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Exhibit
10.2
PFF BANK &
TRUST
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
This AMENDED AND RESTATED
AGREEMENT (“Agreement”) is made effective as of
by and among PFF Bank & Trust (the “Bank”), a
federally-chartered stock savings institution, with its principal
administrative office at 9337 Milliken Avenue, Rancho Cucamonga,
California 91729, PFF Bancorp, Inc., a corporation organized under
the laws of the State of Delaware, the holding company for the Bank
(the “Holding Company”), and
(“Executive”).
WHEREAS, the Bank wishes to
assure itself of the services of Executive for the period provided
in this Agreement; and
WHEREAS, Executive is willing
to serve in the employ of the Bank on a full-time basis for said
period.
NOW, THEREFORE, in
consideration of the mutual covenants herein contained, and upon
the other terms and conditions hereinafter provided, the parties
hereby agree as follows:
1. POSITION AND
RESPONSIBILITIES.
During the period of his
employment hereunder, Executive agrees to serve as
of the Bank. Executive shall render administrative and management
services to the Bank such as are customarily performed by persons
situated in a similar executive capacity. During said period,
Executive also agrees to serve, if elected, as an officer and
director of the Holding Company or any subsidiary of the
Bank.
2. TERMS AND DUTIES.
a) The period of
Executive’s employment under this Agreement shall be deemed
to have commenced as of the date first above written and shall
continue for a period of thirty-six (36) full calendar months
thereafter. Commencing on the first anniversary date of this
Agreement, and continuing on each anniversary thereafter, the
disinterested members of the board of directors of the Bank
(“Board”) may extend the Agreement an additional year
such that the remaining term of the Agreement shall be three
(3) years unless Executive elects not to extend the term of
this Agreement by giving written notice in accordance with
Section 8 of this Agreement. The Board will review the
Agreement and Executive’s performance annually for purposes
of determining whether to extend the Agreement, and the rationale
and results thereof shall be included in the minutes of the
Board’s meeting. The Board shall give notice to Executive as
soon as possible after such review as to whether the Agreement is
to be extended.
b) During the period of
Executive’s employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially
all his business time, attention, skill, and efforts to the
faithful performance of his duties hereunder including activities
and services related to the organization, operation and management
of the Bank and participation in community and civic
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organizations; provided, however, that,
with the approval of the Board, as evidenced by a resolution of
such Board, from time to time, Executive may serve, or continue to
serve, on the boards of directors of, and hold any other offices or
positions in, companies or organizations, which, in such
Board’s judgment, will not present any conflict of interest
with the Bank, or materially affect the performance of
Executive’s duties pursuant to this Agreement.
c) Notwithstanding anything
herein to the contrary, Executive’s employment with the Bank
may be terminated by the Bank or Executive during the term of this
Agreement, subject to the terms and conditions of this
Agreement.
3. COMPENSATION AND
REIMBURSEMENT.
a) The Bank shall pay
Executive as compensation a salary of $
per year (“Base Salary”). Base Salary shall include any
amounts of compensation deferred by Executive under any qualified
or unqualified plan maintained by the Bank. Such Base Salary shall
be payable bi-weekly. During the period of this Agreement,
Executive’s Base Salary shall be reviewed at least annually;
the first such review will be made no later than one year from the
date of this Agreement. Such review shall be conducted by the Board
or by a Committee of the Board (the “Committee”),
delegated such responsibility by the Board. The Committee or the
Board may increase Executive’s Base Salary. Any increase in
Base Salary shall become the “Base Salary” for purposes
of this Agreement. In addition to the Base Salary provided in
Section 3(a), the Bank shall also provide Executive, at no
premium cost to Executive, with all such other benefits as are
provided uniformly to permanent full-time employees of the
Bank.
b) Executive shall be
entitled to participate in any employee benefit plans, arrangements
and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from
immediately prior to the beginning of the term of this Agreement,
and the Bank will not, without Executive’s prior written
consent, make any changes in such plans, arrangements or
perquisites which would materially adversely affect
Executive’s rights or benefits thereunder; except to the
extent such changes are made applicable to all Bank employees on a
non-discriminatory basis. Without limiting the generality of the
foregoing provisions of this Section (b), Executive shall be
entitled to participate in or receive benefits under any employee
benefit plans including but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident plans, medical coverage or any other employee
benefit plan or arrangement made available by the Bank in the
future to its senior executives and key management employees,
subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements. Executive
shall be entitled to incentive compensation and bonuses as provided
in any plan of the Bank in which Executive is eligible to
participate. Nothing paid to Executive under any such plan or
arrangement will be deemed to be in lieu of other compensation to
which Executive is entitled under this Agreement.
