Exhibit 10.25


    


    


    


    


    


    


    EMPLOYMENT
      AGREEMENT

    


    COMMERCE
      BANCORP, INC.

    


    


    


    


    


    DOUGLAS
      J. PAULS

    


    


    


    EFFECTIVE
      DATE JANUARY 1, 2005


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

                                                                                                                                        

      

    


    


    


    EMPLOYMENT
      AGREEMENT INDEX

    


    

      
        	
                1.

              	
                Employment
                  and Term of Employment.

              	
                1

              
	
                2.

              	
                Services
                  and Duties.

              	
                2

              
	
                3.

              	
                Compensation.

              	
                2

              
	
                4.

              	
                Plans
                  and Fringe Benefits.

              	
                2

              
	
                5.

              	
                Termination
                  by Commerce for Cause.

              	
                3

              
	
                6.

              	
                Disability
                  and Death.

              	
                3

              
	
                7.

              	
                Termination
                  by Commerce without Cause and Termination for Good
                  Reason.

              	
                4

              
	
                8.

              	
                Change
                  in Control and Good Reason.

              	
                6

              
	
                9.

              	
                Confidential
                  Information and Non-Competition.

              	
                7

              
	
                10.

              	
                Successors
                  and Assigns.

              	
                9

              
	
                11.

              	
                Assignment.

              	
                9

              
	
                12.

              	
                Source
                  of Payment and Timing.

              	
                10

              
	
                13.

              	
                Interest.

              	
                10

              
	
                14.

              	
                Reimbursement
                  of Enforcement Expenses.

              	
                10

              
	
                15.

              	
                Notices.

              	
                10

              
	
                16.

              	
                General
                  Provisions.

              	
                11

              


      




    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
                                                                                                                                         

        

      

    



                                                                                                                                      

    EMPLOYMENT
      AGREEMENT

    


    


    This
      Agreement is dated effective as of January 1, 2005, by and between COMMERCE
      BANCORP, INC.
      (“Commerce”),
      a New
      Jersey business corporation, and Douglas
      J. Pauls
      (“Pauls”
or
      “Pauls”).

    


    BACKGROUND

    


    Pauls
      is
      the Senior Vice President/Chief Financial Officer (“CFO”)
      of
      Commerce Bank, N.A. (“CB”),
      a
      national banking association and a wholly-owned subsidiary of Commerce. The
      Board of Directors of Commerce (the “Board”)
      has
      determined that the future services of Pauls in these capacities will be of
      value to Commerce, CB and Commerce’s other present and future subsidiaries.
      Accordingly, the Board wishes to have Pauls’ services available to Commerce for
      at least two years and to provide supplemental benefits to Pauls should his
      employment with Commerce terminate under certain circumstances or should he
      die
      or become disabled before the termination of this Agreement.

    


    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and agreements contained here, and
      intending to be legally bound, the parties agree as follows:

    


    1.  Employment
      and Term of Employment.

     

    1.1  Commerce
      offers Pauls employment, and Pauls accepts such employment, subject to all
      the
      terms and conditions of this Agreement, for a term of two years beginning on
      the
      date stated above, and, subject to automatic renewal and extension as stated
      below and to Commerce’s and Pauls’ right to terminate his employment as stated
      below. Notwithstanding anything provided to the contrary, on each Anniversary
      Date of this Agreement, this Agreement and Pauls’ employment shall automatically
      be renewed and extended (upon the same terms and conditions) for a new two
      year
      term unless written notice by either party is given pursuant to Section 1.2
      below. “Term”
means
      the original two-year employment period, as well as any renewed or extended
      periods as provided for in this Agreement. “Anniversary
      Date”
means
      May 1, 2006, as well as each annual May 1 thereafter if this Agreement is
      automatically renewed or extended. 

