EXHIBIT 4.4
PEAPACK-GLADSTONE BANK
1995 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
1. PURPOSE
The purpose of the Peapack-Gladstone Bank (the "Company") 1995 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) Each Outside Director (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 a employee of the Company) will receive one
grant of options to purchase shares of the common stock of the Company
("Common Stock"), subject to adjustment as provided in Section 4 hereof,
under this Plan according to when the recipient first becomes an Outside
Director. Subject to Section 5, below, shares will be granted according to
the following schedule:
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WHEN PARTICIPANT FIRST BECOMES AN OUTSIDE NUMBER OF SHARES
DIRECTOR GRANTED
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At or prior to the 1995 Annual Shareholders meeting 1,250
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After the 1995 Annual Shareholders meeting and at or prior 1,000
to the 1996 Annual Shareholders meeting
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After the 1996 Annual Shareholders meeting and at or prior 750
to the 1997 Annual Shareholders meeting
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After the 1997 Annual Shareholders meeting and at or prior 500
to the 1998 Annual Shareholders meeting
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After the 1998 Annual Shareholders meeting and at or prior 250
to the 1999 Annual Shareholders meeting
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The purchase price per share of the Common Stock 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 (e) of this
Section 2 and in no event below the par value of the Common Stock on the
Date of Grant. These initial grants shall be effective as of the effective
date of the Directors' Option Plan as defined in Section 5 hereof
("Effective Date").
(b) If options for sufficient shares are not available under the Directors'
Option Plan to fulfill the grant of options under Section 2(a) to any
Outside Director or Outside Director first elected subsequent to the
Effective Date of this Plan, and thereafter options become available, such
Outside Directors shall then receive options to purchase an amount of
shares of Common Stock, determined by dividing pro rata among each Outside
Director who has not received their full allotment of shares, options for
the number of shares then available under the Outside Directors' Plan, not
to exceed options for shares with the values set forth in the preceding
paragraph with respect to such subsequent Outside Directors, subject to
adjustment under Section 4 as appropriate. The date of grant shall be the
date options for such shares become available. The purchase price per share
of the Common Stock deliverable upon exercise of such options shall equal
the Fair Market Value of the Common Stock on the date the option is granted
as determined under paragraph (e) of this Section 2.
(d) Ineligibility. An option under the Directors' Option Plan shall not be
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.
(e) Fair Market Value. For purposes of the Directors' Option Plan, when
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
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), (b) or (c)
hereof shall 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. The first installment of
options granted pursuant to Section 2(b) shall vest one year from the date
of their grant.
(c) Manner of Exercise. The option when exercisable may be exercised from
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(a) or (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(e) above.
(d) Transferability. Each option granted hereby may be exercised only by
the recipient to whom it is issued, or in the event of the Outside
Director's death, his or her legal representative or successor in interest
pursuant to the terms of Section 3(e) hereof.
(e) Termination of Service. Upon the termination of a recipient's service
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 (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 15,000 shares of the Common Stock of the Company, par value $6 2/3
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.
5.5. EFFECTIVE DATE OF THE PLAN; SHAREHOLDER RATIFICATION
This Plan was approved by the Board of Directors on January 12, 1995 and,
subject to first obtaining approval at the 1995 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 1995
Annual Meeting, when accepted by the New Jersey Department of Banking.
6. TERMINATION OF THE PLAN
The right to grant options under the Directors' Option Plan will terminate
automatically upon the earlier of five years after the Effective Date of
the Plan or the issuance of 15,000 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 becomes qualified under 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 to retain the Plan's qualification and as 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.