def14a-104955_pgfc.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed by
the Registrant þ
Filed by
a Party other than the Registrant
Check the
appropriate box:
o
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Preliminary
Proxy Statement
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o
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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þ
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to Rule 14a-11(c) or Rule
14a-12
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PEAPACK-GLADSTONE
FINANCIAL CORPORATION
(Name of
Registrant as Specified in its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
o
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Fee
Computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of
transaction:
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o Fee paid
previously with preliminary
materials.
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o 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.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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PEAPACK-GLADSTONE
FINANCIAL CORPORATION
158
ROUTE 206 NORTH
GLADSTONE, NEW JERSEY
07934
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
TO
BE HELD ON TUESDAY, APRIL 27, 2010
To
Our Shareholders:
NOTICE IS
HEREBY GIVEN that the Annual Meeting of Shareholders of Peapack-Gladstone
Financial Corporation will be held at Bridgewater Manor, 1251 Route 202/206,
Bridgewater, New Jersey, on Tuesday, April 27, 2010, at 2:00 p.m. local time for
the purpose of considering and voting upon the following matters:
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1.
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Election
of eleven directors to serve until the expiration of their terms and
thereafter until their successors shall have been duly elected and
qualified.
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2.
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To
approve, on a non-binding basis, the compensation of the Corporation’s
named executive officers as determined by the Compensation
Committee.
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3.
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The
ratification of the appointment of Crowe Horwath LLP as the Corporation’s
independent registered public accounting firm for the year ending December
31, 2010.
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4.
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Such
other business as may properly come before the meeting or any adjournment
thereof.
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Only
shareholders of record at the close of business on March 15, 2010, are entitled
to receive notice of, and to vote at, the meeting.
You are
urged to read carefully the attached proxy statement relating to the
meeting.
Shareholders
are cordially invited to attend the meeting in person. Whether or not you expect
to attend the meeting, we urge you to date and sign the enclosed proxy form and
return it in the enclosed envelope as promptly as possible. You may revoke your
proxy by filing a later-dated proxy or a written revocation of the proxy with
the Corporate Secretary of Peapack-Gladstone prior to the meeting. If you attend
the meeting, you may revoke your proxy by filing a later-dated proxy or written
revocation of the proxy with the Corporate Secretary of the meeting prior to the
voting of such proxy.
By
Order of the Board of Directors
ANTOINETTE
ROSELL,
CORPORATE
SECRETARY
Gladstone,
New Jersey
March 26,
2010
YOUR
VOTE IS IMPORTANT. PLEASE SIGN AND RETURN THE
ENCLOSED
PROXY IN THE ENVELOPE PROVIDED.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE
SHAREHOLDER MEETING TO BE HELD ON APRIL 27, 2010
This
Proxy Statement and our Annual Report are available at
http://phx.corporate-ir.net/phoenix.zhtml?c=100168&p=proxy
PEAPACK-GLADSTONE
FINANCIAL CORPORATION
158
ROUTE 206 NORTH
GLADSTONE,
NEW JERSEY 07934
DATED
MARCH 26, 2010
GENERAL
PROXY STATEMENT INFORMATION
This
proxy statement is furnished to the shareholders of Peapack-Gladstone Financial
Corporation (“Peapack-Gladstone”) in connection with the solicitation by the
Board of Directors of Peapack-Gladstone of proxies for use at the Annual Meeting
of Shareholders to be held at Bridgewater Manor, 1251 Route 202/206,
Bridgewater, New Jersey on Tuesday, April 27, 2010 at 2:00 p.m. local time. This
proxy statement is first being mailed to shareholders on approximately March 26,
2010.
VOTING
INFORMATION
Outstanding
Securities and Voting Rights
The
record date for determining shareholders entitled to notice of, and to vote at,
the meeting is March 15, 2010. Only shareholders of record as of the record date
will be entitled to notice of, and to vote at, the meeting.
On the
record date 8,726,361 shares of Peapack-Gladstone's common stock, no par value,
were outstanding and eligible to be voted at the meeting. Each share of
Peapack-Gladstone's common stock is entitled to one vote.
Required
Vote
The
election of directors requires the affirmative vote of a plurality of
Peapack-Gladstone's common stock voted at the meeting, whether voted in person
or by proxy. At the meeting, inspectors of election will tabulate both ballots
cast by shareholders present and voting in person, and votes cast by proxy.
Under applicable New Jersey law and Peapack-Gladstone's certificate of
incorporation and by-laws, abstentions and broker non-votes are counted for
purpose of establishing a quorum but have no impact on the election of
directors.
The
approval, on a non-binding basis, of the compensation of the Corporation’s named
executive officers as determined by the Compensation Committee requires the
affirmative vote of a majority of the votes cast at the meeting, whether voted
in person or by proxy. Abstentions and broker non-votes will have no
impact on the approval of this advisory proposal.
The
ratification of the appointment of Crowe Horwath LLP requires the affirmative
vote of a majority of the votes cast at the meeting, whether voted in person or
by proxy. Abstentions and broker non-votes will have no impact on the
ratification of Crowe Horwath LLP.
All
shares represented by valid proxies received pursuant to this solicitation will
be voted FOR the election of the 11 nominees for director who are named in this
proxy statement, FOR the approval, on a non-binding basis, of the compensation
of the Corporation’s named executive officers as determined by the Compensation
Committee, and FOR ratification of the appointment of Crowe Horwath LLP as the
Corporation’s independent registered public accounting firm for the year ending
December 31, 2010, unless the shareholder specifies a different choice by means
of the proxy or revokes the proxy prior to the time it is exercised. Should any
other matter properly come before the meeting, the persons named as proxies will
vote upon such matters according to their discretion.
Revocability
of Proxy
Any
shareholder giving a proxy has the right to attend and to vote at the meeting in
person. A proxy may be revoked prior to the meeting by filing a later-dated
proxy or a written revocation if it is sent to the Corporate Secretary of
Peapack-Gladstone, Antoinette Rosell, at 158 Route 206 North, Gladstone, New
Jersey, 07934, and is received by Peapack-Gladstone in advance of the meeting. A
proxy may be revoked at the meeting by filing a later-dated proxy or a written
revocation with the Secretary of the meeting prior to the voting of such
proxy.
Solicitation
of Proxies
This
proxy solicitation is being made by the Board of Peapack-Gladstone and its agent
Laurel Hill Advisory Group, LLC, and the costs of the solicitation will be borne
by Peapack-Gladstone. In addition to the use of the mails, proxies
may be solicited personally or by telephone, e-mail or facsimile transmission by
directors, officers and employees of Peapack-Gladstone and its subsidiaries or
Laurel Hill who, with the exception of Laurel Hill, will not be specially
compensated for such solicitation activities. The amount Peapack-Gladstone will
pay Laurel Hill for its proxy solicitation services is $6,500 plus certain out
of pocket costs. Peapack-Gladstone will also make arrangements with
brokers, dealers, nominees, custodians and fiduciaries to forward proxy
soliciting materials to the beneficial owners of shares held of record by such
persons, and Peapack-Gladstone may reimburse them for their reasonable expenses
incurred in forwarding the materials.
PROPOSAL 1 - ELECTION OF
DIRECTORS
DIRECTOR
INFORMATION
Peapack-Gladstone's
certificate of incorporation and by-laws authorize a minimum of 5 and a maximum
of 25 directors, but leave the exact number to be fixed by resolution of
Peapack-Gladstone's Board of Directors. The Board has currently fixed
the number of directors at 11 and the Board is presently comprised of 11
members. Directors are elected annually by the shareholders for
one-year terms. Peapack-Gladstone's Nominating Committee has
recommended to the Board the 11 current directors for reelection to serve for
one-year terms expiring at Peapack-Gladstone’s 2010 Annual Meeting of
Shareholders or until their successors shall have been duly elected and
qualified. If, for any reason, any of the nominees become unavailable
for election, the proxy solicited by the Board will be voted for a substitute
nominee selected by the Board. The Board has no reason to believe
that any of the named nominees is not available or will not serve if
elected.
Unless a
shareholder indicates otherwise on the proxy, the proxy will be voted for the
persons named in the table below to serve until the expiration of their terms,
and thereafter until their successors have been duly elected and
qualified.
The
following table sets forth the names and ages of the Board's nominees for
election, the nominees' position with Peapack-Gladstone (if any), the principal
occupation or employment of each nominee for the past five years and the period
during which each nominee has served as a director of Peapack-Gladstone. The
nominee's prior service as a director includes prior service as a director of
Peapack-Gladstone Bank (the “Bank”) prior to the formation of the holding
company. In addition, described below are each director nominee’s
particular experience, qualifications, attributes or skills that have led the
Board to conclude that the person should serve as a director.
NOMINEES
FOR ELECTION AS DIRECTORS
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Name
and Position
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Director
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Principal
Occupation or Employment for the Past Five Years;
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With
Peapack-Gladstone
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Age
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Since
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Other
Company Directorships
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Anthony
J. Consi, II
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64
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2000
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Retired;
previously Senior Vice President of Finance and Operations, Weichert
Realtors. Mr. Consi is qualified to serve on the Board of
Directors because of his 15 years of public accounting experience at
Coopers & Lybrand and his 22 years of finance and operations
leadership at Weichert Realtors, both of which are invaluable to his role
as Audit Committee Chairman.
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Pamela
Hill
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72
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1991
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President
of Ferris Corp., a commercial real estate management
company. Ms. Hill is qualified to serve on the Board of
Directors because of her 21 years of experience in managing commercial
real estate, which is invaluable to the Board’s oversight of the
Corporation’s real estate loan portfolio.
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Frank
A. Kissel
Chairman
and CEO
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59
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1989
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Chairman
and CEO of Peapack-Gladstone and the Bank. Mr. Kissel, who began his
career in banking 1973, is qualified to serve on the Board of Directors
because of his 37 years of banking experience, demonstrated business
leadership, judgment and vision.
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John
D. Kissel
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57
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1987
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Real
Estate Broker, Turpin Real Estate, Inc. Mr. Kissel is qualified
to serve on the Board of Directors because of his 20 years of experience
in the residential real estate market, which is invaluable to the Board’s
oversight of the Corporation’s real estate loan
portfolio.
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James
R. Lamb
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67
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1993
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Principal
of James R. Lamb, P.C., Attorney at Law. Mr. Lamb is qualified
to serve on the Board of Directors because of his 43 years of legal
experience, which is invaluable to the Board’s corporate governance
program and the Board’s oversight of the Bank’s legal and regulatory
affairs.
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Edward
A. Merton
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69
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1981
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President
of Merton Excavating and Paving Co. Mr. Merton is qualified to
serve on the Board of Directors because of his 50 years of experience in
managing a successful New Jersey business, which is invaluable to the
Board’s oversight of the Corporation’s small business
lending.
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Name
and Position
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Director
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Principal
Occupation or Employment for the Past Five Years;
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With
Peapack-Gladstone
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Age
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Since
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Other
Company Directorships
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F.
Duffield Meyercord
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63
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1991
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Partner
of Carl Marks Advisory Group, LLC; President, Meyercord Advisors, Inc.;
Director of Wayside Technology Group (formerly Programmer’s Paradise,
Inc.); Director of Headway Corporation. Mr. Meyercord is
qualified to serve on the Board of Directors because of his 35 years of
experience in directing strategic projects and providing operational
advisory services to numerous businesses, which is invaluable to the
Board’s oversight of corporate strategy.
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John
R. Mulcahy
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71
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1981
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Retired;
previously President and CEO of Mulcahy Realty and Construction
Co. Mr. Mulcahy is qualified to serve on the Board of Directors
because of his 32 of experience in residential real estate construction,
which is invaluable to the Board’s oversight of the Corporation’s real
estate loan portfolio as well as facilities development and
management.
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Robert
M. Rogers,
President
and COO
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51
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2002
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President
and COO of Peapack-Gladstone and the Bank. Mr. Rogers, who
began his career in banking in 1981, is qualified to serve on the Board of
Directors because of his 29 years of banking experience, proven leadership
and operational expertise.
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Philip
W. Smith, III
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54
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1995
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President,
Phillary Management, Inc., a real estate management
company. Mr. Smith is qualified to serve on the Board of
Directors because of his 23 years of experience in commercial real estate
agency and management, which is invaluable to the Board’s oversight of the
Corporation’s real estate loan portfolio.
