Document:

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                                  EXHIBIT 10.1

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                                 ATLANTIC COAST
                               FEDERAL CORPORATION

                                 EMPLOYEE STOCK
                                 OWNERSHIP PLAN

                                 JANUARY 1, 2004

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ARTICLE I                 DEFINITIONS.............................................................................2

         1-1.             Accounts................................................................................2
         1-2.             Administrator...........................................................................2
         1-3.             Code....................................................................................2
         1-4.             Company Stock...........................................................................2
         1-5.             Company Stock Account...................................................................2
         1-6.             Compensation............................................................................2
         1-7.             Controlled Group........................................................................3
         1-8.             Effective Date..........................................................................3
         1-9.             Employee................................................................................3
         1-10.            ERISA...................................................................................3
         1-11.            ESOP Loan...............................................................................3
         1-12.            Fair Market Value.......................................................................3
         1-13.            Highly Compensated Employee.............................................................4
         1-14.            Leased Employee.........................................................................4
         1-15.            Limitation Year.........................................................................4
         1-16.            Other Investments Account...............................................................4
         1-17.            Participant.............................................................................4
         1-18.            Plan Year...............................................................................4
         1-19.            Qualified Military Service..............................................................4
         1-20.            Related Plan............................................................................5
         1-21.            Transfer Account........................................................................5
         1-22.            Trust Fund..............................................................................5
         1-23.            Valuation Date..........................................................................5

ARTICLE II                SERVICE COMPUTATIONS....................................................................6

         2-1.             Service.................................................................................6
         2-2.             Hour of Service.........................................................................6
         2-3.             One-Year Break-in-Service...............................................................7
         2-4.             Year of Service.........................................................................7
         2-5.             Credit for Service......................................................................7
         2-6.             Service with Affiliated Companies.......................................................8

ARTICLE III               PLAN PARTICIPATION......................................................................9

         3-1.             Eligibility for Participation...........................................................9
         3-2.             Summary Plan Description................................................................9
         3-3.             Subsequent Ineligibility of a Participant...............................................9
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ARTICLE IV                ANNUAL COMPANY CONTRIBUTIONS...........................................................10

         4-1.             Annual Company Contribution............................................................10
         4-2.             Manner of Payment......................................................................10
         4-3.             Limitation on Amount of Annual Company Contribution....................................10
         4-4.             When Contributions Made................................................................10

ARTICLE V                 INVESTMENT OF TRUST ASSETS.............................................................11

         5-1.             Investment Policy......................................................................11
         5-2.             Sales of Company Stock.................................................................11

ARTICLE VI                SUSPENSE ACCOUNT FOR UNALLOCATED SHARES................................................12

         6-1.             Suspense Account.......................................................................12
         6-2.             Release of Company Stock from Suspense Account.........................................12
         6-3.             Definitions............................................................................12
         6-4.             Limitation on Use of Fraction 2........................................................12

ARTICLE VII               PARTICIPANTS' ACCOUNTS AND ANNUAL ADJUSTMENTS..........................................14

         7-1.             Accounts for Participants..............................................................14
         7-2.             Charges to Accounts....................................................................14
         7-3.             Company Stock Account..................................................................14
         7-4.             Other Investments Account..............................................................14
         7-5.             Allocations............................................................................14
         7-6.             Limitation on Allocations to Participants..............................................15
         7-7.             Special Limitations for Participants Who Sell Their Stock..............................17
         7-8.             Adjusting to Value of Trust Fund.......................................................18
         7-9.             Participant Statements.................................................................18

ARTICLE VIII              RETIREMENT DATES.......................................................................19

         8-1.             Normal Retirement Date.................................................................19
         8-2.             Early Retirement Date..................................................................19
         8-3.             Disability Retirement Date.............................................................19
         8-4.             Retirement Date........................................................................19

ARTICLE IX                VESTING OF ACCOUNT BALANCES............................................................20

         9-1.             Vesting on Retirement..................................................................20
         9-2.             Vesting on Disability..................................................................20
         9-3.             Vesting on Death.......................................................................20
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         9-4.             Vesting on Other Termination...........................................................20
         9-5.             Determination of Account Balances......................................................21
         9-6.             Reinstatement of Forfeitures...........................................................21

ARTICLE X                 DISTRIBUTION OF PLAN BENEFITS..........................................................22

         10-1.            Method of Distribution.................................................................22
         10-2.            Form of Distribution...................................................................22
         10-3.            Distributions After Death..............................................................22
         10-4.            Time of Distribution...................................................................23
         10-5.            Diversification........................................................................23
         10-6.            Rollover Distributions.................................................................24
         10-7.            Dividends and Distributions on Company Stock...........................................25
         10-8.            Distributions To Persons Under Disability..............................................26
         10-9.            Benefits May Not Be Assigned or Alienated..............................................26
         10-10.           No Guarantee of Benefits...............................................................26
         10-11.           Beneficiaries..........................................................................26
         10-12.           Benefits of Persons Who Cannot Be Located..............................................27
         10-13.           Participant's Consent To a Distribution................................................27

ARTICLE XI                SHAREHOLDER RIGHTS AND RESTRICTIONS....................................................28

         11-1.            Voting of Company Stock................................................................28
         11-2.            Put Option.............................................................................28
         11-3.            Nonterminable Rights...................................................................28

ARTICLE XII               PLAN ADMINISTRATION....................................................................29

         12-1.            Plan Administration....................................................................29
         12-2.            The Trust..............................................................................29

ARTICLE XIII              THE COMMITTEE..........................................................................30

         13-1.            Membership.............................................................................30
         13-2.            Rights, Powers, and Duties.............................................................30
         13-3.            Application of Rules...................................................................31
         13-4.            Remuneration and Expenses..............................................................31
         13-5.            Exercise of Committee's Duties.........................................................31
         13-6.            Resignation or Removal of Committee Members............................................31
         13-7.            Appointment of Successor Committee Members.............................................31
         13-8.            Claims Procedure.......................................................................31
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         13-9.            Procedures with Respect to Domestic Relations Orders...................................33
         13-10.           Interested Committee Member............................................................34
         13-11.           Records................................................................................34

ARTICLE XIV               TRANSFERS FROM OTHER BENEFIT PLANS.....................................................35

         14-1.            Rollover Contributions.................................................................35
         14-2.            Transferred Accounts from Merged Plans.................................................35
         14-3.            Separate Accounts......................................................................35
         14-4.            Restrictions on Transferred Amounts....................................................35
         14-5.            Eligibility and Vesting................................................................35
         14-6.            Other Provisions of the Plan...........................................................36

ARTICLE XV                AMENDMENT AND TERMINATION..............................................................37

         15-1.            Amendment..............................................................................37
         15-2.            Termination............................................................................37
         15-3.            Merger or Consolidation of Plan, Transfer of Plan Assets...............................37
         15-4.            Vesting and Distribution on Termination and Partial Termination........................37
         15-5.            Notice of Amendment, Termination, or Partial Termination...............................38

ARTICLE XVI               MISCELLANEOUS..........................................................................39

         16-1.            No Reversion to Company................................................................39
         16-2.            Notices................................................................................39
         16-3.            Indemnification........................................................................39
         16-4.            Subsidiary and Affiliated Companies....................................................39
         16-5.            Participation Not Guarantee of Employment..............................................39
         16-6.            Gender and Number......................................................................40
         16-7.            Governing Laws.........................................................................40
         16-8.            Text to Control........................................................................40

SUPPLEMENT A              Special Rules for Years in Which Plan is Top-Heavy....................................a-1

         A-1.             Purpose and Effect....................................................................A-1
         A-2.             Top-Heavy Plan........................................................................A-1
         A-3.             Aggregation Group.....................................................................A-1
         A-4.             Key Employee..........................................................................A-2
         A-5.             Top-Heavy Vesting Schedule............................................................A-2
         A-6.             Minimum Employer Contribution.........................................................A-3
         A-7.             No Duplication of Benefits............................................................A-3
         A-8.             Use of Terms..........................................................................A-3
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SUPPLEMENT B              Minimum Distribution Rules............................................................B-1

         B-1.             General...............................................................................B-1
         B-2.             Time and Manner of Distribution.......................................................B-1
         B-3.             Definitions...........................................................................B-2
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                       ATLANTIC COAST FEDERAL CORPORATION

                          EMPLOYEE STOCK OWNERSHIP PLAN

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                                    RECITALS
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        Atlantic Coast Federal Corporation, a Federal corporation (the
"Company"), desires to recognize and reward the contribution by its employees to
its successful operation, and to provide incentive for its employees to increase
their productivity, by enabling them to acquire stock ownership interests in the
Company and to share in the profits of the Company. The Company desires to
attain these objectives pursuant to a plan designed to invest primarily in stock
of the Company, which shall qualify as an "employee stock ownership plan" within
the meaning of Section 4975(e)(7) of the Internal Revenue Code of 1986 and
Section 407(d)(6) of the Employee Retirement Income Security Act of 1974.

        The Company intends to enter into a trust agreement, known as the
"Atlantic Coast Federal Corporation Employee Stock Ownership Trust" (the "Trust
Agreement"), with First Bankers Trust Company, N.A., a national association, as
Trustee, dated as of the date of this plan. Pursuant to the Trust Agreement, all
contributions made by the Company under this plan will be held, managed, and
controlled by the Trustee.

        Therefore, the Company hereby adopts the Atlantic Coast Federal
Corporation Employee Stock Ownership Plan (the "Plan"), effective as of January
1, 2004.

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                                    ARTICLE I
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                                   DEFINITIONS
                                   -----------

        Whenever used in this Plan, the following words and phrases shall have
the meanings stated below, unless a different meaning is plainly required by the
context:

        1-1.    ACCOUNTS. The term "Accounts" means, collectively, a
Participant's Company Stock Account, Other Investments Account, and Transfer
Account.

        1-2.    ADMINISTRATOR. The term "Administrator" means the person or
persons who are granted the authority to control and manage the operation and
administration of the Plan and who shall have the rights, duties, and
obligations of an Administrator under the provisions of ERISA. The committee
referred to in Section 12-1 and described in Article XIII shall be the
Administrator of the Plan.

        1-3.    CODE. The term "Code" means the Internal Revenue Code of 1986,
as amended from time to time. Reference to a section of the Code shall include
that section and any comparable section or sections of any future legislation
that amend, supplement, or supersede that section.

        1-4.    COMPANY STOCK. The term "Company Stock" means the shares of
common stock issued by the Company, provided that the shares constitute
"employer securities" as that term is defined in Section 409(l) of the Code.

        1-5.    COMPANY STOCK ACCOUNT. The term "Company Stock Account" means
the account established for a Participant by the Administrator pursuant to
Section 7-1 and to which Company Stock shall be allocated pursuant to Section
7-3.

        1-6.    COMPENSATION. Except as otherwise provided in Section 7-6(a),
the term "Compensation" means a Participant's total regular earnings from the
Company paid during a Plan Year for services rendered that are reportable on the
Participant's IRS Form W-2, Wage and Tax Statement, including bonuses, overtime,
and commissions. In addition, the term "Compensation" shall include earnings
which are not currently includible in a Participant's gross income for federal
income tax purposes by reason of Section 125, 132(f), 402(e)(3), 402(h), or
403(b) of the Code. However, the term "Compensation" shall not include any of
the following: (a) any earnings in excess of the amount that is determined under
Section 401(a)(17) of the Code (which amount for the Limitation Year ending
December 31, 2004 is $205,000; or (b) any contributions or benefits under this
Plan or under any other pension, profit sharing, insurance, hospitalization, or
other plan or policy maintained by the Company for the benefit of the
Participant. In any case where a Participant commences participation in the
Plan, or resumes active participation in the Plan after incurring a One-Year
Break-in-Service, on

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any day other than the first day of a Plan Year, his or her Compensation for
that Plan Year shall be that portion of his or her Compensation as determined
under this Section 1-6 paid during the period of his or her participation in the
Plan for that Plan Year.

        1-7.    CONTROLLED GROUP. The term "Controlled Group" means: (a) the
Company and one or more other corporations which are members of a "controlled
group" of corporations within the meaning of Section 414(b) of the Code and the
regulations thereunder; (b) the Company and one or more unincorporated trades or
businesses which are under "common control" within the meaning of Section 414(c)
of the Code and the regulations thereunder; (c) the Company and one or more
other organizations which are members of an "affiliated service group," as
determined under Section 414(m) of the Code and the regulations thereunder; and
(d) the Company and any other entities that must be treated as a "controlled
group" under Section 414(o) of the Code and the regulations thereunder.

        1-8.    EFFECTIVE DATE. The term "Effective Date" means January 1, 2004,
the date upon which the Plan first shall be effective.

        1-9.    EMPLOYEE. The term "Employee" means any person employed by the
Company, including any officer, who receives regular Compensation other than
retirement benefits under this Plan and including Leased Employees. However, if
Leased Employees constitute less than twenty percent of the Company's "nonhighly
compensated work force" (as that term is defined in Section 414(n)(5)(C)(ii) of
the Code), the term "Employee" then shall not include any Leased Employees who
are covered by a plan described in Section 414(n)(5)(B) of the Code which is
maintained by the leasing organization.

        1-10.   ERISA. The term "ERISA" means Public Law No. 93-406, the
Employee Retirement Income Security Act of 1974, as amended from time to time.

        1-11.   ESOP LOAN. The term "ESOP Loan" means any loan to the Trustee
for the purpose of financing the purchase by the Trustee of Company Stock or for
the purpose of repaying all or any portion of any outstanding ESOP Loan.

        1-12.   FAIR MARKET VALUE. The term "Fair Market Value" means, with
respect to Company Stock, either (a) the price of the stock prevailing on a
national securities exchange which is registered under Section 6 of the
Securities Exchange Act of 1934, or (b) if the stock is not traded on such a
national securities exchange, then the offering price for the stock as
established by the current bid and asked prices quoted by persons independent of
the Company and of any affiliates of the Company. If at any time there shall be
no generally-recognized market for the Company Stock, then the Fair Market Value
of the Company Stock shall be determined by the Trustee based upon a valuation
by an independent appraiser.

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        1-13.   HIGHLY COMPENSATED EMPLOYEE. The term "Highly Compensated
Employee" means any Employee who during a particular Plan Year: (a) was a
"5-percent owner" (as that term is defined in Section 416(i)(1) of the Code) at
any time during the Plan Year or during the preceding Plan Year; or (b) for the
preceding Plan Year (i) had compensation from the Company in excess of $90,000
(as adjusted each Plan Year to take into account any cost-of-living increase
adjustment provided for that Plan Year under Section 415(d) of the Code), and
(ii) was in the group of Employees consisting of the top 20 percent of the
Employees when ranked on the basis of compensation paid by the Company during
the preceding Plan Year.

