Exhibit 10.22


 


FIRST FARMERS AND MERCHANTS CORPORATION


DIRECTOR DEFERRED COMPENSATION AGREEMENT


 


This Director Deferred Compensation Agreement
(the “Agreement”) is adopted this 5th day of March, 2008, by and between First
Fanners and Merchants Corporation, a Tennessee corporation located in Columbia,
Tennessee (the “Company”), and Tim E. Pettus (the “Director”) and is effective
as of the 5th day of March, 2008.


 


The purpose of this Agreement is to provide
specified benefits to the Director who contributes to the continued growth,
development and future business success of the Company.


 


ARTICLE 1


Definitions


 


Whenever used in this Agreement, the
following words and phrases shall have the meaning specified:


 


1.1           “Beneficiary” means each designated
person, or the estate of the deceased Director, entitled to benefits, if any,
upon the death of the Director determined pursuant to Article 6.


 


1.2           “Beneficiary Designation Form” means
the form established from time to time by the Plan Administrator that the
Director completes signs and returns to the Plan Administrator to designate one
or more beneficiaries.


 


1.3           “Board” means the Board of Directors
of the Company as from time to time constituted.


 


1.4           “Change in Control” means a change in
the ownership or effective control of the Company, as such change is defined in
section 409A of the code and regulations there under.


 


1.5           “Code” means the Internal Revenue
Code of 1986, as amended.


 


1.6           “Crediting Rate” means the Wall
Street Journal Prime Rate as published on the last business day of the previous
Plan Year plus three percent (3%), with a maximum rate of nine and three
quarters percent (9.75%).


 


1.7           “Deferrals” means the amount of Fees
which the Director elects to defer according to this Agreement. In the absence
of a valid Deferral Election Form, Deferrals shall mean 100% of the Fees.


 

















 


1.8           “Deferral Account” means the Company’s
accounting of the Director’s accumulated Deferrals, plus accrued interest.


 


1.9           “Deferral Election Form” means the
form established from time to time by the plan Administrator that the Director
completes, signs, and returns to the Plan Administrator to designate the amount
of the deferrals.


 


1.10         “Distribution Election Form” means the
form established from time to time by the Plan Administrator that the Director
completes, signs, and returns to the Plan Administrator to designate the time
and form of distribution.


 


1.11         “Fees” means the total fees payable to
the Director during a Plan Year.


 


1.12         “Original Effective Date” means March 5,
2008.


 


1.13         “Plan Administrator” means the plan
administrator described in Article 8.


 


1.14         “Plan Year” means each twelve-month
period commencing on January 1 and ending on December 31 of each
year.


 


1.15         “Separation from Service” In accordance
with Section 409A, “Separation from Service” shall mean the Director dies,
retires, or otherwise has a termination of service with the Company. However,
the employment relationship is treated as continuing intact while the
individual is on military leave, sick leave, or other bona fide leave of
absence if the period of such leave does not exceed six (6) months, or if
longer, so long as the individual retains a right to reemployment with the
service recipient under an applicable statute or by contract. For purposes of
this definition, a leave of absence constitutes a bona fide leave of absence
only if there is a reasonable expectation that the Director will return to
perform services for the Company. If the period of leave exceeds six (6) months
and the individual does not retain a right to reemployment under an applicable
statute or by contract, the employment relationship is deemed to terminate on
the first date immediately following such six (6) month period.
Notwithstanding the foregoing, where a leave of absence is due to any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than six (6) months,
where such impairment causes the Director to be unable to perform the duties of
his or her position of employment or any substantially similar position of
employment, a twenty-nine (29) month period of absence may be substituted for
such six (6) month period.


 


Whether a termination of service has occurred
is determined based on whether the facts and circumstances indicate that the
Company and Director reasonably anticipated that no further services would be
performed after a


 

















 


certain date or that the level of bona fide
services the Director would perform after such date (whether as a Director or
as an independent contractor) would permanently decrease to no more than twenty
percent (20%) of the average level of bona fide services performed (whether as
a Director or an independent contractor) over the immediately preceding thirty-six
(36) month period (or the full period of services to the Company if the
Director has been providing services to the Company less than 36 months). Facts
and circumstances to be considered in making this determination include, but
are not limited to, whether the Director continues to be treated as an Director
for other purposes (such as continuation of salary and participation in
Director benefit programs), whether similarly situated service providers have
been treated consistently, and whether the Director is permitted, and
realistically available, to perform services for other service recipients in
the same line of business. A Director is presumed to have separated from
service where the level of bona fide services performed decreases to a level
equal to twenty percent (20%) or less of the average level of services
performed by the Director during the immediately preceding thirty-six (36)
month period. A Director will be presumed not to have separated from service
where the level of bona fide services performed continues at a level that is
fifty percent (50%) or more of the average level of service performed by the
Director during the immediately preceding thirty-six (36) month period.


