Peapack-Gladstone Financial has reported the receipt of a $28.68 million investment by the U.S. Department of Treasury.
The investment is part of the Treasury’s capital purchase programme and is in the form of preferred stock.
The investment is considered tier one capital. The corporation applied for and received preliminary approval of the Treasury’s investment in November 2008. Prior to consummating the Treasury’s investment, the corporation was required to obtain shareholder approval to amend its certificate of incorporation to provide for the issuance of preferred stock.
As part of the investment, the corporation issued the Treasury warrants to purchase 143,139 shares of the corporation’s common stock at an exercise price of $30.06 per share. The warrants are exercisable for a period of 10 years.
The U.S. Treasury recently created the capital purchase programme (CPP) which is part of the troubled assets relief programme to encourage qualifying U.S. financial institutions to increase the flow of financing to businesses and consumers, thereby restoring liquidity and stability to the U.S. financial system. Companies participating in the programme must adopt the Treasury Department’s standards for executive compensation and corporate governance, for the period during which Treasury holds equity issued under this programme. These standards generally apply to the chief executive officer, chief financial officer and the next three most highly compensated executive officers. The approval is subject to certain conditions and the execution of definitive agreements.
