Unassociated Document


    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement (“Agreement”) is made by and between Atlantic Coast Bank
(the “Bank”), and Robert J. Larison, Jr. (“Executive”) this 11th day of
December, 2009 and is effective as of such date (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 May 16, 2008, 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 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 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
$250,000. 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 no later than August 1, 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.


    
      
         


      

      
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    (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.  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 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 on the same
basis as for all employees of the Bank 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, restated as of January 1,
2005 and restated as of December 11, 2009 between Executive and the
Bank;

     

    (iii)         the
Bank’s payment of premiums for a long term disability insurance policy providing
for long term disability benefits on the same basis as provided for all
employees of the Bank;

    


    (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; provided, however, that
such reimbursement shall not continue after termination of Executive’s
employment with the Bank.



    
      
         


      

      
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    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.

     

    (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 (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)          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); provided, however,
that a failure to re-elect Executive to the Board shall not constitute an Event
of Termination under this Agreement and any change to Executive’s duties as an
officer or director of any affiliate does not constitute an Event of Termination
under this Agreement;


    
      
         


      

      
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    (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.

     

    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; 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) 36
months following the Event of Termination or (ii) Executive’s obtaining
substantially similar coverage from a new employer.


    
      
         


      

      
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    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
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.


    
      
         


      

      
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    (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 the Executive’s
voluntary termination of employment for retirement purposes 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; provided, however,
that “Retirement” does not include Executive’s voluntary termination of
employment for Good Reason after age 55 or involuntary termination of employment
(other than for Cause) after age 55 if Executive is still employed after age 55,
such that, upon Executive’s voluntary termination of employment for Good Reason
after age 55 or involuntary termination of employment (other than for Cause)
after age 55, Executive shall be entitled to receive severance benefits as set
forth in Sections 4(b) and (c).  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 any other plans or agreements to which Executive is a
party.

     

    8.    TERMINATION
FOR CAUSE.

     

    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.”  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.

    


    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.


    
      
         


      

      
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    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 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 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.


    
      
         


      

      
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    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.

     

    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.


    
      
         


      

      
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    (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.

     

    (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.


    
      
         


      

      
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    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
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:


    
      
         


      

      
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                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

                                
	 
      	 	 
      	 
      
	
                                  December 11, 2009

                                	 	
                                  By:

                                	
                                  /s/
      Charles E. Martin, Jr.

                                
	
                                  Date

                                	 	 
      	
                                  Chairman
      of the Board

                                
	 
      	 	 
      	 
      
	 
      	 	
                                  ATLANTIC
      COAST FEDERAL

                                
	 
      	 	
                                  CORPORATION

                                
	 
      	 	 
      
	
                                  December 11, 2009

                                	 	
                                  By:

                                	
                                  /s/
      Charles E. Martin, Jr.

                                
	
                                  Date

                                	 	 
      	
                                  Chairman
      of the Board

                                
	 
      	 	 
      	 
      
	 
      	 	
                                  EXECUTIVE:

                                
	 
      	 	 
      
	
                                  December 11, 2009

                                	 	
                                  /s/ Robert J. Larison,
  Jr.

                                
	
                                  Date

                                	 	
                                  Robert
      J. Larison,
Jr.

                                


                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         


      

      
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