FOURTH AMENDED AND RESTATED
SUPPLEMENTAL RETIREMENT AGREEMENT

 

THIS FOURTH AMENDED AND RESTATED SUPPLEMENTAL RETIREMENT AGREEMENT is made as of
July 26, 2011 by and between ATLANTIC COAST BANK (the "Bank"), its successors
and assigns and THOMAS B. WAGERS, SR. (the "Executive").

 

1. Definitions. In this Agreement, the following words and phrases shall have
the following meanings:

 

(a)             Administrator shall mean the person or committee appointed by
the Board of Directors of the Bank (the "Board") to administer this Agreement.
If a committee is appointed by the Board, a majority of those persons shall
constitute a quorum and the act of the majority of such of persons either at a
meeting or by written consent, shall be the act of the Administrator. The
administrator may adopt such rules and procedures, not inconsistent with this
Agreement, as it deems necessary or appropriate in order to administer this
Agreement.

 

(b)            Appreciation Benefit shall mean:

 

(1)           an amount equal to the lesser of (A) the Prior Benefit Component
multiplied by the Issue Price (as defined below), or (B) the Executive's benefit
under the Agreement as of December 11, 2009 multiplied by three (3) percent per
annum (in the event of a fractional year, the three (3) percent attributable to
the fractional year will be reduced proportionately); plus

 

(2)           an amount equal to the Stock Award Component (after applying the
weighting requirements of subparagraph 2(q)) multiplied by the Issue Price; plus

 

(3)           an amount equal to the Stock Ownership Component (after applying
the weighting requirements of subparagraph 2(r)) multiplied by the Issue Price.

 

For example, assume the following:

 

·           Second Step Conversion takes place on December 11, 2014

·           Executive's benefit as of December 11, 2009 is $28,800

·           Prior Benefit Component of 20,000 shares ($28,800 / $1.44)

·           Stock Award Component of 30,000 shares

·           Stock Ownership Component of 25,000 shares

·           Issue Price of $5 ($6.44-$1.44)

·           Prior Benefit Component = $33,387.09 [the lesser of $100,000 (20,000
x $5) or $33,387.09 (28,800 x 3% per annum for five (5) years)]; plus

·           Stock Award Component — $37,500 (30,000 x .25 x $5); plus

 

 

  

·           Stock Ownership Component = $93,750 (25,000 x .75 x $5); equals

·           Appreciation Benefit = $164,637.09

 

The Company will pay interest on the unpaid balance of the Executive's
Appreciation Benefit at the rate of the monthly average of the three-month
London Interbank Offered Rate (LIBOR) plus 275 basis points per annum until the
Appreciation Benefit is paid in full.

 

In the event the Executive dies, becomes Disabled, incurs an Involuntary
Termination or there is a Change in Control prior to the date of closing of the
Second-Step Conversion, the Fair Market Value of the Company Stock as of the
date of death, determination of Disability, Involuntary Termination or Change in
Control will be substituted for "the average selling price of a share of Company
Stock over the thirty (30) day period immediately preceding the closing of a
Second-Step Conversion" when calculating the Issue Price.

 

The Executive shall vest in his Appreciation Benefit in accordance with the
following schedule:

 

Vested Percentage Timing of Vesting

 

15%Upon the expiration date of the "Subscription  Offering" as defined in the
Prospectus for the Second-Step Conversion, provided, however, if a Second-Step
Conversion does not occur, vesting will not occur.

 

100%Upon the Company's operation with positive before-tax income (disregarding
any expense recorded by the Company or the Bank for a nonqualified deferred
compensation plan sponsored by the Company or the Bank) for two consecutive
calendar quarters following the closing of a Second-Step Conversion, provided,
however, if a Second-Step Conversion does not occur, vesting will not occur.

 

Notwithstanding the foregoing, the Executive will become 100 percent vested in
his Appreciation Benefit prior to the schedule provided above in the event one
of the following events occurs: death, Disability, Involuntary Termination, the
occurrence of a Change in Control or the Plan Administrator in its sole
discretion accelerates vesting. Notwithstanding the preceding provisions, if the
Executive resigns at the request of, or is removed from service by, the Office
of Thrift Supervision, Federal Deposit Insurance Corporation or any other
regulatory authority for the Bank, the Executive shall be ineligible to
participate and shall forfeit any benefits under this Agreement.

