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Exhibit 10.3

 
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) dated this 7th  day of
April 2014, by and between Michael Karr (the “Executive”) and Pacific Premier
Bank (the “Bank”).
 
WITNESSETH
 
WHEREAS, the Bank desires to assure itself of the services of the Executive for
the period provided in this Agreement, and the Executive is willing to serve in
the employ of the Bank for such period, all in accordance with the terms and
conditions contained in this Agreement.
 
WHEREAS, Pacific Premier Bancorp, Inc., a Delaware corporation (the “Company”),
is the bank holding company for the Bank.
 
NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the
Executive and the Bank do agree to the terms of employment as follows:
 
1.           Definitions.  The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
 
(a)           Affiliate.  Affiliate of any person or entity means any
stockholder or person or entity controlling, controlled by or under common
control with such person or entity, or any director, officer or key executive of
such entity or any of their respective relatives. For purposes of this
definition, “control,” when used with respect to any person or entity, means the
power to direct the management and policies of such person or entity, directly
or indirectly, whether through ownership of voting securities, by contracting or
otherwise; and the terms “controlling” and “controlled” have meanings that
correspond to the foregoing.
 
(b)           Base Salary.  “Base Salary” shall have the meaning set forth in
Section 3 (a) hereof.
 
(c)           Cause. Termination of the Executive's employment for “Cause” shall
mean termination because of personal dishonesty or incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or other misdemeanor offenses), final
cease-and-desist order, or material breach of any provision of this Agreement.
 
(d)           Change in Control.  “Change in Control” shall mean the occurrence
of any of the following events subsequent to the date of this Agreement: (i) the
acquisition of control of the Company or the Bank as defined in the rules and
regulations of the applicable banking regulators on the date hereof (provided
that in applying the definition of Change in Control as set forth under the
rules and regulations of the applicable banking regulators, the Board of
Directors of the Bank shall substitute its judgment for that of the applicable
banking regulators); (ii) an event that would be required to be reported in
response to Item 5.01(a) of the Current Report on Form 8-K pursuant to Sections
13 or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”),
or any successor thereto, whether or not any class of securities of the Company
is registered under the Exchange Act; (iii) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act), after the date hereof, other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any Affiliate of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; (iv) the
sale or other disposition of all or substantially all of the assets of the
Company or the transfer by the Company of greater than 25% of the voting
securities of the Company; or (v) during any period of three consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by stockholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
 
(e)           Code.  “Code” shall mean the Internal Revenue Code of 1986, as
amended.
 
(f)           Confidential and Proprietary Information. “Confidential and
Proprietary Information” shall mean any and all (i) confidential or proprietary
information or material not in the public domain about or relating to the
business, operations, assets or financial condition of the Company, the Bank or
any Affiliate of the Company or the Bank or any trade secrets of any of the
foregoing; and (ii) information, documentation or material not in the public
domain by virtue of any action by or on the part of the Executive, the knowledge
of which gives or may give the Company, the Bank or any Affiliate of the Company
or the Bank an advantage over any person not possessing such information. For
purposes hereof, the term Confidential and Proprietary Information shall not
include any information or material (i) that is known to the general public
other than due to a breach of this Agreement by the Executive or (ii) was
disclosed to the Executive by a person who the Executive did not reasonably
believe was bound to a confidentiality or similar agreement with the Bank.
 
(g)           Date of Termination. “Date of Termination” shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
 
(h)           Disability. Termination by the Bank of the Executive's employment
based on “Disability” shall mean termination because of any physical or mental
impairment which qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Bank or, if no such plan
applies, which would qualify the Executive for disability benefits under the
Federal Social Security System.
 
(i)           Good Reason. Termination by the Executive of the Executive's
employment for “Good Reason” shall mean termination by the Executive following a
Change in Control based on:
 
 
(i)
Without the Executive's express written consent, a material adverse change made
by the Bank which would reduce the Executive's functions, duties or
responsibilities as Executive Vice President - Chief Credit Officer.

 
 
(ii)
Without the Executive's express written consent, a material reduction by the
Bank in the Executive's Base Salary as the same may be increased from time to
time; or

 
 
(iii)
Without the Executive's express written consent, the Bank requires the Executive
to be based at a location more than 50 miles from Irvine, California (which
requirement shall be deemed to be a material change in the geographic location
at which the Executive must perform services for the Bank), except for required
travel on business of the Bank to an extent substantially consistent with the
Executive's present business travel obligations.

