8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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): April 6, 2009

PAB BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

Georgia	000-25422	58-1473302
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3250 North Valdosta Road, Valdosta, GA	31602
(Address of principal executive offices)	(Zip Code)

(229) 241-2775

(Registrant’s telephone number, including area code)

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

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

¨ Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On April 7, 2009, PAB Bankshares, Inc. (the “Company”) announced that M. Burke Welsh, Jr. retired from his position as President and Chief Executive Officer of the Company and The Park Avenue Bank (the “Bank”) effective April 6, 2009.  Mr. Welsh also concurrently resigned from his position as a member of the Board of Directors of the Company and the Bank.  In connection with his retirement, Mr. Welsh, the Company and the Bank have entered into an Employment Termination Agreement, dated as of April 6, 2009 (the “Employment Termination Agreement”) pursuant to which Mr. Welsh will receive a one-time, lump-sum cash payment of $730,000.  Mr. Welsh has agreed to serve as a consultant to the Company and the Bank through March 31, 2010 pursuant to the terms of a Consulting Agreement entered into by the Company, the Bank and Mr. Welsh on April 6, 2009 (the “Consulting Agreement”) whereby Mr. Welsh will be available to consult with the Company during the transition period regarding certain regulatory, capital and asset quality matters. The foregoing discussion is qualified in its entirety by the Employment Termination Agreement and Consulting Agreement, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and each are incorporated herein by reference.

Effective April 6, 2009, the Board of Directors of the Company and the Bank has promoted Mr. Donald J. “Jay” Torbert, Jr., from his position as an Executive Vice President and the Chief Financial Officer and Treasurer of the Company and the Bank to serve as President and Interim Chief Executive Officer of the Company and the Bank.  Mr. Torbert has been with the Company since 2000, and has served as an Executive Vice President of the Company and the Bank since August 2003 and as the Chief Financial Officer and Treasurer since August 2001. The Board of Directors will commence a search for a Chief Executive Officer.

Concurrent with Mr. Torbert’s promotion to President and Interim Chief Executive Officer, the Board of Directors of the Company and the Bank also promoted Ms. Nicole S. Stokes from her current position as a Vice President and the Controller of the Company and the Bank to Senior Vice President and Chief Financial Officer of the Company and the Bank.  Ms. Stokes, age 34, is a certified public accountant and has served as Vice President and Controller of the Company and the Bank since December 2005.  Prior to joining the Company in 2005, Ms. Stokes served as Senior Vice President and Controller for The Banc Corporation in Birmingham, Alabama since March 2004 and Assistant Controller for The Banc Corporation since September 2001.

As previously reported, effective March 31, 2009, Thompson Kurrie, Jr. was appointed as a director of the Company and the Bank.   On April 6, 2009, Mr. Kurrie was elected as a Vice Chairman of the Board of Directors of the Company and the Bank.

Item 9.01. Financial Statements and Exhibits.

(d)  Exhibits

10.1	Employment Termination Agreement among PAB Bankshares, Inc., The Park Avenue Bankand M. Burke Welsh, Jr., dated April 6, 2009.
10.2	Consulting Agreement among PAB Bankshares, Inc., The Park Avenue Bankand M. Burke Welsh, Jr., dated April 6, 2009.
99.1	Press release dated April 7, 2009.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.

PAB BANKSHARES, INC.
By:	/s/ Donald J. Torbert, Jr.
Name:	Donald J. Torbert, Jr.
Title:	President and Interim Chief Executive Officer

Date:  April 7, 2009

EX-10.1

Exhibit 10.1

EMPLOYMENT TERMINATION AGREEMENT

THIS EMPLOYMENT TERMINATION AGREEMENT (the "Agreement") is made and entered into by and between M. BURKE WELSH, JR., an individual, on behalf of himself, his spouse, agents, representatives, attorneys, assignees, heirs, executors, administrators, beneficiaries and trustees ("WELSH"), and PAB BANKSHARES, INC. (the “COMPANY”) and THE PARK AVENUE BANK (the “BANK”) on behalf of themselves, their predecessors, successors, all former, current and future related companies, divisions, subsidiaries, affiliates and parents, and collectively, their former, current and future directors, officers, employees, agents, representatives, attorneys, fiduciaries, assignees, heirs, executors, administrators, beneficiaries and trustees (the “COMPANIES”).   WELSH and the COMPANIES are sometimes referred to together as the “parties” or individually as a “party.”

WITNESSETH:

WHEREAS, WELSH is employed as the President and Chief Executive Officer of the COMPANIES pursuant to an Employment Agreement dated May 1, 2008 (the “Employment Agreement”), between WELSH and the COMPANIES; and

WHEREAS, WELSH and the COMPANIES desire to fully and finally terminate the Employment Agreement and resolve any and all obligations that each may have against the other under the Employment Agreement or otherwise in an amicable manner;

NOW, THEREFORE, in consideration of the mutual covenants and promises each party has made to the other as set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, WELSH and the COMPANIES agree as follows:

1.            Termination of Employment and Employment Agreement. Effective on the date that this Agreement is executed by both parties (the “Termination Date”), WELSH resigns his employment with the Companies and further resigns as President, Chief Executive Officer and Director of the COMPANIES.   Except as provided herein, the terms of the Employment Agreement shall terminate as of the Termination Date.