 

(c)          Benefit Determination Date shall mean any of the following: (1) the
Executive's Normal Retirement Date; (2) the date the Executive incurs an
Involuntary Termination prior to the Executive's Normal Retirement Date; (3) the
date of the Executive's death; (4) the date the Executive incurs a Disability;
or (5) the date of a Change in Control.

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(d)          Cause shall mean a Separation from Service due to the Executive's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, and
willful violation of any law, rule, or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order.

 

The basis for determining whether Cause exists shall not be deemed to include
any impact on the Company's or the Bank's business, properties, assets,
liabilities, results of operations, financial condition or business from (1)
changes in thrift, banking and similar laws of general applicability or
interpretations thereof by courts or governmental authorities, or other changes
affecting depository institutions generally, including changes in general
economic conditions and changes in prevailing interest and deposit rates, (2)
changes in GAAP or regulatory accounting requirements applicable to thrifts,
banks and their holding companies generally, or (3) changes in national or
international political or social conditions including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist attack
upon or within the United States, or any of its territories, possessions or
diplomatic or consular offices or upon any military installation, equipment or
personnel in the United States.

 

A determination of Cause shall require the affirmative vote of a majority of the
members of the Board, acting in good faith with respect to such termination, and
such vote shall not be made prior to the expiration of a 60-day period following
the date on which the Board shall by written notice to the Executive, furnish
him a statement of its grounds for proposing to make such determination, during
which period the Executive shall be afforded a reasonable opportunity to make
oral and written presentations to the members of the Board, and to be
represented by his legal counsel at such presentations, or to refute the grounds
for the proposed determination.

 

(e)Change in Control shall mean the following:

 

(1)               A "change in the ownership" of the Bank or Atlantic Coast
Federal Corporation or its successor (the "Company"), a "change in the effective
control" of the Bank or the Company, or a "change in the ownership of a
substantial portion of the assets" of the Bank or the Company, each described
below. Notwithstanding anything herein to the contrary, a Second-Step Conversion
shall not be deemed a Change in Control.

 

(2)               A "change in ownership" occurs on the date that anyone person,
or more than one person acting as a group (as defined in Treasury Regulation
Section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the Bank or
Company that, together with stock held by such person or group, constitutes more
than 50 percent of the total fair market value or total voting power of the
stock of such corporation.

 

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(3)               A "change in the effective control" of the Bank or Company
occurs on the date that either (A) anyone person, or more than one person acting
as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)(B))
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the
Bank or Company possessing 30 percent or more of the total voting power of the
stock of the Bank or Company, or (B) a majority of the members of the Bank's or
Company's board of directors is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of
the Bank's or Company's board of directors prior to the date of the appointment
or election, provided that this subsection (B) is inapplicable where a majority
shareholder of the Bank or Company is another corporation.

 

(4)               A "change in a substantial portion of the assets" of the Bank
or the Company occurs on the date that anyone person or more than one person
acting as a group (as defined in Treasury Regulation Section
1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the Bank or Company that have a total gross fair market value equal
to or more than 40 percent of the total gross fair market value of (A) all of
the assets of the Bank or Company, or (B) the value of the assets being disposed
of, either of which is determined without regard to any liabilities associated
with such assets. For all purposes hereunder, the definition of Change in
Control shall be construed to be consistent with the requirements of Treasury
Regulation Section 1.409A-3(i)(5), except to the extent that such regulations
are superseded by subsequent guidance.

 

(f)Company Stock shall mean the common stock of the Company.

 

(g)Disabled or Disability shall mean the Executive:

 

(1)               is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death, or last for a continuous period of not less than 12
months;

 

(2)               by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last for a continuous
period of not less than 12 months, is receiving income replacement benefits for
a period of not less than three months under an accident and health plan
covering employees of the Bank; or

 

(3)               is determined to be totally disabled by the Social Security
Administration.

