Document:

Unassociated Document

     

    ATLANTIC
COAST BANK

    AMENDED
AND RESTATED

    SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

    

    This
Amended and Restated Atlantic Coast Bank Supplemental Executive Retirement Plan
(the “Plan”) was originally established on November 1, 2002, and was amended and
restated effective October 1, 2004, and most recently is amended and restated by
this document, effective January 1, 2005, in order to comply with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and the 2007 final
regulations issued thereunder.  The Plan is being amended and restated
to make certain changes to the Plan’s vesting and benefit calculation
provisions.

     

    The
purpose of the Plan is to provide supplemental retirement benefits to those
members of senior management who have contributed significantly to the success
and growth of Atlantic Coast Bank (the “Bank”) and its holding company, Atlantic
Coast Federal Corporation (the “Company”) (and any successors thereto), and the
Bank’s 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

     

    1.1          Eligibility. Each
individual who is selected by the Plan Administrator shall be eligible to
participate in the Plan. Such individuals are “Participants.” The Plan is
intended to only be available to a select group of management or highly
compensated employees, and as such, is intended to be a “top hat” plan for
purposes of the Employee Retirement Income Security Act of 1974, as
amended.

     

    1.2         Vesting.

     

    (a)           Participants
shall vest in their benefits under this Plan upon the earliest to occur of the
date (i) Atlantic Coast Federal, MHC completes a Second-Step Conversion, (ii) a
Change in Control (as defined below) occurs, (iii) the Participant dies in
accordance with Section 2.2, or (iv) the Plan Administrator, in its sole
discretion, accelerates vesting.  Notwithstanding the preceding
provisions, 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 the Bank, shall be ineligible
to participate and shall forfeit any benefits under this Plan.

     

    (b)          “Change
in Control” means:

     

    (i)           A
“change in the ownership” of the Bank or the Company, a “change in the effective
control” of the Bank or the Company, or a “change in the ownership of a
substantial portion of the assets” of the Bank or the Company, each 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.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

    BENEFITS

     

    2.1          Appreciation
Benefit.

     

    (a)           Upon
Separation from Service (as defined below) at or after age sixty-five (65)
(“Normal Retirement Age”), the Bank shall pay the Participant an Appreciation
Benefit (as defined below).  The Appreciation Benefit will be divided
by 20 and will be paid in equal annual installments commencing on January 1st of
the year following Separation from Service and on each anniversary thereafter
for a period of 20 years.  Notwithstanding the preceding sentence, to
the extent a Participant is a “Specified Employee” (as defined below), solely to
the extent necessary to avoid penalties under Code Section 409A, payment shall
be delayed until the first day of the seventh month following the Participant’s
Separation from Service.  A “Specified Employee” means an employee of
the Bank or Company who is also a “key employee” as such term is defined in Code
Section 416(i), without regard to Paragraph 5 thereof, but only if the Bank or
the Company (or any successors) is a publicly traded company.

     

    (b)           Upon
Separation from Service at or after age fifty-five (55) (“Early Retirement Age”)
but before Normal Retirement Age, the Bank shall pay the Participant an
Appreciation Benefit reduced by five percent for each year the Participant’s
Early Retirement Age is less than the Normal Retirement Age.  For
purposes of calculating the reduction, the Participant’s age shall be determined
as of the end of the calendar year preceding the year in which the reduced
Appreciation Benefit will be paid.  The reduced Appreciation Benefit
will be divided by 20 and will be paid in equal annual installments commencing
on January 1st of the year following Separation from Service and on each
anniversary thereafter for a period of 20 years.  Notwithstanding the
preceding sentence, to the extent a Participant is a Specified Employee, solely
to the extent necessary to avoid penalties under Code Section 409A, payment
shall be delayed until the first day of the seventh month following the
Participant’s Separation from Service.

