Exhibit 10 (H)
AMENDED AND RESTATED
CHANGE-IN-CONTROL AGREEMENT
FRANK A. KISSEL
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), is
made as of this 11 day of December, 2003, among PEAPACK-GLADSTONE BANK ("Bank"),
a New Jersey state banking association with its principal office at 190 Main
Street, Gladstone, New Jersey 07934, PEAPACK-GLADSTONE FINANCIAL CORPORATION
("Peapack"), a New Jersey Corporation which maintains its principal office at
158 Route 206 North, Gladstone, New Jersey 07934 (Peapack and the Bank
collectively are the "Company") and Frank A. Kissel (the "Executive"). This
Agreement amends and restates in its entirety the Employment Agreement dated as
of January 1, 1998 by and among the Executive, Peapack, and the Bank.
BACKGROUND
WHEREAS, the Executive has been continuously employed by the Bank
for many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Peapack;
WHEREAS, the Board of Directors of the Bank and Peapack believe that
the future services of the Executive are of great value to the Bank and Peapack
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his
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advice, if they request it, as to the best interests of the Company and its
shareholders, without concern that the Executive might be distracted by the
personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment
shall mean (i) willful and continued failure by the Executive
to perform his duties for the Company under this Agreement
after at least one warning in writing from the Company's Board
of Directors identifying specifically any such failure; (ii)
the willful engaging by the Executive in misconduct which
causes material injury to the Company as specified in a
written notice to the Executive from the Board of Directors;
or (iii) conviction of a crime, other than a traffic
violation, habitual drunkenness, drug abuse, or excessive
absenteeism other than for illness, after a warning (with
respect to drunkenness or absenteeism only) in writing from
the Board of Directors to refrain from such behavior. No act
or failure to act on the part of the Executive shall be
considered willful unless done, or omitted to be done, by the
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Executive not in good faith and without reasonable belief that
the action or omission was in the best interest of the
Company.
b. Change in Control. "Change in Control" means any of the
following events: (i) when Peapack or a Subsidiary acquires
actual knowledge that any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act), other than
an affiliate of Peapack or a Subsidiary or an employee benefit
plan established or maintained by Peapack, a Subsidiary or any
of their respective affiliates, is or becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act) directly
or indirectly, of securities of Peapack representing more than
twenty-five percent (25%) of the combined voting power of
Peapack's then outstanding securities (a "Control Person"),
(ii) upon the first purchase of Peapack's common stock
pursuant to a tender or exchange offer (other than a tender or
exchange offer made by Peapack, a Subsidiary or an employee
benefit plan established or maintained by Peapack, a
Subsidiary or any of their respective affiliates), (iii) upon
the approval by Peapack's stockholders of (A) a merger or
consolidation of Peapack with or into another corporation
(other than a merger or consolidation which is approved by at
least two-thirds of the Continuing Directors (as hereinafter
defined) and the definitive agreement for which provides that
at least two-thirds of the directors of the surviving or
resulting corporation immediately after the transaction are
Continuing Directors (a "Non-Control Transaction")), (B) a
sale or disposition of all or substantially all of Peapack's
assets or (C) a plan of liquidation or dissolution of Peapack,
(iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
Board (the "Continuing Directors") cease for any reason to
constitute at least two-thirds thereof or, following a
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Non-Control Transaction, two-thirds of the board of directors
of the surviving or resulting corporation; provided that any
individual whose election or nomination for election as a
member of the Board (or, following a Non-Control Transaction,
the board of directors of the surviving or resulting
corporation) was approved by a vote of at least two-thirds of
the Continuing Directors then in office shall be considered a
Continuing Director, or (v) upon a sale of (A) common stock of
the Bank if after such sale any person (as such term is used
in Section 13(d) and 14(d)(2) of the Exchange Act) other than
Peapack, an employee benefit plan established or maintained by
Peapack or a Subsidiary, or an affiliate of Peapack or a
Subsidiary, owns a majority of the Bank's common stock or (B)
all or substantially all of the Bank's assets (other than in
the ordinary course of business). No person shall be
considered a Control Person for purposes of clause (i) above
if (A) such person is or becomes the beneficial owner,
directly or indirectly, of more than ten percent (10%) but
less than twenty-five percent (25%) of the combined voting
power of Peapack's then outstanding securities if the
acquisition of all voting securities in excess of ten percent
(10%) was approved in advance by a majority of the Continuing
Directors then in office or (B) such person acquires in excess
of ten percent (10%) of the combined voting power of Peapack's
then outstanding voting securities in violation of law and by
order of a court of competent jurisdiction, settlement or
otherwise, disposes or is required to dispose of all
securities acquired in violation of law.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control
and ending on the earlier of (i) the third anniversary of the
Change in Control or (ii) the death of the Executive. For the
purpose
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of this Agreement, a Change in Control shall be deemed to have
occurred at the date specified in the definition of
Change-in-Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company,
"Good Reason" shall mean any of the following, if taken
without Executive's express written consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or
functions associated with, Executive's position, title,
duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of
Executive from, or any failure to re-elect Executive to,
any position(s) or office(s) Executive held immediately
prior to such Change in Control. A change in title or
positions resulting merely from a merger of the Company
into or with another bank or company which does not
downgrade in any way the Executive's powers, duties and
responsibilities shall not meet the requirements of this
paragraph;
(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a
Change in Control or the failure to award Executive
annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the
Change in control or a failure by the Company to
continue Executive as a participant in such plan on at
least the same basis as Executive participated in such
plan prior to the Change in Control;
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(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than
25 miles from his present office location, except for
required travel on the Company's business to an extent
substantially consistent with Executive's business
travel obligations immediately prior to such Change in
Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement
(including, without limitation the Company's retirement
plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred
compensation plan or long term stock incentive plan) in
which Executive is participating immediately prior to a
Change in Control (except that the Company may institute
or continue plans, programs or arrangements providing
Executive with substantially similar benefits); the
taking of any action by the Company which would
adversely affect Executive's participation in or
materially reduce Executive's benefits under, any of
such plans, programs or arrangements; the failure to
continue, or the taking of any action which would
deprive Executive, of any material fringe benefit
enjoyed by Executive immediately prior to such Change in
Control; or the failure by the Company to provide
Executive with the number of paid vacation days to which
Executive was entitled immediately prior to such Change
in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform
this Agreement by any successor to the Company and to
provide such assumption to the Executive prior to any
Change in Control; or
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(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which
is not effected pursuant to all of the requirements of
this Agreement; and, for purposes of this Agreement, no
such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Peapack, if
each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of
the other corporations in such chain.
2. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract
Period upon the terms and conditions set forth herein.
3. Position. During the Contract Period the Executive shall be
employed as Chairman of the Board of Directors & CEO of Peapack and
the Bank, or such other corporate or divisional profit center as
shall then be the principal successor to the business, assets and
properties of the Company, with substantially the same title and the
same duties and responsibilities as before the Change in Control.
The Executive shall devote his full time and attention to the
business of the Company, and shall not during the Contract Period be
engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments
of his which do not require any service on his part in the operation
of such investments.
4. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
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a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual
salary shall be payable in installments in accordance with the
Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three
years prior to the Change in Control. The bonus shall be
payable at the time and in the manner which the Company paid
such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the
Executive's compensation and shall award him additional
compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation
levels, all as determined in the discretion of the Board of
Directors.
5. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in
the same manner and to the same extent as such expenses were
previously reimbursed to him immediately prior to the Change
in Control.
b. Supplemental Retirement Plan. During the Contract Period,
if the Executive was entitled to benefits under any
supplemental retirement plan prior to the Change in Control,
the Executive shall be entitled to continued benefits under
such plan after the Change in Control and such plan may not be
modified to reduce or eliminate such benefits during the
Contract Period.
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c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country
club and/or the use of an automobile, he shall be entitled to
the same membership and/or use of an automobile at least
comparable to the automobile provided to him prior to the
Change in Control.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and
procedures of the Company, as such existed immediately prior
to the Change in Control. During the Contract Period, the
Executive also shall be entitled to hospital, health, medical
and life insurance, and any other benefits enjoyed, from time
to time, by senior officers of the Company, all upon terms as
favorable as those enjoyed by other senior officers of the
Company. Notwithstanding anything in this paragraph 5(d) to
the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy
is uniformly applied to all officers of the Company (and any
successor or acquiror of the Company, if any), including the
chief executive officer of such entities, then no such change
shall be deemed to be contrary to this paragraph.
6. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive
shall not be entitled to any further benefits under this Agreement.
7. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder
for 4 consecutive months in any 12 month period, the Company may
terminate the employment of the Executive. In such event, the
Executive shall not be entitled to any further benefits under this
Agreement.
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8. Death Benefits. Upon the Executive's death during the Contract
Period, his estate shall not be entitled to any further benefits
under this Agreement.
9. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the
Contract Period by written notice to the Executive providing four
weeks notice. The Executive may resign for Good Reason during the
Contract Period upon four weeks' written notice to the Company
specifying facts and circumstances claimed to support the Good
Reason. The Executive shall be entitled to give a Notice of
Termination that his or her employment is being terminated for Good
Reason at any time during the Contract Period, not later than twelve
months after any occurrence of an event stated to constitute Good
Reason. If the Company terminates the Executive's employment during
the Contract Period without Cause or if the Executive Resigns for
Good Reason, the Company shall, subject to Section 12 hereof:
(a) Within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three
(3.0) times the highest annual cash compensation, consisting solely
of salary and bonus, as well as any 401(k) deferral, paid to the
Executive during any calendar year in each of the three calendar
years immediately prior to the Change in Control, along with any
Gross-Up Payment due under Section 12 hereof for the calendar year
of the termination; and
(b) Continue to provide the Executive during the remainder of the
Contract Period with health, hospitalization and medical insurance,
as were provided at the time of the termination of his employment
with the Company, at the Company's cost (subject to standard
deductibles and co-pays, and the Executive's continuing payment of
his part of the premium for family coverage, if applicable).
