UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under ss. 240.14a-12

COMMERCE BANCORP, INC.
(Name of Registrant as Specified In Its Charter)

N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

N/A

(2) Aggregate number of securities to which transaction applies:

N/A

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

N/A

(4) Proposed maximum aggregate value of transaction:

N/A

(5) Total fee paid:

N/A

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:

COMMERCE BANCORP, INC.

[GRAPHIC OMITTED - LOGO]

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Shareholders (the
"Annual Meeting") of Commerce Bancorp, Inc. ("Bancorp") will be held at Commerce
University, 17000 Horizon Way, Mt. Laurel, New Jersey, on Tuesday, May 15, 2001,
at 5:30 P.M., local time, to consider and act upon the following matters as more
fully described in the annexed proxy statement:

1. To elect directors;

2. To approve the amendment of Bancorp's Restated Certificate of
Incorporation to increase the number of shares of Common Stock that
Bancorp is authorized to issue by 100,000,000 shares; and

3. To act upon such other matters as may properly come before the Annual
Meeting or any adjournment or postponement thereof.

The board of directors has fixed April 2, 2001 as the record date for
determination of shareholders entitled to vote at the Annual Meeting. Only
shareholders of record at the close of business on that date will be entitled to
receive notice of, and to vote at, the Annual Meeting.

You are cordially invited to attend the Annual Meeting in person. Whether
or not you expect to attend the Annual Meeting in person, you are urged to sign
and date the enclosed proxy and promptly return it in the envelope provided for
that purpose.

By Order of the Board of Directors

ROBERT C. BECK,
Secretary

April 13, 2001

COMMERCE BANCORP, INC.
COMMERCE ATRIUM
1701 ROUTE 70 EAST
CHERRY HILL, NEW JERSEY 08034-5400

PROXY STATEMENT

This Notice of Annual Meeting, proxy statement and enclosed proxy are
being furnished to shareholders of Commerce Bancorp, Inc. ("Bancorp") in
conjunction with the solicitation of proxies by the board of directors of
Bancorp for use at Bancorp's 2001 Annual Meeting of Shareholders to be held on
Tuesday, May 15 , 2001, at 5:30 P.M., local time, at Commerce University, 17000
Horizon Way, Mt. Laurel, New Jersey, (the "Annual Meeting"), and at any
adjournment or postponement thereof. The approximate date upon which this proxy
statement and the accompanying form of proxy will be first sent, given or
otherwise made available to Bancorp's shareholders is April 13, 2001.

The expense of the proxy solicitation will be borne by Bancorp. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone by directors, officers or employees of Bancorp and its subsidiaries
without additional compensation. Bancorp is required to pay the reasonable
expenses incurred by recordholders of Bancorp common stock who are brokers,
dealers, banks or voting trustees, or their nominees, for mailing proxy material
and annual shareholder reports to the beneficial owners of Bancorp common stock
they hold of record, upon request of such recordholders.

The board of directors of Bancorp has fixed the close of business on
April 2, 2001, as the date for determining holders of record of Bancorp common
stock entitled to receive notice of, and to vote at, the Annual Meeting. On that
date, there were 32,044,924 shares of common stock outstanding. Each holder of
common stock is entitled to cast one vote for each share held of record on that
date.

The holders of a majority of the aggregate outstanding shares of common
stock, present either in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. Pursuant to the New Jersey
Business Corporation Act ("NJBCA"), abstentions and broker non-votes (which may
occur if a beneficial owner of stock where shares are held in a brokerage or
bank account fails to provide the broker or bank voting instructions as to such
shares) will be counted solely for the purpose of determining whether a quorum
is present.

If the enclosed form of proxy is properly marked, signed, and returned
in time to be voted at the Annual Meeting and not revoked, the shares
represented by the proxy will be voted in accordance with the instructions
marked thereon. Signed proxies not marked to the contrary will be voted (i)
"FOR" the election of all nominees for director, and (ii) "FOR" the amendment to
Bancorp's Restated Certificate of Incorporation to increase the number of shares
of Common Stock that Bancorp is authorized to issue by 100,000,000 shares.
Sending in a signed proxy will not affect a shareholder's right to attend the
Annual Meeting and vote in person, since the proxy is revocable.

Any Bancorp shareholder giving a proxy may revoke it at any time before
it is voted by (i) giving written notice of such revocation, signed in the same
manner as the proxy, to Bancorp's Secretary, (ii) executing a new proxy and
returning it to the Secretary of Bancorp prior to the voting of the first proxy
at the Annual Meeting, or (iii) attending the Annual Meeting and voting in
person (although attendance at the Annual Meeting will not in and of itself
constitute revocation of a proxy).

SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS

Common Stock

The following table sets forth, as of April 2, 2001, the beneficial
ownership of Bancorp's common stock by (i) each director and nominee for
director of Bancorp, (ii) each of the executive officers of Bancorp named in the
Summary Compensation Table and (iii) all the directors, nominees for director,
and executive officers of Bancorp as a group. Except as set forth below, no
person is known by Bancorp to own beneficially more than 5% of Bancorp's common
stock. Unless otherwise specified, all persons listed below have sole voting and
investment power with respect to their shares.

Name of Number of Shares Percent of
Beneficial Owner or Beneficially Class
Identity of Group Owned(1) Beneficially Owned(1)
----------------- -------- ---------------------

David Baird, IV...................................... 107,488 *
Robert C. Beck....................................... 202,821 (2) *
Jack R Bershad....................................... 65,152 (3) *
Joseph E. Buckelew................................... 322,960 (4) 1.01%
Vernon W. Hill, II................................... 1,623,813 (5) 4.94%
C. Edward Jordan, Jr................................. 238,109 (6) *
Morton N. Kerr....................................... 22,652 (7) *
Steven M. Lewis ..................................... 241,575 (8) *
Daniel J. Ragone..................................... 104,552 (9) *
William A. Schwartz, Jr.............................. 37,107 (10) *
Joseph T. Tarquini, Jr............................... 270,076 (11) *
Frank C. Videon, Sr.................................. 92,736 (12) *
Peter M. Musumeci, Jr ............................... 212,520 (13) *
Robert D. Falese, Jr. ............................... 210,224 (14) *
Dennis M. DiFlorio................................... 308,016 (15) *
David Wojcik......................................... 185,087 (16) *
All Directors, Nominees for Director
and Executive Officers of Bancorp
as a Group (16 Persons).............................. 4,065,636 (17) 13.25%
FMR Corp. (18)
82 Devonshire Street
Boston, MA 02109..................................... 2,369,110 7.53%
<FN>
- -----------------------------
* less than 1%
(1) The securities "beneficially owned" are determined in accordance with
the definitions of "beneficial ownership" as set forth in the
regulations of the Securities and Exchange Commission ("SEC") and,
accordingly, may include securities owned by or for, among others, the
wife and/or minor children of the individual and any other relative who
has the same residence as such individual as well as other securities
as to which the individual has or shares voting or investment power or
has the right to acquire under outstanding stock options within 60 days
after April 2, 2001. Shares subject to outstanding stock options which
an individual has the right to acquire within 60 days after April 2,
2001are deemed to be outstanding for the purpose of computing the
percentage of outstanding securities of the class owned by such
individual or any group including such individual only. Beneficial
ownership may be disclaimed as to certain of the securities.

(2) Includes 554 shares of common stock held by Mr. Beck's wife and 47,429
shares of common stock issuable upon the exercise of stock options
granted under Bancorp's 1989 and 1998 Stock Option Plans for
Non-Employee Directors.

(3) Includes 9,888 shares of common stock held by Mr. Bershad's wife and
32,140 shares of common stock issuable upon the exercise of stock
options granted under Bancorp's 1989 and 1998 Stock Option Plans for
Non-Employee Directors.

(4) Includes 79,244 shares of common stock held by Mr. Buckelew's wife,
2,389 shares of common stock held by Buckelew & Lane Investments, 3,264
shares of common stock issuable upon the exercise of stock options
granted under Bancorp's 1989 Stock Option Plan for Non-Employee
Directors and 68,413 shares of common stock issuable upon the exercise
of stock options granted under Bancorp's 1997 Employee Stock Option
Plan. Mr. Buckelew is a partner of Buckelew & Lane Investments.

(5) Includes 82,192 shares of common stock held by Site Development Inc.,
26,836 shares of common stock held by Mr. Hill's wife, 72,771 shares of
common stock held by S. J. Dining, Inc., 74,333 shares of common stock
held by U.S. Restaurants, Inc., 51,088 shares of common stock held by
J.V. Properties, 17,874 shares of common stock held by InterArch, Inc.,
77,452 shares held by InterArch, Inc. Profit Sharing Plan, 63,598
shares of common stock held by the Hill Family Trust, 25,800 shares
held by the Hill Family Foundation and 17,718 shares of common stock
allocated to Mr. Hill by Bancorp's ESOP. Mr. Hill is the Chairman of
the Board of Site Development, Inc., a shareholder of S. J. Dining,
Inc., a shareholder of U.S. Restaurants, Inc., a partner in J.V.
Properties, a co-trustee and beneficiary of the Hill Family Trust, a
trustee of the Hill Family Foundation, and a co-trustee and beneficiary
of Bancorp's ESOP Trust. InterArch, Inc., is a company owned by Mr.
Hill's wife. This amount also includes 835,734 shares of common stock
issuable upon the exercise of stock options granted to Mr. Hill under
Bancorp's Employee Stock Option Plans.

