# EDGAR Filing Document

**Accession Number:** 0001050743
**File Stem:** 0000950170-23-008624
**Filing Date:** 2023-3
**Character Count:** 329711
**Document Hash:** 4e4d1b45eb4161feb5e2faa6ad2b5dfe
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-008624.hdr.sgml**: 20230317

**ACCESSION NUMBER**: 0000950170-23-008624

**CONFORMED SUBMISSION TYPE**: DEF 14A

**PUBLIC DOCUMENT COUNT**: 24

**FILED AS OF DATE**: 20230317

**DATE AS OF CHANGE**: 20230317

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PEAPACK GLADSTONE FINANCIAL CORP
- **CENTRAL INDEX KEY:** 0001050743
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMMERCIAL BANKS, NEC [6029]
- **IRS NUMBER:** 223537895
- **STATE OF INCORPORATION:** NJ
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** DEF 14A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-16197
- **FILM NUMBER:** 23742200

**BUSINESS ADDRESS:**
- **STREET 1:** 500 HILLS DRIVE
- **CITY:** BEDMINSTER
- **STATE:** NJ
- **ZIP:** 07921
- **BUSINESS PHONE:** 9082340700

**MAIL ADDRESS:**
- **STREET 1:** 500 HILLS DRIVE
- **CITY:** BEDMINSTER
- **STATE:** NJ
- **ZIP:** 07921

?xml version="1.0" encoding="ASCII"? DEF 14A

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

SCHEDULE 14A

**(Rule 14a-101)**

**INFORMATION REQUIRED IN PROXY STATEMENT**

**SCHEDULE 14A INFORMATION**

**Proxy Statement Pursuant to Section 14(a) of the Securities**

**Exchange Act of 1934** 

Filed by the Registrant ☒

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))**

☒ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material Pursuant to §240.14a-12

Peapack-Gladstone Financial Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☒ No fee required.

☐ Fee paid previously with preliminary materials.

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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PEAPACK-GLADSTONE FINANCIAL CORPORATION

**500 HILLS DRIVE** 

**<u>BEDMINSTER, NEW JERSEY 07921</u>** 

**NOTICE OF ANNUAL MEETING OF SHAREHOLDERS** 

**TO BE HELD ON TUESDAY, MAY 2, 2023**

**To Our Shareholders:** 

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Peapack-Gladstone Financial Corporation (the "Company") will be held online on Tuesday, May 2, 2023 at 10:00 a.m., Eastern time. Due to the public health concerns regarding the coronavirus (COVID-19), and well-being of our employees, directors and shareholders, the Annual Meeting will be held in a virtual format only. You will not be able to attend the Annual Meeting physically. At the meeting, shareholders will be asked to consider and vote:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.To elect thirteen directors to serve for a one-year term and until their successors shall have been duly elected and qualified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.To approve, on a non-binding basis, the compensation of the Company's named executive officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.To approve, on a non-binding basis, the frequency of future non-binding advisory votes on the compensation of the Company's named executive officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.To approve the amendment to the Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan to increase the number of shares available for issuance by 600,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.To ratify the appointment of Crowe LLP as the Company's independent registered public accounting firm for the year ending December 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.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 8, 2023 are entitled to receive notice of, and to vote at, the meeting.

You are urged to carefully read the attached proxy statement relating to the meeting.

Whether or not you expect to attend the virtual meeting, we urge you to exercise your right to vote as promptly as possible.

By Order of the Board of Directors

Heidi Smith

Corporate Secretary

Bedminster, New Jersey

March 17, 2023

**YOUR VOTE IS IMPORTANT.** 

**PLEASE SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED**

**OR VOTE BY TELEPHONE OR VIA THE INTERNET.**

**IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR**

**THE SHAREHOLDER MEETING TO BE HELD ON MAY 2, 2023**

**This Proxy Statement and our Annual Report on Form 10-K are available at** 

**http://www.edocumentview.com/PGC**

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**Peapack-Gladstone Financial Corporation**

**Proxy Statement**<br>

**Table of Contents**

---

| | |
|:---|:---|
| [<u>Attending the Meeting</u>](#attending_the_meeting) | 1 |
| [<u>Voting Information</u>](#voting_information) | 1 |
| [<u>Corporate Governance</u>](#corporate_governance) | 3 |
| [<u>Director Compensation</u>](#director_compensation) | 9 |
| [<u>Beneficial Ownership of Common Stock</u>](#beneficial_ownership_common_stock) | 10 |
| [<u>Proposal 1 – Election of Directors</u>](#proposal_1) | 11 |
| [<u>Proposal 2 – Advisory Vote on Compensation of Named Executive Officers.</u>](#proposal_2) | 13 |
| [<u>Proposal 3 – Frequency of Advisory Vote on Compensation of Named Executive Officers.</u>](#proposal_3) | 14 |
| [<u>Proposal 4 – Approval of the Amendment to Increase the Number of Shares Available For Issuance Under the Peapack-Gladstone 2021 Long-Term Incentive Plan by 600,000</u>](#proposal_4) | 15 |
| [<u>Proposal 5 – Ratification of the Appointment of the Independent Registered Public Accounting Firm</u>](#proposal_5). | 23 |
| [<u>Compensation Discussion and Analysis</u>](#compensation_discussion_and_analysis) | 26 |
| [<u>Compensation Committee Report</u>](#compensation_committee_report) | 40 |
| [<u>Executive Compensation</u>](#executive_compensation) | 42 |
| [<u>Delinquent Section 16(a) Reports</u>](#delinquent_section_16a_reports) | 54 |
| [<u>Transactions with Related Persons</u>](#transactions_with_related_persons) | 55 |
| [<u>Shareholder Proposals</u>](#shareholder_proposals) | 55 |
| [<u>Other Matters</u>](#or_matters) | 55 |
| [<u>Appendix - Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan</u>](#appendix) | A-1 |

---

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**PEAPACK-GLADSTONE FINANCIAL CORPORATION**

**500 HILLS DRIVE**

**BEDMINSTER, NEW JERSEY 07921** 

**PROXY STATEMENT** 

This proxy statement is furnished to the shareholders of Peapack-Gladstone Financial Corporation ("Peapack-Gladstone" or the "Company") 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 virtually on Tuesday, May 2, 2023 at 10:00 a.m., Eastern time.

Due to the public health concerns regarding the coronavirus (COVID-19) and to support the health and well-being of our employees, directors and shareholders, the Annual Meeting will be held in a virtual format only. You will not be able to attend the Annual Meeting physically.

This proxy statement is first being made available to shareholders on approximately March 17, 2023.

**ATTENDING THE MEETING**

The annual meeting will be a completely virtual meeting of shareholders, which will be conducted exclusively by webcast. No physical meeting will be held. You are entitled to participate in the annual meeting only if you were a shareholder of record of the Company as of the close of business on March 8, 2023 (a "Registered Holder"), if you are a beneficial holder and hold your shares through an intermediary, such as a bank or broker (a "Beneficial Holder") or if you hold a valid legal proxy for the Annual Meeting.

As a **Registered Holder**, you will be able to attend the Annual Meeting online, submit your questions online and vote by visiting <u>www.meetnow.global/MXDMD9G</u> and following the instructions on your Notice, proxy card, or on the instructions that accompanied your proxy materials.

If you are a **Beneficial Holder** and want to attend the Annual Meeting online (with the ability to submit your questions online and/or vote, if you choose to do so) you must submit proof of your proxy power from your broker or bank reflecting your Peapack-Gladstone Financial Corporation stock holdings ("Legal Proxy") along with your name and e-mail address to Computershare.

Requests for registration must be labeled as "Legal Proxy" and be received no later than 5:00 p.m., Eastern Time, on April 27, 2023. You will receive a confirmation of your registration by e-mail after we receive your registration materials.

Requests for registration should be directed to us at the following:

<u>By e-mail</u>: Forward the e-mail from your broker granting you a Legal Proxy, or attach an image of your Legal Proxy, to legalproxy@computershare.com.

<u>By mail</u>: Computershare

Peapack-Gladstone Financial Corporation Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

**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 8, 2023. 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, 17,826,405 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.

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**Delivery of Proxy Materials** 

The 2023 notice of annual meeting of shareholders, this proxy statement, the Company's 2022 annual report on Form 10-K and the proxy card or voting instruction form are referred to as our "proxy materials." Pursuant to the rules of the Securities and Exchange Commission (the "SEC"), we are furnishing our proxy materials to certain shareholders over the Internet. Most shareholders are receiving by mail a Notice of Internet Availability of Proxy Materials (an "E-Proxy Notice"), which provides general information about the annual meeting, the matters to be voted on at the annual meeting, the website where our proxy statement and annual report are available for review, downloading and printing, and instructions on how to submit proxy votes. The E-Proxy Notice also provides instructions on how to request a paper copy of the proxy materials and how to elect to receive either a paper copy or an electronic copy of the proxy materials for future meetings.

Shareholders that have previously elected to receive proxy materials via electronic delivery will receive an e-mail with the proxy statement, annual report and instructions on how to vote. Shareholders who previously elected to receive paper copies of the proxy materials will receive the proxy statement, annual report and instructions on how to vote.

**Householding**

When more than one holder of our common stock shares the same address, we may deliver only one E-Proxy Notice or set of proxy materials, as applicable, to that address unless we have received contrary instructions from one or more of those shareholders. Similarly, brokers and other intermediaries holding shares of our common stock in "street name" for more than one beneficial owner with the same address may deliver only one E-Proxy Notice or set of proxy materials, as applicable, to that address if they have received consent from the beneficial owners of the stock.

We will deliver promptly upon written demand or oral request a separate copy of the E-Proxy Notice or set of proxy materials, as applicable, to any shareholder of record at a shared address to which a single copy of those documents was delivered. To receive additional copies, you may write to or call Heidi Smith, Corporate Secretary of Peapack-Gladstone, 500 Hills Drive, Suite 300, P.O. Box 700, Bedminster, New Jersey 07921 or (908) 443-5386. If your shares are held in "street name," you should contact the broker or other intermediary who holds the shares on your behalf to request an additional copy of the E-Proxy Notice or proxy materials.

If you are a shareholder of record and are either receiving multiple E-Proxy Notices or multiple paper copies of the proxy materials, as applicable, and wish to request future delivery of a single copy or are receiving a single E-Proxy Notice or copy of the proxy materials, as applicable, and wish to request future delivery of multiple copies, please contact Heidi Smith, Corporate Secretary at the address or telephone number above. If your shares are held in "street name," you should contact the broker or other intermediary who holds the shares on your behalf.

**Required Vote** 

The presence, online or by proxy, of a majority of the shares entitled to vote is necessary to constitute a quorum at the meeting. Abstentions and broker non-votes are counted to determine a quorum. A broker non-vote occurs when a broker holding shares for a beneficial holder does not vote on a particular proposal because the broker does not have discretionary power to vote with respect to that item and has not received voting instructions from the beneficial owner.

The election of directors requires the affirmative vote of a plurality of Peapack-Gladstone's common stock voted at the meeting, whether voted online or by proxy. This means that the nominees receiving the greatest number of votes will be elected. Abstentions and broker non-votes will have no impact on the election of directors.

The approval (1) on a non-binding basis, of the compensation of the Company's named executive officers, (2) of the amendment to the Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan to increase the number of shares available for issuance by 600,000 and (3) of the ratification of the appointment of Crowe LLP each requires the affirmative vote of a majority of the votes cast at the meeting, whether voted online or by proxy. Abstentions and broker non-votes will have no impact on the approval of these proposals.

The approval of the frequency of conducting, on a non-binding basis, on the compensation of the Company's named executive officers will be decided by the option receiving the highest number of votes cast, in person or by proxy, at the meeting. Abstentions and broker non-votes will have no impact on the approval of this proposal.

All shares represented by valid proxies received pursuant to this solicitation will be voted as follows, unless the shareholder specifies a different choice by means of the proxy or revokes the proxy prior to the time it is exercised:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Proposal 1 – "FOR" the election of the 13 nominees for director;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Proposal 2 – "FOR" the approval, on a non-binding basis, of the compensation of the Company's named executive officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Proposal 3 – "1 YEAR" frequency, on a non-binding basis, of future non-binding advisory votes on the compensation of the Company's named executive officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Proposal 4 – "FOR" the approval of the amendment to increase the number of shares available for issuance under the Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan by 600,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Proposal 5 – "FOR" the ratification of the appointment of Crowe LLP as the Company's independent registered public accounting firm for the year ending December 31, 2023.

Should any other matter properly come before the meeting, the persons named as proxies will vote upon such matters in their discretion.

**Voting**

We are offering you four alternative ways to vote your shares:

<u>Internet</u>. If you wish to vote using the Internet, you can access the webpage at www.envisionreports.com/PGC and follow the on-screen instructions or scan the QR code on your E-Proxy Notice or proxy card with your smartphone. Have your proxy card available when you access the webpage.

<u>Telephone</u>. If you wish to vote by telephone, call, toll free, 1-800-652-VOTE(8683) and follow the instructions. Have your proxy card available when you call.

<u>Mail</u>. If you wish to vote by mail, please sign your name exactly as it appears on your proxy card, date and mail your proxy card in the envelope provided as soon as possible.

<u>Online at the Meeting</u>. The method by which you vote will not limit your right to vote online at the meeting if you decide to virtually attend. To be admitted to the Annual Meeting, you must go online to <u>www.meetnow.global/MXDMD9G</u> and enter the control number found on your proxy card. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting.

**Revocability of Proxy** 

Any shareholder giving a proxy has the right to attend the meeting virtually and to vote online at the meeting in person. A proxy may be revoked prior to the meeting by submitting a later-dated proxy or by submitting a written revocation to Heidi Smith, Corporate Secretary, Peapack-Gladstone, 500 Hills Drive, Suite 300, P.O. Box 700, Bedminster, New Jersey, 07921. A proxy may be revoked at the meeting by voting online at the meeting. Attendance at the meeting will not in itself constitute revocation of a 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 or Laurel Hill Advisory Group LLC, a proxy solicitor firm. Directors, officers and employees will not be compensated for such solicitation activities. Peapack-Gladstone will pay $5,500 plus certain out of pocket costs to Laurel Hill Advisory Group LLC for its proxy solicitation services. 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 will reimburse them for their reasonable expenses incurred in forwarding the materials.

**CORPORATE GOVERNANCE**

**General and Corporate Governance Principles**

The business and affairs of Peapack-Gladstone are managed under the direction of the Board of Directors. Members of the Board are kept informed of Peapack-Gladstone's business through discussions with our President and CEO and Peapack-Gladstone's other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees. All members of the Board also served as directors of Peapack-Gladstone's subsidiary bank, Peapack-Gladstone Bank (the "Bank"), during 2022. The Board of Directors of Peapack-Gladstone and Peapack-Gladstone Bank each held 11 meetings during 2022. During 2022, each director of Peapack-Gladstone attended at least 75% of the total number of meetings of Peapack-Gladstone's Board and meetings of committees on which such director served.

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The Board has adopted Corporate Governance Principles, which are intended to provide guidelines for the governance of Peapack-Gladstone, including: the qualification and selection of the Board of Directors and its committees; convening executive sessions of independent directors; the Board of Directors' interaction with management and third parties; director compensation; orientation and continuing education; and the evaluation of the performance of the CEO. The Corporate Governance Principles are available in the Government Documents portion of the Investor Relations section of Peapack-Gladstone's website located at www.pgbank.com.

**Board Leadership Structure and Role in Risk Oversight**

Our Board of Directors is comprised of 13 directors, all of whom are independent directors under applicable NASDAQ Stock Market ("NASDAQ") rules, except for Douglas L. Kennedy, our Chief Executive Officer. The Company maintains a Risk Committee, which, along with our Board of Directors, is responsible for overseeing the Company's risk management. The Board receives and reviews a company-wide risk assessment annually. While the Risk Committee and the Board oversee the Company's risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is appropriate for addressing the risks facing the Company. Our independent directors conduct separate executive sessions to discuss Company affairs on at least a semi-annual basis and more frequently as necessary. The Chair of the Board, who is independent, presides over these sessions. If in the future our Board Chair is not independent, our bylaws provide for the appointment of an independent lead director.

We believe that having a separate Chair and CEO, independent chairs and membership for each of our Audit, Compensation and Nominating Committees and holding executive sessions of independent directors provides the right form of leadership for the Company. Separating the Chair and CEO positions allows the CEO to better focus on his responsibilities of running the Company, enhancing shareholder growth and better positioning the Company for future growth, while our experienced independent directors provide oversight of Company operations and provides different perspectives based on the directors' experience, oversight and expertise from outside the Company.

**Director Independence**

The Board has determined that a majority of the directors and all current members of the Nominating, Compensation, and Audit Committees are "independent" in accordance with NASDAQ rules. The Board has determined that the members of the Audit Committee are also "independent" under the heightened standards of independence under NASDAQ rules and Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and that the members of the Compensation Committee are also "independent" under the heightened standards of independence under the NASDAQ rules. The Board's conclusion follows a review by the Nominating Committee and management of the responses of the directors and executive officers to questions regarding employment history, transactions with the Bank, affiliations and family and other relationships.

To assist it in making determinations of independence, the Board has concluded that the following relationships are immaterial and that a director whose only relationships with Peapack-Gladstone fall within these categories is independent absent any other relationship that would interfere with the director's exercise of independent judgment in carrying out the responsibilities of a director:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A loan made by the Bank to a director, his or her immediate family member or an entity affiliated with a director or his or her immediate family member, or a loan personally guaranteed by such persons, if such loan (1) complies with state and federal regulations on insider loans, where applicable; (2) is not classified as substandard, doubtful or loss; and (3) is on customary and usual market terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A deposit, trust, insurance brokerage, securities brokerage or similar customer relationship between Peapack-Gladstone or its subsidiaries and a director, his or her immediate family member or an affiliate of his or her immediate family member if such relationship is on customary and usual market terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The employment by Peapack-Gladstone or its subsidiaries of any immediate family member of the director if the employee serves below the level of senior vice president.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Annual contributions by Peapack-Gladstone or its subsidiaries to any charity or non-profit corporation with which a director is affiliated if the contributions do not exceed $20,000 in any calendar year and the contribution is made in the name of Peapack-Gladstone.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Purchases of goods or services by Peapack-Gladstone or any of its subsidiaries from a business in which a director or his or her immediate family member is a partner, shareholder or officer, if the director or his or her immediate family member owns five percent or less of the equity interests of that business and does not serve as an executive officer of the business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Purchases of goods or services by Peapack-Gladstone, or any of its subsidiaries, from a business in which the director or his or her immediate family member is a partner, shareholder or officer if the annual aggregate

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purchases of goods or services from the director, his or her immediate family member or such business in the last calendar year does not exceed the greater of $60,000 or two percent of the gross revenues of the business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fixed retirement benefits paid or payable to a director either currently or on retirement.

The following categories or types of transactions, relationships or arrangements were considered by the Board in determining that each listed director is independent in accordance with the NASDAQ rules.

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| | |
|:---|:---|
| <u>Independent Director</u> | <u>Category or Type</u> |
| Susan A. Cole | Wealth Management |
| Anthony J. Consi, II | Loans, Deposits |
| Richard Daingerfield | Loans, Deposits, Wealth Management |
| Edward A. Gramigna | Deposits, Wealth Management |
| Peter D. Horst | Deposits |
| F. Duffield Meyercord | Loans, Deposits, Wealth Management |
| Philip W. Smith | Loans, Deposits, Wealth Management, Employment of Immediate Family Member\* |
| Beth Welsh | Loans, Deposits |

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\* Mr. Smith's sister in-law Anne Smith was promoted to Senior Managing Director in 2017. Anne Smith is not an executive officer of the Company.

**Board Diversity Matrix**

The table below provides the composition of our board members. Under NASDAQ rules, each NASDAQ-listed company must have, or explain why it does not have, at least two members of its Board of Directors who are "Diverse," including (1) at least one Diverse director who self-identifies as Female; and (2) at least one Diverse director who self-identifies as an "Underrepresented Minority" or LGBTQ+. Diverse means an individual who self-identifies as female, an Underrepresented Minority, or LGBTQ+. Each of the categories listed in the below table has the meaning as it is used in NASDAQ Rule 5605(f).

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Board Diversity Matrix** | **Board Diversity Matrix** | **Board Diversity Matrix** | **Board Diversity Matrix** |
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2022** | **December 31, 2022** |
| Total Number of Directors | **13** | **13** | **13** | **13** |
|  | **Female** | **Male** | **Female** | **Male** |
| **Gender Identity** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Directors | 3 | 10 | 3 | 10 |
| **Demographic Background** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;African American or Black | 1 | - | 1 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Alaskan Native or Native American | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Asian | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Hispanic or Latino | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Native Hawaiian or Pacific Islander | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;White | 2 | 10 | 2 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Two or More Races or Ethnicities | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;LGBTQ+ | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Did Not Disclose Demographic Background | - | - | - | - |

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**Shareholder Communication with Directors**

The Board of Directors has established the following procedures for shareholder communications with the Board of Directors or the Chair, who presides over the independent director sessions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Shareholders wishing to communicate with the Board of Directors or the Chair should send any communication to either the Board of Directors or the Presiding Director of Independent Director Sessions, Peapack-Gladstone Financial Corporation, c/o Heidi Smith, Corporate Secretary, 500 Hills Drive, Suite 300, P.O. Box 700, Bedminster, New Jersey, 07921. Any such communication should state the number of shares owned by the shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Corporate Secretary will forward such communication to the Board of Directors, the Chair or as appropriate to the particular Committee Chair, unless the communication is a personal or similar grievance, an abusive or inappropriate communication, or a communication not related to the duties or responsibilities of the Board of Directors, in which case the Corporate Secretary has the authority to disregard the communication. All such communications will be kept confidential to the extent possible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Corporate Secretary will maintain a log of, and copies of, all communications, for inspection and review by any Board member, and will regularly review all such communications with the Board, the Chair or the appropriate Committee Chair.

**Committees of the Board of Directors**

The Board of Directors maintains an Audit Committee, a Compensation Committee, a Nominating Committee, and a Risk Committee. The following table identifies the members of each of these committees as of March 8, 2023. All members of each committee are independent in accordance with the NASDAQ listing requirements. Each committee operates under a written charter that is approved by the Board of Directors that governs its composition, responsibilities and operations. Each committee reviews and reassesses the adequacy of its charter at least annually. The charters are available in the Governance Documents portion of the Investor Relations section of the Company's web site (www.pgbank.com).

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| | | | | |
|:---|:---|:---|:---|:---|
| **Director** | **Audit<br>Committee** | **Compensation<br>Committee** | **Nominating<br>Committee** | **Risk<br>Committee** |
| Carmen M. Bowser |  |  | X | X |
| Susan A. Cole |  |  |  |  |
| Anthony J. Consi, II | X | X |  | X |
| Richard Daingerfield | X |  |  | X\* |
| Edward A. Gramigna, Jr. | X |  | X\* |  |
| Peter D. Horst |  |  | X |  |
| Steven A. Kass | X\* |  |  | X |
| Douglas L. Kennedy |  |  |  |  |
| F. Duffield Meyercord |  | X\* | X |  |
| Patrick J. Mullen | X |  |  | X |
| Philip W. Smith, III |  |  | X |  |
| Tony Spinelli |  | X |  | X |
| Beth Welsh | X |  |  | X |
| Number of meetings in 2022 | 10 | 5 | 2 | 6 |
| \* Chairperson |  |  |  |  |

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<u>Audit Committee</u>

The Board of Directors has determined that Messrs. Consi and Kass meet the SEC criteria of an "audit committee financial expert."

The Audit Committee charter provides the Audit Committee with the authority and responsibility for the appointment, retention, compensation and oversight of our independent auditors, including pre-approval of all audit and non-audit services to be performed by our independent auditors. Other responsibilities of the Audit Committee include: reviewing the scope and results of the audit with our independent auditors; reviewing with management and our independent auditors, Peapack-Gladstone's interim and year-end operating results, including earnings releases; considering the appropriateness of the internal accounting and auditing procedures of Peapack-Gladstone; considering our auditors' independence; reviewing examination reports by bank regulatory agencies; reviewing audit reports prepared by the Internal Audit Department of

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Peapack-Gladstone; reviewing audit reports prepared by any outside firm that may conduct internal audit functions for Peapack-Gladstone; and reviewing the response of management to those reports. The Audit Committee reports to the Board pertinent matters coming before it.

<u>Compensation Committee</u>

The Compensation Committee recommends to the independent members of the Board the CEO's compensation, sets specific compensation for executive officers (other than the CEO) and ratifies general compensation levels for all other officers and employees. It also administers our long-term stock incentive plans and makes awards under those plans. The Compensation Committee also recommends Board compensation. In setting compensation levels, the Compensation Committee undertakes a thorough analysis and consideration of overall Company performance, individual job performance, the overall need of the Company to attract, retain and incent executive talent, the total cost of the compensation programs, and peer compensation.

The Compensation Committee has the authority to and responsibility for the appointment, retention, compensation and oversight of compensation consulting and advisory firms as it deems appropriate to its role. In 2022, the Compensation Committee engaged the services of McLagan, part of the rewards solutions practice at Aon PLC, an independent compensation consulting firm specializing in executive compensation, which provided an updated competitive market analysis and peer group data and assisted with the Pay versus Performance disclosures. McLagan reports directly to the Compensation Committee and carries out its responsibilities to the Compensation Committee in coordination with the Human Resources Department as requested by the Compensation Committee.

<u>Risk Committee</u>

The Risk Committee provides oversight and guidance for the Bank's Enterprise Risk Management initiatives, including risk governance structure, risk management and risk assessment guidelines, policies and procedures, market, credit, operational, liquidity and reputational risks, and the Bank's risk tolerance. Risk assessment and risk management are the responsibility of the Bank's management. The Committee's responsibility consists of oversight and review.

<u>Nominating Committee</u>

The Nominating Committee reviews the qualifications of and recommends to the Board candidates for election as directors of Peapack-Gladstone and the Bank, recommends committee assignments, and discusses management succession for the Chair and the CEO positions. The Nominating Committee is also charged with reviewing the Board's adherence to the Corporate Governance Principles and the Code of Business Conduct and Conflict of Interest Policy. The Nominating Committee reviews recommendations from shareholders regarding director candidates and any shareholder proposals. The procedure for submitting recommendations of director candidates is set forth below under the caption "Nomination of Directors."

**Nomination of Directors**

Nominations for director may be made only by the Board of Directors, a committee of the Board or by a shareholder of record. The Board of Directors has established minimum criteria for members of the Board, which include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Stock ownership in compliance with the Company's stock ownership guidelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Being respected members of their communities and of high ethical and moral standards and having sound personal finances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Not serving on the board of directors of any other bank that serves the same market area as Peapack-Gladstone.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An appropriate mix of educational background, professional background and business experience to make a significant contribution to the overall composition of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The candidate being able to read and understand fundamental financial statements and being financially sophisticated as described in the NASDAQ rules, or considered to be an audit committee financial expert as defined pursuant to the SEC rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Being independent under the NASDAQ rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Demonstrated character and reputation, both personal and professional.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Willingness to apply sound and independent business judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Ability to work productively with the other members of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Availability for the substantial duties and responsibilities of a Peapack-Gladstone director.

