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:
__________________________________
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
3 was determined):
__________________________________
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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: _______________________________________
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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 TUESDAY, APRIL 22, 2003
---------------------------------
To Our Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Peapack-Gladstone Financial Corporation will be held at Peapack-Gladstone's Loan
and Administration Building, 158 Route 206 North, Gladstone, New Jersey, on
Tuesday, April 22, 2003, at 2:00 p.m. local time for the purpose of considering
and voting upon the following matters:
1. Election of fourteen directors to serve until the expiration
of their terms and thereafter until their successors shall
have been duly elected and qualified.
2. Approval of an amendment to Peapack-Gladstone's Certificate of
Incorporation to increase the authorized common stock of
Peapack-Gladstone to 20 million shares from the presently
authorized 10 million shares.
3. 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 12, 2003,
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 Peapack-Gladstone 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
ANTOINETTE ROSELL,
CORPORATE SECRETARY
Gladstone, New Jersey
March 24, 2003
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
158 ROUTE 206 NORTH
GLADSTONE, NEW JERSEY 07934
-----------------------------------
PROXY STATEMENT
DATED MARCH 24, 2003
------------------------------------
GENERAL PROXY STATEMENT INFORMATION
This proxy statement is furnished to the shareholders of
Peapack-Gladstone Financial Corporation in connection with the solicitation by
the Board of Directors of Peapack-Gladstone of proxies for use at the Annual
Meeting of Shareholders to be held at Peapack-Gladstone's Loan and
Administration Building, 158 Route 206 North, Gladstone, New Jersey on Tuesday,
April 22, 2003 at 2:00 p.m. local time. This proxy statement is first being
mailed to shareholders on approximately March 24, 2003.
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 12, 2003. 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, 6,704,984 shares of Peapack-Gladstone's common
stock, no par value, were outstanding and eligible to be voted at the meeting.
Each share of Peapack-Gladstone's common stock is entitled to one vote.
REQUIRED VOTE
The election of directors requires the affirmative vote of a plurality
of Peapack-Gladstone's common stock voted at the meeting, whether voted in
person or by proxy. 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 New Jersey law and Peapack-Gladstone'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 fourteen 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.
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
Peapack-Gladstone, Antoinette Rosell, at 158 Route 206 North, Gladstone, New
Jersey, 07934, and is received by
Peapack-Gladstone 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 Peapack-Gladstone
and the costs of the solicitation will be borne by Peapack-Gladstone. In
addition to the use of the mails, proxies may be solicited personally or by
telephone, e-mail or facsimile transmission by directors, officers and employees
of Peapack-Gladstone and its subsidiaries who will not be specially compensated
for such solicitation activities. Peapack-Gladstone 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 Peapack-Gladstone may reimburse them for their reasonable expenses
incurred in forwarding the materials.
PROPOSAL 1 - ELECTION OF DIRECTORS
DIRECTOR INFORMATION
Peapack-Gladstone'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 Peapack-Gladstone's Board of Directors. The Board has
fixed the number of directors at 14 and the Board is presently comprised of 14
members. Directors are elected annually by the shareholders for one-year terms.
Peapack-Gladstone's Nominating Committee has nominated the fourteen current
directors for reelection to serve for one-year terms expiring in 2004 and until
their successors shall have been duly elected and qualified.
Shareholders will elect 14 directors at the meeting. Unless a
shareholder 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 Peapack-Gladstone (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
Peapack-Gladstone. The nominee's prior service as a director includes prior
service as a director of Peapack-Gladstone Bank prior to the formation of the
holding company.
NOMINEES FOR ELECTION AS DIRECTORS
NAME AND POSITION WITH DIRECTOR PRINCIPAL OCCUPATION OR
THE COMPANY AGE SINCE EMPLOYMENT FOR PAST FIVE YEARS
=========================== =========== ============= ==========================================================================
Anthony J. Consi, II 58 2000 Senior Vice President of Finance and Operations, Weichert Realtors;
previously Chairman of Chatham Savings, FSB.
Pamela Hill 65 1991 President of Ferris Corp., a real estate management company; previously
Vice President of Ferris Corp.
T. Leonard Hill 91 1944 Chairman Emeritus of the Board of Peapack-Gladstone and the Bank;
previously Chairman of Peapack-Gladstone and the Bank; previously
Chairman of Ferris Corp., a real estate management company.
Frank A. Kissel, 52 1989 Chairman and CEO of Peapack-Gladstone and the Bank; previously President
Chairman and CEO and CEO of Peapack-Gladstone and the Bank.