 
(j)           IRS.  IRS shall mean the Internal Revenue Service.
 
(k)           Notice of Termination. Any purported termination of the
Executive's employment by the Bank for any reason including, without limitation,
for Cause or Disability, or by the Executive for any reason including, without
limitation, for Good Reason, shall be communicated by written “Notice of
Termination” to the other party or parties hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be not less than
thirty (30) nor more than ninety (90) days after such Notice of Termination is
given, except in the case of the Bank’s termination of Executive's employment
for Cause, which shall be effective immediately; and (iv) is given in the manner
specified in Section 14 hereof.
 
(l)           Separation from Service.  Whether a Separation from Service takes
place is determined based on the facts and circumstances surrounding the
termination of the Executive’s employment and whether the Bank and the Executive
intended for the Executive to provide significant services for the Bank
following such termination.  A termination of employment will not be considered
a Separation from Service if:
 
 
(i)
the Executive continues to provide services as an employee of the Bank at an
annual rate that is twenty percent or more of the services rendered, on average,
during the immediately preceding three full calendar years of employment and the
annual remuneration for such services is twenty percent (20%) or more of the
average annual remuneration earned during the final three full calendar years of
employment, or

 
 
(ii)
the Executive continues to provide services to the Bank in a capacity other than
as an employee of the Bank at an annual rate that is twenty percent or more of
the services rendered, on average, during the immediately preceding three full
calendar years of employment and the average annual remuneration earned during
the final three full calendar years of employment.

 
(m)           Specified Employee.  Pursuant to Section 409A of the Code, a
Specified Employee shall mean a key employee (as defined in Section 416(i) of
the Code without regard to paragraph 5 thereof) of the Bank if any stock of the
Company is publicly traded on an established securities market or otherwise.
 
2.           Term of Agreement.
 
(a)           The Bank hereby employs the Executive as Executive Vice President,
Chief Credit Officer of the Bank, and the Executive hereby accepts said
employment and agrees to render such services to the Bank, on the terms and
conditions set forth in this Agreement.  The term of employment under this
Agreement shall be for a term of three years, commencing on the date of this
Agreement, unless such term is extended as provided in this Section 2.  On the
annual anniversary of the date first above written and each annual anniversary
thereafter, the term of this Agreement shall automatically be extended for an
additional one-year without the need for notification to be given by the Board
of Directors of the Bank of their approval of such extension.  If either the
Executive on the one hand, or the Bank on the other hand, gives written notice
to the other party or parties hereto of such party’s or parties’ election not to
extend the term, with such notice to be given not less than ninety (90) days
prior to any such anniversary date, then this Agreement shall terminate at the
conclusion of its remaining term. References herein to the “Term of Employment”
shall refer both to the initial term and successive terms.
 
(b)           During the Term of Employment, the Executive shall perform such
executive services for the Bank as may be consistent with Executive’s titles and
such executive services which are from time to time assigned to Executive by the
Bank’s Board of Directors.  The Executive shall devote Executive’s entire
business time, attention, skill and energy exclusively to the business of the
Bank.  The Executive shall not engage or prepare to engage in any other business
activity, whether or not such business activity is pursued for gain, profit or
other economic or financial advantage; provided, however, that the Executive may
engage in appropriate civic, charitable or religious activities and devote a
reasonable amount of time to private investments or boards or other activities
provided that such activities do not interfere or conflict with the Executive’s
responsibilities and are not or not likely to be contrary to the Bank’s
interests.
 
3.           Compensation and Benefits.
 
(a)           The Bank shall compensate and pay the Executive for services
during the term of this Agreement at a base salary of $225,000 per year (“Base
Salary”), which may be increased from time to time in such amounts as may be
determined by the Board of Directors of the Bank.  The Executive’s Base Salary
shall be paid in periodic installments (not less than monthly) in accordance
with the general payroll practices of the Bank, as in effect from time-to-time.
 
(b)           During the term of this Agreement, the Executive shall be entitled
to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the Bank, to
the extent commensurate with the Executive’s then duties and responsibilities as
fixed by the Board of Directors of the Bank.
 