c) In addition to the Base
Salary provided for by paragraph (a) of this Section 3
and other compensation provided for by paragraph (b) of this
Section 3, the Bank shall pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred by
Executive performing his obligations under this Agreement and may
provide such additional compensation in such form and such amounts
as the Board may from time to time determine.
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4. PAYMENTS TO EXECUTIVE UPON AN EVENT
OF TERMINATION.
a) Upon the occurrence of an
Event of Termination (as herein defined) during Executive’s
term of employment under this Agreement, the provisions of this
Section shall apply. As used in this Agreement, an “Event of
Termination” shall mean and include any one or more of the
following: (i) the termination, as defined in Treasury
Regulation Section 1.409A-1(h)(1)(ii), by the Bank or the
Holding Company of Executive’s full-time employment,
hereunder for any reason other than a termination governed by
Section 5(a) hereof, death, retirement (as defined in the
Bank’s employee handbook) or Termination for Cause, as
defined in Section 7 hereof; (ii) Executive’s
resignation from the Bank’s employ, as defined in Treasury
Regulation Section 1.409A-1(h)(1)(ii), upon (A) any
failure to elect or reelect or to appoint or reappoint Executive as
, unless consented to by Executive, (B) a material change in
Executive’s function, duties, or responsibilities, which
change would cause Executive’s position to become one of
lesser responsibility, importance, or scope from the position and
attributes thereof described in Section 1, above, unless
consented to by Executive, (C) a relocation of
Executive’s principal place of employment by more than 25
miles from its location at the effective date of this Agreement,
unless consented to by Executive, (D) a material reduction in
the benefits and perquisites to Executive from those being provided
as of the effective date of this Agreement, unless consented to by
Executive, or (E) breach of this Agreement by the Bank. Upon
the occurrence of any event described in clauses (A), (B), (C),
(D), or (E), above, Executive shall have the right to elect to
terminate his employment under this Agreement by resignation upon
not less than sixty (60) days prior written notice given
within six (6) full months after the event giving rise to said
right to elect; provided, however, an Event of Termination shall
not be deemed to have occurred if, during such sixty (60) day
notice period, the circumstances giving grounds to the Event of
Termination are cured in a manner determined by Executive, in his
discretion, to be satisfactory.
b) Upon the occurrence of an
Event of Termination, on the Date of Termination, as defined in
Section 8, the Bank shall be obligated to pay Executive, or,
in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, a sum equal to
the sum of: (i) the amount of the remaining payments that
Executive would have earned if he had continued working for the
Institution during the remaining unexpired term of this Agreement
at Executive’s Base Salary at the Date of Termination;
(ii) the amount equal to the annual value of the additional
employer-derived contributions that would have been credited
directly to Executive’s accounts under the tax-qualified
401(k) plan, employee stock ownership plan and all nonqualified
benefit plans that Executive would have earned if he had continued
working for the Institution during the remaining unexpired term of
this Agreement, with such amounts to be calculated by multiplying
the last annual amount credited to Executive’s account under
each of these plans by the remaining unexpired term of this
Agreement; (iii) the portion, if any, of the compensation
earned by Executive through the date of the termination of his
employment with the Institution which remains unpaid as of such
date, such payment to be made at the time and in the manner
prescribed by law applicable to the payment of wages but in no
event later than twenty (20) days following the later of the
end of the taxable year of Executive, Holding Company or Bank in
which the termination event, as defined in Treasury Regulation
Section 1.409A-1(h)(1)(ii), occurs; and (iv) the
benefits, if any, to which he is entitled as a former employee
under the employee benefit plans and programs and compensation
plans and programs maintained by the Institution for their officers
and employees on a non-discriminatory basis;
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provided, however, that any payments
pursuant to this Section and Section 4(c) below shall not, in
the aggregate, exceed three (3) times Executive’s
average annual compensation for the five (5) most recent
taxable years that Executive has been employed by the Bank or such
lesser number of years in the event that Executive shall have been
employed by the Bank for less than five years. In the event the
Bank is not in compliance with its minimum capital requirements or
if such payments pursuant to this Section (b) and Section
(c) would cause the Bank’s capital to be reduced below
its minimum regulatory capital requirements, such payments shall be
deferred until such time as the Bank or successor thereto is in
capital compliance. At the election of Executive, which election is
to be made prior to an Event of Termination, such cash payments
shall be made in a lump sum within thirty (30) days following
the Date of Termination or in approximately equal monthly
installments during the remaining term of the Agreement with no
present value applied; provided, however, that if no election is
made, then payments will be made in monthly installments rather
than in a lump sum; provided, further, that the final payment shall
be made within twenty (20) days following the later of the end
of the taxable year of Executive, Holding Company or Bank in which
the termination event occurs. Such payments shall not be reduced in
the event Executive obtains other employment following termination
of employment.
