COMMERCE BANCORP, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                           (Effective January 1, 2004)





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                                               COMMERCE BANCORP, INC.

                                       SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                                             (Effective January 1, 2004)

                                                  TABLE OF CONTENTS



<S>                                                                                                              <C>
ARTICLE I             DEFINITIONS.................................................................................1


ARTICLE II            PARTICIPATION...............................................................................4

         2.1          Effective Date of Participation.............................................................4

         2.2          Cessation of Active Participation/Full Participation........................................4


ARTICLE III           ACCRUAL OF CREDITS..........................................................................5

         3.1          Employer Discretionary Credits..............................................................5

         3.2          Earnings Credits............................................................................5

         3.3          Maintenance of Deferred Compensation Accounts...............................................5

         3.4          Investment Obligation of an Employer........................................................5

         3.5          Trust Fund..................................................................................6


ARTICLE IV            PLAN BENEFITS...............................................................................6

         4.1          Termination of Employment...................................................................6

         4.2          Pre-Termination of Employment Death.........................................................6

         4.3          Forfeiture of Deferred Compensation Account.................................................6

         4.4          Benefit Commencement/Payment Dates..........................................................7

         4.5          Forms of Distribution.......................................................................7

         4.6          Claims Procedure for Benefits...............................................................8

         4.7          Appointment of the Named Appeals Fiduciary..................................................9

         4.8          Payments to Minors, Etc.....................................................................9

         4.9          Satisfaction of Liability...................................................................9

         4.10         Nonassignability...........................................................................10

         4.11         Tax Withholding............................................................................10

         4.12         Benefit Offset.............................................................................10


ARTICLE V             VESTING....................................................................................10

         5.1          Deferred Compensation Account Vesting......................................................10

         5.2          Acceleration of Vesting....................................................................11




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         5.3          Forfeiture of Non-Vested Deferred Compensation Account.....................................11


ARTICLE VI            BENEFICIARY DESIGNATION....................................................................11

         6.1          Beneficiary Designation....................................................................11


ARTICLE VII           OPERATION AND ADMINISTRATION OF THE PLAN...................................................12

         7.1          Authority and Responsibility...............................................................12

         7.2          Records and Reports........................................................................12

         7.3          Required Information.......................................................................13

         7.4          Payment of Expenses of Plan................................................................13


ARTICLE VIII          AMENDMENT AND TERMINATION..................................................................13

         8.1          Amendment..................................................................................13

         8.2          Termination................................................................................13


ARTICLE IX            GENERAL PROVISIONS.........................................................................13

         9.1          Withdrawal by Adopting Employer............................................................14

         9.2          Limitation of Rights.......................................................................14

         9.3          Construction of Plan.......................................................................14

         9.4          Severability...............................................................................14

         9.5          Heirs, Assigns and Personal Representatives................................................14

         9.6          Lost Payees................................................................................14

         9.7          Reliance on Data and Consents..............................................................14

         9.8          Titles and Headings........................................................................15

         9.9          Gender and Number..........................................................................15

         9.10         Notices....................................................................................15

         9.11         Waiver of Notice...........................................................................15

         9.12         Effect on Other Employee Benefit Plans.....................................................15



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                                                         ii
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                             COMMERCE BANCORP, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                     --------------------------------------

                           (Effective January 1, 2004)

         Commerce  Bancorp,  Inc. and each of its subsidiary  corporations  that
participate in this Plan (each an "Employer")  desire to acknowledge  and reward
certain of their respective employees for their efforts by providing them with a
deferred  compensation benefit payable from the general assets of the applicable
Employer, subject to the terms and conditions of this Plan.

         This  Plan  is  intended  to   constitute   a   nonqualified   deferred
compensation  retirement plan which, in accordance with Sections 201(2),  301(a)
(3) and 401(a) (l) of the Employee  Retirement  Income  Security Act of 1974, as
amended,  is unfunded and maintained by an employer primarily for the purpose of
providing  deferred  compensation  for a select  group of  management  or highly
compensated employees.

         NOW, THEREFORE, effective as of January 1, 2004, Commerce Bancorp, Inc.
hereby adopts the Commerce Bancorp, Inc. Supplemental Executive Retirement Plan.

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

         For purposes of this Plan,  the following  words and phrases shall have
the following  meanings  unless a different  meaning is plainly  required by the
context.

         1.1 "Age" shall mean the  chronological age attained by the Participant
at the most recent birthday of the Participant.

         1.2 "Beneficiary" shall mean the individual or entity designated by the
Participant  in writing to be the  recipient of the benefits  payable under this
Plan in the event of the death of the  Participant.  As to any  Participant  who
dies and who has not  designated  a  Beneficiary  (or who is not survived by any
such designated  Beneficiary),  Beneficiary  shall mean the following classes of
takers, each class to take to the exclusion of all subsequent classes,  with all
members of that class to share equally: (a) the Participant's  surviving spouse;
(b) the  Participant's  lineal  descendants  (including  adopted persons but not
including  step-children  that  have  not been  adopted)  per  stirpes;  (c) the
Participant's surviving parents; and (d) the Participant's estate.

         1.3 "Benefit  Commencement Date" shall mean the ninetieth (90) day next
following  (or if  the  ninetieth  (90)  day is not a  business  day,  the  next
following  business day) the termination of the employment of a Participant with
the Company and all of its subsidiaries and affiliates and the  determination by
the Plan Administrator that benefits are payable with respect to the Participant
under this Plan.

         1.4 "Board" shall mean the board of directors of the Commerce  Bancorp,
Inc.




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         1.5  "Change  in  Control"  shall be deemed to have  occurred  upon the
happening of any of the following  events:  (a) a change  within a  twelve-month
period  in a  majority  of the  members  of the  Board;  (b) a  change  within a
twelve-month  period in the holders of more than 50% of the  outstanding  voting
stock of Commerce  Bancorp,  Inc.; or (c) any other event deemed to constitute a
"change in control" by the Board.

