Document:

EX-10.4 EMPLOYMENT AGREEMENT/DONALD E. ALLISON

 

Exhibit 10.4

EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made and entered into on the 28th day of March, 2008, by and between
MOUNTAIN VALLEY COMMUNITY BANK, a bank organized under the laws of the State of Georgia (the
“Bank”), and DONALD E. ALLISON (hereinafter “Employee”).

WITNESSETH:

     WHEREAS, the Board of Directors of the Bank believes that it is in the best interest of the
Bank to arrange terms of employment for Employee so as to reasonably induce Employee to remain in
his capacities with the Bank for the term hereof; and

     WHEREAS, Employee is willing to provide services to the Bank in accordance with the terms and
conditions hereinafter set forth;

     NOW, THEREFORE, for and in consideration of the mutual premises and covenants herein
contained, the parties hereto agree as follows:

     1. EMPLOYMENT. For the Term of Employment, as hereinafter defined, the Bank agrees to
employ Employee as its President, and Employee agrees to accept such employment and to perform such
duties and functions as the Board of Directors of the Bank may assign to Employee from time to
time. Employee agrees to devote his full business time, attention, skill and efforts to the
business of the Bank, and shall perform his duties in a trustworthy and businesslike manner, all
for the purpose of advancing the interests of the Bank.

     2. TERM OF EMPLOYMENT. The “Term of Employment” referred to in Section 1 hereof and
hereinafter shall be deemed to have commenced as of the date first above mentioned and shall
continue for a period of five (5) years, unless sooner terminated pursuant to this Agreement, and
shall include any extension of the period of employment in accordance with this paragraph. The
period of employment shall automatically be extended without further action by the parties for an
additional twelve (12) full calendar months, on each anniversary hereof during the Term of
Employment, unless (i) either party shall have served written notice upon the other of its
intention that this Agreement shall not be extended at least six (6) months before the anniversary
date on which this Agreement would have been automatically extended for an additional year, or (ii)
the Employee’s employment hereunder shall have been terminated pursuant to Section 4 hereof. In
the event that Employee is a member of the Board of Directors of the Bank or the Bank’s holding
company, then Employee agrees that any termination of this Agreement shall constitute a resignation
by Employee from these Boards of Directors.

     3. COMPENSATION.

          3.1 Base Salary. During the Term of Employment, Employee shall be paid an annual base
salary (hereinafter “Base Salary”) of $180,000, which shall be paid in equal installments in
accordance with the Bank’s normal pay practices, but not less frequently than monthly. Employee’s
salary shall be reviewed by the Board of Directors of the Bank annually and Employee shall be
entitled to receive annually an increase (but in no event a decrease) in such amount, if any, as
may be determined by the Board of Directors of the Bank.

 

 

          3.2 Directors Fees. Subject to continued re-election and possible removal, Employee
shall serve on the Board of Directors of the Bank and the Bank’s holding company and shall be
entitled to receive directors fees for such services on the same basis as other directors. Such
director fees shall be in addition to any other compensation to which he is entitled.

          3.3 Management Incentives and Discretionary Bonuses. During the Term of Employment,
Employee shall be entitled, in an equitable manner based on the terms of any bonus and incentive
plans that have been approved or may, from time to time, be approved by the Board of Directors,
with all other key management personnel of the Bank, to such incentives and discretionary bonuses
as may be authorized, declared and paid by the Board of Directors to the Bank’s key management
employees. The incentive compensation shall be based on meeting or exceeding the attainment of
certain criteria to be established by the Board of Directors. In determining whether to grant
incentive compensation, the Board of Directors shall consider factors such as the Bank’s
profitability, its asset quality, its compliance with laws and regulations, and its loan quality.

               No other compensation provided for in this Agreement shall be deemed a substitute for the
Employee’s right to such incentives and discretionary bonuses when and as declared by the Board.

          3.4 Stock Options. Employee has been awarded stock options to purchase 50,600 shares
of the common stock of the Bank’s holding company. The exercise price of the options is $8.00 per
share, which the Board of Directors determined was the fair market value of the stock on the date
of grant. Employee’s options have fully vested as of the date of this Agreement. These stock
options are the subject of a separate stock option grant agreement between the Bank and Employee
that has been assumed by the Bank’s holding company (the “Grant Agreement”). In the event of a
conflict between the terms of this Agreement and the Grant Agreement, the terms of the Grant
Agreement shall control.

          3.5 Additional Benefits. During the Term of Employment, Employee shall be provided
with such employee benefits and benefit levels, including health insurance, automobile for personal
use, life insurance, and membership in social, professional and civic clubs which the Board of
Directors in its discretion determines to be in keeping with a level commensurate with a bank in a
similar environment. These benefits shall be provided and maintained at a level of not less than
what is in effect at the time this Agreement is executed.

               Throughout the Term of Employment, Employee shall also be entitled to reimbursement for
reasonable business expenses incurred by him in the performance of his duties hereunder.

               During the Employee’s Term of Employment hereunder, Employee shall receive four (4) weeks paid
vacation during each year of employment.

     4. TERMINATION.

          4.1 Death or Disability. This Agreement may be terminated before the expiration of
the Term of Employment upon the occurrence of any one of the following events:

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          (a) Upon Employee’s death, this Agreement shall terminate immediately. Any salary and
any other amounts that may be due Employee from Bank at the time of his death (whether
pursuant to benefits plans or otherwise) shall be paid to the executor or administrator of
his estate.

          (b) The Bank may terminate this Agreement upon Employee’s “Total Disability.” As used
in this Agreement, “Total Disability” means any physical or mental disorder that renders
Employee incapable of performing his normal duties and services under this Agreement for a
period of one hundred twenty (120) days in any consecutive twelve (12) month period, as
determined by a licensed physician selected by mutual agreement of the Bank and the Employee
or the Employee’s legal representative. If this Agreement is terminated as a result of the
Employee’s “Total Disability,” the Employee’s compensation hereunder shall terminate and the
Employee shall be paid in accordance with such long-term disability plans of the Bank as may
be in effect at that time. The Employee’s compensation, title and status shall continue
during any such period of disability until the date of termination except that the Bank may
provide disability insurance to cover the Employee during any part of such disability period
and the Bank’s obligation for the Employee’s compensation for any such period shall be
reduced by the amount of any such insurance proceeds which the Employee receives.

          4.2 For Cause. This Agreement may be terminated by the Board of Directors of the Bank
for “Cause” for any of the following reasons:

          (a) failure of Employee to follow reasonable written instructions or policies of the
Board of Directors of the Bank;

          (b) gross negligence or willful misconduct of Employee materially damaging to the
business of the Bank;

          (c) conviction of Employee of a crime involving breach of trust, moral turpitude, theft
or fraud;

          (d) the failure by the Employee to perform substantially his duties other than any
failure resulting from incapacity due to physical or mental illness;

          (e) willful commission by Employee of (i) acts involving dishonesty or fraud or (ii)
acts causing harm to the Bank;

          (f) a willful misrepresentation by the Employee to the stockholders or the Board of
Directors of the Bank which causes substantial injury to the Bank;

          (g) Employee has committed acts that the Board feels, in its discretion, constitute
acts of morale turpitude; or

          (h) a request by any state or federal authority regulating the Bank that the Employee
be removed from his office as President of the Bank.

