Exhibit 10.1

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and
entered into this 19 day of July, 2018 (the “Effective Date”), by and between
PRIME MERIDIAN HOLDING COMPANY, a Florida corporation (the “Holding Company”),
PRIME MERIDIAN BANK, a Florida bank and wholly owned subsidiary of the Holding
Company (the “Bank”), and SAMMIE D. DIXON, JR. (“Executive”). The Holding
Company and the Bank are collectively referred to herein as the “Bank.”

BACKGROUND

WHEREAS, Executive is currently engaged as the Chief Executive Officer and
President of the Bank pursuant to that certain Employment Agreement between
Executive and the Bank dated July 25, 2016 and effective January 1, 2016 (“Prior
Agreement”); and

WHEREAS, the Bank and Executive desire to amend and restate the Prior Agreement
on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the payments, consents and acknowledgements
described below, in consideration of Executive’s continued employment with the
Bank, and in consideration of other good and valuable consideration, the receipt
and sufficiency of all of which is hereby acknowledged, the Bank and Executive
agree as follows:

1. Effective Date; Term. Upon the terms and subject to the conditions set forth
in this Agreement, the Bank hereby employs Executive, and Executive hereby
accepts such employment, for the term commencing on the Effective Date and,
unless otherwise earlier terminated pursuant to Section 4 hereof, the close of
business on the third anniversary of the Effective Date (the “Term”). The third
anniversary of the Effective Date is referred to herein as the “Term End Date.”
Beginning on Term End Date and on each anniversary of the Term End Date
thereafter, the Term shall, without further action by Executive or the Bank, be
extended by an additional one-year period; provided, however, that either party
may cause the Term to cease to extend automatically, by giving written notice to
the other not less than sixty (60) days prior to the scheduled expiration of the
Term. Upon such notice, the Term shall terminate upon the expiration of, as
applicable, the Term End Date or the then-current one-year extension period.
Notwithstanding the foregoing, if a Change in Control (as defined in Exhibit A
attached hereto) occurs during the Term, then, on the effective date of the
Change in Control, the Term shall, without further action by Executive or the
Bank, be extended by an additional three-year period. Thereafter, the Term shall
be extended by an additional one-year period on each anniversary of the Change
in Control instead of each anniversary of the Term End Date and the provisions
regarding notice of non-extension shall apply to the anniversaries of the Change
in Control rather than the anniversaries of the Term End Date.

2. Employment; Extent of Service. Executive is hereby employed on the Effective
Date as the Chief Executive Officer and President of the Holding Company and the
Bank. In his capacity as the Chief Executive Officer and President, Executive
shall have the duties, responsibilities and authority commensurate with such
positions and such other duties as may be assigned to him by the Board of
Directors of the Holding Company (the “Holding Company Board”) and the Board of
Directors of the Bank (the “Bank Board”). Executive shall serve as a member of
the Holding Company Board and the Bank Board (subject to Executive’s nomination
and election as a member of such boards for subsequent terms). In his capacity
as the Chief Executive Officer and President, Executive will report directly to
the Holding Company Board and the Bank Board.

 

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3. Compensation and Benefits.

(a) Base Salary. During the Term, the Bank shall pay to Executive base salary at
the rate of U.S. $282,000 per year (“Base Salary”), less normal withholdings,
payable in approximately equal bi-weekly or other installments (no less
frequently than monthly) as are or become customary under the Bank’s payroll
practices for its Executives from time to time. The Bank shall review
Executive’s Base Salary annually and may increase or, but only with Executive’s
consent, decrease Executive’s Base Salary from year to year. Such adjusted
salary then shall become Executive’s Base Salary for purposes of this Agreement.
The Base Salary shall be apportioned between the Holding Company and the Bank in
accordance with the Management Service Agreement dated as of April 21, 2016 (the
“Management Service Agreement”), as such agreement may be amended from time to
time.

(b) Annual Bonus. During the Term, Executive shall be eligible to receive an
annual bonus based upon the achievement of performance goals established from
year to year by the Compensation Committee of the Holding Company Board (the
“Annual Bonus”), which Annual Bonus shall be subject to approval by the Holding
Company Board prior to payment thereof. Executive’s target Annual Bonus
opportunity for each fiscal year of the Bank shall be no less than twenty-five
percent (25%) of Executive’s Base Salary as of the end of the relevant fiscal
year of the Bank. Any Annual Bonus that becomes payable to Executive shall be
paid by March 15th of the fiscal year of the Bank immediately following the year
to which such Annual Bonus relates. The Annual Bonus shall be apportioned
between the Holding Company and the Bank in accordance with the Management
Service Agreement.

(c) Retirement and Welfare Benefit Plans. During the Term, Executive shall be
entitled to participate in any retirement plans available to other Bank
employees similarly situated to Executive (“Peer Executives”) and the welfare
benefit plans, practices, policies and programs provided by the Bank, and on the
same basis as such Peer Executives.

(d) Expenses. During the Term, Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by Executive in the course of
performing his duties and responsibilities under this Agreement, in accordance
with the policies, practices and procedures of the Bank to the extent available
to other Peer Executives with respect to travel and other business expenses.

(f) Vacation. During the Term, Executive shall be entitled to four (4) weeks
paid vacation time annually on a non-cumulative basis to be paid by the Bank.

(g) Automobile Allowance. During the Term, Executive shall receive an automobile
allowance of $550.00 per month.

(h) Continuing Education. During the Term, the Bank shall reimburse Executive
for the cost of Executive’s professional dues, licensing, membership fees for
professional associations and continuing education costs (“Professional
Expenses”). Reimbursements for Professional Expenses shall be paid within ten
(10) business days following Executive’s submission of evidence of the
incurrence of such Professional Expenses.

(i) Clawback of Compensation. Executive agrees to repay the gross amount of any
compensation previously paid or otherwise made available to Executive under this
Agreement that is subject to recovery under any applicable law (including any
rule of any exchange or service through which the securities of the Holding
Company are then traded) or compensation recoupment policy the Bank may adopt
from time to time, including, but not limited to, the following circumstances:

(1) where such compensation was in excess of what should have been paid or made
available because the determination of the amount due was based, in whole or in
part, on materially inaccurate financial information of the Bank;

 

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(2) where such compensation constitutes “excessive compensation” within the
meaning of 12 C.F.R. Part 30, Appendix A;

(3) where Executive has committed, is substantially responsible for, or has
violated, the respective acts, omissions, conditions, or offenses outlined under
12 C.F.R. Section 359.4(a)(4); and

(4) if the Bank becomes, and for so long as the Bank remains, subject to the
provisions of 12 U.S.C. Section 1831o(f), where such compensation exceeds the
restrictions imposed on the senior executive officers of such an institution.

