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.

 
 

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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:
 
 
(i)
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.  

 
 
(ii)
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.

 
 
(iii)
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.
 

 
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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 execution of this Agreement. Reimbursement for
expenses for travel by Employee and his spouse between the current residence in
New York and Washington, DC shall also be paid to the Employee promptly
following his submission to FAMC of invoices therefor.   Farmer Mac will also
reimburse, or pay directly, the Employee’s temporary living expenses in the DC
metropolitan area for up to 180 days from the date of execution of this
Agreement and, not later than 180 days from the Date of execution of this
Agreement, will purchase the residence at the address in the first paragraph for
an amount equal to the average of two appraisals by appraisers acceptable to
Farmer Mac.
 
9.           Termination.
 
(a)           Events of Termination.  The Employee's employment shall be
terminated and the employment relationship between the Employee and FAMC shall
be severed as set forth below:
 
(i)           FAMC may terminate the employment of the Employee effective upon
notice to the Employee if the Employee dies or is incapacitated or disabled by
accident, sickness or otherwise so as to render him (in the opinion of an
independent medical consultant selected by the Board in its reasonable
discretion) mentally or physically incapable of performing the services required
to be performed by him under the terms of this Agreement for a period of at
least ninety (90) consecutive days, or for ninety (90) days (whether consecutive
or not) during any six-month period.

 
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(ii)           FAMC may terminate the employment of Employee effective upon
notice to the Employee at any time for “cause.”  For the purposes of this
subsection, “cause” shall mean only:  (A) the Employee’s material breach of an
obligation or representation under this Agreement or of any material fiduciary
duty to FAMC, or any willful act of fraud or willful misrepresentation or
willful concealment to FAMC or the Board, in each case that results or could
reasonably be expected to result in material harm to FAMC; (B) the Employee's
material failure to adhere to (i) any Code of Conduct in effect from time to
time and applicable to officers and/or employees generally or (ii) any written
policy, in each case that results or could reasonably be expected to result in
material harm to FAMC; (C)  the Employee is convicted of, or pleads guilty or
nolo contendere to, any felony or to a misdemeanor involving moral turpitude;
(D) the Employee's willful violation of any law relating to his employment with
FAMC (including, for the avoidance of doubt, any insider trading law); or (E)
conduct by the Employee in connection with his employment hereunder that
constitutes willful misconduct or willful neglect, in each case that results or
should reasonably be expected to result in material harm to FAMC.   For purposes
of this subsection, no act, or failure to act on the Employee's part, shall be
considered “willful” unless done, or omitted to be done, by the Employee not in
good faith and without reasonable belief that the Employee's action or omission
was in the best interests of Farmer Mac.   For the avoidance of doubt,
termination of the Employee's employment for any reason upon the end of the Term
shall not be treated as a termination without Cause for purposes of this
Agreement.
 
Notwithstanding the foregoing, the Employee shall not be deemed to have been
terminated for cause unless and until there shall have been delivered to the
Employee a copy of a resolution, duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board duly called and held for the purpose (after five (5) days’ prior
written notice to the Employee and an opportunity for him, together with his
counsel, to be heard before such meeting of the Board, finding that, in the good
faith opinion of the Board, the Employee was guilty of conduct set forth above
in one or more of clauses (A) through (E) of this Section 9(a)(ii) and
specifying the particulars in detail.  Such a resolution shall constitute notice
of termination hereunder.  In addition, the Board may place the Employee on
administrative leave at any time if it is considering whether the Employee's
employment may be terminated for cause.  In such event, during the period the
Employee is on administrative leave, the Employee shall continue to receive the
payments and benefits specified in Sections 4 and 7 hereof.
 
(iii)           Farmer Mac may terminate the employment of the Employee without
“cause” at any time.
 
(iv)           Notwithstanding the provisions of subsection 9(a)(iii) above,
FAMC may terminate the employment of the Employee at any time after the passage
by the Board of a resolution authorizing the dissolution of FAMC.  Such
termination of the Employee’s employment shall become effective on the later of
eighteen (18) months after notice of termination or the date that such
dissolution of FAMC becomes final as a matter of law, provided however,  that
neither of the following shall be deemed to be a dissolution for purposes of
this Agreement:  (1) dissolution of FAMC which becomes final as a matter of law
more than twelve (12) months after adoption of the resolution of dissolution; or
(2) incorporation, organization or reorganization of a corporation or other
business entity which is substantially similar to FAMC and which uses
substantially the same assets or equity as FAMC, within twelve (12) months of
adoption of the resolution of dissolution.  As used herein, the term
“reorganization” shall have the same meaning as in Section 368(a) of the
Internal Revenue Code of 1986, as amended.

