paid), and will automatically
reinvest such cash dividends in additional shares of Common Stock, computed to
four decimal places, in accordance with the option selected by the Participant.
Certificates for Shares
24. Will certificates be issued for shares purchased under the Plan?
No. Shares purchased under the Plan will be maintained by the Plan
Administrator in your name in non-certificated form. This service protects
against loss, theft or destruction of the share certificates representing Plan
shares. Certificates for shares purchased under the Plan will not be issued to a
Participant unless a Participant requests certificates in writing for a
specified number of whole shares credited to a Participant's account under the
Plan (See Question 31). No certificate for a fractional share will be
issued.
A Participant's written request to the Plan Administrator for share
certificates to be issued in the Participant's name will not be treated as a
withdrawal of such shares from the Participant's account unless the request is
made in conjunction with a Participant's termination of participation in the
Plan and/or change in the number of shares to be reinvested (see Question
-13-
<PAGE>
28). In the absence of an accompanying Authorization Card changing the
number of shares to be reinvested or a Participant's termination of
participation in the Plan, the dividends on such shares will continue to be paid
to and reinvested by the Plan Administrator (See Questions 8 and 28).
25. In whose name will certificates be registered when issued?
Accounts under the Plan are maintained in the names in which share
certificates of the Participants are registered at the time the Participant's
enroll in the Plan. Certificates for whole shares, when issued at the request of
Participants, will be registered in the same names. However, even after the Plan
Administrator has issued certificates to a Participant for some or all of the
whole shares held in his or her Plan Account, cash dividends on all shares
credited to a Participant's Plan account will continue to be reinvested in
additional Common Stock pursuant to the Plan. (See Questions 8 and 23).
If a Participant has some or all of his or her shares held
re-registered in another name (because of a sale or gift of these shares, for
example), dividends on the re-registered shares will not continue to be
reinvested in additional Common Stock under the Plan. Dividends on the
re-registered shares will be reinvested in additional Common Stock under the
Plan only if the new record owner elects to become a Participant.
See Question 30 for information concerning the effect on a
Participant's Plan Account if the Participant sells or transfers Common Stock
certificates registered in his or her name.
Shares credited to the account of a Participant may not be pledged or
assigned and any such purported pledge or assignment is void. A Participant who
wishes to pledge or assign such shares must first request that the Plan
Administrator issue certificates for such shares.
26. May a Participant deposit Company shares in his or her account?
You may deposit certificates representing your shares of Company Stock
with the Plan Administrator for safekeeping at no charge. Shareholders are
encouraged but not required to deposit their Company Stock share certificates
with the Plan Administrator upon their initial election to participate in the
Plan. Such certificates must be accompanied by a written request that the shares
be added to your Plan Account. All shares of Company Stock held in your Plan
Account will have the cash dividends received thereon reinvested in additional
shares of Common Stock as provided in the Plan. (See Questions 8 and 23 )
27. How may share certificates or other documents be sent to the Plan
Administrator?
The method of delivery of share certificates and other documents is at
the election and risk of the Participant. If such delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.
Certificates should be mailed to:
-14-
<PAGE>
ChaseMellon Shareholder Services
P.O. Box 3340
South Hackensack, NJ 07606-1940
Termination of Participation in the Plan or Withdrawal of Shares
28. How does a Participant terminate participation in the Plan or withdraw
shares from the Plan?
You may terminate your participation in the Plan at any time by
notifying the Plan Administrator in writing at least five full business days
before the next dividend record date. In the event written notice of termination
is not received by the Plan Administrator by such time, shares will be purchased
for the Participant with the related cash dividend and participation in the Plan
will not terminate until after such dividend has been reinvested. Because the
legal requirements for proper notice of the death of the holder of a Plan
account which is registered solely to that holder vary greatly, depending on the
state of residence of the Participant and form of registration of the
Participant's Plan account, the Plan Administrator should be contacted at the
address or phone number set forth in the response to Question 6 in the event of
such death.
Upon termination by reason of notice of a Participant's death or
adjudicated incompetency, the Participant's shares held by the Plan
Administrator and any cash dividends thereafter received by the Plan
Administrator will be retained by the Plan Administrator until such time as such
Participant's legal representative has been appointed and has furnished proof
satisfactory to the Plan Administrator of the legal representative's right to
receive the share certificate and/or payment. No interest will be paid by either
the Company or the Plan Administrator on any dividends retained by the Plan
Administrator during any such period of time.
A Participant may withdraw a portion of the shares of Company Stock
credited to his or her account from participation in the Plan by giving notice
to that effect to the Plan Administrator and specifying in the notice the number
of whole shares to be withdrawn. This notice should be accompanied by a new
Authorization Card designating the Partial Dividend Reinvestment option and
showing the number of shares registered in your name with respect to which you
desire to have cash dividends reinvested in accordance with the Plan. No
fractional shares may be withdrawn except upon termination of participation in
the Plan. The Plan Administrator will send to the Participant a statement of
account and a certificate representing the withdrawn shares.
29. What will Participants receive when they terminate participation in the
Plan?
-15-
<PAGE>
Upon electing to terminate participation in the Plan, the Plan
Administrator will send to the Participant a certificate representing the whole
shares of Common Stock held by the Plan Administrator in the Participant's Plan
account and a check for the cash equivalent of any fractional share of Common
Stock less applicable sales fees.