     

    1.2  Either
      party may terminate this Agreement on any Anniversary Date of this Agreement
      by
      giving to the other party written notice of termination no later than April
      1
      before any such Anniversary Date. As a result of the foregoing notice being
      given to either party, the Term will have one (1) year remaining from the
      applicable Anniversary Date, subject to the terms and conditions of this
      Agreement.

     


    
      
        
           

          
            	 Employment Agreement	
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                    DJP

                  


          

        

      

      
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    2.  Services
      and Duties.

     

    2.1  During
      the Term, Pauls shall be employed as Senior Vice President/Chief Financial
      Officer of Commerce. Subject to the approval of the CB Board of Directors,
      during the Term, Pauls shall also serve as the Senior Vice President/Chief
      Financial Officer of CB. Subject to the approval of the respective Boards of
      Directors, during the Term, Pauls shall also serve as an officer and/or director
      of such other subsidiaries of Commerce as such Board of Directors, with the
      consent of Pauls, shall designate. Pauls shall have such powers and duties
      as
      may from time to time be prescribed by the respective chief executive officers
      and Boards of Directors, provided that such duties are consistent with his
      present duties. Pauls agrees to accept such employment, and to devote his full
      time and efforts to the business and affairs of Commerce and its subsidiaries,
      and to use his best efforts to promote the interests of Commerce and its
      subsidiaries.

     

    3.  Compensation.

     

    3.1  Commerce
      shall pay the following compensation to Pauls for all services to be rendered
      by
      him under this Agreement and for all positions held by him during the Term,
      payable at regular intervals in accordance with Commerce’s normal payroll
      practices now or subsequently in effect: “base
      salary”
at
      the
      rate of not less than $450,000 per year, subject to an annual review and subject
      to such upward adjustments as may be deemed appropriate by the Board or a
      Board-designated Committee. For this Agreement, a “year”
shall
      be deemed to commence on January 1, 2005, and on January 1 of each subsequent
      calendar year. Compensation for a portion of a year shall be pro-rated. The
      Board or such Committee may recommend an increase in salary for Pauls, but
      shall
      have no obligation to do so. Base salary once increased by the Board or a
      Board-designated Committee may not be decreased.

     

    3.2  During
      the Term, Commerce will reimburse Pauls for all expenses incurred by Pauls
      which
      Commerce determines to be reasonable and necessary (in accordance with its
      normal reimbursement practices now or subsequently in effect) for Pauls to
      carry
      out his duties under this Agreement.

     

    


    4.  Plans
      and Fringe Benefits.

     

    4.1  During
      the Term, Pauls shall be entitled to participate in any bonus programs,
      incentive compensation plans, stock option plans or similar benefit or
      compensation programs now or hereafter in effect which are generally made
      available from time to time to executive officers of Commerce. For any period
      less than a full year during the Term, Pauls shall receive an amount equal
      to
      the prorated portion of the compensation payable pursuant to such plan or
      program.

     

     

     

    
      
        
           

          
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    4.2  During
      the Term, Pauls shall also be entitled to: (a) participate in all fringe
      benefits as then in effect that are generally available to Commerce’s salaried
      officers including, without limitation, medical and hospitalization coverage,
      life insurance coverage and disability coverage; and (b) such other fringe
      benefits as the Board, or a designated Committee, shall deem appropriate;
      provided that such benefits are consistent with those that he currently enjoys
      including, without limitation, use of an automobile and paid holidays and
      vacations.