c) Upon the occurrence of an
Event of Termination, the Bank will cause to be continued life,
medical, dental and disability coverage substantially identical to
the coverage maintained by the Bank or the Holding Company for
Executive prior to his termination at no premium cost to Executive,
except to the extent such coverage may be changed in its
application to all Bank or Holding Company employees on a
nondiscriminatory basis. Such coverage shall cease upon the
expiration of the remaining term of this Agreement. In addition,
notwithstanding the foregoing, if the provision of any of the
benefits covered by this Section 4(c) would trigger the 20%
tax and interest penalties under Section 409A of the Internal
Revenue Code (“Section 409A”), then the benefit(s) that
would trigger such tax and interest penalties shall not be provided
(collectively, the “Excluded Benefits”), and in lieu of
the Excluded Benefits the Bank shall pay to Executive, in a lump
sum within thirty (30) days following the termination event,
or within thirty (30) days after such determination should it
occur following termination of employment, a cash amount equal to
the economic equivalent (defined as the present value of the full
monthly premium cost over the remaining unexpired term using the
120% discount rate of the short-term applicable federal rate as set
forth in the IRS Regulations) of such Excluded Benefits.
The Bank and Executive hereby
stipulate that the damages which may be incurred by Executive
following any such termination of employment are not capable of
accurate measurement as of the date first above written and that
the payments and benefits contemplated by Sections 4(b) and
(c) constitute reasonable damages under the circumstances and
shall be payable without any requirement of proof of actual damage
and without regard to Executive’s efforts, if any, to
mitigate damages. The Bank and Executive further agree that the
Bank may condition the payments and benefits (if any) due under
Sections 4(b)(i), 4(b)(ii), and 4(c) on the receipt of
Executive’s resignation from any and all positions which he
holds as an officer, director or committee member with respect to
the Holding Company, the Bank or any subsidiary or affiliate of
either of them and the execution of an effective release of claims,
consistent with the time frame and terms contained in
Section 26 of this Agreement, against the Holding Company, the
Bank and its Subsidiaries in a form to be prescribed by the
Bank.
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d) Executive, the Holding
Company and the Bank acknowledge that each of the payments and
benefits promised to Executive under this Agreement must either
comply with the requirements of Section 409A of the Code and
the regulations thereunder or qualify for an exception from
Section 409A of the Code. To that end, Executive, the Holding
Company and the Bank agree that the termination benefits described
in Section 4(b) are intended to be exempt from
Section 409A pursuant to Treasury Regulation
Section 1.409A-1(b)(4) as short-term deferrals (or payments in
substitution for payments that qualify as short-term deferrals) and
the benefits described in Section 4(c) are intended to be
exempt from Section 409A pursuant to Treasury Regulation
Section 1.409A-1(a)(5) as amounts not includable in income by
virtue of being received under a health plan satisfying
Section 105 of the Code or termination benefits exempt from
Section 409A pursuant to Treasury Regulation
Section 1.409A-1(b)(4) as short-term deferrals (or payments in
substitution for payments that qualify as short-term
deferrals).