2.            General Waiver And Release.  WELSH fully and completely waives, releases, and forever discharges the COMPANIES from any and all claims, charges, complaints, actions, causes of action, grievances, controversies, demands, agreements, contracts, covenants, promises, liabilities, judgments, obligations, debts, damages (including, but not limited to, actual, compensatory, exemplary and punitive damages), attorneys' fees and costs and/or any other liabilities of any kind, nature, description or character which he may have against the COMPANIES arising out of WELSH’S employment with the COMPANIES, the termination of his employment with the COMPANIES, and/or any other occurrence whatsoever before the date that WELSH executes this Agreement, whether known or unknown, suspected or concealed, and whether presently asserted or otherwise, including, but not limited to, all claims that the COMPANIES:

· violated public policy or common law (including claims for breach of contract, promissory estoppel, detrimental reliance, retaliatory discharge, personal injury, invasion of privacy, negligent hiring, retention or supervision, defamation, intentional or negligent infliction of emotional distress and/or mental anguish, intentional or tortious interference with contract, negligence, or loss of consortium); or

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Exhibit 10.1

· violated their personnel policies or handbooks, or any purported contract of employment, express or implied, between WELSH and the COMPANIES; or

· failed to provide WELSH with any severance pay or other benefits pursuant to the terms of any employee benefit plan or arrangement of the COMPANIES, violated the terms of any such employee benefit plan, breached any fiduciary obligation with respect to such plan or arrangement, or discriminated against WELSH for the purpose of preventing WELSH from obtaining benefits pursuant to the terms of any such plan or arrangement, or in any way violated any provision of the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; or

· retaliated against or discriminated against WELSH on the basis of age, sex (including sexual harassment), race, disability, handicap, national origin, age, ancestry, religion, sexual orientation, marital status, parental status, caregiver status, source of income, or any other basis in violation of any city, local, state or federal laws, ordinances, executive orders, regulations or constitutions or otherwise violated any city, local, state, or federal laws, ordinances, executive orders, regulations or constitutions, including Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Equal Pay Act, 29 U.S.C. § 206(d), and the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (“ADEA”).

For the purpose of implementing a full and complete waiver and release, WELSH expressly acknowledges that the waiver and release he gives in this Agreement is intended to include in its effect, without limitation, claims that he did not know or suspect to exist in his favor at the time WELSH executes this Agreement, regardless of whether the knowledge of such claims, or the facts upon which they might be based, would materially have affected the settlement of this matter, and that the consideration given under the Agreement was also for the waiver and release of those claims and contemplates the extinguishment of any such unknown claims.

3.            Covenant Not To Sue.  WELSH also agrees not to sue the COMPANIES, either individually or collectively, in any forum for any claim covered by the waiver and release set forth in Paragraph 2, except that WELSH may bring a claim under the ADEA to challenge this Agreement.  If WELSH violates this Agreement by suing the COMPANIES, other than under the ADEA to challenge this Agreement, WELSH shall be liable to the COMPANIES for their reasonable attorneys’ fees and other litigation costs incurred in defending against such a lawsuit.

4.            Rights And Claims Excluded From Waiver And Release.  This Agreement does not waive any rights that cannot be waived by law, including WELSH’S right to file an administrative charge of discrimination.  WELSH is waiving, however, any right to monetary recovery should any administrative agency (such as the Equal Employment Opportunity Commission) pursue any claims on his behalf.

5.            Non-Admission Of Liability.  WELSH acknowledges that nothing contained in this Agreement, nor any of the acts taken thereunder, shall be deemed or construed as an admission of liability of any violation of any applicable law, ordinance, order, regulation, or constitution of any kind.

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Exhibit 10.1

6.            Future Cooperation.  Upon reasonable advance notice from the COMPANIES, following the Termination Date, WELSH shall make himself available to the COMPANIES or their designated representatives for the purposes of:  (a) providing information regarding the projects, files, and matters on which WELSH worked for the purpose of transitioning such projects; and (b) providing information and/or testimony regarding any other matter, file, project, and/or client with whom WELSH was involved while employed with the COMPANIES.

7.            Future Assurance.  Upon a reasonable request by the COMPANIES, WELSH agrees to take any and all actions, including, without limitation, the execution of certificates, documents, or instruments necessary or appropriate to give effect to the terms and conditions set forth in this Agreement.

8.            Consideration.

(a)           In consideration for WELSH’S agreement to terminate the Employment Agreement, to fully release the COMPANIES from any and all claims under the Employment Agreement or otherwise, and the other duties and obligations of WELSH contained herein, the parties agree, subject to Paragraph 18 below, that the BANK shall pay severance to WELSH in a total, gross amount of Seven Hundred Thirty Thousand Dollars ($730,000), less any amounts required to be withheld under applicable law.  The COMPANIES will issue to WELSH an IRS Form W-2 indicating the amount withheld under applicable law.  Such payment shall be made as soon as administratively feasible following the expiration of the revocation period applicable to this Agreement, but in no event later than May 30, 2009.

(b)           Notwithstanding anything else contained herein to the contrary, no payment shall be made or benefits delivered under this Agreement (other than payments required to be made by the COMPANIES pursuant to Paragraph 9 below) unless and until the applicable revocation period to this Agreement has expired without WELSH having elected to revoke the Release.  WELSH agrees and acknowledges that he would not be entitled to the consideration described herein absent execution of this Agreement.