 

(h)Fair Market Value shall mean the per share closing price of Company Stock, as
reported by the principal exchange or market over which the shares of Company
Stock are then listed or regularly traded.

 

(1)Involuntary Termination shall mean Separation from Service other than for
Cause without the Executive's express written consent and voluntary resignation

 

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due to a material diminution of or interference with the Executive's duties,
responsibilities and benefits as Chief Financial Officer of the Bank, including
(without limitation) any of the following actions unless consented to in writing
by the Executive: (i) a change in the principal workplace of the Executive to a
location outside of a 30 mile radius from the Executive's principal workplace as
of the date hereof; (ii) a material demotion of the Executive; (iii) a material
reduction in the number or seniority of other personnel reporting to the
Executive or a material reduction in the frequency with which, or on the nature
of the matters with respect to which, such personnel are to report to the
Executive, other than as part of an institution-wide reduction in staff; (iv) a
material adverse change in the Executive's salary, perquisites, benefits,
contingent benefits or vacation, other than as part of an overall program
applied uniformly and with equitable effect to all members of the senior
management of the Bank; and (v) a material permanent increase in the required
hours of work or the workload of the Executive; provided that the Executive has
notified the Bank of the existence of such a condition no later than 90 days
after the initial existence of such condition and the Bank has at least 30 days
to cure such condition. The term "Involuntary Termination" does not include
termination for Cause or termination of employment due to retirement, death,
Disability or suspension or temporary or permanent prohibition from
participation in the conduct of the Bank's affairs under Section 8 of the
Federal Deposit Insurance Act.

 

(i)Issue Price shall mean the average selling price of a share of Company Stock
over the thirty (30) day period immediately preceding the closing of a
Second-Step Conversion minus $1.44 (the closing price of Company Stock on
December 11, 2009).

 

(k)Monthly Benefit shall mean an amount, as of a Benefit Determination Date,
equal to the vested Appreciation Benefit divided by 180. For example, if on a
Benefit Determination Date the Appreciation Benefit is $450,000, then
Executive's Monthly Benefit is $2,500 ($450,000 / 180) plus accrued interest.

 

Notwithstanding the foregoing, in the event an amount becomes vested following a
Benefit Determination Date but prior to payment of an Appreciation Benefit, the
Monthly Benefit will be recomputed to reflect the additional vested amount. For
example, as of a Benefit Determination Date the Executive begins to receive his
vested Monthly Benefit. After the Executive has received 80 installment
payments, he becomes vested in the remainder of his Appreciation Benefit. As a
result, the remaining installment payments due to the Executive will be
increased to reflect the additional vested amount.

 

(I)Normal Retirement Date shall mean January 1, 2014. The Executive may change
his Normal Retirement Date provided that he files an election form with the
Bank; provided, however, that: (1) the new election will not take effect until
at least 12 months after the date the new election is filed; (2) the
commencement of installment payments with respect to which such election is made
must be deferred for a period of not less than five years from the date such
payment would otherwise have been made; and (3) the new election is filed at
least 12 months prior to the date of the first scheduled payment under the Plan.

 

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(m)Prior Benefit Component shall mean a number of shares of Company Stock equal
to the Executive's benefit under the Agreement as of December 11, 2009, divided
by the Fair Market Value of Company Stock on December 11, 2009. For example, the
Executive's prior benefit under the terms of the Agreement on December 11, 2009
was $40,000 and the Fair Market Value of Company Stock on December 11, 2009 was
$2.00. The Executive is deemed to have, for purposes of the Agreement, 20,000
shares of Company Stock ($40,000/$2.00) in the Prior Benefit Component.

 

(n)Second-Step Conversion shall mean the conversion and reorganization of
Atlantic Coast Federal, MHC, the Company and the Bank from a mutual holding
company structure to a fully public ownership structure.

 

(o)Separation from Service shall mean the date of cessation of the employment
relationship (other than an approved leave of absence) between the Executive and
the Bank and its affiliates and subsidiaries (including any successor in
interest, if applicable), and shall be construed to comply with Code Section
409A and Treasury Regulations Section 1.409A-1(h).