John D. Kissel 50 1987 Real Estate Broker, Turpin Real Estate, Inc.
2
NAME AND POSITION WITH DIRECTOR PRINCIPAL OCCUPATION OR
THE COMPANY AGE SINCE EMPLOYMENT FOR PAST FIVE YEARS
=========================== =========== ============= ==========================================================================
James R. Lamb 60 1993 Principal of James R. Lamb, P.C., Attorney at Law.
George R. Layton 75 1966 Director of Layton Funeral Home.
Edward A. Merton 62 1981 President of Merton Excavating and Paving Co.
F. Duffield Meyercord 56 1991 Managing Director and Partner of Carl Marks Consulting Group, LLC;
Managing Director, Meyercord Advisors, Inc.; Director of Programmer's
Paradise, Inc.
John R. Mulcahy 64 1981 Retired; previously President of Mulcahy Realty and Construction.
Robert M. Rogers, 44 2002 President and COO of Peapack-Gladstone and the Bank; previously
President and COO Executive Vice President and COO of Peapack-Gladstone and the Bank;
previously Senior Vice President and COO of Peapack-Gladstone and the
Bank.
Philip W. Smith III 47 1995 President, Phillary Management, Inc., a real estate management company.
Craig C. Spengeman, 47 2002 President, PGB Trust and Investments, a division of the Bank and
President, PGB Trust and Executive Vice President of Peapack-Gladstone; previously Executive Vice
Investments President and Senior Trust Officer of Peapack-Gladstone and the Bank;
previously Senior Vice President and Senior Trust Officer of
Peapack-Gladstone and the Bank.
Jack D. Stine 81 1976 Retired. Trustee, Proprietary House Association.
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
Peapack-Gladstone's Board of Directors unanimously recommends a vote
"FOR" the foregoing nominees for director. Peapack-Gladstone's directors will be
elected by a plurality of the votes cast at Peapack-Gladstone's meeting, whether
in person or by proxy.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of Peapack-Gladstone held five (5) meetings
during 2002.
Peapack-Gladstone 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 Peapack-Gladstone's Board in the
management and affairs of Peapack-Gladstone, as required, between meetings of
the Board. The Executive Committee also serves as Peapack-Gladstone's Nominating
Committee and as such makes recommendations with respect to nominees for
election to Peapack-Gladstone's Board and nominees to fill vacancies in Board
membership between meetings. Shareholders may make nominations to the Committee,
which has no established procedures for making nominations. The members are
Messrs. Frank A. Kissel, Hill,
3
Lamb, Layton, Mulcahy, Rogers, Spengeman and Stine. There were ten (10) meetings
of the Executive Committee in 2002.
AUDIT COMMITTEE. The Audit Committee (which also serves as the audit
committee for the Bank) supervises internal audits of Peapack-Gladstone and the
Bank, reviews reports of internal and external auditors engaged by
Peapack-Gladstone and the Bank, makes recommendations for changes in relevant
systems and policies, and appoints outside auditors. The members are Messrs.
Consi, Mulcahy, Smith and Stine. There were five (5) meetings of the Audit
Committee in 2002.
COMPENSATION COMMITTEE. The Compensation Committee is responsible for
overseeing the executive compensation practices at Peapack-Gladstone and the
Bank and reviewing and evaluating the compensation of other officers and
employees of Peapack-Gladstone and the Bank. The members are Messrs. Consi,
Frank A. Kissel, Hill, Meyercord, Merton, Rogers and Stine. Messrs. Kissel, Hill
and Rogers have no input regarding their own compensation which is determined by
the remaining committee members. There were two (2) meetings of the Compensation
Committee to establish compensation levels for 2002.
During 2002, all directors of Peapack-Gladstone attended no fewer than
75% of the total number of meetings of Peapack-Gladstone's Board and meetings of
committees on which such director served.
Messrs. T. Leonard Hill and Frank A. Kissel, as Chairman, are
ex-officio with full voting powers on the Executive/Nominating Committee and the
Compensation Committee.
DIRECTOR'S COMPENSATION
Peapack-Gladstone pays its directors an $8,000 annual retainer for
service on the Board, and $500 for each regular Bank Board meeting they attend
and $400 for each Bank committee meeting they attend. Committee Chairmen and
Audit Committee members receive an additional $2,000 annual retainer, and the
Audit Committee Chairman receives an additional $4,000 annual retainer. Frank A.