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Except for the reasons described in (c), (e), (f) or (h) above, for which no notice shall be
required prior to termination, the Bank shall notify Employee in writing of the specific reasons
for the termination for “Cause” and the Employee will be allowed thirty (30) days to reply in
writing to the accusation before any termination for “Cause”. If the Employee is terminated for
“Cause,” he shall receive his salary and any other amounts due to him from the Bank (whether
pursuant to benefit plans or otherwise) through the date of termination plus an amount equal to
one-half of his Base Salary (the latter payment, which shall be paid in regular installments over a
six (6)-month period, shall be in consideration of Employee’s non-compete agreement set forth in
Section 6.2).

          4.3 Without Cause. The Bank may immediately terminate this Agreement at any time
“without Cause” by giving the Employee written notice of the termination date. If this Agreement
is terminated pursuant to this Section 4.3, then:

          (i) Employee shall be paid severance compensation in an amount equal to his
annual “Base Salary” (as defined in Section 3.1) then in effect which shall be paid
over a twelve (12)-month period commencing from the termination date in such
installments and intervals as if the Employee had remained employed;
provided, however, that the payments pursuant to this clause (i)
shall only be made if Employee executes a release substantially in the form of
Exhibit A attached hereto; and

          (ii) Employee shall be paid any other amounts owing to the Employee by the Bank
under this Agreement at such termination date, which amounts shall be paid within a
reasonable time after such termination date.

If this Agreement is terminated “without Cause,” and if and to the extent that the Employee timely
elects COBRA continuation coverage, the Bank will pay to Employee on a monthly basis the cost of
COBRA continuation coverage, less the amount of premiums by active employees receiving the same
coverage, for a period of twelve (12) months from the termination date or such lesser period as the
Employee continues to have COBRA coverage. Anything in this Agreement to the contrary
notwithstanding, upon a termination “without Cause” pursuant to this Section 4.3, Employee’s sole
rights and remedies against the Bank arising out of any such termination of his employment
hereunder are to receive the severance compensation and the other amounts and benefits as are
explicitly set forth in this Section 4.3. All of the provisions of this Section 4.3 shall be
subject to the provisions of Section 5 below.

     5. CHANGE IN CONTROL OF THE BANK. In the event of a “Change in Control” during the
Term of Employment, as defined herein, and the Employee either (i) is terminated by the Bank
(except “for Cause” as defined in Section 4.2 above), or the Employee voluntarily resigns during
the one-year period after the Change in Control, but before he reaches age 75, then Employee shall
be entitled to receive severance compensation in an amount equal to three (3) times the sum of: (i)
his Base Salary then in effect and (ii) the bonus paid to Employee for the previous year. Employee
shall also be entitled to any other amounts owing to Employee at the time of such termination date.
All amounts payable to Employee pursuant to this Section 5 shall be paid in a lump sum within 14
days following the date of termination or resignation.

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          For purposes of this Section 5, “Change in Control” of the Bank shall mean the occurrence of
any of the following events that does not also constitute a Non-Control Transaction:

          (i) During any twelve (12) month period, the individuals who are members of the
Board of Mountain Valley Bancshares, Inc., the Bank’s holding company (the “Holding
Company”) (the “Incumbent Board”), cease for any reason to constitute at least 50%
of the Board of the Holding Company; provided, however, that if the election, or
nomination for election by the Holding Company’s shareholders, of any new director
was approved in advance by a vote of at least 50% of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered as a member of the
Incumbent Board.

          (ii) A future acquisition (other than directly from the Bank or the Holding
Company) of any voting securities of the Bank or the Holding Company (the “Voting
Securities”) by any “Person” (as the term “person” is used for purposes of Section
13(d) or 14(d) of the Exchange Act) immediately after which such Person has
“Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the combined voting power of the Bank’s or the
Holding Company’s then outstanding Voting Securities.

          (iii) Any Person, or more than one Person acting as a group, acquires (or has
acquired during the 12 month period ending of the date of the most recent
acquisition by such Person or Persons) securities of the Company representing 30% or
more of the Voting Securities; provided, however, that the event described in this
paragraph (iii) shall not be deemed to be a Change in Control by virtue of any of
the following acquisitions: (A) by the Bank or the Holding Company, (B) by any
employee benefit plan (or related trust) sponsored or maintained by the Bank or the
Holding Company, or (C) by an underwriter temporarily holding securities pursuant to
an offering of such securities.

          (iv) When any one Person, or more than one Person acting as a group, acquires
(or has acquired during the twelve (12)-month period ending on the date of the most
recent acquisition by such Person or Persons) assets from the Bank or the Holding
Company that have a total gross fair market value equal to or more than 40% of the
total gross fair market value of all of the assets of such entity (determined
without regard to any liabilities associated with such assets) immediately prior to
such acquisition or acquisitions, without regard to assets transferred to: (A) a
shareholder or owner of the entity (immediately before the asset transfer) in
exchange for or with respect to its stock, (B) an organization, 50% or more of the
total value or voting power of which is owned directly or indirectly, by the entity
immediately after the transfer, (C) a Person, or more than one Person acting as a
group, that owns, directly or indirectly, 50% or more of the total value or voting
power of the entity immediately after the transfer or (D) an organization, at least
50% of the total value or voting power of which is owned, directly or indirectly, by
a Person, or more than one Person acting as a group, that

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owns, directly or indirectly, 50% or more of the total value or voting power of
the entity immediately after the transfer.

          A “Non-Control Transaction” means any merger, consolidation or reorganization or similar
transaction in which:

          (i) the shareholders of the Bank or the Holding Company immediately before such
merger, consolidation, reorganization or similar transaction, own, directly or
indirectly and in substantially the same proportion as their ownership of the common
stock of the Bank or the Holding Company immediately before such transaction,
immediately following such transaction, at least 50% of the combined voting power of
the outstanding voting securities of the corporation resulting from such merger,
consolidation or reorganization (the “Surviving Corporation”); and

          (ii) immediately following such merger, consolidation or reorganization,
members of the Incumbent Board shall constitute at least 50% of the members of the
board of directors of the Surviving Corporation.

          Notwithstanding the foregoing, this paragraph shall apply if all or any portion of the
payments and benefits provided to an Employee under this Agreement, or any other payment or benefit
(including under any plan or arrangement adopted in the future), would otherwise constitute “excess
parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”), that are subject to the tax imposed by Section 4999 of the Code (or similar
tax and/or assessment). If, after the application of such tax and/or assessment, the amount of
such payment and benefits would be less than if the payment and benefits had been reduced to an
amount that would result in there being no excess parachute payments, then such payments and
benefits shall be so reduced (the minimum extent necessary) so that no excess parachute payments
result. If reduction is necessary hereunder, the Employee shall elect which of the payments and
benefits shall be reduced. Determination of whether payments and benefits would constitute excess
parachute payments, and the amount of reduction so that no excess parachute payments shall exist,
shall be made, at the Bank’s expense, by the independent accounting firm employed by the Bank
immediately prior to the occurrence of any change of control of the Bank or Holding Company which
would result in the imposition of such tax.

     6. NONCOMPETE AND NON-SOLICITATION COVENANTS.

          6.1 Definitions. In this Agreement the following terms shall have the meanings set
forth below:

          (a) “Affiliate” shall be used to indicate a relationship to a specified person, firm,
corporation, partnership, association or entity, and shall mean any person, firm,
corporation, partnership, association or entity that, directly or indirectly or through one
or more intermediaries, controls, is controlled by or is under common control with such
person, firm, corporation, partnership, association or entity.

