Document:

Unassociated Document

     

    FIRST AMENDMENT TO CHANGE IN
CONTROL AGREEMENT

    

    

    This
First Amendment to the Change in Control 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 (the “Company”)
and ___ (“Executive”).

    

    

    RECITALS

    

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

    

    
      	
              A.  

            	
              Executive
      is a party to that certain Change in Control Agreement dated as of July
      23, 2007 and entered into by and between the Company and the Executive
      (the “Agreement”).

            

    

    

    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:

    

    
      	
              1.  

            	
              Section
      14 of the Agreement is hereby removed in its entirety and amended to read
      as follows:

            

    

    

    14.           REDUCTION OF PAYMENT;
COMPLIANCE WITH LAWS; IRC SECTION 409A COMPLIANCE.

    

    
      	
               
      

            	
               

            	
              

                (i)
          Notwithstanding
      anything in the foregoing to the contrary, if the severance payment or any
      of the other payments provided for in this Agreement, together with any
      other payments which Executive has the right to receive from the Company
      would constitute a "parachute payment" (as defined in Section 280G(b)(2)
      of the Internal Revenue Code of 1986, as amended, or such similar set of
      laws (the “Code”)), the payments pursuant to this Agreement shall be
      reduced (reducing first the payments under Section 3 to the largest amount
      as will result in no portion of such payments being subject to the excise
      tax imposed by Section 4999 of the Code, provided, however, that the
      determination as to whether any reduction in the payments under this
      Agreement pursuant to this proviso is necessary shall be made in good
      faith by the Company’s then current tax services provider / advisor, and
      such determination shall be conclusive and binding on the Company and
      Executive with respect to the treatment of the payment for tax reporting
      purposes.

              

            

    

    

    
      	
               
      

            	
               

            	
              (ii)    This
      Agreement, and any payments or benefits hereunder, are made expressly
      subject to and conditioned upon compliance with all federal and state law,
      regulations and policies relating to the subject matter of this Agreement,
      including but not limited to the provisions of law codified at 12 U.S.C.
      Section 1828(k), the regulations of the FDIC codified as 12 C.F.R. Part
      359, and any successor or similar federal or state law or regulation
      applicable to the Company.  Employee acknowledges that he
      understands the sections of law and regulations cited above and that the
      Company’s obligations to make payments hereunder are expressly relieved if
      such payments violate any federal or state law or regulation applicable to
      the Company.

            

    

    

    
      	
               
      

            	
               

            	
              (iii)    If the
      Company is subject to the executive compensation limitations under TARP at
      the time the Executive receives payment(s) under this Agreement and any
      such payment(s), together with any other payments which Executive has the
      right to receive from the Company, exceed the limits allowed for Executive
      established under TARP, then the aggregate payments pursuant to this
      Agreement, and any other agreement with Executive, shall be reduced to the
      largest amount as will result in no portion of such payments violating the
      executive compensation limitations under
TARP.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
               
      

            	
               

            	
              (iv)    Notwithstanding
      any provision existing in this Agreement or any amendment thereto, it is
      the intent of the Company and Executive that any payment or benefit
      provided pursuant to this Agreement shall be made and paid in a manner, at
      a time and in a form which complies with the applicable requirements of
      IRC Section 409A, in order to avoid any unfavorable tax consequences
      resulting from any such failure to comply. Furthermore, for the purposes
      of this Agreement, IRC Section 409A shall be read to include any related
      or relevant IRS Notices (including but not limited to Notice
      2007-86).  In the event of any ambiguity in terms, or in the
      event further clarification of any term or provision is necessary, all
      interpretations and payouts of benefits based thereon shall be in
      accordance with IRC 409A and any related notices or guidance
      thereon.

            

    

    

    
      	
              2.  

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

            

    

    

    
      	
              3.  

            	
              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.

            

    

    

    
      	
              4.  

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

            

    

    

    
      	
              5.  

            	
              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	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	
                             

                          	 	 	By:	
                             

                          	 
	
                             

                          	 	 	Its:	
                             

                          	 

                  

                

                
                  
                    	
                             

                          	 	 	Print
      name:	
                             

                          	 

                  

                

                 

                 

                
                  

                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	 	 	 	THE
      EXECUTIVE	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	
                                                   

                                                	 	 	 	 
	
                                                  Witness

                                                	 	 	ExecutiveUnassociated Document

    

    SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT

    

    

    This
Second Amendment to  Employment Agreement (the “Second Amendment”) is
made and is effective as of August 26, 2009, by and between Heritage Oaks Bank,
a California state chartered bank (“Bank”) and Lawrence P. Ward
(“Executive”).

    

    

    RECITALS

    

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

    

    
      	
              B.    

            	
              Executive
      is currently employed by the Bank pursuant to that certain Employment
      Agreement dated as of January 1, 2005 by and between the Bank and the
      Executive (the “Agreement”).

            

    

    

    
      	
              C.    

            	
              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”).

            

    

    

    
      	
              D.    

            	
              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”).

            

    

    

    
      	
              E.    

            	
              Executive
      and Bank desire to amend the terms of the Agreement in the manner set
      forth herein for the purpose of complying with
  TARP.

            

    

    

    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:

    

    
      	
              6.    