        1-14.   LEASED EMPLOYEE. The term "Leased Employee" means any person
(other than an employee of the Recipient) who, pursuant to an agreement between
the Recipient and any other Leasing Organization: (a) has performed services for
the Recipient (or for the Recipient and related persons determined in accordance
with Section 414(n)(6) of the Code) on a substantially full-time basis for a
period of at least one year; and (b) has performed these services under the
primary direction and control of the Recipient. For purposes of this Section
1-14, the terms "Recipient" and "Leasing Organization" shall have the meanings
set forth in Section 414(n) of the Code.

        1-15.   LIMITATION YEAR. The term "Limitation Year" means the period of
twelve consecutive months to be used in determining whether the Plan is in
compliance with the provisions of Section 415 of the Code and of the regulations
thereunder. The Company shall take all actions necessary to ensure that the
Limitation Year is the same twelve-month period as the Plan Year.

        1-16.   OTHER INVESTMENTS ACCOUNT. The term "Other Investments Account"
means the account established for a Participant by the Administrator pursuant to
Section 7-1 and to which the Participant's share of the Company's contributions
made in cash or in property other than Company Stock shall be allocated pursuant
to Section 7-4.

        1-17.   PARTICIPANT. The term "Participant" means an Employee who
becomes a participant in the Plan under the provisions of Section 3-1. An
Employee whose account balances under another tax-qualified plan are transferred
to this Plan pursuant to Section 14-2 shall be deemed to be a Participant to the
extent that the provisions of this Plan apply to the Transfer Account of the
Employee established pursuant to Section 14-3.

        1-18.   PLAN YEAR. The term "Plan Year" means the year that begins on
January 1st and ends on December 31st.

        1-19.   QUALIFIED MILITARY SERVICE. The term "Qualified Military
Service" means any service performed in the "uniform services" (as defined in
Title 38 of the United States Code) by an Employee who terminates his or her
employment with the Company in

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order to perform this service and who is entitled to reemployment with the
Company after he or she has completed this service pursuant to Title 38 of the
United States Code.

        1-20.   RELATED PLAN. The term "Related Plan" means any other defined
contribution plan (as defined in Section 415 of the Code) maintained by the
Company or by any other employer of the Controlled Group.

        1-21.   TRANSFER ACCOUNT. The term "Transfer Account" means the account
established for a Participant by the Administrator pursuant to Section 14-3 and
to which shall be credited all amounts transferred by the Participant to this
Plan from any other tax-qualified plan.

        1-22.   TRUST FUND. The term "Trust Fund" means all property held by the
Trustee under the Trust Agreement.

        1-23.   VALUATION DATE. For so long as there is a generally-recognized
market for the Company Stock, the term "Valuation Date" means each business day.
If at any time there shall be no generally-recognized market for the Company
Stock, then "Valuation Date" shall mean the last day of each Plan Year and any
other dates as determined by the Company.

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                                   ARTICLE II
                                   ----------

                              SERVICE COMPUTATIONS
                              --------------------

        2-1.    SERVICE. The term "Service" means the period of employment of an
Employee or Participant for which he or she receives credit pursuant to the
provisions of this Article II.

        2-2.    HOUR OF SERVICE. The term "Hour of Service" means, with respect
to any Employee or Participant:

                (a)     each hour for which he or she is directly or indirectly
paid, or entitled to payment, by the Company for the performance of duties
during the applicable computation period;

                (b)     each hour for which he or she has been awarded back pay
or for which the Company has agreed to award him or her back pay, irrespective
of mitigation of damages;

                (c)     each hour for which he or she is directly or indirectly
paid, or entitled to payment, by the Company for reasons other than the
performance of duties during the applicable computation period (such as for
vacation, sickness, injury, or disability); and

                (d)     each hour for which he or she performs Qualified
Military Service, provided that he or she is rehired by the Company after his or
her performance of the Qualified Military Service is completed.

Hours of Service shall not be credited under more than one of the preceding
subsections. Hours described in clause (a) above shall be credited to the
Employee or Participant for the computation periods in which the duties were
performed. Employees for whom the Company does not maintain records of their
hours worked shall be credited with Hours of Service on the basis of a 45-hour
workweek or, in the case of a partial workweek, on the basis of a ten-hour
workday. Hours described in clause (b) above shall be credited to the Employee
or Participant for the computation periods to which the award or agreement
pertains, rather than for the computation periods in which either payment is
actually made or amounts payable to the Employee or Participant become due.
Hours described in clause (c) above shall be credited to the Employee or
Participant for the computation periods during which the events giving rise to
the payments occurred. Hours of service shall be computed in accordance with
paragraphs (b), (c), and (e) of Section 2530.200b-2 of the Department of Labor
Regulations under ERISA and any successor regulations. The provisions of this
Section 2-2 shall be construed so as to resolve any ambiguities in favor of
crediting an Employee or Participant with Hours of Service.

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        2-3.    ONE-YEAR BREAK-IN-SERVICE. (a) GENERAL. The term "One-Year
Break-in-Service" means any Plan Year during which a Participant completes 500
or fewer Hours of Service with the Company.

                (b)     PREGNANCY OR BIRTH OR ADOPTION OF A CHILD. For purposes
of determining whether a One-Year Break-in-Service has occurred, a Participant
shall be given credit for the Hours of Service which normally would have been
credited but for an absence from work for any period for any of the following
reasons: (i) by reason of the pregnancy of the Participant; (ii) by reason of
the birth of a child of the Participant; (iii) by reason of the placement of a
child with the Participant in connection with the adoption of the child by the
Participant; or (iv) for purposes of caring for the child for a period beginning
immediately following the birth or placement. If the Administrator is unable to
determine the hours which normally would have been credited to a Participant but
for an absence of the kind described above, there shall be credited to the
Participant eight Hours of Service per day of absence. However, the total number
of hours treated as Hours of Service by reason of an absence of the kind
described above shall not exceed 501. The hours described in this Section 2-3(b)
shall be treated as Hours of Service either: (i) only in the year in which the
absence from work begins, if a Participant would be prevented from incurring a
One-Year Break-in-Service in that year solely because the period of absence is
treated as Hours of Service; or (ii) in any other case, in the immediately
following year.

        2-4.    Year of Service. The term "Year of Service" means any Plan Year
during which an Employee or Participant has completed at least 1,000 Hours of
Service with the Company.

        2-5.    Credit for Service. Except as otherwise specifically provided
below in this Section 2-5, each Employee and each Participant shall receive
credit for each Year of Service for all purposes of the Plan.

                (a)     For purposes of Article IX, a Participant shall be
credited with one Year of Service for each two Years of Service the Participant
completed prior to the Effective Date with the Company and with employers which
operated predecessor businesses of the Company.

                (b)     For purposes of Article III, an Employee will be deemed
to have completed a Year of Service for the twelve-month period commencing on
his or her first date of hire by the Company if he or she has completed at least
1,000 Hours of Service with the Company during that twelve-month period.

                (c)     If an Employee fails to complete a Year of Service for
the twelve-month period commencing on his or her first date of hire by the
Company, the

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determination when that Employee has first completed a Year of Service then
shall be made by reference to the Plan Year, beginning with the Plan Year which
includes the first anniversary of the Employee's first date of hire by the
Company.

                (d)     Years of Service before a One-Year Break-in-Service
shall be disregarded until the Employee completes a Year of Service after the
break. However, once an Employee completes a Year of Service after a One-Year
Break-in-Service, his or her participation in the Plan shall be effective as of
the date of his or her return to service if the other conditions for
participation are satisfied.

                (e)     In the case of a Participant who does not have any
nonforfeitable right under the Plan to an accrued benefit derived from Company
contributions, Years of Service before any period of five consecutive One-Year
Breaks-in-Service shall not be taken into account in computing that
Participant's period of service.

                (f)     If at the time that a Participant first incurs a
One-Year Break-in-Service any portion of his or her Accounts is vested pursuant
to Article IX, then Years of Service completed after a period of five
consecutive One-Year Breaks-in-Service shall not be counted for purposes of
determining the nonforfeitable percentage of the Participant's accrued benefit
derived from Company contributions which were made before that period.

                (g)     If at the time that an Employee terminates his or her
service with the Company he or she is not a Participant and he or she is
subsequently rehired by the Company after a period of five consecutive One-Year
Breaks-in-Service, then the Years of Service that the Employee completed prior
to his or her termination shall be disregarded for purposes of determining the
nonforfeitable percentage of his or her accrued benefit derived from Company
contributions which are made after his or her reemployment.

                (h)     Years of Service completed by an Employee or Participant
prior to the attainment of age eighteen shall be disregarded.

        2-6.    Service with Affiliated Companies. For purposes of determining
Hours of Service and Years of Service under this Article II and the vested
portion of a Participant's Accounts under Article IX, credit shall be granted
for service with any other entity which, together with the Company, is a member
of a Controlled Group.

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                                  ARTICLE III
                                  -----------

                               PLAN PARTICIPATION
                               ------------------

        3-1.    ELIGIBILITY FOR PARTICIPATION. Each Employee employed with the
Company on the Effective Date shall immediately become a Participant on the
Effective Date. Each other Employee shall initially become a Participant in the
Plan on January 1st or July 1st immediately following the date on which he or
she completes one Year of Service.

        3-2.    SUMMARY PLAN DESCRIPTION. Within 90 days after the date on which
an Employee becomes a Participant in the Plan, the Administrator shall furnish
him or her with a summary plan description containing the information required
by Section 102(b) of ERISA.

        3-3.    SUBSEQUENT INELIGIBILITY OF A PARTICIPANT. If at any time after
an Employee becomes a Participant any of the conditions described below in this
Section 3-3 shall occur, then (a) that Employee shall cease to be a Participant
in the Plan for purposes of Section 7-5(b), and (b) his or her Accounts shall be
reduced in the manner provided for in Section 9-4 as of the last day of the Plan
Year in which the condition first occurs. The conditions which shall bring this
Section 3-3 into effect are the following:

                (a)     the Participant incurs a One-Year Break-in-Service and
receives or is deemed to receive a distribution of the vested portions of the
balances credited to his or her Accounts; or

                (b)     the Participant incurs five consecutive One-Year
Breaks-in-Service prior to receiving a distribution of the vested portions of
the balances credited to his or her Accounts.

A Participant will be deemed to have received a distribution as of the date of
his or her separation from service with the Company if his or her vested
interest in the balances credited to his or her Accounts is zero. If after a
Participant's Accounts have been reduced pursuant to the provisions of this
Section 3-3 the condition causing the Participant's Accounts to be placed in
suspense is eliminated, and if the conditions set forth in Section 9-6 are
satisfied, then the Participant's Accounts shall be reinstated as Company Stock
and Other Investments Accounts on the first day of the first fiscal quarter next
succeeding the month in which the condition is eliminated.

                                       9
<PAGE>

                                   ARTICLE IV
                                   ----------

                          ANNUAL COMPANY CONTRIBUTIONS
                          ----------------------------

        4-1.    ANNUAL COMPANY CONTRIBUTION. Subject to the following provisions
of this Article IV, for any Plan Year the Company may pay over to the Trustee
the amount, if any, as an annual contribution to the Plan for that year as is
determined by resolution of the Board of Directors of the Company. Payment of
all contributions shall be conditioned on qualification of the Plan under
Section 401(a) of the Code and on deductibility of the contributions under
Section 404 of the Code. However, for any year during which an ESOP Loan is
outstanding, the Company shall pay over to the Trustee, as contributions to the
Plan for that year, no less than the amounts necessary to enable the Trustee to
pay any maturing obligations under any outstanding ESOP Loan.

        4-2.    MANNER OF PAYMENT. The Company's contributions may be made in
cash or in shares of Company Stock. Contributions shall be made in cash to the
extent necessary to enable the Trustee to pay any maturing obligations under any
outstanding ESOP Loan. Any shares of Company Stock contributed to the Plan shall
be valued at their Fair Market Value.

        4-3.    LIMITATION ON AMOUNT OF ANNUAL COMPANY CONTRIBUTION. In no event
shall the amount of the Company's contribution under the Plan for any Plan Year
exceed the maximum amount allowable as a deduction in computing its taxable
income for that year for federal income tax purposes.

        4-4.    WHEN CONTRIBUTIONS MADE. The Company's contributions for any
Plan Year shall accrue on the last day of that Plan Year and shall be paid over
to the Trustee not later than the time prescribed by law for filing the
Company's federal income tax return for that Plan Year (including any extensions
of the filing deadline).

                                       10
<PAGE>

                                    ARTICLE V
                                    ---------

                           INVESTMENT OF TRUST ASSETS
                           --------------------------

        5-1.    INVESTMENT POLICY. Assets held in the Trust Fund shall be
invested by the Trustee primarily in Company Stock. Contributions made by the
Company to the Plan and other assets of the Trust Fund may be used to acquire
shares of Company Stock from any shareholder of the Company or from the Company.
The Trustee also may invest assets of the Trust Fund in other properties, as the
Trustee deems appropriate for the Trust Fund, and as provided in Article II of
the Trust Agreement. All purchases of Company Stock by the Trustee shall be made
only at prices which do not exceed the Fair Market Value of the shares
purchased.

        5-2.    SALES OF COMPANY STOCK. The Trustee may sell shares of Company
Stock to any person, including the Company. Any sale must be made at a price not
less than the Fair Market Value of the shares sold as of the date of the sale.
The Trustee may not sell shares of Company Stock in a sale that would be a
"prohibited transaction" within the meaning of the Code and ERISA.

                                       11
<PAGE>

                                   ARTICLE VI
                                   ----------

                     SUSPENSE ACCOUNT FOR UNALLOCATED SHARES
                     ---------------------------------------

        6-1.    SUSPENSE ACCOUNT. The Administrator shall establish and maintain
a "Suspense Account," to which it shall allocate all shares of Company Stock
that the Trustee acquires with the proceeds of an ESOP Loan. These shares shall
be released from the Suspense Account at the time and in the manner provided for
in Section 6-2 and then shall be allocated to Participants' Company Stock
Accounts in the manner provided for in Article VII.