(c)           During the term of this Agreement, the Executive shall be entitled
to receive all benefits and conditions of employment generally available to
other executives of the Bank, including, without limitation, sick leave,
disability, accident, life, hospitalization, medical and dental insurance, paid
holidays, and participation in any pension, profit sharing or other retirement
plan pursuant to the terms of said plans
 
(d)           During the term of this Agreement, the Executive shall accrue paid
vacation and paid sick leave in accordance with the Bank’s Employee Handbook, as
amended from time-to-time.
 
(e)           Executive shall be eligible for a discretionary performance bonus
not to exceed 100% of Executive’s Base Salary, based on individual performance
and overall performance of the Bank.  The criteria for determining eligibility
and the amount of any bonus shall be in the discretion of the Compensation
Committee of the Bank’s Board of Directors.  Such bonus, if any, shall be paid
between January 1 and March 15 following the year during which performance is
measured.
 
4.           Expenses. The Bank shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of or in connection with the business of the Bank, including, but
not by way of limitation, traveling expenses, subject to such reasonable
documentation and other limitations as may be established by the Board of
Directors of the Bank. If such expenses are paid in the first instance by the
Executive, the Bank shall reimburse the Executive therefore.
 
5.           Termination.
 
(a)           The Bank shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including, without limitation, termination for Cause or Disability, and the
Executive shall have the right, upon prior Notice of Termination, to terminate
Executive’s employment hereunder for any reason.
 
(b)           In the event that (i) the Executive’s employment is terminated by
the Bank for Cause or (ii) the Executive terminates his employment hereunder
other than for Disability or Good Reason, the Executive shall have no right
pursuant to this Agreement to compensation or other benefits for any period
after the applicable Date of Termination other than for Base Salary accrued
through the Date of Termination and benefits in accordance with the Bank’s
policy.
 
(c)           In the event that the Executive's employment is terminated as a
result of Disability or death during the term of this Agreement, the Executive
or the Executive’s estate (as the case may be) shall receive the Executive’s
existing Base Salary as in effect as of the Date of Termination or death,
multiplied by one (1) year.  Payment pursuant to this Subsection (c) shall be
paid to the Executive or Executive’s estate (as the case may be) within sixty
(60) days after the Date of Termination or death.
 
(d)           In the event that the Executive's employment is terminated (i) by
the Bank for other than Cause, Disability, or the Executive's death and such
termination occurs within two (2) years following a Change of Control or (ii) by
the Executive (a) due to a material breach of this Agreement by the Bank, or (b)
for Good Reason, then the Bank shall, subject to Section 6 hereof, if
applicable, provide the benefits described in subparagraphs (A) and (C) of this
Section 5(d).  Such a termination shall be deemed an involuntary termination if
the breach or Good Reason basis for termination has not been cured within thirty
(30) business days after a written notice of non-compliance has been given by
the Executive to the Bank, such written notice has been given no more than
ninety (90) days after the initial occurrence of the breach or the Good Reason
basis for termination, and the termination occurs within two (2) years following
the initial occurrence of the breach or the Good Reason basis for termination.
 
In the event that the Executive's employment is terminated by the Bank for other
than Cause, Disability, or the Executive's death and such termination does not
occur in conjunction with a Change in Control or within two (2) years after a
Change of Control then the Bank shall, subject to Section 6 hereof, if
applicable, provide the benefits described in subparagraphs (B) and (C) of this
Section 5(d).  Such a termination shall be deemed an involuntary termination.
 
(A)           Pay to the Executive a cash severance amount equal to the sum of
the Base Salary plus Executive’s incentive bonus for the previous year as in
effect immediately prior to the Date of Termination, less taxes and other
required withholding (“Severance Pay”).  Such Severance Pay shall be paid in a
lump sum on the first business day of the month following the Date of
Termination.  Nothwithstanding the foregoing, no such Severance Pay will be paid
to Executive unless the Executive has undergone a Separation from Service.
 
(B)           Pay to the Executive a cash severance amount equal to the sum of
the Base Salary plus Executive’s incentive bonus for the previous year as in
effect immediately prior to the Date of Termination, less taxes and other
required withholding (“Severance Pay”).  Such Severance Pay shall be paid in a
lump sum on the first business day of the month following the Date of
Termination.  Notwithstanding the foregoing, no such Severance Pay will be paid
to Executive unless the Executive has undergone a Separation from Service.
 
