FIRST AMENDMENT TO THE FRANK BASIRICO, JR. EMPLOYMENT AGREEMENT
EXHIBIT
NO. 10.7
FIRST
AMENDMENT TO THE
XXXXX
XXXXXXXX, XX.
This First Amendment (“First Amendment”) to that
certain Employment Agreement dated December 4, 2006 (the “Original Agreement”) is
entered into as of March 10, 2008, and shall be deemed effective as of July 1,
2007, by and between Xxxxx Xxxxxxxx, Xx., an individual (“Executive”), and Temecula
Valley Bank (“Bank”).
R E C I T A L
Pursuant to the recommendation of the
Executive Officer Compensation Committee, with such recommendations adopted by
the Bank's Board of Directors on July 25, 2007, Bank and Executive wish to amend
the Original Agreement as provided in this First Amendment.
A G R E E M E N T
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements contained herein, the parties
hereby agree and consent to the amendment of the Original Agreement, effective
on the date hereof, as follows:
1. Section
3.2 of the Original Agreement is hereby deleted and replaced with the
following:
“3.2 Bonus.
January
1, 2007 to January 1, 2008, Executive shall be entitled to an annual Incentive
Bonus equal to 0.80% of Pre-Tax Profit (as defined below), and for each year
thereafter, 0.75% of Pre-Tax Profit, of Temecula Valley Bancorp Inc. (“Company”), if the following
conditions are met: 1) Bank's regular outside independent loan reviewer gives a
favorable review of the overall quality of Bank; and 2) Bank receives no less
than a satisfactory rating on its annual safety and soundness examination.
“Pre-Tax Profit” shall
mean the consolidated net income of Company after the payment of all bonus
amounts paid by Bank and before the payment of taxes. Subject to applicable
termination provisions, the Incentive Bonus shall be paid on or before March 15
of the calendar year following the calendar year in which it was
earned.”
2. Section
4.4 of the Original Agreement is hereby deleted and replaced with the
following:
“4.4 Vesting of Options Upon
Change Of Control.
Executive’s
option agreements covering Company stock options to be issued to him, from time
to time, shall provide that in the event of a Change of Control (as defined
below), all options shall vest immediately prior to any Change of Control.
“Change of Control”
means a change in the ownership of Bank or Company (Section 1.409A-3(i)(5)(v))
of the 409A regulations of the Internal Revenue Code, a change in the effective
control of Bank or Company (Section 1.409A-3(i)(5)(vi)), or a change in the
ownership of a substantial portion of the assets of Bank or Company (Section
1.409A-3(i)(5)(vii)). Notwithstanding the foregoing, a Change of Control shall
not be deemed to have occurred as a result of any transaction whose primary
purpose is to change the jurisdiction of incorporation of Company or Bank or the
transfer is to an “Affiliate,” as that term is defined in 12 U.S.C. Section
371c.”
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3. Section
5.13 of the Original Agreement is hereby deleted and replaced with the
following:
“5.13 Restriction on Timing of
Distributions.
Notwithstanding
any provision of this Agreement to the contrary, distributions to Executive may
not commence earlier than six (6) months after the date of a Separation from
Service (as defined below) (or, if earlier, the date of death of Executive) if,
pursuant to Internal Revenue Code Section 409A, as may be amended from time to
time (“Section 409A”),
Executive is considered a “specified employee” (under Internal Revenue Code
Section 416(i)) of Bank if any stock of Bank or Company is publicly traded on an
established securities market, or otherwise. In the event a distribution is
delayed pursuant to this Section 5.13, the originally scheduled distribution
shall be delayed for six months, and shall commence instead on the first day of
the seventh month following Separation from Service. If payments are scheduled
to be made in installments, the first six months of installment payments shall
be delayed, aggregated and paid instead on the first day of the seventh month,
after which all installment payments shall be made on their regular schedule. If
payment is scheduled to be made in a lump sum, the lump sum payment shall be
delayed for six months and instead be made on the first day of the seventh
month. “Separation from
Service” shall mean that Executive has experienced a termination of
employment from Bank which will be deemed to have occurred where the facts and
circumstances indicate that Executive and Bank reasonably anticipated that
Executive would permanently reduce his level of bona fide service to Bank to a
level not to exceed 25% of the average level of bona fide services provided to
Bank in the immediately preceding 12 months.”
4. Continued
Effect. Except as otherwise expressly provided herein, the
Original Agreement continues in full force and effect, in accordance with its
terms.
5. Miscellaneous. This
First Amendment will be governed in all respects by the laws of the State of
California as such laws are applied to agreements between California residents
entered into and to be performed entirely within California. This First
Amendment constitutes the full and entire understanding and agreement between
the parties with regard to the subjects hereof and supersedes all prior written
and oral agreements, representations and commitments, if any, between the
parties with respect to such subjects. This First Amendment may be executed in
any number of counterparts, each of which will be an original, but all of which
together will constitute one instrument.
IN WITNESS WHEREOF, the parties hereto
have executed this First Amendment as of the effective date established in the
first paragraph of this First Amendment.
EXECUTIVE
/s/ Xxxxx Xxxxxxxx,
Xx.
Xxxxx Xxxxxxxx, Xx.
TEMECULA VALLEY BANK
By: /s/ Xxxxxxx X.
Xxxxxxxx
Xxxxxxx
X. Xxxxxxxx
President
and Chief Executive Officer
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