     

    (c)           “Separation
from Service” means the Participant’s retirement or termination of employment
with the Bank. No Separation from Service shall be deemed to occur due to
military leave, sick leave or other bona fide leave of absence if the period of
such leave does not exceed six (6) months or, if longer, so long as the
Participant’s right to reemployment is provided by law or contract. If the leave
exceeds six (6) months and the Participant’s right to reemployment is not
provided by law or by contract, then the Participant shall have a Separation
from Service on the first date immediately following such six-month period.
Whether a termination of employment has occurred is determined based on whether
the facts and circumstances indicate that the Bank and the Participant
reasonably anticipated that no further services would be performed after a
certain date or that the level of bona fide services the employee would perform
after such date (whether as an employee or as an independent contractor) would
permanently decrease to no more than 20% of the average level of bona fide
services performed over the immediately preceding 36 months (or such lesser
period of time in which the Participant has provided services for the Bank). The
determination of whether a Participant has a Separation from Service shall be
made by applying the presumptions set forth in the Treasury Regulations under
Code Section 409A.

     

    (d)           “Appreciation
Benefit” means an amount equal to the Prior Benefit (as defined below)
multiplied by the Issue Price (as defined below) multiplied by the Exchange
Ratio (as defined below).  For example, if the Executive’s Prior
Benefit was 20,000 shares of common stock of the Company (“Company Stock”), the
Issue Price was $10.00 and the Exchange Ratio was 60 percent, then the
Participant’s Appreciation Benefit would be equal to $120,000
[(20,000)($10.00)(.6)] payable in 20 equal annual installments.  The
Company will pay interest on unpaid balance of the Executive’s Appreciation
Benefit at the rate of three percent per annum.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    In the
event the Executive dies or there is a Change in Control prior to the date of
closing of the Second-Step Conversion, the Fair Market Value of Company Stock as
of the date of death or Change in Control will be substituted for the Issue
Price and the Exchange Ratio.  For example, the Executive dies prior
to the closing of the Second-Step Conversion.  The Fair Market Value
of Company Stock on that date is $4.00 per share.  In this instance,
the Executive’s Appreciation Benefit is $80,000 (20,000*$4.00).  The
Company will pay interest on unpaid balance of the Executive’s Appreciation
Benefit at the rate of three percent per annum.

     

    (e)           “Prior
Benefit” shall mean a number of shares of Company Stock equal to the Executive’s
benefit under the Agreement as of December 11, 2009, divided by the Fair Market
Value of Company Stock on December 11, 2009.  For example, the
Executive’s prior benefit under the terms of the Agreement on December 11, 2009
was $40,000 and the Fair Market Value of Company Stock on December 11, 2009 was
$2.00.  The Executive is deemed to have, for purposes of the
Agreement, 20,000 shares of Company Stock ($40,000/$2.00).  “Fair
Market Value of Company Stock” means the per share closing price of common stock
of the Company, as reported by the principal exchange or market over which the
shares are then listed or regularly traded.

     

    (f)           “Issue
Price” shall mean the initial offered price of the common stock of the newly
formed successor corporation that is issued in connection with the Second-Step
Conversion.

     

    (g)           “Exchange
Ratio” shall mean the ratio used to determine the number of shares of common
stock in a successor corporation each share of Company Stock will exchanged for
in a Second-Step Conversion.  The Exchange Ratio will be determined as
part of the independent valuation conducted in connection with the Second-Step
Conversion.

     

    2.2          Death
Benefit.  In
the event a Participant dies and has at least 60 full months of service with the
Bank, the Company or one of their affiliates or subsidiaries, (whether
continuous or otherwise), then the Participant will become vested in his or her
Appreciation Benefit.  If a Participant dies prior to attaining 60
full months of service, then he or she will forfeit his or her Appreciation
Benefit.  Such Appreciation Benefit shall be paid to the Participant’s
“Beneficiary” (as defined below) in a lump sum on the first business day of the
month following the Executive’s death.  “Beneficiary” means the
person(s) designated by the Participant on the form set forth at Appendix A to receive
any death benefits hereunder. If the Participant has not designated a
Beneficiary, the Participant’s spouse shall be the Beneficiary. In the absence
of any surviving Beneficiary or spouse, the benefits shall be paid to the
Participant’s estate.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    2.3          Unforeseeable
Emergency.

