================================================================================
- --------------------------------------------------------------------------------
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- --------------------------------------------------------------------------------
================================================================================
PEAPACK-GLADSTONE FINANCIAL CORPORATION
(Name of Registrant as Specified in its Charter
and
Name of Person Filing Proxy Statement)
================================================================================
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction
applies:
______________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
______________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________
5) Total fee paid:
______________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing with which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: ______________________________________
Form, Schedule or Registration Statement No.: _________________
Filing Party: ________________________________________________
Date Filed: __________________________________________________
- --------------------------------------------------------------------------------
================================================================================
PEAPACK-GLADSTONE FINANCIAL CORPORATION
158 Route 206 North
Gladstone, New Jersey 07934
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 1999
---------------------------------
To Our Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
(the "Meeting") of Peapack-Gladstone Financial Corporation (the "Corporation")
will be held at the Corporation's Loan and Administration Building, 158 Route
206 North, Gladstone, New Jersey, on April 27, 1999, at 2:00 p.m. local time for
the purpose of considering and voting upon the following matters:
1. Election of eleven directors to serve until the expiration of
their terms and thereafter until their successors shall have
been duly elected and qualified;
2. Such other business as may properly come before the Meeting or
any adjournment thereof.
Only shareholders of record at the close of business on March 22,
1999, are entitled to receive notice of, and to vote at, the Meeting.
You are urged to read carefully the attached Proxy Statement
relating to the Meeting.
Shareholders are cordially invited to attend the Meeting in
person. Whether or not you expect to do so, we urge you to date and sign the
enclosed proxy form and return it in the enclosed envelope as promptly as
possible. You may revoke your proxy by filing a later-dated proxy or a written
revocation of the proxy with the Secretary of the Corporation prior to the
Meeting. If you attend the Meeting, you may revoke your proxy by filing a
later-dated proxy or written revocation of the proxy with the Secretary of the
Meeting prior to the voting of such proxy.
By Order of the Board of Directors
__________________________________________
CATHERINE A. McCATHARN,
Corporate Secretary
Gladstone, New Jersey
March 26, 1999
PEAPACK-GLADSTONE FINANCIAL CORPORATION
158 Route 206 North
Gladstone, New Jersey 07934
-----------------------------------
PROXY STATEMENT
Dated March 26, 1999
------------------------------------
GENERAL PROXY STATEMENT INFORMATION
This Proxy Statement is furnished to the shareholders of
Peapack-Gladstone Financial Corporation (the "Corporation") in connection with
the solicitation by the Board of Directors (the "Board") of the Corporation of
proxies for use at the Annual Meeting of Shareholders (the "Meeting") to be held
at the Corporation's Loan and Administration Building, 158 Route 206 North,
Gladstone, New Jersey on April 27, 1999 at 2:00 p.m. local time. This Proxy
Statement is first being mailed to shareholders on approximately March 26, 1999.
VOTING INFORMATION
Outstanding Securities and Voting Rights
The record date for determining shareholders entitled to notice
of, and to vote at, the Meeting is March 22, 1999 (the "Record Date"). Only
shareholders of record as of the Record Date will be entitled to notice of, and
to vote at, the Meeting.
On the Record Date, 2,439,966 shares of the Corporation's Common
Stock, no par value, were outstanding and eligible to be voted at the Meeting.
Each share of the Corporation's Common Stock is entitled to one vote.
At the Meeting, inspectors of election will tabulate both ballots
cast by shareholders present and voting in person, and votes cast by proxy.
Under applicable state law and the Corporation's certificate of incorporation
and by-laws, abstentions and broker non-votes are counted for purpose of
establishing a quorum but otherwise do not count. Generally, the approval of a
specified percentage of shares voted at a shareholders meeting is required to
approve a proposal and thus abstentions and broker non-votes have no effect on
the outcome of a vote.
All shares represented by valid proxies received pursuant to this
solicitation will be voted "FOR" the election of the eleven nominees for
director who are named in this Proxy Statement, unless the shareholder specifies
a different choice by means of the proxy or revokes the proxy prior to the time
it is exercised. Should any other matter properly come before the Meeting, the
persons named as proxies will vote upon such matters according to their
discretion unless the shareholder otherwise specifies in the proxy.
The election of directors requires the affirmative vote of a
plurality of the Corporation's common stock voted at the Meeting, whether voted
in person or by proxy.
