UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 12, 2010
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ATLANTIC COAST FEDERAL CORPORATION
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(Exact name of Registrant as specified in its charter)
Federal 000-50962 59-3764686
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
505 Haines Avenue, Waycross, Georgia 31501
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(Address of principal executive offices)
(800) 342-2824
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Registrant's telephone number, including area code
Not Applicable
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(Former Name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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(e) On May 12, 2010, the Bank adopted (1) the Fourth Amended and Restated
Supplemental Retirement Agreement for Robert J. Larison, Jr.; (2) the Second
Amended and Restated Supplemental Retirement Agreement for Thomas B. Wagers,
Sr.; (3) the Third Amended and Restated Supplemental Retirement Agreement for
Carl W. Insel; and (4) 2005 Amended and Restated Director Retirement Plan, which
are attached as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this
Current Report on Form 8-K. The amended plans provide a new definition of
"cause," including a procedure to be followed before the executive's employment
may be terminated for "cause," as well as arbitration provisions and a new
amendment procedure, whereby both the executive and the Bank must agree to any
amendments to the plan. The benefits under the plans have also been revised to
more clearly align vested values with stockholders by associating the vested
benefits with the increase in stock value combined with the use of a 3% per
annum cap on increased value over the value of the accrued benefit surrendered
at December 11, 2009.
Under the amended plans for Messrs. Larison, Wagers and Insel, the amount
of each executive's benefit is:
(1) an amount equal to the lesser of (A) the Prior Benefit Component
multiplied by the Issue Price, or (B) the Executive's benefit under
the Agreement as of December 11, 2009 multiplied by three (3) percent
per annum (in the event of a fractional year, the three (3) percent
attributable to the fractional year will be reduced proportionately);
plus
(2) an amount equal to the Stock Award Component (after applying the
weighting requirements of subparagraph 2(q) of the plan) multiplied by
the Issue Price; plus
(3) an amount equal to the Stock Ownership Component (after applying
the weighting requirements of subparagraph 2(r) of the plan)
multiplied by the Issue Price.
The definitions of capitalized terms are set forth in the plans. The
Company will pay interest on the unpaid balance of the executive's benefit at
the rate of three percent per year.
Messrs. Larison, Wagers and Insel will each become vested in their plan
benefits upon the earliest to occur of (1) the closing date of a second-step
conversion of the Company; (2) his involuntary termination of employment other
than for cause; (3) a change in control; (4) his death; (5) his disability; or
(6) the date the administrator of the plan (as appointed by the Company's Board
of Directors), in its sole discretion, accelerates vesting.
Following vesting, Messrs. Larison, Wagers and Insel will each be paid upon
the earliest of (1) involuntary termination of employment other than for cause;
(2) disability; (3) death; (4) change in control; or (5) attainment of the
normal retirement date stated in the plan. Mr. Larison's normal retirement date
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is February 9, 2012, Mr. Wager's normal retirement date is January 1, 2014, and
Mr. Insel's normal retirement date is attainment of age 55. Benefits are paid as
a cash lump sum within 30 days after the change in control, but otherwise are
paid in 180 monthly installments starting on the first day of the month after
the date of the payment triggering event, subject to a six month delay if the
employee is a "specified employee" under Section 409A of the Internal Revenue
Code of 1986, as amended.
Similar changes were made to the reinstated Atlantic Coast Bank 2005
Amended and Restated Director Retirement Plan.
On May 12, 2010, Atlantic Coast Bank (the "Bank") the wholly owned
subsidiary of Atlantic Coast Federal Corporation (the "Company") entered into
revised employment agreements with Robert J. Larison, Jr., the Chief Executive
Officer of the Bank, with Thomas B. Wagers, Sr., the Chief Financial Officer of
the Bank, with Carl W. Insel, the Bank's Executive Vice President - Retail
Operations and with Phillip Buddenbohm, Chief Risk Officer of the Bank. The
agreements are attached as Exhibits 10.5, 10.6, 10.7 and 10.8, respectively, to
this Current Report on Form 8-K. These employment agreements have substantially
the same terms and conditions as the employment agreement entered into by Mr.
Larison on December 11, 2009 and the employment agreements entered into by
Messrs. Wagers, Insel and Buddenbohm on January 1, 2010. The employment
agreements have been restated in order to provide a new definition of "cause,"
including a procedure to be followed before the executive's employment may be
terminated for "cause." Several of the post-termination obligation provisions
for Messrs Wagers and Insel have been deleted from their employment agreements
because these provisions have been moved to a new "Non-Compete and
Non-Solicitation Agreement," which is discussed below.
