Document:

ex10-2.htm

    Exhibit
      10.2

     

    UNITED
      STATES OF AMERICA

    DEPARTMENT
      OF THE TREASURY

    OFFICE
      OF THE COMPTROLLER OF THE CURRENCY

    

    
      	 	 	 
	
               

              In
                the Matter of:

              Commerce
                Bank, National Association

              Philadelphia,
                Pennsylvania

            	
              )

              )    AA-EC-07-44                  

              )

              )

            	 

    

    
 

    STIPULATION
      AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER

    

    WHEREAS,
      the Comptroller of the Currency of the United States of America (“Comptroller”),
      through his National Bank Examiners and other staff, is conducting an
      investigation of Commerce Bank, National Association, Philadelphia, Pennsylvania
      (“Bank”); and

    

    WHEREAS,
      information obtained in the investigation indicates that it is necessary and
      appropriate for the Comptroller to issue a cease and desist order pursuant
      to 12
      U.S.C. § 1818(b) to ensure that actual or apparent conflicts of interest or
      unsafe or unsound practices involving the construction or acquisition of branch
      offices do not occur in the future; and

    

    WHEREAS,
      certain issues arising from the investigation have been communicated to the
      Bank; and

    

    WHEREAS,
      the Bank, by and through its duly elected and acting Board of Directors
      (“Board”), in the interest of compliance and cooperation, consents to the
      issuance of a Consent Order, dated June 28, 2007 (“Order”); and

    

    THEREFORE,
      in consideration of the above premises, the Comptroller, through his authorized
      representative, and the Bank, through its duly elected and acting Board of
      Directors, hereby stipulate and agree to the following:

     

    ARTICLE
      I

    

    Jurisdiction

    

      (1) The
      Bank is a national banking association chartered and examined by the Comptroller
      pursuant to the National Bank Act of 1864, as amended, 12 U.S.C. § 1
etseq.

      

      (2) The
      Comptroller is “the appropriate Federal banking agency” regarding the Bank
      pursuant to 12 U.S.C. §§ 1813(q) and 1818(b).

     

      (3) The
      Bank is an “insured depository institution” within the meaning of 12 U.S.C. §
1818(b)(1).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      II

    

    Agreement

    

      (1) The
      Bank, without admitting or denying any wrongdoing, hereby consents and agrees
      to
      the issuance of the Order by the Comptroller.

      

      (2) The
      Bank further agrees that said Order shall be deemed an “order issued with the
      consent of the depository institution” as defined in 12 U.S.C. § 1818(h)(2), and
      consents and agrees that said Order shall become effective upon its issuance
      and
      shall be fully enforceable by the Comptroller under the provisions of 12 U.S.C.
      § 1818(i).  Notwithstanding the absence of mutuality of obligation, or
      of consideration, or of a contract, the Comptroller may enforce any of the
      commitments or obligations herein undertaken by the Bank under his supervisory
      powers, including 12 U.S.C. § 1818(i), and not as a matter of contract
      law.  The Bank expressly acknowledges that neither the Bank nor the
      Comptroller has any intention to enter into a contract.

     

      (3) The
      Bank also expressly acknowledges that no officer or employee of the Comptroller
      has statutory or other authority to bind the United States, the U.S. Treasury
      Department, the Comptroller, or any other federal bank regulatory agency or
      entity, or any officer or employee of any of those entities to a contract
      affecting the Comptroller’s exercise of his supervisory
      responsibilities.

    

    

    ARTICLE
      III

     

    Waivers

     

      (4) The
      Bank, by signing this Stipulation and Consent, hereby waives:

      

      (a) the
      issuance of a Notice of Charges pursuant to 12 U.S.C. § 1818(b);

      

      (b) any
      and all procedural rights available in connection with the issuance of the
      Order;

     

      (c) all
      rights to a hearing and a final agency decision pursuant to 12 U.S.C. § 1818(i),
      12 C.F.R. Part 19;

      

      (d) all
      rights to seek any type of administrative or judicial review of the Order;
      and

     

      (e) any
      and all rights to challenge or contest the validity of the Order.