     

    5.  Termination
      by Commerce for Cause.

     

    5.1  Commerce
      shall have the right at any time to terminate Pauls’ employment, for cause, on
      thirty days’ prior written notice to Pauls. For this Agreement, the term “for
      cause” means only the following:

     

    (i)  If
      at any
      time during the Term, Pauls is indicted for, convicted of or enters a plea
      of
      guilty or nolo contendere to, a felony, a crime of falsehood or a crime
      involving fraud, moral turpitude or dishonesty; or

     

    (ii)  If
      at any
      time during the Term, Pauls willfully violates any of the covenants or
      provisions of this Agreement including, without limitation, the willful failure
      of Pauls to perform his duties hereunder or the instructions of the Board after
      written notice of such instructions (other than any such failure resulting
      from
      Pauls’ incapacity due to illness or disability) or Pauls engages in any conduct
      materially harmful to Commerce’s business, and in either case fails to cease
      such conduct or correct such conduct, as the case may be, within thirty days
      subsequent to receiving written notice from the Board advising Pauls of same
      (which conduct shall be specifically set forth in such notice).

     

    5.2  If
      Pauls’
employment shall terminate for cause, then Commerce shall pay Pauls his full
      base salary through the date of termination at the rate in effect at the time
      notice of termination is given and Commerce shall have no further obligations
      to
      Pauls under this Agreement other than to pay Pauls such other compensation
      as
      may be due Pauls pursuant to Sections 4.1 and 4.2 above.

     

    


    6.  Disability
      and Death.

     

    6.1  If
      Pauls
      becomes permanently disabled while employed during the Term, then Commerce
      shall
      compensate Pauls for the balance of the Term at a rate equal to 70% of his
      base
      annual salary at the time he became permanently disabled. Commerce agrees that
      it will make the payments due under this Section 6.1 on the first day of each
      month, commencing with the first day of the month following the month in which
      Pauls is deemed to be permanently disabled, in an amount equal to 1/12 of 70%
      of
      Pauls’ base annual salary at the time he is deemed to be permanently disabled.
      Such payments shall be reduced each month, however, by the amount of any
      disability payments made to Pauls under any Commerce-sponsored disability
      insurance plan. The amount of the reduction under the preceding sentence shall
      be computed as 

     

     

    
      
        
           

          
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    if
      Pauls
      had elected to receive monthly payments of disability benefits (regardless
      of
      the actual payment frequency). If Pauls becomes permanently disabled as provided
      in this Section 6, then he shall nonetheless continue, after becoming so
      disabled and until the end of the Term, to be entitled to receive at Commerce’s
      expense such group hospitalization coverage, life insurance coverage and
      disability coverage as is generally made available from time to time to
      executive officers of Commerce, if and to the extent permitted by the respective
      insurers of such coverage. Until such time as Pauls is deemed to be permanently
      disabled, Pauls shall continue to receive his full base salary and other
      compensation and fringe benefits due him under Sections 4.1 and 4.2
      above.

     

    6.2  For
      this
      Agreement, Pauls shall be deemed to have become “permanently
      disabled”
upon
      his failure to render services of the character contemplated by this Agreement,
      because of his physical or mental illness or other incapacity beyond his
      control, other than his death, for a continuous period of 6 months, or for
      shorter periods aggregating more than 9 months in any 18 consecutive
      months.

     

    6.3  If
      Pauls
      dies during the Term while employed hereunder, then his employment and his
      rights to compensation hereunder shall automatically terminate at the close
      of
      the calendar week in which death occurs; and, in addition to his full base
      salary to the date of termination and any compensation due him as provided
      in
      Section 4.1. above, Commerce shall pay to such person as Pauls shall designate
      in a notice filed with Commerce or, if no such person shall be designated,
      to
      his estate, as a lump sum death benefit, an amount equal to the product of:
      (A)
      Pauls’ average annual base salary in effect during the twenty-four months
      immediately preceding his death; and (B) two. The foregoing death benefit shall
      be in addition to any amount payable under any group life insurance program
      maintained by Commerce or any of its subsidiaries.

