UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934, as
amended
Filed by the
Registrant ý
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¨Preliminary Proxy
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by Rule 14a-6(e)(2))
ýDefinitive Proxy Statement
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¨Soliciting Material Pursuant to
§240.14a-12
Pacific
Premier Bancorp, Inc.
(Name of
Registrant as Specified In Its Charter)
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(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
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of each class of securities to which transaction applies:
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________________________________________________________________________
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(set forth the amount on which the filing fee is calculated and state how it
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Filed:
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1600 Sunflower Avenue
Costa Mesa, California 92626
714-431-4000
April 12,
2010
Fellow
Stockholders:
On behalf
of the Board of Directors and management of Pacific Premier Bancorp, Inc. (the
“Company”), you are cordially invited to attend the Annual Meeting of
Stockholders of the Company (“Annual Meeting”). The Annual Meeting will be held
on Wednesday, May 26, 2010, at 9:00 a.m., Pacific Time, at the Company’s
corporate headquarters located at 1600 Sunflower Avenue, Costa Mesa, California
92626.
An
important aspect of the Annual Meeting is the stockholder vote on corporate
business items. The attached Notice of the Annual Meeting and Proxy Statement
describe the formal business to be transacted at the Annual Meeting. Directors
and officers of the Company will be present at the Annual Meeting to respond to
any questions that you may have regarding the business to be
transacted.
The Board of Directors of
the Company has determined that the matters to be considered at the Annual
Meeting are in the best interests of the Company and its stockholders. For
the reasons set forth in the Proxy Statement, the Board of Directors unanimously
recommends that you vote “FOR” the director nominees specified under Item 1 and
“FOR” the appointment of Vavrinek, Trine, Day & Co., LLP as the independent
auditors of the Company for the fiscal year ended December
31, 2010
specified under Item 2.
We
encourage you to attend the Annual Meeting in person if it is convenient for you
to do so. If you are unable to attend, it is important that vote via Internet,
telephone or sign, date and return the enclosed proxy card in the enclosed
postage-paid envelope. Your cooperation is appreciated since a majority of the
common stock must be represented, either in person or by proxy, to constitute a
quorum for the transaction of business.
On behalf
of the Board of Directors and all of the employees of Pacific Premier Bancorp,
Inc., we thank you for your continued support.
Best
Regards,
Steven R.
Gardner
President
and Chief Executive Officer
PACIFIC
PREMIER BANCORP, INC.
1600
Sunflower Avenue
Costa
Mesa, California 92626
714-431-4000
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held May 26, 2010
NOTICE IS
HEREBY GIVEN that the Annual Meeting of the Stockholders (“Annual Meeting”) of
Pacific Premier Bancorp, Inc. (the “Company”) will be held on
Wednesday, May 26, 2010 at 9:00 a.m., Pacific Time, at the Company’s corporate
headquarters located at 1600 Sunflower Avenue, Costa Mesa, California, to
consider and act upon the following matters:
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1.
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To
elect two (2) directors, each for a three-year term, or until their
successors are elected and
qualified;
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2.
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To
ratify the appointment of Vavrinek, Trine, Day & Co., LLP as the
Company’s independent auditor for the fiscal year ended December 31, 2010;
and
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3.
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To
transact such other matters as may properly come before the meeting and at
any adjournments thereof, including whether or not to adjourn the
meeting. Management is not aware of any other such
business.
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The Board
of Directors has fixed March 31, 2010 as the record date for determination of
stockholders entitled to receive notice of and to vote at the Annual Meeting and
any adjournment thereof. Only those stockholders of record as of the close of
business on that date will be entitled to vote at the Annual Meeting or at any
such adjournment.
By Order
of the Board of Directors,
Kent
Smith
Corporate
Secretary/SVP/CFO
Costa
Mesa, California
April 12,
2010
IMPORTANT:
Whether or not you expect to attend the Annual Meeting, we urge you to
vote your proxy at your earliest convenience via the Internet, by telephone or
by mail by either (i) using the enclosed postage-paid reply envelope if you
received printed proxy materials or (ii) requesting printed materials and using
the paid reply enveloped delivered to you if you initially did not receive
printed materials. This will ensure the presence of a quorum at the Annual
Meeting and will save Pacific Premier Bancorp, Inc. the expense of additional
solicitation. Submitting your proxy will not prevent you from voting your shares
in person at the Annual Meeting if you desire to do so. Your proxy is revocable
at your option in the manner described in the Proxy
Statement.
NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF
STOCKHOLDERS
TO
BE HELD ON MAY 26, 2010.
The proxy
materials for this Annual Meeting of Stockholders are available over the
Internet at www.proxyvote.com.
Table
of Contents
PACIFIC
PREMIER BANCORP, INC.
1600
Sunflower Avenue
Costa
Mesa, California 92626
_________________________________
PROXY
STATEMENT
For
2010 Annual Meeting of Stockholders
To
Be Held on Wednesday, May 26, 2010
Our
Board of Directors is soliciting proxies to be voted at our 2010 Annual Meeting
of Stockholders (“Annual Meeting”) on May 26, 2010, at 9:00 a.m., Pacific Time,
and at any adjournments or postponements thereof, for the purposes set forth in
the attached Notice of Annual Meeting of Stockholders (the
“Notice”).
As
permitted by rules adopted by the Securities and Exchange Commission (“SEC”), we
are making this proxy statement and our annual report for the year ended
December 31, 2009, available to our stockholders electronically via the
Internet. On April 16, 2010, we mailed to our U.S. stockholders
as of the record date for the Annual Meeting, or March 31, 2010, a notice
containing instructions on how to access this proxy statement and our annual
report online and to vote your shares at the Annual Meeting. Also on April 20,
2010, we began mailing printed copies of these proxy materials to stockholders
that have requested printed materials. If you received a notice by mail, you
will not receive a printed copy of the proxy materials in the mail unless you
request a copy as indicated below. Instead, the notice instructs you on how to
access and review online all of the important information contained in the proxy
statement and annual report. The notice also instructs you on how you may submit
your proxy over the Internet. If you received a notice by mail and would like to
receive a printed copy of our proxy materials, you should follow the
instructions for requesting such materials included in the notice and as
indicated below.
As
used in this Proxy Statement, the terms “Company,” “we,” “us” and “our” refer to
Pacific Premier Bancorp, Inc., the term “Bank” refers to Pacific Premier Bank
and the terms “Board of Directors” and “the Board” refers to the Board of
Directors of the Company.
_________________________________
Question:
Why
am I receiving these materials?
Answer:
Our Board of Directors is providing these proxy materials to you in
connection with the Annual Meeting, to be held on May 26, 2010. As a stockholder
of record as of March 31, 2010, you are invited to attend our Annual Meeting,
and are entitled to and requested to vote on the items of business described in
this Proxy Statement.
Question:
What
information is contained in this Proxy Statement?
Answer:
This information relates to the proposals to be voted on at our Annual
Meeting, the voting process, compensation of our directors and most highly paid
executives, and certain other required information.
Question:
Can
I access the Company’s proxy materials and annual report
electronically?
Answer:
Important
Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting
to Be Held on May 26, 2010. The
proxy statement and annual report are available at www.proxyvote.com.
To view
this material, you must have available the 12-digit control number located on
the notice mailed on April 16, 2010 or the proxy card or, if shares are held in
the name of a broker, bank or other nominee, the voting instruction
form.
Question:
Who
is soliciting my vote pursuant to this Proxy
Statement?
Answer:
Our Board of Directors is soliciting your vote at our Annual
Meeting.
Question:
Who
is entitled to vote?
Answer:
Only stockholders of record at the close of business on March 31, 2010
(the “Record Date”) will be entitled to vote at our Annual
Meeting.
Question:
How
many shares are eligible to be voted?
Answer:
As of the Record Date, we had 10,033,836 shares of common stock
outstanding. Each outstanding share of our common stock will entitle its holder
to one vote on each of the two (2) directors to be elected and one vote on each
other matter to be voted on at our Annual Meeting.
Question:
What
am I voting on?
Answer:
You are voting on the following matters:
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The
election of two (2) directors. Our nominees are Steven R. Gardner and Jeff
C. Jones.
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Ratification
of the appointment of Vavrinek, Trine, Day & Co., LLP (“VTD”) as the
Company’s independent auditor for
2010.
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Question:
How
does our Board of Directors recommend that I vote?
Answer:
Our Board recommends that you vote “FOR” each director nominee and “FOR”
the ratification of the
appointment
of VTD as independent auditor.
Question:
How
many votes are required to hold the Annual Meeting and what are the voting
procedures?
Answer:
Quorum
Requirement: As of the Record Date, 10,033,836 shares of the Company’s
common stock were issued and outstanding. A majority of the outstanding shares,
present or represented by proxy, constitutes a quorum for the purpose of
adopting proposals at the Annual Meeting. If you submit a properly executed
proxy, then you will be considered part of the quorum.
Required
Votes: Each outstanding share of our common stock is entitled to one vote
on each proposal at the Annual Meeting, subject to the limitation in our
certificate of incorporation, as amended, that provides that record holders of
our common stock who beneficially own in excess of 10% of our outstanding shares
of common stock are not entitled to vote in respect to the shares held in excess
of this voting limitation (the “Voting Limit”).
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Election
of Directors: If there is a quorum at our Annual Meeting, the two
(2) nominees who receive the greatest number of votes cast for directors
will be elected. There is no cumulative voting for our directors. If you
indicate “withhold authority to vote” for a particular nominee on your
proxy card, your vote will not count either “for” or “against” the
nominee. Abstentions are not counted in the election of directors and do
not affect the outcome.
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Ratification
of Independent Auditors: If there is a quorum, the affirmative vote
of a majority of the shares present and entitled to vote at the meeting is
required for ratification of the appointment of VTD as our independent
auditor for 2010.
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If a
broker indicates on its proxy that it does not have authority to vote certain
shares held in “street name,” the shares not voted are referred to as “broker
non-votes.” Broker non-votes occur when brokers do not have discretionary voting
authority to vote certain shares held in “street name” on particular proposals
under the rules of the New York Stock Exchange, and the “beneficial owner” of
those shares has not instructed the broker how to vote on those proposals. If
you are a beneficial owner, your broker, bank or other nominee is permitted to
vote your shares for or against “routine” matters such as the ratification of
the appointment of our independent registered public accounting firm, even if
the holder does not receive voting instructions from you. Brokers are not
permitted to exercise discretionary voting authority to vote your shares for or
against “non-routine” matters such as the election of
directors. Shares represented by proxies that are marked vote
“withheld” with respect to the election of any nominee will not be considered in
determining whether such nominee has received the affirmative vote of a
plurality of the shares. Shares represented by proxies that are marked “abstain”
with respect to any other mater to be voted upon at the annual meeting will have
the effect of a negative vote.
Question:
How
may I cast my vote?
Answer:
If you are the stockholder of record, you may vote by one of the
following four methods (as instructed on the enclosed proxy
card):
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in
person at the Annual Meeting,
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via
the Internet,
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by
telephone, or
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by
mail.
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If you
would like to vote in person at the Annual Meeting and would like to obtain
directions to the Annual Meeting please contact Investor Relations, Pacific
Premier Bancorp, Inc., 1600 Sunflower Avenue, Costa Mesa, California 92626 at
(714) 431-4000.
If you
elect to vote by mail and you received a printed proxy card, you may mark, sign,
date and mail the proxy card you received from us in the return
envelope. If you did not receive a printed proxy card and wish to
vote by mail, you may do so by requesting a paper copy of the proxy materials
(as described below), which will include a proxy card.
Whichever
method of voting you use, the proxies identified on the proxy card will vote the
shares of which you are the stockholder of record in accordance with your
instructions. If you submit a proxy card without giving specific voting
instructions, the proxies will vote the shares as recommended by our Board of
Directors.
If you
own your shares in “street name,” that is, through a brokerage account or in
another nominee form, you must provide instructions to the broker or nominee as
to how your shares should be voted. Your broker or nominee will usually provide
you with the appropriate instruction forms at the time you receive this Proxy
Statement and our Annual Report. If you own your shares in this manner, you
cannot vote in person at the Annual Meeting unless you receive a proxy to do so
from the broker or the nominee, and you bring the proxy to our Annual
Meeting.
Question:
How
may I cast my vote over the Internet or by telephone?
Answer:
Voting
over the Internet: If you are a stockholder of record, you may use the
Internet to transmit your vote up until 11:59 P.M. Eastern Time May 25, 2010.
Visit www.voteproxy.com
and have your proxy card in hand when you access the website and follow
the instructions to obtain your records and to create an electronic voting
instruction form.
Voting
by Telephone: If you are a stockholder of record, you may call
1-800-776-9437 and use any touch-tone telephone to transmit your vote up until
11:59 P.M. Eastern Time May 25, 2010. Have your proxy card in hand when you call
and then follow the instructions.
If you
hold your shares in “street name,” that is through a broker, bank or other
nominee, that institution will instruct you as to how your shares may be voted
by proxy, including whether telephone or Internet voting options are
available.
Question:
How
may a stockholder nominate someone at the Annual Meeting to be a director or
bring any other business before the Annual Meeting?
Answer:
The Company’s bylaws require advance notice to the Company if a
stockholder intends to attend an annual meeting of stockholders in person and to
nominate someone for election as a director or to bring other business before
the meeting. Such a notice may be made only by a stockholder of record within
the time period established in the bylaws and described in each year’s Proxy
Statement.
Question:
How
may I revoke or change my vote?
Answer:
If you are the record owner of your shares, and you completed and
submitted the proxy card you may revoke your proxy at any time before it is
voted at the Annual Meeting by:
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submitting
a new proxy card,
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delivering
written notice to our Secretary prior to May 26, 2010, stating that you
are revoking your proxy, or
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attending
the Annual Meeting and voting your shares in
person.
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If you
are a record owner of your shares and you submitted your proxy by telephone or
via the Internet, you may change your vote or revoke your proxy with a later
telephone or Internet proxy, as the case may be.
Please
note that attendance at the Annual Meeting will not, in itself, constitute
revocation of your proxy.
Question:
Who
is paying for the costs of this proxy solicitation?