 


1.16         “Termination for Cause” means a
Separation from Service for:


 


(a)           Gross negligence or gross neglect of duties
to the Company; or


 


(b)           Conviction of a felony or of a gross
misdemeanor involving moral turpitude in connection with the Director’s service
with the Company; or


 


(c)           Fraud, disloyalty, dishonesty or willful violation
of any law or significant Company policy committed in connection with the
Director’s service and resulting in a material adverse effect on the Company.


 


1.17         “Unforeseeable Emergency” means a
severe financial hardship to the Director resulting from an illness or accident
of the Director, the Director’s spouse, or the Director’s dependent (as defined
in Section 152(a) of the Code), loss of the Director’s property due
to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Director.


 

















 


Article 2


Deferral Election


 


2.1           “Elections Generally” In any Plan
Year during which Director defers fees, Director shall file a Deferral Election
Form for any fees deferred. Such form shall be filed with the Plan
Administrator no later than the end of the Plan Year preceding the Plan Year
during which services will be performed for fees deferred, and is effective
only to deferred fees that have not yet been earned by the Director.


 


2.2           A deferral election submitted for a
particular year may continue to be valid for succeeding years until changed or
modified. Deferral elections, once made, however, are irrevocable for the Plan
Year in which the fees are to be deferred.


 


A.            Initial Deferral Election(s).


 


Upon notification of eligibility in this
Agreement during the initial Plan Year, and if Director elects to defer fees,
Director shall deliver to the Plan Administrator:


 


(a)           a Deferral Election Form, signed and dated;


 


(b)           a Beneficiary Form, signed and dated;


 


(c)           a Distribution Election Form, signed and
dated.


 


The Director shall deliver such forms to the
Plan Administrator within thirty (30) days of notification of eligibility, and
shall set forth on the forms the amount of fees to be deferred.


 


2.3           Change in Form or Timing of
Distributions. All changes in the form or timing of distributions hereunder
must comply with the following requirements. The changes:


 


(a)           may not accelerate the time or schedule of
any distribution, except as provided in Section 409A of the Code and the
regulations thereunder;


 


(b)           must, for benefits distributable under Section 4.1,
delay the commencement of distributions for a minimum of five (5) years
from the date the first distribution was originally scheduled to be made; and


 


(c)           must take effect not less than twelve (12)
months after the election is made.


 

















 


Article 3


Deferral Account


 


3.1           Establishing and Crediting. The
Company shall establish a Deferral Account on its books for the Director and
shall credit to the Deferral Account the following amounts:


 


(a)           Any Deferrals hereunder: and


 


(b)           Interest as follows:


 


(i)            On the last day of each month interest
shall be credited on the Deferral Account at an annual rate equal to the
Crediting Rate, compounded monthly until the account has a zero balance; and


 


(ii)           Prior to the commencement of any
distributions hereunder, the Board, in its sole discretion, may change the rate
used to calculate interest credited on the unpaid Deferral Account balance
during any applicable installment period. Once the annual interest rate is
determined it will compound monthly on the last day of each month.


 


3.2           Accounting Device Only. The Deferral
Account is solely a device for measuring amounts to be paid under this
Agreement. The Deferral Account is not a trust fund of any kind. The Director
is a general unsecured creditor of the Company for the distribution of
benefits. The benefits represent the mere Company promise to distribute such
benefits. The Director’s rights are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by the Director’s creditors.


 


Article 4


Distributions During Lifetime


 


4.1           Separation from Service Benefit. Upon
Separation from Service, the Company shall distribute to the Director the
benefit described in this section 4.1.


 


4.1.1        Amount of Benefit. The benefit under
this Section 4.1 is the Deferral Account balance plus interest at
Separation from Service.


 


4.1.2        Distribution of Benefit. The Company
shall pay the benefit to the Director as elected by the Director on the
Distribution Election Form commencing within sixty (60) days following
Separation from Service. In the event the Director elects monthly installments,
the Company shall annuitize the Deferral Account using an interest rate
determined in accordance with Section 3.1(b)(ii).