 

(10Specified Employee shall mean a key employee of the Bank within the meaning
of Code Section 416(i) without regard to paragraph 5 thereof, determined in
accordance with Code Section 409A and Treasury Regulations Section 1.409A-1(i).

 

(q)Stock Award Component shall mean the number of shares of Company Stock
awarded to the Executive under the Atlantic Coast Federal Corporation 2005
Recognition and Retention Plan that are still held by the Executive on December
11, 2009 times 25 percent. For example, on December 11, 2009 the Executive had
100 shares awarded to him under the Atlantic Coast Federal Corporation 2005
Recognition and Retention Plan. For purposes of calculating the Appreciation
Benefit, only 25 shares would be counted.

 

(r)Stock Ownership Component shall mean the number of shares of Company Stock
directly or beneficially owned by the Executive (as that term is defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended, disregarding any
beneficial ownership of stock options) as of December 11, 2009 times 75 percent.
For example, on December 11, 2009 the Executive directly and beneficially owns
100 shares. For purposes of calculating the Appreciation Benefit, only 75 shares
would be counted.

 

2.Payment of Benefits.

  

(a)Normal Benefit. If Monthly Benefits have not already started due to
Separation from Service, Disability or Change in Control, the Bank shall pay the
Monthly Benefit to Executive starting on the first business day of the month
following the Normal Retirement Date and on the first business day of each
calendar month thereafter for a total of 180 months (i.e., monthly payments for
15 years), regardless of whether the Executive has experienced a Separation from
Service; provided however, that, if the Executive has experienced a Separation
from Service, then, to the extent necessary to avoid penalties under Code
Section 409A and the regulations thereunder, such payments shall not commence
until the first day of the seventh month following the date of the Executive's
Separation from Service if the Executive is a Specified Employee on his date of
Separation from Service.

 

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(b)Death Benefit. If the Executive dies prior to the Normal Retirement Date,
Separation from Service, Disability or Change in Control, the Bank shall pay to
the beneficiary designated on Exhibit A, the Appreciation Benefit in a lump sum
on the first business day of the month following the Executive's death. If no
beneficiary or beneficiaries have been designated, or if all of the
beneficiaries predecease the Executive, the Monthly Benefit will be paid to the
Executive's estate.

 

(c)Disability Benefit. If the Executive becomes Disabled prior to the Normal
Retirement Date, death, Separation from Service or Change in Control, the Bank
shall pay the Monthly Benefit to him commencing on the first business day of the
month following the date on which the Executive becomes Disabled and on the
first business day of each calendar month thereafter for a period of 180 months.

 

(d)Separation from Service Benefit. In the event the Executive incurs a
Separation from Service due to an Involuntary Termination before the Normal
Retirement Date, Disability, death or Change in Control, the Bank shall pay the
Monthly Benefit to him commencing on the first business day of the month
following the Separation from Service and on the first business day of each
calendar month thereafter for a period of 180 months. However, if the Executive
is a Specified Employee on the date of his Separation from Service, such
payments shall not commence until the first day of the seventh month following
the date of the Executive's Separation from Service.

 

(e)Change in Control Benefit. If a Change in Control occurs before the Normal
Retirement Date, Separation from Service due to an Involuntary Termination,
Disability or death, then, within 30 calendar days after such Change in Control,
the Bank shall pay the Executive a lump sum equal to the Appreciation Benefit.

(f)Funding of Monthly Benefit. The Bank reserves the right to purchase a
contract from a life insurance company with a minimum rating of AA from Standard
& Poors and Moody's in order to provide all or any portion of the Monthly
Benefit described herein. Upon the Bank's purchase of such contract and
distribution of the contract to Executive or his Beneficiary, the Bank's
liability to provide the Monthly Benefit hereunder shall cease and such contract
shall be the sole source of funds for providing such Monthly Benefit.

 

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(g)Changes in Company Stock. In the event of any change in Company Stock through
stock dividends, split-ups, stock splits or reverse stock splits,
recapitalizations, reclassifications, conversions or otherwise, then the Board
will make appropriate adjustment or substitution in the aggregate value of the
Prior Benefit Component, the Stock Award Component and the Stock Ownership
Component.