(6) Includes 161,886 shares of common stock issuable upon the exercise of
stock options granted to Mr. Jordan under Bancorp's Employee Stock
Option Plans, 15,158 shares of common stock allocated to Mr. Jordan by
Bancorp's ESOP, of which Mr. Jordan is a co-trustee and beneficiary,
and 3,554 shares of common stock held in trust for Mr. Jordan's minor
children.

(7) Includes 21,077 shares of common stock held by the Markeim-Chalmers,
Inc. Pension Plan. Markeim-Chalmers, Inc. is a company owned by Mr.
Kerr.

(8) Includes 72,771 shares of common stock held by S. J. Dining, Inc.,
74,333 shares of common stock held by U.S. Restaurants, Inc. and 31,450
shares of common stock issuable upon the exercise of stock options
granted to Mr. Lewis under Bancorp's 1989 and 1998 Stock Option Plans
for Non-Employee Directors. Mr. Lewis is President of S. J. Dining,
Inc. and President of U.S. Restaurants, Inc. This amount also includes
5,558 shares of common stock held in trust for Mr. Lewis' minor
children.

(9) Includes 24,876 shares of common stock held by Mr. Ragone's wife,
14,825 shares of common stock held jointly with Mr. Ragone's wife and
30,714 shares of common stock issuable upon the exercise of stock
options granted to Mr. Ragone under Bancorp's 1989 and 1998 Stock
Option Plans for Non-Employee Directors.

(10) Includes 3,219 shares of common stock held by Mr. Schwartz's wife,
11,536 shares of common stock held jointly with Mr. Schwartz's wife and
20,080 shares of common stock issuable upon the exercise of stock
options granted to Mr. Schwartz under Bancorp's 1989 and 1998 Stock
Option Plans for Non-Employee Directors.

(11) Includes 20,359 shares of common stock held by Mr. Tarquini's wife,
2,348 shares of common stock held by The Tarquini Foundation and 40,563
shares of common stock issuable upon the exercise of stock options
granted to Mr. Tarquini under Bancorp's 1989 and 1998 Stock Option
Plans for Non-Employee Directors.

(12) Includes 23,405 shares of common stock held jointly with Mr. Videon's
wife, 8,830 shares of common stock held by Mr. Videon's wife, 7,621
shares held by Frank C. Videon, Inc., Profit Sharing Trust, 4,425
shares of common stock held by Videon Chevrolet Profit Sharing Plan,
15,945 shares of common stock held by the Videon Dodge, Inc. Employee
Profit Sharing Trust, 8,483 shares of common stock held by the Frank C.
Videon Funeral Home Profit Sharing Plan, 10,649 shares of common stock
held in Trust for Mr. Videon's minor grandchildren and 13,369 shares of
common stock issuable upon the exercise of stock options granted to Mr.
Videon under Bancorp's 1989 and 1998 Stock Option Plans for
Non-Employee Directors. Mr. Videon is

president of Frank C. Videon, Inc., Vice President of Videon Chevrolet,
President of Videon Dodge, Inc., and Owner of Videon Funeral Home.

(13) Includes 93,119 shares of common stock held jointly with Mr. Musumeci's
wife, 2,560 shares held by the Peter/Linda Musumeci Foundation, 102,027
shares of common stock issuable upon the exercise of stock options
granted to Mr. Musumeci under Bancorp's Employee Stock Option Plans and
14,387 shares of common stock allocated to Mr. Musumeci under Bancorp's
ESOP.

(14) Includes 181,015 shares of common stock issuable upon the exercise of
stock options granted to Mr. Falese under Bancorp's Employee Stock
Option Plans, 4,802 shares of common stock allocated to Mr. Falese
under Bancorp's ESOP, 10,897 shares of common stock held by Mr.
Falese's wife, and 432 shares of common stock held jointly with Mr.
Falese's wife.

(15) Includes 12,819 shares held by Mr. DiFlorio's wife, 234,528 shares of
common stock issuable upon the exercise of stock options granted to Mr.
DiFlorio under Bancorp's Employee Stock Option Plans and 8,307 shares
of common stock allocated to Mr. DiFlorio under Bancorp's ESOP.

(16) Includes 154,431 shares of common stock issuable upon the exercise of
stock options granted to Mr. Wojcik under Bancorp's Employee Stock
Option Plans, 11,196 shares of common stock held by Mr. Wojcik's wife,
639 shares of common stock held in trust for Mr. Wojcik's minor
children and 7,499 shares of common stock allocated to Mr. Wojcik under
Bancorp's ESOP.

(17) Includes an aggregate of 1,953,779 shares of common stock issuable upon
the exercise of stock options granted to directors and certain
executive officers of Bancorp under Bancorp's Stock Option Plans for
Non-Employee Directors and Employee Stock Option Plans.

(18) According to FMR Corp.'s Schedule 13G, dated February 14, 2001, as
filed under the Securities Exchange Act of 1934, as amended, the shares
shown in the table are beneficially owned as follows: Fidelity
Management & Research Company, 1,996,410 shares and Fidelity Management
Trust Company, 402,700 shares. According to the Schedule 13G, FMR Corp.
and related entities have sole voting power over 393,000 shares and
sole dispositive power over 2,369,110 shares of the shares reported as
beneficially owned. The Schedule 13G indicates that Edward C. Johnson
3d, Chairman of FMR Corp. and Abigail Johnson, a director and
significant shareholder of FMR Corp., may also be considered beneficial
owners of these shares.

</FN>

ELECTION OF DIRECTORS

The bylaws of Bancorp provide that Bancorp's business shall be managed
by a board of not less than five nor more than twenty-five directors and that
within these limits the number of directors shall be as established by
resolution of a majority of the full board of directors. The board of directors
by resolution has set at twelve the number of persons to be elected to the board
of directors at the Annual Meeting.

Pursuant to the NJBCA, the election of directors will be determined by
a plurality vote and the twelve nominees receiving the most "FOR" votes will be
elected. Shares may be voted "FOR" or withheld from each nominee. Abstentions
and broker non-votes (which may occur if a beneficial owner of stock where
shares are held in a brokerage or bank account fails to provide the broker or
bank voting instructions as to such shares) will have no effect on the outcome
of the election because directors will be elected by a plurality of the shares
voted for directors.

The board of directors unanimously recommends a vote "FOR" the election
as directors of the nominees named herein.

The board of directors has designated the twelve persons listed below
to be nominees for election as directors. All of the nominees are currently
members of the board, and each of them has consented to serve if elected.
Bancorp has no reason to believe that any of the nominees will be unavailable
for election; however, if any nominee becomes unavailable for any reason, the
board of directors may designate a substitute nominee, or the number of
directors

to be elected at the Annual Meeting will be reduced accordingly. Directors of
Bancorp hold office for one year and until their respective successors have been
duly elected and qualified.

The following information regarding Bancorp's nominees is based, in
part, on information furnished by the nominees.

Name Age Positions with Bancorp and Subsidiaries
---- --- ---------------------------------------

Vernon W. Hill, II............. 55 Chairman and President of Bancorp; Chairman and President of
Commerce NJ; Chairman and President of Commerce PA; Chairman
of Commerce Shore, Commerce Central, Commerce North and
Commerce Delaware

C. Edward Jordan, Jr........... 57 Executive Vice President and Director of Bancorp; Executive
Vice President and Director of Commerce NJ; Director of
Commerce PA

Robert C. Beck................. 65 Secretary and Director of Bancorp; Secretary and Director of
Commerce NJ; Director of Commerce PA

David Baird, IV................ 64 Director of Bancorp, Commerce NJ and Commerce PA

Jack R Bershad................. 70 Director of Bancorp, Commerce NJ and Commerce PA

Joseph E. Buckelew............. 72 Director of Bancorp, Commerce NJ, Commerce Shore and Commerce
PA; President of Commerce Shore; Chairman of Commerce National
Insurance Services, Inc.

Morton N. Kerr................. 70 Director of Bancorp, Commerce NJ and Commerce PA

Steven M. Lewis................ 51 Director of Bancorp, Commerce NJ and Commerce PA

Daniel J. Ragone............... 73 Director of Bancorp, Commerce NJ and Commerce PA

William A. Schwartz, Jr........ 60 Director of Bancorp, Commerce NJ and Commerce PA

Joseph T. Tarquini, Jr......... 65 Director of Bancorp, Commerce NJ and Commerce PA

Frank C. Videon, Sr............ 78 Director of Bancorp, Commerce NJ and Commerce PA

Mr. Hill, a director of Commerce NJ since 1973 and Bancorp since 1982,
has been Chairman and/or President of Commerce NJ since 1973 and Chairman and
President of Bancorp since 1982. Mr. Hill has been Chairman and/or President of
Site Development, Inc., Cherry Hill, New Jersey, a developer of real estate,
since 1968. Mr. Hill has been Chairman of the board of directors of Commerce PA
from June 1984 to June 1986 and from January 1987 to the present, President of
Commerce PA since June 1994, a director of Commerce Bank/Harrisburg, Camp Hill,
Pennsylvania since 1985, Chairman of Commerce Shore since January, 1989,
Chairman of Commerce North since January, 1997 and Chairman of Commerce Delaware
and Commerce Central since October, 1999 and January,1999, respectively.

Mr. Jordan, a director of Commerce NJ since 1974, Bancorp since 1982
and Commerce PA since June, 1997, has been Executive Vice President of Commerce
NJ since 1974 and Executive Vice President of Bancorp since 1982.