9.            Other Benefits.

(a)           Nothing in this Agreement shall:

(i)            alter or reduce any vested, accrued benefits (if any) WELSH may be entitled to receive under any 401(k) plan established by the COMPANIES, which shall be paid in accordance with the terms of the 401(k) plan;

(ii)           affect WELSH’S right (if any) to elect and pay for continuation of WELSH’S health insurance coverage under COMPANIES’ health plans pursuant to  the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) or other applicable law concerning health care continuation coverage;

(iii)           affect WELSH’S right (if any) to receive (i) any Base Salary, as defined in the Employment Agreement, that accrues through the Termination Date but is unpaid, (ii) any reimbursable expenses that WELSH incurs before the Termination Date but are unpaid, provided Welsh has provided substantiation of such expenses, (iii) any unused paid time off days (including vacation days) accrued through the Termination Date, all of which shall be paid as soon as administratively practicable (and in any event within thirty (30) days) after the Termination Date;

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Exhibit 10.1

 (iv)         affect WELSH’s right to continue to receive his health care benefits through the Termination Date, as in effect as of the date hereof, which health care benefits will continue through the Termination Date, except with respect to any changes in benefits that are applicable generally to the other executives of the COMPANIES; or

(vi)           alter or reduce the vested benefits to which WELSH is entitled under any of the COMPANIES’ other benefit plans (including any stock option plans), which shall be paid in accordance with the terms of those plans.

10.           Additional Consideration.

(a)           Mutual Confidentiality. The parties agree that, as a condition of, and as further consideration for, this Agreement, they shall keep strictly confidential the circumstances leading up to the termination of WELSH’S employment with the COMPANIES, the terms and provisions of this Agreement, and all of the discussions, conversations, and negotiations leading to the execution of this Agreement, and the parties shall not directly or indirectly disclose, reveal, publicize, publish, or in any other manner communicate to or with any other person, any of the foregoing, except to any attorney(s) or tax advisor(s), or as required by law, or by WELSH to his spouse.  Any such disclosure to the parties’ attorney(s), or tax advisor(s), or by WELSH to his spouse, will be made only if those persons must have such information for the performance of his or her responsibilities and each of those individuals must be informed of the confidential nature of this Agreement.WELSH agrees that if he violates Paragraph 10(a) of this Agreement, he has breached this Agreement, the COMPANIES will be irreparably harmed as a matter of law and will be entitled to immediate injunctive relief.   Notwithstanding the foregoing, WELSH may tell prospective employers the dates of his employment, the positions held, the evaluations received, and WELSH’S duties and responsibilities and salary with the COMPANIES.

(b)           Mutual Non-disparagement.  The parties agree that, as a condition of, and as further consideration for, this Agreement, they will not engage in, or induce other persons or entities to engage in, any harassing or disparaging conduct or negative or derogatory statements directed at WELSH or the COMPANIES or any of the COMPANIES’ affiliates at any time in the future.  Notwithstanding the foregoing, this Paragraph 10(b) may not be used to penalize WELSH or the COMPANIES for providing truthful testimony under oath in a judicial or administrative proceeding or complying with an order of a court or government agency of competent jurisdiction.

11.           Indemnification.  To the fullest extent provided in the COMPANIES’ by-laws and by Georgia law, the COMPANIES shall indemnify and defend WELSH against any and all future claims and civil actions arising out of his employment as President and Chief Executive Officer of the COMPANIES.

12.           Other Agreements By WELSH.  WELSH also agrees that:

· he is entering into this Agreement knowingly, voluntarily, and with full knowledge of its significance.  WELSH has not been coerced, threatened, or intimidated into signing this Agreement;

· he has carefully read this Agreement and fully understands all of the provisions of this Agreement;

4

Exhibit 10.1

· any information provided to him about the terms of this Agreement by the COMPANIES does not constitute legal advice, that he understands that the COMPANIES’ outside counsel is not his attorney and that the COMPANIES have expressly advised him to consult with his own attorney about the terms of this Agreement;

· he understands that he has at least Twenty-One (21) days to consider the Agreement prior to signing it and shall have seven (7) days following the execution and delivery of this signed Agreement to revoke said Agreement in writing by delivering written notice of such revocation upon the attorney for the COMPANIES, Richard Gerakitis, Troutman Sanders LLP, 600 Peachtree Street, N.E., Suite 5200, Atlanta, Georgia 30308-2216.  Written notice may be given via facsimile to Richard Gerakitis at 404-962-6568 if advance notice of this facsimile is provided by a telephone call or voice mail to 404-885-3328.  If WELSH does not revoke the signed Agreement on or before the close of business (5:00 p.m. Eastern Time) of the seventh day after he delivers the signed Agreement, the entirety of the Agreement shall immediately become effective.  However, if WELSH revokes the Agreement, he understands that he will not receive any benefits pursuant to the Agreement;

· in signing this Agreement, he does not rely on and has not relied on any representation or statement (written or oral) not specifically set forth in this Agreement; and

· he was not coerced, threatened, or otherwise forced to sign this Agreement, and he is voluntarily signing and delivering this Agreement of his own free will.

13.           Return of All Property and Information of the COMPANIES.  WELSH agrees to return all of the COMPANIES’ property within seven (7) days following the Termination Date. To the extent that WELSH is provided with information of the COMPANIES in connection with performance of duties pursuant to Paragraph 6 of this Agreement, he shall retain such information only for so long as it is necessary for the performance of such duties and shall return all of the COMPANIES’ information at any time upon the COMPANIES’ request.

14.           Restrictive Covenants.

(a)           Definitions.  For purposes of this Agreement, the following terms shall have the following respective meanings:

(i)           “Business of the Companies” means the services of banking and the provision, selling, marketing, or distribution of products and/or services that are the same, or substantially the same, as those sold, marketed, distributed, or provided, by the COMPANIES during the term of the Employment Agreement.

