Exhibit 10.3
PEAPACK-GLADSTONE EMPLOYMENT AGREEMENT
OF XXXXXX XXXXXX
This EMPLOYMENT AGREEMENT (this "Agreement") is as of January 1, 2007,
by and between Peapack-Gladstone Financial Corporation ("PGFC") and
Peapack-Gladstone Bank (the "Bank") (PGFC and the Bank are collectively referred
to herein as the "Company"), and Xxxxxx Xxxxxx (the "Executive"), whose home
address is 00 Xxxxxxx Xxxx, Xxxx Xxxxxx, XX 00000.
WITNESSETH:
WHEREAS, the Executive is willing to continue to serve as the President
and Chief Operating Officer of the Company and the Company desires to retain the
Executive in that capacity on the terms and conditions herein set forth; and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
Section 1. Term of Employment. This Agreement shall be effective as of
the date hereof and, subject to earlier termination as specified herein, shall
continue until December 31, 2007 (the "Term").
Section 2. Position and Duties. During the Term, the Executive shall
serve as the President and Chief Operating Officer of the Company. The Executive
shall have such powers and duties as are commensurate with such position and as
may be conferred upon him by the Board of Directors of the Company (the
"Board"). During the Term, the Executive shall devote all of his business time,
attention, skill and efforts exclusively to the business and affairs of the
Company and its subsidiaries. Notwithstanding the foregoing, the Executive may
engage in charitable, educational, religious, civic and similar types of
activities, speaking engagements, membership on the board of directors of other
organizations, and similar activities to the extent that such activities do not
inhibit the performance of his duties hereunder or conflict in any material way
with the business of the Company and its subsidiaries.
Section 3. Compensation. For all services rendered by the Executive in
any capacity required hereunder during the Term, including, without limitation,
services as an executive officer, director, or member of any committee of the
Company or any of its subsidiaries, the Executive shall be compensated as
follows:
(a) The Company shall pay the Executive a fixed salary at a rate per
annum equal to $204,846.99 ("Base Salary"). Base Salary shall be payable
bi-weekly.
(b) The Executive shall be eligible to receive a bonus with respect to
the Term. The amount, terms and conditions of such bonus shall be determined in
due course by the Board.
(c) The Executive shall be entitled to five weeks of vacation in each
calendar year during the Term. The Executive shall not be entitled to carryover
vacation from one year to another or to any payment in respect of any unused
vacation.
(d) The Executive shall be entitled to participate in all compensation
and employee benefit plans for which any salaried employees of the Company are
eligible. Notwithstanding the foregoing, nothing in this Agreement shall
preclude the amendment or termination of any such plan or program.
Section 4. Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable entertainment, travel or other expenses incurred by
the Executive in connection with the performance of his duties under this
Agreement, subject to the Executive's presentation of appropriate documentation
in accordance with such procedures as the Company may from time to time
establish.
Section 5. Termination of Employment.
(a) The Company shall have the right, upon delivery of written notice
to the Executive, to terminate the Executive's employment hereunder prior to the
expiration of the Term:
(i) pursuant to a Termination for Cause, or
(ii) upon the Executive's Permanent Disability, or
(iii) pursuant to a Without Cause Termination.
(b) The Executive shall have the right, upon delivery of written notice
to the Company 30 days in advance of the proposed termination date, to terminate
the Executive's employment hereunder prior to the expiration of the Term in the
Executive's sole discretion.
(c) The Executive's employment hereunder shall terminate automatically
without action by any party hereto upon the Executive's death.
(d) For purposes of this Agreement, the following terms have the
following meanings:
"Termination for Cause" means a termination of the Executive's
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employment by the Company because the Executive has (a) materially
failed to perform the duties assigned to him hereunder or imposed upon
him by applicable law, and such failure to perform constitutes
self-dealing, willful misconduct or recklessness, (b) committed an act
of dishonesty in the performance of his duties hereunder or engaged in
conduct materially detrimental to the business of the Company, (c) been
convicted of a felony or a misdemeanor involving moral turpitude, (d)
materially failed to perform his duties hereunder, which breach or
failure the Executive shall fail to remedy within 30 days after written
demand from the Company, (e) knowingly failed to follow lawful, written
directives of the Board, or (f) engaged in any material employment act
or practice, including but not limited to sexual harassment, forbidden
by the Company in its employment manual as revised from time to time.
