<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
COMMERCE BANCORP, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
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[GRAPHIC OMITTED]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders (the
"Annual Meeting") of Commerce Bancorp, Inc. ("Bancorp") will be held at
Commerce University, 17000 Horizon Way, Mt. Laurel, New Jersey, on Tuesday,
June 20, 2000, at 5:30 P.M., local time, and at any adjournment or postponement
thereof, to consider and act upon the following matters as more fully described
in the annexed proxy statement:
1. To elect directors;
2. To approve the amendment to the Bancorp 1997 Employee Stock Option Plan
to increase the number of shares issuable under the 1997 Plan by
5,000,000 shares; and
3. To act upon such other matters as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The board of directors has fixed May 1, 2000 as the record date for
determination of shareholders entitled to vote at the Annual Meeting. Only
shareholders of record at the close of business on that date will be entitled
to receive notice of, and to vote at, the Annual Meeting.
You are cordially invited to attend the Annual Meeting in person. Whether
or not you expect to attend the Annual Meeting in person, you are urged to sign
and date the enclosed proxy and promptly return it in the envelope provided for
that purpose.
By Order of the Board of Directors
ROBERT C. BECK,
Secretary
May 12, 2000
<PAGE>
COMMERCE BANCORP, INC.
COMMERCE ATRIUM
1701 ROUTE 70 EAST
CHERRY HILL, NEW JERSEY 08034-5400
PROXY STATEMENT
This Notice of Annual Meeting, proxy statement and enclosed proxy are
being furnished to shareholders of Commerce Bancorp, Inc. ("Bancorp") in
conjunction with the solicitation of proxies by the board of directors of
Bancorp for use at Bancorp's 2000 Annual Meeting of Shareholders to be held on
Tuesday, June 20, 2000, at 5:30 P.M., local time, at Commerce University, 17000
Horizon Way, Mt. Laurel, New Jersey, (the "Annual Meeting"), and at any
adjournment or postponement thereof. The approximate date upon which this proxy
statement and the accompanying form of proxy will be first sent, given or
otherwise made available to Bancorp's shareholders is May 12, 2000.
The expense of the proxy solicitation will be borne by Bancorp. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone by directors, officers or employees of Bancorp and its subsidiaries
without additional compensation. Bancorp is required to pay the reasonable
expenses incurred by recordholders of Bancorp common stock who are brokers,
dealers, banks or voting trustees, or their nominees, for mailing proxy
material and annual shareholder reports to the beneficial owners of Bancorp
common stock they hold of record, upon request of such recordholders.
The board of directors of Bancorp has fixed the close of business on May
1, 2000, as the date for determining holders of record of Bancorp common stock
entitled to receive notice of, and to vote at, the Annual Meeting. On that
date, there were 30,624,092 shares of common stock outstanding. Each holder of
common stock is entitled to cast one vote for each share held of record on that
date.
The holders of a majority of the aggregate outstanding shares of common
stock, present either in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. Pursuant to the New Jersey
Business Corporation Act ("NJBCA"), abstentions and broker non-votes (which may
occur if a beneficial owner of stock where shares are held in a brokerage or
bank account fails to provide the broker or bank voting instructions as to such
shares) will be counted solely for the purpose of determining whether a quorum
is present.
If the enclosed form of proxy is properly marked, signed, and returned in
time to be voted at the Annual Meeting and not revoked, the shares represented
by the proxy will be voted in accordance with the instructions marked thereon.
Signed proxies not marked to the contrary will be voted (i) "FOR" the election
of all nominees for director, and (ii) "FOR" the approval of the amendment to
the Bancorp 1997 Employee Stock Option Plan to increase the number of shares
issuable under the 1997 Plan by 5,000,000 shares. Sending in a signed proxy
will not affect a shareholders' right to attend the Annual Meeting and vote in
person, since the proxy is revocable.
Any Bancorp shareholder giving a proxy may revoke it at any time before it
is voted by (i) giving written notice of such revocation, signed in the same
manner as the proxy, to Bancorp's Secretary, (ii) executing a new proxy and
returning it to the Secretary of Bancorp prior to the voting of the first proxy
at the Annual Meeting, or (iii) attending the Annual Meeting and voting in
person (although attendance at the Annual Meeting will not in and of itself
constitute revocation of a proxy).
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SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
Common Stock
The following table sets forth, as of May 1, 2000, the beneficial
ownership of Bancorp's common stock by (i) each director and nominee for
director of Bancorp, (ii) each of the executive officers of Bancorp named in
the Summary Compensation Table and (iii) all the directors, nominees for
directors, and executive officers of Bancorp as a group. No person is known by
Bancorp to own beneficially more than 5% of Bancorp's common stock. Unless
otherwise specified, all persons listed below have sole voting and investment
power with respect to their shares.
<TABLE>
<CAPTION>
Name of Number of Shares Percent of
Beneficial Owner or Beneficially Class
Identity of Group Owned(1) Beneficially Owned(1)
------------------- ----------------- ---------------------
<S> <C> <C>
David Baird, IV ...................................... 125,662(2) *
Robert C. Beck ....................................... 202,952(3) *
Jack R Bershad ....................................... 73,380(4) *
Joseph E. Buckelew ................................... 312,708(5) 1.02%
Vernon W. Hill, II ................................... 1,491,896(6) 4.76%
C. Edward Jordan, Jr ................................. 276,581(7) *
Morton N. Kerr ....................................... 59,544(8) *
Steven M. Lewis ...................................... 239,245(9) *
Daniel J. Ragone ..................................... 108,108(10) *
William A. Schwartz, Jr .............................. 35,307(11) *
Joseph T. Tarquini, Jr ............................... 291,526(12) *
Frank C. Videon, Sr .................................. 90,677(13) *
Peter M. Musumeci, Jr ................................ 235,343(14) *
Robert D. Falese, Jr. ................................ 195,091(15) *
Dennis M. DiFlorio ................................... 254,726(16) *
Thomas J. Sukay ...................................... 119,027(17) *
David Wojcik ......................................... 189,492(18) *
All Directors, Nominees for Directors and Executive
Officers of Bancorp as a Group (17 Persons) ......... 4,154,159(19) 12.78%
</TABLE>
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* less than 1%
(1) The securities "beneficially owned" are determined in accordance with the
definitions of "beneficial ownership" as set forth in the regulations of the
SEC and, accordingly, may include securities owned by or for, among others,
the wife and/or minor children of the in dividual and any other relative who
has the same residence as such individual as well as other securities as to
which the individual has or shares voting or investment power or has the
right to acquire under outstanding stock options within 60 days after May 1,
2000. Shares subject to outstanding stock options which an individual has
the right to acquire within 60 days after May 1, 2000 are deemed to be
outstanding for the purpose of computing the percentage of outstanding
securities of the class owned by such individual or any group including such
individual only. Beneficial ownership may be disclaimed as to certain of the
securities.
(2) Includes 15,354 shares of common stock issuable upon the exercise of stock
options granted under Bancorp's 1998 Stock Option Plan for Non-Employee
Directors.
(3) Includes 554 shares of common stock held by Mr. Beck's wife and 45,854
shares of common stock issuable upon the exercise of stock options granted
under Bancorp's 1989 and 1998 Stock Option Plans for Non-Employee Directors.
(4) Includes 23,224 shares of common stock held by Mr. Bershad's wife and 30,565
shares of common stock issuable upon the exercise of stock options granted
under Bancorp's 1989 and 1998 Stock Option Plans for Non-Employee Directors.
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(5) Includes 79,244 shares of common stock held by Mr. Buckelew's wife, 2,389
shares of common stock held by Buckelew & Lane Investments, 3,264 shares
of common stock issuable upon the exercise of stock options granted under
Bancorp's 1989 Stock Option Plan for Non-Employee Directors and 42,163
shares of common stock issuable upon the exercise of stock options granted
under Bancorp's 1997 Employee Stock Option Plan. Mr. Buckelew is a partner
of Buckelew & Lane Investments.
(6) Includes 51,840 shares of common stock held by Site Development Inc.,
26,836 shares of common stock held by Mr. Hill's wife, 72,771 shares of
common stock held by S. J. Dining, Inc., 74,335 shares of common stock
held by U.S. Restaurants, Inc., 47,209 shares of common stock held by J.V.
Properties, 17,874 shares of common stock held by InterArch, Inc., 77,453
shares held by InterArch, Inc. Profit Sharing Plan, 63,598 shares of
common stock held by the Hill Family Trust, 15,800 shares held by the Hill
Family Foundation and 16,403 shares of common stock allocated to Mr. Hill
by Bancorp's ESOP. Mr. Hill is the Chairman of the Board of Site
Development, Inc., a shareholder of S. J. Dining, Inc., a shareholder of
U.S. Restaurants, Inc., a partner in J.V. Properties, a co-trustee and
beneficiary of the Hill Family Trust, a trustee of the Hill Family
Foundation, and a co-trustee and beneficiary of Bancorp's ESOP Trust.
InterArch, Inc., is a company owned by Mr. Hill's wife. This amount also
includes 730,734 shares of common stock issuable upon the exercise of
stock options granted to Mr. Hill under Bancorp's Employee Stock Option
Plans.
(7) Includes 166,773 shares of common stock issuable upon the exercise of
stock options granted to Mr. Jordan under Bancorp's Employee Stock Option
Plans, 14,026 shares of common stock allocated to Mr. Jordan by Bancorp's
ESOP, of which Mr. Jordan is a co-trustee and beneficiary, and 3,154
shares of common stock held in trust for Mr. Jordan's minor children.
(8) Includes 211 shares of common stock held by Mr. Kerr's wife and 22,410
shares of common stock held by the Markeim-Chalmers, Inc. Pension Plan and
36,026 shares of Common Stock issuable upon the exercise of stock options
granted to Mr. Kerr under Bancorp's 1998 Stock Option Plan for
Non-Employee Directors. Markeim-Chalmers, Inc. is a company owned by Mr.