     

    (a)           Upon
an “Unforeseeable Emergency” (as defined below), (i) a Participant who is vested
in his or her benefit hereunder but has not yet begun to receive payments; or
(ii) a Participant who is receiving either Early or Normal Retirement Benefits,
may request a lump sum payment in an amount necessary (but not exceeding the
present value of the remaining benefits) to meet the Unforeseeable Emergency,
including an amount necessary to pay any taxes due as a result of such lump sum
payment from the Plan. The present value shall be equal to the amount accrued by
the Bank in accordance with generally accepted accounting
principles.

     

    (b)           “Unforeseeable
Emergency” means a severe financial hardship to the Participant or Beneficiary
resulting from (i) an illness or accident of the Participant or Beneficiary, his
or her spouse, or dependent (as defined in Code Section I52(a)); (ii) loss of
the Participant’s or Beneficiary’s property due to casualty; or (iii) other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant or Beneficiary. The term
“Unforeseeable Emergency” shall be construed consistent with Code Section 409A
and the final regulations and other guidance issued thereunder.

     

    2.4          Tax
Withholding. All
benefits paid under this Plan shall be subject to withholding in accordance with
federal and state law.

     

    ARTICLE
III

    ADMINISTRATION;
CLAIMS PROCEDURES

     

    3.1          Plan
Administrator. The
Board of Directors of the Bank (the “Board”) is hereby designated the Plan
Administrator.

     

    3.2          Powers of Plan
Administrator. As Plan
Administrator, the Board shall be responsible for the management, control,
interpretation and administration of this Plan and may allocate to others
certain aspects of the management and operational responsibilities of the Plan
including the employment of advisors and the delegation of any ministerial
duties to qualified individuals. All decisions of the Plan Administrator shall
be final and binding on all persons.

     

    3.3          Claims
Procedures. Claims
for benefits hereunder shall be submitted to the
President of the Bank, as agent for the Plan Administrator. 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 of the denial in writing within thirty (30) calendar days after the
Plan Administrator’s receipt of the claim. 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 perfect the claim for benefits. 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 after receipt of the initial
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 within
sixty (60) calendar days of the Plan Administrator’s receipt of the request for
review together with the specific reasons for the decision.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
IV

    AMENDMENT
AND TERMINATION

     

    4.1          Amendments. The
Board may amend this Plan any time, but no such amendment shall affect the
rights of, or reduce the benefits to, any Participant without their written
consent.

     

    4.2          Termination. The
Board may completely terminate the Plan. Subject to the requirements of Code
Section 409A, in the event of complete termination with respect to such
benefits, the Plan shall cease to operate and the Bank shall payout to each
Participant his or her account as if that Participant had terminated service as
of the effective date of the complete termination. Such complete termination of
the Plan shall occur only under the following circumstances and
conditions:

     

    (a)           The
Board may terminate the Plan 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 deferred under the Plan are
included in each Participant’s gross income in the latest of (i) the calendar
year in which the Plan 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
Board may terminate the Plan within the 30 days preceding a “Change in Control”
(as defined in Code Section 409A and the regulations thereunder), but not
following a Change in Control, provided that the Plan shall only be treated as
terminated if all substantially similar arrangements sponsored by the Bank are
terminated so that the Participants and all participants under substantially
similar arrangements are required to receive all amounts of compensation
deferred under the terminated arrangements within 12 months of the date of the
termination of the arrangements.

