exv10w15



 





EXHIBIT 10.15




EMPLOYMENT AGREEMENT




     This Employment Agreement (“Agreement”) is made by and between Atlantic Coast Bank (the
“Bank”), and Robert J. Larison, Jr. (“Executive”) and is effective as of July 1, 2007 (the
“Effective Date”). References herein to the “Company” mean Atlantic Coast Federal Corporation,
which owns 100% of the common stock of the Bank. The Company is a signatory to this Agreement for
the sole purpose of guaranteeing the Bank’s performance hereunder.



     WHEREAS, the Executive and the Bank are a party to an employment agreement dated January 1,
2006, and this Agreement supersedes such prior agreement and all obligations of the parties under
such prior agreement shall become null and void after the Effective Date of this Agreement; and



     WHEREAS, Executive is serving as President and Chief Executive Officer of the Bank and the
Bank wishes to assure itself of the services of Executive as an officer of the Bank for the period
provided in this Agreement; and



     WHEREAS, in order to induce Executive to remain in the employ of the Bank and to provide
further incentive for Executive to achieve the financial and performance objectives of the Bank,
the parties desire to enter into this Agreement.



     NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the terms
and conditions hereinafter provided, the parties hereby agree as follows:




	1.	 	POSITION AND RESPONSIBILITIES.





     During the term of this Agreement, Executive shall serve as President and Chief Executive
Officer of the Bank. Executive shall be responsible for the overall management of the Bank, and
shall be responsible for establishing the business objectives, policies and strategic plan of the
Bank, in conjunction with the Board of Directors of the Bank (the “Board”). Executive also shall be
responsible for providing leadership and direction to all departments or divisions of the Bank, and
shall be the primary contact between the Board and the staff. As Chief Executive Officer,
Executive shall directly report to the Board. Executive also shall be nominated as a member of the
Board, subject to election by members or shareholders of the Bank, as the case may be. Executive
also agrees to serve, if elected, as an officer and director of any affiliate of the Bank.




	2.	 	TERM AND DUTIES.





     (a) Three Year Contract; Annual Renewal. The term of Executive’s employment under this
Agreement shall commence as of the Effective Date and shall continue thereafter for a period of
three (3) years. Commencing on the first anniversary date of this Agreement (the “Anniversary
Date”) and continuing on each Anniversary Date thereafter, the term of this Agreement shall renew
for an additional year such that the remaining term of this Agreement is always three (3) years,
unless written notice of non-renewal (a “Non-Renewal Notice”) is provided to Executive at least
thirty (30) days and not more than sixty (60) days prior to such Anniversary Date, in which case
the term of this Agreement shall become fixed and shall end



 









 




three (3) years following such Anniversary Date. The disinterested members of the Board of
Directors (the “Board”) of the Bank will conduct a performance evaluation and review of Executive
annually for purposes of determining whether to give notice not to extend the term of this
Agreement, and the results thereof shall be included in the minutes of the Board’s meeting.




     (b) Termination of Agreement. Notwithstanding anything contained in this Agreement to
the contrary, either Executive or the Bank may terminate Executive’s employment with the Bank at
any time during the term of this Agreement, subject to the terms and conditions of this Agreement.



     (c) Continued Employment Following Expiration of Term. Nothing in this Agreement
shall mandate or prohibit a continuation of Executive’s employment following the expiration of the
term of this Agreement, upon such terms and conditions as the Bank and Executive may mutually
agree.



     (d) Duties; Membership on Other Boards. During the term of this Agreement, except for
periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of
absence approved by the Board, Executive shall devote substantially all of his business time,
attention, skill, and efforts to the faithful performance of his duties hereunder, including
activities and services related to the organization, operation and management of the Bank;
provided, however, that, with the prior approval of the Board, as evidenced by a resolution of the
Board, from time to time, Executive may serve, or continue to serve, on the boards of directors of,
and hold any other offices or positions in, business companies or business organizations, which, in
the Board’s judgment, will not present any conflict of interest with the Bank, or materially affect
the performance of Executive’s duties pursuant to this Agreement. Executive shall provide the
Board of Directors annually for its approval a list of organizations for which the Executive acts
as a director or officer.