         1.6 "Code"  shall mean the Internal  Revenue Code of 1986,  as the same
may be amended from time to time.

         1.7  "Company"  shall  mean  Commerce  Bancorp,   Inc.,  a  New  Jersey
corporation and any successor to the Company as a result of a statutory  merger,
or any other form of reorganization of the business of the Company.

         1.8 "Compensation  Committee" shall mean the Compensation  Committee of
the Board.

         1.9 "Deferred  Compensation Account" shall mean the account established
on the books of account of the Employer for its  Employee/Participant to reflect
the balance of the Employer  Discretionary  Credits and Earnings Credits awarded
to that Participant.

         1.10  "Disability"  shall  mean  "permanent  and total  disability"  as
defined in Section 22(e)(3) of the Code and the regulations thereunder. The Plan
Administrator  shall rely, in making any determination of Disability  hereunder,
upon the  judgment  of one or more  medical  practitioners  selected by the Plan
Administrator  and upon such  evidence as is  presented by the  Participant.  No
determination  of Disability  shall be made if the Participant  fails to provide
such  evidence as required by the Plan  Administrator  and/or fails to submit to
examination by the medical practitioner(s) selected by the Plan Administrator.

         1.11  "Earnings  Credit"  shall  mean  a  credit  of  a  dollar  amount
representing an award of earnings on Employer  Discretionary Credits credited to
a Deferred Compensation Account.

         1.12 "Effective Date" shall mean January 1, 2004.

         1.13 "Employee" shall mean an individual who is employed by an Employer
and is an employee  under the usual common law rules  applicable in  determining
the employer-employee relationship.

         1.14 "Employer" shall mean the Company, the subsidiaries of the Company
that have  adopted  this Plan,  and such other  subsidiary  of the Company  that
hereafter adopts this Plan with the consent of the Company.

         1.15  "Employer  Discretionary  Credit" shall mean a credit of a dollar
amount representing an award of deferred compensation to a Participant.

         1.16 "ERISA" shall mean the Employee  Retirement Income Security Act of
1974, as the same may be amended from time to time.





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         1.17  "Good  Cause"  shall be  deemed to exist,  as  determined  by the
Company  in  its  sole  discretion,  if,  and  only  if  the  employment  of the
Participant  with an Employer is  terminated  due to, among other  reasons:  (a)
his/her willful  misconduct or gross negligence;  (b) his/her material breach of
any agreement with an Employer;  or (c) his/her  failure to render  satisfactory
services to an Employer.

         1.18 "Key Employee"  shall mean an Employee who, in the sole discretion
of the  President,  is determined to be a member of a select group of management
or highly compensated employees within the meaning of Sections 201(2), 301(a)(3)
and 401(a)(l) of ERISA.

         1.19 "Normal Retirement Age" shall mean Age 65.

         1.20  "Participant"  shall mean any individual who (a) has been or is a
Key  Employee,  (b)  has  been  designated  by the  President  in  his/her  sole
discretion  in  writing  to be a  participant  in  this  Plan,  and  (c) has not
otherwise  lost his/her  participant  status  under the terms of this Plan.  The
President  shall  consider  such factors as he/she  determines,  in his/her sole
discretion,   to  be  appropriate  in  the  selection  of  a  Key  Employee  for
participation  in this Plan. At the time of  designation,  the  President  shall
classify  the  Participant  as a Class A  Participant  or  Class B  Participant.
Notwithstanding  anything  in  this  Plan to the  contrary,  the  President  may
exclude,   in  his/her  sole   discretion,   any   Participant   from  continued
participation  in this  Plan,  or may  take any  action  that  he/she  considers
necessary or appropriate if he/she reasonably  determines in good faith that the
exclusion of a Participant or further action is necessary in order for this Plan
to qualify or to continue to qualify as maintained by the Employer primarily for
the purpose of providing deferred  compensation for a select group of management
or highly compensated employees within the meaning of ERISA.

         1.21  "Plan"  shall  mean  the  Commerce  Bancorp,   Inc.  Supplemental
Executive  Retirement  Plan, as set forth herein and as may be amended from time
to time.

         1.22 "Plan Administrator" shall mean the Company.

         1.23 "Plan Year" shall mean the twelve (12)  consecutive  month  period
beginning on each January 1st and ending on the following December 31st.

         1.24 "President" shall mean the President of Commerce Bancorp, Inc.

         1.25  "Trust  Agreement"  shall  mean  the  instrument  executed  by an
Employer and the Trustee fixing the rights and  liabilities of each with respect
to the holding and administering of the Trust Fund, if any.

         1.26  "Trustee"  shall  mean  the  Trustee  or any  successor  Trustee,
appointed  by an  Employer,  acting  in  accordance  with the terms of the Trust
Agreement, if any.

         1.27  "Trust  Fund"  shall mean all assets  held by the Trustee for the
purposes of this Plan in accordance  with the terms of the Trust  Agreement.  An
Employer may establish such a Trust Fund (known as a "grantor  trust" within the
meaning  of the Code) for the  purpose  of  accumulating  funds to  satisfy  the
obligations incurred by the Employer under this Plan.




                                       3
<PAGE>

         1.28  "Valuation  Date"  shall mean the last  business  day of June and
December  in each Plan Year and each other  interim  date  during a Plan Year as
selected by the Company from time to time.

