EXHIBIT 10.4
STATE OF GEORGIA 1/20/99
COUNTY OF XXXXXXX
EMPLOYMENT AGREEMENT
AGREEMENT made this 1st day of January, 1999, between FARMERS &
MERCHANTS BANK (hereinafter referred to as the "Bank"); and XXXXXXX XXXXXXXXXX
of the State of Georgia (hereinafter referred to as the "Executive").
W I T N E S S E T H:
WHEREAS, the Bank is a banking corporation with its principal office
located in Xxxxxxx County, Georgia; and
WHEREAS, the Bank desires to hire and employ Executive as President and
Chief Executive Officer and Executive desires to be employed by the Bank as its
President and Chief Executive Officer, all in accordance with the terms and
conditions as hereinafter set forth,
NOW, THEREFORE, in consideration of the premises herein contained, the
mutual covenants hereinafter set forth, and other good and valuable
consideration, the Bank and Executive agree as follows:
1. EMPLOYMENT: The Bank hereby agrees to employ the Executive, and the
Executive agrees to accept such employment as the President and Chief Executive
Officer of the Bank in accordance with the terms, duties, and obligations
hereinafter set forth.
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2. TERM: The initial term of this agreement shall be for three (3)
years beginning January 1, 1999 and ending December 31, 2001, and the agreement
shall continue from year to year thereafter unless sooner terminated as
hereinafter provided.
3. COMPENSATION: The Bank shall pay the Executive for all services
rendered under this agreement a salary of One Hundred Eleven Thousand Five
Hundred Ten Dollars ($111,510.00) per year. The Executive shall be paid with the
same frequency as are other executives of the Bank. Salary payments shall be
subject to withholding and other applicable taxes. The Executive's salary and
bonus will be reviewed and may be changed on a year to year basis with the first
review to be no earlier than December, 1999.
BONUSES: The Executive shall be entitled to an annual bonus based upon
the Bank's performance as shown on the Accountant's final year-end audit. The
bonus shall be paid within 30 days of the Board of Directors being furnished the
final year-end audit. The Executive shall receive up to $25,000 as an annual
bonus based on the following formula:
Total Bonus Schedule
I. GROWTH RATES (20%)
------------
A. Average Assets 10%
B. Pretax Operating Income 10%
II. FINANCIAL CONDITION (60%)
-------------------
A. Return on Average Assets 30%
B. Return on Average Equity 30%
III. ASSET QUALITY (20%)
-------------
A. Non-Current Loans to Gross Loans 10%
B. Net Loan Loss to Average Total Loans 10%
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Levels of Performance
--------------------------------------------------------------------------------
Threshold - 0% Target - 75% Maximum - 100%
I. Growth Rates
A. 7% 10% 12%
B. 9% 11% 13%
II. Financial Condition
A. 1% 1.175% 1.50%
B. 12% 12.75% 15%
III. Asset Quality
A. 1.15% .95% .75%
B. .25% .18% .10%
The Board of Directors of the Bank shall use the method used in the
Bank's Uniform Bank Performance Report in determining the Bank's growth rates,
financial condition and asset quality.
4. AUTOMOBILE: The Bank recognizes the Executive's need for an
automobile for business purposes. Therefore, the Bank shall provide the
Executive with an automobile, including all related maintenance, repairs,
insurance, and other costs. The automobile and related costs shall be comparable
to those which the Bank presently provides other executives of the Bank and as
may be mutually agreed upon by Executive and the Bank. At the Executive's
option, in lieu of being provided an automobile as set forth herein, the Bank
shall reimburse the Executive for business use of the Executive's personal
automobile at a rate equal to the per mile rate of reimbursement of federal
employees and published from time to time by the Internal Revenue Service.
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5. DUTIES: The Executive shall serve as the President and Chief
Executive Officer of the Bank and shall at all times discharge his duties in
consultation with and under the supervision of the Bank's Board of Directors, to
whom he shall report. He will be in charge of all day to day operations and
management of the Bank, including, but not limited to, all personnel decisions
and other functions to make the Bank successful. The Bank may, from time to
time, extend or curtail the Executive's precise services.
6. EXTENT OF SERVICES: The Executive shall exert his best efforts and
devote his entire time and attention to the Bank's business. During the term of
this agreement, the Executive shall not engage in any other business activity
regardless of whether it is pursued for gain or profit, if it detracts from his
duties with the Bank. It is understood that the Executive will not engage in any
business that conflicts with his duties as Chief Executive Officer of the Bank
or that may be deemed a conflict of interest.
Should the Executive desire to become engaged in a business activity
that does not conflict or detract from his duties as Chief Executive Officer of
the Bank, then he will advise the Board of Directors of the Bank of his business
activities prior to engaging in same and shall obtain approval by the Board of
Directors.
7. PRESIDENT REPORTING: The Executive shall work with the Board of
Directors and shall report to the Board and keep them informed as to all matters
that pertain to or affect the Board or the Bank or stockholders.
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8. WORKING FACILITIES: The Executive shall have a private office,
secretarial help, and other facilities and services that are suitable to his
position and appropriate for the performance of his duties.
