EMPLOYMENT AGREEMENT
Exhibit 10.3
EMPLOYMENT AGREEMENT (“Agreement”) dated this 1st day of January 2011, by and between Xxxx Xxxxx (the “Executive”), Pacific Premier Bancorp, Inc. (the “Company”) and Pacific Premier Bank (the “Bank” and, together with the Company, the “Employers”).
WHEREAS, the Employers desire to assure themselves of the services of the Executive for the period provided in this Agreement, and the Executive is willing to serve in the employ of the Employers for such period, all in accordance with the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth, Executive and the Employers do agree to the terms of employment as follows:
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(i)
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Without the Executive's express written consent, a material adverse change made by the Employers which would reduce the Executive's functions, duties or responsibilities as Senior Vice President and Chief Financial Officer of the Company and the Bank.
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(ii)
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Without the Executive's express written consent, a material reduction by the Employers in the Executive's Base Salary as the same may be increased from time to time; or
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(iii)
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Without the Executive's express written consent, the Employers require the Executive to be based at a location more than 50 miles from Costa Mesa, California (which requirement shall be deemed to be a material change in the geographic location at which the Executive must perform services for the Company and the Bank), except for required travel on business of the Employers to an extent substantially consistent with the Executive's present business travel obligations.
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(j) IRS. IRS shall mean the Internal Revenue Service.
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(i)
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the Executive continues to provide services as an employee of the Employers at an annual rate that is twenty percent or more of the services rendered, on average, during the immediately preceding three full calendar years of employment and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment, or
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(ii)
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the Executive continues to provide services to the Employers in a capacity other than as an employee of the Employers at an annual rate that is twenty percent or more of the services rendered, on average, during the immediately preceding three full calendar years of employment and the average annual remuneration earned during the final three full calendar years of employment.
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(a) Each of the Company and the Bank hereby employs the Executive as Senior Vice President and Chief Financial Officer of the Company and the Bank, and the Executive hereby accepts said employment and agrees to render such services to the Employers, on the terms and conditions set forth in this Agreement. The term of employment under this Agreement shall be for a term of three years, commencing on the date of this Agreement, unless such term is extended as provided in this Section 2. On the annual anniversary of the date first above written and each annual anniversary thereafter, the term of this Agreement shall automatically be extended for an additional one-year without the need for notification to be given by the Board of Directors of each of the Employers of their approval of such extension. If either the Executive on the one hand, or the Company or the Bank on the other hand, gives written notice to the other party or parties hereto of such party’s or parties’ election not to extend the term, with such notice to be given not less than ninety (90) days prior to any such anniversary date, then this Agreement shall terminate at the conclusion of its remaining term. References herein to the “Term of Employment” shall refer both to the initial term and successive terms.
(b) During the Term of Employment, the Executive shall perform such executive services for the Employers as may be consistent with Executive’s titles and such executive services which are from time to time assigned to Executive by the Employers’ respective Boards of Directors. The Executive shall devote Executive’s entire business time, attention, skill and energy exclusively to the business of the Employers. The Executive shall not engage or prepare to engage in any other business activity, whether or not such business activity is pursued for gain, profit or other economic or financial advantage; provided, however, that the Executive may engage in appropriate civic, charitable or religious activities and devote a reasonable amount of time to private investments or boards or other activities provided that such activities do not interfere or conflict with the Executive’s responsibilities and are not or not likely to be contrary to the Employers interests
(a) The Employers shall compensate and pay the Executive for services during the term of this Agreement at a minimum base salary of $195,000 per year (“Base Salary”), which may be increased from time to time in such amounts as may be determined by the Board of Directors of the Employers and may not be decreased without the Executive's express written consent. The Executive’s Base Salary shall be paid in periodic installments (not less than monthly) in accordance with the general payroll practices of the Employers, as in effect from time-to-time.
(b) During the term of this Agreement, the Executive shall be entitled to participate in and receive the benefits of any pension or other retirement benefit plan, profit sharing, stock option, employee stock ownership, or other plans, benefits and privileges given to employees and executives of the Employers, to the extent commensurate with Executive’s then duties and responsibilities as fixed by the Boards of Directors of the Employers.