 

3. Required Provisions.

 

(a)The Bank may terminate Executive's employment at any time, but any
termination by the Bank other than Separation from Service for Cause as defined
above shall not prejudice Executive's right to compensation or other benefits
under this Agreement. Executive shall have no right to receive compensation or
other benefits for any period after Separation from Service for Cause.

 

(b)If Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) [12 USC §1818(e)(3)] or 8(g)(1) [12 USC §1818(g)(I)] of the
Federal Deposit Insurance Act (the "FDI Act"), the Bank's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while its contract obligations were suspended and (ii) reinstate (in whole or in
part) any of its obligations which were suspended.

 

(c)If Executive is removed and/or permanently prohibited from participating in
the conduct of the Bank's affairs by an order issued under Section 8(e)(4) [12
USC §1818(e)(4)] or 8(g)(1) [12 USC §1818(g)(1)] of the FDI Act, all obligations
of the Bank under this Agreement shall terminate as of the effective date of the
order, but vested rights of the contracting parties shall not be affected.

 

(d)If the Bank is in default as defined in Section 3(x)(1) [12 USC §1813(x)(1)]
of the FDI Act, all obligations of the Bank under this Agreement shall terminate
as of the date of default, but this paragraph shall not affect any vested rights
of the contracting parties.

 

(e)All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank, (i) by the Director of the Office of Thrift
Supervision ("OTS") or his or her designee, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section B(c) [12 USC §1823(c)] of the FDI Act; or (ii) by the
Director or his or her designee at the time the Director or his or her designee
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.

 

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(f)Notwithstanding anything herein contained to the contrary, any payments to
Executive by the Company, whether pursuant to this Agreement or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) of the FDI
Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12
C.F.R. Part 359.

 

4.Claims. In the event a claim for benefits is wholly or partially denied under
this Agreement, the Executive or any other person claiming benefits under this
Agreement (a "Claimant") shall be given notice in writing within 30 calendar
days after the Administrator's receipt of the claim. For good cause shown, the
Administrator may extend this period for an additional 30 calendar days. Any
denial must specifically set forth the reasons for the denial and any additional
information necessary to rescind such denial. The Claimant shall have the right
to seek a review of the denial by filing a written request with the
Administrator within 60 calendar days of receipt of the denial. Such request may
be supported by such documentation and evidence deemed relevant by the Claimant.
Following receipt of this information, the Administrator shall make a final
determination and notify the Claimant in writing within 60 calendar days of the
Administrator's receipt of the request for review together with the specific
reasons for the decision.

 

5.General Assets and Funding. The amounts payable under this Agreement are
payable from the general assets of the Bank and no special fund or arrangement
is intended to be established hereby nor shall the Bank be required to earmark,
place in trust or otherwise segregate assets with respect to this Agreement or
any benefits hereunder. The Administrator reserves the right to determine how
the Bank will fund its obligation undertaken by this Agreement. At its
discretion, the Administrator may establish one or more trusts, with such
trustees as the Board may approve, for the purpose of providing for the payment
of such benefits. Such trust or trusts may be irrevocable, but the assets
thereof shall be subject to the claims of the Bank's creditors. To the extent
any benefits provided under the Plan are actually paid from any such trust, the
Bank shall have no further obligation with respect thereto, but to the extent
not so paid, such benefits shall remain the obligation of, and shall be paid by,
the Bank. Under no circumstances shall a Participant serve as trustee or
co-trustee of any trust established by the Bank pursuant to this Plan.

 

Should the Administrator elect to purchase assets relating to this Agreement, in
whole or in part, through the medium of life insurance or annuities, or both,
the Bank shall be the owner and beneficiary of each such policy unless otherwise
provided by this Agreement. Bank reserves the absolute right, in its sole
discretion, to terminate such life insurance or annuities, as well as any other
investment program, at any time, in whole or in part unless otherwise provided
by this Agreement. Such termination shall in no way affect the Bank's obligation
to pay the Executive the benefits as provided in this Agreement. At no time
shall the Executive be deemed to have any right, title, or interest in or to any
specific asset or assets of the Bank, including but not by way of restriction,
any insurance or annuity contract and contracts or the proceeds therefrom.

