**EXHIBIT 10.4****EMPLOYMENT AGREEMENT**          THIS AGREEMENT is made effective as of April 11, 2002, by and between SouthEast Bank & Trust(the “Bank”), Athens, Tennessee, and F. Stephen Miller (the “Executive”).          WHEREAS, the Bank wishes to assure itself of the services of Executive for the period providedin this Agreement; and          WHEREAS, the Executive is willing to serve in the employment of the Bank on a full-time basisfor said period.          NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the otherterms and conditions hereinafter provided, the parties hereby agree as follows:1. POSITION AND RESPONSIBILITIES.    During the period of his employment hereunder, Executive agrees to serve as Chairman and ChiefExecutive Officer of the Bank.2. TERMS AND DUTIES.    (a) The term of this Agreement shall be deemed to have commenced as of the date first abovewritten and shall continue for a period of thirty-six (36) full calendar months thereafter.Commencing on the first anniversary date, which is defined as the last day of the 36-month term,the Agreement will renew automatically for an additional thirty-six (36) months unless theAgreement is otherwise terminated or amended by mutual agreement upon delivery of notice to theother party of intent not to renew within one hundred eighty (180) days of the renewal date.Unless amended by the parties hereto in writing, the term of this Agreement shall continue in thisfashion in thirty-six-month intervals. Upon the expiration of this Agreement for a period of twelve(12) months, the Executive agrees that he will not compete with the Bank in any city or town inwhich the Bank operates a branch or main office. For purposes of this paragraph, the term“compete” shall have the same meaning as that more fully described in Paragraph 10,Non-Competition. The provisions of Paragraph 2(a) do not apply to a termination of this Agreementby reason of Change in Control, as defined in Paragraph 5(a) hereof; disability as defined inParagraph 6(a) hereof; death; retirement, as defi ned in Paragraph 7 hereof; for cause, as definedin Paragraph 8 hereof; or Executive’s resignation pursuant to the conditions set forth in Paragraph4(a) hereof.    (b) During the period of his employment hereunder, except for periods of absence occasioned byillness, vacation periods, and leaves of absence, Executive shall devote substantially all hisbusiness time, attention, skill, and efforts to the faithful performance of his
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duties hereunder including activities and services related to the organization, operation andmanagement of the Bank; provided, however, that, from time to time, Executive may serve, orcontinue to serve, on the boards of directors of, and hold any other offices or positions in,companies or organizations, which will not materially affect the performance of Executive’s dutiespursuant to this Agreement.3. COMPENSATION AND REIMBURSEMENT.     (a) The compensation specified under this Agreement shall constitute the salary and benefitspaid for the duties described in Sections 1 and 2. The Bank shall pay Executive as compensation asalary of one hundred twenty-five thousand ($125,000.00) per year (“Base Salary”). Such Base Salaryshall be payable in accordance with the customary payroll practices of the Bank. During the periodof this Agreement, Executive’s Base Salary shall be reviewed at least annually; the first suchreview will be made no later than one (1) year from the date of this Agreement. Such review shallbe conducted by a Committee designated by the Board, and the Board may increase Executive’s BaseSalary. In addition to the Base Salary provided in this Section 3(a), the Bank shall provide toExecutive at no additional cost to Executive all such other benefits as are provided to regularfull-time employees of the Bank.     (b) Executive will be entitled to participate in or receive benefits under any employeebenefit plans including, but not limited to, stock options, retirement plans, supplementalretirement plans, pension plans, profit-sharing plans, health-and-accident plans, medical coverageor any other employee benefit plan or arrangement made available by the Bank in the future to itssenior executives and key management employees, subject to, and on a basis consistent with, theterms, conditions and overall administration of such plans and arrangements. Executive will beentitled to incentive compensation and bonuses as provided in any plan, or pursuant to anyarrangement of the Bank, in which Executive is eligible to participate. Nothing paid to theExecutive under any such plan or arrangement will be deemed to be in lieu of other compensation towhich the Executive is entitled under this Agreement, except as provided under Section 5(e).     (c) Executive will be reimbursed for reasonable travel and entertainment expenses.     (d) The Bank will reimburse the Executive for the monthly dues, the capital improvement fundfee and applicable taxes as well as the per month standard meal allowance charge andbusiness-related entertainment at the Springbrook Golf and Country Club (“Country Club”), Niota,Tennessee. Executive will pay for any personal expenditures at the Country Club not related to thebusiness of the Bank. Executive will maintain accurate records segregating business and personalexpenditures at the Country Club.4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.     (a) Upon the occurrence of an Event of Termination (as herein defined) during the Executive’sterm of employment under this Agreement, the provisions of this Section shall apply. As used inthis Agreement, an “Event of Termination” shall mean and include any one or more of the following:(i) the termination of Executive’s full-time employment hereunder due to
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expiration of this Agreement pursuant to Paragraph 2(a); (ii) the termination by the Bank ofExecutive’s full-time employment hereunder for any reason *other than*a Change in Control as definedin Paragraph 5(a) hereof or for Cause as defined in Paragraph 8 hereof; disability, as defined inParagraph 6(a) hereof; death; retirement, as defined in Paragraph 7 hereof; (iii) Executive’sresignation from the Bank’s employment, upon (A), unless consented to by the Executive, a materialchange in Executive’s function, duties, or responsibilities, which change would cause Executive’sposition to become one of lesser responsibility, importance, or scope from the position andattributes thereof described in Paragraphs 1 and 2, above, (any such material change shall bedeemed a continuing breach of this Agreement); (B) a relocation of Executive’s principal place ofemployment by more than fifty(50) miles from its location at the effective date of this Agreement,or a material reduction in the benefits and perquisites to Executive from those being provided asof the effective date of this Agreement; (C) the liquidation or dissolution of the Bank; or (D) anybreach of this Agreement by the Bank. Upon the occurrence of any event described in clauses (A),(B), (C), or (D), above, Executive shall have the right to elect to terminate his employment underthis Agreement by resignation upon not less than sixty (60) days prior written notice to the Bankgiven within a reasonable period of time not to exceed, except in case of a continuing breach,four (4)calendar months after the event giving rise to said right to elect.     (b) Upon the occurrence of an Event of Termination, the Bank shall pay Executive, or, in theevent of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be,as severance pay or liquidated damages, or both, a lump sum payment equal to twelve (12) months’Base Salary.     (c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued life,medical, dental and disability coverage substantially identical to the coverage maintained by theBank for Executive prior to his termination for a period of twelve (12) months at the Bank’sexpense. A COBRA notice will issue upon the date of termination. Any COBRA-mandated coverageextensions beyond the first twelve (12) months will be at the option of the Executive and paid forby him as provided by law unless he has secured other coverage from another source extinguishinghis coverage rights.5. CHANGE IN CONTROL.     (a) No benefit shall be paid under this Paragraph 5 unless there shall have occurred a Changein Control of the Bank. For purposes of this Agreement, a “Change in Control” of the Bank shall bedeemed to occur if and when:     (i) there occurs an acquisition in one or more transactions of at least 15 percent butless than 25 percent of the Common Stock by any Person, or by two or more Persons acting asa group (excluding officers and directors of the Bank), and the adoption by the Board ofDirectors of a resolution declaring that a change in control of the Bank has occurred; or     (ii) there occurs a merger, consolidation, reorganization, recapitalization or similartransaction involving the securities of the Bank upon the consummation of which