(ii)           “Confidential Information” means any secret or confidential information or know-how and shall include, but shall not be limited to, the plans, strategic plans, budgets, customers, costs, prices, uses, and applications of products and services, results of investigations, studies owned or used by the COMPANIES, and all products, processes, compositions, computer programs, and servicing, marketing or operational methods and techniques at any time used, developed, investigated, made or sold by the COMPANIES, before or during the term of the Employment Agreement, that are not readily available to the public or that are maintained as confidential by such person.

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Exhibit 10.1

 (iii)           “Material Contact” means contact in person, by telephone, or by paper or electronic correspondence in furtherance of the Business of the Companies while employed by the COMPANIES.

(iv)           “Restricted Territory” means, and is limited to, the the counties of Henry, Newton, Spalding, Fayette, Butts, Clayton, Fulton, DeKalb, Gwinnett, Cobb, Forsyth, Hall, Lowndes, Cook, Grady and Decatur in the State of Georgia and the counties of Duval, St. John and Marion in the State of Florida.  WELSH acknowledges and agrees that this is the area in which the COMPANIES conduct Business at the time of the execution of this Agreement, and in which WELSH had responsibility on behalf of the COMPANIES during his employment.

(b)           Non-Competition.  WELSH agrees that for a period of twelve (12) months following the Termination Date, WELSH will not, either for himself or on behalf of any other person or entity, compete with the Business of the Companies within the Restricted Territory by performing activities involving the Business of the Companies which are the same as or similar to those performed by WELSH for the COMPANIES while employed by the COMPANIES.

(c)           Non-Solicitation of Customers.  WELSH agrees that for a period of twelve (12) months following the Termination Date, WELSH shall not, directly or indirectly, solicit any actual or prospective customers of COMPANIES with whom WELSH had Material Contact, for the purpose of selling any products or services which compete with the Business of Companies.

(d)           Non-Recruitment of Employees or Contractors.  WELSH agrees that for a period of twelve (12) months following the Termination Date, WELSH will not, directly or indirectly, solicit or attempt to solicit any employee or contractor of the COMPANIES with whom WELSH had Material Contact, to terminate or lessen such employment or contract.

(e)           Non Disclosure of Confidential Information. WELSH agrees to maintain in confidence, not disclose to any person, or use to the benefit of WELSH any Confidential Information of any person received by WELSH as a result of WELSH’s employment with the COMPANIES.

(f)           Acknowledgments.  WELSH hereby acknowledges and agrees that the covenants contained in (b) through (e) of this Paragraph 14 hereof are reasonable as to time, scope and territory given the COMPANIES’ need to protect their business, customer relationships, personnel, and Confidential Information.  In the event any covenant or agreement in this Agreement shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it shall be interpreted to extend only over the maximum period of time for which it may be enforceable and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action.  WELSH acknowledges and represents that WELSH has substantial experience and knowledge such that WELSH can readily obtain subsequent employment which does not violate this Agreement and that the restrictive covenants contained in this Paragraph 14 are intended to supersede the restrictive covenants contained in the Employment Agreement.

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Exhibit 10.1

 (g)           Specific Performance.  WELSH acknowledges and agrees that any breach of the provisions of this Paragraph 14 by him will cause irreparable damage to the Companies, the exact amount of which will be difficult to determine, and that the remedies at law for any such breach will be inadequate.  Accordingly, WELSH agrees that, in addition to any other remedy that may be available at law, in equity, or hereunder, the COMPANIES shall be entitled to specific performance and injunctive relief, without posting bond or other security, to enforce or prevent any violation of any of the provisions of this Paragraph 14 by the WELSH.

(h)           Limitation. The ownership or control of up to five percent (5%) of the outstanding securities of any class of a bank or bank holding company doing business in the Restricted Territory, which has a class of securities registered under the Securities Exchange Act of 1934, as amended, shall not be deemed to be a violation of the provisions of this Paragraph 14.

15.           Entire Agreement/Severability.  This Agreement sets forth the entire agreement between WELSH and the COMPANIES and supersedes any other written or oral understandings (except for any Consulting Agreement WELSH may have entered into with the COMPANIES) unless specifically excluded herein.  WELSH and the COMPANIES agree that if any phrase, clause or provision of this Agreement is declared to be illegal, invalid or unenforceable by a court of competent jurisdiction, such phrase, clause or provision shall be deemed severed from this Agreement, but will not affect any other provisions of this Agreement, which shall otherwise remain in full force and effect.  If any phrase, clause or provision in this Agreement is deemed to be unreasonable, onerous or unduly restrictive by a court of competent jurisdiction, it shall not be stricken in its entirety and held totally void and unenforceable, but shall remain effective to the maximum extent permissible within reasonable bounds.  If any waiver, release or covenant not to sue set forth in Paragraphs 2 and 3 is deemed to be illegal, invalid or unenforceable in whole or in part, the COMPANIES’ obligations under this Agreement shall be nullified.

16.           No Assignment.  WELSH may not assign this Agreement, in whole or in part, without the prior written consent of the COMPANIES, and any attempted assignment not in accordance herewith shall have no force or effect.

17.           Construction of Agreement and Venue for Disputes.  This Agreement shall be deemed to have been jointly drafted by WELSH and the COMPANIES and shall not be construed more strongly against either party.  This Agreement shall be governed by the laws of the State of Georgia, and the parties agree that any actions arising out of or relating to this Agreement or WELSH’S employment with the COMPANIES, or the termination of WELSH’S employment with the COMPANIES, shall be brought exclusively in either the United States District Court for the Southern District of Georgia, Valdosta Division or the State or Superior Courts of Lowndes County, Georgia.

