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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
AGREEMENT made and entered into this 17th day of March, 1998, but as of
the Effective Date hereinafter defined, by and between the proposed MESA BANK
("MB") and JOSEPH D. REID ("Employee");
WHEREAS, MB has retained the services of the Employee as chairman of
the board and chief executive officer, and the Employee has accepted such
employment; and
WHEREAS, the parties desire to enter into this Agreement, which is
intended to set forth in its entirety the terms and conditions of the employment
relationship between MB and the Employee;
WHEREAS, the board of directors of MB has approved this Agreement as
evidenced by the signature of the chairman of the board, who is authorized to
enter into this Agreement with the Employee;
NOW, THEREFORE, IT IS AGREED as follows:
1. Employment. The Employee is employed to render services to MB as are
customarily performed by the chairman of the board of directors and chief
executive officer. It is recognized that this position is part-time.
2. Compensation. There shall be no cash compensation.
3. Term. The initial term of employment under this Agreement shall be
for a period of three (3) years, commencing on the Effective Date hereof.
Beginning on the anniversary date of the commencement of the second year of this
Agreement, its term shall be extended automatically for a period of one (1) year
in addition to the then remaining years of this Agreement unless either MB or
the Employee gives contrary written notice to the other not less than 45 days in
advance of the anniversary date of the Agreement. Each year thereafter this
Agreement shall be extended automatically for a period of one (1) year.
Reference in this Agreement or in any notice given hereunder to the term of this
Agreement shall refer both to such initial term and to such extended terms.
4. Effective Date. For the purpose of this Agreement, the "Effective
Date" is the date upon which the Employee shall enter upon the performance of
his duties, which is agreed to be no sooner than commencement of business by MB.
5. Standards. The Employee shall perform his duties under this
Agreement in accordance with reasonable standards established from time to time
by the board of directors of
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MB.
6. Termination of Employment.
(a) The Employee's employment under this Agreement may be
terminated at any time by the board of directors of MB, with or without
cause (as defined below). The Employee shall have no right to receive
Severance Pay or any other remuneration whatsoever under this Agreement
for any period after voluntary termination or termination for cause.
For purposes of this Agreement, for "cause" shall mean termination for
any of the following reasons:
(i) Personal dishonesty materially affecting MB or
any affiliate;
(ii) Willful misconduct;
(iii) Willful breach of a fiduciary duty involving
personal profit;
(iv) Intentional failure to perform stated duties;
(v) Willful violation of any law, rule, or regulation
relating to the operation of MB or any of its affiliates;
(vi) The order of any court or supervising agency
with jurisdiction over the affairs of MB or any subsidiary; or
(vii) The Employee's violation of any provision of
this Agreement.
(viii) Unauthorized acts outside the scope of
employment which tend to disparage MB or lessen its good will.
(b) This Agreement may be terminated by the Employee at any
time upon ninety (90) days' written notice to MB or upon such shorter
period as may be agreed upon between the Employee and the board of
directors of MB. In the event of such termination, MB shall be
obligated only to continue to pay the Employee's salary and provide the
other benefits provided by this Agreement up to the date of the
termination.
(c) In the event of the death of the Employee during the term
of this Agreement, the Employee's estate shall be entitled to receive
the benefits due the Employee through the last day of the calendar
month in which his death shall have occurred.
(d) If the Employee is temporarily prohibited from
participating in the conduct of MB's affairs at the request of or by
the order of any court or supervising agency with jurisdiction, MB's
obligations under this Agreement shall not terminate and
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the Employee shall be placed on administrative leave. If the charges in
the proceeding out of which such request or order is issued mature into
a permanent prohibition order, unless stayed by appropriate
proceedings, MB's obligations hereunder shall terminate as of the
effective date of such permanent order.
(e) All obligations under this Agreement may be terminated,
except to the extent determined that continuation of the Agreement is
necessary for the continued operation of MB:
(i) By the Federal Deposit Insurance Corporation
("FDIC") at the time the FDIC enters into an agreement to
provide assistance to or on behalf of MB or any affiliate; and
(ii) By the Federal Reserve Board ("FRB"), or any
other agency, at the time the FRB approves a supervisory
merger to resolve problems related to the operation of MB or
any affiliate or when MB is determined by the FRB to be in an
unsafe or unsound condition. Any rights of the parties that
have already vested, however, shall not be affected by such
action.
7. Employment Options. The Employee shall be granted employment
options. Each option shall expire on December 31, 2005. Each option, upon
exercise, shall require the option holder to pay to MB a price equivalent to the
original price of each share of common stock issued by MB at the time of its
formation. It is anticipated that the price will be $14.00 per share, therefore,
$14.00 per option.
Options shall be granted to the Employee in accordance with
the following schedule:
March 17, 1998 20,000
March 17, 1999 5,000
March 17, 2000 5,000
The total number of options issued in accordance with this
provision shall equal 30,000. All options shall be vested in the Employee on the
date that said options are granted.
All options allocated in the aforementioned schedule shall
issue to the Employee in the event of termination of employment, without cause.
8. Sale of Mesa Bank. Although not intended by either party, the sale
of MB during the term of employment is recognized as a possibility.
In the event that MB is sold to Sun Community Bancorp Limited,
then, each of the options owing to the Employee shall be converted into options
of Sun Community Bancorp Limited applying the same ratio and to the same extent
that stock of MB is converted into stock of Sun Community Bancorp Limited. All
options shall be immediately vested irrespective of
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the date of a sale to Sun Community Bancorp Limited as described herein.
In the event that a sale is made to a third party, then all
allocated options shall issue and be vested irrespective of the date of sale.
9. No Assignments. This Agreement is personal to each of the parties
hereto, and neither party may assign or delegate any of the rights or
obligations hereunder without first obtaining the written consent of the other
party.
10. Notices. Any notices under this Agreement shall be deemed given
when in writing and delivered personally or sent by certified mail, postage
prepaid, to the last known address of the party to whom notice is given. If sent
by mail, notice shall be deemed given on the second day after mailing.
11. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
12. Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect or be used in
connection with the interpretation of this Agreement.
13. Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
14. Arbitration. Any controversy or claim arising out of or relating to
this contract, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association in accordance with its
Commercial Arbitration rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
EMPLOYER:
MESA BANK
By
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Joseph D. Reid
Chairman of the Board of Directors
and Chief Executive Officer
EMPLOYEE:
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Joseph D. Reid