Kissel, Robert M. Rogers and Craig C. Spengeman, as full-time employees, were
not compensated for services rendered as directors.
The 1998 Stock Option Plan for Outside Directors provides for the award
of non-qualified stock options to each non-employee director. The 1998 Plan
provides that grants are made based upon recommendations from the Compensation
Committee to the Board and a vote from the full Board. No stock options were
awarded under the 1998 Plan in 2002.
The 2002 Stock Option Plan for Outside Directors provides for the award
of non-qualified stock options to each non-employee director. The 2002 Plan
provides that grants are made based upon recommendations from the Compensation
Committee to the Board and a vote from the full Board. No stock options were
awarded under the 2002 Plan in 2002.
Under each of the outside director Plans, 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.
Effective March 31, 2001, Peapack-Gladstone established a retirement
plan for eligible non-employee directors of Peapack-Gladstone and/or its
subsidiaries. The plan provides 5 years of annual benefits to directors with 10
or more years of service, which commence after a director has retired from the
Board. The annual benefit is equal to 25 percent of the director's final
compensation, except that the percentage will increase by 5 percent for each
year of service in excess of 10, but in all cases is limited to a maximum of 50
percent of final compensation. No director was credited with more than 10 years
of service when the plan became effective, regardless of how long the person
4
had served as director as of the effective date. If a director with 10 years of
service ceases to be a director as a result of death or disability, or a
director with 5 years of service ceases to be a director following a change in
control, the director will be credited with a total of 15 years of service for
plan purposes. In the event that the director dies prior to receipt of all
benefits, the payments continue to the director's beneficiary or estate.
Effective March 31, 2001, Peapack-Gladstone established a nonqualified
deferred compensation plan for non-employee directors covering retainer fees and
the aggregate of all fees for service and attendance at Board and committee
meetings. Participation is optional. Interest is paid on the deferred fees equal
to that which would have been credited if such deferred fees were invested in
the Peapack-Gladstone Money Market Account which yields 1.11% as of March 15,
2003. The provisions of the deferred compensation plan are designed to comply
with certain rulings of the Internal Revenue Service under which the deferred
amounts are not taxed until received. Under the deferred compensation plan, the
directors who elect to defer their fees receive the fees either (i) in a lump
sum on the first day of the calendar quarter following termination of service as
director, or on the first day of a calendar quarter that is at least 5 years
following the date of the original deferral election, or (ii) in substantially
equal annual installments over a period of between 2 to 10 years, commencing in
January of the calendar year following the calendar year during which the
director ceases serving as director. In the event the director dies, within a
reasonable period of time following his or her death, the amount credited to the
director's deferred compensation account shall be paid in a lump sum to the
director's beneficiary or estate.
BENEFICIAL OWNERSHIP OF COMMON STOCK
CERTAIN BENEFICIAL OWNERS
The following table sets forth as of February 28, 2003 certain
information as to beneficial ownership of each person known to Peapack-Gladstone
to own beneficially more than 5% of the outstanding common stock of
Peapack-Gladstone. The beneficial owner in the table below has sole voting and
investment power as to all his shares.
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
============================= ========================== =======================
James M. Weichert 662,344 9.74%
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth as of February 28, 2003 the number of
shares of Peapack-Gladstone's common stock that were beneficially owned by each
of the directors/nominees, the executive officers of Peapack-Gladstone 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 by all directors and executive officers as
a group.
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) PERCENT OF CLASS (2)
========================================= ======================== ========================
Arthur F. Birmingham 17,879 (3) *
Garrett P. Bromley 19,398 (4) *
Anthony J. Consi, II 47,824 (5) *
Pamela Hill 64,470 (6) *
5
T. Leonard Hill 130,485 (7) 1.84%
Frank A. Kissel 78,220 (8) 1.11%
John D. Kissel 49,274 (9) *
James R. Lamb 28,222 (10) *
George R. Layton 82,808 (11) 1.17%
Edward A. Merton 28,702 (11) *
F. Duffield Meyercord 24,546 (11) *
John R. Mulcahy 30,168 (12) *
Robert M. Rogers 25,005 (13) *
Philip W. Smith, III 33,012 (14) *
Craig C. Spengeman 26,725 (15) *
Jack D. Stine 31,958 (16) *
ALL DIRECTORS AND EXECUTIVE OFFICERS 718,696 10.16%
AS A GROUP (16 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, 2003, and 270,482 shares purchasable pursuant to options
exercisable within 60 days of February 28, 2003.