     

    (c)           The
Board may terminate the Plan provided that (i) the termination and liquidation
does not occur proximate to a downturn in the financial health of the Bank or
Company, (ii) all arrangements sponsored by the Bank that would be aggregated
with this Plan under Final Regulations Section 1.409A-l(c) if the Participant
covered by this Plan was also covered by any of those other arrangements are
also terminated; (iii) 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; (iv) all payments are
made within 24 months of the termination of the arrangements; and (v) the Bank
does not adopt a new arrangement that would be aggregated with any terminated
arrangement under Final Regulations Section 1.409A-1(c) if the Participant
participated in both arrangements, at any time within three years following the
date of termination of the arrangement.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (d)           The
Board may terminate the Plan pursuant to such other terms and conditions as the
Internal Revenue Service may permit from time to time.

     

    ARTICLE
V

    UNFUNDED
ARRANGEMENT

     

    5.1          Unsecured General
Creditors. The
Participant and Beneficiaries are general unsecured creditors of the Bank for
the payment of benefits under this Plan. The benefits represent the mere promise
by the Bank to pay such benefits. The benefits payable under this Plan 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 Plan or any
benefits hereunder.

     

    5.2          Rabbi
Trust. The
Bank shall be responsible for the payment of all benefits provided under the
Plan. At its discretion, the Bank may establish one or more trusts, with such
trustees as the Board may approve, for the purpose of providing for the payment
of such benefits.  Such trust or trusts may be irrevocable, but the
assets thereof shall be subject to the claims of the Bank’s creditors. To the
extent any benefits provided under the Plan are actually paid from any such
trust, the Bank shall have no further obligation with respect thereto, but to
the extent not so paid, such benefits shall remain the obligation of, and shall
be paid by, the Bank. Under no circumstances shall a Participant serve as
trustee or co-trustee of any trust established by the Bank pursuant to this
Plan.

     

    ARTICLE
VI

    MISCELLANEOUS

     

    6.1          No Employment
Contract.  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 the Bank.

     

    6.2          Binding
Effect.  This
Plan shall be binding upon the Bank, the Company and their successors and
assigns, and upon the Participants and the Beneficiaries and legal
representatives of the Participant.

     

    6.3          No
Assignment.  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.

     

    6.4          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.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    6.5          Payment to
Guardians.  If
a Participant’s benefit is payable to a minor or a person declared incompetent
or to a person incapable of handling the disposition of his property, the Plan
Administrator may direct payment of such Plan benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or person. The Plan Administrator may require proof of incompetency, minority,
incapacity or guardianship as it may deem appropriate prior to distribution of
the Plan benefit. Such distribution shall completely discharge the Plan
Administrator and the Bank from all liability with respect to such
benefit.

     

    IN WITNESS WHEREOF, the Bank
has caused this amended and restated Plan to be executed by its duly authorized
officer.

    

    
      
        	 
      	
                ATLANTIC
      COAST BANK

              
	 
      	 
      	 
      
	
                December
      11, 2009

              	
                By: 

              	
                /s/
      Robert J. Larison, Jr.

              
	
                Date

              	 
      	
                Robert
      J. Larison, Jr., President and

              
	 
      	 
      	
                Chief
      Executive Officer

              

      

    

    
      
         

      

      
        8Unassociated Document

    THIRD
AMENDED AND RESTATED

    SUPPLEMENTAL
RETIREMENT AGREEMENT

     

    THIS THIRD AMENDED AND RESTATED
SUPPLEMENTAL RETIREMENT AGREEMENT (the “Agreement”) is made as of
December 11, 2009 by and between ATLANTIC COAST BANK (the
“Bank”), its successors and assigns and ROBERT J. LARISON, JR. (the
“Executive”).  The original agreement, which was effective January 1,
2005, is being amended and restated to make certain changes to the Agreement’s
vesting and benefit calculation provisions.

     

    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 an Amended and Restated
Supplemental Retirement Agreement dated as of January 1, 2005; and

     

    WHEREAS, the Bank and the
Executive have determined to amend the vesting and benefit calculation
provisions of the Plan;

     

    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 December 11, 2009:

     

    
      	
              1.

