Document:

exv10w3

 

Exhibit 10.3

SUPPLEMENTAL RETIREMENT AGREEMENT

AMENDED AND RESTATED AS OF JANUARY 1, 2005

          THIS SUPPLEMENTAL RETIREMENT AGREEMENT is amended and restated as of January 1, 2005 by and
between ATLANTIC COAST FEDERAL (the “Bank”), its successors and assigns and ROBERT J. LARISON, JR.
(the “Executive”).

WITNESSETH:

          WHEREAS, the Executive and the Bank entered into a Supplemental Retirement Agreement dated as
of the 1st day of November, 2002 (the “Original Agreement”); and

          WHEREAS, the American Jobs Creation Act of 2004 enacted new section 409A of the Internal
Revenue Code (the “Code”), which affects the Original Agreement, and the Executive and the Bank now
wish to amend and restate the Original Agreement solely in order to comply with Code section 409A.

          NOW, THEREFORE, in consideration of the premises and covenants contained herein, the Executive
and the Bank hereby amend and restate the Original Agreement in its entirety as follows, effective
as of January 1, 2005:

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

	 	(a)	 	Accrued Benefit Percentage shall mean, except as otherwise provided in this
Agreement, 2.5% for each full calendar quarter of the Executive’s employment with the
Bank since January 1, 2002, calculated through the last day of the calendar quarter in
which the Executive (i) experiences a Separation from Service or (ii) attains the Normal
Retirement Date, whichever shall first occur; provided, however, that in
no event shall the Accrued Benefit Percentage exceed 60%.
	 
	 	(b)	 	Administrator shall mean the person or committee appointed by the Board of
Directors of the Bank to administer this Agreement. If a committee is appointed by the
Board of Directors, a majority of those persons shall constitute a quorum and the act of
the majority of such of persons either at a meeting or by written consent, shall be the
act of the Administrator. The administrator may adopt such rules and procedures, not
inconsistent with this Agreement, as it deems necessary or appropriate in order to
administer this Agreement.
	 
	 	(c)	 	Average Compensation shall mean the amount determined by dividing by three
(3) the total monetary compensation earned by the Executive from the Bank and its
affiliates and subsidiaries (or any successors thereto by merger or purchase) during the
three annual periods in the ten year period prior to his Separation from Service that
results in the largest total, including but not limited to salary, bonuses and incentive
compensation (but excluding specifically stock-based compensation, such

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	 	 	 	as restricted stock, stock options and stock appreciation rights). An annual period
shall consist of any twelve (12) month consecutive period not including any portion of
another twelve (12) month period.
	 
	 	(d)	 	Benefit Commencement Date shall mean the first business day of the calendar
month following the earliest of (i) the Executive’s Normal Retirement Date; (ii) the
Executive’s Separation from Service; (iii) the Executive’s death; (iv) the Executive’s
Disability; or (v) a Change in Control.
	 
	 	(e)	 	Cause shall mean a Separation from Service that arises from the Executive’s
gross negligence, willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, and willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses) or final cease-and-desist
order.
	 
	 	(f)	 	Change in Control shall mean the following:
	 
	 	 	 	(1) “Change in Control” shall mean (i) a change in the ownership of the Bank or Atlantic
Coast Federal Corporation (the “Company”), (ii) a change in the effective control of the
Bank or Company, or (iii) a change in the ownership of a substantial portion of the
assets of the Bank or Company, as described below. Notwithstanding anything herein to
the contrary, the reorganization of Atlantic Coast Federal, MHC by way of a “second-step
conversion” shall not be deemed a Change in Control.
	 
	 	 	 	(2) A change in ownership occurs on the date that any one person, or more than one
person acting as a group (as defined in Proposed Treasury Regulations section
1.409A-3(g)(5)(v)(B)), acquires ownership of stock of the Bank or Company that, together
with stock held by such person or group, constitutes more than 50% of the total fair
market value or total voting power of the stock of such corporation.
	 