(3) This total includes 1,714 shares allocated to Mr. Birmingham under
Peapack-Gladstone's Profit Sharing Plan, 144 shares owned by Mr.
Birmingham's child, and 12,841 shares purchasable pursuant to options
exercisable within 60 days of February 28, 2003.
(4) This total includes 1,455 shares allocated to Mr. Bromley under
Peapack-Gladstone's Profit Sharing Plan and 16,915 shares purchasable
pursuant to options exercisable within 60 days of February 28, 2003.
(5) This total includes 3,574 shares purchasable pursuant to options
exercisable within 60 days of February 28, 2003.
(6) This total includes 21,020 shares purchasable pursuant to options
exercisable within 60 days of February 28, 2003.
6
(7) This total includes 94,708 shares owned by the Hill Family Trusts and
5,641 shares purchasable pursuant to options exercisable within 60 days
of February 28, 2003.
(8) This total includes 2,768 shares owned by Mr. Frank A. Kissel's wife,
2,307 shares owned by Mr. Kissel's child, 5,775 shares allocated to Mr.
Kissel under Peapack-Gladstone's Profit Sharing Plan and 30,769 shares
purchasable pursuant to options exercisable within 60 days of February
28, 2003.
(9) This total includes 1,330 shares owned by Mr. John D. Kissel's wife,
4,594 shares owned by Mr. Kissel's children and 21,020 shares
purchasable pursuant to options exercisable within 60 days of February
28, 2003.
(10) This total includes 2,672 shares owned by Mr. Lamb's wife, 2,988 shares
owned by Mr. Lamb's children and 12,964 shares purchasable pursuant to
options exercisable within 60 days of February 28, 2003.
(11) This total includes 21,020 shares purchasable pursuant to options
exercisable within 60 days of February 28, 2003.
(12) This total includes 806 shares owned by Mr. Mulcahy's wife and 7,648
shares purchasable pursuant to options exercisable within 60 days of
February 28, 2003.
(13) This total includes 3,168 shares allocated to Mr. Rogers under
Peapack-Gladstone's Profit Sharing Plan and 18,237 shares purchasable
pursuant to options exercisable within 60 days of February 28, 2003.
(14) This total includes 5,182 shares owned by Mr. Smith's wife, 1,032
shares owned by Mr. Smith's children and 18,346 shares purchasable
pursuant to options exercisable within 60 days of February 28, 2003.
(15) This total includes 665 shares owned by Mr. Spengeman's wife, 3,606
shares allocated to Mr. Spengeman under Peapack-Gladstone's Profit
Sharing Plan and 20,099 shares purchasable pursuant to options
exercisable within 60 days of February 28, 2003.
(16) This total includes 18,346 shares purchasable pursuant to options
exercisable within 60 days of February 28, 2003.
EXECUTIVE COMPENSATION
GENERAL
Executive compensation is described below in the tabular format
mandated by the SEC. All share amounts have been re-stated to give effect to
stock dividends and splits.
7
SUMMARY COMPENSATION TABLE
The following table summarizes all compensation earned in the past
three years for services performed in all capacities for Peapack-Gladstone and
its subsidiaries with respect to the named executive officers.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------- --------------------------------
RESTRICTED SECURITIES UNDER-
STOCK LYING OPTIONS/ ALL OTHER
NAME AND YEAR SALARY ($) BONUS ($) AWARDS ($) SARS(#) COMPENSATION
PRINCIPAL POSITION ($)(1)(2)
-------------------------- ---------- ------------- ------------- ----------- -------------------- -----------------------
Frank A. Kissel, 2002 275,778 115,000 -- -- 16,761
CHAIRMAN OF THE 2001 249,765 110,000 -- 4,400 14,299
BOARD AND CEO OF 2000 239,615 98,000 -- -- 14,861
PEAPACK-GLADSTONE AND
THE BANK
Craig C. Spengeman, 2002 200,904 40,000 -- -- 18,211
PRESIDENT OF PGB 2001 151,381 35,000 -- 5,500 14,973
TRUST AND INVESTMENTS 2000 131,838 26,400 -- 1,050 13,810
AND EXECUTIVE VICE
PRESIDENT OF
PEAPACK-GLADSTONE
Robert M. Rogers, 2002 175,856 35,000 -- -- 16,921
PRESIDENT AND COO OF 2001 124,765 25,000 -- 5,500 12,866
PEAPACK-GLADSTONE AND 2000 115,065 23,000 -- -- 13,009
THE BANK
Arthur F. Birmingham 2002 149,675 30,000 -- -- 10,740
EXECUTIVE VICE 2001 109,615 35,000 -- 3,300 7,872
PRESIDENT AND CFO OF 2000 99,915 20,000 -- -- 8,053
PEAPACK-GLADSTONE AND
THE BANK
Garrett P. Bromley,
EXECUTIVE VICE 2002 123,899 26,400 -- -- 13,033
PRESIDENT OF THE BANK 2001 109,958 22,000 -- 3,300 11,227
2000 105,182 21,000 -- -- 11,946
-------------------------
NOTES:
