Exhibit 10.2
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT (this
“Agreement”) made as of the first day of March, 2009,
by and between the Federal Agricultural Mortgage Corporation, a
federally-chartered instrumentality of the United States with its
principal place of business at 1133 Twenty-First Street, N.W.,
Washington, D.C. (“FAMC” or “Farmer Mac”)
and Michael A. Gerber, residing at 3815 Batavia Elba Townline Road,
Oakfield, NY 14125 (the “Employee”).
By this Agreement, FAMC and the Employee agree
as follows:
1.
Employment. FAMC employs the Employee, and the
Employee accepts employment by FAMC pursuant to this Agreement, as
of the date first above written (the “Effective Date”)
upon the terms and conditions set forth in this
Agreement.
2.
Term. The Employee's employment pursuant to this
Agreement shall commence on the Effective Date and shall continue
until June 30, 2011 or any earlier effective date of termination
pursuant to Section 9 hereof (as it may be extended by mutual
agreement of the parties, the “Term”).
3.
Scope of Authority and Employment.
(a)
Scope of Authority. The Employee shall be
employed as an officer of FAMC, with the title of President and
Chief Executive Officer. The Employee shall report
directly to the Board of Directors of FAMC (the "Board"), and there
shall be no other employee of FAMC with equal or senior
authority. The Employee shall have responsibility for
the administrative and operational affairs of FAMC, as set forth in
the Bylaws of FAMC, subject to the general supervision and control
of the Board. In addition, the Employee shall have those
rights, duties, responsibilities and authority normally reserved
for officers with similar positions of similarly situated
companies, together with such other rights, duties,
responsibilities and authority as may be set forth in said
Bylaws.
(b)
Full Time Employment. The Employee shall devote
his best efforts and substantially all his time and endeavor to his
duties hereunder, and shall not engage in any other gainful
occupation without the prior written consent of the Board;
provided , however , that this provision shall not be
construed to prevent the Employee from personally, and for his own
account or that of members of his immediate family, investing or
trading in real estate, stocks, bonds, securities, commodities, or
other forms of investment, so long as such investing or trading is
not in conflict with the best interests of FAMC.
(c)
Place of Employment. The Employee shall be
employed to perform his duties under this Agreement at the
principal office of FAMC. Notwithstanding this, it is
expected that the Employee shall be required to travel a reasonable
amount of time in the performance of his duties under this
Agreement.
4.
Compensation. FAMC will pay to the Employee the
following aggregate compensation for all services rendered by the
Employee under this Agreement:
(a)
Base Salary. The Employee will be paid a base
salary (the “Base Salary”) during the Term of Five
Hundred Thousand Dollars ($500,000) per year, payable in arrears on
a bi-weekly basis. The Base Salary will be reviewed
periodically by FAMC and may be increased (but not decreased) in
the sole discretion of the Board or the Compensation Committee of
the Board.
(b)
Incentive Compensation. In addition to the Base
Salary, the Employee will be eligible to be paid an additional
amount (the “Incentive Salary”) during the Term in
respect of work performed by during the preceding Planning Year
(July 1 through June 30), or portion thereof as follows:
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In respect of
the Planning Year ending June 30, 2009, the Incentive Salary shall
be paid in two (2) installments, a first installment in the amount
of Two Hundred and Eight Thousand Three Hundred and Thirty Three
Dollars ($208,333) shall be paid to the Employee by the later of:
(a) ten (10) business days of the Effective Date and (b)
five (5) business days of the execution of this Agreement, and a
second installment (the "Second Installment") of One Hundred Sixty
Six Thousand Six Hundred and Sixty-Seven Dollars ($166,667) shall
be paid when annual incentives are paid to FAMC executives
generally in the third calendar quarter of 2009. If the
Employee voluntarily resigns his employment with FAMC (other than
pursuant to Section 9(e)) or the Employee's employment is
terminated by the Employer for cause, in either case on or before
February 28, 2010, the Employee shall repay FAMC a portion of the
Second Installment equal to the Second installment
multiplied by a fraction, (A) the numerator of which is
365 minus the number of days between March 1, 2009 and the date of
the Employee's termination of employment, and (B) the denominator
of which is 365.
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For the
Planning Year commencing on July 1, 2009, the Employee will be
covered by the Incentive Salary arrangement for such Planning Year
applicable to senior executives of FAMC generally.