     

    


    7.  Termination
      by Commerce without Cause and Termination for Good
      Reason.

     

    7.1  If
      Commerce shall terminate Pauls’ employment other than for cause or as provided
      in Section 1.2 above, then:

     

    (i)  Commerce
      shall pay to Pauls his full base salary through the date of termination and
      any
      compensation when due him as provided in Section 4.1 above; and

     

    (ii)  In
      lieu
      of any further salary payments to Pauls for a period subsequent to the date
      of
      termination, Commerce shall pay as severance pay to Pauls a lump sum severance
      payment (the “Severance
      Payment”)
      equal
      to the amount of Pauls’ base salary which is in effect on the date of
      termination and which would have been paid to Pauls between the date of
      termination and the end of the then Term had Pauls continued to be employed
      by
      Commerce to the end of the then Term.

     

     

     

    
      
        
           

          
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    7.2  If
      Pauls
      shall terminate his employment for “Good
      Reason”
(as
      defined in section 8.2 below) then:

     

    (i)  Commerce
      shall pay to Pauls his full base salary through the date of termination and
      any
      compensation when due him as provided in Section 4.1 above; and

     

    (ii)  In
      lieu
      of any further salary payments to Pauls for a period subsequent to the date
      of
      termination, Commerce shall pay as severance pay to Pauls a lump sum severance
      payment (the “Severance
      Payment”)
      equal
      to four times Pauls’ average annual base salary in effect during the twenty-four
      months immediately preceding such termination.

     

    7.3  Upon
      termination of Pauls’ employment as set forth in either Section 7.1 or 7.2
      above, Commerce shall promptly determine the aggregate present value pursuant
      to
      Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the
“Code”)
      of all
      amounts payable to Pauls under this Agreement, and of all other amounts payable
      to Pauls upon or by reason of his termination which are determined in good
      faith
      by Commerce to be “parachute
      payments”
(as
      defined in section 280G(b)(2) of the Code and the regulations promulgated
      thereunder) made pursuant to agreements or plans which are subject to section
      280G. Commerce’s determination of present value and of other amounts
      constituting “parachute payments” is binding; provided that if Pauls obtains an
      opinion of counsel satisfactory to Commerce or an Internal Revenue Service
      ruling to the effect that the method of determining present value was improper
      or that specified payments did not constitute “parachute payments,” calculations
      will be made in accordance with such opinion or ruling. In the event the
      aggregate present value of all benefits under this Agreement and other
“parachute payments” is equal to or in excess of 300% of Pauls’ “base
      amount”
as
      defined in Section 280G(b)(3)(A) and the regulations thereunder, Pauls waives
      the right to “parachute payments” sufficient to reduce the present value of all
      such payments below 300% of the “base amount.” Pauls shall have the right to
      designate those benefits which shall be waived or reduced in order to comply
      with this provision but failing designation by Pauls, Commerce may designate
      those benefits which may be waived or reduced. If it is established pursuant
      to
      a final determination of a court of competent jurisdiction or an Internal
      Revenue service proceeding that, notwithstanding the good faith of Pauls and
      Commerce in applying the terms of this Section 7, the aggregate “parachute
      payments” paid to or for Pauls’ benefit are in an amount that would result in
      any portion of such “parachute payments” not being deductible by Commerce or any
      affiliate by reason of Section 280G of the Code, then Pauls shall have an
      obligation to pay Commerce upon demand
      an
      amount equal to the sum of (i) the excess of the aggregate “parachute payments”
paid to or for Pauls’ benefit without any portion of such “parachute payments”
not being deductible by reason of Section 280G of the Code and (ii) interest
      on
      the amount set forth in clause (i) above at the applicable federal rate (as
      defined in Section 1274(d) of the Code) from the date of Pauls’ receipt of such
      excess until the date of such payment.

     


    
      
        
           

          
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    7.4  In
      addition to the other compensation set forth in either Section 7.1 or 7.2 above,
      upon termination of Pauls’ employment as set forth in either Section 7.1 or 7.2
      above, Pauls shall be entitled to the following benefits from
      Commerce:

     

    (i)
      Following the date of termination, Pauls shall be entitled to participate in
      all
      Commerce medical, disability, hospitalization and life insurance benefits for
      a
      period of three years except that should subsequent employment be accepted
      during the three year period following the date of termination, continuation
      of
      any medical, disability, hospitalization and life insurance benefits will be
      offset by coverages provided through Pauls’ subsequent employer.