Executive agrees to return within sixty (60) days, or within any earlier
timeframe required by applicable law or any recoupment policy, any such
compensation properly identified by the Bank by written notice. If Executive
fails to return such compensation within the applicable time period, Executive
agrees that the amount of such compensation may be deducted from any and all
other compensation owed to Executive by the Bank. The provisions of this
Section 3(i) shall be modified to the extent, and remain in effect for the
period, required by applicable law.

(j) During the Term, Executive shall be eligible to receive an annual equity
incentive award in the form of, at the discretion of the Holding Company Board,
an option to purchase Holding Company common stock or an award of restricted
Holding Company common stock (the “Annual Equity Award”), which Annual Equity
Award shall be subject to approval by the Holding Company Board prior to award
thereof. Executive’s minimum Annual Equity Award opportunity for any annual
period shall have a value (based on the fair value of the award for financial
accounting purposes) at the time of grant of no less than twenty-five percent
(25%) of Executive’s prior year Base Salary. Each Annual Equity Award shall be
granted by March 31st of each year during the Term, vest in annual increments of
at least twenty percent (20%) and be subject to any performance conditions or
other customary terms and conditions as set forth in the applicable award
document prepared by the Holding Company.

(k) The Bank shall establish a nonqualified account balance deferred
compensation plan for the benefit of Executive to which the Bank will, at the
discretion of the Holding Company Board, credit annually an amount then
determined to be sufficient to result in an account balance at the date
Executive would attain age 65 which would be sufficient to pay to Executive at
least $150,000 of annual retirement benefits for fifteen (15) years after his
qualifying retirement. Payments under the plan shall commence upon the later of
(i) Executive attaining age 65 and (ii) the date that Executive is no longer
providing services to the Bank as an employee. All of Executive’s rights under
the plan shall be subject to all other terms and conditions of that plan.

(l) During the Term, the Bank shall maintain bank owned life insurance
arrangements on Executive’s life providing at least $1.7 million in death
benefits to Executive’s designated beneficiaries.

4. Termination of Employment.

(a) Death. Executive’s employment shall terminate automatically upon Executive’s
death.

 

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(b) Disability. If the Bank or Executive determines in good faith that the
Disability (as defined below) of Executive has occurred during the Term, either
such party may give written notice to the other party of its or his intention to
terminate Executive’s employment on account of Executive’s Disability. In such
event, Executive’s employment with the Bank shall terminate effective on the
30th day after receipt of such written notice by either party, provided that,
within the thirty (30) days after such receipt, Executive shall not have
returned to full-time performance of Executive’s duties. “Disability” shall mean
the inability of Executive, as reasonably determined by either party, to perform
the essential functions of his regular duties and responsibilities, with or
without reasonable accommodation, due to a medically determinable physical or
mental illness which has lasted (or can reasonably be expected to last) for a
period of six (6) consecutive months. At the request of Executive or his
personal representative or the Bank, either party’s determination that the
Disability of Executive has occurred shall be certified by a physician mutually
agreed upon by Executive, or his personal representative, and the Bank.

(c) Termination by Bank. The Bank may terminate Executive’s employment during
the Term with or without Cause immediately on written notice to Executive.
“Cause” shall mean: (i) Executive’s failure to follow the reasonable directions
of the Bank Board and the failure to cure such failure to the Bank’s
satisfaction within ten (10) days after receipt of written notice from the Bank
Board specifying the particulars of the failure; (ii) any intentional misconduct
by Executive in connection with the Bank’s business or relating to Executive’s
duties hereunder, or any willful violation of any laws, rules or regulations
applicable to banks or the banking industry generally; (iii) Executive’s
material failure to comply with the Bank’s written policies and the failure to
cure such failure to the Bank’s satisfaction within ten (10) days after receipt
of written notice from the Bank Board specifying the particulars of the failure;
(iv) any act of fraud, misappropriation or embezzlement by Executive; (v) a
material breach of this Agreement that is not cured by Executive within ten
(10) days of written notice by the Bank Board of the breach; or (vi) the
conviction of Executive of, or Executive’s pleading guilty or nolo contendere
to, a felony or a crime involving moral turpitude (including pleading guilty or
nolo contendere to a felony or lesser charge which results from plea
bargaining).

(d) Termination by Executive.

(1) Executive’s employment may be terminated by Executive without Good Reason
(as defined herein) by delivering to the Bank written notice of termination
thirty (30) days prior to the desired date of termination.

(2) Executive’s employment may be terminated by Executive with Good Reason by
first delivering to the Bank written notice setting forth with specificity the
occurrence deemed to give rise to a right to terminate for Good Reason (which
notice must be given no later than thirty (30) days after the initial occurrence
of such event) (the “Good Reason Notice”). If the Bank has not taken action to
correct, rescind or otherwise substantially reverse the occurrence supporting
termination for Good Reason as identified by Executive within thirty (30) days
following its receipt of such Good Reason Notice, then Executive may terminate
his employment for Good Reason; provided, however, that Executive’s date of
termination must occur within a period of ninety (90) days after the occurrence
of an event of Good Reason. For purposes of this Agreement, “Good Reason” shall
mean any of the following, without Executive’s consent: (i) a material
diminution in Executive’s Base Salary; (ii) a material diminution in Executive’s
authority, duties, or responsibilities; (iii) the relocation of the Bank’s
principal office to a location that is more than twenty-five (25) miles from the
location of the Bank’s principal office on the Effective Date; (iv) any material
breach of this Agreement by the Bank; or (v) the Holding Company Board’s or the
Bank Board’s failure to nominate or re-nominate, as applicable, Executive to the
Holding Company Board or the Bank Board, respectively. Good Reason shall not
include Executive’s death or Disability.

 

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5. Obligations of the Bank upon Termination.