	 	 	 	(3) A change in the effective control of the Bank or Company occurs on the date that
either (i) any one person, or more than one person acting as a group (as defined in
Proposed Treasury Regulations section 1.409A-3(g)(5)(vi)(B)) acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of stock of the Bank or Company possessing 35% or more of
the total voting power of the stock of the Bank or Company, or (ii) a majority of the
members of the Bank’s or Company’s board of directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority of the
members of the Bank’s or Company’s board of directors prior to the date of the
appointment or election, provided that this sub-section “(ii)” is inapplicable where a
majority shareholder of the Bank or Company is another corporation.
	 
	 	 	 	(4) A change in a substantial portion of the Bank’s or Company’s assets occurs on the
date that any one person or more than one person acting as a group (as defined in
Proposed Treasury Regulations section 1.409A-3(g)(5)(vii)(C)) acquires (or has

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	 	 	 	acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Bank or Company that have a total gross fair
market value equal to or more than 40% of the total gross fair market value of (i) all
of the assets of the Bank or Company, or (ii) the value of the assets being disposed of,
either of which is determined without regard to any liabilities associated with such
assets. For all purposes hereunder, the definition of Change in Control shall be
construed to be consistent with the requirements of Proposed Treasury Regulations
section 1.409A-3(g)(5), except to the extent that such proposed regulations are
superseded by subsequent guidance.
	 
	 	(g)	 	Disabled or Disability shall mean the Executive:
	 
	 	 	 	(1) is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death, or
last for a continuous period of not less than 12 months;
	 
	 	 	 	(2) by reason of any medically determinable physical or mental impairment which can be
expected to result in death, or last for a continuous period of not less than 12 months,
is receiving income replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the Bank; or
	 
	 	 	 	(3) is determined to be totally disabled by the Social Security Administration.
	 
	 	(h)	 	Involuntary Termination shall mean Separation from Service without the
Executive’s express written consent, and shall include a material diminution of or
interference with the Executive’s duties, responsibilities and benefits as President and
Chief Executive Officer of the Bank, including (without limitation) any of the following
actions unless consented to in writing by the Executive: (i) a change in the principal
workplace of the Executive to a location outside of a 30 mile radius from the Bank’s main
office as of the date hereof; (ii) a material demotion of the Executive; (iii) a material
reduction in the number or seniority of other personnel reporting to the Executive or a
material reduction in the frequency with which, or on the nature of the matters with
respect to which, such personnel are to report to the Executive, other than as part of an
institution-wide reduction in staff; (iv) a material adverse change in the Executive’s
salary, perquisites, benefits, contingent benefits or vacation, other than as part of an
overall program applied uniformly and with equitable effect to all members of the senior
management of the Bank; and (v) a material permanent increase in the required hours of
work or the workload of the Executive. The term “Involuntary Termination” does not
include termination for Cause or termination of employment due to retirement, death,
Disability or suspension or temporary or permanent prohibition from participation in the
conduct of the Bank’s affairs under Section 8 of the Federal Deposit Insurance Act.
	 
	 	(i)	 	Monthly Benefit shall mean the Average Compensation multiplied by the
Accrued Benefit Percentage and then divided by twelve (12), calculated at the Benefit
Commencement Date.

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	 	(j)	 	Normal Retirement Date shall mean the date the Executive attains age 55
(i.e., February 9, 2012).
	 
	 	(k)	 	Separation from Service shall mean the date of cessation of the employment
relationship (other than an approved leave of absence) between the Executive and the Bank
and its affiliates and subsidiaries (including any successor in interest, if applicable),
and shall be construed to comply with Code Section 409A and Proposed Treasury Regulations
Section 1.409A-1(h).
	 
	 	(l)	 	Specified Employee shall mean a key employee of the Bank within the meaning
of Code Section 416(i) without regard to paragraph 5 thereof, determined in accordance
with Code Section 409A and Proposed Treasury Regulations Section 1.409A-1(i).

	2.	 	Payment of Benefits.

	 	(a)	 	Normal Benefit.
	 