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The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
the Gross-Up Payment due under Section 12 hereof, or to provide him with the
health, hospitalization and medical insurance benefits due under this section,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his enforcement
against the Company of the terms of this Agreement. The Executive shall be
denied payment of his legal fees and expenses only if a court finds that the
Executive sought payment of such fees without reasonable cause and not in good
faith.
10. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the
Contract Period without Good Reason, but upon such resignation the
Executive shall not be entitled to any additional compensation for
the time after which he ceases to be employed by the Company, and
shall not be entitled to any of the other benefits provided
hereunder. No such resignation shall be effective unless in writing
with four weeks' notice thereof.
11. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit
of the business of the Company or any of its subsidiaries or
affiliates, the Executive shall not, at any time during or
following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or
any of its subsidiaries or affiliates. The Executive
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agrees that, among other things, all information concerning
the identity of and the Company's relations with its customers
is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this
section and agrees that he shall be subject to injunctive
relief and equitable remedies as a result of the breach of
this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and
effect of the remaining valid portions.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this
Agreement.
12. Gross-Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section
4999 or other substitute or similar tax assessment (the
"Excise Tax") of the Internal Revenue Code of 1986, as amended
(the "Code"), including the corresponding provisions of any
succeeding law, with respect to any payments under this
Section 12 or any payments and/or benefits under this
Agreement or under any benefit plan of the Company applicable
to Executive individually or generally to executives or
employees of the Company, then, the Company shall pay to the
Executive, subject to Section 15 hereof by paying the
withholding for the Executive, an additional amount (the
"Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on such payments
and benefits and any federal, state and local income tax and
Excise Tax upon payments provided for in this Section 12,
shall be equal to the payments due to the Executive hereunder
and the payments and/or
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benefits due to the Executive under any benefit plan of the
Company. Each Gross-Up Payment shall be made in good funds
upon the later of (i) five (5) days after the date the
Executive notifies the Company or the Company receives notice
from the certified public accounting firm of its need to make
such Gross-Up Payment, or (ii) the date of any payment causing
the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally
recognized certified public accounting firm designated jointly
by the Company and the Executive. The cost of such services by
the accounting firm shall be paid by the Company. If the
Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm
used by the Company immediately prior to the Change in
Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service
("IRS") that, if successful, would require the payment by the
Company of a Gross-Up Payment in addition to that payment
previously paid by the Company pursuant to this section. Such
notification shall be given an soon as practicable but no
later than fifteen (15) business days after the Executive is
informed in writing of such claim and shall apprise the
Company of the nature of such claim, the date on which such
claim is requested to be paid, and attach a copy of the IRS
notice. The Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on
which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes
with respect to such claim is
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due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing
from time to time, including, without limitation,
accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however
that the Company shall pay directly all costs and
expenses (including legal and accounting fees, as well
as other expenses and any additional interest and
penalties) incurred by the Executive and the Company in
connection with an IRS levy, contest or claim and
provided further that the Company shall not take any
action or fail to make any Gross-Up Payment so as to
cause the assessment of any IRS levy and the Company
shall cause any levy so assessed to be immediately
released by payment of the Gross-Up Amount, together
with all costs, interest and penalties.
13. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain
in effect for a period of 3 years from the
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date hereof (the "Initial Term") or until the end of the
Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on
the anniversary date hereof (so that the Initial Term is
always 3 years) unless, prior to a Change in Control, the
Chairman of the Board of Directors of Peapack notifies the
Executive in writing at any time that the Contract is not so
extended, in which case the Initial Term shall end upon the
later of (i) 3 years after the date hereof, or (ii) 2 years
after the date of such written notice.
b. No Effect Prior to Change in Control. This Agreement shall
not effect any rights of the Company to terminate the
Executive prior to a Change in Control or any rights of the
Executive granted in any other agreement or contract or plan
with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon and after a Change
in Control. If the full-time employment of the Executive by
the Company is ended for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further
force and effect.
14. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding,
the payment or obligation to pay any monies, or granting of any
benefits, rights or privileges to Executive as provided in this
Agreement shall not be in lieu or derogation of the rights and
privileges that the Executive now has or will have under any plans
or programs of or agreements with the Company, except that if the
Executive received any payment hereunder, he shall not be entitled
to any payment under the Company's severance policies for officers
and employees.
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15. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to
applicable federal and state payroll or withholding taxes. Any
Gross-Up Payment shall be made in the form of withholding taxes and
shall not be paid to the Executive, but shall be sent to the IRS in
the ordinary course of the Company's payroll withholding.
16. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Peapack. The terms of this Agreement
shall be governed by, and interpreted and construed in accordance
with the provisions of, the laws of New Jersey. This Agreement
supersedes all prior agreements and understandings with respect to
the matters covered hereby, including expressly any prior agreement
with the Company concerning change-in-control benefits. The parties
hereto expressly agree that the Severance Agreement between the Bank
and the Executive dated January 27, 1997, is hereby terminated in
its entirety. The amendment or termination of this Agreement may be
made only in a writing executed by the Company and the Executive,
and no amendment or termination of this Agreement shall be effective
unless and until made in such a writing. This Agreement shall be
binding upon any successor (whether direct or indirect, by purchase,
merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is
personal to the Executive and the Executive may not assign any of
his rights or duties hereunder but this Agreement shall be
enforceable by the Executive's legal representatives, executors or
administrators. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce
or account for more than one such counterpart.
(signature page to follow)
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IN WITNESS WHEREOF, Peapack-Gladstone Bank and Peapack-Gladstone
Financial Corporation each have caused this Agreement to be signed by their duly
authorized representatives pursuant to the authority of their Boards of
Directors, and the Executive has personally executed this Agreement, all as of
the day and year first written above.
ATTEST: PEAPACK-GLADSTONE
FINANCIAL CORPORATION
ANTOINETTE ROSELL By: F. DUFFIELD MEYERCORD
- ----------------- ---------------------
Antoinette Rosell, Secretary F. Duffield Meyercord, Chairman,
Compensation Committee
ATTEST: PEAPACK-GLADSTONE BANK
ANTOINETTE ROSELL By: F. DUFFIELD MEYERCORD
- ----------------- ---------------------
Antoinette Rosell, Secretary F. Duffield Meyercord, Chairman,
Compensation Committee
WITNESS:
ANTOINETTE ROSELL FRANK A. KISSEL
- ----------------- ---------------------
Antoinette Rosell Frank A. Kissel, Executive
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AMENDED AND RESTATED
CHANGE-IN-CONTROL AGREEMENT
ROBERT M. ROGERS
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), is
made as of this 11th day of December, 2003, among PEAPACK-GLADSTONE BANK
("Bank"), a New Jersey state banking association with its principal office at
190 Main Street, Gladstone, New Jersey 07934, PEAPACK-GLADSTONE FINANCIAL
CORPORATION ("Peapack"), a New Jersey Corporation which maintains its principal
office at 158 Route 206 North, Gladstone, New Jersey 07934 (Peapack and the Bank
collectively are the "Company") and Robert M. Rogers (the "Executive"). This
Agreement amends and restates in its entirety the Employment Agreement dated as
of January 1, 1998 by and among the Executive, Peapack, and the Bank.
BACKGROUND
WHEREAS, the Executive has been continuously employed by the Bank
for many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Peapack;
WHEREAS, the Board of Directors of the Bank and Peapack believe that
the future services of the Executive are of great value to the Bank and Peapack
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his advice, if they request it, as to the best interests of the
Company and its shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such a proposal;
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WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment
shall mean (i) willful and continued failure by the Executive
to perform his duties for the Company under this Agreement
after at least one warning in writing from the Company's Board
of Directors identifying specifically any such failure; (ii)
the willful engaging by the Executive in misconduct which
causes material injury to the Company as specified in a
written notice to the Executive from the Board of Directors;
or (iii) conviction of a crime, other than a traffic
violation, habitual drunkenness, drug abuse, or excessive
absenteeism other than for illness, after a warning (with
respect to drunkenness or absenteeism only) in writing from
the Board of Directors to refrain from such behavior. No act
or failure to act on the part of the Executive shall be
considered willful unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that
the action or omission was in the best interest of the
Company.
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b. Change in Control. "Change in Control" means any of the
following events: (i) when Peapack or a Subsidiary acquires
actual knowledge that any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act), other than
an affiliate of Peapack or a Subsidiary or an employee benefit
plan established or maintained by Peapack, a Subsidiary or any
of their respective affiliates, is or becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act) directly
or indirectly, of securities of Peapack representing more than
twenty-five percent (25%) of the combined voting power of
Peapack's then outstanding securities (a "Control Person"),
(ii) upon the first purchase of Peapack's common stock
pursuant to a tender or exchange offer (other than a tender or
exchange offer made by Peapack, a Subsidiary or an employee
benefit plan established or maintained by Peapack, a
Subsidiary or any of their respective affiliates), (iii) upon
the approval by Peapack's stockholders of (A) a merger or
consolidation of Peapack with or into another corporation
(other than a merger or consolidation which is approved by at
least two-thirds of the Continuing Directors (as hereinafter
defined) and the definitive agreement for which provides that
at least two-thirds of the directors of the surviving or
resulting corporation immediately after the transaction are
Continuing Directors (a "Non-Control Transaction")), (B) a
sale or disposition of all or substantially all of Peapack's
assets or (C) a plan of liquidation or dissolution of Peapack,
(iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
Board (the "Continuing Directors") cease for any reason to
constitute at least two-thirds thereof or, following a
Non-Control Transaction, two-thirds of the board of directors
of the surviving or resulting corporation; provided that any
individual whose election or nomination for
58
election as a member of the Board (or, following a Non-Control
Transaction, the board of directors of the surviving or
resulting corporation) was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director, or (v) upon a sale of (A)
common stock of the Bank if after such sale any person (as
such term is used in Section 13(d) and 14(d)(2) of the
Exchange Act) other than Peapack, an employee benefit plan
established or maintained by Peapack or a Subsidiary, or an
affiliate of Peapack or a Subsidiary, owns a majority of the
Bank's common stock or (B) all or substantially all of the
Bank's assets (other than in the ordinary course of business).