	3.	 	COMPENSATION, BENEFITS AND REIMBURSEMENT.





     (a) Base Salary. In consideration of Executive’s performance of the duties set forth
in Section 2, the Bank shall provide Executive the compensation specified in this Agreement. The
Bank shall pay Executive a salary of $225,000 for the period July 1, 2007 through December 31, 2007
and a salary of $250,000 for the period January 1, 2008 through June 30, 2008 (“Base Salary”). The
Base Salary shall be payable biweekly, or with such other frequency as officers of the Bank are
generally paid. During the term of this Agreement, the Base Salary shall be reviewed at least
annually by the Board or by a committee designated by the Board, and the Bank may increase, but not
decrease (except for a decrease that is generally applicable to all employees) Executive’s Base
Salary. Any increase in Base Salary shall become “Base Salary” for purposes of this Agreement.



     (b) Bonus and Incentive Compensation. Executive shall be entitled to incentive
compensation and bonuses as provided in any plan or arrangement of the Bank in which Executive is
eligible to participate or as agreed to by the Bank and the Executive. Nothing paid to Executive
under any such plan or arrangement will be deemed to be in lieu of other compensation to which
Executive is entitled under this Agreement.



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     (c) Employee Benefits and Perquisites. The Bank shall provide Executive with employee
benefit plans, arrangements and perquisites substantially equivalent to those in which Executive
was participating or from which he was deriving benefit immediately prior to the commencement of
the term of this Agreement, including:



          (i) the Bank’s payment of premiums for life insurance on Executive’s life for a face amount
equaling twice the amount of Executive’s base salary rounded up to the next thousand dollars and
including $50,000 of accidental death and dismemberment coverage, where Executive has the right to
designate the beneficiary(ies) of such policies;



          (ii) the Deferred Compensation Plan dated March 9, 1995 between Executive and Atlantic Coast
Federal Credit union (the predecessor to the Bank) and the Supplemental Retirement Agreement
(“SERP”) dated November 1, 2002 and restated as of January 1, 2005 between Executive and the Bank;



          (iii) the Bank’s payment of premiums for a long term disability insurance policy providing for
coverage until Executive attains age seventy (70) at the rate of 66 2/3% of Executive’s Base
Salary after the 90th day of disability as defined in the policy;;



          (iv) the Bank’s payment to Executive of $5,000 per year for an individual retirement account
contribution;



          (v) the Bank’s reimbursement of out-of-pocket expenses of up to $2,500 on January
1st and July 1st each year for health insurance for Executive and his
dependents, plus reimbursement of out-of-pocket expenses for an annual physical examination for
Executive at the Mayo Clinic or such other facility as Executive may determine;



          (vi) the Bank’s reimbursement of up to $750 each month to Executive as a car allowance
(provided, however, that the Bank shall not reimburse Executive for costs associated with such
automobile, except for travel which is business related, which shall be reimbursed at the Bank’s
established mileage rates); and



          (vii) the Bank’s reimbursement of up to $5,000 (net after taxes) for Executive’s membership in
a country club of Executive’s choosing.



     The Bank shall not, without Executive’s prior written consent, make any changes in such plans,
arrangements or perquisites that would adversely affect Executive’s rights or benefits thereunder,
except as to any changes that are applicable to all participating employees or as reasonably or
customarily available. Without limiting the generality of the foregoing provisions of this Section
3(c), Executive will be entitled to participate in or receive benefits under any employee benefit
plans including, but not limited to, retirement plans, supplemental retirement plans, pension
plans, profit-sharing plans, health-and-accident insurance plans, medical coverage or any other
employee benefit plan or arrangement made available by the Bank in the future to its senior
executives, including any stock benefit plans, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.



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     (d) Paid Time Off. Executive shall be entitled to paid vacation time each year during
the term of this Agreement (measured on a fiscal or calendar year basis, in accordance with the
Bank’s usual practices), as well as sick leave, holidays and other paid absences in accordance with
the Bank’s policies and procedures for senior executives. Any unused paid time off during an
annual period shall be cumulative if not used.



     (e) Expense Reimbursements. During the term of this Agreement, the Bank shall pay or
reimburse Executive for all reasonable travel, entertainment and other reasonable expenses incurred
by Executive during the course of performing his obligations under this Agreement, including,
without limitation, fees for memberships in such organizations and associations as Executive and
the Board shall mutually agree are necessary and appropriate in connection with the performance of
his duties under this Agreement, upon presentation to the Bank of an itemized account of such
expenses in such form as the Bank may reasonably require. In addition, Executive shall be
reimbursed for expenses in the amount of the Internal Revenue Service per diem rate for each day
Executive spends at the Bank’s Jacksonville office up to a maximum of twenty (20) days per month.




