Benefit Plans

12 Months Ended

Dec. 31, 2011

Benefit Plans

Benefit Plans

13. Benefit Plans

401(k) Plan—The Bank maintains an Employee Savings Plan (the “401(k) Plan”) which qualifies under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, employees may contribute between 1% to 50% of their compensation.  In 2011, 2010 and 2009, the Bank matched 100% of contributions for the first three percent contributed and 50% on the next two percent contributed.  Contributions made to the 401(k) Plan by the Bank amounted to $212,000 for 2011, $148,000 for 2010 and $161,000 for 2009.

On April 27, 2000, in an effort to attract and retain talented employees, the Board approved the combination of the 1996 Option Plan and the 1997 Option Plan into the 2000 Stock Incentive Plan. At the 2000 Annual Meeting, the Company’s shareholder approved 2000 Stock Incentive Plan.  Additionally, the Company increased the total shares available under the 2000 Incentive Plan to 975,000 shares.

Pacific Premier Bancorp, Inc. 2004 Long-Term Incentive Plan (the “Plan”)—The Plan was approved by the Corporation’s stockholders in May 2004.  The Plan authorizes the granting of options equal to 525,500 shares of the common stock of the Corporation for issuances to executives, key employees, officers, and directors.  The Plan will be in effect for a period of ten years from February 25, 2004, the date the Plan was adopted.  Options granted under the Plan will be made at an exercise price equal to the fair market value of the stock on the date of grant.  Awards granted to officers and employees may include incentive stock options, nonstatutory stock options and limited rights, which are exercisable only upon a change in control of the Corporation.  The options granted pursuant to the Plan originally vested at a rate of 33.3% per year. On March 4, 2005, the Corporation chose to accelerate the vesting on all outstanding options.

Below is a summary of the activity in the 2000 Stock Incentive Plan and the Plan for the year ended December 31, 2011:

	Shares		Weighted average exercise price per share
Options outstanding at the beginning of the year	505,500		$	8.61
Granted	66,000		6.32
Exercised	—		—
Forfeited & Expired	(3,000	)	8.07
Options outstanding at the end of the year	568,500		$	8.34
Options exercisable at the end of the year	502,500
Weighted average remaining contractual life of options outstanding at end of year	5.1 Years

The aggregate intrinsic value (the amount by which a call option is in the money, calculated by taking the difference between the strike price and the market price of the underlier) of options outstanding was $184,000 at December 31, 2011, $202,000 at December 31, 2010, and zero at December 31, 2009.

The amount charged against compensation expense in relation to the stock options was $208,000 for 2011 and $86,000 for 2010. At December 31, 2011, unrecognized compensation expense related to the options is approximately $32,000 for 2012, $32,000 for 2013 and $22,000 for 2014.

There were no options granted under the Plan during 2009 or 2010.  Options granted under the Plan during 2011 were valued using the Black-Scholes model with the following average assumptions:

	Year Ended December 31,
	2011
Expected volatility	16.49% to 38.47%
Expected term	10.0 Years
Expected dividends	None
Risk free rate	1.92% to 3.50%
Weighted-average grant date fair value	$1.80 to $3.47

During 2006, restricted stock awards were granted for 35,050 shares of the Corporation’s common stock. These shares vested with respect to each employee over a three-year period from the date of grant, provided the individual remains in the employment of the Company as of the vesting date. Additionally, these shares (or a portion thereof) could vest earlier in the event of a change in control of the Company. There was no compensation expenses relating to these grants for 2011 and 2010, and $15,000 in compensation expense for 2009. As of September 8, 2009, all restricted stock awards were fully vested.  The table below summarizes the restricted stock award activity for the periods indicated.

	2011			2010			2009
		Weighted			Weighted				Weighted
		Average			Average				Average
	Shares	Grant Price		Shares	Grant Price		Shares		Grant Price
Restricted stock awards
Outstanding grants at beginning of year	—	$	—	—	$	—	8,900		$	11.70
Granted	—	—		—	—		—		—
Vested	—	—		—	—		(8,900	)	11.70
Cancelled	—	—		—	—		—		—
Outstanding grants at end of year	—	$	—	—	$	—	—		$	—

Restricted stock awards were expensed evenly over the vesting period.  At December 31, 2009 there was no remaining amount to be expensed for restricted stock awards that had been granted under the Plan.

Salary Continuation Plan—The Bank implemented a non-qualified supplemental retirement plan in 2006 (the “Salary Continuation Plan”) for certain executive officers of the Bank. The Salary Continuation Plan is unfunded. The amounts expensed in 2011 and 2010 under the Salary Continuation Plan amounted to $77,000 and $71,000, respectively.  As of December 31, 2011 and 2010, $454,000 and $389,000, respectively, were recorded in other liabilities on the consolidated statements of condition for the Salary Continuation Plan.

Directors’ Deferred Compensation Plan—The Bank created a Directors’ Deferred Compensation Plan in September 2006 which allows directors to defer board of directors’ fees. 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 plan. At December 31, 2011 the liability for the plan was $211,000 compared to $154,000, at December 31, 2010.  The interest expense for 2011 was $7,000, compared to $5,000 for 2010 and $3,000 for 2009.

Long-Term Care Insurance Plan—The Bank implemented a Long-Term Care Insurance Plan in September 2006 for the 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.  The expense for 2011 and 2010 was $32,000 and $34,000, respectively, for this plan. As of December 31, 2011 and 2010, $58,000 and $46,000, respectively, was recorded in other liabilities on the consolidated statements of condition for the insurance plan.