Exhibit 10.39
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and effective
as of February 10, 2006 between TEMECULA VALLEY BANK, a
California
state-chartered banking corporation ("Bank") and FRANK BASIRICO,
JR.
("Executive").
R E C I T A L
Bank desires that Executive be employed as Executive Vice
President and Chief Administrative Officer of Bank and Executive
desires to be
so employed subject to the terms and conditions herein stated.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other good and valuable
consideration, the
parties agree as follows:
1. TERM OF EMPLOYMENT.
1.1. Term. Bank hereby agrees to employ Executive, and Executive
hereby
accepts employment with Bank, for the period ("Term") commencing
February 23,
2006 ("Commencement Date"), and terminating on such date and upon
such terms as
provided for in Section 4 hereof.
2. DUTIES OF EXECUTIVE.
2.1. Duties. Executive shall perform the duties of Executive
Vice
President and Chief Administrative Officer, as assigned by Bank's
Chief
Executive Officer, subject to the powers by law vested in the Board
of Directors
of Bank and in Bank's Shareholder. During the Term, Executive shall
perform the
services herein contemplated to be performed by Executive with due
care
faithfully, diligently, to the best of Executive's ability and in
compliance
with all applicable laws and Bank's Articles of Incorporation and
Bylaws.
2.2. Exclusivity. Executive shall devote substantially all of
Executive's productive time, ability and attention to the business
of Bank
during the Term. Executive shall not directly or indirectly render
any services
of a business, commercial or professional nature to any other
person, firm or
corporation for compensation without prior consent evidenced by a
resolution
duly adopted by the Board of Directors of Bank, or the Executive
Committee
thereof. Notwithstanding the foregoing, Executive may (i) make
investments of a
passive nature in any business or venture; and (ii) serve in any
capacity in
civic, charitable or social organizations, provided, however, that
such
investments or services shall not be in competition, directly or
indirectly, in
any manner with Bank.
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3. COMPENSATION AND BENEFITS.
3.1. Salary. For Executive's services hereunder, Bank shall pay,
or
cause to be paid, as annual gross base salary, to Executive
$250,000 during the
Term ("Base Salary"), beginning with the Commencement Date, payable
in equal
installments in accordance with Bank's normal payroll periods as in
effect from
time to time. The Board of Directors shall also, from time to time,
grant such
additional "merit" increases, if any, in the Base Salary as are
determined after
review to be appropriate in the discretion of the Board of
Directors.
3.2. Bonus. For each year within the Term, Executive shall be
entitled
to an Incentive Bonus, determined in accordance with this Section,
if the
Threshold Test is met. The Threshold Test shall be deemed to have
been met if:
(i) Bank's regular outside independent loan reviewer gives a
favorable review of
the overall loan quality of Bank; and (ii) the latest report of
supervisory
activity relative to Bank issued by Bank's principal bank regulator
rates Bank
operations no less than satisfactory. The Incentive Bonus shall
equal 1% of
Bank's Pre-Tax Profit. Pre-Tax Profit shall equal the consolidated
net income of
Temecula Valley Bancorp Inc. ("Company") after the payment of all
bonus amounts
paid by Bank but before the payment of taxes. The Incentive Bonus
shall be
payable in January of the year following completion of the fiscal
year on which
it is based, or as soon thereafter as is practicable after Bank's
or its
parent's outside accountants have delivered their report on Bank's
and its
parent's condition and results of operations. Notwithstanding the
foregoing,
Executive shall be entitled to an Incentive Bonus for the portion
of the Term in
2006, payable in January 2007 or as soon thereafter as is
practicable after
Bank's or its parent's outside accountants have delivered their
report on Bank's
and its parent's condition and results of operations, prorated as
follows:
Pre-Tax Profit for fiscal year 2006 x 1%, divided by 12, multiplied
by the
number of full calendar months in 2006 within the Term.