            	
              Section
      6(b) of the Agreement is amended and restated as
  follows:

            

    

    

    
      	
               
      

            	
              (b)

            	
              Bonuses.   Executive
      may receive certain annual bonus compensation during the Term of this
      Agreement as follows:

            

    

    

    
      	
              (i)    

            	
              1997 Bonus
      Plan.  During each year of the Term, Executive shall be
      eligible to participate in the 1997 Bonus Plan and to receive a bonus from
      such bonus plan in an amount to be determined by the Board’s compensation
      committee.

            

    

    
      	
              (ii)    

            	
              Discretionary
      Bonus.  Executive may also, in the discretion of the
      Board, receive an additional bonus based on individual merit and
      performance.  The amount of this bonus, if any, in any such year
      shall be determined by the Board, in its sole discretion.

               

              If the Company is subject to the executive compensation limitations
      under the United States Treasury Department’s Troubled Asset Relief
      Program (“TARP”,) the payment of any such discretionary bonus shall be
      subject to those restrictions set forth under TARP.  Such
      restrictions specifically include the requirement that any and all such
      bonuses and/or portions thereof shall be subject to forfeiture and/or
      repayment by the Executive to the Company if the payment of such bonus was
      based on materially inaccurate financial statements or any other
      materially inaccurate performance metric
  criteria.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	
              7.    

            	
              Section
      8(h) of the Agreement is hereby removed in its entirety and amended to
      read as follows:

            

    

    

    
      	
               
      

            	
              (h)

            	
              Reduction of Payment;
      Compliance with Laws; IRC Section 409A
  Compliance.

            

    

    

    
      	
              (i)    

            	
              Notwithstanding
      anything in the foregoing to the contrary, if the payments made to
      Executive following a Termination Without Cause or Resignation For Good
      Reason or any of the other payments provided for in this Agreement,
      together with any other payments which Executive has the right to receive
      from the Bank or Bancorp would constitute a "parachute payment" (as
      defined in Section 280G of the Code), the payments pursuant to this
      Agreement shall be reduced to the largest amount as will result in no
      portion of such payments being subject to the excise tax imposed by
      Section 4999 of the Code; provided, however, that (A) the parties
      acknowledge that the foregoing payment is for services to be rendered in
      the event of a Change in Control over and above those normally and
      reasonably expected of the Executive, and (B) the determination as to
      whether any reduction in the payments under this Agreement pursuant to
      this proviso is necessary shall be made in good faith by the Bank’s and
      Bancorp’s independent auditors or if such firm is no longer providing tax
      services to Bank or Bancorp to such other tax advisor as shall be mutually
      acceptable to Bank, Bancorp and Executive, and such determination shall be
      conclusive and binding on the Bank, Bancorp and Executive with respect to
      the treatment of the payment for tax reporting
  purposes.

            

    

    

    
      	
              (ii)    

            	
              This
      Agreement, and any payments or benefits hereunder, are made expressly
      subject to and conditioned upon compliance with all federal and state law,
      regulations and policies relating to the subject matter of this Agreement,
      including but not limited to the provisions of law codified at 12 U.S.C.
      Section 1828(k), the regulations of the FDIC codified as 12 C.F.R. Part
      359, and any successor or similar federal or state law or regulation
      applicable to the Bank or Bancorp.  Employee acknowledges that
      he understands the sections of law and regulations cited above and that
      Bank’s and Bancorp’s obligations to make payments hereunder are expressly
      relieved if such payments violate any federal or state law or regulation
      applicable to the Bank or Bancorp.

            

    

    

    
      	
              (iii)    

            	
              If
      the Company is subject to the executive compensation limitations under
      TARP at the time the Executive receives payment(s) under sections 8(d)
      and/or 8(e) and any such payment(s), together with any other payments
      which Executive has the right to receive from the Company, exceed the
      limits allowed for Executive established under TARP, then the aggregate
      payments pursuant to this Agreement, and any other agreement with
      Executive, shall be reduced to the largest amount as will result in no
      portion of such payments violating the executive compensation limitations
      under TARP.

            

    

    

    
      	
              (iv)    

            	
              Notwithstanding
      any provision existing in this Agreement or any amendment thereto, it is
      the intent of the Bank and Executive that any payment or benefit provided
      pursuant to this Agreement shall be made and paid in a manner, at a time
      and in a form which complies with the applicable requirements of IRC
      Section 409A, in order to avoid any unfavorable tax consequences resulting
      from any such failure to comply. Furthermore, for the purposes of this
      Agreement, IRC Section 409A shall be read to include any related or
      relevant IRS Notices (including but not limited to Notice
      2007-86).  In the event of any ambiguity in terms, or in the
      event further clarification of any term or provision is necessary, all
      interpretations and payouts of benefits based thereon shall be in
      accordance with IRC 409A and any related notices or guidance
      thereon.

            

    

    

    
      	
              8.    

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

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              9.    

            	
              This
      Second 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.

            

    

    

    
      	
              10.    

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

            

    

    

    
      	
              11.    

            	
              This
      Second 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/
      Michael Morris	 
	
                                         

                                      	 	 	Its:	
                                        Chairman
      of the Board

                                      	 

                              

                            

                          

                        

                      

                    

                  

                  
                    
                      
                        	
                                 

                              	 	 	Print
      name:	
                                Michael
      Morris

                              	 

                      

                    

                  

                   

                   

                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	 	 	 	THE
      EXECUTIVE	 
	 	 	 	 	 	 
	/s/ Lorraine R.
      Williams           
      	 	 	/s/
      Lawrence P.
      Ward                              
      	 
	
                                                        Witness

                                                      	 	 	(Named
      Executive)

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