Exhibit 10.1
PEAPACK-GLADSTONE FINANCIAL CORPORATION
1998 Stock Option Plan for Outside Directors
(As Amended and Restated by Directors on January 1, 2001)
(As Amended and Restated by Directors on December 8, 2005)
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1. Purpose
The purpose of the Peapack-Gladstone Corporation (the "Company") 1998
Stock Option Plan for Outside Directors (the "Directors' Option Plan" or the
"Plan") is to promote the growth and profitability of the Company by providing
Outside Directors of the Company with an incentive to achieve long-term
objectives of the Company and to attract and retain non-employee directors of
outstanding competence by providing such Outside Directors with an opportunity
to acquire an equity interest in the Company.
2. Grant of Options
(a) The Plan will be administered by the Compensation Committee of the
Board of Directors (the "Committee"). The Committee shall consist solely of two
or more Non-Employee Directors, as such term is defined in Rule 16b-3(b)(3) of
the Exchange Act. The Committee may, from time to time, recommend the grant of
options to the Outside Directors (for purposes of this Directors' Option Plan,
the term "Outside Director" shall mean a member of the Board of Directors of the
Company not also serving as an employee of the Company) under this Plan in such
numbers and upon such terms as it deems appropriate, but all grants must be
approved by the Company's Board of Directors.
(b) Option Price. The purchase price per share of the Common Stock
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deliverable upon exercise of such option shall equal the Fair Market Value of
the Common Stock on the date of the grant of this option as determined under
paragraph (d) of this Section 2 and in no event below the par value of the
Common Stock on the Date of Grant.
(c) Ineligibility. An option under the Directors' Option Plan shall not be
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granted to any Outside Director who at any previous time was an employee of the
Company and in such capacity was eligible to receive any options to purchase
Common Stock.
(d) Fair Market Value. For purposes of the Directors' Option Plan, when
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used in connection with Common Stock on a certain date, Fair Market Value means
the average of the high and low prices of known trades of the Common Stock on
the relevant date, or if the Common Stock was not traded on such date, on the
next preceding day on which the Common Stock was traded thereon.
3. Terms and Conditions
(a) Option Agreement. Each option shall be evidenced by a written option
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agreement between the Company and the recipient specifying the number of shares
of Common Stock that may be acquired through
its exercise and containing such other terms and conditions which are not
inconsistent with the terms of this grant.
(b) Vesting. Each option granted pursuant to Section 2(a) hereof shall
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become exercisable in five annual installments of twenty percent (20%). The
first installment of options granted pursuant to Section 2(a) shall vest one
year from the date of grant and the remaining four annual installments will vest
on successive anniversary dates, but only if the optionee continues to serve as
an Outside Director at such applicable vesting date, unless otherwise provided
in this Plan. Notwithstanding the foregoing, the Committee may accelerate the
vesting and exercisability of any option or portion thereof at any time.
(c) Manner of Exercise. The option when exercisable may be exercised from
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time to time in whole or in part, by delivering a written notice of exercise to
the President of the Company signed by the recipient. Such notice is irrevocable
and must be accompanied by full payment of the exercise price (as determined in
Section 2(b) hereof) in cash or shares of previously acquired common stock of
the Company at the Fair Market Value of such shares determined on the exercise
date by the manner described in Section 2(d) above.
(d) Transferability. Each option granted hereby may be exercised only by
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the recipient to whom it is issued, or in the event of the Outside Director's
death, his or her legal representative or successor(s) in interest pursuant to
the terms of section 3(e) hereof.
(e) Termination of Service. Upon the termination of a recipient's service
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for any reason other than disability, Change in Control, death or removal for
cause, the participant's stock options shall be exercisable only as to those
shares which were immediately purchasable by the recipient at the date of
termination. In the event of death or disability of any recipient, all stock
options held by such recipient, whether or not exercisable at such time, shall
become immediately exercisable by the recipient or the recipient's legal
representatives or beneficiaries. Upon termination of the recipient's service
due to a Change in Control, all stock options held by such recipient, whether or
not exercisable at such time, shall become immediately exercisable. However,
shares of Common Stock acquired through the exercise of options granted under
Section 2 may not be sold or otherwise disposed of for a period of one year from
the Date of Grant of the option. For purposes of this plan the following terms
are defined:
(i) "Change in Control" for purposes of this Plan, a "Change in
Control" of the Company shall mean an event of a nature that; (1) any "person"
(as the term is used in Sections 13(d) and 14(d) of the Exchange Act) who is not
now presently but becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the Company's outstanding securities except for any
securities purchased by any tax-qualified employee benefit plan of the Company;
or (2) individuals who constitute the Board on the date hereof (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose election
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board, or whose nomination for election by the Company's
stockholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (2), considered as though
he were a member of the Incumbent Board; or (3) filing is made for regulator
approval to implement a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Company or similar transaction occurs
in which the Company is not the resulting entity or such plan, merger,
consolidation, sale or similar transaction occurs; or (4) a proxy statement
soliciting proxies from shareholders of the Company, by someone other than the
current management of the Company,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or similar transaction with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to the plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Company shall be
distributed; or (5) a tender offer is made for 25% or more of the voting
securities of the Company.
