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CONTRACT 3474B - PERM Amendment CLOSED3474&. . C' AMENDMENT NO.2 TO EMPLOYMENT AGREEMENT THIS AMENDMENT NO 2 TO EMPLOYMENT AGREEMENT ( "AMENDMENT NO. 2 ") is entered into this 17th day of July, 2007, between the City of El Segundo ( "CITY ") and Jeffrey L. Stewart ( "EMPLOYEE ") with respect to that certain EMPLOYMENT AGREEMENT entered into between the CITY and EMPLOYEE on May 3, 2005 as amended by AMENDMENT NO. 1 on August 1, 2006 ( "AGREEMENT "). Effective as of July 1, 2007, the CITY and EMPLOYEE do hereby agree to amendment Section 4(A) the AGREEMENT and replace this section in its entirety with the following language: "(A) EMPLOYEE'S annual base salary is $178,374 which shall be paid in equal bi- weekly payments. In addition, subject to the City Council's sole discretion, on July 1, 2008, EMPLOYEE shall be eligible to receive a single payment in an amount not to exceed $7,500 based on EMPLOYEE'S performance during the prior twelve -month period of this Agreement. In addition, the City Council shall evaluate EMPLOYEE'S performance and salary annually following the effective date of this AGREEMENT and determine in its sole discretion whether to increase EMPLOYEE'S compensation. Any increase in compensation must be in writing signed by the parties;" All of the other terms and conditions of the AGREEMENT shall remain in full force and effect. EMPLOYEE: tewart 4 ATTEST: Cindy Mo sen, City Clerk APPROVED AS TO FORM: Mark D. Hensley, City Attorney