EXHIBIT 10.10
NON-COMPETE AND NON-SOLICITATION AGREEMENT
This NON-COMPETE AND NON-SOLICITATION AGREEMENT (the "Agreement") is dated
as of May 12, 2010, by and between Xxxx X. Xxxxx ("Executive") and Atlantic
Coast Bank (the "Bank"), a wholly-owned subsidiary of Atlantic Coast Federal
Corporation (the "Company").
WHEREAS, Executive is Executive Vice President - Retail Operations of the
Bank and the Company; and
WHEREAS, the Executive, the Bank and the Company are parties to an
employment agreement dated January 1, 2010 (the "Employment Agreement"); and
WHEREAS, separate from the Employment Agreement, in order to protect the
business, trade secrets and other confidential and proprietary information of
the Bank and Company known to Executive following Executive's termination of
employment for any reason (other than "Cause," as defined and determined in the
Employment Agreement), including, but not limited to, (i) voluntary resignation;
(ii) Retirement (as defined in the Employment Agreement); (iii) involuntary
termination of employment without Cause; and (iv) voluntary termination for
"Good Reason" (as defined in the Employment Agreement) (all of which shall
constitute a "Termination of Employment" under this Agreement), Executive has
agreed to restrict his activities in accordance with the terms and conditions of
this Agreement; and
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Covenants.
(a) Executive hereby covenants and agrees that for a period of two (2)
years following his Termination of Employment he shall not, without the written
consent of the Bank, either directly or indirectly:
(1) solicit, offer employment to, or take any other action intended
(or that a reasonable person acting in like circumstances would expect) to have
the effect of causing any officer or employee of the Bank or the Company, or any
of their respective subsidiaries or affiliates, to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, any business whatsoever that
competes with the business of the Bank or the Company, or any of their direct or
indirect subsidiaries or affiliates or has headquarters or offices within 50
miles of the locations in which the Bank or the Company has business operations
or has filed an application for regulatory approval to establish an office;
(2) become an officer, employee, consultant, director, independent
contractor, agent, sole proprietor, joint venturer, greater than 5% equity owner
or stockholder, partner or trustee of any savings bank, savings and loan
association, savings and loan holding company, credit union, bank or bank
holding company, insurance company or agency, any mortgage or loan broker or any
other entity competing with the Bank or its affiliates in the same geographic
locations where the Bank or its affiliates has material business interests; or
(3) solicit, provide any information, advice or recommendation or take
any other action intended (or that a reasonable person acting in like
circumstances would expect) to have the effect of causing any customer of the
Bank to terminate an existing business or commercial relationship with the Bank.
(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank and/or the Company as may reasonably be required by the
Bank and/or the Company, in connection with any litigation in which it or any of
its subsidiaries or affiliates is, or may become, a party; provided, however,
that Executive shall not be required to provide information or assistance with
respect to any litigation between the Executive and the Bank and/or the Company
and/or any of its subsidiaries or affiliates.
(c) All payments to Executive under this Agreement shall be subject to
Executive's compliance with this Section 1. The parties hereto, recognizing that
irreparable injury will result to the Bank and/or the Company, its business and
property in the event of Executive's breach of this Section 1, agree that, in
the event of any such breach by Executive, the Bank and/or the Company will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive and all persons acting
for or with Executive. Executive represents and admits that Executive's
experience and capabilities are such that Executive can obtain employment in a
business engaged in other lines and/or of a different nature than the Bank, and
that the enforcement of a remedy by way of injunction will not prevent Executive
from earning a livelihood. Nothing herein will be construed as prohibiting the
Bank or the Company from pursuing any other remedies available to them for such
breach or threatened breach, including the recovery of damages from Executive.
(d) The terms and provisions of the covenants contained in this Section 1
are intended to be separate and divisible provisions and if, for any reason, any
one or more of them is held to be invalid or unenforceable, the validity or the
enforceability of any other provision of this Agreement shall not thereby be
affected. If, in any judicial proceeding, a court shall refuse to enforce any of
the separate covenants (or any part thereof) contained in the preceding
paragraphs of this Section 1, then such unenforceable covenants (or any such
part) shall be deemed eliminated from this Agreement for the purpose of those
proceedings to the extent necessary to permit the remaining separate covenants
(or portions thereof) to be enforced.
(e) Each party hereto acknowledges that the potential restrictions on
Executive's future activities imposed by the covenants in this Section 1 are
reasonable in both duration and geographic scope and in all other respects. In
the event that the provisions of this Section 1 should ever be deemed to exceed
the duration or geographic limitations or scope permitted by applicable law,
then such provisions shall be reformed to the maximum time or geographic
limitations or scope, as the case may be, permitted by applicable law, and each
party agrees that the restrictions and prohibitions contained herein shall be
effective to the fullest extent allowed under applicable law in such
jurisdiction. If the two-year duration is deemed unenforceable, and a court will
not permit reformation as provided for in this subparagraph, then the two-year
duration provided for above, shall be deemed to be one year.
