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EXHIBIT 10.1
EXECUTIVE SALARY CONTINUATION AGREEMENT
THIS AGREEMENT, made and entered into this first day of December, 1992,
by and between First Farmers and Merchants National Bank, a Bank organized and
existing under the laws of the State of Tennessee, (hereinafter called the
Bank), and Xxxxxx X. Xxxxxxx (hereinafter called the Executive).
W I T N E S S E T H :
WHEREAS, the Executive is in the employ of the Bank; serving as its
President and Chief Executive Officer; and
WHEREAS, the experience of the Executive, his knowledge of the affairs
of the Bank, his reputation and contacts in the industry are so valuable that
assurance of his continued service is essential for the future growth and
profits of the Bank and it is in the best interests of the Bank to arrange teens
of continued employment for the Executive so as to reasonably assure his
remaining in the Corporation's employment during his lifetime or until the age
of retirement; and
WHEREAS, it is the desire of the Bank that his services be retained as
herein provided; and
WHEREAS, the Executive is willing to continue in the employ of the Bank
provided the Bank agrees to pay him or his beneficiaries certain benefits in
accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the services to be performed in the
future as well as the mutual promises and covenants herein contained, it is
agreed as follows:
ARTICLE 1.
1.1) Beneficiary - The term Beneficiary shall mean the person or
persons whom the Executive shall designate in writing to receive the benefits
provided hereunder.
1.2) Disability - The terms Disability shall mean an inability to
substantially perform the usual and regular duties performed by the Executive as
an employee of the Bank. Such disability may be caused by either illness or
injury and includes mental disabilities. For purposes of this Agreement the
determination of the Executive's disability shall be made solely by the Board of
Directors of the Bank without participation by the alleged disabled Executive
Such a determination by the Board of Directors shall be final and conclusive on
all parties hereto.
1.3) Named Fiduciary and Plan Administrator - The Named Fiduciary and
Plan Administrator of this plan shall be the Bank.
ARTICLE 2.
2.1) Employment - The Bank agrees to employ the Executive in such
capacity as the Bank may from time to time determine. The Executive will
continue in the employ of the Bank in such capacity and with such duties and
responsibilities as may be assigned to him, and with such compensation as may be
determined from time to time by the Board of Directors of the Bank.
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2.2) Full Efforts - The Executive agrees to devote his full time and
attention exclusively to the business and affairs of the Bank, except during
vacation periods, and to use his best efforts to furnish faithful and
satisfactory services to the Bank.
2.3) Fringe Benefit - The salary continuation benefits provided by this
Agreement are granted by the Bank as a fringe benefit to the Executive and are
not part of any salary reduction plan or any arrangement deferring a bonus or a
salary increase. The Executive has no option to take any current payment or
bonus in lieu of these salary continuation benefits.
ARTICLE 3.
3.1) Retirement - If the Executive shall continue in the employment of
the Bank until he attains the age of sixty-five (65), he may retire from active
daily employment as of the first day of the month next following attainment of
age sixty-five (65) or upon such later date as may be mutually agreed upon by
the Executive and the Bank.
3.2) Payment - The Bank agrees that upon such retirement it will pay to
the Executive the annual sum of twenty thousand dollars ($20,000), payable
monthly on the first day of each month following such retirement for a period of
one hundred eighty (180) months; subject to the conditions and limitations
hereinafter set forth.
3.3) Death After Retirement - The Bank agrees that if the Executive
shall so retire, but shall die before receiving the full amount of monthly
payments to which he is entitled hereunder, it will continue to make such
monthly payments to the Executive's designated Benefit for the remaining period.
If a valid Beneficiary Designation is not in effect, the payments shall be made
to the Executive's surviving spouse or, if none, said payments shall be made to
the duly qualified personal representative, executor or administrator of his
estate.
ARTICLE 4.
4.1) Death Prior to Retirement - In the event the Executive should die
while actively employed by the Bank at any time after the date of this Agreement
but prior to his attaining the age of sixty-five (65) years, the Bank will pay
the annual sum of twenty thousand dollars ($20,000) per year, to the Executive's
designated Beneficiary in equal monthly installments for a period of one hundred
eighty (180) months. If a valid Beneficiary. Designation is not in effect, the
payments shall be made to the Executive's surviving spouse or, if none, said
payments shall be made to the duly qualified personal representative, executor
or administrator of his estate. The said monthly payments shall begin the first
day of the month following the month of the decease of the Executive.
4.2) Disability Prior to Retirement - In the event the Executive should
become disabled while actively employed by the Bank at any time after the date
of this Agreement but prior to his attaining the age of sixty-five (65) years'
the Executive Will be eligible for his projected retirement benefit as noted in
3.2. Said amount shall be paid to the executive beginning on his 65th birthday.
Said payment shall be in lieu of any other retirement or death benefit under
this Agreement.
