Exhibit 10 A 6
AMENDED AND RESTATED
CHANGE-IN-CONTROL AGREEMENT
"FINN M.W. CASPERSEN, JR."
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), is
made as of this "JANUARY 1, 2008", 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 FINN M.W. CASPERSEN, JR. (the "Executive").
BACKGROUND
WHEREAS, the Executive has been continuously employed by the Bank
for many years;
WHEREAS, the Executive throughout his/her tenure has worked
diligently in his/her 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/her 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/her position, and that they be able to receive
and rely upon his/her 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/her 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:
1. Definitions
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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/her 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.
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 consummation 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 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.
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/her 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/her
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
(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 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/her 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/her which do not require any
service on his/her part in the operation of such investments.
4. Cash Compensation. The Company shall pay to the Executive
compensation for his/her services during the Contract Period as follows:
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.
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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.
c. Club Membership and Automobile. If prior to the Change
in Control, the Executive was entitled to membership in a country club and/or
automobile allowance, he shall be entitled to the same membership and/or
automobile allowance 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 acquirer 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/her 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.
8. Death Benefits. Upon the Executive's death during the Contract
Period, his/her 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/her 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/her employment with the Company,
at the Company's cost (subject to standard deductibles and co-pays, and the
Executive's continuing payment of his/her part of the premium for family
coverage, if applicable).
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his/her 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/her reasonable legal fees and expenses incurred in connection with his/her
enforcement against the Company of the terms of this Agreement. The Executive
shall be denied payment of his/her 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.
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a. Non-Disclosure of Confidential Information. Except in
the course of his/her 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 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.
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a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section 4999 and/or
Section 409A 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 benefits due to the
Executive under any benefit plan of the Company. Each Gross-Up Payment shall be
made 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 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.
c. This Section shall survive the termination of
Executive's employment hereunder.
13. Term and Effect Prior to Change in Control.
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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 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 affect 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 or under any employment agreement
between Executive and the Company including the Employment Agreement dated
[DATE].
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 timely directed to the IRS (or any state division of taxation) on
the Executive's behalf.
16. Delay in Payment. Notwithstanding anything else to the
contrary in this Agreement, or any other plan, contract, program or otherwise,
the Company (and its affiliates) are expressly authorized to delay any scheduled
payments under this Agreement and any other plan, contract, program or
otherwise, as such payments relate to the Executive, if the Company (or its
affiliate) determines that such delay is necessary in order to comply with the
requirements of Section 409A of the Internal Revenue Code. No such payment may
be delayed beyond the date that is six (6) months following the Executive's
separation from service (as defined in Section 409A). At the end of such period
of delay, the Executive will be paid the delayed payment amounts, plus interest
for the period of any such delay. For purposes of the preceding sentence,
interest shall be calculated using the six (6) month Treasury Bill rate in
effect on the date on which the payment is delayed, and shall be compounded
daily. Notwithstanding the foregoing, in the event that the conditions of the
severance exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) are
satisfied, payment of benefit will not be delayed for six (6) months following
termination from employment to the extent permitted under the severance
exception.
17. 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/her 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)
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
/s/ Antoinette Rosell By: /s/ Frank A. Kissel
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
ATTEST: PEAPACK-GLADSTONE BANK
/s/ Antoinette Rosell By: /s/ Frank A. Kissel
Antoinette Rosell, Secretary Frank A. Kissel, Chairman
WITNESS:
/s/ Bridget J. Walsh By: /s/ Finn M.W. Caspersen, Jr.
Finn M.W. Caspersen, Jr., Executive