(a) Qualifying Termination. If, during the Term, (i) Executive resigns for Good
Reason or (ii) the Bank terminates Executive’s employment other than for Cause
or Disability (each, a “Qualifying Termination”), then, subject to Section 6
hereof:

(1) the Bank shall pay to Executive in a lump sum in cash within thirty
(30) days after the date of termination, the exact payment date to be determined
by the Bank, Executive’s Base Salary through the date of termination to the
extent not theretofore paid (the “Accrued Salary”), (ii) any earned and unpaid
Annual Bonus for any year prior to the year in which the date of termination
occurs, and (iii) any unreimbursed business expenses incurred by Executive on or
before the date of termination;

(2) Executive shall be entitled to receive a pro rata portion of the Annual
Bonus for the year in which the date of termination occurs, equal to (i) the
Annual Bonus, if any, that would have been earned by Executive for such year if
he had remained employed on such payment date, based on actual performance under
applicable financial metrics, multiplied by (ii) a fraction, the numerator of
which is the number of days worked by Executive during such final year and the
denominator of which is 365 (the “Final Year Pro Rata Bonus”), and such Final
Year Pro Rata Bonus shall be paid a single lump sum cash payment at the time
such bonus awards are normally paid for such plan year;

(3) the Bank shall pay to Executive an amount equal to two (2) times the sum of
(x) Executive’s then-current Base Salary plus (y) the average of the Annual
Bonuses earned by Executive for each of the three (3) calendar years immediately
preceding the year in which the date of termination occurs (the “Non-CIC
Severance Payment”); provided, however, that if such Qualifying Termination
occurs during the period beginning three months prior to, and ending eighteen
(18) months after the closing of, a Change in Control (as defined in Exhibit A
attached hereto), then the Bank shall pay to Executive an amount equal to 2.99
times the sum of (i) Executive’s then-current Base Salary plus (ii) the average
of the Annual Bonuses earned by Executive for each of the three calendar years
immediately preceding the year in which the date of termination occurs (the “CIC
Severance Payment”). Subject to Sections 6 and 12 hereof, the Non-CIC Severance
Payment or the CIC Severance Payment, as applicable, shall be paid in a single
lump sum in cash within sixty (60) days following the date of termination
(except that the excess of the CIC Severance Payment over the non-CIC Severance
Payment on the date of the Qualifying Termination shall be paid within sixty
(60) days following the date of the closing of the relevant Change in Control if
the termination of employment occurs during the period beginning three months
prior to and ending on the date of the Change in Control), the exact payment
date to be determined by the Bank. For the avoidance of doubt, Executive shall
not be entitled to receive both the CIC Severance Payment and the Non-CIC
Severance Payment;

(4) if Executive elects to continue participation in any group medical, dental,
vision and/or prescription drug plan benefits to which Executive and/or
Executive’s eligible dependents would be entitled under Section 4980B of the
Code (COBRA), then for eighteen (18) months following the date of termination
(the “COBRA Reimbursement Period”), the Bank shall pay to Executive monthly
payments (the “COBRA Payments”) of an amount equal to the excess of (a) the
COBRA cost of such coverage over (b) the amount that Executive would have had to
pay for such coverage if he had remained employed during the COBRA Reimbursement
Period

 

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and paid the active employee rate for such coverage, less withholding for taxes
and other similar items; provided, however, that (i) if Executive becomes
eligible to receive group health benefits under a program of a subsequent
employer or otherwise, the Bank’s obligation to pay any portion of the cost of
health coverage as described herein shall cease, except as otherwise provided by
law; and (ii) the COBRA Reimbursement Period shall only run for the period
during which Executive is eligible to elect health coverage under COBRA and
timely elects such coverage;

(5) the Bank shall continue to pay (no less frequently than monthly) Executive’s
long-term disability premiums and life insurance premiums for Executive for a
period of eighteen (18) months (the “Other Premium Payments”); and

(6) to the extent not theretofore paid or provided, the Bank shall timely pay or
provide to Executive any other amounts or benefits required to be paid or
provided or which Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Bank and its affiliated
companies (such other amounts and benefits shall be hereinafter referred to as
the “Other Benefits”).

(b) Termination Other than by Reason of a Qualifying Termination; Expiration of
Term. If Executive’s employment is terminated for any reason other than a
Qualifying Termination, or if Executive’s employment ends because this Agreement
is not renewed in accordance with Section 1, then the Bank shall have no further
obligations to Executive or Executive’s legal representatives under this
Agreement, other than for payment of Accrued Salary and the timely payment or
provision of Other Benefits. Notwithstanding the foregoing, if Executive’s
employment is terminated by reason of his death or Disability, Executive, or his
estate or legal representative, as applicable, shall be entitled to the Final
Year Pro Rata Bonus and, in the case of a termination by reason of his
Disability, COBRA Payments and Other Premium Payments for a period of six
(6) months following the date of termination.

(c) Resignations. Termination of Executive’s employment for any reason
whatsoever shall constitute Executive’s resignation from the Bank Board and the
boards of directors of any subsidiary on which he serves, and resignation as an
officer of the Holding Company and the Bank, and of any of the subsidiaries for
which he serves as an officer.

6. Release of Claims. Notwithstanding anything to the contrary in this
Agreement, the Bank shall be obligated to provide the benefits and payments
specified in Section 5(a) hereof only if within forty-five (45) days after the
date of termination, Executive shall have executed a full general release of
claims and covenant not to sue substantially in the form attached hereto as
Exhibit B and returned same to the Company and such Release Agreement shall not
have been revoked within any revocation period specified in the Release
Agreement.

7. Protective Covenants.

(a) Definitions. The following capitalized terms used in this Agreement shall
have the meanings assigned to them below, which definitions shall apply to both
the singular and the plural forms of such terms:

(i) “Competitive Services” means engaging in the business of community banking
or commercial banking, including, without limitation, originating, underwriting,
closing and selling loans, receiving deposits and otherwise engaging in the
business of banking, as well as the business of providing any other activities,
products, or services of the type conducted, authorized, offered, or provided by
the Bank as of Executive’s Termination Date, or during the two (2) years
immediately prior to Executive’s Termination Date.

 

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(ii) “Confidential Information” means any and all data and information relating
to the Bank, its activities, business, or clients that (i) is disclosed to
Executive or of which Executive becomes aware as a consequence of his employment
with the Bank; (ii) has value to the Bank; and (iii) is not generally known
outside of the Bank. “Confidential Information” shall include, but is not
limited to the following types of information regarding, related to, or
concerning the Bank: trade secrets (as defined by applicable law); financial
plans and data; management planning information; business plans; operational
methods; market studies; marketing plans or strategies; pricing information;
product development techniques or plans; customer lists; customer files, data
and financial information; details of customer contracts; current and
anticipated customer requirements; identifying and other information pertaining
to business referral sources; past, current and planned research and
development; computer aided systems, software, strategies and programs; business
acquisition plans; management organization and related information (including,
without limitation, data and other information concerning the compensation and
benefits paid to officers, directors, employees and management); personnel and
compensation policies; new personnel acquisition plans; and other similar
information. “Confidential Information” also includes combinations of
information or materials which individually may be generally known outside of
the Bank, but for which the nature, method, or procedure for combining such
information or materials is not generally known outside of the Bank. In addition
to data and information relating to the Bank, “Confidential Information” also
includes any and all data and information relating to or concerning a third
party that otherwise meets the definition set forth above, that was provided or
made available to the Bank by such third party, and that the Bank has a duty or
obligation to keep confidential. This definition shall not limit any definition
of “confidential information” or any equivalent term under state or federal law.
“Confidential Information” shall not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right or privilege of the Bank.

