Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made by and between Atlantic
Coast Bank (the "Bank"), and Xxxxxx X. Xxxxxxx, Xx. ("Executive") this 16th day
of May, 2008 and is effective as of July 1, 2008 (the "Effective Date").
References herein to the "Company" mean Atlantic Coast Federal Corporation,
which owns 100% of the common stock of the Bank. The Company is a signatory to
this Agreement for the sole purpose of guaranteeing the Bank's performance
hereunder.
WHEREAS, the Executive and the Bank are a party to an employment
agreement dated January 1, 2006, and this Agreement supersedes such prior
agreement and all obligations of the parties under such prior agreement shall
become null and void after the Effective Date of this Agreement; and
WHEREAS, Executive is serving as President and Chief Executive Officer of
the Bank and the Bank wishes to assure itself of the services of Executive as an
officer of the Bank for the period provided in this Agreement; and
WHEREAS, in order to induce Executive to remain in the employ of the Bank
and to provide further incentive for Executive to achieve the financial and
performance objectives of the Bank, the parties desire to enter into this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the terms and conditions hereinafter provided, the parties
hereby agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the term of this Agreement, Executive shall serve as President and
Chief Executive Officer of the Bank. Executive shall be responsible for the
overall management of the Bank, and shall be responsible for establishing the
business objectives, policies and strategic plan of the Bank, in conjunction
with the Board of Directors of the Bank (the "Board"). Executive also shall be
responsible for providing leadership and direction to all departments or
divisions of the Bank, and shall be the primary contact between the Board and
the staff. As Chief Executive Officer, Executive shall directly report to the
Board. Executive also shall be nominated as a member of the Board, subject to
election by members or shareholders of the Bank, as the case may be. Executive
also agrees to serve, if elected, as an officer and director of any affiliate of
the Bank.
2. TERM AND DUTIES.
(a) Three Year Contract; Annual Renewal. The term of Executive's
employment under this Agreement shall commence as of the Effective Date and
shall continue thereafter for a period of three (3) years. Commencing on the
first anniversary date of this Agreement (the "Anniversary Date") and continuing
on each Anniversary Date thereafter, the term of this Agreement shall renew for
an additional year such that the remaining term of this Agreement is always
three (3) years provided, however, that in order for the Agreement to renew, the
disinterested members of the Board of Directors of the Bank (the "Board") must
take the following actions prior to each non-renewal notice period (as described
in the next sentence): (i) at least sixty (60) days prior to the Anniversary
Date, conduct a comprehensive performance evaluation and review of Executive for
purposes of determining whether to extend the Agreement; and (ii) affirmatively
approve the renewal or non-renewal of the Agreement, which decision shall be
included in the minutes of the Board's meeting. If the decision of such
disinterested members of the Board is not to renew the Agreement, then the Board
shall provide the Executive with a written notice of non-renewal ("Non-Renewal
Notice") at least thirty (30) days and not more than sixty (60) days prior to
any Anniversary Date, such that this Agreement shall terminate at the end of
twenty-four (24) months following such Anniversary Date.
(b) Termination of Agreement. Notwithstanding anything contained in
this Agreement to the contrary, either Executive or the Bank may terminate
Executive's employment with the Bank at any time during the term of this
Agreement, subject to the terms and conditions of this Agreement.
(c) Continued Employment Following Expiration of Term. Nothing in this
Agreement shall mandate or prohibit a continuation of Executive's employment
following the expiration of the term of this Agreement, upon such terms and
conditions as the Bank and Executive may mutually agree.
(d) Duties; Membership on Other Boards. During the term of this
Agreement, except for periods of absence occasioned by illness, reasonable
vacation periods, and reasonable leaves of absence approved by the Board,
Executive shall devote substantially all of his business time, attention, skill,
and efforts to the faithful performance of his duties hereunder, including
activities and services related to the organization, operation and management of
the Bank; provided, however, that, with the prior approval of the Board, as
evidenced by a resolution of the Board, from time to time, Executive may serve,
or continue to serve, on the boards of directors of, and hold any other offices
or positions in, business companies or business organizations, which, in the
Board's judgment, will not present any conflict of interest with the Bank, or
materially affect the performance of Executive's duties pursuant to this
Agreement. Executive shall provide the Board of Directors annually for its
approval a list of organizations for which the Executive acts as a director or
officer.