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For subsequent
Planning Years during the Term, the Employee shall be covered by
the Incentive Salary arrangement for such Planning Year applicable
to senior executives of FAMC generally, with any Incentive Salary
determined pursuant to this sentence payable when annual incentives
are paid to FAMC executives generally with respect to such Planning
Year and subject to the Employee's continued employment through the
applicable date of payment.
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(c)
Long Term Incentive Compensation. In addition to
the foregoing, effective as of July 1, 2009, the Employee shall be
granted long term incentive compensation in an amount equal to Two
Hundred Thousand Dollars ($200,000.00), in a form, and subject to
such conditions, as determined by the Board or the Compensation
Committee in its sole discretion.
(d)
Base Salary Differential. The Employee will be
paid a one-time lump sum cash payment of Seventy-Two Thousand Nine
Hundred Seventeen Dollars ($72,917), payable by the later of:
(a) ten (10) business days of the Effective Date and (b)
five (5) business days of the execution of this
Agreement. Such payment is intended to compensate the
Employee for the reduced base salary received by the Employee for
the period commencing October 1, 2008 through the Effective
Date.
(e)
One-Time Signing Bonus. The Employee will be
paid a one-time lump sum cash payment as a signing bonus (the
“Signing Bonus”) in the amount of One Hundred and Fifty
Thousand Dollars ($150,000.00), payable by the later of:
(a) ten (10) business days of the Effective Date and (b)
five (5) business days of the execution of this
Agreement. If the Employee voluntarily resigns his
employment with FAMC (other than pursuant to Section 9(e)) or the
Employee's employment is terminated by the Employer for cause, in
either case on or before February 28, 2010, the Employee shall
repay FAMC a portion of the Signing Bonus equal to the Signing
Bonus multiplied by a fraction, (A) the numerator of which is 365
minus the number of days between March 1, 2009 and the date of the
Employee's termination of employment, and (B) the denominator of
which is 365.
5.
Expenses. FAMC shall reimburse the Employee for
his reasonable and necessary expenses incurred in carrying out his
duties under this Agreement, including, without limitation,
expenses for: travel; attending business meetings,
conventions and similar gatherings; home and portable telephone
bills; business entertainment and professional association dues, in
each case in accordance with FAMC's policies as in effect from
time-to-time. Reimbursement shall be made to the Employee in
accordance with FAMC’s standard expense reimbursement
protocol after presentation to FAMC of an itemized accounting and
documentation of such expenses in accordance with FAMC’s
expense reimbursement policies.
6.
Vacation and Sick Leave. The Employee shall be
entitled to four (4) weeks of paid vacation per year, with any
vacation exceeding two consecutive weeks requiring the advance
approval of the Chairman of the Board. Vacation rights
shall vest on July 10th of each year during the Term, and must be
exercised within fourteen (14) months thereafter or forfeited,
unless FAMC policy for non-contract employees provides for less
restrictive vacation rights carry-over. The Employee
shall be entitled to reasonable and customary amounts of sick
leave.
7.
Employee Benefits. During the Term, FAMC
will provide the Employee with all employee benefits regularly
provided to employees of FAMC and the following other (or upgraded)
benefits: the best level of personal and family health insurance
obtainable by FAMC on reasonable terms; an annual medical
examination; business travel and personal accident insurance; life
insurance in an amount approximately equal to the Employee’s
base salary; disability benefits at least equal to statutory
benefits in the District of Columbia; participation in the Farmer
Mac Money Purchase Plan; and participation in a savings plan
established under Section 401(k) of the Internal Revenue
Code. The providers of any insurance will be listed in
Best’s Insurance Guide. All of the foregoing is
subject to the limitation that the total cost thereof will not
exceed twenty five percent (25%) of the Employee's Base Salary,
exclusive of administrative expense. In the event that such
cost limitation would be exceeded in any year, the Employee may be
required to select from among the foregoing a group of benefits
within that cost limitation.
8.
Relocation Expenses. The Employee shall relocate
his residence from that stated in the first paragraph of this
Agreement to the Washington, D.C. metropolitan area. In
lieu of reimbursing the Employee’s moving and ancillary
expenses and providing other relocation assistance, FAMC shall pay
the Employee a one-time lump-sum cash payment in the amount of
Seventy-Five Thousand Dollars ($75,000) to cover packing, moving,
and other ancillary expenses, to be paid by the later of: (a) ten
(10) business days of the Effective Date and (b) five (5)
business days of the execu