    


    7.5  Except
      as
      provided in this Section 7, nothing in this Agreement shall affect or have
      any
      bearing on Pauls’ entitlement to other benefits under any plan or program
      providing benefits by reason of termination of employment.

     

    7.6  Pauls
      shall have the right to terminate his employment for “Good
      Reason”
(as
      defined in Section 8.2 below) if he shall first give Commerce not less than
      thirty days written notice of his intention to so terminate his employment
      specifying the reason(s) for such termination and the date of termination,
      and
      thereafter Commerce shall not have cured or remedied the reason(s) for such
      termination prior to the date of termination set forth in such
      notice.

     

    7.7  Anything
      in this Agreement to the contrary notwithstanding, Pauls shall not be required
      to mitigate the amount of any payment provided for in this Agreement by seeking
      other employment.

     

    


    8.  Change
      in Control and Good Reason.

     

    8.1  For
      this
      Agreement, a “change
      of control”
of
      Commerce means a change in control of Commerce or CB of a nature that would
      be
      required to be reported in response to Item 6(e) of Schedule 14A of Regulation
      14A promulgated under the Securities Exchange Act of 1934, as amended (the
      “Exchange
      Act”),
      as
      enacted and enforced on the date hereof, whether or not Commerce or CB is
      subject to such reporting requirement; provided that without limitation such
      a
      change in control shall have been deemed to conclusively occur when any of
      the
      following events shall have occurred without Pauls’ prior written
      consent:

     

    (i)  within
      any period of two consecutive years during the Term, a change in at least a
      majority of the members of the Board or the addition of five or more new members
      to the Board unless such change or addition occurs with the affirmative vote
      in
      writing of Pauls in his capacity as a director or a shareholder; or

     


    
      
        
           

          
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    (ii)  a
      Person
      or group acting in concert as described in Section 13(d)(2) of the Exchange
      Act
      holds or acquires beneficial ownership within the meaning of Rule 13d-3
      promulgated under the Exchange Act of a number of common shares of Commerce
      which constitutes either (a) more than fifty percent of the shares which voted
      in the election of directors of Commerce at the shareholders’ meeting
      immediately preceding such determination or (b) more than thirty percent of
      Commerce’s outstanding common shares. For purposes of this Section 8.1(ii)(b),
      unexercised warrants or options or unconverted nonvoting securities shall count,
      for this purpose, as constituting beneficial ownership of Commerce’s common
      shares into which the warrants or options are exercisable or the nonvoting
      convertible securities are convertible, notwithstanding anything to the contrary
      contained in Rule 13d-3 of the Exchange Act.

     

    8.2  For
      this
      Agreement, “Good
      Reason”
means:
      (i) a change in control of Commerce (as defined in Section 8.1 above) and within
      three years thereafter, without Pauls’ consent, the nature and scope of Pauls’
authority with Commerce or a surviving or acquiring Person are materially
      reduced to a level below that which he enjoys on the date hereof, the duties
      and
      responsibilities assigned to Pauls are materially inconsistent with that which
      he has on the date of this Agreement, the fringe benefits which Commerce
      provides Pauls on the date of this Agreement or at any time hereafter are
      materially reduced, Pauls’ position or title with Commerce or the surviving or
      acquiring person is reduced from his current position or title with Commerce,
      or
      any relocation or transfer of Commerce’s principal executive offices to a
      location more than fifty miles from Pauls’ principal residence on the date
      hereof without Pauls’ consent; (ii) Commerce materially breaches this Agreement;
      or (iii) the failure or refusal of any successor to Commerce to assume all
      duties and obligations of Commerce under this Agreement.