         1.29 "Year of Vesting Service" shall mean each Plan Year,  beginning on
and after January 1, 2004,  during which the individual was a Participant  and a
full-time  Employee  of any  Employer  throughout  the  entire  Plan  Year.  The
employment of a Participant  shall not be considered to have been  terminated or
interrupted  because of his/her  absence  from active  employment  on account of
vacation,  time off,  temporary illness or leaves of absence,  provided that any
such absence is  specifically  authorized  by his/her  Employer or in accordance
with its vacation,  time off, sick or leave policy, and the Participant complies
with the  requirements  set forth in the  authorization  or  policy  of  his/her
Employer.

                                   ARTICLE II

                                  PARTICIPATION
                                  -------------

         2.1 Effective Date of  Participation.  A Key Employee who is designated
by the President as a Participant in this Plan as of the Effective Date shall be
eligible to  participate  in this Plan as of such date.  Each other Key Employee
designated  by the  President as a  Participant  in this Plan  subsequent to the
Effective  Date shall be  eligible  to  participate  in this Plan as of the date
specified by the President.

         2.2 Cessation of Active Participation/Full Participation.

          (a)  For purposes of eligibility to receive an Employer  Discretionary
               Credit,  an  individual  shall cease to be eligible to receive an
               award of an Employer Discretionary Credit on the earliest of:

               (i)  The date on which he/she ceases to be a Key Employee;

               (ii) The date on which he/she no longer employed by any Employer;

               (iii) The date on which this Plan terminates; or

               (iv) The date on which the President, in his/her sole discretion,
                    removes him/her from such eligibility.

          (b)  For all other  purposes  under this Plan, a  Participant  who has
               accrued a benefit under this Plan shall cease to be a Participant
               as of the date on which he/she ceases to have a vested balance in
               his/her Deferred Compensation Account.




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                                   ARTICLE III

                               ACCRUAL OF CREDITS
                               ------------------

         3.1  Employer  Discretionary  Credits.  Not later than ninety (90) days
following the end of a Plan Year, the President may  determine,  in his/her sole
discretion,  that the Deferred  Compensation  Account of a Participant  shall be
credited with an Employer  Discretionary  Credit with respect to that Plan Year.
The President is empowered to establish the amount of an Employer  Discretionary
Credit, if any, that shall be awarded on behalf of a Participant  without regard
to the amount awarded to any other Participant.  The Plan  Administrator  shall:
(a) as of the end of each Plan Year, credit the Deferred Compensation Account of
the  Participant who is awarded an Employer  Discretionary  Credit for that Plan
Year and (b) notify the Participant  that an Employer  Discretionary  Credit has
been credited (and the amount thereof) to his/her Deferred Compensation Account.

         3.2 Earnings Credits. Not later than ninety (90) days following the end
of the applicable period, the Compensation Committee may determine,  in its sole
discretion,  that the Deferred  Compensation  Account of a Participant  shall be
credited  with an  Earnings  Credit for the  six-month  period  ending June 30th
and/or December 31st during a Plan Year. The Compensation Committee is empowered
to establish the amount of an Earnings Credit,  if any, that shall be awarded to
a Deferred  Compensation  Account  without  regard to the amount  awarded to any
other Deferred  Compensation  Account.  The Plan Administrator  shall: (a) as of
June 30th and  December  31st Plan Year,  as  applicable,  credit  the  Deferred
Compensation  Account that is awarded an Earnings Credit for that period and (b)
notify the  Participant/Beneficiary,  as applicable, that an Earnings Credit has
been credited (and the amount thereof) to his/her Deferred Compensation Account.

         3.3   Maintenance   of  Deferred   Compensation   Accounts.   The  Plan
Administrator shall establish and maintain a Deferred  Compensation Account with
respect to each Participant.  As of each Valuation Date, the Plan  Administrator
shall credit or debit, as applicable,  each Deferred  Compensation  Account with
the following:  (1) an Employer  Discretionary  Credit,  if any, (2) an Earnings
Credit, if any, (3) payments made by an Employer (or if applicable,  Trust Fund)
pursuant to the terms of this Plan;  and (4) a forfeiture as provided under this
Plan.  A valuation  summary  shall be prepared as of each  Valuation  Date which
shall reflect the value of each Deferred Compensation Account as of such date.

         3.4 Investment  Obligation of an Employer.  A benefit is payable by the
Employer  with  respect  to its  Employee/Participant  in cash from its  general
assets as it becomes due without regard to any actual  investments  the Employer
may make to meet its obligations  under this Plan.  Neither any Employer nor any
Trustee (in the event an Employer  elects to use a grantor  trust to  accumulate
funds) shall be obligated to purchase or maintain any asset,  and any  reference
to  investments  is solely  for the  purpose of meeting  the  obligation  of the
Employer to pay benefits. Neither this Plan nor any action taken pursuant to the
terms of this  Plan  shall be  considered  to  create a  fiduciary  relationship
between any Employer and any  Participant in this Plan or any other persons,  or
to establish a trust in which the assets are beyond the claims of any  unsecured
creditor of any  Employer.  A benefit  hereunder  with respect to a  Participant
shall be paid from  assets of his/her  Employer  which shall  continue,  for all





                                       5
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purposes, to be a part of the general, unrestricted assets of that Employer. The
obligation of an Employer  hereunder shall be an unfunded and unsecured  promise
to pay  money in the  future.  No person  shall  have nor  acquire  any legal or
equitable  right,  interest  or claim in, or to, any  property  or assets of the
Employer.  The  right  of a  Participant,  or in the  event  of the  death  of a
Participant,  the Beneficiary of the  Participant,  shall be no greater than any
unsecured creditor of the Employer. No person shall have nor acquire any control
over, or incidents of ownership, with respect to any policy of insurance that is
an asset of the  Employer.  It is intended  that this Plan be  unfunded  for tax
purposes and for  purposes of Title I of ERISA.  The  obligation  of an Employer
under this Plan shall be limited to the benefit  payments for its  Employees who
are Participants in this Plan.