(1) Consists of contributions made to Peapack-Gladstone's Savings and
Profit Sharing Plan of $12,313 for Frank A. Kissel, $12,201 for Craig
C. Spengeman, $10,689 for Robert M. Rogers, $9,204 for Arthur F.
Birmingham, $7,464 for Garrett P. Bromley and imputed income arising
from Bank Owned Life Insurance Agreements of $735 for Frank A. Kissel,
$372 for Craig C. Spengeman, $264 for Robert M. Rogers, $373 for Arthur
F. Birmingham and $531 for Garrett P. Bromley.
(2) Includes taxable income relating to the use of corporate owned
automobile.
8
STOCK OPTION GRANTS IN 2002
No stock options were granted in 2002 with respect to the named
executive officers.
AGGREGATED OPTION EXERCISES IN 2002 AND YEAR-END OPTION VALUE
The following table shows options exercised, if any, during 2002, and
the value of unexercised options held at year-end 2002, by the named executive
officers. Peapack-Gladstone did not use SARs as compensation in 2002.
AGGREGATED OPTION/SAR EXERCISES IN THE
LAST FISCAL YEAR AND FY-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FISCAL FISCAL
YEAR-END (#) YEAR-END ($)
---------------------- -----------------------
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
------------------------- ------------------ ------------------ ---------------------- -----------------------
Frank A. Kissel 4,000 117,680 30,769/22,013 628,384/274,586
Craig C. Spengeman 2,200 47,894 18,469/7,035 386,210/102,768
Robert M. Rogers 2,000 59,260 16,607/6,341 339,509/90,491
Arthur F. Birmingham 2,832 31,024 11,211/4,581 195,301/59,215
Garrett P. Bromley 1,020 16,483 15,285/4,581 288,840/59,215
SAVINGS AND PROFIT SHARING PLANS
Peapack-Gladstone 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 with at least twelve 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 of their pay to their
elective account via payroll withholding. Peapack-Gladstone adds a matching
contribution equal to fifty percent 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's common
stock.
PENSION PLAN
Peapack-Gladstone sponsors a non-contributory defined benefit pension
plan that covers substantially all of Peapack-Gladstone's salaried employees.
The benefits are based on an employee's compensation, age at retirement and
years of service. It is the policy of Peapack-Gladstone to fund not less than
the minimum funding amount required by the Employee Retirement Income Security
Act.
9
The following table sets forth the estimated annual benefits that an
eligible employee would receive under Peapack-Gladstone's qualified defined
benefit pension plan, assuming retirement age at 65 in 2002 and a straight life
annuity benefit, for the remuneration levels (subject to an annual compensation
limit of $200,000) and years of service shown.
YEARS OF CREDITED SERVICE
------------------------------------------------------------------------
REMUNERATION 10 15 20 25 30
----------------------------- ----------- --------- ---------- ---------- -----------
$50,000 $ 11,319 $ 16,961 $ 22,537 $ 28,113 $ 30,556
100,000 25,504 38,360 51,636 64,912 69,356
150,000 39,689 59,759 80,735 101,711 108,156
200,000 and higher 53,874 81,159 109,835 138,511 146,956
Messrs. Kissel, Spengeman, Rogers, Birmingham and Bromley have
approximately 14, 18, 16, 6 and 5 years of credited service, respectively, under
the pension plan as of January 1, 2002, and at age 65, would have 28, 37, 38, 21
and 13 years of credited service, respectively.
EMPLOYMENT AGREEMENTS
Peapack-Gladstone and the Bank entered into Employment Agreements with
Frank A. Kissel, Craig C. Spengeman, Robert M. Rogers and Arthur F. Birmingham
as of January 1, 2002 for a period of three years to expire on December 31,
2004.