Answer:
Our Company will bear the cost of preparing, printing and mailing the
materials in connection with this solicitation of proxies. In addition to
mailing these materials, officers and regular employees of our Company may,
without being additionally compensated, solicit proxies personally and by mail,
telephone, facsimile or electronic communication. We have retained American
Stock Transfer & Trust Co. to assist in the solicitation at a cost of
approximately $3,500, plus payment of reasonable out-of-pocket expenses incurred
by American Stock Transfer & Trust Co.
Question:
Who
will count the votes?
Answer:
American Stock Transfer & Trust Co., our inspector of elections for
the Annual Meeting, will receive and tabulate the ballots and voting instruction
forms.
Question:
What
happens if the Annual Meeting is postponed or
adjourned?
Answer:
Your proxy will still be effective and may be voted at the rescheduled
meeting. You will still be able to change or revoke your proxy until it is
voted.
Question:
How
can I obtain the Company’s Corporate Governance
information?
Answer:
Our Company’s Corporate Governance information is available on our
website at www.ppbi.com
under the Investor Relations section. Our stockholders may also obtain
written copies at no cost by writing to us at 1600 Sunflower Avenue, Costa Mesa,
California 92626, Attention: Investor Relations Department, or by calling (714)
431-4000.
Question: How
do I request electronic or printed copies of this and future proxy
materials?
Answer:
You may request and consent to delivery of electronic or printed copies
of future proxy statements, annual reports and other stockholder communications
by (i) visiting www.proxyvote.com,
(ii) calling 1-800-579-1639, or (iii) sending an email to sendmaterial@proxyvote.com. You
must have available the 12-digit control number described
above.
Our
Annual Meeting will be held at 9:00 a.m., Pacific Time, on Wednesday, May 26,
2010, at Pacific Premier Bancorp, Inc.’s corporate headquarters located at 1600
Sunflower Avenue, Costa Mesa, California 92626.
The
Company’s Board of Directors has nominated each of the following persons for
election as a director. Each nominee is currently a director of the Company and
each has indicated that he is willing and able to continue to serve as a
director. We have provided biographical and other information on each of the
nominees beginning on page 4 of this Proxy Statement.
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Steven
R. Gardner
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Jeff C. Jones
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If any
nominee becomes unable or unwilling to serve, which is not anticipated, the
accompanying proxy may be voted for the election of such other person as shall
be designated by the Nominating and Corporate Governance (“Nominating
Committee”) of our Board of Directors. Proxies granted may not be
voted for a greater number of nominees than the two (2) named above. Unless
instructions to the contrary are specified in a proxy properly voted and
returned through available channels, the proxies will be voted FOR
each of the nominees listed above.
OUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” EACH OF THE NOMINEES.
Below is
information regarding each of our nominated directors, each of whom has been
nominated for re-election at the Annual Meeting.
Steven
R. Gardner, 49, has been the President and Chief Executive Officer of the
Company and the Bank since the third quarter of 2000, and has served as a
director of the Company since 2000. Prior to joining us in February 2000 as
Chief Operating Officer, Mr. Gardner was Senior Vice President of Lending at
Hawthorne Savings since 1997. Mr. Gardner has served in management positions in
credit administration, portfolio management, lending production and operations
as well as risk management for the past 24 years. Mr. Gardner holds a
B.A. from California State University, Fullerton and attended graduate school at
California State University, Long Beach.
Jeff
C. Jones, 55, has served as a member of the Company’s Board since July
2006. Mr. Jones is the past Managing Partner and current Executive
Committee member of, and partner in, the regional accounting firm Moore Stephens
Wurth Frazer and Torbet, LLP, which he has been with since 1977. Mr. Jones has
over 30 years of experience in servicing small and medium sized business clients
primarily within the real estate, construction, and agricultural industries. Mr.
Jones is a past president of Inland Exchange, Inc, an accommodator corporation
and has served on the Board of Directors of Moore Stephens North America, Inc.
Mr. Jones holds a B.S. in Business Administration from Lewis and Clark College
in Portland, Oregon, and a Masters of Business Taxation from Golden Gate
University. Mr. Jones is a CPA in California and licensed as a life insurance
agent and holds a Series 7 securities license.
Kenneth
A. Boudreau, 60, has served as a member of the Company’s Board since
2005. Mr. Boudreau is Vice President of Coast Composites, Inc., a manufacturing
concern in Irvine, California. He joined Coast Composites in 2008 after a
12-year career with M. C. Gill Corporation, a manufacturing concern in El Monte,
California, where he last served as President and Chief Executive
Officer. Mr. Boudreau joined M. C. Gill Corporation in 1996 as its
Chief Financial Officer, assumed progressive responsibilities over time, and was
named President and Chief Executive Officer in 2002. Mr. Boudreau had previously
been employed by The Quikset Organization in Irvine, California for 15 years
where he was initially hired as their controller and advanced to lead their
subsidiaries with $40 million in revenue. Mr. Boudreau is a CPA in California,
and was employed by Deloitte & Touche before joining The Quikset
Organization. He obtained his B.A. in Business Administration from California
State University, Fullerton.
John
D. Goddard, 71, has served as a director for the Company since
1988. Mr. Goddard has been a Certified Public Accountant for the past
43 years. Mr. Goddard was initially employed by W.C. Brassfield, CPA from 1962
to 1965. He formed the partnership, Brassfield and Goddard, CPAs in
1965 and continued practicing there until September 1976. The firm incorporated
into Goddard Accountancy Corporation, CPAs where Mr. Goddard practiced and
served as President from September 1976 until December 2003. The corporation
merged with the firm of Soren McAdam Christenson, LLP in January 2004. Mr.
Goddard retired on January 1, 2008 from full-time practice as a CPA and now
works part-time on a consulting basis.
David
L. Hardin, 56, began serving as a director for the Company in April 2007.
In March 2008, Mr. Hardin resigned as a director to pursue other professional
activities. In August 2008, Mr. Hardin was again appointed as a
director. Mr. Hardin has been the President and Chief Executive
Officer of HRE Mortgage, Inc., the parent company of Covenant Mortgage which was
founded in 2004 and Chief Executive Officer of Covenant Debt Solutions, Inc.
which was founded in 2008. Prior to that, Mr. Hardin was Executive Vice
President/Chief Banking Officer of Hawthorne Savings from 1993 to
2003. Mr. Hardin has served in management positions in retail
banking, lending production and operations as well as sitting on various
management loan committees, including serving as an executive at World Savings,
Columbia Savings, Valley Federal Savings and Downey Savings. Mr. Hardin holds a
B.A. from California State University, Fullerton.
Michael
L. McKennon, 49, has served as a director of the Company since 2004 and
currently chairs our Audit Committee. Mr. McKennon is a partner with the Newport
Beach public accounting firm of dbbmckennon, a registered firm of the Public
Company Accounting Oversight Board (PCAOB). Prior thereto, Mr. McKennon was a
founding partner of the Irvine, California accounting firm of McKennon Wilson
& Morgan LLP, a registered firm of the PCAOB. Mr. McKennon, a CPA in the
state of California and Nevada, has been responsible for audit and accounting
practices since 1998 in these firms. Mr. McKennon was previously employed by the
accounting firm of PricewaterhouseCoopers LLP and Arthur Andersen & Co. Mr.
McKennon has 26 years experience in private and public accounting, auditing and
consulting in Southern California. He obtained his B.A. degree in Business
Administration from California State University, Fullerton.
Ronald
G. Skipper, 69, has been Chairman of the Board of the Company since 1997
and a member of the Company’s Board since 1983. Mr. Skipper is a self-employed
attorney and has been practicing law for 45 years. Mr. Skipper also serves on
the Board of Directors of Stater Bros. Markets Corporation, a supermarket
company. He is general counsel to the National Orange Show Board of Directors of
San Bernardino County, California and has served on numerous boards of
directors, including The University of California, Hastings College of Law 1066
Foundation, California State University, San Bernardino Foundation and St.
Bernadine’s Hospital Foundation.
Kent
Smith, 48,
Senior Vice President/Chief Financial Officer and Treasurer, was hired in
September 2009. Mr. Smith serves as Chairman of our Asset Liability Committee.
Prior to joining the Bank, Mr. Smith worked for sixteen years for Downey Savings
and Loan Association as a Senior Vice President, Controller, Assistant
Controller, Financial Reporting Manager and Senior Technical Auditor. Mr. Smith
served as Vice President, Loan Accounting Manager for FarWest Savings and Loan
and as a Senior Accountant for Deloitte and Touche. Mr. Smith obtained his BA in
Accounting from Brigham Young University.
Edward
Wilcox, 44, Executive Vice President/Chief Banking Officer – was hired in
August 2003 as the Bank’s Senior Vice President and Chief Credit Officer. In
September 2004, Mr. Wilcox was promoted to Executive Vice President and was
responsible for overseeing loan and deposit production. In the fourth quarter of
2005, Mr. Wilcox was promoted to Chief Banking Officer and assumed
responsibility of the branch network. Prior to joining us, Mr. Wilcox served as
Loan Production Manager at Hawthorne Savings for two years and as the Secondary
Marketing Manager at First Fidelity Investment & Loan for five years. Mr.
Wilcox has an additional nine years of experience in real estate banking
including positions as Asset Manager, REO Manager and Real Estate Analyst at
various financial institutions.
We value
strong corporate governance principles and adhere to the highest ethical
standards. These principles and standards, along with our core values of
fairness and caring, assist us in achieving our corporate mission. To foster
strong corporate governance and business ethics, our Board of Directors
continues to take many steps to strengthen and enhance our corporate governance
practices and principles. To that end, we have adopted Corporate Governance
Guidelines to achieve the following goals:
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to
promote the effective functioning of the Board of
Directors;
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to
ensure that the Company conducts all of its business in accordance with
the highest ethical and legal standards;
and
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to
enhance long-term stockholder
value.
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The full
text of our Corporate Governance Guidelines is available on our website at www.ppbi.com
under the Investor Relations section. Our stockholders may also obtain a
written copy of the guidelines at no cost by writing to us at 1600 Sunflower
Avenue, Costa Mesa, California 92626, Attention: Investor Relations Department,
or by calling (714) 431-4000.
The
Nominating and Corporate Governance Committee (the “Nominating Committee”) of
our Board of Directors administers our Corporate Governance Guidelines, reviews
performance under the guidelines and the content of the guidelines annually and,
when appropriate, and recommends updates and revisions to our Board of
Directors.
Director
Qualifications, Diversity and Nomination Process
Our
Nominating Committee is responsible for reviewing with the Board of Directors
annually the appropriate skills and characteristics required of our Board
members, and for selecting, evaluating and recommending nominees for election by
our stockholders. The Nominating Committee has authority to retain a third-party
search firm to identify or evaluate, or assist in identifying and evaluating,
potential nominees if it so desires, although it has not done so to
date.
In
evaluating both the current directors and the nominees for director, the
Nominating Committee considers such other relevant factors as it deems
appropriate, including the current composition of the Board, the need for Audit
Committee expertise, and the director qualification guidelines set forth in the
Company’s Corporate Governance Policy. Under the Company’s Governance
Policy, the factors considered by the Committee and the Board in its review of
potential nominees and directors include: high integrity and independence,
substantial accomplishments, and prior or current association with institutions
noted for their excellence; demonstrated leadership ability, with broad
experience, diverse perspectives, and the ability to exercise sound business
judgment; the background and experience of candidates, particularly in areas
important to the operation of the Company such as business, education, finance,
government, law or banking; the ability to make a significant and immediate
contribution to the Board’s discussions and decision-making; special skills,
expertise or background that add to and complement the range of skills,
expertise and background of the existing directors; career success that
demonstrates the ability to make the kind of important and sensitive judgments
that the Board is called upon to make; and the availability and energy necessary
to perform his or her duties as a director. In addition, the
Committee and the Board believes the composition of the Board should reflect
sensitivity to the need for diversity as to gender, ethnic background and
experience. Application of these factors involves the exercise of judgment by
the Board and cannot be measured in any mathematical or routine
way.
In
connection with the evaluation of nominees, the Nominating Committee determines
whether to interview the prospective nominee, and if warranted, one or more
members of the Nominating Committee, in concert with the Company’s Chief
Executive Officer, interviews prospective nominees. After completing its
evaluation, the Nominating Committee makes a recommendation to the full Board as
to the persons who should be nominated by the Board, and the Board determines
the nominees after considering the recommendation and report of the Nominating
Committee.
For each
of the nominees to the Board and the current directors, the biographies shown
above highlight the experiences and qualifications that were among the most
important to the Nominating Committee in concluding that the nominee or the
director should serve or continue to serve as a director of the
Company. The table below supplements the biographical information
provided above. The vertical axis displays the primary factors reviewed by the
Governance Committee in evaluating a board candidate.
|
Boudreau
|
Gardner
|
Goddard
|
Hardin
|
Jones
|
McKennon
|
Skipper
|
|
|
Experience,
Qualifications, Skill or Attribute
|
|||||||
|
Professional
standing in chosen field
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
|
Expertise
in financial services or related industry
|
X
|
X
|
X
|
X
|
X
|
X
|
|
|
Audit
Committee Financial Expert (actual or potential)
|
X
|
X
|
X
|
X
|
X
|
||
|
Civic
and community involvement
|
X
|
X
|
X
|
X
|
X
|
||
|
Other
public company experience
|
X
|
X
|
X
|
X
|
X
|
||
|
Leadership
and team building skills
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
|
Specific
skills/knowledge:
|
|||||||
|
-
finance
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
|
-
marketing
|
X
|
||||||
|
-
public affairs
|
X
|
||||||
|
-
human resources
|
X
|
X
|
|||||
|
-
governance
|
X
|
X
|
X
|
X
|
X
|
Our
stockholders may propose director candidates for consideration by the Company’s
Nominating Committee by submitting the individual’s name and qualifications to
our Secretary at 1600 Sunflower Avenue, Costa Mesa, CA 92626. Our Nominating
Committee will consider all director candidates properly submitted by our
stockholders in accordance with our bylaws and Corporate Governance Guidelines.
Stockholders who wish to nominate candidates for election to our Board at our
Annual Meeting of Stockholders must follow the procedures outlined in
“Stockholder Proposals for the 2010 Annual Meeting” set forth
below.