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          (b) “Applicable Period” shall mean twelve (12) months following the effective date of
the termination of this Agreement.

          (c) “Area” shall mean the geographic area within White County, Georgia.

          (d) “Competing Business” shall mean a federally insured financial institution.

          6.2 Agreement Not to Compete. The Employee hereby agrees that during his employment
by the Bank, and for the Applicable Period thereafter, he will not (except on behalf of, or with
the prior written consent of, the Bank) for a Competing Business located within the Area, either
directly or indirectly, on his own behalf, or in the service or on behalf of others, as a
principal, partner, officer, director, manager, supervisor, administrator, consultant, executive
employee or in any other capacity which involves the duties and responsibilities similar to those
undertaken for the Bank as described in Section 1, work for, engage or participate in any such
Competing Business, or control or own (other than ownership of less than five percent (5%) of the
outstanding voting securities of an entity whose voting securities are traded on a national
securities exchange or quoted on the National Association of Securities Dealers, Inc. Automated
Quotation System), a beneficial interest in, any Competing Business.

          6.3 Agreement Not to Solicit Customers. The Employee agrees that during his
employment by the Bank and for the Applicable Period thereafter, he will not, without the prior
written consent of the Bank, either directly or indirectly, on his own behalf or in the service or
on behalf of others, solicit, divert or appropriate, or attempt to solicit, divert or appropriate,
to any Competing Business any customer or client or actively sought prospective customer or client
of the Bank or any Affiliate located in the Area who was serviced by or under the supervision of
the Employee in the course of his employment within the one (1) year period immediately prior to
the termination of the Employee’s employment with the Bank.

          6.4 Agreement Not to Solicit Employees. The Employee agrees that during his
employment by the Bank and for the Applicable Period thereafter, he will not, either directly or
indirectly, on his own behalf or in the service or on behalf of others, solicit, divert or hire
away, or attempt to solicit, divert or hire away, any person employed by the Bank or any of its
Affiliates, whether or not such employee is a full-time, a part-time or a temporary employee and
whether or not such employment is pursuant to a written agreement and whether or not such
employment is for a determined period or is at will.

     7. OWNERSHIP AND PROTECTION OF PROPRIETARY INFORMATION.

          7.1 Definitions. The following capitalized terms used in this Section 7 shall have
the meanings assigned to them below, which definitions shall apply to both the singular and the
plural forms of such terms:

               “Confidential Information” means all information regarding the Bank, its activities, business
or clients that is the subject of reasonable efforts by the Bank to maintain its confidentiality
and that is not generally disclosed by practice or authority to persons not employed by the Bank,
but that does not rise to the level of a Trade Secret. “Confidential

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Information” shall include, but is not limited to, financial plans and data concerning the
Bank; management planning information; business plans; operational methods; market studies;
marketing plans or strategies; product development techniques or plans; customer lists; details of
customer contracts; current and anticipated customer requirements; past, current and planned
research and development; business acquisition plans; and new personnel acquisition plans.
“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. This definition shall not limit any definition of “confidential
information” or any equivalent term under state or federal law.

               “Trade Secret” means all information, without regard to form, including, but not limited to,
technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method,
a technique, a drawing, a process, financial data, financial plans, product plans, distribution
lists or a list of actual or potential customers, advertisers or suppliers which is not commonly
known by or available to the public and which information: (A) derives economic value, actual or
potential, from not being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy. Without limiting
the foregoing, Trade Secret means any item of confidential information that constitutes a “trade
secret(s)” under the common law or statutory law of the State of Georgia.

          7.2 Restriction on Disclosure and Use of Confidential Information and Trade Secrets.
Employee understands and agrees that the Confidential Information and Trade Secrets constitute
valuable assets of the Bank and its affiliated entities, and may not be converted to Employee’s own
use. Accordingly, Employee hereby agrees that Employee shall not, directly or indirectly, at any
time during the Term of Employment and a period extending one year thereafter (the “Restricted
Period”) reveal, divulge, or disclose to any person not expressly authorized by the Bank any
Confidential Information, and Employee shall not, directly or indirectly, at any time during the
Restricted Period use or make use of any Confidential Information in connection with any business
activity other than that of the Bank. Throughout the term of this Agreement and at all times after
the date that this Agreement terminates for any reason, Employee shall not directly or indirectly
transmit or disclose any Trade Secret of the Bank to any Person, and shall not make use of any such
Trade Secret, directly or indirectly, for [himself/herself] or for others, without the prior
written consent of the Bank. The parties acknowledge and agree that this Agreement is not intended
to, and does not, alter either the Bank’s rights or Employee’s obligations under any state or
federal statutory or common law regarding trade secrets and unfair trade practices.

               Anything herein to the contrary notwithstanding, Employee shall not be restricted from
disclosing or using Confidential Information or Trade Secrets that are required to be disclosed by
law, court order or other legal process; provided, however, that in the event disclosure is
required by law, Employee 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 Employee.

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          7.3 Return of Property. Upon request by the Bank, and in any event upon termination
of the employment of the Employee with the Bank for any reason, the Employee will promptly deliver
to the Bank all property belonging to the Bank, including, without limitation, all Confidential
Information and all Trade Secrets (and all physical embodiments thereof) then in his custody,
control or possession.

          7.4 Termination. The Employee shall maintain and observe the obligations of
confidentiality contained in this Agreement with respect to Confidential Information during the
term of his employment with the Bank and at all times following the termination of such employment
for any reason whatsoever.

     8. INJUNCTIVE RELIEF. The Employee agrees that the covenants and agreements contained
in Sections 6 and 7 of this Agreement, and the subsections of these Sections, are of the essence of
this Agreement; that each of such covenants is reasonable and necessary to protect and preserve the
interests and properties of the Bank and the business of the Bank; that the Bank is engaged in the
business of the Bank throughout the Area; that irreparable loss and damage will be suffered by the
Bank should the Employee breach any of such covenants and agreements; and that, in addition to
other remedies available to it, the Bank shall be entitled to both temporary and permanent
injunctions to prevent a breach or contemplated breach by the Employee of any of such covenants or
agreements.

     9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the
parties hereto regarding employment of Employee, and supersedes and replaces any prior agreement
between the parties.

     10. ASSIGNMENT. Neither of the parties hereto may assign this Agreement without the
prior written consent of the other party hereto except that the Bank may assign the Agreement to a
successor in interest who agrees, either by consent or by operation of law, to assume the Bank’s
obligations under this Agreement.

     11. SEVERABILITY. Each section and subsection of this Agreement constitutes a
separate and distinct understanding, covenant and provision hereof. In the event that any
provision of this Agreement shall finally be determined to be unlawful, such provision shall be
deemed to be severed from this Agreement, but every other provision of this Agreement shall remain
in full force and effect.

     12. GOVERNING LAW. This Agreement shall in all respects be interpreted, construed and
governed by and in accordance with the laws of the State of Georgia.

     13. RIGHTS OF THIRD PARTIES. Nothing herein expressed or implied is intended to or
shall be construed to confer upon or give to any person, firm or other entity, other than the
parties hereto and their permitted assigns, any rights or remedies under or by reason of this
Agreement.

     14. AMENDMENT. This Agreement may not be amended orally but only by an instrument in
writing duly executed by the parties hereto.