"Without Cause Termination" means a termination of the
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Executive's employment by the Company other than due to Permanent
Disability, retirement or expiration of the Term and other than a
Termination for Cause.
"Permanent Disability" means permanently disabled so as to
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qualify for full benefits under the Company's then-existing disability
insurance policy. If the Company does not maintain any such policy on
the date of termination, "Permanent Disability" shall mean the
inability of the Executive to work for a period of four full calendar
months during any eight consecutive calendar months due to illness or
injury of a physical or mental nature, supported by the completion by
the Executive's attending physician of a medical certification form
outlining the disability and treatment.
Section 6. Benefits Upon Termination.
(a) In lieu of any severance that may otherwise be payable to the
Executive pursuant to any policies of the Company, whether existing on the date
hereof or in effect from time to time hereafter, in the event that the Company
terminates the Executive's employment pursuant to a Without Cause Termination,
the Company shall continue to pay the Executive's Base Salary for a period (the
"Severance Period") equal to the longer of (A) the remainder of the Term, or (B)
one year from the effective date of such termination. The Executive also shall
be entitled to any earned but unpaid Base Salary as of the effective date of
termination of employment. No other payments shall be made, or benefits
provided, by the Company under this Agreement except as otherwise required by
law or the Company's benefit plans.
(b) In the event that the Company terminates the Executive's employment
pursuant to a Permanent Disability, the Company shall pay the Executive any
earned but unpaid Base Salary as of the date of termination of employment. No
other payments shall be made, or benefits provided, by the Company under this
Agreement except as otherwise required by law or the Company's benefit plans.
(c) In the event that the Company terminates the Executive's employment
pursuant to a Termination for Cause or the Executive terminates his employment
with the Company (including, without limitation, pursuant to any retirement),
the Company shall pay the Executive any earned but unpaid Base Salary as of the
date of termination of employment. No other payments shall be made, or benefits
provided, by the Company under this Agreement or otherwise except to the extent
required by law or the Company's benefit plans.
(d) In the event that the Executive's employment hereunder is
terminated due to the Executive's death, the Company shall pay the Executive's
executor or other legal representative (the "Representative") any earned but
unpaid Base Salary as of the date of termination of employment. No other
payments shall be made, or benefits provided, by the Company whether under this
Agreement or otherwise except to the extent required by law or the Company's
benefit plans.
(e) Any payments to be made or benefits to be provided by the Company
pursuant to this Section 6 (other than in the event of the Executive's death or
Permanent Disability) are subject to the receipt by the Company of an effective
general release and agreement not to xxx,
in a form reasonably satisfactory to the Company and the Executive (the
"Release") pursuant to which the Executive agrees (i) to release all claims
against the Company and certain related parties (excluding claims for (x)
indemnification under the Company's Certificate of Incorporation or by-laws or
(y) any severance benefits payable hereunder), (ii) not to maintain any action,
suit, claim or proceeding against the Company, its subsidiaries and affiliates
and certain related parties, and (iii) to be bound by certain confidentiality
and mutual non-disparagement covenants specified therein. Notwithstanding the
due date of any post-employment payment, the Company shall not be obligated to
make any payments under this Section 6 until after the expiration of any
revocation period applicable to the Release.
(f) The Executive shall not be required to mitigate the severance
payments to be made to him hereunder and if the Executive obtains other
employment while receiving severance payments hereunder he shall continue to be
entitled to the benefits of this Agreement.
Section 7. Confidential Information. The Executive and the Company
agree that all information pertaining to the affairs, business, clients, or
customers of the Company or any of its subsidiaries, other than information that
the Company has previously made publicly available, is confidential information
belonging to the Company and is a unique and valuable asset of the Company. Both
during the Term hereof and thereafter, the Executive shall not, except to the
extent reasonably necessary in the performance of his duties for the Company
during the Term, disclose any information concerning the affairs, businesses,
clients, or customers of the Company or its subsidiaries, or make use of any
such information for his own purposes or for the benefit of any other person,
firm, or corporation. All records, memoranda, letters, books, papers, reports,
or other data, and other records and documents relating to the Company or its
subsidiaries, whether made by the Executive or otherwise coming into his
possession, shall remain the property of the Company, no copies thereof shall be
made which are not retained by the Company, and the Executive agrees, on
termination of his employment not to retain any copies and deliver all such
confidential information in his possession to the Company.
