Document:

exv10w28

Exhibit 10.28

SIXTH AMENDED AND RESTATED

SUPPLEMENTAL RETIREMENT AGREEMENT

          THIS SIXTH AMENDED AND RESTATED SUPPLEMENTAL RETIREMENT AGREEMENT (the “Agreement”) is made as
of________, 2010 by and between ATLANTIC COAST BANK (the “Bank”), its successors and assigns and
ROBERT J. LARISON, JR. (the “Executive”).

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

	 	(a)	 	Administrator shall mean the person or committee appointed by the Board
of Directors of the Bank (the “Board”) to administer this Agreement. If a committee is
appointed by the Board, 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.
	 
	 	(b)	 	Appreciation Benefit shall mean:
	 
	 		 	(1) an amount equal to the lesser of (A) the Prior Benefit Component multiplied by
the Issue Price (as defined below), or (B) the Executive’s benefit under the
Agreement as of December 11, 2009 multiplied by three (3) percent per annum (in the
event of a fractional year, the three (3) percent attributable to the fractional
year will be reduced proportionately); plus
	 
	 		 	(2) an amount equal to the Stock Award Component (after applying the weighting
requirements of subparagraph 2(q)) multiplied by the Issue Price; plus
	 
	 		 	(3) an amount equal to the Stock Ownership Component (after applying the weighting
requirements of subparagraph 2(r)) multiplied by the Issue Price.
	 
	 	 	 	For example, assume the following:

	 	•	 	Second Step Conversion takes place on December 11, 2014
	 
	 	•	 	Executive’s benefit as of December 11, 2009 is $28,800
	 
	 	•	 	Prior Benefit Component of 20,000 shares ($28,800 / $1.44)
	 
	 	•	 	Stock Award Component of 30,000 shares
	 
	 	•	 	Stock Ownership Component of 25,000 shares
	 
	 	•	 	Issue Price of $5 ($6.44-$1.44)

	 	•	 	Prior Benefit Component = $33,387.09 [the lesser of $100,000
(20,000 x $5) or $33,387.09 (28,800 x 3% per annum for five (5) years)];
plus
	 
	 	•	 	Stock Award Component = $37,500 (30,000 x .25 x $5); plus
	 
	 	•	 	Stock Ownership Component = $93,750 (25,000 x .75 x $5); equals

 

 

	 	•	 	Appreciation Benefit = $164,637.09

	 	 	 	The Company will pay interest on the unpaid balance of the Executive’s Appreciation
Benefit at the rate of the monthly average of the three-month London Interbank
Offered Rate (LIBOR) plus 275 basis points per annum until the Appreciation Benefit
is paid in full.
	 
	 	 	 	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 average selling price of a share of Company Stock over
the thirty (30) day period immediately preceding the closing of a Second-Step
Conversion” when calculating the Issue Price.
	 
	 	 	 	The Executive shall vest in his Appreciation Benefit in accordance with the
following schedule:

	 	 	 
	Vested Percentage	 	Timing of Vesting
	15%

	 	Upon the expiration date of the “Subscription Offering” as defined in the Prospectus for the Second-Step Conversion, provided, however, if a Second-Step Conversion does not occur, vesting will not occur.
	 
	 	 
	100%

	 	Upon the Company’s operation with positive before-tax income (disregarding any expense recorded by the Company or the Bank for a nonqualified deferred compensation plan sponsored by the Company or the Bank) for two consecutive calendar quarters following the closing of a Second-Step Conversion, provided, however, if a Second-Step Conversion does not occur, vesting will not occur.

	 	 	 	Notwithstanding the foregoing, the Executive will become 100 percent vested in
his Appreciation Benefit prior to the schedule provided above in the event one of
the following events occurs: death, Disability, Involuntary Termination, the
occurrence of a Change in Control or 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.

	 	(c)	 	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.

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	 	(d)	 	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.
	 
	 	 	 	The basis for determining whether Cause exists shall not be deemed to include any
impact on the Company’s or the Bank’s business, properties, assets, liabilities,
results of operations, financial condition or business from (1) changes in thrift,
banking and similar laws of general applicability or interpretations thereof by
courts or governmental authorities, or other changes affecting depository
institutions generally, including changes in general economic conditions and changes
in prevailing interest and deposit rates, (2) changes in GAAP or regulatory
accounting requirements applicable to thrifts, banks and their holding companies
generally, or (3) changes in national or international political or social
conditions including the engagement by the United States in hostilities, whether or
not pursuant to the declaration of a national emergency or war, or the occurrence of
any military or terrorist attack upon or within the United States, or any of its
territories, possessions or diplomatic or consular offices or upon any military
installation, equipment or personnel in the United States.
	