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Craig
C. Spengeman, President, PGB Trust and
Investments
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54
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2002
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President,
PGB Trust and Investments, a division of the Bank and Executive Vice
President of Peapack-Gladstone. Mr. Spengeman, who began his
career in trust and investments in 1977, is qualified to serve on the
Board of Directors because of his 33 years of experience in financial
services, demonstrated leadership and trust and investments
expertise.
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Frank A.
Kissel and John D. Kissel are brothers.
The members of our Board of Directors
are persons who as a group we believe have demonstrated appropriate leadership
skills, experience and judgment in areas that are relevant to our
business. We believe that their collective ability to challenge and
stimulate management and their dedication to the affairs of the Company serve
the interests of the Company and its shareholders. In accordance with
its charter, the Nominating Committee has established director qualifications
and standards, and identifies and evaluates each candidate on a case-by-case
basis including an assessment of the requisite skills and characteristics of new
board members as well as the composition of the Board as a whole. This
assessment includes consideration of the independence, diversity, skills,
experience and other elements relevant to the success of our Company in today’s
business environment. In selecting director nominees for our Board,
we consider the collective experience, attributes and skills of the entire
Board, as well as the ability of the individuals to work together with other
members of the Board.
RECOMMENDATION
AND VOTE REQUIRED ON PROPOSAL 1
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE ‘FOR’ THE NOMINATED SLATE OF
DIRECTORS INCLUDED IN PROPOSAL 1. Directors will be elected by a
plurality of the votes cast at the meeting. Abstentions and broker
non votes will have no impact on the election of directors.
CORPORATE
GOVERNANCE
General
The
business and affairs of Peapack-Gladstone are managed under the direction of the
Board of Directors. Members of the Board are kept informed of
Peapack-Gladstone's business through discussions with the Chairman and
Peapack-Gladstone’s other officers, by reviewing materials provided to them and
by participating in meetings of the Board and its committees. All
members of the Board also served as directors of Peapack-Gladstone's subsidiary
bank, Peapack-Gladstone Bank, during 2009. The Board of Directors of
Peapack-Gladstone and Peapack-Gladstone Bank held 12 meetings during
2009. During 2009, all directors of Peapack-Gladstone attended no
fewer than 75% of the total number of meetings of Peapack-Gladstone’s Board and
meetings of committees on which such director served. It is
Peapack-Gladstone’s policy to encourage director attendance at the Annual
Meeting absent a compelling reason such as illness. Last year, all
but two directors attended the Annual Meeting.
Our Board
of Directors believes that the purpose of corporate governance is to maximize
shareholder value in a manner consistent with legal requirements. The Board has
adopted corporate governance principles, which the Board and senior management
believe promote this purpose. We periodically review these governance
principles, the rules and listing standards of the National Association of Securities
Dealers Automated Quotations (NASDAQ) and Securities and Exchange Commission
(the “SEC”) regulations.
Board
Leadership Structure and Role in Risk Oversight
Our company is led by Mr. Frank A.
Kissel, who has served as Chairman of the Board of Directors and Chief Executive
Officer of the Company and the Bank since 2001. Our board of directors is
comprised of Mr. Kissel and 10 other directors, a majority of which are
independent directors. The board has three primary committees –
Audit, Compensation, and Nominating. Each of the Audit, Compensation and
Nominating committees is comprised solely of independent directors, with each of
the three committees having a separate independent chair. Our full Board of
Directors is responsible for overseeing risk management, and our full Board
receives and reviews a company-wide risk assessment annually. While
the Board oversees the Company’s risk management, management is responsible for
day-to-day risk management processes. We believe this division of
responsibilities is an appropriate approach for addressing the risks facing our
Company at this time. Our independent directors conduct separate
executive sessions to discuss Company affairs on a semi-annual
basis. Our Board of Directors has chosen to rotate the presiding
director for each of these independent director sessions among the independent
directors serving as chairs of the Audit, Compensation and Nominating
Committees.
We
believe that having a combined chairman/CEO, independent chairs and membership
for each of our Audit, Compensation and Nominating Committees and a rotating
independent presiding director for each of the independent director sessions
provides the right form of leadership for our Company. Having a combined
chairman/CEO allows us to present a single, uniform voice to our customers,
business partners and shareholders while our experienced independent director
majority, which has appointed independent chairs of our Audit, Compensation and
Nominating Committees, provides oversight of Company operations.
Director
Independence
The Board
has determined that a majority of the directors and all current members of the
Nominating, Compensation, and Audit Committees are “independent” for purposes of
the NASDAQ rules, and that the members of the Audit Committee are also
“independent” for purposes of the NASDAQ rules and Section 10A-3 of the
Securities Exchange Act of 1934. The Board based these determinations
on a review by the Nominating Committee and on a review by management of the
responses of the directors and executive officers to questions regarding
employment and transaction history, affiliations and family and other
relationships. The independent directors are Anthony J. Consi, II,
Pamela Hill, James R. Lamb, Edward A. Merton, F. Duffield Meyercord, John R.
Mulcahy, and Philip W. Smith, III.
To assist
it in making determinations of independence, the Board has concluded that the
following relationships are immaterial and that a director whose only
relationships with Peapack-Gladstone fall within these categories is
independent:
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·
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A
loan made by the Bank to a director, his or her immediate family member or
an entity affiliated with a director or his or her immediate family
member, or a loan personally guaranteed by such persons if such loan (i)
complies with state and federal regulations on insider loans, where
applicable; and (ii) is not classified by the Bank’s credit committee or
by any bank regulatory agency which supervised the Bank as substandard,
doubtful or loss.
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·
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A
deposit, trust, insurance brokerage, securities brokerage or similar
customer relationship between Peapack-Gladstone or its subsidiaries and a
director, his or her immediate family member or an affiliate of his or her
immediate family member if such relationship is on customary and usual
market terms and conditions.
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·
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The
employment by Peapack-Gladstone or its subsidiaries of any immediate
family member of the director if the employee serves below the level of a
senior vice president.
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·
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Annual
contributions by Peapack-Gladstone or its subsidiaries to any charity or
non-profit corporation with which a director is affiliated if the
contributions do not exceed an aggregate of $20,000 in any calendar year
and the contribution is made in the name of
Peapack-Gladstone.
|
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·
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Purchases
of goods or services by Peapack-Gladstone or any of its subsidiaries from
a business in which a director or his or her immediate family member is a
partner, shareholder or officer, if the director or his or her immediate
family member owns five percent or less of the equity interests of that
business and does not serve as an executive officer of the
business.
|
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·
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Purchases
of goods or services by Peapack-Gladstone, or any of its subsidiaries,
from a director or a business in which the director or his or her
immediate family member is a partner, shareholder or officer if the annual
aggregate purchases of goods or services from the director, his or her
immediate family member or such business in the last calendar year does
not exceed the greater of $60,000 or two percent of the gross revenues of
the business.
|
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·
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Fixed
retirement benefits paid or payable to a director either currently or on
retirement.
|
The
following categories or types of transactions, relationships or arrangements
were considered by the Board in determining that each listed director is
independent in accordance with the NASDAQ listing standards and
Peapack-Gladstone’s Corporate Governance Principles.
Independent
Director
|
Category or
Type
|
Mr.
Consi
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Deposits
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Ms.
Hill
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Deposits,
Trust
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Mr.
Lamb
|
Loans,
Deposits, Trust
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Mr.
Merton
|
Loans,
Deposits, Trust
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Mr.
Meyercord
|
Loans,
Deposits, Trust
|
Mr.
Mulcahy
|
Loans,
Deposits, Trust
|
Mr.
Smith
|
Loans,
Deposits, Trust, Employment of Immediate Family Member below level of
Senior Vice President
|
Executive
Sessions of Non-Management Directors
Our
Corporate Governance Principles require the Board to provide for at least
semi-annual executive sessions to include non-management
directors. Twice a year the Board holds an executive session
including only independent directors. Peapack-Gladstone’s Board has chosen to
rotate the presiding director for each meeting among the Chairperson of the
Audit, Compensation, and Nominating Committees.
Shareholder
Communication with Directors
The Board
of Directors has established the following procedures for shareholder
communications with the Board of Directors:
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·
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Shareholders
wishing to communicate with the Board of Directors should send any
communication to the Board of Directors, Peapack-Gladstone Financial
Corporation, c/o Corporate Secretary of Peapack-Gladstone, Antoinette
Rosell, at 158 Route 206 North, Gladstone, New Jersey,
07934. Any such communication should state the number of shares
owned by the shareholder.
|
|
·
|
The
Corporate Secretary will forward such communication to the Board of
Directors or as appropriate to the particular Committee Chairman, unless
the communication is a personal or similar grievance, a shareholder
proposal or related communication, an abusive or inappropriate
communication, or a communication not related to the duties or
responsibilities of the Board of Directors, in which case the Corporate
Secretary has the authority to disregard the communication. All
such communications will be kept confidential to the extent
possible.
|
|
·
|
The
Corporate Secretary will maintain a log of, and copies of, all
communications, for inspection and review by
any
|
Board
member, and shall regularly review all such communications with the Board or the
appropriate Committee Chairman.
The Board
of Directors has also established the following procedures for shareholder
communications with the rotating chairman of the executive sessions of the
non-management directors of the Board:
|
·
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Shareholders
wishing to communicate with the presiding director of executive sessions
should send any communication to the Presiding Director of Executive
Sessions, Peapack-Gladstone Financial Corporation, c/o Corporate Secretary
of Peapack-Gladstone, Antoinette Rosell, at 158 Route 206 North, P.O. Box
178, Gladstone, New Jersey, 07934. Any such communication
should state the number of shares owned by the
shareholder.
|
|
·
|
The
Corporate Secretary will forward such communication to the then presiding
director, unless the communication is a personal or similar grievance, a
shareholder proposal or related communication, an abusive or inappropriate
communication, or a communication not related to the duties or
responsibilities of the non-management directors, in which case the
Corporate Secretary has the authority to disregard the
communication. All such communications will be kept
confidential to the extent
possible.
|
|
·
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The
Corporate Secretary will maintain a log of, and copies of, all
communications, for inspection and review by the presiding director of
executive sessions, and shall regularly review all such communications
with the presiding director at the next
meeting.
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Committees
of the Board of Directors
In 2009,
the Board of Directors maintained an Audit Committee, a Nominating Committee and
a Compensation Committee.
Audit
Committee
Mr. Consi
serves as Chair of the Audit Committee. Other members of the Audit
Committee are Messrs. Mulcahy, Smith and Ms. Hill. The Audit
Committee met 9 times during 2009.
The Board
of Directors has determined that at least one member of the Audit Committee
meets the NASDAQ standard of being financially sophisticated. The
Board of Directors has also determined that Mr. Consi meets the SEC criteria of
an “audit committee financial expert.”
The Audit
Committee operates pursuant to a charter. The charter can be viewed
at the Investor Relations link on our website www.pgbank.com. The charter gives the Audit
Committee the authority and responsibility for the appointment, retention,
compensation and oversight of our independent auditors, including pre-approval
of all audit and non-audit services to be performed by our independent
auditors. Other responsibilities of the Audit Committee pursuant to
the charter include: reviewing the scope and results of the audit with our
independent auditors; reviewing with management and our independent auditors
Peapack-Gladstone’s interim and year-end operating results including press
releases; considering the appropriateness of the internal accounting and
auditing procedures of Peapack-Gladstone; considering our outside auditors’
independence; reviewing examination reports by bank regulatory agencies;
reviewing audit reports prepared by the Internal Audit Department of
Peapack-Gladstone, reviewing audit reports prepared by any outside firm which
may conduct some internal audit functions for Peapack-Gladstone; and reviewing
the response of management to those reports. The Audit Committee
reports to the full Board concerning pertinent matters coming before
it.
Compensation
Committee
Peapack-Gladstone’s
Compensation Committee consists of Messrs. Meyercord (Chair), Merton and
Consi. During 2009 the Compensation Committee met 5
times.
The
Compensation Committee operates under a written charter setting out the
functions and responsibilities of this committee. The charter can be viewed at
the Investor Relations link on our website www.pgbank.com. The
Compensation Committee determines CEO compensation, sets general compensation
levels for all officers and employees and sets specific compensation for
executive officers. It also administers our stock option plans and makes awards
under those plans. The Board has approved
its charter, which delegates to the Compensation Committee the responsibility to
recommend Board compensation.
The
Compensation Committee annually reviews, considers, and approves all
compensation and awards to executive officers, including the CEO, the President,
Executive Vice Presidents, Senior Vice Presidents and First Vice
Presidents. Included in this process is a thorough analysis and
consideration of overall Bank performance, individual job performance, the
overall need of the Bank to attract, retain and incent executive talent, and the
total cost of the compensation programs.