3. COMPENSATION, BENEFITS AND REIMBURSEMENT.
(a) Base Salary. In consideration of Executive's performance of the
duties set forth in Section 2, the Bank shall provide Executive the compensation
specified in this Agreement. The Bank shall pay Executive a salary of $250,000
for the period July 1, 2008 through June 30, 2009 ("Base Salary"). The Base
Salary shall be payable biweekly, or with such other frequency as officers of
the Bank are generally paid. During the term of this Agreement, the Base Salary
shall be reviewed at least annually by the Board or by a committee designated by
the Board, and the Bank may increase, but not decrease (except for a decrease
that is generally applicable to all employees) Executive's Base Salary. Any
increase in Base Salary shall become "Base Salary" for purposes of this
Agreement.
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(b) Bonus and Incentive Compensation. Executive shall be entitled to
incentive compensation and bonuses as provided in any plan or arrangement of the
Bank in which Executive is eligible to participate or as agreed to by the Bank
and the Executive. Nothing paid to Executive under any such plan or arrangement
will be deemed to be in lieu of other compensation to which Executive is
entitled under this Agreement. Subject to the terms of the relevant plan
documents, payments of bonuses and incentive compensation are dependent on the
Board's review of Executive's performance for the relevant period and shall be
paid at the Board's discretion.
(c) Employee Benefits and Perquisites. The Bank shall provide
Executive with employee benefit plans, arrangements and perquisites
substantially equivalent to those in which Executive was participating or from
which he was deriving benefit immediately prior to the commencement of the term
of this Agreement, including:
(i) the Bank's payment of premiums for life insurance on
Executive's life on the same basis as for all employees of the Bank and
including $50,000 of accidental death and dismemberment coverage, where
Executive has the right to designate the beneficiary(ies) of such policies;
(ii) the Deferred Compensation Plan dated March 9, 1995 between
Executive and Atlantic Coast Federal Credit union (the predecessor to the Bank)
and the Supplemental Retirement Agreement ("SERP") dated November 1, 2002 and
restated as of January 1, 2005 between Executive and the Bank;
(iii) the Bank's payment of premiums for a long term disability
insurance policy providing for long term disability benefits on the same basis
as provided for all employees of the Bank;
(iv) the Bank's payment to Executive of $5,000 per year for an
individual retirement account contribution;
(v) the Bank's reimbursement of out-of-pocket expenses of up to
$2,500 on January 1st and July 1st each year for health insurance for Executive
and his dependents, plus reimbursement of out-of-pocket expenses for an annual
physical examination for Executive at the Mayo Clinic or such other facility as
Executive may determine;
(vi) the Bank's reimbursement of up to $750 each month to
Executive as a car allowance (provided, however, that the Bank shall not
reimburse Executive for costs associated with such automobile, except for travel
which is business related, which shall be reimbursed at the Bank's established
mileage rates); and
(vii) the Bank's reimbursement of up to $5,000 (net after taxes)
for Executive's membership in a country club of Executive's choosing; provided,
however, that such reimbursement shall not continue after termination of
Executive's employment with the Bank.
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The Bank shall not, without Executive's prior written consent, make any
changes in such plans, arrangements or perquisites that would adversely affect
Executive's rights or benefits thereunder, except as to any changes that are
applicable to all participating employees or as reasonably or customarily
available. Without limiting the generality of the foregoing provisions of this
Section 3(c), Executive will be entitled to participate in or receive benefits
under any employee benefit plans including, but not limited to, retirement
plans, supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident insurance plans, medical coverage or any other employee
benefit plan or arrangement made available by the Bank in the future to its
senior executives, including any stock benefit plans, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements.
(d) Paid Time Off. Executive shall be entitled to paid vacation time
each year during the term of this Agreement (measured on a fiscal or calendar
year basis, in accordance with the Bank's usual practices), as well as sick
leave, holidays and other paid absences in accordance with the Bank's policies
and procedures for senior executives. Any unused paid time off during an annual
period shall be cumulative if not used.
(e) Expense Reimbursements. During the term of this Agreement, the
Bank shall pay or reimburse Executive for all reasonable travel, entertainment
and other reasonable expenses incurred by Executive during the course of
performing his obligations under this Agreement, including, without limitation,
fees for memberships in such organizations and associations as Executive and the
Board shall mutually agree are necessary and appropriate in connection with the
performance of his duties under this Agreement, upon presentation to the Bank of
an itemized account of such expenses in such form as the Bank may reasonably
require. In addition, Executive shall be reimbursed for expenses in the amount
of the Internal Revenue Service per diem rate for each day Executive spends at
the Bank's Jacksonville office up to a maximum of twenty (20) days per month.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the term of this Agreement, the provisions of this Section 4 shall apply.