         3.5 Trust Fund.  An Employer may establish a trust (known as a "grantor
trust" within the meaning of the Code) for the purpose of accumulating  funds to
satisfy the obligations  incurred by the Employer under this Plan. To the extent
that any benefit  provided under this Plan is actually paid from any such trust,
the Employer shall have no further  obligation with respect thereto,  but to the
extent not so paid,  such benefit shall remain the  obligation  of, and shall be
paid by, the Employer as may be required under this Plan.

                                   ARTICLE IV

                                  PLAN BENEFITS
                                  -------------

         4.1  Termination of  Employment.  In the event that the employment of a
Participant  with the  Company and all of its  subsidiaries  and  affiliates  is
terminated for any reason other than death,  he/she shall be entitled to receive
the vested balance in his/her Deferred  Compensation  Account at the time and in
the  form of  distribution  as set  forth  in  this  Plan.  Notwithstanding  the
foregoing to the contrary,  if the employment of a Participant  with the Company
and all of its subsidiaries and affiliates is terminated for a reason other than
his/her  death,  but  the  Participant  dies  prior  to the  date on  which  the
distribution of the vested balance in his/her Deferred  Compensation  Account is
completed,  the Beneficiary of the Participant  shall be entitled to receive the
vested balance in the Deferred  Compensation  Account of the  Participant at the
time and in the form of distribution as set forth in this Plan.

         4.2  Pre-Termination  of  Employment  Death.  If  the  event  that  the
employment of a  Participant  with the Company and all of its  subsidiaries  and
affiliates  is  terminated  by reason of the death of the  Participant,  his/her
Beneficiary   shall  be  entitled  to  receive  the  balance  in  the   Deferred
Compensation  Account  of the  Participant  at the  time  and  in  the  form  of
distribution as set forth in this Plan.

         4.3 Forfeiture of Deferred Compensation Account.

          (a)  Good Cause.  Notwithstanding  anything  contained in this Plan to
               the  contrary,  including,  but not  limited  to a  Participant's
               vested status in his/her Deferred  Compensation  Account,  in the
               event that a Participant's  employment with the Company or any of
               its  subsidiaries  or  affiliates  is (i)  terminated  by his/her
               employer by reason of Good  Cause;  (ii)  terminated  for reasons
               other than Good Cause,  but it is later determined by the Company





                                       6
<PAGE>

               that the employment of the Participant could have been terminated
               by reason of Good Cause,  or (iii)  terminated by the Participant
               and the Company determines that the employment of the Participant
               could have been terminated by his/her  employer by reason of Good
               Cause, the Deferred Compensation Account of the Participant shall
               be forfeited,  and neither the Participant nor any Beneficiary of
               the Participant shall not be entitled to any benefit or remaining
               unpaid benefit under this Plan.

          (b)  Non-Competition.  Notwithstanding anything contained in this Plan
               to the contrary,  including,  but not limited to a  Participant's
               vested status in his/her Deferred  Compensation  Account,  in the
               event that the Company determines at any time that a Participant,
               whether before or after his/her  termination  of employment  with
               the  Company  or any of its  subsidiaries  or  affiliates,  is in
               breach of a non-competition  agreement with the Company or any of
               its subsidiaries or affiliates, the Deferred Compensation Account
               of  the   Participant   shall  be  forfeited,   and  neither  the
               Participant nor any  Beneficiary of the Participant  shall not be
               entitled to any benefit or remaining  unpaid  benefit  under this
               Plan.

         4.4 Benefit Commencement/Payment Dates. Except as otherwise provided in
this Plan,  the Employer of the  Participant  shall  commence the payment of the
vested balance in the Deferred  Compensation  Account of its  Participant on the
Benefit Commencement Date with respect to that Participant without regard to the
reason for the  termination of employment.  In the event that the payment of the
benefit of a Participant  is made in  installments,  the Employer shall make the
payment of subsequent  installment  payments on each  anniversary of the Benefit
Commencement Date until the vested balance of the Deferred  Compensation Account
is fully paid.

         4.5 Forms of Distribution.

          (a)  Installment  Payments.  The payment of the vested  balance in the
               Deferred  Compensation Account to a Participant in pay status, or
               to the  Beneficiary of a Participant  whose  employment  with the
               Company and all of its  subsidiaries and affiliates is terminated
               by reason of death,  shall be in the form of annual  installments
               over a  period  of  five  (5)  years,  beginning  on the  Benefit
               Commencement  Date  with  respect  to  that  Participant.   If  a
               Participant  dies after  installment  payments  have  begun,  but
               before the vested balance in the Deferred Compensation Account of
               the Participant  has been fully paid, the remaining  installments
               shall be paid to the  Beneficiary of the Participant at such time
               that  the  installment  payments  would  have  been  paid  to the
               deceased  Participant.  Each annual installment  payment shall be
               equal to the vested balance in the Deferred  Compensation Account
               of the  Participant  determined  as of the  Valuation  Date  that
               precedes  the  installment  payment  divided  by  the  number  of
               remaining installment payments.

          (b)  Single-Sum  Payment Option. A Participant who is in pay status or
               a  Beneficiary  of a deceased  Participant  may request  that the
               unpaid vested balance in the Deferred Compensation Account of the
               Participant or deceased  Participant,  as applicable,  be paid in
               the form of a single sum payment,  provided  that such request is
               made  by the  Participant  or  Beneficiary,  as  applicable,  and
               approved by the  Company  (i) at least  ninety (90) days prior to
               and (ii) no later than the last day of the Plan Year prior to the





                                       7
<PAGE>

               Plan  Year  in  which  falls,  the  date  that  the  next  annual
               installment  payment is  scheduled  to be made.  The  Company has
               complete and sole discretion to approve or deny such request.