	 	 	 	If the Executive is living on the Benefit Commencement Date, the Bank shall pay the
Monthly Benefit to him on such date and on the first business day of each calendar month
thereafter for a total of 180 months (i.e., monthly payments for 15 years), regardless
of whether the Executive has experienced a Separation from Service; provided however,
that, if the Executive has experienced a Separation from Service, then, to the extent
necessary to comply with Code Section 409A and the regulations thereunder, such payments
shall not commence until the first day of the seventh month following the date of the
Executive’s Separation from Service if the Executive is a Specified Employee on his date
of Separation from Service.
	 
	 	(b)	 	Death Benefit.

	 	(i)	 	Death During or After Service. If the Executive dies prior to
the Normal Retirement Date, the Bank shall pay to the beneficiary designated on
Exhibit A, using an Accrued Benefit Percentage of 60%, the Monthly Benefit
commencing on the first business day of the month following what would have
been the Executive’s Normal Retirement Date and on the first business day of
each calendar month thereafter for a period of 180 months. The Average
Compensation calculation shall assume that the Executive’s compensation
increased by 3% for each full calendar year that occurs prior to what would
have been his 55th birthday.
	 
	 	(ii)	 	Death During Benefit Period. If the Executive dies on or after
the Benefit Commencement Date, the Bank shall continue to make the remaining
monthly payments due to the Executive to the beneficiary designated by the
Executive on Exhibit A.

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	 	(c)	 	Disability Benefit. If the Executive becomes Disabled before the Normal Retirement Date, the Bank shall pay
the Monthly Benefit to him, using an Accrued Benefit Percentage of not less than 60%,
starting on the first business day of the calendar month following the date on which the
Executive became Disabled and on the first business day of each calendar month
thereafter for a total of 180 months (i.e., monthly payments for 15 years). If the
Executive dies after becoming entitled to Disability benefits, the Bank shall continue
to make the remaining monthly payments due to the Executive to the beneficiary
designated by the Executive on Exhibit A.
	 
	 	(d)	 	Involuntary Termination Benefit. In the event the Executive incurs a
Separation from Service due to an Involuntary Termination before the Normal Retirement
Date, the Bank shall pay the Monthly Benefit to the Executive, using an Accrued Benefit
Percentage of not less than 60%, commencing on the first business day of the month
following the Separation from Service and on the first business day of each calendar
month thereafter for a total of 180 months; (i) provided, however, that in the event of
Involuntary Termination due to Cause, except as may be prohibited by federal law, the
Executive shall only be entitled to the Monthly Benefit calculated at the time of his
Separation from Service with payment commencing on the first business day of the month
following the Separation from Service and on the first business date of each calendar
month thereafter for a total of 180 months; and (ii) provided, further, that, to the
extent necessary to comply with Code Section 409A and the regulations thereunder, such
payments shall not commence until the first day of the seventh month following the date
of the Executive’s Separation from Service if the Executive is a Specified Employee on
his date of Separation from Service.
	 
	 	(e)	 	Change in Control Benefit. Subject to Section 5, if a Change in Control
occurs before the Normal Retirement Date, then, within 30 calendar days of a Change in
Control, the Bank shall pay the Executive a lump sum equal to the present value of the
Monthly Benefit that would otherwise be paid to the Executive hereunder, using an Accrued
Benefit Percentage of not less than 60%, regardless of whether the Executive has
experienced a Separation from Service; provided however, that, if the Executive has
experienced a Separation from Service, then, to the extent necessary to comply with Code
Section 409A and the regulations thereunder, such payments shall not be made until the
first day of the seventh month following the date of the Executive’s Separation from
Service if the Executive is a Specified Employee on his date of Separation from Service.

	3.	 	Claims. In the event a claim for benefits is wholly or partially denied under this
Agreement, the Executive or any other person claiming benefits under this Agreement (a
“Claimant”) shall be given notice in writing within 30 calendar days after the Administrator’s
receipt of the claim. For good cause shown, the Administrator may extend this period for an
additional 30 calendar days. Any denial must specifically set forth the reasons for the
denial and any additional information necessary to rescind such denial. The Claimant shall
have the right to seek a review of the denial by filing a written request with the
Administrator within 60 calendar days of receipt of the denial. Such request may be

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	 	 	supported by such documentation and evidence deemed relevant by the Claimant. Following
receipt of this information, the Administrator shall make a final determination and notify the
Claimant in writing within 60 calendar days of the Administrator’s receipt of the request for
review together with the specific reasons for the decision.
	 