Revocability of Proxy
- ---------------------
Any shareholder giving a proxy has the right to attend and to
vote at the Meeting in person. A proxy may be revoked prior to the Meeting by
filing a later-dated proxy or a written revocation if it is sent to the
Secretary of the Corporation, Catherine A. McCatharn, at 158 Route 206 North,
Gladstone, New Jersey, 07934, and is received by the Corporation in advance of
the Meeting. A proxy may be revoked at the Meeting by filing a later-dated proxy
or a written revocation with the Secretary of the Meeting prior to the voting of
such proxy.
Solicitation of Proxies
- -----------------------
This proxy solicitation is being made by the Board of the
Corporation and the costs of the solicitation will be borne by the Corporation.
In addition to the use of the mails, proxies may be solicited personally or by
telephone or facsimile transmission by directors, officers and employees of the
Corporation and its subsidiaries who will not be specially compensated for such
solicitation activities. The Corporation will also make arrangements with
brokers, dealers, nominees, custodians and fiduciaries to forward proxy
soliciting materials to the beneficial owners of shares held of record by such
persons, and the Corporation may reimburse them for their reasonable expenses
incurred in forwarding the materials.
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Information
The Corporation's certificate of incorporation and by-laws
authorize a minimum of 5 and a maximum of 25 directors, but leave the exact
number to be fixed by resolution of the Corporation's Board of Directors. The
Board is presently comprised of 12 members. Mr. William Turnbull has announced
his retirement and will not stand for reelection. Directors are elected annually
by the shareholders for one-year terms. The Corporation's Nominating Committee
has nominated the remaining eleven members of the current Board whose terms
expire in 1999, for reelection to serve for one-year terms expiring in 2000 and
until their successors shall have been duly elected and qualified.
Shareholders will elect eleven directors at the Meeting. Unless a
shareholder either indicates otherwise on the proxy, the proxy will be voted for
the persons named in the table below to serve until the expiration of their
terms, and thereafter until their successors have been duly elected and
qualified.
The following table sets forth the names and ages of the Board's
nominees for election, the nominees' position with the Corporation (if any), the
principal occupation or employment of each nominee for the past five years and
the period during which each nominee has served as a director of the
Corporation. The nominee's prior service as a director includes prior service as
a director of Peapack-Gladstone Bank (the "Bank") prior to the formation of the
holding company.
NOMINEES FOR ELECTION AS DIRECTORS
Principal Occupation or
Name Age Director Since Employment for Past Five Years
=============================== ====== ===================== ===================================================================
Pamela Hill 61 1991 President of Ferris Corp. since 1995; previously Vice President
of Ferris Corp.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
T. Leonard Hill 87 1944 Chairman of the Board of the Corporation and the Bank since 1989;
Chairman of Ferris Corp.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
Frank A. Kissel 48 1989 President and CEO of the Corporation and the Bank since 1989.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
John D. Kissel 46 1987 Manager of Turpin Real Estate, Inc. since 1991.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
James R. Lamb 56 1993 Principal of James R. Lamb, P.C., Attorney at Law since 1967.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
George R. Layton 71 1966 Director of Layton Funeral Home since 1953.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
Edward A. Merton 55 1981 President of Merton Excavating and Paving Co. since 1961.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
F. Duffield Meyercord 52 1991 Managing Director and Partner of Carl Marks Consulting Group, LLC.,
since 1998; Managing Director, Meyercord Advisors, Inc., since
1985; Director of Programmer's Paradise, Inc. since 1991.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
John R. Mulcahy 60 1981 Retired since 1994; previously President of Mulcahy Realty and
Construction.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
Philip W. Smith III 43 1995 President, Phillary Management, Inc. since 1994; previously
Commercial Real Estate Broker, C.B. Commercial Group, Inc.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
Jack D. Stine 75 1976 Chairman of Bridgewater Community Services since 1983.
- ------------------------------- ------ --------------------- -------------------------------------------------------------------
_______________________________
T. Leonard Hill is the father of Pamela Hill.
Frank A. Kissel and John D. Kissel are brothers.
Recommendation and Vote Required on Proposal 1
- ----------------------------------------------
The Corporation's Board of Directors unanimously recommends a
vote "FOR" management's nominees for director. The Corporation's directors will
be elected by a plurality of the votes cast at the Corporation's Meeting,
whether in person or by proxy.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation held four (4) meetings during
1998. All the directors of the Corporation also serve as directors of the Bank
which held twelve (12) meetings during 1998.