	4.	 	PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.





     (a) Upon the occurrence of an Event of Termination (as herein defined) during the term of this
Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of
Termination’’ shall mean and include any one or more of the following:



          (i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for
any reason other than a termination due to “Disability” or death, as set forth in Section 6; or a
termination upon “Retirement,” as defined in Section 7 or a termination for “Cause,” as defined in
Section 8; and



          (ii) Executive’s voluntary resignation from the Bank’s employ within two years after any of
the following, unless consented to by Executive:



               (A) failure to appoint Executive to the position set forth in Section 1, or a material change
in Executive’s function, duties, or responsibilities, which change would cause Executive’s position
to become one of lesser responsibility, importance, or scope from the position and responsibilities
described in Section 1, to which Executive has not agreed in writing (and any such material change
shall be deemed a continuing breach of this Agreement by the Bank);



               (B) a relocation of Executive’s principal place of employment to a location that is more than
50 miles from either Waycross, Georgia or Jacksonville, Florida;



               (C) a material reduction in the benefits and perquisites, including Base Salary, to Executive
from those being provided as of the Effective Date (except for any reduction that is part of a
reduction in pay or benefits that is generally applicable to officers or employees of the Bank) or;



               (D) a material breach of this Agreement by the Bank.



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     Upon the occurrence of any event described in clause (ii) above (“Good Reason”), Executive
shall have the right to elect to terminate his employment under this Agreement by resignation
within two years after the initial occurrence of such condition upon not less than 30 days prior
written notice given within a reasonable period of time (not to exceed, 90 days) after the initial
event giving rise to the right to elect; provided, however, that the Bank shall be given at least
30 days to remedy the condition before the Executive terminates employment. Such voluntary
termination for Good Reason by Executive shall be an Event of Termination.



     (b) Upon the occurrence of an Event of Termination, the Bank shall pay Executive, or, in the
event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be,
as severance pay or liquidated damages, or both, a lump sum in cash equal to three times (i) the
highest annual rate of Base Salary paid to Executive at any time under this Agreement and (ii) the
highest annual bonus and non-equity incentive compensation paid to the Executive over the most
recent three calendar years prior to the Event of Termination. Such payment shall not be reduced
in the event Executive obtains other employment following the Event of Termination. Notwithstanding
the foregoing, in the event Executive is a “Specified Employee” (as defined in the Internal Revenue
Code (the “Code”) Section 409A and the regulations thereunder) to the extent required under Code
Section 409A, no payment shall be made to Executive prior to the first day of the seventh month
following the Event of Termination.



     (c) Upon the occurrence of an Event of Termination, the Bank shall provide at the Bank’s
expense, life and disability insurance coverage and non-taxable medical and dental insurance
coverage substantially comparable to the coverage maintained by the Bank for Executive and his
family prior to the Event of Termination, except to the extent such coverage may be changed in its
application to all Bank employees. Such coverage shall cease 36 months following the Event of
Termination




	5.	 	CHANGE IN CONTROL





     (a) In the event that the aggregate payments or benefits to be made or afforded to Executive
in the event of a change in control as defined in Code Section 280G and that would be deemed to
include an “excess parachute payment” under Code Section 280G or any successor thereto, then at the
election of Executive, (i) such payments or benefits shall be payable or provided to Executive over
the minimum period necessary to reduce the present value of such payments or benefits to an amount
that is one dollar ($1.00) less than three times Executive’s “base amount” under such Code Section
280G, or (ii) the payments or benefits to be provided under this Agreement shall be reduced to the
extent necessary to avoid treatment as an excess parachute payment, with the allocation of the
reduction among such payments and benefits to be determined by Executive. Notwithstanding anything
in this subsection to the contrary, a change in control shall not be deemed to have occurred upon
the conversion of the Company’s mutual holding company parent to stock form, or in connection with
any reorganization used to effect such a conversion.