The
Compensation Committee has the authority to hire, fire, and seek the services of
compensation consulting and advisory firms as it deems appropriate to its role.
In 2009, the Committee engaged the services of Pearl Meyer &
Partners (PM&P), an independent compensation consulting firm
specializing in executive compensation. Services were related to providing
an updated competitive market analysis. PM&P reports
directly to the Committee and carries out its responsibilities to the Committee
in coordination with the Human Resources department as requested by the
Committee. As a matter of policy the Committee does not prohibit its
advisors from providing services to Management, but any such engagement must be
requested or approved by the Committee. PM&P is independent with
respect to SEC standards.
Nominating
Committee
Peapack-Gladstone’s
Nominating Committee consists of Messrs. Smith (Chair), Consi, Lamb, Merton,
Meyercord, Mulcahy and Ms. Hill. The Nominating
Committee met two times during 2009.
The
Nominating Committee operates under a written charter setting out the functions
and responsibilities of this committee. The charter can be viewed at the
Investor Relations link on our website www.pgbank.com. The Nominating Committee
reviews qualifications of and recommends to the Board candidates for election as
director of Peapack-Gladstone and the Bank, considers the composition of the
Board, recommends committee assignments, and discusses management succession for
the Chairman and the CEO positions. The Nominating Committee develops
corporate governance principles which include director qualifications and
standards; director responsibilities; director orientation and continuing
education; limitations concerning service on other boards and director access to
management and records. The committee is also charged with reviewing
the Board’s adherence to the Corporate Governance Principles and the Code of
Business Conduct and Ethics. The Nominating Committee reviews
recommendations from shareholders regarding corporate governance and director
candidates. The procedure for submitting recommendations of director
candidates is set forth below under the caption “Nomination of
Directors.”
Nomination
of Directors
Nominations
for director may be made only by the Board of Directors or a committee of the
Board or by a shareholder of record entitled to vote. The Board of
Directors has established minimum criteria for members of the
Board.
These
include:
|
·
|
Directors
are encouraged to live and/or work in the communities served by
Peapack-Gladstone’s subsidiary
bank.
|
|
·
|
Directors
shall beneficially own or agree to acquire at least $25,000 (market value)
of Peapack-Gladstone stock.
|
|
·
|
Directors
shall be experienced in business, shall be financially literate and shall
be respected members of their
communities.
|
|
·
|
Directors
shall be of high ethical and moral standards and have sound personal
finances.
|
|
·
|
A
Director may not serve on the board of directors of any other bank that
serves the same market area as
Peapack-Gladstone.
|
|
·
|
If
there is a vacancy, the Nominating Committee shall evaluate the
qualifications of persons who may be recommended to it as potential
candidates based on information the Committee may deem
relevant.
|
The Nominating Committee has not
adopted a formal diversity policy with regard to the selection of director
nominees. The Nominating Committee considers diversity of experience,
both of the individual under consideration and of the Board as a whole, as a
factor in identifying nominees for director. In accordance with the
Company’s Corporate Governance Principles, in assessing candidates for
nomination, the Nominating Committee considers, among other factors, the
candidate’s independence, diversity, skills and experience in the context of the
needs of the Board.
The Nominating Committee has adopted a
policy regarding consideration of director candidates recommended by
shareholders. The Nominating Committee will consider nominations made
by shareholders. In order for a shareholder to make a nomination, the
shareholder must provide a notice along with the additional information and
supporting materials to our Corporate Secretary not less than 120 days or more
than 150 days prior to the first anniversary of the date of the preceding year’s
annual meeting. The shareholder wishing to propose a candidate for
consideration by the Nominating Committee must have a significant stake in
Peapack-Gladstone. To
qualify for consideration by the Nominating Committee, the shareholder
submitting the candidate must demonstrate that he or she has been the beneficial
owner of at least one percent of Peapack-Gladstone’s outstanding shares for a
minimum of one year prior to the submission of the request. In
addition, the Nominating Committee has the right to require any additional
background or other information from any director candidate or the recommending
shareholder, as it may deem appropriate. For our annual meeting in
the year 2011, we must receive this notice on or after November 27, 2010, and on
or before December 27, 2010. The following factors, at a minimum, are considered
by the Nominating Committee as part of its review of all director candidates and
in recommending potential director candidates to the Board:
|
·
|
appropriate
mix of educational background, professional background and business
experience to make a significant contribution to the overall composition
of the Board;
|
|
·
|
if
the Committee deems it applicable, whether the candidate would be able to
read and understand fundamental financial statements and considered to be
financially sophisticated as described in the NASDAQ rules, or considered
to be an audit committee financial expert as defined pursuant to the
Sarbanes-Oxley Act of 2002;
|
|
·
|
if
the Committee deems it applicable, whether the candidate would be
considered independent under the NASDAQ rules and the Board’s additional
independence guidelines set forth in Peapack-Gladstone’s Corporate
Governance Principles;
|
|
·
|
demonstrated
character and reputation, both personal and professional, consistent with
that required for a bank director;
|
|
·
|
willingness
to apply sound and independent business
judgment;
|
|
·
|
ability
to work productively with the other members of the
Board;
|
|
·
|
availability
for the substantial duties and responsibilities of a Peapack-Gladstone
director; and
|
|
·
|
meets
the additional criteria set forth in the Peapack-Gladstone’s Corporate
Governance Principles.
|
You can
obtain a copy of the full text of our policy regarding shareholder nominations
by writing to Antoinette Rosell, Corporate Secretary, Peapack-Gladstone
Financial Corporation, 158 Route 206 North, P.O. Box 178, Gladstone, New Jersey
07934.
Code
of Business Conduct and Ethics and Corporate Governance Principles
Peapack-Gladstone
has adopted a Code of Business Conduct and Ethics, which applies to
Peapack-Gladstone’s chief executive officer, principal financial officer,
principal accounting officer and to all other Peapack-Gladstone directors,
officers and employees. The Code of Business Conduct and Ethics is
available in the Investor Relations section of Peapack-Gladstone’s website
located at www.pgbank.com. The Code of Business Conduct and Ethics is
also available in print to any shareholder who requests it from Antoinette
Rosell, Corporate Secretary, Peapack-Gladstone Financial Corporation, 158 Route
206 North, P.O. Box 178, Gladstone, New Jersey,
07934. Peapack-Gladstone will disclose any substantive amendments to
or waiver from provisions of the Code of Business Conduct and Ethics made with
respect to a director or executive officer on our website and to the extent
required by NASDAQ and SEC rules, in a Current Report on Form 8-K.
We have
also adopted Corporate Governance Principles, which are intended to provide
guidelines for the governance of Peapack-Gladstone by the Board and its
committees. The Corporate Governance Principles are available at the Investor
Relations section of Peapack-Gladstone’s website located at www.pgbank.com.
The following table summarizes the
compensation of the non-employee directors of Peapack-Gladstone in
2009.
Name
(4)
|
|
Fees
Earned or Paid
in
Cash (1)
|
|
Option
Awards
(2)
|
|
Change
in Pension Value and
Nonqualified
Deferred Compensation
Earnings
(3) (5)
|
|
Total
|
Anthony
J. Consi, II
|
|
$ |
37,730 |
|
|
$ |
0 |
|
|
$ |
5,500 |
|
|
$ |
43,230 |
|
Pamela
Hill
|
|
|
26,800
|
|
|
|
0
|
|
|
|
13,500
|
|
|
|
40,300
|
|
John
D. Kissel
|
|
|
31,200
|
|
|
|
0
|
|
|
|
2,000
|
|
|
|
33,200
|
|
James
R. Lamb, Esq.
|
|
|
20,800
|
|
|
|
0
|
|
|
|
8,000
|
|
|
|
28,800
|
|
Edward
A. Merton
|
|
|
18,200
|
|
|
|
0
|
|
|
|
5,500
|
|
|
|
23,700
|
|
F.
Duffield Meyercord
|
|
|
26,800
|
|
|
|
0
|
|
|
|
5,000
|
|
|
|
34,800
|
|
John
R. Mulcahy
|
|
|
56,600
|
|
|
|
0
|
|
|
|
19,400
|
|
|
|
76,000
|
|
Philip
W. Smith, III
|
|
|
38,400
|
|
|
|
0
|
|
|
|
2,000
|
|
|
|
40,400
|
|
|
(1)
|
Peapack-Gladstone
pays its directors an $8,000 annual retainer for service on the Board,
$500 for each regular Bank Board meeting they attend and $400 for each
committee meeting they attend. Committee Chairs and Audit
Committee members receive an additional $2,000 annual
retainer. The Audit Committee Chair receives an additional
$16,000 annual retainer. The Compensation Committee Chair receives an
additional $10,000 annual retainer and the Compensation Committee members
receive an additional $1,000 annual retainer. Frank A. Kissel,
Robert M. Rogers and Craig C. Spengeman, as full-time employees, were not
compensated for services rendered as
directors.
|
|
(2)
|
There
were no stock options granted to directors in
2009.
|
The
following table represents the shares awarded during 2009, the grant date fair
market value of the underlying stock and the aggregate number of options
outstanding at December 31, 2009, after the effect of the five percent stock
dividend declared on June 18, 2009, for each of the following
participants:
Name
|
Number
of
Shares
Awarded
2009
|
Grant
Date Fair
Market
Value of
Options
Awarded
|
Aggregate
Number of Stock
Awards
Outstanding at
12/31/2009
|
Anthony
J. Consi, II
|
0
|
0
|
25,097
|
Pamela
Hill
|
0
|
0
|
21,943
|
John
D. Kissel
|
0
|
0
|
20,244
|
James
R. Lamb, Esq.
|
0
|
0
|
20,242
|
Edward
A. Merton
|
0
|
0
|
20,244
|
F.
Duffield Meyercord
|
0
|
0
|
20,244
|
John
R. Mulcahy
|
0
|
0
|
16,170
|
Philip
W. Smith, III
|
0
|
0
|
17,506
|
|
(3)
|
Peapack-Gladstone
has a retirement plan for eligible non-employee directors of
Peapack-Gladstone and/or its Subsidiaries. The plan provides 5 years of
annual benefits to directors with 10 or more years of service, which
commence after a director has retired from the Board. The annual benefit
is equal to 25 percent of the director's final compensation and increases
by 5 percent for each year of service in excess of 10. The
maximum benefit is limited to 50 percent of final compensation. No
director was credited with more than 10 years of service when the plan
became effective, regardless of how long the person had served as director
as of the effective date. If a director with 10 years of service ceases to
be a director as a result of death or disability, or a director with 5
years of service ceases to be a director following a change in control,
the director will be credited with a total of 15 years of service for plan
purposes. In the event that the director dies prior to receipt of all
benefits, the payments continue to the director's beneficiary or
estate.
|
|
(4)
|
Peapack-Gladstone
has a nonqualified deferred compensation plan for non-employee directors
covering retainer fees and the aggregate of all fees for service and
attendance at Board and committee meetings. Participation is optional. As
of January 1, 2005, the plan is frozen and no further contributions may be
made. Interest is paid on the deferred fees equal to that which
would have been credited if such deferred fees were invested in the
Peapack-Gladstone Money Market Account, which yields 0.90 percent as of
February 28, 2010. The provisions of the deferred compensation plan are
designed to comply with certain rulings of the Internal Revenue Service
under which the deferred amounts are not taxed until received. Under the
deferred compensation plan, the directors who elect to defer their fees
receive the fees either (i) in a lump sum on the first day of the calendar
quarter following termination of service as director, or on the first day
of a calendar quarter that is at least 5 years following the date of the
original deferral election, or (ii) in substantially equal annual
installments over a period of between 2 to 10 years, commencing in January
of the calendar year following the calendar year during which the director
ceases serving as director. In the event the director dies, within a
reasonable period of time following his or her death, the amount credited
to the director's deferred compensation account shall be paid in a lump
sum to the director's beneficiary or
estate.
|
|
(5)
|
The
amount in this column represents the change in pension
value. There were no above-market, nonqualified deferred
compensation earnings.
|
BENEFICIAL
OWNERSHIP OF COMMON STOCK
Certain
Beneficial Owners
The
following table sets forth as of February 28, 2010 certain information as to
beneficial ownership of each person known to Peapack-Gladstone to own
beneficially more than 5 percent of the outstanding common stock of
Peapack-Gladstone.