As used in this Agreement, an "Event of Termination" shall mean and include any
one or more of the following:
(i) the involuntary termination by the Bank of Executive's
full-time employment hereunder for any reason other than a termination due to
"Disability" or death, as set forth in Section 6; or a termination upon
"Retirement," as defined in Section 7 or a termination for "Cause," as defined
in Section 8; and
(ii) Executive's voluntary resignation from the Bank's employ
within two years after any of the following, unless consented to by Executive
(where any vote by Executive in performance of his duties as a member of the
Board in favor of such action shall constitute express consent of Executive to
such action):
(A) failure to appoint Executive to the position set
forth in Section 1, or a material change in Executive's function, duties, or
responsibilities, which change would cause Executive's position to become one of
lesser responsibility, importance, or scope from the position and
responsibilities described in Section 1, to which Executive has not agreed in
writing (and any such material change shall be deemed a continuing breach of
this Agreement by the Bank); provided, however, that a failure to re-elect
Executive to the Board shall not constitute an Event of Termination under this
Agreement and any change to Executive's duties as an officer or director of any
affiliate does not constitute an Event of Termination under this Agreement;
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(B) a relocation of Executive's principal place of
employment to a location that is more than 50 miles from either Waycross,
Georgia or Jacksonville, Florida;
(C) a material reduction in the benefits and
perquisites, including Base Salary, to Executive from those being provided as of
the Effective Date (except for any reduction that is part of a reduction in pay
or benefits that is generally applicable to officers or employees of the Bank)
or;
(D) a material breach of this Agreement by the Bank.
Upon the occurrence of any event described in clause (ii) above ("Good
Reason"), Executive shall have the right to elect to terminate his employment
under this Agreement by resignation within two years after the initial
occurrence of such condition upon not less than 30 days prior written notice
given within a reasonable period of time (not to exceed, 90 days) after the
initial event giving rise to the right to elect; provided, however, that the
Bank shall be given at least 30 days to remedy the condition before the
Executive terminates employment. Such voluntary termination for Good Reason by
Executive shall be an Event of Termination.
(b) Upon the occurrence of an Event of Termination, the Bank shall pay
Executive, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, a lump sum in cash equal to three times (i) the highest annual
rate of Base Salary paid to Executive at any time under this Agreement and (ii)
the highest annual bonus and non-equity incentive compensation paid to the
Executive over the most recent three calendar years prior to the Event of
Termination; provided however, that, to the extent required by regulations or
interpretations of the Office of Thrift Supervision, all severance payments
under the Agreement shall be reduced not to exceed three (3) times Executive's
average annual compensation (as defined in such regulations or interpretations)
over the most recent five (5) taxable years. Such payment shall not be reduced
in the event Executive obtains other employment following the Event of
Termination. Notwithstanding the foregoing, in the event Executive is a
"Specified Employee" (as defined in the Internal Revenue Code (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 Event of Termination.
(c) Upon the occurrence of an Event of Termination, the Bank shall
provide at the Bank's expense, life and disability insurance coverage and
non-taxable medical and dental insurance coverage substantially comparable to
the coverage maintained by the Bank for Executive and his family prior to the
Event of Termination, except to the extent such coverage may be changed in its
application to all Bank employees. Such coverage shall cease upon the earlier of
(i) 36 months following the Event of Termination or (ii) Executive's obtaining
substantially similar coverage from a new employer.
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5. CHANGE IN CONTROL
(a) In the event that the aggregate payments or benefits to be made or
afforded to Executive in the event of a change in control as defined in Code
Section 280G and that would be deemed to include an "excess parachute payment"
under Code Section 280G or any successor thereto, then at the election of
Executive, (i) such payments or benefits shall be payable or provided to
Executive over the minimum period necessary to reduce the present value of such
payments or benefits to an amount that is one dollar ($1.00) less than three
times Executive's "base amount" under such Code Section 280G, or (ii) the
payments or benefits to be provided under this Agreement shall be reduced to the
extent necessary to avoid treatment as an excess parachute payment, with the
allocation of the reduction among such payments and benefits to be determined by
Executive. Notwithstanding anything in this subsection to the contrary, a change
in control shall not be deemed to have occurred upon the conversion of the
Company's mutual holding company parent to stock form, or in connection with any
reorganization used to effect such a conversion.