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The Nominating Committee considers diversity of experience, both of the individual under consideration and of the Board as a whole, as a factor in identifying nominees for director.

The Nominating Committee has adopted a policy regarding consideration of director candidates recommended by shareholders. Shareholders wishing to submit a director candidate for consideration by the Committee must submit such director candidate recommendations to the Committee, c/o the Corporate Secretary, 500 Hills Drive, Suite 300, P.O. Box 700, Bedminster, New Jersey 07921, in writing, not less than 120 nor more than 150 days prior to the first anniversary date of the prior year's annual meeting. For our annual meeting in 2023, we must have received this notice between December 3, 2022 and January 2, 2023. The Committee has the right to require any additional background or other information from any director candidate or the recommending shareholder as it may deem appropriate. Shareholders who wish to nominate a director must also follow the requirements in our bylaws. For information regarding shareholder nominations of director candidates, see "Shareholder Proposals" below.

You can obtain a copy of our policy regarding shareholder recommendations for director candidates by writing to Heidi Smith, Corporate Secretary, Peapack-Gladstone Financial Corporation, 500 Hills Drive, Suite 300, P.O. Box 700, Bedminster, New Jersey 07921.

**Hedging Policy**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains a policy prohibiting our executives and directors from hedging shares, including buying or selling puts or calls, short sales, or engaging in any other transaction designed to hedge or offset any decrease in the market value of the Company's stock.

**Code of Business Conduct and Conflict of Interest Policy** 

Peapack-Gladstone maintains a Code of Business Conduct and Conflict of Interest Policy, which applies to all of Peapack-Gladstone's directors, officers and employees. The Code of Business Conduct and Conflict of Interest Policy is available in the Government Documents portion of the Investor Relations section of Peapack-Gladstone's website located at www.pgbank.com. Peapack-Gladstone will disclose any substantive amendments to or waiver from provisions of the Code of Business Conduct and Conflict of Interest Policy on its website as may be required and within the time period specified under applicable SEC and NASDAQ rules.

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**DIRECTOR COMPENSATION**

The following table summarizes the compensation of the non-employee directors of Peapack-Gladstone in 2022. Douglas L. Kennedy, as a full-time employee, was not compensated for his service rendered as a director.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Fees Earned or<br>Paid in Cash (1)** | **Stock Awards (2)** | **Total** |
| Carmen M. Bowser | $51000 | $44970 | $95970 |
| Susan A. Cole | 35600 | 44970 | 80570 |
| Anthony J. Consi, II | 83000 | 44970 | 127970 |
| Richard Daingerfield | 107000 | 69994 | 176994 |
| Edward A. Gramigna, Jr. | 97600 | 64989 | 162589 |
| Peter D. Horst | 34000 | 44970 | 78970 |
| Steven A. Kass | 117000 | 79966 | 196966 |
| F. Duffield Meyercord | 154000 | 149997 | 303997 |
| Patrick J. Mullen | 70000 | 44970 | 114970 |
| Philip W. Smith, III | 36000 | 44970 | 80970 |
| Tony Spinelli | 60000 | 44970 | 104970 |
| Beth Welsh | 68000 | 44970 | 112970 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)In 2022, Peapack-Gladstone paid its directors a $10,000 annual retainer for service on the Board, $900 each for Trust committee meetings attended, and $2,000 for each regular Board, Executive or other committee meeting they attended. The Chair received an additional $80,000 annual retainer. The Audit Committee Chair received an additional $25,000 annual retainer, the Risk Committee Chair received an additional $15,000 annual retainer and the Nominating Committee Chair received an additional $10,000 annual retainer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The following table represents the number of restricted shares awarded to each director during 2022 and the grant date fair market value of these awards computed in accordance with ASC 718 based on the Peapack-Gladstone stock price on the date of grant of $36.80. The shares vest in two equal annual installments beginning on March 20, 2023, the first anniversary of the date of grant. The table below also shows the aggregate number of restricted stock units outstanding at December 31, 2022 for each director. None of the directors had outstanding options at December 31, 2022.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Number of<br>Shares of<br>Restricted Stock Units<br>Awarded in 2022** | **Grant Date Fair<br>Market Value of<br>Stock Units Awarded** | **Aggregate<br>Number of<br>Restricted Stock Shares/Units<br>Outstanding at<br>12/31/2022** |
| Carmen M. Bowser | 1222 | $44970 | 1939 |
| Susan A. Cole | 1222 | 44970 | 1939 |
| Anthony J. Consi, II | 1222 | 44970 | 1939 |
| Richard Daingerfield | 1902 | 69994 | 3018 |
| Edward A. Gramigna, Jr. | 1766 | 64989 | 2802 |
| Peter D. Horst | 1222 | 44970 | 1939 |
| Steven A. Kass | 2173 | 79966 | 3449 |
| F. Duffield Meyercord | 4076 | 149997 | 6468 |
| Patrick J. Mullen | 1222 | 44970 | 1939 |
| Philip W. Smith, III | 1222 | 44970 | 1939 |
| Tony Spinelli | 1222 | 44970 | 1939 |
| Beth Welsh | 1222 | 44970 | 1939 |

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**BENEFICIAL OWNERSHIP OF COMMON STOCK**

**Certain Beneficial Owners**

The following table sets forth as of March 1, 2023 certain information as to beneficial ownership of each person known to Peapack-Gladstone to own beneficially more than five percent of the outstanding common stock of Peapack-Gladstone.

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| | | |
|:---|:---|:---|
| **Name and Address<br>of Beneficial Owner** | **Amount and<br>Nature of Beneficial<br>Ownership** | **Percent of Class** |
| &nbsp;&nbsp;&nbsp;BlackRock Inc. (1)<br>55 East 52d Street<br>New York, NY 10055 | 1466461 | 8.23% |
| &nbsp;&nbsp;&nbsp;Dimensional Fund Advisors LP (2) <br>Building One<br>6300 Bee Cave Road<br>Austin, TX 78746 | 1312005 | 7.36% |
| &nbsp;&nbsp;&nbsp;James M. Weichert (3)<br>1625 State Highway 10<br>Morris Plains, NJ 07950 | 1070480 | 6.01% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Based on a Schedule 13G/A filed with the SEC on February 3, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Based on a Schedule 13G/A filed with the SEC on February 10, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Based on a Schedule 13D/A filed with the SEC on April 30, 2014.

**Stock Ownership of Directors and Executive Officers**

The following table sets forth as of March 1, 2023 the number of shares of Peapack-Gladstone's common stock, beneficially owned by each of the directors and the executive officers of Peapack-Gladstone for whom individual information is required to be set forth in this proxy statement (the "named executive officers"), and by all directors and executive officers as a group.

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Name of Beneficial Owner** | **Amount and Nature of Beneficial<br>Ownership (1)** | **Amount and Nature of Beneficial<br>Ownership (1)** | **Percent of Class (2)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;John P. Babcock | 136587 | (3) | 0.77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Carmen M. Bowser | 9478 | (4) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jeffrey J. Carfora | 147237 | (5) | 0.83 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Susan A. Cole | 9051 | (4) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anthony J. Consi, II | 109152 | (4) | 0.61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard Daingerfield | 19415 | (6) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Edward A. Gramigna, Jr. | 19897 | (7) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peter D. Horst | 12893 | (4) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steven A. Kass | 16278 | (8) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Douglas L. Kennedy | 244307 | (9) | 1.37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Duffield Meyercord | 121566 | (10) | 0.68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Patrick J. Mullen | 5733 | (4) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Robert Plante | 46264 | (11) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gregory M. Smith | 20111 | (12) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Philip W. Smith, III | 72277 | (13) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anthony Spinelli | 8858 | (4) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beth Welsh | 12122 | (4) | \* |
| &nbsp;&nbsp;&nbsp;**All directors and executive<br> officers as a group (26 persons)** | 1359613 |  | 7.63% |

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\* Less than one-half of one percent

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Beneficially owned shares include shares over which the named person exercises either sole or shared voting or 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) all shares over which 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The number of shares of common stock used in calculating the percentage of the class owned by all directors and executive officers as a group includes 17,826,405 shares of common stock outstanding as of March 1, 2023, and 234,887 restricted stock units vesting within 60 days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Includes 38,577 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Includes 1,328 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Includes 26,614 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Includes 2,067 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)Includes 1,919 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)Includes 2,500 shares owned by a family partnership, 1,000 shares owned by Mr. Kass' wife, and 2,362 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)Includes 8,610 shares purchased under the Employee Stock Purchase Plan and 54,511 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)Includes 4,430 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11)Includes 2,389 shares purchased under the Employee Stock Purchase Plan and 16,931 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)Includes 11,460 restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13)Includes 8,429 shares owned by Mr. Smith's wife, 1,335 shares owned by Mr. Smith's management company, and 1,328 restricted stock units.

**Stock Ownership Guidelines**

The Company maintains Stock Ownership Guidelines, which apply to the Board of Directors, the Chief Executive Officer and the executive officers of the Company and impose the following requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•All new members elected to the Board must own a minimum of $10,000 in Company stock at the time of his or her appointment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Directors must maintain five times the amount of the annual Company Board retainer for service on the Board in Company stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Chief Executive Officer must maintain three times his or her base salary in Company stock; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Executive officers must maintain one time his or her base salary in Company stock.

Individuals can count shares owned in a Company benefit plan towards the stock ownership requirement. There is no set compliance period to meet the guidelines, with the exception of the minimum ownership requirement applicable to new Board members, which must be met at the time of a new Board member's appointment. However, until the guidelines are achieved, individuals will be required to retain 100% of any net shares received through a Company grant under the 2021 Long-Term Incentive Plan.

**PROPOSAL 1**

**ELECTION OF DIRECTORS**

The Board has 13 members. Peapack-Gladstone's Nominating Committee has recommended to the Board that the 13 current directors be re-elected for one-year terms expiring at Peapack-Gladstone's 2024 Annual Meeting of Shareholders or until their successors shall have been duly elected and qualified. If, for any reason, any of the nominees become unavailable for election, the proxy solicited by the Board may be voted for a substitute nominee selected by the Board. The Board has no reason to believe that any of the named nominees will be unavailable for election or will not serve if elected.

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' positions 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. In addition, described below is each director nominee's particular experience, qualifications, attributes or skills that have led the Board to conclude that the person should serve as a director.

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**NOMINEES FOR ELECTION AS DIRECTORS**

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| | | | |
|:---|:---|:---|:---|
| **Name and Position With <br>Peapack-Gladstone** | **Age** | **Director <br>Since** | **Principal Occupation or Employment for the Past Five Years;**<br>**Other Company Directorships** |
| Carmen M. Bowser | 68 | 2017 | Retired; former Managing Vice President, Commercial Real Estate Division, Capital One Bank. Ms. Bowser is qualified to serve on the Board of Directors because of her extensive experience in the commercial real estate market, which includes serving as Managing Vice President, Commercial Real Estate Division at Capital One Bank and as Managing Director for Prudential Mortgage Capital Company. Her expertise and leadership experience is invaluable to the oversight of the Bank's real estate portfolio. |
| Dr. Susan A. Cole | 80 | 2014 | Retired; former President of Montclair State University. Dr. Cole is qualified to serve on the Board of Directors because of her 23 years as President of Montclair State University (the second largest university in New Jersey, with approximately 20,000 students), which provides invaluable experience in the oversight of Bank operations.  |
| Anthony J. Consi, II | 77 | 2000 | Retired; previously Senior Vice President of Finance and Operations, Weichert Realtors. Mr. Consi is qualified to serve on the Board of Directors because of his 15 years of public accounting experience at Coopers & Lybrand and his 22 years of finance and operations leadership at Weichert Realtors. |
| Richard Daingerfield | 69 | 2014 | Retired; Executive Vice President and General Counsel of Citizens Financial Group, Inc., Boston, Massachusetts from 2010 to 2014. Mr. Daingerfield is qualified to serve on the Board of Directors because of his expertise in corporate governance, executive management, risk management, corporate banking and commercial banking. His broad legal experience with commercial and retail banking, including international and domestic private banking, are invaluable to his role as Risk Committee Chair. |
| Edward A. Gramigna, Jr. | 62 | 2012 | Partner and Member of the Management Board of Faegre Drinker Biddle & Reath LLP. Mr. Gramigna is qualified to serve on the Board of Directors because of his 32 years of experience in trust, estate planning and estate administration, which is invaluable in the oversight of our wealth management division. |
| Peter D. Horst | 61 | 2019 | Retired; previously Chief Executive Officer of PSB, a global research-based consultancy. Mr. Horst also had over 31 years of marketing leadership experience as a Chief Marketing Officer across diverse industries in consumer and business products, services and technology for market leaders such as General Mills, US West, Hershey, Capital One and Ameritrade. Mr. Horst is qualified to serve on the Board of Directors because of his extensive marketing experience, which is invaluable in introducing our expanding wealth management brand to new markets. |
| Steven A. Kass | 66 | 2018 | Retired; previously senior partner of KPMG from 2014 to 2016. Mr. Kass was Chief Executive Officer of Rothstein Kass, an accounting firm that specialized in audit, tax and advisory services to hedge fund, private equity and venture capital clients, before it was sold to KPMG in 2014. Mr. Kass is qualified to serve on the Board of Directors and as Audit Committee Chair because of his public company accounting and management level experience.  |
| Douglas L. Kennedy<br>Chief Executive Officer  | 66 | 2012 | President and CEO of Peapack-Gladstone and the Bank since 2012. Prior to joining the Company, Mr. Kennedy served as Executive Vice President and Market President at Capital One Bank/North Fork and held key executive level positions with Summit Bank and Bank of America/Fleet Bank. Mr. Kennedy, who began his career in commercial  |

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| | | | |
|:---|:---|:---|:---|
| **Name and Position With <br>Peapack-Gladstone** | **Age** | **Director <br>Since** | **Principal Occupation or Employment for the Past Five Years;**<br>**Other Company Directorships** |
|  |  |  | banking in 1978, is qualified to serve on the Board of Directors because of his over 45 years of commercial banking experience, demonstrated business leadership, judgment and vision. |
| F. Duffield Meyercord <br>Chairman | 76 | 1991 | Chairman of the Board of Peapack-Gladstone and the Bank; Managing Partner of Carl Marks Advisory Group, LLC; President, Meyercord Advisors, Inc. Mr. Meyercord is qualified to serve on the Board of Directors because of his 46 years of experience in directing strategic projects and providing operational advisory services to numerous businesses, which is invaluable to the Board's oversight of corporate strategy. |
| Patrick J. Mullen | 77 | 2019 | Retired; previously served as the Director of Banking, for the New Jersey Department of Banking and Insurance. Mr. Mullen was responsible for the examination and supervision of all state-chartered banks and credit unions and state-licensed non-bank financial institutions. Mr. Mullen is qualified to serve on the Board of Directors because of his financial services background, which provides invaluable oversight of Bank operations. |
| Philip W. Smith, III | 67 | 1995 | President, Phillary Management, Inc., a real estate management company. Mr. Smith is qualified to serve on the Board of Directors because of his 34 years of experience in commercial real estate agency and management, which is invaluable to the Board's oversight of the Company's real estate loan portfolio. |
| Tony Spinelli | 55 | 2017 | Mr. Spinelli is currently Chief Information Officer for Urban One, a multi-media company. Mr. Spinelli also served as Senior Vice President, Chief Information Security Officer, Capital One Bank and as Chief Operating Officer and President, Cyberdivision for Fractal Industries, Inc. Mr. Spinelli is qualified to serve on the Board of Directors because of his expertise in cybersecurity, security engineering and compliance, which provides insight into emerging threats to the Company and our clients. |
| Beth Welsh | 64 | 2012 | General Manager of Bassett Associates, a real estate management company in Summit, New Jersey. Ms. Welsh is qualified to serve on the Board of Directors because of her 26 years of experience in the commercial real estate market as well as her past banking experience, which is invaluable to the Board's oversight of the Bank's real estate lending and small business banking. |

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The members of our Board of Directors collectively demonstrate appropriate leadership skills, experience and judgment in areas that are relevant to our business. We believe that their collective ability to challenge and stimulate management and their dedication to the affairs of the Company serve the interests of the Company and its shareholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE **<u>"FOR"</u>** THE

DIRECTORS INCLUDED IN **<u>PROPOSAL 1</u>**.

**PROPOSAL 2**

**ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS** 

We believe that our compensation policies and procedures are competitive, are focused on pay-for-performance principles and are strongly aligned with the long-term interests of our shareholders. We also believe that both the Company and our shareholders benefit from responsive corporate governance policies and constructive and consistent dialogue. The proposal described below, commonly known as a "Say on Pay" proposal, gives you, as a shareholder of Peapack-Gladstone, the opportunity to endorse or not endorse the compensation for our named executive officers.

As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), shareholders are provided an opportunity to approve on an advisory, or non-binding basis, the compensation of our named

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executive officers. Accordingly, we are asking you to vote on the compensation of Peapack-Gladstone's named executive officers as described under the section "Compensation Discussion and Analysis" and in the tabular disclosure (together with the accompanying narrative disclosure) in this proxy statement. Your vote is advisory and will not be binding upon the Board. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

The following summarizes the backgrounds of the named executive officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Douglas L. Kennedy** joined the Bank in October 2012 as Chief Executive Officer. He is a career banker with over 45 years of commercial banking experience. Previously, Mr. Kennedy served as Executive Vice President and Market President at Capital One Bank/North Fork and held key executive level positions with Summit Bank and Bank of America/Fleet Bank. Mr. Kennedy has a Bachelor's Degree in Economics and an M.B.A. from Sacred Heart University in Fairfield, Connecticut.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Frank A. Cavallaro** joined the Bank in October 2022 as Senior Executive Vice President. He became the Chief Financial Officer in November 2022. Prior to joining the Bank, Mr. Cavallaro served as Executive Vice President and Chief Financial Officer at Republic Bank since 2012. Mr. Cavallaro has more than 30 years of experience, where he has held senior level positions at several financial institutions and CPA firms. Mr. Cavallaro has a Bachelor of Science Degree in Accounting from Rutgers University School of Business in Camden, New Jersey and is a Certified Public Accountant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Jeffrey J. Carfora** joined the Bank in April 2009 as Chief Financial Officer, which position he stepped down from in November 2022, and is currently serving as Senior Executive Officer until his upcoming retirement in April 2023. Mr. Carfora previously served as a Transitional Officer with New York Community Bank from April 2007 until January 2008 as a result of a merger with PennFed Financial Services Inc. and Penn Federal Savings Bank (collectively referred to as "PennFed"). Prior to the merger, Mr. Carfora served as Chief Operating Officer of PennFed from October 2001 until April 2007 and Chief Financial Officer from December 1993 to October 2001. Mr. Carfora has 42 years of experience, including 40 years in the banking industry. Mr. Carfora has a Bachelor's Degree in Accounting and an M.B.A. in Finance, both from Fairleigh Dickinson University and is a Certified Public Accountant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Robert A. Plante** joined the Bank in March 2017 as Chief Operating Officer. Mr. Plante previously served as Chief Operating Officer at Israel Discount Bank New York. Mr. Plante also served as Chief Information Officer at CIT Group and also held senior leadership positions at GE Capital Global Consumer Finance and with the Geary Corporation, a privately held IT consulting company. Mr. Plante has a Bachelor of Science in Business Administration in Finance from the University of Vermont.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**John P. Babcock** joined the Bank in March 2014 as Senior Executive Vice President of the Bank and President of Private Wealth Management. Mr. Babcock has over 41 years of experience in commercial and wealth management/private bank businesses in New York City and regional markets. Prior to joining the Bank, Mr. Babcock was the managing director of the Northeast Mid-Atlantic region for the HSBC Private Bank. Mr. Babcock graduated from Tulane University's A.B. Freeman School of Business and has an M.B.A. from Fairleigh Dickinson University. Mr. Babcock holds FINRA Series 7, 63 and 24 securities licenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Gregory M. Smith** joined the Bank in April 2019 as Executive Vice President, Head of Commercial Banking. Mr. Smith was promoted to President of Commercial Banking in January 2021 and oversees commercial banking across the organization including commercial and industrial, commercial real estate and multifamily lending, equipment finance, investment banking and corporate advisory, the Bank's platinum service team and professional services group, residential lending, the small business administration team, and treasury management and escrow services. Prior to joining the Bank, Mr. Smith served as group sales executive for the Northeast and Mid-Atlantic regions for Capital One Bank and was also a senior regional vice president for Summit Bank. Mr. Smith has a Bachelor of Science in Finance from Fairleigh Dickinson University and an M.B.A in Business Administration from Rider University.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE **<u>"FOR"</u>** THE NON-BINDING APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS.

**PROPOSAL 3**

**ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE** 

**ON NAMED EXECUTIVE OFFICER COMPENSATION**

We are providing shareholders with the opportunity to cast an advisory vote regarding the frequency of future advisory votes on executive compensation, commonly known as a "Say on Frequency" vote. Under the Dodd-Frank Act and as required by Section 14A(a)(2) of the Exchange Act, our shareholders are entitled to vote on an advisory basis at the annual

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meeting regarding whether Peapack-Gladstone should hold the shareholder vote to approve the compensation of our named executive officers every one, two or three years.

Because your vote is advisory, it will not be binding upon the Board. However, the Board values the opinions expressed by shareholders in these votes and will take into account the outcome of the vote when determining how frequently it will submit for shareholder vote a proposal seeking advisory approval of the compensation of our named executive officers.

Although we recognize the potential benefits of having less frequent Say on Pay votes, including allowing Peapack-Gladstone additional time to conduct a more detailed review of its pay practices in response to the outcome of shareholder advisory votes, we recognize that the widely adopted standard is to hold Say on Pay votes annually. We also acknowledge current shareholder expectations regarding having the opportunity to express their views on the compensation of Peapack-Gladstone's executive officers on an annual basis.

In light of prevailing market practice and investor expectations, the Board believes for purposes of this vote that an advisory shareholder vote to approve the compensation of our named executive officers should be held every year. However, it is important to note for purposes of this proposal that you are being asked to vote on one of four choices (every year, every two years, every three years or abstain) and that you are not voting to approve or disapprove the Board's recommendation.

Pursuant to the Dodd-Frank Act, we are required to submit this proposal to our shareholders at least once every six years. In the future, the Board may in its discretion decide to hold an advisory vote on the frequency of holding a Say on Pay vote more often than once every six years.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE **"<u>1 YEAR</u>"** ON A NON-BINDING BASIS TO HOLD THE ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS EVERY YEAR.

**PROPOSAL 4 APPROVAL OF THE AMENDMENT TO INCREASE THE NUMBER**

**OF SHARES AVAILABLE FOR ISSUANCE UNDER THE** 

**PEAPACK-GLADSTONE FINANCIAL CORPORATION 2021 LONG-TERM INCENTIVE PLAN BY 600,000**

**General**

The Board of Directors is proposing an amendment (the "Plan Amendment") to the Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan (the "2021 Incentive Plan"). If approved by the shareholders, the Plan Amendment would increase the maximum number of shares issuable under the 2021 Incentive Plan from 500,000 to 1,100,000 shares. In March 2023, the Compensation Committee recommended and the full Board approved the Plan Amendment, subject to shareholder approval.

The following should be noted:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The additional 600,000 shares requested when combined with the remaining 499,720 shares in the Plan as of February 28, 2023, will be more than enough for at least three granting cycles – March 2023, March 2024, and March 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The Company believes in more heavily weighting equity incentives vs cash incentives in setting overall compensation since it aligns executives with shareholders, provides for meaningful retention, and conserves cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) For the CEO and other NEOs, restricted stock units (Long Term Incentive) awards are generally more than double cash (Short Term Incentive) awards. Additionally, 60% of such stock awards will vest solely based on Company performance at the end of a prospective three-year performance period. (Depending on Company performance relative to peers, vesting can be as low as zero).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) For the Company's Executive Team (NEOs and all other EVPs), equity compensation makes up 41% of total compensation compared to 24% for our Executive Compensation Peer Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Approximately 50% of total Company employees receive restricted stock units under the Company's Long Term Stock Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. During 2021 and 2022, the Company has repurchased approximately five percent of shares outstanding each year, reducing total shares outstanding by approximately 1.8 million shares, thereby negatively affecting the calculation of stock plan usage as a percent of shares outstanding.

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**Background**

The 2021 Incentive Plan was adopted by the Board of Directors in 2021, and it became effective when it was approved by the Company's shareholders on May 4, 2021. As of December 31, 2022, only 499,720 shares of common stock remain available for issuance under the 2021 Incentive Plan. In the absence of an amendment to increase the number of shares of common stock that may be offered under the 2021 Incentive Plan, we expect that the remaining shares will be exhausted in March 2024. The proposed amendment is intended to ensure that the Company can remain competitive and provide sufficient equity incentives to attract and retain highly qualified and experienced employees. The Board of Directors believes that approval of the Plan Amendment is in the best interests of the Company and its shareholders because the availability of an adequate reserve of shares under the 2021 Incentive Plan is an important factor in attracting, motivating and retaining qualified officers and employees essential to our success and in aligning their long-term interests with those of our shareholders.

**Governance Highlights of the 2021 Incentive Plan**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2021 Incentive Plan incorporates certain governance best practices, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Minimum Vesting.** Minimum vesting period of one year from the date of grant for all awards granted under the 2021 Incentive Plan, except under certain limited circumstances and with permitted exceptions up to 5% of the share reserve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **No Single-Trigger for Vesting of Awards Upon a Change in Control.** The 2021 Incentive Plan does not provide for vesting of time-based vesting awards based solely on the occurrence of a change in control for awards assumed by a surviving entity, without an accompanying involuntary termination of service (including a termination for good reason).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Dividends on Unvested Awards Not Paid Until Vesting.** Dividends on unvested awards will be withheld and paid to participants only after the underlying awards have vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **No Cash-Out or Repricing of Underwater Options.** No repricing of stock options and no cash buyout of underwater stock options without shareholder approval, except for adjustments with respect to a change in control or an equitable adjustment in connection with certain corporate transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Awards Subject to Clawback.** Awards granted under the 2021 Incentive Plan are subject to clawback based on inaccurate financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Limits on Grants to Directors.** The maximum grant date fair value of equity awards that may be awarded to a non-employee director under the 2021 Incentive Plan during one fiscal year is limited so that the value of such equity awards, taken together with any cash fees paid to such non-employee director for his or her service during such fiscal year, does not exceed $450,000 in total value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **No Liberal Share Recycling.** The 2021 Incentive Plan provides that to the extent (i) a stock option is exercised by using an actual or constructive exchange of shares of stock to pay the exercise price or (ii) shares are withheld to satisfy applicable tax withholdings related to an award, then, the number of shares of stock available shall be reduced by the gross number of shares issued with respect to an award rather than by the net number of shares issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **No excise tax gross-ups.**

**Summary of the 2021 Incentive Plan**

The following is a summary of the material features of the 2021 Incentive Plan, which is qualified in its entirety by reference to the provisions of the 2021 Incentive Plan, which is attached hereto as Exhibit A.