 

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6.Certain Reductions. Notwithstanding any other provision of this Agreement, if
the value and amounts of benefits under this Agreement, together with any other
amounts and the value of benefits received or to be received by the Executive in
connection with a Change in Control would cause any amount to be nondeductible
for federal income tax purposes by the Bank or the consolidated group of which
the Bank is a member pursuant to Section 280G of the Code, then amounts and
benefits under this Agreement shall be reduced (not less than zero) to the
extent necessary so as to maximize amounts and the value of benefits to the
Employee without causing any amount to become nondeductible by Bank pursuant to
or by reason of such Section 280G. The Employee shall determine the allocation
of such reduction among payments and benefits to the Employee.

 

7.Beneficiary Designations. The Executive shall designate a beneficiary by
filing with Bank a written designation of beneficiary on a form substantially
similar to the form attached as Exhibit A. The Executive may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Executive and accepted by the Bank
during the Executive's lifetime. The Executive's beneficiary designation shall
be deemed automatically revoked if the beneficiary predeceases the Executive, or
if the Executive names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Executive dies without a valid beneficiary designation, all
payments shall be made to the Executive's surviving spouse, if any, and if none,
to the Executive's surviving children and the descendants of any deceased child
by right of representation, and if no children or descendants survive, to the
Executive's estate.

 

If a benefit is payable to a minor, to a person declared incompetent, or to a
person incapable of handling the disposition of his or her property, the Bank
may pay such benefit to the guardian, legal representative or person having the
care or custody of such minor, incompetent person or incapable person, or to a
custodian selected by the Bank under the Georgia Uniform Transfers to Minors Act
for the benefit of such minor. The Bank may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Bank from all
liability with respect to such benefit.

 

8.Amendment and Termination.

 

(a)Amendment. This Agreement may be amended at any time by a written
instrument signed by the Bank and the Executive.

 

(b)Termination. The Bank may at any time partially or completely terminate the
Agreement, if, in its judgment, the tax, accounting, or other effects of the
continuance of the Agreement, or potential payments thereunder, would not be in
the best interests of the Bank.

 

(1)Partial Termination. In the event of a partial termination, the Agreement
shall continue to operate and be effective with regard to benefits accrued prior
to the effective date of such partial termination, but no further benefits shall
accrue after the date of such partial termination.

 

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(2)Complete Termination. Subject to the requirements of Code Section 409A, in
the event of complete termination, the Agreement shall cease to operate and the
Bank shall pay the Executive his Account as if he had terminated service as of
the effective date of the complete termination. Such complete termination of the
Agreement shall occur only under the following circumstances and conditions.

 

 

(A)The Bank may terminate the Agreement within 12 months of a corporate
dissolution taxed under Code section 331, or with approval of a bankruptcy court
pursuant to 11 U.S.C. §503(b)(1)(A), provided that the amounts accrued under the
Agreement are included in the Executive's gross income in the latest of (i) the
calendar year in which the Agreement terminates; (ii) the calendar year in which
the amount is no longer subject to a substantial risk of forfeiture; or (iii)
the first calendar year in which the payment is administratively practicable.

 

(B)The Bank may terminate the Agreement within the 30 days preceding a Change in
Control (but not following a Change in Control), provided that the Agreement
shall only be treated as terminated if all substantially similar arrangements
sponsored by the Bank are terminated so that the Executive and all participants
under substantially similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within 12 months of the
date of the termination of the arrangements.

 

(C)The Bank may terminate the Agreement provided that (i) all arrangements
sponsored by the Bank that would be aggregated with this Agreement under
Treasury Regulations section 1.409A-1(c) if any individual; covered by this
Agreement was also covered by any of those other arrangements are also
terminated; (ii) no payments other than payments that would be payable under the
terms of the arrangement if the termination had not occurred are made within 12
months of the termination of the arrangement; (iii) all payments are made within
24 months of the termination of the arrangements; and (iv) the Bank does not
adopt a new arrangement that would be aggregated with any terminated arrangement
under Treasury Regulations section 1.409A-1(c) if the same individual
participated in both arrangements, at any time within three years following the
date of termination of the arrangement.