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more than 50 percent in voting power of the voting securities of the survivingcorporation(s) is held by Persons other than former shareholders of the Bank; or     (iii) 25 percent or more of the directors elected by shareholders of the Bank to theBoard of Directors are persons who were not listed as nominees in the Bank’s then mostrecent proxy statement (the “New Directors”).     (b) If any of the events described in Paragraph 5(a) hereof constituting a Change in Controlhave occurred or the Board of the Bank has determined that a Change in Control has occurred,Executive shall be entitled to the benefits provided in Paragraphs (c ), (d) and (e) of thisParagraph 5 upon his subsequent involuntary termination of employment at any time during the termof this Agreement (or voluntary termination following a Change of Control following any demotion,loss of title, office or significant authority, reduction in his annual compensation or benefits,or relocation of his principal place of employment by more than 50 miles from its locationimmediately prior to the Change in Control), unless such termination is because of his death,retirement as provided in Paragraph 7, termination for Cause, or termination for Disability.     (c) Upon the occurrence of a Change in Control followed by the Executive’s termination ofemployment, the Bank shall pay Executive, or in the event of his subsequent death, his beneficiaryor beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, orboth, a sum equal to one (1) time the Executive’s “base amount,” currently in effect, within themeaning of §280G(b)(3) of th e Internal Revenue Code of 1986 (“Code”), as amended. Such paymentshall be made in a lump sum paid within ten (10) days of the Executive’s Date of Termination.     (d) Upon the occurrence of a Change in Control followed by the Executive’s termination ofemployment, the Bank will cause to be continued life, medical, dental and disability coveragesubstantially identical to the coverage maintained by the Bank for Executive prior to hisseverance. In addition, Executive shall be entitled to receive the value of employer contributionsthat would have been made on the Executive’s behalf over the remaining term of the agreement to anytax-qualified retirement plan sponsored by the Bank as of the Date of Termination. Such coverageand payments shall cease upon the expiration of twelve (12) months.     (e) Upon the occurrence of a Change in Control the Executive shall be entitled to receivebenefits due him under, or contributed by the Bank on his behalf, pursuant to any retirement,incentive, profit sharing, bonus, performance, disability or other employee benefit plan maintainedby the Bank on the Executive’s behalf to the extent that such benefits are not otherwise paid tothe Executive upon a Change in Control.     (f) Notwithstanding the preceding paragraphs of this Paragraph 5, in the event that theaggregate payments or benefits to be made or afforded to the Executive under this Paragraph wouldbe deemed to include an “excess parachute payment” under §280G of the Code, such payments orbenefits shall be payable or provided to Executive in equal monthly installments over the minimumperiod necessary to reduce the present value of such payments or benefits to
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an amount which is one dollar ($1.00) less than three (3) times the Executive’s “baseamount,” currently in effect, under §280G(b)(3) of the Code.     (g) Upon the occurrence of a Change in Control followed by the Executive’s termination ofemployment, the Executive agrees that he will not compete with the Bank or the surviving financialinstitution for a period of twelve (12) months in any city or town in which the Bank operates abranch or main office. For purposes of this paragraph, the term “compete” shall have the samemeaning as more fully defined in Paragraph 10, Non-Competition.6. TERMINATION FOR DISABILITY.     (a) If the Executive shall become disabled as defined in the Bank’s then current disabilityplan (or, if no such plan is then in effect, if the Executive is permanently and totally disabledwithin the meaning of Section 22(e)(3) of the Code as determined by a physician designated by theBoard), the Bank may terminate Executive’s employment for “Disability.”     (b) Upon the Executive’s termination of employment for Disability, the Bank will payExecutive, as disability pay, a bi-weekly payment equal to two-thirds (2/3) of Executive’sbi-weekly rate of Base Salary on the effective date of such termination. These disability paymentsshall commence on the effective date of Executive’s termination and will end on the earlier of (i)the date Executive returns to the full-time employment of the Bank in the same capacity as he wasemployed prior to his termination for Disability and pursuant to an employment agreement betweenExecutive and the Bank; (ii) Executive’s full-time employment by another employer; (iii) Executiveattaining the normal expected retirement age or age 70 if the Executive so elects; or (iv)Executive’s death. The disability pay shall be reduced by the amount, if any, paid to the Executiveunder any plan of the Bank providing disability benefits to the Executive.     (c) The Bank will cause to be continued life, medical, dental and disability coveragesubstantially identical to the coverage maintained by the Bank for Executive prior to histermination for Disability. This coverage and payments shall cease upon the earlier of (i) the dateExecutive returns to the full-time employment of the Bank, in the same capacity as he was employedprior to his termination for Disability and pursuant to an employment agreement between Executiveand the Bank; (ii) Executive’s full-time employment by another employer; (iii) Executive’sattaining normal retirement age or age 65 if the Executive so elects; or (iv) the Executive’sdeath.     (d) Notwithstanding the foregoing, there will be no reduction in the compensation otherwisepayable to Executive during any period during which Executive is incapable of performing his dutieshereunder by reason of temporary disability.     (e) Executive agrees that he will not compete with the Bank in any city or town in which theBank operates a branch or main office for a period of twelve (12) months following his retirementfrom his employment by the Bank. For purposes of this paragraph, the term “compete” shall have thesame meaning as more fully defined in Paragraph 10, Non-
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Competition.7. TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.     Termination by the Bank of Executive based on “Retirement” shall mean retirement at age 70 orin accordance with any retirement arrangement established with Executive’s consent with respect tohim. Upon termination of Executive upon Retirement, Executive shall be entitled to all benefitsunder any retirement plan of the Bank and other plans to which Executive is a party. Upon the deathof the Executive during the term of this Agreement, the Bank shall pay to Executive’s estate thecompensation due to the Executive through the last day of the calendar month in which his deathoccurred.8. TERMINATION FOR CAUSE.     For purposes of this Agreement, “Termination for Cause” shall include termination because ofthe Executive’s personal dishonesty, incompetence, willful misconduct, breach of fiduciary dutyinvolving personal profit, intentional failure to perform stated duties, willful violation of anylaw, rule, or regulation which negatively impacts the Bank (other than traffic violations orsimilar offenses) or final cease-and-desist order, or material breach of any provision of thisAgreement. For purposes of this Paragraph, the term “willful” is defined to include any act oromission which demonstrates an intentional or reckless disregard for the duties andresponsibilities owed to the business of the employer by Executive. Notwithstanding theforegoing, Executive shall not be deemed to have been terminated for Cause unless and until thereshall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of notless than three-fourths (3/4) of the members of the Board at a meeting of the Board called and heldfor that purpose, finding that in the good faith opinion of the Board, Executive was guilty ofconduct justifying termination for Cause and specifying the reasons thereof. The Executive shallnot have the right to receive compensation or other benefits for any period after termination forCause. Any stock options granted to Executive under any stock option plan or any unvested awardsgranted under any other stock benefit plan of the Bank, or any subsidiary or affiliate thereof,shall become null and void effective upon Executive’s receipt of Notice of Termination for Causepursuant to Paragraph 9 hereof, and shall not be exercisable by Executive at any time subsequentto such Termination for Cause. If he is terminated for Cause, Executive shall not compete with theBank in any city or town in which the Bank operates a branch or main office for twelve (12) monthsfrom the Date of the Termination for Cause. For purposes of this paragraph, the term “compete”shall have the same meaning as more fully defined in Paragraph 10, Non-Competition.