The Corporation maintains a standing Executive/Nominating Committee,
Audit Committee and Compensation Committee. These Committees are described
below:
Executive/Nominating Committee. The principal function of the Executive
Committee is to exercise the authority of the Corporation's Board in the
management and affairs of the Corporation, as required, between meetings of the
Board. The Executive Committee also serves as the Corporation's Nominating
Committee and as such makes recommendations with respect to nominees for
election to the Corporation's Board and nominees to fill vacancies in Board
membership between meetings. Shareholders may make recommendations to the
Committee, which has no established criteria. The members are Messrs. Frank A.
Kissel, Hill, Layton, Stine and Turnbull. There were seven (7) meetings of the
Executive Committee in 1998.
Audit Committee. The Audit Committee (which also serves as the audit
committee for the Bank) supervises internal audits of the Corporation and the
Bank, reviews reports of internal and external auditors engaged by the
Corporation and the Bank, makes recommendations for changes in relevant systems
and policies, and recommends the appointment of outside auditors. The Audit
department of the Bank reports directly to the Audit Committee. The members are
Ms. Pamela Hill and Messrs. John D. Kissel, Stine and Turnbull. There were four
(4) meetings of the Audit Committee in 1998.
Compensation Committee. The Compensation Committee is responsible for
overseeing the executive compensation practices at the Corporation and the Bank
and reviewing and evaluating the compensation of other officers and employees of
the Corporation and the Bank. The members are Messrs. Frank A. Kissel, T.
Leonard Hill, Meyercord, Merton and Stine. There were three (3) meetings of the
Compensation Committee to establish compensation levels for 1998.
During 1998, all directors of the Corporation attended no fewer than
75% of the total number of meetings of the Corporation's (or the Bank's) Board
and meetings of committees on which such director served.
Mr. T. Leonard Hill is ex-officio with full voting powers on all
committees.
DIRECTOR'S COMPENSATION
The Corporation pays its directors an $8,000 annual retainer, and
$400 for each regular Bank Board meeting they attended and $300 for each
committee meeting they attended. Frank A. Kissel, as a full-time employee, was
not compensated for services rendered as a director.
In April 1995, the shareholders of the Bank approved a non-qualified
stock option plan for non-employee directors of the Bank. The 1995 Stock Option
Plan for Outside Directors (the "1995 Directors Plan") provides for the award of
options to each outside director on a scheduled basis depending upon when an
outside director first is elected to the Board of the Bank. That schedule is:
1995 Annual Meeting or before - 5,513 shares; after the 1995 Annual Meeting
through the 1996 Annual Meeting - 4,410 shares; after the 1996 Annual Meeting
through the 1997 Annual Meeting - 3,308 shares; after the 1997 Annual Meeting
through the 1998 Annual Meeting - 2,205 shares; after the 1998 Annual Meeting
through the 1999 Annual Meeting - 1,103 shares. The Bank's directors were
awarded the following stock options in 1995: Pamela Hill-5,513 shares; John D.
Kissel-5,513 shares; James R. Lamb-5,513 shares; George R. Layton-5,513 shares;
Edward A. Merton-5,513 shares; F. Duffield Meyercord-5,513 shares; John R.
Mulcahy-5,513 shares; Philip W. Smith III-4,410 shares; Jack D. Stine-5,513
shares; William Turnbull-5,513 shares. No stock options were awarded to
directors in 1998, 1997 or 1996. All options awarded directors were adjusted for
the five percent (5%) stock dividends paid in November, 1996 and 1998 and for
the 2-for-1 stock split of the Corporation's Common Stock in December, 1997. The
exercise price for the option shares may not be less than the fair market value
of the common stock on the date of grant of the option.
In April 1998, the shareholders of the Corporation approved a
non-qualified stock option plan for non-employee directors of the Corporation.
