ex10-2.htm


    
      

    

    Exhibit
10.2

     

    


     

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement (the “Agreement”) is made effective as of May 8, 2009 (the
“Effective Date”), by and between Atlantic Coast Bank (the “Bank”) and Carl W.
Insel (the “Executive”).  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.  Any
reference to the “Employer” shall mean both the Company and the
Bank.

     

    WHEREAS, the Executive is
currently employed as Executive Vice President – Commercial Lending of the
Employer; and

     

    WHEREAS, Executive is willing
to serve the Employer on the terms and conditions hereinafter set forth;
and

     

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

     

    1.    POSITION
AND RESPONSIBILITIES.

     

    During
the term of this Agreement, Executive agrees to serve as Executive Vice
President – Commercial Lending of the Bank (the “Executive Position”), and will
perform all duties and will have all powers associated with such position as set
forth in the job description for such Executive Position as established by the
Employer.  During the term of the Agreement, Executive also agrees to
serve, if elected, as an officer and/or director of any subsidiary or affiliate
of Employer and in such capacity carry out such duties and responsibilities
reasonably appropriate to that office.

     

    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 provided,
however, that in order for the Agreement to renew, the disinterested members of
the Board of Directors of the Bank (the “Board”) must take the following actions
prior to each non-renewal notice period (as described in the next sentence): (i)
at least sixty (60) days prior to the Anniversary Date, conduct a comprehensive
performance evaluation and review of Executive for purposes of determining
whether to extend the Agreement; and (ii) affirmatively approve the renewal or
non-renewal of the Agreement, which decision shall be included in the minutes of
the Board’s meeting.  If the decision of such disinterested members of
the Board is not to renew the Agreement, then the Board shall provide the
Executive with a written notice of non-renewal (“Non-Renewal Notice”) at least
thirty (30) days and not more than sixty (60) days prior to any Anniversary
Date, such that this Agreement shall terminate at the end of twenty-four (24)
months following such Anniversary Date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    (c)           Continued Employment
Following Termination of Employment Period.  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 Employer and Executive may mutually agree.

    


    (d)           Duties; Membership on Other
Boards.  During the Employment Period, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence approved by the Chief Executive Officer, Executive shall
devote substantially all 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 Employer; provided,
however, that, with the approval of the Chief Executive Officer, 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 Chief Executive Officer’s judgment, will not present any conflict of
interest with the Employer, or materially affect the performance of Executive’s
duties pursuant to this Agreement it being understood that membership in and
service on boards or committees of social, religious, charitable or similar
organizations does not require Chief Executive Officer approval pursuant to this
Section. For purposes of this Section, Chief Executive Officer approval shall be
deemed to have been granted as to service with any such business company or
organization that Executive was serving as of the date of this Agreement and
disclosed to the Chief Executive Officer.

     

    3.    COMPENSATION,
BENEFITS AND REIMBURSEMENT.

     

    (a)    Base
Salary.  The Employer shall pay Executive a salary of not less
than $175,000 per year (“Base Salary”).  Such Base Salary shall be
payable biweekly, or with such other frequency as officers and employees are
generally paid. During the period of this Agreement, Executive’s Base Salary
shall be reviewed at least annually. Such review shall be conducted by the Chief
Executive Officer, and the Employer may increase, but not decrease, Executive’s
Base Salary (with any increase in Base Salary to 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 Employer
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.  Subject to the terms of
the relevant plan documents, payments of bonuses and incentive compensation are
dependent on the Board’s review of Executive’s performance for the relevant
period and shall be paid at the Board’s discretion.

     

    (c)    Employee
Benefits.  Executive shall be entitled to participate in all
employee benefit plans, programs and arrangements as generally provided by the
Employer to senior executive officers and for which Executive shall
qualify.  Executive is also entitled to receive reimbursement for a
country club membership of the Executive’s choosing, not to exceed $5,000 (net
after taxes) annually.

     

    
      
         

      

      
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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 Employer’s usual practices), as well as sick
leave, holidays and other paid absences in accordance with the Employer’s
policies and procedures for senior executives.  Any unused paid time
off during an annual period shall be treated in accordance with the Employer’s
personnel policies as in effect from time to time.

     

    (e)    Expense
Reimbursements.  During the Employment Period, the Employer
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, upon presentation to the Employer of an
itemized account of such expenses in such form as the Employer may reasonably
require.  All reimbursements under this Section 3(e) shall be paid as
soon as practicable by the Employer; provided, however, that no payment shall be
made later than March 15 of the year immediately following the year in which the
expense was incurred.

     

    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 within two years after any of the following, unless
consented to by Executive (where any vote by Executive in performance of his
duties as a member of the Board in favor of such action shall constitute express
consent of Executive to such action):

     

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

     

    (B)           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;

     

    (C)           a
material breach of this Agreement by the Employer; provided, however, that a
change in the Executive’s title or duties will not be considered a material
breach of this Agreement.

