EXHIBIT 10.7
AMENDMENT NO. 3
TO
EXECUTIVE SALARY CONTINUATION AGREEMENT
This Amendment No. 3 to the Executive Salary Continuation Agreement ("Amended
Agreement") is made and entered into as of this 26th day of May, 1999 by and
between The Bank of Hemet, a California banking corporation (the "Employer") and
Xxxxx X. Xxxxx, an individual residing in the State of California (hereinafter
referred to as "Executive").
RECITALS AND UNDERTAKINGS
A. WHEREAS, the Executive is an employee of the Employer and is serving as
its President and Chief Executive Officer;
B. WHEREAS, the Executive's experience and knowledge of the affairs of the
Employer and the banking industry are extensive and valuable;
C. WHEREAS, the Employer has provided Executive with certain salary
continuation benefits as set forth in the Salary Continuation Agreement
("Agreement") between Employer and Executive dated March 22, 1995; as
amended on July 16, 1998 and July 29, 1998; and
D. WHEREAS, Employer and Executive desire to adopt a specific payment
amount for the proposed acquisition of Employer by Pacific Community
Banking Group.
NOW, THEREFORE, the parties hereto agree to amend the Agreement as follows:
1. Section 5.2 is amended and shall read in the entirety as follows:
5.2 TERMINATION IN A SALE OF BUSINESS. In the event there is a Sale
of Business, the Executive shall be entitled to be paid in a lump
sum the present value (using the annual discount rate equal to
the annual interest rate of a ten year treasury bond) of the
Annual Benefit for a period of fifteen (15) years with the
Applicable Percentage being 100% to be paid on the first day of
each month, beginning with the month following the month in which
the Executive for any reason terminates employment with Employer
or a successor of Employer after a Sale of Business.
The annual interest rate of a ten year treasury bond will be the
yield on the 10 Year Treasury Note as shown in the "Morning
Economic Notes" provided daily to Employer by Xxxxx Xxxxxx on the
date of the Sale of Business. In the event this source is no
longer available on the date of the Sale of Business, then the
source of the rate will be selected by mutual agreement of the
Employer and Executive.
The payment of the lump sum will be made to the Executive by the
Employer via wire transfer to the Executive's choice of bank
account as
soon as practicable after the earlier of a) the Sale of Business
(assuming the Executive's termination date has been contractually
or officially established by the Employer), or b) the effective
date of the Executive's termination by Employer or a successor of
Employer after a Sale of Business.
Notwithstanding the calculation provided for in the foregoing
paragraphs of this Section 5.2, in the event the Bank is acquired
by Pacific Community Banking Group the amount of the lump sum
payment required by this Section 5.2 shall be $484,000.
2. Except as amended hereby, the provisions of the Agreement remain in full
force and effect and the enforceability thereof is not affected by this
Amended Agreement.
IN WITNESS WHEREOF, the parties to this Amended Agreement have duly executed
this Amended Agreement as of the day and year first above written.
THE BANK OF HEMET
By: /s/ Xxxx X. XxXxxxxxx, Chairman
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XXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxxx, President and Chief Executive Officer
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