No person shall be considered a Control Person for purposes of
clause (i) above if (A) such person is or becomes the
beneficial owner, directly or indirectly, of more than ten
percent (10%) but less than twenty-five percent (25%) of the
combined voting power of Peapack's then outstanding securities
if the acquisition of all voting securities in excess of ten
percent (10%) was approved in advance by a majority of the
Continuing Directors then in office or (B) such person
acquires in excess of ten percent (10%) of the combined voting
power of Peapack's then outstanding voting securities in
violation of law and by order of a court of competent
jurisdiction, settlement or otherwise, disposes or is required
to dispose of all securities acquired in violation of law.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control
and ending on the earlier of (i) the third anniversary of the
Change in Control or (ii) the death of the Executive. For the
purpose of this Agreement, a Change in Control shall be deemed
to have occurred at the date specified in the definition of
Change-in-Control.
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d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company,
"Good Reason" shall mean any of the following, if taken
without Executive's express written consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or
functions associated with, Executive's position, title,
duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of
Executive from, or any failure to re-elect Executive to,
any position(s) or office(s) Executive held immediately
prior to such Change in Control. A change in title or
positions resulting merely from a merger of the Company
into or with another bank or company which does not
downgrade in any way the Executive's powers, duties and
responsibilities shall not meet the requirements of this
paragraph;
(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a
Change in Control or the failure to award Executive
annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the
Change in control or a failure by the Company to
continue Executive as a participant in such plan on at
least the same basis as Executive participated in such
plan prior to the Change in Control;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than
25 miles from his present office location, except
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for required travel on the Company's business to an
extent substantially consistent with Executive's
business travel obligations immediately prior to such
Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement
(including, without limitation the Company's retirement
plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred
compensation plan or long term stock incentive plan) in
which Executive is participating immediately prior to a
Change in Control (except that the Company may institute
or continue plans, programs or arrangements providing
Executive with substantially similar benefits); the
taking of any action by the Company which would
adversely affect Executive's participation in or
materially reduce Executive's benefits under, any of
such plans, programs or arrangements; the failure to
continue, or the taking of any action which would
deprive Executive, of any material fringe benefit
enjoyed by Executive immediately prior to such Change in
Control; or the failure by the Company to provide
Executive with the number of paid vacation days to which
Executive was entitled immediately prior to such Change
in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform
this Agreement by any successor to the Company and to
provide such assumption to the Executive prior to any
Change in Control; or
(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which
is not effected pursuant to all of the
61
requirements of this Agreement; and, for purposes of
this Agreement, no such purported termination shall be
effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Peapack, if
each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of
the other corporations in such chain.
17. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract
Period upon the terms and conditions set forth herein.
18. Position. During the Contract Period the Executive shall be
employed as President & COO of Peapack and the Bank, or such other
corporate or divisional profit center as shall then be the principal
successor to the business, assets and properties of the Company,
with substantially the same title and the same duties and
responsibilities as before the Change in Control. The Executive
shall devote his full time and attention to the business of the
Company, and shall not during the Contract Period be engaged in any
other business activity. This paragraph shall not be construed as
preventing the Executive from managing any investments of his which
do not require any service on his part in the operation of such
investments.
19. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
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a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual
salary shall be payable in installments in accordance with the
Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three
years prior to the Change in Control. The bonus shall be
payable at the time and in the manner which the Company paid
such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the
Executive's compensation and shall award him additional
compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation
levels, all as determined in the discretion of the Board of
Directors.
20. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in
the same manner and to the same extent as such expenses were
previously reimbursed to him immediately prior to the Change
in Control.
b. Supplemental Retirement Plan. During the Contract Period,
if the Executive was entitled to benefits under any
supplemental retirement plan prior to the Change in Control,
the Executive shall be entitled to continued benefits under
such plan after the Change in Control and such plan may not be
modified to reduce or eliminate such benefits during the
Contract Period.
63
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country
club and/or the use of an automobile, he shall be entitled to
the same membership and/or use of an automobile at least
comparable to the automobile provided to him prior to the
Change in Control.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and
procedures of the Company, as such existed immediately prior
to the Change in Control. During the Contract Period, the
Executive also shall be entitled to hospital, health, medical
and life insurance, and any other benefits enjoyed, from time
to time, by senior officers of the Company, all upon terms as
favorable as those enjoyed by other senior officers of the
Company. Notwithstanding anything in this paragraph 5(d) to
the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy
is uniformly applied to all officers of the Company (and any
successor or acquiror of the Company, if any), including the
chief executive officer of such entities, then no such change
shall be deemed to be contrary to this paragraph.
21. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive
shall not be entitled to any further benefits under this Agreement.
22. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder
for 4 consecutive months in any 12 month period, the Company may
terminate the employment of the Executive. In such event, the
Executive shall not be entitled to any further benefits under this
Agreement.
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23. Death Benefits. Upon the Executive's death during the Contract
Period, his estate shall not be entitled to any further benefits
under this Agreement.
24. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the
Contract Period by written notice to the Executive providing four
weeks notice. The Executive may resign for Good Reason during the
Contract Period upon four weeks' written notice to the Company
specifying facts and circumstances claimed to support the Good
Reason. The Executive shall be entitled to give a Notice of
Termination that his or her employment is being terminated for Good
Reason at any time during the Contract Period, not later than twelve
months after any occurrence of an event stated to constitute Good
Reason. If the Company terminates the Executive's employment during
the Contract Period without Cause or if the Executive Resigns for
Good Reason, the Company shall, subject to Section 12 hereof:
(a) Within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three
(3.0) times the highest annual cash compensation, consisting solely
of salary and bonus, as well as any 401(k) deferral, paid to the
Executive during any calendar year in each of the three calendar
years immediately prior to the Change in Control, along with any
Gross-Up Payment due under Section 12 hereof for the calendar year
of the termination; and
(b) Continue to provide the Executive during the remainder of the
Contract Period with health, hospitalization and medical insurance,
as were provided at the time of the termination of his employment
with the Company, at the Company's cost (subject to standard
deductibles and co-pays, and the Executive's continuing payment of
his part of the premium for family coverage, if applicable).
65
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
the Gross-Up Payment due under Section 12 hereof, or to provide him with the
health, hospitalization and medical insurance benefits due under this section,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his enforcement
against the Company of the terms of this Agreement. The Executive shall be
denied payment of his legal fees and expenses only if a court finds that the
Executive sought payment of such fees without reasonable cause and not in good
faith.
25. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the
Contract Period without Good Reason, but upon such resignation the
Executive shall not be entitled to any additional compensation for
the time after which he ceases to be employed by the Company, and
shall not be entitled to any of the other benefits provided
hereunder. No such resignation shall be effective unless in writing
with four weeks' notice thereof.
26. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit
of the business of the Company or any of its subsidiaries or
affiliates, the Executive shall not, at any time during or
following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or
any of its subsidiaries or affiliates. The Executive
66
agrees that, among other things, all information concerning
the identity of and the Company's relations with its customers
is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this
section and agrees that he shall be subject to injunctive
relief and equitable remedies as a result of the breach of
this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and
effect of the remaining valid portions.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this
Agreement.
27. Gross-Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section
4999 or other substitute or similar tax assessment (the
"Excise Tax") of the Internal Revenue Code of 1986, as amended
(the "Code"), including the corresponding provisions of any
succeeding law, with respect to any payments under this
Section 12 or any payments and/or benefits under this
Agreement or under any benefit plan of the Company applicable
to Executive individually or generally to executives or
employees of the Company, then, the Company shall pay to the
Executive, subject to Section 15 hereof by paying the
withholding for the Executive, an additional amount (the
"Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on such payments
and benefits and any federal, state and local income tax and
Excise Tax upon payments provided for in this Section 12,
shall be equal to the payments due to the Executive hereunder
and the payments and/or
67
benefits due to the Executive under any benefit plan of the
Company. Each Gross-Up Payment shall be made in good funds
upon the later of (i) five (5) days after the date the
Executive notifies the Company or the Company receives notice
from the certified public accounting firm of its need to make
such Gross-Up Payment, or (ii) the date of any payment causing
the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally
recognized certified public accounting firm designated jointly
by the Company and the Executive. The cost of such services by
the accounting firm shall be paid by the Company. If the
Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm
used by the Company immediately prior to the Change in
Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service
("IRS") that, if successful, would require the payment by the
Company of a Gross-Up Payment in addition to that payment
previously paid by the Company pursuant to this section. Such
notification shall be given an soon as practicable but no
later than fifteen (15) business days after the Executive is
informed in writing of such claim and shall apprise the
Company of the nature of such claim, the date on which such
claim is requested to be paid, and attach a copy of the IRS
notice. The Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on
which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes
with respect to such claim is
68
due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing
from time to time, including, without limitation,
accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however
that the Company shall pay directly all costs and
expenses (including legal and accounting fees, as well
as other expenses and any additional interest and
penalties) incurred by the Executive and the Company in
connection with an IRS levy, contest or claim and
provided further that the Company shall not take any
action or fail to make any Gross-Up Payment so as to
cause the assessment of any IRS levy and the Company
shall cause any levy so assessed to be immediately
released by payment of the Gross-Up Amount, together
with all costs, interest and penalties.
28. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain
in effect for a period of 3 years from the
69
date hereof (the "Initial Term") or until the end of the
Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on
the anniversary date hereof (so that the Initial Term is
always 3 years) unless, prior to a Change in Control, the
Chairman of the Board of Directors of Peapack notifies the
Executive in writing at any time that the Contract is not so
extended, in which case the Initial Term shall end upon the
later of (i) 3 years after the date hereof, or (ii) 2 years
after the date of such written notice.
b. No Effect Prior to Change in Control. This Agreement shall
not effect any rights of the Company to terminate the
Executive prior to a Change in Control or any rights of the
Executive granted in any other agreement or contract or plan
with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon and after a Change
in Control. If the full-time employment of the Executive by
the Company is ended for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further
force and effect.
29. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding,
the payment or obligation to pay any monies, or granting of any
benefits, rights or privileges to Executive as provided in this
Agreement shall not be in lieu or derogation of the rights and
privileges that the Executive now has or will have under any plans
or programs of or agreements with the Company, except that if the
Executive received any payment hereunder, he shall not be entitled
to any payment under the Company's severance policies for officers
and employees.