    

    

    ARTICLE
      IV

     

    Other
      Action

    

      (5) The
      Bank further agrees not to take any action or to make, nor permit any Bank
      officer, director, employee, or agent to take any action or to make, any public
      statement denying, directly or indirectly, the specific acts, omissions, or
      violations referenced in this Order or otherwise creating the impression that
      this Order is without factual basis, other than in defense to any charges made
      in any administrative, criminal, or civil proceeding.

      

      (6) The
      Bank understands and agrees that the provisions of this Stipulation and Consent
      shall not inhibit, estop, bar, or otherwise prevent the Comptroller from taking
      any other action affecting the Bank, or any of its Institution-Affiliated
      Parties if, at any time, he deems it appropriate to do so to fulfill the
      responsibilities placed upon him by the several laws of the United States of
      America.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      

      (7) This
      Stipulation may be executed in counterparts by the Directors of the Bank after
      approval of its execution at a duly called board meeting.

    

      IN
      TESTIMONY WHEREOF, the
      undersigned, authorized by the Comptroller as his representative,
      has hereunto set his hand on behalf of the Comptroller.

    

    

    
      	 	 	 
	
              Timothy
                W. Long

              Senior
                Deputy Comptroller

              Mid-Size/Community
                Bank Supervision

            	 	
              Date

            

    

     

         
      IN TESTIMONY WHEREOF, the undersigned, as the duly elected and acting Board
      of
      Directors of the Bank, have hereunto set their hands on behalf of the
      Bank.

    

    

    
      	 	 	 
	
              Jack
                R. Bershad

            	 	
              Date

            
	
              Joseph
                E. Buckelew

            	 	
              Date

            
	 	 	 
	
              Donald
                T. DiFrancesco

            	 	
              Date

            
	
              Nicholas
                A. Giordano

            	 	
              Date

            
	
              Morton
                N. Kerr

            	 	
              Date

            
	
              Steven
                M. Lewis

            	 	
              Date

            
	
              John
                K. Lloyd

            	 	
              Date

               

            
	
              George
                E. Norcross, III

            	 	
              Date

            
	
              Daniel
                J. Ragone

            	 	
              Date

            
	
              William
                A. Schwartz, Jr.

            	 	
              Date

            
	
              Joseph
                T. Tarquini, Jr.

            	 	
              Date

            
	
              Joseph
                S. Vassalluzzo

            	 	
              Dateex10-3.htm

    Exhibit
      10.3

     

     

    MEMORANDUM
      OF UNDERSTANDING

    

    This
      Memorandum of Understanding
      (“MOU”) is entered into this 28 day of June, 2007 by and between the Federal
      Reserve Bank of Philadelphia (the “Reserve Bank”) and Commerce Bancorp, Inc.,
      Cherry Hill, New Jersey (“Commerce”), a registered bank holding
      company.

    

    WHEREAS,
      the parties hereto have agreed
      to enter into this MOU in recognition and in mutual understanding of their
      common goals to ensure that certain actual or apparent conflicts of interest
      and
      unsafe and unsound practices at Commerce or its subsidiary banks do not occur
      in
      the future.

    

    NOW,
      THEREFORE, the parties mutually
      agree as follows:

    

    
      	
              1.  

            	
              Compliance
                with Consent Order

            

    

    Commerce’s
      Board of Directors shall take all actions that are necessary to ensure that
      Commerce Bank, N.A. (the “Bank”) complies fully with the Consent Order between
      the Bank and the Office of the Comptroller of the Currency (“OCC”) entered into
      on June 28, 2007.

    

    
      	
              2.  

            	
              Corporate-wide
                Policies and
                Procedures

            

    

    Commerce’s
      Board of Directors shall take all actions that are necessary to ensure that
      all
      corporate-wide policies and procedures that address Real Estate Related
      Activities and Insider-Related Party transactions are consistent with the
      Consent Order between the Bank and the OCC entered into on June 28,
      2007.