Mr. Beck, a director of Commerce NJ since 1973, Bancorp since 1982 and
Commerce PA since June, 1997, has been Secretary of Commerce NJ since 1973 and
Secretary of Bancorp since 1982. Mr. Beck has been a partner of the law firm of
Parker, McCay & Criscuolo, Marlton, New Jersey since 1987.

Mr. Baird, a director of Bancorp and Commerce NJ since 1988 and
Commerce PA since June, 1997, is the former President of Haddonfield Lumber
Company, Inc., Cherry Hill, New Jersey.

Mr. Bershad, a director of Commerce PA since 1984 and Bancorp and
Commerce NJ since 1987, is the Chairman Emeritus of the law firm of Blank Rome
Comisky & McCauley LLP, Philadelphia, Pennsylvania and Cherry Hill, New Jersey,
and has been a partner in such firm since 1964.

Mr. Buckelew has been a director of Bancorp and Chairman of Commerce
National Insurance Services, Inc., the wholly-owned insurance brokerage
subsidiary of Bancorp, since November, 1996 and has been a director of Commerce
Shore since 1993 and Commerce NJ and Commerce PA since June, 1997. Mr. Buckelew
was elected President of Commerce Shore in 1998. Mr. Buckelew was the President
of Morales, Potter & Buckelew, Inc. t/a Buckelew & Associates, Toms River, New
Jersey from 1959 to November, 1996, when this insurance agency was acquired by
Bancorp.

Mr. Kerr, a director of Commerce NJ since 1973, Bancorp since 1982 and
Commerce PA since June, 1997, has been Chairman and/or President of
Markeim-Chalmers, Inc., Realtors, Cherry Hill, New Jersey, since 1965.

Mr. Lewis, a director of Commerce PA since 1984 and a director of
Bancorp and Commerce NJ since 1988, has been President of U.S. Restaurants,
Inc., Blue Bell, Pennsylvania since 1985 and President of S. J. Dining, Inc.
since 1986.

Mr. Ragone, a director of Commerce NJ since 1981, Bancorp since 1982
and Commerce PA since June, 1997, is the former Chairman and/or President of
Ragone, Raible, Lacatena & Beppel, C.P.A., Haddonfield, New Jersey, and its
predecessor firms.

Mr. Schwartz, a director of Commerce PA since 1984 and a director of
Bancorp and Commerce NJ since June, 1997, has been Chairman, President and Chief
Executive Officer of U.S. Vision, Glendora, New Jersey, or its predecessor
firms, since 1967.

Mr. Tarquini, a director of Commerce NJ since 1973, Bancorp since 1982
and Commerce PA since June, 1997, is the Chairman and former President of The
Tarquini Organization, A.I.A., Camden, New Jersey, since 1980. Prior thereto, he
was a partner in its predecessor firms.

Mr. Videon, a director of Commerce PA since 1991 and a director of
Bancorp and Commerce NJ since June, 1997, has been the owner of Frank C. Videon
Funeral Home, Broomall, Pennsylvania, since 1982.

Director Compensation

Directors of Bancorp, Commerce NJ and Commerce PA were paid an annual
fee of $14,000 plus $1,000 for each meeting of the board of directors and
committee meeting attended in 2000 and will be paid an annual fee of $14,000 and
a meeting fee of $1,000 for each meeting of the board of directors and committee
meeting attended in 2001. When meetings of the board of directors of Bancorp,
Commerce NJ and Commerce PA occur on the same day, only one fee is paid.
Directors of Commerce Shore, Commerce Central, Commerce North and Commerce
Delaware were paid a fee of $500 for each meeting of the board of directors and
committee meeting attended in 2000 and will be paid the same meeting fee for
each meeting of the board of directors and committee meeting attended in 2001.
No fees are paid to directors who are also operating officers of Bancorp or its
banking subsidiaries. Each director of Bancorp is provided with $100,000 of
permanent life insurance.

A retirement plan for Bancorp's directors who are not officers or
employees of Bancorp on the date their service as a Bancorp director ends
("outside director"), provides that outside directors with five or more years of
service as a Bancorp director are entitled to receive annually, for ten years or
the number of years served as a director, whichever is less, commencing upon
such director's attainment of age 65 and retirement from the Bancorp board or
upon such director's disability, payments equal to the highest 1099 Compensation
(as such term is defined in the plan) in effect at any time during the five year
period immediately preceding such director's retirement or, if earlier, death or
disability.

This plan further provides that, in the event a director dies before receiving
all benefits to which he or she is entitled, such director's surviving spouse is
entitled to receive all benefits not received by the deceased director
commencing upon such director's death. Upon a change in control of Bancorp, the
plan provides that each director then sitting on the Bancorp board,
notwithstanding the length of time served as a director, becomes entitled to
receive annually, for ten years, or twice the number of years served as a
director, whichever is less, payments equal to the higher of the director's 1099
Compensation at the time of the director's termination of board service and the
highest 1099 Compensation in effect at any time during the five year period
immediately preceding the change in control commencing on the latest to occur of
the termination of the director's board service, attainment of age 65 or any
date designated by the director at any time and from time to time. The
definition of "change in control" for purposes of this plan parallels the
definition of that term contained in the Employment Agreements discussed on page
12 of this proxy statement. This plan became effective January 1, 1993, as
amended.

1989 and 1998 Stock Option Plans For Non-Employee Directors

Effective April 24, 1989 (and as amended in 1994), Bancorp adopted the
1989 Stock Option Plan for Non-Employee Directors (the "1989 Plan") which
provides for the purchase of a total of not more than 320,690 shares (as
adjusted for all stock splits and dividends through April 2, 2001) of Bancorp
common stock by members of the boards of directors of Bancorp and its subsidiary
corporations. Options granted pursuant to the 1989 Plan may be exercised
beginning on the earlier to occur of (i) one year after the date of their grant
or (ii) a "change in control" of Bancorp, as such term is defined in the 1989
Plan. No further options may be granted under the 1989 Plan. As of April 2,
2001, 76,951 options (as adjusted for all stock splits and stock dividends
through April 2, 2001) were outstanding under the 1989 Plan.

Effective June 29, 1998, Bancorp adopted the 1998 Stock Option Plan for
Non-Employee Directors (the "1998 Plan") which provides for the purchase of a
total of not more than 551,250 shares (as adjusted for all stock splits and
dividends through April 2, 2001) of Bancorp common stock by members of the board
of directors of Bancorp and its subsidiary corporations. Under the 1998 Plan,
members of the boards of directors of Bancorp and its current and future
subsidiary corporations (i.e., any corporation in which Bancorp owns, directly
or indirectly, fifty percent or more of the outstanding voting power of all
classes of stock of such corporation at the time of election or reelection of
such director) who are not also employees of Bancorp or its subsidiary
corporations are entitled to receive options to purchase Bancorp common stock.
Options granted pursuant to the 1998 Plan may be exercised in whole, or from
time to time in part, beginning on the earlier to occur of (i) one year after
the date of their grant or (ii) a "change in control" of Bancorp, as such term
is defined in the 1998 Plan. As of April 2, 2001, 431,563 options (as adjusted
for all stock splits and stock dividends through April 2, 2001) had been granted
under the 1998 Plan and 119,688 options (as adjusted for all stock splits and
stock dividends through April 2, 2001) were available for grant. Options may
continue to be granted under the 1998 Plan through December 31, 2007.

Both the 1989 Plan and 1998 Plan are administered by the board of
directors of Bancorp, including non-employee directors. Options granted under
the 1989 Plan and/or 1998 Plan are not "incentive stock options" as defined in
Section 422 of the Internal Revenue Code of 1986, as amended. Option prices are
intended to equal 100% of the fair market value of Bancorp's common stock on the
date of option grant. The board of directors of Bancorp, in their sole
discretion, may grant options under the 1998 Plan to non-employee directors and
determine the number of shares subject to each option, the rate of option
exercisability, and subject to certain limitations, the option price and the
duration of the options. Unless terminated earlier by the option's terms,
options granted under the 1998 Plan expire ten years after the date they are
granted.

During the fiscal year ended December 31, 2000, no options to purchase
shares of Bancorp common stock were granted to the directors under the 1998
Plan.

Meetings and Committees of the Board of Directors

During 2000, there were 12 meetings of the board of directors of
Bancorp. The board of directors of Bancorp has established an Audit Committee,
an Oversight Committee and a Personnel Committee but does not have a standing
Nominating Committee. In addition, each of Bancorp's six subsidiary banks,
Commerce Bank, N.A., Cherry Hill, New Jersey ("Commerce NJ"), Commerce
Bank/Pennsylvania, N.A., Devon, Pennsylvania ("Commerce PA"), Commerce
Bank/Shore, N.A., Toms River, New Jersey ("Commerce Shore"), Commerce
Bank/Central, N.A., Flemington, New Jersey ("Commerce Central"), Commerce
Bank/Delaware, N.A., Wilmington, Delaware ("Commerce Delaware") and Commerce
Bank/North, Ramsey, New Jersey ("Commerce North") has various committees of
their respective boards.

Information with respect to the committees of the board of directors of
Bancorp is set forth below.