(iii) “Material Contact” means contact between Executive and a customer or
potential customer of the Bank (i) with whom or which Executive has or had
dealings on behalf of the Bank; (ii) whose dealings with the Bank are or were
coordinated or supervised by Executive; (iii) about whom Executive obtains
Confidential Information in the ordinary course of business as a result of his
employment with the Bank; or (iv) who receives products or services of the Bank,
the sale or provision of which results or resulted in compensation, commissions,
or earnings for Executive within the two (2) years prior to Executive’s
Termination Date.

(iv) “Person” means any individual or any corporation, partnership, joint
venture, limited liability company, association or other entity or enterprise.

(v) “Principal or Representative” means a principal, owner, partner,
shareholder, joint venturer, investor, member, trustee, director, officer,
manager, employee, agent, representative or consultant.

(vi) “Protected Customer” means any Person to whom the Bank has sold its
products or services or actively solicited to sell its products or services, and
with whom Executive has had Material Contact on behalf of the Bank during his
employment with the Bank.

(viii) “Non-Compete Restricted Period” means any time during Executive’s
employment with the Bank, and, if Executive incurs a Qualifying Termination,
then the Non-Compete Restricted Period shall mean during Executive’s employment
plus two (2) years from Executive’s Termination Date by reason of such
Qualifying Termination. Notwithstanding the foregoing, if either the Bank or
Executive provides notice to the other party under Section 1 to cause the Term
to cease to extend automatically, then the Non-Compete Restricted Period shall
end upon expiration of the Term.

 

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(ix) “Non-Recruitment Restricted Period” means any time during Executive’s
employment with the Bank, plus two (2) years from Executive’s Termination Date.
Notwithstanding the foregoing, if either the Bank or Executive provides notice
to the other party under Section 1 to cause the Term to cease to extend
automatically, then the Non-Recruitment Restricted Period shall end upon
expiration of the Term.

(x) “Non-Solicitation Restricted Period” means any time during Executive’s
employment with the Bank, plus two (2) years from Executive’s Termination Date.
Notwithstanding the foregoing, if either the Bank or Executive provides notice
to the other party under Section 1 to cause the Term to cease to extend
automatically, then the Non-Solicitation Restricted Period shall end upon
expiration of the Term.

(xi) “Restricted Territory” means Gadsden, Jefferson, Leon and Wakulla Counties
in the State of Florida, and anywhere within a twenty (20) mile radius of a
branch office of the Bank that is operational as of the Termination Date.

(xii) “Restrictive Covenants” means the restrictive covenants contained in
Section 7(b) through 7(f) hereof.

(xiii) “Termination” means the termination of Executive’s employment with the
Bank, for any reason, whether with or without cause, upon the initiative of
either party.

(xiv) “Termination Date” means the date of Executive’s Termination.

(b) Restriction on Disclosure and Use of Confidential Information. Executive
agrees that Executive shall not, directly or indirectly, use any Confidential
Information on Executive’s own behalf or on behalf of any Person other than the
Bank, or reveal, divulge, or disclose any Confidential Information to any Person
not expressly authorized by the Bank to receive such Confidential Information.
This obligation shall remain in effect for as long as the information or
materials in question retain their status as Confidential Information. Executive
further agrees that he shall fully cooperate with the Bank in maintaining the
Confidential Information to the extent permitted by law. The parties acknowledge
and agree that this Agreement is not intended to, and does not, alter either the
Bank’s rights or Executive’s obligations under any state or federal statutory or
common law regarding trade secrets and unfair trade practices. Anything herein
to the contrary notwithstanding, Executive shall not be restricted from:
(i) disclosing information that is required to be disclosed by law, court order
or other valid and appropriate legal process; provided, however, that in the
event such disclosure is required by law, Executive shall provide the Bank with
prompt notice of such requirement so that the Bank may seek an appropriate
protective order prior to any such required disclosure by Executive; or
(ii) reporting possible violations of federal, state, or local law or regulation
to any governmental agency or entity, or from making other disclosures that are
protected under the whistleblower provisions of federal, state, or local law or
regulation, and Executive shall not need the prior authorization of the Bank to
make any such reports or disclosures and shall not be required to notify the
Bank that Executive has made such reports or disclosures.

(c) Non-Competition. Executive agrees that, during the Non-Compete Restricted
Period, he will not, without prior written consent of the Bank, directly or
indirectly (a) carry on or engage in Competitive Services within the Restricted
Territory on his own or on behalf of any Person or any Principal or
Representative of any Person, or (b) own, manage, operate, join, control or
participate in the ownership, management, operation or control, of any business,
whether in corporate, proprietorship or partnership form or otherwise where such
business is engaged in the provision of Competitive Services within the
Restricted Territory.

 

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(d) Non-Solicitation of Protected Customers. Executive agrees that, during the
Non-Solicitation Restricted Period, he shall not, without the prior written
consent of the Bank, directly or indirectly, on his own behalf or as a Principal
or Representative of any Person, solicit, divert, take away, or attempt to
solicit, divert, or take away a Protected Customer for the purpose of engaging
in, providing, or selling Competitive Services.

(e) Non-Recruitment of Employees. Executive agrees that during the
Non-Recruitment Restricted Period, he shall not, without the prior written
consent of the Bank, directly or indirectly, whether on his own behalf or as a
Principal or Representative of any Person, solicit or induce or attempt to
solicit or induce any employee of the Bank to terminate his employment
relationship with the Bank or to enter into employment with Executive or any
other Person.

(f) Return of Materials. Executive agrees that he will not retain or destroy
(except as set forth below), and will immediately return to the Bank on or prior
to the Termination Date, or at any other time the Bank requests such return, any
and all property of the Bank that is in his possession or subject to his
control, including, but not limited to, keys, credit and identification cards,
personal items or equipment, customer files and information, papers, drawings,
notes, manuals, specifications, designs, devices, code, email, documents, flash
drives, CDs, keys, access cards, credit cards, identification cards, computers,
mobile devices, other electronic media, all other files and documents relating
to the Bank and its business (regardless of form, but specifically including all
electronic files and data of the Bank), together with all Confidential
Information belonging to the Bank or that Executive received from or through his
employment with the Bank. Executive will not make, distribute, or retain copies
of any such information or property.

(g) Enforcement of Restrictive Covenants.

