EXHIBIT 10.2
PRESIDENT'S EMPLOYMENT AGREEMENT
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THIS AGREEMENT entered into this 1st day of January, 2004, by and
between XXXXXX X. XXXXXXX, XX., ("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 Xxxxxx X. Xxxxxxx,
Xx., 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
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
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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.
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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
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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.
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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
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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.
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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
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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.
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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.
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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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(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
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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
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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.
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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.
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11.7. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall first be mediated in Xxxx 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 Xxxx 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, Xxxx Xxxxxx Xxx 0000, Xxxxxxxx, Xxxxxxx 00000-0000.
(b) If to the President/CEO, to: Xxxxxx X. Xxxxxxx, Xx.,
00000 Xxxxxxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000.
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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.
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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/ Xxxxxx Xxxxx
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H. XXXXXX XXXXX, Chair
Board of Directors
Attest: /s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX, XX., 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/ Xxxxxx X. Xxxxxxx
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President
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