 

















 


4.2           Hardship Distribution.  The Company will permit early withdrawals for
an unforeseeable emergency under certain circumstances arising as a result of
events beyond the control of the Director. The Director may submit an
application for an in-service early withdrawal due to an unforeseeable
emergency to the Board of Directors. If, in the discretion of the Board, the
Director is permitted to take an early withdrawal due to an unforeseeable
emergency, the Board shall make a distribution to such Director from the
Director’s Account. Such distribution shall be paid in one (1) lump sum
payment within thirty (30) days, after the Board determines that the Director
is permitted to take an early withdrawal due to an unforeseeable emergency. The
amount of such lump sum payment shall be limited to the amount reasonably
necessary to meet the Director’s requirements to the extent such emergency is
not relieved through reimbursement or compensation from insurance or otherwise,
by liquidation of the Director’s assets, (to the extent the liquidation of such
assets will not cause severe financial hardship) or by cessation of deferrals.
For purposes of this section the term “unforeseeable emergency” means a
severe financial hardship to the Director resulting from an illness or accident
of the Director, the Director’s spouse, the Director’s dependent, or the
Director’s Beneficiary, loss of the Director’s property due to casualty, other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Director. The imminent foreclosure of or
eviction from the service provider’s primary residence may constitute an
unforeseeable emergency. In addition, the need to pay for medical expenses,
including non-refundable deductibles, as well as for the costs of prescription
drug medication, may constitute an unforeseeable emergency. Finally, the need
to pay for the funeral expenses of a spouse, a beneficiary, or a dependent may
also constitute an unforeseeable emergency. At all times this definition shall
be construed in accordance with the definition under Section 409A. If the
Director seeks to terminate any current deferral elections or re-start the deferral
election, it must be done in accordance with Section 409A.


 


4.3           Restriction on Timing of Distribution.
Notwithstanding any provision of this Agreement to the contrary, if the
Director is considered a Specified Employee at Separation from Service under
such procedures as established by the Company in accordance with Section 409A
of the Code, benefit distributions that are made upon Separation from Service
may not commence earlier than six (6) months after the date of such
Separation from Service. Therefore, in the event this Section 4.3 is
applicable to the Director, any distribution which would otherwise be paid to
the Director within the first six months following the Separation from Service
shall be accumulated and paid to the Director in a lump sum on the first day of
the seventh month following the Separation from Service. All subsequent
distributions shall be paid in the manner specified.


 

















 


4.4           Distributions Upon Income Inclusion Under
Section 409A of the Code. Upon the inclusion of any portion of the
Deferral Account balance into the Director’s income as a result of the failure
of this non-qualified deferred compensation plan to comply with the
requirements of Section 409A of the Code, to the extent such tax liability
can be covered by the Deferral Account balance, a distribution shall be made as
soon as is administratively practicable following the discovery of the plan
failure.


 


Article 5


Distributions at Death


 


5.1           Death During Active Service. If the
Director dies while in active service to the Company, the Company shall
distribute to the Beneficiary the benefit described in this Section 5.1.
This benefit shall be distributed in lieu of the benefit under Article 4.


 


5.1.1        Amount of Benefit. The benefit under
this Section 5.1 is the greater of (i) the Deferral Account balance
determined as of the date of the Director’s death, or (ii) $162,000.


 


5.1.2        Distribution of Benefit. The Company
shall pay the benefit to the Beneficiary as elected by the Director on the
Distribution Election Form commencing within sixty (60) days following the
Director’s death. In the event the Director elects monthly installments, the
Company shall annuitize the Deferral Account using an interest rate determined
in accordance with Section 3.1(b)(ii).


 


5.2           Death During Distribution of a Benefit.
If the Director dies after any benefit distributions have commenced under this
Agreement but before receiving all such distributions, the Company shall
distribute to the Beneficiary the remaining benefits at the same time and in
the same amounts that would have been distributed to the Director had the
Director survived.


 


5.3           Death After Separation from Service But
Before Benefit Distributions Commence. If the Director is entitled to
benefit distributions under this Agreement, but dies prior to the commencement
of said benefit distributions, the Company shall distribute to the Beneficiary
the same benefits that the Director was entitled to prior to death except that
the benefit distributions shall commence within thirty (30) days following
receipt by the Company of the Director’s death certificate.