Kerr.
(9) Includes 72,771 shares of common stock held by S. J. Dining, Inc., 74,335
shares of common stock held by U.S. Restaurants, Inc. and 29,875 shares of
common stock issuable upon the exercise of stock options granted to Mr.
Lewis under Bancorp's 1989 and 1998 Stock Option Plans for Non-Employee
Directors. Mr. Lewis is President of S. J. Dining, Inc. and President of
U.S. Restaurants, Inc. This amount also includes 4,974 shares of common
stock held in trust for Mr. Lewis' minor children.
(10) Includes 25,807 shares of common stock held by Mr. Ragone's wife, 16,130
shares of common stock held jointly with Mr. Ragone's wife and 29,139
shares of common stock issuable upon the exercise of stock options granted
to Mr. Ragone under Bancorp's 1989 and 1998 Stock Option Plans for
Non-Employee Directors.
(11) Includes 3,135 shares of common stock held by Mr. Schwartz's wife, 11,301
shares of common stock held jointly with Mr. Schwartz's wife and 18,505
shares of common stock issuable upon the exercise of stock options granted
to Mr. Schwartz under Bancorp's 1989 and 1998 Stock Option Plans for
Non-Employee Directors.
(12) Includes 20,359 shares of common stock held by Mr. Tarquini's wife, 23,025
shares of common stock held by The Tarquini Organization Profit Sharing
Plan, 2,348 shares of common stock held by The Tarquini Foundation and
38,988 shares of common stock issuable upon the exercise of stock options
granted to Mr. Tarquini under Bancorp's 1989 and 1998 Stock Option Plans
for Non-Employee Directors. Mr. Tarquini is the President of The Tarquini
Organization.
(13) Includes 26,563 shares of common stock held jointly with Mr. Videon's
wife, 8,704 shares of common stock held by Mr. Videon's wife, 7,546 shares
held by Frank C. Videon, Inc., Profit Sharing Trust, 4,362 shares of
common stock held by Videon Chevrolet Profit Sharing Plan, 15,796 shares
of common stock held by the Videon Dodge, Inc. Employee Profit Sharing
Trust, 8,400 shares of common stock held by the Frank C. Videon Funeral
Home Profit Sharing Plan, 7,512 shares of common stock held in Trust for
Mr. Videon's minor grandchildren and 11,794 shares of common stock
issuable upon the exercise of stock
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options granted to Mr. Videon under Bancorp's 1989 and 1998 Stock Option
Plans for Non- Employee Directors. Mr. Videon is president of Frank C.
Videon, Inc., Vice President of Videon Chevrolet, President of Videon
Dodge, Inc., and Owner of Videon Funeral Home.
(14) Includes 88,142 shares of common stock held jointly with Mr. Musumeci's
wife, 2,310 shares held by the Peter/Linda Musumeci Foundation, 131,154
shares of common stock issuable upon the exercise of stock options granted
to Mr. Musumeci under Bancorp's Employee Stock Option Plans and 13,310
shares of common stock allocated to Mr. Musumeci under Bancorp's ESOP.
(15) Includes 179,621 shares of common stock issuable upon the exercise of
stock options granted to Mr. Falese under Bancorp's Employee Stock Option
Plans and 4,411 shares of common stock allocated to Mr. Falese under
Bancorp's ESOP, 5,468 shares of common stock held by Mr. Falese's wife,
618 shares of common stock held jointly with Mr. Falese's wife and 3,685
shares of common stock held by Mr. Falese's wife in trust for their minor
daughter.
(16) Includes 182,028 shares of common stock issuable upon the exercise of
stock options granted to Mr. DiFlorio under Bancorp's Employee Stock
Option Plans and 7,665 shares of common stock allocated to Mr. DiFlorio
under Bancorp's ESOP.
(17) Includes 103,613 shares of common stock issuable upon the exercise of
stock options granted to Mr. Sukay under Bancorp's Employee Stock Option
Plans and 6,073 shares of common stock allocated to Mr. Sukay under
Bancorp's ESOP.
(18) Includes 138,681 shares of common stock issuable upon the exercise of
stock options granted to Mr. Wojcik under Bancorp's Employee Stock Option
Plans, 21,102 shares of common stock held by Mr. Wojcik's wife, 862 shares
of common stock held in trust for Mr. Wojcik's minor children and 7,499
shares of common stock allocated to Mr. Wojcik under Bancorp's ESOP.
(19) Includes an aggregate of 1,934,131 shares of common stock issuable upon
the exercise of stock options granted to directors and certain executive
officers of Bancorp under Bancorp's Employee Stock Option Plans.
ELECTION OF DIRECTORS
The bylaws of Bancorp provide that Bancorp's business shall be managed by
a board of not less than five nor more than twenty-five directors and that
within these limits the number of directors shall be as established by
resolution of a majority of the full board of directors. The board of directors
by resolution has set the number of persons to be elected to the board of
directors at the Annual Meeting at twelve.
The election of directors will be determined by a plurality vote and the
twelve nominees receiving the most "FOR" votes will be elected. Shares may be
voted "FOR" or withheld from each nominee. Abstentions and broker non-votes
(which may occur if a beneficial owner of stock where shares are held in a
brokerage or bank account fails to provide the broker or bank voting
instructions as to such shares) will have no effect on the outcome of the
election because directors will be elected by a plurality of the shares voted
for directors.
The board of directors unanimously recommends a vote "FOR" the election as
directors of the nominees named herein.
The board of directors has designated the twelve persons listed below to
be nominees for election as directors. All of the nominees are currently
members of the board, and each of them has consented to serve if elected.
Bancorp has no reason to believe that any of the nominees will be unavailable
for election; however, if any nominee becomes unavailable for any reason, the
board of directors may designate a substitute nominee, or the number of
directors to be elected at the Annual Meeting will be reduced accordingly.
Directors of Bancorp hold office for one year and until their respective
successors have been duly elected and qualified.
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The following information regarding Bancorp's nominees is based, in part,
on information furnished by the nominees.
<TABLE>
<CAPTION>
Name Age Positions with Bancorp and Subsidiaries
---- --- ---------------------------------------
<S> <C> <C>
Vernon W. Hill, II ................ 54 Chairman and President of Bancorp; Chairman and President
of Commerce NJ; Chairman and President of Commerce PA;
Chairman of Commerce Shore, Commerce Central,
Commerce North and Commerce Delaware
C. Edward Jordan, Jr. ............. 56 Executive Vice President and Director of Bancorp; Executive
Vice President and Director of Commerce NJ; Director of
Commerce PA
Robert C. Beck .................... 64 Secretary and Director of Bancorp; Secretary and Director of
Commerce NJ; Director of Commerce PA
David Baird, IV ................... 63 Director of Bancorp, Commerce NJ and Commerce PA
Jack R Bershad .................... 69 Director of Bancorp, Commerce NJ and Commerce PA
Joseph E. Buckelew ................ 71 Director of Bancorp, Commerce Shore and Commerce PA;
President of Commerce Shore; Chairman of Commerce
National Insurance Services, Inc.
Morton N. Kerr .................... 69 Director of Bancorp, Commerce NJ and Commerce PA
Steven M. Lewis ................... 50 Director of Bancorp, Commerce NJ and Commerce PA
Daniel J. Ragone .................. 72 Director of Bancorp, Commerce NJ and Commerce PA
William A. Schwartz, Jr. .......... 59 Director of Bancorp, Commerce NJ and Commerce PA
Joseph T. Tarquini, Jr. ........... 64 Director of Bancorp, Commerce NJ and Commerce PA
Frank C. Videon, Sr. .............. 77 Director of Bancorp, Commerce NJ and Commerce PA
</TABLE>
Mr. Hill, a director of Commerce NJ since 1973 and Bancorp since 1982, has
been Chairman and/or President of Commerce NJ since 1973 and Chairman and
President of Bancorp since 1982. Mr. Hill has been Chairman and/or President of
Site Development, Inc., Cherry Hill, New Jersey, a developer of real estate,
since 1968. Mr. Hill has been Chairman of the board of directors of Commerce PA
from June 1984 to June 1986 and from January 1987 to the present, President of
Commerce PA since June 1994, a director of Commerce Bank/Harrisburg, Camp Hill,
Pennsylvania since 1985, Chairman of Commerce Shore since January, 1989,
Chairman of Commerce North since January, 1997 and Chairman of Commerce
Delaware and Commerce Central since October, 1999 and January, 1999,
respectively.
Mr. Jordan, a director of Commerce NJ since 1974, Bancorp since 1982 and
Commerce PA since June, 1997, has been Executive Vice President of Commerce NJ
since 1974 and Executive Vice President of Bancorp since 1982.
Mr. Beck, a director of Commerce NJ since 1973, Bancorp since 1982 and
Commerce PA since June, 1997, has been Secretary of Commerce NJ since 1973 and
Secretary of Bancorp since 1982. Mr. Beck has been a partner of the law firm of
Parker, McCay & Criscuolo, Marlton, New Jersey since 1987.
Mr. Baird, a director of Bancorp and Commerce NJ since 1988 and Commerce
PA since June, 1997, has been President of Haddonfield Lumber Company, Inc.,
Cherry Hill, New Jersey since 1962.
Mr. Bershad, a director of Commerce PA since 1984 and Bancorp and Commerce
NJ since 1987, has been a partner of the law firm of Blank Rome Comisky &
McCauley LLP, Philadelphia, Pennsylvania and Cherry Hill, New Jersey, since
1964.