	6.	 	TERMINATION FOR DISABILITY OR DEATH.





     (a) Termination of Executive’s employment based on “Disability” shall be construed to comply
with Section 409A of the Internal Revenue Code and shall be deemed to have



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occurred if: (i) Executive is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be expected to result in
death, or last for a continuous period of not less than 12 months; (ii) by reason of any medically
determinable physical or mental impairment that can be expected to result in death, or last for a
continuous period of not less than 12 months, Executive 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 the Company; or (iii) Executive is determined to be totally disabled by the Social
Security Administration. The provisions of Sections 6(b) and (c) shall apply upon the termination
of the Executive’s employment based on Disability.




     (b) Executive shall be entitled to receive Base Salary earned until the date of Executive’s
termination of employment due to Disability, plus payment for unused vacation, personal leave, sick
leave and other vested benefits, as well as payment under any short- or long-term disability plan
maintained by the Bank.



     (c) The Bank shall cause to be continued life, disability, and non-taxable medical and dental
insurance coverage substantially comparable to the coverage maintained by the Bank for the
Executive prior to the termination of his employment based on Disability, except to the extent such
coverage may be changed in its application to all Bank employees or not available on an individual
basis to an employee terminated based on Disability. This coverage shall cease upon the earlier of
(i) the date Executive returns to the full-time employment of the Bank; (ii) Executive’s full-time
employment by another employer; or (iii) Executive’s death.



     (d) In the event of Executive’s death during the term of this Agreement, his estate, legal
representatives or named beneficiaries (as directed by Executive in writing) shall be paid
Executive’s earned but unpaid Base Salary through Executive’s date of death, and the Bank shall pay
all premiums for six (6) months following Executive’s date of death for medical, dental and other
insurance benefits normally provided for Executive’s family. Such payments are in addition to any
other benefits that Executive’s beneficiaries may be entitled to receive under any employee benefit
plan maintained by the Bank for the benefit of Executive, including, but not limited to, the Bank’s
life insurance and tax-qualified and non-qualified retirement plans.




	7.	 	TERMINATION UPON RETIREMENT.





     Termination of Executive’s employment based on “Retirement” shall mean termination of
Executive’s employment at any time after Executive reaches age 55 or in accordance with any
retirement policy established by the Board with Executive’s consent with respect to him. Upon
termination of Executive based on Retirement, no amounts or benefits shall be due Executive under
this Agreement, and Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.




	8.	 	TERMINATION FOR CAUSE.





     (a) The Bank may terminate Executive’s employment at any time, but any termination other than
termination for “Cause,” as defined herein, 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 termination for “Cause.”



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Termination for “Cause” shall mean termination because of Executive’s personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal profit, material
breach of the Bank’s Code of Ethics, material violation of the Sarbanes-Oxley requirements for
officers of public companies, that in the reasonable opinion of the Board will likely cause
substantial financial harm or substantial injury to the reputation of the Bank or the Company,
willfully engaging in actions that in the reasonable opinion of the Board will likely cause
substantial financial harm or substantial injury to the business reputation of the Bank,
intentional failure to perform stated duties, willful violation of any law, rule or regulation
(other than routine traffic violations or similar offenses) or final cease-and-desist order, or
material breach of any provision of this Agreement.




     (b) For purposes of this Section 8, no act or failure to act, on the part of Executive, shall
be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or
without reasonable belief that Executive’s action or omission was in the best interests of the
Bank. Any act, or failure to act, based upon the direction of the Board or based upon the advice
of counsel for the Bank shall be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of the Bank.




	9.	 	RESIGNATION FROM BOARDS OF DIRECTORS.





     In the event of Executive’s termination of employment for any reason, Executive’s service as a
director of the Bank or the Company, and any affiliate of the Bank or the Company shall immediately
terminate. This Section 9 shall constitute a resignation notice for such purposes.




	10.	 	NOTICE.





     (a) Any purported termination by the Bank for Cause shall be communicated by Notice of
Termination to Executive. If, within thirty (30) days after any Notice of Termination for Cause is
given, Executive notifies the Bank that a dispute exists concerning the termination, the parties
shall promptly proceed to arbitration, as provided in Section 20. Notwithstanding the pendency of
any such dispute, the Bank shall discontinue paying Executive’s compensation until the dispute is
finally resolved in accordance with this Agreement. If it is determined that Executive is entitled
to compensation and benefits under Section 4, the payment of such compensation and benefits by the
Bank shall commence immediately following the date of resolution by arbitration, with interest due
Executive on the cash amount that would have been paid pending arbitration (at the prime rate as
published in The Wall Street Journal from time to time).