        6-2.    RELEASE OF COMPANY STOCK FROM SUSPENSE ACCOUNT. For each Plan
Year, there shall be released from the Suspense Account that percentage of the
shares of Company Stock allocated to the Suspense Account equal to "Fraction 1"
or "Fraction 2," as those terms are defined below. The Administrator shall
determine which fraction shall be used during the initial Plan Year. However, to
the extent that shares of Company Stock allocated to the Suspense Account are
not pledged as collateral to secure an ESOP Loan, Fraction l shall be used.

        6-3.    DEFINITIONS. (a) Fraction 1. For purposes of this Article VI,
the term "Fraction 1" shall mean a fraction, the numerator of which is the
amount of principal and interest paid on any ESOP Loan outstanding for a
particular Plan Year, and the denominator of which is the sum of the numerator
plus the principal and interest to be paid for all future Plan Years. If the
rate of interest payable under the ESOP Loan is variable, the interest rate to
be paid in future years shall be assumed to be equal to the interest rate
applicable as of the last day of the Plan Year for which a calculation is being
made.

                (b)     FRACTION 2. The Term "Fraction 2" shall mean a fraction,
the numerator of which is the amount of principal paid on an ESOP Loan for a
particular Plan Year, and the denominator of which is the sum of the numerator
plus the principal to be paid for all future Plan Years.

        6-4.    LIMITATION ON USE OF FRACTION 2. Notwithstanding anything to the
contrary contained above in this Article VI, the Administrator shall be
permitted to use Fraction 2 to determine the number of shares of Company Stock
to be released from the Suspense Account for any particular Plan Year only if
the following conditions are satisfied:

                (a)     the terms of the ESOP Loan provide for annual payments
of principal and interest at a cumulative rate that is not less rapid at any
time than level annual payments of principal and interest for ten years;

                                       12
<PAGE>

                (b)     interest is disregarded for purposes of determining the
number of shares of Company Stock to be released from the Suspense Account only
to the extent that the interest would be determined to be interest under
standard loan amortization tables; and

                (c)     the term of the ESOP Loan, together with any renewal,
extension, or refinancing of the ESOP Loan, does not exceed ten years.

                                       13
<PAGE>

                                  ARTICLE VII
                                  -----------

                  PARTICIPANTS' ACCOUNTS AND ANNUAL ADJUSTMENTS
                  ---------------------------------------------

        7-1.    ACCOUNTS FOR PARTICIPANTS. The Trustee shall establish and
maintain a Company Stock Account and an Other Investments Account for each
Participant. If the Plan receives the account balances of a Participant in a
tax-qualified plan or trust in accordance with Section 14-2, the Trustee shall
also establish and maintain a Transfer Account in the name of that Participant.

        7-2.    CHARGES TO ACCOUNTS. When a Valuation Date occurs, any
distributions made to or on behalf of any Participant or beneficiary since the
last preceding Valuation Date shall be charged to the proper Accounts maintained
for that Participant or beneficiary.

        7-3.    COMPANY STOCK ACCOUNT. Subject to the provisions of Section 7-6,
as of the last day of each Plan Year, the Trustee shall credit to each
Participant's Company Stock Account: (a) the Participant's allocable share of
Company Stock purchased by the Trustee or contributed by the Company to the
Trust Fund for that year; (b) the Participant's allocable share of the Company
Stock that is released from the Suspense Account for that year; (c) the
Participant's allocable share of any forfeitures of Company Stock arising under
the Plan during that year; and (d) any stock dividends declared and paid during
that year on Company Stock credited to the Participant's Company Stock Account.

        7-4.    OTHER INVESTMENTS ACCOUNT. As of the last day of each Plan Year,
the Trustee shall credit to each Participant's Other Investments Account: (a)
the Participant's allocable share of any contribution for that year made by the
Company in cash or in property other than Company Stock that is not used by the
Trustee to purchase Company Stock or to make payments due under an ESOP Loan
agreement; (b) the Participant's allocable share of any forfeitures from the
Other Investments Accounts of other Participants arising under the Plan during
that year; (c) any cash dividends paid during that year on Company Stock
credited to the Participant's Company Stock Account, other than dividends which
are paid directly to the Participant and other than dividends which are used to
repay an ESOP Loan; and (d) the share of the net income or loss of the Trust
Fund properly allocable to that Participant's Other Investments Account, as
provided in Section 7-8.

        7-5.    ALLOCATIONS. (a) ELIGIBILITY. Subject to the provisions to the
Plan Sections 7-6 and 7-7, as of the last day of each Plan Year, the Company's
contributions for that year, the shares of Company Stock that are released from
the Suspense Account during that year, and the forfeitures arising under the
Plan during that year shall be allocated among Participants who are employed by
the Company on the last day of that

                                       14
<PAGE>

Plan Year or died or retired on a Retirement Date (as defined in Section 8-4)
during that Plan Year.

                (b)     ALLOCATION FORMULA. The portion of the Company's
contribution for any Plan Year that is not used to pay down an ESOP Loan, the
shares of Company Stock released from the Suspense Account during that year by
reason of Company contributions, and forfeitures arising under the Plan during
that year shall be allocated to the eligible Participants in the proportion that
each Participant's Compensation for that year bears to all Participants'
Compensation for that year.

        7-6.    LIMITATION ON ALLOCATIONS TO PARTICIPANTS. (a) GENERAL.
Notwithstanding any other provisions of the Plan to the contrary, the Annual
Additions credited to a Participant's Accounts for any Limitation Year shall not
exceed an amount equal to the lesser of:

                        (i)     $40,000, adjusted each Limitation Year to take
        into account any cost-of-living increase adjustment provided for that
        year under Section 415(d) of the Code; or

                        (ii)    100 percent of the Compensation paid to the
        Participant by the Company and by any member of a Controlled Group in
        that Limitation Year.

The maximum amount that may be credited to a Participant's Company Stock and
Other Investments Accounts in any Limitation Year, as determined pursuant to the
preceding provisions of this Section 7-6(a), shall be reduced to the extent
necessary to comply with the provisions of Section 415 of the Code, which are
incorporated in this Plan by reference. For purposes of this Section 7-6, the
term "Compensation" shall not include only those items specified in Section 1-5
of the Plan. However, "Compensation" shall include earnings which are not
currently includible in a Participant's gross income for federal income tax
purposes by reason of Section 125, 132(f), 402(e)(3), 402(h), or 403(b) of the
Code. For purposes of determining the limitations of this subsection (a), any
Participant who terminates his or her employment with the Company in order to
perform Qualified Military Service and who subsequently is rehired by the
Company upon the completion of his or her Qualified Military Service shall be
deemed to have received Compensation equal to the Compensation that the
Participant would have received if he or she had been employed by the Company
during the period of his or her Qualified Military Service.

                (b)     DEFINITION OF "ANNUAL ADDITIONS." The term "Annual
Additions" means the sum of: (i) a Participant's allocable share of employer
contributions and forfeitures under this Plan and under any Related Plan; and
(ii) a Participant's voluntary employee contributions to a Related Plan. Annual
Additions shall not include a contribution of a rollover amount or earnings and
losses of the Trust Fund. Shares of

                                       15
<PAGE>

Company Stock that are released from the Suspense Account during any Limitation
Year shall be valued at the lesser of: (i) a Participant's allocable share of
Company contributions for that year that are used to repay the ESOP Loan; or
(ii) the Fair Market Value of the Company Stock that is allocated to the
Participant's Company Stock Account for that year.

                (c)     LIMITATIONS ON ACCOUNTS OF HIGHLY COMPENSATED EMPLOYEES.
If the limitations of subsection (a) would be exceeded in any Limitation Year
for any Participant but for the application of subsection (d), then no more than
one-third of the Company contributions for that Limitation Year which are
applied to the payment of principal or interest on an ESOP Loan shall be
allocated to the Accounts of Highly Compensated Employees. Any amount in excess
of one-third of the Company contributions that otherwise would be allocated to
the Accounts of Highly Compensated Employees shall be an "excess amount" and
shall be allocated as provided in subsection (f) of this Section 7-6.

                (d)     EXCLUSION OF CERTAIN AMOUNTS IN COMPUTING ALLOCATIONS.
Provided that no more than one-third of the Company contributions for a
Limitation Year which are applied to the payment of principal or interest on an
ESOP Loan are allocated to the Accounts of Highly Compensated Employees, the
limitations of subsection (a) shall not apply for that Limitation Year to either
Company contributions used to pay interest on an ESOP Loan or forfeitures of
employer securities that were purchased with the proceeds of an ESOP Loan.

                (e)     RELATED PLANS. If the limitations of Section 7-6(a)
shall apply to the Accounts of any Participant for any Limitation Year, then the
amounts credited to his or her accounts under any Related Plan shall be reduced
to the extent required to bring the total amount allocated to his or her
accounts under this Plan and under any Related Plans within the limit set forth
in Section 7-6(a). If after the reduction in the amounts credited to a
Participant's accounts under any Related Plan required by this Section 7-6(e)
the limitations of Section 7-6(a) still shall be exceeded, then (i) the amount
credited to the Participant's Accounts under this Plan shall be reduced to the
extent required by Section 7-6(a), and (ii) the amount in excess of the limit
set forth in Section 7-6(a) shall be an "excess amount" and shall be allocated
as provided in subsection (f) of this Section 7-6.

                (f)     ALLOCATIONS OF EXCESS AMOUNTS. Subject to the
limitations of this Section 7-6, the portions of any Company contributions and
of any forfeitures which have been allocated to a Participant under this Plan
for a Limitation Year, but which cannot be credited to his or her Accounts
because of the limitations imposed by this Section 7-6 (the "excess amounts"),
shall be allocated among and credited to the Accounts of the remaining
Participants entitled to share in the Company's contribution and forfeitures for
that year, in accordance with Sections 7-3, 7-4, and 7-5. If it is not possible
to so allocate the excess amounts among the remaining Participants without
exceeding the limitations

                                       16
<PAGE>

set forth in this Section 7-6, then any portion of the excess amounts which
cannot be so allocated shall be held in a suspense account, which shall not
share in the increase or decrease in the net worth of the Trust Fund. The
amounts held in the suspense account shall be allocated in the following year as
if they were forfeitures occurring on the first day of the following year.

                (g)     DIVIDEND RECHARACTERIZATION. If any dividend paid on
Company Stock shall be recharacterized to be a Company contribution to the Plan
for any Limitation Year, and if this recharacterization would cause an
allocation to a Participant's Accounts to exceed the limits allowed under
Section 415 of the Code for that Limitation Year, then the Participant's
Accounts shall be retroactively reduced by an amount equal to the sum of (i) the
excess of the amount credited to the Participant's Accounts over the maximum
amount that was properly allocable to his or her Accounts (the "excess amount"),
plus (ii) all earnings of the Trust Fund credited to the Participant's Accounts
that are attributable to the excess amount. This provision shall be administered
in such a way as to assure that no Participant receives any benefit from an
allocation of any excess amount to his or her Accounts. Any excess amount and
any earnings attributable to the excess amount shall be placed in the suspense
account referred to in subsection (f) of this Section 7-6. It shall be
conclusively presumed that any error with respect to the characterization of any
dividend payment by the Company was a mistake of fact with respect to which the
Trustee or the Administrator shall be entitled to make corrective adjustments to
Participant Accounts.

        7-7.    SPECIAL LIMITATIONS FOR PARTICIPANTS WHO SELL THEIR STOCK. (a)
GENERAL. If any person sells any shares of Company Stock to the Trustee and
elects to have the federal income tax treatment of the sale determined under the
provisions of Section 1042 of the Code (the "Section 1042 election"), then the
following two rules shall apply:

                        (i)     During the nonallocation period, none of the
        shares of Company Stock sold to the Trustee with respect to which the
        Section 1042 election has been made (the "Section 1042 Stock"), and no
        dividends or other income attributable to those shares, may be allocated
        to the Accounts of the seller, to the Accounts of any person who is
        related to the seller within the meaning of Section 267(b) of the Code
        (except as otherwise provided below), or to the Accounts of any other
        person who has sold shares of Company Stock to the Trustee and who has
        made the Section 1042 election; and

                        (ii)    None of the Section 1042 Stock, and no dividends
        or other income attributable to that stock, may be allocated to the
        Accounts of any other person who owns more than 25 percent of the
        outstanding shares of the Company's stock, as determined after
        application of the provisions of Section 318(a) of the Code (without
        regard to the provisions of subparagraph (2)(B)(i) of that Section).

                                       17
<PAGE>

For purposes of this Section 7-7, the term "nonallocation period" means the
period of time beginning on the date of the purchase of Section 1042 Stock by
the Trustee and ending on the later of (A) the date which is ten years after the
date of the purchase, or (B) the date of the allocation of shares of Company
Stock attributable to the final payment of any ESOP Loan incurred in connection
with the purchase.

                (b)     LINEAL DESCENDANTS. Notwithstanding the provisions of
Section 7-7(a)(i) to the contrary, shares of Company Stock which the Trustee has
purchased in a Section 1042 transaction may be allocated to the seller's lineal
descendants. However, the aggregate amount of Section 1042 Stock that may be
allocated to the accounts of all lineal descendants of the seller may not exceed
five percent of the Company Stock held by the Plan which is attributable to
sales to the Trustee by any persons related to the seller's lineal descendants
(within the meaning of Section 267(c)(4) of the Code) in transactions to which
Section 1042 of the Code applied.

        7-8.    ADJUSTING TO VALUE OF TRUST FUND. As of the last day of each
Plan Year, the Trustee shall determine: (i) the net worth of that portion of the
Trust Fund which consists of properties other than Company Stock (the
"Investment Fund"); and (ii) the increase or decrease in the net worth of the
Investment Fund since the last day of the preceding Plan Year. The net worth of
the Investment Fund shall be the Fair Market Value of all properties held by the
Trustee under the Trust Agreement other than Company Stock, net of liabilities
other than liabilities to Participants and their beneficiaries. The Trustee
shall allocate to the Other Investments and Transfer Accounts of each
Participant that percentage of the increase or decrease in the net worth of the
Investment Fund equal to the ratio which the balances credited to the
Participant's Other Investments and Transfer Accounts bear to the total amount
credited to all Other Investments and Transfer Accounts. This allocation shall
be made after application of Section 7-2, but before application of Sections
7-4, 7-5, and 7-6.

        7-9.    PARTICIPANT STATEMENTS. Each Plan Year, the Trustee will provide
each Participant with a statement of his or her Account balances as of the last
day of the Plan Year. This statement shall show the value of the Company Stock
credited to a Participant's Company Stock Account, which value shall be based on
its closing price listed on a major stock exchange as of the last day of the
Plan Year.