         4.6 Claims Procedure for Benefits.

          (a)  Initial Request for  Information/Claim.  Any request for specific
               information  or a claim with respect to a benefit under this Plan
               must  be  made  to  the  Plan   Administrator  in  writing  by  a
               Participant,  or in the event of the death of a Participant,  the
               Beneficiary of the Participant.  The Plan Administrator shall not
               recognize an oral  communication as a formal request or claim for
               benefits under this Plan.  Written notice of the disposition of a
               claim shall be furnished to the claimant  within ninety (90) days
               after  the  application  for  benefits  is  filed  with  the Plan
               Administrator,  unless special circumstances require an extension
               of time for  processing  the claim.  If such an extension of time
               for processing is required,  the Plan Administrator shall furnish
               the  claimant  written  notice  of  the  extension  prior  to the
               termination  of the initial  ninety (90) day period.  In no event
               shall such an extension  exceed a period of ninety (90) days from
               the  end  of the  initial  period.  The  extension  notice  shall
               indicate the special circumstances requiring an extension of time
               and the date by which the Plan  Administrator  expects  to render
               its decision.

          (b)  Appeals  of Denied  Claims  for  Benefits.  In the event that any
               claim for a benefit is denied in whole or in part, or any benefit
               is  forfeited  under the  provisions  of this Plan,  the claimant
               whose  claim has been so denied or  benefit  forfeited,  shall be
               notified  of such  denial or  forfeiture  in  writing by the Plan
               Administrator.  The notice  advising of the denial or  forfeiture
               shall  specify  the reason or reasons  for denial or  forfeiture,
               make  specific  reference  to pertinent  provisions  of the Plan,
               shall describe any additional  material or information  necessary
               for the  claimant  to  perfect  the  claim  (explaining  why such
               material  or  information  is  needed),   and  shall  advise  the
               Participant or Beneficiary,  as applicable,  of the procedure for
               the appeal of such denial or  forfeiture.  All  appeals  shall be
               made through the following procedure:

               (i)  The  claimant  whose  claim  has  been  denied  or  benefits
                    forfeited shall file with the Plan Administrator a notice of
                    desire to appeal the denial or forfeiture. Such notice shall
                    be filed within sixty (60) days of  notification by the Plan
                    Administrator  of the claim denial or  forfeiture,  shall be
                    made in  writing,  and shall set forth all of the facts upon
                    which  the  appeal is based.  An appeal  that is not  timely
                    filed shall be barred.

               (ii) The Plan  Administrator,  within thirty (30) days of receipt
                    of the notice of appeal of the claimant,  shall  establish a
                    hearing date on which the claimant (or his attorney or other
                    authorized  representative) may make an oral presentation to
                    the  "Named  Appeals  Fiduciary"  (as  appointed  below)  in
                    support  of the appeal of the  claimant.  The  claimant  (or
                    representative)  shall  have the right to submit  written or





                                       8
<PAGE>

                    oral  evidence and  argument in support of his/her  claim at
                    such hearing.  The claimant shall be given not less than ten
                    (10) days'  notice of the date set for the  hearing.  At the
                    hearing  (or  prior  thereto  upon five (5)  business  days'
                    written notice to the Plan Administrator),  the claimant (or
                    representative)  shall  have an  opportunity  to review  all
                    documents which are pertinent to the claim at issue.

               (iii)The Named  Appeals  Fiduciary  shall  consider the merits of
                    the  written and oral  presentations  of the  claimant,  the
                    merits of any facts or  evidence in support of the denial of
                    benefits,  and such  other  facts and  circumstances  as the
                    Named Appeals Fiduciary shall deem relevant. If the claimant
                    elects not to make an oral presentation, such election shall
                    not be deemed  adverse  to his/her  interest,  and the Named
                    Appeals Fiduciary shall proceed as set forth below as though
                    an  oral  presentation  of the  contents  of the  claimant's
                    written presentation had been made.

               (iv) The Named  Appeals  Fiduciary  shall render a  determination
                    within sixth (60) days of the receipt of the appeal  (unless
                    there has been an  extension of no more than sixty (60) days
                    due to special  circumstances,  provided  that the delay and
                    the special circumstances occasioning it are communicated to
                    the  claimant  in writing  within  the first  sixty (60) day
                    period).  That  determination  shall  be  accompanied  by  a
                    written  statement  presented in a manner  calculated  to be
                    understood  by  the  claimant  and  shall  include  specific
                    reasons for the determination and specific references to the
                    pertinent  provisions of the Plan on which the determination
                    is based.  The  determination  so rendered  shall be binding
                    upon all parties.

         4.7  Appointment  of the Named  Appeals  Fiduciary.  The Named  Appeals
Fiduciary  shall be the person or persons named as such by the Board,  or, if no
such  person or persons be named,  then the person or persons  named by the Plan
Administrator as the Named Appeals Fiduciary.  Named Appeals  Fiduciaries may at
any time be removed by the Board,  and any Named Appeals  Fiduciary named by the
Plan Administrator may be removed by the Plan  Administrator.  All such removals
may be with or without  cause and shall be  effective  on the date stated in the
notice  of  removal.  The  Named  Appeals  Fiduciary  shall  have no  authority,
responsibility,  or  liability  with respect to any matter other than the proper
discharge of the  functions of the Named  Appeals  Fiduciary as set forth herein
unless appointed to other fiduciary responsibilities.

         4.8 Payments to Minors,  Etc. If a Participant or Beneficiary  entitled
to receive any benefits hereunder is, in the judgment of the Plan Administrator,
legally,   physically,   or  mentally  incapable  of  personally  receiving  and
receipting any distribution,  or in the case of a Beneficiary, a minor, the Plan
Administrator may make  distributions to a legally appointed guardian or to such
other person or institution  as, in the judgment of the Plan  Administrator,  is
then  maintaining  or has custody of the payee.  Any payments made in accordance
with the  foregoing  provisions  shall be a full and  complete  discharge of any
liability for such payments.