    

    
      	
              3.  

            	
              Transactions
                on Behalf of the Bank

            

    

    
      	
              a.  

            	
              Commerce’s
                Board of Directors shall take all actions to ensure that Commerce
                does not
                conduct Insider-Related Party transactions on behalf of the Bank
                or enter
                into any employment contracts or agreements with any Insider-Related
                Party
                that, if conducted or entered into by the Bank, would be subject
                to the
                provisions of Articles I or II of the Consent Order between the Bank
                and
                the OCC entered into on June 28, 2007 without conducting, entering
                into,
                and reporting on such transactions consistent with the provisions
                of
                Articles I or II.

            

    

    

    
      	
              b.  

            	
              Commerce’s
                Board of Directors shall take all actions to ensure that Commerce
                does not
                conduct Real Estate Related Activity on behalf of the Bank that,
                if
                conducted by the Bank, would be subject to the provisions of Article
                III
                of the Consent Order between the Bank and the OCC entered into on
                June 28,
                2007 without conducting such activity consistent with the provisions
                of
                Article III.

            

    

     

     

     

    
      
        
        

      

      
        Page
          1 of 4

        
          

        

      

      
        
        

      

    

    
 

    
      	
              4.  

            	
              Cooperation
                with Investigative
                Service

            

    

    Commerce’s
      Board of Directors shall take all actions to ensure that Commerce’s directors,
      officers, and employees fully cooperate with the Investigative Service required
      by Article I of the Consent Order between the Bank and the OCC entered into
      on
      June 28, 2007.

    

    
      	
              5.  

            	
              Management
                Plan

            

    

    Within
      ten (10) days of the effective date of this MOU, Commerce’s Board of Directors
      (the “Board”) shall submit a proposed Management Plan to the Reserve Bank. The
      Management Plan shall include:

    

    
      	
              a.  

            	
              The
                steps the Board shall take to address necessary or desirable changes
                to
                Commerce’s management structure

            

    

    
      	
              b.  

            	
              The
                steps the Board shall take to address necessary or desirable changes
                to
                the composition and membership of the Board and Board
                committees

            

    

    
      	
              c.  

            	
              Specific
                timeframes to accomplish each such
                step

            

    

    

    Commerce’s
      Board of Directors shall not make any changes or modifications to the Management
      Plan without first submitting the proposed changes to the Reserve
      Bank.

    

    
      	
              6.  

            	
              Reporting

            

    

    
      	
              a.  

            	
              Within
                ten (10) days of submission to the OCC, Commerce shall submit to
                the
                Reserve Bank a copy of the submissions and/or reports required under
                Articles I, II, III, IV, and V of the Consent Order between the Bank
                and
                the OCC entered into on June 28,
                2007.

            

    

    

    
      	
              b.  

            	
              Within
                forty-five (45) days after the end of each calendar quarter, starting
                with
                the calendar quarter ending September 30, 2007, Commerce shall submit
                to
                the Reserve Bank a list of all Insider and Insider-Related Party
                transactions and Real Estate Related Activities conducted by Commerce
                on
                behalf of the Bank in the calendar
                quarter.

            

    

    

    
      	
              7.  

            	
              Resolutions

            

    

    Within
      ten (10) days after the date of this MOU, Commerce shall submit to the Reserve
      Bank a copy of a resolution certified by the Secretary of Commerce’s Board of
      Directors as true, correct, and in full force and effect, stating that “The
      Board of Directors has received and reviewed a copy of this MOU and, at a duly
      constituted meeting, has adopted a resolution on behalf of Commerce, its
      directors, officers, agents, and employees, authorizing Commerce to enter into
      this MOU and specifically consenting to the terms of the MOU.”

     

     

     

    
      
        
        

      

      
        Page
          2 of 4

        
          

        

      

      
        
        

      

    

    

    
      	
              8.  