9. EXPENSES: The Executive may incur reasonable expenses for promoting
the Bank's business, including expenses for entertainment, travel, and similar
items. The Bank will reimburse the Executive for all such expenses upon the
Executive's periodic presentation of an itemized account of such expenditures,
which shall be examined on a monthly basis by at least two outside directors.
One of the directors must be the Chairman of the Board.
10. CAPITAL EXPENDITURES: The Executive shall obtain prior approval of
the Board of Directors for any capital expenditure over $ 1,000.00
11. DISABILITY: If the Executive becomes disabled during the period of
this agreement, his salary shall continue at the same rate that it was on the
date of such disability. If such disability continues for a continuous period of
three (3) consecutive months, the Bank, at its option, may thereafter, upon
written notice to the Executive or his personal representative, terminate this
agreement. If the Executive receives disability payments from insurance policies
paid for by the Bank, the salary paid to the Executive during any period of
disability shall be reduced by the amount of disability payment received by the
Executive under any such insurance policy or policies. For the purpose of the
agreement, disability shall mean mental or physical illness or a condition
rendering the Executive incapable of performing his normal duties with the Bank.
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12. DEATH DURING EMPLOYMENT: If the Executive dies during the term of
employment, the Bank shall pay to the Executive's estate the compensation that
would otherwise be payable to the Executive up to the end of the month in which
his death occurs.
13. EMPLOYMENT BENEFITS: This agreement shall not be in lieu of any
rights, benefits and privileges to which the Executive may be entitled as an
employee of the Bank under any retirement, pension, profit sharing, insurance,
hospital or other plans which may now be in effect or which may hereafter be
adopted. The Executive shall have the same rights and privileges to participate
in such plans and benefits as any other employee during his period of
employment. The Executive shall be entitled to health, life, and disability
benefits available to all employees of the Bank in accordance with his income
level. The Bank agrees to reimburse him for his Country Club and civic club
dues.
14. VACATIONS: The Executive shall be entitled to annual vacations in a
manner commensurate with Ws status as a principal executive, which shall not be
less than two (2) weeks per year.
15. BUY-OUT PROVISION: Should the Bank be purchased or merge into a
holding company that is independent of the Farmers & Merchants Bank, or should
the bank be purchased by another bank, then in that event, if the Executive is
terminated for reasons other than those listed in Paragraph 16, then he shall
receive one year of his base salary as severance pay. A holding company
independent of the Farmers & Merchants Bank shall be a holding company that was
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not created or authorized to be formed or created by the Farmers & Merchants
Bank stockholders or directors.
16. TERMINATION: The Bank reserves the right to terminate the Executive
upon ten (10) days written notice for cause, including but not limited to: 1)
failure to carry out the directives of the Board of Directors; 2) failure to act
ethically with the Bank's regulators, customers and/or directors; 3)
participating or being involved in such activities as are detrimental to the
best interests of the Bank and its shareholders; 4) any other provision of this
agreement; or, 5) any other reason that the Board of Directors deems good and
sufficient cause. In the event of termination for cause, the Bank shall pay the
Executive his compensation up to the date of termination, whereupon all
obligations hereunder shall cease. This agreement may also be terminated by
either party at any time, without cause, upon ninety (90) days written notice to
the other party.
17. ASSIGNMENT: This agreement is intended to secure the personal
services of the Executive and cannot be assigned or transferred in any manner by
the Executive.
18. NOTICES: All notices required or permitted to be given under this
agreement shall be given by certified mail, return receipt requested, to the
parties at the following addresses or to such other addresses as either may
designate in writing to the other party.
To the Bank:
Chairman of the Board of Directors
Farmers & Merchants Bank
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
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To the Executive:
Xx. Xxxxxxx Xxxxxxxxxx
Farmers & Merchants Bank
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
19. SUCCESSORS AND ASSIGNS: This agreement shall inure to the benefit
of and be binding upon the Bank, its successors and assigns, including, without
limitation, any corporation which may acquire all or substantially all of the
Bank's assets and business or into which the Bank may be consolidated or merged,
and the Executive, his heirs, executors, administrators and legal
representatives.
20. ENTIRE AGREEMENTEEMENT: This agreement contains the entire
agreement between the parties and supersedes all prior understandings and
agreements between the parties. It may not be changed, waived or modified
orally, but only by an agreement in writing, signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
21. CONSTRUCTION: The provisions of this agreement shall be construed
in accordance with the laws of the State of Georgia.
22. HEADINGS: Headings in this agreement are for convenience only and
shall not be used to interpret or construe its provisions.
23. NON-WAIVER: No delay or failure of either party in exercising any
right under this agreement, and no partial or single exercise of that right,
shall constitute a waiver of that or any other right.
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24. COUNTERPARTS: This agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have affixed their hands and
seals the day and year first above written.
FARMERS & MERCHANTS BANK
By: /s/ Xxxxx Xxxxx
--------------------------------
Chairman of the Board of Directors
Attest: /s/ Xxxxxx Xxxxx
---------------------------
Signed, sealed & delivered
in the presence of:
/s/ Xxxxx XxXxxxx
-----------------------------------
Witness
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Notary Public
EXECUTIVE
/s/ Xxxxxxx Xxxxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxxxx
Signed, sealed & delivered
in the presence of:
/s/ Xxxxx XxXxxxx
-----------------------------------
Witness
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Notary Public
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