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Exhibit 10.1

18.           Code Section 409A.  Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit which is provided pursuant to, or in connection with, this Agreement that is considered to be deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) shall be provided and paid in a manner, and at such time, as complies with the applicable requirements of Section 409A of the Code.  It is intended that the termination of employment under this Agreement shall be a "separation from service" within the meaning of Section 409A of the Code, where it is reasonably anticipated that WELSH will either perform no further services for the COMPANIES after such date or that the level of bona fide services WELSH will perform after that date (whether as an employee or independent contractor) will permanently decrease to no more than 20 percent of the average level of bona fide services he performed over the immediately preceding 36-month period (or, such lesser period as WELSH provided service to the  COMPANIES).  For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code.If WELSH is a key employee (as defined in Section 416(i) of the Code without regard to paragraph (5) thereof) and any stock of the COMPANIES (or any of their affiliates) is publicly traded on an established securities market or otherwise, then payment of any amount or provision of any benefit under this Agreement which is considered deferred compensation subject to Section 409A and which is payable as a result of separation from service shall be delayed for six (6) months after WELSH experiences a “separation from service” or, if earlier, until WELSH’s death, as required by Section 409A(a)(2)(B)(i) of the Code (the "409A Deferral Period").  The payments that would otherwise have been made in the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends.  However, the payments and benefits provided hereunder are intended to be exempt from the definition of “deferred compensation” for purposes of Section 409A of the Code and therefore, not subject to delay during the 409A Deferral Period.  Notwithstanding the foregoing, neither the COMPANIES, nor any of their affiliates, nor any of their officers, directors, employees or representatives shall be liable to WELSH if any payments or benefits provided hereunder are considered deferred compensation or for any interest, taxes or penalties resulting from non-compliance with Section 409A of the Code.

M. BURKE WELSH, JR.
/s/ M. Burke Welsh, Jr
Date:	4/6/09
FOR PAB BANKSHARES, INC.
/s/ Thompson Kurrie, Jr.
Title:	Vice Chairman
Date:	4/6/09
FOR THE PARK AVENUE BANK
/s/ Thompson Kurrie, Jr.
Title:	Vice Chairman
Date:	4/6/09

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EX-10.2

Exhibit 10.2

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (“Agreement”) is made and entered into by and between M. BURKE WELSH, JR. ("Consultant"), and PAB BANKSHARES, INC. and THE PARK AVENUE BANK (the “Companies”).   Consultant and the Companies are sometimes referred to together as the “parties” or individually as a “party.”

W I T N E S S E T H:

WHEREAS, the Companies desire to retain Consultant to provide certain services to the Companies, and Consultant desires to provide such services to the Companies, all subject to the terms and conditions set forth herein;

NOW THEREFORE, for and in consideration of the premises, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

1.            Engagement as an Independent Contractor.

The Companies hereby agree to engage Consultant as an independent contractor, and Consultant hereby accepts such engagement as an independent contractor, upon the terms and conditions set forth in this Agreement.

2.            Term.

(a)           The term of this Agreement shall commence on April 6, 2009 and shall expire on March 31, 2010 (“Term”), unless the Agreement is terminated before the expiration of the Term pursuant to Section 2(b), (c), or (d) below.

(b)           Notwithstanding Section 2(a), if Consultant dies during the Term of this Agreement, the Agreement shall terminate.

(c)           Notwithstanding Section 2(a), the Companies may terminate this Agreement at any time with or without advance notice or cause by providing written notice to Consultant.

(d)           Notwithstanding Section 2(a), Consultant may terminate this Agreement upon a material breach by the Companies.

(e)           Upon termination of this Agreement by the Companies, Consultant shall be entitled to payments in the amount, and under the terms, provided in Section 5 below.  Upon payment of such sums, the Companies shall have no further obligations under this Agreement except the obligations in Section 12 of this Agreement.

3.            Services.

Subject to the terms and conditions set forth in this Agreement, during the Term of this Agreement, Consultant shall provide the following services (the “Services”) to the Companies or their designated representatives:

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Exhibit 10.2

(a)           assist with the Companies’ efforts to participate in certain government-sponsored programs;

(b)           assist with the Companies’ interaction with various banking regulators, including, but not limited to, the Georgia Department of Banking and Finance and the Board of Governors of the Federal Reserve System;

(c)           assist with the Companies’ relationships with its borrowers, depositors, and other customers;

(d)           assist with the Companies’ efforts to reduce their level of non-performing assets; and

(e)           assist the Companies with such services as they may reasonably request from time to time.

Consultant shall provide the Services during the Term of this Agreement at the request of the Companies, at an average level of no more than eight (8) hours per week.  Additionally, during the Term of this Agreement, Consultant agrees to take no actions that in any way damage the public image or reputation of the Companies or their affiliates or to knowingly assist, in any way, a competitor of the Companies.

4.            Consultant as an Independent Contractor.

In the performance of this Agreement, both Consultant and the Companies will be acting in their own separate capacities and not as agents, employees, partners, joint venturers or associates of one another.  It is expressly understood and agreed that Consultant is an independent contractor of the Companies in all manners and respects.  The parties further agree that:

(a)           Consultant is not authorized to bind the Companies to any liability or obligation or to represent that Consultant has any such authority.

(b)           Consultant may, at his own option, choose to perform his consulting services as part of a single-member limited liability corporation or other corporate entity.

(c)           Consultant may, at his option, obtain and maintain (at Consultant’s own cost) any required insurance or other protection required for the performance of the Services under this Agreement.

(d)           Except as provided in Section 5, Consultant shall be solely and exclusively responsible and liable for all expenses, costs, liabilities, assessments, maintenance, insurance, undertakings and other obligations incurred by Consultant at any time and for any reason as a result of this Agreement or the performance of the Services by Consultant.