Name
and Address
of
Beneficial Owner
|
Amount
and Nature
of
Beneficial Ownership
|
Percent
of Class
|
James
M. Weichert (1)
1625
State Highway 10
Morris
Plains, NJ 07950
|
841,507
|
9.64%
|
Royce
& Associates, LLC (2)
1414
Avenue of the Americas
New
York, NY 10019
|
478,685
|
5.49%
|
|
(1)
|
Based
on a Schedule 13-D filed with the SEC on March 9, 2007 by James M.
Weichert. The filing discloses that as of March 9, 2007, James
M. Weichert has sole voting and dispositive power with respect to 841,507
shares of our common stock, as adjusted for the five percent stock
dividend paid in 2009.
|
|
(2)
|
Based
on a Schedule 13-G/A filed with the SEC on January 26, 2010 by Royce &
Associates, LLC. The filing discloses that as of January 26,
2010, Royce & Associates, LLC has sole voting and dispositive power
with respect to 478,685 shares of our common
stock.
|
Stock Ownership of
Directors and Executive Officers
The
following table sets forth as of February 28, 2010 the number of shares of
Peapack-Gladstone's common stock, after the effect of the five percent stock
dividend declared on June 18, 2009, beneficially owned by each of the
directors/nominees, the executive officers of Peapack-Gladstone for whom
individual information is required to be set forth in this proxy statement (the
“named executive officers”) pursuant to the regulations of the SEC, and by all
directors and executive officers as a group.
Name
of Beneficial Owner
|
Amount
and Nature of Beneficial Ownership (1)
|
Percent
of Class (2)
|
Arthur
F. Birmingham
|
44,353
|
(3)
|
*
|
Garrett
P. Bromley
|
39,319
|
(4)
|
*
|
Jeffrey
J. Carfora
|
10,669
|
(5)
|
*
|
Anthony
J. Consi, II
|
84,738
|
(6)
|
*
|
Pamela
Hill
|
119,699
|
(7)
|
1.32%
|
Frank
A. Kissel
|
146,684
|
(8)
|
1.62%
|
John
D. Kissel
|
63,024
|
(9)
|
*
|
James
R. Lamb
|
41,772
|
(10)
|
*
|
Edward
A. Merton
|
46,824
|
(11)
|
*
|
F.
Duffield Meyercord
|
48,166
|
(12)
|
*
|
John
R. Mulcahy
|
31,104
|
(13)
|
*
|
Robert
M. Rogers
|
62,184
|
(14)
|
*
|
Philip
W. Smith, III
|
54,145
|
(15)
|
*
|
Craig
C. Spengeman
|
63,780
|
(16)
|
*
|
All
directors and executive officers
as
a group (16 persons)
|
1,007,139
|
|
11.13%
|
NOTES:
|
(1)
|
Beneficially
owned shares include shares over which the named person exercises either
sole or shared voting power or sole or shared investment
power. It also includes shares owned (i) by a spouse, minor
children or by relatives sharing the same home, (ii) by entities owned or
controlled by the named person and (iii) by other persons if the named
person has the right to acquire such shares within 60 days by the exercise
of any right or option. Unless otherwise noted, all shares are
owned of record or beneficially by the named
person.
|
|
(2)
|
The
number of shares of common stock used in calculating the percentage of the
class owned includes shares of common stock outstanding as of February 28,
2010, and 306,013 shares purchasable pursuant to options exercisable
within 60 days of February 28,
2010.
|
|
(3)
|
This
total includes 247 shares owned by Mr. Birmingham’s wife, 3,592 shares
allocated to Mr. Birmingham under Peapack-Gladstone's Profit Sharing Plan
and 31,752 shares purchasable pursuant to options exercisable within 60
days of February 28, 2010.
|
|
(4)
|
This
total includes 1,580 shares allocated to Mr. Bromley under
Peapack-Gladstone's Profit Sharing Plan and 28,078 shares purchasable
pursuant to options exercisable within 60 days of February 28,
2010.
|
|
(5)
|
This
total includes 7,669 shares of restricted
stock.
|
|
(6)
|
This
total includes 22,787 shares purchasable pursuant to options exercisable
within 60 days of February 28,
2010.
|
|
(7)
|
This
total includes 19,633 shares purchasable pursuant to options exercisable
within 60 days of February 28, 2010 and 26,192 shares held in a
partnership for which Ms. Hill is an
owner.
|
|
(8)
|
This
total includes 3,515 shares owned by Mr. Frank A. Kissel's wife, 10,256
shares allocated to Mr. Kissel under Peapack-Gladstone's Profit Sharing
Plan, 14,147 shares of restricted stock and 39,713 shares purchasable
pursuant to options exercisable within 60 days of February 28,
2010.
|
|
(9)
|
This
total includes 1,689 shares owned by Mr. John D. Kissel's wife, 5,823
shares owned by Mr. Kissel's children and 17,934 shares purchasable
pursuant to options exercisable within 60 days of February 28,
2010.
|
|
(10)
|
This
total includes 2,684 shares owned by Mr. Lamb's wife and 17,932 shares
purchasable pursuant to options exercisable within 60 days of February 28,
2010.
|
|
(11)
|
This
total includes 17,934 shares purchasable pursuant to options exercisable
within 60 days of February 28,
2010.
|
|
(12)
|
This
total includes 17,934 shares purchasable pursuant to options exercisable
within 60 days of February 28, 2010 and of this total, 19,705 shares were
pledged as security to a loan with Peapack-Gladstone
Bank.
|
|
(13)
|
This
total includes 2,512 shares owned by Mr. Mulcahy's wife and 13,860 shares
purchasable pursuant to options exercisable within 60 days of February 28,
2010.
|
|
(14)
|
This
total includes 6,100 shares allocated to Mr. Rogers under
Peapack-Gladstone's Profit Sharing Plan, 9,047 shares of restricted stock
and 34,284 shares purchasable pursuant to options exercisable within 60
days of February 28, 2010.
|
|
(15)
|
This
total includes 7,370 shares owned by Mr. Smith's wife, 1,473 shares owned
by Mr. Smith's children, 1,050 shares owned by Mr. Smith’s Management
Company and 15,196 shares purchasable pursuant to options exercisable
within 60 days of February 28, 2010 and of this total, 15,052 shares were
pledged as security to a loan with Peapack-Gladstone
Bank.
|
|
(16)
|
This
total includes 7,091 shares allocated to Mr. Spengeman under
Peapack-Gladstone's Profit Sharing Plan, 10,052 shares of restricted stock
and 35,749 shares purchasable pursuant to options exercisable within 60
days of February 28, 2010.
|
PROPOSAL
2 - ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
We
believe that our compensation policies and procedures are competitive, are
focused on pay-for-performance principles and are strongly aligned with the
long-term interests of our shareholders. We also believe that both we
and our shareholders benefit from responsive corporate governance policies and
constructive and consistent dialogue. The proposal described below, commonly
known as a “Say on Pay” proposal, gives you as a shareholder the opportunity to
endorse or not endorse the compensation for our named executive officers by
voting to approve or not approve such compensation as described in this proxy
statement.
On
February 17, 2009, President Obama signed the American Recovery and Reinvestment
Act of 2009 (the “Stimulus Act”) into law. The Stimulus Act requires,
among other things, every participant in the Troubled Asset Relief Program to
permit a non-binding shareholder vote to approve the compensation of the
participant’s executives. Accordingly, we are asking you to approve the
compensation of Peapack-Gladstone’s named executive officers as described under
“Compensation Discussion and Analysis” and the tabular disclosure regarding
named executive officer compensation (together with the accompanying narrative
disclosure) in this proxy statement. Under the Stimulus Act, your
vote is advisory and will not be binding upon the Board. However, the
Compensation Committee will take into account the outcome of the vote when
considering future executive compensation arrangements.
RECOMMENDATION
AND VOTE REQUIRED ON PROPOSAL 2
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE NON-BINDING APPROVAL OF THE
COMPENSATION OF THE NAMED EXECUTIVE OFFICERS DETERMINED BY THE COMPENSATION
COMMITTEE. Approval of this advisory proposal requires the favorable
vote of a majority of the votes cast. Abstentions and broker
non-votes will have no impact on the approval of this advisory
proposal.
COMPENSATION
DISCUSSION AND ANALYSIS
The fundamental objective of
Peapack-Gladstone’s named executive officer compensation program is to fairly
compensate our named executive officers in a way that best advances the
interests of the shareholders. Peapack-Gladstone feels that
shareholder interests are best advanced through the retention of superior
executive talent and the alignment of shareholder and executive
interests.
Peapack-Gladstone
compensates our named executive officers with a mix of base salary, bonus and
equity compensation designed to: (1) align compensation with performance, (2)
align management and shareholder interests and (3) be competitive, within the
context of our conservative compensation culture, with the compensation of
comparable employers.
The base
salary we pay our named executives is determined by a combination of factors,
including but not limited to an analysis of market comparables, skill set, level
of responsibility, individual performance and Peapack-Gladstone’s overall
performance.
We design
the incentive compensation (bonus and equity compensation) to align the
interests of our named executive officers with the short and long-term interests
of shareholders. We align named executive officer and shareholder
short-term interests by linking bonus awards to individual performance and
Peapack-Gladstone’s overall performance over the prior year. We align
named executive officer and shareholder long-term interests by awarding equity
compensation to our named executive officers. Both bonus and equity
compensation are awarded on a discretionary basis.
We
believe that our salary, bonus and equity compensation is both fair and
reflective of market conditions in our business and geography, within the
context of our conservative compensation culture. We believe that we
have no compensation policies or practices with respect to our employees that
are likely to have a material adverse effect on our Company
The
Decision Process
The
Compensation Committee of the Board of Directors is responsible for establishing
and overseeing policies governing annual and long-term compensation programs for
the named executive officers, and for making recommendations to the Board of
Directors on actual named executive officer compensation levels. The
Chief Executive Officer provides advice to the Compensation Committee relative
to the compensation of the four other named executive officers. The
Compensation Committee makes all of its determinations based on
discretion.
After the
Compensation Committee makes its recommendations to the Board of Directors, the
Board of Directors (without the presence of the named executive officers) makes
the final determination of compensation paid to Peapack-Gladstone’s named
executive officers.
Elements
of Compensation
Peapack-Gladstone’s
direct compensation consists of base salary, an annual cash award (our bonus),
and equity compensation. Our base salaries are linked to individual
performance, level of responsibility, the competitive market and
Peapack-Gladstone’s overall performance.
We design
our base salaries in significant part to attract and retain talented executives
who can help drive long-term shareholder value. Because the markets
in which we operate present current and potential executives with many
high-paying alternatives, we believe we must keep our base salaries competitive,
within the context of our conservative compensation culture, or risk losing
executive talent.
Our cash
bonuses are based on individual performance, level of responsibility, and
Peapack-Gladstone’s overall performance. “Individual performance” is
the performance by an individual of his/her duties within
Peapack-Gladstone. “Level of responsibility” is the level of
responsibility an individual has within
Peapack-Gladstone. “Peapack-Gladstone’s overall performance” is the
performance of the Corporation, both absolute and relative to the business
environment. The assessment of these factors is subjective and is
made by the Compensation Committee. On the basis of this assessment,
the Compensation Committee uses its discretion to determine the amount of the
cash bonus. We feel that linking cash bonuses to individual
performance and Peapack-Gladstone’s overall performance places a portion of
individual compensation at risk—thereby motivating individual performance while
at the same time correlating Peapack-Gladstone’s overall compensation to
Peapack-Gladstone’s overall performance.
Our
equity compensation is based on the degree to which the executive is in a
position to influence Peapack-Gladstone’s long-term performance. We
feel the rationale behind equity compensation is straightforward: by allowing
our executives to participate in the long-term appreciation of our shares, these
executives will work and make decisions to maximize Peapack-Gladstone’s
long-term
performance. The
Compensation Committee in its discretion determines the amount, type and timing
of our equity compensation. In the past our equity compensation has
consisted of stock options. In 2006, the Committee decided to make
smaller stock option grants every year, as opposed to the prior practice of
making larger stock option grants once every two or three years. With
respect to 2009, in place of stock options the Compensation Committee issued
restricted stock to the six most senior executive officers.
Compensation
Review
In the
fall of 2009, the Compensation Committee commissioned a compensation review by
its independent compensation consultant, Pearl Meyer & Partners (the
PM&P review). The purpose of this review was to provide an
independent and objective analysis of elements of compensation (individually and
in aggregate) relative to the market and peer group practices.