	 
	 	 	 	A determination of Cause shall require the affirmative vote of a majority of the
members of the Board, acting in good faith with respect to such termination, and
such vote shall not be made prior to the expiration of a 60-day period following the
date on which the Board shall by written notice to the Executive, furnish him a
statement of its grounds for proposing to make such determination, during which
period the Executive shall be afforded a reasonable opportunity to make oral and
written presentations to the members of the Board, and to be represented by his
legal counsel at such presentations, or to refute the grounds for the proposed
determination.
	

	 
	 	(e)	 	Change in Control shall mean the following:
	 
	 		 	(1) A “change in the ownership” of the Bank or Atlantic Coast Federal Corporation or
its successor (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) 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.

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	 		 	(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.

	 	(f)	 	Company Stock shall mean the common stock of the Company.
	 
	 	(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)	 	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.
	 
	 	(i)	 	Involuntary Termination shall mean Separation from Service other than
for Cause without the Executive’s express written consent and voluntary resignation

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	 	 	 	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.

	 	(j)	 	Issue Price shall mean the average selling price of a share of Company
Stock over the thirty (30) day period immediately preceding the closing of a
Second-Step Conversion minus $1.44 (the closing price of Company Stock on December 11,
2009).
	 
	 	(k)	 	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) plus accrued interest.
	 
	 	(l)	 	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.
	 
	 	(m)	 	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 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

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	 	 	 	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.

	 	(n)	 	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.
	 
	 	(o)	 	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).
	 
	 	(p)	 	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).
	 
	 	(q)	 	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 times 25
percent. For example, on December 11, 2009 the Executive had 100 shares awarded to him
under the Atlantic Coast Federal Corporation 2005 Recognition and Retention Plan. For
purposes of calculating the Appreciation Benefit, only 25 shares would be counted.
	 
	 	(r)	 	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 times 75 percent. For
example, on December 11, 2009 the Executive directly and beneficially owns 100 shares.
For purposes of calculating the Appreciation Benefit, only 75 shares would be counted.

	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

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	 	 	 	Service if the Executive is a Specified Employee on his date of Separation from
Service.

	 	(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 death. 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, Disability, 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.

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	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. At its discretion, the Administrator 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.
	 
	 	 	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

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	 	 	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
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. This Agreement may be amended at any time by a written
instrument signed by the Bank and the Executive.
	 
	 	(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.

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          (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.

          (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.

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	 	(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.
	 
	 	(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.

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	9.	 	Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, as an alternative to civil
litigation and without any trial by jury to resolve such claims, conducted by a panel of three
arbitrators sitting in a location selected by Executive within fifty (50) miles from the main
office of the Bank, in accordance with the rules of the American Arbitration Association’s
National Rules for the Resolution of Employment Disputes (“National Rules”) then in effect.
One arbitrator shall be selected by Executive, one arbitrator shall be selected by the Bank
and the third arbitrator shall be selected by the arbitrators selected by the parties. If the
arbitrators are unable to agree within fifteen (15) days upon a third arbitrator, the
arbitrator shall be appointed for them from a panel of arbitrators selected in accordance with
the National Rules. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction.

12

 

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

	 	 	 	 	 	 	 

	 	 	ATLANTIC COAST BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

Date

	 	 	 	 

Charles E. Martin, Jr.
	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	Date	 	Robert J. Larison, Jr.	 	 

13exv10w29

Exhibit 10.29

FOURTH AMENDED AND RESTATED

SUPPLEMENTAL RETIREMENT AGREEMENT

     THIS FOURTH AMENDED AND RESTATED SUPPLEMENTAL RETIREMENT AGREEMENT is made as of                     ,
2010 by and between ATLANTIC COAST BANK (the “Bank”), its successors and assigns and THOMAS B.
WAGERS, SR. (the “Executive”).

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

	 	(a)	 	Administrator shall mean the person or committee appointed by the Board
of Directors of the Bank (the “Board”) to administer this Agreement. If a committee is
appointed by the Board, 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.
	 
	 	(b)	 	Appreciation Benefit shall mean:

	 	 	 	(1) an amount equal to the lesser of (A) the Prior Benefit Component multiplied by
the Issue Price (as defined below), or (B) the Executive’s benefit under the
Agreement as of December 11, 2009 multiplied by three (3) percent per annum (in the
event of a fractional year, the three (3) percent attributable to the fractional
year will be reduced proportionately); plus
	 
	 	 	 	(2) an amount equal to the Stock Award Component (after applying the weighting
requirements of subparagraph 2(q)) multiplied by the Issue Price; plus
	 
	 	 	 	(3) an amount equal to the Stock Ownership Component (after applying the weighting
requirements of subparagraph 2(r)) multiplied by the Issue Price.
	 