(c) Executive shall be entitled to receive all benefits and conditions of employment generally available to other executives of Employers, including, without limitation, sick leave, disability, accident, life, hospitalization, medical and dental insurance, paid holidays, and participation in any pension, profit sharing or other retirement plan pursuant to the terms of said plans
(d) Executive shall accrue paid vacation at the rate of three weeks per year and paid sick leave at the rate of two hours per pay period unless extended for years of service as governed by the Employer’s Employee Handbook. Except as stated herein, other terms and conditions of Executive’s vacation and sick pay shall be governed by Employer’s Employee Handbook, as amended from time-to-time.
(e) Executive shall be eligible for a discretionary performance bonus not to exceed 100% of Executive’s Base Salary, based on individual performance and overall performance of the Employers. The criteria for determining eligibility and the amount of any bonus shall be in the discretion of the Compensation Committee of the Employer’s Board of Directors. Such bonus, if any, shall be paid between January 1 and March 15 following the year during which performance is measured.
(a) The Employers shall have the right, at any time upon prior Notice of Termination, to terminate the Executive's employment hereunder for any reason, including, without limitation, termination for Cause or Disability, and the Executive shall have the right, upon prior Notice of Termination, to terminate Executive’s employment hereunder for any reason.
(b) In the event that (i) the Executive’s employment is terminated by the Employers for Cause or (ii) the Executive terminates his employment hereunder other than for Disability or Good Reason, the Executive shall have no right pursuant to this Agreement to compensation or other benefits for any period after the applicable Date of Termination other than for Base Salary accrued through the Date of Termination. To the extent that Executive voluntarily terminates his employment with either one of the Employers, he shall be deemed to have voluntarily terminated his employment with the other Employer.
(c) In the event that the Executive's employment is terminated as a result of Disability or death during the term of this Agreement, the Executive or the Executive’s estate (as the case may be) shall receive the lesser of (i) Executive’s existing Base Salary as in effect as of the Date of Termination or death, multiplied by one year or (ii) Executive’s Base Salary for the duration of the Term of Employment. Payment pursuant to this Subsection (c) shall be paid to the Executive or Executive’s estate (as the case may be) within sixty (60) days after the Date of Termination or death.
(d) In the event that the Executive's employment is terminated (i) by the Employers for other than Cause, Disability, or the Executive's death and such termination occurs within two (2) years following a Change of Control or (ii) by the Executive (a) due to a material breach of this Agreement by the Employers, or (b) for Good Reason, then the Employers shall, subject to Section 6 hereof, if applicable, provide the benefits described in subparagraphs (A) and (C) of this Section 5(d). Such a termination shall be deemed an involuntary termination if the breach or Good Reason basis for termination has not been cured within thirty (30) business days after a written notice of non-compliance has been given by the Executive to the Employers, such written notice has been given no more than ninety (90) days after the initial occurrence of the breach or the Good Reason basis for termination, and the termination occurs within two (2) years following the initial occurrence of the breach or the Good Reason basis for termination.
In the event that the Executive's employment is terminated by the Employers for other than Cause, Disability, or the Executive's death and such termination does not occur in conjunction with a Change in Control or two (2) years after a Change of Control then the Employers shall, subject to Section 6 hereof, if applicable, provide the benefits described in subparagraphs (B) and (C) of this Section 5(d). Such a termination shall be deemed an involuntary termination.
(A) Pay to the Executive a cash severance amount equal to the sum of the Executive's Base Salary plus his incentive bonus for the previous year as in effect immediately prior to the Date of Termination multiplied by one (1) year, less taxes and other required withholding (“Severance Pay”). Such Severance Pay shall be paid in a lump sum on the first business day of the month following the Date of Termination. Nothwithstanding the foregoing, no such Severance Pay will be paid to Executive unless the Executive has undergone a Separation from Service.
(B) Pay to the Executive a cash severance amount equal to the Executive's Base Salary as in effect immediately prior to the Date of Termination multiplied by one (1) year, plus his incentive bonus for the previous year, less taxes and other required withholding (“Severance Pay”). Such Severance Pay shall be paid in a lump sum on the first business day of the month following the Date of Termination. Notwithstanding the foregoing, no such Severance Pay will be paid to Executive unless the Executive has undergone a Separation from Service.