Audit Committee

The Audit Committee reviews the financial statements, accounting
procedures and methods employed in connection with audit programs of Bancorp and
its wholly-owned subsidiary banks. It serves as the principal liaison between
the board of directors and Bancorp's independent auditors. In addition, this
committee makes recommendations to the board of directors concerning the
selection of Bancorp's independent auditors. Daniel J. Ragone, Chairman, Frank
C. Videon, Sr. and Joseph T. Tarquini, Jr. are the current members of the Audit
Committee. During 2000, there were four meetings of the Audit Committee. The
Board of Directors adopted an Audit Committee Charter on May 16, 2000, a copy of
which is attached as Appendix A. The board of directors of Bancorp, in its
business judgement, has determined that each member of the Audit Committee is
independent, financially literate and possessed of appropriate financial
management expertise, as required by applicable listing standards of the New
York Stock Exchange.

Oversight Committee

The Oversight Committee reviews compliance matters at Bancorp and its
banking subsidiaries, and reports to Bancorp's Audit Committee. Daniel J.
Ragone, Joseph T. Tarquini, Jr., Joseph A. Haynes (Director of Commerce North)
and Daniel M. Monroe (Director of Commerce Shore) are the current members of the
Oversight Committee. During 2000, there were four meetings of the Oversight
Committee.

Personnel Committee

The Personnel Committee reviews and recommends the levels of
compensation of Bancorp's and its subsidiary banks' executive officers and
administers Bancorp's Employee Plans. Morton N. Kerr, Daniel J. Ragone and Jack
R Bershad are the current members of the Personnel Committee. During 2000, there
was one meeting of the Personnel Committee. The report of the Personnel
Committee with respect to 2000 compensation is set forth on page 17 of this
proxy statement.

Attendance

In 2000, each of Bancorp's directors and nominees for director attended
more than 75% of the total number of meetings of the board of directors and all
committees of which they were members of Bancorp and its subsidiary banks, as
the case may be.

REPORT OF THE AUDIT COMMITTEE

On February 20, 2001, the Audit Committee met with management to review
and discuss the audited financial statements. The Audit Committee also conducted
discussions with its independent auditors, Ernst & Young LLP, regarding the
matters required by the Statement on Auditing Standards No. 61. As required by
Independence Standards Board Standard No. 1, "Independence Discussion with Audit
Committees," the Audit Committee has discussed with and received the required
written disclosures and a confirming letter from Ernst & Young LLP regarding its
independence and has discussed with Ernst & Young LLP its independence. The
Audit Committee has also considered whether the provision of non-audit services
by the independent accountants to Bancorp is compatible with maintaining the
accountants' independence. Based upon the review and discussions referred to
above, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on Form
10-K for the year ended December 31, 2000.

This Audit Committee Report and information regarding the Audit
Committee contained in the paragraph preceding the Report shall not be deemed
incorporated by reference in any document previously or subsequently filed with
the Securities and Exchange Commission that incorporates by reference all or any
portion of this proxy statement, except to the extent that Bancorp specifically
requests that the Report or information be specifically incorporated by
reference. The Audit Committee's considerations and discussions referred to
above do not assure that the audit of Bancorp's financial statements for the
year ended December 31, 2000 has been carried out in accordance with generally
accepted auditing standards, that the financial statements are presented in
accordance with generally accepted accounting principles or that Bancorp's
accountants are in fact "independent".

THE AUDIT COMMITTEE

Daniel J. Ragone
Frank C. Videon, Sr.
Joseph T. Tarquini, Jr.

EXECUTIVE OFFICERS

The executive officers of Bancorp and its banking subsidiaries, as of
April 2, 2001, are set forth below.

Position with Bancorp, Commerce NJ, Commerce PA,
Commerce Shore, Commerce Central,
Commerce Delaware and Commerce North
Name Age Principal Occupation
---- --- ------------------------------------------------

Vernon W. Hill, II 55 Chairman and President of Bancorp since 1982; Chairman and/or President
of Commerce NJ since 1973; Chairman of Commerce PA from June 1984 to
June 1986 and from January 1987 to present; President of Commerce PA
from June 1994 to present; Chairman of Commerce Shore since 1989,
Commerce North since 1997, and Commerce Central and Commerce Delaware
since 1999.

C. Edward Jordan, Jr. 57 Executive Vice President and Director of Bancorp since 1982; Executive
Vice President and Director of
Commerce NJ since 1974; Director of
Commerce PA since 1997.

Peter M. Musumeci, Jr. 50 Executive Vice President and Senior Credit Officer of Bancorp since
1986 and Treasurer and Assistant
Secretary of Bancorp since 1984;
Executive Vice President of
Commerce NJ since 1986; Director of
Commerce Shore since 1989.

Robert D. Falese, Jr. 54 Executive Vice President and Senior Loan Officer of Commerce NJ since
1992.

Dennis M. DiFlorio 47 Executive Vice President of Commerce NJ since January, 1996; Director
of Commerce North since 1997. Prior thereto Mr. DiFlorio was Senior
Vice President of Commerce NJ since 1988.

David Wojcik 48 Senior Vice President of Bancorp since 1988.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table is a summary of certain information concerning the
compensation during the last three fiscal years awarded or paid to, or earned
by, Bancorp's chief executive officer and each of Bancorp's other four most
highly compensated executive officers during Bancorp's last fiscal year.

Long Term
Annual Compensation Compensation
------------------------------------------------- --------------
Securities
Other Underlying All
Annual Stock Option Other
Name/Title Year Salary Bonus Compensation(1) Grants(2) Compensation(3)
---------- ---- ------ ----- --------------- --------- ---------------

Vernon W. Hill, II 2000 $800,000 $250,000 $93,020 0 $30,072 (3)
Chairman and President of Bancorp; 1999 700,000 200,000 69,091 105,000 33,086
Chairman and President of Commerce NJ 1998 620,000 150,000 69,006 248,058 34,568
and Commerce PA; Chairman of Commerce
Shore, Commerce Central, Commerce
Delaware and Commerce North

C. Edward Jordan, Jr. 2000 $262,500 $25,000 0 $24,097 (3)
Executive Vice President of Bancorp; 1999 262,500 25,000 10,500 24,312
Executive Vice President of Commerce 1998 250,000 25,000 11,160 25,950
NJ

Peter M. Musumeci, Jr. 2000 $330,000 $75,000 0 $19,001 (3)
Executive Vice President and Senior 1999 300,000 60,000 26,250 22,077
Credit Officer, Treasurer and 1998 280,000 60,000 22,185 23,429
Assistant Secretary of Bancorp;
Executive Vice President of Commerce
NJ

Robert D. Falese, Jr. 2000 $375,000 $100,000 0 $14,414 (3)
Executive Vice President and Senior 1999 325,000 100,000 52,500 17,299
Loan Officer of Commerce NJ 1998 300,000 80,000 27,697 18,211

Dennis M. DiFlorio 2000 $375,000 $100,000 0 $4,783 (3)
Executive Vice President of 1999 325,000 100,000 52,500 7,645
Commerce NJ 1998 300,000 80,000 27,697 8,632

<FN>
__________
(1) The total in this column reflects personal use of a company car (2000,
$4,518; 1999, $4,517; 1998, $4,517), expense allowances (2000,
$86,632;1999, $62,004; 1998, $62,004) and country club dues (2000,
$1,870;1999, $2,570; 1998, $2,485). The value of such other annual
compensation did not exceed the lesser of $50,000 or 10% of salary and
bonus for any individual in any year except Mr. Hill.

(2) The stock option grants reflected in this column have been adjusted for
the 5-for-4 stock split in the form of a 25% stock dividend declared on
June 29, 1998, and the 5% stock dividends declared on December 21, 1999
and December 15, 1998. The original grant was adjusted based on the
unexercised option shares outstanding on the date of the stock
dividend.

(3) The totals in this column reflect (i) premiums on life insurance (for
2000, Mr. Hill $22,129, Mr. Jordan $15,818; and Mr. Musumeci $12,851;
1999, Mr. Hill $22,746; Mr. Jordan, $16,320; and Mr. Musumeci $13,147;
and for 1998, Mr. Hill, $23,375; Mr. Jordan, $16,855; and Mr. Musumeci,
$13,456); (ii) long-term disability policies (for 2000, Mr. Hill
$7,724, Mr. Jordan $8,060; Mr. Musumeci $5,931; Mr. Falese $14,195; and
Mr. DiFlorio $4,564; for 1999, Mr. Hill $7,329; Mr. Jordan, $4,981; Mr.
Musumeci $5,919; Mr. Falese, $14,288 and Mr. DiFlorio $4,634; for 1998,
Mr. Hill, $7,033; Mr. Jordan, $4,935, Mr. Musumeci, $5,813; Mr. Falese,
$14,051 and Mr. DiFlorio, $4,472); and (iii) contributions to Bancorp's
ESOP (in 2000, $219 each for all five individuals; in 1999, $3,011 each
for all five individuals; and in 1998, $4,160 each for all five
individuals).
</FN>

Employment Agreements

Mr. Hill's employment agreement provides that he will be employed by
Bancorp and Commerce NJ as Chairman of the Board, President and Chief Executive
Officer for a term of five years effective January 1, 1992, provided that on
each January 1 thereafter Mr. Hill's employment agreement shall be automatically
renewed and extended for a new five year term unless either Bancorp or Mr. Hill
gives the other at least ninety days prior written notice of their desire to
terminate Mr. Hill's employment agreement, in which event the term will have
four years remaining.

Under the terms of Mr. Hill's employment agreement, Mr. Hill's "base
salary" shall not be less than $1,250,000. Mr. Hill's employment agreement
provides that Mr. Hill will participate in any benefit or compensation programs
in effect which are generally made available from time to time to executive
officers of Bancorp and provides for all other fringe benefits as in effect from
time to time which are generally available to Bancorp's salaried officers
including, without limitation, medical and hospitalization coverage, life
insurance coverage and disability coverage.