	4.	 	General Assets and Funding. The amounts payable under this Agreement are payable
from the general assets of the Bank and no special fund or arrangement is intended to be
established hereby nor shall the Bank be required to earmark, place in trust or otherwise
segregate assets with respect to this Agreement or any benefits hereunder. The Administrator
reserves the right to determine how the Bank will fund its obligation undertaken by this
Agreement. Should the Administrator elect to purchase assets relating to this Agreement, in
whole or in part, through the medium of life insurance or annuities, or both, the Bank shall
be the owner and beneficiary of each such policy unless otherwise provided by this Agreement.
Bank reserves the absolute right, in its sole discretion, to terminate such life insurance or
annuities, as well as any other investment program, at any time, in whole or in part unless
otherwise provided by this Agreement. Such termination shall in no way affect the Bank’s
obligation to pay the Executive the benefits as provided in this Agreement. At no time shall
the Executive be deemed to have any right, title, or interest in or to any specific asset or
assets of the Bank, including but not by way of restriction, any insurance or annuity contract
and contracts or the proceeds therefrom.
	 
	5.	 	Certain Reductions. Notwithstanding any other provision of this Agreement, if the
value and amounts of benefits under this Agreement, together with any other amounts and the
value of benefits received or to be received by the Executive in connection with a Change in
Control would cause any amount to be nondeductible for federal income tax purposes by the Bank
or the consolidated group of which the Bank is a member pursuant to Section 280G of the Code,
then amounts and benefits under this Agreement shall be reduced (not less than zero) to the
extent necessary so as to maximize amounts and the value of benefits to the Employee without
causing any amount to become nondeductible by Bank pursuant to or by reason of such Section
280G. The Employee shall determine the allocation of such reduction among payments and
benefits to the Employee.
	 
	6.	 	Beneficiary Designations. The Executive shall designate a beneficiary by filing with
Bank a written designation of beneficiary on a form substantially similar to the form attached
as Exhibit A. The Executive may revoke or modify the designation at any time by filing a new
designation. However, designations will only be effective if signed by the Executive and
accepted by the Bank during the Executive’s lifetime. The Executive’s beneficiary designation
shall be deemed automatically revoked if the beneficiary predeceases the Executive, or if the
Executive names a spouse as beneficiary and the marriage is subsequently dissolved. If the
Executive dies without a valid beneficiary designation, all payments shall be made to the
Executive’s surviving spouse, if any, and if none, to the Executive’s surviving children and
the descendants of any deceased child by right of representation, and if no children or
descendants survive, to the Executive’s estate.
	 
	 	 	If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable
of handling the disposition of his or her property, the Bank may pay such benefit

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	 	 	to the guardian, legal representative or person having the care or custody of such minor,
incompetent person or incapable person, or to a custodian selected by the Bank under the
Georgia Uniform Transfers to Minors Act for the benefit of such minor. The Bank may require
proof of incompetency, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the Bank from all
liability with respect to such benefit.
	 
	7.	 	Amendment and Termination.

	 	(a)	 	Amendment. The Bank may at any time amend the Agreement in whole or in
part, provided, however, that no amendment shall decrease or restrict the amount accrued
to the date of amendment.
	 
	 	(b)	 	Termination. The Bank may at any time partially or completely terminate
the Agreement, if, in its judgment, the tax, accounting, or other effects of the
continuance of the Agreement, or potential payments thereunder, would not be in the best
interests of the Bank.

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

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

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

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

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

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

	8.	 	Miscellaneous.

	 	(a)	 	Withholding. To the extent amounts payable under this Agreement are
determined by the Administrator, in good faith, to be subject to federal, state or local
income tax, the Bank may withhold from each such payment an amount necessary to meet the
Bank’s obligation to withhold amounts under the applicable federal, state or local law.
	 
	 	(b)	 	Governing Law. This Agreement shall be construed under the laws of the
State of Georgia, except to the extent that federal law applies.
	 