(i) Rights and Remedies Upon Breach. The parties specifically acknowledge and
agree that the remedy at law for any breach of the Restrictive Covenants will be
inadequate, and that in the event Executive breaches, or threatens to breach,
any of the Restrictive Covenants, the Bank shall have the right and remedy,
without the necessity of proving actual damage or posting any bond, to enjoin,
preliminarily and permanently, Executive from violating or threatening to
violate the Restrictive Covenants and to have the Restrictive Covenants
specifically enforced by any court of competent jurisdiction, it being agreed
that any breach or threatened breach of the Restrictive Covenants would cause
irreparable injury to the Bank and that money damages would not provide an
adequate remedy to the Bank.

(ii) Severability and Modification of Covenants. Executive acknowledges and
agrees that each of the Restrictive Covenants is reasonable and valid in time
and scope and in all other respects. The parties agree that it is their
intention that the Restrictive Covenants be enforced in accordance with their
terms to the maximum extent permitted by law. Each of the Restrictive Covenants
shall be considered and construed as a separate and independent covenant. Should
any part or provision of any of the Restrictive Covenants be held invalid, void,
or unenforceable, such invalidity, voidness, or unenforceability shall not
render invalid, void, or unenforceable any other part or provision of this
Agreement or such Restrictive Covenant. If any of the provisions of the
Restrictive Covenants should ever be held by a court of competent jurisdiction
to exceed the scope permitted by the applicable law, such provision or
provisions shall be automatically modified to such lesser scope as such court
may deem just and proper for the reasonable protection of the Bank’s legitimate
business interests and may be enforced by the Bank to that extent in the manner
described above and all other provisions of this Agreement shall be valid and
enforceable.

 

9

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8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any employee benefit plan,
program, policy or practice provided by Parent or its affiliated companies and
for which Executive may qualify, except as specifically provided herein. Amounts
that are vested benefits or which Executive is otherwise entitled to receive
under any plan, policy, practice or program of the Bank or any of its affiliated
companies at or subsequent to the date of termination shall be payable in
accordance with such plan, policy, practice or program except as explicitly
modified by this Agreement.

9. Full Settlement; No Mitigation. The Bank’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Bank may have against
Executive or others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not Executive obtains other employment.

10. Limitation of Benefits.

(a) Notwithstanding anything in this Agreement to the contrary, in the event it
shall be determined that any benefit, payment or distribution by the Bank to or
for the benefit of Executive (whether payable or distributable pursuant to the
terms of this Agreement or otherwise) (such benefits, payments or distributions
are hereinafter referred to as “Payments”) would, if paid, be an “excess
parachute payment” within the meaning of Section 280G of the Code, but for the
application of this sentence (“Parachute Payments”), then the aggregate present
value of the Payments shall be reduced (but not below zero) to an amount
expressed in present value that maximizes the aggregate present value of the
Payments without causing the Payments or any part thereof to be Parachute
Payments; provided, however, that the foregoing reduction will be made only if
and to the extent that such reduction would result in an increase in the
aggregate Payments to be provided, determined on an after-tax basis (taking into
account the excise tax imposed by Section 4999 of the Code (the “Excise Tax”),
any tax imposed by any comparable provision of state law, and any applicable
federal, state and local income and employment taxes). Whether requested by
Executive or the Bank, the determination of whether any reduction in such
Payments is required pursuant to the preceding sentence will be made at the
expense of the Bank by an independent, nationally recognized accounting firm or
compensation consulting firm mutually acceptable to the Bank and Executive (the
“Determination Firm”). In the event the Payments are required to be reduced
pursuant to this Section, the Payments will be reduced by category in the
following order: (a) reduction or elimination of cash severance benefits that
are subject to Code Section 409A (beginning with the amounts with the latest
payment dates); (b) reduction or elimination of cash severance benefits that are
not subject to Code Section 409A(beginning with the amounts with the latest
payment dates); (c) reduction or elimination of any remaining portion of the
Payments that are subject to Code Section 409A(beginning with the amounts with
the latest payment dates); (d) reduction or elimination of any remaining portion
of the Payments that are not subject to Code Section 409A (beginning with the
amounts with the latest payment dates) and (e) cancellation of accelerated
vesting of equity awards. In the event that acceleration of vesting of equity
award compensation is to be cancelled, such acceleration of vesting will be
cancelled in the order that maximizes the aggregate Payments to be provided,
determined on an after-tax basis.

(b) Section 7 of this Agreement contains covenants of Executive to refrain from
certain activities deemed harmful to the Bank for a set period of time in
exchange for the promises contained herein. If Executive is deemed eligible to
receive Payments under this Agreement that could be

 

10

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subject to the Excise Tax, the Bank shall seek a valuation from the
Determination Firm to determine the value of the covenants contained in
Section 7 of this Agreement and such amount shall be allocated to such
arrangements and be excluded from treatment as a Parachute Payment. For the
avoidance of doubt, it is the intention of this Agreement that the value
assigned to the covenants contained in Sections 7, 8 and 9 of this Agreement by
the Accountants not be considered a Parachute Payment for purposes of this
Section 4.4.

(c) For purposes of this Section 10, present value shall be determined in
accordance with Section 280G(d)(4) of the Code. All determinations required to
be made under this Section 10, including whether an Excise Tax would otherwise
be imposed, whether the Payments shall be reduced, the amount of the reduction,
and the assumptions to be utilized in arriving at such determinations, shall be
made in writing and in good faith by the Determination Firm, which shall provide
detailed supporting calculations both to the Bank and Executive within fifteen
(15) business days of the receipt of notice from Executive that a Payment is due
to be made, or such earlier time as is requested by the Bank. All fees and
expenses of the Determination Firm shall be borne solely by the Bank. The Bank
and Executive shall provide the Determination Firm with such information and
documents as the Determination Firm may reasonably request in order to make a
determination under this Section 10. The Determination Firm’s determinations
shall be final and binding on the Bank and Executive.

11. Successors. This Agreement is personal to Executive and shall not be
assignable by Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
Executive’s legal representatives. This Agreement can be assigned by the Bank
and shall be binding and inure to the benefit of the Bank, its successors and
assigns.

12. Code Section 409A.

(a) General. This Agreement shall be interpreted and administered in a manner so
that any amount or benefit payable hereunder shall be paid or provided in a
manner that is either exempt from or compliant with the requirements of
Section 409A of the Code and applicable Internal Revenue Service guidance and
Treasury Regulations issued thereunder (and any applicable transition relief
under Section 409A of the Code). Nevertheless, the tax treatment of the benefits
provided under the Agreement is not warranted or guaranteed. Neither the Bank
nor its directors, officers, employees or advisers shall be held liable for any
taxes, interest, penalties or other monetary amounts owed by Executive as a
result of the application of Section 409A of the Code.