**Administration**

The 2021 Incentive Plan will be administered by the Committee, consisting solely of two or more non-employee directors (as defined in Rule 16b-3 of Exchange Act, as amended). The Committee will have the power to identify each officer, key employee or director qualified to receive an option or award (a "participant") and determine the number of shares subject to each option or award, the date of grant and the terms and conditions governing the option or award; provided however, that all grants to directors must be approved by the Board of Directors. The Committee will also be charged with the responsibility of interpreting the 2021 Incentive Plan and making all administrative determinations.

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Approval of the 2021 Incentive Plan by the shareholders authorizes the Committee to determine the number of awards to be granted to non-employee directors, subject to the individual limitations in the 2021 Incentive Plan as set forth therein and discussed further below.

The closing sale price of the Company's common stock as reported on the Nasdaq Global Select Market on March 15, 2023 was $32.66.

Officers and other key employees ("eligible employees") and directors of the Company or its subsidiaries are eligible to receive awards under the 2021 Incentive Plan, except that non-employees may not be granted incentive stock options. The Committee has the sole authority to determine the eligible employees and directors who will be granted an award under the 2021 Incentive Plan. As of March 15, 2023, the number of employees eligible to receive awards under the 2021 Incentive Plan was 489 and the number of non-employee directors eligible to receive awards under the 2021 Incentive Plan was 12.

**Number of Shares Authorized**

Subject to permitted adjustments for certain corporate transactions, if the Plan Amendment is approved by the Company's shareholders, the 2021 Incentive Plan would authorize the issuance to participants of up to 1,100,000 shares of the Company's common stock (the "Share Limit") pursuant to grants of restricted stock, restricted stock units, stock options, including incentive stock options and non-qualified stock options, and stock appreciation rights any of which may vest based either on the passage of time or achievement of performance, or a combination of each.

If any award granted under the 2021 Incentive Plan expires, terminates, is canceled or is forfeited without being settled or exercised or is settled without the issuance of shares of common stock, shares of the Company common stock subject to such award will be made available for future grant under the 2021 Incentive Plan. If any shares are surrendered or tendered to pay the exercise price of a stock option, such shares will not again be available for grant under the 2021 Incentive Plan. In addition, shares of common stock withheld in payment to satisfy tax withholding obligations with respect to an award do not become available for re-issuance under the 2021 Incentive Plan.

The following table shows information at December 31, 2022 for all equity compensation plans under which shares of our common stock may be issued:

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| | | | |
|:---|:---|:---|:---|
|  | Number of Securities to |  | Number of Securities |
|  | Be Issued Upon |  | Remaining |
|  | Exercise of Outstanding | Weighted Average | Available for |
| Plan | Options and Rights | Exercise Price | Issuance Under Plan |
| Equity compensation plans approved by security holders | 6800 | $16.53 | 1283644 |
| &nbsp;&nbsp;&nbsp;Total | 6800 | $16.53 | 1283644 |

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The number of securities remaining available for issuance shown in the above table includes 604,132 shares under the dividend reinvestment plan, 94,364 shares under the employee stock purchase plan, 85,428 shares under the 401(k) plan, and 499,720 shares under the 2021 Incentive Plan.

**Limitations**

The 2021 Incentive Plan includes the following limitations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The maximum number of shares that may be covered by awards to any non-employee director during a fiscal year is limited so that the value of such awards, taken together with any cash fees paid to such non-employee director, in respect of his or her service during such year (including services as a member or chair of any committees of the board) does not exceed $450,000 in total value (calculating the value of any such awards based on their grant date fair value for financial reporting purposes).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.No more than a number of shares of the Company's common stock equal to the Share Limit determined as of the date on which the Plan Amendment is approved by our shareholders may be issued in aggregate as incentive stock options under the 2021 Incentive Plan.

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**Adjustments**

In the event of a corporate transaction involving the stock of the Company, such as a recapitalization, stock dividend, extraordinary cash dividend or a stock split, the number of shares covered by awards then outstanding under the 2021 Incentive Plan, the limitation on awards under the 2021 Incentive Plan and/or the exercise price of outstanding stock options and other equitable substitutions or adjustments will be made proportionally and uniformly to reflect such corporate transaction, as applicable.

**Types of Awards and Terms and Conditions**

The Committee may determine the type and terms and conditions of awards under the 2021 Incentive Plan, which will be set forth in an award agreement delivered to each participant. Each award will be subject to the conditions established by the Committee as set forth in the applicable award agreement and will be subject to vesting conditions and restrictions as determined by the Committee. Awards may be granted as incentive and non-qualified stock options, stock appreciation rights, restricted stock awards or restricted stock units any of which may vest based either on the passage of time or achievement of performance, as follows:

**Stock Options.** A stock option is the right to purchase shares of common stock at a specified price for a specified period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The exercise price may not be less than the fair market value of a share of our common stock (which is defined as the last sale price as reported on the Nasdaq Stock Market) on the date the stock option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The Committee may not grant a stock option with a term that is longer than ten years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Stock options are either "incentive" stock options or "non-qualified" stock options. Incentive stock options have certain tax advantages that are not available to non-qualified stock options and must comply with the requirements of Section 422 of the Internal Revenue Code (the "Code"). Only employees are eligible to receive incentive stock options. Non-employee directors may only receive non-qualified stock options under the 2021 Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Shares of common stock purchased upon the exercise of a stock option must be paid for at the time of exercise and may paid either by cash or check, by tendering of shares (at their market value on the date of exercise), through "net settlement" using a portion of the shares obtained on exercise in payment of the exercise price (and if applicable, any tax withholdings), through a brokered-assisted cashless exercise mechanism as approved by the Committee or by such other property deemed acceptable by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Under no circumstances will the Company buy back underwater stock options granted under the 2021 Incentive Plan without shareholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.The 2021 Incentive Plan expressly prohibits repricing of stock options without shareholder approval, except for an equitable adjustment in connection with certain corporate transactions.

**Restricted Stock.** A restricted stock award is a grant of shares of Company common stock to a participant for no consideration (or such minimum consideration as may be required by applicable law) that is subject to certain restrictions as may be determined by the Committee for a specified period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Restricted stock awards may be granted only in whole shares of common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Prior to vesting, recipients of a restricted stock award are entitled to vote the shares of restricted stock during the restricted period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.No dividends on unvested restricted stock awards, whether subject to a time-based vesting schedule or performance-based vesting conditions, will be paid to the participant that has been granted the restricted stock award unless and until the participant vests in the restricted stock award.

**Restricted Stock Units.** Restricted stock units may be denominated in shares of common stock and are similar to restricted stock awards except that no shares of common stock are actually issued to the award recipient at the time of grant of a restricted stock unit. Rather, the restricted stock units are settled in cash or shares of Company common stock, at the discretion of the Committee at the time of grant, when the units are earned or at a later date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted stock units granted under the 2021 Incentive Plan may be settled in shares of our common stock, or in the sole discretion of the Committee determined at the time of final settlement, in cash or a combination of cash and our common stock, subject to vesting conditions and other restrictions set forth in the 2021 Incentive Plan or the award agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Participants have no voting rights with respect to any restricted stock units granted under the 2021 Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.In the sole discretion of the Committee, exercised at the time of grant, dividend equivalent rights may be paid on restricted stock units. Dividend equivalent rights will be paid when the restricted stock unit, including restricted stock units subject to performance-based vesting conditions, vests or is settled, or at the same time as the shares subject to such restricted stock unit are distributed to the participant.

**Stock Appreciation Rights.** A stock appreciation right is the right to receive a payment of either cash or shares of our common stock in an amount equal to the excess of the fair market value of a share of our common stock on the date of exercise of the stock appreciation right over the fair market value of the common stock on the date of grant of the stock appreciation right. The total number of shares that may be acquired upon the exercise of a stock appreciation right will be rounded down to the nearest whole share. Stock appreciation rights may be granted in tandem with the grant of stock options, and are exercisable on the same conditions as the related stock option that is granted simultaneously. The exercise of a tandem stock appreciation right cancels the related stock option and the exercise of the related stock option cancels the tandem stock appreciation right.

**Cash-Based Awards.** The Committee is authorized to grant cash-based awards denominated in cash in such amounts and subject to such terms and conditions as established by the Committee. Each such cash-based award will specify a payment amount, payment range or value determined with respect to the fair market value of the shares, as determined by the Committee.

**Performance Awards.** The Committee may grant any award under the 2021 Incentive Plan in the form of a performance award by conditioning the vesting of the award on the satisfaction of certain performance goals of the Company and/or the participant.

**Performance Measures**

The performance measures can include, but are not limited to: earnings, earnings growth, earnings per share, stock price (including growth measures and total shareholder return), improvement of financial ratings, internal rate of return, market share, cash flow, operating income, operating margin, net profit after tax, earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per share basis, gross profit, operating profit, cash generation, revenues, asset quality, return on equity, return on assets, return on operating assets, cost saving levels, efficiency ratio, net income, marketing-spending efficiency, core non-interest income, change in working capital, return on capital, book value or tangible book value, or shareholder return, or any combination of these or other measures.

The performance goals may be described in terms of objectives that are related to the individual participant or objectives that are company-wide or related to a subsidiary, division, department, region, branch, function or business unit and may, but need not be, measured on an absolute or cumulative basis or on the basis of percentage of improvement over time, measured in terms of company performance (or performance of the applicable subsidiary, division, department, region, branch, function or business unit) or measured relative to selected peer companies or a market index. Any performance goals that are financial metrics, may be determined in accordance with U.S. generally accepted accounting principles ("GAAP"), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP.

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When the Committee determines whether a performance goal has been satisfied for any period, the Committee may include or exclude unusual, infrequently occurring or non-recurring charges, asset write downs, losses from discontinued operations, restatements and accounting changes and other unplanned special charges such as restructuring expenses, acquisitions, acquisition or disposition expenses, including expenses related to goodwill and other intangible assets, stock offerings, stock repurchases and loan loss provisions.

**Vesting of Awards**

The Committee shall specify the vesting schedule or conditions of each award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Awards made under the 2021 Incentive Plan are subject to a minimum vesting period of one year from the date of grant; provided, however, that the following awards would not be subject to the one-year minimum vesting requirement: (i) substitute awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction; (ii) awards to non-employee directors that vest on the earlier of the one-year anniversary of the date of grant or the next annual meeting of shareholders that is at least 50 weeks after the immediately preceding year's annual meeting; and (iii) up to 5% of the available share reserve authorized for issuance under the 2021 Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Notwithstanding the foregoing, vesting (including the reduction or elimination of any restrictions) and exercisability of awards are accelerated upon death, disability or involuntary termination without cause at or following a change in control.

**Change in Control**

The 2021 Incentive Plan uses a double trigger change in control feature, providing for an acceleration of vesting upon an involuntary termination of employment or service simultaneous with or within two years following a change in control. Also, if an acquiring corporation fails to assume awards granted under the 2021 Incentive Plan (other than performance-based awards, addressed below), such awards will vest immediately upon the effective time of a change in control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.At the time of an involuntary termination of service within two years following a change in control, all stock options then held by the participant shall become fully earned and exercisable (subject to the expiration provisions otherwise applicable to the stock option). All stock options may be exercised for a period of three years following the participant's involuntary termination of service; provided, however, that no stock option will be eligible for treatment as an incentive stock option if such stock option is exercised more than three months following involuntary termination of service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.At the time of an involuntary termination of service within two years following a change in control, all time-based awards of restricted stock and restricted stock units will immediately become earned and fully vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Unless otherwise provided in an award agreement (which may provide for full payout level of the awards, subject to the satisfaction of certain performance criteria set forth in the award agreement), the payout level under all of the participants' performance-based awards will be deemed to have been earned as of the date of termination (or date of change in control if the awards are not assumed by the surviving entity) based upon achievement of all relevant performance goals at target level, or at a level in excess of target in the Committee's discretion, and a pro rata portion of the performance awards will be distributed.

**Awards Subject to Clawback Policy**

Awards granted under the Plan are subject to clawback if the Company is required to prepare an accounting restatement due to material non-compliance of the Company or as a result of misconduct with any financial reporting requirement under the federal securities laws and the forfeiture provisions of the Sarbanes-Oxley Act of 2002 apply. Awards

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may also be subject to clawback under any other clawback policy adopted by the Company from time to time, whether pursuant to the Dodd-Frank Act or otherwise.

**Amendment and Termination**

Our board of directors may amend or terminate the 2021 Incentive Plan or any award granted under the 2021 Incentive Plan. However, except as provided in the 2021 Incentive Plan, no amendment or termination may adversely impair the rights of an outstanding award without the participant's (or affected beneficiary's) written consent. The board of directors may not amend the 2021 Incentive Plan to allow repricing of a stock option, materially increase the aggregate number of securities that may be issued under the 2021 Incentive Plan (other than as provided in the 2021 Incentive Plan), materially increase the benefits accruing to a participant, or materially modify the requirements for participation in the 2021 Incentive Plan, without approval of shareholders. Notwithstanding the foregoing, the board may, without shareholder approval, amend the 2021 Incentive Plan at any time, retroactively or otherwise, to ensure that the Plan complies with current or future law and our board of directors may unilaterally amend the 2021 Incentive Plan and any outstanding award, without participant consent, to conform to any changes in the law or any accounting pronouncement or interpretation thereof.

**Duration of Plan**

The 2021 Plan became effective upon approval by the shareholders at the 2021 annual meeting of shareholders. The 2021 Incentive Plan terminates ten years after that date, or, if sooner, when all shares reserved under the 2021 Incentive Plan have been issued. At any time, the board of directors may terminate the 2021 Incentive Plan; however, any termination of the 2021 Incentive Plan will not affect outstanding awards.

**Summary of Federal Tax Consequences of Awards**

The following is a summary of the federal income tax consequences that may arise in conjunction with participation in the 2021 Incentive Plan.

**Non-Qualified Stock Options.** The grant of a non-qualified stock option will not result in taxable income to the participant. Except as described below, the participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares acquired over the exercise price for those shares, and we will be entitled to a corresponding deduction for tax purposes. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.

**Incentive Stock Options.** The grant of an incentive stock option will not result in taxable income to the participant. The exercise of an incentive stock option will not result in taxable income to the participant provided the participant was, without a break in service, an employee of the Company or a subsidiary during the period beginning on the date of the grant of the option and ending on the date three months before the date of exercise (one year before the date of exercise if the participant is disabled, as that term is defined in the Code). We will not be entitled to a tax deduction upon the exercise of an incentive stock option.

The excess of the fair market value of the shares at the time of the exercise of an incentive stock option over the exercise price is an adjustment that is included in the calculation of the participant's alternative minimum taxable income for the tax year in which the incentive stock option is exercised. For purposes of determining the participant's alternative minimum tax liability for the year of disposition of the shares acquired pursuant to the incentive stock option exercise, the participant will have a basis in those shares equal to the fair market value of the shares at the time of exercise.

If the participant does not sell or otherwise dispose of the shares within two years from the date of the grant of the incentive stock option or within one year after the exercise of such stock option, then, upon disposition of such shares, any amount realized in excess of the exercise price will be taxed as a capital gain. A capital loss will be recognized to the extent that the amount realized is less than the exercise price. If the foregoing holding period requirements are not met, the participant will generally recognize ordinary income at the time of the disposition of the shares in an amount equal to the lesser of (1) the excess of the fair market value of the shares on the date of exercise over the exercise price, or (2) the excess, if any, of the amount realized upon disposition of the shares over the exercise price, and we will be entitled to a corresponding deduction. If the amount realized exceeds the fair market value of the shares on the date of exercise, any additional amount will be a capital gain. If the amount realized at the time of disposition is less than the exercise price, the participant will recognize no income, and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of the shares.

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**Restricted Stock.** A participant who has been granted a restricted stock award will not realize taxable income at the time of grant, provided that the stock subject to the award is not delivered at the time of grant, or if the stock is delivered, it is subject to restrictions that constitute a "substantial risk of forfeiture" for federal income tax purposes. Upon the later of delivery or vesting of shares subject to an award, the holder will realize ordinary income in an amount equal to the then fair market value of those shares and we will be entitled to a corresponding deduction for tax purposes. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of delivery or vesting. Dividends paid to the holder will also be compensation income to the participant and we will be entitled to a corresponding deduction for tax purposes. A participant who makes an election under Code Section 83(b) will include the full fair market value of the restricted stock award (or portion of the award subject to such election) in taxable income in the year of grant at the grant date fair market value. The Committee has the right to prohibit participants from making Code Section 83(b) elections.

**Restricted Stock Units.** A participant who has been granted a restricted stock unit will not realize taxable income at the time of grant and will not be entitled to make an election under Code Section 83(b) since no stock is actually transferred to the recipient on the date of grant. At the time a restricted stock unit vests, assuming the award is distributed at that time, the recipient will recognize ordinary income in an amount equal to the fair market value of the common stock or the amount of cash received. If the restricted stock unit is not distributed at the time it vests, no income will be recognized at that time and taxation will be deferred until the value of the restricted stock unit is distributed. At the time the recipient recognizes taxable income on a restricted stock unit, we will be entitled to a corresponding tax deduction in the same amount recognized by the award.

**Stock Appreciation Rights.** No income will be realized by a participant in connection with the grant of a stock appreciation right. When the right is exercised, the participant generally will be required to include in gross income as ordinary income in the year of exercise an amount equal to the amount of cash received and the fair market value of any shares of common stock received on the exercise. At the same time, the Company will be entitled to a deduction for federal income tax purposes equal to the amount included in the participant's gross income by reason of the exercise, subject to satisfaction of the ordinary and necessary test. Upon disposition of common stock acquired upon the exercise of a stock appreciation right, appreciation (or depreciation) occurring after the date of exercise will be treated as either short-term or long-term capital gain (or loss), depending on the recipient's holding period of the shares.

**Cash-Based Awards**. A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a cash-based award is granted (for example, when the performance goals are established). Upon receipt of cash in settlement of the award, a participant will recognize ordinary income equal to the cash received, and the Company will be allowed a corresponding federal income tax deduction at that time.

**Withholding of Taxes.** We may withhold amounts from participants to satisfy withholding tax requirements. Except as otherwise provided by the Committee, participants may have shares withheld from awards to satisfy tax withholding requirements up to an amount that will not trigger adverse accounting for the Company.

**Change in Control.** Any acceleration of the vesting or payment of awards under the 2021 Incentive Plan in the event of a change in control or termination of service that is contingent upon a change in control may cause part or all of the consideration involved to be treated as an "excess parachute payment" under the Section 280G of the Code, which may subject the participant to a 20% excise tax and preclude deduction by the Company.

**Deduction Limits.** Section 162(m) of the Code generally limits our ability to deduct for tax purposes compensation in excess of $1.0 million per year for each of the Company's principal executive officer, principal financial officer and three other executive officers named in the summary compensation table (each, a "covered employee") of our annual proxy statement, as well as any employee who has been designated a covered employee for any fiscal year beginning after December 31, 2016. Compensation resulting from awards under the 2021 Incentive Plan will be counted toward the $1.0 million limit.

**Tax Advice.** The preceding discussion is based on federal tax laws and regulations presently in effect, which are subject to change, and the discussion does not purport to be a complete description of the federal income tax aspects of the 2021 Incentive Plan. A participant may also be subject to state and local taxes in connection with the grant of awards under the 2021 Incentive Plan.

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**Receipt of Allocation of New Plan Benefits**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither the Committee nor the Board has made any specific allocation of the additional shares that would be available for issuance under the 2021 Incentive Plan if the Plan Amendment is approved, and therefore it is not possible to determine the benefits or amounts that will be received by or allocated under the 2021 Incentive Plan to the named executive officers or to any other individuals. The Committee will consider in the future whether to make awards. An example of past equity grants to named executive officers can be found in the "Grants of Plan-Based Awards" table in the "Executive Compensation" section of this Proxy Statement. In addition, the Company has, in the past, made grants of restricted stock awards and restricted stock units to non-employee directors as compensation for their service as directors, as discussed above under "Director Compensation." The Committee currently intends to continue to make such awards to non-employee directors in fiscal year 2023.

**Required Vote and Recommendation of the Board of Directors**

To approve the Plan Amendment, the proposal must receive the affirmative vote of at least a majority of the votes cast at the annual meeting, either online or by proxy.

**Recommendation and Vote Required on Proposal 4**

Approval of the Plan Amendment requires the affirmative vote of a majority of the votes cast on Proposal 4, whether online or by proxy.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE **<u>"FOR"</u>** PROPOSAL 4.

**PROPOSAL 5**

**RATIFICATION OF THE APPOINTMENT OF THE** 

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** 

The Audit Committee of the Board of Directors appointed Crowe LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2023. Representatives from Crowe LLP are expected to be available at the annual meeting to answer questions and they will have the opportunity to speak if desired. The Audit Committee will consider the outcome of our shareholders' vote in connection with the selection of Crowe LLP but is not bound by the vote. If the appointment is not ratified, the Audit Committee will consider whether a different independent registered public accounting firm should be selected.

Aggregate fees for the fiscal years ended December 31, 2022 and December 31, 2021 billed by Crowe LLP were as follows:

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| | | |
|:---|:---|:---|
| **Type of Service** | **2022** | **2021** |
| Audit Fees | $639520 | $515000 |
| Audit-Related Fees (1) | 30000 | 112103 |
| Total | $669520 | $627103 |

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(1)Represents fees for procedures related to HUD, corporate advisory and critical audit matters for both 2022 and 2021.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE **"FOR"** THE RATIFICATION OF THE APPOINTMENT OF CROWE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023.

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**Audit Committee Pre-Approval Procedures**

The Audit Committee maintains a policy concerning the pre-approval of audit and non-audit services to be provided by the independent registered public accounting firm to Peapack-Gladstone. The policy requires that all services to be performed by Peapack-Gladstone's independent registered public accounting firm, including audit services, audit-related services and permitted non-audit services, be pre-approved by the Audit Committee. Specific services being provided by the independent registered public accounting firm are regularly reviewed in accordance with the pre-approval policy. At subsequent Audit Committee meetings, the Audit Committee receives updates on the services actually provided by the independent registered public accounting firm, and management may present additional services for approval. All services rendered by Crowe LLP are permissible under applicable laws and regulations. Each new engagement of Crowe LLP in 2022 was approved in advance by the Audit Committee.

**Audit Committee Report**

The Company's management is responsible for the Company's internal control over financial reporting. The Company's independent registered public accounting firm is responsible for performing an independent audit of the Company's consolidated financial statements and issuing an opinion on the conformity of those financial statements with U.S. generally accepted accounting principles. The independent registered public accounting firm is also responsible for issuing an opinion on the Company's internal control over financial reporting based on criteria issued by the Committee on Sponsoring Organizations of the Treadway Commission. The Audit Committee oversees the Company's internal control over financial reporting on behalf of the Board of Directors.

In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the Company's independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission.

In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence, and have discussed with the independent accountant the independent accountant's independence. In concluding that the independent registered public accounting firm is independent, the Audit Committee considered, among other factors, whether the non-audit services provided by the firm were compatible with its independence.

The Audit Committee discussed with the Company's independent registered public accounting firm the overall scope and plans for their audit. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examination, their evaluation of the Company's internal control over financial reporting and the overall quality of the Company's financial reporting process.

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In performing these functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of the Company's management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm that, in its report, expresses an opinion on the conformity of the Company's financial statements with U.S. generally accepted accounting principles. The Audit Committee's oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal control over financial reporting designed to ensure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee's considerations and discussions with management and the independent registered public accounting firm do not ensure that the Company's financial statements are presented in accordance with U.S. generally accepted accounting principles, that the audit of the Company's financial statements has been carried out in accordance with the standards of the Public Company Accounting Oversight Board or that the Company's independent registered public accounting firm is "independent."

Based on the reviews and discussions referred to above, we recommended to the Board of Directors that the audited financial statements referred to above be included in Peapack-Gladstone's Annual Report on Form 10-K for the year ended December 31, 2022.

**The Audit Committee**

**of the Board of Directors**

**Steven A. Kass, Chair**

**Anthony J. Consi, II**

**Richard Daingerfield**

**Edward A. Gramigna, Jr.**

**Patrick J. Mullen**

**Beth Welsh**

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**COMPENSATION DISCUSSION AND ANALYSIS**

The following is a discussion and analysis of our compensation programs as they apply to our Chief Executive Officer ("CEO"), the individuals that served as our Chief Financial Officer ("CFO"), and other highest compensated individuals who were serving as executive officers at the end of 2022 (collectively, the "named executive officers" or "NEOs").

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| | |
|:---|:---|
| &nbsp;&nbsp;**Named Executive Officer** | **Position** |
| &nbsp;&nbsp;Douglas L. Kennedy | President and Chief Executive Officer |
| &nbsp;&nbsp;Frank A. Cavallaro (1) | Senior EVP, Chief Financial Officer |
| &nbsp;&nbsp;Robert A. Plante | EVP, Chief Operating Officer |
| &nbsp;&nbsp;John P. Babcock | Senior EVP, President of Private Wealth Management |
| &nbsp;&nbsp;Gregory M. Smith | Senior EVP, President of Commercial Banking |
| &nbsp;&nbsp;Jeffrey J. Carfora (2) | Senior EVP, Former CFO |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a Senior EVP until April 7, 2023, when he retires.

**Executive Summary**

General Philosophy

The Company believes in aligning the interest of the NEOs with those of shareholders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company believes in aligning pay to performance in determining compensation for its CEO and other NEOs.

➣CEO and CFO incentive awards are based 100% on Company performance.

➣Other NEOs incentive awards are based 75% on Company performance and 25% on individual performance.

➣For the cash short-term incentive (STI) portion of compensation, Company performance is determined based on pre-tax income before the provision for credit losses and earnings per share, both relative to a budget set at the beginning of the year.

➣For the restricted stock unit long-term incentive (LTI) portion of compensation, 50% of grants to NEOs vest based on Company performance at the end of a prospective three-year period (cliff vest). Depending on performance relative to peers, vesting can be as low as zero.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪For the 2023 restricted stock unit incentive (LTI) grants, the percentage subjected to cliff vesting at the end of a three-year performance period was increased to 60% of the grant; with 40% time vested over a prospective period. For the performance-based shares, vesting can be as low as zero, depending on the achievement of certain performance metrics.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company believes in more heavily weighting equity incentives as opposed to salary, cash incentives, or time-based retirement vehicles in setting compensation for its CEO and other NEOs.

➣The Company believes that emphasizing equity in our compensation package aligns executives with shareholders, provides meaningful retention and conserves cash.

➣For the CEO and other NEOs, restricted stock unit (LTI) awards are generally more than double the cash (STI) awards.