Board
of Directors Independence
The Board
of Directors of the Company and the Bank is made up of seven (7)
directors. The directors are divided into three
classes. Directors are elected for staggered terms of three years and
serve until their successors are elected and qualified. Our Corporate Governance
Guidelines require that the Board consist predominantly of non-management
directors. This means directors who are not currently, and have not been,
employed by us during the most recent three years. Currently, our Chief
Executive Officer is our only director who is also a member of
management.
Our
Corporate Governance Guidelines require that a majority of the Board of
Directors consist of independent directors as defined under the NASDAQ Stock
Market (the “NASDAQ”) rules. No director will be “independent” unless the Board
affirmatively determines that the director meets the categorical standards set
forth in the NASDAQ rules and otherwise has no relationship with the Company
that, in the opinion of the Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director and has
no material relationship with the Company (either directly or as a partner,
stockholder or officer of an organization that has a relationship with the
Company).
Our
Nominating Committee is responsible for reviewing with the Board annually the
appropriate criteria and standards for determining director independence
consistent with the NASDAQ rules. The Company’s Board has determined that
Kenneth A. Boudreau, John D. Goddard, Jeff C. Jones, Michael L. McKennon, David
L. Hardin, and Ronald G. Skipper are independent and have no material
relationships with the Company.
Responsibilities
of the Board of Directors
In
addition to each director’s basic duties of care and loyalty, the Company’s
Board of Directors has separate and specific obligations enumerated in our
Corporate Governance Guidelines. Among other things, these obligations require
directors to effectively monitor management’s capabilities, compensation,
leadership and performance, without undermining management’s ability to
successfully operate the business. In addition, our Board and its committees
have the authority to retain and establish the fees of outside legal, accounting
or other advisors, as necessary to carry out their
responsibilities.
Our
directors are expected to avoid any action, position or interest that conflicts
with an interest of the Company, or gives the appearance of a conflict. As a
result, our directors must disclose all business relationships with the Company
and with any other person doing business with us to the entire Board and to
recuse themselves from discussions and decisions affecting those relationships.
We periodically solicit information from directors in order to monitor potential
conflicts of interest and to confirm director independence.
Board
of Directors Leadership Structure
Our
certificate of incorporation and bylaws provide for a Board of Directors that is
divided into three classes. The classes have three-year terms, and the term of
one class expires each year in rotation at that year’s annual meeting. The size
of the Board shall be designated by the Board, but shall be seven in the absence
of such designation. Vacancies on the Board may be filled by a majority of the
remaining directors. A director elected to fill a vacancy, or a new directorship
created by an increase in the size of the Board, serves for the remainder of the
full term of the class of directors in which the vacancy or newly created
directorship occurred.
Our Board
of Directors has no fixed policy with respect to the separation of the offices
of Chairman of the Board of Directors and Chief Executive Officer. Our Board
retains the discretion to make this determination on a case-by-case basis from
time to time as it deems to be in the best interests of the Company and our
stockholders at any given time. The Board currently believes that separating the
positions of CEO and Chairman is the best structure to fit the Company’s needs.
This structure ensures a greater role for the independent directors in the
oversight of the Company and active participation of the independent directors
in setting agendas and establishing priorities and procedures for the work of
the Board. The Board also believes that this structure is preferred
by a significant number of the Company’s stockholders.
Board
of Directors Risk Oversight
The
understanding, identification and management of risk are essential elements for
the successful management of our Company. The entire Board of Directors is
responsible for oversight of the Company’s risk management processes. The Board
delegates many of these functions to the Audit Committee. Under its charter, the
Audit Committee is responsible for monitoring business risk practices and legal
and ethical programs. In this way, The Audit Committee helps the Board fulfill
its risk oversight responsibilities relating to the Company’s financial
statements, financial reporting process and regulatory requirements. The Audit
Committee also oversees our corporate compliance programs, as well as the
internal audit function. In addition to the Audit Committee’s work in overseeing
risk management, our full Board regularly engages in discussions of the most
significant risks that the Company is facing and how these risks are being
managed, and the board receives reports on risk management from senior officers
of the Company and from the chair of the Audit Committee. The board receives
periodic assessments from the Company’s ongoing enterprise risk management
process that are designed to identify potential events that may affect the
achievement of the Company’s objectives. In addition, our Board and its standing
committees periodically request supplemental information or reports as they deem
appropriate.
Communication
With Directors
Individuals
may submit communications to any individual director, including our presiding
Chairman, our Board of Directors as a group, or a specified Board committee or
group of directors, including our non-management directors, by sending the
communications in writing to the following address: Pacific Premier Bancorp,
Inc., 1600 Sunflower Avenue, Costa Mesa, California 92626. All correspondence
should indicate to whom it is addressed. The Company’s Corporate Secretary will
sort the Board correspondence to classify it based on the following categories
into which it falls: stockholder correspondence, commercial correspondence,
regulator correspondence or customer correspondence. Each classification of
correspondence will be handled in accordance with a policy unanimously approved
by the Board.
Board
Meetings and Executive Sessions
Our Board
of Directors currently holds twelve full Board meetings each year. All of our
directors are encouraged to attend each meeting in person. Our management
provides all directors with an agenda and appropriate written materials
sufficiently in advance of the meetings to permit meaningful review. Any
director may submit topics or request changes to the preliminary agenda as he or
she deems appropriate in order to ensure that the interests and needs of
non-management directors are appropriately addressed. To ensure active and
effective participation, all of our directors are expected to arrive at each
Board and committee meeting having reviewed and analyzed the materials for the
meeting. During 2009, our Board of Directors met twelve times, and
all of our directors attended at least 98% of the aggregate of the total number
of meetings of the Board of Directors held during his tenure in office during
the last fiscal year and the total number of all meetings held by all committees
of the Board of Directors on which he served during such year.
It is the
Company’s policy that the independent directors of the Company meet in executive
sessions without management at least twice on an annual basis in conjunction
with regularly scheduled board meetings. Executive sessions at which
the independent directors meet with the Chief Executive Officer also may be
scheduled. During 2009, the independent directors met twice in
executive session without the presence of management.
Director
Attendance at Company Annual Meetings
All of
our directors are encouraged to attend every Company annual meeting of
stockholders. All of our directors attended our prior 2009 annual
meeting of stockholders.
Director
Contact with Management
All of
our directors are invited to contact our Chief Executive Officer and or any of
our executive or senior level managers at any time to discuss any aspect of our
business. In addition, there generally are frequent opportunities for directors
to meet with other members of our management team.
Corporate
Code of Business Conduct and Ethics
We have
implemented a Code of Business Conduct and Ethics applicable to our directors,
Chief Executive Officer, Chief Financial Officer, other senior management, and
to all of our officers and employees. Our Code of Business Conduct and Ethics
provides fundamental ethical principles to which these senior financial officers
are expected to adhere to. Our Code of Business Conduct and Ethics
operates as a tool to help our directors, officers, and employees understand and
adhere to the high ethical standards required for employment by, or association
with, the Company and the Bank. Our Code of Business Conduct and Ethics is
available on our website at www.ppbi.com
under the Investor Relations section. Our stockholders may also obtain
written copies at no cost by writing to us at 1600 Sunflower Avenue, Costa Mesa,
California 92626, Attention: Investor Relations Department, or by calling (714)
431-4000. Any future changes or amendments to our Code of Business Conduct and
Ethics and any waiver that applies to one of our senior financial officers or a
member of our Board of Directors will be posted to our website.
|
Audit
|
Compensation
|
Nominating
& Corporate Governance
|
|
Kenneth
A. Boudreau
|
Kenneth
A. Boudreau
|
Kenneth
A. Boudreau
|
|
Jeff
C. Jones
|
John
D. Goddard
|
John
D. Goddard
|
|
Michael
L. McKennon *
|
Ronald
G. Skipper *
|
Ronald
G. Skipper *
|
|
4
meetings held in 2009
|
1
meeting held in 2009
|
1
meeting held in 2009
|
_______________________
* Chairperson
A
description of the general functions of each of the Company’s Board committees
and the composition of each committee is set forth below.
Audit
Committee. The Audit Committee is responsible for selecting
and communicating with the independent auditors, reporting to the Board on the
general financial condition of the Company and the results of the annual audit,
and ensuring that the Company's activities are being conducted in accordance
with applicable laws and regulations. The internal auditor of the Bank
participates in the Audit Committee meetings. A copy of the audit
committee charter can be found on the Company’s website at www.ppbi.com
under the Investor Relations section.
No member
of the Audit Committee receives any consulting, advisory or other compensation
fee from the Company other than fees for service as member of the Board of
Directors, committee member or officer of the Board. Each of the
Audit Committee members is considered “independent” under the NASDAQ listing
standards and rules of the SEC. The Board of Directors has determined
that Mr. McKennon satisfies the requirements established by the SEC for
qualification as an “audit committee financial expert”.
Compensation
Committee. The Compensation Committee reviews the amount and
composition of director compensation from time to time and makes recommendations
to the Board when it concludes changes are needed. In recommending director
compensation, the Compensation Committee considers the potential negative effect
on director independence if director compensation and perquisites exceed
customary levels. The Compensation Committee also (i) has oversight
responsibility for the Bank’s compensation policies, benefits and practices,
(ii) reviews the Chief Executive Officer’s recommendations concerning individual
incentive awards of officers directly reporting to him, (iii) approves all stock
option and restricted stock grants, (iv) has oversight responsibility for
management planning and succession, and (v) determines the annual salary, the
annual bonus, stock options, and restricted stock grants of the Chief Executive
Officer (“CEO”) and Chief Financial Officer (“CFO”). Our Compensation
Committee does not have a charter.
Nominating
and Corporate Governance Committee. The Nominating Committee
has oversight responsibility for nominating candidates as directors and to
determine satisfaction of independence requirements. The
Nominating Committee has adopted a written charter. A copy of the
charter and the Company’s Corporate Governance policy can both be found on the
Company’s website at www.ppbi.com
under the Investor Relations section.
The
primary responsibilities of our Nominating Committee include:
|
·
|
assisting
the board in identifying and screening qualified candidates to serve as
directors, including considering stockholder
nominees;
|
|
·
|
recommending
to the board candidates for election or reelection to the board or to fill
vacancies on the board;
|
|
·
|
aiding
in attracting qualified candidates to serve on the
board;
|
|
·
|
making
recommendations to the board concerning corporate governance
principles;
|
|
·
|
periodically
assessing the effectiveness of the Board of Directors in meeting its
responsibilities representing the long-term interests of the stockholders;
and
|
|
·
|
reporting
annually to the Board with an assessment of the Board’s performance and
the performance of the Board committees to be discussed with the full
Board following the end of each fiscal
year.
|
Compensation
Committee Interlocks and Insider Participation
For 2009,
the Company’s Compensation Committee was comprised of Messrs. Boudreau, Goddard,
and Skipper, each of whom was an independent director. None of these
individuals is or has been an officer or employee of the Company during the last
fiscal year or as of the date of this Proxy Statement or is serving or has
served as a member of the compensation committee of another entity that has an
executive officer serving on the Company’s Compensation Committee. No
executive officer of the Company served as a director of another entity that had
an executive officer serving on the Company’s Compensation
Committee. Finally, no executive officer of the Company served as a
member of the compensation committee of another entity that had an executive
officer serving as a director of the Company.
Committee
Independence and Additional Information
The
Company’s Audit, Nominating and Compensation Committees are currently composed
entirely of “independent” directors, as defined by our Corporate Governance
Guidelines and applicable NASDAQ and SEC rules and regulations. Our Compensation
Committee does not have a written charter; however, our Audit and Nominating
Committees each have a written charter, which may be obtained on our website at
www.ppbi.com
under the Investor Relations section. Company stockholders may also
obtain written copies of the charters at no cost by writing to us at 1600
Sunflower Avenue, Costa Mesa, California 92626, Attention: Investor Relations
Department, or by calling (714) 431-4000.
The Chair
of each committee is responsible for establishing committee agendas. The agenda,
meeting materials and the minutes of each committee meeting are furnished in
advance to all of our directors, and each committee chair reports on his or her
committee’s activities to the full Board.
The
following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as represented by the owner or as
disclosed in certain reports regarding such ownership filed by such persons with
the Company and with the SEC, in accordance with Sections 13(d) and 13(g) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). Other than
those persons listed below, the Company is not aware of any person, as such term
is defined in the Exchange Act, that beneficially owns more than 5% of the
Company’s common stock as of the Record Date.
|
Amount
and
|
||||||||
|
Nature
of
|
||||||||
|
Name
and Address of
|
Beneficial
|
Percent
|
||||||
|
Title
of Class
|
Beneficial
Owner
|
Ownership
|
of
Class (1)
|
|||||
|
Common
Stock
|
Wells
Capital Management, Inc.
|
991,924 (2) | 9.89 | % | ||||
|
525
Market Street 10th floor
|
||||||||
|
San
Francisco, CA 94105
|
||||||||
|
Common
Stock
|
Sandler
O'Neill Asset Management LLC
|
988,900 (2) | 9.86 | % | ||||
|
780
Third Avenue 5th floor
|
||||||||
|
New
York, NY 10017
|
||||||||
|
Common
Stock
|
Wellington
Management Co. LLP
|
952,260 (2) | 9.49 | % | ||||
|
75
State Street
|
||||||||
|
Boston,
MA 02109-1809
|
||||||||
|
Common
Stock
|
AWM
Investment Co., Inc.
|
937,716 (2) | 9.35 | % | ||||
|
527
Madison Avenue Suite 2600
|
||||||||
|
New
York, NY 10022
|
||||||||
|
Common
Stock
|
Fidelity
Management & Research
|
925,500 (2) | 9.22 | % | ||||
|
245
Summer Street
|
||||||||
|
Boston,
MA 02210
|
||||||||
_____________________
|
(1)
|
As
of March 31, 2010, there were 10,033,836 shares of Company common stock
outstanding on which “Percent of Class” in the above table is
based.
|
|
(2)
|
As
disclosed on a Schedule 13F filed with the SEC for December 31,
2009.
|
This
table and the accompanying footnotes provide a summary of the beneficial
ownership of our common stock as of the Record Date, by (i) our directors, (ii)
our executive officers named in Summary Compensation Table, also referred to
herein as the Named Executive Officer, and (iii) all of our current directors
and executive officers as a group. The following summary is based on information
furnished by the respective directors and officers.