            	
              Definitions.

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

            

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (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)

            	
              Appreciation
      Benefit shall mean an amount equal to the Prior Benefit Component
      plus the Stock Award Component plus the Stock Ownership Component
      multiplied by the Issue Price (as defined below) multiplied by the
      Exchange Ratio (as defined below).  For example, if the
      Executive’s Prior Benefit Component had 20,000 shares of Company Stock,
      the Stock Award Component had 30,000 shares of Company Stock and the Stock
      Ownership Component had 25,000 shares of Company Stock; the Issue Price
      was $10.00 and the Exchange Ratio was 60 percent, then the Executive’s
      Appreciation Benefit would be equal to $450,000
      [(20,000+30,000+25,000)($10.00)(.6)].  The Company will pay
      interest on unpaid balance of the Executive’s Appreciation Benefit at the
      rate of three percent per annum.

            

    

     

    In the
event the Executive dies, becomes Disabled, incurs an Involuntary Termination or
there is a Change in Control prior to the date of closing of the Second-Step
Conversion, the Fair Market Value of the Company Stock as of the date of death,
determination of Disability, Involuntary Termination or Change in Control will
be substituted for the Issue Price and the Exchange Ratio.  For
example, the Executive incurs an Involuntary Termination prior to the closing of
the Second-Step Conversion.  The Fair Market Value of the Company
Stock on that date is $4.00 per share.  In this instance, the
Executive’s Appreciation Benefit is $300,000
[(20,000+30,000+$25,000)*$4.00].  The Company will pay interest on
unpaid balance of the Executive’s Appreciation Benefit at the rate of three
percent per annum.

     

    The
Executive shall vest in his Appreciation Benefit upon the earliest to occur of
(i) the closing date of a Second-Step Conversion, (ii) the Executive’s
Involuntary Termination, (iii) a Change in Control, (iv) the Executive’s death,
(v) the Executive’s Disability or (vi) the date the Administrator, in its sole
discretion, accelerates vesting.  Notwithstanding the preceding
provisions, if the Executive resigns at the request of, or is removed from
service by, the Office of Thrift Supervision, Federal Deposit Insurance
Corporation or any other regulatory authority for the Bank, the Executive shall
be ineligible to participate and shall forfeit any benefits under this
Agreement.

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

            	
              Change
      in Control shall mean the
      following:

            

    

     

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

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

     

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

     

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

     

    
      	
               
      

            	
              (g)

            	
              Company
      Stock shall mean the common stock of the
  Company.

            

    

     

    
      	
               
      

            	
              (h)

            	
              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

        
          

        

      

      
         

      

    

     

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

     

    
      	
               
      

            	
              (i)

            	
              Exchange
      Ratio shall mean the ratio used to determine the number of shares
      of common stock in a successor corporation each share of Company Stock
      will exchanged for in a Second-Step Conversion.  The Exchange
      Ratio will be determined as part of the independent valuation conducted in
      connection with the Second-Step
Conversion.

            

    

     

    
      	
               
      

            	
              (j)

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

            

    

     

    
      	
               
      

            	
              (k)

            	
              Involuntary
      Termination shall mean Separation from Service other than for Cause
      without the Executive’s express written consent and voluntary resignation
      due to a material diminution of or interference with the Executive’s
      duties, responsibilities and benefits as 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 Executive’s principal workplace as of the date hereof; (ii) a material
      demotion of the Executive; (iii) a material reduction in the number or
      seniority of other personnel reporting to the Executive or a material
      reduction in the frequency with which, or on the nature of the matters
      with respect to which, such personnel are to report to the Executive,
      other than as part of an institution-wide reduction in staff; (iv) a
      material adverse change in the Executive’s salary, perquisites, benefits,
      contingent benefits or vacation, other than as part of an overall program
      applied uniformly and with equitable effect to all members of the senior
      management of the Bank; and (v) a material permanent increase in the
      required hours of work or the workload of the Executive; provided that the
      Executive has notified the Bank of the existence of such a condition no
      later than 90 days after the initial existence of such condition and the
      Bank has at least 30 days to cure such condition. The term “Involuntary
      Termination” does not include termination for Cause or termination of
      employment due to retirement, death, Disability or suspension or temporary
      or permanent prohibition from participation in the conduct of the Bank’s
      affairs under Section 8 of the Federal Deposit Insurance
    Act.