(b) Definitional Restrictions. Notwithstanding anything in this Agreement to the
contrary, to the extent that any amount or benefit that would constitute
non-exempt “deferred compensation” for purposes of Section 409A of the Code
(“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable
hereunder by reason of a Change in Control or Executive’s termination of
employment, such Non-Exempt Deferred Compensation will not be payable or
distributable to Executive by reason of such circumstance unless (i) the Change
in Control satisfies the definition of a change in the ownership or effective
control of the Bank or in the ownership of a substantial portion of the assets
of the Bank and (ii) the circumstances giving rise to such termination of
employment meet any description or definition of “separation from service,” in
each case within the meanings under Section 409A of the Code and applicable
regulations (without giving effect to any elective provisions that may be
available under such definition). This provision does not affect the dollar
amount or prohibit the vesting of any Non-Exempt Deferred Compensation upon a
termination of employment, however defined. If this provision prevents the
payment or distribution of any Non-Exempt Deferred Compensation, such payment or
distribution shall be made at the time and in the form that would have applied
absent the non-409A-conforming event.

 

11

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(c) Treatment of Installment Payments. Each payment of termination benefits
under Section 5 of this Agreement, including, without limitation, each
installment payment and each payment or reimbursement of premiums for continued
medical, dental, disability or life insurance coverage, shall be considered a
separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for
purposes of Section 409A of the Code.

(d) Timing of Release of Claims. Whenever in this Agreement a payment or benefit
is conditioned on Executive’s execution of a release of claims, such release
must be executed and delivered to the Bank and all revocation periods shall have
expired within 60 days after the date of termination; failing which such payment
or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt
Deferred Compensation, then such payment or benefit (including any installment
payments) that would have otherwise been payable during such 60-day period shall
be accumulated and paid on the 60th day after the date of termination provided
such release shall have been executed and such revocation periods shall have
expired. If such payment or benefit is exempt from Section 409A of the Code, the
Bank may elect to make or commence payment at any time during such period.

(e) Six-Month Delay in Certain Circumstances. Notwithstanding anything in this
Agreement to the contrary, if any amount or benefit that would constitute
Non-Exempt Deferred Compensation would otherwise be payable or distributable
under this Agreement by reason of Executive’s separation from service during a
period in which he is a Specified Employee (as defined below), then, subject to
any permissible acceleration of payment by the Bank under Treas. Reg.
Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of
interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such
Non-Exempt Deferred Compensation that would otherwise be payable during the
six-month period immediately following Executive’s separation from service will
be accumulated through and paid or provided on the first day of the seventh
month following Executive’s separation from service (or, if Executive dies
during such period, within 30 days after Executive’s death) (in either case, the
“Required Delay Period”); and (ii) the normal payment or distribution schedule
for any remaining payments or distributions will resume at the end of the
Required Delay Period. For purposes of this Agreement, the term “Specified
Employee” has the meaning given such term in Code Section 409A and the final
regulations thereunder.

(f) Timing of Reimbursements and In-kind Benefits. If Executive is entitled to
be paid or reimbursed for any taxable expenses under this Agreement, including
but not limited to Sections 3(d), 3(g), 3(h), 5(a)(4), 5(a)(5) or 14(1) and such
payments or reimbursements are includible in Executive’s federal gross taxable
income, the amount of such expenses reimbursable in any one calendar year shall
not affect the amount reimbursable in any other calendar year, and the
reimbursement of an eligible expense must be made no later than December 31 of
the year after the year in which the expense was incurred. No right of Executive
to reimbursement of expenses under this Agreement, including but not limited to
Sections 3(d), 3(g), 3(h), 5(a)(4), 5(a)(5) or 14(1) shall be subject to
liquidation or exchange for another benefit.

13. Regulatory Action.

(a) If Executive is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and
(g)(1)), all obligations of the Bank under this Agreement shall terminate, as of
the effective date of such order.

(b) If Executive is suspended and/or temporarily prohibited from participating
in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or
8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of the
Bank under this Agreement shall be suspended as of the date of service, unless
stayed by appropriate proceedings. If the charges in the notice are dismissed,
the Bank shall reinstate (in whole or in part) any of its obligations which were
suspended.

 

12

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(c) If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all
obligations under this Agreement shall terminate as of the date of default.

(d) All obligations under this Agreement shall be terminated, except to the
extent a determination is made that continuation of the Agreement is necessary
for the continued operation of the Bank (1) by the director of the FDIC or his
or his designee (the “Director”), at the time the FDIC enters into an agreement
to provide assistance to or on behalf of the Bank under the authority contained
in 12(c) of the FDIA; or (2) by the Director, at the time the Director approves
a supervisory merger to resolve problems related to operation of the Bank when
the Bank is determined by the Director to be in an unsafe and unsound condition.

(e) Notwithstanding the timing for the payment of any severance amounts
described in Section 5, no such payments shall be made or commence, as
applicable, that require the concurrence or consent of the appropriate federal
banking agency of the Bank pursuant to 12 C.F.R. Section 359 prior to the
receipt of such concurrence or consent. The Bank shall have the obligation to
submit an application to make such payment to the appropriate federal banking
agency within fifteen (15) business days of Executive’s right to such payment
arising and shall provide a copy of such application to Executive. Any payments
suspended by operation of this Section 13(e) shall be paid as a lump sum within
thirty (30) days following receipt of the concurrence or consent of the
appropriate federal banking agency of the Bank or as otherwise directed by such
federal banking agency.

(f) All obligations under this Agreement are further subject to such conditions,
restrictions, limitations and forfeiture provisions as may separately apply
pursuant to any applicable state or federal banking laws.

14. Miscellaneous.

(a) Applicable Law; Forum Selection; Consent to Jurisdiction: The Bank and
Executive agree that this Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Florida without giving
effect to its conflicts of law principles. Executive agrees that the exclusive
forum for any action to enforce this Agreement, as well as any action relating
to or arising out of this Agreement, shall be the state or federal courts of the
State of Florida. With respect to any such court action, Executive hereby
(i) irrevocably submits to the personal jurisdiction of such courts;
(ii) consents to service of process; (iii) consents to venue; and (iv) waives
any other requirement (whether imposed by statute, rule of court, or otherwise)
with respect to personal jurisdiction, service of process, or venue. The parties
hereto further agree that the state and federal courts of the State of Florida
are convenient forums for any dispute that may arise herefrom and that neither
party shall raise as a defense that such courts are not convenient forums.

(b) Captions. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.

(c) Amendments. This Agreement may not be amended or modified otherwise than-by
a written agreement executed by the parties hereto or their respective
successors and legal representatives.