Each
person has sole voting and investment power with respect to the shares he
beneficially owns.
|
Unvested
|
Total
Beneficial
|
|||||||||||||||||||||||
|
Common
|
Restricted
|
Options
|
Ownership
|
|||||||||||||||||||||
|
Name
|
Stock
|
Stock
|
Exercisable
(1)
|
Warrants
(2)
|
# | (3) | % | (4) | ||||||||||||||||
| A | B | C | D | E | F | |||||||||||||||||||
|
Kenneth
A. Boudreau
|
22,867 | - | 10,000 | - | 32,867 | 0.3 | % | |||||||||||||||||
|
John
D. Goddard
|
56,806 | - | 21,000 | - | 77,806 | 0.7 | % | |||||||||||||||||
|
Jeff
C. Jones
|
25,192 | - | 10,000 | 16,400 | 51,592 | 0.5 | % | |||||||||||||||||
|
Michael
L. McKennon
|
17,000 | - | 18,000 | - | 35,000 | 0.3 | % | |||||||||||||||||
|
Ronald
G. Skipper
|
42,887 | - | 21,000 | - | 63,887 | 0.6 | % | |||||||||||||||||
|
David
L. Hardin
|
7,692 | - | 1,667 | - | 9,359 | 0.1 | % | |||||||||||||||||
|
Steven
R. Gardner
|
96,078 | - | 218,333 | - | 314,411 | 3.0 | % | |||||||||||||||||
|
Kent
Smith
|
9,230 | - | - | - | 9,230 | 0.1 | % | |||||||||||||||||
|
Eddie
Wilcox
|
24,124 | - | 72,500 | - | 96,624 | 0.9 | % | |||||||||||||||||
|
Stock
Ownership of all Directors and Executive Officers as a Group (9
persons)
|
301,876 | - | 372,500 | 16,400 | 690,776 | 6.6 | % | |||||||||||||||||
|
1)
|
In
accordance with applicable SEC rules, only shares of unvested restricted
stock that vest, or options that are exercisable within 60 days after
March 31, 2010 are included in this
column.
|
|
2)
|
The
amounts in column D represent warrants to purchase Pacific Premier
Bancorp, Inc. common stock which were purchased by the director
separately.
|
|
3)
|
The
amounts in column E are derived by adding shares, unvested restricted
stock, options exercisable, and warrants listed in columns A, B, C and D
of the table.
|
|
4)
|
The
amounts contained in column F are derived by dividing the amounts in
column E of the table by (i) the total outstanding shares of 10,033,836,
plus (ii) the total amount in column C, plus (iii) the total amount in
column D.
|
The
Company’s Board of Directors, acting upon a recommendation from the Compensation
Committee, annually determines the non-employee directors’ compensation for
serving on the Board and its committees. In establishing director compensation,
the Board and the Compensation Committee are guided by the following
goals:
|
·
|
Compensation
should consist of a combination of cash and equity awards that are
designed to fairly pay the directors for work required for a company of
our size and scope;
|
|
·
|
Compensation
should align the directors’ interests with the long-term interests of
stockholders; and
|
|
·
|
Compensation
should assist with attracting and retaining qualified
directors.
|
The
Compensation Committee of the Company was comprised of Messrs. Boudreau,
Goddard, and Skipper for 2009, each of whom is “independent” as defined under
the NASDAQ listing standards. The Compensation Committee held one meeting during
2009, at which all members were present. The Compensation Committee
(i) has oversight responsibility for the Bank’s compensation policies, benefits
and practices; (ii) reviews the CEO’s recommendations concerning individual
incentive awards of officers directly reporting to him; (iii) approves all stock
option and restricted stock grants; (iv) has oversight responsibility for
management planning and succession; and (v) determines the annual compensation
amount and the annual bonus, stock option and restricted stock grants of the CEO
and CFO. The Compensation Committee may from time to time retain
independent compensation consultants to assist it in the exercise of its
responsibilities, including developing compensation plans and providing
comparative data regarding the Bank’s compensation policies.
The
Compensation Committee and Board most recently completed this process in
November 2009, and determined that our director compensation for 2010 should
remain unchanged from 2009. The Company does not pay director
compensation to directors who are also our employees. Below are the elements of
compensation paid to nonemployee directors for their service on our
Board.
Cash
Compensation
Company
non-employee directors receive the following cash payments for their service on
our Board of Directors and Board committees:
|
·
|
a
monthly cash retainer of $500 for service on the Company
Board;
|
|
·
|
a
monthly cash retainer of $2,000 for service on the Bank’s board of
directors;
|
|
·
|
a
monthly cash retainer of $2,500 to the Chairman of the Bank’s board of
directors;
|
|
·
|
a
quarterly cash retainer of $500 to the Chairman of the audit committee of
the Bank;
|
During
2009, the Company did not provide perquisites to any director in an amount that
is reportable under applicable SEC rules and regulations. All non-employee
directors are entitled to reimbursement for travel expense incurred in attending
Board and committee meetings.
Stock
Compensation
Each
non-employee director is eligible for a grant of either options to purchase
Company common stock or shares of restricted stock issued from our 2004
Long-term Incentive Plan, as recommended by our Compensation Committee. The
options and restricted stock that the Company awards to our directors vest in
equal thirds over three years on each anniversary of the date of grant, subject
to earlier vesting on termination of service in certain
circumstances. All awards are made based on the closing market price
on the date of grant. There were no options awarded in
2009.
Long-Term
Care Insurance Plan
As more
fully described under the heading “Long-Term Care Insurance” of “Executive
Compensation” below, the Bank implemented in September 2006 a Long-Term Care
Insurance Plan for the Named Executive Officers and directors of the Bank. The
non-employee directors may elect not to participate in the insurance plan. For
those who opt out, the amount of the insurance premium, up to $4,000 annually,
will be recorded each month to their deferred compensation account with
interest. See “Deferred Compensation Plan”
below. The plan expense for 2009 was $35,265, and as of December 31,
2009, the accrued liability for the plan was $34,714.
In
accordance with applicable SEC rules and regulations, the following table
reports all compensation the Company paid during 2009 to its non-employee
directors.
|
2009
DIRECTOR COMPENSATION
|
||||||||||||||||||||||||||||
|
Name
|
Fees
Earned or Paid in Cash ($)
|
Stock
Awards
($)
|
Option
Awards
($)
(2)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change
in Nonqualified Deferred Compensation Earnings ($)(3)
|
All
Other Compensation ($)
|
Total
($)
|
|||||||||||||||||||||
|
Kenneth
A. Boudreau (1)
|
30,000 | - | - | - | - | - | 30,000 | |||||||||||||||||||||
|
John
D. Goddard
|
30,500 | - | - | - | 517 | - | 31,017 | |||||||||||||||||||||
|
David
L. Hardin
|
30,000 | - | - | - | - | - | 30,000 | |||||||||||||||||||||
|
Jeff
C. Jones
|
30,000 | - | - | - | 517 | - | 30,517 | |||||||||||||||||||||
|
Michael
L. McKennon (1)
|
32,000 | - | - | - | 193 | - | 32,193 | |||||||||||||||||||||
|
Ronald
G. Skipper
|
36,000 | - | - | - | - | - | 36,000 | |||||||||||||||||||||
___________________
|
1)
|
Mr.
McKennon started deferring a portion of his Board fees in September 2006.
Mr. Boudreau started deferring a portion of his Board fees in January
2008. The deferment program allows a director to defer their
normal monthly Board fees into an account that earns the rate of prime
plus one percent. At December 31, 2009, Mr. McKennon had
deferred $46,000 of fees and had earned $5,361 on that deferment and Mr.
Boudreau had deferred $48,000 of fees and had earned $2,192 on that
deferment.
|
|
2)
|
There
were no awards of stock options in
2009.
|
|
3)
|
Represents
the above market earnings in fiscal year 2009. Above market earnings
represent earnings greater than 120% of the 10-year Treasury Note during
2009.
|
Deferred
Compensation Plan
The Bank
created a Directors’ Deferred Compensation Plan in September 2006 which allows
non-employee directors to defer Board of Directors’ fees and provides for
additional contributions from any opt-out portion of the Long-Term Care
Insurance Plan. See “Long-Term Care Insurance Plan” under “Executive
Compensation” below. The deferred compensation is credited with interest by the
Bank at prime plus one percent and the accrued liability is payable upon
retirement or resignation. The Directors’ Deferred Compensation Plan
is unfunded. The Company is under no obligation to make matching
contributions to the Directors’ Deferred Compensation Plan. As of December 31,
2009, the unfunded liability for the plan was $136,267 and the interest expense
for 2009 was $4,655.
|
2009
NONQUALIFIED DIRECTOR DEFERRED COMPENSATION
|
||||||||||||||||||||||||
|
Name
|
Aggregate
Balance at Fiscal Year-End Prior to Last Fiscal Year-End
($)
|
Director
Contributions in Last Fiscal Year ($)
|
Long-Term
Care Insurance Plan Opt Out Contributions in Last Fiscal Year
($)
|
Aggregate
Earnings in Last Fiscal Year ($)
|
Aggregate
Withdrawls/
Distributions
($)
|
Aggregate
Balance at Last Fiscal Year-End ($)
|
||||||||||||||||||
|
Kenneth
A. Boudreau
|
24,634 | 24,000 | - | 1,558 | - | 50,192 | ||||||||||||||||||
|
John
D. Goddard
|
10,097 | - | 4,000 | 517 | - | 14,614 | ||||||||||||||||||
|
David
L. Hardin
|
- | - | - | - | - | - | ||||||||||||||||||
|
Jeff
C. Jones
|
10,097 | - | 4,000 | 517 | - | 14,614 | ||||||||||||||||||
|
Michael
L. McKennon
|
41,285 | 12,000 | 1,498 | 2,063 | - | 56,847 | ||||||||||||||||||
|
Ronald
G. Skipper
|
- | - | - | - | - | - | ||||||||||||||||||
EXECUTIVE
COMPENSATION
The following
discussion and analysis of compensation arrangements of our Named Executive
Officers for 2009, which we refer to as the CD&A, should be read together
with the compensation tables and related disclosures set forth
below. This discussion contains forward-looking statements that are
based on our current plans, considerations, expectations and determinations
regarding future compensation programs. The Compensation Committee
may adopt from time to time additional compensation arrangements or modify
current compensation arrangements with our Named Executive Officers based upon
its evaluation of the need for such modifications to achieve the objectives of
our compensation program discussed below.
Compensation
Philosophy and Objectives
This
CD&A provides an overview and analysis of our compensation program and
policies, the material decisions we have made under those programs and policies
with respect to our Named Executive Officers, and the material factors we
considered in making those decisions. We discuss within this CD&A
the various elements included in executive compensation and how we determined
those elements. We also discuss the roles of the Compensation
Committee and our CEO in this process.
We
believe that the most effective executive compensation program is one that
enables us to attract, retain and motivate our Named Executive Officers to
achieve the Company’s long-term and strategic goals and enhancing long-term
stockholder value. We intend for our compensation program to align
executives’ interests with those of the stockholders by rewarding performance
for implementing the Company’s various strategies, with the ultimate goal of
improving long-term stockholder value. We evaluate both performance
and compensation to ensure that we maintain our ability to attract and retain
employees in key positions, and to ensure that compensation provided to key
employees keeps these employees focused on franchise value
creation.
Our Named
Executive Officers for 2010 consist of Steven R. Gardner, our CEO, Kent J.
Smith, our CFO, and Eddie Wilcox, our Chief Banking Officer
(“CBO”). We refer to Messrs. Gardner, Smith and Wilcox in this Proxy
Statement as our Named Executive Officers.
Process
for Making Compensation Decisions
Roles
of the Compensation Committee and Compensation
Consultants. The Compensation Committee reviews and makes
decisions with respect to salaries, cash incentives, equity incentives and
employee benefits for our Named Executive Officers. The Compensation
Committee has the authority to engage consultants as necessary and to request
other information as needed to fairly measure, monitor and control the overall
compensation of the Named Executive Officers. For 2009, the
Compensation Committee engaged JLR Associates, Management Consultants (“JLR”),
an Irvine, California-based consulting firm specializing in compensation program
design and evaluation for the financial services industry, to assist in
establishing targeted aggregate levels and components of executive
compensation. JLR performed studies of compensation for CEOs and CFOs
at comparable peer group publicly-traded financial institutions and in the
industry in general as found in surveys to assist the Compensation Committee in
evaluating and determining appropriate market-level
compensation.
The
following banking institutions comprised the peer group for the JLR
study:
Bank of
Marin
Pacific
Mercantile Bancorp
Central
Valley Community Bancorp
Preferred
Bank
Commerce
West Bank
Provident
Financial Holdings, Inc.
First
Northern Community Bancorp
San
Joaquin Bancorp
Harrington
West Financial Group, Inc.
Tamalpais
Bancorp
K-Fed
Bancorp
United
Security Bancshares
This data
included results from two compensation surveys conducted by the California
Bankers Association, the State of California Department of Financial
Institutions and SNL Financial for banking institutions similar in size to the
Company. The results of the JLR studies provided the Compensation
Committee with the starting point for the analysis of compensation for our Named
Executive Officers for 2009 and 2010.
Based on
information in the studies and advice from JLR and the recommendations of the
CEO, in the case of the CFO and CBO, and independent analysis performed by the
Compensation Committee, including a discussion and analysis of the various
components and levels of compensation for CEOs and CFOs within the peer group
focusing on base salary, incentive and equity compensation as well as benefits
and retirement plans, the Compensation Committee established compensation levels
for our Named Executive Officers, including the parameters for base salaries,
annual cash incentives, equity incentive awards, retirement plans and other
benefits, and other executive benefits (including perquisites) that were
appropriate for the Named Executive Officers and in alignment with our
compensation philosophy. The Compensation Committee determined, in
light of the information provided by JLR, the current size of the Company and
the current transformation of Company to a commercial banking business model
that base salaries for the Named Executive Officers should remain unchanged from
2009 levels.