Mr. Buckelew has been a director of Bancorp and Chairman of Commerce
National Insurance Services, Inc., the wholly-owned insurance brokerage
subsidiary of Bancorp, since November, 1996 and has been a director of
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<PAGE>
Commerce Shore since 1993 and Commerce NJ and Commerce PA since June, 1997. Mr.
Buckelew was elected President of Commerce Shore in 1998. Mr. Buckelew was the
President of Morales, Potter & Buckelew, Inc. t/a Buckelew & Associates, Toms
River, New Jersey from 1959 to November 1996, when this insurance agency was
acquired by Bancorp.
Mr. Kerr, a director of Commerce NJ since 1973, Bancorp since 1982 and
Commerce PA since June, 1997, has been President of Markeim-Chalmers, Inc.,
Realtors, Cherry Hill, New Jersey, since 1965.
Mr. Lewis, a director of Commerce PA since 1984 and a director of Bancorp
and Commerce NJ since 1988, has been President of U.S. Restaurants, Inc., Blue
Bell, Pennsylvania since 1985 and President of S. J. Dining, Inc. since 1986.
Mr. Ragone, a director of Commerce NJ since 1981, Bancorp since 1982 and
Commerce PA since June, 1997, has been Chairman and President of Ragone,
Raible, Lacatena & Beppel, C.P.A., Haddonfield, New Jersey, and its predecessor
firms, since 1960.
Mr. Schwartz, a director of Commerce PA since 1984 and a director of
Bancorp and Commerce NJ since June, 1997, has been Chairman, President and
Chief Executive Officer of U.S. Vision, Glendora, New Jersey, or its
predecessor firms, since 1967.
Mr. Tarquini, a director of Commerce NJ since 1973, Bancorp since 1982 and
Commerce PA since June, 1997, has been President of The Tarquini Organization,
A.I.A., Camden, New Jersey, since 1980. Prior thereto, he had been a partner in
its predecessor firms.
Mr. Videon, a director of Commerce PA since 1991 and a director of Bancorp
and Commerce NJ since June, 1997, has been the owner of Frank C. Videon Funeral
Home, Broomall, Pennsylvania, since 1982.
Director Compensation
Directors of Bancorp, Commerce NJ and Commerce PA were paid an annual fee
of $10,000 plus $1,000 for each meeting of the board of directors and committee
meeting attended in 1999 and will be paid an annual fee of $14,000 and a
meeting fee of $1,000 for each meeting of the board of directors and committee
meeting attended in 2000. When meetings of the board of directors of Bancorp,
Commerce NJ and Commerce PA occur on the same day, only one fee is paid.
Directors of Commerce Shore, Commerce Central, Commerce North and Commerce
Delaware were paid a fee of $500 for each meeting of the board of directors and
committee meeting attended in 1999 and will be paid the same meeting fee for
each meeting of the board of directors and committee meeting attended in 2000.
No fees are paid to directors who are also operating officers of Bancorp or its
banking subsidiaries. Each director of Bancorp is provided with $100,000 of
permanent life insurance.
A retirement plan for Bancorp's outside directors, i.e., directors who are
not officers or employees of Bancorp on the date their service as a Bancorp
director ends, provides that outside directors with five or more years of
service as a Bancorp director are entitled to receive annually, for ten years
or the number of years served as a director, whichever is less, commencing upon
such director's attainment of age 65 and retirement from the Bancorp board or
upon such director's disability, payments equal to the highest 1099
Compensation (as such term is defined in the plan) in effect at any time during
the five year period immediately preceding such director's retirement or, if
earlier, death or disability. This plan further provides that, in the event a
director dies before receiving all benefits to which he or she is entitled,
such director's surviving spouse is entitled to receive all benefits not
received by the deceased director commencing upon such director's death. Upon a
change in control of Bancorp, the plan provides that each director then sitting
on the Bancorp board, notwithstanding the length of time served as a director,
becomes entitled to receive annually, for ten years, or twice the number of
years served as a director, whichever is less, payments equal to the higher of
the director's 1099 Compensation at the time of the director's termination of
board service and the highest 1099 Compensation in effect at any time during
the five year period immediately preceding the change in control commencing on
the latest to occur of the termination of the director's board service,
attainment of age 65 or any date designated by the director at any time and
from time to time. The definition of "change in control" for purposes of this
plan parallels the definition of that term contained in the Employment
Agreements discussed on page 11 of this proxy statement. This plan became
effective January 1, 1993, as amended.
6
<PAGE>
1989 and 1998 Stock Option Plans For Non-Employee Directors
Effective April 24, 1989 (and as amended in 1994), Bancorp adopted the
1989 Stock Option Plan for Non-Employee Directors (the "1989 Plan") which
provides for the purchase of a total of not more than 320,690 shares (as
adjusted for all stock splits and dividends through May 1, 2000) of Bancorp
common stock by members of the boards of directors of Bancorp and its
subsidiary corporations. Options granted pursuant to the 1989 Plan may be
exercised beginning on the earlier to occur of (i) one year after the date of
their grant or (ii) a "change in control" of Bancorp, as such term is defined
in the 1989 Plan. No further options may be granted under the 1989 Plan. As of
May 1, 2000, 78,763 options (as adjusted for all stock splits and stock
dividends through May 1, 2000) were outstanding under the 1989 Plan.
Effective June 29, 1998, Bancorp adopted the 1998 Stock Option Plan for
Non-Employee Directors (the "1998 Plan") which provides for the purchase of a
total of not more than 551,250 shares (as adjusted for all stock splits and
dividends through May 1, 2000) of Bancorp common stock by members of the boards
of directors of Bancorp and its subsidiary corporations. Under the 1998 Plan,
members of the board of directors of Bancorp and its current and future
subsidiary corporations (i.e., any corporation in which Bancorp owns, directly
or indirectly, fifty percent or more of the outstanding voting power of all
classes of stock of such corporation at the time of election or reelection of
such director) who are not also employees of Bancorp or its subsidiary
corporations are entitled to receive options to purchase Bancorp common stock.
Options granted pursuant to the 1998 Plan may be exercised in whole, or from
time to time in part, beginning on the earlier to occur of (i)one year after
the date of their grant or (ii) a "change in control" of Bancorp, as such term
is defined in the 1998 Plan. As of May 1, 2000, 376,562 options (as adjusted
for all stock splits and stock dividends through May 1, 2000) had been granted
under the 1998 Plan and 174,688 options (as adjusted for all stock splits and
stock dividends through May 1, 2000) were available for grant. Options may
continue to be granted under the 1998 Plan through December 31, 2007.
Both the 1989 Plan and 1998 Plan are administered by the board of
directors of Bancorp, including non-employee directors. Options granted under
both the 1989 Plan and/or 1998 Plan are not "incentive stock options" as
defined in Section 422 of the Internal Revenue Code of 1986, as amended. Option
prices are intended to equal 100% of the fair market value of Bancorp's common
stock on the date of option grant. The board of directors of Bancorp, in their
sole discretion, may grant options under the 1998 Plan to non-employee
directors and determine the number of shares subject to each option, the rate
of option exercisability, and subject to certain limitations, the option price
and the duration of the options. Unless terminated earlier by the option's
terms, options granted under the 1998 Plan expire ten years after the date they
are granted.
For the year ended December 31, 1999, options to purchase the following
shares of Bancorp common stock (as adjusted to reflect the 5% stock dividend
declared on December 21, 1999) were granted to the following directors under
the 1998 Plan: Messrs. Baird, 3,150; Beck, 3,150; Bershad, 3,150; Kerr, 3,150;
Lewis, 3,150; Ragone, 3,150; Schwartz, 3,150; Tarquini, 3,150; and Videon,
3,150. Such options were not exercisable in 1999.
Meetings and Committees of the Board of Directors
During 1999, there were 13 meetings of the board of directors of
Bancorp. The board of directors of Bancorp has established an Audit Committee,
an Oversight Committee and a Personnel Committee but does not have a standing
Nominating Committee. In addition, each of Bancorp's six subsidiary banks,
Commerce Bank, N.A., Cherry Hill, New Jersey ("Commerce NJ"), Commerce
Bank/Pennsylvania, N.A., Devon, Pennsylvania ("Commerce PA"), Commerce
Bank/Shore, N.A., Toms River, New Jersey ("Commerce Shore"), Commerce
Bank/Central, N.A., Flemington, New Jersey ("Commerce/Central), Commerce
Bank/Delaware, N.A., Wilmington, Delaware ("Commerce Delaware) and Commerce
Bank/North ("Commerce North"), Ramsey, New Jersey has various committees of
their respective boards.
Information with respect to the committees of the board of directors of
Bancorp is set forth below.
Audit Committee
The Audit Committee reviews Bancorp's and its wholly-owned subsidiary
banks' financial statements, accounting procedures and methods employed in
connection with audit programs. It serves as the principal liaison between the
board of directors and Bancorp's independent auditors. In addition, this
committee makes recommendations to the board of directors concerning the
selection of Bancorp's independent auditors. Daniel J. Ragone and Joseph T.
Tarquini, Jr. are the current members of the Audit Committee. During 1999,
there were four meetings of the Audit Committee.
7
<PAGE>
Oversight Committee
The Oversight Committee reviews compliance matters at Bancorp and its
banking subsidiaries, and reports to Bancorp's Audit Committee. Daniel J.
Ragone, Joseph T. Tarquini, Jr., Joseph A. Haynes (Director of Commerce North)
and Daniel M. Monroe (Director of Commerce Shore) are the current members of
the Oversight Committee. During 1999, there were four meetings of the Oversight
Committee.
Personnel Committee
The Personnel Committee reviews and recommends the levels of compensation
of Bancorp's and its subsidiary banks' executive officers and administers
Bancorp's Employee Plans. Morton N. Kerr, Daniel J. Ragone and Jack R Bershad
are the current members of the Personnel Committee. During 1999, there was one
meeting of the Personnel Committee. The report of the Personnel Committee with
respect to 1999 compensation is set forth on page 16 of this proxy statement.