The cash to be paid in lieu of a fractional share will be based on the
Current Market Price of the Common Stock on the Investment Date, which for
purposes of this sentence is the day that the account is terminated by the Plan
Administrator.
Whenever a Participant does not own at least one share directly, the
Plan Administrator may, if instructed by the Company, terminate the Plan
account, sell the fractional share and send the Participant the sale proceeds,
less related sales fees, if any.
Other Information
30. What happens when a Participant sells or transfers some (but not all) of the
shares registered in his or her name?
(a) Full Dividend Reinvestment.
If you are reinvesting the cash dividends on all of the shares
registered in your name, and you dispose of a portion of these shares, the Plan
Administrator will continue to reinvest the dividends on the remainder of the
shares registered in your name.
(b) Partial Dividend Reinvestment.
If you have directed the Plan Administrator to pay cash dividends to
you on some of your shares and to reinvest dividends on the remainder of your
shares, and you dispose of a portion of your shares, you should provide new
written instructions to the Plan Administrator on how to handle your account. If
the Plan Administrator does not receive new instructions, it may, in its
discretion, either (i) pay cash dividends on all of your shares or (ii) continue
to reinvest dividends on the number of shares, if any, you own in which you have
requested to have the dividends reinvested.
31. What happens if the Company pays a dividend in stock or splits its shares?
Any shares of the Company's Common Stock issued in connection with a
stock split or dividend distributed by the Company with respect to shares
credited to your Plan account will be added to your account.
As soon as practicable after the payment of a stock dividend or stock
split, a statement will be sent to each Participant which will indicate the
number of shares of Common Stock credited to each Participant's account under
the Plan as a result of the stock dividend or stock split. A Participant may
receive a certificate for such shares (other than fractional shares) at any time
by sending a written request to:
-16-
<PAGE>
ChaseMellon Shareholder Services
P.O. Box 3338
South Hackensack, NJ 07606-1938
32. If the Company has a Common Stock rights offering or otherwise makes
securities available to its shareholders, how will the rights offering with
respect to shares held in Plan Accounts be handled?
Warrants or other written instruments representing the rights offered
with respect to the whole shares of Common Stock credited to the Plan account of
a Participant will be mailed directly to the Participant in the same manner as
the warrants or other written instruments are mailed to shareholders of record
who do not participate in the Plan.
33. How will a Participant's shares be voted at meetings of holders of shares?
Each Participant will receive a single proxy card covering the total
number of shares held by the Participant in certificate form plus the total
number of full shares credited to the Participant's Plan account. If a properly
signed proxy card is returned to the Company and not revoked prior to the time
of voting, the Participant's shares will be voted as directed on the proxy card.
If a proxy card is returned properly signed, but without indicating instructions
as to the manner shares are to be voted with respect to any item thereon, the
shares covered will be voted in accordance with the recommendations of the
Company's management. If the proxy card is not returned, or if it is returned
unexecuted or improperly executed, the shares covered will not be voted unless
the Participant or the Participant's duly appointed representative votes in
person at the meeting.
Federal Income Tax Consequences
34. What are the Federal income tax consequences of participation in the Plan?
The following summary is based upon Federal income tax law as of the
date of this Prospectus. The discussion assumes that all distributions under the
Plan will be from the Company's earnings and profits.
A Participant in the Plan will generally be treated for Federal income
tax purposes as having received, on each dividend payment date, a dividend in an
amount equal to the fair market value on such dividend payment date of the
shares acquired with reinvested dividends. For Federal income tax purposes, the
fair market value of shares acquired with reinvested dividends under the Plan
will be equal to the mean of the highest and lowest quoted selling price, or if
such information is not available, the mean of the bid and the asked price, for
shares on the dividend payment date; the Discounted Purchase Price is not taken
into account in determining such fair market value. The tax basis of shares
acquired with reinvested dividends will equal the fair market value on the
dividend payment date of such shares. A corporate shareholder participating in
the Plan may be entitled to deduct a portion of that amount deemed received as a
dividend.
-17-
<PAGE>
A Participant will not be treated as having received a dividend upon
the purchase of shares at the Discounted Purchase Price with a voluntary cash
payment unless the Discounted Purchase Price of the shares is less than the fair
market value of the shares on the date on which shares are acquired for the
Participant's account. If the Discounted Purchase Price is less than the fair
market value of such shares, a Participant will be treated as having received a
dividend equal to the excess of the fair market value of the shares being
purchased over their Discounted Purchase Price. The tax basis of shares
purchased with a voluntary cash payment will equal the Participant's voluntary
cash payment plus the excess, if any, of the fair market value of the shares
being purchased over their Current Discounted Purchase Price.
The Internal Revenue Service may take the position that any service fee
paid by the Company to the Plan Administrator on behalf of Plan Participants is
an additional distribution, taxable as dividend income, to such Participants. In
the event the Internal Revenue Service asserts this position, those Participants
who itemize deductions on their Federal income tax returns may be entitled to
deduct the amount of the service fee attributable to their account as a
miscellaneous itemized deduction, subject to applicable limitations.
A Participant's holding period for shares acquired pursuant to the Plan
should begin no later than the day following the date of acquisition of such
shares for the Participant's account.