(C) Maintain and provide for a period ending at the earlier of (i) the third anniversary of the Date of Termination or (ii) the date of the Executive's full-time employment by another employer, at no cost to the Executive, the Executive's continued participation in all group insurance, life insurance, health and accident, disability and other employee benefit plans, programs and arrangements in which the Executive was entitled to participate immediately prior to the Date of Termination (other than any stock option or other stock compensation plans or bonus plans of the Employers), provided that in the event that Executive's participation in any such plan, program or arrangement is barred, the Employers shall arrange to provide Executive with benefits substantially similar to those Executive was entitled to receive under such plans, programs and arrangements prior to the Date of Termination.
(e) In receiving any payments pursuant to this Section 5, the Executive shall not be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive hereunder, and such amounts shall not be reduced or terminated whether or not the Executive obtains other employment.
(a) The Executive acknowledges and agrees that by virtue of the Executive's position and involvement with the business and affairs of the Employers, the Executive will develop substantial expertise and knowledge with respect to all aspects of the Employers’ business, affairs and operations and will have access to all significant aspects of the business and operations of the Employers and to Confidential and Proprietary Information.
(b) The Executive hereby covenants and agrees that, during the term of employment and thereafter, unless otherwise authorized by the Employers in writing, the Executive shall not, directly or indirectly, under any circumstance: (i) disclose to any other person or entity (other than in the regular course of business of the Employers) any Confidential and Proprietary Information, other than pursuant to applicable law, regulation or subpoena or with the prior written consent of the Employers; (ii) act or fail to act so as to impair the confidential or proprietary nature of any Confidential and Proprietary Information; (iii) use any Confidential and Proprietary Information other than for the sole and exclusive benefit of the Employers; or (iv) offer or agree to, or cause or assist in the inception or continuation of, any such disclosure, impairment or use of any Confidential and Proprietary Information. Following the term of employment, the Executive shall return all documents, records and other items containing any Confidential and Proprietary Information to the Employers (regardless of the medium in which maintained or stored).
(c) While the Executive is employed by the Employers and for two (2) years after the Date of Termination, the Executive shall not hire or solicit or attempt to solicit for hire a Covered Employee, encourage another person to hire a Covered Employee, or otherwise seek to adversely influence or alter such Covered Employee’s relationship with the Employers or any of the Employers’ Affiliates (except during the Executive’s employment with the Employers, when acting on the good faith belief that ending the Covered Employee’s employment would be in the Employers’ best interest). A “Covered Employee” shall be any person who has been employed by the Employers or any of the Employers’ Affiliates in which Executive was directly involved or had access to Confidential and Proprietary Information at any time within the twelve (12) months prior to the date of any action prohibited by the preceding sentence occurs.
(d) The Executive acknowledges that as a result of Executive’s employment with the Employers, Executive has held and will continue to hold a position of the highest trust in which Executive comes to know the Employers’ employees, its customers and its Confidential and Proprietary Information. The Executive agrees that the provisions of Section 7 (c) are necessary to protect the Employers’ legitimate business interests. The Executive warrants that these provisions will not unreasonably interfere with Executive’s ability to earn a living or to pursue Executive’s occupation after Executive’s employment ends for any reason. Executive agrees to promptly notify the Employers of the name and address of any Person or entity to which Executive provides services during the Covered Period and authorizes the Employers, after consultation with Executive as to the form and content of any such notice, to notify that entity of Executive’s obligations under this Agreement.
(e) The parties agree that nothing in this Agreement shall be construed to limit or negate the common law of torts, confidentiality, trade secrets, fiduciary duty and obligations where such laws provide the Employers with any broader, further or other remedy or protection than those provided herein.
(f) Because the breach of any of the provisions of this Section 7 will result in immediate and irreparable injury to the Employers for which the Employers will not have an adequate remedy at law, the Employers shall be entitled, in addition to all other rights and remedies, to seek a degree of specific performance of the restrictive covenants contained in this Section 7 and to a temporary and permanent injunction enjoining such breach, without posting bond or furnishing similar security.