 
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(b)           Payment of Accrued Compensation.
 
(i)           Upon termination of the Employee's employment pursuant to
preceding subsection (a), the Employee (or his estate or heirs, as the case may
be) shall be entitled to receive all Base Salary, annual incentive payments,
expense reimbursements, vacation pay, and similar amounts accrued and unpaid as
of the date of such termination.  With respect to annual incentive payments, the
term “accrued” means that the amount of the payment to the Employee has been
definitively determined by Farmer Mac but the payment has not been made.  The
obligations of FAMC under this subsection (b) shall survive any termination of
this Agreement.
 
(ii)           In the event of the Employee’s voluntary termination of
employment hereunder, other than pursuant to Section 9(e) below, FAMC shall not
be obligated to make any further compensation payments to Employee beyond those
accrued prior to the effective date of such termination.
 
(c)           Disability Pay.  Upon termination of the Employee's employment
pursuant to preceding subsection (a)(i), FAMC shall continue to pay the Employee
(or his estate or heirs, as the case may be) for the lesser of twenty-four (24)
months or the balance of the Term the difference between the Employee’s current
Base Salary and the amount of disability insurance payments received by the
Employee under insurance policies provided by FAMC in accordance with this
Agreement.
 
(d)           Severance Pay.  Upon termination of the Employee's employment
pursuant to preceding subsection 9(a)(iii) or pursuant to Section 9(e) below, or
as a result of the Farmer Mac's decision not to extend the Term pursuant to
Section 2 by offering the Employee the right to continue employment pursuant to
this Agreement, subject to the Employee's execution of a release of claims
mutually agreeable to the parties within five (5) days following such
termination and the Employee not revoking such release, FAMC shall pay the
Employee within thirty (30) days after such termination an aggregate amount in
cash equal to two times the Base Salary.
 
The amount to be paid by FAMC to the Employee under this Section 9(d) will not
be mitigated by any subsequent earnings by the Employee from any other source.
 
(e)           Constructive Termination.  The Employee may, at his option,
terminate his employment with FAMC if FAMC materially breaches its obligations
hereunder, the Employee so notifies FAMC of such breach in writing within thirty
(30) days after the breach occurs, and FAMC does not remedy such breach within
thirty (30) days after receiving such notice. Upon notice to FAMC of his
exercise of this option, the Employee shall have the same rights under such a
constructive termination as if FAMC had terminated his employment pursuant to
the preceding subsection (a)(iii); provided, however, that if FAMC determines
that it could have terminated the Employee's employment for "cause," the
Employee shall have no right to receive any amounts described in Section 9(d).

 
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10.           Notices.  Any notice given under this Agreement will be sufficient
if in writing and either:  (a) mailed postage prepaid by registered or certified
mail, return receipt requested; or (b) delivered by hand to, in the case of
Farmer Mac, 1133 Twenty-First Street, N.W., Washington, D.C. 20036, attention
Vice President – General Counsel or, in the case of the Employee, 3815 Batavia
Elba Townline Road, Oakfield, NY 14125 (or to such other addresses as may be
from time to time designated by notice from the recipient party to the
other).  Any such notice will be effective upon actual receipt or refusal
thereof.
 
11.           Miscellaneous.
 
(a)           Governing Law.  This Agreement shall be governed by, interpreted
and enforced in accordance with the laws of the District of Columbia.
 
(b)           Waiver.  The waiver by any party of a breach of any provision of
this Agreement shall not operate as a waiver of any other breach of any
provision of this Agreement by any party.
 
(c)           Entire Agreement.  This Agreement sets forth the entire
understanding of the parties concerning the subject matter hereof, and may not
be changed or modified except by a written instrument duly executed by or on
behalf of the parties hereto.
 