(C)           Maintain and provide for a period ending at the earlier of (i) the
third anniversary of the Date of Termination or (ii) the date of the Executive's
full-time employment by another employer, at no cost to the Executive, the
Executive's continued participation in all group insurance, life insurance,
health and accident, disability and other employee benefit plans, programs and
arrangements in which the Executive was entitled to participate immediately
prior to the Date of Termination (other than any stock option or other stock
compensation plans or bonus plans of the Company or the Bank), provided that in
the event that Executive's participation in any such plan, program or
arrangement is barred, the Bank shall arrange to provide the Executive with
benefits substantially similar to those the Executive was entitled to receive
under such plans, programs and arrangements prior to the Date of Termination.
 
(e)           In receiving any payments pursuant to Sections 5(c) and 5(d), the
Executive shall not be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive hereunder,
and such amounts shall not be reduced or terminated whether or not the Executive
obtains other employment.
 
(f)           Restrictions on Timing of Distribution.  Notwithstanding any
provision of this Agreement to the contrary, if Executive is a Specified
Employee on the Date of Termination and, as a result thereof, Section 409A of
the Code and the rules promulgated thereunder would so require, payments
pursuant to Subsection (d) of this Section 5 may not commence earlier than six
(6) months after the Date of Termination.  Therefore, in the event this
Subsection (f) is applicable, the payment required pursuant to Subsection (d) of
this Section 5 shall be paid in a lump sum on the first day of the seventh month
following the Date of Termination.
 
(g)           In addition to the provisions of Sections 5(b) through 5(e),
Executive or Executive’s estate, as applicable, shall be entitled to Base Salary
and vacation accrued through the Date of Termination or death, payable in
accordance with California law, and reimbursement of all expenses pursuant to
the provisions of Section 4.
 
6.           Limitation of Benefits under Certain Circumstances. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Bank, would constitute a “parachute payment” under Section 280G of the Code, the
payments and benefits payable by the Bank pursuant to Section 5 hereof shall be
reduced, in the manner determined by the Executive, by the amount, if any, which
is the minimum necessary to result in no portion of the payments and benefits
payable by the Bank under Section 5 being non-deductible to the Bank pursuant to
Section 280G of the Code and subject to the excise tax imposed under Section
4999 of the Code. The determination of any reduction in the payments and
benefits to be made pursuant to Section 5 shall be based upon the opinion of
independent counsel selected by the Bank’s independent public accountants and
paid by the Bank. Such counsel shall be reasonably acceptable to the Bank and
the Executive; shall promptly prepare the foregoing opinion, but in no event
later than thirty (30) days from the Date of Termination; and may use such
actuaries as such counsel deems necessary or advisable for the purpose. Nothing
contained herein shall result in a reduction of any payments or benefits to
which the Executive may be entitled upon termination of employment under any
circumstances other than as specified in this Section 6, or a reduction in the
payments and benefits specified in Section 5 below zero.
 
7.           Restrictions Respecting Confidential Information, Non-Competition
and Non-Solicitation
 
(a)           The Executive acknowledges and agrees that by virtue of the
Executive's position and involvement with the business and affairs of the Bank,
the Executive will develop substantial expertise and knowledge with respect to
all aspects of the Company’s and the Bank’s business, affairs and operations and
will have access to all significant aspects of the business and operations of
the Company and the Bank and to Confidential and Proprietary Information.
 
(b)           The Executive hereby covenants and agrees that, during the term of
employment as provided in Section 2(a) and thereafter, unless otherwise
authorized by the Bank in writing, the Executive shall not, directly or
indirectly, under any circumstance: (i) disclose to any other person or entity
(other than in the regular course of business of the Bank) any Confidential and
Proprietary Information, other than pursuant to applicable law, regulation or
subpoena or with the prior written consent of the Bank; (ii) act or fail to act
so as to impair the confidential or proprietary nature of any Confidential and
Proprietary Information; (iii) use any Confidential and Proprietary Information
other than for the sole and exclusive benefit of the Bank; or (iv) offer or
agree to, or cause or assist in the inception or continuation of, any such
disclosure, impairment or use of any Confidential and Proprietary Information.
Following the term of employment, the Executive shall either return all
documents, records and other items containing any Confidential and Proprietary
Information to the Bank (regardless of the medium in which maintained or stored)
or provide certification to the Bank as to their destruction.
 