The Employment Agreements provide, among other things, for (I) an
annual base salary, (II) annual increases to base salary, and (III) bonus
payments with respect to each calendar year based on budgeted goals. If the
Executive's employment is terminated without cause, Peapack-Gladstone shall pay
the Executive's base salary for a period equal to the longer of (A) the
remainder of the term, or (B) one year from the effective date of such
termination. The Employment Agreements also include certain non-compete and
non-solicitation provisions, which extend for two years following the
executive's termination of employment.
CHANGE-IN-CONTROL ARRANGEMENTS
Peapack-Gladstone and the Bank entered into Change-in-Control
Agreements with Frank A. Kissel, Craig C. Spengeman, Robert M. Rogers and Arthur
F. Birmingham as of January 1, 1998 and with Garrett P. Bromley as of April 3,
1998, each of which provide for termination benefits in the event of a change in
control of Peapack-Gladstone (as defined in the agreements). Pursuant to the
agreements, under certain circumstances, Peapack-Gladstone 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 agreements have
cut-back provisions so that the payments 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 Peapack-Gladstone's executive officers, directors and
persons who own more than ten percent of a registered class of
Peapack-Gladstone's common stock, file reports of ownership and changes in
ownership with the SEC. Based upon
10
copies of reports furnished by insiders, all Section 16(a) reporting
requirements applicable to insiders during 2002 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
Peapack-Gladstone. Members of the Compensation Committee are Anthony J. Consi,
II, F. Duffield Meyercord, Edward A. Merton, Robert M. Rogers, 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
Emeritus, Frank A. Kissel, Chairman & Chief Executive Officer and Robert M.
Rogers, President and Chief Operations Officer, have no input regarding their
own compensation which is determined by the remaining Directors.
During 2002, 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 Peapack-Gladstone. In addition, during 2002 the Bank paid Merton
Excavating Company for contracting work, whose Principal is Edward A. Merton, a
director and shareholder of Peapack-Gladstone.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In addition to the matters discussed above under the caption
"Compensation Committee Interlocks and Insider Participation," directors and
officers and their associates were customers of and had transactions with the
Bank subsidiary during the year ended December 31, 2002, 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
Peapack-Gladstone, did not involve more than normal risks of collectibility or
present other unfavorable features.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report was prepared by the Compensation Committee of
Peapack-Gladstone regarding executive compensation policy and its relation to
Peapack-Gladstone'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 Peapack-Gladstone.
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 Peapack-Gladstone 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 LLP
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 2002, Mr. Frank A. Kissel served as Chairman and Chief Executive
Officer of the Bank and Chairman and Chief Executive Officer of
Peapack-Gladstone. Mr. Kissel's base salary for 2002 was set by the Board based
on his performance in executing his responsibilities in those positions in 2001
and the performance anticipated from him in 2002 and future years. The Board
also considered the objectives set by the Committee for 2002, the overall
performance of Peapack-Gladstone and Mr. Kissel's ability to develop and
motivate employees to
11
meet Peapack-Gladstone's short and long-term objectives. Mr. Kissel's 2002 bonus
was based on the completion of specified corporate projects for 2002 within a
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. Mr. Kissel was not awarded stock options in 2002.
With respect to 2002 compensation for executive 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 Peapack-Gladstone and of the particular officer in 2001, and the
performance anticipated from the officer in 2002 and future years. Bonuses for
each executive officer were set based on goals set for the executive officer and
for Peapack-Gladstone as a whole. The Chief Executive Officer set goals for each
executive officer. During 2002, other named executive officers did not receive
qualified incentive stock options.
Based upon current levels of compensation, Peapack-Gladstone is not
affected by the provisions of Section 162(m) of the Interval Revenue Code which
limits the deductibility of compensation above $1 million for each of the five
highest paid officers of the Company. Certain forms of compensation are exempt
from this deductibility limit, primarily performance based compensation which
has been approved by shareholders. Compensation under the prior stock option
plan and the 2002 Stock Incentive Plan (but not restricted stock awards) is
expected to be exempt.
Detailed information relating to the named executive officers is shown
in the compensation tables above.
ANTHONY J. CONSI, II
T. LEONARD HILL
FRANK A. KISSEL
EDWARD A. MERTON
F. DUFFIELD MEYERCORD, CHAIRMAN
ROBERT M. ROGERS
JACK D. STINE
12
PERFORMANCE GRAPH
The following graph compares the cumulative total return on a
hypothetical $100 investment made on January 1, 1998 in: (a) Peapack-Gladstone's
common stock: (b) the Standard and Poor's ("S&P") 500 Stock Index; and (c) the
Keefe, Bruyette & Woods KBW 50 Index. 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
(stock or cash) and increases or decreases in the market price of the stock.