6. TERMINATION FOR DISABILITY OR DEATH.
(a) Termination of Executive's employment based on "Disability" shall
be construed to comply with Section 409A of the Internal Revenue Code and shall
be deemed to have occurred if: (i) Executive is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death, or last for a
continuous period of not less than 12 months; (ii) by reason of any medically
determinable physical or mental impairment that can be expected to result in
death, or last for a continuous period of not less than 12 months, Executive is
receiving income replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the Bank or the Company;
or (iii) Executive is determined to be totally disabled by the Social Security
Administration. The provisions of Sections 6(b) and (c) shall apply upon the
termination of the Executive's employment based on Disability.
(b) Executive shall be entitled to receive Base Salary earned until
the date of Executive's termination of employment due to Disability, plus
payment for unused vacation, personal leave, sick leave and other vested
benefits, as well as payment under any short- or long-term disability plan
maintained by the Bank.
(c) The Bank shall cause to be continued life, disability, and
non-taxable medical and dental insurance coverage substantially comparable to
the coverage maintained by the Bank for the Executive prior to the termination
of his employment based on Disability, except to the extent such coverage may be
changed in its application to all Bank employees or not available on an
individual basis to an employee terminated based on Disability. This coverage
shall cease upon the earlier of (i) the date Executive returns to the full-time
employment of the Bank; (ii) Executive's full-time employment by another
employer; or (iii) Executive's death.
(d) In the event of Executive's death during the term of this
Agreement, his estate, legal representatives or named beneficiaries (as directed
by Executive in writing) shall be paid Executive's earned but unpaid Base Salary
through Executive's date of death, and the Bank shall pay all premiums for six
(6) months following Executive's date of death for medical, dental and other
insurance benefits normally provided for Executive's family. Such payments are
in addition to any other benefits that Executive's beneficiaries may be entitled
to receive under any employee benefit plan maintained by the Bank for the
benefit of Executive, including, but not limited to, the Bank's life insurance
and tax-qualified and non-qualified retirement plans.
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7. TERMINATION UPON RETIREMENT.
Termination of Executive's employment based on "Retirement" shall mean
termination of Executive's employment at any time after Executive reaches age 55
or in accordance with any retirement policy established by the Board with
Executive's consent with respect to him. Upon termination of Executive based on
Retirement, no amounts or benefits shall be due Executive under this Agreement,
and Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.
8. TERMINATION FOR CAUSE.
The Bank may terminate Executive's employment at any time, but any
termination other than termination for "Cause," as defined herein, shall not
prejudice Executive's right to compensation or other benefits under this
Agreement. Executive shall have no right to receive compensation or other
benefits for any period after termination for "Cause." Termination for "Cause"
shall mean termination because of Executive's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit, material
breach of the Bank's Code of Ethics, material violation of the Xxxxxxxx-Xxxxx
requirements for officers of public companies, that in the reasonable opinion of
the Board will likely cause substantial financial harm or substantial injury to
the reputation of the Bank or the Company, willfully engaging in actions that in
the reasonable opinion of the Board will likely cause substantial financial harm
or substantial injury to the business reputation of the Bank, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than routine traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement.
9. RESIGNATION FROM BOARDS OF DIRECTORS.
In the event of Executive's termination of employment for any reason,
Executive's service as a director of the Bank or the Company, and any affiliate
of the Bank or the Company shall immediately terminate. This Section 9 shall
constitute a resignation notice for such purposes.
10. NOTICE.
(a) Any purported termination by the Bank for Cause shall be
communicated by Notice of Termination to Executive. If, within thirty (30) days
after any Notice of Termination for Cause is given, Executive notifies the Bank
that a dispute exists concerning the termination, the parties shall promptly
proceed to arbitration, as provided in Section 20. Notwithstanding the pendency
of any such dispute, the Bank shall discontinue paying Executive's compensation
until the dispute is finally resolved in accordance with this Agreement. If it
is determined that Executive is entitled to compensation and benefits under
Section 4, the payment of such compensation and benefits by the Bank shall
commence immediately following the date of resolution by arbitration, with
interest due Executive on the cash amount that would have been paid pending
arbitration (at the prime rate as published in The Wall Street Journal from time
to time).