(e)           Consultant shall be solely and exclusively responsible for obtaining and providing (at Consultant’s own cost) whatever computer, training, software or other equipment Consultant believes is necessary to complete the Services required under this Agreement.

(f)           Consultant shall complete the Services required under this Agreement according to Consultant’s own means and methods of work which shall be in the exclusive charge and control of Consultant and which shall not be subject to the control or supervision of Companies, except as to the results of the work.

2

Exhibit 10.2

 (g)           Consultant shall not be subject to the Companies’ employee personnel policies and procedures.  Except as a former employee of the Companies, or pursuant to any Employment Termination Agreement with the Companies, or as required by law, Consultant also shall not be eligible to receive any employee benefits or participate in any employee benefit plan sponsored by the Companies, including, but not limited to, any retirement plan, insurance program, disability plan, medical benefits plan or any other fringe benefit program sponsored and maintained by the Companies for their employees.

(h)            The Companies and Consultant acknowledge and agree that Consultant shall not provide the Services to the Companies on a full-time basis.  Nothing in this Agreement shall prevent Consultant from engaging in other activities for and on behalf of other clients during the Term of this Agreement, provided that those services (i) are not inconsistent or incompatible with Consultant’s obligations under this Agreement, including Section 6 of this Agreement, and (ii) do not violate the Employment Termination Agreement between Consultant and the Companies.

5.            Compensation.

(a)           As payment for the Services rendered pursuant to this Agreement, the Companies shall pay, and Consultant shall accept, a fee of one hundred-fifty dollars ($150) per each hour that Consultant provides the Services.  The fee for any partial hour that Consultant provides the Services shall be determined by multiplying one hundred-fifty dollars ($150) by a fraction of which the numerator is the number of minutes in the period and the denominator is sixty (60).

(b)           Consultant shall be reimbursed by the Companies for reasonable business expenses incurred in providing the Services, including mileage, airfare, hotels, meals, and parking, in accordance with Section 20 below, provided that those expenses are approved by at least one of the Companies in advance and Consultant submits receipts for those expenses to the Companies in a timely manner.

(c)           Consultant shall invoice The Park Avenue Bank on a monthly basis for hours worked and reimbursable expenses for the preceding month.  All invoices shall be directed to:

The Park Avenue Bank

Attention: Donald J. Torbert

3250 North Valdosta Road

Valdosta, Georgia 31602

Payment to Consultant for hours worked and reimbursable expenses shall be made no later than 15 days after receipt of such invoice.

(d)           Consultant hereby acknowledges and agrees that Consultant shall be solely responsible for all of Consultant’s withholding taxes, social security taxes, unemployment taxes, and workers’ compensation insurance premiums, if any.  Consultant hereby agrees to indemnify and hold harmless the Companies from any liability for, and any and all federal, state and local taxes or assessments of any kind arising out of or in connection with any fee paid by the Companies to Consultant.

3

Exhibit 10.2

6.            Confidentiality.

(a)           For purposes of this Agreement, the following terms shall have the following respective meanings:

(i)           “Confidential Information” shall mean all valuable, proprietary and confidential information belonging to or pertaining to the Companies that does not constitute a “Trade Secret” of the Companies and that is not generally known by or available to the Companies’ competitors but is generally known only to the Companies and those of its employees, independent contractors, clients or agents to whom such information must be confided for internal business purposes.

(ii)           “Trade Secrets” shall mean the “trade secrets” of the Companies as defined under applicable law.

(b)           During the performance of his duties hereunder, Consultant will be exposed to certain Trade Secrets and Confidential Information.  Consultant acknowledges and agrees that the Trade Secrets and Confidential Information represent a substantial investment by the Companies and that any disclosure or use of any of such Trade Secrets or Confidential Information, except as otherwise authorized in this Agreement, or any other violation of the confidentiality provisions of this Section 6, would be wrongful and could cause immediate and irreparable injury to the Companies.

(c)           Except as required to perform his obligations under this Agreement, Consultant hereby covenants and agrees that Consultant shall regard and treat Trade Secrets and all Confidential Information as strictly confidential and wholly-owned by the Companies and shall not, for any reason, in any fashion, either directly or indirectly, use, sell, lend, lease, distribute, license, give, transfer, assign, show, disclose, disseminate, reproduce, copy, misappropriate or otherwise communicate any such item or information to any third party entity for any purpose other than in accordance with this Agreement or as required by applicable law:  (i) with regard to any Confidential Information, during the Term of this Agreement and for a period of three (3) years thereafter, and (ii) with regard to any Trade Secret, at any time during which such information constitutes a trade secret under applicable law.

7.            Ownership of Work Product.

All work product, property, data, documentation, information or materials conceived, discovered, developed or created by Consultant in performing the Services pursuant to this Agreement (collectively, the “Work Product”) shall be owned exclusively by the Companies.  To the greatest extent possible, any Work Product shall be deemed to be a “work made for hire” (as defined in the United States Copyright Act, 17 U.S.C.A. §101 et seq., as amended) and owned exclusively by the Companies.  Consultant hereby unconditionally and irrevocably transfers and assigns to the Companies all right, title and interest in or to any Work Product.  To the extent the Work Product is deemed to be other than a “work made for hire,” Consultant hereby assigns all right, title and interest in and to the Work Product to the Companies and agrees to execute all documents requested by the Companies to confirm such assignment.