The 1998 Stock Option Plan for Outside Directors (the "1998 Directors Plan")
provides for the award of options to each outside director on a scheduled basis
depending upon when an outside director first is elected to the Board of the
Corporation. That schedule is: 1998 Annual Meeting or before - 2,625 shares;
after the 1999 Annual Meeting through the 2000 Annual Meeting - 2,100 shares;
after the 2000 Annual Meeting through the 2001 Annual Meeting - 1,575 shares;
after the 2001 Annual Meeting through the 2002 Annual Meeting - 1,050 shares;
after the 2002 Annual Meeting through the 2003 Annual Meeting - 525 shares. The
Corporation's directors were awarded the following stock options in 1998: Pamela
Hill-2,625 shares; John D. Kissel-2,625 shares; James R. Lamb-2,625 shares;
George R. Layton-2,625 shares; Edward A. Merton-2,625 shares; F. Duffield
Meyercord-2,625 shares; John R. Mulcahy-2,625 shares; Philip W. Smith III-2,625
shares; Jack D. Stine-2,625 shares; William Turnbull-2,625 shares. All options
awarded directors were adjusted for the five percent (5%) stock dividend paid in
November, 1998. The exercise price for the option shares may not be less than
the fair market value of the common stock on the date of grant of the option.
The options granted under these plans are, in general, exercisable not earlier
than one year after the date of grant, at a price equal to the fair market value
of the common stock on the date of grant, and expire not more than ten years
after the date of grant. The stock options vest during a period of up to five
years after the date of grant. All options granted under these plans are
exercisable in cumulative installments of 20% for each year after the date of
grant such that 100% of such options will be exercisable after five years.
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth as of February 28, 1999 the number
of shares of the Corporation's Common Stock that is beneficially owned by each
of the directors/nominees, the executive officers of the Corporation for whom
individual information is required to be set forth in this Proxy Statement (the
"Named Executive Officers") pursuant to the regulations of the Securities and
Exchange Commission (the "SEC"), and all directors and executive officers as a
group. The Corporation knows of no person or group which beneficially owns 5% or
more of the Corporation's Common Stock.
Number of Shares
Name of Beneficial Owner Beneficially Owned (1) Percent of Class (2)
============================ ============================== ===============================
Garrett P. Bromley 1,565 (3) *
Pamela Hill 22,342 (4) *
- ---------------------------- ------------------------------ -------------------------------
T. Leonard Hill 55,764 (5) 2.22%
- ---------------------------- ------------------------------ -------------------------------
Frank A. Kissel 23,313 (6) *
- ---------------------------- ------------------------------ -------------------------------
John D. Kissel 16,318 (7) *
- ---------------------------- ------------------------------ -------------------------------
James R. Lamb 7,583 (8) *
- ---------------------------- ------------------------------ -------------------------------
George R. Layton 30,410 (9) 1.21%
- ---------------------------- ------------------------------ -------------------------------
Edward A. Merton 8,103 (9) *
- ---------------------------- ------------------------------ -------------------------------
F. Duffield Meyercord 6,390 (9) *
- ---------------------------- ------------------------------ -------------------------------
John R. Mulcahy 8,860 (10) *
Robert M. Rogers 4,152 (11) *
- ---------------------------- ------------------------------ -------------------------------
Philip W. Smith III 8,838 (12) *
Craig C. Spengeman 6,255 (13) *
- ---------------------------- ------------------------------ -------------------------------
Jack D. Stine 9,412 (14) *
- ---------------------------- ------------------------------ -------------------------------
William Turnbull 54,276 (15) 2.16%
- ---------------------------- ------------------------------ -------------------------------
All directors and executive
officers as a group (18 273,363 (16) 10.87%
persons)
- --------------------------- ------------------------------ ------------------------------
- ------------------------------------------
NOTES:
* Less than one percent
(1) Beneficially owned shares include shares over which the named person
exercises either sole or shared voting power or sole or shared
investment power. It also includes shares owned (i) by a spouse, minor
children or by relatives sharing the same home, (ii) by entities owned
or controlled by the named person and (iii) by other persons if the
named person has the right to acquire such shares within 60 days by the
exercise of any right or option. Unless otherwise noted, all shares are
owned of record or beneficially by the named person.
(2) The number of shares of common stock used in calculating the percentage
of the class owned includes shares of common stock outstanding as of
February 28, 1999, and 74,892 shares purchasable pursuant to options
exercisable within 60 days of February 28, 1999.
(3) This total includes 95 shares allocated to Mr. Bromley under the
Corporation's Profit Sharing Plan and 1,470 shares purchasable pursuant
to options exercisable within 60 days.
(4) This total includes 4,935 shares purchasable pursuant to options
exercisable within 60 days.
(5) This total includes 22,050 shares owned by The Hill Family Trusts and
5,922 shares purchasable pursuant to options exercisable within 60
days.