         4.9 Satisfaction of Liability. After all benefits have been distributed
in full to a Participant or in the event of the death of the Participant, to the
Beneficiary  of the  Participant,  all liability to such  Participant  or to the
Beneficiary shall terminate. The Plan Administrator may require such Participant
or Beneficiary,  as a condition to receiving such final payment under this Plan,
to execute a receipt and release  therefore in such form as shall be  determined
by the  Plan  Administrator.  If a  receipt  and  release  is  required  but the





                                       9
<PAGE>

Participant or Beneficiary does not provide such receipt and release in a timely
manner  to  permit a  distribution  in  accordance  with the  general  timing of
distributions  under this Plan, the payment of any affected  distribution may be
delayed until the Plan Administrator receives a proper receipt and release.

         4.10 Nonassignability. No payment, benefit, or right of any Participant
or Beneficiary shall be subject to any claim of any creditor of such person and,
in  particular,  to the fullest  extent  permitted  by law,  all such  payments,
benefits  and  rights  shall be free  from  attachment,  garnishment,  trustee's
process,  or any other legal or equitable  process  available to any creditor of
such  Participant or Beneficiary.  No Participant or Beneficiary  shall have the
right to alienate,  anticipate,  commute,  pledge, encumber or assign any of the
benefits  or  payments  that  he/she  may  expect to  receive,  contingently  or
otherwise,  under this Plan,  except the right to  designate  a  Beneficiary  or
Beneficiaries as appropriate. Compliance with the provisions and conditions of a
domestic  relations  order  approved  by the  Plan  Administrator,  in its  sole
discretion, shall not be considered a violation of this provision.

         4.11 Tax  Withholding.  An Employer (or if  applicable,  a Trustee) may
make  such  provisions  and  take  such  actions  as it may  deem  necessary  or
appropriate  for the  withholding  of any taxes which a payee is required by any
law or regulation of any  governmental  authority,  whether  federal,  state, or
local, to withhold in connection  with any benefits under this Plan,  including,
but not  limited  to,  the  withholding  of  appropriate  sums  from any  amount
otherwise  payable  to the  Participant  or in the  event  of the  death  of the
Participant,  to the  Beneficiary  of  the  Participant.  Each  payor  shall  be
responsible  for the payment of all individual tax  liabilities  with respect to
any such benefits.

         4.12 Benefit  Offset.  An Employer  may, in its sole  discretion,  upon
notice to the  Participant,  or in the event of the death of a Participant,  the
Beneficiary of the Participant,  reduce any benefit by any outstanding debt owed
by the  Participant  to the Company or any of its  subsidiaries  or  affiliates,
including,  but not limited to, any loan to the Participant,  advanced  vacation
pay, salary or expenses.

                                   ARTICLE V

                                     VESTING
                                     -------

         5.1 Deferred  Compensation Account Vesting. A Class A Participant shall
have a nonforfeitable  (fully vested) interest in his/her Deferred  Compensation
Account.  A Class B Participant's  nonforfeitable  (vested)  interest in his/her
Deferred  Compensation  Account shall be determined  by  multiplying  the amount
standing to the credit in the Deferred  Compensation  Account of the Participant
by the appropriate percentage from the following table:





                                       10
<PAGE>



              Class B Participant's                        Class B
            Years of Vesting Service           Participant's Vested Percentage
       ------------------------------------    -------------------------------
       Less than 5 Years of Vesting Service                  None
        5 Years of Vesting Service or more                   100%


         5.2  Acceleration  of  Vesting.  A Class  B  Participant  shall  have a
nonforfeitable  (fully vested) interest in his/her Deferred Compensation Account
upon:

          (a)  his/her  attainment of Normal  Retirement Age while in the employ
               of the Company or any of its subsidiaries or affiliates; or

          (b)  the  occurrence of any of the following  events while the Class B
               Participant  is in  the  employ  of  the  Company  or  any of its
               subsidiaries or affiliates:

               (i)  termination of employment due to Disability;

               (ii) termination of employment due to death; or

               (iii) upon a Change in Control.

         5.3 Forfeiture of Non-Vested Deferred Compensation Account. No Employer
shall have an obligation  with respect to the  non-vested  portion of a Deferred
Compensation Account.

                                   ARTICLE VI

                             BENEFICIARY DESIGNATION
                             -----------------------

         6.1 Beneficiary  Designation.  Upon becoming eligible for participation
in this Plan, a  Participant  may  designate one or more primary and one or more
contingent Beneficiaries to receive any benefit becoming payable under this Plan
upon the death of the  Participant.  All  beneficiary  designations  shall be in
writing in form satisfactory to the Plan  Administrator.  A Participant shall be
entitled to change a designation  of a Beneficiary  at any time and from time to
time. A change in a designation  of a Beneficiary  shall become  effective  only
upon  receipt  of the  designation  by the Plan  Administrator,  but  upon  such
receipt,  the change  shall  relate  back to and take  effect as of the date the
Participant  executed  the  designation  (which shall be presumed to be the date
appearing on such  designation,  or if there be none, then the date of the death
of the Participant) whether or not the Participant is living at the time of such
receipt.  The Plan Administrator and the Employer in its capacity as the sponsor
of this Plan shall not be liable by reason of any  payment  of a benefit  before
receipt of any  acceptable  form  designating  or changing the  designation of a
Beneficiary. Any change of beneficiary designation filed in proper form with the
Plan  Administrator  shall revoke all prior beneficiary  designations.  The Plan
Administrator  shall, in its sole discretion,  determine the  acceptability of a
beneficiary designation or change in a beneficiary designation.