Role
of Executive Officers in Compensation Decisions. The
Compensation Committee makes the compensation decisions for the Named Executive
Officers as set forth in the Summary Compensation Table below. The
CEO reviews the performance of the CFO and CBO annually and makes
recommendations on salary adjustments and annual award amounts, which are
presented to the Compensation Committee. The Compensation Committee
then exercises its discretion and modifies any recommendations, adjustments, or
awards to the CFO and CBO, to align any such adjustment or award with the
overall compensation philosophies of the Company.
Elements
of Compensation
For
fiscal year ended December 31, 2009, the principal elements of compensation for
the Named Executive Officers were:
|
·
|
Base
salary;
|
|
·
|
Annual
discretionary cash incentive
awards;
|
|
·
|
Long-term
equity incentive awards,
|
|
·
|
Retirement
plans and other benefits; and
|
|
·
|
Other
executive benefits, such as perquisites and severance
benefits.
|
Base
Salary
The
Company provides the Named Executive Officers and all other employees with base
salary to compensate them for services rendered during the fiscal
year. Base salary ranges for the Named Executive Officers are
determined by using market assessments and internal evaluations for each
executive based on his position, experience, anticipated contributions and
responsibilities.
As part
of its review of base salaries for the Named Executive Officers, the
Compensation Committee considers:
|
·
|
market
data provided by public proxy information which may be confirmed or
reviewed by independent sources;
|
|
·
|
scope
of the roles, duties and responsibilities of the executive and the impact
these duties have on both the short and long term performance of the
Company; and
|
|
·
|
individual
performance of the executive.
|
Employment
Agreements. As more fully described below, in December 2007,
the Company entered into employment agreements with two of our Named Executive
Officers. We believe employment agreements serve a number of
functions, including (1) retention of our Named Executive Officers;
(2) mitigation of any uncertainty about future employment and continuity of
management in the event of a change in control; and (3) protection of the
Company and customers through confidentiality and non-solicitation
covenants. Except as determined by the terms of the employment
agreements with our Named Executive Officers, salary levels are typically
reviewed annually as part of the Company’s performance review process as well as
upon a promotion or other change in job responsibility.
Incentive
Compensation
The
Company’s incentive compensation is designed to provide cash (short-term) and
equity-based (long-term) incentive compensation to:
|
·
|
promote
high performance on a risk adjusted basis and achievement of the our
strategic plans by our Named Executive Officers and key
employees;
|
|
·
|
encourage
the growth of stockholder value;
and
|
|
·
|
allow
key employees to participate as an equity stockholder in the long-term
growth and profitability of the
Company.
|
Annual
Incentive Cash Awards.
The Compensation Committee oversees establishment of annual discretionary
incentive cash awards that are designed to motivate short-term performance and
retain talent. In 2008, the Compensation Committee discussed if there was
a need to establish specific performance targets for the awarding of the
discretionary cash award and concluded that annual incentives for executives
based on specific performance targets was not be in the best interest of the
stockholders. Instead, the Compensation Committee focused on both the
Company’s performance compared to select peer banks performance, as well as the
Named Executive Officers’ performance in light of the key areas of
implementation of the strategic plan such as new business account acquisition,
new relationship account growth, core deposit growth, loan portfolio
diversification, loan quality, as well as the overall risk mitigation and
management practices. Upon completing their review, the Committee decided to
reduce the level of incentive due to the overall decline in net income from the
prior year taking into consideration the onetime charges associate with the
other-than-temporary impairment charges associated with mark to market
accounting of the Bank’s securities portfolio.
The
Compensation Committee analyzed the Bank’s financial performance compared to the
Company’s strategic plan and the peer banks and referenced the increasingly
challenging environment for financial institutions. The Compensation
Committee discussed the growth in business accounts and business banking
relationships as well as the change in the composition of the loan
portfolio. The Compensation Committee also discussed the specific
performance of Mr. Gardner and the Bank for the past year and the transition of
the Bank to a commercial banking business model. When determining the
Named Executive Officers’ discretionary cash awards, the Compensation Committee
took into consideration all components of compensation including the Named
Executive Officer’s use of a Company owned vehicle or vehicle allowance, the
payment of his life insurance premium, health benefits, Salary Continuation
Plan, if applicable, and total cash compensation.
Based on
its analysis, the Compensation Committee approved the following discretionary
incentive cash awards for the Named Executive Officers for 2009, which were paid
in January 2010, in the amount of $67,500 for the CEO, $5,000 for the CFO and
$43,000 for the CBO.
Long-Term
Equity Incentive Awards. We maintain the 2004 Long-term
Incentive Plan, under which we are permitted to grant incentive stock options,
restricted stock grants and stock appreciation rights. Each Named
Executive Officer is eligible for equity incentive awards under the 2004
Long-term Incentive Plan, as determined by the Compensation
Committee. The options and restricted stock that the Company awards
to our Named Executive Officers vest in equal thirds over three years on each
anniversary of the date of grant, subject to earlier vesting on termination of
service in certain circumstances. All awards are made based on the
closing market price of our common stock on the date of
grant.
The
Compensation Committee believes it is important that the Named Executive
Officers’ and employees’ interests are aligned with stockholders and to provide
long term incentive to achieve the Company’s goals and attract and retain
talented executive officers. In discussing the grant of equity
incentive awards to the Named Executive Officers for 2009, the Compensation
Committee concluded, consistent with its determination of the annual
discretionary incentive cash awards discussed above, that because of the
Company’s strategic transition to a commercial banking platform, financial
measures for the grants of equity awards were less relevant for 2009 than would
be during a period of non-transition. The Committee also noted the
fact that the Named Executive Officers have made open market purchases of the
Company’s stock from time to time and thus have continued to commit personal
cash toward the support of the Company’s stock.
As a
result, for 2009, there were no awards of stock options or restricted stock to
the Named Executive Officers.
Retirement
Plans and Other Benefits
The Bank
provides one tax-qualified, broadly-based Employee Savings Plan (the “401(k)
Plan”), to all employees and management of the Bank. Under the 401(k) Plan,
employees may contribute from 1% to 50% of their compensation. In
2009, the Bank matched 100% of contributions for the first three percent
contributed and 50% on the next two percent contributed. The
amounts of contributions made to the 401(k) Plan by the Bank were $161,194 for
the year ended December 31, 2009, for all employees of the Bank and $26,388 to
executives named in the Summary Compensation Table. See “All Other
Compensation” below.
In
addition, the Bank implemented in 2006 a non-qualified supplemental retirement
plan or the Salary Continuation Plan for the CEO and then CFO, John Shindler who
resigned in August 2009. The Salary Continuation Plan is an unfunded plan and
the Company is under no obligation to fund the Salary Continuation
Plan. See “Salary Continuation Plan” under “Nonqualified
Deferred Compensation” below.
Also in
September 2006, the Bank implemented a Long-Term Care Insurance Plan for the
Named Executive Officers at the time. The 2009 expense for this plan for the
CEO, CBO, and John Shindler was $7,420. See “Long-Term Care Insurance
Plan” under “Nonqualified Deferred Compensation” below.
Additionally,
the Company provides Mr. Gardner, per his employee agreement, a life insurance
policy in the amount of $1.5 million and a short-term disability
policy. See “All Other Compensation” below.
Perquisites
and Other Personal Benefits
The
Company provides perquisites and other personal benefits that the Company and
the Compensation Committee believe are reasonable and consistent with the
Company’s overall compensation objectives of attracting and retaining superior
employees for key positions. The Compensation Committee annually reviews the
levels of perquisites and other personal benefits provided to the CEO, CFO and
CBO.
Perquisites
provided for the CEO, CFO, or CBO may include, but are not limited to, the use
of Company automobiles, auto allowance, travel and transportation
accommodations, entertainment expenses, and participation in the plans and
programs described above.
Attributed
costs of the perquisites received by the above individuals for the fiscal year
2009 are included in the “All Other Compensation” column and related footnotes
of the “Summary Compensation Table” below.
Employment
Arrangements
Given the
state of our industry and the CEO’s and CBO’s leadership positions with the
Company or the Bank, the Company and the Bank have entered into an employment
agreement with Mr. Gardner and the Bank has entered into an employment agreement
with Mr. Wilcox, the terms of which are summarized below.
Gardner
Employment Agreement. Mr. Gardner, the Company and the
Bank entered
into an Employment Agreement dated December 19, 2007, also referred to here as
the Gardner Agreement, which provides for the employment of Mr. Gardner as the
President and CEO of the Company and the Bank. The Gardner Agreement
has a term of three (3) years and, on each annual anniversary date, the term
automatically is extended for an additional one-year period by the Company’s and
the Bank’s boards of directors, unless Mr. Gardner, on the one hand, or the
Company or the Bank, on the other hand, gives written notice to the other party
of its election not to extend the term of the Gardner Agreement, with such
notice to be given not less than ninety (90) days prior to any such anniversary
date. If notice is given by either party, then the Gardner Agreement
will terminate at the conclusion of its remaining term.
Pursuant
to the Gardner Agreement, Mr. Gardner will receive a minimum base salary of
$375,000 per year, which may be increased from time to time in such amounts as
may be determined by the Company’s and the Bank’s boards of
directors. In addition, Mr. Gardner will be eligible for a
discretionary performance bonus not to exceed 125% of his base salary, based on
his individual performance and the overall performance of the Company and the
Bank, with eligibility and the amount of any such bonus to be at the discretion
of Compensation Committee of each of the Company’s and the Bank’s boards of
directors. Mr. Gardner also receives the use of an automobile paid
for by the Company. Mr. Gardner is entitled to participate in any
pension, retirement or other benefit plan or program given to employees and
executives of the Company and the Bank, to the extent commensurate with Mr.
Gardner’s then duties and responsibilities as fixed by the boards of directors
of the Company and the Bank. Under the terms of the Gardner
Agreement, the Company and the Bank are required to maintain a life insurance
policy for Mr. Gardner in the amount of $1.5 million, with the beneficiary(ies)
designated by Mr. Gardner.
Pursuant
to the Gardner Agreement, the Company and the Bank have the right, at any time
upon prior notice of termination, to terminate Mr. Gardner’s employment for any
reason, including, without limitation, termination for cause or disability, as
each term is defined in the Gardner Agreement, and Mr. Gardner has the right,
upon prior notice of termination, to terminate his employment with the Company
and the Bank for any reason. As detailed in “Potential Payments Made
upon Termination or Change-in-Control” below, Mr. Gardner may be entitled to
certain payments if he is terminated or resigns for good reason.
The
Gardner Agreement does not affect the benefits that Mr. Gardner is entitled to
receive pursuant to the Salary Continuation Agreement between Mr. Gardner and
the Bank dated May 17, 2006.
Wilcox
Employment Agreement. Mr. Wilcox and the Bank entered into an
Employment Agreement dated December 19, 2007, also referred to here as the
Wilcox Agreement, that provides for the employment of Mr. Wilcox as the
Executive Vice President and CBO of the Bank. The Wilcox Agreement has a term of
three (3) years, and, on each annual anniversary date, the term automatically is
extended for an additional one-year period by the Bank’s board of directors,
unless either Mr. Wilcox or the Bank gives written notice to the other party of
its election not to extend the term of the Wilcox Agreement, with such notice to
be given not less than ninety (90) days prior to any such anniversary date. If
notice is given by either party, then the Wilcox Agreement will terminate at the
conclusion of its remaining term.
Pursuant
to the Wilcox Agreement, Mr. Wilcox will receive a minimum base salary of
$215,000 per year, which may be increased from time to time in such amounts as
may be determined by the Bank’s board of directors. In addition, Mr.
Wilcox will be eligible for a discretionary performance bonus not to exceed 100%
of his base salary, based on his individual performance and the overall
performance of the Bank, with eligibility and the amount of any such bonus to be
at the discretion of the Compensation Committee of the Bank’s board of
directors. Mr. Wilcox receives a car allowance of $500 per
month. Mr. Wilcox is entitled to participate in any pension,
retirement or other benefit plan or program given to employees and executives of
the Bank, to the extent commensurate with Mr. Wilcox’s then duties and
responsibilities as fixed by the board of directors of the Bank.
Pursuant
to the Wilcox Agreement, the Bank will have the right, at any time upon prior
notice of termination, to terminate Mr. Wilcox’s employment for any reason,
including, without limitation, termination for cause or disability, as each term
is defined in the Wilcox Agreement, and Mr. Wilcox has the right, upon prior
notice of termination, to terminate his employment with the Bank for any
reason. As detailed in “Potential Payments Made upon Termination or
Change-in-Control” below, Mr. Wilcox may be entitled to certain payments if he
is terminated or resigns for good reason.
Salary
Continuation Agreements
As more
fully discussed in “Salary Continuation Plan” under “Nonqualified Deferred
Compensation” below, we have established a Salary Continuation Plan for our CEO
that provides for certain annual benefits for him following his retirement from
the Company, and that provides for the acceleration of his benefits upon his
termination due to a change-in-control, as that term is defined in the
plan.
Administration
of the Company’s Compensation Program
The
Company monitors its compensation program through the Compensation
Committee. The Compensation Committee ensures that the total
compensation paid to the Company’s Named Executive Officers are appropriate
given the Company’s compensation goals and philosophies, as well as the skill
sets and abilities of each individual recipient. The Company, through the
Compensation Committee, endeavors to ensure that that the compensation and
benefits of the Named Executive Officers are appropriate as compared to similar
executive officers within the banking industry.
The
Compensation Committee’s responsibilities are to:
|
·
|
establish
the base salary, incentive compensation and any other compensation for the
Company’s CEO and; review and approve the base salary, incentive
compensation and other compensation for the CFO and the CBO in
consultation with the Company’s
CEO;
|
|
·
|
monitor
the Company’s management incentive and equity-based compensation plans,
retirement and benefit plans and discharge the duties imposed on the
Compensation Committee by the terms of those plans;
and
|
|
·
|
perform
other functions or duties deemed appropriate by the
Board.
|
Compensation
decisions for our Named Executive Officers and the non-employee Directors are
made by the Compensation Committee.