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     15. CODE SECTION 409A. Notwithstanding any other provision of this Agreement, it is
intended that any payments or benefit which is provided pursuant to or in connection with this
Agreement which is considered to be deferred compensation subject to Section 409A of the Code shall
be provided and paid in such form and at such time, including, without limitation, payment only in
connection with a permissible payment event as complies with the applicable requirements of Code
Section 409A to avoid the unfavorable tax consequences provided therein for noncompliance. If
Employee is a “specified employee” (as defined in Section 409A of the Code) and any of the Bank’s
or Holding Company’s stock is publicly traded on an established securities market or otherwise,
then payment of any amount or provision of any benefit under this Agreement which is considered to
be deferred compensation subject to Section 409A of the Code shall be deferred for six (6) months
as required by Section 409A(a)(2)(B)(i) of the Code (the “409A Deferral Period”). In the event
such payments are otherwise due to be made in installments or periodically during the 409A Deferral
Period, the payments which would otherwise have been made in the 409A Deferral Period shall be
accumulated and paid in lump sum as soon as the 409A Deferral Period ends, and the balance of the
payments shall be made as otherwise scheduled. For purposes of this Agreement, any termination of
employment will be read to mean a “separation from service” within the meaning of Section 409A of
the Code where it is reasonably anticipated that no further services would be performed after such
date or that the level of bona fide services Employee would perform after that date (whether as an
employee or independent contractor) would permanently decrease to less than fifty percent (50%) of
the average level of bona fide services performed over the immediately preceding thirty-six (36)
month period.

     16. NOTICES. Any notice or other document or communication permitted or required to
be given to Employee pursuant to the terms hereof shall be deemed given if personally delivered to
Employee or sent to him postage prepaid, by registered or certified mail, at 3395 Blue Creek Road,
Cleveland, Ga. 30528, or at any such other address as Employee shall have notified the Bank in
writing. Any notice or other document or other communication permitted or required to be given to
the Bank pursuant to the terms hereof shall be deemed given if personally delivered or sent to the
Bank, postage prepaid, by registered or certified mail, at 136 North Main Street, Cleveland,
Georgia 30528, or at such other address as the Bank shall have notified Employee in writing. All
notices personally delivered shall be deemed received on the date delivered. All notices sent by
postage-prepaid, registered or certified mail shall be deemed received on the actual date of
receipt, or when refused or returned because of failure to claim if mailed return-receipt
requested.

     17. WAIVER. The waiver by either party hereto of a breach of any provision of this
Agreement by the other shall not operate or be construed as a waiver of any subsequent breach of
the same or any other provision of this Agreement by the breaching party.

(Signatures on following page.)

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered as of the day and year first above written.

	 	 	 	 	 
	
[BANK SEAL]	MOUNTAIN VALLEY COMMUNITY BANK

 	 
	 	By:  	/s/ E. Ray Black
 	 
	 	 	Name:  	E. Ray Black 	 
	 	 	Title:  	Chairman of the Board 	 

	 	 	 	 	 
	Attest:

 	 	 
	/s/ Aubrey H. McIntyre
 	 	 
	Secretary 	 	 
	 	 	 

	 	 	 	 	 
	 	EMPLOYEE

 	 
	 	/s/ Donald E. Allison
 	 
	 	Donald E. Allison 	 
	 	 	 

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EXHIBIT A

FORM OF RELEASE

     THIS
RELEASE (“Release”) is granted effective as of the ______ day of _______________, ______, by
________________________(“Employee”) in favor of Mountain Valley Community Bank (the “Bank”).
This is the Release referred to in that certain Employment Agreement dated as of __________,
__________by and between the Bank and Employee (the “Employment Agreement”). Employee gives this
Release in consideration of the Bank’s promises and covenants as recited in the Employment
Agreement, with respect to which this Release is an integral part.

     1. Release of the Bank. Employee, for himself, his successors, assigns, attorneys,
and all those entitled to assert his rights, now and forever hereby releases and discharges the
Bank and its respective officers, directors, stockholders, trustees, employees, agents, parent
corporations, subsidiaries, affiliates, estates, successors, assigns and attorneys (“the Released
Parties”), from any and all claims, actions, causes of action, sums of money due, suits, debts,
liens, covenants, contracts, obligations, costs, expenses, damages, judgments, agreements,
promises, demands, claims for attorney’s fees and costs, or liabilities whatsoever, in law or in
equity, which Employee ever had or now has against the Released Parties, including any claims
arising by reason of or in any way connected with any employment relationship which existed between
the Bank or any of its parents, subsidiaries, affiliates, or predecessors, and Employee. It is
understood and agreed that this Release is intended to cover all actions, causes of action, claims
or demands for any damage, loss or injury, which may be traced either directly or indirectly to the
aforesaid employment relationship, or the termination of that relationship, that Employee has, had
or purports to have, from the beginning of time to the date of this Release, whether known or
unknown, that now exists, no matter how remotely they may be related to the aforesaid employment
relationship including but not limited to claims for employment discrimination under federal or
state law, except as provided in Paragraph 2; claims arising under Title VII of the Civil Rights
Act, 42 U.S.C. § 2000(e), et seq. or the Americans With Disabilities Act, 42 U.S.C.
§ 12101 et seq.; claims for statutory or common law wrongful discharge, including
any claims arising under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.;
claims for attorney’s fees, expenses and costs; claims for defamation; claims for wages or vacation
pay; claims for benefits, including any claims arising under the Employee Retirement Income
Security Act, 29 U.S.C. § 1001, et seq.; and provided, however, that nothing herein
shall release the Bank of its obligations to Employee under the Employment Agreement or any other
contractual obligations between the Bank or its affiliates and Employee, or any indemnification
obligations to Employee under the Bank’s bylaws, articles of incorporation, Georgia law or
otherwise.

     2. Release of Claims Under Age Discrimination in Employment Act. Without limiting the
generality of the foregoing, Employee agrees that by executing this Release, he has released and
waived any and all claims he has or may have as of the date of this Release for age discrimination
under the Age Discrimination in Employment Act, 29 U.S.C. § 621,
et seq. It is understood that
Employee is advised to consult with an attorney prior to executing this Release; that he in fact
has consulted a knowledgeable, competent attorney regarding this Release; that he

 

 

may, before executing this Release, consider this Release for a period of twenty-one (21)
calendar days; and that the consideration he receives for this Release is in addition to amounts to
which he was already entitled. It is further understood that this Release is not effective until
seven (7) calendar days after the execution of this Release and that Employee may revoke this
Release within seven (7) calendar days from the date of execution hereof.

     Employee agrees that he has carefully read this Release and is signing it voluntarily.
Employee acknowledges that he has had twenty one (21) days from receipt of this Release to review
it prior to signing or that, if Employee is signing this Release prior to the expiration of such
21-day period, Employee is waiving his right to review the Release for such full 21-day period
prior to signing it. Employee has the right to revoke this release within seven (7) days following
the date of its execution by him. However, if Employee revokes this Release within such seven (7)
day period, no severance benefit will be payable to him under the Employment Agreement and he shall
return to the Bank any such payment received prior to that date.