                                       18
<PAGE>

                                  ARTICLE VIII
                                  ------------

                                RETIREMENT DATES
                                ----------------

        8-1.    NORMAL RETIREMENT DATE. The term "Normal Retirement Date" means
the date on which a Participant's employment with the Company is terminated for
any reason on or after the date on which he or she attains age 65.

        8-2.    EARLY RETIREMENT DATE. The term "Early Retirement Date" means
the date on which a Participant's employment with the Company is terminated for
any reason on or after the date on which he or she attains age 55.

        8-3.    DISABILITY RETIREMENT DATE. The term "Disability Retirement
Date" means the date that the Participant's employment by the Company is
terminated because of physical or mental disability (as determined by a
duly-licensed physician selected by the Company).

        8-4.    RETIREMENT DATE. The term "Retirement Date" means a
Participant's Normal Retirement Date, Early Retirement Date, or Disability
Retirement Date, as the case may be.

                                       19
<PAGE>

                                   ARTICLE IX
                                   ----------

                           VESTING OF ACCOUNT BALANCES
                           ---------------------------

        9-1.    VESTING ON RETIREMENT. If a Participant retires or is retired on
a Retirement Date, the balances credited to his or her Accounts will be fully
vested and will be distributed to him or her, or for his or her benefit, as
provided in Article X.

        9-2.    VESTING ON DISABILITY. If a Participant becomes disabled while
in the employ of the Company, the balances credited to his or her Accounts will
be fully vested and will be distributed to him or her, or for his or her
benefit, as provided in Article X. Whether a Participant has become disabled
shall be determined by a duly-licensed physician selected by the Company.

        9-3.    VESTING ON DEATH. If a Participant dies while in the employ of
the Company, the balances credited to his or her Accounts will be fully vested
and will be distributed to or for the benefit of his or her beneficiary, as
provided in Article X.

        9-4.    VESTING ON OTHER TERMINATION. (a) SCHEDULE. A Participant shall
have a vested and nonforfeitable right to a percentage of the balances credited
to his or her Company Stock and Other Investments Accounts, as determined in
accordance with the schedule set forth below. If either of the conditions
described in subsections (a) and (b) of Section 3-3 shall occur, then the
balances credited to the Participant's Company Stock and Other Investments
Accounts shall be reduced, as of the last day of the Plan Year in which the
condition first occurs, to an amount equal to that percentage of the balances
credited to the Participant's Company Stock and Other Investments Accounts as is
determined in accordance with the following schedule:

                Number of Completed
                  Years of Service                     Percentage
                -------------------                    ----------

                Less than one year                        0%
                One year                                  20%
                Two years                                 40%
                Three years                               60%
                Four years                                80%
                Five or more years                        100%

                (b)     VESTING AND FORFEITURES. The vested percentage of the
balances credited to the Participant's Accounts will be distributed to him or
her or for his or her benefit as provided in Article X. The portions of the
balances credited to the Participant's Company Stock and Other Investments
Accounts which he or she is not entitled to receive by reason of the application
of the schedule set forth in subparagraph (a) of this

                                       20
<PAGE>

Section 9-4 will be "forfeitures" and will be allocated and credited in
accordance with Section 7-5. Forfeitures shall first be charged against a
Participant's Other Investments Account. If the amount forfeited exceeds the
amount credited to the Participant's Other Investments Account, the balance then
shall be charged against his or her Company Stock Account.

        9-5.    DETERMINATION OF ACCOUNT BALANCES. All determinations of the
balances credited to the Accounts of Participants required pursuant to this
Article IX shall be made as of the last day of the Plan Year during which the
event giving rise to the determination occurs. All Other Investments and
Transfer Accounts shall continue to share in the changes in the value of the
Investment Fund, pursuant to Section 7-9, until they are distributed.

        9-6.    REINSTATEMENT OF FORFEITURES. This Section 9-6 shall apply if
the following events shall occur: (a) a Participant separates from service with
less than a 100-percent vested interest in the balances credited to his or her
Company Stock and Other Investments Accounts; (b) the Participant receives a
distribution of his or her vested interest in these Accounts prior to incurring
five consecutive One-Year Breaks-in-Service; (c) the Participant returns to
service with the Company before incurring five consecutive One-Year
Breaks-in-Service; and (d) the Participant repays to the Trustee the full amount
that was distributed from his or her Accounts. Upon repayment by the Participant
of the amounts that were distributed from his or her Accounts: (i) there shall
be restored to the Participant's Company Stock Account that number of shares
that have a value equal to the value of the shares that previously were
forfeited from his or her Company Stock Account (determined as of the date of
the forfeiture); and (ii) there shall be restored to the Participant's Other
Investments Account the amount that was forfeited from that Account. Any
reinstatement of forfeited amounts under this Section 9-6 shall be made from
amounts forfeited under Section 9-4 or from additional contributions by the
Company. Neither Section 7-6 (which imposes limitations on allocations to
Participants) nor Section 4-1 (which imposes limitations on contributions by the
Company) shall apply to a reinstatement under this Section 9-6.

                                       21
<PAGE>

                                   ARTICLE X
                                   ---------

                          DISTRIBUTION OF PLAN BENEFITS
                          -----------------------------

        10-1.   METHOD OF DISTRIBUTION. Subject to the provisions of this
Article X, distribution of the balances credited to a Participant's Accounts
will be made by payment in a lump sum.

        10-2.   FORM OF DISTRIBUTION. (a) COMPANY STOCK ACCOUNT. Distribution of
the balance credited to a Participant's Company Stock Account shall be made in
whole shares of Company Stock, in cash, or partly in each, as elected by the
Participant. Before making any distribution to a Participant in cash, the
Trustee shall notify the Participant of his or her right to demand that his or
her Accounts be distributed in the form of Company Stock. If the Participant
makes this demand, the Trustee shall distribute the Participant's benefits
entirely in whole shares of Company Stock, except that the value of any
fractional share shall be paid in cash.

                (b)     OTHER INVESTMENTS AND TRANSFER ACCOUNTS. Distributions
of the balances credited to a Participant's Other Investments and Transfer
Accounts shall be made in cash or in property, or partly in each. Property shall
be distributed at its fair market value as of the date of distribution, as
determined by the Trustee.

        10-3.   DISTRIBUTIONS AFTER DEATH. If a Participant dies before the
entire balance credited to his or her Accounts has been distributed, the
remaining balance shall be payable in full upon the death of the Participant to
the Participant's surviving spouse. However, the remaining balance may be paid
to a beneficiary designated by the Participant in accordance with Section 10-11
if either one of the following conditions is satisfied: (a) the surviving spouse
of the deceased Participant has consented in writing to the payment of the
balances credited to the Participant's Accounts to the beneficiary and the
spouse's consent acknowledges the effect of the consent and has been witnessed
by the Administrator or by a notary public; or (b) it is established to the
satisfaction of the Administrator that the consent could not be obtained because
the Participant was not married, because the Participant's spouse cannot be
located, or because of any other circumstances that the Secretary of the
Treasury may prescribe by regulation. Any consent by a spouse under this Section
10-3, or any establishment that the consent of a spouse cannot be obtained,
shall be effective only with respect to that spouse. Any consent by a spouse
under this Section 10-3 must acknowledge the beneficiary designated by the
Participant, including any class of beneficiaries or any contingent
beneficiaries; and the Participant may not subsequently change beneficiaries
without the consent of his or her spouse. Any consent by a spouse pursuant to
this Section 10-3 shall be irrevocable. If there is no surviving spouse upon the
death of a Participant, the balances credited to the Participant's Accounts
shall be paid to the beneficiary designated by the Participant in accordance
with Section 10-11.

                                       22
<PAGE>

        10-4.   TIME OF DISTRIBUTION. (a) OTHER INVESTMENTS AND TRANSFER
ACCOUNTS. The distribution of the balances credited to a Participant's Other
Investments and Transfer Accounts shall be made within one year after the close
of the Plan Year in which he or she terminates employment with the Company.

                (b)     COMPANY STOCK ACCOUNT. If a Participant dies, becomes
disabled, or retires, distribution of the balance credited to his or her Company
Stock Account shall by made within one year after the close of the Plan Year in
which he or she terminates employment with the Company due to death, disability,
or retirement. If a Participant's service with the Company is terminated for any
reason other than death, disability, or retirement, distribution of the balance
credited to his or her Company Stock Account shall be made not later than one
year after the close of the Plan Year which is the fifth Plan Year following the
Plan Year in which the Participant's employment with the Company is terminated
(unless the Participant is reemployed by the Company before distributions are
made). However, except as otherwise provided below in Section 10-4(d), no shares
of Company Stock that were purchased with the proceeds of an ESOP Loan shall be
distributed to a Participant whose service with the Company is terminated for
any reason other than death, disability, or retirement until the ESOP Loan has
been repaid in full.

                (c)     DEFERRAL OF DISTRIBUTION. A Participant whose Account
balances exceed $5,000 may elect to defer distribution of his or her benefits
until the time specified below in Section 10-4(d).

                (d)     SPECIAL RULES. Notwithstanding anything to the contrary
set forth in paragraph (a), (b), or (c) of this Section 10-4, distribution of a
Participant's benefits shall be made not later than the sixtieth day after the
close of the Plan Year in which the later of the following events occurs: (1)
the attainment of age 65 or normal retirement age, if earlier, by the
Participant; or (2) the termination of the Participant's service with the
Company. However, the balances credited to a Participant's Accounts shall be
distributed in accordance with the provisions set forth in Supplement B.

        10-5.   DIVERSIFICATION. A Participant who has attained age 55 and who
has completed at least ten years of participation in the Plan shall be notified
of his or her right to direct the transfer of a portion of the balance credited
to his or her Company Stock Account to an account in his or her name in another
tax-qualified plan maintained by the Company, to be invested at the direction of
the Participant among three or more investment funds consisting of differing
types of properties and offering different degrees of risk and potential reward.
An election to transfer must be made on a form prescribed by the Committee and
filed with the Committee within the 90-day period immediately following the
close of any Plan Year within the "Election Period." The "Election Period" is
the period of six consecutive Plan Years beginning with the Plan Year in which
the Participant first becomes eligible to make a transfer. For each of the first
five Plan Years in the Election Period, the Participant may elect to transfer an
amount which does not

                                       23
<PAGE>

exceed: (a) 25 percent of the sum of the value of the Company Stock credited to
his or her Company Stock Account plus all amounts previously transferred
pursuant to this Section 10-5; less (b) all amounts previously transferred
pursuant to this Section 10-5. In the case of the last Plan Year in the Election
Period, the Participant may elect to transfer an amount which does not exceed:
(a) 50 percent of the sum of the value of the Company Stock credited to his or
her Company Stock Account plus all amounts previously transferred pursuant to
this Section 10-5; less (b) all amounts previously transferred pursuant to this
Section 10-5. Any amount which a Participant elects to transfer to another
tax-qualified plan maintained by the Company under this Section 10-5 shall be
transferred to that plan within 90 days after the 90-day period in which the
election may be made.

        10-6.   ROLLOVER DISTRIBUTIONS. (a) ELECTION. A distributee may elect,
in accordance with the administrative rules and procedures prescribed by the
Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.

                (b)     DEFINITIONS. (i) ELIGIBLE ROLLOVER DISTRIBUTIONS. An
"eligible rollover distribution" is any distribution of all or any portion of
the balance to the credit of the distributee, except that an eligible rollover
distribution does not include: (A) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; (B) any
distribution to the extent the distribution is required under Section 401(a)(9)
of the Code; (C) the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); or (D) any distribution that
is made on account of a hardship.

                        (ii)    ELIGIBLE RETIREMENT PLAN. An "eligible
retirement plan" is an individual retirement account described in Section 408(a)
of the Code, an individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, a qualified trust
described in Section 401(a) of the Code that accepts the distributee's eligible
rollover distribution, an annuity contract described in Section 403(b) of the
Code, or an eligible plan under Section 457(b) of the Code which is maintained
by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state and which agrees to separately
account for amounts transferred into that plan from this Plan. The definition of
eligible retirement plan shall also apply in the case of a distribution to a
surviving spouse or to a spouse or former spouse who is the alternative payee
under a Qualified Domestic Relation Order, as defined in Section 414(p) of the
Code.

                                       24
<PAGE>

                        (iii)   DISTRIBUTEE. A "distributee" includes an
employee or former employee. In addition, the employee or former employee's
surviving spouse and the employee or former employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as that
term is defined in Section 414(p) of the Code, are distributees with regard to
the interest of the spouse or former spouse.

                        (iv)    DIRECT ROLLOVER. A "direct rollover" is a
payment by the plan to the eligible retirement plan specified by the
distributee.

        10-7.   DIVIDENDS AND DISTRIBUTIONS ON COMPANY STOCK. (a) If so
determined by the Board of Directors of the Company, any cash dividends received
by the Trustee on any Company Stock held in the Suspense Account shall be used
to repay any ESOP Loan taken out by the Trustee to finance the purchase of
Company Stock. If dividends or distributions on Company Stock held in the Plan
are used to repay an ESOP Loan, then the shares of Company Stock that are
released from the Suspense Account by reason of the dividends or distributions
shall be allocated to Participants' Company Stock Accounts on the following
basis:

                        (i)     first, shares of Company Stock with a Fair
        Market Value at least equal to the dividends paid with respect to the
        Company Stock allocated to the Participants' Accounts shall be allocated
        among the Company Stock Accounts of the Participants in proportion to
        the number of shares of Company Stock allocated to their Accounts as of
        the record date of the dividends or distributions; and

                        (ii)    any remaining shares of Company Stock which are
        released from the Suspense Account by reason of dividends or
        distributions paid on those shares shall be allocated as provided in
        Section 7-5(b).

                (b)     If so determined by the Board of Directors of the
Company, any cash dividends received by the Trustee on Company Stock allocated
to the Company Stock Accounts of Participants may be paid currently (or within
90 days after the end of the Limitation Year in which the dividends are paid to
the Trustee) in cash by the Trustee to the Participants (or to their
beneficiaries), in proportion to the amounts of Company Stock allocated to their
Company Stock Accounts as of the record date of the dividends. Any distribution
of cash dividends may be limited to dividends on shares of Company Stock which
are then vested or may be applicable to cash dividends on all shares allocated
to Participants' Company Stock Accounts.