Accounting
and Tax Considerations - Equity-Based Compensation
The
Compensation Committee also considers the tax and accounting treatment of the
various components of compensation, and although these considerations do not
generally drive its decisions, the Compensation Committee generally strives to
put the Company in the best position with respect to tax and accounting
treatment. In particular, the Compensation Committee attempts to ensure that
compensation to Named Executive Officers is deductible under Section 162(m) of
the Internal Revenue Code, although the Compensation Committee has reserved the
right to provide compensation to Named Executive Officers that is not deductible
for income tax purposes as circumstances warrant.
The Compensation Committee
of the Board of Directors has reviewed and discussed the Compensation Discussion
and Analysis set forth in this Proxy Statement with management. Based on
this review and discussion, the Compensation Committee has recommended to the
Board that the Compensation Discussion and Analysis be included in this Proxy
Statement.
COMPENSATION
COMMITTEE
Ronald G. Skipper, Chair
Kenneth
A. Boudreau
John D.
Goddard
The
Compensation Committee views the Company’s compensation program with a long-term
focus. The greatest amount of compensation can be achieved over long
periods of time through sustained excellent performance. We believe
our compensation policies and programs provide a balanced mix of cash and
equity, annual and longer-term incentives, and performance metrics that mitigate
excessive risk-taking that could harm our value or reward poor judgment by our
Named Executive Officers. In addition, the Compensation Committee,
with the assistance of the CEO, establishes goals and objectives with a mix of
quantitative and qualitative performance elements in order to avoid excessive
weight on one performance measure. The Compensation Committee retains
discretion in making final award determinations under its program so as to take
into account changing market conditions, which allows our executives to focus on
the long-term health of our Company rather than an “all or nothing” approach to
achieving short-term goals.
The following
table shows the compensation of our Named Executive Officers for services to the
Company or the Bank during the years ended December 31, 2009, 2008 and 2007,
respectively.
|
SUMMARY
COMPENSATION TABLE
|
|||||||||||||||||||||||||||||||||
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
(1)
|
Stock
Awards
($) (2)
|
Option
Awards
($)
(3)(4)
|
Non-Equity
Incentive Plan Compensation ($) (5)
|
Change
in Nonqualified Deferred Compensation Earnings ($)
|
All
Other Compensation ($) (6)
|
Total
($)
|
||||||||||||||||||||||||
|
Steven
R. Gardner
|
2009
|
375,000 | 67,500 | - | - | 62,257 | - | 29,220 | 533,977 | ||||||||||||||||||||||||
|
President
and
|
2008
|
373,558 | 265,000 | - | 162,600 | 58,641 | - | 29,513 | 889,312 | ||||||||||||||||||||||||
|
Chief
Executive Officer
|
2007
|
300,000 | 330,000 | - | 115,750 | 52,809 | - | 16,898 | 815,457 | ||||||||||||||||||||||||
|
Eddie
Wilcox
|
2009
|
218,000 | 43,000 | - | - | - | - | 18,043 | 279,043 | ||||||||||||||||||||||||
|
Executive
Vice President and
|
2008
|
215,000 | 90,000 | - | 113,425 | - | - | 16,934 | 435,359 | ||||||||||||||||||||||||
|
Chief
Banking Officer
|
2007
|
200,000 | 100,000 | - | 110,550 | - | - | 13,056 | 423,606 | ||||||||||||||||||||||||
|
Kent
Smith (*)
|
2009
|
49,808 | 5,000 | - | - | - | - | 1,185 | 55,993 | ||||||||||||||||||||||||
|
Senior
Vice President and
|
2008
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
|
Chief
Financial Officer
|
2007
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
|
John
Shindler (**)
|
2009
|
149,707 | - | - | - | 30,641 | - | 11,286 | 191,634 | ||||||||||||||||||||||||
|
Executive
Vice President and
|
2008
|
190,000 | 50,000 | - | 62,025 | 52,457 | - | 13,628 | 368,110 | ||||||||||||||||||||||||
|
Chief
Financial Officer
|
2007
|
150,000 | 75,000 | - | 36,000 | 47,304 | - | 8,514 | 316,818 | ||||||||||||||||||||||||
|
(*)
Kent Smith was hired as Senior Vice President and Chief Financial Officer
on September 8, 2009.
|
|||||||||||||||||||||||||||||||||
|
(**)
John Shindler resigned from all positions of the Bank and Company on
August 26, 2009.
|
|||||||||||||||||||||||||||||||||
|
(1)
|
Discretionary
incentive cash awards earned in 2008 were paid in
2009. Discretionary incentive cash awards earned in 2009 were
paid in 2010.
|
|
(2)
|
There
were no stock awards granted in 2007, 2008, or
2009.
|
|
(3)
|
Option
awards include options that were awarded on January 3, 2007 at a grant
price that was $12.10 per shared and on January 2, 2008 at a grant price
that was $7.10 per share and on August 27, 2008 at a grant price that was
$5.01 per share. There were no options awards in
2009. Mr. Gardner was awarded options to purchase 25,000 in
2007, and a total of 60,000 in 2008, shares of common stock; Mr. Shindler
was awarded options to purchase 5,000 in 2007, and a total of 22,500 in
2008, shares of common stock; and Mr. Wilcox was awarded options to
purchase 10,000 in 2007, and a total of 42,500 in 2008, shares of common
stock.
|
|
(4)
|
The
value of options granted in 2007 and 2008 were determined based upon the
aggregate grant date fair value as computed pursuant to FASB ASC Topic
718, there were no option awards in
2009.
|
|
(5)
|
Non-equity
Incentive Plan Compensation included amounts as detailed in “Salary
Continuation Plan.”
|
|
(6)
|
All
Other Compensation is detailed in the section “All Other Compensation”
below.
|
Stock
Awards
The
Company made no awards of stock in 2009.
Option
Awards
The
Company made no awards of stock options in 2009.
Non-Equity
Incentive Compensation
The
Company’s non-equity incentive compensation consists solely of discretionary
cash bonuses paid to the Named Executive Officers as described in “Annual
Incentive Cash Awards” above. In the case of Mr. Gardner, the
non-equity incentive compensation cannot exceed 125% of his base salary per his
employment agreement, and in the case of Mr. Wilcox, the non-equity incentive
compensation cannot exceed 125% of his base salary per her employment
agreement.
All
Other Compensation
The
amount of All Other Compensation reported for each Named Executive Officer in
the Summary Compensation Table above consisted of the following:
|
ALL
OTHER COMPENSATION
|
|||||||||||||||||||||
|
Name
and Principal Position
|
Year
|
401(k)
Contributions
($)
|
Auto
($)
(1)
|
Group
Term Life
($)
|
Other
Insurance
($)(2)
|
Total
($)
|
|||||||||||||||
|
Steven
R. Gardner
|
2009
|
9,800 | 6,450 | 585 | 12,385 | 29,220 | |||||||||||||||
|
President
and Chief
|
|||||||||||||||||||||
|
Executive
Officer
|
|||||||||||||||||||||
|
Eddie
Wilcox
|
2009
|
8,600 | 4,800 | 198 | 4,445 | 18,043 | |||||||||||||||
|
Executive
Vice President and
|
|||||||||||||||||||||
|
Chief
Banking Officer
|
|||||||||||||||||||||
|
Kent
Smith (*)
|
2009
|
- | - | 61 | 1,124 | 1,185 | |||||||||||||||
|
Senior
Vice President and
|
|||||||||||||||||||||
|
Chief
Financial Officer
|
|||||||||||||||||||||
|
John
Shindler (**)
|
2009
|
7,988 | - | 253 | 3,045 | 11,286 | |||||||||||||||
|
Executive
Vice President and
|
|||||||||||||||||||||
|
Chief
Financial Officer
|
|||||||||||||||||||||
|
(*)
Kent Smith was hired as Senior Vice President and Chief Financial Officer
on September 8, 2009.
|
|||||||||||||||||||||
|
(**)
John Shindler resigned from all positions of the Bank and Company on
August 26, 2009.
|
|||||||||||||||||||||
_________________
|
1)
|
Mr.
Gardner has the use of a Company-leased vehicle and this amount represents
the personal use by Mr. Gardner. Mr. Wilcox received an annual
auto allowance of $4,800.
|
|
2)
|
Mr.
Gardner is covered under a separate $1.5 million life insurance policy,
for which the Bank pays $698.70 every six months. The Bank pays
for a Short Term Disability policy for Mr. Gardner which costs $1,728
annually.
|
Grants
of Plan-Based Awards in 2009
The
Company made no grants of plan-based awards in 2009.
Outstanding
Equity Awards
This
table shows the equity awards that have been previously awarded to each of the
Named Executive Officers and which remained outstanding as of December 31,
2009.
|
2009
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
|
|||||||||||||||||||||||||||||||||
|
Option
Awards
|
Stock
Awards
|
||||||||||||||||||||||||||||||||
|
Name
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of securities Underlying Unexercised
Unearned Options (#)
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested (#)
|
Market
Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested (#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested ($)
|
||||||||||||||||||||||||
|
Steven
R. Gardner
|
20,000 | - | - | $ | 18.13 |
7/7/2010
|
- | $ | - | - | - | ||||||||||||||||||||||
|
President
and
|
20,000 | - | - | $ | 3.44 |
1/2/2011
|
- | - | - | - | |||||||||||||||||||||||
|
Chief
Executive Officer
|
25,000 | - | - | $ | 5.85 |
12/19/2012
|
- | - | - | - | |||||||||||||||||||||||
| 25,000 | - | - | $ | 10.54 |
12/10/2013
|
- | - | - | - | ||||||||||||||||||||||||
| 75,000 | - | - | $ | 10.65 |
6/30/2014
|
- | - | - | - | ||||||||||||||||||||||||
| 16,667 | - | 8,333 | $ | 12.10 |
1/3/2017
|
- | - | - | - | ||||||||||||||||||||||||
| 8,333 | - | 16,667 | $ | 7.10 |
1/2/2018
|
- | - | - | - | ||||||||||||||||||||||||
| 11,667 | - | 23,333 | $ | 5.01 |
8/27/2018
|
- | - | - | - | ||||||||||||||||||||||||
|
Eddie
Wilcox
|
10,000 | - | - | $ | 7.47 |
8/4/2013
|
- | $ | - | - | - | ||||||||||||||||||||||
|
Executive
Vice President
|
5,000 | - | - | $ | 10.54 |
12/10/2013
|
- | - | - | - | |||||||||||||||||||||||
|
and
Chief Banking Officer
|
25,000 | - | - | $ | 10.65 |
6/30/2014
|
- | - | - | - | |||||||||||||||||||||||
| 6,667 | - | 3,333 | $ | 12.10 |
1/3/2017
|
- | - | - | - | ||||||||||||||||||||||||
| 8,333 | - | 16,667 | $ | 7.10 |
1/2/2018
|
- | - | - | - | ||||||||||||||||||||||||
| 5,833 | - | 11,667 | $ | 5.01 |
8/27/2018
|
- | - | - | - | ||||||||||||||||||||||||
Exercised
Options and Vested Restricted Stock in 2009
During
2009 a total of 8,900 shares of outstanding restricted stock
vested. Effective on September 8, 2009, all restricted stock had
become fully vested. The table below lists the number of shares and
realized value for the Named Executive Officers. There were no
options exercised during 2009.
|
2009
OPTION EXERCISES AND STOCK VESTED
|
||||||||||||||||
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||
|
Name
|
Number
of Shares Acquired on Exercise (#)
|
Value
Realized on Exercise ($)
|
Number
of Shares Acquired on Vesting (#)
|
Value
Realized on Vesting ($)
|
||||||||||||
|
Steven
R. Gardner
President and
Chief Executive
Officer
|
- | - | 2,500 | $ | 9,875 | |||||||||||
|
Eddie
Wilcox
Executive Vice President
and
Chief Banking
Officer
|
- | - | 833 | $ | 3,290 | |||||||||||
|
Kent
Smith (*)
Senior Vice President
and
Chief Financial
Officer
|
- | - | - | $ | - | |||||||||||
|
John
Shindler (**)
Executive Vice President
and
Chief Financial
Officer
|
- | - | 667 | $ | 2,635 | |||||||||||
|
(*)
Kent Smith was hired as Senior Vice President and Chief Financial Officer
on September 8, 2009.
|
||||||||||||||||
|
(**)
John Shindler resigned from all positions of the Bank and Company on
August 26, 2009.
|
||||||||||||||||
Pension
Benefits
The
Company has no pension benefits plans.
Nonqualified
Deferred Compensation
The Company
offers two nonqualified defined contribution plans: the Director’s Deferred
Compensation Plan and the Salary Continuation Plan. During 2009, none
of the Named Executive Officers withdrew any amounts from the plans listed in
the table below. Currently the Company only offers deferred
compensation to its Board of Directors under the Director’s Deferred
Compensation Plan as more fully described under “Director Compensation in 2009”
above in this Proxy Statement. The Company does not offer deferred
compensation to the Named Executive Officers at this time.
Salary
Continuation Plan
In 2006, the
Bank implemented a non-qualified supplemental retirement plan for our CEO and
then CFO John Shindler. Because the Salary Continuation Plan is an
unfunded plan, the Company is under no obligation to fund the Salary
Continuation Plan. The Salary Continuation Plan, as outlined in the
Salary Continuation Agreements between the Bank and each of our CEO and Mr.
Shindler, provides for the annual benefit of $150,000 for our CEO and $75,000
for Mr. Shindler, which is to be paid out in twelve (12) equal monthly
installments commencing on the first day of the month following normal
retirement at age 62. The annual benefit shall be distributed to the
executive for fifteen (15) years.