     EMPLOYEE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT CONSTITUTES A GENERAL
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE COMPANY UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT. EMPLOYEE ACKNOWLEDGES THAT HE HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN
ATTORNEY OR OTHER ADVISOR OF HIS CHOOSING CONCERNING HIS EXECUTION OF THIS RELEASE AND THAT HE IS
SIGNING THIS RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY FROM ALL SUCH
CLAIMS.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 
	 	Date:EX-10.5 EMPLOYMENT AGREEMENT/RACHEL E. MARSHALL

 

Exhibit 10.5

EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made and entered into on the 28th day of March, 2008, by and between
MOUNTAIN VALLEY COMMUNITY BANK, a bank organized under the laws of the State of Georgia (the
“Bank”), and RACHEL E. MARSHALL (hereinafter “Employee”).

WITNESSETH:

     WHEREAS, the Board of Directors of the Bank believes that it is in the best interest of the
Bank to arrange terms of employment for Employee so as to reasonably induce Employee to remain in
her capacities with the Bank for the term hereof; and

     WHEREAS, Employee is willing to provide services to the Bank in accordance with the terms and
conditions hereinafter set forth;

     NOW, THEREFORE, for and in consideration of the mutual premises and covenants herein
contained, the parties hereto agree as follows:

     1. EMPLOYMENT. For the Term of Employment, as hereinafter defined, the Bank agrees to
employ Employee as its Senior Vice President and Chief Financial Officer, and Employee agrees to
accept such employment and to perform such duties and functions as the Board of Directors and CEO
of the Bank may assign to Employee from time to time. Employee agrees to devote her full business
time, attention, skill and efforts to the business of the Bank, and shall perform her duties in a
trustworthy and businesslike manner, all for the purpose of advancing the interests of the Bank.

     2. TERM OF EMPLOYMENT. The “Term of Employment” referred to in Section 1 hereof and
hereinafter shall be deemed to have commenced as of the date first above mentioned and shall
continue for a period of two (2) years, unless sooner terminated pursuant to this Agreement, and
shall include any extension of the period of employment in accordance with this paragraph. The
period of employment shall automatically be extended without further action by the parties for an
additional twelve (12) full calendar months, on each anniversary hereof during the Term of
Employment, unless (i) either party shall have served written notice upon the other of its
intention that this Agreement shall not be extended at least six (6) months before the anniversary
date on which this Agreement would have been automatically extended for an additional year, or (ii)
the Employee’s employment hereunder shall have been terminated pursuant to Section 4 hereof. In
the event that Employee is a member of the Board of Directors of the Bank or the Bank’s holding
company, then Employee agrees that any termination of this Agreement shall constitute a resignation
by Employee from these Boards of Directors.

     3. COMPENSATION.

          3.1 Base Salary. During the Term of Employment, Employee shall be paid an annual base
salary (hereinafter “Base Salary”) of $100,000, which shall be paid in equal installments in
accordance with the Bank’s normal pay practices, but not less frequently than monthly. Employee’s
salary shall be reviewed by the Board of Directors of the Bank annually

 

 

and Employee shall be entitled to receive annually an increase (but in no event a decrease) in
such amount, if any, as may be determined by the Board of Directors of the Bank.

          3.2 Management Incentives and Discretionary Bonuses. During the Term of Employment,
Employee shall be entitled, in an equitable manner based on the terms of any bonus and incentive
plans that have been approved or may, from time to time, be approved by the Board of Directors,
with all other key management personnel of the Bank, to such incentives and discretionary bonuses
as may be authorized, declared and paid by the Board of Directors to the Bank’s key management
employees. The incentive compensation shall be based on meeting or exceeding the attainment of
certain criteria to be established by the Board of Directors. In determining whether to grant
incentive compensation, the Board of Directors shall consider factors such as the Bank’s
profitability, its asset quality, its compliance with laws and regulations, and its loan quality.

               No other compensation provided for in this Agreement shall be deemed a substitute for the
Employee’s right to such incentives and discretionary bonuses when and as declared by the Board.

          3.3 Stock Options. Employee has been awarded stock options to purchase 12,500 shares
of the common stock of the Bank’s holding company. The exercise price of the options is $8.00 per
share, which the Board of Directors has determined was the fair market value of the stock on the
date of grant. Employee’s options have fully vested as of the date of this Agreement. These stock
options are the subject of a separate stock option grant agreement between the Bank and Employee
that has been assumed by the Bank’s holding company (the “Grant Agreement”). In the event of a
conflict between the terms of this Agreement and the Grant Agreement, the terms of the Grant
Agreement shall control.

          3.4 Additional Benefits. During the Term of Employment, Employee shall be provided
with such employee benefits and benefit levels, including health insurance, life insurance and
membership in social, professional and civic clubs which the Board of Directors in its discretion
determines to be in keeping with a level commensurate with a bank in a similar environment. These
benefits shall be provided and maintained at a level of not less than what is in effect at the time
this Agreement is executed.

               Throughout the Term of Employment, Employee shall also be entitled to reimbursement for
reasonable business expenses incurred by her in the performance of her duties hereunder.

               During the Employee’s Term of Employment hereunder, Employee shall receive four (4) weeks paid
vacation during each year of employment. 

     4. TERMINATION.

          4.1 Death or Disability. This Agreement may be terminated before the expiration of
the Term of Employment upon the occurrence of any one of the following events:

          (a) Upon Employee’s death, this Agreement shall terminate immediately. Any salary and
any other amounts that may be due Employee from Bank at

2

 

the time of her death (whether pursuant to benefits plans or otherwise) shall be paid
to the executor or administrator of her estate.

          (b) The Bank may terminate this Agreement upon Employee’s “Total Disability.” As used
in this Agreement, “Total Disability” means any physical or mental disorder that renders
Employee incapable of performing her normal duties and services under this Agreement for a
period of one hundred twenty (120) days in any consecutive twelve (12) month period, as
determined by a licensed physician selected by mutual agreement of the Bank and the Employee
or the Employee’s legal representative. If this Agreement is terminated as a result of the
Employee’s “Total Disability,” the Employee’s compensation hereunder shall terminate and the
Employee shall be paid in accordance with such long-term disability plans of the Bank as may
be in effect at that time. The Employee’s compensation, title and status shall continue
during any such period of disability until the date of termination except that the Bank may
provide disability insurance to cover the Employee during any part of such disability period
and the Bank’s obligation for the Employee’s compensation for any such period shall be
reduced by the amount of any such insurance proceeds which the Employee receives.

          4.2 For Cause. This Agreement may be terminated by the Bank for “Cause” for any of
the following reasons:

          (a) failure of Employee to follow reasonable written instructions or policies of the
Board of Directors of the Bank;

          (b) gross negligence or willful misconduct of Employee materially damaging to the
business of the Bank;

          (c) conviction of Employee of a crime involving breach of trust, moral turpitude, theft
or fraud;

          (d) the failure by the Employee to perform substantially her duties other than any
failure resulting from incapacity due to physical or mental illness;

          (e) willful commission by Employee of (i) acts involving dishonesty or fraud or (ii)
acts causing harm to the Bank;

          (f) a willful misrepresentation by the Employee to the stockholders or the Board of
Directors of the Bank which causes substantial injury to the Bank;

          (g) Employee has committed acts that the Board feels, in its discretion, constitute
acts of morale turpitude; or

          (h) a request by any state or federal authority regulating the Bank that the Employee
be removed from her office as President and CEO of the Chief Financial Officer of the Bank.