Attendance
In 1999, each of Bancorp's directors and nominees for directors attended
more than 75% of the aggregate of the total number of meetings of the board of
directors and all committees of which they were members of Bancorp and its
subsidiary banks, as the case may be.
8
<PAGE>
EXECUTIVE OFFICERS
The executive officers of Bancorp and its banking subsidiaries, as of May
1, 2000, are set forth below.
<TABLE>
<CAPTION>
Position with Bancorp, Commerce NJ, Commerce PA,
Commerce Shore and Commerce North
Name Age Principal Occupation
---- --- ------------------------------------------------
<S> <C> <C>
Vernon W. Hill, II 54 Chairman and President of Bancorp since 1982; Chairman
and/or President of Commerce NJ since 1973; Chairman of
Commerce PA from June 1984 to June 1986 and from
January 1987 to present; President of Commerce PA from
June 1994 to present; Chairman of Commerce Shore since
1989, Commerce North since 1997, and Commerce Central
and Commerce Delaware since 1999.
C. Edward Jordan, Jr. 56 Executive Vice President and Director of Bancorp since
1982; Executive Vice President and Director of Commerce
NJ since 1974; Director of Commerce PA since 1997.
Peter M. Musumeci, Jr. 49 Executive Vice President and Senior Credit Officer of
Bancorp since 1986 and Treasurer and Assistant Secretary of
Bancorp since 1984; Executive Vice President of Commerce
NJ since 1986; Director of Commerce Shore since 1989.
Robert D. Falese, Jr. 53 Executive Vice President and Senior Loan Officer of
Commerce NJ since 1992.
Dennis M. DiFlorio 46 Executive Vice President of Commerce NJ since January,
1996; Director of Commerce North since 1997. Prior thereto
Mr. DiFlorio was Senior Vice President of Commerce NJ
since 1988.
David Wojcik 47 Senior Vice President of Bancorp since 1988.
Thomas J. Sukay 46 Senior Vice President of Bancorp since 1989.
</TABLE>
9
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table is a summary of certain information concerning the
compensation during the last three fiscal years awarded or paid to, or earned
by, Bancorp's chief executive officer and each of Bancorp's other four most
highly compensated executive officers during Bancorp's last fiscal year.
<TABLE>
<CAPTION>
Annual Compensation
----------------------------------------------------
Other
Annual
Name/Title Year Salary Bonus Compensation (1)
---------- ------ ----------- ----------- ------------------
<S> <C> <C> <C> <C>
Vernon W. Hill, II 1999 $700,000 $200,000 $69,091
Chairman and President of Bancorp; 1998 620,000 150,000 69,006
Chairman and President of Commerce 1997 550,000 150,000 67,213
NJ and Commerce PA; Chairman of Commerce
Shore, Commerce Central, Commerce Delaware
and Commerce North
C. Edward Jordan, Jr. 1999 $262,500 $ 25,000
Executive Vice President of Bancorp; 1998 250,000 25,000
Executive Vice President of 1997 260,000 25,000
Commerce NJ
Peter M. Musumeci, Jr. 1999 $300,000 $ 60,000
Executive Vice President and Senior 1998 280,000 60,000
Credit Officer, Treasurer and Assistant 1997 265,000 60,000
Secretary of Bancorp; Executive Vice President
of Commerce NJ
Robert D. Falese, Jr. 1999 $325,000 $100,000
Executive Vice President and Senior 1998 300,000 80,000
Loan Officer of Commerce NJ 1997 275,000 80,000
Dennis M. DiFlorio 1999 $325,000 $100,000
Executive Vice President of 1998 300,000 80,000
Commerce NJ 1997 275,000 80,000
Long Term
Compensation
--------------
Securities
Underlying All
Stock Option Other
Name/Title Grants (2) Compensation (3)
---------- -------------- -----------------
Vernon W. Hill, II 105,000 $ 33,086
Chairman and President of Bancorp; 248,058 34,568
Chairman and President of Commerce 144,698 37,004
NJ and Commerce PA; Chairman of Commerce
Shore, Commerce Central, Commerce Delaware
and Commerce North
C. Edward Jordan, Jr. 10,500 $ 24,312(3)
Executive Vice President of Bancorp; 11,160 25,950
Executive Vice President of 7,230 28,346
Commerce NJ
Peter M. Musumeci, Jr. 26,250 $ 22,077(3)
Executive Vice President and Senior 22,185 23,429
Credit Officer, Treasurer and Assistant 28,936 25,528
Secretary of Bancorp; Executive Vice President
of Commerce NJ
Robert D. Falese, Jr. 52,500 $ 17,299(3)
Executive Vice President and Senior 27,697 18,211
Loan Officer of Commerce NJ 36,174 19,997
Dennis M. DiFlorio 52,500 $ 7,645(3)
Executive Vice President of 27,697 8,632
Commerce NJ 36,174 10,413
</TABLE>
<PAGE>
- ------------
(1) The total in this column reflects personal use of a company car (1999,
$4,517; 1998, $4,517; 1997, $4,517;), expense allowances (1999, $62,004;
1998, $62,004; 1997, $54,996) and country club dues (1999, $2,570; 1998,
$2,485; 1997, $7,700). The value of such other annual compensation did not
exceed the lesser of $50,000 or 10% of salary and bonus for any individual
in any year except Mr. Hill.
(2) The stock option grants reflected in this column have been adjusted for the
5-for 4 stock split in the form of a 25% stock dividend declared on June
29, 1998, and the 5% stock dividends declared on December 21, 1999,
December 15, 1998, and December 16, 1997. The original grant was adjusted
based on the unexercised option shares outstanding on the date of the
stock dividend.
(3) The totals in this column reflect (i) premiums on life insurance (for 1999,
Mr. Hill $22,746; Mr. Jordan, $16,320; and Mr. Musumeci $13,147; 1998, Mr.
Hill, $23,375; Mr. Jordan, $16,855; and Mr. Musumeci, $13,456; and for
1997, Mr. Hill, $24,032; Mr. Jordan, $17,344; and Mr. Musumeci, $13,738;
(ii) long-term disability policies (for 1999, Mr. Hill $7,329; Mr. Jordan,
$4,981; Mr. Musumeci $5,919; Mr. Falese, $14,288 and Mr. DiFlorio $4,634;
for 1998, Mr. Hill, $7,033; Mr. Jordan, $4,935, Mr. Musumeci, $5,813; Mr.
Falese, $14,051 and Mr. DiFlorio, $4,472; and for 1997, Mr. Hill $7,094;
Mr. Jordan, $5,124; Mr. Musumeci, $5,912; Mr. Falese, $14,119; and Mr.
DiFlorio, $4,535); and (iii) contributions to Bancorp's ESOP (in 1999,
$3,011 each for all five individuals; in 1998, $4,160 each for all five
individuals; and in 1997, $5,878 each for all five individuals).
10
<PAGE>
Employment Agreements
Mr. Hill's employment agreement provides that he will be employed by
Bancorp and Commerce NJ as Chairman of the Board, President and Chief Executive
Officer for a term of five years effective January 1, 1992, provided that on
each January 1 thereafter Mr. Hill's employment agreement shall be
automatically renewed and extended for a new five year term unless either
Bancorp or Mr. Hill gives the other at least ninety days prior written notice
of their desire to terminate Mr. Hill's employment agreement, in which event
the term will have four years remaining.
Under the terms of Mr. Hill's employment agreement, Mr. Hill's "base
salary" shall not be less than $800,000. Mr. Hill's employment agreement
provides that Mr. Hill will participate in any benefit or compensation programs
in effect which are generally made available from time to time to executive
officers of Bancorp and provides for all other fringe benefits as in effect
from time to time which are generally available to Bancorp's salaried officers
including, without limitation, medical and hospitalization coverage, life
insurance coverage and disability coverage.
Mr. Hill's employment agreement requires Bancorp to compensate Mr. Hill
for the balance of the term of his employment agreement at a rate equal to
seventy percent of his annual base salary if he becomes permanently disabled
(as defined in Mr. Hill's employment agreement) during the term and to pay Mr.
Hill's designated beneficiary a lump sum death benefit if he dies during the
term in an amount equal to three times his average annual base salary in effect
during the twenty-four months immediately preceding his death.
Mr. Hill's employment agreement allows Mr. Hill to terminate his
employment with Bancorp upon a change in control of Bancorp (as defined in Mr.
Hill's employment agreement) and if within three years of such change in
control, without Mr. Hill's consent, among other things, the nature and scope
of his authority with Bancorp or a surviving or acquiring person are materially
reduced to a level below that which he enjoyed on January 1, 1992. If Mr. Hill
terminates his employment because of a change in control, he will be entitled
to a lump sum severance payment equal to four times his average annual base
salary in effect during the twenty-four month period immediately preceding such
termination (provided that such payment does not constitute a "parachute
payment" under Section 280G of the Internal Revenue Code of 1986, as amended,
and in the event such payment would constitute a "parachute payment", such lump
sum severance payment shall be reduced so as to not constitute a "parachute
payment"), and the continuation of certain benefits including medical,
hospitalization and life insurance. Mr. Hill's employment agreement contains a
non-competition covenant for Mr. Hill should his employment with Bancorp be
terminated under certain circumstances.
The employment agreements for Messrs. Jordan, Musumeci, Falese and
DiFlorio are substantially similar to that of Mr. Hill's except that: Mr.
Jordan will serve as Executive Vice President of Bancorp and Commerce NJ, Mr.