(c)           While the Executive is employed by the Bank and for two (2)
years after the Date of Termination, the Executive shall not hire or solicit or
attempt to solicit for hire a Covered Employee, encourage another person to hire
a Covered Employee, or otherwise seek to adversely influence or alter such
Covered Employee’s relationship with the Bank or any of the Bank’s Affiliates
(except during the Executive’s employment with the Bank, when acting on the good
faith belief that ending the Covered Employee’s employment would be in the
Bank’s best interest). A “Covered Employee” shall be any person who has been
employed by the Bank or any of the Bank’s Affiliates in which Executive was
directly involved or had access to Confidential and Proprietary Information at
any time within the twelve (12) months prior to the date of any action
prohibited by the preceding sentence occurs.
 
(d)           The Executive acknowledges that as a result of the Executive’s
employment with the Bank, the Executive has held and will continue to hold a
position of the highest trust in which the Executive comes to know the Bank’s
employees, its customers and its Confidential and Proprietary Information.  The
Executive agrees that the provisions of Section 7 (c) are necessary to protect
the Bank’s legitimate business interests.  The Executive warrants that these
provisions will not unreasonably interfere with the Executive’s ability to earn
a living or to pursue the Executive’s occupation after the Executive’s
employment ends for any reason.  Executive agrees to promptly notify the Bank of
the name and address of any Person or entity to which Executive provides
services during the Covered Period and authorizes the Bank, after consultation
with Executive as to the form and content of any such notice, to notify that
entity of Executive’s obligations under this Agreement.
 
(e)           The parties agree that nothing in this Agreement shall be
construed to limit or negate the common law of torts, confidentiality, trade
secrets, fiduciary duty and obligations where such laws provide the Bank with
any broader, further or other remedy or protection than those provided herein.
 
(f)           Because the breach of any of the provisions of this Section 7 will
result in immediate and irreparable injury to the Bank for which the Bank will
not have an adequate remedy at law, the Bank shall be entitled, in addition to
all other rights and remedies, to seek a degree of specific performance of the
restrictive covenants contained in this Section 7 and to a temporary and
permanent injunction enjoining such breach, without posting bond or furnishing
similar security.
 
8.           Cooperation in Legal Proceedings.  After the Date of Termination,
the Executive agrees to reasonably cooperate with the Bank and any of its
Affiliates in the defense or prosecution of any claims or actions that may be
brought against or on behalf of the Bank or its Affiliates, which relate to
events or occurrences that transpired while the Executive was employed by the
Bank.  The Executive’s reasonable cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Bank or any of its Affiliates.  The Executive also agrees to reasonably
cooperate with the Bank and any of its Affiliates in connection with any
investigation or review of any federal, state, or local regulatory authority as
any such investigation or review relates to any acts or omissions that
transpired while the Executive was employed by the Bank.  The Executive
understands that in any legal action, investigation, or review covered by this
Section 8 that the Bank expects the Executive to provide only accurate and
truthful information or testimony.  The Bank will pay expenses necessarily and
reasonably incurred by the Executive in complying with this Section.
 
9.           Work Product.  The Executive acknowledges that all inventions
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Bank or its Affiliates, research and development or existing or
future products or services and which are conceived, developed or made by the
Executive while employed by the Bank and its Affiliates (“Work Product”) belong
to the Bank or such Affiliates (as applicable).  The Executive shall promptly
disclose such Work Product to the Board of Directors of the Bank and perform all
actions reasonably requested by the Board of Directors of the Bank (whether
during or after the Executive’s employment with the Bank) to establish and
confirm such ownership (including, without limitation, executing assignments,
consents, powers of attorney and other instruments).
 