Except for the reasons described in (c), (e), (f) or (h) above, for which no notice shall be
required prior to termination, the Bank shall notify Employee in writing of the specific reasons
for the

3

 

termination for “Cause” and the Employee will be allowed thirty (30) days to reply in writing to
the accusation before any termination for “Cause”. If the Employee is terminated for “Cause,” she
shall receive only her salary and any other amounts due to her from the Bank (whether pursuant to
benefit plans or otherwise) through the date of termination.

          4.3 Without Cause. The Bank may immediately terminate this Agreement at any time
“without Cause” by giving the Employee written notice of the termination date. If this Agreement
is terminated pursuant to this Section 4.3, then:

          (i) Employee shall be paid severance compensation in an amount equal to her
annual “Base Salary” (as defined in Section 3.1) then in effect which shall be paid
over a twelve (12)-month period commencing from the termination date in such
installments and intervals as if the Employee had remained employed;
provided, however, that the payments pursuant to this clause (i)
shall only be made if Employee executes a release substantially in the form of
Exhibit A attached hereto; and

          (ii) Employee shall be paid any other amounts owing to the Employee by the Bank
under this Agreement at such termination date, which amounts shall be paid within a
reasonable time after such termination date.

If this Agreement is terminated “without Cause,” and if and to the extent that the Employee timely
elects COBRA continuation coverage, the Bank will pay to Employee on a monthly basis the cost of
COBRA continuation coverage, less the amount of premiums by active employees receiving the same
coverage, for a period of twelve (12) months from the termination date or such lesser period as the
Employee continues to have COBRA coverage. Anything in this Agreement to the contrary
notwithstanding, upon a termination “without Cause” pursuant to this Section 4.3, Employee’s sole
rights and remedies against the Bank arising out of any such termination of her employment
hereunder are to receive the severance compensation and the other amounts and benefits as are
explicitly set forth in this Section 4.3. All of the provisions of this Section 4.3 shall be
subject to the provisions of Section 5 below.

     5. CHANGE IN CONTROL OF THE BANK. In the event of a “Change in Control” during the
Term of Employment, as defined herein, and the Employee either (i) is terminated by the Bank
(except “for Cause” as defined in Section 4.2 above), or the Employee voluntarily resigns during
the one-year period after the Change in Control, but before she reaches age 75, then Employee shall
be entitled to receive severance compensation in an equal to two (2) times the sum of: (i) her Base
Salary then in effect and (ii) the bonus paid to Employee for the previous year. Employee shall
also be entitled to any other amounts owing to Employee at the time of such termination date. All
amounts payable to Employee pursuant to this Section 5 shall be paid in a lump sum within 14 days
following the date of termination or resignation.

          For purposes of this Section 5, “Change in Control” of the Bank shall mean the occurrence of
any of the following events that does not also constitute a Non-Control Transaction:

4

 

          (i) During any twelve (12) month period, the individuals who are members of the
Board of Mountain Valley Bancshares, Inc., the Bank’s holding company (the “Holding
Company”) (the “Incumbent Board”), cease for any reason to constitute at least 50%
of the Board of the Holding Company; provided, however, that if the election, or
nomination for election by the Holding Company’s shareholders, of any new director
was approved in advance by a vote of at least 50% of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered as a member of the
Incumbent Board.

          (ii) A future acquisition (other than directly from the Bank or the Holding
Company) of any voting securities of the Bank or the Holding Company (the “Voting
Securities”) by any “Person” (as the term “person” is used for purposes of Section
13(d) or 14(d) of the Exchange Act) immediately after which such Person has
“Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the combined voting power of the Bank’s or the
Holding Company’s then outstanding Voting Securities.

          (iii) Any Person, or more than one Person acting as a group, acquires (or has
acquired during the 12 month period ending of the date of the most recent
acquisition by such Person or Persons) securities of the Company representing 30% or
more of the Voting Securities; provided, however, that the event described in this
paragraph (iii) shall not be deemed to be a Change in Control by virtue of any of
the following acquisitions: (A) by the Bank or the Holding Company, (B) by any
employee benefit plan (or related trust) sponsored or maintained by the Bank or the
Holding Company, or (C) by an underwriter temporarily holding securities pursuant to
an offering of such securities.

          (iv) When any one Person, or more than one Person acting as a group, acquires
(or has acquired during the twelve (12)-month period ending on the date of the most
recent acquisition by such Person or Persons) assets from the Bank or the Holding
Company that have a total gross fair market value equal to or more than 40% of the
total gross fair market value of all of the assets of such entity (determined
without regard to any liabilities associated with such assets) immediately prior to
such acquisition or acquisitions, without regard to assets transferred to: (A) a
shareholder or owner of the entity (immediately before the asset transfer) in
exchange for or with respect to its stock, (B) an organization, 50% or more of the
total value or voting power of which is owned directly or indirectly, by the entity
immediately after the transfer, (C) a Person, or more than one Person acting as a
group, that owns, directly or indirectly, 50% or more of the total value or voting
power of the entity immediately after the transfer or (D) an organization, at least
50% of the total value or voting power of which is owned, directly or indirectly, by
a Person, or more than one Person acting as a group, that owns, directly or
indirectly, 50% or more of the total value or voting power of the entity immediately
after the transfer.

5

 

          A “Non-Control Transaction” means any merger, consolidation or reorganization or similar
transaction in which:

          (i) the shareholders of the Bank or the Holding Company immediately before such
merger, consolidation, reorganization or similar transaction, own, directly or
indirectly and in substantially the same proportion as their ownership of the common
stock of the Bank or the Holding Company immediately before such transaction,
immediately following such transaction, at least 50% of the combined voting power of
the outstanding voting securities of the corporation resulting from such merger,
consolidation or reorganization (the “Surviving Corporation”); and

          (ii) immediately following such merger, consolidation or reorganization,
members of the Incumbent Board shall constitute at least 50% of the members of the
board of directors of the Surviving Corporation.

     Notwithstanding the foregoing, this paragraph shall apply if all or any portion of the
payments and benefits provided to an Employee under this Agreement, or any other payment or benefit
(including under any plan or arrangement adopted in the future), would otherwise constitute “excess
parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”), that are subject to the tax imposed by Section 4999 of the Code (or similar
tax and/or assessment). If, after the application of such tax and/or assessment, the amount of
such payment and benefits would be less than if the payment and benefits had been reduced to an
amount that would result in there being no excess parachute payments, then such payments and
benefits shall be so reduced (the minimum extent necessary) so that no excess parachute payments
result. If reduction is necessary hereunder, the Employee shall elect which of the payments and
benefits shall be reduced. Determination of whether payments and benefits would constitute excess
parachute payments, and the amount of reduction so that no excess parachute payments shall exist,
shall be made, at the Bank’s expense, by the independent accounting firm employed by the Bank
immediately prior to the occurrence of any change of control of the Bank or Holding Company which
would result in the imposition of such tax.

     6. NONCOMPETE AND NON-SOLICITATION COVENANTS.

          6.1 Definitions. In this Agreement the following terms shall have the meanings set
forth below:

          (a) “Affiliate” shall be used to indicate a relationship to a specified person, firm,
corporation, partnership, association or entity, and shall mean any person, firm,
corporation, partnership, association or entity that, directly or indirectly or through one
or more intermediaries, controls, is controlled by or is under common control with such
person, firm, corporation, partnership, association or entity.

          (b) “Applicable Period” shall mean twelve (12) months following the effective date of
the termination of this Agreement.