 

13

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(d) Notices. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
if to Executive, the address on file with the Bank, and if to the Bank, Prime
Meridian Bank, 1897 Capital Circle NE, Second Floor, Tallahassee, Florida,
Attention: Jill McMillan, or to such other address as either party shall have
furnished to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the addressee.

(e) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

(f) Withholding. The Bank may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

(g) Waivers. Failure of either party to insist, in one or more instances, on
performance by the other in strict accordance with the terms and conditions of
this Agreement shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by the party making the waiver.

(h) Entire Agreement. This Agreement contains the entire agreement between the
Bank and Executive with respect to the subject matter hereof and, from and after
the date hereof, this Agreement shall supersede any other agreement, written or
oral, between the parties relating to the subject matter of this Agreement.

(i) Construction. The parties understand and agree that because they both have
been given the opportunity to have counsel review and revise this Agreement, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement. Instead, the language of all parts of this Agreement shall be
construed as a whole, and according to its fair meaning, and not strictly for or
against either of the parties.

(j) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

(k) Third Party Beneficiary. The parties acknowledge and agree that the Holding
Company is an intended third-party beneficiary of this Agreement and may enforce
the Bank’s rights hereunder.

(l) Legal Fees. If, after a Change of Control, it appears to Executive that
(a) the Bank has failed to comply with any of its obligations under this
Agreement, or (b) the Bank or any other person (other than Executive) has taken
any action to declare this Agreement void or unenforceable, or instituted any
litigation or other legal action designed to deny, diminish, or to recover from
Executive the benefits intended to be provided to Executive hereunder (including
any payment pursuant to Section 5 of this Agreement), the Bank irrevocably
authorizes Executive from time to time to retain counsel of his choice, at the
Bank’s expense, to represent Executive in connection with the initiation or
defense of any litigation or other legal action, whether by or against the Bank
or any of its affiliated companies or any director, officer, shareholder, or
other person affiliated with the Bank. The fees and expenses of counsel selected
from time to time by Executive as provided in this Section 14(l) shall be paid
or reimbursed to Executive by the Bank, whether suit or an arbitration
proceeding has been brought or not. The Bank’s obligation to pay Executive’s
legal fees provided by this Section 14(l) operates separately from and in
addition to any legal fee reimbursement obligation the Bank have with Executive
under any separate severance or other agreement.

[Signature Page to Follow]

 

14

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IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand and the Bank has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

 

    PRIME MERIDIAN BANK /s/ Sammie D. Dixon, Jr.     By:  

/s/ Richard A. Weidner

Sammie D. Dixon, Jr.       Name: Richard A. Weidner       Title: Chairman of the
Bank Board     PRIME MERIDIAN HOLDING COMPANY     By:  

/s/ Richard A. Weidner

      Name: Richard A. Weidner       Title: Chairman of the Bank Board

[Signature Page to Amended and Restated Employment Agreement]

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Exhibit A

Change in Control

For purposes of this Agreement, a “Change in Control” shall mean (i) any
transaction, whether by merger, consolidation, asset sale, recapitalization,
reorganization, combination, stock purchase, tender offer, reverse stock split,
or otherwise, which results in the acquisition of, or beneficial ownership (as
such term is defined under rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any entity, person or any group
thereof acting in concert, of 50% or more of the outstanding shares of common
stock of the Holding Company; or (ii) the sale of 50% or more of the collective
assets of the Holding Company.

For the avoidance of doubt, the occurrence of a Change in Control alone shall
not trigger any payments under this Agreement. Rather, the occurrence of a
Change in Control shall (i) impact the Term, pursuant to Section 1 of this
Agreement, (ii) dictate the formula for the severance payment, if applicable,
pursuant to Section 5(a)(3) of this Agreement and (iii) provide for the time for
payment of additional severance in connection with the Change in Control.

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Exhibit B

SEPARATION AGREEMENT

THIS AGREEMENT (the “Agreement”) is entered into as of the Effective Date, as
defined in Paragraph 6 hereof, by and between PRIME MERIDIAN BANK (the “Bank”),
PRIME MERIDIAN HOLDING COMPANY (“PMHC” and, together with the Bank, collectively
referred to herein as the “Company”) and SAMMIE D. DIXON, JR. (“Executive”).
Together, the Company and Executive may be referred to hereinafter as the
“Parties.”

In consideration of the payments, covenants and releases described below, and in
consideration of other good and valuable consideration, the receipt and
sufficiency of all of which is hereby acknowledged, the Company and Executive
agree as follows:

1. Separation from Employment. Executive’s employment with the Company ended on
_______________ (the “Termination Date”). Executive will receive by separate
letter information regarding his rights regarding continuation of health
insurance under Section 4980B of the Internal Revenue Code (“COBRA”), and to the
extent that Executive has such rights, nothing in this Agreement will change or
impair those rights.

2. Separation Obligations of the Company. In consideration of Executive’s
promises contained in this Agreement, the Company agrees as follows:

[Insert compensation based on relevant portion of Section 5(a).]

The Parties acknowledge and agree that the payments and benefits set forth in
this Paragraph 2 exceed any and all actions, pay, and benefits that the Company
might otherwise have owed to Executive by contract or law, and that the payments
and benefits set forth in this Paragraph 2 constitute good, valuable, and
sufficient consideration for Executive’s release and agreements herein. The
Company’s obligation to provide the payments and benefits set forth in this
Paragraph 2 is expressly contingent on Executive executing and not revoking this
Agreement pursuant to Paragraph 6 below.

3. General Release of Claims. In consideration of the payments made to him by
the Company and the promises contained in this Agreement, Executive on behalf of
himself and his agents and successors in interest, hereby UNCONDITIONALLY
RELEASES AND DISCHARGES the Company, its successors, subsidiaries, parent
companies (including, without limitation, Prime Meridian Holding Company),
assigns, joint ventures, and affiliated companies and their respective agents,
legal representatives, shareholders, attorneys, employees, members, managers,
officers and directors (collectively, the “Releasees”) from ALL CLAIMS,
LIABILITIES, DEMANDS AND CAUSES OF ACTION which he may by law release, as well
as all contractual obligations not expressly set forth in this Agreement,
whether known or unknown, fixed or contingent, that he may have or claim to have
against any Releasee for any reason as of the date of execution of this
Agreement. This Release and Covenant Not To Sue includes, but is not limited to,
claims arising under federal, state or local laws prohibiting employment
discrimination; claims arising under severance plans and contracts; and claims
growing out of any legal restrictions on the Company’s rights to terminate its
employees or to take any other employment action, whether statutory, contractual
or arising under common law or case law. Executive specifically acknowledges and
agrees that he is releasing any and all rights under federal, state and local
employment laws including without limitation the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 1981, the Americans With Disabilities Act, the
Family and Medical Leave Act, the Genetic Information Nondiscrimination Act, the
anti-retaliation provisions of the Fair Labor Standards Act, the Employee

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Retirement Income Security Act, the Equal Pay Act, the Occupational Safety and
Health Act, the Worker Adjustment and Retraining Notification Act, the Employee
Polygraph Protection Act, the Fair Credit Reporting Act, and any and all other
local, state, and federal law claims arising under statute or common law. It is
agreed that this is a general release and it is to be broadly construed as a
release of all claims, except those that cannot be released by law. This
Agreement shall not in any way be construed as an admission by the Company or
any of the Releasees of wrongdoing or liability or that Executive has any rights
against the Company or any of the Releasees. Executive represents and agrees
that he has not transferred or assigned, to any person or entity, any claim that
he is releasing in this Paragraph 3.