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(b) Any other purported termination by the Bank or by Executive shall
be communicated by a "Notice of Termination" (as defined in Section 10(c)) to
the other party. If, within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the parties shall promptly
proceed to arbitration as provided in Section 20. Notwithstanding the pendency
of any such dispute, the Bank shall continue to pay Executive his Base Salary,
and other compensation and benefits in effect when the notice giving rise to the
dispute was given (except as to termination of Executive for Cause); provided,
however, that such payments and benefits shall not continue beyond the date that
is 24 months from the date the Notice of Termination is given. In the event the
voluntary termination by Executive of his employment is disputed by the Bank,
and if it is determined in arbitration that Executive is not entitled to
termination benefits pursuant to this Agreement, he shall return all cash
payments made to him pending resolution by arbitration, with interest thereon at
the prime rate as published in The Wall Street Journal from time to time, if it
is determined in arbitration that Executive's voluntary termination of
employment was not taken in good faith and not in the reasonable belief that
grounds existed for his voluntary termination. If it is determined that
Executive is entitled to receive severance benefits under this Agreement, then
any continuation of Base Salary and other compensation and benefits made to
Executive under this Section 10 shall offset the amount of any severance
benefits that are due to Executive under this Agreement.
(c) For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice that shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
11. POST-TERMINATION OBLIGATIONS.
(a) Executive hereby covenants and agrees that (except following a
change in control as defined in the Company's 2005 Stock Option Plan), for a
period of one year following his termination of employment with the Bank, he
shall not, without the written consent of the Bank, either directly or
indirectly:
(i) 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;
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(ii) 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
(iii) 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 as may reasonably be required by the Bank, 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 or any of its subsidiaries or
affiliates.
(c) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with this Section 11. The parties hereto,
recognizing that irreparable injury will result to the Bank, its business and
property in the event of Executive's breach of this Section 11, agree that, in
the event of any such breach by Executive, the Bank 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.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Company, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive,
and if such amounts and benefits due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to Executive of
a kind elsewhere provided. No provision of this Agreement shall be interpreted
to mean that Executive is subject to receiving fewer benefits than those
available to him without reference to this Agreement.
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14. NO ATTACHMENT; BINDING ON SUCCESSORS.
(a) Except as required by law, no right to receive payments 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.
15. 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 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.
16. 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 or other benefits under this Agreement.
Executive shall have no right to receive compensation or other benefits 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.
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(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.
17. 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 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.
18. 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.
19. 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.
20. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, as an alternative
to civil litigation and without any trial by jury to resolve such claims,
conducted by a panel of three arbitrators sitting in a location selected by
Executive within fifty (50) miles from the main office of the Bank, in
accordance with the rules of the American Arbitration Association's National
Rules for the Resolution of Employment Disputes ("National Rules") then in
effect. One arbitrator shall be selected by Executive, one arbitrator shall be
selected by the Bank and the third arbitrator shall be selected by the
arbitrators selected by the parties. If the arbitrators are unable to agree
within fifteen (15) days upon a third arbitrator, the arbitrator shall be
appointed for them from a panel of arbitrators selected in accordance with the
National Rules. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
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21. INDEMNIFICATION.
(a) Executive shall be provided with coverage under a standard
directors' and officers' liability insurance policy, and shall be indemnified
for the term of this Agreement and for a period of six years thereafter to the
fullest extent permitted under applicable law against all expenses and
liabilities reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his having
been a director or officer of the Bank or any affiliate (whether or not he
continues to be a director or officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited to,
judgments, court costs and attorneys' fees and the cost of reasonable
settlements (such settlements must be approved by the Board), provided, however,
Executive shall not be indemnified or reimbursed for legal expenses or
liabilities incurred in connection with an action, suit or proceeding arising
from any illegal or fraudulent act committed by Executive. Any such
indemnification shall be made consistent with Section 545.121 of the OTS
Regulations and Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C.
ss.1828(k), and the regulations issued thereunder in 12 C.F.R. Part 359.
(b) Any indemnification by the Bank shall be subject to compliance
with any applicable regulations of the OTS.
22. NOTICE.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below:
To the Bank: Atlantic Coast Bank
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
To the Company: Atlantic Coast Federal Corporation
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
To Executive: Xxxxxx X. Xxxxxxx, Xx.
000 Xxxxxxxx Xxxxxxxxx #000
Xx. Xxxxxxxxx, Xxxxxxx 00000
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SIGNATURES
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 16, 2008 By: /s/ Xxxxxxx X. Xxxxxx, Xx.
----------------------------- -----------------------------
Date Chairman of the Board
ATLANTIC COAST FEDERAL
CORPORATION
May 16, 2008 By: /s/ Xxxxxxx X. Xxxxxx, Xx.
----------------------------- -----------------------------
Date Chairman of the Board
EXECUTIVE:
May 16, 2008 /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------- -----------------------------
Date Xxxxxx X. Xxxxxxx, Xx.
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