➣The Company maintains a much higher percentage of its CEO and other NEO compensation in restricted stock units as compared to its executive compensation peer group (41% for the Company compared to 24% for peers).

2022 Financial Highlights and Company Performance

The Compensation Committee of the Board of Directors (the "Committee") believes that the Company, under the leadership and guidance of its CEO and other named executive officers, had a very successful 2022 year.

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In particular, the Committee noted the following, which it believes demonstrated the success of the Company and of the CEO and other named executive officers in 2022:

<u>Earnings/Returns</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•2022's return on average assets, return on average equity, and return on average tangible equity totaled 1.20%, 14.02%, and 15.43%, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•2022's pre-tax income before the provision for credit losses and earnings per share ("EPS") reflected growth of 29% and 36%, respectively, when compared to 2021 levels.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company's one-year and three-year EPS growth metrics compare very favorably to those of various peer groups:

➣NJ Bank Peer Group (7 Banks including PGC)

✓PGC ranks 1 of 7 for one-year EPS growth; and 2 of 7 for three-year EPS growth

➣Banks with a Significant Wealth Business Peer Group

✓PGC ranks 1 of 6 for both one-year and three-year EPS growth

➣Peer Banks included in 2022 Proxy Compensation Discussion and Analysis

✓PGC ranks 2 of 17 for one-year EPS growth; and 3 of 17 for three-year EPS growth

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The above results improve further when results are adjusted to what the Company believes are "core earnings," as shown in the Company's 12/31/2022 Investor Update (previously filed with the SEC and available on the Company's website).

<u>Capital Management and Stock Price Performance:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company's one-year and three-year Total Shareholder Return (TSR) metrics compare very favorably to those of various peer groups:

➣NJ Bank Peer Group (7 Banks including PGC)

✓PGC ranks 1 of 7 for both one-year and three-year TSR

➣Banks with a Significant Wealth Business Peer Group

✓PGC ranks 1 of 6 for both one-year and three-year TSR

➣Peer Banks listed in 2022 Proxy Compensation Discussion and Analysis

✓PGC ranks 1 of 17 for one-year TSR; and 2 of 17 for three-year TSR

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•During 2022, the Company repurchased 930,977 shares of stock at an average price of $35.15 for a total cost of $32.7 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Tangible book value per share increased 4.5% to $27.26 at December 31, 2022 from $26.10 at December 31, 2021, despite stock repurchase activity and significant increases to unrealized loss on available-for-sale securities caused by the rising interest rate environment (which impacted the entire banking industry).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company's and the Bank's capital ratios are all well above regulatory well capitalized standards.

<u>Peapack Private Wealth Management:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Assets under management/assets under administration in our Peapack Private Wealth Management Division totaled $9.9 billion at December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Gross new business inflows for 2022 totaled $1 billion (record level).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Wealth Management fee income increased 3% to $54.7 million (record level) for 2022 compared to $53.0 million for 2021, despite negative market action in 2022.

<u>Commercial Banking and Balance Sheet Management:</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The net interest margin improved by 53 basis points from 2.38 percent for 2021 to 2.91 percent for 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•At December 31, 2022, total loans grew 9% to $5.30 billion compared to $4.84 billion at December 31, 2021.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Commercial and industrial loan/lease balances grew $205 million or 10% from December 31, 2021, and comprised 42% of the total loan portfolio at December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Small Business Administration income ($6.8 million) and Corporate Advisory fees ($1.7 million) totaled $8.5 million in 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fee income on unused commercial lines of credit totaled $2.2 million for 2022 compared to $655,000 for the prior year. Additionally, income recorded by the Equipment Finance division related to equipment transfers to lessees was $1.3 million compared to none in prior periods. Both of these were significant increases from the prior year.

<u>Other:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Bank was recognized by the American Bankers Association as one of the Best Banks to Work for in 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company carries investment grade ratings from both Moody's and Kroll.

<u>2022 Executive Performance Plan Results</u>

The Executive Performance Plan consisted of the following two components:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•<u>Short-term incentive awards</u> ("STI Awards") that provide an annual cash incentive opportunity to the NEOs based on prior-year Company performance for the CEO and CFO, and based on a mix of prior-year Company and individual performance for all other NEOs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•<u>Long-term incentive awards</u> ("LTI Awards") that provide annual restricted stock unit awards with 50% (60% beginning with March 2023 grants) that vest solely based on Company performance relative to a peer group at the end of a prospective three-year period (cliff vest), and 50% (40% beginning with March 2023 grants) that vest over a three-year period. (A five-year vesting period was utilized for time-vested shares granted since the Pandemic, i.e. in 2020, 2021, and 2022.)

For 2022, pre-tax income before provision for loan losses and earnings per share, as reported and as adjusted to reflect core earnings (as shown in the Company's 12/31/2022 Investor Update - previously filed with the SEC and available on the Company's website) were both well above the budget/plan for 2022 ("2022 Budget") as shown in the table below.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**(Dollars in millions, except EPS)** | **2022 as reported** | **2022 as adjusted (1)** | **2022 Budget** | **2022 as reported vs. 2022 budget** | **2022 as reported vs. 2022 budget** | **2022 as adjusted vs. 2022 budget** | **2022 as adjusted vs. 2022 budget** |
| &nbsp;&nbsp;&nbsp;Pretax income before provision for loan losses | $108.70 | $118.38 | $89.37 | $19.33 | 22% | $29.01 | 32% |
| &nbsp;&nbsp;&nbsp;Diluted earnings per share (EPS) | $4.00 | $4.38 | $2.99 | $1.01 | 34% | $1.39 | 46% |

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1)As disclosed and described fully in the Company's 12/31/2022 Investor Update, previously filed with the SEC and available on the Company's website, 2022 as adjusted excluded: (i) a $6.6 million loss on the sale of securities; (ii) $1.7 million negative fair value adjustment on CRA equity security; (iii) a $275,000 gain on the sale of property; (iv) $25,000 of additional bank owned life insurance ("BOLI") income related to the receipt of life insurance proceeds; (v) $1.5 million of severance expense related to certain corporate restructurings within several areas of the Bank; and (vi) $200,000 of expense related to accelerated vesting of restricted stock units related to one employee.

For purposes of the Company's Executive Performance Plan (the "EPP"), Company performance was measured as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Threshold – 85% of "2022 Budget;"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Target – 100% of "2022 Budget;" and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Maximum – 110% and above of "2022 Budget."

2022 Budget achievement is based on pre-tax income before provision for loan losses weighted at 40% and EPS weighted at 60%. Based on these weightings, the Company's 2022 performance was 29% over budget based on as reported, and 41% over budget based on as adjusted.

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After consideration of 2022 results to budget, the Committee determined Company performance to be at the maximum level. Additionally, results compared to the prior year and results compared to various peer groups are consistent with such results and determination.

Compensation Philosophy and Program Objectives

The fundamental objective of the Company's executive compensation program, the elements of which are summarized in the table below, is to fairly compensate our named executive officers at appropriate levels and grant equity compensation to align the interests of our named executive officers with those of our shareholders. Our compensation program is designed to retain and attract qualified executives and motivate such executives to achieve short- and long-term strategic and operational goals that ultimately deliver value to shareholders. We believe in a pay-for-performance philosophy that appropriately aligns our executives' total compensation with the performance and value of their contributions as well as the Company's ultimate success.

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| | | | |
|:---|:---|:---|:---|
| **Element** | **Purpose** | **Link to Performance** | **Fixed/Performance <br>Based** |
| Annual Cash Bonus (STI) | Encourages achievement of short-term strategic and financial performance metrics that create long-term shareholder value | Based on achievement of short-term, pre-defined corporate performance objectives and (for officers other than the CEO and CFO) an assessment of individual performance. | Performance Based |
| Restricted Stock Units (LTI) | Encourages achievement of long-term strategic and financial performance metrics that create long-term shareholder value | The Company has an LTI Plan intended to further link executive pay with Company performance. The grant value is based on the prior year's Company performance. For the 2022 grant, equity vesting for the CEO and the NEOs was 50% cliff vested based on performance of a prospective three-year period of EPS growth, liquidity and credit quality metrics and 50% time-based over a five-year period. | Performance Based |
| Benefits and Perquisites | Establishes limited perquisites in line with market practice, as well as health and welfare benefits on the same basis as our general employee population | -- | Fixed |

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2022 CEO Compensation Decisions

The Company made the following key decisions regarding Mr. Kennedy's compensation package:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Salary:** Mr. Kennedy did not receive a salary increase during 2022. After receiving no salary increases in 2019 and 2020, the Company provided a salary increase to Mr. Kennedy in April 2021 from $695,000 to $731,000 based on a review of market data as well as Company and individual performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**STI (Cash) Incentive:** The STI (Cash) incentive for 2022 (to be paid in March 2023) was calculated based on 100% Company performance, which was deemed to be achieved at maximum. The cash incentive award calculated and paid to Mr. Kennedy was $657,900.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**LTI (Restricted Stock Units) Incentive:** The 2022 long-term incentive award granted to Mr. Kennedy in March 2022 was based on 2021 performance. 50% of the LTI (restricted stock) incentive vests solely based on Company performance at the end of a prospective three-year period (cliff vest). For performance-based shares, vesting can be as low as zero, depending on performance.

o**2021 Company Performance:** The LTI (Restricted Stock Units) Incentive was calculated based on 100% Company performance, which was deemed to be achieved at maximum. 2021 Budget achievement was based on pre-tax income before provision for loan losses weighted at 40% and EPS weighted at 60%. Based on these weightings, the Company's 2021 performance was 33% over budget based on as reported, and 38% over budget based on an as adjusted basis. Additionally, results compared to the prior year and results compared to various peer groups are consistent with such results and determination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪**50% Performance-Vested:** Half of the award will cliff vest based on five metrics measured relative to peers. The metrics and their weightings (as a percentage of the performance-vested portion of the award) are 60% three-year EPS growth, 20% Liquidity metrics and 20% Credit Quality metrics

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relative to the compensation peer group. For performance-based shares, vesting can be as low as zero, depending on performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪**50% Time-Vested:** Half of the award will vest equally over five years. The Plan calls for a three-year time vest, however, given the challenges to earnings the pandemic presented, the Committee decided to vest shares granted in 2020, 2021 and 2022 over a five-year period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪**For 2023, 60% Performance-Vested:** Compensation is continually re-assessed to ensure a strong link between pay and performance. For March 2023 restricted stock incentive (LTI) grants, the percentage subjected to cliff vesting at the end of a three-year performance period was increased to 60% of the grant with 40% time vested over a prospective period. For performance-based shares, vesting can be as low as zero, depending on performance.

Summary of Key Compensation Compliance Policies

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| | |
|:---|:---|
| **Policy** | **Description** |
| Stock Ownership | Our named executive officers are subject to meaningful stock ownership guidelines, with which all NEOs are in compliance. |
| Clawback | All awards (cash and equity) made under the EPP are subject to clawback based on inaccurate financial statements. |
| No Excise Tax Gross-Ups | No 280G tax gross-up provisions are in our executive's agreements. |
| Double Trigger CIC Severance | Cash severance is not automatically triggered upon a change-in-control without a corresponding termination. |
| Double Trigger Equity in CIC | Equity grants require a change in control along with a corresponding termination in order to trigger an acceleration of equity in the case of a change-in-control. |
| Anti-Hedging Policy | The Committee maintains a policy prohibiting our executives and directors from hedging shares, including buying or selling puts or calls, short sales, or engaging in any other transaction designed to hedge or offset any decrease in the market value of the Company's stock. |
| Anti-Pledging Policy | The Committee maintains a policy prohibiting our executives and directors from holding Company shares in a margin account as collateral for a margin loan or otherwise pledging Company shares as collateral for a loan. |

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The Company's 2022 Incentive Plan also incorporates certain governance best practices, including:

**Minimum Vesting**. Minimum vesting period of one year from the date of grant for all awards granted under the 2021 Incentive Plan, except under certain limited circumstances and with permitted exceptions up to 5% of the share reserve.

**No Single-Trigger for Vesting of Awards Upon a Change in Control**. The 2022 Incentive Plan does not provide for vesting of time-based awards based solely on the occurrence of a change in control for awards assumed by a surviving entity, without an accompanying involuntary termination of service (including a termination for good reason).

**Dividends on Unvested Awards Not Paid Until Vesting**. Dividends on unvested awards will be withheld and paid to participants only after the underlying awards have vested.

**No Cash-Out or Repricing of Underwater Options**. No repricing of stock options and no cash buyout of underwater stock options without shareholder approval, except for adjustments with respect to a change in control or an equitable adjustment in connection with certain corporate transactions.

**Roles and Decision Process** 

The Committee is responsible for establishing and overseeing policies governing annual and long-term compensation programs for our executives, and for determining executive compensation levels in line with our philosophy. Details of the Committee's functions are more fully described in its charter, which has been approved by the Board of

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Directors and is available on our website. The Chair of the Committee regularly reports on Committee actions at the Company's Board of Directors meetings.

The Committee reviews all compensation components for the Company's CEO and other named executive officers, including base salary, annual cash and equity incentives, benefits and contracts/arrangements.

Although the Committee makes independent determinations on all matters related to compensation of the named executive officers, certain members of management may be requested to attend or provide input to the Committee. The CEO provides advice to the Committee relative to the compensation of the other named executive officers. The CEO is not present for the discussion by the Committee of his own compensation. Other senior officers, such as the Head of Human Capital, General Counsel, and/or the CFO, may provide information and perspective to the Committee as appropriate and/or as requested. The Committee's independent compensation consultant (Aon, formerly McLagan) also provides market data and advice as appropriate. The Committee makes its determinations based on an assessment of Company performance and individual performance and on data provided by management and its independent compensation consultant.

The Committee has the sole authority to retain, terminate, obtain advice from, oversee and compensate its outside advisors, including its independent compensation consultant. The Committee has determined that it has the funding it needs to retain the advisors necessary to carry out its duties effectively. In 2013, the Committee first retained Aon's Human Capital Solutions practice, a division of Aon plc ("Aon"), which is a part of the Rewards Solutions practice at Aon PLC, as an independent outside compensation consultant. Aon was retained again for 2022. Aon's services included peer group development and market benchmarking studies, assisting with the continued implementation and administration of the incentive program, and providing insight and best practices with respect to the compensation of our named executive officers.

While the Committee seeks independent external perspective, the Committee makes all decisions regarding the compensation of the Company's named executive officers.

The Committee reviewed its relationship with Aon (formerly McLagan) and considered Aon's independence in light of all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act and under applicable NASDAQ listing rules. The Compensation Committee received a report from Aon addressing its independence, which included the following factors: (1) there were no services provided to the Company, other than compensation related to consulting services provided by Aon; (2) fees paid by the Company as a percentage of total revenue of Aon; (3) policies or procedures maintained by Aon that are designed to prevent a conflict of interest; (4) any business or personal relationships between the senior advisors of Aon and a member of the Committee; (5) any Company stock owned by the senior advisors of Aon; and (6) any business or personal relationships between the executives and the senior advisors of Aon. The Committee discussed these considerations and concluded that the work performed by Aon and Aon's senior advisors involved in the engagement did not raise any conflict of interest.

**Compensation Review**

Understanding the competitive landscape is a key element for the Committee to consider when making compensation decisions. Each year, the Committee commissions a compensation review by its independent compensation consultant to provide an independent and objective analysis of the Bank's total compensation relative to a peer group and to industry practices. The Committee utilizes market data for ongoing monitoring of executive pay relative to market practices, and to determine executive compensation.

The foundation for the review is publicly-filed data from a peer group of banks. In 2021, the Committee reviewed compensation information provided by Aon that the Committee used to set 2022 executive compensation. The peer group for this study consisted of 20 commercial banks selected by the Committee after considering recommendations from Aon. The selection criteria generally included: eastern U.S. commercial banks with total revenue between $100 million and $466 million, non-interest income to total revenue greater than 12.5% or trust or investment revenue greater than $2 million, and nonperforming assets to total assets less than 2%. This peer group of 20 banks had median total assets of $6.4 billion when selected (comparable to the Company's $6.1 billion at December 31, 2021, and $6.4 billion at December 31, 2022), and median revenue of $198 million (comparable to the Company's $210 million for 2021 and $242 million for 2022).

The peer group consisted of the following 20 banks:

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Arrow Financial Corp. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Orrstown Financial Services, Inc. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Berkshire Hills Bancorp, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Park National Corp. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cambridge Bancorp | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provident Financial Services, Inc. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital Bancorp, Inc | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Republic First Bancorp Inc. |

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dime Community Bancshares, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sandy Spring Bancorp Inc. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Eagle Bancorp, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The First Long Island Corp. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Enterprise Bancorp Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tompkins Financial Corp. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lakeland Bancorp, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TriState Capital Holdings, Inc. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Meridian Corp. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Univest Financial Corp. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OceanFirst Financial Corp. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Washington Trust Bancorp |

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The Committee uses compensation data from the annual total compensation study of peer companies to inform its decisions about overall compensation opportunities and specific compensation elements. Additionally, the Committee uses multiple reference points when establishing target compensation levels. The Committee does not benchmark specific compensation elements or total compensation to any specific percentile relative to the peer companies or the broader U.S. market. Instead, the Committee applies judgment and discretion in establishing targeted pay levels, considering market data, along with factors such as Company, business, and individual performance; scope of responsibility; critical needs and skill sets; and leadership potential and succession planning.

**Say on Pay Consideration**

At the 2022 Annual Meeting, 71% of votes cast were in favor of the say-on-pay proposal. Notwithstanding this majority support, we target a vote with higher support than we received, and we continue to monitor our pay alignment and seek ways to improve our compensation program. For the March 2023 restricted stock unit incentive (LTI) grants, the percentage subjected to cliff vesting at the end of a three-year performance period was increased to 60% of the grant; with 40% time vested over a prospective period. For performance-based shares, vesting can be as low as zero, depending on performance.

As noted in prior periods, the Committee restructured the long-term incentive awards for 2021 and beyond to provide for a greater percentage of awards with vesting linked to the performance of the Company. In 2022, we instituted using multiple goals for the performance-vested portion of the award. And, for the time-based vested stock grants made to NEOs in 2020, 2021 and 2022 we utilized a five-year vesting period instead of the three-year period prescribed by the Plan. Utilization of a five-year period provides better expense recognition economics for the Company and enhances the "retention tool" benefit of a restricted stock grant. Further, as noted previously, for the March 2023 restricted stock unit incentive (LTI) grants, the percentage subjected to cliff vesting at the end of a three-year performance period was increased to 60% of the grant; with 40% time vested over a prospective period. For performance-based shares, vesting can be as low as zero, depending on performance.

**Elements of Compensation and Decisions**

We target our total compensation to be fair and appropriate considering market conditions, peer group comparisons, Company performance, individual performance, as well as our long-term strategic goals. We believe our compensation policies and practices appropriately balance risk against our desire to award competitive compensation and are unlikely to have an adverse effect on our Company. The elements of our compensation include base salary, short-term (cash) incentive awards, and long-term (equity) incentive awards.

<u>Base Salary</u>

Our named executive officers' base salaries are set to reflect a combination of factors, including, but not limited to level of responsibility, being competitive in the market, experience, skill-set, and individual performance, as well as the Company's compensation philosophy and overall performance. We design our base salaries in significant part to retain and attract talented executives who can help drive long-term shareholder value. We believe we must keep our base salaries competitive, within the context of our compensation culture, or risk losing executive talent, because the markets in which we operate present current and potential executives with higher-paying alternatives.

The following summarizes the 2021 and 2022 base salaries for the Company's named executive officers:

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**Named Executive Officer** | **2021 Base <br>Salary Rate** | **2022 Base <br>Salary Rate** | **%<br>Increase** |
| &nbsp;&nbsp;Douglas L. Kennedy<br>President and Chief Executive Officer | $731000 | $731000 | 0% |
| &nbsp;&nbsp;Frank A. Cavallaro (1)<br>Senior EVP, Chief Financial Officer | N/A (1) | $375000 | N/A (1) |
| &nbsp;&nbsp;Robert A. Plante<br>EVP, Chief Operating Officer | $365000 | $365000 | 0% |
| &nbsp;&nbsp;John P. Babcock<br>Senior EVP, President of Private Wealth Management | $545000 | $545000 | 0% |
| &nbsp;&nbsp;Gregory M. Smith<br>Senior EVP, President-Commercial Banking (3) | $340000 | $355000 | 4% |
| &nbsp;&nbsp;Jeffrey J. Carfora (2)<br>Senior EVP, Former CFO | $376000 | $376000 | 0% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a Senior EVP until April 7, 2023, when he retires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Mr. Smith's increase was based on a review of market compensation data.

<u>Executive Performance Plan</u>

The EPP consisted of the following two components:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•<u>Short-term (Cash) incentive awards</u> ("STI Awards") that provide an annual cash incentive opportunity based on Company performance for the CEO and CFO, and based on a combination of Company and individual performance for all other NEOs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•<u>Long-term (Equity) incentive awards</u> ("LTI Awards") that provide annual restricted stock unit awards with three-year vesting (five-year for the 2020, 2021 and 2022 time-based vesting grants). For the 2022 award, 50% vests based on future performance, while the other 50% of the award is time vested. For the March 2023 restricted stock unit incentive (LTI) grants, the percentage subjected to cliff vesting at the end of a three-year performance period was increased to 60% of the grant; with 40% time vested over the prospective period. For performance-based shares, vesting can be as low as zero, depending on performance.

The following chart depicts the 2022 potential for awards granted to each named executive officer under the EPP. The percentages referenced in the chart with respect to the STI Awards (Cash) and LTI Awards (Restricted Stock Units) refer to percentages of base salary.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **<u>Performance Re. STI</u>** | **<u>Performance Re. STI</u>** | **<u>STI Awards (Cash)</u>** | **<u>STI Awards (Cash)</u>** | **<u>STI Awards (Cash)</u>** | **<u>LTI Awards (Stock) (3)</u>** | **<u>LTI Awards (Stock) (3)</u>** | **<u>LTI Awards (Stock) (3)</u>** |
|  | **Company** | **Individual** | **Threshold** | **Target** | **Max** | **Threshold** | **Target** | **Max** |
| &nbsp;&nbsp;Douglas L. Kennedy<br>President and Chief Executive Officer | 100% | 0% | 45% | 60% | 90% | 75% | 120% | 185% |
| &nbsp;&nbsp;Frank A. Cavallaro (1)<br>Senior EVP, Chief Financial Officer | 100% | 0% | 30% | 40% | 60% | 70% | 110% | 170% |
| &nbsp;&nbsp;Robert A. Plante<br>EVP, Chief Operating Officer | 75% | 25% | 22.5% | 30% | 45% | 45% | 70% | 115% |
| &nbsp;&nbsp;John P. Babcock<br>Senior EVP, President of Private Wealth Management | 75% | 25% | 30% | 40% | 60% | 70% | 110% | 170% |
| &nbsp;&nbsp;Gregory M. Smith<br>Senior EVP, President of Commercial Banking | 75% | 25% | 30% | 40% | 60% | 70% | 110% | 170% |
| &nbsp;&nbsp;Jeffrey J. Carfora (2)<br>Senior EVP, Former CFO | 100% | 0% | 30% | 40% | 60% | 70% | 110% | 170% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022. Mr. Cavallaro did not receive any STI (cash) awards or LTI (restricted stock units) awards under the Company's Executive Performance Plan, as he joined the Company during the last quarter of 2022. He did receive a $200,000 cash payment, as guaranteed in his offer letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)For the 2022 grant, 50% was performance based and 50% was time-based. For the 2023 grant, 60% was performance based and 40% was time-based. For performance-based shares, vesting can be as low as zero, depending on performance.

In formulating the EPP, the Committee also considered internal policies and relevant guidance from bank regulatory authorities that direct the Committee to ensure that compensation incentive programs do not jeopardize the safety and soundness of the Company or the Bank. To that end, the Committee believes that the EPP and the Company's other incentive compensation policies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•appropriately balance risk and reward;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are compatible with effective controls and procedures; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are supported by strong corporate governance, including active oversight by the Committee.

The Committee has discretion to make awards that are less than or greater than awards calculated by the EPP. The Committee also may change, modify or discontinue the EPP at any time, including during the course of a particular year. The Committee may take into account the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the safety and soundness of the Company;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•unexpected events that occur during the year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the Company's performance relative to its peer group;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•regulatory changes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•extraordinary efforts in achieving financial, non-financial, and/or strategic goals.

While the Committee has the discretion to modify awards, this discretion is not expected to be utilized except for extraordinary circumstances.

<u>Short Term Incentive Awards - Performance Calculation</u>

As described and shown previously under 2022 Executive Performance Plan Results, the Committee concluded Company performance was at the maximum level for 2022.

For NEOs with an individual performance portion, the individual performance was determined by the CEO and the Compensation Committee. Individual ratings are based on five levels- 5=maximum; 4=target+; 3=target; 2=threshold+; 1=threshold. Among other things, the CEO and the Committee considered: specifics relative to each individual's responsibilities as included in the budget, wherever applicable; specifics relative to each individual's responsibilities as included in prior year results, wherever applicable; and various goals and targets previously set by the CEO, the Committee and the individual at the beginning of the fiscal year, including personal accountability for critical performance with respect to standard banking industry company metrics, such as deposit growth, loan growth, credit quality, efficiency ratio, and other such goals. The use of individual goals represents the clear assignment by the Committee of direct personal accountability for specific financial, organizational, operational and risk management objectives, the attainment of which contribute significantly to the Company's performance. We believe the assignment of personal accountability in the form of individual goals has strengthened the effectiveness of our executive compensation program and has a positive impact on the performance of our named executive officers.

The following table shows the cash portion of the EPP as calculated (Messrs. Kennedy's and Carfora's weighting was 100% Company and for the other named executive officers was 75%).

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Named Executive Officer** | **2022 Base Salary Rate** | **Company Weighting** | **Company Related Award as a % of Salary** | **Individual Weighting** | **Individual Related Award as a % of Salary** | **Total STI (Cash) Paid for 2022** | **Total Calculated Award as a % of Salary** |
| &nbsp;&nbsp;Douglas L. Kennedy<br>President and Chief Executive Officer | $731000 | 100% | 90.00% | 0% | 0.00% | $657900 | 90.00% |
| &nbsp;&nbsp;Frank A. Cavallaro (1)<br>Senior EVP, Chief Financial Officer | $375000 | 100% | (1) | 0% | 0.00% | (1) | (1) |
| &nbsp;&nbsp;Robert A. Plante<br>EVP, Chief Operating Officer | $365000 | 75% | 33.75% | 25% | 11.25% | $164250 | 45.00% |
| &nbsp;&nbsp;John P. Babcock<br>Senior EVP, President of Private Wealth Management | $545000 | 75% | 45.00% | 25% | 15.00% | $327000 | 60.00% |
| &nbsp;&nbsp;Gregory M. Smith<br>Senior EVP, President of Commercial Banking | $355000 | 75% | 45.00% | 25% | 15.00% | $213000 | 60.00% |
| &nbsp;&nbsp;Jeffrey J. Carfora (2)<br>| $376000 | 100% | 60.00% | 0% | 0.00% | $225600 | 60.00% |

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<u>Senior EVP, Former CFO</u>                                          

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022. Mr. Cavallaro did not receive any STI (cash) awards or LTI (restricted stock units) awards under the Company's Executive Performance Plan, as he joined the Company during the last quarter of 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a senior EVP until April 7, 2023, when he retires.