Section 8. Non-Compete; Non-Solicitation.
(a) During the period (the "Restricted Period") commencing on the
termination of his employment for any reason whatsoever, except in the event of
Change in Control, during the Term and ending one year thereafter, the Executive
shall not, without express prior written consent of the Company, directly or
indirectly, own or hold any proprietary interest in, or be employed by or
receive remuneration from, any corporation, partnership, sole proprietorship or
other entity (collectively, an "entity") "engaged in competition" (as defined
below) with the Company or any of its subsidiaries (a "Competitor"). For
purposes of the preceding sentence, (i) the term "proprietary interest" means
direct or indirect ownership of an equity interest in an entity other than
ownership of less than 2 percent of any class stock in a publicly-held entity,
and (ii) an entity shall be considered to be "engaged in competition" if such
entity is, or is a holding company for or a subsidiary of an entity which is
engaged in the business of (A) providing banking, trust services, asset
management advice, or similar financial services to consumers, businesses
individuals or other entities, and (B) the entity, holding company or subsidiary
maintains any physical offices for the transaction of such business located
within 50 miles of the main office of the Company.
(b) During the Restricted Period, and for a period of one year
thereafter, the Executive shall not, without express prior written consent of
the Company, solicit or assist any other person in soliciting for the account of
any Competitor, any customer or client of the Company or any of its
subsidiaries.
(c) During the Restricted Period, and for a period of one year
thereafter, the Executive shall not, without the express prior written consent
of the Company, directly or indirectly, (i) solicit or assist any third party in
soliciting for employment any person employed by the Company or any of its
subsidiaries at the time of the termination of the Executive's employment
(collectively, "Employees"), (ii) employ, attempt to employ or materially assist
any third party in employing or attempting to employ any Employee, or (iii)
otherwise act on behalf of any Competitor to interfere with the relationship
between the Company or any of its subsidiaries and their respective Employees.
(d) The Executive acknowledges that the restrictions contained in this
Section 8 are reasonable and necessary to protect the legitimate interests of
the Company and that any breach by the Executive of any provision contained in
this Section 8 will result in irreparable injury to the Company for which a
remedy at law would be inadequate. Accordingly, the Executive acknowledges that
the Company shall be entitled to temporary, preliminary and permanent injunctive
relief against the Executive in the event of any breach or threatened breach by
the Executive of the provisions of this Section 8, in addition to any other
remedy that may be available to the Company whether at law or in equity. With
respect to any provision of this Section 8 finally determined by a court of
competent jurisdiction to be unenforceable, such court shall be authorized to
reform this Agreement or any provision hereof so that it is enforceable to the
maximum extent permitted by law. If the covenants of Section 8 are determined to
be wholly or partially unenforceable in any jurisdiction, such determination
shall not be a bar to or in any way diminish the Company's right to enforce such
covenants in any other jurisdiction and shall not bar or limit the
enforceability of any other provisions.
(e) The provisions of this Section 8 shall survive the termination of
the Executive's employment with the Company for any reason whatsoever so long as
the termination of employment occurs during the Term. If there is no termination
of Executive's employment during the Term, the provisions of this Section 8
shall expire and be of no further force and effect after the Term. The Company
shall not be required to post any bond or other security in connection with any
proceeding to enforce the provisions of this Section 8.
Section 9. Withholdings. The Company may directly or indirectly
withhold from any payments made under this Agreement all Federal, State, City or
other taxes and all other deductions as shall be required pursuant to any law or
regulation or pursuant to any contributory benefit plan maintained by or on
behalf of the Company.
Section 10. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be given in writing and
shall be deemed to have been duly given if delivered or mailed, postage prepaid,
by same day or overnight mail (i) if to the Executive, at the address set forth
above, or (ii) if to the Company, as follows:
Xxxxx X. Xxxxxx, Chairman & CEO
Peapack-Gladstone Bank
000 Xxxxx 000 Xxxxx
Xxxxxxxxx, XX 00000
or to such other address as either party shall have previously specified in
writing to the other.