3.3. Vacation. Executive shall be entitled to 20 days of vacation
leave
each year of the Term accruing in accordance with Bank policy.
Vacation time
shall not accumulate but at the end of each year of the Term,
Executive shall be
entitled to vacation pay in lieu of vacation.
3.4. Equipment. Bank shall provide for Executive's use a luxury
automobile, the selection of which shall be within the discretion
of the Chief
Executive Officer. Bank shall pay all the expenses (including, but
not limited
to, maintenance, fuel, insurance, registration) related to such
automobile
during the Term. Executive shall be responsible for taxes in
connection with any
non-cash compensation relative to personal use of the automobile.
Bank shall
also provide Executive with a cellular phone for Executive's
reasonable use in
the performance of his duties hereunder. Bank shall pay all
reasonable expenses
in connection with the business use of such cellular phone.
3.5. Group Medical and
Other Benefits. Bank shall provide for Executive
participation in the medical, dental, vision, life insurance
program, long-term
disability coverage, voluntary life insurance programs and other
benefit plans
offered to other similarly titled employees of Bank, commencing on
the first day
of the month following Executive's start date, except that
Executive will not
become eligible to participate in Bank's 401(k) Plan until the
first day of the
month following the 90th day after the Commencement Date.
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3.6. Sick Leave. Executive shall be entitled to sick leave in
accordance with Bank's personnel policy. Accrued sick leave may not
be carried
over from prior periods and Executive shall not be entitled to be
paid in lieu
thereof.
3.7. Stock Options. As soon as practicable and when legally
permissible
after the Commencement Date, Executive shall receive an incentive
stock option
under a plan ("Plan") maintained by the Company which will entitle
Executive,
upon vesting, to purchase up to an aggregate of 20,000 shares of
Company's
common stock. The vesting schedule shall provide for vesting of
one-third of the
options at the end of each of the next three successive 12 month
periods of the
Term, subject to all applicable provisions of the Plan and the
stock option
agreement to be entered into by Executive and Company.
3.8. Salary Deferment Program. Bank will use its best efforts to
afford
Executive, as soon as practicable after the Commencement Date, a
salary
deferment plan that is acceptable to Bank and Executive.
3.9. Salary Continuation Plan. Subject to Executive's
successful
passing of any required physical examination and insurability, as
determined by
Bank and Bank's insurance provider, Executive shall receive a
salary
continuation plan that provides for an annual $100,000 benefit when
Executive
reaches the age of 65 for up to 15 years, and a fully vesting death
benefit for
the benefit of Executive's family, subject to specific terms and
conditions to
be agreed upon by Executive and Bank.
3.10. Additional Compensation. Executive shall be entitled to
receive
the lesser of: (i) $100,000 or (ii) the difference between (a) the
exercise
prices of CVB Financial Corporation ("CVBF") options to purchase
common stock
issued to Executive and scheduled to become exercisable in March
and June 2006
("Vesting Options") and (b) the closing price of CVBF common stock
on the
Commencement Date, as quoted on NASDAQ.com, multiplied by the
number of Vesting
Options, only in the instance where the exercise price of the
Vesting Options is
less than the applicable closing price (the "Additional
Compensation"). Each
1/12th of the Additional Compensation shall be payable on the first
day of each
month, beginning March 1, 2006 and continuing for 11 successive
months
thereafter.
3.11. Designation of Beneficiaries. Executive may designate in
writing
(only on a form requested by Executive and provided by Bank and
delivered by
Executive to Bank before Executive's death or permanent disability,
as
determined by the Board of Directors) primary and contingent
beneficiaries to
receive the balance of any payments under Section 3.10, 4.3(b) or
4.3(c) that
are not made prior to Executive's death or permanent disability, as
determined
by the Board of Directors, and the proportions in which such
beneficiaries are
to receive such payments. The total amount of the balance of such
payment shall
be paid to such beneficiaries in a single unreduced lump sum
payment made wi