	 	(c)	 	Future Employment. This Agreement shall not be construed as providing the
Executive the right to be continued in the employ of the Bank or its affiliates or
subsidiaries.
	 
	 	(d)	 	No Pledge or Attachment. No benefit which is or may become payable under
this Agreement shall be subject to any anticipation, alienation, sale, transfer, pledge,
encumbrance or hypothecation or subject to any attachment, levy or similar process and
any attempt to effect any such action shall be null and void.
	 
	 	(e)	 	Successors and Assigns. This Agreement and the obligations of the Bank
herein shall be binding upon the successors and assigns of the Bank. This Agreement may
not be assigned by the Bank without the prior written consent of the Executive or any
other beneficiary receiving payments under this Agreement.
	 
	 	(f)	 	Participation in Plans. Nothing contained in this Agreement shall be
construed to alter, abridge, or in any manner affect the rights and privileges of the
Executive to participate in and be covered by any pension, profit sharing, group
insurance, bonus, incentive, or other employee plans which the Bank or its affiliates or
subsidiaries may now or hereafter have.

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	 	(g)	 	Notices. Any notices under this Agreement shall be provided to the
Executive at his last address on file with the Administrator and shall be provided to the
Administrator in care of President, Atlantic Coast Federal, 505 Haines Avenue, Waycross,
Georgia 31501.
	 
	 	(h)	 	Headings. Headings of sections herein are inserted for convenience of
reference. They are not to be considered in the construction of this Agreement.
	 
	 	(i)	 	Savings Clause. If any provision of this Agreement shall be for any reason
invalid or unenforceable, the remaining provisions shall be carried into effect.
	 
	 	(j)	 	Entire Agreement. This Agreement constitutes the entire agreement between
the Bank and the Executive as to the subject matter hereof. No rights are granted to the
Executive be virtue of this Agreement other than as specifically set forth herein.
	 
	 	(k)	 	Suicide. No benefits shall be payable if the Executive commits suicide
within two (2) years after the date of this Agreement, or if the Executive has made any
material misstatement of fact on any application for life insurance purchased by the Bank
	 
	 	(l)	 	Top Hat Agreement.  For purposes of the Internal Revenue Code, the Bank
intends this Agreement to be an unfunded, unsecured promise to pay on the part of the
Bank. For purposes of ERISA, The Bank intends this Agreement to be an unfunded
obligation solely for the benefit of the Executive for the purpose of qualifying this
Agreement for the “top hat” exception under sections 201(2), 301(a)(3) and 401(a) of
ERISA.

     The parties have caused this Agreement to be executed and delivered as of the date first above
written.

	 	 	 	 	 	 	 
	 

	 	 	 	ATLANTIC COAST FEDERAL	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Charles E. Martin, Jr. 	 	 
	 

	 	 	 	 

Name: Charles E. Martin, Jr.
	 	 
	 

	 	 	 	Title: Comp. Committee Chairman	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	/s/ Robert J. Larison, Jr. 	 	 
	 

	 	 	 	 

Robert J. Larison, Jr.
	 	 

9exv10w4

 

Exhibit 10.4

ATLANTIC COAST FEDERAL

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

December 1, 2005

     This Atlantic Coast Federal Supplemental Executive Retirement Plan (the “Plan”) is established
for the purpose of providing retirement benefits to those members of senior management who have
contributed significantly to the success and growth of Atlantic Coast Federal, and its predecessor
Atlantic Coast Federal Credit Union, whose services are vital to its continued growth and success
in the future and who are to be encouraged to remain a valuable part of our future success.

ARTICLE I

ELIGIBILITY AND VESTING

     Each individual who is selected by the Plan Administrator as eligible to participate (each a
“Participant”) in the Plan and who has attained the vesting requirement of one hundred and twenty
(120) full months of service as a full-time employee of Atlantic Coast Federal following the date
of this Plan, whether continuous or otherwise, shall be entitled to receive the retirement benefits
as provided in this Plan. Atlantic Coast Federal, in its sole discretion, may allow exceptions to
this service requirement for good cause shown. Any Participant who resigns at the request of, or
is removed from service by, the Office of Thrift Supervision, Federal Deposit Insurance Corporation
or any other regulatory authority for Atlantic Coast Federal, shall be ineligible to participate
and shall forfeit any benefits under this Plan.

