Exhibit 10.1
PRESIDENT'S EMPLOYMENT AGREEMENT
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THIS AGREEMENT effective this 1st day of January, 2006, 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. Atlantic Coast hereby employs Xxxxxx X. Xxxxxxx, Xx., as
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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
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provided, this Agreement shall be effective as of January 1, 2006 the
"Commencement
Date"), and remain in force for a period of two (2) years or until December 31,
2007. Beginning on the first anniversary of the Commencement Date, and on each
anniversary thereafter, the term of this Agreement shall be extended for a
period of one year, 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 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 year. Reference herein to the term of
this Agreement shall refer to both such initial term and such extended terms.
3. Duties and Responsibilities.
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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.
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 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
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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 supervise Atlantic Coast's daily investment
activities in accordance with the policies, procedures and goals established by
the Board.
3.4. With the counsel and consent of the Board, retain outside legal
counsel and other consultants for Atlantic Coast.
3.5. With the counsel and consent of the Board, retain the services of
outside certified public accountants and internal auditors.
3.6. 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.
3.7. The President will participate in such professional and community
activities which are beneficial to, and serve the interests of, Atlantic Coast.
3.8. 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
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Agreement only upon consultation with the Chair of the Board and obtaining
approval of such activities before engaging in the same.
3.9. The President, before assuming any financial institution organization
office or activity related to any financial institution organization, must
obtain approval from the Board.
3.10. 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.
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4.1. In consideration for the services of the President, Atlantic Coast
shall compensate him as follows:
(a) A base salary of $210,000 per year, payable in 26 equal
installments on a bi-weekly basis.
(b) An incentive bonus of up to 10% of the base salary if Atlantic
Coast has net operating income ("NOI") for the fiscal year ended
December 31, 2006 ("fiscal 2006") of at least 10% greater than
NOI for the fiscal year ended December 31, 2005 ("fiscal 2005")
and an incentive bonus of up to 20% of base salary if Atlantic
Coast has NOI for fiscal 2006 of at least 15% greater than NOI
for fiscal 2005, in each case, 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
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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 1st 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. Benefits.
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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.
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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 may be
modified with the consent of the President.
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.
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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.
5.7. Atlantic Coast shall pay to or for the benefit of the President the
sum of $3,000 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 $4,000 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 each year for an individual retirement account
contribution.
5.10. 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.
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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 under this Agreement in accordance with the approved budget and
adopted policies of the Board.
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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 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.
6.4. The President will be paid as a reimbursement for expenses the amount
of the Internal Revenue Service per diem rate for each day the President spends
at Atlantic Coast's Jacksonville office up to a maximum of 20 days per month.
7. Termination.
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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
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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.
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.
7.2.1. Notwithstanding Section 7.2, the total amount of
compensation paid under Section 7.2 shall not exceed three (3) times
the President's average annual compensation for the most recent past
five taxable years. In addition, if the amount payable hereunder were
deemed to be an "excess parachute payment" under Section 280G of the
Internal Revenue Code, such amount shall be reduced to an amount that
is
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$1.00 less than the amount that would trigger an excess parachute payment under
Section 280G of the Internal Revenue Code.
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
(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
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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 (k)
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
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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
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and/or 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
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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.
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7.8. Termination by Regulators. All obligations under this Agreement shall
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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
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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 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,
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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
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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.
10. Confidentiality. The President shall not, during the term of this
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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.
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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.
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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.
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
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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., 000 Xxxxxxxx
Xxxxxxxxx, #000, Xx. Xxxxxxxxx, XX 00000.
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.
Section 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 6th day of February, 2006.
ATLANTIC COAST FEDERAL
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
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XXXXXXX X. XXXXXX, XX., Chair
Board of Directors
Attest: /s/ Xxxxxxx X. Xxxxx, Xx.
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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, Xx.
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XXXXXX X. XXXXXXX, XX.
President
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