A Participant will not realize any taxable income upon receipt of
certificates for whole shares credited to the Participant's account, either upon
the Participant's request for certain of those shares or upon withdrawal from or
termination of the Plan. Upon withdrawal from or termination of the Plan, a
Participant will also receive a cash payment in lieu of any fractional share
equivalent credited to the Participant's account. This payment likely will be
treated as an amount realized from the sale of the fractional share equivalent,
and the participant will recognize gain or loss equal to the difference between
the amount received for the fractional share equivalent and the Participant's
tax basis therefor.
In addition, a Participant will recognize gain or loss when the
Participant sells or exchanges shares received by the Participant after
withdrawal of such shares from the Plan or upon the termination of the Plan. The
amount of such gain or loss will be the difference between the amount that the
Participant receives for the shares and the Participant's tax basis therefor.
In the case of both foreign shareholders who elect to have their
dividends reinvested and whose dividends are subject to United States income tax
withholding, and other shareholders who elect to have their dividends reinvested
and who are subject to back-up withholding under Section 3406(a)(1) of the
Internal Revenue Code, the Plan Administrator will invest in shares of Common
Stock in an amount equal to the dividends of such participants less the amount
of tax required to be withheld. The full amount of the dividends will be
recognized as taxable income, without reduction for the amount of tax required
to be withheld. The quarterly statements confirming purchases made for such
participants will indicate the net payment reinvested.
-18-
<PAGE>
Under Section 3406(a)(1) of the Internal Revenue Code, the Company is
required to withhold for United States income tax purposes 31% of all dividend
payments to a shareholder of the Company if (i) such shareholder has failed to
furnish to the Company his/her taxpayer identification number ("TIN"), which for
an individual is his/her Social Security number, (ii) the Internal Revenue
Service has notified the Company that the TIN furnished by the shareholder is
incorrect, (iii) the Internal Revenue Service notifies the Company that back-up
withholding should be commenced because the shareholder has failed to report
interest or dividends properly, or (iv) the shareholder has failed to certify,
under penalties of perjury, that he/she is not subject to back-up withholding.
Shareholders have previously been requested by the Company or their broker to
submit all information and certifications required in order to exempt them from
back-up withholding if such exemption is available to them.
The foregoing discussion is based on the assumption that shares are
purchased directly from the Company. If the shares are purchased in the open
market, the Federal tax consequences would generally be the same. However, the
payment of brokerage commissions by the Company in connection with the purchase
or sale of shares in the open market may be treated as additional dividend
income to Participants, in which case the amount of such commissions would not
be deductible, but would increase the basis of the applicable shares.
Each Participant should consult his or her own tax advisor to determine
the particular tax consequences, including state tax consequences (which will
vary from state to state), that may result from participation in the Plan and a
subsequent disposal of shares acquired pursuant to the Plan.
General
35. What are the liabilities of the Plan Administrator and the Company under the
Plan?
The Plan Administrator (or its nominees) and the Company shall not be
liable under the Plan for any act done in good faith, or for any good faith
omission to act, including, without limitation, any claim of liability (a)
arising out of any such act or omission to act which occurs prior to the
termination of participation and (b) with respect to the prices at which shares
are purchased or sold for the Participant's account and the times such purchases
or sales are made.
Participants should recognize that neither the Company nor the Plan
Administrator can assure Participants of profits, or protect participants
against losses, on shares purchased and/or held under the Plan.
The Plan Administrator (or its nominees) and the Company shall have no
duties, responsibilities or liabilities except as are expressly set forth in the
Plan.
-19-
<PAGE>
Shareholders are cautioned that this Prospectus does not represent a
change in the Company's dividend policy or a guarantee of future dividends,
which will continue to depend upon the Company's earnings, financial
requirements, governmental regulations and other factors. The Plan Administrator
has no responsibility with respect to the preparation and contents of this
Prospectus.
36. Can the Company terminate the Plan or a Participant's interest in the Plan?
The Company may terminate the Plan or a Participant's interest therein
upon not less than ten calendar days prior notice in writing mailed to the
Participant. In such event the Plan Administrator will follow the procedures for
termination set forth in Question 28.
37. What happens if the Plan cannot acquire shares?
If the Company determines not to make newly issued or treasury shares
available for purchase pursuant to the Plan and in the event that applicable law
or the closing of securities markets requires the temporary curtailment or
suspension of open market purchases of shares under the Plan, the Plan
Administrator is not accountable for the inability of the Plan to acquire shares
at such times. If shares are not available for a period longer than thirty
calendar days, the Plan Administrator will promptly mail to the Participant a
check (without any interest earned thereon) payable to the Participant's order
in the amount of any unapplied funds in the Participant's account.
38. When does a Participant obtain rights in shares acquired under the Plan?
A Participant will not acquire rights to dividends or other benefits of
stock ownership with respect to shares acquired under the Plan until the date
shares are actually purchased for his or her account.
39. Where should correspondence regarding the Plan be sent?
Any notice, instruction, request or election which by any provision of
the Plan is required or permitted to be given or made by the Participant to the
Plan Administrator shall be in writing, signed by the Participant and addressed
to:
ChaseMellon Shareholder Services
P.O. Box 3338
South Hackensack, NJ 07606-1938
or such address as the Plan Administrator shall furnish to the Participant, and
such notice, instruction, request or election shall be deemed to have been
sufficiently given or made when received by the Plan Administrator.