Musumeci will serve as Executive Vice President and Senior Credit Officer of
Bancorp and Commerce NJ, Mr. Falese will serve as Executive Vice President and
Senior Loan Officer of Bancorp and Commerce NJ, and Mr. DiFlorio will serve as
Executive Vice President of Bancorp and Commerce NJ. The term of each
employment agreement is three years and the lump sum death benefit is each
equal to two times their respective average annual base salary in effect during
the twenty-four month period preceding death. Mr. Jordan's "base salary" under
his employment agreement is $262,500, Mr. Musumeci's "base salary" under his
employment agreement is $330,000, Mr. Falese's "base salary" under his
employment agreement is $375,000 and Mr. DiFlorio's "base salary" under his
employment agreement is $375,000.
Employee Stock Option Plans
Effective April, 1984, Bancorp adopted the Commerce Bancorp, Inc.
Incentive Stock Option Plan (the "1984 Plan") which provided for the purchase
of a total of not more than 1,950,905 shares of Bancorp common stock (as
adjusted for all stock splits and stock dividends through May 1, 2000) by
officers and key employees. Options granted under the 1984 Plan were intended
to constitute "incentive stock options" as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). No further options may
be granted under the 1984 Plan. As of May 1, 2000, 348,798 options (as adjusted
for all stock splits and stock dividends through May 1, 2000) were outstanding
under the 1984 Plan.
11
<PAGE>
Effective May, 1994, Bancorp adopted the Commerce Bancorp, Inc. 1994
Employee Stock Option Plan (the "1994 Plan") which provided for the purchase of
a total of not more than 1,674,290 shares of Bancorp common stock (as adjusted
for all stock splits and stock dividends through May 1, 2000) by officers and
key employees. Pursuant to the 1994 Plan, stock options may be granted which
qualify under the Code as incentive stock options as well as stock options that
do not qualify as incentive stock options. No further options may be granted
under the 1994 Plan. As of May 1, 2000, 1,077,002 options (as adjusted for all
stock splits and stock dividends through May 1, 2000) were outstanding under
the 1994 Plan.
Effective May, 1997, Bancorp adopted the Commerce Bancorp, Inc. 1997
Employee Stock Option Plan (the "1997 Plan") which provides for the purchase of
a total of not more than 3,617,578 shares of Bancorp common stock (as adjusted
for all stock splits and stock dividends through May 1, 2000) by officers and
key employees. Pursuant to the 1997 Plan, stock options may be granted which
qualify under the Code as incentive stock options as well as stock options that
do not qualify as incentive stock options. All officers and key employees of
Bancorp or any current or future subsidiary corporation are eligible to receive
options under the 1997 Plan. As of May 1, 2000, 3,599,375 options (as adjusted
for all stock splits and stock dividends through May 1, 2000) had been granted
under the 1997 Plan and 18,203 options (as adjusted for all stock splits and
stock dividends through May 1, 2000) were available for grant. Options may
continue to be granted under the 1997 Plan through December 31, 2006. See
"APPROVAL OF THE AMENDMENT TO THE 1997 EMPLOYEE STOCK OPTION PLAN."
The 1984 Plan, 1994 Plan and 1997 Plan are collectively referred to as the
"Employee Plans."
The purpose of the Employee Plans is to provide additional incentive to
employees of Bancorp by encouraging them to invest in Bancorp's common stock
and thereby acquire a proprietary interest in Bancorp and an increased personal
interest in Bancorp's continued success and progress.
The Employee Plans are administered by the Personnel Committee
("Committee") which is appointed by the board of directors and consists only of
directors who are not eligible to receive options under the Employee Plans. The
Committee determines, among other things, which officers and key employees
receive an option or options under the Employee Plans, the type of option
(incentive stock options or non-qualified stock options, or both) to be
granted, the number of shares subject to each option, the rate of option
exercisability, and, subject to certain other provisions to be discussed below,
the option price and duration of the option. Under the 1997 Plan, no individual
may be granted a number of options that is more than 50% of the total number of
shares of Bancorp common stock authorized for issuance under the 1997 Plan. In
addition, incentive stock options first exercisable by an employee in any one
year under the 1997 Plan (and all other Employee Plans of Bancorp) may not
exceed $100,000 in value (determined at the time of grant). The Committee may,
in its discretion, modify or amend any of the option terms hereafter described,
provided that if an incentive option is granted, the option as modified or
amended continues to be an incentive stock option.
In the event of any change in the capitalization of Bancorp, such as by
stock dividend, stock split or what the board of directors deems in its sole
discretion to be similar circumstances, the aggregate number and kind of shares
which may be issued under the Employee Plans will be appropriately adjusted in
a manner determined in the sole discretion of the board of directors.
Reacquired shares of Bancorp's common stock, as well as unissued shares, may be
used for the purpose of the 1997 Plan. Common stock of Bancorp subject to
options which have terminated unexercised, either in whole or in part, will be
available for future options granted under the 1997 Plan. The option price for
options issued under the 1997 Plan must be at least equal to 100% of the fair
market value of the common stock as of the date the option is granted.
Options granted pursuant to the Employee Plans are not exercisable until
one year after the date of grant and then are exercisable pursuant to a
schedule based on years of service or option holding period. Under the 1994
Plan and 1997 Plan, but not the 1984 Plan, in the event of a "change in
control" of Bancorp, as defined in the 1994 Plan and 1997 Plan, each optionee
may exercise the total number of shares then subject to the option. The
Committee has the authority to provide for a different rate of option
exercisability for any optionee.
Options granted under the 1984 Plan and 1994 Plan are not transferable
other than by will or by the laws of descent and distribution. Except as
otherwise authorized by the Committee with respect to non-qualified stock
options only, options granted pursuant to the 1997 Plan are not transferable,
except by will or the laws of descent and distribution in the event of death.
12
<PAGE>
Options granted under the 1984 Plan had a term of ten years subject to
earlier termination in the event of termination of employment, death, or
disability. The 1984 Plan provided that during the lifetime of an optionee, his
option is exercisable only by him and only while employed by Bancorp or a
subsidiary or within (i) three months after his retirement, or (ii) three
months after he otherwise ceases to be so employed, to the extent the option
was exercisable on the last day of employment. For these purposes, retirement
means termination of employment by an optionee who has attained age 65. If an
optionee retires due to disability, his options may be exercised within twelve
months of his retirement date. If an optionee dies within a period during which
his option could have been exercised by him, his option may be exercised within
one year of his death (unless the option earlier terminates) by those entitled
under his will or the laws of descent and distribution, but only to the extent
the option was exercisable by him immediately prior to his death.
Under the 1994 Plan and 1997 Plan, unless terminated earlier by the
option's terms, both incentive stock options and non-qualified stock options
expire ten years after the date they are granted. Options terminate three
months after the date on which employment is terminated (whether such
termination be voluntary or involuntary), other than by reason of death or
disability. The option terminates one year from the date of termination due to
death or disability (but not later than the scheduled termination date). During
an optionee's lifetime, the option is exercisable only by the optionee
including, for this purpose, the optionee's legal guardian or custodian in the
event of disability, except that under the 1997 Plan, if specifically permitted
by the Committee or the board of directors, non-qualified stock options are
transferrable.
During 1999, Bancorp granted stock options to purchase an aggregate of
1,076,091 shares (as adjusted for all stock splits and stock dividends through
May 1, 2000) of Bancorp's common stock at an average price of $38.73 per share
(as adjusted for all stock splits and stock dividends through May 1, 2000)
under the 1997 Plan. During 1999, a total of 240,970 options were exercised
under the Employee Plans.
Stock Option Tables
The following table sets forth certain information regarding options
granted during 1999 to each of the executive officers named in the Summary
Compensation Table.
INDIVIDUAL OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Black-Scholes
Options Employees in Exercise Expiration Grant Date
Name Granted (1) Fiscal Year Price (1) Date Present Value (2)
---- ------------- -------------- ----------- ------------------- ------------------
<S> <C> <C> <C> <C> <C>
Vernon W. Hill, II ............. 105,000 9.8% $ 38.57 December 21, 2009 $1,251,600
C. Edward Jordan, Jr. .......... 10,500 1.0% 38.57 December 21, 2009 125,160
Peter M. Musumeci, Jr. ......... 26,250 2.4% 38.57 December 21, 2009 312,900
Robert D. Falese, Jr. .......... 52,500 4.9% 38.57 December 21, 2009 625,800
Dennis M. DiFlorio ............. 52,500 4.9% 38.57 December 21, 2009 625,800
</TABLE>
- ------------
(1) The stock option grants and exercise price reflected in these columns have
been adjusted for the 5% stock dividend declared on December 21, 1999.
(2) In accordance with SEC rules, the Black-Scholes option pricing model was
chosen to estimate the grant date present value of the options set forth in
this table. Bancorp's use of this model should not be construed as an
endorsement of its accuracy at valuing options. All stock option valuation
models, including the Black-Scholes model, require a prediction about future
movement of the stock price. The assumptions used in the model were expected
volatility of .332, risk-free rates of return of 6.54%, dividend yield of
3%, and weighted average expected life of 4.75 years. The real value of the
options in this table depends upon the actual performance of Bancorp's
common stock during the applicable period.
13
<PAGE>
The following table sets forth certain information regarding individual
exercises of stock options during 1999 by each of the executive officers named
in the Summary Compensation Table.
AGGREGATED STOCK OPTION EXERCISES IN 1999 AND YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised in the
Stock Options at Money Stock Options
Shares Year-End 1999 (1) at Year-End 1999
Acquired on Value ------------------------------ -------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ------------- ---------- ------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Vernon W. Hill, II ............. 8,722 $383,254 758,208 105,000 $ 9,897,451 --
C. Edward Jordan, Jr. .......... 25 853 166,771 10,500 3,937,325 --
Peter M. Musumeci, Jr. ......... 15,003 490,134 131,154 26,250 2.050,478 --
Robert D. Falese, Jr. .......... 25,273 870,344 154,189 77,931 2,608,110 $241,115
Dennis M. DiFlorio ............. 11,257 489,430 192,676 52,500 3,406,230 --
</TABLE>
- ------------
(1) The stock options reflected in this column have been adjusted for the 5%
stock dividend declared on December 21, 1999.