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30. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to
applicable federal and state payroll or withholding taxes. Any
Gross-Up Payment shall be made in the form of withholding taxes and
shall not be paid to the Executive, but shall be sent to the IRS in
the ordinary course of the Company's payroll withholding.
31. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Peapack. The terms of this Agreement
shall be governed by, and interpreted and construed in accordance
with the provisions of, the laws of New Jersey. This Agreement
supersedes all prior agreements and understandings with respect to
the matters covered hereby, including expressly any prior agreement
with the Company concerning change-in-control benefits. The parties
hereto expressly agree that the Severance Agreement between the Bank
and the Executive dated January 27, 1997, is hereby terminated in
its entirety. The amendment or termination of this Agreement may be
made only in a writing executed by the Company and the Executive,
and no amendment or termination of this Agreement shall be effective
unless and until made in such a writing. This Agreement shall be
binding upon any successor (whether direct or indirect, by purchase,
merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is
personal to the Executive and the Executive may not assign any of
his rights or duties hereunder but this Agreement shall be
enforceable by the Executive's legal representatives, executors or
administrators. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce
or account for more than one such counterpart.
(signature page to follow)
71
IN WITNESS WHEREOF, Peapack-Gladstone Bank and Peapack-Gladstone
Financial Corporation each have caused this Agreement to be signed by their duly
authorized representatives pursuant to the authority of their Boards of
Directors, and the Executive has personally executed this Agreement, all as of
the day and year first written above.
ATTEST: PEAPACK-GLADSTONE
FINANCIAL CORPORATION
ANTOINETTE ROSELL By: FRANK A. KISSEL
- ----------------- ----------------------------
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
ATTEST: PEAPACK-GLADSTONE BANK
ANTOINETTE ROSELL By: FRANK A. KISSEL
- ----------------- ----------------------------
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
WITNESS:
ANTOINETTE ROSELL ROBERT M. ROGERS
- ----------------- ----------------------------
Antoinette Rosell Robert M. Rogers, Executive
72
AMENDED AND RESTATED
CHANGE-IN-CONTROL AGREEMENT
CRAIG C. SPENGEMAN
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), is
made as of this 11th day of December, 2003, among PEAPACK-GLADSTONE BANK
("Bank"), a New Jersey state banking association with its principal office at
190 Main Street, Gladstone, New Jersey 07934, PEAPACK-GLADSTONE FINANCIAL
CORPORATION ("Peapack"), a New Jersey Corporation which maintains its principal
office at 158 Route 206 North, Gladstone, New Jersey 07934 (Peapack and the Bank
collectively are the "Company") and Craig C. Spengeman (the "Executive"). This
Agreement amends and restates in its entirety the Employment Agreement dated as
of January 1, 1998 by and among the Executive, Peapack, and the Bank.
BACKGROUND
WHEREAS, the Executive has been continuously employed by the Bank
for many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Peapack;
WHEREAS, the Board of Directors of the Bank and Peapack believe that
the future services of the Executive are of great value to the Bank and Peapack
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his
73
advice, if they request it, as to the best interests of the Company and its
shareholders, without concern that the Executive might be distracted by the
personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment
shall mean (i) willful and continued failure by the Executive
to perform his duties for the Company under this Agreement
after at least one warning in writing from the Company's Board
of Directors identifying specifically any such failure; (ii)
the willful engaging by the Executive in misconduct which
causes material injury to the Company as specified in a
written notice to the Executive from the Board of Directors;
or (iii) conviction of a crime, other than a traffic
violation, habitual drunkenness, drug abuse, or excessive
absenteeism other than for illness, after a warning (with
respect to drunkenness or absenteeism only) in writing from
the Board of Directors to refrain from such behavior. No act
or failure to act on the part of the Executive shall be
considered willful unless done, or omitted to be done, by the
74
Executive not in good faith and without reasonable belief that
the action or omission was in the best interest of the
Company.
b. Change in Control. "Change in Control" means any of the
following events: (i) when Peapack or a Subsidiary acquires
actual knowledge that any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act), other than
an affiliate of Peapack or a Subsidiary or an employee benefit
plan established or maintained by Peapack, a Subsidiary or any
of their respective affiliates, is or becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act) directly
or indirectly, of securities of Peapack representing more than
twenty-five percent (25%) of the combined voting power of
Peapack's then outstanding securities (a "Control Person"),
(ii) upon the first purchase of Peapack's common stock
pursuant to a tender or exchange offer (other than a tender or
exchange offer made by Peapack, a Subsidiary or an employee
benefit plan established or maintained by Peapack, a
Subsidiary or any of their respective affiliates), (iii) upon
the approval by Peapack's stockholders of (A) a merger or
consolidation of Peapack with or into another corporation
(other than a merger or consolidation which is approved by at
least two-thirds of the Continuing Directors (as hereinafter
defined) and the definitive agreement for which provides that
at least two-thirds of the directors of the surviving or
resulting corporation immediately after the transaction are
Continuing Directors (a "Non-Control Transaction")), (B) a
sale or disposition of all or substantially all of Peapack's
assets or (C) a plan of liquidation or dissolution of Peapack,
(iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
Board (the "Continuing Directors") cease for any reason to
constitute at least two-thirds thereof or, following a
75
Non-Control Transaction, two-thirds of the board of directors
of the surviving or resulting corporation; provided that any
individual whose election or nomination for election as a
member of the Board (or, following a Non-Control Transaction,
the board of directors of the surviving or resulting
corporation) was approved by a vote of at least two-thirds of
the Continuing Directors then in office shall be considered a
Continuing Director, or (v) upon a sale of (A) common stock of
the Bank if after such sale any person (as such term is used
in Section 13(d) and 14(d)(2) of the Exchange Act) other than
Peapack, an employee benefit plan established or maintained by
Peapack or a Subsidiary, or an affiliate of Peapack or a
Subsidiary, owns a majority of the Bank's common stock or (B)
all or substantially all of the Bank's assets (other than in
the ordinary course of business). No person shall be
considered a Control Person for purposes of clause (i) above
if (A) such person is or becomes the beneficial owner,
directly or indirectly, of more than ten percent (10%) but
less than twenty-five percent (25%) of the combined voting
power of Peapack's then outstanding securities if the
acquisition of all voting securities in excess of ten percent
(10%) was approved in advance by a majority of the Continuing
Directors then in office or (B) such person acquires in excess
of ten percent (10%) of the combined voting power of Peapack's
then outstanding voting securities in violation of law and by
order of a court of competent jurisdiction, settlement or
otherwise, disposes or is required to dispose of all
securities acquired in violation of law.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control
and ending on the earlier of (i) the third anniversary of the
Change in Control or (ii) the death of the Executive. For the
purpose
76
of this Agreement, a Change in Control shall be deemed to have
occurred at the date specified in the definition of
Change-in-Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company,
"Good Reason" shall mean any of the following, if taken
without Executive's express written consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or
functions associated with, Executive's position, title,
duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of
Executive from, or any failure to re-elect Executive to,
any position(s) or office(s) Executive held immediately
prior to such Change in Control. A change in title or
positions resulting merely from a merger of the Company
into or with another bank or company which does not
downgrade in any way the Executive's powers, duties and
responsibilities shall not meet the requirements of this
paragraph;
(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a
Change in Control or the failure to award Executive
annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the
Change in control or a failure by the Company to
continue Executive as a participant in such plan on at
least the same basis as Executive participated in such
plan prior to the Change in Control;
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(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than
25 miles from his present office location, except for
required travel on the Company's business to an extent
substantially consistent with Executive's business
travel obligations immediately prior to such Change in
Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement
(including, without limitation the Company's retirement
plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred
compensation plan or long term stock incentive plan) in
which Executive is participating immediately prior to a
Change in Control (except that the Company may institute
or continue plans, programs or arrangements providing
Executive with substantially similar benefits); the
taking of any action by the Company which would
adversely affect Executive's participation in or
materially reduce Executive's benefits under, any of
such plans, programs or arrangements; the failure to
continue, or the taking of any action which would
deprive Executive, of any material fringe benefit
enjoyed by Executive immediately prior to such Change in
Control; or the failure by the Company to provide
Executive with the number of paid vacation days to which
Executive was entitled immediately prior to such Change
in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform
this Agreement by any successor to the Company and to
provide such assumption to the Executive prior to any
Change in Control; or
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(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which
is not effected pursuant to all of the requirements of
this Agreement; and, for purposes of this Agreement, no
such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Peapack, if
each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of
the other corporations in such chain.
32. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract
Period upon the terms and conditions set forth herein.
33. Position. During the Contract Period the Executive shall be
employed as President & Chief Investment Officer of Peapack and the
Bank, or such other corporate or divisional profit center as shall
then be the principal successor to the business, assets and
properties of the Company, with substantially the same title and the
same duties and responsibilities as before the Change in Control.
The Executive shall devote his full time and attention to the
business of the Company, and shall not during the Contract Period be
engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments
of his which do not require any service on his part in the operation
of such investments.
34. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
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a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual
salary shall be payable in installments in accordance with the
Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three
years prior to the Change in Control. The bonus shall be
payable at the time and in the manner which the Company paid
such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the
Executive's compensation and shall award him additional
compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation
levels, all as determined in the discretion of the Board of
Directors.
35. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in
the same manner and to the same extent as such expenses were
previously reimbursed to him immediately prior to the Change
in Control.
b. Supplemental Retirement Plan. During the Contract Period,
if the Executive was entitled to benefits under any
supplemental retirement plan prior to the Change in Control,
the Executive shall be entitled to continued benefits under
such plan after the Change in Control and such plan may not be
modified to reduce or eliminate such benefits during the
Contract Period.
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c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country
club and/or the use of an automobile, he shall be entitled to
the same membership and/or use of an automobile at least
comparable to the automobile provided to him prior to the
Change in Control.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and
procedures of the Company, as such existed immediately prior
to the Change in Control. During the Contract Period, the
Executive also shall be entitled to hospital, health, medical
and life insurance, and any other benefits enjoyed, from time
to time, by senior officers of the Company, all upon terms as
favorable as those enjoyed by other senior officers of the
Company. Notwithstanding anything in this paragraph 5(d) to
the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy
is uniformly applied to all officers of the Company (and any
successor or acquiror of the Company, if any), including the
chief executive officer of such entities, then no such change
shall be deemed to be contrary to this paragraph.
36. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive
shall not be entitled to any further benefits under this Agreement.
37. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder
for 4 consecutive months in any 12 month period, the Company may
terminate the employment of the Executive. In such event, the
Executive shall not be entitled to any further benefits under this
Agreement.
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38. Death Benefits. Upon the Executive's death during the Contract
Period, his estate shall not be entitled to any further benefits
under this Agreement.
39. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the
Contract Period by written notice to the Executive providing four
weeks notice. The Executive may resign for Good Reason during the
Contract Period upon four weeks' written notice to the Company
specifying facts and circumstances claimed to support the Good
Reason. The Executive shall be entitled to give a Notice of
Termination that his or her employment is being terminated for Good
Reason at any time during the Contract Period, not later than twelve
months after any occurrence of an event stated to constitute Good
Reason. If the Company terminates the Executive's employment during
the Contract Period without Cause or if the Executive Resigns for
Good Reason, the Company shall, subject to Section 12 hereof:
(a) Within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three
(3.0) times the highest annual cash compensation, consisting solely
of salary and bonus, as well as any 401(k) deferral, paid to the
Executive during any calendar year in each of the three calendar
years immediately prior to the Change in Control, along with any
Gross-Up Payment due under Section 12 hereof for the calendar year
of the termination; and
(b) Continue to provide the Executive during the remainder of the
Contract Period with health, hospitalization and medical insurance,
as were provided at the time of the termination of his employment
with the Company, at the Company's cost (subject to standard
deductibles and co-pays, and the Executive's continuing payment of
his part of the premium for family coverage, if applicable).
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The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
the Gross-Up Payment due under Section 12 hereof, or to provide him with the
health, hospitalization and medical insurance benefits due under this section,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his enforcement
against the Company of the terms of this Agreement. The Executive shall be
denied payment of his legal fees and expenses only if a court finds that the
Executive sought payment of such fees without reasonable cause and not in good
faith.
40. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the
Contract Period without Good Reason, but upon such resignation the
Executive shall not be entitled to any additional compensation for
the time after which he ceases to be employed by the Company, and
shall not be entitled to any of the other benefits provided
hereunder. No such resignation shall be effective unless in writing
with four weeks' notice thereof.
41. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit
of the business of the Company or any of its subsidiaries or
affiliates, the Executive shall not, at any time during or
following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or
any of its subsidiaries or affiliates. The Executive
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agrees that, among other things, all information concerning
the identity of and the Company's relations with its customers
is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this
section and agrees that he shall be subject to injunctive
relief and equitable remedies as a result of the breach of
this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and
effect of the remaining valid portions.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this
Agreement.
42. Gross-Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section
4999 or other substitute or similar tax assessment (the
"Excise Tax") of the Internal Revenue Code of 1986, as amended
(the "Code"), including the corresponding provisions of any
succeeding law, with respect to any payments under this
Section 12 or any payments and/or benefits under this
Agreement or under any benefit plan of the Company applicable
to Executive individually or generally to executives or
employees of the Company, then, the Company shall pay to the
Executive, subject to Section 15 hereof by paying the
withholding for the Executive, an additional amount (the
"Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on such payments
and benefits and any federal, state and local income tax and
Excise Tax upon payments provided for in this Section 12,
shall be equal to the payments due to the Executive hereunder
and the payments and/or
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benefits due to the Executive under any benefit plan of the
Company. Each Gross-Up Payment shall be made in good funds
upon the later of (i) five (5) days after the date the
Executive notifies the Company or the Company receives notice
from the certified public accounting firm of its need to make
such Gross-Up Payment, or (ii) the date of any payment causing
the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally
recognized certified public accounting firm designated jointly
by the Company and the Executive. The cost of such services by
the accounting firm shall be paid by the Company. If the
Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm
used by the Company immediately prior to the Change in
Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service
("IRS") that, if successful, would require the payment by the
Company of a Gross-Up Payment in addition to that payment
previously paid by the Company pursuant to this section. Such
notification shall be given an soon as practicable but no
later than fifteen (15) business days after the Executive is
informed in writing of such claim and shall apprise the
Company of the nature of such claim, the date on which such
claim is requested to be paid, and attach a copy of the IRS
notice. The Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on
which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes
with respect to such claim is
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due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing
from time to time, including, without limitation,
accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however
that the Company shall pay directly all costs and
expenses (including legal and accounting fees, as well
as other expenses and any additional interest and
penalties) incurred by the Executive and the Company in
connection with an IRS levy, contest or claim and
provided further that the Company shall not take any
action or fail to make any Gross-Up Payment so as to
cause the assessment of any IRS levy and the Company
shall cause any levy so assessed to be immediately
released by payment of the Gross-Up Amount, together
with all costs, interest and penalties.
43. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain
in effect for a period of 3 years from the
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date hereof (the "Initial Term") or until the end of the
Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on
the anniversary date hereof (so that the Initial Term is
always 3 years) unless, prior to a Change in Control, the
Chairman of the Board of Directors of Peapack notifies the
Executive in writing at any time that the Contract is not so
extended, in which case the Initial Term shall end upon the
later of (i) 3 years after the date hereof, or (ii) 2 years
after the date of such written notice.
b. No Effect Prior to Change in Control. This Agreement shall
not effect any rights of the Company to terminate the
Executive prior to a Change in Control or any rights of the
Executive granted in any other agreement or contract or plan
with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon and after a Change
in Control. If the full-time employment of the Executive by
the Company is ended for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further
force and effect.
44. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding,
the payment or obligation to pay any monies, or granting of any
benefits, rights or privileges to Executive as provided in this
Agreement shall not be in lieu or derogation of the rights and
privileges that the Executive now has or will have under any plans
or programs of or agreements with the Company, except that if the
Executive received any payment hereunder, he shall not be entitled
to any payment under the Company's severance policies for officers
and employees.
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45. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to
applicable federal and state payroll or withholding taxes. Any
Gross-Up Payment shall be made in the form of withholding taxes and
shall not be paid to the Executive, but shall be sent to the IRS in
the ordinary course of the Company's payroll withholding.
46. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Peapack. The terms of this Agreement
shall be governed by, and interpreted and construed in accordance
with the provisions of, the laws of New Jersey. This Agreement
supersedes all prior agreements and understandings with respect to
the matters covered hereby, including expressly any prior agreement
with the Company concerning change-in-control benefits. The parties
hereto expressly agree that the Severance Agreement between the Bank
and the Executive dated January 27, 1997, is hereby terminated in
its entirety. The amendment or termination of this Agreement may be
made only in a writing executed by the Company and the Executive,
and no amendment or termination of this Agreement shall be effective
unless and until made in such a writing. This Agreement shall be
binding upon any successor (whether direct or indirect, by purchase,
merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is
personal to the Executive and the Executive may not assign any of
his rights or duties hereunder but this Agreement shall be
enforceable by the Executive's legal representatives, executors or
administrators. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce
or account for more than one such counterpart.
(signature page to follow)
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IN WITNESS WHEREOF, Peapack-Gladstone Bank and Peapack-Gladstone
Financial Corporation each have caused this Agreement to be signed by their duly
authorized representatives pursuant to the authority of their Boards of
Directors, and the Executive has personally executed this Agreement, all as of
the day and year first written above.
ATTEST: PEAPACK-GLADSTONE
FINANCIAL CORPORATION
ANTOINETTE ROSELL By: FRANK A. KISSEL
- ----------------- -----------------------------
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
ATTEST: PEAPACK-GLADSTONE BANK
ANTOINETTE ROSELL By: FRANK A. KISSEL
- ----------------- -----------------------------
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
WITNESS:
ANTOINETTE ROSELL CRAIG C. SPENGEMAN
- ----------------- -----------------------------
Antoinette Rosell Craig C. Spengeman, Executive
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AMENDED AND RESTATED
CHANGE-IN-CONTROL AGREEMENT
ARTHUR F. BIRMINGHAM
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), is
made as of this 11 day of December, 2003, among PEAPACK-GLADSTONE BANK ("Bank"),
a New Jersey state banking association with its principal office at 190 Main
Street, Gladstone, New Jersey 07934, PEAPACK-GLADSTONE FINANCIAL CORPORATION
("Peapack"), a New Jersey Corporation which maintains its principal office at
158 Route 206 North, Gladstone, New Jersey 07934 (Peapack and the Bank
collectively are the "Company") and Arthur F. Birmingham (the "Executive"). This
Agreement amends and restates in its entirety the Employment Agreement dated as
of January 1, 1998 by and among the Executive, Peapack, and the Bank.