	 	 	 	For example, assume the following:

	 	•	 	Second Step Conversion takes place on December 11, 2014
	 
	 	•	 	Executive’s benefit as of December 11, 2009 is $28,800
	 
	 	•	 	Prior Benefit Component of 20,000 shares ($28,800 / $1.44)
	 
	 	•	 	Stock Award Component of 30,000 shares
	 
	 	•	 	Stock Ownership Component of 25,000 shares
	 
	 	•	 	Issue Price of $5 ($6.44-$1.44)

	 	•	 	Prior Benefit Component = $33,387.09 [the lesser of $100,000
(20,000 x $5) or $33,387.09 (28,800 x 3% per annum for five (5) years)];
plus
	 
	 	•	 	Stock Award Component = $37,500 (30,000 x .25 x $5); plus
	 
	 	•	 	Stock Ownership Component = $93,750 (25,000 x .75 x $5); equals
	 
	 	•	 	Appreciation Benefit = $164,637.09

 

	 	 	The Company will pay interest on the unpaid balance of the Executive’s Appreciation
Benefit at the rate of the monthly average of the three-month London Interbank
Offered Rate (LIBOR) plus 275 basis points per annum until the Appreciation Benefit
is paid in full.
	 
	 	 	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 average selling price of a share of Company Stock over
the thirty (30) day period immediately preceding the closing of a Second-Step
Conversion” when calculating the Issue Price.
	 
	 	 	The Executive shall vest in his Appreciation Benefit in accordance with the
following schedule:

	 	 	 
	Vested Percentage	 	Timing of Vesting
	15%

	 	Upon the expiration date of the “Subscription Offering”
as defined in the Prospectus for the Second-Step
Conversion, provided, however, if a Second-Step
Conversion does not occur, vesting will not occur.
	 
	 	 
	100%

	 	Upon the Company’s operation with positive before-tax
income (disregarding any expense recorded by the Company
or the Bank for a nonqualified deferred compensation
plan sponsored by the Company or the Bank) for two
consecutive calendar quarters following the closing of a
Second-Step Conversion, provided, however, if a
Second-Step Conversion does not occur, vesting will not
occur.

	 	 	Notwithstanding the foregoing, the Executive will become 100 percent vested in his
Appreciation Benefit prior to the schedule provided above in the event one of the
following events occurs: death, Disability, Involuntary Termination, the occurrence
of a Change in Control or the Plan 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.
	 
	(c)	 	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.

2

 

	(d)	 	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.
	 
	 	 	The basis for determining whether Cause exists shall not be deemed to include any
impact on the Company’s or the Bank’s business, properties, assets, liabilities,
results of operations, financial condition or business from (1) changes in thrift,
banking and similar laws of general applicability or interpretations thereof by
courts or governmental authorities, or other changes affecting depository
institutions generally, including changes in general economic conditions and changes
in prevailing interest and deposit rates, (2) changes in GAAP or regulatory
accounting requirements applicable to thrifts, banks and their holding companies
generally, or (3) changes in national or international political or social
conditions including the engagement by the United States in hostilities, whether or
not pursuant to the declaration of a national emergency or war, or the occurrence of
any military or terrorist attack upon or within the United States, or any of its
territories, possessions or diplomatic or consular offices or upon any military
installation, equipment or personnel in the United States.
	

	 
	 	 	A determination of Cause shall require the affirmative vote of a majority of the
members of the Board, acting in good faith with respect to such termination, and
such vote shall not be made prior to the expiration of a 60-day period following the
date on which the Board shall by written notice to the Executive, furnish him a
statement of its grounds for proposing to make such determination, during which
period the Executive shall be afforded a reasonable opportunity to make oral and
written presentations to the members of the Board, and to be represented by his
legal counsel at such presentations, or to refute the grounds for the proposed
determination.
	

	 
	(e)	 	Change in Control shall mean the following:
	 
	 	 	(1) A “change in the ownership” of the Bank or Atlantic Coast Federal Corporation or
its successor (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) 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

 

	 	 	(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.
	 
	(f)	 	Company Stock shall mean the common stock of the Company.
	 
	(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)	 	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.
	 
	(i)	 	Involuntary Termination shall mean Separation from Service other than
for Cause without the Executive’s express written consent and voluntary resignation

4

 

	 	 	due to a material diminution of or interference with the Executive’s duties,
responsibilities and benefits as Chief Financial 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.

	(j)	 	Issue Price shall mean the average selling price of a share of Company
Stock over the thirty (30) day period immediately preceding the closing of a
Second-Step Conversion minus $1.44 (the closing price of Company Stock on December 11,
2009).
	 
	(k)	 	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) plus accrued interest.
	 