Mr. Hill's employment agreement requires Bancorp to compensate Mr. Hill
for the balance of the term of his employment agreement at a rate equal to
seventy percent of his annual base salary if he becomes permanently disabled (as
defined in Mr. Hill's employment agreement) during the term and to pay Mr.
Hill's designated beneficiary a lump sum death benefit if he dies during the
term in an amount equal to three times his average annual base salary in effect
during the twenty-four months immediately preceding his death.

Mr. Hill's employment agreement allows Mr. Hill to terminate his
employment with Bancorp upon a change in control of Bancorp (as defined in Mr.
Hill's employment agreement) and if within three years of such change in
control, without Mr. Hill's consent, among other things, the nature and scope of
his authority with Bancorp or a surviving or acquiring person are materially
reduced to a level below that which he enjoyed on January 1, 1992. If Mr. Hill
terminates his employment because of a change in control, he will be entitled to
a lump sum severance payment equal to four times his average annual base salary
in effect during the twenty-four month period immediately preceding such
termination (provided that such payment does not constitute a "parachute
payment" under Section 280G of the Internal Revenue Code of 1986, as amended,
and in the event such payment would constitute a "parachute payment", such lump
sum severance payment shall be reduced so as to not constitute a "parachute
payment"), and the continuation of certain benefits including medical,
hospitalization and life insurance. Mr. Hill's employment agreement contains a
non-competition covenant for Mr. Hill should his employment with Bancorp be
terminated under certain circumstances.

The employment agreements for Messrs. Jordan, Musumeci, Falese and
DiFlorio are substantially similar to that of Mr. Hill's except that: Mr. Jordan
will serve as Executive Vice President of Bancorp and Commerce NJ, Mr. Musumeci
will serve as Executive Vice President and Senior Credit Officer of Bancorp and
Commerce NJ, Mr. Falese will serve as Executive Vice President and Senior Loan
Officer of Bancorp and Commerce NJ, and Mr. DiFlorio will serve as Executive
Vice President of Bancorp and Commerce NJ. The term of each employment agreement
is three years and the lump sum death benefit is in each case equal to two times
the respective average annual base salary in effect during the twenty-four month
period preceding death. Mr. Jordan's "base salary" under his employment
agreement is $275,000, Mr. Musumeci's "base salary" under his employment
agreement is $360,000, Mr. Falese's "base salary" under his employment agreement
is $500,000 and Mr. DiFlorio's "base salary" under his employment agreement is
$500,000.

Employee Stock Option Plans

Effective April, 1984, Bancorp adopted the Commerce Bancorp, Inc.
Incentive Stock Option Plan (the "1984 Plan") which provided for the purchase of
a total of not more than 1,950,905 shares of Bancorp common stock (as adjusted
for all stock splits and stock dividends through April 2, 2001) by officers and
key employees. Options granted under the 1984 Plan were intended to constitute
"incentive stock options" as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"). No further options may be granted under the
1984 Plan. As of April 2, 2001, 242,982 options (as adjusted for all stock
splits and stock dividends through April 2, 2001) were outstanding under the
1984 Plan.

Effective May, 1994, Bancorp adopted the Commerce Bancorp, Inc. 1994
Employee Stock Option Plan (the "1994 Plan") which provided for the purchase of
a total of not more than 1,674,290 shares of Bancorp common stock (as adjusted
for all stock splits and stock dividends through April 2, 2001) by officers and
key employees. Pursuant to the 1994 Plan, stock options may be granted which
qualify under the Code as incentive stock options as well as stock options that
do not qualify as incentive stock options. No further options may be granted
under the 1994 Plan. As of April 2, 2001, 808,328 options (as adjusted for all
stock splits and stock dividends through April 2, 2001) were outstanding under
the 1994 Plan.

Effective May, 1997, Bancorp adopted the Commerce Bancorp, Inc. 1997
Employee Stock Option Plan (the "1997 Plan") which provides for the purchase of
a total of not more than 8,617,578 shares of Bancorp common stock (as adjusted
for all stock splits and stock dividends through April 2, 2001) by officers and
key employees. Pursuant to the 1997 Plan, stock options may be granted which
qualify under the Code as incentive stock options as well as stock options that
do not qualify as incentive stock options. All officers and key employees of
Bancorp or any current or future subsidiary corporation are eligible to receive
options under the 1997 Plan. As of April 2, 2001, 4,850,260 options (as adjusted
for all stock splits and stock dividends through April 2, 2001) had been granted
under the 1997 Plan and 3,767,318 options (as adjusted for all stock splits and
stock dividends through April 2, 2001) were available for grant. Options may
continue to be granted under the 1997 Plan through December 31, 2006.

The 1984 Plan, 1994 Plan and 1997 Plan are collectively referred to as
the "Employee Plans."

The purpose of the Employee Plans is to provide additional incentive to
employees of Bancorp by encouraging them to invest in Bancorp's common stock and
thereby acquire a proprietary interest in Bancorp and an increased personal
interest in Bancorp's continued success and progress.

The Employee Plans are administered by the Personnel Committee
("Committee") which is appointed by the board of directors and consists only of
directors who are not eligible to receive options under the Employee Plans. The
Committee determines, among other things, which officers and key employees
receive an option or options under the Employee Plans, the type of option
(incentive stock options or non-qualified stock options, or both) to be granted,
the number of shares subject to each option, the rate of option exercisability,
and, subject to certain other provisions to be discussed below, the option price
and duration of the option. Under the 1997 Plan, no individual may be granted a
number of options that is more than 50% of the total number of shares of Bancorp
common stock authorized for issuance under the 1997 Plan. In addition, incentive
stock options first exercisable by an employee in any one year under the 1997
Plan (and all other Employee Plans of Bancorp) may not exceed $100,000 in value
(determined at the time of grant). The Committee may, in its discretion, modify
or amend any of the option terms herein described, provided that if an incentive
option is granted, the option as modified or amended continues to be an
incentive stock option.

In the event of any change in the capitalization of Bancorp, such as by
stock dividend, stock split or what the board of directors deems in its sole
discretion to be similar circumstances, the aggregate number and kind of shares
which may be issued under the Employee Plans will be appropriately adjusted in a
manner determined in the sole discretion of the board of directors. Reacquired
shares of Bancorp's common stock, as well as unissued shares, may be used for
the purpose of the 1997 Plan. Common stock of Bancorp subject to options which
have terminated unexercised, either in whole or in part, will be available for
future options granted under the 1997 Plan. The option price for options issued
under the 1997 Plan must be at least equal to 100% of the fair market value of
the common stock as of the date the option is granted.

Options granted pursuant to the Employee Plans are not exercisable
until one year after the date of grant and then are exercisable pursuant to a
schedule based on years of service or option holding period. Under the 1994 Plan
and 1997 Plan, but not the 1984 Plan, in the event of a "change in control" of
Bancorp, as defined in the 1994 Plan and 1997 Plan, each optionee may exercise
the total number of shares then subject to the option. The Committee has the
authority to provide for a different rate of option exercisability for any
optionee.

Options granted under the 1984 Plan and 1994 Plan are not transferable
other than by will or by the laws of descent and distribution. Except as
otherwise authorized by the Committee with respect to non-qualified stock
options only, options granted pursuant to the 1997 Plan are not transferable,
except by will or the laws of descent and distribution in the event of death.

Options granted under the 1984 Plan had a term of ten years subject to
earlier termination in the event of termination of employment, death, or
disability. The 1984 Plan provided that during the lifetime of an optionee, his
option is exercisable only by him and only while employed by Bancorp or a
subsidiary or within (i) three months after his retirement, or (ii) three months
after he otherwise ceases to be so employed, to the extent the option was
exercisable on the last day of employment. For these purposes, retirement means
termination of employment by an optionee who has attained age 65. If an optionee
retires due to disability, his options may be exercised within twelve months of
his retirement date. If an optionee dies within a period during which his option
could have been exercised by him, his option may be exercised within one year of
his death (unless the option earlier terminates) by those entitled to do so
under his will or the laws of descent and distribution, but only to the extent
the option was exercisable by him immediately prior to his death.

Under the 1994 Plan and 1997 Plan, unless terminated earlier by the
option's terms, both incentive stock options and non-qualified stock options
expire ten years after the date they are granted. Options terminate three months
after the date on which employment is terminated (whether such termination be
voluntary or involuntary), other than by reason of death or disability. The
option terminates one year from the date of termination due to death or
disability (but not later than the scheduled termination date). During an
optionee's lifetime, the option is exercisable only by the optionee including,
for this purpose, the optionee's legal guardian or custodian in the event of
disability, except that under the 1997 Plan, if specifically permitted by the
Committee or the board of directors, non-qualified stock options are
transferrable.

During 2000, Bancorp granted stock options to purchase an aggregate of
48,825 shares (as adjusted for all stock splits and stock dividends through
April 2, 2001) of Bancorp's common stock at an average price of $37.45 per share
(as adjusted for all stock splits and stock dividends through April 2, 2001)
under the 1997 Plan. During 2000, a total of 694,646 options were exercised
under the Employee Plans.

Stock Option Tables

During 2000 no options were granted to any of the executive officers
named in the Summary Compensation Table.

The following table sets forth certain information regarding individual
exercises of stock options during 2000 by each of the executive officers named
in the Summary Compensation Table.

