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AMENDMENT NO. 1 TO <br />EMPLOYMENT AGREEMENT <br />THIS AMENDMENT NO. 1 ("First Amendment") to the July 21, 2015 Employment <br />Agreement ("Agreement") executed by the City of Brea, a California municipal corporation <br />("City"), and William Gallardo ("Employee"), is dated March 20, 2018 for reference purposes. <br />f aa[el"115 <br />A. The parties executed the Agreement to: provide for City's retention of the <br />services of Employee in the position of City Manager for a three-year term; encourage the highest <br />standards of fidelity and public service on the part of Employee; provide a just means for <br />terminating Employee's employment and the Agreement when City may desire to do so; and <br />establish Employee's conditions of employment. <br />B. The parties desire to amend the Agreement to: extend the term by five years; <br />establish a procedure by which Employee may waive an automatic salary adjustment that <br />otherwise would maintain a 10% separation between Employee's salary and the highest base <br />salary of any other City employee; and authorize Employee to select a replacement City -provided <br />automobile having similar equipment and specifications as the current City -provided automobile. <br />NOW, THEREFORE, the parties agree as follows: <br />1. Amendment of Section 3. Section 3 ("Term") of the Agreement is amended to <br />read as follows: <br />"3. Term. This Agreement shall be effective July 4, 2015, and will remain in force <br />and effect until close of business on June 30, 2023 unless the term hereof is extended by mutual <br />agreement of City and Employee." <br />2. Amendment of Section 4. Section 4 ("Salary") of the Agreement is amended to <br />read as follows: <br />"4. Salary. <br />(A) Subject to adjustment as provided in this paragraph 4, City shall pay <br />Employee for the performance of Employee's duties under this Agreement a starting monthly <br />base salary of $19,402.93, less customary and legally required payroll deductions. <br />(B) Effective July 2, 2018, Employee's monthly base salary shall <br />automatically be adjusted if necessary to be set, and then shall automatically be permanently <br />maintained, at a level at least ten (10) percent greater than the maximum base salary specified in <br />the executive compensation plan established by City Council resolution unless Employee waives <br />a particular adjustment. Any such waiver shall: (i) be delivered in a notice to the City Council <br />within ten (10) days of the effective date of a City Council resolution increasing the maximum <br />base salary in the executive compensation plan; and (ii) apply only to the particular automatic <br />- 1 of 2- <br />2159240.6 <br />