 
















 


Article 6

Beneficiaries


 


6.1           Beneficiary.
The Director shall have the right, at any time, to designate a Beneficiary(ies)
to receive any benefits distributable under the Agreement to a Beneficiary upon
the death of the Director. The Beneficiary designated under this Agreement may
be the same as or different from the beneficiary designation under any other
plan of the Company in which the Director participates.


 


6.2           Beneficiary
Designation: Change. The Director shall designate a Beneficiary by
completing and signing the Beneficiary Designation Form, and delivering it to
the Plan Administrator or its designated agent. The Director’s beneficiary
designation shall be deemed automatically revoked if the Beneficiary
predeceases the Director or if the Director names a spouse as Beneficiary and
the marriage is subsequently dissolved. The Director shall have the right to
change a Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Plan Administrator’s rules and
procedures, as in effect from time to time. Upon the acceptance by the Plan
Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Plan Administrator shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Director and accepted by the Plan Administrator prior to the Director’s death.


 


6.3           Acknowledgement.
No designation or change in designation of a Beneficiary shall be effective
until received, accepted and acknowledged in writing by the Plan Administrator
or its designated agent.


 


6.4           No
Beneficiary Designation. If the Director dies without a valid Beneficiary
designation, or if all designated Beneficiaries predecease the Director, then
the Director’s spouse shall be the designated Beneficiary. If the Director has
no surviving spouse, the benefits shall be paid to the personal representative
of the Director’s estate.


 


6.5           Facility
of Distribution. If the Plan Administrator determines in its discretion
that a benefit is to be paid to a minor, to a person declared incompetent, or
to a person incapable of handling the disposition of that person’s property,
the Plan Administrator may direct distribution of such benefit to the guardian,
legal representative or person having the care or custody of such minor,
incompetent person or incapable person. The Plan Administrator may require
proof of incompetence, minority or guardianship as it may deem appropriate
prior to distribution of the benefit. Any distribution of a benefit shall be a
distribution for the account of the Director and the Beneficiary, as the case 


 

















 


may be, and shall be a complete
discharge of any liability under the Agreement for such distribution amount.


 


Article 7

General Limitations


 


7.1           Termination
for Cause. Notwithstanding any provision of this Agreement to the contrary,
the Company shall not distribute any benefit under this Agreement in excess of
the Deferrals if the Director’s service with the Company is terminated due to a
Termination for Cause.


 


7.2           Suicide
or Misstatement. Notwithstanding any provision of this Agreement to the
contrary, the Company shall not distribute any benefit under this Agreement in
excess of the Deferrals if the Director commits suicide within two years after
the Original Effective Date of this Agreement, or if an insurance company which
issued a life insurance policy covering the Director and owned by the Company
denies coverage (i) for material misstatements of fact made by the
Director on an application for such life insurance, or (ii) for any other
reason.


 


7.3           Removal.
Notwithstanding any provision of this Agreement to the contrary, the Company
shall not distribute any benefit under this Agreement in excess of the
Deferrals if the Director is subject to a final removal or prohibition order
issued by an appropriate federal banking agency pursuant to Section 8(e) of
the Federal Deposit Insurance Act.


 


Article 8

Administration of Agreement


 


8.1           Plan
Administrator Duties. This Agreement shall be administered by a Plan Administrator
which shall consist of the Board, or such committee or person(s) as the
Board shall appoint. The Plan Administrator shall administer this Agreement
according to its express terms and shall also have the discretion and authority
to (i) make, amend interpret and enforce all appropriate rules and
regulations for the administration of this Agreement and (ii) decide or
resolve any and all questions including interpretations of this Agreement, as
may arise in connection with the Agreement to the extent the exercise of such
discretion and authority does not conflict with Section 409A of the Code
and regulations thereunder.


 


8.2           Agents.
In the administration of this Agreement, the Plan Administrator may employ
agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from time
to time consult with counsel who may be counsel to the Company.


 

















 


8.3           Binding
Effect of Decisions. The decision or action of the Plan Administrator with
respect to any question arising out of or in connection with the
administration, interpretation and application of the Agreement and the rules and
regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Agreement.


 


8.4           Indemnity
of Plan Administrator. The Company shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with respect
to this Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.


 


8.5           Company
Information. To enable the Plan Administrator to perform its functions, the
Company shall supply full and timely information to the Plan Administrator on
all matters relating to the Compensations of its Directors, the date and
circumstances of the retirement, Disability, death or Separation from Service
of its Directors, and such other pertinent information as the Plan Administrator
may reasonably require.