10.           Return of Property.  On and after the Date of Termination for any
reason, or at any time during the Executive’s employment, on the request or
direction of the Bank, the Executive will immediately deliver to the Bank any or
all equipment, property, material, Confidential and Proprietary Information,
Work Product or copies thereof which are owned by the Bank, the Company or their
respective Affiliates and are in the Executive’s possession or control.  This
includes documents or other information prepared by the Executive, on the
Executive’s behalf or provided to the Executive in connection with the
Executive’s duties while employed by the Bank, regardless of the form in which
such document or information are maintained or stored, including computer,
typed, written, electronic, audio, video, micro-fiche, imaged, drawn or any
other means of recording or storing documents or other information.  The
Executive hereby warrants that the Executive will not retain in any form such
documents, Confidential and Proprietary Information, Work Product or other
information or copies thereof.  The Executive may retain a copy of this
Agreement and any other document or information describing any rights the
Executive may have after the termination of the Executive’s employment.
 
11.           Nondisparagement.  Executive agrees that during the course of this
Agreement and after the Termination of this Agreement Executive will not make
any voluntary statements, written or oral, or cause or encourage others to make
any such statements that defame, disparage or in any way criticize the personal
and/or business reputations, practices or conduct of the Bank or any of the
other Released Parties.
 
12.           Dispute Resolution.  The Executive and the Bank agree that
arbitration in accordance with the Federal Arbitration Act and the Dispute
Resolution Procedures set forth in Attachment A to this Agreement shall be the
exclusive means for final resolution of any dispute between the parties arising
out of or relating to the Executive’s employment or this Agreement, except (1)
for workers’ compensation and unemployment claims; (2) when injunctive relief is
necessary to preserve the status quo or to prevent irreparable injury; and (3)
any claims arising from or relating to Section 7 of this Agreement.  Injunctive
relief may be sought only from any court of competent jurisdiction located in
Orange County, California and the Executive consents to venue and personal
jurisdiction in any such court. The parties hereto agree that the arbitration
provided for hereunder shall be conducted by the Judicial Arbitration and
Mediation Services, Inc. (“JAMS”), presently located in Orange County,
California.  In the event JAMS is unable or unwilling to conduct the arbitration
provided for under the terms of this Section 12, or has discontinued its
business, the parties agree that the American Arbitration Association, presently
located in Orange County, California, shall conduct the binding arbitration
referred to in this Section 12.  If any part of this Agreement is held by an
arbitrator or court of competent jurisdiction to be void or unenforceable, the
remaining provisions shall continue with full force and effect.  If this
Agreement shall be determined by any court or an arbitrator to be unenforceable
because of its duration, or the scope of activities, information or geographic
area covered, the parties agree that this Agreement shall be interpreted to
extend to the maximum period of time or range of activities, information or
geographic area that would be enforceable.
 
13.           Withholding.  All payments required to be made by the Bank
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or regulation.
 
14.           Assignability.  The Bank may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation or other
entity with or into which the Bank may hereafter merge or consolidate or to
which the Bank may transfer all or substantially all of its respective assets,
if in any such case said corporation or other entity shall by operation of law
or expressly in writing assume all obligations of the Bank hereunder as fully as
if it had been originally made a party hereto, but may not otherwise assign this
Agreement or its rights and obligations hereunder. The Executive may not assign
or transfer this Agreement or any rights or obligations hereunder.
 
15.           Notice.  For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the signature page hereto. Any notice,
request, demand or other communication delivered or sent in the manner aforesaid
shall be deemed given or made (as the case may be) upon the earliest of (a) the
date it is actually received, (b) the business day after the day on which it is
delivered by hand, (c) the business day after the day on which it is properly
delivered to Federal Express (or a comparable overnight delivery service), or
(d) the third business day after the day on which it is deposited in the United
States mail. The Bank or the Executive may change their respective addresses by
notifying the other party of the new addresses in any manner permitted by this
Section 15.
 
16.           Amendment; Waiver.  No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer or officers as
may be specifically designated by the Board of Directors of the Bank to sign on
its behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
 
17.           Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of
California, without regard to any conflicts of laws provisions thereof.
 
18.           Nature of Obligations. Nothing contained herein shall create or
require the Bank to create a trust of any kind to fund any benefits which may be
payable hereunder, and to the extent that the Executive acquires a right to
receive benefits from the Bank hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Bank.
 
19.           Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
 
20.           Validity. The invalidity, illegality or unenforceability of any
provision of this Agreement, in whole or in part, shall not affect the validity,
legality or enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.
 