6

 

          (c) “Area” shall mean the geographic area within twenty-five (25) miles of the Bank’s
location in White County, Georgia.

          (d) “Competing Business” shall mean a federally insured financial institution.

          6.2 Agreement Not to Compete. The Employee hereby agrees that during her employment
by the Bank, and for the Applicable Period thereafter, she will not (except on behalf of, or with
the prior written consent of, the Bank) for a Competing Business located within the Area, either
directly or indirectly, on her own behalf, or in the service or on behalf of others, as a
principal, partner, officer, director, manager, supervisor, administrator, consultant, executive
employee or in any other capacity which involves the duties and responsibilities similar to those
undertaken for the Bank as described in Section 1, work for, engage or participate in any such
Competing Business, or control or own (other than ownership of less than five percent (5%) of the
outstanding voting securities of an entity whose voting securities are traded on a national
securities exchange or quoted on the National Association of Securities Dealers, Inc. Automated
Quotation System), a beneficial interest in, any Competing Business.

          6.3 Agreement Not to Solicit Customers. The Employee agrees that during her
employment by the Bank and for the Applicable Period thereafter, she will not, without the prior
written consent of the Bank, either directly or indirectly, on her own behalf or in the service or
on behalf of others, solicit, divert or appropriate, or attempt to solicit, divert or appropriate,
to any Competing Business any customer or client or actively sought prospective customer or client
of the Bank or any Affiliate located in the Area who was serviced by or under the supervision of
the Employee in the course of her employment within the one (1) year period immediately prior to
the termination of the Employee’s employment with the Bank.

          6.4 Agreement Not to Solicit Employees. The Employee agrees that during her
employment by the Bank and for the Applicable Period thereafter, she will not, either directly or
indirectly, on her own behalf or in the service or on behalf of others, solicit, divert or hire
away, or attempt to solicit, divert or hire away, any person employed by the Bank or any of its
Affiliates, whether or not such employee is a full-time, a part-time or a temporary employee and
whether or not such employment is pursuant to a written agreement and whether or not such
employment is for a determined period or is at will.

     7. OWNERSHIP AND PROTECTION OF PROPRIETARY INFORMATION.

          7.1 Definitions. The following capitalized terms used in this Section 7 shall have
the meanings assigned to them below, which definitions shall apply to both the singular and the
plural forms of such terms:

               “Confidential Information” means all information regarding the Bank, its activities, business
or clients that is the subject of reasonable efforts by the Bank to maintain its confidentiality
and that is not generally disclosed by practice or authority to persons not employed by the Bank,
but that does not rise to the level of a Trade Secret. “Confidential Information” shall include,
but is not limited to, financial plans and data concerning the Bank; management planning
information; business plans; operational methods; market studies;

7

 

marketing plans or strategies; product development techniques or plans; customer lists;
details of customer contracts; current and anticipated customer requirements; past, current and
planned research and development; business acquisition plans; and new personnel acquisition plans.
“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. This definition shall not limit any definition of “confidential
information” or any equivalent term under state or federal law.

               “Trade Secret” means all information, without regard to form, including, but not limited to,
technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method,
a technique, a drawing, a process, financial data, financial plans, product plans, distribution
lists or a list of actual or potential customers, advertisers or suppliers which is not commonly
known by or available to the public and which information: (A) derives economic value, actual or
potential, from not being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy. Without limiting
the foregoing, Trade Secret means any item of confidential information that constitutes a “trade
secret(s)” under the common law or statutory law of the State of Georgia.

          7.2 Restriction on Disclosure and Use of Confidential Information and Trade Secrets.
Employee understands and agrees that the Confidential Information and Trade Secrets constitute
valuable assets of the Bank and its affiliated entities, and may not be converted to Employee’s own
use. Accordingly, Employee hereby agrees that Employee shall not, directly or indirectly, at any
time during the Term of Employment and a period extending one year thereafter (the “Restricted
Period”) reveal, divulge, or disclose to any person not expressly authorized by the Bank any
Confidential Information, and Employee shall not, directly or indirectly, at any time during the
Restricted Period use or make use of any Confidential Information in connection with any business
activity other than that of the Bank. Throughout the term of this Agreement and at all times after
the date that this Agreement terminates for any reason, Employee shall not directly or indirectly
transmit or disclose any Trade Secret of the Bank to any Person, and shall not make use of any such
Trade Secret, directly or indirectly, for herself or for others, without the prior written consent
of the Bank. The parties acknowledge and agree that this Agreement is not intended to, and does
not, alter either the Bank’s rights or Employee’s obligations under any state or federal statutory
or common law regarding trade secrets and unfair trade practices.

               Anything herein to the contrary notwithstanding, Employee shall not be restricted from
disclosing or using Confidential Information or Trade Secrets that are required to be disclosed by
law, court order or other legal process; provided, however, that in the event disclosure is
required by law, Employee 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 Employee.

          7.3 Return of Property. Upon request by the Bank, and in any event upon termination
of the employment of the Employee with the Bank for any reason, the Employee will promptly deliver
to the Bank all property belonging to the Bank, including, without limitation,

8

 

all Confidential Information and all Trade Secrets (and all physical embodiments thereof) then
in her custody, control or possession.

          7.4 Termination. The Employee shall maintain and observe the obligations of
confidentiality contained in this Agreement with respect to Confidential Information during the
term of her employment with the Bank and at all times following the termination of such employment
for any reason whatsoever.

     8. INJUNCTIVE RELIEF. The Employee agrees that the covenants and agreements contained
in Sections 6 and 7 of this Agreement, and the subsections of these Sections, are of the essence of
this Agreement; that each of such covenants is reasonable and necessary to protect and preserve the
interests and properties of the Bank and the business of the Bank; that the Bank is engaged in the
business of the Bank throughout the Area; that irreparable loss and damage will be suffered by the
Bank should the Employee breach any of such covenants and agreements; and that, in addition to
other remedies available to it, the Bank shall be entitled to both temporary and permanent
injunctions to prevent a breach or contemplated breach by the Employee of any of such covenants or
agreements.

     9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the
parties hereto regarding employment of Employee, and supersedes and replaces any prior agreement
between the parties.

     10. ASSIGNMENT. Neither of the parties hereto may assign this Agreement without the
prior written consent of the other party hereto except that the Bank may assign the Agreement to a
successor in interest who agrees, either by consent or by operation of law, to assume the Bank’s
obligations under this Agreement.

     11. SEVERABILITY. Each section and subsection of this Agreement constitutes a
separate and distinct understanding, covenant and provision hereof. In the event that any
provision of this Agreement shall finally be determined to be unlawful, such provision shall be
deemed to be severed from this Agreement, but every other provision of this Agreement shall remain
in full force and effect.

     12. GOVERNING LAW. This Agreement shall in all respects be interpreted, construed and
governed by and in accordance with the laws of the State of Georgia.

     13. RIGHTS OF THIRD PARTIES. Nothing herein expressed or implied is intended to or
shall be construed to confer upon or give to any person, firm or other entity, other than the
parties hereto and their permitted assigns, any rights or remedies under or by reason of this
Agreement.

     14. AMENDMENT. This Agreement may not be amended orally but only by an instrument in
writing duly executed by the parties hereto.