            

    

     

    
      	
               
      

            	
              (l)

            	
              Issue
      Price shall mean the initial offered price of the common stock of
      the newly formed successor corporation that is issued in connection with
      the Second-Step Conversion.

            

    

     

    
      	
               
      

            	
              (m)

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

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (n)

            	
              Normal
      Retirement Date shall mean the date the Executive attains age 55
      (i.e., February 9, 2012.  The Executive may change his Normal
      Retirement Date provided that he files an election form with the Bank;
      provided, however, that: (1) the new election will not take effect until
      at least 12 months after the date the new election is filed; (2) the
      commencement of installment payments with respect to which such election
      is made must be deferred for a period of not less than five years from the
      date such payment would otherwise have been made; and (3) the new election
      is filed at least 12 months prior to the date of the first scheduled
      payment under the Plan.

            

    

     

    
      	
               
      

            	
              (o)

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

            

    

     

    
      	
               
      

            	
              (p)

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

            

    

     

    
      	
               
      

            	
              (q)

            	
              Specified
      Employee shall mean a key employee of the Bank within the meaning
      of Code Section 4l6(i) without regard to paragraph 5 thereof, determined
      in accordance with Code Section 409A and Treasury Regulations Section
      1.409A-1(i).

            

    

     

    
      	
               
      

            	
              (r)

            	
              Stock
      Award Component shall mean the number of shares of Company Stock
      awarded to the Executive under the Atlantic Coast Federal Corporation 2005
      Recognition and Retention Plan that are still held by the Executive on
      December 11, 2009.

            

    

     

    
      	
               
      

            	
              (s)

            	
              Stock
      Ownership Component shall mean the number of shares of Company
      Stock directly or beneficially owned by the Executive (as that term is
      defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
      amended, disregarding any beneficial ownership of stock options) as of
      December 11, 2009.

            

    

     

    
      	
              2.

            	
              Payment
      of Benefits.

            

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              Death
      Benefit.  If the Executive dies prior to the Normal
      Retirement Date, Separation from Service, Disability or Change in Control,
      the Bank shall pay to the beneficiary designated on Exhibit A, the
      Appreciation Benefit in a lump sum on the first business day of the month
      following the Executive’s Normal Retirement Date and on the first business
      day of each calendar month thereafter for a period of 180
      months.  If no beneficiary or beneficiaries have been
      designated, or if all of the beneficiaries predecease the Executive, the
      Monthly Benefit will be paid to the Executive’s
  estate.

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      	
               
      

            	
              (g)

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

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
              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 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.

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
              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 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.

            

    

     

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

     

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

     

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

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

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

     

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

     

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

     

    
      	
              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.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (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.

            

    

     

    
      	
               
      

            	
              (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.

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              
                
                  	 	 	
                          ATLANTIC
      COAST BANK 

                        
	 
      	 
      	 
      
	
                          December
      11, 2009

                        	
                          By:

                        	
                          /s/
      Thomas B. Wagers, Sr.

                        
	
                          Date

                        	 
      	
                          Name:  Thomas
      B. Wagers, Sr.

                        
	 
      	 
      	
                          Title:  Chief
      Financial Officer

                        
	 
      	 
      	 
      
	 
      	 
      	
                          EXECUTIVE

                        
	 
      	 
      	 
      
	
                          December
      11, 2009

                        	 
      	
                          /s/
      Robert J. Larison, Jr.

                        
	 
      	 
      	
                          Robert
      J. Larison,
Jr.

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        11

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