<u>Long Term Incentive Awards (Restricted Stock Units)</u> 

The LTI plan is split between performance-based and time-based vesting. The LTI portion of the plan provides annual restricted stock awards, with the shares or units granted anywhere from a threshold amount to a maximum amount, considering Company as well as individual performance. The performance-based shares will vest at the conclusion of a three-year period provided that certain targets relative to the compensation peer group have been achieved. The time-based shares vest ratably over three years (five years for the 2020, 2021 and 2022 grants). This grant is intended to motivate executives to focus on the achievement of the Company's long-term strategic plan and to further align Company executives with shareholders. For the March 2023 restricted stock unit incentive (LTI) grants, the percentage subjected to cliff vesting at the end of a three-year performance period was increased to 60% of the grant, with 40% time vested over the prospective period.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **LTI <br>Plan** | **<u>% of Grant</u>** | **<u>Performance <br>Metric</u>** | **<u>Vesting <br>Length</u>** | **<u>Vesting <br>Type</u>** | **<u>Grant Value Determination</u>** | **<u># of shares vested</u>** | **<u># of shares vested</u>** | **<u># of shares vested</u>** |
| **LTI <br>Plan** | **NEOs** | **<u>Performance <br>Metric</u>** | **<u>Vesting <br>Length</u>** | **<u>Vesting <br>Type</u>** | **<u>Grant Value Determination</u>** | **<u># of shares vested</u>** | **<u># of shares vested</u>** | **<u># of shares vested</u>** |
| Time-Vested Shares | 50% | n/a | 3 years (1) | Ratable | Prior year's Company and individual performance considered  | 100% of shares granted ratably over the prospective period | 100% of shares granted ratably over the prospective period | 100% of shares granted ratably over the prospective period |
| Performance-Vested Shares | 50% | 3-yr relative EPS Growth, liquidity, and credit quality (2021 & 2022) (2) | 3 years<br>(3) | Cliff | Prior year's Company and individual performance considered | <u>Threshold</u> | <u>Target</u> | <u>Maximum</u> |
| Performance-Vested Shares | 50% | 3-yr relative EPS Growth, liquidity, and credit quality (2021 & 2022) (2) | 3 years<br>(3) | Cliff | Prior year's Company and individual performance considered | 25th percentile of peer EPS growth = approximately 55% of grant | 50th percentile of peer EPS growth = 100% of grant | 75th percentile of peer EPS growth = approximately 165% of grant |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The plan calls for the vesting of awards over three years, however, given the challenges to earnings the pandemic presented, the Committee decided to vest shares granted in 2020, 2021 and 2022 over a five-year period, rather than a three-year period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The 2022 restricted stock unit awards for the performance-vested portion are measured based on five metrics assessed relative to peers instead of one from previous years. The new metrics and their weightings (as a percentage of the performance-vested portion of the award) are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.60% EPS Growth

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.20% Liquidity metrics

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.20% Credit Quality metrics

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Depending on performance relative to peers, vesting can be as low as zero.

Our long-term incentive awards are designed to focus our executives on long-term performance and shareholder value. We granted long-term incentive awards to Messrs. Plante, Babcock and Smith in March 2022 based on 2021 Company and individual performance. Individual performance was not rated for Mr. Carfora and Mr. Kennedy since the grants to them are entirely based on the performance of the Company. The individual performance of the other named executive officers was determined by the CEO and agreed to by the Committee. Among other things, the CEO considered the same criteria as was utilized in the determination for short-term incentive awards.

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The following table shows the income targets at various levels compared to the actual 2021 performance of the Company and the corresponding Company performance achievement as it relates to payouts for the annual LTI (restricted stock units) awards.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Threshold<br>(85% of Budget)** | **Target <br>2021<br>Budget** | **Max<br>(110% of<br>Budget)** | **2021 as reported** | **2021 as adjusted (1)** | **Company Performance<br>2021 as reported as % of Budget** | **Company Performance<br>2021 as adjusted as % of Budget** |
| &nbsp;&nbsp;Pretax Income (in millions) | $59.90 | $70.47 | $77.52 | $84.14 | $87.05 | 119% | 124% |
| &nbsp;&nbsp;Diluted earnings per share (EPS) | $1.76 | $2.07 | $2.28 | $2.93 | $3.04 | 142% | 147% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)As disclosed and described fully in the Company's 12/31/2022 Investor Update, previously filed with the SEC and available on the Company's website, 2021 as adjusted excluded (i) a $1.1 million gain on the sale of loans held at lower of cost or fair value; (ii) $842,000 related to the termination of interest rate swaps; (iii) $722,000 of fee income related to the referral of PPP loans to a third party; (iv) $455,000 of additional BOLI income related to receipt of life insurance proceeds; (v) $1.5 million of severance expense related to certain corporate restructurings within several areas of the Bank; (vi) $648,000 of expense related to the redemption of subordinated debt; and (vii) $2.2 million related to a swap valuation allowance.

2021 Budget achievement is based on pre-tax income before provision for loan losses weighted at 40% and EPS weighted at 60%. Based on these weightings, the Company's 2021 performance was 33% over budget as reported, and 38% over budget as adjusted, and deemed to be at maximum. Additionally, results compared to the prior year and results compared to various peer groups are consistent with such results and determination.

The following tables detail the grant opportunity, and the actual grant value.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Performance** | **Performance** | **Grant Opportunities** | **Grant Opportunities** | **Grant Opportunities** | **Grant Value** | **Grant Value** | **Grant Value** |
| &nbsp;&nbsp;**Named Executive Officer** | **Company** | **Individual** | **Threshold** | **Target** | **Max** | **$ Value** | **% of Base Salary** | **% of Target** |
| &nbsp;&nbsp;Douglas L. Kennedy<br>President and Chief Executive Officer | 100% | 0% | 75% | 120% | 185% | $1352326 | 185% | 154% |
| &nbsp;&nbsp;Frank A. Cavallaro (1)<br>Senior EVP, Chief Financial Officer | 100% | 0% | 70% | 110% | 170% | (1) | (1) | (1) |
| &nbsp;&nbsp;Robert A. Plante<br>EVP, Chief Operating Officer | 75% | 25% | 45% | 70% | 115% | $419741 | 115% | 164% |
| &nbsp;&nbsp;John P. Babcock<br>Senior EVP, President of Private Wealth Management | 75% | 25% | 70% | 110% | 170% | $926477 | 170% | 155% |
| &nbsp;&nbsp;Gregory M. Smith<br>Senior EVP, President of Commercial Banking | 75% | 25% | 70% | 110% | 170% | $577981 | 170% | 155% |
| &nbsp;&nbsp;Jeffrey J. Carfora (2)<br>Senior EVP, Former CFO | 100% | 0% | 70% | 110% | 170% | $639142 | 170% | 155% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022. Mr. Cavallaro did not receive any STI (cash) awards or LTI (restricted stock units) awards under the Company's Executive Performance Plan, as he joined the Company during the last quarter of 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a Senior EVP until April 7, 2023, when he retires.

The following table sets forth the awards of restricted stock units granted in March 2022 to our named executive officers based on 2021 performance. For the named executive officers, 50% of the awards will vest based on three-year relative EPS growth and the achievement of certain liquidity and credit quality metrics compared to the compensation peer

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group, and the other 50% will vest ratably over the five-year period. For the March 2023 restricted stock unit incentive (LTI) grants, the percentage subjected to cliff vesting at the end of a three-year performance period was increased to 60% of the grant, with 40% time vested over the prospective period. For performance-based shares, vesting can be as low as zero, depending on performance.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| Grant at Target | **Total LTI** | **Total LTI** | **Total LTI** | **Time-Vested RSUs** | **Time-Vested RSUs** | **Performance-Vested RSUs** | **Performance-Vested RSUs** |
| &nbsp;&nbsp;**Named Executive Officer** | **Dollar Value** | **Number of Shares** | **% of Base Salary** | **Dollar Values** | **Number of Shares** | **Dollar Values** | **Number of Shares** |
| &nbsp;&nbsp;Douglas L. Kennedy<br>President and Chief Executive Officer | $1352326 | 36748 | 185% | $676163 | 18374 | $676163 | 18374 |
| &nbsp;&nbsp;Frank A. Cavallaro (1)<br>Senior EVP, Chief Financial Officer | (1) | (1) | (1) | (1) | (1) | (1) | (1) |
| &nbsp;&nbsp;Robert A. Plante<br>EVP, Chief Operating Officer | $419741 | 11406 | 115% | $209870 | 5703 | $209870 | 5703 |
| &nbsp;&nbsp;John P. Babcock<br>Senior EVP, President of Private Wealth Management | $926477 | 25176 | 170% | $463238 | 12588 | $463238 | 12588 |
| &nbsp;&nbsp;Gregory M. Smith<br>Senior EVP, President of Commercial Banking | $577981 | 15706 | 170% | $288990 | 7853 | $288990 | 7853 |
| &nbsp;&nbsp;Jeffrey J. Carfora (2)<br>Senior EVP, Former CFO | $639142 | 17368 | 170% | $319571 | 8684 | $319571 | 8684 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022. Mr. Cavallaro did not receive any STI (cash) awards or LTI (restricted stock units) awards under the Company's Executive Performance Plan, as he joined the Company during the last quarter of 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a senior EVP until April 7, 2023, when he retires.

<u>Deferred Compensation Retention Award</u>

In 2017, the Company instituted a retention tool for three of the NEOs (Mr. Kennedy, Mr. Carfora, and Mr. Babcock). The Deferred Compensation Retention Award is a cash-based retention award, with contributions made to the Plan over a five-year period. Beginning with the third quarter of 2017 and through the second quarter of 2022, quarterly contributions of $50,000 for Mr. Kennedy and $25,000 each for Messrs. Carfora and Babcock were made as the executives were each actively employed at the time of contribution. Vesting occurred ratably over the first three years. As of July 1, 2022, the Plan was renewed for an additional five years with quarterly contributions beginning in the third quarter of 2022 and through and including the second quarter of 2027 of $100,000 for Mr. Kennedy and $50,000 each for Messrs. Carfora and Babcock, assuming certain criteria are met, including the executive being actively employed at the time of contribution. The account balance receives interest crediting based on the Wall Street Journal prime rate, provided that the rate will not exceed 7.5%.

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| | |
|:---|:---|
| &nbsp;&nbsp;**Named Executive Officer** | **2022<br>Contribution** |
| &nbsp;&nbsp;Douglas L. Kennedy<br>President and Chief Executive Officer | $300000 |
| &nbsp;&nbsp;Frank A. Cavallaro (1)<br>Senior EVP, Chief Financial Officer | $- |
| &nbsp;&nbsp;Robert A. Plante<br>EVP, Chief Operating Officer | $- |
| &nbsp;&nbsp;John P. Babcock<br>Senior EVP, President of Private Wealth Management | $150000 |
| &nbsp;&nbsp;Gregory M. Smith<br>Senior EVP, President of Commercial Banking | $- |
| &nbsp;&nbsp;Jeffrey J. Carfora (2)<br>Senior EVP, Former CFO | $150000 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a Senior EVP until April 7, 2023, when he retires. Contributions on behalf of Mr. Carfora will cease upon his retirement.

The Committee determined a retention award based in cash instead of stock was appropriate because of the substantial stock ownership of the top executives. The current equity ownership of these executives is well in excess of the Company's stock ownership guidelines.

<u>Benefits/Other Compensation</u>

The Company provides bank-sponsored insurance and retirement benefit plans for our named executive officers. The benefit packages are designed to assist named executive officers in providing for their financial security.

The Company provides retirement benefits to named executive officers through a combination of plans that are qualified and nonqualified under the Internal Revenue Code of 1986, as amended (the "Code"). The Company has established a qualified defined contribution plan under Section 401(k) of the Code, covering substantially all salaried employees over the age of 21 with at least twelve months of 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 15% of their base pay (up to a maximum of $20,500 in 2022). Annually, the Company makes a matching contribution equal to 50% of the first 6% of an employee's salary, plus up to an additional 3% employer contribution for all employees, on a discretionary basis. The Committee believes that employees require 401(k) plans, and that to attract and retain able employees the Company must offer these benefits to its employees, including its named executive officers.

The named executive officers receive the same employer-provided health and welfare insurance available to all full-time employees, which includes health, dental, vision, disability and basic group life insurance.

The Company has also purchased bank-owned life insurance and entered into a split-dollar plan with certain named executive officers and certain other employees to provide current and post-employment life insurance that ranges from $25,000 to 2.5 times the participant's annual base salary. A life insurance benefit of 2.5 times a named executive officer's annual base salary vests if prior to the termination of employment there is a change in control or the named executive officer becomes disabled. A benefit of 2.5 times the named executive officer's salary is paid if the participant dies while employed by the Company. Certain named executive officers are also entitled to a vested post-employment life insurance benefit based on years of service and age as of the date of termination of employment. This vested benefit includes a minimum benefit of $25,000, or then range from 1.0 times base annual salary at age 50 to a maximum of 2.5 times annual base salary at age 60, in each case after completion of 15 years of service. Bank-owned life insurance assists the Company in offsetting the rising costs of employee benefits by providing the Company with current income prior to the death of an insured, and a lump-sum payment upon the death of an insured. The Company owns the cash surrender value of the policies and records the increases in the cash surrender value as income. Upon the death of an insured, the Company will receive cash equal to the cash surrender value of the policy and excess life insurance over the amount paid to the insured's beneficiary. The Committee believes that bank-owned life insurance is a good investment for the Company and provides a supplementary life insurance benefit for many of our officers, including our named executive officers.

<u>Employment Agreements</u> 

We maintain employment agreements with each of Messrs. Kennedy, Cavallaro, Carfora, Babcock and Smith. The employment agreements provide for an initial term through December 31, 2023.

Under the employment agreements, commencing as of January 1, 2022 (January 1, 2023, for Mr. Cavallaro), and on each subsequent January 1<sup>st</sup> thereafter, the term of the agreement will renew for one additional year so that the remaining term will become three years unless the Bank and/or the Company or the executive provides written notice to the other at least 30 days prior to a renewal date. The employment agreements provide the title and initial base salary for each participant. The base salaries may be increased but not decreased unless written consent is received from the executive. In addition to base salary, the employment agreements provide for, among other things, participation in bonus, short-term, and long-term incentive programs and other benefit plans and arrangements applicable to executive officers.

Under the employment agreements, the Bank and/or the Company may terminate the executive's employment for "cause" (as defined in the agreement) at any time, in which event the executive would have no right to receive compensation or other benefits for any period after the executive's termination of employment. Certain events resulting in the executive's termination of employment entitle the executive to severance benefits. In the event of the executive's involuntary termination of employment or voluntary termination for "good reason" (as defined in the agreement), then the executive

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would be entitled to a severance payment equal to the greater of (1) two times the executive's base salary or (2) the amount of base salary that the executive would have earned had the executive remained employed for the remaining term. The severance payments will be payable in equal installments in accordance with the Bank's regular payroll practices over a two-year period.

If on or within 24 months following a change in control of the Company or the Bank, either (i) the executive's employment is involuntarily terminated by the Company or the Bank (other than for cause) or (ii) the executive voluntarily resigns for good reason (as defined in the agreements), the executive would become entitled to a cash lump sum severance payment, payable within 30 days following the executive's date of termination of employment. The amount of the severance payment will equal three times the sum of (a) the executive's annual base salary, plus (b) the greater of (x) the executive's average annual cash bonus (at a minimum of target) for the three annual performance periods immediately preceding the executive's date of termination or (y) the annual bonus paid to the executive for the most recent annual performance period. In addition to the severance payment and provided that the executive timely elects coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended ("COBRA"), for a period of 18 months following the executive's termination of employment, the Bank will pay the executive consecutive monthly cash payments equal to the monthly cost of the executive's COBRA premiums for the level of coverage previously in effect for the executive (including the executive's spouse and dependents) under the Bank's group health plan. Following the end of the 18-month period, if the executive secures an individual policy for health care coverage, the Bank will continue to reimburse the executive for the monthly cost of such coverage for an additional 18 months, provided that the amount of such monthly reimbursement will not exceed the monthly cost of COBRA.

Upon termination of the executive's employment (other than following a change in control), the executive will be subject to certain restrictions on the executive's ability to compete or to solicit business or employees of the Bank and the Company for a period of one year following the executive's termination of employment. The employment agreements also include provisions protecting the Company's and Bank's confidential business information.

<u>Change in Control Agreement</u> 

We maintain a change in control agreement with Mr. Plante. The change in control agreement has an initial term that ends on December 31, 2022, which will extend automatically for one additional year on January 1, 2022, and each January 1<sup>st</sup> thereafter, so that the remaining term is two years, unless either the Bank and/or the Company or the executive gives written notice at least 60 days prior to the renewal date that the agreement will not be renewed. Notwithstanding the foregoing, if the Company or the Bank enters into a transaction that would be considered a change in control as defined under the agreement, the term of the agreement would extend automatically so that it would expire no less than two years beyond the effective date of the change in control.

In the event of the executive's involuntary termination of employment for a reason other than for cause or upon the executive's voluntary termination for good reason upon or within two years following the effective date of a change in control of the Company or the Bank, the executive would be entitled to a severance payment equal to the sum of two times the executive's base salary in effect as of the date of termination or immediately prior to the change in control, whichever is higher, plus two times the greater of (1) the executive's average annual cash bonus (but not less than target) for the three annual performance periods preceding the date of termination of employment or (2) the annual bonus paid to the executive for the most recent annual performance period. Such payment is payable in a lump sum within 30 days following the executive's date of termination. In addition, provided the executive is eligible and timely elects continuing coverage under COBRA, the Bank will pay the executive consecutive monthly COBRA premium reimbursement payments for the level of coverage in effect for the executive (including the executive's spouse and dependents) under the Bank's group health plan for 18 months following the executive's termination of employment.

**COMPENSATION COMMITTEE REPORT**

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis and based on such review and discussions the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in Peapack-Gladstone's Annual Report on Form 10-K and the Proxy Statement.

**The Compensation Committee**

**of the Board of Directors**

**F. Duffield Meyercord, Chair**

**Anthony J. Consi, II**

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**Tony Spinelli**

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**EXECUTIVE COMPENSATION**

**Summary Compensation Table** 

The following table sets forth compensation information for Peapack-Gladstone's named executive officers. For a summary of the Committee's decisions on compensation awarded to our named executive officers in 2022, see the "Compensation Discussion and Analysis" above.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary<br>($)** | **Bonus ($)** | **Stock Awards<br>($)(1)** | **Non-Equity Incentive Plan<br>Compensation<br>($)(2)** | **All Other<br>Compensation<br>($)(3)** | **Total<br>($)** |
| Douglas L. Kennedy | 2022 | 731000 | - | 1352326 | 657900 | 328822 | 3070048 |
| President & CEO of Peapack- | 2021 | 731000 | - | 886108 | 657900 | 248649 | 2523657 |
| Gladstone and the Bank | 2020 | 695000 | 364875 | 910442 | - | 243703 | 2214020 |
| Frank A. Cavallaro (4) | 2022 | 57693 | 200000 | - | - | - | 257693 |
| Senior Executive Vice |  |  |  |  |  |  |  |
| President and CFO of Peapack- |  |  |  |  |  |  |  |
| Gladstone and the Bank |  |  |  |  |  |  |  |
| Robert A. Plante | 2022 | 365000 | - | 419741 | 164250 | 19800 | 968791 |
| Executive Vice President | 2021 | 365000 | - | 269132 | 164250 | 17400 | 815782 |
| and Chief Operating Officer | 2020 | 365000 | 68438 | 290633 | 27375 | 16800 | 768246 |
| of Peapack-Gladstone |  |  |  |  |  |  |  |
| and the Bank |  |  |  |  |  |  |  |
| John P. Babcock | 2022 | 545000 | - | 926477 | 327000 | 175195 | 1973672 |
| Senior Executive Vice President | 2021 | 545000 | - | 626698 | 327000 | 133824 | 1632522 |
| of Peapack-Gladstone | 2020 | 545000 | 136250 | 648552 | 54500 | 131351 | 1515653 |
| and President of Private |  |  |  |  |  |  |  |
| Wealth Management |  |  |  |  |  |  |  |
| Gregory M. Smith | 2022 | 355000 | - | 577981 | 213000 | 19800 | 1165781 |
| Senior Executive Vice | 2021 | 340000 | - | 235952 | 204000 | 17400 | 797352 |
| President and President of | 2020 | 320000 | 60000 | 278201 | 24000 | 16800 | 699001 |
| Commercial Banking of |  |  |  |  |  |  |  |
| Peapack-Gladstone and the Bank |  |  |  |  |  |  |  |
| Jeffrey J. Carfora (5) | 2022 | 376000 | - | 639142 | 225600 | 174325 | 1415067 |
| Senior Executive Vice | 2021 | 376000 | - | 432392 | 225600 | 133060 | 1167052 |
| President, Former CFO | 2020 | 376000 | 131600 | 447428 | - | 129456 | 1084484 |

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(1)Represents the aggregate grant date fair value of restricted stock awards in accordance with ASC 718 and are based on a Peapack-Gladstone stock price on the date of grant.

(2)Amounts represent short-term incentive awards (cash) paid in the first quarter of 2023 under our EPP based on 2022 performance achievement. See "Compensation Discussion and Analysis" for a discussion of how these payments were calculated.

(3)The following table itemizes the compensation in this column for 2022. The table excludes perquisites that did not exceed $10,000 in the aggregate for each named executive officer.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Company<br>Contributions<br>to 401(k)** | **Deferred<br>Retention<br>Award<br>Plan (A)** | **BOLI<br>Premiums** | **Total** |
| &nbsp;&nbsp;Douglas L. Kennedy | $19800 | $306202 | $2820 | $328822 |
| &nbsp;&nbsp;Frank A. Cavallaro | - | - | - | - |
| &nbsp;&nbsp;Robert A. Plante | 19800 | - | - | 19800 |
| &nbsp;&nbsp;John P. Babcock | 19800 | 153101 | 2294 | 175195 |
| &nbsp;&nbsp;Gregory M. Smith | 19800 | - | - | 19800 |
| &nbsp;&nbsp;Jeffrey J. Carfora | 19800 | 153101 | 1424 | 174325 |

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&nbsp;&nbsp;&nbsp;&nbsp;(A)This is a defined contribution plan with annual cash contributions of $300,000 for Mr. Kennedy and $150,000 for Messrs. Carfora and Babcock. The account balance receives interest based on the Wall Street Journal prime rate.

(4)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022. He received a $200,000 cash payment as guaranteed in his offer letter.

(5)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a Senior EVP until April 7, 2023 when he retires.

**Grants of Plan-Based Awards**

The following tables set forth additional detail regarding 2022 incentive compensation non-equity (cash) and stock award grants under the Executive Performance Plan.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Estimated Payouts Under the Short Term** | **Estimated Payouts Under the Short Term** | **Estimated Payouts Under the Short Term** |  |
|  | **(Cash) Incentive Plan** | **(Cash) Incentive Plan** | **(Cash) Incentive Plan** |  |
| **Name (1)** | **Threshold<br>($) (2)** | **Target<br>($) (3)** | **Maximum<br>($) (4)** | **Actual<br>Cash<br>Payments ($) (5)** |
| &nbsp;&nbsp;Douglas L. Kennedy | $328950 | $438600 | $657900 | $657900 |
| &nbsp;&nbsp;Frank A. Cavallaro (6) | - | - | - | (6) |
| &nbsp;&nbsp;Robert A. Plante | 82125 | 109500 | 164250 | 164250 |
| &nbsp;&nbsp;John P. Babcock | 163500 | 218000 | 327000 | 327000 |
| &nbsp;&nbsp;Gregory M. Smith | 106500 | 142000 | 213000 | 213000 |
| &nbsp;&nbsp;Jeffrey J. Carfora (7) | 112800 | 150400 | 225600 | 225600 |

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(1)For 2022, Messrs. Kennedy and Carfora cash incentive was based solely on Company performance and Messrs. Plante, Babcock and Smith cash incentive was based 75% on Company performance and 25% on individual performance.

(2)Assuming both Company and individual performance are rated at Threshold.

(3)Assuming both Company and individual performance are rated at Target.

(4)Assuming both Company and individual performance are rated at Maximum.

(5)Actual cash payments were based on Company performance at Maximum. Individual performance was rated at Maximum for Messrs. Plante, Babcock and Smith. See "Compensation Discussion and Analysis – Short Term Incentive Awards (Cash)."

(6)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022. Mr. Cavallaro did not receive any STI (cash) awards or LTI (restricted stock units) awards under the Company's Executive Performance Plan, as he joined the Company during the last quarter of 2022.

(7)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a Senior EVP until April 7, 2023 when he retires.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Grants Under the Long Term (Stock) Incentive Plan on March 20, 2022** | **Grants Under the Long Term (Stock) Incentive Plan on March 20, 2022** | **Grants Under the Long Term (Stock) Incentive Plan on March 20, 2022** | **Grants Under the Long Term (Stock) Incentive Plan on March 20, 2022** | **Grants Under the Long Term (Stock) Incentive Plan on March 20, 2022** |
|  |  |  |  |  | **Grant Date** |
|  | **Performance Based Awards** | **Performance Based Awards** | **Performance Based Awards** | **Time Vested LTI :** | **Fair Value of** |
| **Name** | **Threshold (#)** | **Target (#) (1)** | **Maximum (#)** | **Number of Units (2)** | **Stock <br>Awards (3)** |
| &nbsp;&nbsp;Douglas L. Kennedy | 10106 | 18374 | 30317 | 18374 | $1352326 |
| &nbsp;&nbsp;Frank A. Cavallaro (4) | (4) | (4) | (4) | (4) | (4) |
| &nbsp;&nbsp;Robert A. Plante | 3137 | 5703 | 9410 | 5703 | 419741 |
| &nbsp;&nbsp;John P. Babcock | 6923 | 12588 | 20770 | 12588 | 926477 |
| &nbsp;&nbsp;Gregory M. Smith | 4319 | 7853 | 12957 | 7853 | 577981 |
| &nbsp;&nbsp;Jeffrey J. Carfora (5) | 4776 | 8684 | 14329 | 8684 | 639142 |

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(1)Represents number of restricted stock units granted. The award cliff vest after a three-year period above or below the amount granted based on the achievement of various metrics, including EPS growth, relative to a peer group.

(2)Represents number of restricted stock units granted. The award is time-based and vests in five equal annual installments beginning on the anniversary of the date of grant.