     

    


    9.  Confidential
      Information and Non-Competition.

     

    9.1  Pauls
      covenants and agrees that he will not, during the term of his employment or
      at
      any subsequent time, except with the express prior written consent of the Board,
      directly or indirectly disclose, communicate or divulge to any Person, or use
      for the benefit of any Person, any knowledge or information with respect to
      the
      conduct or details of Commerce’s business which he, acting reasonably, believes
      or should believe to be of a confidential nature and the disclosure of which
      to
      not be in Commerce’s interest.

     

    9.2  Pauls
      covenants and agrees that he will not, during the term of his employment, except
      with the express prior written consent of the Board, directly or indirectly,
      whether as employee, owner, partner, consultant, agent, director, officer,
      shareholder or in any other capacity, engage in or assist any Person to engage
      in any act or action which he, acting reasonably, believes or should believe
      would be harmful or inimical to the interests of Commerce.

     

     

    
      
        
           

          
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    9.3  (A)
      Pauls
      covenants and agrees that he will not, except with the express prior written
      consent of the Board, in any capacity (including, but not limited to, owner,
      partner, shareholder, consultant, agent, employee, officer, director or
      otherwise), directly or indirectly, for his own account or for the benefit
      of
      any Person, establish, engage or participate in or otherwise be connected with
      any commercial banking business which conducts business in any geographic area
      in which Commerce and its subsidiaries is then conducting such business except
      that the foregoing shall not prohibit Pauls from owning as a shareholder less
      than 5% of the outstanding voting stock of an issuer whose stock is publicly
      traded.

     

    (B) The
      provisions of Section 9.3(A) shall be applicable commencing on the date of
      this
      Agreement and ending on one of the following periods, as
      applicable:

    


    (i) If
      this
      Agreement is terminated by Commerce in accordance with the provisions of Section
      1.2 of this Agreement, the effective date of termination of this
      Agreement;

    


    (ii) 
      If this
      Agreement is terminated by Pauls in accordance with the provisions of Section
      1.2 of this Agreement, one year following the effective date of termination
      of
      this Agreement;

    


    (iii)
      If
      Commerce terminates this Agreement in accordance with the provisions of Section
      5.1 of this Agreement or the Pauls voluntarily terminates his employment, one
      year following the effective date of termination of this Agreement; or


    


    (iv)
      If
      this Agreement is terminated in accordance with the provisions of either Section
      7.1 or 7.2 of this Agreement, one year following the effective date of
      termination of this Agreement.

    


    9.4  The
      parties agree that any breach by Pauls of any of the covenants or agreements
      contained in this Section 9 will result in irreparable injury to Commerce for
      which money damages could not adequately compensate Commerce and therefore,
      in
      the event of any such breach, Commerce shall be entitled (in addition to any
      other rights and remedies which it may have at law or in equity) to have an
      injunction issued by any competent court enjoining and restraining Pauls and/or
      any other Person involved from continuing such breach. The existence of any
      claim or cause of action which Pauls may have against Commerce or any other
      Person (other than a claim for Commerce’s breach of this Agreement for failure
      to make payments hereunder) shall not constitute a defense or bar to the
      enforcement of such covenants. In the event of any alleged breach by Pauls
      of
      any of the covenants or agreements contained in this Section 9, Commerce shall
      continue any and all of the payments due Pauls under this Agreement until such
      time as a Court shall enter a final and unappealable order finding such a
      breach; provided, that the foregoing shall not preclude a Court from ordering
      Pauls to repay such payments made to him for the period after the breach is
      determined to have occurred or from 

     

     

    
      
        
           

          
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    ordering
      that payments hereunder be permanently terminated in the event of a material
      and
      willful breach.