4

Exhibit 10.2

8.            Remedies.

The parties represent and agree that any disclosure or use of any Trade Secrets or Confidential Information by Consultant except as otherwise permitted under this Agreement or authorized by the Companies in writing, or any other violation of Section 6, would be wrongful and cause immediate, significant, continuing and irreparable injury and damage to Companies that is not fully compensable by monetary damages.  Should Consultant breach or threaten to breach any provision of Section 6, the Companies shall be entitled to obtain immediate relief and remedies in a court of competent jurisdiction (including but not limited to damages, preliminary or permanent injunctive relief and an accounting for all profits and benefits arising out of Consultant’s breach), cumulative of and in addition to any other rights or remedies to which Companies may be entitled by this Agreement, at law or in equity.

9.            Return of Materials.

Immediately upon termination of the Agreement, or at any point before or after that time upon the specific request of Companies, the Consultant shall return to the Companies, all written or descriptive materials of any kind belonging or relating to the Companies or their affiliates, including, without limitation, any Work Product, Confidential Information and Trade Secrets, in Consultant’s possession or control.

10.           Laws, Regulations, and Public Ordinances.

Consultant shall comply with all federal, state, and local statutes, regulations, and public ordinances governing his work hereunder and shall indemnify, defend and hold the Companies harmless from any and all liability, damage, cost, fine, penalty, fee and expense arising from Consultant’s failure to do so.

11.           Notices.

All notices required, necessary or desired to be given pursuant to this Agreement shall be in writing and shall be effective when delivered or on the third day following the date upon which such notice is deposited, postage prepaid, in the United States mail, certified return receipt requested, and addressed to the party at the address set forth below:

If to Consultant:	If to the Companies:
M. Burke Welsh, Jr. 154 Darwish Drive McDonough, Georgia 30252	Attention:  Donald J. Torbert The Park Avenue Bank 3250 North Valdosta Road Valdosta, Georgia 31602

5

Exhibit 10.2

12.           Indemnification.

The Companies shall indemnify and defend Consultant against any and all future claims and civil actions arising out of his work as a consultant pursuant to this Agreement.  Any indemnification provided to Consultant under this Paragraph 12 shall be on the same terms and to the same extent as the indemnification provided under the Companies’ bylaws to the Companies’ officers and directors.

13.           Waiver of Breach.

The waiver by any party to this Agreement of a breach of any provision, section or paragraph of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same, or of a different provision, section or paragraph, by any party hereto.

14.           Assignment by Consultant.

Consultant may not assign, transfer or subcontract any of its rights or obligations under this Agreement to any party without the prior written consent of the Companies.  Consultant’s obligations under this Agreement shall be binding on Consultant’s successors and permitted assigns (if any).  Any assignment, transfer or subcontracting in violation of this provision shall be void.

15.           Governing Law and Consent to Jurisdiction.

This Agreement shall be construed and enforced in accordance with the laws of the State of Georgia.  In addition, the parties consent to personal jurisdiction and venue solely within the State of Georgia and waive all otherwise possible objections thereto.  The parties agree that they will not file any action arising out of this Agreement other than in the United States District Court for the Southern District of Georgia, Valdosta Division or the state or superior courts of Lowndes County, Georgia.

16.           Severability.

The unenforceability or invalidity of any particular provision of this Agreement shall not affect its other provisions, and to the extent necessary to give such other provisions effect, they shall be deemed severable. The judicial body interpreting this Agreement shall be authorized and instructed to rewrite any of the sections which are enforceable as written in such a fashion so that they may be enforced to the greatest extent legally possible.  Consultant acknowledges and agrees that the covenants and agreements contained in this Agreement shall be construed as covenants and agreements independent of each other or any other contract between the parties hereto and that the existence of any claim or cause of action by Consultant against the Companies, whether predicted upon this Agreement or any other contract, shall not constitute a defense to the enforcement by the Companies of said covenants and agreements.

17.           Interpretation.

Should a provision of this Agreement require judicial interpretation, it is agreed that the judicial body interpreting or construing the Agreement shall not apply the assumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that an instrument is to be construed more strictly against the party which itself or through its or its agents prepared the agreement, it being agreed that all parties and/or their agents have participated in the preparation hereof.  The headings contained herein are for the convenience of the parties only and shall not be interpreted to limit or affect in any way the meaning of the language contained in this Agreement.

6

Exhibit 10.2

18.           Survival.

Notwithstanding any expiration or termination of this Agreement, the provisions of Sections 6 – 13 and 15 – 19 hereof shall survive and remain in full force and effect, as shall any other provision hereof that, by its terms or reasonable interpretation thereof, sets forth obligations that extend beyond the termination of this Agreement.

19.           Entire Agreement, Binding Nature.

This Agreement embodies the entire agreement of the parties and supersedes all prior agreements between the parties hereto relating to the subject matter hereof (except as to any Employment Termination Agreement executed between Consultant and the Companies).  This Agreement may not be modified or amended except by a written instrument signed by both Consultant and an authorized representative of one of the Companies.  This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

20.           Reimbursements.   To the extent they constitute deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the amount of expenses eligible for reimbursement under this Agreement, or in-kind benefits provided, during one calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year.  Any such reimbursement of an eligible expense shall be made promptly after proper substantiation of such expense, but in no event later than the last day of the calendar year following the calendar year in which the expense was incurred.  The right to reimbursement or in-kind benefits is not subject to liquidation or exchange for any other benefit.

21.           409A.