 


8.6           Statement
of Accounts. The Plan Administrator shall provide to the Director, within
one hundred twenty (120) days after the end of each Plan Year, a statement
setting forth the Deferral Account balance.


 


Article 9

Claims and Review Procedures


 


9.1           Claims
Procedure. The Director or Beneficiary (“Claimant”) who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows:


 


9.1.1        Initiation
— Written Claim. The Claimant initiates a claim by submitting to the
Company a written claim for the benefits. If such a claim relates to the
contents of a notice received by the Claimant, the claim must be made within
sixty (60) days after such notice was received by the Claimant. All other
claims must be made within one hundred eighty (180) days of the date on which
the event that caused the claim to arise occurred. The claim must state with
particularity the determination desired by the Claimant.


 


9.1.2        Timing
of Company Response. The Company shall respond to such Claimant within
ninety (90) days after receiving the claim. If the Company determines that
special circumstances require additional time for processing the claim, the
Company can extend the response period by an additional ninety (90) days by
notifying the Claimant in writing, prior to the end of the initial ninety (90)
day period that an 


 

















 


additional period is required. The notice of
extension must set forth the special circumstances and the date by which the
Company expects to render its decision.


 


9.1.3        Notice
of Decision. If the Company denies part or all of the claim, the Company
shall notify the Claimant in writing of such denial. The Company shall write
the notification in a manner calculated to be understood by the Claimant. The
notification shall set forth:


 


(a)           The
specific reasons for the denial,


 


(b)           A
reference to the specific provisions of the Agreement on which the denial is
based,


 


(c)           A
description of any additional information or material necessary for the
Claimant to perfect the claim and an explanation of why it is needed, and


 


(d)           An
explanation of the Agreement’s review procedures and the time limits applicable
to such procedures.


 


9.2           Review
Procedure. If the Company denies part or all of the claim, the Claimant
shall have the opportunity for a full and fair review by the Company of the
denial, as follows:


 


9.2.1        Initiation
— Written Request. To initiate the review, the Claimant, within sixty (60)
days after receiving the Company’s notice of denial, must file with the Company
a written request for review.


 


9.2.2        Additional
Submissions — Information Access. The Claimant shall then have the
opportunity to submit written comments, documents, records and other
information relating to the claim. The Company shall also provide the Claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to the Claimant’s claim for
benefits.


 


9.2.3        Considerations
on Review. In considering the review, the Company shall take into account
all materials and information the Claimant submits relating to the claim,
without regard to whether such information was submitted or considered in the
initial benefit determination.


 


9.2.4        Timing
of Company Response. The Company shall respond in writing to such Claimant
within sixty (60) days after receiving the request for review. If the Company
determines that special circumstances require additional time for processing
the claim, the Company can extend the 


 

















 


response period by an additional sixty (60)
days by notifying the Claimant in writing, prior to the end of the initial
sixty (60) day period that an additional period is required. The notice of
extension must set for the special circumstances and the date by which the
Company expects to render its decision.


 


9.2.5        Notice
of Decision. The Company shall notify the Claimant in writing of its
decision on review. The Company shall write the notification in a manner
calculated to be understood by the Claimant. The notification shall set forth:


 


(a)           The
specific reasons for the denial,


 


(b)           A
reference to the specific provisions of the Agreement on which the denial is
based, and


 


(c)           A
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to the Claimant’s claim for benefits.


 


Article 10

Amendments and Termination


 


10.1         Amendments.
The Company may amend this Agreement unilaterally at any time. However, no
amendment may be made which would reduce amounts payable under this Agreement
to the Director or a Beneficiary without such person’s written consent.


 


10.2         Plan
Termination Generally. The Company may unilaterally terminate this Agreement
at any time upon ninety (90) days advance written notice to the Director.
Except as provided in Treasury Regulation 1.409A-3(j) (4) a payment
of deferred compensation may not be accelerated.


 


Article 11

Miscellaneous


 


11.1         Binding
Effect. This Agreement shall bind the Director and the Company and their
beneficiaries, survivors, executors, administrators and transferees.


 


11.2         No
Guarantee of Service. This Agreement is not a contract for service. It does
not give the Director the right to remain as a director of the Company, nor
does it interfere with the Company’s right to discharge the Director. It also
does not require the Director to remain a director nor interfere with the
Director’s right to terminate service at any time.