2
2. Payment.
(a) No later than thirty (30) days after the Executive's Termination of
Employment, the Bank or the Company agree to pay Executive a cash lump sum equal
to two times (i) the highest annual rate of "Base Salary" (as defined in the
Employment Agreement) paid to Executive at any time under the Employment
Agreement and (ii) the highest annual bonus and non-equity incentive
compensation (as defined in the Employment Agreement) paid to the Executive over
the most recent two calendar years prior to the Termination of Employment;
provided, however, that any payment owed to Executive under this Agreement shall
be reduced by an amount equal to the amount of any severance pay that the
Executive receives under the Employment Agreement upon an "Event of Termination"
(as defined in the Employment Agreement).
(b) No payment shall be made under this Agreement unless the Termination of
Employment qualifies as a "Separation from Service" (as defined in the Internal
Revenue Code (the "Code") Section 409A and the regulations thereunder).
(c) Notwithstanding the foregoing, in the event Executive is a "Specified
Employee" (as defined in the Code Section 409A and the regulations thereunder)
to the extent required under Code Section 409A, no payment shall be made to
Executive prior to the first day of the seventh month following the Termination
of Employment.
3. Source of Payment. The payment provided in this Agreement shall be
timely paid in cash or check from the general funds of the Bank. The Company,
however, guarantees payment of the amount due hereunder to Executive, and if
such amount due from the Bank is not timely paid or provided by the Bank, such
amount shall be paid by the Company.
4. No Attachment; Binding on Successors.
(a) Except as required by law, no right to receive a payment under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
5. Modification and Waiver.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
3
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
6. Required Provisions.
(a) The Bank may terminate Executive's employment at any time, but any
termination by the Board other than termination for Cause shall not prejudice
Executive's right to compensation under this Agreement. Executive shall have no
right to receive compensation for any period after termination for Cause.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) [12 U.S.C. ss.1818(e)(3)] or 8(g)(1) [12 U.S.C. ss.1818(g)(1)]
of the Federal Deposit Insurance Act, the Bank's obligations under this contract
shall be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may in its
discretion (i) pay Executive all or part of the compensation withheld while its
contract obligations were suspended and (ii) reinstate (in whole or in part) any
of its obligations which were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) [12 U.S.C. ss.1818(e)(4)] or 8(g)(1) [12 U.S.C. ss.1818(g)(1)]
of the Federal Deposit Insurance Act, all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(d) If the Bank is in default as defined in Section 3(x)(1) [12 U.S.C.
ss.1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank
under this Agreement shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of the contract is necessary for the
continued operation of the Bank, (i) by the Director of the Office of Thrift
Supervision ("OTS") or his or her designee, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) [12 U.S.C. ss.1823(c)] of the Federal Deposit
Insurance Act; or (ii) by the Director or his or her designee at the time the
Director or his or her designee approves a supervisory merger to resolve
problems related to operation of the Bank or when the Bank is determined by the
Director to be in an unsafe or unsound condition. Any rights of the parties that
have already vested, however, shall not be affected by such action.
(f) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Bank or the Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. ss. 1828(k), and the
regulations promulgated thereunder in 12 C.F.R. Part 359.
7. Severability. If, for any reason, any provision of this Agreement, or
any part of any provision, is held invalid, such invalidity shall not affect any
4
other provision of this Agreement or any part of such provision not held so
invalid, and each such other provision and part thereof shall to the full extent
consistent with law continue in full force and effect.
8. Headings for Reference Only. The headings of sections and paragraphs
herein are included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this Agreement.
9. Governing Law. This Agreement shall be governed by the laws of the State
of Georgia but only to the extent not superseded by federal law.
5
IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to
be executed by its duly authorized representatives, and Executive has signed
this Agreement, on the date first above written.
ATLANTIC COAST BANK
May 12, 2010 By: /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------- ------------------------------------
Date Xxxxxx X. Xxxxxxx, Xx., President
and Chief Executive Officer
ATLANTIC COAST FEDERAL CORPORATION
May 12, 2010 By: /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------- ------------------------------------
Date Xxxxxx X. Xxxxxxx, Xx., President
and Chief Executive Officer
EXECUTIVE:
May 12, 2010 /s/ Xxxx X. Xxxxx
----------------------------- ----------------------------------------
Date Xxxx X. Xxxxx
6