Employee Stock Ownership Plan
Effective January 1, 1989, Bancorp's board of directors established the
Commerce Bancorp, Inc. Employee Stock Ownership Plan ("ESOP") as a restatement
of Bancorp's Stock Bonus Plan. Employees of Bancorp and its subsidiaries are
eligible to participate in the ESOP if they are at least 21 years of age and
have completed at least 1,000 hours of service to Bancorp or its subsidiaries
during the twelve-month period beginning on the date of hire or during any
subsequent calendar year. Participants are 100% vested in their accounts under
the ESOP upon death, total disability, a complete discontinuance of
contributions by Bancorp, termination of the ESOP, and a partial termination of
the ESOP where a participant is involved in that termination. Except as
provided above, generally, participants are 20% vested after 3 years of
credited service, increasing by 20% for each additional year of credited
service so that participants are 100% vested in their accounts under the ESOP
after seven years of credited service with Bancorp or a subsidiary.
Subject to limitations contained in the Code, contributions by Bancorp to
the ESOP are deductible for federal income tax purposes. Except as described
below, such contributions are determined annually by Bancorp's board of
directors at its discretion. Contributions may consist either of shares of
Bancorp's stock, or cash, which may be invested by the trustees of the ESOP's
trust in shares of Bancorp's stock or to provide funds to pay principal or
interest on any indebtedness incurred by the ESOP in purchasing shares.
Contributions by Bancorp are allocated as of the close of each plan year among
accounts of participants in the ESOP. Each participant's account is credited
with that portion of contributions by Bancorp as such participant's
compensation (as defined in the ESOP) bears to all participants' compensation.
In January 1990, the ESOP Trust purchased 417,000 shares of Series C ESOP
Cumulative Convertible Preferred Stock ("ESOP Shares") from Bancorp for an
aggregate purchase price of $7,500,000. The ESOP Trust borrowed the purchase
price for the ESOP Shares from an unaffiliated bank, which loan was refinanced
with another unaffiliated bank in 1994 (the "Loan"). During 1999, the
outstanding principal balance on the Loan was paid in full.
Effective March 1, 1998, the Trustees of the ESOP exercised their right to
convert all 417,000 ESOP Shares held by the ESOP into 849,062 shares of Bancorp
common stock. As of May 1, 2000, the ESOP Trust held of record 927,510 shares
of common stock (as adjusted for all stock splits and stock dividends through
May 1, 2000). As of May 1, 2000, all but 6,000 of the shares of common stock
held by the ESOP Trust were allocated to individual participant accounts.
The co-trustees of the ESOP are Vernon W. Hill, II and C. Edward Jordan,
Jr. Each participant may direct the trustees of the ESOP's trust as to the
manner in which shares of voting stock allocated to his account are to be
voted. Each participant in the ESOP will become entitled to direct the trustees
as to the voting of the shares of common stock which are released from the
pledge and which are allocated to his account under the ESOP.
14
<PAGE>
The enclosed form of proxy also serves as the voting instruction card for the
trustees of the ESOP with respect to the shares of common stock which have been
allocated to the accounts of participants under the ESOP. Shares which have not
been allocated to the account of any participant will be voted by the
co-trustees in accordance with such procedures as Bancorp, as the Plan
Administrator, shall direct. Shares which have been allocated to the accounts
of participants but for which no voting directions are received will be voted
as the trustees direct in the exercise of their independent judgment. For the
Plan Year ended December 31, 1999, Bancorp contributed $547,000 to the ESOP.
Supplemental Executive Retirement Plan
Effective January 1, 1992, Bancorp established a Supplemental Executive
Retirement Plan ("SERP") for certain designated executives in order to provide
supplemental retirement income if Bancorp's ESOP and social security retirement
benefits fall below sixty percent of average annual compensation at the time of
retirement. Average annual compensation is defined as the average of the actual
annual compensation paid to the executive by Bancorp during the period of three
consecutive years which produces the highest such average during the ten year
period ending with termination of employment. The SERP is unfunded, is not a
qualified plan under the Code and benefits are paid directly by Bancorp.
Messrs. Hill, Jordan, Musumeci, Falese and DiFlorio have been designated to
participate in the SERP.
Certain Transactions
Certain directors and executive officers of Bancorp and its subsidiaries
and certain of their immediate family members and certain corporations or
organizations with which they are affiliated have had and expect to continue to
have loan and other banking transactions with Bancorp's subsidiary banks. All
such loans and other banking transactions were made in the ordinary course of
business, were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions for
unrelated parties, and did not involve more than the normal risk of
uncollectibility or present other unfavorable features.
The board of directors of Bancorp approves all transactions in which an
officer or director of Bancorp or any of its subsidiaries has an interest. In
the case of a transaction involving a director of Bancorp, such director does
not vote on the transaction.
Mr. Kerr, a director and nominee for director of Bancorp, is the President
of Markeim- Chalmers, Inc. which in 1999 received $334,000 in fees for real
estate related services, primarily real estate appraisals.
Messrs. Beck and Bershad, directors and nominees for directors of Bancorp,
are members of law firms which Bancorp and its subsidiaries have retained
during Bancorp's last fiscal year and which Bancorp and its subsidiaries intend
to retain during its current fiscal year.
Bancorp leases the land on which it has constructed fourteen branch
offices from limited partnerships in which Mr. Hill is a partner or in which a
corporation owned by Mr. Hill is a partner under separate operating lease
agreements. The aggregate annual rental under these leases for 1999 was
approximately $723,000. These leases expire periodically through 2020 but are
renewable through 2040. Aggregate annual rentals escalate to $934,000 in 2005.
Bancorp leases land to a limited partnership partially comprised of the
directors of Bancorp including Messrs. Bershad, Hill and Lewis and a
corporation owned by Mr. Hill. The initial lease term is 25 years, with two
successive 10-year options. As of December 31, 1999, the future minimum lease
payments to be received by Bancorp amount to approximately $432,000 for the
remainder of the initial lease term. In accordance with the provision of the
land lease, the limited partnership constructed and owns the office building
located on the land. Commerce PA leases the building as a branch facility. The
initial lease term expires in 2010.
Management believes that the rental paid or received for each of the
foregoing leases is comparable to the rental which they would have to pay to or
would have received from, as the case may be, and that the option prices are
comparable to or more favorable than those that could have been obtained or
received from, non-affiliated parties in similar commercial transactions for
similar locations, assuming that such locations were available.
15
<PAGE>
During 1999, Bancorp subsidiaries obtained interior design, facilities
management and general contractor services in the amount of $2,498,000 from a
business corporation of which Shirley Hill, wife of Vernon W. Hill, II, is a
principal shareholder and the president. Additionally, during 1999 this
business received commissions of $1,408,000 on furniture and facility purchases
made directly by Bancorp subsidiary banks. These expenditures related primarily
to the furnishing and related design services of the opening and/or
refurbishing of certain offices during the period. Management believes such
expenses were substantially equivalent to those that would have been paid to
unaffiliated companies for similar furniture and services.
REPORT OF THE PERSONNEL COMMITTEE
The Personnel Committee of the board of directors of Bancorp is composed
of outside non-employee directors. Bancorp's compensation package for its
executive officers consists of base salary, annual performance bonus, annual
stock option grants and various broad based employee benefits including
contributions under Bancorp's ESOP. Management recommendations of base salary
levels, annual performance bonuses and stock option grants are reviewed by the
Personnel Committee and submitted to the full board of directors for approval.
The objective of Bancorp's executive compensation is to enhance Bancorp's
long-term profitability by providing compensation that will attract and retain
superior talent, reward performance and align the interests of the executive
officers with the long term interests of the shareholders of Bancorp.
Bancorp has employment agreements with Messrs. Hill, Jordan, Musumeci,
Falese and DiFlorio which were effective January 1, 1992 for Messrs. Hill,
Jordan and Musumeci, and January 1, 1998 for Messrs. Falese and DiFlorio. See
"EXECUTIVE COMPENSATION -- Employment Agreements."
Base salary levels for Bancorp's executive officers are competitively set
relative to companies in peer businesses. In reviewing base salaries, the
Personnel Committee also takes into account individual experience and
performance.
Bancorp's annual performance bonuses are intended to provide a direct cash
incentive to executive officers and other key employees to maximize Bancorp's
profitability. Financial performance is compared against budgets as well as
peer businesses.
Stock options are intended to encourage officers and other key employees
to remain employed by Bancorp by providing them with a long term interest in
Bancorp's overall performance as reflected by the performance of the market of
Bancorp's common stock. In granting stock options, the Personnel Committee
takes into account prior stock option grants and considers the executive's
level of compensation and past contributions to Bancorp.
Vernon W. Hill, II was Bancorp's Chairman, President and Chief Executive
Officer for 1999. Mr. Hill's base salary is set competitively relative to other
chief executive officers in financial service companies in Bancorp's market
area. In determining Mr. Hill's base salary as well as annual performance
bonus, the Personnel Committee reviewed independent compensation data and
Bancorp's performance as compared against budgets and peer businesses. As with
Bancorp's other executive officers, Mr. Hill's total compensation involves
certain subjective judgments and is not based solely upon any specific
objective criteria or weighting.
The Personnel Committee and Bancorp are considering the future impact on
executive compensation, and whether certain changes should be made as a result
of Section 162(m) of the Code which became effective January 1, 1994. This
provision generally denies a deduction for federal income tax purposes for
annual compensation in excess of $1.0 million for executive officers named in
the "Summary Compensation Table" contained in this proxy statement, except for
certain compensation that is performance-based and for compensation that is
paid pursuant to certain contracts entered into prior to February, 1993.