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9. NOTICE.     (a) Any purported termination by the Bank or by Executive shall be communicated by Notice ofTermination to the other party hereto. For purposes of this Agreement, a “Notice of Termination”shall mean a written notice which shall indicate the specific termination provision in thisAgreement relied upon and shall set forth in reasonable detail the facts and circumstances claimedto provide a basis for termination of Executive’s employment under the provision so indicated.     (b) “Date of Termination” shall mean (A) if Executive’s employment is terminated forDisability, thirty (30) days after a Notice of Termination is given (provided that he shall nothave returned to the performance of his duties on a full-time basis during such thirty (30) dayperiod); and (B) if his employment is terminated for any other reason, the date specified in theNotice of Termination (which, in the case of a Termination for Cause, shall not be less than thirty(30) days from the date such Notice of Termination is given).     (c) If, within thirty (30) days after any Notice of Termination is given, the party receivingsuch Notice of Termination notifies the other party that a dispute exists concerning thetermination, except upon the occurrence of a Change in Control and voluntary termination byExecutive in which case the Date of Termination shall be the date specified in the Notice, the Dateof Termination shall be the date on which the dispute is finally determined, either by mutualwritten agreement of the parties by a binding arbitration award, or by a final judgment, order ordecree of a court of competent jurisdiction (the time for appeal therefrom having expired and noappeal having been perfected) and provided further that the Date of Termination shall be extendedby a notice of dispute only if such notice is given in good faith and the party giving such noticepursues the resolution of such dispute with reasonable diligence. Notwithstanding the pendency ofany such dispute, the Bank will continue to pay Executive his full compensation in effect when thenotice giving rise to the dispute was given (including, but not limited to, Base Salary) andcontinue him as a participant in all compensation, benefit and insurance plans in which he wasparticipating when the notice of dispute was given, until the dispute is finally resolved inaccordance with this Agreement. Amounts paid under this Paragraph are in addition to all otheramounts due under this Agreement and shall not be offset against or reduce any other amounts dueunder this Agreement. Provided, however, in no event shall the Executive be entitled tocompensation or benefits after the Date of Termination if the Executive is terminated for Cause asprovided in Paragraph 8 hereof.10. NON-COMPETITION.     (a) Upon any termination of Executive’s employment hereunder for any reason, including but notlimited to expiration of this Agreement, Executive agrees not to compete with the Bank for a periodof twelve (12) months following such termination in any city or town in which the Bank operates abranch or main office, determined as of the effective date of such termination. Executive agreesthat, during such period, Executive shall not work for or advise, consult or otherwise serve with,directly or indirectly, any entity whose business materially competes with the depository, lendingor other business activities of the Bank. Executive specifically further agrees that he will not,for the twelve (12) month non-competition period
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work in either a paid or unpaid capacity with any individual or group proposing to establish anew bank or other financial institution in Bank’s market area. The parties hereto, recognizing thatirreparable injury will result to the Bank, its business and property in the event of Executive’sbreach of this Subparagraph 10(a) agree that in the event of any such breach by Executive, the Bankwill be entitled, in addition to any other remedies and damages available, to an injunction torestrain the violation hereof by Executive, Executive’s partners, agents, servants, employers,employees and all persons acting for or with Executive. Executive represents and admits that in theevent of the termination of his employment pursuant to Paragraph 8 hereof, Executive’s experienceand capabilities are such that Executive can obtain employment in a business, engaged in otherlines and/or of a different nature than the Bank, and that the enforcement of a remedy by way ofinjunction will not prevent Executive from earning a livelihood. Nothing herein will be construedas prohibiting the Bank from pursuing any other remedies available to the Bank for such breach orthreatened breach, including the recovery of damages from Executive.     (b) Executive recognizes and acknowledges that the knowledge of the business activities andplans for business activities of the Bank and affiliates thereof, as it may exist from time totime, is a valuable, special and unique asset of the business of the Bank. Executive will not,during or after the term of his employment, disclose any knowledge of the past, present, planned orconsidered business activities of the Bank or affiliates thereof to any person, firm, corporationor other entity for any reason or purpose whatsoever. Notwithstanding the foregoing, Executive maydisclose any knowledge of banking, financial and/or economic principles, concepts or ideas whichare not solely and exclusively derived from the business plans and activities of the Bank. In theevent of a breach or threatened breach by the Executive of the provisions of this Paragraph, theBank will be entitled to an injunction restraining Executive from disclosing, in whole or in part,the knowledge of the past, present, planned or considered business activities of the Bank oraffiliates thereof, or from rendering any services to any person, firm corporation, other entityto whom such knowledge, in whole or in part, has been disclosed or is threatened to be disclosed.Nothing herein will be construed as prohibiting the Bank from pursuing any other remedies availableto the Bank for such breach or threatened breach, including the recovery of damages from Executive.11. SOURCE OF PAYMENTS.     All payments provided in this Agreement shall be timely paid in cash or check from the generalfunds of the Bank.12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.     This Agreement contains the entire understanding between the parties hereto and supersedes anyprior employment agreement between the Bank or any predecessor of the Bank and Executive, exceptthat this Agreement shall not affect or operate to reduce any benefit or compensation inuring tothe Executive of a kind elsewhere provided. No provision of this Agreement shall be interpreted tomean that Executive is subject to receiving fewer benefits than those available to him withoutreference to this Agreement.