AGGREGATED STOCK OPTION EXERCISES IN 2000 AND
YEAR-END STOCK OPTION VALUES

Shares Number of Securities
Acquired Underlying Unexercised Value of Unexercised in the
on Value Stock Options at Money Stock Options
Name Exercise Realized Year-End 2000 at Year-End 2000
---- -------- -------- ------------- ----------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------

Vernon W. Hill, II 26,172 $856,858 835,727 0 $33,102,678 0

C. Edward Jordan, Jr. 15,385 681,170 161,886 0 8,244,508 0

Peter M. Musumeci, Jr. 24,995 996,676 132,409 0 5,218,624 0

Robert D. Falese, Jr. 39,056 1,684,956 193,064 0 7,584,558 0

Dennis M. DiFlorio 10,243 291,536 234,527 0 9,952,192 0

-------------------------

Employee Stock Ownership Plan

Effective January 1, 1989, Bancorp's board of directors established the
Commerce Bancorp, Inc. Employee Stock Ownership Plan ("ESOP") as a restatement
of Bancorp's Stock Bonus Plan. Employees of Bancorp and its subsidiaries are
eligible to participate in the ESOP if they are at least 21 years of age and
have completed at least 1,000 hours of service to Bancorp or its subsidiaries
during the twelve-month period beginning on the date of hire or during any
subsequent calendar year. Participants are 100% vested in their accounts under
the ESOP upon death, total disability, a complete discontinuance of
contributions by Bancorp, termination of the ESOP, and a partial termination of
the ESOP where a participant is involved in that termination. Except as provided
above, generally, participants are 20% vested after 3 years of credited service,
increasing by 20% for each additional year of credited service so that
participants are 100% vested in their accounts under the ESOP after seven years
of credited service with Bancorp or a subsidiary.

Subject to limitations contained in the Code, contributions by Bancorp
to the ESOP are deductible for federal income tax purposes. Except as described
below, such contributions are determined annually by Bancorp's board of
directors at its discretion. Contributions may consist either of shares of
Bancorp's stock, or cash, which may be invested by the trustees of the ESOP's
trust in shares of Bancorp's stock or to provide funds to pay principal or
interest on any indebtedness incurred by the ESOP in purchasing shares.
Contributions by Bancorp are allocated as of the close of each plan year among
accounts of participants in the ESOP. Each participant's account is credited
with that portion of contributions by Bancorp as such participant's compensation
(as defined in the ESOP) bears to all participants' compensation.

In January 1990, the ESOP Trust purchased 417,000 shares of Series C
ESOP Cumulative Convertible Preferred Stock ("ESOP Shares") from Bancorp for an
aggregate purchase price of $7,500,000. The ESOP Trust borrowed the purchase
price for the ESOP Shares from an unaffiliated bank, which loan was refinanced
with another unaffiliated bank in 1994 (the "Loan"). During 1999, the
outstanding principal balance on the Loan was paid in full.

Effective March 1, 1998, the Trustees of the ESOP exercised their right
to convert all 417,000 ESOP Shares held by the ESOP into 849,062 shares of
Bancorp common stock. As of April 2, 2001, the ESOP Trust held of record 893,516
shares of common stock (as adjusted for all stock splits and stock dividends
through April 2, 2001). As of April 2, 2001, all but 4,247 shares of common
stock held by the ESOP Trust were allocated to individual participant accounts.

The co-trustees of the ESOP are Vernon W. Hill, II and C. Edward
Jordan, Jr. Each participant may direct the trustees of the ESOP Trust as to the
manner in which shares of voting stock allocated to his account are to be voted.
Each participant in the ESOP will become entitled to direct the trustees as to
the voting of the shares of common stock which are released from the pledge and
which are allocated to his account under the ESOP. The enclosed form of proxy
also serves as the voting instruction card for the trustees of the ESOP with
respect to the shares of common stock which have been allocated to the accounts
of participants under the ESOP. Shares which have not been allocated to the
account of any participant will be voted by the co-trustees in accordance with
such procedures as Bancorp, as the Plan Administrator, shall direct. Shares
which have been allocated to the accounts of participants but for which no
voting directions are received will be voted as the trustees direct in the
exercise of their independent judgment. For the Plan Year ended December 31,
2000, Bancorp contributed $100,000 to the ESOP.

Supplemental Executive Retirement Plan

Effective January 1, 1992, Bancorp established a Supplemental Executive
Retirement Plan ("SERP") for certain designated executives in order to provide
supplemental retirement income if Bancorp's ESOP and social security retirement
benefits fall below sixty percent of average annual compensation at the time of
retirement. Average annual compensation is defined as the average of the actual
annual compensation paid to the executive by Bancorp during the period of three
consecutive years which produces the highest such average during the ten year
period ending with termination of employment. The SERP is unfunded, is not a
qualified plan under the Code and benefits are paid directly by Bancorp. Messrs.
Hill, Jordan, Musumeci, Falese and DiFlorio have been designated to participate
in the SERP.

Certain Transactions

Certain directors and executive officers of Bancorp and its
subsidiaries and certain of their immediate family members and certain
corporations or organizations with which they are affiliated have had and expect
to continue to have loan and other banking transactions with Bancorp's
subsidiary banks. All such loans and other banking transactions were made in the
ordinary course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions for unrelated parties, and did not involve more than the
normal risk of uncollectibility or present other unfavorable features.

The board of directors of Bancorp approves all transactions in which an
officer or director of Bancorp or any of its subsidiaries has an interest. In
the case of a transaction involving a director of Bancorp, such director does
not vote on the transaction.

Mr. Kerr, a director and nominee for director of Bancorp, is the
Chairman of Markeim-Chalmers, Inc. which in 2000 received $202,000 in fees for
real estate related services, primarily real estate appraisals.

Messrs. Beck and Bershad, directors and nominees for directors of
Bancorp, are members of law firms which Bancorp and its subsidiaries have
retained during Bancorp's last fiscal year and which Bancorp and its
subsidiaries intend to retain during its current fiscal year.

Bancorp leases the land on which it has constructed twenty branch
offices from limited partnerships in which Mr. Hill is a partner or in which a
corporation owned by Mr. Hill is a partner under separate operating lease
agreements. The aggregate annual rental under these leases for 2000 was
approximately $1.1 million. These leases expire periodically through 2020 but
are renewable through 2040. Aggregate annual rentals escalate to $1.2 million in
2004.

Bancorp leases land to a limited partnership partially comprised of the
directors of Bancorp including Messrs. Bershad, Hill and Lewis and a corporation
owned by Mr. Hill. The initial lease term is 25 years, with two successive
10-year options. As of December 31, 2000, the future minimum lease payments to
be received by Bancorp amount to

approximately $315,000 for the remainder of the initial lease term. In
accordance with the provision of the land lease, the limited partnership
constructed and owns the office building located on the land. Commerce PA leases
the building as a branch facility. The initial lease term expires in 2010.

Management believes that the rental paid or received for each of the
foregoing leases is comparable to the rental which they would have to pay to or
would have received from, as the case may be, and that the option prices are
comparable to or more favorable than those that could have been obtained or
received from, non-affiliated parties in similar commercial transactions for
similar locations, assuming that such locations were available.

During 2000, Bancorp subsidiaries obtained interior design, facilities
management and general contractor services in the amount of $2.0 million from a
business corporation of which Shirley Hill, wife of Vernon W. Hill, II, is a
principal shareholder and the president. Additionally, during 2000 this business
received commissions of $1.6 million on furniture and facility purchases made
directly by Bancorp subsidiary banks. These expenditures related primarily to
the furnishing and related design services of the opening and/or refurbishing of
certain offices during the period. Management believes such expenses were
substantially equivalent to those that would have been paid to unaffiliated
companies for similar furniture and services.

REPORT OF THE PERSONNEL COMMITTEE

The Personnel Committee of the board of directors of Bancorp is
composed of outside non-employee directors. Bancorp's compensation package for
its executive officers consists of base salary, annual performance bonus, annual
stock option grants and various broad based employee benefits including
contributions under Bancorp's ESOP. Management recommendations of base salary
levels, annual performance bonuses and stock option grants are reviewed by the
Personnel Committee and submitted to the full board of directors for approval.

The objective of Bancorp's executive compensation is to enhance
Bancorp's long-term profitability by providing compensation that will attract
and retain superior talent, reward performance and align the interests of the
executive officers with the long term interests of the shareholders of Bancorp.

Bancorp has employment agreements with Messrs. Hill, Jordan, Musumeci,
Falese and DiFlorio which were effective January 1, 1992 for Messrs. Hill,
Jordan and Musumeci, and January 1, 1998 for Messrs. Falese and DiFlorio. See
"EXECUTIVE COMPENSATION - Employment Agreements."

Base salary levels for Bancorp's executive officers are competitively
set relative to companies in peer businesses. In reviewing base salaries, the
Personnel Committee also takes into account individual experience and
performance.

Bancorp's annual performance bonuses are intended to provide a direct
cash incentive to executive officers and other key employees to maximize
Bancorp's profitability. Financial performance is compared against budgets as
well as peer businesses.

Stock options are intended to encourage officers and other key
employees to remain employed by Bancorp by providing them with a long term
interest in Bancorp's overall performance as reflected by the performance of
Bancorp's common stock. In granting stock options, the Personnel Committee takes
into account prior stock option grants and considers the executive's level of
compensation and past contributions to Bancorp.