Bancorp believes that the limitation will have no material effect on it in
2000.
PERSONNEL COMMITTEE
Morton N. Kerr
Daniel J. Ragone
Jack R Bershad
Personnel Committee Interlocks and Insider Participation
The Personnel Committee members are Morton N. Kerr, Daniel J. Ragone and
Jack R Bershad.
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<PAGE>
Mr. Kerr, a director and nominee for director of Bancorp, is the President
of Markeim-Chalmers, Inc. which in 1999 received $334,000 in fees for real
estate related services, primarily real estate appraisals.
Mr. Bershad, a director and nominee for director of Bancorp, is a member
of a law firm which Bancorp and its subsidiaries have retained during Bancorp's
last fiscal year and which Bancorp and its subsidiaries intend to retain during
its current fiscal year. See "EXECUTIVE COMPENSATION -- Certain Transactions."
Financial Performance
The graph below shows a comparison of the cumulative return experienced by
Bancorp's shareholders over the years 1995 through 1999, the S&P Regional Bank
Index and the S&P 500 Index assuming an investment of $100 in each at December
31, 1994 and the reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Commerce Bancorp, S&P Regional Bank Index, S&P 500 Index
Year-End 1995 to Year-End 1999
Dollars
------------------------------------------------------------------
$500 | * |
| |
$400 |------------------------------------------------------------------|
| *|
| * & #|
$300 |----------------------------------------&-------------------------|
| # &|
| & # |
$200 |----------------------*-------------------------------------------|
| # # |
| * |
$100 |*#&------&--------------------------------------------------------|
| |
$0 | |
------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
* Comerce Bancorp # S & P 500 Index & S&P Regional Bank Index
Commerce S & P 500 S&P Regional
Year Bancorp Index Bank Index
---- ------- --------- ------------
12/31/1994 100 100 100
12/31/1995 120.1 134.1 151.6
12/31/1996 193.9 161.3 200.8
12/31/1997 322.2 211.3 294.9
12/31/1998 445.2 267.6 318.7
12/31/1999 367.2 319.9 266.8
Bancorp believes the S&P Regional Bank Index is more representative than the KBW
Eastern Regional Index used in the prior year. In addition, the KBW Eastern
Regional Index is no longer maintained.
17
<PAGE>
APPROVAL OF THE AMENDMENT TO THE 1997
EMPLOYEE STOCK OPTION PLAN
At the Annual Meeting you are being asked to approve an amendment to the
1997 Plan that will increase the number of shares issuable under the 1997 Plan
by 5,000,000 shares to an aggregate of 8,617,578 shares (as adjusted for all
stock splits and stock dividends through May 1, 2000). The board of directors
approved the amendment to the 1997 Plan on April 18, 2000 subject to
shareholder approval at the Annual Meeting. The 1997 Plan is discussed in
"EXECUTIVE COMPENSATION -- Employee Stock Option Plans".
General
In 1997, Bancorp adopted, and the shareholders approved, the 1997 Plan.
The board believes that in order to enable Bancorp to continue to attract and
retain personnel of the highest caliber, provide incentive for officers and key
employees and continue to promote the well-being of Bancorp, it is in the best
interest of Bancorp and its shareholders to provide to officers and key
employees, through the granting of stock options, the opportunity to
participate in the value and/or appreciation in value of Bancorp's common
stock. The board has found that the grant of options under the 1997 Plan has
proven to be a valuable tool in attracting and retaining officers and key
employees. It believes that such authority, in view of the substantial growth
of Bancorp and the need to continue to grow, should be expanded to increase the
number of options which may be granted under the 1997 Plan. The board believes
that such authority will provide Bancorp with significant means to attract and
retain talented personnel and maintain current officers and key employees
without utilizing its cash resources.
Currently, only 18,203 shares are available for issuance under the 1997
Plan. The board of directors approved the increase in the number of shares
issuable under the 1997 Plan to an aggregate of 8,617,578 shares (as adjusted
for all stock splits and stock dividends through May 1, 2000) to provide
sufficient shares to fund future awards.
For information concerning grants of options pursuant to the 1997 Plan in
1999, see "Option Grants in 1999." Information concerning options granted in
1999 to the persons named in the Summary Compensation Table is set forth under
"EXECUTIVE COMPENSATION -- Stock Option Tables".
A summary of certain federal income tax consequences associated with the
1997 Plan is set forth in "FEDERAL INCOME TAX CONSEQUENCES OF THE 1997 PLAN."
There are two reasons for seeking shareholder approval of the amendment to
the 1997 Plan set forth herein. One is to satisfy a New York Stock Exchange
requirement that requires companies whose shares are reported on the New York
Stock Exchange to obtain shareholder approval of amendments to stock plans for
directors, officers or key employees. The second reason is to satisfy
requirements of the Code which require shareholder approval of the amendments
in order for options granted for the additional shares issuable under the 1997
Plan to qualify as incentive stock options to the extent so designated and for
the 1997 Plan to satisfy one of the conditions of Section 162(m) applicable to
performance-based compensation.
Required Vote
The affirmative vote of the holders of a majority of the votes cast by the
holders of shares entitled to vote thereon is necessary to approve the
amendment to the 1997 Plan. For purposes of determining the votes cast, only
those votes "FOR" or "AGAINST" are included. Pursuant to the NJBCA, abstentions
and brokers non-votes (which may occur if a beneficial owner of stock where
shares are held in a brokerage or bank account fails to provide the broker or
bank voting instructions as to such shares) will be counted solely for the
purpose of determining whether a quorum is present.
The board of directors recommends that you vote "FOR" approval of the
Amendment to the 1997 Plan.
Option Grants in 1999
Options to purchase a total of 829,341 shares of Bancorp's common stock
were granted in 1999 under the 1997 Plan to 773 employees of Bancorp (none of
whom are directors or executive officers of Bancorp) at
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exercise prices of $38.78 per share. Of the options granted in 1999, no options
were granted pursuant to the amendment to the 1997 Plan described above. No
determination has been made with respect to the grant of options in 2000
authorized by the amendment set forth herein to any officer or key employee of
Bancorp.
On May 1, 2000, the last sale price of the common stock was $40.00 per
share as reported on the NYSE.
FEDERAL INCOME TAX CONSEQUENCES OF THE 1997 PLAN
THE FOLLOWING INFORMATION IS NOT INTENDED TO BE A COMPLETE DISCUSSION OF
THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE 1997 PLAN AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CODE, AND THE REGULATIONS ADOPTED
PURSUANT THERETO. THE PROVISIONS OF THE CODE DESCRIBED IN THIS SECTION INCLUDE
CURRENT TAX LAW ONLY AND DO NOT REFLECT ANY PROPOSALS TO REVISE CURRENT TAX
LAW. EACH PARTICIPANT WHO ACQUIRES SHARES OF COMMON STOCK UNDER THE 1997 PLAN
SHOULD CONSULT HIS OR HER OWN TAX ADVISOR WITH RESPECT TO HIS OR HER INDIVIDUAL
TAX POSITION AND THE EFFECT OF ANY LEGISLATIVE REVISIONS ON SUCH POSITION.
Options granted under the 1997 Plan may be incentive stock options
("Incentive Options") intended to qualify under Section 422 of the Code, or
options not intended to so qualify ("Non-Qualified Options").
Incentive Stock Options
Generally, under the Code, an optionee will not realize taxable income by
reason of the grant or the exercise of an Incentive Option (see, however,
discussion of alternative minimum tax below). If an optionee exercises an
Incentive Option and does not dispose of the shares until the later of (i) two
years from the date the option was granted and (ii) one year from the date of
exercise, the entire gain, if any, realized upon disposition of such shares
will be taxable to the optionee as long-term capital gain, and Bancorp will not
be entitled to any deduction. If an optionee disposes of the shares within the
period of two years from the date of grant or one year from the date of
exercise (a "disqualifying disposition"), the optionee generally will realize
ordinary income in the year of disposition and Bancorp will receive a
corresponding deduction, in an amount equal to the excess of (1) the lesser of
(a) the amount, if any, realized on the disposition and (b) the fair market
value of the shares on the date the option was exercised over (2) the option
price. Any additional gain realized on the disposition will be long-term or
short-term capital gain and any loss will be long-term or short-term capital
loss. The optionee will be considered to have disposed of a share if he sells,
exchanges, makes a gift of or transfers legal title to the share (except
transfers, among others, by pledge, on death or to spouses). If the disposition
is by sale or exchange, the optionee's tax basis will equal the amount paid for
the share plus any ordinary income realized as a result of the disqualifying
disposition.
The exercise of an Incentive Option may subject the optionee to the
alternative minimum tax. The amount by which the fair market value of the
shares purchased at the time of the exercise exceeds the option exercise price
is an adjustment for purposes of computing the so-called alternative minimum
tax. In the event of a disqualifying disposition of the shares in the same
taxable year as exercise of the Incentive Option, no adjustment is then
required for purposes of the alternative minimum tax, but regular income tax,
as described above, may result from such disqualifying disposition.
An optionee who surrenders shares as payment of the exercise price of his
Incentive Option generally will not recognize gain or loss on his surrender of
such shares. The surrender of shares previously acquired upon exercise of an
Incentive Option in payment of the exercise price of another Incentive Option,
is, however, a "disposition" of such stock. If the incentive stock option
holding period requirements described above have not been satisfied with
respect to such stock, such disposition will be a disqualifying disposition
that may cause the optionee to recognize ordinary income as discussed above.