                (c)     If so determined by the Board of Directors of the
Company, any cash dividends received by the Trustee on Company Stock allocated
to the Suspense Account which are not used to repay the ESOP Loan may be
allocated to the Participants' Other

                                       25
<PAGE>

Investments Accounts, as provided in Article VII, or may be distributed to the
Participants as provided for in subparagraph (b) of this Section 10-7.

        10-8.   DISTRIBUTIONS TO PERSONS UNDER DISABILITY. Notwithstanding any
provisions of this Article X to the contrary, if a Participant, surviving
spouse, or beneficiary is declared incompetent and a conservator or other person
legally charged with the care of his or her person or of his or her estate is
appointed, then any benefits to which that Participant, surviving spouse, or
beneficiary is entitled shall be paid to the conservator or other person. Except
as provided above in this Section 10-8, when the Administrator, in its sole
discretion, determines that a Participant, surviving spouse, or beneficiary is
unable to manage his or her financial affairs, the Administrator may direct the
Trustee to make distributions to any person for the benefit of the Participant,
surviving spouse, or beneficiary.

        10-9.   BENEFITS MAY NOT BE ASSIGNED OR ALIENATED. The benefits payable
to any person under this Plan may not be voluntarily or involuntarily assigned
or alienated. However, the provisions of this Section 10-9 shall not apply to
the creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a "qualified domestic relations order," as
that term is defined in Section 414(p) of the Code.

        10-10.  NO GUARANTEE OF BENEFITS. The benefits provided under the Plan
for any Participant shall be paid solely from that Participant's Accounts.

        10-11.  BENEFICIARIES. Subject to the provisions of Section 10-3, each
Participant may designate any legal or natural person to receive any benefits
payable under the Plan on account of his or her death. Each designation by a
Participant shall be in writing and shall be filed with the Administrator in the
form that the Administrator requires. Subject to the provisions of Section 10-3,
a beneficiary may change or revoke a direction as to the manner in which his or
her benefits are to be paid, or may make a direction if none has been made, at
any time prior to the payment of his or her benefits by the Trustee. Subject to
the provisions of Section 10-3, by a writing filed with the Administrator, a
Participant may change his or her beneficiary designation at any time and from
time to time without the consent of or notice to any person previously
designated by him or her. If no person has been designated by a Participant, or
if all persons so designated predecease the Participant or die prior to complete
distribution of his or her benefits, then the Administrator, in its sole
discretion, shall direct the Trustee to distribute the Participant's benefits
to:

                (a)     one or more of the Participant's relatives by blood,
adoption, or marriage, as the Trustee decides; or

                (b)     the Participant's executor or administrator.

                                       26
<PAGE>

In no event may the beneficiary of a deceased Participant designate a
beneficiary.

        10-12.  BENEFITS OF PERSONS WHO CANNOT BE LOCATED. If the Administrator
notifies a Participant or a beneficiary designated in accordance with Section
10-11 in writing at his or her last known address that he or she is entitled to
benefits under the Plan and the Participant or beneficiary fails to claim his or
her benefits within seven calendar years after notification, then his or her
benefits will be distributed to one or more of the Participant's or
beneficiary's relatives by blood, adoption, or marriage, as the Administrator
decides.

        10-13.  PARTICIPANT'S CONSENT TO A DISTRIBUTION. Notwithstanding
anything to the contrary set forth in Section 10-4, no distribution shall
commence to a Participant without his or her written consent, unless the entire
balance credited to the Participant's Accounts is $5,000 or less or unless the
distribution is required to commence in accordance with the special rules set
forth in Section 10-4(d). The Administrator shall furnish a written explanation
of the distribution options available under the Plan, including a rollover
distribution, to each Participant who is entitled to receive a distribution
under this Article X within 30 to 90 days prior to the distribution. A
distribution may be made or commence less than 30 days after the explanation is
given to the Participant only if the Participant is advised that he or she has
at least 30 days in which to elect a distribution and the Participant elects a
distribution.

                                       27
<PAGE>

                                   ARTICLE XI
                                   ----------

                       SHAREHOLDER RIGHTS AND RESTRICTIONS
                       -----------------------------------

        11-1.   VOTING OF COMPANY STOCK. The Participants shall have the right
to direct the Trustee regarding the voting of the shares of Company Stock
allocated to their Company Stock Accounts with respect to all corporate matters
requiring a vote of stockholders. The Trustee shall vote the shares of Company
Stock which are not allocated to any Participant's Company Stock Account and the
shares of allocated Company Stock with respect to which no directions are
received from the Participants to whose Accounts the shares are allocated, as
directed by the Board of Directors of the Company. Each Participant and each
beneficiary of a deceased Participant shall be a "named fiduciary," within the
meaning of Section 402 of ERISA, with respect to the voting of shares of Company
stock to the extent that voting rights are passed through to the Participant or
beneficiary.

        11-2.   PUT OPTION. If the Company Stock shall cease to be readily
tradable on an established market, then the Company shall provide put options to
the Participants. Pursuant to this option, a Participant shall have the right to
sell his or her Company Stock to the Company at any time during two option
periods, at a price equal to the Fair Market Value of the stock as of the most
recent Valuation Date. The first put option period shall be for at least 60
days, beginning on the date of the distribution of the stock. The second put
option period shall be for at least 60 days beginning after the new
determination of the Fair Market Value of the Stock in the following Plan Year
(and after the delivery of notice of the value to the Participant or
beneficiary). The Company may allow the Trustee to purchase shares of Company
Stock tendered to the Company under a put option. Payment shall commence within
30 days after the put option is exercised and may be made either in a lump sum
or, if the Company Stock was distributed in a lump sum, in substantially equal,
annual installments over a period not exceeding five years, with adequate
security provided and interest payable at a reasonable rate on any unpaid
installment balance (as determined by the Company or by the Trustee).

        11-3.   NONTERMINABLE RIGHTS. Except as otherwise provided in this
Article XI, no shares of Company Stock held or distributed by the Trustee may be
subject to a put, call, or other option or to a buy-sell or similar arrangement.
The provisions of this Article XI shall continue to be applicable to Company
Stock even if the Plan ceases to be an employee stock ownership plan within the
meaning of Section 4975(e)(7) of the Code.

                                       28
<PAGE>

                                   ARTICLE XII
                                   -----------

                               PLAN ADMINISTRATION
                               -------------------

        12-1.   PLAN ADMINISTRATION. The authority to control and manage the
operation and administration of the Plan is vested in a Committee, as described
in Article XIII. The Committee shall be the Administrator of the Plan, having
the rights, duties, and obligations of an "administrator" under the provisions
of ERISA. The members of the Committee and the Trustee shall be "Named
Fiduciaries" (as described in Section 402 of ERISA) with respect to their
authority under the Plan.

        12-2.   THE TRUST. All contributions made under the Plan will be held,
managed, and controlled by a trustee acting under a trust which forms a part of
the Plan. The terms of the trust are set forth in a Trust Agreement known as the
"Atlantic Coast Federal Corporation Employee Stock Ownership Trust" (the
"Trust"). All rights which may accrue to any person under the Plan shall be
subject to all of the terms and provisions of the Trust as in effect from time
to time.

                                       29
<PAGE>

                                  ARTICLE XIII
                                  ------------

                                  THE COMMITTEE
                                  -------------

        13-1.   MEMBERSHIP. The Committee referred to in Section 12-1 shall
consist of at least three members who shall be appointed by the Board of
Directors of the Company. In controlling and managing the operation and
administration of the Plan, the Committee shall act by the concurrence of a
majority of its members at a meeting or by writing without a meeting. By
unanimous written consent, the Committee may authorize any one of its members to
sign any document, instrument, or direction on its behalf. A written statement
by a majority of the Committee members or by an authorized Committee member
shall be conclusive in favor of any person (including the Trustee) acting in
reliance on that statement.

        13-2.   RIGHTS, POWERS, AND DUTIES. The Committee shall have all
authority necessary to efficiently administer the Plan. The rights, powers, and
duties of the Committee shall include the following:

                (a)     to interpret and construe the provisions of the Plan;

                (b)     to determine all questions relating to the eligibility,
benefits, and other rights of Employees, Participants, and beneficiaries under
the Plan;

                (c)     to adopt rules of procedure and regulations, consistent
with the provisions of the Plan, as the Committee deems necessary and proper;

                (d)     to maintain and keep adequate records concerning the
Plan, and concerning the proceedings and acts of the Committee, in the form and
amount of detail that the Committee may decide;

                (e)     to appoint investment managers to manage any assets of
the Trust Fund, and to authorize the managers to acquire and dispose of assets
of the Trust Fund;

                (f)     to employ one or more persons to render advice with
respect to any responsibility which the Committee has under the Plan;

                (g)     to delegate authority and duties, including the
authority to sign any documents, as the Committee may deem appropriate to the
Trustee or to other agents, provided that the Committee shall exercise
reasonable care in the selection of any agents; and

                (h)     to act as the agent for the service of legal process.

                                       30
<PAGE>

        13-3.   APPLICATION OF RULES. In operating and administering the Plan,
the Committee shall apply all rules of procedure and regulations adopted by it
in a uniform and nondiscriminatory manner.

        13-4.   REMUNERATION AND EXPENSES. No remuneration shall be paid to any
Committee member as such. However, the reasonable expenses of a Committee member
incurred in the performance of a Committee function shall be reimbursed by the
Company.

        13-5.   EXERCISE OF COMMITTEE'S DUTIES. Notwithstanding any other
provisions of the Plan, the Committee shall discharge its duties under this Plan
solely in the interests of the Plan Participants and their beneficiaries, and:

                (a)     for the exclusive purpose of providing benefits to Plan
Participants and their beneficiaries; and

                (b)     with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims.

        13-6.   RESIGNATION OR REMOVAL OF COMMITTEE MEMBERS. A Committee member
may resign at any time by giving ten days' advance written notice to the
Company, to the Trustee, and to the other members of the Committee. The Company
may remove a Committee member by giving written notice to him or her, to the
Trustee, and to the other members of the Committee. A Committee member who is a
Participant in the Plan shall be automatically removed upon his or her
termination of employment with the Company.

        13-7.   APPOINTMENT OF SUCCESSOR COMMITTEE MEMBERS. The Board of
Directors of the Company may fill any vacancy in the membership of the Committee
and shall give prompt written notice of the appointment to the other Committee
members and to the Trustee. While there is a vacancy in the membership of the
Committee, the remaining Committee members shall have the same powers as the
full Committee until the vacancy is filled.

        13-8.   CLAIMS PROCEDURE. (a) PROCEDURE. (i) GENERAL. Claims for
benefits under the Plan shall be made in writing to the Committee. The Committee
shall have full discretion to render a decision with respect to any claim. If a
claim for benefits is wholly or partially denied by the Committee, then the
Committee must provide notice of its denial to the claimant (a "Notice of
Denial"), which shall be written in a manner calculated to be understood by the
claimant and which shall set forth: (A) the specific reason or reasons for
denial of the claim; (B) a specific reference to the pertinent Plan provisions
upon which the denial is based; (C) a description of any additional material or
information necessary for the claimant to perfect the claim, together with an
explanation

                                       31
<PAGE>

of why the material or information is necessary; and (D) appropriate information
regarding the steps to be taken if the claimant wishes to submit his or her
claim for review.

                        (ii)    DISABILITY CLAIMS. If a claim is related to any
distribution or rights to which a Participant or other claimant may be entitled
in connection with the Participant's termination of employment by reason of
becoming disabled ("Disability Benefits") and the claim is wholly or partially
denied by the Committee, then the Committee shall provide the Notice of Denial
within a reasonable period of time, not to exceed 45 days after receipt of the
claim. This period within which the Committee must provide a Notice of Denial
may be extended twice, for up to 30 days per extension, provided that the
Committee (A) determines that an extension is needed and beyond the control of
the Plan, and (B) notifies the claimant prior to the expiration of the initial
45-day period or of the first 30-day extension period. If the Committee shall
fail to notify the claimant either that his or her claim for benefits has been
granted or that it has been denied within the initial 45-day period or prior to
the expiration of an extension, if applicable, then the claim shall be deemed to
have been denied as of the last day of the applicable period, and the claimant
then may request a review of his or her claim.

                        (iii)   Other Claims. The Committee shall notify a
claimant in writing of the denial of any claim not related to Disability
Benefits within a reasonable period of time, not to exceed 90 days after receipt
of the claim. If the Committee shall fail to notify the claimant either that his
or her claim has been granted or that it has been denied within 90 days after
the claim is received by the Committee, then the claim shall be deemed to have
been denied.

                (b)     PROCEDURE FOR REVIEW OF A DENIED CLAIM. (i) DISABILITY
CLAIMS. If a claim is denied, a claimant may file a written request with the
Committee that it conduct a full and fair review of his or her claim, and the
Committee then must make a determination with respect to its review of the
denied claim. A claimant must file a written request for a review of a claim for
Disability Benefits with the Committee within 180 days after the receipt by the
claimant of a Notice of Denial of his or her claim or within 180 days after the
claim is deemed to have been denied. The Committee's decision with respect to
its review of the denied claim shall be rendered not later than 45 days after
the receipt of the claimant's request for a review, unless special circumstances
require an extension of time for processing, in which case the 45-day period may
be extended to 90 days if the Committee shall notify the claimant in writing
within the initial 45-day period and shall state the reason for the extension.

                        (i)     OTHER CLAIMS. A claimant must file a written
request for a review of any claim not related to Disability Benefits with the
Committee within 60 days after the receipt by the claimant of a Notice of Denial
of his or her claim or within 60 days after the claim is deemed to have been
denied. The Committee's decision with

                                       32
<PAGE>

respect to its review of the denied claim shall be rendered not later than 60
days after the receipt of the claimant's request for a review, unless special
circumstances require an extension of time for processing, in which case the
60-day period may be extended to 120 days if the Committee shall notify the
claimant in writing within the initial 60-day period and shall state the reason
for the extension.

                (c)     REVIEW OF DOCUMENTS. In connection with a claimant's
appeal of a denial of his or her benefits (including Disability Benefits), the
claimant may review pertinent documents and may submit issues and comments in
writing. The Committee shall have full discretion to fully and fairly review the
claim, and the Committee's decision upon review shall (i) include specific
reasons for the decision, (ii) be written in a manner calculated to be
understood by the claimant, and (iii) contain specific references to the
pertinent Plan provisions upon which the decision is based.