Vernon W. Hill, II was Bancorp's Chairman, President and Chief
Executive Officer for 2000. Mr. Hill's base salary is set competitively relative
to other chief executive officers in financial service companies in Bancorp's
market area. In determining Mr. Hill's base salary as well as annual performance
bonus, the Personnel Committee reviewed independent compensation data and
Bancorp's performance as compared against budgets and peer businesses. As with
Bancorp's other executive officers, Mr. Hill's total compensation involves
certain subjective judgments and is not based solely upon any specific objective
criteria or weighting.

The Personnel Committee and Bancorp are considering the future impact
on executive compensation, and whether certain changes should be made as a
result of Section 162(m) of the Code which became effective January 1, 1994.
This provision generally denies a deduction for federal income tax purposes for
annual compensation in excess of $1.0 million for executive officers named in
the "Summary Compensation Table" contained in this proxy statement, except for
certain compensation that is performance-based and for compensation that is paid
pursuant to certain contracts entered into prior to February, 1993. Bancorp
believes that the limitation will have no material effect on it in 2001.

PERSONNEL COMMITTEE

Morton N. Kerr
Daniel J. Ragone
Jack R Bershad

Personnel Committee Interlocks and Insider Participation

The Personnel Committee members are Morton N. Kerr, Daniel J. Ragone
and Jack R Bershad.

Mr. Bershad, a director and nominee for director of Bancorp, is a
member of a law firm which Bancorp and its subsidiaries have retained during
Bancorp's last fiscal year and which Bancorp and its subsidiaries intend to
retain during its current fiscal year. See "EXECUTIVE COMPENSATION - Certain
Transactions."

Financial Performance

The graph below shows a comparison of the cumulative return experienced
by Bancorp's shareholders over the years 1996 through 2000, the S&P Regional
Small Bank Index and the S&P 500 Index assuming an investment of $100 in each at
December 31, 1995 and the reinvestment of dividends.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN

Commerce Bancorp, S&P Regional Small Bank Index, S&P 500 Index
Year-End 1995 to Year-End 2000

S&P Regional
Year CBH Small Bank Index S&P 500
12/31/95 100.0 100.0 100.0
12/31/96 161.4 130.2 122.9
12/31/97 268.1 218.0 164.0
12/31/98 370.5 208.6 210.8
12/31/99 305.6 183.8 255.2
12/31/00 554.3 247.1 231.9

PROPOSAL TO APPROVE AN AMENDMENT TO BANCORP'S
RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK WHICH BANCORP IS AUTHORIZED TO ISSUE

The Board of Directors of Bancorp has determined that it is advisable
to increase the number of shares of Common Stock which Bancorp is authorized to
issue by 100,000,000 shares to a total of 150,000,000. The Restated Certificate
of Incorporation currently provides that Bancorp is authorized to issue
50,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock.

As of April 2, 2001, there were 32,144,983 issued shares of Common
Stock, of which 100,059 were treasury shares. Of the unissued 17,855,017 shares,
8,754,055 shares of Common Stock were reserved for issuance under Bancorp's
1984, 1994 and 1997 Employee Stock Option Plans, 1,705,582 shares of Common
Stock were reserved for issuance under Bancorp's Dividend Reinvestment and Stock
Purchase Plan, and 476,660 shares of Common Stock were reserved for issuance
under Bancorp's 1989 and 1998 Stock Option Plan for Non-Employee Directors,
leaving 6,918,721 shares of Common Stock unreserved and available for issuance.
If the proposed amendment is approved and becomes effective, a total of
106,918,721 shares of Common Stock will be unreserved and available for
issuance. All outstanding and reserved shares have been adjusted to reflect all
stock splits and stock dividends through April 2, 2001.

As of April 2, 2001, no shares of Preferred Stock were outstanding.
Under Bancorp's Restated Certificate, the Board of Directors is authorized,
without further shareholder action, to provide for the issuance of the Preferred
Stock in one or more series, with such designations, dividends, number of
shares, relative rights (including, without limitation, voting rights,
conversion rights, redemption rights and/or liquidation rights), preferences and
limitations as shall be set forth in resolutions providing for the issuance
thereof adopted by the Board of Directors. The proposed amendment does not
increase the number of shares of Preferred Stock unreserved and available for
issuance.

The increase in authorized shares will not affect shareholders' equity
in Bancorp or the capital or surplus account of Bancorp.

Except as set forth above, Bancorp has no present plans for the newly
authorized shares of Common Stock; however, in the judgment of the Board of
Directors, the increase in authorized Common Stock will provide Bancorp with
greater flexibility in meeting future stock needs without the delay and expense
involved in holding a special meeting of shareholders to authorize the issuance
of such shares. Such shares could be used for future financings, acquisitions,
employee benefit plans, stock splits, stock dividends, or other proper corporate
purposes.

Shares will have no preemptive rights with respect to such additional
authorized shares of Common Stock and such shares may be issued solely upon the
action of Bancorp's Board of Directors for any proper corporate purpose
determined by the Board without further authorization from the shareholders
except where because of particular circumstances under which any such shares
will be issued, shareholder approval is required by law and/or the rules of The
New York Stock Exchange. However, the issuance of such additional shares of
Common Stock may adversely affect current shareholders. See "Anti-takeover
Provisions and Management Implications" below. These additional shares of Common
Stock, when issued, will have the same rights as Bancorp's presently authorized
shares of Common Stock.

If the recommendation of the Board of Directors is approved, the first
sentence of Article Five of Bancorp's Restated Certificate of Incorporation will
be amended to read as follows:

"FIFTH: The aggregate number of shares which
the corporation shall have authority to
issue shall be 160,000,000 shares of which
150,000,000 shares shall be common stock
with a par value of $1.5625 per share and of
which 10,000,000 shares shall be preferred
stock without par value."

Required Vote

Pursuant to the NJBCA, the affirmative vote of a majority of the votes
cast by the holders of shares entitled to vote thereon is necessary for adoption
of this proposal to amend Bancorp's Restated Certificate of Incorporation. For
purposes of determining the votes cast, only those votes "FOR" or "AGAINST" are
included. Abstentions and broker non-votes (which may occur if a beneficial
owner of stock where shares are held in a brokerage or bank account fails to
provide the broker or bank voting instructions as to such shares) will be
counted solely for the purpose of determining whether a quorum is present.

The Board of Directors unanimously recommends that the shareholders
vote "FOR" this proposal.

The financial statements contained in Bancorp's 2000 Annual Report and
Form 10-K are incorporated herein by reference in connection with the proposed
Amendment of the Articles; however, the 2000 Annual Report and Form 10-K are not
otherwise to be deemed or considered to be Proxy solicitation material.

"Anti-Takeover" Provisions and Management Implications

Bancorp's Restated Certificate of Incorporation requires the
affirmative vote of the holders of at least 80% of the outstanding capital stock
of Bancorp entitled to vote thereon in order to permit the consummation of any
of the following transactions: (i) any merger or consolidation of Bancorp with
or into any other corporation, or (ii) any sale, lease, exchange or other
disposition of all of the assets of Bancorp to or with any other corporation,
person or other entity. The 80% voting requirement does not, however, apply to
any transaction approved by the Board of Directors of Bancorp prior to the
consummation thereof. As previously set forth, Bancorp's Restated Certificate of
Incorporation also

provides for the issuance of up to 10,000,000 shares of Preferred Stock, the
rights, preferences and limitations of which in most circumstances may be
determined by the Board of Directors of Bancorp without further authorization
from the shareholders.

The provisions in the Restated Certificate of Incorporation relating to
the 80% voting requirements and the issuance of Preferred Stock may have the
effect not only of discouraging tender offers or other stock acquisitions but
also of deterring existing shareholders from making management changes.
Issuances of Preferred Stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could make it more difficult
for a third party to secure a majority of outstanding voting stock. Similarly,
absent the 80% voting requirement provision relating to mergers and dispositions
of assets, the transactions described above could be consummated upon the
favorable vote of the holders of a majority of the votes cast by holders of
shares entitled to vote thereon.

Accordingly, these provisions (together with the proposed amendment to
Bancorp's Restated Certificate of Incorporation to increase its authorized
shares of Common Stock) may enhance the possibility that a potential bidder for
control of Bancorp will be required to act through arm's-length negotiation with
respect to such major transactions as a merger, consolidation or purchase of
substantially all the assets of Bancorp. Such provisions may also have the
effect of discouraging tender offers or other stock acquisitions, giving
management of Bancorp power to reject certain transactions which might be
desired by the owners of a majority of Bancorp's voting securities. These
provisions could also be deemed to benefit incumbent management to the extent
they deter such offers by persons who would wish to make changes in management
or exercise control over management. Bancorp has no present plans to adopt any
other "anti-takeover" provisions. The Board of Directors of Bancorp does not
presently know of a third party that plans to make an offer to acquire Bancorp
through a tender offer, merger or purchase of substantially all the assets of
Bancorp.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act") requires Bancorp's directors and executive officers, and
persons who own more than 10% of a registered class of Bancorp's equity
securities, to file with the SEC reports about their beneficial ownership of
common stock and other equity securities of Bancorp. All such persons are
required by SEC regulation to furnish Bancorp with copies of all Section 16(a)
reports they file.

Based solely on review of the copies of such reports furnished to
Bancorp and written representations that no other reports were required during
the fiscal year ended December 31, 2000, Bancorp believes all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial owners were timely complied with.