     

    
      
         

      

      
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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
thirty (30) days prior written notice given within a reasonable period of time
(not to exceed ninety (90) days) after the initial event giving rise to the
right to elect; provided, however, that the Bank shall be given at least thirty
(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 Employer 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 (3) 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 (3) calendar years prior to the Event of Termination;
provided however, that, to the extent required by regulations or interpretations
of the Office of Thrift Supervision, all severance payments under the Agreement
shall be reduced not to exceed three (3) times Executive’s average annual
compensation (as defined in such regulations or interpretations) over the most
recent five (5) taxable years.  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 upon the earlier of (i)
thirty-six (36) months following the Event of Termination or (ii) Executive’s
obtaining substantially similar coverage from a new employer.

     

    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.

     

    
      
         

      

      
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    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
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 twelve (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 twelve (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 Employer 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 age sixty-five (65) 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 Employer and other
plans to which Executive is a party.

     

    
      
         

      

      
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    8.    TERMINATION
FOR CAUSE.

     

    (a)           The
Employer may terminate the Executive’s employment at any time, but any
termination other than Termination for Cause, as defined herein, shall not
prejudice the Executive’s right to compensation or other benefits under the
Agreement.  The Executive shall have no right to receive compensation
or other benefits for any period after Termination for
“Cause.”  Termination for “Cause” shall include termination because of
the Executive’s personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, material breach of the Code of Ethics
of either the Bank or the Company, material violation of the Sarbanes-Oxley
requirements for officers of public companies that in the reasonable opinion of
the Chief Executive Officer or the Board will likely cause substantial financial
harm or substantial injury to the reputation of the Company or the Bank,
willfully engaging in actions that in the reasonable opinion of the Chief
Executive Officer or the Board will likely cause substantial financial harm or
substantial injury to the business reputation of the Company or the Bank,
failure to perform stated duties after receiving written notice of Executive’s
failure to perform assigned 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 the
Agreement.

     

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

     

    9.    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 19.  Notwithstanding the pendency
of any such dispute, the Employer 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 Employer 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 9(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 19.  Notwithstanding the
pendency of any such dispute, the Employer 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 benefits shall not continue
beyond the date that is twenty-four (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 9 shall offset the amount of any
severance benefits that are due to Executive under this Agreement.

     

    
      
         

      

      
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    (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.

     

    10.         
POST-TERMINATION
OBLIGATIONS AND CONFIDENTIALITY.

     

    (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 five percent
(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.

     

    
      
         

      

      
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    (b)           Executive
shall, upon reasonable notice, furnish such information and assistance 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 10.  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 10, 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.

    


    11.         
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.

     

    12.         
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 Employer or any
predecessor of the Employer 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.

     

    13.         
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
Employer and their respective successors and assigns.

     

    
      
         

      

      
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    14.         
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.

     

    15.         
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 U.S.C. §1818(e)(3)] or 8(g)(1) [12 U.S.C. §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
U.S.C. §1818(e)(4)] or 8(g)(1) [12 U.S.C. §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 U.S.C. §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 U.S.C. §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.

     

    16.         
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.

     

    17.          
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.

     

    18.         
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.

     

    19.         
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.

     

    20.          
INDEMNIFICATION.

     

    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
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.

     

    
      
         

      

      
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    21.          
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 Company:

                    	
                      Atlantic
      Coast Federal Corporation

                      Attn:
      Robert J. Larison, Jr., President

                      505
      Haines Avenue

                      Waycross,
      Georgia 31501

                    	 
	 	 	 	 
	 	
                      To
      the Bank:

                    	
                      Atlantic
      Coast Bank

                      Attn:  Robert
      J. Larison, Jr., President

                      505
      Haines Avenue

                      Waycross,
      Georgia 31501

                    	 
	 	 	 	 
	 	
                      To
      Executive:

                       

                    	
                      Carl
      W. Insel

                      505
      Haines Avenue

                      Waycross,
      Georgia 31501

                    	 


            

          

        

      

    

    


    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    SIGNATURES

     

    IN WITNESS WHEREOF, the
Company and the Bank have each caused this Agreement to be executed by its duly
authorized representative, and Executive has signed this Agreement, effective as
of the date first above written.

     

    
      
        
          
            
              
                
                  	 
      	 
      	
                          ATLANTIC
      COAST FEDERAL CORPORATION

                        
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                          May
      8, 2009

                        	 
      	
                          By:

                        	
                          /s/ Robert J. Larison, Jr.

                        	 
      
	
                          Date

                        	 
      	 
      	
                          Robert
      J. Larison, Jr. President and

                        	 
      
	 
      	 
      	 
      	
                          Chief
      Executive Officer

                        	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          ATLANTIC
      COAST BANK

                        	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                          May
      8, 2009

                        	 
      	
                          By:

                        	
                          /s/ Robert J. Larison, Jr.

                        	 
      
	
                          Date

                        	 
      	 
      	
                          Robert
      J. Larison, Jr. President and

                        	 
      
	 
      	 
      	 
      	
                          Chief
      Executive Officer

                        	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          EXECUTIVE

                        	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                          May
      8, 2009

                        	 
      	
                          /s/
      Carl W. Insel

                        	 
      
	
                          Date

                        	 
      	 
      	 
      	 
      


                

              

            

          

        

      

    

     

     

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