ARTICLE II

RETIREMENT BENEFIT

     A. Normal Retirement. Atlantic Coast Federal shall pay to the Participant, following
cessation of employment in any capacity and the attainment of sixty-five (65) years of age
(“Retirement Age”), an annual normal retirement benefit of twenty thousand dollars ($20,000) per
year, payable annually, commencing on January 1st of the year following attainment of
the Retirement Age and on each anniversary thereafter for a period of twenty (20) years (the
“Benefit Period”). The benefits paid under this Article shall be subject to withholding in
accordance with federal and state law.

     B. Early Retirement Election. At the Participants discretion, within the first month of
becoming eligible for the Plan, in accordance with the other provisions of the Plan, including
eligibility, each Participant may elect upon Early Retirement from Atlantic Coast Federal to
receive an annual early retirement benefit by filing the election form in Appendix A with the Plan
Administrator

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     The annual early retirement benefit shall be calculated as follows: for each year that the
Participant’s age is less than the Retirement Age (i.e. early retirement), the retirement benefit
in Article II.A. shall be reduced by one thousand dollars ($1,000) per year. The timing of the
annual payment and the Benefit Period for early retirement benefits shall be the same as those set
forth in Article II.A. The Participant’s age shall be determined at the end of the calendar year
preceding the year in which benefits are requested to begin. For example, a Participant who
chooses early retirement at age sixty (60) would receive fifteen thousand dollars ($15,000) per
year for twenty (20) years commencing January 1st in the year following the calendar
year in which early retirement was elected. If you wish to receive your annual benefits earlier
than the “Retirement Age’ in the event that you retire early, please complete Appendix A and submit
to the Plan Administrator within your first month of eligibility for this Plan.

     C. Death During Benefit Period. If the Participant dies within the Benefit Period, the
remaining annual payments due the Participant shall be paid to the Participant’s designated
beneficiary (including any contingent beneficiary) on file with Atlantic Coast Federal in the form
of Appendix B or if no designation is on file, the spouse shall be the designated beneficiary. In
the absence of any surviving beneficiary or spouse, the benefits shall be paid to the personal
representative of the estate of the Participant.

     If the Participant’s designated beneficiary begins to receive the annual payments and
thereafter dies without receiving the remaining annual payments, Atlantic Coast Federal shall pay
the installments remaining to the contingent beneficiary, if any, and then to the personal
representative of the estate of the designated beneficiary.

     D. Death of Participant Prior to Retirement but after Vesting. In the event the Participant
should die prior to attaining Retirement Age and prior to electing early retirement benefits,
Atlantic Coast Federal agrees to pay to the Participant’s designated beneficiary the retirement
benefit the Participant would have otherwise received as if he or she had attained Retirement Age
at his or her death commencing January 1st of the year following the Participant’s death. If the
designated beneficiary (including any contingent beneficiary) dies before receiving all the annual
installments, Atlantic Coast Federal shall pay the remaining installments to the personal
representative of the estate of the designated beneficiary. If the Participant dies prior to
retirement with no surviving designated beneficiary (including any spouse or contingent
beneficiary), Atlantic Coast Federal shall pay the installments to the personal representative of
the estate of the Participant. Notwithstanding any other terms of this Plan, no death benefit
shall be payable under this Plan if it is determined that the Participant’s death was caused by
suicide.

     E. Death Prior to Full Vesting. In the event a Participant dies while employed by Atlantic
Coast Federal, and has attained at least sixty (60) full months of service (whether continuous or
otherwise), such person shall be eligible for benefits as a Participant in this Plan whether or not
the Participant has met the Retirement Age. The amount of the annual benefits
payable to such person or his or her designated beneficiary, as the case may be, over the Benefit
Period shall be equal to the product of twenty thousand dollars ($20,000) multiplied by a fraction

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the denominator of which is one-hundred and twenty (120) and the numerator of which is the number
of full months of service as an employee. Such benefits shall be paid in equal annual installments
over the Benefit Period on January 1st of each year.