(6) This total includes 1,050 shares owned by Mr. Frank A. Kissel's wife,
1,470 shares owned by Mr. Kissel's children, 1,536 shares allocated to
Mr. Kissel under the Corporation's Profit Sharing Plan and 6,552 shares
purchasable pursuant to options exercisable within 60 days.
(7) This total includes 550 shares owned by Mr. John D. Kissel's wife,
1,898 shares owned by Mr. Kissel's children and 4,935 shares
purchasable pursuant to options exercisable within 60 days.
(8) This total includes 1,103 shares owned by Mr. Lamb's wife, 663 shares
owned by Mr. Lamb's children and 4,935 shares purchasable pursuant to
options exercisable within 60 days.
(9) This total includes 4,935 shares purchasable pursuant to options
exercisable within 60 days.
(10) This total includes 221 shares owned by Mr. Mulcahy's wife and 3,884
shares purchasable pursuant to options exercisable within 60 days.
(11) This total includes 700 shares allocated to Mr. Rogers under the
Corporation's Profit Sharing Plan and 3,452 shares purchasable pursuant
to options exercisable within 60 days.
(12) This total includes 1,891 shares owned by Mr. Smith's wife, 146 shares
owned by Mr. Smith's children and 4,053 shares purchasable pursuant to
options exercisable within 60 days.
(13) This total includes 971 shares owned by Mr. Spengeman's wife, 782
shares allocated to Mr. Spengeman under the Corporation's Profit
Sharing Plan and 3,452 shares purchasable pursuant to options
exercisable within 60 days.
(14) This total includes 3,831 shares purchasable pursuant to options
exercisable within 60 days.
(15) This total includes 17,501 shares owned by Mr. Turnbull's wife and
4,935 shares purchasable pursuant to options exercisable within 60
days.
(16) This total includes 9,782 shares beneficially owned by 3 Executive
Officers who are not Directors or Named Executive Officers which total
includes 7,731 shares purchasable pursuant to options exercisable
within 60 days.
EXECUTIVE COMPENSATION
General
- -------
Executive compensation is described below in the tabular format
mandated by the SEC. The letters in parentheses under each column heading are
the letters designated by the SEC for such columns, and are provided to make
inter-company comparisons easier. The absence of any column designated by the
SEC means that no compensation was paid or earned which would be required to be
described in such column. All share amounts have been re-stated to give effect
to stock dividends.
Summary Compensation Table
- --------------------------
The following table summarizes all compensation earned in the past
three years for services performed in all capacities for the Corporation and its
subsidiaries with respect to the Named Officers.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
------------------- ------------------------------------------
(i)
- --------------------------------------- (f) (g) All Other
(a) (b) (c) (d) Other ($) Stock Option Compensation ($) (2)
Name and Year Salary ($) Bonus ($) (1) Awards(#)
Principal Position
- ---------------------------------------- ------- ----------- ----------- --------- ------------------------------------------
Frank A. Kissel, 1998 229,692 42,000 -- -- 13,537
President and CEO of the 1997 197,495 40,000 -- 6,300 10,784
Corporation and the Bank 1996 185,000 13,000 -- -- 5,646
Craig C. Spengeman, 1998 113,538 13,200 -- -- 6,292
Senior Vice President of the 1997 91,846 9,200 -- 3,150 5,113
Corporation and the Bank 1996 85,112 6,200 -- -- 3,831
Robert M. Rogers, 1998 95,288 13,800 -- -- 5,320
Senior Vice President of the 1997 85,435 8,550 -- 3,150 4,771
Corporation and the Bank 1996 78,419 5,775 -- -- 3,545
Garrett P. Bromley, 1998 97,461 11,280 -- -- 5,436
Senior Vice President of the Bank 1997 63,000 9,000 -- 3,150 --
1996 -- -- -- -- --
- -------------------------
NOTES:
(1) Aggregate amount of other compensation does not exceed the lesser of
$50,000 or 10% of executive officer's salary and bonus.
(2) Consists of contributions made to the Corporation's Savings and Profit
Sharing Plan.
(3) Mr. Bromley commenced employment on April 3, 1997.
Stock Option Grants in 1998
- ---------------------------
The Corporation did not grant stock options to any Named
Executive Officer in 1998.
Aggregated Option Exercises in 1998 and Year-End Option Value
- -------------------------------------------------------------
The following table shows options exercised during 1998, and the
value of unexercised options held at year-end 1998, by the Named Executive
Officers. The Corporation does not use SARs as compensation.