-20-
<PAGE>
40. What is sufficient notice to a Participant?
Any notice or certificate which by any provision of the Plan is
required to be given by the Plan Administrator to the Participant shall be in
writing and shall be deemed to have been sufficiently given for all purposes by
being deposited by first class mail, postage prepaid, in a post office letter
box, addressed to the Participant at the Participant's address as it shall last
appear on the Plan Administrator's records.
41. Can a successor Plan Administrators be named?
Upon not less than thirty calendar days prior written notice to
Participants, the Company may terminate the Plan Administrator at any time and
may designate a bank or trust company as successor Plan Administrator for all or
a part of the Plan Administrator's functions under the Plan. If the Company does
so, references in this Prospectus to Chase Manhattan Bank shall be deemed to be
references to the successor Plan Administrator, unless the context requires
otherwise.
Chase Manhattan Bank may resign as Plan Administrator at any time
upon not less than thirty calendar days prior written notice to the Company,
such resignation to become effective as soon as a successor Plan Administrator
is named. The Company will endeavor to name a successor Plan Administrator as
soon as practicable.
42. What law governs the Plan?
The terms and conditions of the Plan and its operation are governed
by the substantive laws of the State of New Jersey.
43. Who bears the risk of fluctuations in the market price of Common Stock?
A Participant's investment in Common Stock held in a Plan account is
no different with regard to market risk than an investment in Common Stock held
in certificate form. A Participant bears the risk of loss (and receives any
benefit of gain) occurring by reason of fluctuations in the market price of
Common Stock held in a Plan account.
44. May the Plan be changed or discontinued?
While the Company hopes to continue the Plan indefinitely, the
Company reserves the right upon not less than ten calendar days prior written
notice to Participants to suspend or terminate the Plan or any Participant's
Plan account (see Question 36) at any time. The Company also reserves the right
to interpret and make modifications in the Plan and any such determination will
be final. The Company may adopt rules and regulations to facilitate the
administration of the Plan. The terms and conditions of any such suspension,
termination or modification will be promptly announced to affected Participants.
-21-
<PAGE>
45. Are there any restrictions on the resale of shares acquired under the Plan?
Persons who are not "affiliates" of the Company are free to sell
Common Stock acquired under the Plan at any time.
However, persons who are "affiliates" of the Company, as that term
is defined in Rule 405 promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended, may not
publicly reoffer shares acquired under the Plan except pursuant to Rule 144 of
the Commission or pursuant to an effective registration statement. Rule 405
defines an "affiliate" as a person who directly, or indirectly through one or
more intermediaries, controls, is controlled by or is under common control with
the Company. Directors and executive officers of the Company are generally
deemed to be "affiliates" of the Company under this definition. The Company has
no present intention of filing a registration statement which would permit
"affiliates" to reoffer Common Stock acquired under the Plan.
Officers and directors participating in the Plan are subject to the
reporting obligations of Section 16(a) and the short-swing profit recovery
provisions of Section 16(b) of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), with respect to purchases of Common Stock made
under the Plan with voluntary cash payments. While executive officers and
directors are not subject to the short-swing profit recovery provisions of
Section 16(b) of the Exchange Act with respect to purchases of Common Stock made
under the Plan with reinvested dividends, ownership and disposition of Common
Stock so acquired must be disclosed on reports filed pursuant to Section 16(a)
of the Exchange Act.
-22-
<PAGE>
Use of Proceeds
The number of shares of Commerce Bancorp common stock that will be
purchased under the Plan and the prices at which the shares will be sold cannot
be determined at this time. The net proceeds from the sale of any shares by
Commerce Bancorp, after deducting expenses in connection with the Plan of
approximately $30,000, will be added to Commerce Bancorp's working capital.
These proceeds will be used for general corporate purposes, including, without
limitation, contributing all or a significant portion of the proceeds to one or
more of Commerce Bancorp's four banking subsidiaries. Commerce Bancorp cannot
estimate the amount of proceeds which will be devoted to any specific purpose.
Pending investment or application of the net proceeds, Commerce Bancorp will
invest the net proceeds primarily in short-term liquid investments. Commerce
Bancorp will not receive any proceeds from open market purchases of shares by
the Plan.
Description of Commerce Bancorp's Capital Stock
The following description is a summary of certain provisions of
Commerce Bancorp's charter and is qualified in its entirety by reference to the
complete text of Commerce Bancorp's charter which is incorporated by reference
as an exhibit to the registration statement on Form S-3 of which this prospectus
is a part.
Authorized Capital
The authorized capital stock of Commerce Bancorp consists of 50,000,000
shares of common stock, par value $1.5625 per share and 10,000,000 shares of
preferred stock, without par value.
Common Stock
The number of shares of Commerce Bancorp common stock outstanding as of
the date of this prospectus is approximately 26.2 million shares. The number of
shareholders of record of Commerce Bancorp is approximately 1,800 holders.
The rights, preferences and privileges of holders of Commerce Bancorp
common stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock which Commerce Bancorp may
designate and issue in the future.