     15. CODE SECTION 409A. Notwithstanding any other provision of this Agreement, it is
intended that any payments or benefit which is provided pursuant to or in connection with this
Agreement which is considered to be deferred compensation subject to Section 409A of the Code shall
be provided and paid in such form and at such time, including, without limitation,

9

 

payment only in connection with a permissible payment event as complies with the applicable
requirements of Code Section 409A to avoid the unfavorable tax consequences provided therein for
noncompliance. If Employee is a “specified employee” (as defined in Section 409A of the Code) and
any of the Bank’s or Holding Company’s stock is publicly traded on an established securities market
or otherwise, then payment of any amount or provision of any benefit under this Agreement which is
considered to be deferred compensation subject to Section 409A of the Code shall be deferred for
six (6) months as required by Section 409A(a)(2)(B)(i) of the Code (the “409A Deferral Period”).
In the event such payments are otherwise due to be made in installments or periodically during the
409A Deferral Period, the payments which would otherwise have been made in the 409A Deferral Period
shall be accumulated and paid in lump sum as soon as the 409A Deferral Period ends, and the balance
of the payments shall be made as otherwise scheduled. For purposes of this Agreement, any
termination of employment will be read to mean a “separation from service” within the meaning of
Section 409A of the Code where it is reasonably anticipated that no further services would be
performed after such date or that the level of bona fide services Employee would perform after that
date (whether as an employee or independent contractor) would permanently decrease to less than
fifty percent (50%) of the average level of bona fide services performed over the immediately
preceding thirty-six (36) month period.

     16. NOTICES. Any notice or other document or communication permitted or required to
be given to Employee pursuant to the terms hereof shall be deemed given if personally delivered to
Employee or sent to her postage prepaid, by registered or certified mail, at 3623 Shady Oaks Trail,
Gainesville, Georgia 30506, or at any such other address as Employee shall have notified the Bank
in writing. Any notice or other document or other communication permitted or required to be given
to the Bank pursuant to the terms hereof shall be deemed given if personally delivered or sent to
the Bank, postage prepaid, by registered or certified mail, at 136 North Main Street, Cleveland,
Georgia 30528, or at such other address as the Bank shall have notified Employee in writing. All
notices personally delivered shall be deemed received on the date delivered. All notices sent by
postage-prepaid, registered or certified mail shall be deemed received on the actual date of
receipt, or when refused or returned because of failure to claim if mailed return-receipt
requested.

     17. WAIVER. The waiver by either party hereto of a breach of any provision of this
Agreement by the other shall not operate or be construed as a waiver of any subsequent breach of
the same or any other provision of this Agreement by the breaching party.

(Signatures on following page.)

10

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered as of the day and year first above written.

	 	 	 	 	 
	
[BANK SEAL]	MOUNTAIN VALLEY COMMUNITY BANK

 	 
	 	By:  	/s/ E. Ray Black
 	 
	 	 	Name:  	E. Ray Black 	 
	 	 	Title:  	Chairman of the Board 	 
	 

	 	 	 	 	 
	 	Attest:

 	 
	 	/s/ Aubrey H. McIntyre
 	 
	 	Secretary 	 

	 	 	 	 	 
	 	EMPLOYEE

 	 
	 	/s/ Rachel E. Marshall
 	 
	 	Rachel E. Marshall 	 
	 	 	 

11

 

	 	 	 	 	 

EXHIBIT A

FORM OF RELEASE

     THIS RELEASE (“Release”) is granted effective as of the            day of                     ,            , by      
                                    (“Employee”)
in favor of Mountain Valley Community Bank (the “Bank”).
This is the Release referred to in that certain Employment Agreement dated as of                     ,                      by
and between the Bank and Employee (the “Employment Agreement”). Employee gives this
Release in consideration of the Bank’s promises and covenants as recited in the Employment
Agreement, with respect to which this Release is an integral part.

     1. Release of the Bank. Employee, for herself, her successors, assigns, attorneys,
and all those entitled to assert her rights, now and forever hereby releases and discharges the
Bank and its respective officers, directors, stockholders, trustees, employees, agents, parent
corporations, subsidiaries, affiliates, estates, successors, assigns and attorneys (“the Released
Parties”), from any and all claims, actions, causes of action, sums of money due, suits, debts,
liens, covenants, contracts, obligations, costs, expenses, damages, judgments, agreements,
promises, demands, claims for attorney’s fees and costs, or liabilities whatsoever, in law or in
equity, which Employee ever had or now has against the Released Parties, including any claims
arising by reason of or in any way connected with any employment relationship which existed between
the Bank or any of its parents, subsidiaries, affiliates, or predecessors, and Employee. It is
understood and agreed that this Release is intended to cover all actions, causes of action, claims
or demands for any damage, loss or injury, which may be traced either directly or indirectly to the
aforesaid employment relationship, or the termination of that relationship, that Employee has, had
or purports to have, from the beginning of time to the date of this Release, whether known or
unknown, that now exists, no matter how remotely they may be related to the aforesaid employment
relationship including but not limited to claims for employment discrimination under federal or
state law, except as provided in Paragraph 2; claims arising under Title VII of the Civil Rights
Act, 42 U.S.C. § 2000(e), et seq. or the Americans With Disabilities Act, 42 U.S.C.
§ 12101 et seq.; claims for statutory or common law wrongful discharge, including
any claims arising under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.;
claims for attorney’s fees, expenses and costs; claims for defamation; claims for wages or vacation
pay; claims for benefits, including any claims arising under the Employee Retirement Income
Security Act, 29 U.S.C. § 1001, et seq.; and provided, however, that nothing herein
shall release the Bank of its obligations to Employee under the Employment Agreement or any other
contractual obligations between the Bank or its affiliates and Employee, or any indemnification
obligations to Employee under the Bank’s bylaws, articles of incorporation, Georgia law or
otherwise.

     2. Release of Claims Under Age Discrimination in Employment Act. Without limiting the
generality of the foregoing, Employee agrees that by executing this Release, she has released and
waived any and all claims she has or may have as of the date of this Release for age discrimination
under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. It is understood that
Employee is advised to consult with an attorney prior to executing this Release; that she in fact
has consulted a knowledgeable, competent attorney regarding this Release; that

 

 

she may, before executing this Release, consider this Release for a period of twenty-one (21)
calendar days; and that the consideration she receives for this Release is in addition to amounts
to which she was already entitled. It is further understood that this Release is not effective
until seven (7) calendar days after the execution of this Release and that Employee may revoke this
Release within seven (7) calendar days from the date of execution hereof.

     Employee agrees that she has carefully read this Release and is signing it voluntarily.
Employee acknowledges that she has had twenty one (21) days from receipt of this Release to review
it prior to signing or that, if Employee is signing this Release prior to the expiration of such
21-day period, Employee is waiving her right to review the Release for such full 21-day period
prior to signing it. Employee has the right to revoke this release within seven (7) days following
the date of its execution by her. However, if Employee revokes this Release within such seven (7)
day period, no severance benefit will be payable to her under the Employment Agreement and she
shall return to the Bank any such payment received prior to that date.

     EMPLOYEE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT CONSTITUTES A GENERAL
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE COMPANY UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT. EMPLOYEE ACKNOWLEDGES THAT SHE HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN
ATTORNEY OR OTHER ADVISOR OF HER CHOOSING CONCERNING HER EXECUTION OF THIS RELEASE AND THAT SHE IS
SIGNING THIS RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY FROM ALL SUCH
CLAIMS.

	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 
	 

	 	Date:

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