AGGREGATED OPTIONS/SAR EXERCISES IN THE
LAST FISCAL YEAR AND FY-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal At Fiscal
Year-End (#) Year-End ($)
------------- ------------
Shares Acquired On Exercisable/ Exercisable/
Name Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ------------------- ------------------ ------------------ ---------------------- ------------------
(a) (b) (c) (d) (e)
Frank A. Kissel -- -- 5,229/7,686 179,023/204,356
Craig C. Spengeman -- -- 2,746/3,932 94,598/105,620
Robert M. Rogers -- -- 2,746/3,932 94,598/105,620
Garrett P. Bromley -- -- 1,050/4,200 24,351/97,406
Savings and Profit Sharing Plans
- --------------------------------
The Corporation has established a qualified defined contribution plan
under Section 401(k) (the "401(k) Plan") of the Internal Revenue Code of 1986,
as amended (the "Code"), covering substantially all salaried employees over the
age of twenty-one (21) with at least twelve (12) months' service and whose
participation is not prohibited by the 401(k) Plan. Under the savings portion of
the 401(k) Plan, employees may contribute up to fifteen percent (15%) of their
pay to their elective account via payroll withholding. The Corporation adds a
matching contribution equal to fifty percent (50%) up to a maximum of $250 of
the employee contribution. In addition, the Board may elect to make a
discretionary contribution to the profit sharing part of the 401(k) Plan. The
profit sharing portion is non-contributory and funds are invested in
Peapack-Gladstone Financial Corporation Common Stock.
Pension Plan
- ------------
The Corporation sponsors a non-contributory defined benefit pension
plan that covers substantially all of the Corporation's salaried employees. The
benefits are based on an employee's compensation, age at retirement and years of
service. It is the policy of the Corporation to fund not less than the minimum
funding amount required by the Employee Retirement Income Security Act.
The following table sets forth the estimated annual benefits that an
eligible employee would receive under the Corporation's qualified defined
benefit pension plan, assuming retirement age at 65 in 1998 and a straight life
annuity benefit, for the remuneration levels (subject to an annual compensation
limit of $160,000) and years of service shown.
Years of Credited Service
Remuneration 10 15 20 25 30
- ------------- --------- --------- ------- ------- --------
$ 50,000 $12,275 $ 18,211 $24,147 $30,083 $31,424
100,000 27,025 40,661 54,297 67,933 69,966
150,000 41,775 63,111 84,447 105,783 108,507
160,000 42,955 65,831 88,707 111,583 114,671
200,000 42,955 71,991 101,027 117,000 117,000
- -----------------------------------------------------------------------------------------
The years of service of the named executives are as follows: Mr. Kissel
- - ten (10) years, Mr. Spengeman - fourteen (14) years, Mr. Bromley - one (1)
year, and Mr. Rogers - twelve (12) years.
Change of Control Arrangements
- ------------------------------
The Corporation and the Bank entered into a Change-in-Control Agreement
with Frank A. Kissel (and six other officers) as of January 1, 1998 which
provides for termination benefits in the event of a change in control of the
Corporation (as defined in the Agreement). Pursuant to the agreement, under
certain circumstances, the Corporation and the Bank would be required to pay
aggregate amounts equal to three times the highest salary and bonuses paid per
year during any calendar year during the three years prior to the change in
control plus continue certain health benefits. The agreement has a cut-back
provision such that the payment would be reduced to avoid exceeding amounts set
forth in Section 280G of the Internal Revenue Code. That provision limits
payments generally to three times the last five-year average W-2 compensation.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") requires that the Corporation's executive officers, directors
and persons who own more than ten percent of a registered class of the
Corporation's common stock, file reports of ownership and changes in ownership
with the SEC. Based upon copies of reports furnished by insiders, all Section
16(a) reporting requirements applicable to Insiders during 1998 were satisfied
on a timely basis.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors established a Compensation Committee which has
been charged with overseeing executive compensation practices at the
Corporation. Members of the Compensation Committee are F. Duffield Meyercord,
Edward A. Merton, Jack D. Stine, T. Leonard Hill and Frank A. Kissel. Decisions
on compensation of executive officers have been made by the full Board of
Directors based upon the recommendations of the Compensation Committee. T.
