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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
AGREEMENT made and entered into this 1st day of September, 1998, but as
of the Effective Date hereinafter defined, by and between the proposed SUNRISE
BANK OF ARIZONA ("SB") and JOSEPH D. REID ("Employee");
WHEREAS, SB 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 SB and the Employee;
WHEREAS, the board of directors of SB 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 SB 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 SB 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 SB.
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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SB.
6. Termination of Employment.
(a) The Employee's employment under this Agreement may be terminated
at any time by the board of directors of SB, 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 SB 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 SB or any of its affiliates;
(vi) The order of any court or supervising agency
with jurisdiction over the affairs of SB 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 SB or lessen its good will.
(b) This Agreement may be terminated by the Employee at any time
upon ninety (90) days' written notice to SB or upon such shorter period
as may be agreed upon between the Employee and the board of directors
of SB. In the event of such termination, SB 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 SB's affairs at the request of or by the order of any
court or supervising agency with jurisdiction, SB'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, SB'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 SB:
(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 SB 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 SB or any affiliate or when SB
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 SB a price equivalent to the
original price of each share of common stock issued by SB 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:
December 16, 1998 20,000
December 16, 1999 5,000
December 16, 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 Sunrise Bank. Although not intended by either party, the
sale of SB during the term of employment is recognized as a possibility.
In the event that SB 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 SB 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:
SUNRISE BANK OF ARIZONA
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