(ii) "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of an Outside Director to perform the
work customarily assigned to him. Additionally, a medical doctor selected or
approved by the Board of Directors must advise the Board that it is either not
possible to determine when such disability will terminate or that it appears
probable that such disability will be permanent during the remainder of said
recipient's lifetime.
(f) Termination of Option. Each option shall expire upon the earlier of
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(i) one hundred and twenty (120) months following the date of grant, or (ii)
three (3) years following the date on which the Outside Director ceases to serve
in such capacity for any reason other than removal for cause. If the Outside
Director dies before fully exercising any portion of an option then exercisable,
such option may be exercised by such Outside Director's beneficiary, personal
representative(s), heir(s) or devisee(s) at any time within the three (3) year
period following his or her death; provided, however, that in no event shall the
option be exercisable more than one hundred and twenty (120) months after the
date of its grant. If the Outside Director is removed for cause, all options
awarded to him shall expire upon such removal.
4. Common Stock Subject to the Directors' Option Plan
The shares which shall be issued and delivered upon exercise of options
granted under the Directors' Option Plan may be either authorized and unissued
shares of Common Stock or authorized and issued shares of Common Stock held by
the Company as treasury stock. The number of shares of Common Stock reserved for
issuance under the Directors' Option Plan shall not exceed 35,000 shares of the
Common Stock of the Company, no par value per share, subject to adjustments
pursuant to this Section 4. Any shares of Common Stock subject to an option
which for any reason either terminates unexercised or expires, shall again be
available for issuance under the Directors' Option Plan.
In the event of any change or changes in the outstanding Common Stock of
the Company by reason of any stock dividend or split, recapitalization,
reorganization, merger, consolidation, spin-off, combination or any similar
corporate change, or other increase or decrease in such shares effected without
receipt or payment of consideration by the Company, the number of shares of
Common Stock which may be issued under the Directors' Option Plan, the number of
shares of Common Stock to options granted under this Directors' Option Plan and
the option price of such options, shall be automatically and proportionately
adjusted to prevent dilution or enlargement of the rights granted to recipient
under the Directors' Option Plan.
5. Effective Date of the Plan; Shareholder Ratification
This Plan was approved by the Board of Directors on February 12, 1998 and,
subject to first obtaining approval at the 1998 Annual Meeting of Shareholders
of the Company by the affirmative vote of at least 66 2/3% of the shares of
Common Stock of the Company entitled to vote at the 1998 Annual Meeting,
when accepted by the New Jersey Department of Banking. This Plan is amended and
restated effective as of January 1, 2001.
6. Termination of the Plan
The right to grant options under the Directors' Option Plan will terminate
automatically upon the earlier of ten years after the Effective Date of the Plan
or the issuance of 35,000 shares of Common Stock (the maximum number of shares
of Common Stock reserved for under this Plan) subject to adjustment pursuant to
Section 4 hereof.
7. Amendment of the Plan
The Directors' Option Plan may be amended from time to time by the Board
of Directors of the Company provided that Section 2 and 3 hereof shall not be
amended more than once every six months other than to comport with the Internal
Revenue Code of 1986, as amended, or the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder. Except as provided in Section 4
hereof, rights and obligations under any option granted before an amendment
shall not be altered or impaired by such amendment without the written consent
of the optionee. If the Directors' Option Plan is subject to 17 C.F.R.
ss.240.16(b)-3 ("Rule 16(b)-3") of the rules and regulations promulgated under
the Securities Exchange Act of 1934 and an amendment would require shareholder
approval under such Rule 16(b)-3 or as otherwise may be required under
applicable New Jersey and federal banking law, then subject to the discretion of
the Board of Directors of the Company, such amendment shall be presented to
shareholders for ratification, provided, however, that the failure to obtain
shareholder ratification shall not affect the validity of this Plan as so
amended and the options granted thereunder.
8. Applicable Law
The Plan will be administered in accordance with the laws of the State of
New Jersey and applicable federal law.
9. Compliance with Section 16
If this Plan is qualified under Rule 16b-3, transactions under this Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent that any provision of the Plan
fails to so comply, such provision shall be deemed null and void, to the extent
permitted by law.