 

















 


11.3         Non-Transferability.
Benefits under this Agreement cannot be sold, transferred, assigned, pledged,
attached or encumbered in any manner.


 


11.4         Tax
Withholding and Reporting. The Company shall withhold any taxes that are
required to be withheld, from the benefits provided under this Agreement.
Director acknowledges that the Company’s sole liability regarding taxes is to
forward any amounts withheld to the appropriate taxing authority(ies). Further,
the Company shall satisfy all applicable reporting requirements, including those
under Section 409A of the Code and regulations thereunder.


 


11.5         Applicable
Law. The Agreement and all rights hereunder shall be governed by the laws
of the State of Tennessee, except to the extent preempted by the laws of the
United States of America.


 


11.6         Unfunded
Arrangement. The Director and the Beneficiary are general unsecured
creditors of the Company for the distribution of benefits under this Agreement.
The benefits represent the mere promise by the Company to distribute such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Director’s life or other
informal funding asset is a general asset of the Company to which the Director
and the Beneficiary have no preferred or secured claim.


 


11.7         Reorganization.
The Company shall not merge or consolidate into or with another bank, or
reorganize, or sell substantially all of its assets to another bank, firm, or
person unless such succeeding or continuing bank, firm, or person agrees to
assume and discharge the obligations of the Company under this Agreement. Upon
the occurrence of such event, the term “Company” as used in this
Agreement shall be deemed to refer to the successor or survivor company.


 


11.8         Entire
Agreement. This Agreement constitutes the entire agreement between the
Company and the Director as to the subject matter hereof. No rights are granted
to the Director by virtue of this Agreement other than those specifically set
forth herein.


 


11.9         Interpretation.
Wherever the fulfillment of the intent and purpose of this Agreement requires,
and the context will permit, the use of the masculine gender includes the
feminine and use of the singular includes the plural.


 


11.10       Alternative
Action. In the event it shall become impossible for the Company or the Plan
Administrator to perform any act required by this Agreement, the Company or
Plan Administrator may, in its discretion, perform such alternative act as most
nearly carries out the intent and purpose of this 


 

















 


Agreement and is in the best interests of the
Company, provided that such alternative acts do not violate Section 409A
of the Code.


 


11.11       Headings.
Article and section headings are for convenient reference only and shall
not control or affect the meaning or construction of any of its provisions.


 


11.12       Validity.
In case any provision of this Agreement shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Agreement shall be construed and enforced as if such illegal
and invalid provision has never been inserted herein.


 


11.13       Notice.
Any notice or filing required or permitted to be given to the Plan
Administrator under this Agreement shall be sufficient if in writing and hand-
delivered, or sent by registered or certified mail, to the address below:


 


First Farmers and Merchants Corporation

816 S. Garden Street

Columbia, Tennessee 38402-1148


 


Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark or the receipt
for registration or certification. Any notice or filing required or permitted
to be given to the Director under this Agreement shall be sufficient if in
writing and hand-delivered, or sent by mail, to the last known address of the
Director.


 


11.14.      Permissible
Acceleration Provision. Under Section 409A-3(j)(4), a payment of
deferred compensation may not be accelerated except as provided in regulations
by the Internal Revenue Code. This Agreement allows all permissible payment
accelerations under 409A-3(j)(4) that include but are not limited to
payments necessary to comply with a domestic relations order, payments
necessary to comply with certain conflict of interest rules, payments intended
to pay employment taxes, and other permissible payments are allowed as
permitted by statute or regulation.


 


11.15       Compliance
with Section 409A.         This
Agreement shall at all times be administered and the provisions of this
Agreement shall be interpreted consistent with the requirements of Section 409A
of the Code and any and all regulations thereunder, including, such regulations
as may be promulgated after the Effective Date of this Agreement.


 


IN WITNESS WHEREOF,
the Company and the Director have signed this Agreement as of March 5,
2008.


 

















 


	
  Director:

  	
   

  	
  Company:

  
	
   

  	
   

  	
   

  
	
  Tim E. Pettus

  	
   

  	
  FIRST FARMERS AND MERCHANTS CORPORATION

  
	
   

  	
   

  	
  Columbia, Tennessee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Tim E. Pettus

  	
   

  	
  By:

  	
  /s/ T. Randy Stevens

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Martha M. McKennon

  	
   

  	
  Title:

  	
  Chairman and CEO

  
	
  Witness