[TOTAL RETURN PERFORMANCE GRAPH GOES HERE]
PERIOD ENDING
----------------------------------------------------------------------
INDEX 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
----------------------------------------------------------------------------------------------------------------
Peapack-Gladstone Financial Corp. $100.00 $142.59 $124.81 $130.59 $121.69 $228.89
S&P 500 100.00 128.55 155.60 141.42 124.63 96.95
KBW 50 100.00 108.28 104.52 125.48 120.31 112.00
THE AUDIT COMMITTEE
Peapack-Gladstone has a standing Audit Committee. Each member of the
Audit Committee is independent, as that term is defined in the listing standards
of the American Stock Exchange relating to audit committees.
REPORT OF THE AUDIT COMMITTEE
To the Board of Directors of Peapack-Gladstone Financial Corporation:
We have reviewed and discussed with management the Company's audited financial
statements as of and for the year ended December 31, 2002.
13
We have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, COMMUNICATION WITH AUDIT
COMMITTEES, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from the
independent auditors required by Independence Standard No. 1, INDEPENDENCE
DISCUSSIONS WITH AUDIT COMMITTEE, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the year ended December 31,
2002.
THE AUDIT COMMITTEE
ANTHONY J. CONSI, II, CHAIRMAN
JOHN R. MULCAHY
PHILIP W. SMITH, III
JACK D. STINE
March 10, 2003
RECOMMENDATION AND VOTE REQUIRED ON PROPOSAL 1
Directors will be elected by a plurality of the votes cast at the
Annual Meeting, whether in person or by proxy. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINATED SLATE OF DIRECTORS INCLUDED IN
PROPOSAL 1.
PROPOSAL 2 -- AMENDMENT TO CERTIFICATE OF INCORPORATION
INCREASING THE NUMBER OF COMMON SHARES
AUTHORIZED TO BE ISSUED
GENERAL
On December 12, 2002, the Board of Directors unanimously approved an
amendment (the "Amendment") to Article III of the Corporation's Certificate of
Incorporation (the "Certificate") to increase the authorized common stock of
Peapack-Gladstone to 20 million shares from the presently authorized 10 million
shares.
As of the record date for the Annual Meeting, 6,704,984 shares of
common stock were outstanding. Of the authorized but unissued shares of
Peapack-Gladstone's common stock, 339,144 shares of common stock were reserved
for issuance Peapack-Gladstone's stock option plans.
The purpose of the Amendment is to maximize Peapack-Gladstone's ability
to expand its capital base. The full text of the proposed Amendment is attached
to this Proxy Statement as Appendix A. The following description of the
Amendment is qualified in its entirety by reference to Appendix A.
PURPOSE OF THE PROPOSAL
While Peapack-Gladstone may consider effecting an equity offering of
common stock in the future for the purposes of raising additional working
capital or otherwise, Peapack-Gladstone, as of the date hereof, has no
agreements or understandings with any third party to effect any such offering
and no assurances are given that any offering will in fact be effected. If the
issuance of shares is deemed advisable by the Board, having the authority to
issue the additional shares of common stock would avoid the time delay and
expense of a special shareholders' meeting to authorize the issuance of common
stock. No further action or authorization by Peapack-Gladstone's shareholders
would be necessary prior to issuance of such stock, except as may be required
for a particular transaction by applicable law or regulation,
14
including but not limited to the listing regulations of the American Stock
Exchange which may require approval under certain circumstances.
The additional shares of common stock to be authorized by the proposed
Amendment will be identical to the shares of common stock now authorized and
outstanding, and the Amendment will not affect the terms and rights of the
holders of those shares.
POSSIBLE ADVERSE EFFECTS AND POSSIBLE ANTI-TAKEOVER EFFECTS OF THE PROPOSAL
When in the judgment of the Board of Directors such action would be in
the best interests of the shareholders and Peapack-Gladstone, the issuance of
shares of common stock could be used to create voting or other impediments or to
discourage persons seeking to gain control of Peapack-Gladstone, for example, by
the sale of common stock to purchasers favorable to the Board of Directors.
Issuance of common stock could also have the effect of diluting percentage
ownership, earnings per share and book value per share of the common stock held
by then existing holders of common stock.