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13. NO ATTACHMENT; SUCCESSORS AND ASSIGNS.     (a) Except as required by law, no right to receive payments under this Agreement shall besubject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, orhypothecation, or to execution, attachment, levy, or similar process or assignment by operation oflaw, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, andof no effect.     (b) This Agreement shall be binding upon, and inure to the benefit of, Executive and the Bankand their respective successors and assigns.14. MODIFICATION AND WAIVER.     (a) This Agreement may not be modified or amended except by an instrument in writing signed bythe parties hereto.     (b) No term or condition of this Agreement shall be deemed to have been waived, nor shallthere by any estoppel against the enforcement of any provision of this Agreement, except by writteninstrument of the party charged with such waiver or estoppel. No such written waiver shall bedeemed a continuing waiver unless specifically stated therein, and each such waiver shall operateonly as to the specific term or condition waived and shall not constitute a waiver of such term orcondition for the future as to any act other than that specifically waived.15. SEVERABILITY.     If, for any reason, any provision of this Agreement, or any part of any provision, is heldinvalid, such invalidity shall not affect any other provision of this Agreement or any part of suchprovision not held so invalid, and each such other provision and part thereof shall to the fullextent consistent with law continue in full force and effect.16. HEADINGS FOR REFERENCE ONLY.     The headings of sections and paragraphs herein are included solely for convenience ofreference and shall not control the meaning or interpretation of any of the provisions of thisAgreement.17. GOVERNING LAW.     This Agreement shall be governed by the substantive laws and procedural provisions of theState of Tennessee, unless otherwise specified herein; provided, however, that in the event of aconflict between the terms of this Agreement and any applicable federal or state law or regulation,the provisions of such law or regulation shall prevail.18. PAYMENT OF LEGAL FEES.
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     All reasonable legal fees paid or incurred by the Bank or the Executive pursuant to anydispute or question of interpretation relating to this Agreement shall be paid or reimbursed bythe prevailing party in such judgment, arbitration or settlement.19. INDEMNIFICATION.     The Bank shall provide Executive with coverage under a standard directors’ and officers’liability insurance policy at its expense, or in lieu thereof, shall indemnify Executive to thefullest extent permitted under applicable Tennessee and federal law and the Bank’s Charter andBylaws against all expenses and liabilities reasonably incurred by him in connection with orarising out of any action, suit or proceeding in which he may be involved by reason of his havingbeen a director or officer of the Bank (whether or not he continues to be a director or officer atthe time of incurring such expenses or liabilities), such expenses and liabilities to include, butnot be limited to, judgment, court costs and attorneys’ fees and the cost of reasonablesettlements.20. SUCCESSOR TO THE BANK.     The Bank shall require any successor or assignee, whether direct or indirect, by purchase,merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank,expressly and unconditionally to assume and agree to perform the Bank’s obligations under thisAgreement, in the same manner and to the same extent that the Bank would be required to perform ifno such succession or assignment had taken place.     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a dulyauthorized officer or director, and Executive has signed this Agreement, effective on the datefirst written above.       SOUTHEAST BANK & TRUST       BY: /s/ Tom B. Hughes, III, President         Tom B. Hughes, III, President            BY: /s/ F. Stephen Miller, Executive         F. Stephen Miller, Executive
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