The
PM&P review established a market composite based upon the average of the
proxy peer group and three banking compensation surveys: the 2008/2009 Watson
Wyatt Financial Institutions Benchmark Survey, Mercer Financial Services Suite
and PMP Northeast Banking Survey. The proxy peer group consisted of
commercial banks with assets of $1.0 to $3.0 billion, and specifically included
the following 18 publicly traded institutions: Tompkins Financial Corporation,
Washington Trust Bancorp, Inc., Hudson Valley Holding Corp., Smithtown Bancorp,
Inc., Univest Corporation of Pennsylvania, Arrow Financial Corporation, First
United Corporation, Suffolk Bancorp, Canandaigua National Corporation, Alliance
Financial Corporation, First Chester County Corporation, Citizens & Northern
Corporation, First of Long Island Corporation, Bryn Mawr Bank Corporation,
Orrstown Financial Services, Inc., Shore Bancshares, Inc., CNB Financial
Corporation and, Wilber Corporation.
For 2009
base salaries, the PM&P review found that the 50th
percentile of the competitive composite was $401,000 for Mr. Frank A. Kissel,
$272,000 for Mr. Robert M. Rogers, $248,000 for Mr. Craig C. Spengeman, $208,000
for Messrs. Arthur F. Birmingham and Jeffrey J. Carfora, and $205,000 for
Messrs. Garrett P. Bromley and Vincent A. Spero (for that portion of the year
during which Mr. Spero served as Chief Lending Officer). As to bonuses, the
PM&P review found that the 50th
percentile of the market composite translated to a bonus equal to 40% of Mr.
Kissel’s base salary, 35% of Mr. Roger’s base salary, 35% of Mr. Spengeman’s
base salary, 30% of the base salary of Messrs Birmingham and Carfora and 30% of
the base salary of Messrs. Bromley and Spero (for that portion of the year
during which Mr. Spero served as Chief Lending Officer).
2009
Compensation—Facts and Analysis
In
establishing compensation for named executive officers, the Compensation
Committee considers many factors including but not limited to
Peapack-Gladstone’s overall performance, the individual’s performance, the
PM&P review and annual pay raise survey data.
Mr.
Kissel's base salary for 2009 of $368,000 was $33,000 below the 50th
percentile of the competitive composite and was set by the Compensation
Committee, in its discretion, based on Peapack-Gladstone’s conservative
compensation culture, the prior Pearl Meyer & Partners review, Mr. Kissel’s
performance in executing his responsibilities in 2008 and his anticipated
performance in 2009 and future years. The Committee also considered
Mr. Kissel's ability to develop and motivate employees to meet
Peapack-Gladstone’s short and long-term objectives, as well as
Peapack-Gladstone’s overall performance. Finally, the Committee
considered annual pay raise survey data from America’s Community
Bankers, LR Webber Associates, and the NJ Bankers (hereinafter
referred to as the annual pay raise survey), which found an average planned
increase in executive salaries, from 2009-2010, of 2.6%. Mr. Kissel’s
2009 salary of $368,000 represented a 5 % increase over his 2008 salary of
$350,000.
Mr.
Kissel was paid no bonus in 2009 in reflection of the difficult economic
environment and the TARP restrictions.
To
further align Mr. Kissel’s and the shareholders’ long-term interests, the
Committee awarded Mr. Kissel 14,147 shares of restricted stock on January 4,
2010 with respect to 2010, valued at $190,000 based upon the closing price of
PGC stock on January 4, 2010 and representing 50% of Mr. Kissel’s 2010 base
salary. The Committee determined the size of the award, in its
discretion, through consideration of the ability of Mr. Kissel to positively
influence the long-term performance of Peapack-Gladstone and Peapack-Gladstone’s
actual performance.
Mr.
Roger's 2009 base salary of $236,000 was $36,000 below the 50th percentile of
the competitive composite. Mr. Roger’s 2009 salary represented a 5%
increase over his 2008 salary of $225,000. Mr. Spengeman’s 2009 base
salary of $262,000 was $14,000 above the 50th percentile of the competitive
composite. Mr. Spengeman’s 2009 salary represented a 5% increase over
his 2008 salary of $250,008. Mr. Birmingham’s annualized 2009 base
salary of $194,263 was $13,737 below the 50th percentile of the competitive
composite. Mr. Birmingham’s annualized 2009 salary represented a 5%
increase over his 2008 salary of $185,012. Mr. Birmingham retired
from the Bank on March 30, 2009. Mr. Carfora’s 2009 base salary of
$200,000 was $8,000 below the 50th percentile of the competitive
composite. Mr. Carfora was not an employee during any time in
2008. Mr. Bromley’s 2009 base salary of $184,000 was $21,000 below
the 50th percentile of the competitive composite. Mr. Bromley’s 2009
salary represented an 8% increase over his 2008
salary of
$170,000. Mr. Spero’s annualized base salary for the months of
January through November 2009 of $183,000 was $ 2,000 above the 50th percentile
of the competitive composite. Mr. Spero’s annualized 2009 salary
during these months represented an 11% increase over his 2008 salary of
$165,000. Mr. Spero’s annualized base salary for the month of
December 2009 of $200,000 was $5,000 below the 50th percentile of the
competitive composite. Mr. Spero’s annualized 2009 salary for the
month of December 2009 represented a 21% increase over his 2008 salary of
$165,000.
None of
Messrs. Rogers, Spengeman, Birmingham, Carfora, Bromley and Spero was paid a
bonus in 2009 in reflection of the difficult economic environment and the TARP
restrictions.
To
further align their and the shareholders’ long-term interests, in 2010 the
Committee awarded 10,052 shares of restricted stock to Mr. Spengeman, 9,047
shares of restricted stock to Mr. Rogers, 7,669 shares of restricted stock to
Mr. Carfora and 7,632 shares of restricted stock to Mr. Spero, valued at
$135,000, $121,500, $103,000 and $102,500, respectively, based upon the closing
price of PGC stock on January 4, 2010 and representing 50% of the 2010 base
salary of each executive. The Committee determined the size of the
awards, in its discretion, within the constraints of the TARP restrictions and
through consideration of the ability of the executives to positively influence
the long-term performance of Peapack-Gladstone and Peapack-Gladstone’s actual
performance in the difficult economic environment.
Peapack-Gladstone
Benefit Plans—Facts and Analysis
Peapack-Gladstone
provides bank-sponsored insurance and retirement benefit plans to our named
executive officers. The benefit packages are designed to assist named
executive officers in providing for their own financial security in a way that
recognizes individual needs and preferences.
The basic
insurance package includes health, dental, vision, disability and basic group
life insurance. The Committee believes that these basic benefits are
currently sought after by able employees, and that to attract and retain able
employees Peapack-Gladstone must offer these benefits to its employees,
including its named executive officers.
In
addition to providing a term life insurance benefit to each of the named
executive officers, Peapack-Gladstone has also purchased bank owned life
insurance and entered into a split-dollar plan with the named executive officers
and certain other employees to provide current and post-employment life
insurance in an amount which ranges from a minimum benefit of $25,000 to 2.5
times the executive’s annual base salary. A life insurance benefit of 2.5
times a participant’s annual base salary vests if prior to the termination of
employment there is a change in control or the participant becomes
disabled. A benefit of 2.5 times the participant’s salary is paid if the
participant dies while employed by Peapack-Gladstone. The
participant also is entitled to a vested post-employment life insurance
benefit based on years of service and the participant’s age as of the date of
termination of employment. This vested benefit ranges from a minimum of
1.0 times base annual salary at age 50 to a maximum of 2.5 times annual base
salary at age 60, in each case after completion of 15 years of
service. There is a minimum benefit of $25,000 if the participant
does not reach the vesting levels. Bank owned life insurance assists
Peapack-Gladstone in offsetting the rising costs of employee benefits by
providing Peapack-Gladstone with current income prior to the death of an
insured, and a lump-sum payment upon the death of an
insured. Peapack-Gladstone owns the cash surrender value of the
policies and records the increases in the cash surrender value as
income. Further, and more importantly, upon the death of an insured
Peapack-Gladstone will receive cash equal to the cash surrender value of the
policy and excess life insurance over the amount paid to the insured’s
beneficiary. The Committee feels that bank owned life insurance is
primarily a good investment for Peapack-Gladstone, and secondarily a
supplementary life insurance benefit for many of our officers, including our
named executive officers.
Peapack-Gladstone
provides retirement benefits to named executive officers through a combination
of plans that qualify under the Internal Revenue
Code. Peapack-Gladstone has established a qualified defined
contribution plan under Section 401(K) of the Internal Revenue Code of 1986, as
amended, covering substantially all salaried employees over the age of
twenty-one with at least twelve months of service and whose participation is not
prohibited by the 401(K) plan. Under the savings portion of the
401(K) plan, employees may contribute up to 15 percent of their pay (up to a
maximum of $16,500 in 2009) to their elective account via payroll withholding.
Annually, Peapack-Gladstone makes a matching contribution equal to 50% of the
first 6% of an employee’s salary, an additional 3% employer contribution for
eligible employees and an additional Age and Service contribution for eligible
employees. In addition, the Committee may recommend a
discretionary contribution to the profit sharing portion of the 401(K)
plan. The profit sharing portion is based on base salary with a cap
($245,000 in 2009) and is non-contributory. Contributions to the
profit sharing portion are invested in Peapack-Gladstone's common
stock. The Committee believes that able employees demand 401(K)
plans, and that to attract and retain able employees Peapack-Gladstone must
offer these benefits to its employees, including its named executive
officers.
Change
in Control Agreements—Facts and Analysis
We have
entered into change in control agreements that give the named executive officers
certain benefits in the event of a change in control. Each of these
agreements require Peapack-Gladstone or its successor to pay certain termination
benefits if (a) there is a change in control and (b) a named executive officer
either resigns for good reason or is terminated without cause. Under
these circumstances Peapack-Gladstone or its successor would be required to pay
aggregate amounts equal to three times the highest annual salary and
bonuses paid during any calendar year during the three years prior to the change
in control plus continue certain health and other benefits. In the
event that the severance payments and benefits under the agreements, together
with any other parachute payments, would constitute an excess parachute payment
under Section 280G of the Internal Revenue Code, the payments would be increased
in an amount sufficient to pay the excise taxes and other income and payroll
taxes necessary to allow the named executive officers to retain the same net
amount, after such taxes, as each was otherwise entitled to
receive. The Committee feels these agreements are necessary to
encourage our named executive officers to approach an advantageous merger or
acquisition transaction without regard to immediate loss of salary and
benefits. The Committee also feels that, given the high degree of
consolidation within the banking business, these agreements are necessary to
attract and retain talented named executive officers.
Employment
Contracts—Facts and Analysis
We are a
party to employment agreements that give the named executive officers certain
benefits. These agreements, each with a term of two years, provide
among other things for (i) participation during the employment term in all
compensation and employee benefits plans for which any salaried employees of
Peapack-Gladstone are eligible, (ii) an annual base salary and (iii)
discretionary bonus payments with respect to each calendar
year. Under these agreements, if a named executive officer’s
employment is terminated without cause, Peapack-Gladstone shall pay the
executive’s base salary for a period equal to two years from the effective date
of such termination. In the event that Peapack-Gladstone terminates a
named executive officer’s employment for cause or pursuant to retirement,
permanent disability or death, Peapack-Gladstone shall pay the named executive
officer any earned but unpaid base salary as of the date of termination of
employment. The employment agreements also include certain
non-compete and non-solicitation provisions. The Committee believes
Peapack-Gladstone would be unable to attract and retain talented senior
executives without employment agreements, which are customary in the competitive
market.
Restrictions
under the Capital Purchase Program
In
January 2009 we entered into a Securities Purchase Agreement with the United
States Treasury that provides for our participation in the Capital Purchase
Program (“CPP”) under the Treasury’s Troubled Assets Relief Program
(“TARP”). CPP participants are subject to several
compensation-related limitations associated with the Program. Each of
our named executive officers agreed in writing to be subject to the
compensation-related limitations in existence at that time which served to cap
or eliminate some of their contractual or legal rights. The
provisions agreed to were as follows:
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·
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No golden parachute
payments.
Our named executive officers have agreed to forego all golden
parachute payments for as long as both (i) they remain “senior executive
officers” (defined as our CEO, Chief Financial Officer and our next three
highest-paid executive officers), and (ii) the Treasury continues to hold
our equity or debt securities we issued to it under the CPP (we refer to
the period during which the Treasury holds those securities as the “CPP
Covered Period”). “Golden parachute payment” under the CPP is
defined as any severance payment resulting from involuntary termination of
employment, or from bankruptcy of the employer, that exceeds three times
the terminated employee’s average annual base salary over the five years
prior to termination.