     

    9.5  If
      any
      portion of the covenants or agreements contained in this Section 9, or the
      application hereof, is construed to be invalid or unenforceable, the other
      portions of such covenant(s) or agreement(s) or the application thereof shall
      not be affected and shall be given full force and effect without regard to
      the
      invalid or unenforceable portions to the fullest extent possible. If any
      covenant or agreement in this Section 9 is held to be unenforceable because
      of
      the area covered, the duration thereof, or the scope thereof, then the court
      making such determination shall have the power to reduce the area and/or
      duration and/or limit the scope thereof, and the covenant or agreement shall
      then be enforceable in its reduced form.

     

    9.6  For
      purposes of this Section 9, the term “Commerce”
shall
      include Commerce, any successor of Commerce under Section 10 hereof, and all
      present and future direct and indirect subsidiaries and affiliates of Commerce
      including, but not limited to, CB.

     

    


    10.  Successors
      and Assigns.

     

    This
      Agreement shall inure to the benefit of and be binding upon any corporate or
      other successor of Commerce which will acquire, directly or indirectly, by
      merger, consolidation, purchase, or otherwise, all or substantially all of
      the
      assets of Commerce, and shall otherwise inure to the benefit of and be binding
      upon the parties hereto and their respective heirs, executors, administrators,
      successors and assigns. Upon the death of Pauls, any payments or benefits
      otherwise due Pauls hereunder shall be paid to or be for the benefit of Pauls’
legal representatives. Nothing in the Agreement shall preclude Commerce from
      consolidating or merging into or with or transferring all or substantially
      all
      of its assets to another Person. In that event, such other Person shall assume
      this Agreement and all obligations of Commerce in this Agreement. Upon such
      a
      consolidation, merger, or transfer of assets and assumption, the term “Commerce”
as used in this Agreement, shall mean such other Person and this Agreement
      shall
      continue in full force and effect.

    


    11.  Assignment.

     

    Neither
      this Agreement nor any rights to receive payments hereunder shall be voluntarily
      or involuntarily assigned, transferred, alienated, encumbered or disposed of,
      in
      whole or in part, without Commerce’s prior written consent and approval, and
      shall not be subject to anticipation, levy, execution, garnishment, attachment
      by, or interference or control of, any creditor.

     

     

    
      
        
           

          
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    12.  Source
      of Payment and Timing.

     

    12.1  All
      payments provided under this Agreement shall be paid in cash from the general
      funds of Commerce, no special or separate fund shall be required to be
      established and Pauls shall have no right, title or interest whatsoever in
      or to
      any investment which Commerce may make to aid Commerce in meeting its
      obligations hereunder except to the extent that Commerce shall, in its sole
      and
      absolute discretion, choose to designate any of its rights it may have under
      one
      or more life insurance policies it may obtain to cover any of its obligations
      under this Agreement. Nothing contained in this Agreement, and no action taken
      pursuant to its provisions, shall
      create or be construed to create a trust of any kind or fiduciary relationship
      between Commerce and Pauls or any other Person.

     

    12.2  All
      payments due Pauls under Sections 5.1, 6.3, 7.1 or 7.2 above shall be made
      not
      later than the thirtieth day following the date of termination of
      employment.

     

    


    13.  Interest.

     

    In
      the
      event any benefits due to Pauls are not paid when due hereunder, Pauls shall
      be
      entitled (in addition to his other rights and remedies) to interest on the
      past
      due amounts at a rate equal to two percentage points above the prime rate
      charged from time to time by CB, such interest to commence on the date a benefit
      was due hereunder.

    


    


    14.  Reimbursement
      of Enforcement Expenses.

     

    If
      Commerce fails to pay or provide Pauls any of the amounts due him under this
      Agreement or fails to provide Pauls with any of the other benefits due him
      under
      this Agreement, and provided Commerce does not cure any such failure within
      thirty days after having received written notice from Pauls of such failure,
      Pauls shall be entitled to full reimbursement from Commerce for all costs and
      expenses (including reasonable attorneys’ fees and costs) incurred by Pauls in
      enforcing his rights under this Agreement.

