FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to the Employment Agreement
(the “First Amendment”) is made and is effective as of
August 26, 2009, by and between Heritage Oaks Bank, a California
state chartered bank (“Bank”) and Joanne Funari
(“Executive”).
This First Amendment is made with regard to the
following facts:
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Executive is
currently employed by the Bank pursuant to that certain Employment
Agreement dated on May 29, 2007 by and between the Bank and the
Executive (the “Agreement”).
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Heritage Oaks
Bancorp (the “Company”), the Bank’s holding
company, closed a transaction with the United States Department of
Treasury (the “Treasury”) and as a result, became a
participant in the Capital Purchase Program (“CPP”), as
authorized under the Troubled Asset Relief Program
(“TARP”).
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As a result of
the Company’s participation in the CPP, the Company and its
subsidiaries, including the Bank, are subject to executive
compensation and other restrictions as set forth in the CPP, as
modified by the American Recovery and Reinvestment Act of 2009
(“ARRA”) and the Interim Final Rule on TARP Standards
for Compensation and Corporate Governance published in the Federal
Register on June 15, 2009 (the “Interim Final
Rule”).
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Executive and
Bank desire to amend the terms of the Agreement in the manner set
forth herein for the purpose of complying with TARP.
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TERMS
In
consideration of the premises and the respective covenants and
agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as
follows:
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Section 1(c) of
the Agreement is hereby removed in its entirety and amended to read
as follows:
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Executive’s failing to perform her duties
and obligations as an employee of the Company and failing to cure
such breach within 15 days following delivery to Executive of
written notice specifying in reasonable detail the failures to
perform;
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Executive’s engaging in either grossly
negligent conduct or willful misconduct in connection with the
performance of her duties as an employee of the
Company;
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The
conviction of Executive for any crime which constitutes a felony
(other than a vehicular violation not involving theft or fraud) in
the jurisdiction in which committed and which involves an act of
theft or fraud, or the entry by Executive of a plea of guilty or
nolo contendre to such a felony in any jurisdiction;
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Any
violation by Executive of her fiduciary duty to the Company which
has the effect of unlawfully converting for Executive’s own
personal benefit, any material property or prospect of the
Company;
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The repeated
consumption of alcohol or drugs in a manner that materially impairs
Executive abilities to perform her duties under this
Agreement;
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Executive’s personal
dishonesty;
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Executive
engages, or is alleged to have engaged, in activity which, in the
opinion of the Board or the Bank’s Chief Executive Officer,
could materially adversely affect the Bank’s reputation in
the community or which evidences the lack of Executive’s
fitness or ability to perform Executive’s duties as
determined by the Board or the Bank’s Chief Executive
Officer, as the case may be, in good faith, after Executive has
been given written warning specifically advising her that she has
engaged in such activity, and after Executive has been given a
reasonable time period (not to exceed 15 days) after such warning
to provide assurance to the Board or the Bank of her continuing fitness and
ability to perform her duties; or
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Executive’s material breach of any
provision of the Agreement or the Employment
Agreement.
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Section 7(e) of
the Agreement is hereby removed in its entirety and amended to read
as follows:
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Resignation for Good Reason
. Either before or
following a Change in Control during the Term hereof, Executive
may, under the following circumstances, regard Executive’s
employment as being constructively terminated by the Bank (and in
such case Executive’s employment shall terminate) and may,
therefore, Resign for Good Reason within 90 days of
Executive’s discovery of the occurrence of one or more of the
following events, any of which shall constitute “Good
Reason” for such Resignation for Good Reason:
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If the
Company, without the prior written consent of Executive, reduces,
by more than ten percent (10%), Executive’s base salary or
any bonus compensation applicable to her as in effect prior to such
reduction other than as part of a Company-wide reduction in
compensation expenses that similarly affects all other senior
members of management at and above Executive’s pay grade or
as required by the United States D
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