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·
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No Compensation Arrangements
That Encourage Excessive Risks. During
the CPP Covered Period, we are not allowed to enter into compensation
arrangements that encourage named executive officers to take “unnecessary
and excessive risks that threaten the value” of our
company. The Committee is required to meet at least twice a
year with our senior risk officer to review our executive compensation
arrangements in the light of our risk management policies and practices to
ensure this does not occur. Our named executive officers have
agreed to execute whatever documents may be required in order to adjust
compensation arrangements resulting from the Committee’s required
review.
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·
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Recovery of Bonus, Retention
Awards and Incentive Compensation if Based on Certain Material
Inaccuracies. Under
the provisions of the CPP and as agreed to by our named executive
officers, we can recover any bonus, retention award or incentive
compensation paid during the CPP Covered Period that is later found to
have been based on materially inaccurate financial statements or other
materially inaccurate measurements of
performance.
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·
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Limit on Federal Income Tax
Deductions.
During the CPP Covered Period, we are not allowed to take federal
income tax deductions for compensation paid to senior executive officers
in excess of $500,000 per year, with certain exceptions that do not apply
to our named executive officers. This represents a 50%
reduction in the income tax deductibility limit and the elimination of the
exemption for performance-based compensation.
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Additional
Restrictions under the American Recovery and Reinvestment Act of
2009
The
American Recovery and Reinvestment Act of 2009 (the “Stimulus Act”) was signed
into law on February 17, 2009. The Stimulus Act (i) modified the
compensation-related limitations contained in the CPP, (ii) created additional
compensation-related limitations and (iii) directed the Secretary of the
Treasury to establish standards for executive compensation applicable to
participants in the TARP, regardless of when participation
commenced. The newly enacted compensation-related limitations apply
to us and the provisions may be retroactive. In their January 2009
agreements our named executive officers did not waive their contractual or legal
rights with respect to these new and retroactive provisions; and additional
officers now covered for the first time by the Stimulus Act provisions were not
asked and did not agree to waive their contractual or legal
rights. The compensation-related limitations applicable to us added
or modified by the Stimulus Act, and which are subject to standards to be
established by the Secretary of the Treasury, are as follows:
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·
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No severance
payments. Under
the Stimulus Act, “golden parachute” was redefined as any severance
payment resulting from involuntary termination of employment, or from
bankruptcy of the employer, except for payments for services performed or
benefits accrued. Consequently, under the Stimulus Act, we are
prohibited from making any severance payment during the CPP Covered Period
to our “senior executive officers” (defined in the Stimulus Act as the
five highest paid named executive officers) and our next five most highly
compensated employees.
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·
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No Compensation Arrangements
That Encourage Earnings Manipulation. Under
the Stimulus Act, during the CPP Covered Period, we are not allowed to
enter into compensation arrangements that encourage manipulation of our
reported earnings to enhance the compensation of any of our
employees.
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·
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Recovery of Bonus, Retention
Awards and Incentive Compensation if Based on Certain Material
Inaccuracies. The Stimulus
Act also contains the “clawback provision” discussed above but extends its
application to any bonus, retention award or awards and incentive
compensation paid to any of our senior executive officers or our next 20
most highly compensated employees during the CPP Covered Period that is
later found to have been based on materially inaccurate financial
statements or other materially inaccurate measurements of
performance.
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·
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Limit on Incentive
Compensation. The
Stimulus Act contains a provision that prohibits the payment or accrual
during the CPP Covered Period of any bonus, retention award or incentive
compensation to any of our senior executive officers or our next 5 most
highly compensated employees other than awards of long-term restricted
stock that (i) do not fully vest during the CPP Covered Period, (ii) have
a value not greater than one-third of the total annual compensation of the
award recipient and (iii) are subject to such other restrictions as may be
determined by the Secretary of the Treasury. The prohibition on
bonus, incentive compensation and retention awards does not preclude bonus
payments required under written employment contracts entered into on or
prior to February 11, 2009.
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·
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Compensation Committee
Functions. The
Stimulus Act requires that our Compensation Committee be comprised solely
of independent directors and that it meet at least semiannually to discuss
and evaluate our employee compensation plans in light of an assessment of
any risk posed to us from such compensation plans. See
“Corporate Governance – Director Independence” above for a discussion of
the independence of our Compensation Committee.
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·
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Compliance
Certifications. The
Stimulus Act also requires a written certification by our Chief Executive
Officer and Chief Financial Officer of our compliance with the provisions
of the Stimulus Act. These certifications must be contained in the
Company’s Annual Report on Form 10-K beginning next year.
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·
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Treasury Review of Bonuses
Previously Paid. The Stimulus
Act directs the Secretary of the Treasury to review all compensation paid
to our senior executive officers and our next 20 most highly compensated
employees to determine whether any such payments were inconsistent with
the purposes of the Stimulus Act or were otherwise contrary to the public
interest. If the Secretary of the Treasury makes such a
finding, the Secretary of the Treasury is directed to negotiate with the
CPP recipient and the subject employee for appropriate reimbursements to
the federal government with respect to compensation and bonuses found to
be excessive.
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·
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Say on Pay. Under
the Stimulus Act, the SEC is required to promulgate rules requiring an
advisory, non-binding say on pay vote by the shareholders on executive
compensation at the annual meeting during the CPP Covered
Period. We will comply with the provisions of the Stimulus Act
and its implementing regulations in all respect, which includes the
submission of “Proposal 2: Advisory Vote on Compensation of
Named Executive Officers” set forth in this proxy
statement.
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COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed
and discussed with management the Compensation Discussion and Analysis and based
on such review and discussions the Compensation Committee has recommended to the
Board that the Compensation Discussion and Analysis be included in
Peapack-Gladstone’s annual report on Form 10-K and the Proxy
Statement.
In addition, the Compensation Committee
certifies that:
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(1)
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It
has reviewed with Peapack-Gladstone’s senior risk officer the senior
executive officer (“SEO”) compensation plans and has made all reasonable
efforts to ensure that these plans do not encourage SEOs to take
unnecessary and excessive risks that threaten the value of
Peapack-Gladstone;
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(2)
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It
has reviewed with Peapack-Gladstone’s senior risk officer the employee
compensation plans and has made all reasonable efforts to limit any
unnecessary risks these plans pose to
Peapack-Gladstone; and
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(3)
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It
has reviewed the employee compensation plans to eliminate any features of
these plans that would encourage the manipulation of reported earnings of
Peapack-Gladstone to enhance the compensation of any
employee.
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This certification above and the
narrative below are being provided in accordance with the requirement of the
Interim Final Rule of the United States Treasury, TARP Standards for
Compensation and Corporate Governance, issued June 15,
2009.
The
Compensation Committee and the senior risk officer have conducted two
assessments of the Company’s compensation programs since August 2009. The most
recent assessment by the Compensation Committee and senior risk officer occurred
on March 8, 2010 and covered all compensation plans, including the SEO
compensation plans. The Compensation Committee and senior risk
officer concluded that Peapack-Gladstone’s compensation plans did not present
opportunities for or encourage employees to take unnecessary and excessive risks
that threaten the value of Peapack-Gladstone, or to manipulate earnings to
enhance the compensation of any employee.
The Compensation Committee believes
that Peapack-Gladstone’s overall compensation practices for SEOs, which include
the following elements, limit the ability of executive officers to benefit from
taking unnecessary or excessive risks:
•
|
Discretion-based
awards, as opposed to formula-based performance awards;
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•
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All
SEO compensation decisions made by fully independent Compensation
Committee;
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•
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Balance
between fixed compensation (base salary) and equity compensation
opportunity.
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In
addition, the Compensation Committee believes that there are controls around
incentive plans for all employees as described below that effectively discourage
unnecessary and excessive risk taking.
Peapack-Gladstone’s
Board of Directors has established a conservative tone for risk tolerance within
the Company. Adherence to the risk tolerance is ensured by the
Company’s system of internal processes and validated by independent groups,
including Internal Audit, Risk Management, Credit Administration and to some
extent, the external auditors.
In
addition to the general risk policy framework which limits risks, there are
controls around employee incentive compensation (including the SEO incentive
compensation) that effectively discourage and limit unnecessary and excessive
risks relating to incentive compensation. All SEO incentive
compensation is fully subject to Compensation Committee discretion and almost
all other employee incentive compensation is fully subject to either management
or Compensation Committee discretion (a relatively small number of sales
personnel receive incentive compensation on the basis of
formulae). As further described below, the Compensation Committee
reviews and approves all SEO incentive compensation.
The SEO
compensation plans are currently operating within the constraints of the TARP
limits. However, the Compensation Committee believes, even before
application of the TARP limits, that Peapack-Gladstone’s standard compensation
programs for executives do not encourage unnecessary and excessive
risk. As discussed in further detail in the Compensation Discussion
and Analysis section, the standard incentive compensation plans for SEOs consist
of long-term incentives under the 2006 Long-Term Stock Incentive Plan in the
form of equity awards (under TARP, these awards are limited to restricted
stock). The opportunity to earn long-term awards helps to attract and
retain executive officers, and align the efforts of these officers with the
long-term interests of the Company. Long-term, equity-based awards
are a critical part of Peapack-Gladstone’s compensation philosophy as they
encourage the alignment of senior management’s goals with those of our
shareholders, namely the goal of increasing overall shareholder
value.
All
Peapack-Gladstone SEO incentive compensation is at the full and complete
discretion of the Compensation Committee, which consists solely of independent
directors. Peapack-Gladstone does not maintain a plan by which the
SEO’s are compensated based upon specific pre-determined performance
goals.
Due to
the impact of TARP, for 2009 the equity awards for SEOs were limited to
long-term restricted stock awards that will vest on the second anniversary of
the date of grant or, if Peapack-Gladstone has not fully redeemed the preferred
shares it issued to Treasury under TARP as of such second anniversary, then such
restricted stock shall vest upon and after such second anniversary in 25%
increments in proportion to the percentage of such preferred shares it has so
redeemed. Also due to TARP, the Company did not pay the SEO’s cash
bonuses as to 2009.
Employee Compensation
Plans
In
addition to the incentive plans in which the SEOs participate, Peapack-Gladstone
awards incentive compensation to other employees in the form of annual cash
bonuses and stock options, and for a small number of sales personnel, formula
based commissions. The Compensation Committee believes that the
features of these incentive compensation awards, alone and/or combined with the
system of controls in place, do not encourage unnecessary or excessive risk and
do not encourage the manipulation of reported earnings to enhance the
compensation of any employee.
Conclusions as to
Compensation Risk
In light
of the discretion-based nature of Peapack-Gladstone’s incentive plans and the
significant level of oversight and controls over compensation decisions, the
Compensation Committee believes that the incentive plans for employees,
including SEOs, do not contain any features that would encourage the
manipulation of reported earnings to enhance the compensation of any
employee.
The
Compensation Committee
of
the Board of Directors
F.
Duffield Meyercord, Chairman
Edward
A. Merton
Anthony J. Consi,
II
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth compensation information for Peapack-Gladstone’s
named executive officers.
Name
and
Principal
Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Option
Awards
(1)
|
|
|
Change
in Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
(2)
|
|
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All
Other
Compensation
|
|
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Total
|
|
Frank
A.
Kissel
Chairman
of the Board
and
CEO of Peapack-Gladstone
and
the Bank
|
|
|
2009
2008
2007
|
|
|
$
|
367,500
350,000
321,903
|
|
|
$
|
-
-
48,584
|
|
|
$
|
-
53,950
51,150
|
|
|
$
|
-
31,295
81,595
|
|
|
$
|
102,999
65,437
8,929
|
|
|
$
|
470,499
500,682
512,161
|
|
Arthur
F.
Birmingham
(3)
Executive
Vice President
and
CFO of
Peapack-Gladstone
and
the Bank
|
|
|
2009
2008
2007
|
|
|
|
59,773
185,013
175,583
|
|
|
|
-
-
26,337
|
|
|
|
-
37,765
35,805
|
|
|
|
-
14,285
61,077
|
|
|
|
175,158
31,326
4,808
|
|
|
|
234,931
268,389
303,610
|
|
Jeffrey
J.
Carfora
(4)
Executive
Vice President and
CFO
of Peapack-Gladstone
and
the Bank
|
|
|
2009
2008
2007
|
|
|
|
147,708
-
-
|
|
|
|
-
-
-
|
|
|
|
-
-
-
|
|
|
|
-
-
-
|
|
|
|
2,859
-
-
|
|
|
|
150,567
-
-
|
|
Craig
C.
