MEMORANDUM OF UNDERSTANDING
Exhibit
10.3
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:
|
Xx.
Xxxxxxx X. Course
Assistant
Vice President
Federal
Reserve Bank of Philadelphia
Xxx
Xxxxxxxxxxxx Xxxx
Xxxxxxxxxxxx,
XX 00000
|
|
b.
|
All
written communication to Commerce regarding this MOU shall be addressed
and sent to:
|
Xxxxxxx
X. Xxxxx
Chief
Financial Officer
Commerce
Bancorp, Inc.
Commerce
Atrium
0000
Xx.
00 Xxxx
Xxxxxx
Xxxx, XX 00000-0000
|
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:
_______________________
|
|
Xxxxxxx
X. Xxxxxxx, SVP
|
Xxxxxxx
X. Xxxxx, CFO
|
THE
UNDERSIGNED DIRECTORS OF COMMERCE EACH ACKNOWLEDGE HAVING READ THE FOREGOING
MOU
AND APPROVING OF THE CONSENT THERETO BY COMMERCE.
|
___________________________
|
___________________________
|
|
Xxxx
X. Xxxxxxx
|
Xxxxxx
Xxxxxxxx
|
|
___________________________
|
___________________________
|
|
Xxxxxx
X. XxXxxxxxxxx
|
Xxxxxxxx
X. Xxxxxxxx
|
|
___________________________
|
___________________________
|
|
Xxxxxx
X. Xxxx
|
Xxxxxx
X. Xxxxx
|
|
___________________________
|
___________________________
|
|
Xxxx
X. Xxxxx
|
Xxxxxx
X. Xxxxxxxx, III
|
|
___________________________
|
___________________________
|
|
Xxxxxx
X. Xxxxxx
|
Xxxxxxx
X. Xxxxxxxx, Xx.
|
|
___________________________
|
___________________________
|
|
Xxxxxx
X. Xxxxxxxx, Xx.
|
Xxxxxx
X. Xxxxxxxxxxx
|
Page 4
of 4