    


    


    15.  Notices.

     

    All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be deemed to have been duly given if delivered by hand or
      mailed, certified or registered mail, return receipt requested, with postage
      prepaid, to the following addresses or to such other address as either party
      may
      designate by like notice:

    



    
      
        
           

          
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              If
                to Commerce, to:

            


    

    


    Commerce
      Bancorp, Inc.

    Commerce
      Atrium

    1701
      Route 70 East

    Cherry
      Hill, New Jersey 08034-5400

    


    
      	 	
              Attn:

            	
              Vernon
                W. Hill, II

              Chief
                Executive Officer

            


    

     

    


    and
      to
      such other or additional person or persons as either party shall have designated
      to the other party in writing by like notice.

    


    


    16.  General
      Provisions.

     

    16.1  This
      Agreement constitutes the entire agreement between the parties concerning its
      subject matter, and supersedes and replaces all prior agreements between the
      parties. No amendment, waiver or termination of any of the provisions of this
      Agreement shall be effective unless in writing and signed by the party against
      whom it is sought to be enforced. Any written amendment, waiver or termination
      hereof executed, by Commerce and Pauls (or his legal representatives) shall
      be
      binding upon them and upon all other Persons, without the necessity of securing
      the consent of any other Person including, but not limited to, Pauls’ wife, and
      no Person shall be deemed to be a third party beneficiary under this Agreement
      except to the extent provided under Section 12.1 above.

     

    16.2  CB
      or any
      other subsidiary of commerce may make payments to Pauls hereunder in lieu of
      payments to be made by Commerce, and to the extent such payments are so made,
      Commerce shall be released of its obligations to make such
      payments.

     

    16.3  The
      benefits provided under this Agreement shall be in addition to and shall not
      affect the proceeds payable to Pauls’ beneficiaries under group life insurance
      policies which Commerce may be carrying on Pauls’ life.

     

    16.4  “Person”
as
      used
      in this Agreement means a natural person, joint venture, corporation, sole
      proprietorship, trust, estate, partnership, cooperative, association, non-profit
      organization or any other legal entity.

     

    



    
      
        
           

          
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    16.5  This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which taken together shall constitute one and
      the
      same Agreement.

     

    16.6  Except
      as
      otherwise expressly stated in this Agreement, no failure on the part of any
      party to this Agreement to exercise and no delay in exercising any right, power
      or remedy under this Agreement shall operate as a waiver; nor shall any single
      or partial exercise of any right, power or remedy hereunder preclude any other
      or further exercise thereof or the exercise of any other right, power or
      remedy.

     

    16.7  Commerce
      and Pauls consent to the exclusive jurisdiction of the courts of the State
      of
      New Jersey and the United States District Court for the District of New Jersey
      in any and all actions arising hereunder and irrevocably consent to service
      of
      process as set forth in Section 15 above.

     

    16.8  The
      headings of the sections of this Agreement have been inserted for convenience
      of
      reference only and shall in no way restrict or modify any of the terms or
      provisions of this Agreement.

     

    16.9  This
      Agreement shall be governed and construed and the legal relationships of the
      parties determined in accordance with the laws of the State of New Jersey
      applicable to contracts executed and to be performed solely in the State of
      New
      Jersey.

     

    

      
        	 	
                COMMERCE
                  BANCORP, INC.

              
	 	 
	 	 
	 	 
	
                (Corporate
                  Seal)

              	
                By:
                  /s/ Vernon W. Hill, II

              
	 	
                Vernon
                  W. Hill, II 

              
	 	
                President
                  and Chief Executive Officer

              
	 	 
	 	 
	 	
                Attest:_____________________________

              
	 	 
	 	 
	 	 
	 	
                /s/ 
                  Douglas
                  J. Pauls   (SEAL)

              
	 	
                Douglas
                  J. Pauls

              


      

    

     

     

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