The
amount expensed in 2009 under the Salary Continuation Plan amounted to an
aggregate of $36,104, of which $62,062 was for Mr. Gardner,
partially offset by a net distribution amount of $25,958 for Mr. Shindler. As of
December 31, 2009, $326,501 was recorded in other liabilities on the
consolidated statements of condition for this Salary Continuation
Plan. The Salary Continuation Plan was accounted for in accordance
with SFAS No. 158 as of December 31, 2009.
|
2009
NONQUALIFIED SALARY CONTINUATION PLAN
|
||||||||||||||||||||
|
Name
|
Aggregate
Balance at Fiscal Year-End Prior to Last Fiscal Year-End
($)
|
Registrant
Contributions in Last Fiscal Year ($)
|
Aggregate
Earnings in Last Fiscal Year ($)
|
Aggregate
Withdrawls/
Distributions
($)
|
Aggregate
Balance at Last Fiscal Year-End ($)
|
|||||||||||||||
|
Steven
R. Gardner
President and
Chief Executive
Officer
|
153,379 | 62,062 | - | - | 215,441 | |||||||||||||||
|
John
Shindler (*)
Executive
Vice President and
Chief Financial
Officer
|
137,018 | 30,836 | - | 56,794 | 111,060 | |||||||||||||||
|
(*)
John Shindler resigned from all positions of the Bank and Company on
August 26, 2009.
|
||||||||||||||||||||
Long-Term
Care Insurance Plan
In
September 2006, the Bank implemented the Long-Term Care Insurance Plan for the
Named Executive Officers and non-employee directors of the Bank. The
non-employee directors may elect not to participate in the insurance plan. For
those who opt out, the amount of the insurance premium, up to $4,000 annually,
is recorded each month to their deferred compensation account with interest. The
expense for 2009 was $35,265 for the Long-Term Care Insurance Plan.
|
2009
LONG-TERM CARE INSURANCE
|
||||
|
Name
|
Premiums
Paid and/or Contributions to by Registrant ($)
|
|||
|
Kenneth
A. Boudreau
|
5,803 | |||
|
John
D. Goddard
|
4,000 | |||
|
David
L. Hardin
|
4,884 | |||
|
Jeff
C. Jones
|
4,000 | |||
|
Michael
L. McKennon
|
4,209 | |||
|
Ronald
G. Skipper
|
4,331 | |||
|
Total
Directors
|
27,227 | |||
|
Steven
R. Gardner
|
2,710 | |||
|
John
Shindler (*)
|
3,739 | |||
|
Eddie
Wilcox
|
1,589 | |||
|
Total
Named Executives
|
8,038 | |||
|
Total
Long-Term Care Insurance
|
35,265 | |||
|
(*)
John Shindler resigned from all positions of the Bank and Company on
August 26, 2009.
|
||||
Potential
Payments Made Upon Termination or a Change-in-Control
As
described in “Employment Arrangements” under “Compensation Discussion and
Analysis” above in this Proxy Statement, two of our Named Executive Officers,
the CEO and CBO, are party to an employment agreement with us, which provides
the executives with benefits in the event of certain terminations of
employment. In addition, Mr. Gardner is a party to a
Salary Continuation Agreement, which also provides him with benefits in the
event of certain terminations of employment.
Employment
Agreements
As
previously discussed in “Employment Arrangements” under “Compensation Discussion
and Analysis” above, on December 19, 2007, we entered into employment
agreements with two of our Named Executive Officers. The following
describes payments due to those Named Executive Officers under their respective
employment agreements following their termination of employment with
us.
Termination
for Cause; Resignation without Disability or Good Reason. If
an executive is terminated for cause or resigns without disability or good
reason, as such terms are defined in the employment agreements, he will receive
only his base salary accrued through the date of termination or
death. In this event, no special severance benefits are
payable.
Termination
as a Result of Disability; Death. If an executive is
terminated as a result of disability or death during the term of employment, the
executive will receive the lesser of (i) his base salary as in effect as of the
date of termination, multiplied by one year, or (ii) his base salary for the
duration of the term of his employment agreement.
Termination
other than for Cause, Disability or Death; Resignation by the Executive Due to
Our Material Breach or Following a Change of Control. If (i)
an executive is terminated by us other than for cause, disability or his death,
or (ii) an executive terminates the employment agreement due to (A) our material
breach of the employment agreement, or (B) without his express written consent,
(1) a material reduction by us of his functions, duties or responsibilities, (2)
a material reduction by us of his base salary, or (3) our requirement that he be
based at a location more than 50 miles from Costa Mesa, California, and the
termination by the executive occurs within two (2) years following the initial
occurrence of the breach or the good cause reason basis for termination, the
executive will be entitled to a lump sum cash payment equal to his base salary
as in effect immediately prior to the date of termination plus his incentive
bonus for the previous year with respect to Mr. Wilcox, and with respect to Mr.
Gardner, that same amount multiplied by three (3) years. Under the
terms of Mr. Gardner’s employment agreement only, if his employment with us is
terminated as described in the previous sentence, then Mr. Gardner is entitled
to participate, at no cost to him, in all group insurance, life insurance,
health and accident, disability and other employee benefit plans, programs and
arrangements in which he was entitled to participate immediately prior to the
date of termination (other than any of our stock option or other stock
compensation plans or bonus plans), for a period ending at the earlier of (i)
the third anniversary of the date of termination, and (ii) the date of his
full-time employment by another employer, provided that in the event Mr.
Gardner’s participation in any such plan, program or arrangement is barred, we
must arrange to provide him with benefits substantially similar to those he was
entitled to receive under such plans, programs and arrangements prior to the
date of termination.
In
receiving any of the foregoing payments, the Named Executive Officers are not
obligated to seek other employment or to mitigate in any way the amounts payable
to them as set forth above, and such amounts will not be reduced or terminated
whether or not an executive obtains other employment.
Each
employment agreement also provides that the severance payments and benefits will
be modified or reduced by the amount, if any, which is the minimum necessary to
result in no portion of the payments and benefits payable being subject to an
excise tax under the “golden parachute” provisions under Section 280G of
the Internal Revenue Code or subject to the excise tax imposed under Section
4999 of the Internal Revenue Code.
Restrictive
Covenants
The
employment agreements require each executive to refrain from soliciting
employees of the Company for a two-year period after termination of employment.
The agreements limit the executives’ ability to disclose or use any of the
Company’s confidential information, trade secrets or business
opportunities.
Salary
Continuation Agreements
The
following describes the Salary Continuation Agreement that we entered into with
our CEO on April 1, 2006, which is still in effect.
Early
Termination other than due to Change in Control, Death, Disability or for
Cause. In the event of an early termination of the executive’s
employment agreement, which termination results other than from a change in
control, disability or cause, as such terms are defined in the Salary
Continuation Agreements the executive will receive one hundred percent (100%) of
the accrual balance, as defined in the Salary Continuation Agreement, determined
as of the end of the month preceding the termination payable in twelve (12)
equal monthly installments for a period of fifteen (15)
years.
Disability
Benefit. In the event the executive’s employment is terminated
due to disability, the executive will receive one hundred percent (100%) of the
accrual balance determined as of the end of the month preceding the termination
payable in twelve (12) equal monthly installments for a period of fifteen (15)
years.
Change
in Control Benefit. Upon a change of control, followed within twelve (12)
months by a termination of the executive’s employment agreement, the executive
will receive a lump sum amount equal to the present value of the stream of one
hundred eighty (180) monthly payments of $12,500 each for Mr.
Gardner; provided that, in the event this amount is subject to
federal excise taxes under the “golden parachute” provisions under
Section 280G of the Internal Revenue Code, the payments will be reduced or
delayed to the extent it would not be an excess parachute
payment.
Death
Benefit. In the event the executive dies while employed
by us, his beneficiary will receive a lump sum amount equal to the present value
of the stream of one hundred eighty (180) monthly payments of $12,500 for Mr.
Gardner.
Summary
of Potential Termination Payments
The
following table reflects the value of termination payments and benefits that
each of our Named Executive Officers would receive under the employment
agreements and Salary Continuation Agreements, as applicable, which were in
place on December 31, 2009, if they had terminated employment on
December 31, 2009 under the circumstances shown. The table does not include
accrued salary and benefits, or certain amounts that the Named Executive
Officers would be entitled to receive under certain plans or arrangements that
do not discriminate in scope, terms or operation, in favor of our executive
officers and that are generally available to all salaried
employees.
|
Officer
|
Severance
($)
|
Insurance
Benefits
($)
|
Salary
Continuation
Plan
($)
|
Equity
Accelerated
Vesting
($)
|
Total
($)
|
|||||||||||||||||||||||||||
|
Mr. Gardner
|
||||||||||||||||||||||||||||||||
|
Termination
for Cause or
Resignation without Disability
or Good Reason
|
- | - | 215,636 | (5 | ) | - | 215,636 | |||||||||||||||||||||||||
|
Death
|
375,000 | (1 | ) | 1,500,000 | 1,488,700 | (4 | ) | - | (8 | ) | 3,363,700 | |||||||||||||||||||||
|
Disability
|
375,000 | (1 | ) | 36,000 | 215,636 | (5 | ) | - | (8 | ) | 626,636 | |||||||||||||||||||||
|
Retirement
|
- | - | 2,250,000 | (6 | ) | - | (8 | ) | 2,250,000 | |||||||||||||||||||||||
|
Change
of Control
|
- | - | - | - | - | |||||||||||||||||||||||||||
|
Termination
without Cause, or
Resignation
Due to Our Material Breach
|
1,327,500 | (2 | ) | 32,963 | (3 | ) | 215,636 | (5 | ) | - | 1,576,099 | |||||||||||||||||||||
|
Termination
in connection with a
Change
in Control
|
1,327,500 | (2 | ) | 32,963 | (3 | ) | 1,778,932 | (7 | ) | - | 3,139,395 | |||||||||||||||||||||
|
Mr. Wilcox
|
||||||||||||||||||||||||||||||||
|
Termination
for Cause or
Resignation without Disability
or Good Reason
|
- | - | - | - | - | |||||||||||||||||||||||||||
|
Death
|
215,000 | (1 | ) | - | - | - | (8 | ) | 215,000 | |||||||||||||||||||||||
|
Disability
|
215,000 | (1 | ) | - | - | - | (8 | ) | 215,000 | |||||||||||||||||||||||
|
Retirement
|
- | - | - | - | (8 | ) | - | |||||||||||||||||||||||||
|
Change
of Control
|
- | - | - | - | - | |||||||||||||||||||||||||||
|
Termination
without Cause, or
Resignation
Due to Our Material Breach
|
258,000 | (2 | ) | - | - | - | 258,000 | |||||||||||||||||||||||||
|
Termination
in connection with a
Change
in Control
|
258,000 | (2 | ) | - | - | - | 258,000 | |||||||||||||||||||||||||
______________________
|
(1)
|
With
respect to termination due to disability or death, represents an amount
equal to the lesser of (i) his base salary as in effect as of the date of
termination, multiplied by one year, or (ii) his base salary for the
duration of the term of his employment agreement.
|
|
(2)
|
For
Mr. Gardner, the amount represents a cash severance amount equal to the
executive’s base salary as in effect immediately prior to the date of
termination plus his incentive bonus for the previous year, multiplied by
three (3) years, to be paid in a lump sum. For Mr. Wilcox, the amount
represents a cash severance amount equal to the executive’s base salary as
in effect immediately prior to the date of termination, plus his incentive
bonus for the previous year, to be paid in a lump sum. The
foregoing severance amounts will be modified or reduced pursuant to
Sections 280G or 4999 of the Internal Revenue Code (as applicable) as more
fully described above under “Employment Agreements."
|
|
(3)
|
Represents
the incremental cost to the Company resulting in Mr. Gardner’s
participation, at no cost to him, in all group insurance, life insurance,
health and accident, disability and other employee benefit plans, programs
and arrangements in which he 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 us), for a period ending at the
earlier of (i) the third anniversary of the date of termination, and (ii)
the date of his full-time employment by another employer, provided that in
the event Mr. Gardner’s participation in any such plan, program or
arrangement is barred, we must arrange to provide him with benefits
substantially similar to those he was entitled to receive under such
plans, programs and arrangements prior to the date of
termination.
|
|
(4)
|
Represents
a lump sum amount equal to the present value of the stream of one hundred
eighty (180) monthly payments of $12,500 each.
|
|
(5)
|
Represents
an amount equal to one hundred percent (100%) of the accrual balance, as
defined in the Salary Continuation Agreement, determined as of the end of
the month preceding the termination payable in twelve (12) equal monthly
installments for a period of fifteen (15) years.
|
|
(6)
|
Represents
$150,000 payable annually in twelve (12) equal monthly installments for a
period of fifteen (15) years.
|
|
(7)
|
Upon
a change of control, followed within twelve (12) months by a termination
of an executive’s employment agreement, represents a lump sum amount equal
to the present value of the stream of one hundred eighty (180) monthly
payments of $12,500 each; provided that, in the event this amount is
subject to federal excise taxes under the “golden parachute” provisions
under Section 280G of the Internal Revenue Code, the payments will be
reduced or delayed to the extent it would not be an excess parachute
payment.
|
|
(8)
|
Reflects
the dollar value of unexercisable options that become exercisable upon the
occurrence of termination due to death, disability or retirement pursuant
to the terms of out 2004 Long-Term Incentive Plan. The dollar
value of the vested of stock options were determined by calculating the
closing price of the Company’s common stock on December 31, 2009 less the
option exercise price, and multiplying that by the number of shares for
each award at the end of year 2009.
|
Transactions
with Certain Related Persons
It is the
policy of the Company that all permissible transactions between the Company and
its executive officers, directors, holders of 10% or more of the shares of any
class of its common stock and affiliates thereof, contain terms no less
favorable to the Company than could have been obtained by it in arm's-length
negotiations with unaffiliated persons and are required to be approved by a
majority of independent outside directors of the Company not having any interest
in the transaction.
Indebtedness
of Management
No
Company executive officer or director was indebted to the Company or its
subsidiaries in an amount greater than $120,000 at any time during the fiscal
year that ended December 31, 2009, except Mr. McKennon who personally
guaranteed, along with his two partners, three loans that their partnership,
McKennon Wilson & Morgan, LLP, had outstanding with the Bank with an
aggregate amount of $120,000 or more. All such loans were made in the ordinary
course of business, did not involve more than normal risk of collectability or
present other unfavorable features, and were made on substantially the same
terms, including interest rates and collateral requirements, as those prevailing
at the same time for comparable loan transactions with unaffiliated
persons. As of December 31, 2009, all three of the loans to McKennon
Wilson & Morgan, LLP were paid off in full and had not been classified as a
non-accrual, past due, restructured or potential problem loans at any time
during the life of the loans.