(d)           Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective, successors,
heirs, personal representatives and assigns.  This subsection is not to be
construed to permit the Employee to assign his obligation to perform the duties
of his employment hereunder.  This subsection permits FAMC the right to assign
this Agreement to a successor entity.
 
(e)           Severability.  If any term, condition, or provision of this
Agreement or the application thereof to any party or circumstances shall, at any
time or to any extent be invalid or unenforceable, the remainder of this
Agreement, or the application of such term, condition or provision to parties or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby, and each term, condition and provision of their
Agreement shall be valid and enforceable to the fullest extent permitted by law.
 
(f)           Tax Withholding.  All payments here under shall be subject to all
applicable tax withholdings.
 
12.           Agreement Not to Compete with Farmer Mac.  Notwithstanding
anything in this Agreement to the contrary, in the event of the termination of
the Employee's employment either for cause or at the discretion of the employee,
for a period of two years thereafter, the Employee shall not, without the prior
written consent of Farmer Mac, directly or indirectly, engage in any business or
activity, whether as principal, agent, officer, director, partner, employee,
independent contractor, consultant, stockholder or otherwise, alone or in
association with any other person, firm, corporation or other business
organization, that directly or indirectly competes with any of the businesses of
Farmer Mac in any manner, including without limitation, the acquisition and
securitization (for capital market sale) of agricultural mortgage loans or USDA
“guaranteed portions” (hereinafter referred to as “Farmer Mac Qualified Loans”);
provided, however, that such prohibited activity shall not include the ownership
of up to 20% of the common stock in a public company.

 
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13.           Agreement Not to Use Confidential or Proprietary
Information.  Farmer Mac and the Employee both recognize that the Employee has
access to and acquire, and may assist in developing, confidential and
proprietary information relating to the business and operations of Farmer Mac as
a result of the Employee's employment or association with Farmer Mac.  The
Employee hereby covenants and agrees that he will retain all “Confidential
Information” (as defined below) in trust for the sole benefit of Farmer Mac and
its successors and assigns.  The Employee hereby covenants further that, in
addition to his fiduciary responsibilities as an officer not to disclose certain
information of or relating to Farmer Mac, he will not, at any time during or
after the term of this Agreement, without the prior written consent of Farmer
Mac, directly or indirectly communicate or divulge any such Confidential
Information to any person, firm, corporation or other business organization, or
use any such Confidential Information for the Employee's own account or for the
account of any other person, except as required in connection with the
performance of his services hereunder.  The term “Confidential Information”
shall mean any trade secret, data or other confidential or proprietary
information related to the business and activities of Farmer
Mac.  Notwithstanding the foregoing, Confidential Information shall not include
any information that is or becomes a part of the public domain or generally
available to the public (unless such availability occurs as a result of any
breach by the Employee of this Section 13), or becomes available to the Employee
on a non-confidential basis from a source (other than Farmer Mac) that is not
bound by a confidentiality agreement and does not breach his or her fiduciary
responsibilities.  The provisions of this Section 13 shall survive the
termination of this Agreement and the termination of the Employee's employment
hereunder.
 
14.           Agreement Not to Solicit Farmer Mac Employees.  For a period of
two years after the termination of the Employee's employment hereunder, the
Employee shall not, directly or indirectly, induce any employee of Farmer Mac
who is a “member of management” (as defined below) or is directly involved in
the acquisition and securitization (for capital market sale) of Farmer Mac
Qualified Loans to engage in any activity in which the Employee is prohibited
from engaging in under this Agreement, or to terminate such person’s employment
with Farmer Mac.  The Employee shall not directly or indirectly, either
individually or as owner, agent, employee, consultant or otherwise, employ,
offer employment to, lure, entice away or assist others in recruiting or hiring
any person who is or was employed by Farmer Mac unless such person shall have
ceased to be employed by Farmer Mac for a period of at least six months and is
not subject to any non-compete covenants substantially similar in nature to
those contained in Section 12 hereof.  “Member of management” means the
President, any Senior Vice President, Vice President or the Controller of Farmer
Mac.

Federal Agricultural Mortgage Corporation
 
Employee
       
By:
/s/ Lowell L. Junkins
 
/s/ Michael A. Gerber
 
Acting Chairman
 
Michael A. Gerber

 
 
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