Spengeman
President
of PGB Trust
and
Investments and Executive
Vice
President of Peapack-Gladstone
|
|
|
2009
2008
2007
|
|
|
|
262,500
250,000
234,112
|
|
|
|
-
-
35,116
|
|
|
|
-
43,160
40,920
|
|
|
|
-
8,204
61,697
|
|
|
|
47,202
36,696
7,311
|
|
|
|
309,702
338,060
379,156
|
|
Robert
M.
Rogers
President
and COO of
Peapack-Gladstone
and
the Bank
|
|
|
2009
2008
2007
|
|
|
|
263,250
225,000
204,847
|
|
|
|
-
-
30,727
|
|
|
|
-
43,160
40,920
|
|
|
|
-
6,240
43,338
|
|
|
|
46,762
37,062
9,168
|
|
|
|
310,012
311,462
329,000
|
|
Garrett
P.
Bromley
Executive
Vice
President
|
|
|
2009
2008
2007
|
|
|
|
184,000
170,000
161,000
|
|
|
|
-
-
24,150
|
|
|
|
-
37,765
35,805
|
|
|
|
-
28,275
87,372
|
|
|
|
59,410
49,028
10,093
|
|
|
|
243,410
285,068
318,420
|
|
|
(1)
|
Represents
aggregate grant date fair value of stock option grants in accordance with
ASC 718, see Note 12 – Stock Option Plans of Peapack-Gladstone’s Annual
Report on Form 10-K for the year ended December 31, 2009 for additional
information on the valuation methodology. The 1998 and 2002
Stock Option Plans provide for the award of incentive stock options to
each named executive officer. The 2006 Long-Term Stock Incentive Plan
provides for the award of non-qualified stock options, stock appreciation
rights or restricted stock to each named executive officer. The
plans provide that grants are made based upon recommendations from the
Compensation Committee to the Board and a vote from the full
Board.
|
Under
each of the plans, the exercise price for the option shares may not be less than
the fair market value of the common stock on the date of grant of the option.
The options granted under these plans are, in general, exercisable not earlier
than one year after the date of grant, at a price equal to the fair market value
of the common stock on the date of grant, and expire not more than ten years
after the date of grant.
|
(2)
|
The
Corporation had a defined benefit pension plan covering substantially all
of its salaried employees which was discontinued on May 12,
2008. The Plan was settled and substantially all benefits were
paid to employees during September 2008. There were no
nonqualified deferred compensation
earnings.
|
|
(3)
|
Retired
from Peapack-Gladstone and the Bank on March 30,
2009.
|
|
(4)
|
Assumed
the position of Chief Financial Officer on March 30,
2009.
|
2009
Grants of Plan-Based Awards
There
were no stock option grants awarded to named executive officers in
2009.
Outstanding
Equity Awards at Fiscal Year-End
The following table represents stock
options outstanding, after the effect of the five percent stock dividend
declared on June 18, 2009, for each named executive officer as of December 31,
2009.
|
|
Option
Awards
|
|
Name
|
|
Number
of Securities Underlying
Unexercised
Options Exercisable
(1)
|
Number
of Securities
Underlying
Unexercised
Options
Unexercisable
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Frank
A. Kissel
|
|
|
5,590 |
(2) |
|
|
-
|
|
|
$ |
16.06
|
|
|
1/11/2011
|
|
|
|
|
28,873 |
(3) |
|
|
-
|
|
|
|
27.51
|
|
|
1/9/2014
|
|
|
|
|
5,250 |
(4) |
|
|
3,150
|
|
|
|
26.76
|
|
|
1/3/2017
|
|
|
|
|
5,250 |
(5) |
|
|
4,200
|
|
|
|
23.40
|
|
|
1/2/2018
|
|
Arthur
F. Birmingham
|
|
|
4,192 |
(2) |
|
|
-
|
|
|
|
16.06
|
|
|
1/11/2011
|
|
|
|
|
20,210 |
(3) |
|
|
-
|
|
|
|
27.51
|
|
|
1/9/2014
|
|
|
|
|
3,675 |
(4) |
|
|
-
|
|
|
|
26.76
|
|
|
1/3/2017
|
|
|
|
|
3,675 |
(5) |
|
|
-
|
|
|
|
23.40
|
|
|
1/2/2018
|
|
Jeffrey
J. Carfora
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Craig
C. Spengeman
|
|
|
1,467 |
(2) |
|
|
-
|
|
|
|
13.03
|
|
|
9/14/2010
|
|
|
|
|
4,191 |
(2) |
|
|
-
|
|
|
|
16.06
|
|
|
1/11/2011
|
|
|
|
|
2,793 |
(2) |
|
|
-
|
|
|
|
12.97
|
|
|
5/10/2011
|
|
|
|
|
23,098 |
(3) |
|
|
-
|
|
|
|
27.51
|
|
|
1/9/2014
|
|
|
|
|
4,200 |
(4) |
|
|
2,520
|
|
|
|
26.76
|
|
|
1/3/2017
|
|
|
|
|
4,200 |
(5) |
|
|
3,360
|
|
|
|
23.40
|
|
|
1/2/2018
|
|
Robert
M. Rogers
|
|
|
4,192 |
(2) |
|
|
-
|
|
|
|
16.06
|
|
|
1/11/2011
|
|
|
|
|
2,794 |
(2) |
|
|
-
|
|
|
|
12.97
|
|
|
5/10/2011
|
|
|
|
|
23,098 |
(3) |
|
|
-
|
|
|
|
27.51
|
|
|
1/9/2014
|
|
|
|
|
4,200 |
(4) |
|
|
2,520
|
|
|
|
26.76
|
|
|
1/3/2017
|
|
|
|
|
4,200 |
(5) |
|
|
3,360
|
|
|
|
23.40
|
|
|
1/2/2018
|
|
Garrett
P. Bromley
|
|
|
4,192 |
(2) |
|
|
-
|
|
|
|
16.06
|
|
|
1/11/2011
|
|
|
|
|
20,211 |
(3) |
|
|
-
|
|
|
|
27.51
|
|
|
1/9/2014
|
|
|
|
|
3,675 |
(4) |
|
|
2,205
|
|
|
|
26.76
|
|
|
1/3/2017
|
|
|
|
|
3,675 |
(5) |
|
|
2,940
|
|
|
|
23.40
|
|
|
1/2/2018
|
|
|
(1)
|
In
the event of a Change in Control, all Options outstanding on the date of
such Change in Control shall become immediately and fully
exercisable. All options expire not more than ten years after
the date of grant.
|
|
(2)
|
Stock
options were originally to vest at a rate of 20% per year for five years;
however, on December 11, 2003, the Board of Directors accelerated the
vesting of the remaining unvested options. All options granted
were exercisable at that time, at a price equal to the fair market value
of the common stock on the date of
grant.
|
|
(3)
|
Stock
options were immediately vested and all options were exercisable at that
time, at a price equal to the fair market value of the common stock on the
date of the grant.
|
|
(4)
|
Stock
options granted on January 3, 2007, vest at a rate of 20% per year for
five years and are exercisable not earlier than one year after the date of
the grant, at a price equal to the fair market value of the common stock
on the date of the grant.
|
|
(5)
|
Stock
options granted on January 2, 2008, vest at a rate of 20% per year for
five years and are exercisable not earlier than one year after the date of
the grant, at a price equal to the fair market value of the common stock
on the date of the grant.
|
Option
Exercises and Stock Vested
The named
executive officers did not exercise stock options nor were there any vesting of
stock awards during 2009.
Change-In-Control
Arrangements
Peapack-Gladstone
and the Bank have entered into change-in-control agreements with the named
executive officers, each of which provides for benefits in the event of a
termination without “cause” or for “good reason” following a merger or
acquisition of Peapack-Gladstone. The change-in-control agreements
also include certain non-disclosure provisions, which survive the termination of
the Executives’ employment and the expiration of the agreements. A
more detailed description of the change in control agreements may be found in
the Compensation Discussion and Analysis section of this proxy.
Employment
Agreements
Peapack-Gladstone
and the Bank have entered into employment agreements with the named executive
officers, which set forth the terms of employment of the officers. A
detailed description of the employment agreements may be found in the
Compensation Discussion and Analysis section of this
proxy. Employment agreements with named executive officers are
customary in the marketplace, and Peapack-Gladstone feels it would be at a
competitive disadvantage if it did not enter into such agreements.
The
following table shows the potential payments under each named executive’s
change-in-control or employment agreement if he had terminated employment with
the Bank at December 31, 2009, under each of the following retirement or
termination circumstances (i) death; (ii) disability or dismissal for cause;
(iii) retirement or resignation; (iv) dismissal without cause; and (v) dismissal
without cause or resignation for good reason following a change-in-control of
Peapack-Gladstone on December 31, 2009. These payments are considered
estimates as of specific dates as they contain some assumptions regarding stock,
price, life expectancy, salary and non-incentive compensation amounts and income
tax rates and laws.
Potential
Payments upon Termination or Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dismissal
without
|
|
|
|
|
|
|
|
|
|
|
|
|
Dismissal
|
|
|
Cause
or Resignation
|
|
|
|
|
|
|
Disability
or
|
|
|
Retirement
|
|
|
Without
Cause
|
|
|
For
Good Reason
|
|
|
|
|
|
|
Dismissal
|
|
|
or
|
|
|
(no
Change in
|
|
|
(following
a Change
|
|
|
|
Death
|
|
|
For
Cause
|
|
|
Resignation
|
|
|
Control)
(1) (3)
|
|
|
In
Control) (1) (2) (3) (6)
|
|
Frank
A. Kissel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
payable in full on indicated date of termination:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
– Salary
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
735,000 |
|
|
$ |
1,247,356 |
|
Stock
Option Acceleration (4)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Welfare
Benefits Continuation
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
16,889 |
|
SERP
Amount
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
197,546 |
|
Parachute
Penalty – Tax Gross-up (5)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
557,366 |
|
Total
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
735,000 |
|
|
$ |
2,019,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
J. Carfora
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
payable in full on indicated date of termination:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
– Salary
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
400,000 |
|
|
$ |
- |
|
Stock
Option Acceleration (4)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Welfare
Benefits Continuation
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
SERP
Amount
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Parachute
Penalty – Tax Gross-up (5)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
400,000 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig
C. Spengeman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
payable in full on indicated date of termination:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
– Salary
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
525,000 |
|
|
$ |
892,850 |
|
Stock
Option Acceleration (4)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Welfare
Benefits Continuation
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
20,013 |
|
SERP
Amount
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
167,872 |
|
Parachute
Penalty – Tax Gross-up (5)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
419,719 |
|
Total
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
525,000 |
|
|
$ |
1,500,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
M. Rogers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
payable in full on indicated date of termination:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
– Salary
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
526,500 |
|
|
$ |
800,931 |
|
Stock
Option Acceleration (4)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Welfare
Benefits Continuation
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
20,013 |
|
SERP
Amount
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
133,116 |
|
Parachute
Penalty – Tax Gross-up (5)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
370,459 |
|
Total
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
526,500 |
|
|
$ |
1,324,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Garrett
P. Bromley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
payable in full on indicated date of termination:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
– Salary
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
624,450 |
|
Stock
Option Acceleration (4)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Welfare
Benefits Continuation
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
20,013 |
|
SERP
Amount
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
54,859 |
|
Parachute
Penalty – Tax Gross-up (5)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
271,647 |
|
Total
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
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$ |
970,969 |
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(1)
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The
term “cause” means (i) willful and continued failure by a named executive
officer to perform the officer’s duties, (ii) willful misconduct by the
named executive officer which causes material injury to the Corporation or
its successor or (iii) the conviction of a crime, other than a traffic
violation, drunkenness, drug abuse, or excessive absenteeism other than
for illness.
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(2)
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The
term “good reason” means a change in job description, location,
compensation or benefits.
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(3)
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The
term “change in control” means (i) the acquisition of the Corporation’s
securities representing 25% or more of the voting power of all its
securities, (ii) the first purchase of the Corporation’s common stock
pursuant to a tender or exchange offer, (iii) the shareholder approval of
(a) a merger or consolidation of the Corporation into another corporation
wherein the other corporation exercises control over the Corporation, (b)
a sale or disposition of all or substantially all of the Corporation’s
assets or (c) a plan of liquidation or dissolution of the Corporation,
(iv) a change in board membership such that over a two year period the
directors constituting the Board at the beginning of such period do not
constitute two thirds of the Board of the Corporation or a successor
corporation at the end of such period, or (v) a sale of (a) the common
stock of the Corporation following which a person or entity other than the
Corporation or its affiliates owns a majority thereof or (b) all or
substantially all of the Corporation’s
assets.