                                       11
<PAGE>

                                  ARTICLE VII

                    OPERATION AND ADMINISTRATION OF THE PLAN
                    ----------------------------------------

         7.1 Authority and  Responsibility.  The Plan  Administrator  shall have
full  authority  and  responsibility  to interpret  and  construe  this Plan and
determine all questions  relating to the status and rights of a Participant  and
Beneficiary. The Plan Administrator shall remedy any ambiguity, inconsistency or
omission  in  its  sole  and  complete  discretion.   The  Plan  Administrator's
interpretation, construction or determination, as the case may be, which is made
in good  faith,  shall be final  and  conclusive  on both the  Employer  and the
Participant and their respective successors,  assigns,  personal representatives
and Beneficiaries.  Such authority and responsibility  shall include,  but shall
not be limited to, the following:

               (a)  appointment    of    qualified    accountants,    actuaries,
                    consultants,  administrators,  counsel, appraisers, or other
                    persons it deems necessary or advisable, who shall serve the
                    Plan  Administrator  as advisors only and shall not exercise
                    any discretionary authority,  responsibility or control with
                    respect to the management or administration of this Plan;

               (b)  determination  of  all  benefits,   and  resolution  of  all
                    questions  arising from the  administration,  interpretation
                    and application of this Plan;

               (c)  adoption  of  forms  and   regulations   for  the  efficient
                    administration  of this Plan which are consistent  with this
                    Plan;

               (d)  remedy of any inequity resulting from incorrect  information
                    received or communicated, or of administrative error;

               (e)  settlement or compromise of any claims or debts arising from
                    the operation of this Plan and the commencement of any legal
                    action or administrative proceeding; and

               (f)  enrollment of a Participant in this Plan,  distribution  and
                    receipt of Plan administration forms and compliance with all
                    applicable    governmental    reporting    and    disclosure
                    requirements.

         7.2 Records and Reports.

               (a)  The  Plan   Administrator   shall   keep  a  record  of  its
                    proceedings  and  acts and  shall  keep  books  of  account,
                    records   and   other   data   necessary   for  the   proper
                    administration of this Plan.

               (b)  At least semi-annually, the Plan Administrator shall provide
                    each  Participant  and  Beneficiary,  if applicable,  with a
                    detailed statement of his/her Deferred Compensation Account,
                    including   all   transactions    affecting   the   Deferred
                    Compensation  Account during the prior six-month period, and




                                       12
<PAGE>

                    reflecting  the  most  recent   valuation  of  the  Deferred
                    Compensation  Account.  The Plan Administrator shall furnish
                    each Participant and Beneficiary,  if applicable,  with such
                    information  as may be  required by him/her for tax or other
                    purposes in connection with this Plan.

         7.3 Required Information.  A Participant or Beneficiary who is entitled
to a benefit under this Plan shall furnish such forms,  information  and data as
requested by the Plan  Administrator  which is  necessary  or desirable  for the
proper  administration of this Plan. A failure on the part of any Participant or
Beneficiary to comply with such request within a reasonable period of time shall
be  sufficient  grounds  for delay in the  payment of  benefits  until the form,
information or data requested is received.  The records and/or  determination of
the Company as to a period or periods of  employment,  termination of employment
and the reason therefore, leaves of absences,  reemployment, and post-employment
activity shall be conclusive on all persons.

         7.4 Payment of Expenses of Plan.  Each  Employer  shall pay its aliquot
share of the administrative expenses of this Plan, including but not limited to,
all  fees  and  retainers  of  accountants,  counsels,  actuaries,  consultants,
administrators or other specialists.

                                  ARTICLE VIII

                            AMENDMENT AND TERMINATION
                            -------------------------

         8.1 Amendment.  The Company may amend or otherwise  modify this Plan at
any time, in its sole discretion,  in whole or in part, either  retroactively or
prospectively, provided that no amendment or modification shall, with respect to
credits awarded previously, reduce the amount of such credits.

         8.2  Termination.  The Company  may  terminate  this Plan,  in its sole
discretion,  at any time without regard to the tax effect on any  Participant or
Beneficiary.  Written  notification  of  such  action  shall  be  given  to each
Participant,  Beneficiary  of  a  deceased  Participant,  and  the  Trustee,  if
applicable.  Thereafter,  no further  allocations or credits shall be made under
this Plan. As soon as  administratively  feasible  following the  termination of
this Plan, each Employer who has an Employee/Participant in this Plan may pay to
each such  Participant,  and if applicable,  the  Beneficiary of a deceased such
Participant,  in a single lump sum payment, an amount equal to the unpaid vested
balance of the Participant or deceased Participant, as applicable,  based on the
value  of the  Deferred  Compensation  Account  as of the  Valuation  Date  that
precedes the date established by the Company for the distribution.

                                   ARTICLE IX

                               GENERAL PROVISIONS
                               ------------------

         9.1 Withdrawal by Adopting  Employer.  A subsidiary of the Company that
is an Employer in this Plan may elect to  terminate  its  participation  in this
Plan at any time  subject to the  consent of the  Company.  In such  event,  the
Employer  shall elect  whether to (a) direct that the  benefits  (payable to its
Employees) be treated as if the Company terminated the Plan or (b) continue this
Plan  in the  form of a  separate  plan  document  that  is  established  by the
Employer. Such termination shall not affect any other Employer.