4. Protected Rights. Executive understands that nothing contained in this
Agreement limits his ability to file a charge or complaint with the Equal
Employment Opportunity Commission, the National Labor Relations Board, or any
other federal, state or local governmental agency or commission (“Government
Agencies”). Executive further understands that this Agreement does not limit his
ability to communicate with any Government Agencies or otherwise participate in
any investigation or proceeding that may be conducted by any Government Agencies
in connection with any charge or complaint, whether filed by Executive, on his
behalf, or by any other individual. However, based on Executive’s release of
claims set forth in Paragraph 3 of this Agreement, Executive understands that he
is releasing all claims that he may have, as well as, to the extent permitted by
applicable law, his right to recover monetary damages or obtain other relief
that is personal to Executive in connection with any claim he is releasing under
this Agreement.

5. Acknowledgment. The Company hereby advises Executive to consult with an
attorney prior to executing this Agreement and Executive acknowledges and agrees
that the Company has advised, and hereby does advise, him of his opportunity to
consult an attorney or other advisor and has not in any way discouraged him from
doing so. Executive expressly acknowledges and agrees that he has been offered
at least twenty-one (21) days to consider this Agreement before signing it, that
he has read this Agreement and Release carefully, that he has had sufficient
time and opportunity to consult with an attorney or other advisor of his
choosing concerning the execution of this Agreement. Executive acknowledges and
agrees that he fully understands that the Agreement is final and binding, that
it contains a full release of all claims and potential claims, and that the only
promises or representations he has relied upon in signing this Agreement are
those specifically contained in the Agreement itself. Executive acknowledges and
agrees that he is signing this Agreement voluntarily, with the full intent of
releasing the Company from all claims covered by Paragraph 3.

6. Revocation and Effective Date. The Parties agree Executive may revoke the
Agreement at will within seven (7) days after he executes the Agreement by
giving written notice of revocation to Company. Such notice must be delivered to
_______________, and must actually be received by [him/her] at or before the
above-referenced seven-day deadline. The Agreement may not be revoked after the
expiration of the seven-day deadline. In the event that Executive revokes the
Agreement within the revocation period described in this Paragraph, this
Agreement shall not be effective or enforceable, and all rights and obligations
hereunder shall be void and of no effect. Assuming that Executive does not
revoke this Agreement within the revocation period described above, the
effective date of this Agreement (the “Effective Date”) shall be the eighth
(8th) day after the day on which Executive executes this Agreement.

7. Termination of Employment Agreement; Survival of Protective Covenants.
Executive acknowledges and agrees that the Employment Agreement is hereby
terminated, without further action by the Parties, as of the Termination Date
and shall be of no further force and effect, and that except as expressly set
forth in this Agreement, the Company shall have no continuing obligations to
Executive under the Employment Agreement; provided, however, that Sections 7 and
14 of the Employment Agreement shall survive and remain in full force and effect
in accordance with their terms.

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8. Confidentiality of Agreement. Executive agrees not to disclose the underlying
facts that led up to this Agreement or the terms, amount, or existence of this
Agreement or the benefits Executive is receiving under this Agreement to anyone
other than a member of his immediate family, attorney, or other professional
advisor and, even as to such a person, only if the person agrees to honor this
confidentiality requirement. Such a person’s violation of this confidentiality
requirement will be treated as a violation of this Agreement by Executive. This
Paragraph 8 does not prohibit Executive from disclosing the terms, amount, or
existence of this Agreement to the extent necessary legally to enforce this
Agreement. Anything herein to the contrary notwithstanding, Executive shall not
be restricted from disclosing information that is required to be disclosed by
law, court order, other valid and appropriate legal process, or a valid request
by a Government Agency.

9. Final Agreement. This Agreement contains the entire agreement between the
Company and Executive with respect to the subject matter hereof, and supersedes
all prior agreements between the Parties, except as set forth in Paragraph 7
above. The Parties agree that this Agreement may not be modified except by a
written document signed by both Parties. The Parties agree that this Agreement
may be executed in one or more counterparts, each of which will be deemed to be
an original copy of this Agreement and all of which, when taken together, will
be deemed to constitute one and the same agreement.

10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Florida without giving effect to its
conflict of law principles.

11. Waiver. The failure of either party to enforce any of the provisions of this
Agreement shall in no way be construed to be a waiver of any such provision. Any
waiver of any provision of this Agreement must be in a writing signed by the
party making such waiver. No waiver of any breach of this Agreement shall be
held to be a waiver of any other or subsequent breach.

12. Enforcement. In the event that either Party initiates a lawsuit against the
other Party to enforce its rights under this Agreement or otherwise relating to
or arising under this Agreement, the Party that prevails in such lawsuit shall
be entitled to recover from the other Party his or its attorneys’ fees and costs
incurred in connection with such lawsuit.

13. Code Section 409A. This Agreement shall be interpreted and administered in a
manner so that any amount or benefit payable hereunder shall be paid or provided
in a manner that is either exempt from or compliant with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
applicable Internal Revenue Service guidance and Treasury Regulations issued
thereunder. The tax treatment of the benefits provided under the Agreement is
not warranted or guaranteed to Executive, who is responsible for all taxes
assessed on any payments made pursuant to this Agreement, whether under
Section 409A of the Code or otherwise. Neither the Company nor its directors,
officers, employees or advisers shall be held liable for any taxes, interest,
penalties or other monetary amounts owed by Executive as a result of the
application of Section 409A of the Code.

[Signature Page to Follow]

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The Parties hereby signify their agreement to these terms by their signatures
below.

 

EMPLOYEE   Sammie D. Dixon, Jr.

Date:    

PRIME MERIDIAN HOLDING COMPANY

By:    

Richard A. Weidner, Chairman of the Board

Date:    

PRIME MERIDIAN BANK

By:    

Richard A. Weidner, Chairman of the Board

Date:    

[Signature Page to Separation Agreement]