5. CHANGE IN CONTROL.
a) For purposes of this
Agreement, a “Change in Control” of the Bank or Holding
Company shall mean any of the following events:
i) the occurrence of any
event (other than an event described in Section 5(a)(iii)(A))
upon which any “person” (as such term is used in
sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (“Exchange Act”)), other than (A) a
trustee or other fiduciary holding securities under an employee
benefit plan maintained for the benefit of employees of the Holding
Company; (B) a corporation owned, directly or indirectly, by
the stockholders of the Holding Company in substantially the same
proportions as their ownership of stock of the Holding Company; or
(C) any group constituting a person in which employees of the
Holding Company are substantial members, becomes the
“beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities issued by the Holding Company representing 20% or more
of the combined voting power of all of the Holding Company’s
then outstanding securities, excluding any securities purchased by
the Holding Company’s employee stock ownership plan and
trust;
ii) the occurrence of any
event upon which the individuals who on the date this Agreement is
executed are members of the Board, together with individuals whose
election by the Board or nomination for election by the Holding
Company’s shareholders was approved by the affirmative vote
of at least three-quarters of the members of the Board then in
office who were either members of the Board on the date this
Agreement is executed or whose nomination or election was
previously so approved, cease for any reason to constitute a
majority of the members of the Board, but excluding, for this
purpose, any such individual whose initial assumption of office is
in connection with an actual or threatened election contest
relating to the election of directors of the Holding
Company;
iii) the consummation of
either:
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(A) a merger or consolidation
of the Holding Company with any other corporation, other than a
merger or consolidation following which both of the following
conditions are satisfied:
(I) either (1) the
members of the Board of the Holding Company immediately prior to
such merger or consolidation constitute at least a majority of the
members of the governing body of the institution resulting from
such merger or consolidation; or (2) the shareholders of the
Holding Company own securities of the institution resulting from
such merger or consolidation representing 80% or more of the
combined voting power of all such securities of the resulting
institution then outstanding in substantially the same proportions
as their ownership of voting securities of the Holding Company
immediately before such merger or consolidation; and
(II) the entity which results
from such merger or consolidation expressly agrees in writing to
assume and perform the Holding Company’s obligations under
this Agreement; or
(B) a plan of complete
liquidation of the Holding Company or an agreement for the sale or
disposition by the Holding Company of all or substantially all of
its assets;
iv) the occurrence of an
event which would require the Holding Company to report a response
to Item 5.01 of the current report on Form 8-K, as in effect
on the date hereof, pursuant to Section 13 or 15(d) of the
Exchange Act;
v) the occurrence of an event
which would result in a Change in Control of the Bank within the
meaning of the Home Owners’ Loan Act of 1933 and the Rules
and Regulations promulgated by the Office of Thrift Supervision
(“OTS”), as in effect on the date hereof (provided that
in applying the definition of change in control as set forth in the
Rules and Regulations of the OTS, the Board shall substitute its
judgment for that of the OTS); or
vi) any event that would be
described in Section 5(a)(i), (ii), (iii) or (iv) if
the term “Bank” were substituted for the term
“Holding Company” therein.
b) If a Change in Control has
occurred pursuant to Section 5(a) or the Board has determined
that a Change in Control has occurred, Executive, at any time
within ninety (90) days following the Change in Control, shall
have the right to terminate employment and shall be entitled to the
benefits provided in paragraphs (c) and (d) of this
Section 5 upon his subsequent termination of employment
(voluntary or involuntary) unless such termination is because of
his Termination for Cause; provided, however, that such benefits
paid on account of Executive’s termination due to a Change in
Control are paid no later than twenty (20) days following the
later of the end of the taxable year of Executive, Holding Company
or Bank in which the termination event occurs, and in order to
accommodate this payment timing, the ninety (90) day period
referenced in this Section 5(b) will be shortened as
necessary.
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c) Upon Executive’s
entitlement to benefits pursuant to Section 5(b), the Bank
shall pay Executive, or in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, an
immediate lump sum equal to three (3) times Executive’s
average annual compensation for the three (3) preceding
taxable years with such compensation to be paid within thirty
(30) days following the termination event. Such annual
compensation shall include any Base Salary, commissions, bonuses,
the value of employer-derived contributions credited to the
accounts of Executive (vested or unvested) under any pension,
401(k), employee stock ownership and profit sharing plan, severance
payments, directors or committee fees and fringe benefits paid or
to be paid to Executive during such years. If Executive shall have
worked less than three (3) taxable years, then the average
shall be computed as an average of the number of years worked by
Executive. Similarly, if Executive shall have worked for any
portion of a taxable year in the th
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