        13-9.   PROCEDURES WITH RESPECT TO DOMESTIC RELATIONS ORDERS. (a)
DEFINITIONS. For purposes of this Section 13-9, the following terms shall have
the following meanings: (i) the term "domestic relations order" shall mean any
judgment, decree, or order (including approval of a property settlement
agreement) which relates to the provision of child support, alimony payments, or
marital property rights to a spouse, former spouse, child, or other dependent of
a Participant and which is made pursuant to a state domestic relations law,
including a community property law; (ii) the term "qualified domestic relations
order" shall have the meaning set forth in Section 414(p) of the Code; and (iii)
the term "alternate payee" shall mean any spouse, former spouse, child, or other
dependent of a Participant who is recognized by a domestic relations order as
having a right to receive all or a portion of the benefits payable under the
Plan with respect to the Participant.

                (b)     PROCEDURES. The Committee shall establish reasonable
procedures with respect to the following matters: (i) the manner for determining
whether a domestic relations order constitutes a qualified domestic relations
order; and (ii) the administration of distributions under qualified domestic
relations orders.

                (c)     NOTICE. Promptly following the receipt of any domestic
relations order, the Committee shall notify the Participant affected by the
order, and any other alternate payee, of the receipt of the order and of the
procedures established under the Plan for determining the qualified status of
domestic relations orders. Within a reasonable period of time after receipt of
any domestic relations order, the Committee shall determine whether the order is
a qualified domestic relations order and shall notify the Participant affected
by the order and each alternate payee of the determination.

                (d)     SEGREGATION OF ACCOUNT. During any period in which the
issue whether a domestic relations order is a qualified domestic relations order
is being determined by the Committee, by a court of competent jurisdiction, or
otherwise, the

                                       33
<PAGE>

Committee shall instruct the Trustee to segregate in a separate account under
the Trust Fund or to deposit in an escrow account the amounts which would have
been payable to the alternate payee during this period if the order had been
determined to be a qualified domestic relations order. If the order or any
modification of the order is determined to be a qualified domestic relations
order within 18 months, the Committee shall direct the Trustee to pay the
segregated amounts, plus any accrued interest, to the persons entitled to those
amounts. If within 18 months either it is determined that the order is not a
qualified domestic relations order or the issue whether the order is a qualified
domestic relations order is not resolved, then the Committee shall direct the
Trustee to pay the segregated amounts, plus any accrued interest, to the persons
who would have been entitled to those amounts if there had been no order. Any
determination that an order is a qualified domestic relations order which is
made after the close of the 18-month period described above shall be applied
prospectively only.

        13-10.  INTERESTED COMMITTEE MEMBER. No member of the Committee may
participate in the determination of any matter or question concerning his or her
own benefits under the Plan or as to how his or her benefits are to be paid
unless either (a) the determination could be made by him or her under the Plan
if he or she were not a member of the Committee, or (b) the determination
applies to all Participants similarly. If a member is disqualified to act, and
the remaining members of the Committee cannot agree on a decision, the Company
may appoint a temporary member to exercise the powers of the interested member
concerning the matter as to which he or she is disqualified.

        13-11.  RECORDS. All acts and determinations of the Committee shall be
duly recorded by the secretary of the Committee, and all of those records shall
be preserved in the custody of the secretary. The records shall be open for
inspection and copying at all times by any person designated by the Company. The
Committee shall provide to the Trustee and to the accountant engaged on behalf
of the Plan by the Company timely information regarding the performance of the
Committee's responsibilities under the Plan, as needed by the Trustee and the
accountant for the effective discharge of their duties.

                                       34
<PAGE>

                                   ARTICLE XIV
                                   -----------

                       TRANSFERS FROM OTHER BENEFIT PLANS
                       ----------------------------------

        14-1.   ROLLOVER CONTRIBUTIONS. The Plan may not receive "Rollover
Contributions" from a tax-qualified plan, trust, individual retirement account,
or annuity. The term "Rollover Contributions" means amounts described in
Sections 402(c), 403(a)(4), and 408(d)(3) of the Code.

        14-2.   TRANSFERRED ACCOUNTS FROM MERGED PLANS. Notwithstanding the
limits on annual contributions that otherwise apply, the Plan may receive:

                (a)     account balances from a tax-qualified plan or trust that
has been merged into this Plan as approved by the Board of Directors of the
Company; and

                (b)     account balances transferred from another tax-qualified
plan or trust.

        14-3.   SEPARATE ACCOUNTS. All amounts transferred in accordance with
Section 14-2 will be credited to "Transfer Accounts" separate from the other
Accounts provided for under the Plan. These Transfer Accounts will share only in
the gains and losses in the net value of the Investment Fund as determined from
time to time as of the last day of the Plan Year or any other dates as
determined by the Company.

        14-4.   RESTRICTIONS ON TRANSFERRED AMOUNTS. Notwithstanding any other
provision of this Article XIV, no amounts shall be transferred to this Plan from
any defined benefit plan, from any defined contribution plan which is subject to
the funding standards of Section 412 of the Code, or from any other defined
contribution plan to which clause (III) of Section 401(a)(11)(B)(iii) of the
Code applied with respect to any person who is a Participant in the Plan or who
otherwise would become a Participant by reason of the merger of this Plan and
another defined contribution plan.

        14-5.   ELIGIBILITY AND VESTING.

                (a)     Participants in merged plans will be credited with Years
of Service based upon their prior plan in determining their eligibility and
vesting under this Plan.

                (b)     Employees of subsidiaries or of affiliated companies
that have adopted this Plan in accordance with Section 16-4 will be credited
with Years of Service with the subsidiary or affiliated company, as the case may
be, in determining their eligibility and vesting under this Plan.

                (c)     If a business entity is acquired by the Company and its
employees are employed by the Company:

                                       35
<PAGE>

                        (i)     if the acquired entity does not have a qualified
        retirement plan, then employees of that entity will be credited with
        Years of Service for employment with the prior employer for eligibility
        purposes only; and

                        (ii)    if the acquired entity has a qualified
        retirement plan which is to be merged into this Plan, the provisions of
        this Article XIV relative to merging plans of subsidiaries shall apply.

        14-6.   OTHER PROVISIONS OF THE PLAN. All provisions of the Plan not
inconsistent with this Article XIV shall apply to all transferred Participants
and to all Transfer Accounts.

                                       36
<PAGE>

                                   ARTICLE XV
                                   ----------

                            AMENDMENT AND TERMINATION
                            -------------------------

        15-1.   AMENDMENT. Subject to the provisions of Section 16-1, the
Company reserves the right to amend the Plan at any time by action of its Board
of Directors or of a person designated by resolution of its Board of Directors.
However, no amendment shall eliminate any benefit described in Section
411(d)(6)(A) of the Code, including an optional form of benefit, or divest a
Participant of any amount that he or she would have received had he or she
resigned from the Company's employ immediately prior to the effective date of
the amendment. The Company shall provide the Trustee with copies of any proposed
amendment to the Plan at least seven days prior to its adoption.

        15-2.   TERMINATION. The Company reserves the right to terminate the
Plan at any time by action of its Board of Directors. The Plan will terminate on
the earliest of the following dates:

                (a)     the date the Company is judicially declared bankrupt or
insolvent;

                (b)     the date the Company permanently discontinues its
contributions under the Plan; or

                (c)     the date the Company is dissolved, merged, consolidated,
or reorganized, or sells all or substantially all of its assets, except that,
subject to the provisions of Section 15-3, provision may be made by the
successor or purchaser for continuing the Plan (and in that event, the successor
or purchaser shall be substituted for the Company under the Plan).

        15-3.   MERGER OR CONSOLIDATION OF PLAN, TRANSFER OF PLAN ASSETS. In the
case of any merger or consolidation with, or transfer of assets and liabilities
to, any other pension or profit sharing plan, each Participant in the Plan on
the date of the merger, consolidation, or transfer shall be entitled to receive
a benefit immediately after the merger, consolidation, or transfer if the Plan
then terminated which is equal to or greater than the benefit he or she would
have been entitled to receive immediately prior to the merger, consolidation, or
transfer if this Plan had terminated then.

        15-4.   VESTING AND DISTRIBUTION ON TERMINATION AND PARTIAL TERMINATION.
Notwith-standing any other provision of the Plan to the contrary, on termination
of the Plan in accordance with Section 15-2 or on partial termination of the
Plan by operation of law, the date of termination or partial termination will be
a Valuation Date and, after all adjustments required on a Valuation Date have
been made, each affected Participant's benefits will be nonforfeitable. If on
termination of the Plan a Participant remains an Employee of the Company, the
amount of his or her benefits shall be retained in the Trust

                                       37
<PAGE>

until after his or her termination of employment with the Company and shall be
paid to him or her in accordance with the provisions of Article X. The benefits
payable to a Participant whose employment with the Company is terminated
coincident with the termination of the Plan, or who is affected by a partial
termination of the Plan, shall be paid to him or her in a lump sum. The
provisions of Article VII will continue to apply until the benefits of all
affected Participants have been distributed to them.

        15-5.   NOTICE OF AMENDMENT, TERMINATION, OR PARTIAL TERMINATION.
Affected Participants and the Trustee will be notified of an amendment,
termination, or partial termination of the Plan as required by the applicable
provisions of ERISA.

                                       38
<PAGE>

                                  ARTICLE XVI
                                  -----------

                                  MISCELLANEOUS
                                  -------------

        16-1.   NO REVERSION TO COMPANY. No part of the corpus or income of the
Trust Fund shall revert to the Company or be used for or diverted to purposes
other than for the exclusive benefit of Participants and their beneficiaries,
except as specifically provided in Article III of the Trust Agreement.

        16-2.   NOTICES. Any notice required to be filed with any person under
the Plan will be properly filed if delivered or mailed to that person, in care
of the Company, at ____________________________________, or at such other
address as the Company may designate from time to time.

        16-3.   INDEMNIFICATION. The Company shall indemnify the Trustee, the
Administrator, the members of the Committee, and any other person acting as a
fiduciary with respect to the Plan for, and hold them harmless against, any and
all liabilities, losses, costs, or expenses of any kind or nature which may be
imposed on, incurred by, or asserted against them at any time by reason of their
service under this Plan (including legal fees and expenses), to the extent the
liability, loss, cost, or expense is not insured against or exceeds any
insurance recovery. However, no person shall be entitled to indemnity under this
Section if he or she acted dishonestly or in willful or grossly negligent
violation of the law or regulation under which the liability, loss, cost, or
expense arises.

        16-4.   SUBSIDIARY AND AFFILIATED COMPANIES. With the approval of the
Board of Directors of the Company, any subsidiary or affiliate of the Company
may become a party to this Plan, and become entitled to all of the benefits and
subjected to all of the obligations of this Plan, by executing an acceptance of
this Plan in the form that the Company and the Trustee shall approve. Upon
acceptance of this Plan by any subsidiary or affiliate, employees of the
subsidiary or affiliate may become Participants upon meeting the eligibility
requirements provided in Article III; and when so qualified, they shall be
subject to the same obligations and entitled to the same rights and benefits as
if they were employees of the Company. The contributions to be made in respect
of employees of any subsidiary or affiliate of the Company which becomes a party
to this Plan shall be made by the subsidiary or affiliate and not by the
Company. The subsidiary or affiliate shall have no right to defer payment of its
contribution or to terminate the Plan in respect of itself or its participating
employees without the written consent of the Board of Directors of the Company.

        16-5.   PARTICIPATION NOT GUARANTEE OF EMPLOYMENT. Participation in the
Plan does not constitute a guarantee or contract of employment with the Company.

                                       39
<PAGE>

        16-6.   GENDER AND NUMBER. In this Plan, where the context admits, words
in the masculine gender include the feminine and neuter genders, words in the
singular include the plural, and the plural includes the singular.

        16-7.   GOVERNING LAWS. The Plan shall be construed and administered
according to the laws of the State of [___________], to the extent that those
laws are not preempted by the laws of the United States of America.

        16-8.   TEXT TO CONTROL. The Article and Section headings and numbers in
this Plan are included solely for convenience of reference, and if there shall
be any conflict between the headings and numbers and the text of this Plan, the
text shall control.

        The foregoing is a true and correct copy of the Atlantic Coast Federal
Corporation Employee Stock Ownership Plan.

        Dated at , ________________ this ____ day of , 2004.

                                ATLANTIC COAST FEDERAL
                                CORPORATION

                                By:
                                   ---------------------------------------------
                                   Its President

                                       40
<PAGE>

                                  SUPPLEMENT A
                                  ------------

               SPECIAL RULES FOR YEARS IN WHICH PLAN IS TOP-HEAVY
               --------------------------------------------------

        A-1.    PURPOSE AND EFFECT. The purpose of this Supplement A is to
comply with the requirements of Section 416 of the Code. The provisions of this
Supplement A shall be effective for each Plan Year in which the Plan is a
"top-heavy plan" within the meaning of Section 416(g) of the Code.

        A-2.    TOP-HEAVY PLAN. In general, the Plan will be a "top-heavy plan"
for any Plan Year if, as of the last day of the preceding Plan Year or, in the
case of the first Plan Year, the last day of that year (the "determination
date"), the present value of accrued benefits of Participants who are "key
employees" (as defined in Section 416(i)(1) of the Code) under this Plan and
under any plan included in the Aggregation Group (defined in Section A-3) exceed
60 percent of the present value of accrued benefits of all Participants under
this Plan and under any plan included in the Aggregation Group. In making this
determination, the following special rules shall apply:

                (a)     A Participant's accrued benefits shall be increased by
the aggregate distributions, if any, made with respect to the Participant during
the one-year period ending on the determination date, even if the Plan has
terminated. However, in the case of a distribution made for a reason other than
termination of employment, death or disability, this provision shall be applied
by substituting "five-year period" for "one-year period."

                (b)     The accrued benefits of a Participant who was previously
a key employee, but who no longer is a key employee, shall be disregarded.

                (c)     Benefits paid on account of death shall be treated as
distributions to the extent the benefits do not exceed the present value of the
accrued benefits of the Participant determined immediately prior to death.

                (d)     The accrued benefits of a Participant who has not
performed services for the Company during the one-year period ending on the
determination date shall be disregarded.

        A-3.    AGGREGATION GROUP. The term "Aggregation Group" means (a) each
pension, profit sharing, stock bonus, and employee stock ownership plan of the
Controlled Group in which a Key Employee is a Participant, and (b) each other
plan of

                                       A-1
<PAGE>

the Controlled Group which enables any plan described in subclause (a) to meet
the requirements of Section 401(a)(4) or 410 of the Code. In addition, the term
"Aggregation Group" shall include any plan designated by the Company as being
part of the group if the group would continue to meet the requirements of
Sections 401(a)(4) and 410 of the Code with that plan being taken into account.

