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Exhibit
10.19
PFF BANK &
TRUST
AMENDED AND
RESTATED
TERMINATION AND CHANGE IN
CONTROL AGREEMENT
This AMENDED AND RESTATED
AGREEMENT is made effective as of
by and between PFF Bank & Trust (the “Bank”),
a federally-chartered stock savings institution, with its principal
administrative office at 9337 Milliken Avenue, Rancho Cucamonga,
California 91729,
(“Executive”), and PFF Bancorp, Inc. (the
“Holding Company”), a corporation organized under the
laws of the State of Delaware, which is the holding company of the
Bank.
WHEREAS, the Bank 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 Bank.
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
Bank & Trust 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 first anniversary date of this
Agreement and continuing at each anniversary date thereafter, the
Board of Directors of the Bank (“Board”) may extend the
Agreement for an additional year. The Board will review the
Agreement and Executive’s performance annually for purposes
of determining whether to extend the Agreement, and the rationale
and the 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.
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
proportions as their ownership of stock of the Holding Company; or
(C) any group
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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 entity resulting from such
merger or consolidation; or (2) the shareholders of the
Holding Company own securities of the entity resulting from such
merger or consolidation representing 80% or more of the combined
voting power of all such securities of the resulting entity 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
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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 Bank 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
Bank and 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 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
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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; provided,
further, that any payments pursuant to this subsection and
subsection 3(b) below shall not, in the aggregate, exceed three
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
(5) years. 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 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 Section 1.409A-1(h)(1)(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 Bank 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 Bank shall pay to Executive, in a lump
sum within thirty (30) days following termination event or
within thirty (30) days after such Excluded Benefits
determination should it occur after 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.
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c) Notwithstanding the
preceding paragraphs of this Section 3, in no event shall the
aggregate payments or benefits to be made or afforded to Executive
under said paragraphs (the “Termination Benefits”)
constitute an “excess parachute payment” under
Section 280G of the Internal Revenue Code of 1986 or any
successor thereto, and in order to avoid such a result Termination
Benefits will be reduced, if necessary, to an amount (the
“Non-Triggering Amount”), the value of which is one
dollar ($1.00) less than an amount equal to three (3) times
Executive’s “base amount,” as determined in
accordance with said Section 280G. The allocation of the
reduction required hereby among the Termination Benefits provided
by the preceding paragraphs of this Section 3 shall be
determined by Executive.
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 this 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 S
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