     (b) Any other purported termination by the Bank or by Executive shall be communicated by a
“Notice of Termination” (as defined in Section 10(c)) to the other party. If, within thirty (30)
days after any Notice of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the parties shall
promptly proceed to arbitration as provided in Section 20. Notwithstanding the pendency of any
such dispute, the Bank shall continue to pay Executive his Base Salary, and other compensation and
benefits in effect when the notice giving rise to the dispute was given (except as to termination
of Executive for Cause); provided, however, that such payments and



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benefits shall not continue beyond the date that is 24 months from the date the Notice of
Termination is given. In the event the voluntary termination by Executive of his employment is
disputed by the Bank, and if it is determined in arbitration that Executive is not entitled to
termination benefits pursuant to this Agreement, he shall return all cash payments made to him
pending resolution by arbitration, with interest thereon at the prime rate as published in The Wall
Street Journal from time to time, if it is determined in arbitration that Executive’s voluntary
termination of employment was not taken in good faith and not in the reasonable belief that grounds
existed for his voluntary termination. If it is determined that Executive is entitled to receive
severance benefits under this Agreement, then any continuation of Base Salary and other
compensation and benefits made to Executive under this Section 10 shall offset the amount of any
severance benefits that are due to Executive under this Agreement.




     (c) For purposes of this Agreement, a “Notice of Termination” shall mean a written notice that
shall indicate the specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated.




	11.	 	POST-TERMINATION OBLIGATIONS.





     (a) Executive hereby covenants and agrees that (except following a change in control as
defined in the Company’s 2005 Stock Option Plan), for a period of one year following his
termination of employment with the Bank, he shall not, without the written consent of the Bank,
either directly or indirectly:



          (i) solicit, offer employment to, or take any other action intended (or that a reasonable
person acting in like circumstances would expect) to have the effect of causing any officer or
employee of the Bank or the Company, or any of their respective subsidiaries or affiliates, to
terminate his or her employment and accept employment or become affiliated with, or provide
services for compensation in any capacity whatsoever to, any business whatsoever that competes with
the business of the Bank or the Company, or any of their direct or indirect subsidiaries or
affiliates or has headquarters or offices within 50 miles of the locations in which the Bank or the
Company has business operations or has filed an application for regulatory approval to establish an
office;



          (ii) become an officer, employee, consultant, director, independent contractor, agent, sole
proprietor, joint venturer, greater than 5% equity owner or stockholder, partner or trustee of any
savings bank, savings and loan association, savings and loan holding company, credit union, bank or
bank holding company, insurance company or agency, any mortgage or loan broker or any other entity
competing with the Bank or its affiliates in the same geographic locations where the Bank or its
affiliates has material business interests; or



          (iii) solicit, provide any information, advice or recommendation or take any other action
intended (or that a reasonable person acting in like circumstances would expect) to have the effect
of causing any customer of the Bank to terminate an existing business or commercial relationship
with the Bank.



     (b) Executive shall, upon reasonable notice, furnish such information and assistance



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to the Bank as may reasonably be required by the Bank, in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however,
that Executive shall not be required to provide information or assistance with respect to any
litigation between the Executive and the Bank or any of its subsidiaries or affiliates.




     (c) All payments and benefits to Executive under this Agreement shall be subject to
Executive’s compliance with this Section 11. The parties hereto, recognizing that irreparable
injury will result to the Bank, its business and property in the event of Executive’s breach of
this Section 11, agree that, in the event of any such breach by Executive, the Bank will be
entitled, in addition to any other remedies and damages available, to an injunction to restrain the
violation hereof by Executive and all persons acting for or with Executive. Executive represents
and admits that Executive’s experience and capabilities are such that Executive can obtain
employment in a business engaged in other lines and/or of a different nature than the Bank, and
that the enforcement of a remedy by way of injunction will not prevent Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the Bank or the Company from pursuing
any other remedies available to them for such breach or threatened breach, including the recovery
of damages from Executive.