 

(D)The Bank may terminate the Agreement pursuant to such other terms and
conditions as the Internal Revenue Service may permit from time to time.

 

9. Miscellaneous.

 

(a)Withholding. To the extent amounts payable under this Agreement are
determined by the Administrator, in good faith, to be subject to federal, state
or local income tax, the Bank may withhold from each such payment an amount
necessary to meet the Bank's obligation to withhold amounts under the applicable
federal, state or local law.

  

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(b)Governing Law. This Agreement shall be construed under the laws of the State
of Georgia, except to the extent that federal law applies.

 

(c)Future Employment. This Agreement shall not be construed as providing the
Executive the right to be continued in the employ of the Bank or its affiliates
or subsidiaries.

 

(d)No Pledge or Attachment. No benefit which is or may become payable under this
Agreement shall be subject to any anticipation, alienation, sale, transfer,
pledge, encumbrance or hypothecation or subject to any attachment, levy or
similar process and any attempt to effect any such action shall be null and
void.

 

(e)Successors and Assigns. This Agreement and the obligations of the Bank herein
shall be binding upon the successors and assigns of the Bank. This Agreement may
not be assigned by the Bank without the prior written consent of the Executive
or any other beneficiary receiving payments under this Agreement.

 

Participation in Plans. Nothing contained in this Agreement shall be construed
to alter, abridge, or in any manner affect the rights and privileges of the
Executive to participate in and be covered by any pension, profit sharing, group
insurance, bonus, incentive, or other employee plans which the Bank or its
affiliates or subsidiaries may now or hereafter have.

 

(g)Notices. Any notices under this Agreement shall be provided to the Executive
at his last address on file with the Administrator and shall be provided to the
Administrator in care of President, Atlantic Coast Federal, 505 Haines Avenue,
Waycross, Georgia 31501.

 

(h)Headings. Headings of sections herein are inserted for convenience of
reference. They are not to be considered in the construction of this Agreement.

 

(I)Savings Clause. If any provision of this Agreement shall be for any reason
invalid or unenforceable, the remaining provisions shall be carried into effect.

 

Entire Agreement. This Agreement constitutes the entire agreement between the
Bank and the Executive as to the subject matter hereof. No rights are granted to
the Executive be virtue of this Agreement other than as specifically set forth
herein.

 

(k)Suicide. No benefits shall be payable if the Executive commits suicide within
two (2) years after the date of this Agreement, or if the Executive has made any
material misstatement of fact on any application for life insurance purchased by
the Bank.

 

 

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(l)Top Hat Agreement. For purposes of the Internal Revenue Code, the Bank
intends this Agreement to be an unfunded, unsecured promise to pay on the part
of the Bank. For purposes of ERISA, the Bank intends this Agreement to be an
unfunded obligation solely for the benefit of the Executive for the purpose of
qualifying this Agreement for the "top hat" exception under sections 201(2), 301
(a)(3) and 401 (a) of ERISA.

 

10.Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by binding arbitration, as an
alternative to civil litigation and without any trial by jury to resolve such
claims, conducted by a panel of three arbitrators sitting in a location selected
by Executive within fifty (50) miles from the main office of the Bank, in
accordance with the rules of the American Arbitration Association's National
Rules for the Resolution of Employment Disputes ("National Rules") then in
effect. One arbitrator shall be selected by Executive, one arbitrator shall be
selected by the Bank and the third arbitrator shall be selected by the
arbitrators selected by the parties. If the arbitrators are unable to agree
within fifteen (15) days upon a third arbitrator, the arbitrator shall be
appointed for them from a panel of arbitrators selected in accordance with the
National Rules. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.

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The parties have caused this Agreement to be executed on the dates set forth
below.

 

  ATLANTIC COAST BANK     Date:  7/26/2011 By:  /s/ G. Thomas Frankland     G.
Thomas Frankland
Chairman and Chief Executive Officer               EXECUTIVE                /s/
Thomas B. Wagers, Sr.  Date:  7/26/2011 Thomas B. Wagers, Sr.

 

 

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