(3)The March 2022 grant is based on Peapack-Gladstone's stock price of $36.80 on the date of grant. See "Compensation Discussion and Analysis – Long Term Incentive Awards (Restricted Stock Units)."

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(4)Mr. Cavallaro became Senior EVP, Chief Financial Officer on November 10, 2022. Mr. Cavallaro did not receive any STI (cash) awards or LTI (restricted stock units) awards under the Company's Executive Performance Plan, as he joined the Company during the last quarter of 2022.

(5)Mr. Carfora was Senior EVP, Chief Financial Officer until November 10, 2022. He will remain a Senior EVP until April 7, 2023 when he retires.

**Outstanding Equity Awards at Fiscal Year-End**

The following table represents restricted stock units outstanding for each named executive officer as of December 31, 2022. The market value of restricted stock units that have not vested is calculated using our closing market price of $37.22 as of December 31, 2022. There were no outstanding options for any of the named executive officers as of December 31, 2022.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Stock Awards** | **Stock Awards** | **Stock Awards** | **Stock Awards** |
| **Name** | **Grant Date** | **Number of<br>Shares<br>That Have<br>Not<br>Vested** |  | **Market<br>Value of<br>Shares That<br>Have Not<br>Vested** |
| Douglas L. Kennedy | 3/20/2020 | 19548 | (2) | $727577 |
|  | 3/20/2020 | 32578 | (3) | 1212553 |
|  | 6/22/2020 | 621 | (1) | 23114 |
|  | 3/20/2021 | 11303 | (2) | 420698 |
|  | 3/20/2021 | 14128 | (4) | 525844 |
|  | 3/20/2022 | 18374 | (2) | 683880 |
|  | 3/20/2022 | 18374 | (4) | 683880 |
| Jeffrey J. Carfora | 3/20/2020 | 9568 | (2) | 356121 |
|  | 3/20/2020 | 15946 | (3) | 593510 |
|  | 6/22/2020 | 336 | (1) | 12506 |
|  | 3/20/2021 | 5516 | (2) | 205306 |
|  | 3/20/2021 | 6894 | (4) | 256595 |
|  | 3/20/2022 | 8684 | (2) | 323218 |
|  | 3/20/2022 | 8684 | (4) | 323218 |
| Robert A. Plante | 3/20/2020 | 6081 | (2) | 226335 |
|  | 3/20/2020 | 10133 | (3) | 377150 |
|  | 6/22/2020 | 327 | (1) | 12171 |
|  | 3/20/2021 | 3433 | (2) | 127776 |
|  | 3/20/2021 | 4291 | (4) | 159711 |
|  | 3/20/2022 | 5703 | (2) | 212266 |
|  | 3/20/2022 | 5703 | (4) | 212266 |
| John P. Babcock | 3/20/2020 | 13870 | (2) | 516241 |
|  | 3/20/2020 | 23114 | (3) | 860303 |
|  | 6/22/2020 | 487 | (1) | 18126 |
|  | 3/20/2021 | 7994 | (2) | 297537 |
|  | 3/20/2021 | 9992 | (4) | 371902 |
|  | 3/20/2022 | 12588 | (2) | 468525 |
|  | 3/20/2022 | 12588 | (4) | 468525 |
| Gregory M. Smith | 5/19/2019 | 10647 | (2) | 396281 |
|  | 3/20/2020 | 8780 | (2) | 326792 |
|  | 3/20/2020 | 4877 | (3) | 181522 |
|  | 6/22/2020 | 286 | (1) | 10645 |
|  | 3/20/2021 | 3010 | (2) | 112032 |
|  | 3/20/2021 | 3762 | (4) | 140022 |
|  | 3/20/2022 | 7853 | (2) | 292289 |
|  | 3/20/2022 | 7853 | (4) | 292289 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Vests in three equal annual commencing on the first anniversary of the date of grant and only if the executive continues to serve as an executive at such applicable vesting date. Upon termination of employment by reason of death, disability or retirement, or upon a change in control, all restricted stock units immediately vest.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Vests in five equal annual installments beginning on the first anniversary of the date of grant and only if the executive continues to serve as an executive at such applicable vesting date. Upon termination of employment by reason of death, disability or retirement, or upon a change in control, all restricted stock units immediately vest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Performance-based restricted stock units, which will cliff vest in three years based on the achievement of EPS growth over a three-year period compared to EPS growth of an established peer group. Upon termination of employment by reason of death or disability shares will vest at target. Upon a change in control, restricted stock units will vest at the greater of the target level or the level determined after conducting the performance calculation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Performance-based restricted stock units, which will cliff vest in three years based on the achievement of EPS growth, liquidity and credit quality metrics over a three-year period compared to EPS growth, liquidity and credit quality metrics of an established peer group. Upon termination of employment by reason of death or disability, the restricted stock units will vest at target. Upon a change in control, restricted stock units will vest at the greater of the target level or the level determined after conducting the performance calculation.

**Option Exercises and Stock Vested**

The following table represents the vesting of restricted stock units during 2022. There were no stock options exercised by any named executive officers in 2022.

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| | | |
|:---|:---|:---|
|  | **Stock Awards** | **Stock Awards** |
|  | **Number of<br>Shares<br>Acquired on<br>Vesting** | **Value Realized<br>On Vesting (1)** |
| **Name** | **(#)** | **($)** |
| Douglas L. Kennedy | 29933 | $1098157 |
| Jeffrey J. Carfora | 14584 | 534831 |
| Robert A. Plante | 8799 | 321883 |
| John P. Babcock | 24411 | 895667 |
| Gregory M. Smith | 9286 | 304436 |

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(1)The value realized upon vesting is equal to the closing market price of the Company's common stock on the date of vesting multiplied by the number of shares vested. In each case, the amount reported is the aggregate of shares vesting from more than one grant of restricted stock.

**Pay Versus Performance**

In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer ("PEO") and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Summary Compensation Table Total for Douglas L. Kennedy (1)** | **Compensation Actually Paid to Douglas Kennedy (1), (2), (3)** | **Average Summary Compensation Table Total for Non-PEO NEOs (1)** | **Average Compensation Actually Paid to Non-PEO NEOs (1), (2), (3)** | **Value of Initial Fixed $100 Investment based on: (4)** | **Value of Initial Fixed $100 Investment based on: (4)** | **Net Income<br>(In Millions)** | **Diluted EPS Compared to Peer Group (percentile) (5)** |
|  |  |  |  |  | **Company TSR** | **Peer Group TSR** |  |  |
| &nbsp;&nbsp;2022 | $3070048 | $3239967 | $1380828 | $1416241 | $123.13 | $116.10 | $74.2 | 87.5% |
| &nbsp;&nbsp;2021 | $2523657 | $3753878 | $1103177 | $1711909 | $116.44 | $124.74 | $56.6 | 80.8 |
| &nbsp;&nbsp;2020 | $2214020 | $2499668 | $1016938 | $1118518 | $74.39 | $91.29 | $26.2 | 13.3 |

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1. Douglas L. Kennedy was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented were Jeffrey J. Carfora, John P. Babcock, Robert A. Plante, and Gregory M. Smith.

2. The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company's NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below.

3. Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table.

4. The Peer Group TSR set forth in this table utilizes the KBW NASDAQ Regional Banking Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2022. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the KBW NASDAQ Regional Banking Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.

5. We determined Diluted EPS Growth Compared to Peer Group to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2022. This performance measure may not have been the most important financial performance measure for years 2021 and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Summary Compensation Table Total for Douglas L. Kennedy** | **Exclusion of Stock Awards for Douglas L. Kennedy** | **Inclusion of Equity Values for Douglas L. Kennedy** | **Compensation Actually Paid to Douglas L. Kennedy** |
| 2022 | $3070048 | $(1352326) | $1522245 | $3239967 |
| 2021 | $2523657 | $(886108) | $2116329 | $3753878 |
| 2020 | $2214020 | $(910442) | $1196090 | $2499668 |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Average Summary Compensation Table Total for Non-PEO NEOs** | **Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs** | **Average Inclusion of Equity Values for Non-PEO NEOs** | **Average Compensation Actually Paid to Non-PEO NEOs** |
| 2022 | $1380828 | $(640835) | $676248 | $1416241 |
| 2021 | $1103177 | $(391044) | $999776 | $1711909 |
| 2020 | $1016938 | $(416204) | $517784 | $1118518 |

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The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Douglas L. Kennedy** | **Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Douglas L. Kennedy** | **Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Douglas L. Kennedy** | **Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Douglas L. Kennedy** | **Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Douglas L. Kennedy** | **Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Douglas L. Kennedy** | **Total - Inclusion of<br>Equity Values for Douglas L. Kennedy** |
| &nbsp;&nbsp;2022 | $1351222 | $154595 | $- | $16428 | $- | $- | $1522245 |
| &nbsp;&nbsp;2021 | $987666 | $783237 | $- | $345426 | $- | $- | $2116329 |
| &nbsp;&nbsp;2020 | $1495522 | $(289016) | $- | $(10416) | $- | $- | $1196090 |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs** | **Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs** | **Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs** | **Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs** | **Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs** | **Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs** | **Total - Average Inclusion of<br>Equity Values for Non-PEO NEOs** |
| &nbsp;&nbsp;2022 | $600785 | $75423 | $- | $40 | $- | $- | $676248 |
| &nbsp;&nbsp;2021 | $445107 | $406890 | $- | $147779 | $- | $- | $999776 |
| &nbsp;&nbsp;2020 | $686662 | $(146704) | $- | $(22174) | $- | $- | $517784 |

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Description of Relationship Between Compensation Actually Paid and Company Total Shareholder Return ("TSR")

The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company's cumulative TSR over the three most recently completed fiscal years.

![img193461321_0.jpg](img193461321_0.jpg)

Description of Relationship Between Compensation Actually Paid and Net Income

The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the three most recently completed fiscal years.

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![img193461321_1.jpg](img193461321_1.jpg)

Description of Relationship Between Compensation Actually Paid and Diluted EPS

The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and Diluted EPS during the three most recently completed fiscal years.

![img193461321_2.jpg](img193461321_2.jpg)

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Description of Relationship Between Company TSR and Peer Group TSR

The following chart compares our cumulative TSR over the three most recently completed fiscal years to that of the KBW NASDAQ Regional Banking Index over the same period.

![img193461321_3.jpg](img193461321_3.jpg)

Tabular List of Most Important Financial Performance Measures

The following table presents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our PEO and Non-PEO NEOs for 2022 to Company performance. The measures in this table are not ranked.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Pre-Tax Income Before Provision for Credit Losses Compared to Budget/Target

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Diluted Earnings per Share (EPS) Compared to Budget

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Diluted Earnings per Share (EPS) Growth Compared to Peer Group

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Liquidity (Cash & Securities / Total Assets) Compared to Peer Group

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Liquidity (Loan / Deposit Ratio) Compared to Peer Group

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Credit Quality (Allowance for Credit Losses / Total Loans) Compared to Peer Group

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Credit Quality (Non-Performing Assets / Total Assets) Compared to Peer Group

**CEO Pay Ratio**

As required by Item 402(u) of SEC Regulation S-K, we are providing the following information:

For fiscal 2022, our last completed fiscal year:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪The median of the annual total compensation of all employees of our Company was $93,266; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪The annual total compensation of Mr. Kennedy, our Chief Executive Officer, was $3,070,048.

Based on this information, the ratio for 2022 of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees is 33 to 1.

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We completed the following steps to identify the median of the annual total compensation of all our employees and to determine the annual total compensation of our median employee and CEO:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.As of December 31, 2022, our employee population consisted of approximately 501 individuals, including any full-time, part-time, temporary, or seasonal employees employed on that date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.To find the median of the annual total compensation of all our employees, we used wages from our payroll records as reported to the Internal Revenue Service on Form W-2 for 2022. In making this determination, we annualized the compensation of full-time and part-time permanent employees who were employed on December 31, 2022, but did not work for us the entire year. No full-time equivalent adjustments were made for part-time employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.We identified a median cohort of 15 employees using this compensation measure and methodology. For the median cohort, we added together all of the elements of such employees' compensation for 2022 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Based on the total compensation calculation outlined in Step 3, we selected the employee within the median cohort with the median total compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.With respect to the annual total compensation of our CEO, we used the amount reported in the "Total" column of our 2022 Summary Compensation Table.

**Potential Payments Upon Termination or Change in Control**

Peapack-Gladstone and the Bank maintain employment agreements with Messrs. Kennedy, Cavallaro, Carfora, Babcock and Smith which set forth the terms of employment of the officers and provide for benefits in the event of termination without "cause." Peapack-Gladstone and the Bank have also entered into a change in control agreement with Mr. Plante, which provides for benefits in the event a termination without "cause" or for "good reason" during a specified period following a merger or acquisition of Peapack-Gladstone. A detailed description of the employment agreements and change in control agreement may be found in the Compensation Discussion and Analysis section of this proxy under "Employment Contracts" and "Change in Control Agreement."

The following table shows the potential payments under each named executive officer's change-in-control or employment agreement if he had terminated employment with the Company effective December 31, 2022, under each of the following retirement or termination circumstances: (1) death or disability; (2) voluntary resignation or dismissal for cause; (3) retirement; (4) dismissal without cause; and (5) dismissal without cause or resignation for good reason following a change in control of Peapack-Gladstone. These payments are considered estimates as they contain some assumptions regarding stock price, life expectancy, salary and non-incentive compensation amounts and income tax rates and laws.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Compensation and/or Benefits<br>Payable Upon Termination** | **Death or<br> Disability** | **Voluntary<br>Resignation or<br>Dismissal For<br>Cause** | **Retirement** | **Dismissal<br>Without<br>Cause (no<br>Change in<br>Control) (1) (2)** | **Dismissal Without<br>Cause or Resignation<br>For Good Reason<br>(following a Change in<br>Control) (1) (2) (3) (7)** |
| **Douglas L. Kennedy** |  |  |  |  |  |
| &nbsp;&nbsp;Cash Severance | $- | $- | $- | $1462000 | $4166700 |
| &nbsp;&nbsp;Equity Acceleration (4) | 4277546 | - | 4277546 | - | 4277546 |
| &nbsp;&nbsp;Welfare Benefits Continuation | - | - | - | - | 38067 |
| &nbsp;&nbsp;Life Insurance Benefit (5) (6) | 1250000 | - | - | - | 293369 |
| **Total Benefit** | $**5527546** | $**-** | $**4277546** | $**1462000** | $**8775682** |
| **Frank A. Cavallaro** |  |  |  |  |  |
| &nbsp;&nbsp;Cash Severance | $- | $- | $- | $750000 | $1725000 |
| &nbsp;&nbsp;Equity Acceleration | - | - | - | - | - |
| &nbsp;&nbsp;Welfare Benefits Continuation | - | - | - | - | 55223 |
| &nbsp;&nbsp;Life Insurance Benefit (5) (6) | - | - | - | - | - |
| **Total Benefit** | $**-** | $**-** | $**-** | $**750000** | $**1780223** |
| **Robert A. Plante** |  |  |  |  |  |
| &nbsp;&nbsp;Cash Severance | $- | $- | $- | $- | $1058500 |
| &nbsp;&nbsp;Equity Acceleration (4) | 1327675 | - | 1327675 | - | 1327675 |
| &nbsp;&nbsp;Welfare Benefits Continuation | - | - | - | - | 52093 |
| &nbsp;&nbsp;Life Insurance Benefit (5) (6) | - | - | - | - | - |
| **Total Benefit** | $**1327675** | $**-** | $**1327675** | $**-** | $**2438268** |
| **John P. Babcock** |  |  |  |  |  |
| &nbsp;&nbsp;Cash Severance | $- | $- | $- | $1090000 | $2616000 |
| &nbsp;&nbsp;Equity Acceleration (4) | 3001160 | - | 3001160 | - | 3001160 |
| &nbsp;&nbsp;Welfare Benefits Continuation | - | - | - | - | 29193 |
| &nbsp;&nbsp;Life Insurance Benefit (5) (6) | 1250000 | - | - | - | 125220 |
| **Total Benefit** | $**4251160** | $**-** | $**3001160** | $**1090000** | $**5771574** |
| **Gregory M. Smith** |  |  |  |  |  |
| &nbsp;&nbsp;Cash Severance | $- | $- | $- | $- | $1088000 |
| &nbsp;&nbsp;Equity Acceleration (4) | 1751871 | - | 1751871 | - | 1751871 |
| &nbsp;&nbsp;Welfare Benefits Continuation | - | - | - | - | 52093 |
| &nbsp;&nbsp;Life Insurance Benefit (5) (6) | - | - | - | - | - |
| **Total Benefit** | $**1751871** | $**-** | $**1751871** | $**-** | $**2891964** |
| **Jeffrey J. Carfora** |  |  |  |  |  |
| &nbsp;&nbsp;Cash Severance | $- | $- | $- | $752000 | $1804800 |
| &nbsp;&nbsp;Equity Acceleration (4) | 2070474 | - | 2070474 | - | 2070474 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;Welfare Benefits Continuation | - | - | - | - | 40599 |
| &nbsp;&nbsp;Life Insurance Benefit (5) (6) | 730000 | - | - | - | 89207 |
| **Total Benefit** | $**2800474** | $**-** | $**2070474** | $**752000** | $**4005080** |

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(1)The term "cause" generally means (i) a material failure to perform the duties assigned to the named executive officer related to the named executive officer's position or imposed upon the named executive officer by applicable law, and such failure to perform constitutes self-dealing, willful misconduct or recklessness; (ii) committing an act of dishonesty in the performance of the named executive officer's duties related to the named executive officer's position or engaging in conduct materially detrimental to the business of the Bank; (iii) a conviction of a felony or misdemeanor involving moral turpitude; (iv) a material failure to perform the named executive officer's duties related to the named executive officer's position, which such breach or failure is not remedied by the named executive officer within 30 days after written demand from the Bank; (v) a knowing failure to follow lawful, written directives of the Board of Directors of the Company and/or the Bank; or (vi) engagement in any material employment act or practice, including but not limited to, sexual harassment, forbidden by the Bank in its employment manual.

(2)The term "change in control" generally means (i) the acquisition by any one person, or more than one person acting as a group, of stock of the Bank or the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the Bank's or the Company's stock; (ii)the acquisition by any one person, or more than one person acting as a group, during a 12-month period ownership of stock of the Bank or the Company possessing 30% or more of the total voting power of the Bank's or the Company's stock; (iii) a change in board of the Bank or the Company such that, during any 12-month period, a majority of the directors are replaced by the directors whose appointment or election is not endorsed by a majority of the members of the board prior to the appointment or election; (iv) a change in ownership by any one person, or more than one person acting as a group, of a substantial portion of the Bank's or the Company's assets.

(3)The term "good reason" generally means (i) a material reduction in the named executive officer's base salary; (ii) a material reduction in the named executive officer's authority, duties or responsibilities from the position and attributes associated with the named executive officer's position; (iii) a change in the named executive officer's primary office or location resulting in an increase in the named executive officer's commute of 25 miles or more; or (iv) a material breach of the named executive officer's employment or change in control agreement, as applicable, by the Bank.

(4)Our 2012 Long-Term Stock Incentive Plan and 2021 Long-Term Incentive Plan provide that equity awards assumed by any acquiror will vest only upon specified termination events following a change in control. If awards are not assumed by the acquiror, then outstanding awards will vest upon the change in control. With respect to awards assumed by the surviving entity in connection with a change in control, if the grantee's employment is terminated without cause or, in certain cases, if the grantee resigns for good reason, within two years after the effective date of the change in control, then the grantee's outstanding options become fully vested, time-based vesting restrictions on outstanding awards lapse and unless otherwise provided in the agreement, outstanding performance-based awards will be deemed to have been earned at the target level, or at a level in excess of target in the Committee's discretion, and paid on a pro-rated basis based upon the length of time the grantee was employed during the performance period. The value of equity acceleration reported is based on the market price of $37.22 as of December 31, 2022.

(5)Peapack-Gladstone has purchased bank-owned life insurance and entered into a split-dollar plan with certain named executive officers and certain other employees to provide current and post-employment life insurance in an amount that ranges from $25,000 to 2.5 times the executive's annual base salary. A benefit of 2.5 times the executive's salary, which is represented in under the death or disability column is paid if the executive dies while employed by Peapack-Gladstone. The life insurance benefit of 2.5 times the executive's annual base salary vests if the executive becomes disabled prior to the termination of employment.

(6)The life insurance benefit at dismissal without cause or resignation for good reason following a change in control represents the imputed income from December 2022 through the end of the executive's plan participation year (calculated on an actuarial basis) under Peapack-Gladstone's Split-Dollar Plan. Upon a change in control, the executive would vest in the benefit of 2.5 times the executive's annual base salary.

**DELINQUENT SECTION 16(a) REPORTS**

Section 16(a) of the Securities and 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 copies of reports furnished by these insiders of Peapack-Gladstone, all Section 16(a) reporting requirements applicable to insiders during 2022 were satisfied on a timely basis except for one Form 4 that was filed late by Gregory M. Smith, President of Commercial Banking.

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**TRANSACTIONS WITH**

 **RELATED PERSONS**

Peapack-Gladstone uses the same policies and procedures for the review, approval and ratification of related persons transactions as described above under the caption "Director Independence." In addition to the matters discussed above under the caption "Director Independence," directors and officers and their associates were customers of and had transactions with the Bank during the year ended December 31, 2022, 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 not related to Peapack-Gladstone, and, in the opinion of management of Peapack-Gladstone, did not involve more than normal risks of collectability or present other unfavorable features.

**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.

Proposals of shareholders which are eligible under the rules of the SEC to be included in Peapack-Gladstone's year 2024 proxy materials must be received by the Secretary of Peapack-Gladstone no later than November 17, 2023.

Under new SEC Rule 14a-19, a shareholder intending to engage in a director election contest with respect to the Company's annual meeting of shareholders to be held in 2023 must give the Company notice of its intent to solicit proxies by providing the names of its nominees and certain other information at least 60 calendar days before the anniversary of the previous year's annual meeting. This deadline is March 4, 2024.

Under the terms of our bylaws, a shareholder who intends to nominate a person for election to our Board or to present an item of business at the 2024 Annual Meeting (other than a proposal submitted for inclusion in our proxy materials) must deliver to the Secretary of Peapack-Gladstone Bank written notice of such business, including the information specified in the bylaws, between December 4, 2023 and January 3, 2024. If Peapack-Gladstone advances its 2024 Annual Meeting date more than 30 days from the anniversary date of its 2023 Annual Meeting or delays it more than 70 days, then notice by the shareholder to be timely must be delivered not earlier than 90 days prior to the annual meeting date and not later than the close of business 10 days following the day on which the public announcement of the date of the meeting is made. If Peapack-Gladstone changes the date of its 2024 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**

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.

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**APPENDIX A**

PEAPACK-GLADSTONE FINANCIAL CORPORATION

2021 LONG-TERM INCENTIVE PLAN

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Purpose</u>. The purpose of the Plan is to provide additional incentive to those officers and key employees of the Company and its Subsidiaries, and certain members of the Board of Directors of the Company whose substantial contributions are essential to the continued growth and success of the Company's business in order to strengthen their commitment to the Company and its Subsidiaries, to motivate such officers, employees and Directors to faithfully and diligently perform their assigned responsibilities and to attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company. To accomplish such purposes, the Plan provides that the Company may grant Incentive Stock Options, Nonqualified Stock Options, Restricted Stock Awards, Restricted Stock Units, Stock Appreciation Rights and Cash-Based Awards. Upon stockholder approval of this Plan, no further awards shall be granted under the Peapack-Gladstone Financial Corporation 2012 Long-Term Stock Incentive Plan (the "<u>Prior Plan</u>"), and the Prior Plan shall remain in existence solely for the purpose of administering outstanding grants thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Definitions</u>. For purposes of this Plan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "Agreement" means the written agreement between the Company and a Grantee evidencing the grant of an Option or Award and setting forth the terms and conditions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "Award" means a grant of Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, or a Cash-Based Award or any combination of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "Bank" means Peapack-Gladstone Bank, a Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "Board" means the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "Cash-Based Award" means any right granted under Section 10.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "Cause" means an intentional failure to perform stated duties, breach of a fiduciary duty involving personal dishonesty, or willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order. Notwithstanding anything else herein to the contrary, in the event that an employee or Director is terminated or removed for Cause, or resigns at a time when Cause exists, or if, following termination, resignation or removal it is determined that Cause existed at the time of such termination, resignation or removal, then any and all Options and Awards will automatically be terminated and void as of the date that Cause arose, and no notice to that effect is required in order to effect that result.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "Change in Capitalization" means any increase, reduction, change or exchange of Shares for a different number or kind of shares or other securities of the Company by reason of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants or rights, extraordinary cash dividend, stock dividend, stock split or reverse stock split, combination or exchange of shares, repurchase of shares, change in corporate structure or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "Change in Control" means 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) consummation of regulatory approval to implement a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Company or similar transaction 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, and, following such distribution, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "Code" means the Internal Revenue Code of 1986, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "Committee" means a committee consisting solely of two (2) or more directors who are non-employee Directors (as defined in Rule 16b-3 of the Exchange Act as it may be amended from time to time) of the Company appointed

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by the Board to administer the Plan and to perform the functions set forth herein. Directors appointed by the Board to the Committee shall have the authority to act notwithstanding the failure to be so qualified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "Company" means Peapack-Gladstone Financial Corporation, a New Jersey corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "Director" means a member of the Board of Directors of Company or the Bank who is not also serving as an employee of the Company or the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "Disability" means the permanent and total inability by reason of mental or physical infirmity, or both, of an employee or Director to perform the work customarily assigned to him. Additionally, a medical doctor selected or approved by the Board must advise the Committee 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 the individual's lifetime.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "Eligible Employee" means any officer or other key employee of the Company or a Subsidiary designated by the Committee as eligible to receive Options or Awards subject to the conditions set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "Escrow Agent" means the escrow agent under the Escrow Agreement, designated by the Committee. The Bank may be appointed as the Escrow Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "Escrow Agreement" means an agreement between the Company, the Escrow Agent and a Grantee, in the form specified by the Committee, under which shares of Restricted Stock awarded pursuant hereto shall be held by the Escrow Agent until either (a) the restrictions relating to such shares expire and the shares are delivered to the Grantee or (b) the Company reacquires the shares pursuant hereto and the shares are delivered to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "Fair Market Value" means the fair market value of the Shares as determined by the Committee in its sole discretion using a method that complies with Section 409A of the Code; provided, however, that (A) if the Shares are listed on NASDAQ, the New York Stock Exchange or other national securities exchange, Fair Market Value on any date shall be the last sale price reported for the Shares on such exchange on such date or on the last date preceding such date on which a sale was reported, or (B) if the Stock is not listed on an Exchange, "Fair Market Value" shall mean a price determined by the Committee in good faith on the basis of objective criteria consistent with the requirements of Code Section 422 and applicable provisions of Code Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) "Grantee" means a person to whom an Option or Award has been granted under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) "Incentive Stock Option" means an Option within the meaning of Section 422 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "Nonqualified Stock Option" means an Option which is not an Incentive Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) "Option" means an Incentive Stock Option, a Nonqualified Stock Option, or either or both of them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) "Parent" means any corporation in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock of one of the other corporations in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) "Plan" means the Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan as set forth in this instrument and as it may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) "Restricted Stock" means Shares issued or transferred to an Eligible Employee or Director which may be subject to restrictions as provided in Section 8 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) "Restricted Stock Unit" means a right to receive one Share upon the satisfaction of terms and conditions as provided in Section 9 hereof, including without limitation the satisfaction of specified performance or other criteria. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, except as otherwise provided by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) "Retirement" means the retirement from active employment of an employee or officer, but only if such person meets all of the following requirements: (i) he has a minimum combined total of years of Service to the Company or any Subsidiary (excluding Service to any acquired company) and age equal to eighty (80), (ii) he is age sixty-two (62) or older, and (iii) he provides six (6) months prior written notice to the Company of the retirement. For Directors, the term "Retirement" shall mean the date on which the Director ceases to be a member of the Board after both attaining age sixty (60) and completing at least ten (10) years of Service on the Board. A non-employee Director will be deemed to have terminated due to Retirement under the provisions of this Plan only if the non-employee Director has terminated Service on the Board(s) of Directors of the Company and the Bank in accordance with applicable Company policy, following the provision of written notice to such Board(s) of Directors of the non-employee Director's intention to retire. A non-employee Director who continues in Service as