            	
              Notices

            

    

    
      	
               

            	
              a.

            	
              All
                written communication to the Reserve Bank regarding this MOU shall
                be  addressed and sent
                to:

            

    

    

    Ms.
      Cynthia L. Course

    Assistant
      Vice President

    Federal
      Reserve Bank of Philadelphia

    Ten
      Independence Mall

    Philadelphia,
      PA 19106

    

    
      	
               

            	
              b.

            	
              All
                written communication to Commerce regarding this MOU shall be addressed
                and sent to:

            

    

    

    Douglas
      F. Pauls

    Chief
      Financial Officer

    Commerce
      Bancorp, Inc.

    Commerce
      Atrium

    1701
      Rt.
      70 East

    Cherry
      Hill, NJ 08034-5400

    

    
      	
              9.  

            	
              Miscellaneous

            

    

    
      	
              a.  

            	
              The
                Reserve Bank may, at its discretion, grant written extensions of
                time to
                Commerce to comply with any provision of this
                MOU.

            

    

    

    
      	
              b.  

            	
              Each
                provision of this MOU shall remain in effect and enforceable until
                stayed,
                modified, terminated, suspended, or set aside by the Reserve
                Bank.  The continuing need for this MOU shall be reviewed and
                determined by the Reserve Bank upon receipt of any written request
                submitted by Commerce.

            

    

    

    
      	
              c.  

            	
              The
                parties expressly understand that, although the Board of Directors
                have
                agreed to submit certain documents to the Reserve Bank for review,
                the
                Board of Directors has the ultimate responsibility for the proper
                and
                sound management of the
                organization.

            

    

    

    
      	
              d.  

            	
              The
                headings contained herein are for ease of reference only and will
                not be
                deemed to affect the meaning or interpretation of this
                MOU.

            

    

    

    
      	
              e.  

            	
              The
                provisions of this MOU shall not bar, estop, or otherwise prevent
                the
                Board of Governors, the Reserve Bank or any other federal or state
                agency
                from taking any other action affecting Commerce or any of its current
                or
                former institution-affiliated parties and their successors and
                assigns.

            

    

     

     

    
      
        
        

      

      
        Page
          3 of 4

        
          

        

      

      
        
        

      

    

     

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this MOU to be executed as
      of
      the 28 day of June, 2007.

    

    

    
      	
              Federal
                Reserve Bank

            	
              Commerce
                Bancorp, Inc.

            
	
              of
                Philadelphia

            	 
	 	 
	
              By:______________________

            	
              By:
                _______________________

            
	
              Michael
                E. Collins, SVP

            	
              Douglas
                J. Pauls, CFO

            

    

    

    

    THE
      UNDERSIGNED DIRECTORS OF COMMERCE EACH ACKNOWLEDGE HAVING READ THE FOREGOING
      MOU
      AND APPROVING OF THE CONSENT THERETO BY COMMERCE.

    

    

    
      	
              ___________________________

            	
              ___________________________

            
	
              Jack
                R. Bershad

            	
              Joseph
                Buckelew

            
	 	 
	 	 
	
              ___________________________

            	
              ___________________________

            
	
              Donald
                T. DiFrancesco

            	
              Nicholas
                A. Giordano

            
	 	 
	 	 
	
              ___________________________

            	
              ___________________________

            
	
              Morton
                N. Kerr

            	
              Steven
                M. Lewis

            
	 	 
	 	 
	
              ___________________________

            	
              ___________________________

            
	
              John
                K. Lloyd

            	
              George
                E. Norcross, III

            
	 	 
	 	 
	
              ___________________________

            	
              ___________________________

            
	
              Daniel
                J. Ragone

            	
              William
                A. Schwartz, Jr.

            
	 	 
	 	 
	
              ___________________________

            	
              ___________________________

            
	
              Joseph
                T. Tarquini, Jr.

            	
              Joseph
                S. Vassalluzzo

            

    

     

    Page 4
      of 4

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