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(4)
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Under
Peapack-Gladstone’s various stock option plans, unvested stock options
would immediately vest in the event of a change in control; however, at
December 31, 2009, the market value of Peapack-Gladstone’s stock is less
than the grant price of all unvested options Named
executive officers would have three years from the date of termination
following a change in control to exercise the vested
options.
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(5)
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The
excise tax gross-up was calculated using marginal tax rate of 60.94%
(40.94% income and employment taxes, plus the 20% excise
tax).
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(6)
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Amounts
disclosed do not reflect the impact of the compensation-related
limitations associated with the CPP and the Stimulus
Act. Please see “Effect of Current Financial Crisis” and
“Effect of Current Financial Crisis: Additional Restrictions
under the American Recovery and Reinvestment Act of 2009”
above.
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(7)
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Arthur
F. Birmingham retired from Peapack-Gladstone and the Bank in 2009;
therefore his Change-in-Control Agreement with Peapack-Gladstone and the
Bank is no longer in effect.
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Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires that Peapack-Gladstone's executive officers,
directors and persons who own more than ten percent of a registered class of
Peapack-Gladstone's common stock, file reports of ownership and changes in
ownership with the SEC. Based upon copies of reports furnished by insiders, all
Section 16(a) reporting requirements applicable to insiders during 2009 were
satisfied on a timely basis except for one Form 4 (representing four
transactions), which was filed late on behalf of Vincent A. Spero and one Form 4
(representing one transaction), which was filed late on behalf of Jeffrey J.
Carfora.
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The Board
of Directors has established a Compensation Committee, which has been charged
with overseeing executive compensation practices at Peapack-Gladstone. Members
of the Compensation Committee are Messrs. Meyercord (Chair), Merton and Consi.
All members of the Compensation Committee, or their affiliates, have engaged in
loan, deposit or trust transactions with the Bank, as discussed below, in
“Transactions with Related Persons, Promoters and Certain Control Persons” and
under “Director Independence” above. No other relationships required to be
reported under the rules promulgated by the Securities and Exchange Commission
exist with respect to members of Peapack-Gladstone’s Compensation
Committee.
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
The Bank
may purchase an undetermined amount of mortgage loans from Weichert Mortgage
Company (“Weichert Mortgage”) during any calendar year. Weichert
Mortgage is wholly owned by James M. Weichert, who beneficially owns
approximately 10 percent of Peapack-Gladstone’s outstanding common
stock. Any purchases by the Bank from Weichert Mortgage will be on
terms that are substantially the same, or at least as favorable to, the Bank as
those offered by Weichert Mortgage to other unaffiliated
entities. During 2009, the Bank did not purchase any mortgages from
Weichert Mortgage. There are no guarantees that any purchases will be
made in the future.
In
addition to the matters discussed above and discussed under the caption
“Compensation Committee Interlocks and Insider Participation,” directors and
officers and their associates were customers of and had transactions with the
Bank during the year ended December 31, 2009, and it is expected that such
persons will continue to have such transactions in the future. All deposit
accounts, loans, and commitments comprising such transactions were made in the
ordinary course of business of the Bank on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and, in the opinion of management of
Peapack-Gladstone, did not involve more than normal risks of collectibility or
present other unfavorable features.
REPORT OF THE AUDIT
COMMITTEE
To
the Board of Directors of Peapack-Gladstone Financial Corporation:
We have
reviewed and discussed with management Peapack-Gladstone's audited consolidated
financial statements as of and for the year ended December 31,
2009.
We have
discussed with the independent auditors the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended (AICPA, Professional
Standards, Vol. 1 AU Section 380) as adopted by the Public Company Accounting
Oversight Board in Rule 3200T.
We have
received and reviewed the written disclosures and the letter from the
independent accountant required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent accountant’s communications
with the audit committee concerning independence, and has discussed with the
independent accountant.
Based on
the reviews and discussions referred to above, we recommend to the Board of
Directors that the audited financial statements referred to above be included in
Peapack-Gladstone's Annual Report on Form 10-K for the year ended December 31,
2009.
The
Audit Committee
Anthony
J. Consi, II, Chairman
John
R. Mulcahy
Philip
W. Smith, III
Pamela
Hill
March 5,
2010
PROPOSAL 3 – RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of
the Board of Directors appointed Crowe Horwath LLP as independent registered
public accounting firm to examine Peapack-Gladstone’s consolidated financial
statements for the fiscal years ending December 31, 2008 and 2009 and to render
other professional services as required. Representatives from Crowe
Horwath LLP will be present at the annual meeting to answer questions and they
will have the opportunity to speak if desired.
Aggregate
fees for the fiscal years ending December 31, 2009 and December 31, 2008, billed
by the Corporation’s independent registered public accounting firms, Crowe
Horwath LLP (“Crowe”) were as follows:
|
|
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Type
of Service
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|
2009
|
|
|
2008
|
|
Audit
Fees (1)
|
|
$ |
192,570 |
|
|
$ |
174,400 |
|
Audit-Related
Fees (2)
|
|
|
34,300 |
|
|
|
33,000 |
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All
Other Fees (3)
|
|
|
21,639 |
|
|
|
18,880 |
|
Total
|
|
$ |
248,509 |
|
|
$ |
226,280 |
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(1)
|
Comprised
of the audit of Peapack-Gladstone’s annual financial statements and
reviews of Peapack-Gladstone’s quarterly financial statements, as well as
statutory audits of Peapack-Gladstone’s subsidiaries, attest services, and
consents to SEC filings.
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(2)
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Comprised
of fees for audit of retirement and 401(K)
plans.
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(3)
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Comprised
of fees for consents and filings.
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AUDIT
COMMITTEE PRE-APPROVAL PROCEDURES
The Audit
Committee has adopted a formal policy concerning the pre-approval of audit and
non-audit services to be provided by the independent registered public
accounting firm to Peapack-Gladstone. The policy requires that all
services to be performed by Crowe Horwath LLP, Peapack-Gladstone’s independent
registered public accounting firm, including audit services, audit-related
services and permitted non-audit services, be pre-approved by the Audit
Committee. Specific services being provided by the independent
registered public accounting firm are regularly reviewed in accordance with the
pre-approval policy. At subsequent Audit Committee meetings, the
Committee receives updates on the services actually provided by the independent
registered public accounting firm, and management may present additional
services for approval. All services rendered by Crowe Horwath LLP are
permissible under applicable laws and regulations. Each new engagement of Crowe
Horwath LLP was approved in advance by the Audit Committee.
RECOMMENDATION
AND VOTE REQUIRED ON PROPOSAL 3
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM. Approval of this proposal requires the favorable vote of a
majority of the votes cast. Abstentions and broker non-votes will
have no impact on the approval of this proposal.
SHAREHOLDER
PROPOSALS
New
Jersey corporate law requires that the notice of shareholders' meeting (for
either a regular or special meeting) specify the purpose or purposes of such
meeting. Thus, any substantive proposals, including shareholder proposals, must
be referred to in Peapack-Gladstone's notice of shareholders' meeting for such
proposal to be properly considered at a meeting of
Peapack-Gladstone.
Proposals
of shareholders which are eligible under the rules of the SEC to be included in
Peapack-Gladstone's year 2010 proxy materials must be received by the Secretary
of Peapack-Gladstone no later than November 25, 2010.
If
Peapack-Gladstone changes its 2011 Annual Meeting date to a date more than 30
days from the date of its 2010 Annual Meeting, then the deadline referred to in
the preceding paragraph will be changed to a reasonable time before
Peapack-Gladstone begins to print and mail its proxy materials. If
Peapack-Gladstone changes the date of its 2011 Annual Meeting in a manner that
alters the deadline, Peapack-Gladstone will so state under Item 5 of the first
quarterly report on Form 10-Q it files with the SEC after the date change or
notify its shareholders by another reasonable means.
OTHER
MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board
of Directors knows of no business that will be presented for consideration at
the meeting other than that stated in this proxy statement. Should any other
matter properly come before the meeting or any adjournment thereof, it is
intended that proxies in the enclosed form will be voted in respect thereof in
accordance with the judgment of the person or persons voting the
proxies.
WHETHER
YOU INTEND TO BE PRESENT AT THE MEETING OR NOT, YOU ARE URGED TO RETURN YOUR
SIGNED PROXY PROMPTLY.
By
Order of the Board of Directors
FRANK
A. KISSEL,
CHAIRMAN
Gladstone,
New Jersey
March 26,
2010
PEAPACK-GLADSTONE'S ANNUAL REPORT
FOR THE YEAR-ENDED DECEMBER 31, 2009 IS BEING MAILED TO THE SHAREHOLDERS WITH
THIS PROXY STATEMENT. HOWEVER, SUCH ANNUAL REPORT IS NOT INCORPORATED INTO THIS
PROXY STATEMENT AND IS NOT DEEMED TO BE A PART OF THE PROXY SOLICITING
MATERIAL. IN ADDITION, A COPY OF OUR PROXY STATEMENT OR ANNUAL REPORT
(WITHOUT EXHIBITS) WILL BE FURNISHED TO ANY SHAREHOLDER UPON WRITTEN REQUEST
ADDRESSED TO ANTOINETTE ROSELL, CORPORATE SECRETARY, PEAPACK-GLADSTONE FINANCIAL
CORPORATION, 158 ROUTE 206 NORTH, P.O. BOX 178, GLADSTONE, NEW JERSEY 07934. OUR
PROXY STATEMENT AND ANNUAL REPORT ARE ALSO AVAILABLE ON OUR WEBSITE AT
WWW.PGBANK.COM.
ýPLEASE MARK
VOTES
AS IN THIS EXAMPLE
|
REVOCABLE
PROXY
PEAPACK-GLADSTONE
FINANCIAL CORPORATION
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For
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With-
hold Authority
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For
All
Except
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THIS
PROXY IS SOLICITED ON BEHALF OF
THE
BOARD OF DIRECTORS
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1. ELECTION
OF ELEVEN (11) DIRECTORS
|
o
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o
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o
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The
undersigned hereby appoints John D. Kissel, James R. Lamb and Philip W.
Smith, III, or any one of them, as Proxy, each with full power to appoint
his substitute and hereby authorizes them to represent and to vote, as
designated below, all of the shares of common stock of Peapack-Gladstone
Financial Corporation (the “Corporation”), standing in the undersigned’s
name at the Annual Meeting of Shareholders of the Corporation to be held
on April 27, 2010 at 2:00 p.m. or any adjournment thereof. The undersigned
hereby revokes any and all proxies heretofore given with respect to the
meeting.
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|
Anthony
J. Consi, II Pamela
Hill Frank
A. Kissel
John D.
Kissel
James
R. Lamb
Edward A. Merton F. Duffield
Meyercord John R. Mulcahy
Robert
M. Rogers Philip W. Smith,
III Craig C. Spengeman
INSTRUCTION:
To withhold authority to vote for any individual nominee, mark “For All
Except” and write the nominee’s name on the line provided
below.
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For
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Against
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Abstain
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2. To
approve, on a non-binding basis, the compensation of the Corporation’s
named executive officers as determined by the Compensation
Committee.
|
o
|
o
|
o
|
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|
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For
|
Against
|
Abstain
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|
3.
The ratification of the appointment of Crowe Horwath LLP as the
Corporation’s independent registered public accounting firm for the year
ending December 31, 2010. |
o
|
o
|
o
|
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4.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
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This
Proxy, when properly signed will be voted in the manner directed herein by
the undersigned shareholder. IF NO DIRECTION is made, this Proxy will be
voted “FOR” the election of all eleven nominees for Director and for
proposals 2 and 3.
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PLEASE CHECK
BOX IF YOU PLAN TO ATTEND ª
THIS
MEETING.
|
o
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Please
be sure to date and sign
this
proxy card in the box below
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Date
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|
Sign
above
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ÇDetach above card, sign, date and
mail in the return envelope provided.Ç
PEAPACK-GLADSTONE
FINANCIAL CORPORATION
Please
sign exactly as names appear above. When shares are held by joint tenants,
both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full corporate names by President or
other authorized officer. If a partnership or limited liability company,
please sign in the entity name by an authorized person.
PLEASE
ACT PROMPTLY
SIGN,
DATE &MAIL YOUR PROXY CARD
TODAY
|
IF YOUR
ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
______________________________
______________________________
______________________________