April 7, 2010
Exhibit
10.3
April 7,
2010
Xxxxxxx
X. Xxxxxxx
Peapack-Gladstone
Financial Corporation
000 Xxxxx
000 Xxxxx
X.X. Xxx
000
Xxxxxxxxx,
XX 00000
Dear
Xxxxxxx,
As you
know, Peapack-Gladstone Financial Corporation (the “Company,” as further defined
below) has entered into a Securities Purchase Agreement, dated January 9, 2009 (the
“Participation Agreement”), with the United States Department of Treasury
(“Treasury”) that provides for the Company’s participation in the Treasury’s
TARP Capital Purchase Program (“CPP”).
As a
participant in the CPP, the Company is required to comply with certain
compensation limitations and restrictions with respect to its senior executive
officers compensation agreements and arrangements. To comply with
these requirements, and in consideration of the agreements and benefits provided
to you as a senior executive officer of the Company, including your Employment
Agreement and Change in Control Agreement with the Company dated the date
hereof, you agree as follows:
(1) No Golden Parachute
Payments. You agree that notwithstanding any provisions in any
agreement between you and the Company or its subsidiaries, the Company will not,
and will not be obligated to, make any golden parachute payments to you during
any “TARP period” to the extent the Company is prohibited from making such
payments to you under Section 111 of EESA and the CPP Compensation Regulations
issued thereunder. Without limiting or enlarging the foregoing but intending to
explain to you this limitation, “TARP period” is any period during which (A) you
are a senior executive officer of the Company, and (B) the United States
Treasury holds an equity or debt instrument acquired from the Company in the
CPP, other than any warrants to purchase common stock of the
Company. Without limiting or enlarging the foregoing the foregoing
but intending to explain to you the limitation, golden parachute payments
generally are any payments due you on your ceasing to be employed by the Company
for any reason including any Company contract or benefit plan, except for
payments for services performed or benefits accrued.
(2) Recovery of Bonus and
Incentive Compensation. Any bonus and/or incentive
compensation paid to you during a TARP period is subject to recovery or
“clawback” by the Company if the payments were based on materially inaccurate
financial statements or any other materially inaccurate performance metric
criteria.
(3) Compensation Program
Amendments. Each of the Company’s compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including, but
not limited to, golden parachute, severance and employment agreements)
(collectively, “Benefit Plans”) with respect to you is hereby amended
(notwithstanding any contrary language within such Benefit Plans) to the extent
necessary to give effect to provisions (1) and (2) above.
In
addition, the Company is required to review its Benefit Plans to ensure that
they do not encourage senior executive officers to take unnecessary and
excessive risks that threaten the value of the Company. To the extent
any such review requires revisions to any Benefit Plan with respect to you, you
and the Company hereby agree to execute such additional documents as the Company
deems necessary to effect such revisions.
(4) Definitions and
Interpretation. This letter shall be interpreted as follows:
“Senior
executive officer” means the Company’s “senior executive officers” as defined in
the CPP Compensation Regulations.
34
“Golden
parachute payment” has the meaning in the CPP Compensation
Regulations.
“EESA”
means the Emergency Economic Stabilization Act of 2008 as amended by the
American Recovery and Reinvestment Act of 2009.
CPP
Compensation Regulations means the TARP Standards for Compensation and Corporate
Governance published by the Department of the Treasury on June 15, 2009 and
existing on the date hereof as 31 CFR part 30 and includes any interpretations
thereunder issued pursuant to the authority of the Department of the Treasury
under EESA. .
The term
“Company” includes any entities included in the definition of the Company as a
TARP Recipient under the CPP Compensation Regulations.
Provisions
(1) and (2) of this letter are intended to, and will be interpreted,
administered and construed to comply with Section 111 of EESA and the CCP
Compensation Regulations as such exist on the date hereof to the maximum extent
consistent with the preceding, to permit operation of any Benefit Plans in
accordance with their terms before giving effect to this letter.
This
agreement will be governed by the laws of the State of New Jersey, except to the
extent that federal law controls.
The
Company’s Board of Directors appreciates the concessions you are making and
looks forward to your continued leadership.
|
Very
truly yours,
|
|
|
Peapack-Gladstone
Financial Corporation
|
|
|
By:
|
/s/
Xxxxx X. Xxxxxx
|
|
Name:
Xxxxx X. Xxxxxx
|
|
|
Title:
Chairman/CEO
|
|
Intending
to be legally bound, I hereby
agree
with, acknowledge the sufficiency
of
consideration for, and accept the foregoing terms.
/s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx
X. Xxxxxxx
Dated:
April 7, 2010
35
