Unassociated Document


     

    FIRST AMENDMENT TO
NON-COMPETE, NON-SOLICITATION AGREEMENT

    


    


    This
First Amendment to the Non-Compete, Non-Solicitation Agreement (the “First
Amendment”) is made and is effective as of August 26, 2009, by and between
Joanne Funari (“Funari”) and Heritage Oaks Bancorp (“Bancorp”), a California
corporation and registered bank holding company of its wholly-owned subsidiary,
Heritage Oaks Bank (“Bank”).  Bancorp, Bank and any other division of
either Bancorp or the Bank shall be referred to herein as the
“Company.”

    


    RECITALS

    


    This
First Amendment is made with regard to the following facts:

    


    
      	
              A.    

            	
              Funari
      is currently employed by the Bank as the Executive Vice President of the
      Bank and the President of Business First Bank, a division of the Bank,
      pursuant to that certain Employment Agreement dated as of May 29, 2007 by
      and between the Bank and the Funari (the “Employment
      Agreement”).

            


    

    


    
      	
              B.    

            	
              Bancorp
      and Funari are parties to that certain Non-Compete, Non-Solicitation
      Agreement dated as of May 29, 2007 (the
  “Agreement”).

            


    

    


    
      	
              C.    

            	
              Funari
      has requested certain changes to the Agreement that the Company is willing
      to make on the terms and conditions set forth
  herein.

            


    

    


    
      	
              D.    

            	
              The
      Parties desire to amend the terms of the Agreement in the manner as set
      forth herein.

            


    

    


    


    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:

    


    
      	
              20.    

            	
              Section
      1(g) will be added to the Agreement and shall read as
    follows:

            


    

    


    (g) Termination Other Than For
Cause. Funari shall be
released from the covenant in Section 1(a), above, and such covenant shall be of
no further force or effect, if the Company terminates Funari’s employment other
than for “Cause.”  For this purpose, the term “Cause” means (i)
Funari’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
Funari of written notice specifying in reasonable detail the failures to
perform; (ii) Funari’s engaging in either grossly negligent conduct or willful
misconduct in connection with the performance of her duties as an employee of
the Company; (iii) the conviction of Funari 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 Funari of a plea of guilty or nolo contendre to such a felony in
any jurisdiction; (iv) any violation by Funari of her fiduciary duty to the
Company which has the effect of unlawfully converting for Funari’s own personal
benefit, any material property or prospect of the Company;  (v) the
repeated consumption of alcohol or drugs in a manner that materially impairs
Funari’s abilities to perform her duties under this Agreement; (vi) Executive’s
personal dishonesty; (vii) 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 Funari’s fitness or ability to perform
Funari’s duties as determined by the Board or the Bank’s Chief Executive
Officer, as the case may be, in good faith, after Funari has been given written
warning specifically advising her that she has engaged in such activity, and
after Funari 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 (vii) Funari’s material
breach of any provision of this Agreement.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              21.    

            	
              Section
      1(h) will be added to the Agreement and shall read as
    follows:

            


    

    


    Resignation for Good
Reason.    Funari shall be released from the covenant
in Section 1(a), above, and such covenant shall be of no further force or
effect, if (a) Funari delivers to the Company written notice specifying in
reasonable detail, the circumstances constituting “Good Reason” and confirming
her intent to resign for “Good Reason,” (b) the Company fails to correct the
circumstances constituting “Good Reason” within fourteen (14) days following the
delivery of the notice, and (c) Funari thereafter resigns within seven (7) days
following expiration of that 14-day period.  For this purpose, the
term “Good Reason” means and shall exist only if the Company, without prior
written consent of Funari, (i) reduces, by more than ten percent (10%), Funari’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 Funari’s pay grade or as required by the United States Department of
Treasury for the purpose of compliance with the restrictions on executive
compensation as set forth by the Capital Purchase Program as authorized under
the Troubled Asset Relief Program, and those laws and/or amendments thereto that
modify the terms thereof, (ii) deprives Funari of the title of Executive Vice
President of Heritage Oaks Bank and President of Business First Bank, a division
of Heritage Oaks Bank or materially diminishes the authority delegated to Funari
in her capacity as a member of the Executive Committee of Heritage Oaks Bank and
as President of Business First Bank, a division of Heritage Oaks Bank, (iii)
requires Funari to relocate her principal place of business outside of Santa
Barbara County,(iv) a failure by the Company to maintain any of the Executive
benefits and perks to which Funari was entitled at a level substantially equal
to or greater than the value of those benefits and perks in effect immediately
prior to such change in benefits or perks; or the taking of any action by the
Company which would materially affect Funari’s participation in or reduce
Funari’s benefits under any such benefits or ‘perks’ plans, programs or
policies, or deprive Funari of any material fringe benefits enjoyed by her
immediately prior to any such action, (v) any purported Termination of Funari’s
employment by the Company other than those effected in good faith pursuant to
Sections 7(a) and 7(b) of the Employment Agreement, (vi) the failure of the
Company to obtain the assumption of the Employment Agreement by any successor or
(vii) receipt by Funari of a Notice of Non-Renewal per the Employment
Agreement.

    


    
      	
              22.    

            	
              The
      following paragraph will be added to Section 3 of the
      Agreement:

            


    

    


    The
term of this Agreement shall expire on May 29, 2012, the fifth (5th) annual
anniversary of the date on which the Company acquired Business First National
Bank, which was May 29, 2007.

    


    
      	
              23.    

            	
              Capitalized
      terms used herein and not otherwise defined shall have the same meaning as
      set forth in the Agreement.

            


    

    


    
      	
              24.    

            	
              This
      First Amendment may be entered into in one or more counterparts, all of
      which shall be considered one and the same instrument, and it shall become
      effective when one or more counterparts have been signed by each of the
      Parties and delivered to the other Parties, it being understood that all
      Parties need not sign the same
counterpart.

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              25.    

            	
              Except
      as herein amended, the Agreement shall remain in full force and
      effect.

            


    

    


    
      	
              26.    

            	
              This
      First Amendment shall be governed by and construed in accordance with the
      laws of the State of California.

            


    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

    


    


    
      


      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	ATTEST: 	 	 	HERITAGE
      OAKS BANK	 
	
                                        /s/
      Lorraine R. Williams    
      

                                      	 	 	/s/
      Lawrence P Ward	 
	
                                         

                                      	 	 	Its:	
                                        President
      and CEO

                                      	 


                              

                            

                          

                        

                      

                    

                  

                  
                    
                      
                        	
                                 

                              	 	 	Print
      name:	
                                Lawrence
      P Ward

                              	 


                      

                    

                  

                  
                     

                     

                     

                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	ATTEST: 	 	 	HERITAGE
      OAKS BANK	 
	
                                                      /s/
      Lorraine R. Williams    
      

                                                    	 	 	/s/
      Lawrence P Ward	 
	
                                                       

                                                    	 	 	Its:	
                                                      President
      and CEO

                                                    	 


                                            

                                          

                                        

                                      

                                    

                                  

                                

                                
                                  
                                    
                                      	
                                               

                                            	 	 	Print
      name:	
                                              Lawrence
      P Ward

                                            	 


                                    

                                  

                                

                                 

                              

                            

                          

                        

                      

                    

                  

                   

                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	 	 	 	THE
      EXECUTIVE	 
	 	 	 	 	 	 
	      
                                                        /s/
      Lorraine R. Williams    
      

                                                      	 	 	/s/
      Joanne Funari	 
	
                                                        Witness

                                                      	 	 	Joanne
      Funari