Exhibit 10.2


 


The Senior Executive Bonus Plan


 


November 15, 2007


 


1.               The SEBP will use three different
criteria for peer group comparisons based on year-end financial results as
published in the Federal Financial Institution Examination Council (FFIEC), Uniform
Bank Performance Reports (UBPRs):


 


1.2                     Criteria one will be Return on
Average Total Equity (ROAE) as published on page 11 of UBPRs.


 


1.3                     Criteria two will be core deposits
as a percentage of total deposits (CDs) as published on page 6 of UBPRs.


 


1.4                     Criteria three will be the annual
rate of growth of Loans Not Held for Sale (LNHFS) as published on page 4 of
UBPRs; i.e. (Payout Year-end LNHFS less Prior Year Year-end LNHFS) divided by
Prior Year Year-end LNHFS expressed as a percentage.


 


2.               The SEBP will use 1st Pacific Bank’s
final year-end UBPR results for comparison to the peer group’s performance.


 


3.               Each year the bank reassesses its
strategic needs at its annual strategic retreat. During or subsequent to the
Bank’s annual strategic retreat but prior to the 1st day of the next fiscal
year, the Board will select at its sole discretion weighting parameters and
payout criteria that may either reduce or increase plan payouts in order to
better align the SEBP incentives to the banks strategic objectives.


 


4.               As described in 3 above, each three of
the measured criteria will be assigned a unique Multiplier in advance that will
be used to weight that criterion with respect to calculating the total SEBP
payout. The sum total of all three multipliers shall equal to 100%. For example
the bank might choose a 50% multiplier for ROAE, 40% for Core Deposits and 10%
for Loan Growth.


 


5.               The Bank has developed and disseminated
a dynamic spreadsheet based point system for allocating fractional increments
to the SEBP payout. The SEBP will begin awarding points for each criterion when
and if the Bank’s financial performance exceeds the minimum established peer
group thresholds with respect to one or more of the three selected criteria.


 


5.2                     For the 2008 performance period:


 


	
  5.2.1

  	
   

  	
  The Minimum Payout Percentile Threshold will be the 33rd
  percentile of the peer group for each of the three criteria independently.

  
	
  5.2.2

  	
   

  	
  The Maximum Payout Percentile Threshold will be the 90th
  percentile of the peer group for each of the three criteria independently.

  
	
  5.2.3

  	
   

  	
  The Initial Payout will be set at: $200,000.

  
	
  5.2.4

  	
   

  	
  The Payout Scaler will be set at: 1.10

  
	
  5.2.5

  	
   

  	
  The ROAE multiplier will be weighted at 70%

  
	
  5.2.6

  	
   

  	
  The CDs multiplier will be weighted at 20%

  
	
  5.2.7

  	
   

  	
  The LNHFS multiplier will be weighted at 10%

  



 


 

















 


 


5.3                     For the 2009 performance period
and each year thereafter:


 


	
  5.3.1

  	
   

  	
  The Minimum Payout Percentile Threshold will be the 50th percentile
  of the peer group for each of the three criteria independently.

  
	
  5.3.2

  	
   

  	
  The Maximum Payout Percentile Threshold will be the 90th percentile
  of the peer group for each of the three criteria independently.

  
	
  5.3.3

  	
   

  	
  The initial payout, Payout Scaler and Multipliers for each of the
  measured criteria (ROAE, CDs and LNHFS) shall be determined by the board
  during or subsequent to the bank’s annual strategic retreat and before the
  1st day of the next fiscal year.

  



 


6.               For each criterion, the difference
between the criteria value at the Maximum Payout Percentile Threshold and the
criteria value at the Minimum Payout Percentile
Threshold shall be divided by twenty (20) to calculate incremental changes
between payout point awards for each criterion (see the attached example Payout
Schedule & Methodology worksheet, Table 1). Raw points will be awarded by
identifying the largest incremental value that is less than or equal to the
Banks performance data (again see Example Spreadsheet).


 


7.               Raw points for each criterion will then
be multiplied by that criteria’s current unique Multiplier to produce a weighted
point value.


 


8.               The sum of the three weighted point
values will then become the Weighted Point Total.


 


9.               The Weighted Point Total is then
compared to the top line incremental point values in Table 2 (Sum of Weighted
Contributions) to determine the Preliminary Total Payout (from Line A in Table
2).


 


10.         Line B from Table 3 is the Anticipated Tax
Effected Return on Average Equity after a Preliminary Total Payout (Line A of Table 2).


 


10.2               If Line B from Table 3 is greater than
or equal to 10.00%, the Final Plan Payout is equal to the Preliminary Total
Payout from Line A in Table 2.


10.3               If Line B from Table 3 is less that
10.00%, then the Preliminary Total Payment from Line A in Table 2 will be
reduced according to the values in Table 4 to produce a Final Plan Payout. The
Line B value is compared to the values in Line C to find the largest value in
Line C that is still less than or equal to the Line B value. The value in Line
D in the column below the value identified in Line C is then multiplied times
the Preliminary Total Payout (from Line A in Table 2) to produce the Final Plan
Payout.


 


10.4               There will be no payouts (Line D equals
0%) for all line B values less than 8.1%


 


11.         The share each senior executive shall receive
under the SEBP’s payout shall be determined by the Chief Executive Officer
(CEO) except that the Compensation Committee shall have the right to review the
CEO’s proposed payouts in advance, and the CEOs share of the total payout may
not exceed a predetermined fraction of the plan’s total payout as described
below.


 


11.2               In the event additional senior
executives become participants in the SEBP, the Board does not want plan
participants to be subject to unfair reductions in bonus


 

















 


payouts. Thus,
the calculated total SEBP payout and the maximum share of the total payout for
the CEO will be adjusted according to the number of SEBP participants as
described in the table below:


 


	
  Plan

  Participants

  	
   

  	
  Total SEBP

  Payout

  Multiplier

  	
   

  	
  CEO

  Maximum

  Share

  	
   

  
	
  4

  	
   

  	
  1

  	
   

  	
  40.00

  	
  %

  
	
  5

  	
   

  	
  1.25

  	
   

  	
  32.00

  	
  %

  
	
  6

  	
   

  	
  1.5

  	
   

  	
  26.67

  	
  %

  
	
  7

  	
   

  	
  1.75

  	
   

  	
  22.86

  	
  %

  
	
  8

  	
   

  	
  2

  	
   

  	
  20.00

  	
  %

  
	
  9

  	
   

  	
  2.25

  	
   

  	
  17.78

  	
  %

  
	
  10

  	
   

  	
  2.5

  	
   

  	
  16.00

  	
  %

  



 


11.2.1                        As an example of the above, if
the calculated SEBP payout is $500,000 and the number of SEBP participants is
five (5), then the total adjusted SEBP would be:


 


(a)                $500,000 X 1.25 equal to $625,000, and


(b)               The CEO’s share of the total plan payout
could not exceed thirty-two percent (32%).