Leonard Hill, Chairman of the Board, and Frank A. Kissel, President & Chief
Executive Officer, have no input regarding their own compensation which is
determined by the remaining Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Directors and officers and their associates were customers of and had
transactions with the Bank subsidiary during the year ended December 31, 1998,
and it is expected that such persons will continue to have such transactions in
the future. All deposit accounts, loans, and commitments comprising such
transactions were made in the ordinary course of business of the Bank on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and, in
the opinion of management of the Corporation, did not involve more than normal
risks of collectibility or present other unfavorable features.
During 1998, Peapack-Gladstone Bank paid for legal services to the law
firm of James R. Lamb, P.C., whose Principal is James R. Lamb, a director and
shareholder of the Corporation.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report was prepared by the Compensation Committee of the
Corporation regarding executive compensation policy and its relation to the
Corporation's performance.
Compensation Review Process
- ---------------------------
The Compensation Committee of the Board of Directors is responsible for
establishing and overseeing policies governing annual and long-term compensation
programs for the officers named in the compensation tables shown above and other
executive officers of the Corporation.
In establishing compensation for executive officers, the Committee
considers many factors including, but not limited to, Corporation performance,
individual performance and peer group compensation practices. In considering
Corporation performance, the Compensation Committee reviews the actual
performance of the Corporation in light of its annual budget, which includes
expense items, deposit levels, loan growth, fee income and trust department
management. Annual performance reviews of each officer together with salary
studies prepared by the New Jersey Community Bankers Association and KPMG are
some of the sources of compensation information which are utilized in
determining executive compensation. Base salaries approximate the average base
salaries paid by similar financial institutions for similar positions.
During 1998, Mr. Frank A. Kissel served as President and Chief
Executive Officer of the Bank and President and Chief Executive Officer of the
Corporation. Mr. Kissel's base salary for 1998 was set by the Board based on his
performance in executing his responsibilities in those positions in 1997 and the
performance anticipated from him in 1998 and future years. The Board also
considered the objectives set by the Committee for 1998, the overall performance
of the Corporation and Mr. Kissel's ability to develop and motivate employees to
meet the Corporation's short and long-term objectives. Mr. Kissel's 1998 bonus
was based on the completion of specified corporate projects for 1998 within
specified time and budget, the achievement of specified minimum financial ratios
and the achievement of specified goals with respect to the Bank's financial
performance and growth.
With respect to 1998 compensation for senior officers, the
Compensation Committee based its recommendations, and the full Board based its
actions, on the duties and responsibilities of the officer in question, the
performance of the Corporation and of the particular officer in 1997, and the
performance anticipated from the officer in 1998 and future years. Bonuses for
each senior officer were set based on goals set for the senior officer and for
the Corporation as a whole. The Chief Executive Officer set goals for each
senior officer.
Another compensation tool which the Board uses to relate
executive compensation to the performance of the Corporation and the Bank as a
whole is the Corporation's Stock Option Plans. Recommendations for awards under
the plans are made to the full Board by the Compensation Committee. T. Leonard
Hill and Frank A. Kissel have no input regarding their own compensation which is
determined by the remaining directors.
Detailed information relating to the Named Officers is shown in the
compensation tables above.
F. DUFFIELD MEYERCORD
EDWARD A. MERTON
JACK D. STINE
T. LEONARD HILL
FRANK A. KISSEL
PERFORMANCE GRAPH
The following graph compares the cumulative total return on a hypothetical $100
investment made at the close of business December 31, 1992 in: (a) the
Corporation's Common Stock, (b) the CRSP Index for the NASDAQ Stock Market (U.S.
Companies) and (c) the Keefe, Bruyette & Woods ("KBW") Eastern Region Index of
banking organizations. The graph is calculated assuming that all dividends are
reinvested during the relevant periods. The graph shows how a $100 investment
would increase or decrease in value over time, based on dividends and increases
or decreases in the market price of the stock and each of the indexes. (The
Corporation became a public reporting company on December 31, 1993.)