Section 11. Binding Agreement; Assignment. This Agreement shall be
binding upon and shall inure to the benefit of, the Executive and the Company
and its successors and permitted assigns. This Agreement is personal to the
Executive and may not be assigned by him. The Company may assign its rights and
obligations under this Agreement in connection with a sale of all or
substantially all of the business of PGFC or the Bank. Any successor to the
Company by merger or consolidation shall be entitled to the benefits of this
Agreement.
Section 12. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New Jersey,
without reference to the choice of law principles thereof.
Section 13. Dispute Resolution. At the option of either the Company or
the Executive, any dispute, controversy or question arising under, out of or
relating to this Agreement, the Executive's employment or termination of
employment, including but not limited to any and all statutory claims involving
workplace discrimination or wrongful discharge, but excluding claims pursuant to
Sections 7 or 8 hereof, shall be referred for decision by arbitration in the
State of New Jersey by a neutral arbitrator mutually selected by the parties
hereto. Any arbitration proceeding shall be governed by the Rules of the
American Arbitration Association then in effect or such last in effect (in the
event such Association is no longer in existence). If the parties are unable to
agree upon such a neutral arbitrator within 21 days after either party has given
the other written notice of the desire to submit the dispute, controversy or
question for decision as aforesaid, then either party may apply to the American
Arbitration Association for a final and binding appointment of a neutral
arbitrator; however, if such Association is not then in existence or does not
act in the matter within 45 days of any such application, either party may apply
to a judge of the local court where the Bank is headquartered for an appointment
of a neutral arbitrator to hear the parties and such judge is hereby authorized
to make such appointment. In the event that either party exercises the right to
submit a dispute, controversy or question arising hereunder to arbitration, the
decision of the neutral arbitrator shall be final, conclusive and binding on all
interested persons and no action at law or in equity shall be instituted or, if
instituted, further prosecuted by either party other than to enforce the award
of the neutral arbitrator. The award of the neutral arbitrator may be entered in
any court that has jurisdiction. The Executive and the Company shall each bear
all their own costs (including the fees and disbursements of counsel) incurred
in connection with any such arbitration and shall each pay one-half of the costs
of any arbitrator.
Section 14. Entire Agreement. This Agreement shall constitute the
entire agreement among the parties with respect to the matters covered hereby
and shall supersede all previous written, oral or implied understandings among
them with respect to such matters.
Section 15. Amendments. This Agreement may only be amended or otherwise
modified, and compliance with any provision hereof may only be waived, by a
writing executed by
all of the parties hereto. The provisions of this Section 15 may only be amended
or otherwise modified by such a writing.
Section 16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which shall together be deemed to constitute one and the same instrument.
Section 17. Effect on Change-in-Control Agreement. Notwithstanding
anything else to the contrary in this Agreement, if the Change-in-Control
Agreement between the Company and the Executive, dated as of December 11, 2003,
becomes effective under Section 13b thereof due to a Change-in-Control of the
Company (as defined therein), while the Executive remains employed by the
Company, this Agreement, including, without limitation, Sections 7 and 8 hereof,
shall no longer be effective in any respect but instead the relationship between
the Executive and the Company shall be governed by the Change-in-Control
Agreement. If the Executive is terminated prior to a Change-in-Control of the
Company, then Sections 7 and 8 hereof shall survive the Change-in-Control in
accordance with the terms of Sections 7 and 8 hereof.
IN WITNESS WHEREOF, PGFC and the Bank have caused this Agreement to be
duly executed by the undersigned, thereunto duly authorized, and the Executive
has signed this Agreement, all as of the date first written above.
WITNESS PEAPACK-GLADSTONE FINANCIAL CORPORATION
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/s/ Xxxxxxxxxx Xxxxxx By: /s/ X. Xxxxxxxx Xxxxxxxxx
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Secretary
PEAPACK-GLADSTONE BANK
/s/ Xxxxxxxxxx Xxxxxx By: /s/ X. Xxxxxxxx Xxxxxxxxx
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Secretary
Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
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EXECUTIVE