RELATIONSHIP WITH INDEPENDENT AUDITORS

Bancorp's independent auditors during the most recent year were Ernst &
Young LLP, 2001 Market Street, Philadelphia, PA 19103. Based upon the
recommendation of the Audit Committee, the board of directors has selected Ernst
& Young LLP to be Bancorp's independent auditors for 2001. The selection of
Bancorp's independent auditors is not being submitted to shareholders because
there is no legal requirement to do so. A representative of Ernst & Young LLP is
expected to be present at the Annual Meeting and to have the opportunity to make
a statement, if he desires to do so, and to be available to respond to
appropriate questions.

Audit Fees. The aggregate fees of Ernst & Young LLP for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2000 (the "2000 fiscal year") and the reviews
of the financial statements included in the Company's Form 10-Qs for the 2000
fiscal year totaled $495,000.

Financial Information Systems Design and Implementation Fees. During
the 2000 fiscal year, no fees were billed for professional services related to
financial information systems design and implementation by Ernst & Young LLP.

All Other Fees. The aggregate fees for services rendered by Ernst &
Young LLP, other than for audit and information technology services, described
in the preceding two paragraphs, totaled $205,000 for the 2000 fiscal year
including $80,000 for various audit related services and the balance for various
tax, nonattest, and advisory services.

The Audit Committee has considered whether the provision of services
covered in the preceding two paragraphs is compatible with maintaining Ernst &
Young LLP's independence.

SHAREHOLDER PROPOSALS

Pursuant to the proxy rules promulgated under the Exchange Act, Bancorp
shareholders are notified that the deadline for providing Bancorp timely notice
of any shareholder proposal to be submitted outside of the Rule 14a-8 process
for consideration at Bancorp's Annual Meeting to be held in 2002 (the "2002
Annual Meeting") will be February 27, 2002. As to all such matters which Bancorp
does not have notice on or prior to February 27, 2002, discretionary authority
shall be granted to the persons designated in Bancorp's proxy related to the
2002 Annual Meeting to vote on such proposal.

A shareholder proposal for the 2002 Annual Meeting must be submitted to
Bancorp at its headquarters located at the Commerce Atrium, 1701 Route 70 East,
Cherry Hill, NJ 08034, Attention: C. Edward Jordan, Jr., by December 14, 2001 to
receive consideration for inclusion in Bancorp's proxy materials relating to the
2002 Annual Meeting. Any such proposal must also comply with the proxy rules
under the Exchange Act, including Rule 14a-8.

OTHER MATTERS

Bancorp is not currently aware of any matters which will be brought
before the Annual Meeting (other than procedural matters) which are not referred
to in the enclosed Notice of Annual Meeting. Nevertheless, the enclosed proxy
confers discretionary authority to vote with respect to those matters described
in Rule 14a-4(c) under the Exchange Act, including matters that the board of
directors does not know, a reasonable time before proxy solicitation, are to be
presented at the Annual Meeting. If any such matters are presented at the Annual
Meeting, then the persons named in the enclosed proxy will vote in accordance
with their best judgment.

A COPY OF BANCORP'S ANNUAL REPORT TO THE SEC ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 2000 WILL BE FURNISHED WITHOUT CHARGE TO ANY SHAREHOLDER UPON
WRITTEN REQUEST TO C. EDWARD JORDAN, JR., EXECUTIVE VICE PRESIDENT, COMMERCE
BANCORP, INC., COMMERCE ATRIUM, 1701 ROUTE 70 EAST, CHERRY HILL, NEW JERSEY,
08034-5400.

By Order of the Board of Directors

ROBERT C. BECK
Secretary

Appendix A

COMMERCE BANCORP, INC.
AUDIT COMMITTEE CHARTER

I. AUTHORITY
---------

The Board of Directors (Board) of Commerce Bancorp, Inc. (Corporation)
authorizes the Audit Committee (Committee) to act on its behalf to
monitor the adequacy of the system of internal controls, the accounting
and financial reporting processes, and compliance with regulations,
policies and procedures within the organization.

II. STATEMENT OF POLICY
-------------------

The Committee is responsible for providing assistance to the Board in
fulfilling their oversight responsibility to the shareholders,
investment community and others relating to the Corporation's financial
statements and financial reporting process, the systems of internal
accounting and financial controls, the internal audit function, the
annual independent audit of the Corporation's financial statements, and
the legal, compliance and ethics programs as established by management
and the Board. In discharging its oversight role, the Committee is
empowered to investigate any matter brought to its attention, with full
access to all books, records, facilities, and personnel of the
Corporation and the power to retain outside counsel or other experts
for this purpose. This oversight may be accomplished through the
Commerce Bancorp, Inc. Oversight Committee, which has been authorized
to act on the behalf of the Committee. Oversight Committee membership
will be made up of the members of the Committee and such members of the
Boards of Directors of affiliates of the Corporation or its
subsidiaries as may be appointed by the Board.

III. STRUCTURE AND MEMBERSHIP REQUIREMENTS
-------------------------------------

Annually the Board shall appoint not less than three outside directors
who are independent of management, to serve as members of the
Committee. Members must be directors of the Corporation and be free
from any relationship that, in the opinion of the Board, would
interfere with the exercise of independent judgment as a Committee
member. Directors of affiliates of the Corporation or its subsidiaries
would not be qualified for Committee membership. All members must be
financially literate, and at least one member must have accounting or
related financial management experience. One of the members shall be
designated as Chair by the Board.

IV. STATEMENT OF COMMITTEE RESPONSIBILITIES AND PROCESSES
-----------------------------------------------------

A. Internal Audit
--------------

The Committee, through review of actions of the Oversight
Committee or through its own actions, will:

o Review and concur in the appointment, replacement, reassignment, or
dismissal of the director of internal auditing.
o Review the internal audit function as to its independence, objectivity and
authority of its reporting obligations.
o Consider and review with management and the director of internal auditing
the Internal Audit Department Charter and the Oversight Committee Charter.
o Review and approve the internal audit plan submitted annually by the
director of internal auditing.
o Meet with the director of internal audit on not less than a quarterly basis
to review the status and results of the audit plan, audit reports and/or
summaries as provided by the director of internal auditing, and any other
matters considered by the director of internal auditing or the Committee to
be of significance to the Committee. The Committee may ask members of
management or others to attend the meetings and provide pertinent
information as necessary.
o Provide opportunity annually for the director of internal auditing to meet
with the Committee without members of management present.

A-1

B. Independent Auditors
--------------------

Management is responsible for preparing the financial
statements, and the external auditors are responsible for
auditing those statements. The Committee, through review of
actions of the Oversight Committee or through its own actions,
is responsible for the following:

o Receiving from the independent auditors a formal written statement
delineating all relationships between the independent auditor and the
Corporation, actively engaging in dialogue with the independent auditor
with respect to any disclosed relationship or services that may impact the
objectivity and independence of the independent auditor, and recommending
that the Board take the appropriate action in response to the independent
auditors' report to satisfy itself of the auditors' independence.
o Recommending annually to the Board the independent auditors to be engaged
for financial reporting and related purposes. In view of the independent
auditor's ultimate accountability to the Board and the Audit Committee, as
representatives of the shareholders, the Committee and the Board shall have
the ultimate authority and responsibility to evaluate and, if appropriate,
replace the independent auditors, subject to shareholder approval.
o Reviewing and discussing annually with the independent public accountants
the scope of their engagement and the audit procedures to be utilized,
coordination of their activities with those of the Internal Audit
Department, and their assessment of the corporation's financial accounting,
internal audit, and credit review functions.
o Discussing with management, the internal auditors and the independent
auditors the adequacy and effectiveness of the accounting and financial
controls, including the system to monitor and manage business risk, and
legal and ethical compliance programs.
o Discussing with management and the independent auditors any matters
regarding the interim financial statements to be filed on form 10-Q which
are required to be communicated to the Committee by the independent
auditors under generally accepted auditing standards.
o Reviewing with management and the independent auditors the financial
statements to be included in the Corporation's Annual Report on Form 10-K,
including their judgement about the quality, not just the acceptability, of
accounting principles, the reasonableness of significant judgments, the
clarity of the disclosures in the financial statements, and other matters
related to the conduct of the audit which are to be communicated by the
independent auditors under generally accepted auditing standards.
o Determine that the independent auditors are satisfied with the disclosure
and content of the financial statements to be presented to the
shareholders, to include review of any changes in accounting principles.
o Provide opportunity for the independent auditors to meet with the Committee
without members of management present.

C. FDICIA
------
The Committee will review with management and the independent
auditors the basis for the audited financial statements as
well as reports by management and the independent public
accountants required by 12 CFR 363.

D. Other
-----
The Board must adopt and approve this charter for the
Committee. The Committee will review and reassess this charter
at least annually, and changes, if any, must be adopted and
approved by the full Board.

This charter must be published in the proxy statements of the
Corporation at least once every three years.

The Committee will perform other such functions as assigned by
law, the Corporation's charter or bylaws, or the Board.

E. Limitations
-----------

The Committee is responsible for the duties set forth in this
charter but is not responsible for either the preparation of
the financial statements or the auditing of the financial
statements. Management has the responsibility for preparing
the financial statements and implementing internal controls
and the independent auditors have the responsibility for
auditing the financial statements and monitoring the
effectiveness of the internal controls. The review of the
financial statements by the Committee is not of the same
quality as the audit performed by the independent auditors. In
carrying out its responsibilities, the Committee believes its
policies and procedures should remain flexible to best react
to a changing environment.

A-2