ARTICLES 5.
5.1) Termination of Employment - In the event that the employment of
the Executive shall terminate prior to his attaining age sixty-five (65), other
than by reason of his disability or his death, then this Agreement shall
terminate upon the date of such termination of employment. Provided, however,
that the Executive shall be entitled to the following benefits under the
following circumstances:
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(01) If the Executive voluntarily terminates employment after having
been employed by the Bank for a period of at least 30 years the Bank
shall pay to the Executive the amount set out in Schedule A attached
hereto and made part hereof, based on the year in which the termination
occurs. The Bank will pay such amount to the Executive upon such teens
and conditions and commencing at such tune as the Bank shall determine,
but in no event commencing later than age sixty-five (65).
(02) Anything hereinabove to the contrary notwithstanding, the
Executive will become fully vested in the proposed retirement benefit
as noted in 3.2 in the event of a transfer in the controlling ownership
or sale of the Bank or its parent corporation and shall be entitled to
that full amount upon the terms and conditions hereof. Said amount
shall be paid to the executive beginning on his 65th birthday.
(03) Anything hereinabove to the contrary notwithstanding, if the Bank
terminates the Executive's employment involuntarily for any reason
other than "reasonable cause", defined below, or if the Bank undertakes
any action or course of action designed to induce the Executive to
terminate his employment (e.g., reducing the Executive's title or
responsibilities, reducing the Executive's compensation
disproportionately as compared to reductions for other Bank
executives), the Bank shall pay to the Executive the retirement benefit
described in 3.2. The benefits shall be paid commencing on the
Executive's 65th birthday. "Reasonable cause" means the Executive's
gross negligence, fraud or willful violation of any law or significant
Bank policy, committed in connection with the Executive's employment
and resulting in a material adverse effect on the Bank. "Reasonable
cause" shall not include ordinary negligence or failure to act, whether
due to an error in judgment or otherwise, if the Executive has
exercised substantial efforts in good faith to perform the duties
reasonably assigned or appropriate to the position.
ARTICLE 6.
6.1) Neither the Executive, his spouse, nor any other beneficiary under
this Agreement shall have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify, or otherwise encumber in advance any of
the benefits payable hereunder, nor shall any of said benefits be subject to
seizure for the payment of any debts, judgments, alimony or separate
maintenance, owned by the executive or his beneficiary or any of them, or be
transferable by operation of law in the event of bankruptcy, insolvency or
otherwise.
ARTICLE 7.
7.1) Claims Procedure - The Bank shall make all determinations as to
rights to benefits under this Agreement. Any decision by the Bank denying a
claim by the Executive or his beneficiary for benefits under this Agreement
shall be stated in writing and delivered or mailed to the Executive or such
beneficiary. Such decision shall set forth the specific reasons for the denial,
written to the best of the Corporation's ability in a manner calculated to be
understood without legal or actuarial counsel. In addition, the Bank shall
provide a reasonable opportunity to the Executive or such beneficiary for full
and fair review of the decision denying such claim.
ARTICLE 8.
8.1) Unsecured General Creditor - The Executive and his beneficiary
shall have no legal right or equitable rights, interests, or claims in or to any
property or assets of the Bank. No assets of the Bank shall be held under any
trust for the benefit of the Executive or his beneficiaries or held in any way
as security for the fulfilling of the obligations of the Bank under this plan.
All of the Corporation's assets shall be and remain the general, unpledged,
unrestricted assets of the Bank. The Corporation's obligation under this plan
shall be that of an unfunded and unsecured promise by
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the Bank to pay money in the future. Executives and their beneficiaries shall be
unsecured general creditors with respect to any benefits hereunder.
ARTICLE 9.
9.1) Reorganization - The Bank shall not merge or consolidate into or
with another corporation, or reorganize, or sell substantially all of its assets
to another corporation, firm, or person unless and until such succeeding or
continuing corporation, firm, or person agrees to assume and discharge the
obligations of the corporation under this Agreement. Upon the occurrence of such
event, the term "Bank" as used in this Agreement shall be deemed to refer to
such successor or survivor corporation.
ARTICLE 10.
10.1) Benefits and Burdens - This Agreement shall be binding upon and
inure to the benefit of the Executive and his personal representatives, and the
Bank and any successor organization which shall succeed to substantially all of
its assets and business.
ARTICLE 11.
11.1) Not a Contract of Employment - This Agreement shall not be deemed
to constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive, or
restrict the right of the Executive to terminate his employment.
IN WITNESS WHEREOF, the Bank has caused this Agreement to be duly
executed by its proper officer and the Executive has hereunto set his hand, the
day and year first above written.
EXECUTIVE: BANK:
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx, Xx.
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Its: Chairman
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