Notwithstanding the foregoing, for purposes of Section 409A of the Code, the parties agree that Consultant will have a “separation from service” within the meaning of Section 409A of the Code on the Termination Date because it is reasonably anticipated that the level of bona fide services Consultant will perform for the Companies or their affiliates after such date pursuant to this Agreement or otherwise will permanently decrease to no more than twenty percent (20%) of the average level of bona fide services that Consultant performed for the Companies over the immediately preceding thirty-six (36) month period (or such lesser period as the Consultant provided services to the Companies).  

Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit which is provided pursuant to, or in connection with, this Agreement that is considered to be deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time, as complies with the applicable requirements of Section 409A of the Code.  For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code.Notwithstanding the foregoing, neither the Companies, nor any of their affiliates, nor any of their officers, directors, employees or representatives shall be liable to Consultant if any payments or benefits provided hereunder are considered deferred compensation or for any interest, taxes or penalties resulting from non-compliance with Section 409A of the Code.

7

Exhibit 10.2

IN WITNESS WHEREOF, the parties hereto have executed this Agreement this _6th___ day of _____April_______, 2009.

“COMPANIES”		“CONSULTANT”
PAB Bankshares, Inc.		M. Burke Welsh, Jr.
By:	/s/ Thompson Kurrie, Jr.	/s/ M. Burke Welsh, Jr.
Its:	Vice Chairman	Witnessed By:	/s/ Al D. Hosford
The Park Avenue Bank
By:	/s/ Thompson Kurrie, Jr.
Its:	Vice Chairman

8 

EX-99.1

Exhibit 99.1

  PAB Bankshares, Inc. 3250 North Valdosta Road P.O. Box 3460 Valdosta, Georgia 31604-3460 Phone: 229-241-2775 Fax: 229-241-2774 Website: www.pabbankshares.com NEWS RELEASE   April 7, 2009

PAB Bankshares, Inc. and The Park Avenue Bank

Announce Retirement of CEO and

Management Transition Plan

VALDOSTA, GA.:  PAB Bankshares, Inc. (NASDAQ: PABK), the parent company for The Park Avenue Bank, today announced the retirement of M. Burke Welsh, Jr. as President, Chief Executive Officer and Director of the Company and the Bank. Welsh joined the Company in August 2000 and has served as its Chief Executive Officer since February 2005. “We greatly appreciate Burke for his leadership and his development of the Company’s executive management team,” stated James L. Dewar, Jr., the Company’s Chairman of the Board of Directors.   Pursuant to a consulting agreement entered into with the Company, Welsh will advise the Company during an interim period regarding certain asset quality, capital and regulatory matters.  “While I have enjoyed my long relationship with the Company, now is a good time for a transition that allows me to retire.  I have tremendous confidence in our management team to lead the Company as we move towards an eventual economic recovery,” added Welsh.

The Board of Directors has elected Donald J. “Jay” Torbert, Jr. to serve as President and Interim Chief Executive Officer of the Company and the Bank.  “Jay has excelled in directing the financial management of the Company and has demonstrated the ability to lead the Company into the future,” stated Dewar.  Torbert joined the Company in May 2000 and has served as an Executive Vice President since August 2003 and its Chief Financial Officer and Treasurer since August 2001.  Prior to joining the Company, Torbert, a certified public accountant, was employed as a manager with the accounting firm Mauldin & Jenkins, LLC in Albany, Georgia.  The Board intends to conduct a formal search for a chief executive officer with Torbert as the lead candidate for the position.

Thompson Kurrie, Jr., who was appointed to the Board of Directors on March 31, 2009, was elected as a Vice Chairman of the Board of Directors of the Company and the Bank.  During the transition period, Kurrie will assist Torbert and the executive management team in implementing, directing and overseeing the banking operations of the Company, and he will establish and manage the strategic planning and management succession functions of the Company.  Kurrie previously served as a director of the Company and the Bank from 1989 to January 2003 and its outside general counsel from 1989 until today.

Nicole S. Stokes has been elected Senior Vice President and the Chief Financial Officer of the Company and the Bank.  Stokes, a certified public accountant, has served as Vice President and Controller of the Company and the Bank since December 2005.  Prior to joining the Company in 2005, Stokes served in a similar capacity for The Banc Corporation in Birmingham, Alabama.

PAB News Release April 7, 2009

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About PAB

The Company is a $1.35 billion bank holding company headquartered in Valdosta, Georgia, and its sole operating subsidiary is The Park Avenue Bank.  Founded in 1956, the Bank operates through 18 branch offices and two loan production offices in 13 counties in Georgia and Florida.  Additional information on the Bank’s locations and the products and services offered by the Bank is available on the Internet at www.parkavebank.com.  The Company’s common stock is listed on the NASDAQ Global Select Market under the symbol PABK.  More information on the Company is available on the Internet at www.pabbankshares.com.

Cautionary Note to Investors Regarding Forward-Looking Statements

Certain matters set forth in this news release are “forward-looking statements” within the meaning of the federal securities laws, including, without limitation, statements regarding the roles and responsibilities of the senior management team, and are based upon management’s beliefs as well as assumptions made based on data currently available to management.  When words like “anticipate”, “believe”, “intend”, “plan”, “expect”, “estimate”, “could”, “should”, “will” and similar expressions are used, you should consider them as identifying forward-looking statements.  These forward-looking statements are not guarantees of future performance, and a variety of factors could cause the Company’s actual results to differ materially from the anticipated or expected results expressed in these forward-looking statements including those risks and factors discussed in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission.  The Company undertakes no obligation to revise these statements following the date of this press release.

Contact: Donald J. “Jay” Torbert, Jr., President

(229) 241-2775, ext. 1717

jayt@parkavebank.com

PAB News Release April 7, 2009

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