Voting Rights. Holders of Commerce Bancorp common stock are entitled to
one vote for each share held on all matters submitted to a vote of shareholders.
Commerce Bancorp common shareholders do not have cumulative voting rights.
Holders of a majority of the shares of Commerce Bancorp common stock entitled to
vote in any election of directors may elect all of the directors standing for
election.
-23-
<PAGE>
Dividends. Holders of Commerce Bancorp common stock are entitled to
receive ratably dividends, if any, as may be declared by Commerce Bancorp's
board of directors out of legally available funds, subject to any preferential
dividend rights of outstanding preferred stock. See "Dividends."
Liquidation. Upon the liquidation, dissolution or winding up of
Commerce Bancorp, the holders of Commerce Bancorp common stock are entitled to
receive ratably the net assets of Commerce Bancorp available after the payment
of all debts and other liabilities and subject to the prior rights of any
outstanding Commerce Bancorp preferred stock.
Preemptive Rights. Holders of Commerce Bancorp common stock have no
preemptive, subscription, redemption or conversion rights.
Transfer Agent and Registrar. The transfer agent and registrar for
Commerce Bancorp common stock is ChaseMellon Shareholder Services, LLC.
Preferred Stock
The Commerce Bancorp preferred stock may be issued with such
preferences, voting rights and conversion rights as Commerce Bancorp's board of
directors, without further approval by the shareholders, may determine by duly
adopted resolution. The issuance of Commerce Bancorp preferred stock may have
the effect of delaying, deferring or preventing a change in control of Commerce
Bancorp. As of the date of this prospectus, there were no shares of Commerce
Bancorp preferred stock issued and outstanding. Commerce Bancorp has no present
plans to issue any shares of Commerce Bancorp preferred stock.
"Anti-Takeover" Provisions and Management Implications
Commerce Bancorp's Charter.
Commerce Bancorp's charter requires the affirmative vote of the holders
of at least 80% of the outstanding capital stock of Commerce Bancorp entitled to
vote on the following transactions in order to permit the consummation of any of
the following transactions:
o any merger or consolidation of Commerce Bancorp with or into
any other corporation; or
o any sale, lease, exchange or other disposition of all of the
assets of Commerce Bancorp to or with any other corporation,
person or other entity.
The 80% voting requirement would not, however, apply to any transaction approved
by Commerce Bancorp's board of directors prior to the consummation of the
transaction.
-24-
<PAGE>
Commerce Bancorp's charter also provides for the issuance of up to
10,000,000 shares of Commerce Bancorp preferred stock, the rights, preferences
and limitations of which may be determined by the Commerce Bancorp board of
directors. Issuance of Commerce Bancorp preferred stock, while providing
flexibility in connection with possible acquisitions and other corporate
purposes, could make it more difficult for a third party to secure a majority of
Commerce Bancorp's outstanding voting stock. The authority of Commerce Bancorp's
board of directors to issue Commerce Bancorp preferred stock with rights and
privileges, including voting rights, as it may deem appropriate, may enable
Commerce Bancorp's board of directors to prevent a change of control despite a
shift in ownership of Commerce Bancorp common stock. In addition, Commerce
Bancorp's board of directors' authority to issue additional shares of Commerce
Bancorp common stock may help deter or delay a change of control by increasing
the number of shares needed to gain control.
The provisions in Commerce Bancorp's charter relating to the 80% voting
requirements and the issuance of Commerce Bancorp preferred stock may have the
effect not only of discouraging tender offers or other stock acquisitions but
also of deterring existing shareholders from making management changes. These
provisions may enhance the possibility that a potential bidder for control of
Commerce Bancorp will be required to act through arms-length negotiation with
respect to major transactions, such as a merger, consolidation or purchase of
substantially all of the assets of Commerce Bancorp. These provisions may also
have the effect of discouraging tender offers or other stock acquisitions,
giving management of Commerce Bancorp the power to reject certain transactions
which might be desired by the owners of a majority of Commerce Bancorp's voting
securities. These provisions could also be deemed to benefit incumbent
management to the extent they deter offers by persons who would wish to make
changes in management or exercise control over management. Commerce Bancorp's
board of directors does not presently know of a third party that plans to make
an offer to acquire Commerce Bancorp through a tender offer, merger or purchase
of substantially all the assets of Commerce Bancorp.
Banking Regulations.
The Change in Bank Control Act prohibits a person or group of persons
from acquiring "control" of a bank holding company unless the Federal Reserve
Board has been given 60 days' prior written notice of the proposed acquisition
and within that time period the Federal Reserve Board has not issued a notice:
o disapproving the proposed acquisition, or
o extending for up to another 30 days the period during which
such a disapproval may be issued
-25-
<PAGE>
or unless the acquisition is subject to Federal Reserve Board approval under the
Bank Holding Company Act of 1956, referred to as the BHCA. An acquisition may be
made prior to the expiration of the disapproval period if the Federal Reserve
Board issues written notice of its intent not to disapprove the action. Under a
rebuttable presumption established by the Federal Reserve Board, the acquisition
of more than ten percent of a class of voting stock of a bank holding company
with a class of securities registered under Section 12 of the Exchange Act, such
as Commerce Bancorp, would, under the circumstances set forth in the
presumption, constitute the acquisition of control.