The agreements for Messrs. Larison, Wagers and Insel provide for a three
year term while the agreement for Mr. Buddenbohm provides for a one year term
with base salaries of $250,000 for Mr. Larison, $178,000 for Mr. Wagers,
$175,000 for Mr. Insel and $135,000 for Mr. Buddenbohm. In addition to the base
salary, the agreement provides for, among other things, participation in
incentive programs and other employee pension benefit and fringe benefit plans
applicable to executive employees. Upon each anniversary date of the agreement,
the term will be extended for an additional year subject to the board of
directors conducting a performance review of the executive and approving such
renewal. Under the agreements, the executive's employment may be terminated for
cause at any time, in which event he would have no right to receive compensation
or other benefits for any period after termination.
Certain events resulting in the executive's termination or resignation will
entitle the executive to payments of severance benefits following termination of
employment. The executive will be entitled to severance benefits under the
agreement in the event (A) his employment is involuntarily terminated (for
reasons other than cause, death, disability or retirement) or (B) he resigns
during the term of the agreement within two years after any of the following
events: (i) relocation of his principal place of employment to a location that
is more than 50 miles from Jacksonville, Florida (but in the case of Mr.
Larison, more than 50 miles from either Jacksonville, Florida or Waycross,
Georgia); (ii) a material reduction in his benefits and perquisites, including
base salary; or (iii) a material breach of the agreement by the Bank, provided,
however, that a change in the executive's title or duties will not be considered
a material breach of the agreement. In such event, the executive would be
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entitled to an immediate cash lump sum severance payment equal to three times
(one times for Mr. Buddenbohm) his highest annual rate of base salary at any
time during the term of the agreement and three times (one times for Mr.
Buddenbohm) his highest annual bonus and non-equity compensation received during
the latest three calendar years (most recent calendar year for Mr. Buddenbohm)
prior to the termination, which may be subject to a six month delay if required
to comply with Section 409A of the Internal Revenue Code. In addition, the
executive would be entitled, at no expense to him, to the continuation of
substantially comparable life, disability and non-taxable medical and dental
insurance coverage for such period.
Notwithstanding any provision to the contrary in the agreements, payments
under the agreements following a change in control are limited so that they will
not constitute an excess parachute payment under Section 280G of the Internal
Revenue Code.
Also on May 12, 2010, the Bank entered into a "Non-Compete and
Non-Solicitation Agreement" with each of Mr. Wagers and Mr. Insel. The
agreements provide that, in order to protect the business, trade secrets and
other confidential and proprietary information of the Bank and Company known to
Mr. Wagers and Mr. Insel following his termination of employment for any reason
other than cause (as defined in his employment agreement), for a period of two
years following such termination of employment, (i) he will not directly or
indirect solicit or any officer or employee to terminate their employment with
the Bank or the Company; (ii) he will not accept employment or become affiliated
with any competitor of the Bank or the Company in the same geographic locations
where the Bank or the Company has material business interests; and (ii) he will
not solicit or cause any customer of the Bank to terminate an existing business
or commercial relationship with the Bank.
No later than 30 days after such termination of the executive's employment,
the Bank or the Company shall pay him a cash lump sum equal to two times (i) the
highest annual rate of base salary (as defined in his employment agreement) paid
to him 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 him over the most recent two calendar years prior to the
termination of employment; provided, however, that any payment owed to the
executive under the agreement shall be reduced by an amount equal to the amount
of any severance pay that the executive receives under his employment agreement
upon an "event of termination" (as defined in the employment agreement). Payment
may be delayed six months in order to comply with Section 409A of the Internal
Revenue Code of 1986, as amended, if the executive is a "specified employee" of
the Company as defined in Code Section 409A.
The Non-Compete and Non-Solicitation Agreements with Mr. Wagers and Mr.
Insel are attached as Exhibits 10.9 and 10.10, respectively, to this Current
Report on Form 8-K.
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Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired: None
(b) Pro Forma Financial Information: None
(c) Shell company transactions: None
(d) Exhibits:
Exhibit 10.1: Fourth Amended and Restated Supplemental Retirement
Agreement for Robert J. Larison, Jr.
Exhibit 10.2: Second Amended and Restated Supplemental Retirement
Agreement for Thomas B. Wagers, Sr.
Exhibit 10.3: Third Amended and Restated Supplemental Retirement
Agreement for Carl W. Insel
Exhibit 10.4: 2005 Amended and Restated Director Retirement Plan
Exhibit 10.5: Employment Agreement of Robert J. Larison, Jr.
Exhibit 10.6: Employment Agreement of Thomas B. Wagers, Sr.
Exhibit 10.7: Employment Agreement of Carl W. Insel
Exhibit 10.8: Employment Agreement of Phillip Buddenbohm
Exhibit 10.9: Non-Compete and Non-Solicitation Agreement with Thomas
B. Wagers, Sr.
Exhibit 10.10: Non-Compete and Non-Solicitation Agreement with Carl
Insel
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATLANTIC COAST FEDERAL CORPORATION
Date: May 14, 2010 By: /s/ Robert J. Larison, Jr.
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Robert J. Larison, Jr.
President and Chief Executive Officer
(Duly Authorized Representative)