        A-4.    KEY EMPLOYEE. In general, a "key employee" is an Employee or a
former Employee who, at any time during the Plan Year is:

                (a)     an officer of the Company receiving annual Compensation
greater than $130,000, adjusted each twelve-month period to take into account
any cost-of-living increase adjustment provided for that period under Section
416(h) of the Code;

                        (i)     a five-percent owner of the Company; or

                (b)     a one-percent owner of the Company receiving annual
Compensation from the Company of more than $150,000.

        A-5.    TOP-HEAVY VESTING SCHEDULE. For any Plan Year in which the Plan
is a top-heavy plan, a Participant's vested interest in his or her Company Stock
and Other Investments Accounts shall not be less than the percentage determined
in accordance with the following schedule:

                Number of Completed
                  Years of Service                     Percentage
                -------------------                    ----------

                Less than two years                        0%
                Two years                                  20%
                Three years                                40%
                Four years                                 60%
                Five years                                 80%
                Six or more years                          100%

If the Plan subsequently ceases to be a top-heavy plan, each Participant who has
then completed three or more Years of Service may elect to continue to have the
vested percentage of his or her Company Stock and Other Investments Accounts
determined under the provisions of this Section A-5, except that the
Participant's vested interest in his or her Company Stock and Other Investments
Accounts after the Plan ceases to be a top-heavy plan shall not be less than his
or her vested interest immediately before the Plan ceased to be a top-heavy
plan.

                                       A-2
<PAGE>

        A-6.    MINIMUM EMPLOYER CONTRIBUTION. For any Plan Year in which the
Plan is a top-heavy plan, the Employers' contributions and forfeitures, if any,
allocated to each Participant who is not a key employee shall not be less than
the "applicable percentage" of the Participant's Compensation for that year. For
purposes of this Section A-6, the "applicable percentage" means the lesser of
three percent or the maximum of the Employers' contributions and forfeitures
allocated in that year to any key employee (expressed as a percentage of the key
employee's Compensation).

        A-7.    NO DUPLICATION OF BENEFITS. If the Employers maintain more than
one plan, the minimum amount of the Employers' contributions otherwise required
under Section A-6 may be reduced in accordance with regulations of the Secretary
of the Treasury to prevent inappropriate duplication of minimum contributions or
benefits.

        A-8.    USE OF TERMS. All terms and provisions of the Plan shall apply
to this Supplement A, except that where the terms and provisions of the Plan and
this Supplement A conflict, the terms and provisions of this Supplement A shall
govern.

                                       A-3
<PAGE>

                                  SUPPLEMENT B
                                  ------------

                           MINIMUM DISTRIBUTION RULES
                           --------------------------

        B-1.    GENERAL. Notwithstanding anything to the contrary set forth in
Section 10-4, distribution of a Participant's Accounts equal to the required
minimum distribution required by Section 401(a)(9) of the Code ("Required
Minimum Distribution") shall commence no later than the Participant's "Required
Beginning Date," as defined below, with respect to a Participant's first
"Distribution Calendar Year," as defined below. With respect to Required Minimum
Distributions required to be distributed in years other than the Participant's
first Distribution Calendar Year, the Required Minimum Distribution shall be
distributed on or before December 31st of that Distribution Calendar Year.

        B-2.    TIME AND MANNER OF DISTRIBUTION. (a) DEATH OF PARTICIPANT BEFORE
DISTRIBUTIONS ARE MADE OR COMMENCE. If a Participant dies before distributions
from his or her Accounts commence, then the balance credited to the
Participant's Accounts shall be distributed, or commence to be distributed, no
later than the dates set forth below.

                        (i)     If the Participant's surviving spouse is his or
her sole "Designated Beneficiary," as defined below, then distributions to the
surviving spouse will commence on or before the later of the following: (A)
December 31st of the calendar year immediately following the calendar year in
which the Participant dies; or (B) December 31st of the calendar year in which
the Participant would have attained age 70 1/2.

                        (ii)    If the Participant's surviving spouse is not his
or her sole Designated Beneficiary, then distributions to the Designated
Beneficiary will commence by December 31st of the calendar year immediately
following the calendar year in which the Participant dies.

                        (iii)   If there is no Designated Beneficiary as of
September 30th of the calendar year following the calendar year in which the
Participant dies, then the balances credited to the Participant's Accounts will
be distributed by December 31st of the calendar year that includes the fifth
anniversary of the Participant's death.

                        (iv)    if the Participant's surviving spouse is the
Participant's sole Designated Beneficiary and the surviving spouse dies after
the Participant but before distributions from the Participant's Accounts to the
surviving spouse commence, then the provisions of this Section B-2, shall apply
as if the surviving spouse is the Participant.

                                       B-1
<PAGE>

                (b)     REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT'S
LIFETIME. During the Participant's lifetime, the minimum amount that shall be
distributed for each Distribution Calendar Year is the lesser of:

                        (i)     a quotient equal to, the balances credited to
the Participant's Accounts divided by the number of calendar years in the
distribution period set forth in the Uniform Lifetime Table in Section
1.401(a)(9)-9 of the Treasury Regulations, which is determined by the
Participant's age as of his or her birthday in the Distribution Calendar Year;
or

                        (ii)    if the Participant's sole Designated Beneficiary
for the Distribution Calendar Year is the Participant's spouse, then a quotient
equal to the balances credited to the Participant's Accounts divided by the
number of calendar years in the distribution period set forth in the Joint and
Last Survivor Table in Section 1.401(a)(9)-9 of the Treasury Regulations, which
is determined by the age of the Participant and the age of the spouse as of
their respective birthdays in the Distribution Calendar Year.

                (c)     REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT'S
DEATH. If the Participant dies on or after the date distributions commence from
his or her Accounts and there is a Designated Beneficiary at the time of the
Participants death, then the minimum distribution for each Distribution Calendar
Year after the calendar year of the Participant's death is equal to the quotient
of the balances credited to the Participant's Accounts divided by the greater
of: (i) the remaining life expectancy of the Participant; or (ii) the remaining
life expectancy of the Participant's Designated Beneficiary, as determined in
Section 1.401(a)(9)-1 of the Treasury Regulations.

        B-3.    DEFINITIONS. For purposes of Supplement B, the following terms
shall have the meaning set forth below.

                (a)     DESIGNATED BENEFICIARY. "Designated Beneficiary" means
the individual who is designated as the beneficiary under Section 10-11 of the
Plan and is the designated beneficiary under Section 401(a)(9) of the Code and
Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.

                (b)     DISTRIBUTION CALENDAR YEAR. "Distribution Calendar Year"
means a calendar year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the first Distribution
Calendar Year is the calendar year immediately preceding the calendar year which
contains the Participant's Required Beginning Date. For distributions beginning
after the Participant's death, the first

                                       B-2
<PAGE>

Distribution Calendar Year is the calendar year in which distributions are
required to commence under Section B-2.

                (c)     REQUIRED BEGINNING DATE. The term "Required Beginning
Date" for a Participant (other than a "five-percent owner") is the April 1st of
the calendar year immediately following the calendar year in which the
Participant terminates employment after attaining age 70 1/2, and in the case of
a Participant who is a "five-percent owner" of the Company (as that term is
defined in Section 416(i)(1)(B)(i) of the Code), the Participant's Required
Beginning Date is the April 1st of the calendar year immediately following the
calendar year in which he or she attains age 70 1/2, regardless of whether he or
she has terminated employment with the Company.

                                       B-3<PAGE>

                                   EXHIBIT 10.2

<PAGE>

                        PRESIDENT'S EMPLOYMENT AGREEMENT
                        --------------------------------

        THIS AGREEMENT entered into this 1st day of January, 2004, by and
between ROBERT J. LARISON, JR., ("President") and ATLANTIC COAST FEDERAL
("Atlantic Coast" or "Institution")

                              W I T N E S S E T H:

        WHEREAS, Atlantic Coast desires to employ President as its Chief
Executive Officer under such non-exclusive terms and conditions as are set forth
herein and as may be revised or modified from time to time; and

        WHEREAS, President desires to serve Atlantic Coast as its Chief
Executive Officer pursuant to the arrangements for compensation, perquisites,
and other employment standards as are detailed below.

        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

        1.      EMPLOYMENT. The Atlantic Coast hereby employs Robert J. Larison,
Jr., as President and Chief Executive Officer of Atlantic Coast and the
President hereby accepts employment upon the terms and conditions hereinafter
set forth. The President shall report to Atlantic Coast's Board of Directors
(hereinafter referred to as the "Board"), and shall perform those duties of
President and Chief Executive Officer under the supervision and direction of the
Board. The President shall be bound by and follow the established rules and
policies of Atlantic Coast unless expressly agreed to otherwise herein.

        2.      EMPLOYMENT TERM. Subject to the provisions of termination as
hereinafter provided, this Agreement shall commence on January 1, 2004 the
"Commencement

<PAGE>

Date"), and remain in force for a period of two (2) years or until December 31,
2006. Beginning on the second anniversary of the Commencement Date, and on each
second anniversary thereafter, the term of this Agreement shall be extended for
a period of two years, provided that (1) Atlantic Coast has not given notice to
the President in writing at least 90 days prior to such anniversary that the
term of this Agreement shall not be extended further; and (2) prior to such
anniversary, the Board of Directors of Atlantic Coast explicitly reviews and
approves the extension, with the President being entitled to the salary and
other benefits at least equal to those benefits received during the prior two
(2) years. Reference herein to the term of this Agreement shall refer to both
such initial term and such extended terms.

        3.      DUTIES AND RESPONSIBILITIES.

        3.1.    During the term of this Agreement, President shall devote his
full time and energy to the business and affairs of Atlantic Coast, and shall
use his best efforts to promote the interests of Atlantic Coast , except as
otherwise agreed to by the President and the Board. The parties agree that the
President shall provide executive management services to those subsidiaries,
affiliates and holding companies wherein Atlantic Coast has an ownership
interest.

        3.2.    The President shall have the responsibility and authority to
supervise and direct the management and administration of all facets of the
operation of Atlantic Coast, except as specifically denoted in other parts of
this Agreement, within prescribed policy limits, the Charter, the By-Laws,
Atlantic Coast's policies, rules and regulations, and applicable federal and
other laws and regulations. The President shall, within the

                                        2
<PAGE>

foregoing limits, formulate, approve, supervise and direct the methods of
keeping the records of Atlantic Coast, statistical or otherwise, and shall
prepare all such reports as are required by law or regulation, including, but
not limited to, statements and reports of the Board, and shall from time to
time, and at any time upon request, make reports to the Board concerning the
affairs and financial condition of Atlantic Coast, and such other matters as the
Board may direct. In addition, the President shall perform those duties
specifically set forth in Atlantic Coast's By-Laws, which are incorporated
herein by reference.

        3.3.    The President shall be Chairperson of the Asset/Liability
Committee.

        3.4.    The President shall supervise Atlantic Coast's daily investment
activities in accordance with the policies, procedures and goals established by
the Board.

        3.5.    With the counsel and consent of the Board, retain outside legal
counsel and other consultants for Atlantic Coast.

        3.6.    With the counsel and consent of the Board, retain the services
of outside certified public accountants and internal auditors.

        3.7.    The President shall be present at all meetings of the Board and
any meeting of any committee of the Board and of any committee established by
the Board, except that the Board may at any time convene in executive session
and excuse the President when those meetings directly affect performance of the
President's official duties, compensation, or terms of employment.

        3.8.    The President will participate in such professional and
community activities which are beneficial to, and serve the interests of,
Atlantic Coast.

                                        3
<PAGE>

        3.9.    The President shall not accept or receive any compensation or
consideration from any person or entity. However, the President may serve, for
compensation, as a lecturer, consultant to others, and engage in other
activities of a short duration which do not interfere with the President's
responsibilities outlined in this Agreement only upon consultation with the
Chair of the Board and obtaining approval of such activities before engaging in
the same.

        3.10.   The President, before assuming any financial institution
organization office or activity related to any financial institution
organization, must obtain approval from the Board.

        3.11.   The President's duties shall include, but not be limited to, the
exclusive authority to hire, compensate and terminate Atlantic Coast's staff
within budgetary limitations. However, the Board shall be advised of major
changes in organizational structure and in the senior management positions.

        4.      COMPENSATION.

        4.1.    In consideration for the services of the President, Atlantic
Coast shall compensate him as follows:

                (a)     A base salary of $160,000 per year, payable in 26 equal
                        installments on a bi-weekly basis.

                (b)     An incentive bonus of up to 15% of the base salary if
                        Atlantic Coast has net income for the fiscal year ended
                        December 31, 2004 of at least 10% greater than net
                        income for the fiscal year ended December 31, 2003,
                        excluding the gain on the sale of the

                                       4
<PAGE>

                        Institution's credit card portfolio, subject to the
                        discretion of the Board.

        4.2.    Further, said incentive bonus which may be awarded shall be
disbursed not later than three (3) months after completion of the prior fiscal
year. The President shall have the option of being paid the bonus, either in a
lump sum payment or over the payroll year.

        4.3.    No later than August 1 of the calendar year the Board shall
complete the evaluation and assessment of the performance of the President. The
results of the evaluation shall be done by the Chair of the Board who shall meet
in private with the President to discuss the evaluation. A copy of the written
evaluation shall be delivered to the President. In the event that any part of
the evaluation is unsatisfactory, the Chair of the Board shall describe in
writing, in reasonable detail, specific instances of unsatisfactory performance.
The evaluation shall include recommendations as to areas of improvement in all
instances where performance is deemed to be unsatisfactory. If President
disagrees with the evaluation, he may respond in writing to the Chair of the
Board. The evaluation and responses to the evaluation shall be made part of the
President's confidential personnel file. The President's confidential personnel
file shall be kept by the Secretary of Atlantic Coast. Upon conclusion of the
evaluation, the Chair of the Board shall make recommendations as to possible
increases in the base salary for the next year.

                                       5
<PAGE>

        5.      BENEFITS.

        5.1.    The President shall be entitled to vacation, sick and personal
leave in any calendar year based on his years of service in an amount equal to
Atlantic Coast's employees of similar service or, if more, with executive
management employees, and in accordance with such policies as may be approved by
the Board. Vacation and personal leave may be taken at the discretion of the
President in consultation with the Chair of the Board. Vacation, sick and
personal leave time is cumulative if not used.