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a director emeritus or advisory director shall be deemed to be in Service of the Employer for purposes of vesting of Awards and exercise of Stock Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) "Shares" means the common stock, no par value, of the Company (including any new, additional or different stock or securities resulting from a Change in Capitalization).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) "Service" means service as an employee or non-employee Director of the Company or a Subsidiary, as the case may be, and shall include service as a director emeritus or advisory director. Termination of Service occurs on the first day on or after a grant date on which the Grantee ceases to be an employee or Director of, the Company or any Subsidiary, regardless of the reason for such cessation, subject to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Grantee's cessation as an employee shall not be deemed to occur by reason of the transfer of the Grantee between the Company and a Subsidiary or between two Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Grantee's cessation as an employee shall not be deemed to occur by reason of the Grantee's being on a leave of absence from the Company or a Subsidiary approved by the Company or Subsidiary otherwise receiving the Grantee's services provided such leave of absence does not exceed six months, or if longer, so long as the employee retains a right to reemployment with the Company or Subsidiary under an applicable statute or by contract. For these purposes, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the employee will return to perform services for the Company or Subsidiary. If the period of leave exceeds six months and the employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first day immediately following such six-month period. For purposes of this subsection, to the extent applicable, an employee's leave of absence shall be interpreted by the Committee in a manner consistent with Treasury Regulation Section 1.409A-1(h)(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If, as a result of a sale or other transaction, the Subsidiary for whom Grantee is employed (or to whom the Grantee is providing services) ceases to be a Subsidiary, and the Grantee is not, following the transaction, an employee of or service provider to the Company or an entity that is then a Subsidiary, then the occurrence of such transaction shall be treated as the Grantee's termination of Service caused by the Grantee being discharged by the entity for whom the Grantee is employed or to whom the Grantee is providing services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Except to the extent Section 409A of the Code may be applicable to an Award, and subject to the foregoing paragraphs of this subsection, the Committee shall have discretion to determine if a termination of Service has occurred and the date on which it occurred. In the event that any Award under the Plan constitutes deferred compensation subject to Code Section 409A, the term termination of Service shall be interpreted by the Committee in a manner consistent with the definition of "Separation from Service" as defined under Code Section 409A and under Treasury Regulation Section 1.409A-1(h)(ii). For purposes of this Plan, a "Separation from Service" shall have occurred if the Bank and Grantee reasonably anticipate that no further services will be performed by the Grantee after the date of the termination of Service (whether as an employee or as an independent contractor) or the level of further services performed will be less than 50% of the average level of bona fide Services in the 36 months immediately preceding the termination of Service. If a Grantee is a "Specified Employee," as defined in Code Section 409A and any payment to be made hereunder shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be delayed and shall be paid on the first day of the seventh month following Grantee's Separation from Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) With respect to a Grantee who is a Director, a termination of Service as a Director will not be deemed to have occurred if the Grantee continues as a director emeritus or advisory director. With respect to a Grantee who is both an employee and a Director, termination of employment as an employee shall not constitute a termination of Service for purposes of the Plan so long as the Grantee continues to provide Service as a Director or director emeritus or advisory director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) "Stock Appreciation Right" means a right to receive all or some portion of the increase in the value of shares of Common Stock as provided in Section 7 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) "Subsidiary" means any corporation in an unbroken chain of corporations, beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) "Ten-Percent Shareholder" means an Eligible Employee, who, at the time an Incentive Stock Option is to be granted to him, owns (within the meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, a Parent or a Subsidiary within the meaning of Section 422(b)(6) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Administration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Plan shall be administered by the Committee which shall hold meetings at such times as may be necessary for the proper administration of the Plan. The Committee shall keep minutes of its meetings. A majority of the

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Committee shall constitute a quorum and a majority of a quorum may authorize any action. Each member of the Committee shall be a non-employee Director (as defined in Rule 16b-3 of the Exchange Act as it may be amended from time to time). No failure to be so qualified shall invalidate any Option or Award or any action or inaction under the Plan. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, the Options or the Awards, and all members of the Committee shall be fully indemnified by the Company with respect to any such action, determination or interpretation.

Subject to the express terms and conditions set forth herein, the Committee shall have the power from time to time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) to determine those Eligible Employees and Directors to whom Options shall be granted under the Plan and the number of Incentive Stock Options and/or Nonqualified Options to be granted to each Eligible Employee and to prescribe the terms and conditions (which need not be identical) of each Option, including the purchase price per share of each Option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) to select those Eligible Employees and Directors to whom Awards shall be granted under the Plan and to determine the number of shares of Restricted Stock, Restricted Stock Units and/or Stock Appreciation Rights to be granted pursuant to each Award and the amount or value of Cash-Based Awards, the terms and conditions of each Award, including the restrictions or performance criteria relating to such shares, units or rights, the purchase price per share, if any, of Restricted Stock or Restricted Stock Units and whether Stock Appreciation Rights will be granted alone or in conjunction with an Option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) to construe and interpret the Plan and the Options and Awards granted thereunder and to establish, amend and revoke rules and regulations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Agreement, in the manner and to the extent it shall deem necessary or advisable to make the Plan fully effective, and all decisions and determinations by the Committee in the exercise of this power shall be final and binding upon the Company or a Subsidiary and Grantees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) to determine the duration and purposes for leaves of absence which may be granted to a Grantee without constituting a termination of employment or Service for purposes of the Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) generally, to exercise such powers and to perform such acts as are deemed necessary or advisable to promote the best interests of the Company with respect to the Plan.

Subject to the terms and conditions set forth herein, the Committee may, from time to time, recommend the grant of Options and Awards to the Directors in such numbers and upon such terms as it deems appropriate, but all such grants must be approved by the Company's Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Stock Subject to Plan; Individual Award Limits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The maximum number of Shares that may be issued or transferred pursuant to all Options and Awards under this Plan is 1,100,000. The maximum number of Shares that may be covered by Options and/or Awards granted to any Director during a single fiscal year shall be limited so that the value of the Options and/or Awards, taken together with any cash fees paid to such Director, in respect of his or her service during such year (including services as a member or chair of any committees of the Board) do not exceed $450,000 in total value (calculating the value of any such Options or Awards based on the grant date fair value for financial reporting purposes). The maximum number of Shares that may be issued or transferred under this plan pursuant to Incentive Stock Options shall be 1,100,000. Upon a Change in Capitalization after the adoption of this Plan by the Board, the Shares shall be adjusted to the number and kind of Shares of stock or other securities existing after such Change in Capitalization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The number of Shares covered by an Option or Award under the Plan not delivered to a Participant or beneficiary for any reason, including because (i) Award is forfeited or canceled, or because a Stock Option is not exercised; (ii) an Option is exercised using by using actual or constructive exchange of Shares to pay the Exercise Price; (iii) Shares are withheld to satisfy withholding taxes upon vesting of an Award granted hereunder; or (iv) Shares are withheld to satisfy the exercise price of Options in a net settlement of Options, then the number of Shares available to be issued under the Plan shall be reduced by the gross number of Shares with respect to Option or Award issued rather than by the net number of Shares issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Eligibility</u>. Subject to the provisions of the Plan, the Committee (or, with respect to Directors, the Board) shall have full and final authority to select those Eligible Employees and Directors who will receive Options and/or Awards, but no person shall receive any Options or Awards unless he or she is an employee of the Company or a Subsidiary, or a Director, at the time the Option or Award is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Stock Options</u>. The Committee (or, with respect to Directors, the Board) may grant Options in accordance with the Plan, the terms and conditions of which shall be set forth in an Agreement. Each Option and Option Agreement shall be subject to the following conditions:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Purchase Price</u>. The purchase price or the manner in which the purchase price is to be determined for Shares under each Option shall be set forth in the Agreement, provided that the purchase price per Share under each Incentive Stock Option shall not be less than 100% of the Fair Market Value of a Share at the time the Option is granted (110% in the case of an Incentive Stock Option granted to a Ten-Percent Shareholder) and under each Nonqualified Stock Option shall not be less than 100% of the Fair Market Value of a Share at the time the Option is granted. Incentive Stock Options cannot be granted to Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Duration</u>. Options granted hereunder shall be for such term as the Committee shall determine, provided that (i) no Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date it is granted (five (5) years in the case of an Incentive Stock Option granted to a Ten-Percent Shareholder) and (ii) no Nonqualified Stock Option shall be exercisable after the expiration of ten (10) years and one (1) day from the date it is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Non-Transferability</u>. No Option granted hereunder shall be transferable by the Grantee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Grantee only by the Grantee or his guardian or legal representative. The terms of such Option shall be binding upon the beneficiaries, executors, administrators, heirs and successors of the Grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Stock Options; Vesting</u>. Each Option shall be exercisable in such installments (which need not be equal) and at such times as may be designated by the Committee or the Board as set forth in the Option Agreement. Unless otherwise provided in the Agreement, to the extent not exercised, installments shall accumulate and be exercisable, in whole or in part, at any time after becoming exercisable, but not later than the date the Option expires. Upon the death, Disability or Retirement of a Grantee, all Options shall become immediately exercisable, provided, however, that the Committee shall have the authority to grant Options that do not become immediately exercisable in the event of the death, Disability or Retirement of a Grantee by including such provision in the Option Agreement evidencing such Option. Notwithstanding the foregoing, the Committee (or, with respect to Directors, the Board) may accelerate the exercisability of any Option or portion thereof at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Method of Exercise</u>. The exercise of an Option shall be made only by a written notice delivered in person or by mail (including electronic mail) to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor, as well as for any required tax withholding, and otherwise in accordance with the Agreement pursuant to which the Option was granted. The purchase price for any Shares purchased pursuant to the exercise of an Option and required tax withholding shall be paid in full upon such exercise (i) by tendering, either actually or constructively by attestation, shares of Stock valued at Fair Market Value as of the day of exercise; (ii) by irrevocably authorizing a third party, acceptable to the Committee, to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from the exercise; (iii) by a net settlement of the Option, using a portion of the shares of Stock obtained on exercise in payment of the exercise price (and if applicable, any tax withholding); (iv) by personal, certified or cashier's check; (v) by other property deemed acceptable by the Committee; or (vi) by any combination thereof. Any Shares transferred to or withheld by the Company as payment of the purchase price or tax withholding under an Option shall be valued at their Fair Market Value on the day preceding the date of exercise of such Option. If requested by the Committee, the Grantee shall deliver the Agreement evidencing the Option and the Agreement evidencing any related Stock Appreciation Right to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Rights of Grantees</u>. No Grantee shall be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Grantee, and (iii) the Grantee's name shall have been entered as a shareholder of record on the books of the Company. Thereupon, the Grantee shall have full voting, dividend and other ownership rights with respect to such Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Termination of Employment</u>. In the event that a Grantee who is not a Director ceases to be employed by the Company or any Subsidiary, any outstanding Options held by such Grantee shall, unless the Option Agreement evidencing such Option provides otherwise, terminate as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) If the Grantee's termination of employment is due to his death or Disability, the Options shall become fully vested and shall be exercisable for a period of three years following such termination of employment, and shall thereafter terminate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If the Grantee's termination of employment is by the Grantee (other than due to the Grantee's Retirement), the Option shall terminate on the date of the termination of employment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If the termination of employment is due to the Grantee's Retirement, the Option shall become fully vested and shall be exercisable for 90 days (three years for an Option designated initially as a Nonqualified Stock Option); and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) If the Grantee's termination of employment is for any other reason, the Option (to the extent exercisable at the time of the Grantee's termination of employment) shall be exercisable for a period of ninety (90) days following such termination of employment, and shall thereafter terminate.

Notwithstanding the foregoing, the Committee may provide, either at the time an Option is granted or thereafter, that the Option may be exercised after the periods provided for in this Section 6(g), but in no event beyond the term of the Option. Notwithstanding anything to the contrary in this Section 6(g), no Option shall be exercisable beyond the term of the Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Termination of Service for Directors</u>. Unless otherwise provided in the Option Agreement, upon the termination of a Director's Service as a member of the Board for any reason other than Retirement, Disability, Change in Control or death, the Director's Options shall be exercisable only as to those Shares which were immediately exercisable by the Director at the date of termination. Unless otherwise provided in the Option Agreement, in the event of the death, Retirement or Disability of a Director, all Options held by the Director shall become immediately exercisable; and upon termination of the Director's Service due to or within 12 months after a Change in Control, all Options held by the Director shall become immediately exercisable. Options granted to a Director shall expire and no longer be exercisable upon the earlier of (i) one hundred twenty (120) months following the date of grant, or (ii) three (3) years following the date on which the Director ceases to serve as a Director (for any reason other than Cause).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Prohibition of Cash Buy-Outs of Underwater Options</u>. Under no circumstances will any underwater Options (i.e., an Option with an exercise price as of an applicable date that is greater than the Fair Market Value of the Stock as of the same date) that was granted under the Plan be bought back by the Company without stockholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Prohibition Against Repricing</u>. Except for adjustment pursuant to Section 13 in connection with a Change in Capitalization and reductions of the exercise price approved by the Company's stockholders, neither the Committee nor the Board of Directors shall have the right or authority to make any adjustment or amendment that reduces or would have the effect of reducing the exercise price of an Option previously granted under the Plan, whether through amendment, cancellation (including cancellation in exchange for a cash payment in excess of the Award's in-the-money value or in exchange for Options or other Awards) or replacement grants, or other means.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Stock Appreciation Rights</u>. The Committee may, in its discretion, either alone or in connection with the grant of an Option, grant Stock Appreciation Rights in accordance with the Plan, the terms and conditions of which shall be set forth in an Agreement. If granted in connection with an Option, a Stock Appreciation Right shall cover the same shares covered by the Option (or such lesser number of shares as the Committee may determine) and shall, except as provided in this Section 7, be subject to the same terms and conditions as the related Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Time of Grant</u>. A Stock Appreciation Right may be granted:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time if unrelated to an Option; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if related to an Option, at the time of grant of the Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Stock Appreciation Rights Related to an Option.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Payment</u>. A Stock Appreciation Right granted in connection with an Option shall entitle the holder thereof, upon exercise of the Stock Appreciation Right or any portion thereof, to receive payment of an amount computed pursuant to Section 7(b)(3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Exercise</u>. A Stock Appreciation Right granted in connection with an Option shall be exercisable at such time or times and only to the extent that the related Option is exercisable, and will not be transferable except to the extent the related Option may be transferable. A Stock Appreciation Right granted in connection with an Incentive Stock Option shall be exercisable only if the Fair Market Value of a Share on the date of exercise exceeds the purchase price specified in the related Incentive Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Amount Payable</u>. Upon the exercise of a Stock Appreciation Right related to an Option, the Grantee shall be entitled to receive an amount determined by multiplying (A) the excess of the Fair Market Value of a Share on the date of exercise of such Stock Appreciation Right over the per Share purchase price under the related Option, by (B) the number of Shares as to which such Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit in the Agreement evidencing the Stock Appreciation Right at the time it is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Treatment of Related Options and Stock Appreciation Rights Upon Exercise</u>. Except as provided in Section 7(b)(5), (A) upon the exercise of a Stock Appreciation Right granted in connection with an Option, the Option shall be cancelled to the extent of the number of Shares as to which the Stock Appreciation Right is exercised and (B) upon the exercise

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of an Option granted in connection with a Stock Appreciation Right, the Stock Appreciation Right shall be cancelled to the extent of the number of Shares as to which the Option is exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) <u>Simultaneous Exercise of Stock Appreciation Right and Option</u>. The Committee may provide, either at the time a Stock Appreciation Right is granted in connection with a Nonqualified Stock Option or thereafter during the term of the Stock Appreciation Right, that upon exercise of such Option, the Stock Appreciation Right shall automatically be deemed to be exercised to the extent of the number of Shares as to which the Option is exercised. In such event, the Grantee shall be entitled to receive the amount described in Section 7(b)(3) (or some percentage of such amount if so provided in the Agreement evidencing the Stock Appreciation Right), in addition to the Shares acquired pursuant to the exercise of the Option. The inclusion in an Agreement evidencing a Stock Appreciation Right of a provision described in this Section 7(b)(5) may be in addition to and not in lieu of the right to exercise the Stock Appreciation Right as otherwise provided herein and in the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Stock Appreciation Rights Unrelated to an Option</u>. The Committee may grant to Eligible Employees (and the Board may grant to Directors) Stock Appreciation Rights unrelated to Options. Stock Appreciation Rights unrelated to Options shall contain such terms and conditions as to exercisability, vesting and duration as the Committee or the Board shall determine, but in no event shall they have a term of greater than ten (10) years. Upon the death, Disability or Retirement of a Grantee, all Stock Appreciation Rights shall become immediately exercisable provided, however, that the Committee or Board shall have the authority to grant Stock Appreciation Rights that do not become immediately exercisable in the event of the death, Disability or Retirement of a Grantee by including such provision in the Agreement evidencing such Stock Appreciation Right. Unless otherwise provided in the Agreement, upon the death or Disability of a Grantee, the exercisable portion of Stock Appreciation Rights held by that Grantee shall be exercisable for a period of one (1) year following such termination of employment or Service, and shall thereafter terminate; and upon the Retirement of a Grantee, the exercisable portion of Stock Appreciation Rights held by that Grantee shall be exercisable for a period of ninety (90) days following such Retirement, and shall thereafter terminate. The amount payable upon exercise of such Stock Appreciation Rights shall be determined in accordance with Section 7(b)(3), except that "Fair Market Value of a Share on the date of the grant of the Stock Appreciation Right" shall be substituted for "purchase price under the related Option."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Method of Exercise</u>. Stock Appreciation Rights shall be exercised by a Grantee only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares with respect to which the Stock Appreciation Right is being exercised. If requested by the Committee, the Grantee shall deliver the Agreement evidencing the Stock Appreciation Right being exercised and the Agreement evidencing any related Option to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreements to the Grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Form of Payment</u>. Payment of the amount determined under Sections 7(b)(3) or 7(c), may be made solely in whole shares of Common Stock in a number determined at their Fair Market Value on the date of exercise of the Stock Appreciation Right or, alternatively, at the sole discretion of the Committee, solely in cash, or in a combination of cash and Shares as the Committee deems advisable. If the Committee decides to make full payment in Shares, and the amount payable results in a fractional Share, payment for the fractional Share will be made in cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Prohibition of Cash Buy-Outs of Underwater Stock Appreciation Rights</u>. Under no circumstances will any underwater Stock Appreciation Rights (i.e., a Stock Appreciation Rights with an exercise price as of an applicable date that is greater than the Fair Market Value of the Stock as of the same date) that was granted under the Plan be bought back by the Company without stockholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Prohibition Against Repricing</u>. Except for adjustment pursuant to Section 13 in connection with a Change in Capitalization and reductions of the exercise price approved by the Company's stockholders, neither the Committee nor the Board of Directors shall have the right or authority to make any adjustment or amendment that reduces or would have the effect of reducing the exercise price of a Stock Appreciation Right previously granted under the Plan, whether through amendment, cancellation (including cancellation in exchange for a cash payment in excess of the Award's in-the-money value or in exchange for Stock Appreciation Rights or other Awards) or replacement grants, or other means.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Restricted Stock</u>. The Committee (or, with respect to Directors, the Board) may grant Awards of Restricted Stock which shall be evidenced by an Agreement between the Company and the Grantee. Each Agreement shall contain such restrictions, terms and conditions as the Committee or Board may require and (without limiting the generality of the foregoing) such Agreements may require that an appropriate legend be placed on Share certificates. Notwithstanding the foregoing, the Company may in its sole discretion issue Restricted Stock in any other approved format (e.g., electronically or through book-entry format) in order to facilitate the paperless transfer of the Award. In the event Restricted Stock is not issued in certificate form, the Company and its transfer agent shall maintain appropriate bookkeeping entries that evidence Grantees' ownership of the Awards. Restricted Stock that is not issued in certificate form shall be subject to the same terms and conditions of the Plan

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as certificated shares, including the restrictions on transferability and the provision of a stock power executed by the Grantee in favor of the Company, until the satisfaction of the conditions to which the Restricted Stock Award is subject.

Awards of Restricted Stock shall be subject to the following terms and provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Rights of Grantee</u>. Shares of Restricted Stock granted pursuant to an Award hereunder shall be issued in the name of the Grantee as soon as reasonably practicable after the Award is granted and the purchase price, if any, is paid by the Grantee; provided, that the Grantee has executed an Agreement evidencing the Award, an Escrow Agreement, appropriate blank stock powers and any other documents which the Committee, in its absolute discretion, may require as a condition to the issuance of such Shares. If a Grantee shall fail to execute the Agreement evidencing a Restricted Stock Award, an Escrow Agreement or appropriate blank stock powers or shall fail to pay the purchase price, if any, for the Restricted Stock, the Award shall be null and void. Shares issued in connection with a Restricted Stock Award, together with the stock powers, shall be deposited with the Escrow Agent. Except as restricted by the terms of the Agreement, upon the delivery of the Shares to the Escrow Agent, the Grantee shall have all of the rights of a shareholder with respect to such Shares, including the right to vote the shares and to receive, subject to Section 8(d), all dividends or other distributions paid or made with respect to the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Non-Transferability</u>. Until any restrictions upon the Shares of Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth in Section 8(c), such Shares shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated, nor shall they be delivered to the Grantee. Upon the termination of employment of the Grantee, all of such Shares with respect to which restrictions have not lapsed shall be resold by the Grantee to the Company at the same price paid by the Grantee for such Shares or shall be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company if no purchase price had been paid for such Shares. The Committee may also impose such other restrictions and conditions on the Shares as it deems appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Lapse of Restrictions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Restrictions, if any, upon Shares of Restricted Stock awarded hereunder shall lapse at such time or times and on such terms, conditions and satisfaction of performance criteria as the Committee (or, when applicable, the Board) may determine; provided, however, that the restrictions upon such Shares shall lapse only if the Grantee on the date of such lapse is then and has continuously been an employee of the Company or a Subsidiary (or a member of the Board) from the date the Award was granted, or unless the Committee sets a later date for the lapse of such restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of termination of employment (or termination of Service as a Director) as a result of death, Disability or Retirement of a Grantee, all restrictions upon Shares of Restricted Stock awarded to such Grantee shall thereupon immediately lapse, provided, however, that the Committee or Board shall have the authority to grant Awards the restrictions on which do not lapse in the event of the termination of employment or Service as a result of the death, Disability or Retirement of a Grantee by including such provision in the Agreement evidencing such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Committee or Board may also decide at any time in its absolute discretion and on such terms and conditions as it deems appropriate, to remove or modify the restrictions upon Shares of Restricted Stock awarded hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Treatment of Dividends</u>. No cash dividends shall be paid with respect to any Restricted Stock Awards unless and until the Grantee vests in the underlying share(s) of Restricted Stock. Upon the vesting of a Restricted Stock Award, any dividends declared but not paid during the vesting period shall be paid within thirty (30) days following the vesting date. Any stock dividends declared on shares of Stock subject to a Restricted Stock Award shall be subject to the same restrictions and shall vest at the same time as the shares of Restricted Stock from which said dividends were derived. All unvested dividends shall be forfeited by the Grantees to the extent their underlying Restricted Stock Awards are forfeited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Delivery of Shares</u>. When any restrictions imposed hereunder and in the Plan expire or have been cancelled with respect to one or more shares of Restricted Stock, the Company shall notify the Grantee and the Escrow Agent of same. The Escrow Agent shall then return the certificate covering the Shares of Restricted Stock to the Company and upon receipt of such certificate the Company shall deliver to the Grantee (or such Grantee's legal representative, beneficiary or heir) a certificate for a number of shares of Common Stock, without any legend or restrictions (except those required by any federal or state securities laws), equivalent to the number of Shares of Restricted Stock for which restrictions have been cancelled or have expired (or alternatively, an applicable book entry shall be made for uncertificated Shares). If applicable, a new certificate covering Shares of Restricted Stock previously awarded to the Grantee which remain restricted shall be issued to the Grantee and held by the Escrow Agent and the Agreement, as it relates to such shares, shall remain in effect. Notwithstanding the foregoing, if requested by the Grantee, the Committee or the Board, in its discretion, has the right to cancel Shares of Restricted Stock to be delivered to the Grantee having a Fair Market Value, on the day preceding the date of vesting of the Restricted Stock, equal to the aggregate required tax withholding in connection with such vesting, and to apply the value of such Shares of Restricted Stock as payment for the Grantee's aggregate required tax withholding for the vesting of any Shares of Restricted Stock.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Unrestricted Shares. Notwithstanding anything to the contrary in this Plan, the Committee shall have the right to grant Awards of Restricted Stock to employees of the Company that are not evidenced by an Agreement, which are fully vested as of the grant date of the Award and which do not contain a restrictive legend. The amount of any aggregate Awards under this Section 8(f) shall not exceed 10,000 shares and any individual Award under this Section 8(f) shall not exceed 5 shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Restricted Stock Units</u>. The Committee (or, with respect to Directors, the Board) may grant Awards of Restricted Stock Units which shall be evidenced by an Agreement between the Company and the Grantee. Each Agreement shall contain such restrictions, terms and conditions as the Committee or Board may require. Awards of Restricted Stock Units shall be subject to the following terms and provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Rights of Grantee</u>. Restricted Stock Units granted pursuant to an Award hereunder shall be issued in the name of the Grantee as soon as reasonably practicable after the Award is granted and the purchase price, if any, is paid by the Grantee, provided that the Grantee has executed an Agreement evidencing the Award and any other documents which the Committee, in its absolute discretion, may require as a condition to the issuance of such Restricted Stock Units. If a Grantee shall fail to execute the Agreement evidencing a Restricted Stock Unit Award or shall fail to pay the purchase price, if any, for the Restricted Stock Units, the Award shall be null and void. The Grantee shall not have any of the rights of a shareholder with respect to Restricted Stock Units, subject to Section 9(d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Non-Transferability</u>. Until any restrictions upon the Restricted Stock Units awarded to a Grantee shall have lapsed in the manner set forth in Section 9(c), such Restricted Stock Units shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated. Upon the termination of employment of the Grantee, all of such Restricted Stock Units with respect to which restrictions have not lapsed shall be forfeited at no cost to the Company if no purchase price had been paid for such Restricted Stock Units. The Committee may also impose such other restrictions and conditions on the Restricted Stock Units as it deems appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Lapse of Restrictions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Restrictions upon Restricted Stock Units awarded hereunder shall lapse at such time or times and on such terms, conditions and satisfaction of performance criteria as the Committee (or, when applicable, the Board) may determine; provided, however, that the restrictions upon such Restricted Stock Units shall lapse only if the Grantee on the date of such lapse is then and has continuously been an employee of the Company or a Subsidiary (or a member of the Board) from the date the Award was granted, or unless the Committee sets a later date for the lapse of such restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of termination of employment (or termination of Service as a Director) as a result of death, Disability or Retirement of a Grantee, all restrictions upon Restricted Stock Units awarded to such Grantee shall thereupon immediately lapse, provided, however, that the Committee or Board shall have the authority to grant Awards of Restricted Stock Units the restrictions on which do not lapse in the event of the termination of employment or Service as a result of the death, Disability or Retirement of a Grantee by including such provision in the Agreement evidencing such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Committee or Board may also decide at any time in its absolute discretion and on such terms and conditions as it deems appropriate, to remove or modify the restrictions upon Restricted Stock Units awarded hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Treatment of Cash Dividends</u>. At the time of an Award of Restricted Stock Units, the Committee may, in its discretion, determine to provide the Grantee with the right to receive cash Dividend Equivalents with respect to the Restricted Stock Units subject to the Award, or a specified portion thereof. A "Dividend Equivalent" is an amount equal to the cash dividend payable per Share, if any, multiplied by the number of Shares then underlying the Award with respect to any cash dividends declared or paid by the Company while the Award is outstanding. Any such Dividend Equivalents shall be credited to the Grantee at the time the Company pays any cash dividend on its Shares. Until such time as the Dividend Equivalents vest or are forfeited, interest may be credited on the amount of such Dividend Equivalents held by the Company for the account of the Grantee from time to time at such rate per annum as the Committee, in its discretion, may determine. Any Dividend Equivalents credited to the Grantee shall vest at the same time as the underlying Restricted Stock Units, and payment of credited Dividend Equivalents, together with any interest accrued thereon, shall be made at the time when the underlying Restricted Stock Units convert to Shares. In the event any Restricted Stock Units are forfeited under Section 9(c) hereof, any Dividend Equivalents credited to Grantee with respect to such forfeited Restricted Stock Units and any interest accrued thereon shall be forfeited to the Company, and the Grantee shall have no rights and the Company shall have no liability as to such Dividend Equivalents or interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Delivery of Shares</u>. When the restrictions imposed hereunder and in the Plan expire or have been cancelled with respect to one or more of the Restricted Stock Units granted under the Plan, the Company shall notify the Grantee of same. The Company shall then deliver to the Grantee (or such Grantee's legal representative, beneficiary or heir) a certificate for a number of Shares, without any legend or restrictions (except those required by any federal or state securities laws), equivalent to the number of Restricted Stock Units for which restrictions have been cancelled or have expired (or alternatively, an