In addition, any "company" would be required to obtain the
approval of the Federal Reserve Board under the BHCA before acquiring 25
percent, five percent in the case of an acquirer that is a bank holding company,
or more of the outstanding shares of Commerce Bancorp common stock, or otherwise
obtaining "control" over Commerce Bancorp. Under the BHCA, "control" generally
means :
o the ownership, control or power to vote 25 percent or more of any
class of voting securities of the banking holding company;
o the ability to elect a majority of the bank holding company's
directors; or
o the ability otherwise to exercise a controlling influence over
the management and policies of the bank holding company.
New Jersey Corporate Law.
The New Jersey Business Corporation Act, referred to as the NJBCA,
restricts the transactions that a publicly held corporation organized under the
laws of New Jersey with its principal executive offices or significant
operations located in New Jersey, referred to as a resident domestic
corporation, can engage. For example, the NJBCA provides that no resident
domestic corporation may engage in a "business combination," as defined in the
NJBCA, with an "interested shareholder" of the corporation for a period of five
years following the interested shareholder's stock acquisition, unless the
business combination is approved by the board of directors of the corporation
prior to the interested shareholder's stock acquisition. An interested
shareholder is a beneficial owner of ten percent or more of the voting power of
a corporation.
In addition, the NJBCA provides that no resident domestic corporation
may engage, at any time, in any business combination, with any interested
shareholders of the corporation other than:
o a business combination approved by the board of directors of such
corporation prior to the interested shareholder's stock
acquisition;
o a business combination approved by the affirmative vote of the
holders of two-thirds of the voting stock not beneficially owned
by that interested shareholder at a meeting called for such
purpose; or
-26-
<PAGE>
o a business combination in which the interested shareholder pays a
formula price designed to ensure that all other shareholders
receive at least the highest price per share paid by that
interested shareholder.
Commerce Bancorp cannot opt out of the foregoing provisions of the NJBCA.
The NJBCA allows the directors of a New Jersey corporation to look at
various factors in considering a proposal or offer to acquire the corporation.
Specifically, the NJBCA provides that a director of a New Jersey corporation in
evaluating a proposal or offer to acquire the corporation may consider, any of
the following:
o the effects of any action on the corporation's shareholders;
o the effects of the action on the corporation's employees,
suppliers, creditors and customers;
o the effects of the action on the community in which the
corporation operates; and
o the long-term as well as the short-term interests of the
corporation and its shareholders, including the possibility that
these interest may best be served by the continued independence
of the corporation.
If, on the basis of the foregoing factors, the board of directors determines
that any proposal or offer to acquire the corporation is not in the best
interest of the corporation, it may reject such proposal or offer, in which
event the board of directors will have no duty to facilitate, remove any
obstacles to, or refrain from impeding, such proposal or offer.
The existence of the foregoing provisions could
o result in Commerce Bancorp being less attractive to a potential
acquirer; and
o result in Commerce Bancorp's shareholders receiving less for
their shares of common stock than otherwise might be available in
the event of a takeover attempt.
Dividends
It is the present intention of Commerce Bancorp's board of directors to
pay quarterly cash dividends on Commerce Bancorp's common stock. However, the
declaration and payment of future dividends will be subject to determination and
declaration by the board of directors, which will consider the following:
o the earnings;
-27-
<PAGE>
o the financial condition;
o the regulatory requirements; and
o the capital needs.
of Commerce Bancorp, Commerce Bank, N.A., Commerce Bank/Pennsylvania, Commerce
Bank/North and Commerce Bank/Shore.
Subject to the preferences, limitations and relative rights as may be
fixed for any series of Commerce Bancorp preferred stock that may be issued,
holders of Commerce Bancorp common stock are entitled to receive dividends,
when, as and if declared by the board of directors out of legally available
funds.
Commerce Bancorp is a legal entity separate and distinct from its
banking and other subsidiaries. Under the NJBCA, a corporation may pay dividends
or purchase, redeem or otherwise acquire its own shares unless, after paying
dividends or acquiring its own stock:
o the corporation would be unable to pay its debts as they become
due in the usual course of its business; or
o its assets would be less than the sum of its liabilities plus the
amount that would be needed to satisfy the preferential
dissolution rights of shareholders whose preferential rights are
superior to those receiving the distribution.
Cash available for dividend distribution to the holders of Commerce
Bancorp's common stock and preferred stock must initially come primarily from
dividends paid to Commerce Bancorp by Commerce Bank, N.A., Commerce
Bank/Pennsylvania, Commerce Bank/North and Commerce Bank/Shore. Accordingly,
restrictions on Commerce Bank, N.A.'s, Commerce Bank/Pennsylvania's, Commerce
Bank/North's and Commerce Bank/Shore's cash dividend payments directly affect
the payment of cash dividends by Commerce Bancorp.
Commerce Bank, N.A., Commerce Bank/Pennsylvania and Commerce
Bank/Shore, as national banks, are subject to certain limitations on the amount
of cash dividends that they can pay, without the prior approval of the Office of
the Comptroller of the Currency, referred to as the OCC. The prior approval of
the OCC is required if the total of all cash dividends declared by a national
bank in any calendar year will exceed the sum of the bank's net profits, as
defined by statute, for that year combined with the retained net profits for the
preceding two calendar years, less any required transfers to surplus.