Under the Code, all of the shares received by an optionee upon exercise of
an Incentive Option by surrendering shares will be subject to the incentive
stock option holding period requirements. Of those shares, a number of shares
(the "Exchange Shares") equal to the number of shares surrendered by the
optionee will have the
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<PAGE>
same tax basis for capital gains purposes (increased by any ordinary income
recognized as a result of any disqualifying disposition of the surrendered
shares if they were incentive stock option shares) and the same capital gains
holding period as the shares surrendered. For purposes of determining ordinary
income upon a subsequent disqualifying disposition of the Exchange Shares, the
amount paid for such shares will be deemed to be the fair market value of the
shares surrendered. The balance of the shares received by the optionee will
have a tax basis (and a deemed purchase price) of zero and a capital gains
holding period beginning on the date of exercise. The Incentive Option holding
period for all shares will be the same as if the option had been exercised for
cash.
Non-Qualified Options
Generally, there will be no federal income tax consequences to either the
optionee or Bancorp on the grant of Non-Qualified Options pursuant to the 1997
Plan. On the exercise of a Non-Qualified Option, the optionee (except as
described below) has taxable ordinary income equal to the excess of the fair
market value of the shares acquired on the exercise date over the option price
of the shares. Bancorp will be entitled to a federal income tax deduction
(subject to the limitations contained in Section 162(m)) in an amount equal to
such excess, provided that Bancorp complies with applicable reporting rules.
Upon the sale of stock acquired by exercise of a Non-Qualified Option,
optionees will realize long-term or short-term capital gain or loss depending
upon their holding period for such stock. Capital losses are deductible only to
the extent of capital gains for the year plus $3,000 for individuals.
An optionee who surrenders shares in payment of the exercise price of a
Non-Qualified Option will not recognize gain or loss with respect to the shares
so delivered unless such shares were acquired pursuant to the exercise of an
Incentive Option and the delivery of such shares is a disqualifying
disposition. See "FEDERAL INCOME TAX CONSEQUENCES -- Incentive Stock Options".
The optionee will recognize ordinary income on the exercise of the
Non-Qualified Option as described above. Of the shares received in such an
exchange, that number of shares equal to the number of shares surrendered will
have the same tax basis and capital gains holding period as the shares
surrendered. The balance of the shares received will have a tax basis equal to
their fair market value on the date of exercise and the capital gains holding
period will begin on the date of exercise.
Limitation on Company's Deduction
Section 162(m) of the Code will generally limit to $1,000,000 Bancorp's
federal income tax deduction for compensation paid in any year to its chief
executive officer and its four highest paid executive officers, to the extent
that such compensation is not "performance based." Under Treasury regulations,
a stock option will, in general, qualify as "performance based" compensation if
it (i) has an exercise price of not less than the fair market value of the
underlying stock on the date of grant, (ii) is granted under a plan that limits
the number of shares for which options may be granted to an employee during a
specified period, which plan is approved by a majority of the shareholders
entitled to vote thereon, and (iii) is granted by a compensation committee
consisting solely of at least two independent directors. If a stock option to
an executive referred to above is not "performance based", the amount that
would otherwise be deductible by Bancorp in respect of such stock option will
be disallowed to the extent that the executive's aggregate non-performance
based compensation paid in the relevant year exceeds $1,000,000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Bancorp's directors and
executive officers, and persons who own more than 10% of a registered class of
Bancorp's equity securities, to file with the SEC reports about their
beneficial ownership of common stock and other equity securities of Bancorp.
All such persons are required by SEC regulation to furnish Bancorp with copies
of all Section 16(a) reports they file.
Based solely on review of the copies of such reports furnished to Bancorp
and written representations that no other reports were required during the
fiscal year ended December 31, 1999, Bancorp believes all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
10% beneficial owners were timely complied with.
20
<PAGE>
RELATIONSHIP WITH INDEPENDENT AUDITORS
Bancorp's independent auditors during the most recent year were Ernst &
Young LLP, 2001 Market Street, Philadelphia, PA 19103. Based upon the
recommendation of the Audit Committee, the board of directors has selected
Ernst & Young LLP to be Bancorp's independent auditors for 2000. The selection
of Bancorp's independent auditors is not being submitted to shareholders
because there is no legal requirement to do so. A representative of Ernst &
Young LLP is expected to be present at the Annual Meeting and to have the
opportunity to make a statement, if he desires to do so, and to be available to
respond to appropriate questions.
SHAREHOLDER PROPOSALS
Pursuant to the proxy rules promulgated under the Exchange Act, Bancorp
shareholders are notified that the deadline for providing Bancorp timely notice
of any shareholder proposal to be submitted outside of the Rule 14a-8 process
for consideration at Bancorp's Annual Meeting to be held in 2001 (the "2001
Annual Meeting") will be March 28, 2001. As to all such matters which Bancorp
does not have notice on or prior to March 28, 2001, discretionary authority
shall be granted to the persons designated in Bancorp's proxy related to the
2001 Annual Meeting to vote on such proposal.
A shareholder proposal for the 2001 Annual Meeting must be submitted to
Bancorp at its headquarters located at the Commerce Atrium, 1701 Route 70 East,
Cherry Hill, NJ 08034, Attention: C. Edward Jordan, Jr., by January 12, 2001 to
receive consideration for inclusion in Bancorp's proxy materials relating to
the 2001 Annual Meeting. Any such proposal must also comply with the proxy
rules under the Exchange Act, including Rule 14a-8.
OTHER MATTERS
Bancorp is not currently aware of any matters which will be brought before
the Annual Meeting (other than procedural matters) which are not referred to in
the enclosed Notice of Annual Meeting. Nevertheless, the enclosed proxy confers
discretionary authority to vote with respect to those matters described in Rule
14a-4(c) under the Exchange Act, including matters that the board of directors
does not know, a reasonable time before proxy solicitation, are to be presented
at the Annual Meeting. If any such matters are presented at the Annual Meeting,
then the persons named in the enclosed proxy will vote in accordance with their
best judgment.
A COPY OF BANCORP'S ANNUAL REPORT TO THE SEC ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1999 WILL BE FURNISHED WITHOUT CHARGE TO ANY SHAREHOLDER
UPON WRITTEN REQUEST TO C. EDWARD JORDAN, JR., EXECUTIVE VICE PRESIDENT,
COMMERCE BANCORP, INC., COMMERCE ATRIUM, 1701 ROUTE 70 EAST, CHERRY HILL, NEW
JERSEY, 08034-5400.
By Order of the Board of
Directors
ROBERT C. BECK
Secretary
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PROXY
This Proxy is solicited on behalf of the Board of Directors
COMMERCE BANCORP, INC.
The undersigned hereby appoints Morton N. Kerr and Daniel J. Ragone and
each of them, as proxies of the undersigned, each with power to act without the
other and with power of substitution, and hereby authorizes each of them to
represent and vote, as designated on the other side, all the shares of stock of
Commerce Bancorp, Inc. (the "Company") which the undersigned is entitled to
vote, standing in the name of the undersigned with all powers which the
undersigned would possess if present, at the Annual Meeting of Shareholders of
the Company to be held on June 20, 2000 or any postponement or adjournment
thereof. The undersigned hereby directs the Proxy to be voted as indicated on
the reverse side.
(Continued, and to be marked, dated and signed, on the other side)
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^FOLD AND DETACH HERE^
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED, IF NO Please mark you votes as
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE indicated in this sample |X|
NOMINEES LISTED BELOW AND "FOR" PROPOSAL 2. DISCRETIONARY AUTHORITY IS
CONFERRED HEREBY AS TO CERTAIN MATTERS DESCRIBED IN THE COMPANY'S PROXY (INSTRUCTION: To withhold authority to vote for any
STATEMENT. individual nominee, write that nominee's name in the
space provided below.)
1. FOR the election of the following nominees to the Board of Directors for
the ensuing year: Vernon W. Hill, II, David Baird, IV, Robert C. Beck, ___________________________________________________
Jack R Bershad, Joseph E. Buckelew, C. Edward Jordan, Jr., Morton N. Kerr,
Steven M. Lewis, Daniel J. Ragone, William A. Schwartz, Jr., Joseph T.
Tarquini, Jr. and Frank C. Videon, Sr. A majority of such attorneys and proxies, or their
substitutes at the Annual Meeting, or any postpone-
__ __ ments or adjournments thereof, may exercise all of
FOR all nominees listed | | WITHHOLD AUTHORITY | | the powers hereby given. Any proxy to vote any of
above (except as | | (to vote for all nominees | | the shares, with respect to which the undersigned is
marked to the contrary) |__| listed above) |__| or would be entitled to vote, heretofore, given to
any person or persons other than the persons named
above, is revoked.
2. To approve the amendment to the Company's 1997 Employee Stock Option Plan
to increase the number of shares issuable under the 1997 Plan by 5,000,000 IN WITNESS WHEREOF, the undersigned has signed and
shares; and sealed this proxy and hereby acknowledges receipt of
the Company's 1999 Annual Report to Shareholders and
FOR / / AGAINST / / ABSTAIN / / a copy of the Notice of the 2000 Annual Meeting of
Shareholders and Proxy Statement in reference there-
3. To act upon such other matters as may properly come before the Annual to both dated in May 2000.
Meeting or any adjournment or postponement thereof.
Dated:_______________________________________, 2000
______
| ______________________________________________(L.S.)
| (Shareholder(s) Signature)
|
______________________________________________(L.S.)
(Shareholder(s) Signature)
_______________________________________________
Printed Name of Shareholder(s)
NOTE: Signature(s) should correspond with name
appearing on stock certificate(s). When signing in a
fiduciary or representative capacity, sign full
title as such. Where more than one owner, each
Please sign, date and return this proxy card promptly using the enclosed should sign.
envelope.
</TABLE>
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^FOLD AND DETACH HERE^