                                       13
<PAGE>

         9.2 Limitation of Rights.  The  establishment of this Plan or the Trust
Agreement,  if  any,  any  modification  thereof,  the  creation  of a  Deferred
Compensation  Account,  or the payment of any benefit  shall not be construed as
giving any Participant,  Beneficiary,  or any other person whomsoever, any legal
or equitable right against an Employer,  the Trustee, or the Plan Administrator,
unless such right shall be specifically  provided for in this Plan, or the Trust
Agreement,  if any, or conferred by affirmative action of the Plan Administrator
in  accordance  with the terms  and  provisions  of this  Plan or as giving  any
Participant  the right to be retained in the employment of an Employer or any of
its subsidiaries or affiliates.  Each Employee shall remain subject to discharge
to the same extent as if this Plan had never been adopted.

         9.3 Construction of Plan. This Plan shall be construed according to the
laws of the State of New Jersey, and all provisions hereof shall be administered
according to, and its validity shall be determined under, the laws of New Jersey
without giving effect to principles of conflicts of laws, except where preempted
by Federal law.

         9.4  Severability.  Should any provision of this Plan or any procedures
adopted  thereunder  be deemed or held to be unlawful or invalid for any reason,
such fact shall not adversely affect the other provisions or procedures,  unless
such invalidity  shall render  impossible or impractical the functioning of this
Plan and, in such case,  the Company or the Plan  Administrator,  as applicable,
shall  immediately  adopt a new  provision or procedure to take the place of the
one held illegal or invalid.

         9.5 Heirs,  Assigns and  Personal  Representatives.  This Plan shall be
binding upon (a) the heirs,  executors,  administrators,  and successors of each
Participant  and  Beneficiary,  present  and  future,  and all persons for whose
benefit there exists any approved  domestic  relations order with respect to any
Participant  and (b) the Employer and any  successor to the Employer as a result
of a statutory merger or any other form of reorganization of the business of the
Employer.

         9.6 Lost  Payees.  A  benefit  shall be  deemed  forfeited  if the Plan
Administrator  is unable to locate a Participant  or Beneficiary to whom payment
is due,  provided,  however,  that such  benefit  shall be  reinstated,  without
interest, if a claim is made by the Participant or Beneficiary for the forfeited
benefit  within  two  (2)  years  of  the   termination  of  employment  of  the
Participant.

         9.7 Reliance on Data and Consents. The Employer, the Plan Administrator
and all other persons or entities  associated  with the  administration  of this
Plan may reasonably  rely on the truth,  accuracy and  completeness  of all data
provided by a Participant and Beneficiary of a deceased Participant,  including,
without  limitation,  data with  respect  to age,  health  and  marital  status.
Furthermore,  the  Employer,  the Plan  Administrator  and all other  persons or
entities  associated with the administration of this Plan may reasonably rely on
all  consents,   elections  and  designations   filed  with  this  Plan  by  any
Participant,  Beneficiary of any deceased Participant, or the representatives of
such persons,  without duty to inquire into the genuineness of any such consent,
election  or  designation.  None  of  the  aforementioned  persons  or  entities
associated  with the  operation of this Plan shall have any duty to inquire into
any  such  data,  and all may rely on such  data  being  current  to the date of
reference,  it being the duty of each  Participant and Beneficiary to advise the
appropriate parties of any change in such data.





                                       14
<PAGE>

         9.8 Titles and  Headings.  The titles and  headings of the  Articles in
this  instrument are for  convenience of reference only and, in the event of any
conflict, the text rather than such titles or headings shall control.

         9.9  Gender  and  Number.  Except if  otherwise  clearly  indicated  by
context, the masculine and the neuter shall include the feminine and the neuter,
the singular shall include the plural, and vice-versa.

         9.10 Notices.  Any notice or document relating to this Plan required to
be given  to or  filed  with the  Plan  Administrator  or an  Employer  shall be
considered  as given or filed if delivered or mailed by  registered or certified
mail, postage prepaid, to the Plan Administrator, in care of the Employer.

         9.11  Waiver of  Notice.  Any  notice  required  under this Plan may be
waived by the person entitled to notice.

         9.12  Effect on Other  Employee  Benefit  Plans.  Any  benefit  paid or
payable  under  this  Plan  shall  not  be  included  in the  compensation  of a
Participant for purposes of computing  benefits under any employee  benefit plan
maintained or contributed to by an Employer, except as may otherwise be required
under the terms of such employee benefit plan.


         IN WITNESS WHEREOF,  the Company has caused this Plan to be executed by
its duly authorized officers this ____ day of ________________, _______.

ATTEST:                                     COMMERCE BANCORP, INC.


By:                                         By:
    ------------------------------             -------------------------------
         Secretary
                                            Title:
                                                  ----------------------------

ATTEST:                                     COMMERCE BANK, N.A.


By:                                         By:
    ------------------------------             -------------------------------
         Secretary
                                            Title:
                                                  ----------------------------







                                       15
<PAGE>


ATTEST:                                     COMMERCE BANK/PENNSYLVANIA, N.A.


By:                                         By:
    ------------------------------             -------------------------------
         Secretary
                                            Title:
                                                  ----------------------------



ATTEST:                                     COMMERCE BANK/SHORE, N.A.


By:                                         By:
    ------------------------------             -------------------------------
         Secretary
                                            Title:
                                                  ----------------------------


ATTEST:                                     COMMERCE BANK/DELAWARE, N.A.


By:                                         By:
    ------------------------------             -------------------------------
         Secretary
                                            Title:
                                                  ----------------------------



ATTEST:                                     COMMERCE BANK/NORTH


By:                                         By:
    ------------------------------             -------------------------------
         Secretary
                                            Title:
                                                  ----------------------------



ATTEST:                                     COMMERCE CAPITAL MARKETS, INC.


By:                                         By:
    ------------------------------             -------------------------------
         Secretary
                                            Title:
                                                  ----------------------------



ATTEST:                                     COMMERCE INSURANCE SERVICES, INC.


By:                                         By:
    ------------------------------             -------------------------------
         Secretary
                                            Title:
                                                  ----------------------------












                                       16
<PAGE>