11. Dispute Resolution. The Executive and the Employers agree that arbitration in accordance with the Federal Arbitration Act and the Dispute Resolution Procedures set forth in Attachment A to this Agreement shall be the exclusive means for final resolution of any dispute between the parties arising out of or relating to the Executive’s employment or this Agreement, except (1) for workers’ compensation and unemployment claims; (2) when injunctive relief is necessary to preserve the status quo or to prevent irreparable injury; and (3) any claims arising from or relating to Section 7 of this Agreement. Injunctive relief may be sought only from any court of competent jurisdiction located in Orange County, California and the Executive consents to venue and personal jurisdiction in any such court. The parties hereto agree that the arbitration provided for hereunder shall be conducted by the Judicial Arbitration and Mediation Services, Inc. (“JAMS”), presently located in Orange County, California. In the event JAMS is unable or unwilling to conduct the arbitration provided for under the terms of this Section, or has discounted its business, the parties agree that the American Arbitration Association, presently located in Orange County, California, shall conduct the binding arbitration referred to in this Section. If any part of this Agreement is held by an arbitrator or court of competent jurisdiction to be void or unenforceable, the remaining provisions shall continue with full force and effect. If this Agreement shall be determined by any court or an arbitrator to be unenforceable because of its duration, or the scope of activities, information or geographic area covered, the parties agree that this Agreement shall be interpreted to extend to the maximum period of time or range of activities, information or geographic area that would be enforceable.
16. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United States where applicable and otherwise by the substantive laws of the California, without regard to any conflicts of laws provisions thereof.
(a) Notwithstanding any other provision of this Agreement to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. §1828(k), and the regulations promulgated thereunder, including 12 C.F.R. Part 359. Furthermore, following such termination for Cause, the Executive will not, directly or indirectly, participate in the affairs or the operations of the Employers.
(b) If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) or (g)(1), the Bank’s obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion (i) pay Executive all or part of the compensation withheld while their contract obligations were suspended; and (ii) reinstate (in whole or in part) any of the obligations which were suspended.
(c) If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(l) of the FDIA, 12 U.S.C. § 1818(e)(4) or (g)(l), all obligations of the Bank under this contract shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.
(d) If the Bank is in default as defined in Section 3(x)(l) of the FDIA, 12 U.S.C. § 1813(x)(l) all obligations of the Bank under this contract shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations of the Bank under this contract shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the institution, by the Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDIA, 12 U.S.C. § 1823(c).
[Signature page follows]
IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.
PACIFIC PREMIER BANCORP, INC.
By:
Name:
Title:
Address:
0000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxx Xxxx, XX 00000
PACIFIC PREMIER BANK
By:
Name:
Title:
Address:
0000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxx Xxxx, XX 00000
EXECUTIVE
By:
Name: Xxxx Xxxxx
Attachment A
DISPUTE RESOLUTION PROCEDURES
The parties agree to make a good faith effort to informally resolve any dispute before submitting the dispute to be resolved in accordance with the following procedures (“Procedures”):
A.
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The party claiming to be aggrieved (“Claimant”) shall furnish to the other a written statement of the grievance, all Persons whose testimony would support the grievance, and the relief requested or proposed. The written statements must be delivered to the other party within the time limits for bringing an administrative or court action based on that claim.
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B.
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If the other party does not agree to furnish the relief requested or proposed, or otherwise does not satisfy the demand of the Claimant within 30 days and the Claimant wishes to pursue the issue, the Claimant shall give notice to the other of the Claimant’s demand that the dispute be submitted to non-binding mediation before a mediator jointly selected by the parties or the parties cannot agree on a mediator selected from a list provided by the American Arbitration Association. Such mediation should occur within 90 days of the demand for mediation.
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C.
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If the dispute is not resolved in mediation, the Claimant shall request arbitration of the dispute by giving written notice to the other party within 30 days after mediation. The parties will attempt to agree on a mutually acceptable arbitrator and, if no agreement is reached, the parties will request a list of nine arbitrators from the American Arbitration Association or such other arbitration firms as agreed and select by alternatively striking names. The arbitration will be conducted consistent with American Arbitration Association’s National Rules for Resolution of Employment Disputes (“Rules”) that are in effect at the time of the arbitration. If there is any conflict between those Rules and the Procedures, the Procedures will govern. The arbitrator shall have authority to decide whether the conduct complained of under Section A above violates the legal rights of the parties. In any such arbitration proceeding, any hearing must be supported by written findings of fact and conclusions of law. The arbitrator’s findings of fact must be supported by substantial evidence on the record as a whole, and the conclusions of law and any remedy must be provided for by and consistent with the laws of California and federal law. The arbitrator shall have no authority to add to, modify, change or disregard any lawful term of the Agreement. The Employers will pay the arbitrator’s fee. Any award that may result from such arbitration may be confirmed into a judgment from a court and enforced in accordance with applicable law.
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