Pursuant
to Section 16(a) of the Securities Exchange Act of 1934, as amended, and the
related rules and regulations, our directors and executive officers and any
beneficial owners of more than 10% of any registered class of our equity
securities, are required to file reports of their ownership, and any changes in
that ownership, with the SEC. Based solely on our review of copies of these
reports and on written representations from such reporting persons, we believe
that during 2009, except for Messrs. Smith, McKennon, Skipper, Jones, Hardin,
Goddard, Boudreau, Wilcox and Gardner, each of whom inadvertently filed a Form 4
one day late, all such persons filed all ownership reports and reported all
transactions on a timely basis.
The
Company’s independent auditors for its fiscal year ended December 31, 2009 were
VTD, independent public accountants. The Audit Committee of the Board
of Directors considered the qualifications and experience of VTD, and, in
consultation with the Board of Directors of the Company, appointed them as
independent auditors for the Company for the current fiscal year which ends
December 31, 2010. Although ratification of our independent auditors
by stockholders is not required by law, the Audit Committee and Board of
Directors desire to obtain the stockholders’ ratification of such
appointment. If ratification of VTD as our independent auditors is
not approved by stockholders, the matter will be referred to the Audit Committee
for further review.
Representatives
of VTD will be present at the Annual Meeting of Stockholders, will have the
opportunity to make a statement if they so desire, and will be available to
respond to appropriate questions submitted to the Secretary of the Company in
advance of the Annual Meeting.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” THE RATIFICATION OF THE APPOINTMENT OF VAVRINEK, TRINE, DAY & CO., LLP
AS THE COMPANY’S INDEPENDENT AUDITOR.
FEES
Aggregate
fees for professional services rendered to the Company by VTD for the years
ended December 31, 2009 and 2008 were as follows:
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2009
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2008
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|||||||
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Audit
fees
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$ | 99,000 | $ | 105,000 | ||||
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Audit-related
fees
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18,000 | 10,000 | ||||||
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Audit
and audit-related fees
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117,000 | 115,000 | ||||||
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Tax
compliance fees
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13,000 | 16,000 | ||||||
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All
other fees
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66,000 | 15,000 | ||||||
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Total
fees
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$ | 196,000 | $ | 146,000 | ||||
Audit
Fees
Audit
fees are related to the audit of the Company’s annual financial statements for
the years ended December 31, 2009 and 2008, and for the reviews of the financial
statements included in the Company’s quarterly reports on Form 10-Q and 10-K for
those years.
Audit-Related
Fees
Audit-related
fees for each of 2009 and 2008 included fees for audits of the Company’s 401(k)
plan.
Tax
Fees
Tax fees
in both 2009 and 2008 consisted of tax compliance services in preparation of the
Company’s tax returns filed with the Internal Revenue Service and various state
tax agencies.
All
Other Fees
All other
fees for 2009 and 2008 included fees paid related to internal control procedures
and internal compliance with management’s assessment of internal
controls. All other fees for 2009 also included fees related to the
Company’s S-1 filing which took place in November 2009.
Audit
Committee Pre-Approval Policies and Procedures
The Audit
Committee has adopted a policy that requires advance approval of all audit,
audit-related, tax services and other services performed by the independent
auditor. The policy provides for pre-approval by the Audit Committee
of specified audit and non-audit services. Unless the specific service has been
previously pre-approved with respect to that year, the Audit Committee must
approve the permitted service before the independent auditor is engaged to
perform it.
In 2009,
100% of Audit-Related Fees, Tax Fees and All Other Fees were pre-approved by the
Audit Committee.
The
report of the Audit Committee shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933, as amended (the “Securities Act”), or
the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
The Audit
Committee has reviewed and discussed the audited financial statements for fiscal
year 2009 with management and with the independent auditors. Specifically, the
Audit Committee has discussed with the independent auditors the matters required
to be discussed by SAS 61, as amended by SAS 114 (Codification of Statements on
Auditing Standards, AU Section 380), which includes, among other
things:
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·
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Methods
used to account for significant unusual
transactions;
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·
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The
effect of significant accounting policies in controversial or emerging
areas for which there is a lack of authoritative guidance or
consensus;
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·
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The
process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditor’s conclusions regarding
the reasonableness of those estimates;
and
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·
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Disagreements
with management over the application of accounting principles, the basis
for management’s accounting estimates and the disclosures in the financial
statements.
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The
Audit Committee has received the written disclosures and the letter from the
Company’s independent accountants, VTD, required by Independence Standards Board
Standard No. 1, Independence
Discussions with Audit Committee. Additionally, the Audit Committee has
discussed with VTD, the issue of its independence from the Company. Based on its
review of the audited financial statements and the various discussions noted
above, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2009. The Audit
Committee also recommended the appointment of VTD as the Company’s independent
accountants for the year ending December 31, 2010.
AUDIT
COMMITTEE
Michael L. McKennon, Chair
Kenneth
A. Boudreau
Jeff C.
Jones
ANNUAL
REPORT
A copy of
our Annual Report on Form 10-K for the year ended December 31, 2009, including
financial statements and schedules, accompanies this Proxy
Statement.
Additional
copies of the Annual Report on Form 10-K for the year ended
December
31, 2009 may
be obtained without charge by writing to Investor Relations, Pacific Premier
Bancorp, Inc., 1600 Sunflower Avenue, Costa Mesa, California 92626. This
Proxy Statement and our Annual Report on Form 10-K for the year ended December
31, 2009, are also available at our website, www.ppbi.com
under the Investor Relations section and from the SEC at its website,
www.sec.gov.
HOUSEHOLDING
The SEC
has adopted rules that permit companies and intermediaries, such as brokers, to
satisfy delivery requirements for Proxy Statements with respect to two or more
stockholders sharing the same address by delivering a single Proxy Statement
addressed to those stockholders. This process, which is commonly referred to as
“householding,” potentially provides extra convenience for stockholders and cost
savings for companies. We and some brokers household proxy materials, delivering
a single Proxy Statement to multiple stockholders sharing an address unless
contrary instructions have been received from the affected stockholders. Once
you have received notice from your broker or us that they or us will
be householding materials to your address, householding will continue
until you are notified otherwise or until you revoke your consent. If, at any
time, you no longer wish to participate in householding and would prefer to
receive a separate Proxy Statement, or if you are receiving multiple copies of
the Proxy Statement and wish to receive only one, please notify your broker or
nominee if your shares are held in a brokerage account or other account or our
agent, American Stock Transfer & Trust Co., if you hold registered shares.
You can notify American Stock Transfer & Trust Co. by sending a written
request to: American Stock Transfer & Trust Co., 59 Maiden Lane, New York,
NY 10038, or by calling American Stock Transfer & Trust Co., at (800)
937-5449.
Under the
rules of the SEC and our bylaws, stockholder proposals that meet certain
conditions may be included in our Proxy Statement and form of proxy for a
particular annual meeting if they are presented to us in accordance with the
following:
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Stockholder
proposals intended to be considered for inclusion in next year’s Proxy
Statement for the 2011 Annual Meeting of Stockholders must be received by
the Company by December 18, 2010, which is one hundred twenty (120) days
prior to the date that we released the Proxy Statement to our stockholders
for the 2010 Annual Meeting of
Stockholders.
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·
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Stockholders
that intend to present a proposal at our 2011 Annual Meeting of
Stockholders, but not to include the proposal in our Proxy Statement, must
give notice of the proposal to us on or before February 24, 2011, which is
ninety (90) days prior to the tentative date of the 2011 Annual Meeting of
Stockholders of May 25, 2011, to be considered timely under our
bylaws.
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·
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If
the date of the 2011 Annual Meeting is held on a date more than 30
calendar days from May 25, 2011, notice of a proposal must be received by
us a reasonable time before we begin to print and mail our proxy materials
to be considered for inclusion in our Proxy Statement and form of proxy
relating to that meeting.
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Pursuant
to Rule 14a-4(c)(1) promulgated under the Exchange the proxies designated
by us for the 2010 Annual Meeting will have discretionary authority to
vote with respect to any proposal received after February 23, 2010, which
is forty-five (45) days before the date on which the Company first sent
the proxy materials for the 2010 Annual Meeting of
Stockholders. In addition, our bylaws provide that any matter
to be presented at the 2010 Annual Meeting must be proper business to be
transacted at the Annual Meeting or a proper nomination to be decided on
at the Annual Meeting and must have been properly brought before such
meeting pursuant to our bylaws.
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Any
proposal by stockholders must include the stockholder’s name and address,
as they appear on the Company’s record of stockholders, a brief
description of the proposed business, the reason for conducting such
business at the Annual Meeting, the class and number of shares of the
Company’s capital stock that are beneficially owned by such stockholder
and any material interest of such stockholder in the proposed business. In
the case of nominations to the Board of Directors, certain information
regarding the nominee must be
provided.
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·
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Receipt
by us of any proposal from a qualified stockholder in a timely manner will
be included in the 2011 Proxy Statement if they comply with certain rules
and regulations promulgated by the SEC and the procedures set forth in our
bylaws.
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·
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Our
Secretary must receive stockholder proposals or nominations in writing at
the executive offices of the Company at 1600 Sunflower Avenue, Costa Mesa,
California 92626, Attention:
Secretary.
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No notice
that a stockholder intends to present a proposal at the Company’s 2010 Annual
Meeting of Stockholders was received by the Company on or before February 25,
2010, which is ninety (90) days before the 2010 Annual Meeting of
Stockholders.
The Board
of Directors knows of no business that will be presented for consideration at
the Annual Meeting other than as stated in the Notice of Annual Meeting of
Stockholders. If, however, other matters are properly brought before the Annual
Meeting, it is the intention of the persons named in the accompanying proxy to
vote the shares represented thereby on such matters in accordance with their
best judgment.
Whether
or not you intend to be present at the Annual Meeting, you are urged to promptly
return your proxy card or vote via telephone or the Internet. If you
are present at the Annual Meeting and wish to vote your shares in person, your
original proxy may be revoked by voting at the Annual Meeting. However, if you
are a stockholder whose shares are not registered in your own name, you will
need appropriate documentation from your record-holder to vote personally at the
Annual Meeting.
By Order
of the Board of Directors,
Kent
Smith
Corporate
Secretary
Senior
Vice President
Costa
Mesa, California
April 12,
2010
ANNUAL MEETING OF SHAREHOLDERS OF
PACIFIC
PREMIER BANCORP, INC.
May
26, 2010
PROXY VOTING
INSTRUCTIONS
MAIL
- If you
received printed materials, mark, sign and date your proxy card and return it in
the enclosed postage-paid envelope. If you did not receive a printed
proxy card and wish to vote by mail, you may do so by requesting a paper copy of
the proxy materials (as described in the Notice and Proxy Statement), which will
include a proxy card.
- OR -
TELEPHONE
- Call toll-free 1-800-PROXIES
(1-800-776-9437) in the United States or
1-718-921-8500
from foreign countries and follow the instructions.
Have your proxy card available when you call.
You will be prompted to enter your control number, located on this proxy card,
and then follow the instructions given.
- OR -
INTERNET
- Access “www.voteproxy.com”
and follow
the on-screen instructions. Have your proxy card
available when you access the web page.
- OR -
IN
PERSON - You may vote your shares in person by
attending the Annual Meeting. If you hold your shares in a brokerage account or
in another nomineed form, to vote in person must obtain a proxy from your broker
or the nominee.
| You may enter your voting instructions at 1-800-PROXIES in the United States or 1-718-921-8500 from foreign countries or www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off or meeting date. |
Please
detach along perforated line and mail in the envelope provided IF you are not
voting via telephone or the Internet.
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THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED
PROPOSALS. PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
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x |
1. The
election as directors of the nominees listed (except as marked to the
contrary
below).
Nominees
o
Steven R. Gardner
o Jeff
C. Jones
o
FOR ALL NOMINEES
o
WITHHOLD AUTHORITY FOR
ALL NOMINEES
o FOR
ALL EXCEPT
(See
instructions below)
INSTRUCTIONS:
To withhold authority to vote for any
individual nominee(s), mark “FOR
ALL EXCEPT” and write the nominee's name in the space
provided below:
(Write that nominee's name in the space provided
below)
2. The
ratification of the appointment of Vavrinek, Trine, Day & Co., LLP
as independent auditors of Pacific Premier Bancorp, Inc. for
the fiscal year ending December 31, 2010.
| FOR | AGAINST | ABSTAIN |
| o | o | o |
This
proxy is revocable and will be voted as directed, but if no instructions
are
specified, this proxy will be voted FOR each of the proposals listed. If
any
other business is presented at the Annual Meeting of Shareholders, including
whether or not to adjourn the meeting, this proxy will be voted by those
named in this proxy in their best judgment. At the present time, the
Board
of Directors knows of no other business to be presented at the Annual
Meeting
of Shareholders.
The
undersigned acknowledges receipt from the Company prior to the execution
of this
proxy of a Notice of Annual Meeting of Shareholders and of a Proxy Statement
dated April 12, 2010.
THIS
PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" THE PROPOSALS. THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Sharedholders to be Held on May 26, 2010:
The
Notice, Proxy Statement, and Annual Report are available at
www.ProxyVote.com.
FOLD AND
DETACH HERE
REVOCABLE
PROXY
PACIFIC
PREMIER BANCORP, INC.
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
May 26,
2010
9:00
a.m., Pacific Time
As
an alternative to completing this form, you may enter your vote instruction by
telephone at 1-800-PROXIES,or via the Internet at WWW.VOTEPROXY.COM
and follow the simple instructions. Use the Company Number and Account Number
shown on your proxy card.
The
undersigned hereby appoints the official proxy committee of the Board of
Directors of Pacific Premier
Bancorp, Inc. (the “Company”), each with full power of substitution, to act as
attorneys and proxies
for the undersigned, and to vote all shares of common stock of the Company which
the undersigned
is entitled to vote only at the Annual Meeting of Stockholders to be held on May
26, 2010 at 9:00
a.m., Pacific Time, at the corporate headquarters of Pacific Premier Bank
located at 1600 Sunflower Avenue, Costa Mesa, California 92626, and at any and
all adjournments thereof, as indicated on the back of this proxy.