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applicable book entry shall be made for uncertificated Shares). Notwithstanding the foregoing, if requested by the Grantee, the Committee or the Board, in its discretion, has the right to cancel Shares to be delivered to the Grantee having a Fair Market Value, on the day preceding the date of vesting of the Restricted Stock Units, equal to the aggregate required tax withholding in connection with such vesting, and to apply the value of such Shares as payment for the Grantee's aggregate required tax withholding for the vesting of any Restricted Stock Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Compliance with Section 409A of the Code</u>. Restricted Stock Units are intended to comply with Section 409A of the Code and provisions of the Plan and Awards shall be interpreted in a manner intended to be consistent with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Cash-Based Awards</u>. The Committee is hereby authorized to grant Cash-Based Awards to Grantees denominated in cash in such amounts and subject to such terms and conditions as the Committee may determine. Each such Cash-Based Award shall specify a payment amount, payment range or a value determined with respect to the Fair Market Value of the Shares, as determined by the Committee. The Committee may designate Cash-Based Awards as "performance-based compensation" by conditioning the Award or the lapse of restrictions on the achievement of performance goals in accordance with Section 11(a). The Committee is authorized at any time during or after a Performance Period to exercise negative discretion to reduce or eliminate a Cash-Based Award of any Grantee for any reason in its discretion, including, without limitation, changes in the position or duties of any Grantee with the Company or any Subsidiary during or after a Performance Period, whether due to any termination of employment (including death, disability, retirement, voluntary termination or termination with or without cause) or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Performance Goals</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If, at the time of grant, the Committee intends a Restricted Stock Award, Restricted Stock Unit Award or Cash-Based Award to qualify as " performance-based compensation", the Committee may establish performance goals for the applicable Performance Period. Such performance goals may be based on one or more of the criteria described in Section 11(b). "Performance Period" means the period selected by the Committee during which performance is measured for purpose of determining the extent to which an award of Restricted Stock, Restricted Stock Units or a Cash-Based Award has been earned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A performance goal described in Section 11(a) shall be based on one or more of the following criteria: earnings, earnings growth, earnings per share, stock price (including growth measures and total shareholder return), improvement of financial ratings, internal rate of return, market share, cash flow, operating income, operating margin, net profit after tax, earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per share basis, gross profit, operating profit, cash generation, revenues, asset quality, return on equity, return on assets, return on operating assets, cost saving levels, efficiency ratio, net income, marketing-spending efficiency, core non-interest income, change in working capital, return on capital, book value or tangible book value, or shareholder return. The performance goals may be described in terms of objectives that are related to the individual Grantee or objectives that are Company-wide or related to a Subsidiary, division, department, region, branch, function or business unit and may, but need not be, measured on an absolute or cumulative basis or on the basis of percentage of improvement over time, measured in terms of Company performance (or performance of the applicable Subsidiary, division, department, region, branch, function or business unit) or measured relative to selected peer companies or a market index. Any performance goals that are financial metrics, may be determined in accordance with Generally Accepted Accounting Principles ("GAAP"), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP. The Committee may establish performance goals based on any other performance criteria it deems appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) When the Committee determines whether a performance goal has been satisfied for any period, the Committee may include or exclude unusual, infrequently occurring or non-recurring charges, asset write downs, losses from discontinued operations, restatements and accounting changes and other unplanned special charges such as restructuring expenses, acquisitions, acquisition or disposition expenses, including expenses related to goodwill and other intangible assets, stock offerings, stock repurchases and loan loss provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If the Committee determines that a performance goal has been satisfied, the Committee shall certify that the goal has been satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Effect of a Change in Control</u>. Notwithstanding anything herein to the contrary (with the exception of Section 6(h)), the provisions of this Section 12 shall apply in the case of a Change in Control of the Company, unless otherwise provided by the Committee in the Agreement and as supplemented by Section 14.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Awards Assumed or Substituted by Surviving Entity</u>. With respect to Options and Awards assumed by the surviving entity or otherwise equitably converted or substituted in connection with a Change in Control: if within two years after the effective date of the Change in Control, a Grantee's employment is terminated without Cause or the Grantee resigns for Good Reason, then (i) all of the Grantee's outstanding Options and Stock Appreciation Rights shall become fully vested and exercisable and shall remain exercisable for three years following such termination, provided no Option or Stock

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Appreciation Right shall be exercisable beyond the term of the Option or Stock Appreciation Right, (ii) all time-based vesting restrictions on his or her outstanding Awards shall lapse, and (iii) unless otherwise provided in the Agreement, the payout level under all of the Grantee's performance-based Awards that were outstanding immediately prior to effective time of the Change in Control shall be determined and deemed to have been earned as of the date of termination based upon an assumed achievement of all relevant performance goals at the target level, or at a level in excess of target in the Committee's discretion, and there shall be a pro rata payout to such Grantee within sixty (60) days following the date of termination of employment based upon the length of time within the performance period that has elapsed prior to the date of termination of employment. With regard to each Award or Option, a Grantee shall not be considered to have resigned for Good Reason unless either (i) the Agreement provides for a Good Reason termination or (ii) the Grantee is party to an employment, severance or similar agreement with the Company or a Subsidiary that includes provisions in which the Grantee is permitted to resign for Good Reason. To the extent that this provision causes Incentive Stock Options to no longer satisfy the requirements of Code Section 422, the affected Options shall be deemed to be Nonqualified Stock Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Awards not Assumed or Substituted by Surviving Entity</u>. Upon the occurrence of a Change in Control, and except with respect to any Options or Awards assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control: (i) outstanding Options and Stock Appreciation Rights shall become fully vested and exercisable, (ii) time-based vesting restrictions on outstanding Awards shall lapse, and (iii) unless otherwise provided in the Agreement, the target payout opportunities attainable under outstanding performance-based Awards shall be deemed to have been earned as of the effective date of the Change in Control based upon an assumed achievement of all relevant performance goals at the target level, or at a level in excess of target in the Committee's discretion, and there shall be a pro rata payout to Grantees within sixty (60) days following the Change in Control based upon the length of time within the performance period that has elapsed prior to the Change in Control. To the extent that this provision causes Incentive Stock Options to no longer satisfy the requirements of Code Section 422, the affected Options shall be deemed to be Nonqualified Stock Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Definitions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) A surviving entity will be deemed to have "assumed by the surviving entity or otherwise equitably converted or substituted" an Award or Option under this Plan if the surviving entity substitutes an Award or Option under this Plan or an award or stock option under a plan of the surviving entity having equivalent value to and terms and conditions no less favorable than the original Award or Option, or otherwise assumes the obligations under and/or equitably adjusts such original Award or Option. The Committee or the Board shall have sole authority to determine whether the proposed assumption of an Award or Option by a surviving entity meets the requirements listed in this Section 12(c)(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) "Good Reason" (or a similar term denoting constructive termination) has the meaning, if any, assigned such term in the employment, severance or similar agreement, if any, between a Grantee and the Company or a Subsidiary; provided, however, if there is no such employment, severance or similar agreement in which such term is defined, "Good Reason" shall have the meaning, if any, given such term in the applicable Agreement. If not defined in either such document, the term "Good Reason" as used herein shall not apply to a particular Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Adjustment Upon Changes in Capitalization.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event of a Change in Capitalization, the Committee shall conclusively determine the appropriate adjustments, if any, to the maximum number and class of shares of stock with respect to which Options or Awards may be granted under the Plan, the number and class of shares as to which Options or Awards have been granted under the Plan, and the purchase price therefor, if applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any such adjustment in the Shares or other securities subject to outstanding Incentive Stock Options (including any adjustments in the purchase price) shall be made in such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code and only to the extent otherwise permitted by Sections 422 and 424 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If, by reason of a Change in Capitalization, a Grantee of an Award shall be entitled to new, additional or different shares of stock or securities, such new additional or different shares shall thereupon be subject to all of the conditions, restrictions and performance criteria which were applicable to the Shares or units pursuant to the Award prior to such Change in Capitalization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Effect of Certain Transactions</u>. Upon the occurrence or in anticipation of any corporate event or transaction involving the Company (including, without limitation, any merger, consolidation, reorganization, recapitalization, combination or exchange of shares, liquidation or dissolution, sale or disposition of all or substantially all of the Company's assets, or any Change in Capitalization), the Committee may, in its sole discretion, notwithstanding Section 12 hereunder, provide (i) that Options or Awards will be settled in cash rather than stock or in unrestricted shares of stock of the surviving entity, (ii) that Options or Awards will become immediately vested and non-forfeitable and exercisable (in whole or in part) and will be cancelled after a designated period of time to the extent not then exercised, (iii) that Options or Awards will be assumed by another party to a transaction or otherwise be equitably converted or substituted in connection with such transaction,

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(iv) that outstanding Options or Awards may be settled by payment in cash or cash equivalents equal to the excess of the fair market value of the underlying stock, as of a specified date associated with the transaction (or the per share transaction price), over the exercise or base price of the Option or Award and those Options or Awards not eligible for payment shall be cancelled, (v) that performance targets and performance periods for performance-based Awards and Options will be modified, or (vi) any combination of the foregoing. The Committee's determination need not be uniform and may be different for different Grantees whether or not such Grantees are similarly situated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Termination and Amendment of the Plan</u>. The Plan shall terminate on the day preceding the tenth anniversary of its effective date and no Option or Award may be granted thereafter. The Board may sooner terminate or amend the Plan at any time, and from time to time; provided, however, that, except as provided in Sections 13 and 14 hereof, no amendment shall be effective unless approved by the shareholders of the Company in accordance with applicable law and regulations at an annual or special meeting held within twelve months before or after the date of adoption of such amendment, where approval of such amendment is required under applicable laws, policies or regulations or applicable listing or other requirements of the national securities exchange upon which the Shares are then listed, including amendments that will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) increase the number of Shares as to which Options or Awards may be granted under the Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) change the class of persons eligible to participate in the Plan; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) materially extend the term of the Plan.

Except as otherwise provided herein, rights and obligations under any Option or Award granted before any amendment of the Plan shall not be altered or impaired by such amendment, except with the consent of the Grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Non-Exclusivity of the Plan</u>. The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Limitation of Liability</u>. As illustrative of the limitations of liability of the Company, but not intended to be exhaustive thereof, nothing in the Plan shall be construed to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) give any person any right to be granted an Option or Award other than at the sole discretion of the Committee or the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) give any person any rights whatsoever with respect to Shares except as specifically provided in the Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) limit in any way the right of the Company to terminate the employment or service of any person at any time; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) be evidence of any agreement or understanding, expressed or implied, that the Company will employ any person in any particular position at any particular rate of compensation or for any particular period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Regulations and Other Approvals; Governing Law.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of New Jersey without giving effect to the choice of law principles thereof, except to the extent that such law is preempted by federal law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The obligation of the Company to sell or deliver Shares with respect to Options and Awards granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Plan is intended to comply with Rule 16b-3 promulgated under the Exchange Act (as amended from time to time) and the Committee shall interpret and administer the provisions of the Plan or any Agreement in a manner consistent therewith to the extent necessary. Any provisions inconsistent with such Rule or Section shall be inoperative but shall not affect the validity of the Plan or any grants thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as otherwise provided in Section 15, the Board may make such changes as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain for Eligible Employees granted Incentive Stock Options the tax benefits under the applicable provisions of the Code and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Option and Award is subject to the requirement that, if at any time the Committee determines, in its absolute discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Option or Award or the issuance of Shares, no

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Options or Awards shall be granted or payment made or Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions unacceptable to the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act of 1933, as amended, and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required by the Securities Act of 1933, as amended, or regulations thereunder, and the Committee may require any individual receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares (including upon exercise of an Option), to represent to the Company in writing that the Shares acquired by such individual are acquired for investment only and not with a view to distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Miscellaneous.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Multiple Agreements</u>. The terms of each Option or Award may differ from other Options or Awards granted under the Plan at the same time, or at some other time. The Committee may also grant more than one Option or Award to a given Eligible Employee during the term of the Plan, either in addition to, or in substitution for, one or more Options or Awards previously granted to that Eligible Employee. The grant of multiple Options and/or Awards may be evidenced by a single Agreement or multiple Agreements, as determined by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Withholding of Taxes</u>. The Company shall have the right to deduct from any distribution of cash to any Grantee an amount equal to the federal, state and local income taxes and other amounts required by law to be withheld with respect to the vesting or exercise of an Option or Award, or, in lieu thereof, to retain, or to sell without notice, a sufficient number of shares of Stock to cover the minimum amount required to be withheld. To the extent determined by the Committee or specified in an Agreement and no adverse accounting consequences are triggered under FASB ASC Topic 718 or its successor and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another applicable governmental entity, a Grantee shall have the ability to direct the Company to satisfy up to his or her highest marginal tax rate of required federal, state and local withholding by, (i) with respect to an Option or Stock Appreciation Right, reducing the number of shares of Stock subject to the Option or Stock Appreciation Right (without issuance of such shares of Stock to the Option holder) by the number equal to the quotient of (a) the total maximum amount of tax withholding divided by (b) the excess of the Fair Market Value of a share of Stock on the exercise date over the exercise price per share of Stock; and (ii) with respect to Restricted Stock Awards and Restricted Stock Units, withholding a number of shares (based on the Fair Market Value on the vesting date) otherwise vesting that would satisfy the maximum amount of tax withholding. Provided there are no adverse accounting consequences to the Company (a requirement to have liability classification of an award under FASB ASC Topic 718 is an adverse consequence), a Grantee who is not required to have taxes withheld may require the Company to withhold in accordance with the preceding sentence as if the Award were subject to tax withholding requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Designation of Beneficiary</u>. Each Grantee may, with the consent of the Committee, designate a person or persons to receive in the event of his/her death, any Option or Award or any amount payable pursuant thereto, to which he/she would then be entitled. Such designation will be made upon forms supplied by and delivered to the Company and may be revoked in writing. If a Grantee fails effectively to designate a beneficiary, then his/her estate will be deemed to be the beneficiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Section 409A Compliance</u>. The Plan is intended to be administered and interpreted in a manner consistent with the requirements, where applicable, of Section 409A of the Code. Where reasonably possible and practicable, the Plan shall be administered in a manner to avoid the imposition on Grantees in the Plan of immediate tax recognition and additional taxes pursuant to Section 409A. Notwithstanding the foregoing, neither the Company, the Board nor the Committee shall have any liability to any person in the event Section 409A applies to any such Award or Option in a manner that results in adverse tax consequences for the Grantee or any of his/her beneficiaries or transferees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Recoupment</u>. To the extent required by applicable law (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of any securities exchange or inter-dealer quotation service on which the Shares are listed or quoted, or if so required pursuant to a written policy adopted by the Company, Options and Awards shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Vesting of Awards</u>. The Committee shall specify the vesting schedule or conditions of each Option and Award. Notwithstanding any other provision of the Plan to the contrary, Options and Awards granted under the Plan shall vest no earlier than the first anniversary of the date on which the Award is granted; provided, that the following Awards shall not be subject to the foregoing minimum vesting requirement: any (i) substitute Awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its Subsidiaries, (ii) Awards to non-employee Directors that vest on the earlier of the one-year anniversary of the date of grant or the next annual meeting of stockholders which is at least 50 weeks after the immediately preceding year's annual meeting, and (iii) any additional Awards the Committee may grant, up to a maximum of five percent (5%) of the available share reserve authorized for issuance under the Plan pursuant to Section 4 (subject to adjustment under Section 13); and,

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provided, further, that the foregoing restriction does not apply to the Committee's discretion to provide for accelerated exercisability or vesting of any Award or acceleration in the event of death, Disability or a Change in Control in the terms of the Agreement or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Effective Date</u>. The effective date of the Plan shall be the date on which the Plan is approved by the Company's stockholders.

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PEAPACK-GLADSTONE FINANCIAL CORPORATION Your vote matters – here's how to vote! You may vote online or by phone instead of mailing this card. Online Go to www.envisionreports.com/PGC or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/PGC Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 4 and 5 and 1 Year on Proposal 3. 1. Election of Directors of Peapack-Gladstone Financial Corporation (the "Company"): + For Withhold For Withhold For Withhold 01 - Carmen M. Bowser 02 - Susan A. Cole 03 - Anthony J. Consi, II 04 - Richard Daingerfield 05 - Edward A. Gramigna, Jr. 06 - Peter D. Horst 07 - Steven A. Kass 08 - Douglas L. Kennedy 09 - F. Duffield Meyercord 10 - Patrick J. Mullen 11 - Philip W. Smith, III 12 - Tony Spinelli 13 - Beth Welsh 2. To approve, on a non-binding basis, the compensation of the Company's named executive officers. 3. To approve, on a non-binding basis, the frequency of future non-binding advisory votes on the compensation of the Company's named executive officers. 4. To approve an amendment to the Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan to increase the number of authorized shares by 600,000. 5. To ratify the appointment of Crowe LLP as the Company's independent registered public accounting firm for the year ending December 31, 2023. For Against Abstain For Against Abstain For Against Abstain 1 Year 2 Years 3 Years Abstain B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. 1UPX + 03S7EB

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The Peapack-Gladstone Financial Corporation Shareholder Meeting (the "Annual Meeting") will be conducted solely online via live webcast. You will be able to virtually attend and participate in the Annual Meeting online, vote your shares electronically, and submit your questions during the meeting by visiting: www.meetnow.global/MXDMD9G on Tuesday, May 2, 2023 at 10:00am Eastern Time as described in our proxy statement. If you plan to virtually attend and participate in the Annual Meeting, please retain these documents that contain your control number, which will be required for you to access the meeting as a shareholder. Important notice regarding the Internet availability of proxy materials for the Annual Meeting. The material is available at: www.envisionreports.com/PGC Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/PGC IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Peapack-Gladstone Financial Corporation + Notice of 2023 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting — May 2, 2023 Richard Daingerfield, Philip W. Smith III, Beth Welsh, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Peapack-Gladstone Financial Corporation to be held on May 2, 2023 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of all the nominees listed and FOR items 2, 4 and 5 and 1 Year on item 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) C Non-Voting Items Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. +

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PEAPACK-GLADSTONE FINANCIAL CORPORATION Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 4 and 5 and 1 Year on Proposal 3. 1. Election of Directors of Peapack-Gladstone Financial Corporation (the "Company"): For Withhold For Withhold For Withhold 01 - Carmen M. Bowser 02 - Susan A. Cole 03 - Anthony J. Consi, II 04 - Richard Daingerfield 05 - Edward A. Gramigna, Jr. 06 - Peter D. Horst 07 - Steven A. Kass 08 - Douglas L. Kennedy 09 - F. Duffield Meyercord 10 - Patrick J. Mullen 11 - Philip W. Smith, III 12 - Tony Spinelli 13 - Beth Welsh + 2. To approve, on a non-binding basis, the compensation of the Company's named executive officers. For Against Abstain 3. To approve, on a non-binding basis, the frequency of future non-binding advisory votes on the compensation of the Company's named executive officers. 1 Year 2 Years 3 Years Abstain 4. To approve an amendment to the Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan to increase the number of authorized shares by 600,000. For Against Abstain 5. To ratify the appointment of Crowe LLP as the Company's independent registered public accounting firm for the year ending December 31, 2023. For Against Abstain B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. Date (mm/dd/yyyy) — Please print date below. 1UPX + 03S7FB

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Important notice regarding the Internet availability of proxy materials for the Annual Meeting. The material is available at: www.edocumentview.com/PGC IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Peapack-Gladstone Financial Corporation Notice of 2023 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting — May 2, 2023 Richard Daingerfield, Philip W. Smith III, Beth Welsh, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Peapack-Gladstone Financial Corporation to be held on May 2, 2023 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of all the nominees listed and FOR items 2, 4 and 5 and 1 Year on item 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side)

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PEAPACK-GLADSTONE FINANCIAL CORPORATION + Online Go to www.envisionreports.com/PGC or scan the QR code — login details are located in the shaded bar below. Shareholder Meeting Notice Important Notice Regarding the Availability of Proxy Materials for the Peapack-Gladstone Financial Corporation Shareholder Meeting to be Held on Tuesday, May 2, 2023. Under Securities and Exchange Commission rules, you are receiving this notice that the proxy materials for the annual shareholders' meeting are available on the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted on and location of the annual meeting are on the reverse side. Your vote is important! This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The 2023 proxy materials are available at: www.envisionreports.com/PGC Easy Online Access — View your proxy materials and vote. Step 1: Go to www.envisionreports.com/PGC. Step 2: Click on Cast Your Vote or Request Materials. Step 3: Follow the instructions on the screen to log in. Step 4: Make your selections as instructed on each screen for your delivery preferences. Step 5: Vote your shares. When you go online, you can also help the environment by consenting to receive electronic delivery of future materials. Obtaining a Copy of the Proxy Materials – If you want to receive a copy of the proxy materials, you must request one. There is no charge to you for requesting a copy. Please make your request as instructed on the reverse side on or before April 18, 2023 to facilitate timely delivery. 2NOT + 03S7GB

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Shareholder Meeting Notice The Peapack-Gladstone Financial Corporation Shareholder Meeting (the "Annual Meeting") will be conducted solely online via live webcast. You will be able to virtually attend and participate in the Annual Meeting online, vote your shares electronically, and submit your questions during the meeting by visiting: www.meetnow.global/MXDMD9G on Tuesday, May 2, 2023, at 10:00am Eastern Time as described in our proxy statement. If you plan to virtually attend and participate in the Annual Meeting, please retain these documents that contain your control number, which will be required for you to access the meeting as a shareholder. Proposals to be voted on at the meeting are listed below along with the Board of Directors' recommendations. The Peapack Gladstone Financial Corporation (the "Company") Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 4 and 5 and 1 Year on Proposal 3: 1. Election of Directors: 01 - Carmen M. Bowser 02 - Susan A. Cole 03 - Anthony J. Consi, II 04 - Richard Daingerfield 05 - Edward A. Gramigna, Jr. 06 - Peter D. Horst 07 - Steven A. Kass 08 - Douglas L. Kennedy 09 - F. Duffield Meyercord 10 - Patrick J. Mullen 11 - Philip W. Smith, III 12 - Tony Spinelli 13 - Beth Welsh 2. To approve, on a non-binding basis, the compensation of the Company's named executive officers. 3. To approve, on a non-binding basis, the frequency of future non-binding advisory votes on the compensation of the Company's named executive officers. 4. To approve an amendment to the Peapack-Gladstone Financial Corporation 2021 Long-Term Incentive Plan to increase the number of authorized shares by 600,000. 5. To ratify the appointment of Crowe LLP as the Company's independent registered public accounting firm for the year ending December 31, 2023. PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must go online or request a paper copy of the proxy materials to receive a proxy card. Here's how to order a copy of the proxy materials and select delivery preferences: Current and future delivery requests can be submitted using the options below. If you request an email copy, you will receive an email with a link to the current meeting materials. PLEASE NOTE: You must use the number in the shaded bar on the reverse side when requesting a copy of the proxy materials. — internet – Go to www.envisionreports.com/PGC. Click Cast Your Vote or Request Materials. — Phone – Call us free of charge at 1-866-641-4276. — Email – Send an email to investorvote@computershare.com with "Peapack-Gladstone Financial Corporation" in the subject line. Include your full name and address, plus the number located in the shaded bar on the reverse side, and state that you want a paper copy of the meeting materials. To facilitate timely delivery, all requests for a paper copy of proxy materials must be received by April 18, 2023.

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