BACKGROUND
WHEREAS, the Executive has been continuously employed by the Bank
for many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Peapack;
WHEREAS, the Board of Directors of the Bank and Peapack believe that
the future services of the Executive are of great value to the Bank and Peapack
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his
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advice, if they request it, as to the best interests of the Company and its
shareholders, without concern that the Executive might be distracted by the
personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment
shall mean (i) willful and continued failure by the Executive
to perform his duties for the Company under this Agreement
after at least one warning in writing from the Company's Board
of Directors identifying specifically any such failure; (ii)
the willful engaging by the Executive in misconduct which
causes material injury to the Company as specified in a
written notice to the Executive from the Board of Directors;
or (iii) conviction of a crime, other than a traffic
violation, habitual drunkenness, drug abuse, or excessive
absenteeism other than for illness, after a warning (with
respect to drunkenness or absenteeism only) in writing from
the Board of Directors to refrain from such behavior. No act
or failure to act on the part of the Executive shall be
considered willful unless done, or omitted to be done, by the
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Executive not in good faith and without reasonable belief that
the action or omission was in the best interest of the
Company.
b. Change in Control. "Change in Control" means any of the
following events: (i) when Peapack or a Subsidiary acquires
actual knowledge that any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act), other than
an affiliate of Peapack or a Subsidiary or an employee benefit
plan established or maintained by Peapack, a Subsidiary or any
of their respective affiliates, is or becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act) directly
or indirectly, of securities of Peapack representing more than
twenty-five percent (25%) of the combined voting power of
Peapack's then outstanding securities (a "Control Person"),
(ii) upon the first purchase of Peapack's common stock
pursuant to a tender or exchange offer (other than a tender or
exchange offer made by Peapack, a Subsidiary or an employee
benefit plan established or maintained by Peapack, a
Subsidiary or any of their respective affiliates), (iii) upon
the approval by Peapack's stockholders of (A) a merger or
consolidation of Peapack with or into another corporation
(other than a merger or consolidation which is approved by at
least two-thirds of the Continuing Directors (as hereinafter
defined) and the definitive agreement for which provides that
at least two-thirds of the directors of the surviving or
resulting corporation immediately after the transaction are
Continuing Directors (a "Non-Control Transaction")), (B) a
sale or disposition of all or substantially all of Peapack's
assets or (C) a plan of liquidation or dissolution of Peapack,
(iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
Board (the "Continuing Directors") cease for any reason to
constitute at least two-thirds thereof or, following a
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Non-Control Transaction, two-thirds of the board of directors
of the surviving or resulting corporation; provided that any
individual whose election or nomination for election as a
member of the Board (or, following a Non-Control Transaction,
the board of directors of the surviving or resulting
corporation) was approved by a vote of at least two-thirds of
the Continuing Directors then in office shall be considered a
Continuing Director, or (v) upon a sale of (A) common stock of
the Bank if after such sale any person (as such term is used
in Section 13(d) and 14(d)(2) of the Exchange Act) other than
Peapack, an employee benefit plan established or maintained by
Peapack or a Subsidiary, or an affiliate of Peapack or a
Subsidiary, owns a majority of the Bank's common stock or (B)
all or substantially all of the Bank's assets (other than in
the ordinary course of business). No person shall be
considered a Control Person for purposes of clause (i) above
if (A) such person is or becomes the beneficial owner,
directly or indirectly, of more than ten percent (10%) but
less than twenty-five percent (25%) of the combined voting
power of Peapack's then outstanding securities if the
acquisition of all voting securities in excess of ten percent
(10%) was approved in advance by a majority of the Continuing
Directors then in office or (B) such person acquires in excess
of ten percent (10%) of the combined voting power of Peapack's
then outstanding voting securities in violation of law and by
order of a court of competent jurisdiction, settlement or
otherwise, disposes or is required to dispose of all
securities acquired in violation of law.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control
and ending on the earlier of (i) the third anniversary of the
Change in Control or (ii) the death of the Executive. For the
purpose
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of this Agreement, a Change in Control shall be deemed to have
occurred at the date specified in the definition of
Change-in-Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company,
"Good Reason" shall mean any of the following, if taken
without Executive's express written consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or
functions associated with, Executive's position, title,
duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of
Executive from, or any failure to re-elect Executive to,
any position(s) or office(s) Executive held immediately
prior to such Change in Control. A change in title or
positions resulting merely from a merger of the Company
into or with another bank or company which does not
downgrade in any way the Executive's powers, duties and
responsibilities shall not meet the requirements of this
paragraph;
(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a
Change in Control or the failure to award Executive
annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the
Change in control or a failure by the Company to
continue Executive as a participant in such plan on at
least the same basis as Executive participated in such
plan prior to the Change in Control;
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(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than
25 miles from his present office location, except for
required travel on the Company's business to an extent
substantially consistent with Executive's business
travel obligations immediately prior to such Change in
Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement
(including, without limitation the Company's retirement
plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred
compensation plan or long term stock incentive plan) in
which Executive is participating immediately prior to a
Change in Control (except that the Company may institute
or continue plans, programs or arrangements providing
Executive with substantially similar benefits); the
taking of any action by the Company which would
adversely affect Executive's participation in or
materially reduce Executive's benefits under, any of
such plans, programs or arrangements; the failure to
continue, or the taking of any action which would
deprive Executive, of any material fringe benefit
enjoyed by Executive immediately prior to such Change in
Control; or the failure by the Company to provide
Executive with the number of paid vacation days to which
Executive was entitled immediately prior to such Change
in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform
this Agreement by any successor to the Company and to
provide such assumption to the Executive prior to any
Change in Control; or
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(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which
is not effected pursuant to all of the requirements of
this Agreement; and, for purposes of this Agreement, no
such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Peapack, if
each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of
the other corporations in such chain.
47. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract
Period upon the terms and conditions set forth herein.
48. Position. During the Contract Period the Executive shall be
employed as Executive Vice President & CFO of Peapack and the Bank,
or such other corporate or divisional profit center as shall then be
the principal successor to the business, assets and properties of
the Company, with substantially the same title and the same duties
and responsibilities as before the Change in Control. The Executive
shall devote his full time and attention to the business of the
Company, and shall not during the Contract Period be engaged in any
other business activity. This paragraph shall not be construed as
preventing the Executive from managing any investments of his which
do not require any service on his part in the operation of such
investments.
49. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
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a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual
salary shall be payable in installments in accordance with the
Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three
years prior to the Change in Control. The bonus shall be
payable at the time and in the manner which the Company paid
such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the
Executive's compensation and shall award him additional
compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation
levels, all as determined in the discretion of the Board of
Directors.
50. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in
the same manner and to the same extent as such expenses were
previously reimbursed to him immediately prior to the Change
in Control.
b. Supplemental Retirement Plan. During the Contract Period,
if the Executive was entitled to benefits under any
supplemental retirement plan prior to the Change in Control,
the Executive shall be entitled to continued benefits under
such plan after the Change in Control and such plan may not be
modified to reduce or eliminate such benefits during the
Contract Period.
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c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country
club and/or the use of an automobile, he shall be entitled to
the same membership and/or use of an automobile at least
comparable to the automobile provided to him prior to the
Change in Control.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and
procedures of the Company, as such existed immediately prior
to the Change in Control. During the Contract Period, the
Executive also shall be entitled to hospital, health, medical
and life insurance, and any other benefits enjoyed, from time
to time, by senior officers of the Company, all upon terms as
favorable as those enjoyed by other senior officers of the
Company. Notwithstanding anything in this paragraph 5(d) to
the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy
is uniformly applied to all officers of the Company (and any
successor or acquiror of the Company, if any), including the
chief executive officer of such entities, then no such change
shall be deemed to be contrary to this paragraph.
51. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive
shall not be entitled to any further benefits under this Agreement.
52. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder
for 4 consecutive months in any 12 month period, the Company may
terminate the employment of the Executive. In such event, the
Executive shall not be entitled to any further benefits under this
Agreement.
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53. Death Benefits. Upon the Executive's death during the Contract
Period, his estate shall not be entitled to any further benefits
under this Agreement.
54. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the
Contract Period by written notice to the Executive providing four
weeks notice. The Executive may resign for Good Reason during the
Contract Period upon four weeks' written notice to the Company
specifying facts and circumstances claimed to support the Good
Reason. The Executive shall be entitled to give a Notice of
Termination that his or her employment is being terminated for Good
Reason at any time during the Contract Period, not later than twelve
months after any occurrence of an event stated to constitute Good
Reason. If the Company terminates the Executive's employment during
the Contract Period without Cause or if the Executive Resigns for
Good Reason, the Company shall, subject to Section 12 hereof:
(a) Within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three
(3.0) times the highest annual cash compensation, consisting solely
of salary and bonus, as well as any 401(k) deferral, paid to the
Executive during any calendar year in each of the three calendar
years immediately prior to the Change in Control, along with any
Gross-Up Payment due under Section 12 hereof for the calendar year
of the termination; and
(b) Continue to provide the Executive during the remainder of the
Contract Period with health, hospitalization and medical insurance,
as were provided at the time of the termination of his employment
with the Company, at the Company's cost (subject to standard
deductibles and co-pays, and the Executive's continuing payment of
his part of the premium for family coverage, if applicable).
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The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
the Gross-Up Payment due under Section 12 hereof, or to provide him with the
health, hospitalization and medical insurance benefits due under this section,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his enforcement
against the Company of the terms of this Agreement. The Executive shall be
denied payment of his legal fees and expenses only if a court finds that the
Executive sought payment of such fees without reasonable cause and not in good
faith.
55. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the
Contract Period without Good Reason, but upon such resignation the
Executive shall not be entitled to any additional compensation for
the time after which he ceases to be employed by the Company, and
shall not be entitled to any of the other benefits provided
hereunder. No such resignation shall be effective unless in writing
with four weeks' notice thereof.
56. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit
of the business of the Company or any of its subsidiaries or
affiliates, the Executive shall not, at any time during or
following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or
any of its subsidiaries or affiliates. The Executive
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agrees that, among other things, all information concerning
the identity of and the Company's relations with its customers
is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this
section and agrees that he shall be subject to injunctive
relief and equitable remedies as a result of the breach of
this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and
effect of the remaining valid portions.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this
Agreement.
57. Gross-Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section
4999 or other substitute or similar tax assessment (the
"Excise Tax") of the Internal Revenue Code of 1986, as amended
(the "Code"), including the corresponding provisions of any
succeeding law, with respect to any payments under this
Section 12 or any payments and/or benefits under this
Agreement or under any benefit plan of the Company applicable
to Executive individually or generally to executives or
employees of the Company, then, the Company shall pay to the
Executive, subject to Section 15 hereof by paying the
withholding for the Executive, an additional amount (the
"Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on such payments
and benefits and any federal, state and local income tax and
Excise Tax upon payments provided for in this Section 12,
shall be equal to the payments due to the Executive hereunder
and the payments and/or
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benefits due to the Executive under any benefit plan of the
Company. Each Gross-Up Payment shall be made in good funds
upon the later of (i) five (5) days after the date the
Executive notifies the Company or the Company receives notice
from the certified public accounting firm of its need to make
such Gross-Up Payment, or (ii) the date of any payment causing
the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally
recognized certified public accounting firm designated jointly
by the Company and the Executive. The cost of such services by
the accounting firm shall be paid by the Company. If the
Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm
used by the Company immediately prior to the Change in
Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service
("IRS") that, if successful, would require the payment by the
Company of a Gross-Up Payment in addition to that payment
previously paid by the Company pursuant to this section. Such
notification shall be given an soon as practicable but no
later than fifteen (15) business days after the Executive is
informed in writing of such claim and shall apprise the
Company of the nature of such claim, the date on which such
claim is requested to be paid, and attach a copy of the IRS
notice. The Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on
which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes
with respect to such claim is
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due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing
from time to time, including, without limitation,
accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however
that the Company shall pay directly all costs and
expenses (including legal and accounting fees, as well
as other expenses and any additional interest and
penalties) incurred by the Executive and the Company in
connection with an IRS levy, contest or claim and
provided further that the Company shall not take any
action or fail to make any Gross-Up Payment so as to
cause the assessment of any IRS levy and the Company
shall cause any levy so assessed to be immediately
released by payment of the Gross-Up Amount, together
with all costs, interest and penalties.
58. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain
in effect for a period of 3 years from the
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date hereof (the "Initial Term") or until the end of the
Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on
the anniversary date hereof (so that the Initial Term is
always 3 years) unless, prior to a Change in Control, the
Chairman of the Board of Directors of Peapack notifies the
Executive in writing at any time that the Contract is not so
extended, in which case the Initial Term shall end upon the
later of (i) 3 years after the date hereof, or (ii) 2 years
after the date of such written notice.
b. No Effect Prior to Change in Control. This Agreement shall
not effect any rights of the Company to terminate the
Executive prior to a Change in Control or any rights of the
Executive granted in any other agreement or contract or plan
with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon and after a Change
in Control. If the full-time employment of the Executive by
the Company is ended for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further
force and effect.
59. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding,
the payment or obligation to pay any monies, or granting of any
benefits, rights or privileges to Executive as provided in this
Agreement shall not be in lieu or derogation of the rights and
privileges that the Executive now has or will have under any plans
or programs of or agreements with the Company, except that if the
Executive received any payment hereunder, he shall not be entitled
to any payment under the Company's severance policies for officers
and employees.
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60. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to
applicable federal and state payroll or withholding taxes. Any
Gross-Up Payment shall be made in the form of withholding taxes and
shall not be paid to the Executive, but shall be sent to the IRS in
the ordinary course of the Company's payroll withholding.
61. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Peapack. The terms of this Agreement
shall be governed by, and interpreted and construed in accordance
with the provisions of, the laws of New Jersey. This Agreement
supersedes all prior agreements and understandings with respect to
the matters covered hereby, including expressly any prior agreement
with the Company concerning change-in-control benefits. The parties
hereto expressly agree that the Severance Agreement between the Bank
and the Executive dated May 6, 1997, is hereby terminated in its
entirety. The amendment or termination of this Agreement may be made
only in a writing executed by the Company and the Executive, and no
amendment or termination of this Agreement shall be effective unless
and until made in such a writing. This Agreement shall be binding
upon any successor (whether direct or indirect, by purchase, merge,
consolidation, liquidation or otherwise) to all or substantially all
of the assets of the Company. This Agreement is personal to the
Executive and the Executive may not assign any of his rights or
duties hereunder but this Agreement shall be enforceable by the
Executive's legal representatives, executors or administrators. This
Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
(signature page to follow)
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IN WITNESS WHEREOF, Peapack-Gladstone Bank and Peapack-Gladstone
Financial Corporation each have caused this Agreement to be signed by their duly
authorized representatives pursuant to the authority of their Boards of
Directors, and the Executive has personally executed this Agreement, all as of
the day and year first written above.
ATTEST: PEAPACK-GLADSTONE
FINANCIAL CORPORATION
ANTOINETTE ROSELL By: FRANK A. KISSEL
- ----------------- ---------------------------
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
ATTEST: PEAPACK-GLADSTONE BANK
ANTOINETTE ROSELL By: FRANK A. KISSEL
- ----------------- ---------------------------
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
WITNESS:
ANTOINETTE ROSELL ARTHUR F. BIRMINGHAM
- ----------------- ---------------------------
Antoinette Rosell Arthur F. Birmingham, Executive
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AMENDED AND RESTATED
CHANGE-IN-CONTROL AGREEMENT
GARRETT P. BROMLEY
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), is
made as of this 11th day of December, 2003, among PEAPACK-GLADSTONE BANK
("Bank"), a New Jersey state banking association with its principal office at
190 Main Street, Gladstone, New Jersey 07934, PEAPACK-GLADSTONE FINANCIAL
CORPORATION ("Peapack"), a New Jersey Corporation which maintains its principal
office at 158 Route 206 North, Gladstone, New Jersey 07934 (Peapack and the Bank
collectively are the "Company") and Garrett P. Bromley (the "Executive"). This
Agreement amends and restates in its entirety the Employment Agreement dated as
of April 3, 1998 by and among the Executive, Peapack, and the Bank.
BACKGROUND
WHEREAS, the Executive has been continuously employed by the Bank
for many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Peapack;
WHEREAS, the Board of Directors of the Bank and Peapack believe that
the future services of the Executive are of great value to the Bank and Peapack
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his
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advice, if they request it, as to the best interests of the Company and its
shareholders, without concern that the Executive might be distracted by the
personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment
shall mean (i) willful and continued failure by the Executive
to perform his duties for the Company under this Agreement
after at least one warning in writing from the Company's Board
of Directors identifying specifically any such failure; (ii)
the willful engaging by the Executive in misconduct which
causes material injury to the Company as specified in a
written notice to the Executive from the Board of Directors;
or (iii) conviction of a crime, other than a traffic
violation, habitual drunkenness, drug abuse, or excessive
absenteeism other than for illness, after a warning (with
respect to drunkenness or absenteeism only) in writing from
the Board of Directors to refrain from such behavior. No act
or failure to act on the part of the Executive shall be
considered willful unless done, or omitted to be done, by the
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Executive not in good faith and without reasonable belief that
the action or omission was in the best interest of the
Company.
b. Change in Control. "Change in Control" means any of the
following events: (i) when Peapack or a Subsidiary acquires
actual knowledge that any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act), other than
an affiliate of Peapack or a Subsidiary or an employee benefit
plan established or maintained by Peapack, a Subsidiary or any
of their respective affiliates, is or becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act) directly
or indirectly, of securities of Peapack representing more than
twenty-five percent (25%) of the combined voting power of
Peapack's then outstanding securities (a "Control Person"),
(ii) upon the first purchase of Peapack's common stock
pursuant to a tender or exchange offer (other than a tender or
exchange offer made by Peapack, a Subsidiary or an employee
benefit plan established or maintained by Peapack, a
Subsidiary or any of their respective affiliates), (iii) upon
the approval by Peapack's stockholders of (A) a merger or
consolidation of Peapack with or into another corporation
(other than a merger or consolidation which is approved by at
least two-thirds of the Continuing Directors (as hereinafter
defined) and the definitive agreement for which provides that
at least two-thirds of the directors of the surviving or
resulting corporation immediately after the transaction are
Continuing Directors (a "Non-Control Transaction")), (B) a
sale or disposition of all or substantially all of Peapack's
assets or (C) a plan of liquidation or dissolution of Peapack,
(iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
Board (the "Continuing Directors") cease for any reason to
constitute at least two-thirds thereof or, following a
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Non-Control Transaction, two-thirds of the board of directors
of the surviving or resulting corporation; provided that any
individual whose election or nomination for election as a
member of the Board (or, following a Non-Control Transaction,
the board of directors of the surviving or resulting
corporation) was approved by a vote of at least two-thirds of
the Continuing Directors then in office shall be considered a
Continuing Director, or (v) upon a sale of (A) common stock of
the Bank if after such sale any person (as such term is used
in Section 13(d) and 14(d)(2) of the Exchange Act) other than
Peapack, an employee benefit plan established or maintained by
Peapack or a Subsidiary, or an affiliate of Peapack or a
Subsidiary, owns a majority of the Bank's common stock or (B)
all or substantially all of the Bank's assets (other than in
the ordinary course of business). No person shall be
considered a Control Person for purposes of clause (i) above
if (A) such person is or becomes the beneficial owner,
directly or indirectly, of more than ten percent (10%) but
less than twenty-five percent (25%) of the combined voting
power of Peapack's then outstanding securities if the
acquisition of all voting securities in excess of ten percent
(10%) was approved in advance by a majority of the Continuing
Directors then in office or (B) such person acquires in excess
of ten percent (10%) of the combined voting power of Peapack's
then outstanding voting securities in violation of law and by
order of a court of competent jurisdiction, settlement or
otherwise, disposes or is required to dispose of all
securities acquired in violation of law.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control
and ending on the earlier of (i) the third anniversary of the
Change in Control or (ii) the death of the Executive. For the
purpose
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of this Agreement, a Change in Control shall be deemed to have
occurred at the date specified in the definition of
Change-in-Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company,
"Good Reason" shall mean any of the following, if taken
without Executive's express written consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or
functions associated with, Executive's position, title,
duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of
Executive from, or any failure to re-elect Executive to,
any position(s) or office(s) Executive held immediately
prior to such Change in Control. A change in title or
positions resulting merely from a merger of the Company
into or with another bank or company which does not
downgrade in any way the Executive's powers, duties and
responsibilities shall not meet the requirements of this
paragraph;
(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a
Change in Control or the failure to award Executive
annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the
Change in control or a failure by the Company to
continue Executive as a participant in such plan on at
least the same basis as Executive participated in such
plan prior to the Change in Control;
111
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than
25 miles from his present office location, except for
required travel on the Company's business to an extent
substantially consistent with Executive's business
travel obligations immediately prior to such Change in
Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement
(including, without limitation the Company's retirement
plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred
compensation plan or long term stock incentive plan) in
which Executive is participating immediately prior to a
Change in Control (except that the Company may institute
or continue plans, programs or arrangements providing
Executive with substantially similar benefits); the
taking of any action by the Company which would
adversely affect Executive's participation in or
materially reduce Executive's benefits under, any of
such plans, programs or arrangements; the failure to
continue, or the taking of any action which would
deprive Executive, of any material fringe benefit
enjoyed by Executive immediately prior to such Change in
Control; or the failure by the Company to provide
Executive with the number of paid vacation days to which
Executive was entitled immediately prior to such Change
in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform
this Agreement by any successor to the Company and to
provide such assumption to the Executive prior to any
Change in Control; or
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(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which
is not effected pursuant to all of the requirements of
this Agreement; and, for purposes of this Agreement, no
such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Peapack, if
each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of
the other corporations in such chain.
62. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract
Period upon the terms and conditions set forth herein.
63. Position. During the Contract Period the Executive shall be
employed as Executive Vice President of Peapack and the Bank, or
such other corporate or divisional profit center as shall then be
the principal successor to the business, assets and properties of
the Company, with substantially the same title and the same duties
and responsibilities as before the Change in Control. The Executive
shall devote his full time and attention to the business of the
Company, and shall not during the Contract Period be engaged in any
other business activity. This paragraph shall not be construed as
preventing the Executive from managing any investments of his which
do not require any service on his part in the operation of such
investments.
64. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
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a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual
salary shall be payable in installments in accordance with the
Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three
years prior to the Change in Control. The bonus shall be
payable at the time and in the manner which the Company paid
such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the
Executive's compensation and shall award him additional
compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation
levels, all as determined in the discretion of the Board of
Directors.
65. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in
the same manner and to the same extent as such expenses were
previously reimbursed to him immediately prior to the Change
in Control.
b. Supplemental Retirement Plan. During the Contract Period,
if the Executive was entitled to benefits under any
supplemental retirement plan prior to the Change in Control,
the Executive shall be entitled to continued benefits under
such plan after the Change in Control and such plan may not be
modified to reduce or eliminate such benefits during the
Contract Period.
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c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country
club and/or the use of an automobile, he shall be entitled to
the same membership and/or use of an automobile at least
comparable to the automobile provided to him prior to the
Change in Control.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and
procedures of the Company, as such existed immediately prior
to the Change in Control. During the Contract Period, the
Executive also shall be entitled to hospital, health, medical
and life insurance, and any other benefits enjoyed, from time
to time, by senior officers of the Company, all upon terms as
favorable as those enjoyed by other senior officers of the
Company. Notwithstanding anything in this paragraph 5(d) to
the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy
is uniformly applied to all officers of the Company (and any
successor or acquiror of the Company, if any), including the
chief executive officer of such entities, then no such change
shall be deemed to be contrary to this paragraph.
66. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive
shall not be entitled to any further benefits under this Agreement.
67. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder
for 4 consecutive months in any 12 month period, the Company may
terminate the employment of the Executive. In such event, the
Executive shall not be entitled to any further benefits under this
Agreement.
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68. Death Benefits. Upon the Executive's death during the Contract
Period, his estate shall not be entitled to any further benefits
under this Agreement.
69. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the
Contract Period by written notice to the Executive providing four
weeks notice. The Executive may resign for Good Reason during the
Contract Period upon four weeks' written notice to the Company
specifying facts and circumstances claimed to support the Good
Reason. The Executive shall be entitled to give a Notice of
Termination that his or her employment is being terminated for Good
Reason at any time during the Contract Period, not later than twelve
months after any occurrence of an event stated to constitute Good
Reason. If the Company terminates the Executive's employment during
the Contract Period without Cause or if the Executive Resigns for
Good Reason, the Company shall, subject to Section 12 hereof:
(a) Within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three
(3.0) times the highest annual cash compensation, consisting solely
of salary and bonus, as well as any 401(k) deferral, paid to the
Executive during any calendar year in each of the three calendar
years immediately prior to the Change in Control, along with any
Gross-Up Payment due under Section 12 hereof for the calendar year
of the termination; and
(b) Continue to provide the Executive during the remainder of the
Contract Period with health, hospitalization and medical insurance,
as were provided at the time of the termination of his employment
with the Company, at the Company's cost (subject to standard
deductibles and co-pays, and the Executive's continuing payment of
his part of the premium for family coverage, if applicable).
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The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
the Gross-Up Payment due under Section 12 hereof, or to provide him with the
health, hospitalization and medical insurance benefits due under this section,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his enforcement
against the Company of the terms of this Agreement. The Executive shall be
denied payment of his legal fees and expenses only if a court finds that the
Executive sought payment of such fees without reasonable cause and not in good
faith.
70. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the
Contract Period without Good Reason, but upon such resignation the
Executive shall not be entitled to any additional compensation for
the time after which he ceases to be employed by the Company, and
shall not be entitled to any of the other benefits provided
hereunder. No such resignation shall be effective unless in writing
with four weeks' notice thereof.
71. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit
of the business of the Company or any of its subsidiaries or
affiliates, the Executive shall not, at any time during or
following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or
any of its subsidiaries or affiliates. The Executive
117
agrees that, among other things, all information concerning
the identity of and the Company's relations with its customers
is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this
section and agrees that he shall be subject to injunctive
relief and equitable remedies as a result of the breach of
this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and
effect of the remaining valid portions.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this
Agreement.
72. Gross-Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section
4999 or other substitute or similar tax assessment (the
"Excise Tax") of the Internal Revenue Code of 1986, as amended
(the "Code"), including the corresponding provisions of any
succeeding law, with respect to any payments under this
Section 12 or any payments and/or benefits under this
Agreement or under any benefit plan of the Company applicable
to Executive individually or generally to executives or
employees of the Company, then, the Company shall pay to the
Executive, subject to Section 15 hereof by paying the
withholding for the Executive, an additional amount (the
"Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on such payments
and benefits and any federal, state and local income tax and
Excise Tax upon payments provided for in this Section 12,
shall be equal to the payments due to the Executive hereunder
and the payments and/or
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benefits due to the Executive under any benefit plan of the
Company. Each Gross-Up Payment shall be made in good funds
upon the later of (i) five (5) days after the date the
Executive notifies the Company or the Company receives notice
from the certified public accounting firm of its need to make
such Gross-Up Payment, or (ii) the date of any payment causing
the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally
recognized certified public accounting firm designated jointly
by the Company and the Executive. The cost of such services by
the accounting firm shall be paid by the Company. If the
Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm
used by the Company immediately prior to the Change in
Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service
("IRS") that, if successful, would require the payment by the
Company of a Gross-Up Payment in addition to that payment
previously paid by the Company pursuant to this section. Such
notification shall be given an soon as practicable but no
later than fifteen (15) business days after the Executive is
informed in writing of such claim and shall apprise the
Company of the nature of such claim, the date on which such
claim is requested to be paid, and attach a copy of the IRS
notice. The Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on
which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes
with respect to such claim is
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due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing
from time to time, including, without limitation,
accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however
that the Company shall pay directly all costs and
expenses (including legal and accounting fees, as well
as other expenses and any additional interest and
penalties) incurred by the Executive and the Company in
connection with an IRS levy, contest or claim and
provided further that the Company shall not take any
action or fail to make any Gross-Up Payment so as to
cause the assessment of any IRS levy and the Company
shall cause any levy so assessed to be immediately
released by payment of the Gross-Up Amount, together
with all costs, interest and penalties.
73. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain
in effect for a period of 3 years from the
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date hereof (the "Initial Term") or until the end of the
Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on
the anniversary date hereof (so that the Initial Term is
always 3 years) unless, prior to a Change in Control, the
Chairman of the Board of Directors of Peapack notifies the
Executive in writing at any time that the Contract is not so
extended, in which case the Initial Term shall end upon the
later of (i) 3 years after the date hereof, or (ii) 2 years
after the date of such written notice.
b. No Effect Prior to Change in Control. This Agreement shall
not effect any rights of the Company to terminate the
Executive prior to a Change in Control or any rights of the
Executive granted in any other agreement or contract or plan
with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon and after a Change
in Control. If the full-time employment of the Executive by
the Company is ended for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further
force and effect.
74. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding,
the payment or obligation to pay any monies, or granting of any
benefits, rights or privileges to Executive as provided in this
Agreement shall not be in lieu or derogation of the rights and
privileges that the Executive now has or will have under any plans
or programs of or agreements with the Company, except that if the
Executive received any payment hereunder, he shall not be entitled
to any payment under the Company's severance policies for officers
and employees.
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75. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to
applicable federal and state payroll or withholding taxes. Any
Gross-Up Payment shall be made in the form of withholding taxes and
shall not be paid to the Executive, but shall be sent to the IRS in
the ordinary course of the Company's payroll withholding.
76. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Peapack. The terms of this Agreement
shall be governed by, and interpreted and construed in accordance
with the provisions of, the laws of New Jersey. This Agreement
supersedes all prior agreements and understandings with respect to
the matters covered hereby, including expressly any prior agreement
with the Company concerning change-in-control benefits. The
amendment or termination of this Agreement may be made only in a
writing executed by the Company and the Executive, and no amendment
or termination of this Agreement shall be effective unless and until
made in such a writing. This Agreement shall be binding upon any
successor (whether direct or indirect, by purchase, merge,
consolidation, liquidation or otherwise) to all or substantially all
of the assets of the Company. This Agreement is personal to the
Executive and the Executive may not assign any of his rights or
duties hereunder but this Agreement shall be enforceable by the
Executive's legal representatives, executors or administrators. This
Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
(signature page to follow)
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IN WITNESS WHEREOF, Peapack-Gladstone Bank and Peapack-Gladstone
Financial Corporation each have caused this Agreement to be signed by their duly
authorized representatives pursuant to the authority of their Boards of
Directors, and the Executive has personally executed this Agreement, all as of
the day and year first written above.
ATTEST: PEAPACK-GLADSTONE
FINANCIAL CORPORATION
ANTOINETTE ROSELL By: FRANK A. KISSEL
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Antoinette Rosell, Secretary Frank A. Kissel, Chairman
ATTEST: PEAPACK-GLADSTONE BANK
ANTOINETTE ROSELL By: FRANK A. KISSEL
- ----------------- ---------------------------
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
WITNESS:
ANTOINETTE ROSELL GARRETT P. BROMLEY
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Antoinette Rosell Garrett P. Bromley, Executive
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