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Exhibit
10.18
PFF BANCORP,
INC.
AMENDED AND
RESTATED
TERMINATION AND CHANGE IN
CONTROL AGREEMENT
This AMENDED AND RESTATED
AGREEMENT is made effective as of
by and between PFF Bancorp, Inc. (the “Holding
Company”), a corporation organized under the laws of the
State of Delaware, with its principal administrative office at 9337
Milliken Avenue, Rancho Cucamonga, California 91729, and
(“Executive”). Any reference to Bank or Institution
herein shall mean PFF Bank & Trust or any successor
thereto.
WHEREAS, the Holding Company
recognizes the substantial contribution Executive has made to the
Bank and wishes to protect Executive’s position therewith for
the period provided in this Agreement; and
WHEREAS, Executive has agreed
to serve in the employ of the Holding Company or its
subsidiaries.
NOW, THEREFORE, in
consideration of the contribution and responsibilities of
Executive, and upon the other terms and conditions hereinafter
provided, the parties hereto agree as follows:
1. TERM OF AGREEMENT .
The term of the PFF Bancorp,
Inc. Amended and Restated Termination and Change in Control
Agreement (the “Agreement”) shall be deemed to have
commenced as of the date first above written and shall continue for
a period of twenty-four (24) full calendar months thereafter.
Commencing on the date of this Agreement, the term of this
Agreement shall be extended for one day each day until such time as
the Board of Directors of the Holding Company (“Board”)
or Executive elects not to extend the term of the Agreement by
giving written notice to the other party in accordance with
Section 5 of this Agreement, in which case the term of the
Agreement shall be fixed and shall end on the second anniversary of
such notice.
2. CHANGE IN CONTROL .
a) Upon the occurrence of a
Change in Control of the Bank or the Holding Company (as herein
defined) the provisions of Section 3 shall apply.
b) 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 2(b)(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
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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:
(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;
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(v) the occurrence of an
event which would result in a Change in Control of the Institution
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 2(b)(i), (ii), (iii) or (iv) if
the term “Institution” were substituted for the term
“Holding Company” therein.
c) Executive shall not have
the right to receive termination benefits pursuant to Sections 3 or
4 hereof upon Termination for Cause. The term “Termination
for Cause” shall mean termination because of
Executive’s personal dishonesty, incompetence, willful
misconduct, any breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of
any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement. In determining
incompetence, the acts or omissions shall be measured against
standards generally prevailing in the savings institutions
industry. Notwithstanding the foregoing, Executive shall not be
deemed to have been Terminated for Cause unless and until there
shall have been delivered to him or her a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the
Board of Directors of the Bank at a meeting of the Board called and
held for that purpose (after reasonable notice to Executive and an
opportunity for him or her, together with counsel, to be heard
before the Board at such meeting and which such meeting shall be
held not more than thirty (30) days from the date of notice
during which period Executive may be suspended with pay), finding
that in the good faith opinion of the Board, Executive was guilty
of conduct justifying Termination for Cause and specifying the
particulars thereof in detail. Executive shall not have the right
to receive compensation or other benefits provided hereunder for
any period after the Date of Termination for Cause. During the
period beginning on the Date of Termination for Cause, stock
options and related limited rights granted to Executive under any
stock option plan shall not be exercisable nor shall any unvested
awards granted to Executive under any stock benefit plan of the
Bank, the Holding Company or any subsidiary or affiliate thereof
vest. At the Date of Termination for Cause, such stock options and
related limited rights and any such unvested awards shall become
null and void and shall not be exercisable by or delivered to
Executive at any time subsequent to such Termination for
Cause.
3. CHANGE IN CONTROL TERMINATION
BENEFITS .
a) Subject to Section 19
hereof, upon the occurrence of a Change in Control, Executive shall
have the right to elect to voluntarily terminate his or her
employment at any time within ninety (90) days following the
Change in Control. Upon Executive’s termination in the event
of a Change in Control following: (1) Executive’s
voluntary termination pursuant to this Section, or
(2) Executive’s dismissal within ninety (90) days
of the Change of Control, unless such termination is due to
Termination for Cause, as defined in Section 2(c) hereof, the
Holding Company shall pay Executive, or in the event of
Executive’s subsequent death, his or her beneficiary or
beneficiaries, or his or her estate, as the case may be, an
immediate lump sum equal to two (2) times Executive’s
average annual compensation for the three (3) preceding
taxable years with such compensation to be paid no later than
thirty (30) days following the
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termination event, as defined in
Treasury Regulation Section 1.409A-1(h)(1)(ii); 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 3(a),
will be shortened as necessary. 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 three (3) preceding taxable years, then
annual compensation for such year shall be annualized. Executive
shall also be entitled to (i) the portion, if any, of the
compensation earned by Executive through the date of the
termination of his employment with the Bank and Holding Company
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 thirty (30) days
following the termination event, as defined in Treasury Regulation
Section 1.409A-1(h)(1)(ii) and (ii) 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 Holding Company and the Bank for their officers
and employees with such payment to be made within thirty
(30) days following the termination event, as defined in
Treasury Regulation 1.409A-1(h)(ii). Such payments shall not be
reduced in the event Executive obtains other employment following
termination of employment. In the event the Bank is not in
compliance with its minimum capital requirements or if such
payments 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.
b) Upon the occurrence of a
Change in Control of the Bank or the Holding Company followed by
Executive’s voluntary termination pursuant to
Section 3(a) or involuntary termination of employment, other
than for Termination for Cause, death or retirement, the Holding
Company shall cause to be continued life, medical and disability
coverage substantially identical to the coverage maintained by the
Bank or Holding Company for Executive prior to his or her severance
at no premium cost to Executive. Such coverage and payments shall
cease upon the expiration of twenty-four (24) full calendar
months from the Date of Termination. In addition, notwithstanding
the foregoing, if the provision of any of the benefits covered by
this Section 3(b) 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 Holding Company shall pay to Executive,
in a lump sum within thirty (30) days following the
termination event or within thirty (30) days after such
Excluded Benefits determination should it occur after the
termination event, 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.
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c) 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 3(a) 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 3(b) 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).
4. GENERAL TERMINATION BENEFIT
.
Subject to Section 19
hereof, upon the occurrence of an Event of Termination which shall
mean the termination by the Holding Company of Executive’s
full-time employment, as defined in Treasury Regulation
Section 1.409A-1(h)(ii), hereunder for any reason other than
death, retirement (as defined in the Bank’s employee
handbook) or Termination for Cause governed by Section 2(c)
hereof and other than in connection with a Change in Control, the
Holding Company shall be obligated to pay Executive, or, in the
event of his or her subsequent death, his or her beneficiary or
beneficiaries, or his or her estate, as the case may be, Severance
Payment
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