RECOMMENDATION AND VOTE REQUIRED FOR ADOPTION OF PROPOSAL 2
In accordance with the New Jersey Business Corporation Act and
Peapack-Gladstone's Certificate, the affirmative vote of a majority of those
shares of common stock voting on this proposal is required to adopt the
Amendment. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL
2.
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.
The fees billed for services rendered for Peapack-Gladstone by KPMG LLP
for the year 2002 were as follows:
Audit Fees $ 107,200
Financial Information Systems Design and Implementation Fees -0-
Other Fees:
Audit of Retirement and 401(k) Plans 14,750
Other-Tax Services (Preparation and Consulting) 43,050
------------
Total Other Fees 57,800
------------
Total $ 165,000
============
The Audit Committee has considered whether the provision of the
services covered under the captions "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" above is compatible with maintaining
KPMG LLP's independence and has concluded that such provision of services is
compatible.
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 proposals, including shareholder
proposals, must be referred to in Peapack-Gladstone's notice of shareholders'
meeting for such proposal to be properly considered at a meeting of
Peapack-Gladstone.
15
Proposals of shareholders which are eligible under the rules of the SEC
to be included in Peapack-Gladstone's year 2004 proxy material must be received
by the Secretary of Peapack-Gladstone no later than November 24, 2003.
If Peapack-Gladstone changes its 2003 Annual Meeting date to a date
more than 30 days from the date of its 2003 Annual Meeting, then the deadline
referred to in the preceding paragraph will be changed to a reasonable time
before Peapack-Gladstone begins to print and mail its proxy materials. If
Peapack-Gladstone changes the date of its 2003 Annual Meeting in a manner that
alters the deadline, Peapack-Gladstone will so state under Item 5 of the first
quarterly report on Form 10-Q it files with the SEC after the date change or
notify its shareholders by another reasonable means.
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
FRANK A. KISSEL,
CHAIRMAN
Gladstone, New Jersey
March 24, 2003
PEAPACK-GLADSTONE'S ANNUAL REPORT FOR THE YEAR-ENDED DECEMBER 31, 2002
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.
16
APPENDIX A
AMENDMENT TO CERTIFICATE
The following would be added as Article III of Peapack-Gladstone's
Certificate of Incorporation.
ARTICLE III
CAPITAL STOCK
The aggregate number of shares which the corporation shall have
authority to issue is 20,000,000 shares of common stock, without nominal or par
value.
DELETIONS FROM CERTIFICATE
Article III of the Certificate, which presently reads as set forth
below, shall be deleted in its entirety.
ARTICLE III
CAPITAL STOCK
The aggregate number of shares which the corporation shall have
authority to issue is 10,000,000 shares of common stock, without nominal or par
value.
REVOCABLE PROXY
Peapack-Gladstone Financial Corporation
PLEASE MARK VOTES
AS IN THIS EXAMPLE
This Proxy is 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 Proxy, each with full power to appoint his
substitute and hereby authorizes them to represent and to vote, as designated
below, all of the shares of common stock of Peapack-Gladstone Financial
Corporation (The "Corporation"), standing in the undersigned's name at the
Annual Meeting of Shareholders of the Corporation to be held on April 22, 2003
at 2:00 p.m. or any adjournment thereof. The undersigned hereby revokes any and
all proxies heretofore given with respect to the meeting.
With- For
hold All
For Authority Except
1. Election of fourteen (14) Directors
Anthony J. Consi, II 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 Robert M. Rogers
Philip W. Smith, III Craig C. Spengeman Jack D. Stine
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
For Against Abstain
2. Approval of an amendment to Peapack-Gladstone's Certificate of Incorporation
to increase the authorized Common Stock of Peapack-Gladstone to 20 million
shares from the presently authorized 10 million shares.
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
This Proxy, when properly signed will be voted in the manner directed herein by
the undersigned shareholder. IF NO DIRECTION is made, this Proxy will be voted
"FOR" the election of all fourteen nominees for Director and "FOR" Proposal 2.
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING.
Please be sure to sign and date this Proxy in the box below.
Stockholder sign above
Detach above card, sign, date and mail in postage paid envelope provided.
Peapack-Gladstone Financial Corporation
158 Route 206 North, Gladstone, New Jersey 07934
Please sign exactly as names appear above. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full corporate names by President or other
authorized officer. If a partnership or limited liability company, please sign
in the entity name by an authorized person.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
If your address has changed, please correct the address in the space provided
below and return this portion with the proxy in the envelope provided.