	12.	 	SOURCE OF PAYMENTS.





     All payments provided in this Agreement shall be timely paid in cash or check from the general
funds of the Bank. The Company, however, guarantees payment and provision of all amounts and
benefits due hereunder to Executive, and if such amounts and benefits due from the Bank are not
timely paid or provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.




	13.	 	EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.





     This Agreement contains the entire understanding between the parties hereto and supersedes any
prior employment agreement between the Bank or any predecessor of the Bank and Executive, except
that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be interpreted to
mean that Executive is subject to receiving fewer benefits than those available to him without
reference to this Agreement.




	14.	 	NO ATTACHMENT; BINDING ON SUCCESSORS.





     (a) Except as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and
of no effect.



     (b) This Agreement shall be binding upon, and inure to the benefit of, Executive and the Bank
and their respective successors and assigns.



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	15.	 	MODIFICATION AND WAIVER.





     (a) This Agreement may not be modified or amended except by an instrument in writing signed by
the parties hereto.



     (b) No term or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate
only as to the specific term or condition waived and shall not constitute a waiver of such term or
condition for the future as to any act other than that specifically waived.




	16.	 	REQUIRED PROVISIONS.





     (a) The Bank may terminate Executive’s employment at any time, but any termination by the
Board other than termination for Cause 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 termination 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)(1)] of the Federal Deposit Insurance Act, the Bank’s obligations under
this contract 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 Federal Deposit Insurance 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
Federal Deposit Insurance 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 the contract 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 13(c) [12 USC §1823(c)] of the Federal Deposit Insurance 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 Bank or the Company, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12
U.S.C. § 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.




	17.	 	SEVERABILITY.





     If, for any reason, any provision of this Agreement, or any part of any provision, is held
invalid, such invalidity shall not affect any other provision of this Agreement or any part of such
provision not held so invalid, and each such other provision and part thereof shall to the full
extent consistent with law continue in full force and effect.




	18.	 	HEADINGS FOR REFERENCE ONLY.





     The headings of sections and paragraphs herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the provisions of this
Agreement.




	19.	 	GOVERNING LAW.





     This Agreement shall be governed by the laws of the State of Georgia but only to the extent
not superseded by federal law.




	20.	 	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.




	21.	 	INDEMNIFICATION.





     (a) Executive shall be provided with coverage under a standard directors’ and officers’
liability insurance policy, and shall be indemnified for the term of this Agreement and for a
period of six years thereafter to the fullest extent permitted under applicable law against all
expenses and liabilities reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his having been a director or
officer of the Bank or any affiliate (whether or not he continues to be a director or officer at
the time of incurring such expenses or liabilities), such expenses and liabilities to include, but
not be limited to, judgments, court costs and attorneys’ fees and the cost of reasonable
settlements (such



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settlements must be approved by the Board), provided, however, Executive shall not be
indemnified or reimbursed for legal expenses or liabilities incurred in connection with an action,
suit or proceeding arising from any illegal or fraudulent act committed by Executive. Any such
indemnification shall be made consistent with Section 545.121 of the OTS Regulations and Section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(K), and the regulations issued
thereunder in 12 C.F.R. Part 359.




     (b) Any indemnification by the Bank shall be subject to compliance with any applicable
regulations of the OTS.




	22.	 	NOTICE.





     For the purposes of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed
by certified or registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:



	 	 	 
	To the Bank:

	 	Atlantic Coast Bank
	 

	 	505 Haines Avenue
	 

	 	Waycross, Georgia 31501
	 

	 	Telephone: (912) 284-2211
	 
	 	 
	To the Company:

	 	Atlantic Coast Federal Corporation
	 

	 	505 Haines Avenue
	 

	 	Waycross, Georgia 31501
	 

	 	Telephone: (912) 284-2211
	 
	 	 
	To Executive:

	 	Robert J. Larison, Jr.
	 

	 	955 Registry Boulevard #320
	 

	 	St. Augustine, Florida 32092






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SIGNATURES




          IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to be executed by its
duly authorized representatives, and Executive has signed this Agreement, on the date first above
written.




	 	 	 	 	 	 	 	 	 
	 	 	 	 	ATLANTIC COAST BANK	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

Date

	 	 	 	 	 	 

Chairman of the Board
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	ATLANTIC COAST FEDERAL

CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

Date

	 	 	 	 	 	 

Chairman of the Board
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Date	 	 	 	Robert J. Larison, Jr.	 	 







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