     F. Present Value of Distribution Benefits – Unforeseeable Emergency. Upon the request of the
designated beneficiary or the personal representative and for good cause shown, Atlantic Coast
Federal may (but is not obligated to do so) pay in a lump sum an amount necessary (but not
exceeding the present value of the remaining benefits) to meet the unforeseeable emergency (on or
after basis) caused by an event beyond the control of the beneficiary or personal representative
that would result in “severe financial hardship” if the distribution was not permitted. Examples
would include the need to pay medical and funeral expenses, or an imminent foreclosure or eviction.
Any remaining future payments shall be adjusted to reflect the distribution under this Article
II.F. The present value determination shall be equal to the amount accrued by Atlantic Coast
Federal in accordance with generally accepted accounting principles.

ARTICLE III

STATUS OF PLAN

     This Plan does not constitute a contract of employment for any Participant, nor shall any
provision of this Plan be construed as giving the Participant the right to continued service as an
employee of Atlantic Coast Federal.

ARTICLE IV

BINDING EFFECT

     This Plan shall be binding upon the parties hereto and upon the successors and assigns of
Atlantic Coast Federal, and upon the heirs and legal representatives of the Participant.

ARTICLE V

ASSIGNMENT OF RIGHTS

     Neither the Participant nor any beneficiary or personal representative of the Participant can
assign any of the rights to benefits under this Plan. Any attempt to anticipate, sell, transfer,
assign, pledge, encumber or change the Participant’s right to receive benefits shall be void. The
rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors.

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ARTICLE VI

CHOICE of LAW

     This Plan shall be construed under and governed by the laws of the State of Georgia, except to
the extent preempted by the laws of the United States of America.

ARTICLE VII

UNFUNDED ARRANGEMENT

     The Participant and any beneficiary are general unsecured creditors of Atlantic Coast Federal
for the payment of benefits under this Plan. The benefits represent the mere promise by Atlantic
Coast Federal to pay such benefits. The benefits payable under this Plan are payable from the
general assets of Atlantic Coast Federal and no special fund or arrangement is intended to be
established hereby nor shall Atlantic Coast Federal be required to earmark, place in trust or
otherwise segregate assets with respect to this Plan or any benefits hereunder.

ARTICLE VIII

PLAN ADMINISTRATOR

     Atlantic Coast Federal is hereby designated the Plan Administrator. As Plan Administrator,
Atlantic Coast Federal shall be responsible for the management, control, interpretation and
administration of this Plan as established herein and may allocate to others certain aspects of the
management and operation responsibilities of the Plan including the employment of advisors and the
delegation of any ministerial duties to qualified individuals. The Plan Administrator shall allow
such exceptions to the requirements from this Plan for good cause shown. All decisions of the Plan
Administrator shall be final and benefits under this Plan shall be paid only if the Plan
Administrator decides in its discretion that the applicant is entitled to such benefits. Any
notices or claims under this Plan shall be filed with the Plan Administrator in care of the
President of Atlantic Coast Federal.

ARTICLE IX

CLAIMS

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

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within sixty (60) calendar days of the Plan Administrator’s receipt of the request for review together with the
specific reasons for the decision.

ARTICLE X

AMENDMENTS

     This Plan may be amended by Atlantic Coast Federal any time, but no such amendment shall
affect the rights of, or reduce the benefits to, any Participant without their written consent.

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ARTICLE XI

TOP HAT PLAN

     For purposes of the Internal Revenue Code, Atlantic Coast Federal intends this Plan to be an
unfunded, unsecured promise to pay on the part of Atlantic Coast Federal. For purposes of ERISA,
Atlantic Coast Federal intends this Plan to be an unfunded Plan solely for the benefit of a select
group of management or highly compensated employees of Atlantic Coast Federal for the purpose of
qualifying this Plan for the “top hat” Plan exception under sections 201(2), 301(a)(3) and
401(a)(1) of ERISA.

Acknowledgment

I hereby acknowledge receipt of a copy of this Plan and agree to comply with its terms.

	 	 	 	 	 	 	 
	 

Participant’s Signature

	 	 
	 	 

Date
	 	 

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