[GRAPHIC OMITTED]
- ------------------- ------------------------------ --------------- --------- --------- --------- --------- ----------
Index
Symbol Description 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- ------------------- ------------------------------ --------------- --------- --------- --------- --------- ----------
/> Peapack-Gladstone $100.00 $110.30 $115.40 $152.40 $189.30 $272.70
Financial Corporation
- ------------------- ------------------------------ --------------- --------- --------- --------- --------- ----------
/ / CRSP Index for NASDAQ $100.00 $114.80 $112.20 $158.70 $195.20 $239.50
(U.S. Companies)
- ------------------- ------------------------------ --------------- --------- --------- --------- --------- ----------
/\ KBW Eastern Region $100.00 $104.30 $ 92.60 $157.20 $215.60 $344.90
- ------------------- ------------------------------ --------------- --------- --------- --------- --------- ----------
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of independent accountants of the Company recommended by the
Audit Committee and selected by the Board of Directors for the current fiscal
year is KPMG LLP. The Board of Directors expects that representatives of KPMG
LLP will be present at the Annual Meeting, will be given an opportunity to make
a statement at such meeting if they desire to do so and will be available to
respond to appropriate questions.
SHAREHOLDER PROPOSALS
New Jersey corporate law requires that the notice of shareholders'
meeting (for either a regular or special meeting) specify the purpose or
purposes of such meeting. Thus any substantive proposal, including shareholder
proposals, must be referred to in the Corporation's notice of shareholders'
meeting for such proposal to be properly considered at a meeting of the
Corporation.
Proposals of shareholders which are eligible under the rules of the SEC
to be included in the Corporation's year 2000 proxy material must be received by
the Secretary of the Corporation no later than December 27, 1999.
If the Corporation changes its 2000 Annual Meeting date to a date more
than 30 days from the date of its 1999 Annual Meeting, then the deadline
referred to in the preceding paragraph will be changed to a reasonable time
before the Corporation begins to print and mail its proxy materials. If the
Corporation changes the date of its 2000 Annual Meeting in a manner that alters
the deadline, the Corporation will so state under Item 5 of the first quarterly
report on Form 10-Q it files with the SEC after the date change.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business that will be presented for
consideration at the Meeting other than that stated in this Proxy Statement.
Should any other matter properly come before the Meeting or any adjournment
thereof, it is intended that proxies in the enclosed form will be voted in
respect thereof in accordance with the judgment of the person or persons voting
the proxies.
Whether you intend to be present at the Meeting or not, you are urged
to return your signed proxy promptly.
By Order of the Board of Directors
T. LEONARD HILL,
Chairman
Gladstone, New Jersey
March 26, 1999
The Corporation's Annual Report for the year-ended December 31, 1998 filed with
the Securities and Exchange Commission as an exhibit to the Corporation's Form
10-K is being mailed to the shareholders with this Proxy Statement. However,
such Annual Report is not incorporated into this Proxy Statement and is not
deemed to be a part of the proxy soliciting material.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS
Tuesday, April 27, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John D. Kissel, George R. Layton and
Jack D. Stine, or any one of them, as Proxies, each with the power to appoint
his substitute and hereby authorizes them to represent and to vote, as
designated below and on the reverse side, all of the shares of common stock of
PEAPACK-GLADSTONE FINANCIAL CORPORATION held of record by the undersigned at the
Annual Meeting of Shareholders of PEAPACK-GLADSTONE FINANCIAL CORPORATION, to be
held at the Peapack-Gladstone Financial Corporation's Loan and Administration
Building, 158 Route 206 North, Gladstone, New Jersey, on Tuesday April 27, 1999
at 2:00 p.m., and at any adjournment thereof.
This proxy will be voted as specified below. If no choice is specified,
the proxy will be voted FOR the election of the 11 nominees for director listed
in the Proxy Statement.
(see reverse side)
1. ELECTION OF 11 DIRECTORS
/ / FOR the nominees listed below (except as marked to the contrary
below):
/ / FOR ALL nominees except:
(Instructions: To withhold authority to vote for
any individual nominee(s) write
that nominee's name on the above
line.)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
Pamela Hill, T. Leonard Hill, Frank A. Kissel, John D. Kissel, James R.
Lamb, George R. Layton, Edward A. Merton, F. Duffield Meyercord, John
R. Mulcahy, Philip W. Smith III, Jack D. Stine.
2. In their discretion, upon such other matters as may properly come
before the meeting.
Dated: ________________, 1999
---------------------------
Signature
---------------------------
Signature
(Please sign exactly as your name appears.
When signing as an executor, administrator,
guardian, trustee or attorney, please give
your title as such. If signer is a
corporation, please sign the full corporate
name and then an authorized officer should
sign his name and print his name and title
below his signature. If the shares are held
in joint name, all joint owners should
sign.)
PLEASE DATE, SIGN AND RETURN PROMPTLY