21.           Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
 
22.           Regulatory Prohibition and Required Provisions.
 
(a)           Notwithstanding any other provision of this Agreement to the
contrary, any payments made to the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. §1828(k)), and
the regulations promulgated thereunder, including 12 C.F.R. Part 359.
Furthermore, following a termination for Cause, the Executive will not, directly
or indirectly, participate in the affairs or the operations of the Bank.
 
(b)           If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank’s affairs by a notice
served under Section 8(e)(3) or 8(g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) or
(g)(1), the Bank’s obligations under this contract shall be suspended as of the
date of service, unless stayed by appropriate proceedings.  If the charges in
the notice are dismissed, the Bank may in its discretion (i) pay the Executive
all or part of the compensation withheld while their contract obligations were
suspended; and (ii) reinstate (in whole or in part) any of the obligations which
were suspended.
 
(c)           If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank’s affairs by an order issued under
Section 8(e)(4) or 8(g)(l) of the FDIA, 12 U.S.C. § 1818(e)(4) or (g)(l), all
obligations of the Bank under this contract shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not be
affected.
 
(d)           If the Bank is in default as defined in Section 3(x)(l) of the
FDIA, 12 U.S.C. § 1813(x)(l) all obligations of the Bank under this contract
shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.
 
(e)           All obligations of the Bank under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution, by the Federal Deposit
Insurance Corporation (“FDIC”), at the time the FDIC enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) of the FDIA, 12 U.S.C. § 1823(c).
 
23.           Entire Agreement. This Agreement embodies the entire agreement
between the Bank and the Executive with respect to the matters agreed to herein.
All prior agreements between the Bank and the Executive with respect to the
matters agreed to herein, except the SERP, are hereby superseded and shall have
no force or effect.
 
[Signature page follows]
 

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.
 
 
 
PACIFIC PREMIER BANK
 
 
By:   /s/ Steven R. Gardner    
      Name: Steven R. Gardner
Title: President and Chief Executive Officer
Address:
17901 Von Karman Avenue
Suite 1200
Irvine, CA  92614
 
 
EXECUTIVE
 
 
By:  /s/ Michael Karr      
      Name:  Michael Karr
 
 

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Attachment A
 
DISPUTE RESOLUTION PROCEDURES
 
The parties agree to make a good faith effort to informally resolve any dispute
before submitting the dispute to be resolved in accordance with the following
procedures (“Procedures”):
 
A.  
The party claiming to be aggrieved (“Claimant”) shall furnish to the other a
written statement of the grievance, all Persons whose testimony would support
the grievance, and the relief requested or proposed.  The written statements
must be delivered to the other party within the time limits for bringing an
administrative or court action based on that claim.

 
B.  
If the other party does not agree to furnish the relief requested or proposed,
or otherwise does not satisfy the demand of the Claimant within 30 days and the
Claimant wishes to pursue the issue, the Claimant shall give notice to the other
of the Claimant’s demand that the dispute be submitted to non-binding mediation
before a mediator jointly selected by the parties or the parties cannot agree on
a mediator selected from a list provided by JAMS.  Such mediation should occur
within 90 days of the demand for mediation.

 
C.  
If the dispute is not resolved in mediation, the Claimant shall request
arbitration of the dispute by giving written notice to the other party within 30
days after mediation. The parties will attempt to agree on a mutually acceptable
arbitrator and, if no agreement is reached, the parties will request a list of
nine arbitrators from JAMS or such other arbitration firms as agreed and select
by alternatively striking names.  The arbitration will be conducted consistent
with JAMS’ rules governing employment disputes (“Rules”) that are in effect at
the time of the arbitration.  If there is any conflict between those Rules and
the Procedures, the Procedures will govern.  The arbitrator shall have authority
to decide whether the conduct complained of under Section A above violates the
legal rights of the parties.  In any such arbitration proceeding, any hearing
must be supported by written findings of fact and conclusions of law.  The
arbitrator’s findings of fact must be supported by substantial evidence on the
record as a whole, and the conclusions of law and any remedy must be provided
for by and consistent with the laws of California and federal law.  The
arbitrator shall have no authority to add to, modify, change or disregard any
lawful term of the Agreement. The Bank will pay the arbitrator’s fee.  Any award
that may result from such arbitration may be confirmed into a judgment from a
court and enforced in accordance with applicable law.

 
 

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