Commerce Bank/North, as a New Jersey State Bank, is also subject to
certain limitations on the amount of cash dividends that it can pay. No
dividends may be paid by Commerce Bank/North unless, following the payment of
the dividend, the capital stock of Commerce Bank/North is unimpaired and either:
-28-
<PAGE>
o Commerce Bank/North will have a surplus of not less than 50% of
its capital stock; or
o the payment of the dividend will not reduce the surplus of
Commerce Bank/North.
In addition, the OCC and the Federal Deposit Insurance Corporation have
authority to prohibit banks from engaging in what in their opinion constitutes
an unsafe or unsound practice in conducting their businesses. The payment of
cash dividends could, depending upon the financial condition of the bank
involved, be considered an unsafe or unsound practice.
Legal Matters
An opinion has been delivered by Blank Rome Comisky & McCauley LLP,
Philadelphia, Pennsylvania and Cherry Hill, New Jersey, to the effect that the
shares of common stock offered by Commerce Bancorp, when issued as contemplated
in this prospectus, will be legally issued, fully paid and non-assessable. Jack
R Bershad, a partner in Blank Rome Comisky & McCauley LLP, is a director of
Commerce Bancorp, Commerce Bank, N.A. and Commerce Bank/ Pennsylvania. Mr.
Bershad and other partners of Blank Rome Comisky & McCauley LLP are shareholders
of Commerce Bancorp.
Experts
The consolidated financial statements of Commerce Bancorp as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997, appearing in Commerce Bancorp's Annual Report on Form 10-K
for the year ended December 31, 1997, as amended, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report which accompanied
the financial statements and is incorporated by reference in this prospectus.
These financial statements are incorporated by reference in this prospectus in
reliance upon the report given upon the authority of Ernst & Young LLP as
experts in accounting and auditing.
-29-
<PAGE>
Where You Can Find More Information
Commerce Bancorp files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, proxy statements and other information Commerce Bancorp files with the
SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0330. Commerce Bancorp's SEC filings are
also available on the SEC's Internet site at http://www.sec.gov.
Commerce Bancorp has filed a registration statement on Form S-3 to
register the shares of Commerce Bancorp common stock offered under this
prospectus. This prospectus is a part of the registration statement on Form S-3
and constitutes a prospectus of Commerce Bancorp. As allowed by SEC rules, this
prospectus does not contain all the information you can find in the registration
statement on Form S-3 or the exhibits to the registration statement on Form S-3.
The SEC also allows Commerce Bancorp to "incorporate by reference" the
information it files with the SEC, which means Commerce Bancorp can disclose
information to you by referring you to another document filed separately with
the SEC. Information incorporated by reference is deemed to be part of this
prospectus. Later information filed by Commerce Bancorp with the SEC updates and
supersedes this prospectus.
This prospectus incorporates important business and financial
information about Commerce Bancorp that is not included in or delivered with
this prospectus. Copies of any of that information are available without charge
to any person to whom this prospectus is delivered, upon written or oral
request. Written requests for those documents should be directed to Commerce
Bancorp Inc., 1701 Route 70 East, Cherry Hill, New Jersey 08034-5400, Attention:
C. Edward Jordan, Jr. and telephone requests may be directed to the C.
Edward Jordan, Jr. at (609) 751-9000.
The following documents previously filed by Commerce Bancorp with the
SEC pursuant to the Exchange Act are incorporated herein by this reference:
- - --------------------------------------------------------------------------------
SEC Filings Period
- - --------------------------------------------------------------------------------
Annual Report on Form 10-K (including those Year ended December 31, 1997
portions of Commerce Bancorp's proxy
statement for its 1998 annual meeting of
shareholders incorporated by reference to
the Annual Report on Form 10-K)
- - --------------------------------------------------------------------------------
Quarterly Reports on Form 10-Q (as amended) Quarters ended March 31,
1998, June 30, 1998 and
September 30, 1998
- - --------------------------------------------------------------------------------
Current Reports on Form 8-K Filed on December 21, 1998
- - --------------------------------------------------------------------------------
-30-
<PAGE>
All documents filed by Commerce Bancorp pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus
and prior to the termination of the offering will be deemed to be incorporated
by reference
-31-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table shows the estimated expenses of the issuance and
distribution of the securities offered.
SEC Registration Fee............................ $ 12,319 *
Legal fees and expenses......................... 10,000**
Accounting fees and expenses.................... 5,000**
Transfer agent and registrar fees............... 1,500**
Printing and Miscellaneous...................... 1,181**
--------
TOTAL.................................. $ 30,000
========
- - ------------------------
* Actual
**Estimated
Item 15..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 Commerce Bancorp's By-laws provides for
indemnification to the fullest extent permitted by section 14A:3-5. Reference is
made to the By-laws of Commerce Bancorp filed as Exhibit 3.3 hereto.
Item 16..Exhibits.
Exhibit No. Description
- - ----------- -----------
3.1 Restated Certificate of Incorporation of Commerce Bancorp, as
amended(1)
3.2 By-laws of Commerce Bancorp(2)
4.1 Form of Commerce Bancorp common stock certificate(3)
5.1 Opinion of Blank Rome Comisky & McCauley LLP relating to the
legality of the securities to be issued.