	(l)	 	Normal Retirement Date shall mean January 1, 2014. 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.
	 
	(m)	 	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 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

5

 

	 	 	 	the Agreement, 20,000 shares of Company Stock ($40,000/$2.00) in the Prior Benefit
Component.
	 
	 	(n)	 	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.
	 
	 	(o)	 	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).
	 
	 	(p)	 	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).
	 
	 	(q)	 	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 times 25
percent. For example, on December 11, 2009 the Executive had 100 shares awarded to him
under the Atlantic Coast Federal Corporation 2005 Recognition and Retention Plan. For
purposes of calculating the Appreciation Benefit, only 25 shares would be counted.
	 
	 	(r)	 	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 times 75 percent. For
example, on December 11, 2009 the Executive directly and beneficially owns 100 shares.
For purposes of calculating the Appreciation Benefit, only 75 shares would be counted.

	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

6

 

	 	 	 	Service if the Executive is a Specified Employee on his date of Separation from
Service.
	 
	 	(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 death. 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, Disability, 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.

7

 

	3.	 	Required Provisions.

	 	(a)	 	The Bank may terminate Executive’s employment at any time, but any termination
by the Bank other than Separation from Service for Cause as defined above shall not
prejudice Executive’s right to compensation or other benefits under this Agreement.
Executive shall have no right to receive compensation or other benefits for any period
after Separation from Service for Cause.
	 
	 	(b)	 	If Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under Section
8(e)(3) [12 USC §1818(e)(3)] or 8(g)(l) [12 USC §1818(g)(I)] of the Federal Deposit
Insurance Act (the “FDI Act”), the Bank’s obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Bank may in its discretion (i) pay Executive
all or part of the compensation withheld while its contract obligations were suspended
and (ii) reinstate (in whole or in part) any of its obligations which were suspended.
	 
	 	(c)	 	If Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) [12 USC
§1818(e)(4)] or 8(g)(l) [12 USC §1818(g)(l)] of the FDI Act, all obligations of the
Bank under this Agreement shall terminate as of the effective date of the order, but
vested rights of the contracting parties shall not be affected.
	 
	 	(d)	 	If the Bank is in default as defined in Section 3(x)(l) [12 USC §1813(x)(1)] of
the FDI Act, all obligations of the Bank under this Agreement shall terminate as of the
date of default, but this paragraph shall not affect any vested rights of the
contracting parties.
	 
	 	(e)	 	All obligations under this Agreement shall be terminated, except to the extent
determined that continuation of this Agreement is necessary for the continued operation
of the Bank, (i) by the Director of the Office of Thrift Supervision (“OTS”) or his or
her designee, at the time the FDIC enters into an agreement to provide assistance to or
on behalf of the Bank under the authority contained in Section B(c) [12 USC §1823(c)]
of the FDI Act; or (ii) by the Director or his or her designee at the time the Director
or his or her designee approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the Director to be in an unsafe
or unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.
	 
	 	(f)	 	Notwithstanding anything herein contained to the contrary, any payments to
Executive by the Company, whether pursuant to this Agreement or otherwise, are subject
to and conditioned upon their compliance with Section 18(k) of the FDI Act, 12 U.S.C.
Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.

8

 

	4.	 	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.
	 
	5.	 	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. At its discretion, the Administrator 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.
	 
	 	 	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.
	 
	6.	 	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

9

 

	 	 	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.	 	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.

	8.	 	Amendment and Termination.

	 	(a)	 	Amendment. This Agreement may be amended at any time by a written
instrument signed by the Bank and the Executive.
	 
	 	(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.

10

 

          (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.

          (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.

	9.	 	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.

11

 

	 	(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.
	 
	 	(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.

12

 

	10.	 	Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, as an alternative to civil
litigation and without any trial by jury to resolve such claims, conducted by a panel of three
arbitrators sitting in a location selected by Executive within fifty (50) miles from the main
office of the Bank, in accordance with the rules of the American Arbitration Association’s
National Rules for the Resolution of Employment Disputes (“National Rules”) then in effect.
One arbitrator shall be selected by Executive, one arbitrator shall be selected by the Bank
and the third arbitrator shall be selected by the arbitrators selected by the parties. If the
arbitrators are unable to agree within fifteen (15) days upon a third arbitrator, the
arbitrator shall be appointed for them from a panel of arbitrators selected in accordance with
the National Rules. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction.

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

	 	 	 	 	 	 	 	 	 

	 	 	 	 	ATLANTIC COAST BANK	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

Date

	 	 
	 	 	 	 

Name: Robert J. Larison, Jr.
	 	 
	 

	 	 	 	 	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Date

	 	 	 	Thomas
	 	B. Wagers, Sr.	 	 

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