        5.2.    The President shall be eligible to participate in Atlantic
Coast's 401(k) Plan in accordance with the provisions of that Plan. Atlantic
Coast shall make the maximum contributions allowed by law on behalf of the
President with or without voluntary contribution by the President.

        5.3.    Atlantic Coast has entered into two supplemental executive
benefit agreements to provide for certain deferred compensation benefits for the
President and to provide an incentive for the President to remain at Atlantic
Coast throughout the term of this Agreement. Those agreements are the Deferred
Compensation Plan, dated March 9, 1995, between the President and Atlantic Coast
Federal Credit Union (the predecessor to the Institution) and the Supplemental
Retirement Agreement (the "SERP"), dated November 1, 2002, between the President
and the Institution. The terms of those supplemental executive benefit
agreements shall govern without reference to this Agreement, except as modified
herein.

        5.3.1.  In the event the Institution does not attain a return on average
assets of sixty (60) basis points for the calendar quarter ended March 3, 2004,
Section 1(a) of the

                                       6
<PAGE>

SERP may be amended, with the consent of both the President and the Institution,
to provide that the Accrued Benefit Percentage (as defined in the SERP) shall be
1.5% for each calendar quarter prior to the Normal Retirement Age (as defined in
the SERP) beginning in the first full calendar quarter following such noted
consent and provided, however, the previous accruals shall not be affected. In
the event, however, the President is terminated without cause (as defined in
Section 7.3) or this Agreement is not renewed for reasons other than cause prior
to the Accrued Benefit Percentage equaling at least 60%, the Accrued Benefit
Percentage shall be deemed to be equal to 60%.

        5.4.    Atlantic Coast shall provide and pay the premiums for life
insurance on the President's life for a face amount equaling twice the amount of
the President's base salary rounded up to the next thousand dollars. This policy
shall contain $50,000 of coverage for accidental death and dismemberment. The
President shall have the right to designate the beneficiary or beneficiaries
under this policy.

        5.5.    Atlantic Coast shall provide and pay the premiums for a
long-term disability insurance policy providing for coverage to age seventy (70)
at the rate of 66- 2/3% of the base salary of the President after the 90th day
of disability as defined in the policy.

        5.6.    The President shall be eligible to receive all other authorized
employee benefits that other Atlantic Coast employees receive, any other
benefits that will be available as set forth herein, or as authorized by the
policy of the Board. However, health, hospitalization, major medical and dental
insurance shall be provided to the President and his family.

                                       7
<PAGE>

        5.7.    Atlantic Coast shall pay to or for the benefit of the President
the sum of $2,000 yearly (net after taxes) for the purchase of a universal life
insurance policy covering the President, the policy to be owned by the
President.

        5.8.    The President shall receive membership in a country club, or the
equivalent of his choosing. Atlantic Coast agrees to pay the cost of membership
to include initiation fees and the minimum fees required for continued
participation in the Club which shall not exceed $3,000 a year. It is understood
that any expenses over and above such minimum shall be borne by the President.

        5.9.    Atlantic Coast shall pay to or provide for the benefit of the
President the sum of $2,000 yearly (net after taxes) for the premiums for a
whole life insurance policy covering the President and the policy shall be owned
by the President.

        5.10.   Atlantic Coast shall pay to or provide for the benefit of the
President the sum of $1,500 yearly (net after taxes) for the premiums for an
annuity policy covering the President and the policy shall be owned by the
President or to an individual retirement account selected by the President.

        5.11.   Atlantic Coast shall pay $2,500 (net after taxes) on January 1st
and July 2nd of each year for health insurance for the President and his
dependents.

        6.      EXPENSE REIMBURSEMENT.

        6.1.    Atlantic Coast shall pay or reimburse the President for all
reasonable expenses incurred by President in the performance of the duties and
responsibilities

                                       8
<PAGE>

under this Agreement in accordance with the approved budget and adopted policies
of the Board.

        6.2.    The President is expected to participate and attend programs to
further his education which are beneficial and advantageous to the operation of
Atlantic Coast. President shall be entitled to membership in those organizations
and associations which will benefit Atlantic Coast in an informational,
communicative, professional or educational manner. Atlantic Coast will pay the
dues or fees so the President can participate in those organizations and
associations.

        6.3.    The President will travel on behalf of Atlantic Coast when
necessary and have his companion accompany him to such functions as companions
may attend, at his option. The President will keep the Chair of the Board
informed of his itinerary. On such occasions when the President's companion
accompanies him for Atlantic Coast, the President will be reimbursed for the
cost associated with the companion's travel as well as the grossed-up amount of
any income tax expense for which the President may be liable related to the
companion reimbursements.

        6.4.    The President will be paid as an automobile allowance the sum of
$500 which shall be paid monthly. In consideration for said automobile
allowance, Atlantic Coast shall not reimburse the President for costs associated
with his automobile, except for travel which is business related, which shall be
reimbursed at Atlantic Coast's established mileage rates.

                                       9
<PAGE>

        6.5.    The President will be paid as a reimbursement for expenses the
amount of $80 per day for each day the President spends at Atlantic Coast's home
office up to 15 days per month.

        7.      TERMINATION.

        7.1.    Should the President suffer from an illness or incapacity which
prevents him from satisfactorily rendering his services to Atlantic Coast for a
period of more than four (4) months and it appears to the satisfaction of the
Board that based upon competent medical evidence the President will continue to
be incapacitated for an extended period or be unable to render the services, the
Board, in its sole discretion, may terminate this Agreement. In such event,
Atlantic Coast shall provide the President with written notice of such
termination and the President shall be entitled to salary earned until the date
of termination along with payment for unused vacation, unused personal leave,
unused sick leave and other vested benefits. All other obligations of Atlantic
Coast to the President under this Agreement shall cease except the President
shall continue to receive all authorized benefits included in the employee
benefit package as it relates to disability insurance, severance pay and certain
other benefits as may be set forth in this Agreement. To the extent available,
it is agreed that the provisions and current medical insurance policies
providing for continued coverage for disability for employees subsequent to
termination shall apply to the President and Atlantic Coast shall have the right
to enforce such provisions notwithstanding any other provision of this
Agreement.

                                       10
<PAGE>

        7.2.    The Board may unilaterally discharge the President at any time
and for any reason, except for cause as set forth herein, by a majority vote of
the entire Board, at a regular or special Board meeting. In the event of
termination of this Agreement for the convenience of Atlantic Coast, the
President shall be entitled to receive as termination benefits the following:

                (a)     An amount equal to two (2) times the current yearly base
                        salary.

                (b)     All employment benefits for a period of twelve (12)
                        months from the date of termination.

        7.3.    A majority of the entire Board shall have the right to discharge
the President at any time when the President has:

                (a)     Been absent from employment for an unauthorized period
                        of more than one (1) week; or

                (b)     Committed a material breach of this Agreement; or

                (c)     Been grossly negligent in the performance of required
                        duties; or

                (d)     Engaged in willful misconduct or willfully failed to
                        perform the obligations under this Agreement; or

                (e)     Committed unethical, dishonest, fraudulent, or criminal
                        acts against Atlantic Coast; or

                (f)     Willfully violated any law, rule or regulation (other
                        than traffic violations or other similar offenses) or a
                        final cease and desist order; or

                (g)     Committed a breach of fiduciary duty involving personal
                        profit; or

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<PAGE>

                (h)     Intentionally failed to perform stated duties; or

                (i)     Engaged in personal dishonesty; or

                (j)     Incompetently performed his duties; or

                (k)     Become unbondable.

        The President shall be given prior written notice of the charges against
him and have an opportunity to respond in person or in writing to the charges
before a final decision is made to terminate this Agreement and his employment.
The President's response shall be made within three (3) business days of the
giving of the written notice by the Board. Termination for causes set forth in
(a) through (j) will cause termination with no termination compensation or
benefits.

        7.4.    Upon the death of the President, Atlantic Coast will pay all
premiums for six (6) months for health and major medical insurance for the
benefit of his family.

        7.5.    TEMPORARY SUSPENSION OR PROHIBITION. If the President is
suspended and/or temporarily prohibited from participating in the conduct of the
Institution's affairs by a notice served under Section 8(e)(3) or (g)(1) of the
Federal Deposit Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e)(3) and (g)(1), the
Institution'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 Institution may in its discretion (i) pay the
President all or part of the compensation withheld while its obligations under
this Agreement were suspended and (ii) reinstate in whole or in part any of its
obligations which were suspended.

        7.6.    PERMANENT SUSPENSION OR PROHIBITION. If the President is removed
and/or

                                       12
<PAGE>

permanently prohibited from participating in the conduct of the Institution's
affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12
U.S.C. ss. 1818(e)(4) and (g)(1), all obligations of the Institution under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the parties shall not be affected.

        7.7.    DEFAULT OF THE INSTITUTION. If the Institution is in default (as
defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement
shall terminate as of the date of default, but this provision shall not affect
any vested rights of the parties.

        7.8.    TERMINATION BY REGULATORS. 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 Institution: (1) by
the Director of the Office of Thrift Supervision (the "Director") or his or her
designee, at the time the Federal Deposit Insurance Corporation enters into an
agreement to provide assistance to or on behalf of the Institution under the
authority contained in Section 13(c) of the FDIA; or (2) 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 Institution
or when the Institution 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 any such action.

        8.      ASSIGNMENT. This Agreement is for the personal services of the
President. Therefore, the duties set forth herein shall not be delegable and the
rights hereunder shall not be assignable, and any attempted assignment or
delegation shall be void, except that in the event of the President's death
while this Agreement is in effect, any

                                       13
<PAGE>

salary due or payable for such services rendered, together with payment for
unused vacation and personal leave, shall be payable to the President's estate,
heirs or personal representative. In the event of a merger, transfer,
consolidation or reorganization involving Atlantic Coast, this Agreement shall
continue in force and become an obligation of Atlantic Coast's successor.

        9.      INDEMNIFICATION. Subject to the requirements of 12 C.F.R. ss.
545.121, Atlantic Coast shall indemnify, defend and hold and save the President,
his heirs, personal representatives and each of them harmless from any and all
actions and causes of action, claims, demands, liabilities, losses, damages or
expenses, of whatsoever kind and nature, including judgments, interest and
attorney's fees and all other reasonable costs, expenses and charges which the
President, his heirs, personal representatives and each of them shall or may at
any time or from time to time, subsequent to the date of this Agreement, sustain
or incur, or become subject to by reason of any claim or claims against the
President, his heirs, personal representatives and each of them, for any reason
resulting from the President, his heirs, personal representatives and each of
them carrying out the terms and conditions of this Agreement, except for willful
misconduct or criminal acts or omissions on the part of the President; and
provided further that the President, his heirs, personal representatives or any
one of them shall promptly notify Atlantic Coast of adverse claims of threatened
or actual causes of action. The President, to the extent reasonably possible,
shall provide complete cooperation to Atlantic Coast, its attorneys and agents
in such case.

                                       14
<PAGE>

        10.     CONFIDENTIALITY. The President shall not, during the term of
this Agreement, or at any time thereafter, impart to anyone any confidential
information which the President may acquire in the performance of his duties
under this Agreement, except as permitted by Atlantic Coast under compulsion of
law.

        11.     OTHER PROVISIONS.

        11.1.   Section headings and numbers have been inserted for convenience
and reference only and, if there shall be any conflict between any such headings
or numbers and the text of this Agreement, the text shall control.

        11.2.   This Agreement may be executed in one or more counterparts, each
of which shall be considered an original, and all of which taken together shall
be considered one and the same instrument.

        11.3.   Waiver by either party of any term or condition of this
Agreement or any breach shall not constitute a waiver of any other term or
condition or breach of this Agreement.

        11.4.   Atlantic Coast may, at its option and expense, obtain such
performance and fidelity bonds covering the President which are appropriate or
necessary.

        11.5.   This Agreement may be altered, amended or terminated at any time
by the mutual written agreement of the President and the Board.

        11.6.   This Agreement contains all of the terms agreed upon by the
parties with respect to the subject matter of this Agreement and supersedes all
prior agreements, arrangements and communications between the parties concerning
such matters, whether oral or written.

                                       15
<PAGE>

        11.7.   Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall first be mediated in Ware County,
Georgia, by a qualified mediator mutually agreeable to the parties. Each party
shall share equally in the costs of any mediation with each party responsible
for his or its own attorneys' fees. However, if the dispute cannot be settled by
mediation, it shall be settled by arbitration in Ware County, Georgia,
administered by the American Arbitration Association in accordance with its
Rules. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. If any dispute is arbitrated, the prevailing
party shall have its attorneys' fees and costs paid by the party that did not
prevail. The Institution may only pay such fees and costs incurred by the
President after an expressed written finding by the Board of Directors that such
payment is not detrimental to the Institution.

        11.8.   Nothing in this Agreement shall create a partnership or agency
relationship between Atlantic Coast and the President.

        11.9.   Any dispute which arises under this Agreement shall be resolved
in accordance with the laws of the state of Georgia.

        11.10.  Any notice of communication permitted or required by this
Agreement shall be in writing and shall become effective three (3) days after
the mailing by certified mail, return receipt requested, postage prepaid, and
addressed as follows:

                (a)     If to Atlantic Coast, to: The Chair, Board of Directors,
Atlantic Coast Federal, Post Office Box 1256, Waycross, Georgia 31502-1256.

                (b)     If to the President/CEO, to: Robert J. Larison, Jr.,
12860 Isleworth Drive, Jacksonville, FL 32225.

                                       16
<PAGE>

        11.11.  Any payments made to the President pursuant to this Agreement,
or otherwise, are subject to and conditioned upon their compliance with 12
U.S.C. ss. 1828(k) and any regulations promulgated thereunder.

                                       17
<PAGE>

        IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
on the day and year first above written.

                                ATLANTIC COAST FEDERAL

                                By: /s/ Dennis Woods
                                    --------------------------------------------
                                           H. DENNIS WOODS, Chair
                                           Board of Directors

                                Attest: /s/ Forrest W. Sweat
                                        ----------------------------------------
                                           FORREST W. SWEAT, JR., Secretary
                                           Board of Directors

        I hereby accept employment from Atlantic Coast upon the terms and
conditions described in this Agreement and agree to faithfully perform the
duties of President of Atlantic Coast.

                                /s/ Robert J. Larison
                                ------------------------------------------------
                                President

                                       18

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