23.1 Consent of Ernst & Young LLP
II-1
<PAGE>
23.2 Consent of Blank Rome Comisky & McCauley LLP (included in
Exhibit 5.1 hereto)
24.1 Powers of Attorney (included in signature pages hereto)
- - ----------------------
(1) Incorporated by reference from the Commerce Bancorp's Registration
Statement on Form S-2 and Amendments Nos. 1 and 2 thereto (Registration No.
33-62702).
(2) Incorporated by reference from the Company's Registration Statement on Form
S-4 (Registration No. 333-10771).
(3) Incorporated by reference from the Company's Registration Statement on Form
S-2 and Amendments No. 2 thereto (Registration No. 33-46972).
Item 17. 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;
(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. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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 information required to be included in a post-effective amendment
by those clauses is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
II-2
<PAGE>
(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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) 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) Insofar as indemnification for liabilities arising under the
Securities Act 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
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by 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 Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has duly caused this Registration Statement on
Form S-3 to be signed on its behalf by the undersigned, thereunto duly
authorized, in Cherry Hill, New Jersey, on this 5th day of March 1999.
COMMERCE BANCORP, INC.
By: /s/ VERNON W. HILL, II
----------------------------------
VERNON W. HILL, II
Chairman of the Board and President
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 indicated, on March 1, 1999. 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, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- - ------------------------------------------- --------------------------------------- --------------------------------
<S> <C> <C>
/s/ VERNON W. HILL, II Chairman of the Board, March 5, 1999
- - --------------------------- President and Director
VERNON W. HILL, II (Principal Executive Officer)
/s/ C. EDWARD JORDAN, JR. Executive Vice President and Director March 5, 1999
- - --------------------------- (Principal Financial
C. EDWARD JORDAN, JR. and Accounting Officer)
/s/ ROBERT C. BECK Secretary and Director March 5, 1999
- - ---------------------------
ROBERT C. BECK
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- - ------------------------------------------- --------------------------------------- --------------------------------
<S> <C> <C>
/s/ DAVID BAIRD, IV Director March 5, 1999
- - ---------------------------
DAVID BAIRD, IV
/s/ JACK R BERSHAD Director March 5, 1999
- - ---------------------------
JACK R BERSHAD
/s/ MORTON N. KERR Director March 5, 1999
- - ---------------------------
MORTON N. KERR
/s/ STEVEN M. LEWIS Director March 5, 1999
- - ---------------------------
STEVEN M. LEWIS
/s/ DANIEL J. RAGONE Director March 5, 1999
- - ---------------------------
DANIEL J. RAGONE
/s/ WILLIAM A. SCHWARTZ, JR. Director March 5, 1999
- - ---------------------------
WILLIAM A. SCHWARTZ, JR.
/s/ JOSEPH T. TARQUINI, JR. Director March 5, 1999
- - ---------------------------
JOSEPH T. TARQUINI, JR.
/s/ JOSEPH BUCKELEW Director March 5, 1999
- - ---------------------------
JOSEPH BUCKELEW
/s/ FRANK C. VIDEON, SR. Director March 5, 1999
- - ---------------------------
FRANK C. VIDEON, SR.
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- - ----------- -----------
5.1 Opinion of Blank Rome Comisky & McCauley LLP relating to
the legality of the securities to be issued.
23.1 Consent of Ernst & Young LLP
<PAGE>
[Letterhead of Blank Rome Comisky & McCauley LLP]
March 4, 1999
Commerce Bancorp, Inc.
Commerce Atrium
1701 Route 70 East
Cherry Hill, New Jersey 08034-5400
Re: Commerce Bancorp, Inc.
Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as counsel to Commerce Bancorp, Inc. (the "Company") in
connection with the Registration Statement on Form S-3 (the "Registration
Statement") to be 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 by the Company of up to 1,000,000 shares of common stock, par
value $1.5625 per share (the "Common Stock"). This opinion is being furnished
pursuant to the requirements of Item 601(b)(5) of Regulation S-K.
In rendering this opinion, we have examined only the documents listed on
Exhibit "A" attached hereto. 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.
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, when sold in the manner and for
the consideration contemplated by the Registration Statement, will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Prospectus, which is part of the Registration Statement.
Sincerely,
BLANK ROME COMISKY & McCAULEY LLP
<PAGE>
Exhibit "A"
-----------
1. The Company's Certificate of Incorporation and all amendments thereto.
2. The Company's By-Laws, as amended.
3. Resolutions adopted by the Board of Directors of the Company at a meeting
held on January 19, 1999.
4. Registration Statement on Form S-3 to be filed with the Securities and
Exchange Commission relating to the offer and sale by the Company of up to
1,000,000 shares of Common Stock.
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 (No. 333 xxxxx) and related Prospectus of
Commerce Bancorp, Inc. for the registration of 1,000,000 shares of its common
stock and to the incorporation by reference therein of our report dated
January 26, 1998 (except as to Note 1, as to which the date is June 29, 1998),
with respect to the consolidated financial statements of Commerce Bancorp, Inc.
and Subsidiaries, included in its Annual Report (Form 10-K), as amended, for the
year ended December 31, 1997, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Philadelphia, Pennsylvania
March 5, 1999
