Exhibit 10.1
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”) is made effective as of May 8, 2009 (the
“Effective Date”), by and between Atlantic Coast Bank
(the “Bank”) and Thomas B. Wagers, Sr. (the
“Executive”). 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. Any
reference to the “Employer” shall mean both the Company
and the Bank.
WHEREAS , the Executive is currently employed as Chief
Operating Officer of the Employer; and
WHEREAS , Executive is willing to serve the Employer on
the terms and conditions hereinafter set forth; and
NOW, THEREFORE , in consideration of the mutual covenants
herein contained, and upon the other terms and conditions
hereinafter provided, the parties hereby agree as
follows:
1.
POSITION AND RESPONSIBILITIES.
During the term of this Agreement, Executive
agrees to serve as Chief Operating Officer of the Bank (the
“Executive Position”), and will perform all duties and
will have all powers associated with such position as set forth in
the job description for such Executive Position as established by
the Employer. During the term of the Agreement,
Executive also agrees to serve, if elected, as an officer and/or
director of any subsidiary or affiliate of Employer and in such
capacity carry out such duties and responsibilities reasonably
appropriate to that office.
(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 Employer may terminate Executive’s
employment with the Employer at any time during the term of this
Agreement, subject to the terms and conditions of this
Agreement.
(c)
Continued Employment Following Termination of Employment
Period . 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 Employer and Executive may mutually
agree.
(d)
Duties; Membership on Other Boards . During the
Employment Period, except for periods of absence occasioned by
illness, reasonable vacation periods, and reasonable leaves of
absence approved by the Chief Executive Officer, Executive shall
devote substantially all 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 Employer; provided, however, that,
with the approval of the Chief Executive Officer, 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 Chief Executive
Officer’s judgment, will not present any conflict of interest
with the Employer, or materially affect the performance of
Executive’s duties pursuant to this Agreement it being
understood that membership in and service on boards or committees
of social, religious, charitable or similar organizations does not
require Chief Executive Officer approval pursuant to this Section.
For purposes of this Section, Chief Executive Officer approval
shall be deemed to have been granted as to service with any such
business company or organization that Executive was serving as of
the date of this Agreement and disclosed to the Chief Executive
Officer.
3.
COMPENSATION, BENEFITS AND REIMBURSEMENT.
(a) Base
Salary . The Employer shall pay Executive a salary
of not less than $178,000 per year (“Base
Salary”). Such Base Salary shall be payable
biweekly, or with such other frequency as officers and employees
are generally paid. During the period of this Agreement,
Executive’s Base Salary shall be reviewed at least annually.
Such review shall be conducted by the Chief Executive Officer, and
the Employer may increase, but not decrease, Executive’s Base
Salary (with any increase in Base Salary to become “Base
Salary” for purposes of this Agreement).
(b) Bonus
and Incentive Compensation . Executive shall be
entitled to incentive compensation and bonuses as provided in any
plan or arrangement of the Employer 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 . Executive shall be entitled to
participate in all employee benefit plans, programs and
arrangements as generally provided by the Employer to senior
executive officers and for which Executive shall
qualify. Executive is also entitled to receive
reimbursement for a country club membership of the
Executive’s choosing, not to exceed $5,000 (net after taxes)
annually.
(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
Employer’s usual practices), as well as sick leave, holidays
and other paid absences in accordance with the Employer’s
policies and procedures for senior executives. Any
unused paid time off during an annual period shall be treated in
accordance with the Employer’s personnel policies as in
effect from time to time.
(e) Expense
Reimbursements . During the Employment Period, the
Employer 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, upon presentation to the Employer of an itemized
account of such expenses in such form as the Employer may
reasonably require. All reimbursements under this
Section 3(e) shall be paid as soon as practicable by the Employer;
provided, however, that no payment shall be made later than March
15 of the year immediately following the year in which the expense
was incurred.
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 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) a
relocation of Executive’s principal place of employment to a
location that is more than 50 miles from Jacksonville,
Florida;
(B) 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;
(C) a
material breach of this Agreement by the Employer; provided,
however, that a change in the Executive’s title or duties
will not be considered a material breach of this
Agreement.
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 thirty (30) days prior written notice given within a
reasonable period of time (not to exceed ninety (90) days) after
the initial event giving rise to the right to elect; provided,
however, that the Bank shall be given at least thirty (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 Employer 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 (3) 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 (3) 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) thirty-six (36) months following the Event of Termination or
(ii) Executive’s obtaining substantially similar coverage
from a new employer.
(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 twelve (12) months; (ii) by reason of any
medically determinable physical or mental impairment that can be
expected
