Exhibit 10.2


                     PEAPACK-GLADSTONE FINANCIAL CORPORATION
                  2002 Stock Option Plan for Outside Directors
                     (Adopted by Directors January 10, 2002)
                    (Adopted by Shareholders April 23, 2002)
              (Amended and Restated by Directors December 8, 2005)

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1.    Purpose

      The purpose of the  Peapack-Gladstone  Corporation  (the  "Company")  2002
      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) The Plan will be  administered  by the  Compensation  Committee of the
      Board of Directors (the  "Committee").  The Committee shall consist solely
      of two or more  Non-Employee  Directors,  as such term is  defined in Rule
      16b-3(b)(3)  of the Exchange  Act. The  Committee  may, from time to time,
      recommend the grant of options to the outside  directors  (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 an
      employee  of the  Company)  under this Plan in such  numbers and upon such
      terms as it deems  appropriate,  but all grants  must be  approved  by the
      Company's Board of Directors.

      (b)  Option  Price.  The  purchase  price  per share of the  Common  Stock
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      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 (d) of this Section 2 and in no event below the par value
      of the Common Stock on the Date of Grant.

      (c) Ineligibility. An option under the Directors' Option Plan shall not be
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      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.

      (d) Fair Market Value.  For purposes of the Directors'  Option Plan,  when
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      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
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      agreement  between the Company and the recipient  specifying the number of
      shares of Common  Stock that may be  acquired

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      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) hereof shall
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      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  and the  remaining  four  annual
      installments  will vest on successive  anniversary  dates, but only if the
      optionee  continues  to serve as an outside  director  at such  applicable
      vesting date, unless otherwise provided in this Plan.  Notwithstanding the
      foregoing,  the Committee may accelerate the vesting and exercisability of
      any option or portion thereof at any time.

      (c) Manner of Exercise.  The option when exercisable may be exercised from
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      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(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(d) above.

      (d)  Transferability.  Each option granted hereby may be exercised only by
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      the  recipient  to whom  it is  issued,  or in the  event  of the  outside
      director's  death,  his or her legal  representative  or  successor(s)  in
      interest pursuant to the terms of section 3(e) hereof.

      (e) Termination of Service.  Upon the termination of a recipient's service
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      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 or within  12  months  after 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 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

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            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  shall be  distributed  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;  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 Direct ors 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
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      (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 40,000 shares of the Common Stock of the Company,  no par value
      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.    Effective Date of the Plan; Shareholder Ratification

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      This Plan was  approved by the Board of  Directors on January 10, 2002 and
      shall become  effective on such date if it is approved by the Shareholders
      by a  majority  of the  votes  cast on such  proposal  at the 2002  Annual
      Meeting if a quorum is present.

6.    Termination of the Plan

      The right to grant options under the Directors' Option Plan will terminate
      automatically  upon the earlier of ten years after the  Effective  Date of
      the Plan or the  issuance of 40,000  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  Sections 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 is subject to 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 or as otherwise may be required  under  applicable New Jersey law,
      then subject to the  discretion  of the Board of Directors of the Company,
      such amendment shall be presented to shareholders for approval;  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.