EXHIBIT 10.10.1

FIRST AMENDMENT

TO SALARY CONTINUATION AGREEMENT

THIS AMENDMENT is made as of the 17th day of December, 2008, by and among
COASTAL BANKING COMPANY, INC. (f/k/a FIRST CAPITAL BANK HOLDING CORPORATION), a
South Carolina corporation, CBC NATIONAL BANK (formerly known as and currently
doing business as FIRST NATIONAL BANK OF NASSAU COUNTY), a national banking
association (collectively, the “Employer”), and LEO DEAS III, a resident of the
State of Florida (the “Executive”).

RECITALS:

The Employer and the Executive previously entered into a salary continuation
agreement, dated January 19, 2005 (the “Agreement”).  The Employer and the
Executive desire to amend the Agreement for compliance with Section 409A of the
Internal Revenue Code of 1986.

In consideration of the Executive’s continued employment by the Employer and the
mutual agreements hereinafter set forth, the parties hereby agree to amend the
Agreement, effective January 1, 2009, as follows:

1.

By deleting the existing Section 1(b) and substituting therefor the following:

“b.

‘Change in Control’ shall mean the occurrence of any of the following events,
unless such event is a result of a Non-Control Transaction:

(i)

on or after January 1, 2009 (the “Amendment Date”), any one person, or more than
one person acting as a group (other than any person or more than one person
acting as a group who is considered to own more than fifty percent (50%) of the
total fair market value of the stock of the Company prior to such acquisition),
acquires stock of the Company that, together with stock held by such person or
group, constitutes more than fifty percent (50%) of the total fair market value
or total voting power of the stock of the Company; provided, however, that in
determining whether a Change in Control has occurred, voting securities of the
Company (the ‘Voting Securities’) which are acquired by a person or group in a
Non-Control Transaction shall not be considered in determining the percentage of
stock acquired by such person or group under this paragraph (i);

(ii)

within any twelve-month period (beginning on or after the Amendment Date), a
majority of members of the Company’s Board of Directors as of the beginning of
such twelve-month period (the ‘Incumbent Board’) is replaced by directors whose
appointment or election is not endorsed by a majority of the members of the
Incumbent Board; provided, however, that any director whose appointment or
election is endorsed by a

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majority of the members of the Incumbent Board shall, upon his or her
appointment or election, be considered a member of the Incumbent Board;

(iii)

within any twelve-month period (beginning on or after the Amendment Date), any
one person, or more than one person acting as a group, acquires ownership of
stock of the Company possessing fifty percent (50%) or more of the total voting
power of the stock of the Company; provided, however, that in determining
whether a Change in Control has occurred, Voting Securities which are acquired
by a person or group in a Non-Control Transaction shall not be considered in
determining the percentage of stock acquired by such person or group under this
paragraph (iii); or

(iv)

within any twelve-month period (beginning on or after the Amendment Date), any
one person, or more than one person acting as a group, acquires assets of the
Company that have a total gross fair market value of eighty-five percent (85%)
or more of the total gross fair market value of all of the assets of the Company
immediately before such acquisition or acquisitions; provided, however, that
transfers to the following entities or person(s) shall not be deemed to result
in a Change in Control under this paragraph (iv):  

(A)

a shareholder (determined immediately before the asset transfer) of the Company
in exchange for or with respect to its stock;

(B)

an entity, fifty percent (50%) or more of the total value or voting power of
which is owned, directly or indirectly, by the Company;

(C)

a person, or more than one person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of
all the outstanding stock of the Company; or

(D)

an entity, at least fifty percent (50%) of the total value or voting power of
which is owned, directly or indirectly, by a person described in the above
subparagraph (C).

For purposes of this Section 1.b., persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company, to the extent provided under Section 409A of the Internal
Revenue Code of 1986, as amended (the ‘Code’).”

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2.

By adding the following new Sections 1(f), (g) and (h) to read as follows:

“f.

‘Separation from Service’ means a termination of the Executive’s employment
where either (i) the Executive has ceased to perform any services for the
Service Recipient or (ii) the level of bona fide services the Executive performs
for the Service Recipient after a given date (whether as an employee or as an
independent contractor) permanently decreases (excluding either a decrease as a
result of military leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six months, or if longer, so long as the
Executive retains a right to reemployment with the Service Recipient under an
applicable statute or by contract or any other decrease permitted under Code
Section 409A) to no more than twenty percent (20%) of the average level of bona
fide services performed for the Service Recipient (whether as an employee or an
independent contractor) over the immediately preceding 36-month period (or the
full period of service if the Executive has been providing services to the
Service Recipient for less than 36 months).

g.

‘Service Recipient’ means the Company and each business entity that, together
with the Company, constitutes the ‘service recipient’ as defined in Code Section
409A and the regulations thereunder.

h.

‘Specified Employee’ means a key employee (as defined in Code Section 416(i)
without regard to Code Section 416(i)(5)) of any member of the Service
Recipient, any stock of which is publicly traded on an established securities
market or otherwise as of the date of the Executive’s Separation from Service.
For this purpose, a Executive is a key employee if the Executive meets the
requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in
accordance with the regulations thereunder and disregarding Code Section
416(i)(5)) at any time during the twelve (12) month period ending on December
31.  Notwithstanding the foregoing, if the Executive is a key employee
determined under the preceding sentence, the Executive will be deemed to be a
Specified Employee for the period commencing as of April 1 following such
December 31 and through the succeeding March 31 or as otherwise required by Code
Section 409A.”

3.

By deleting the existing Section 2 and substituting therefor the following:

“2.

Payments to Executive

If Executive experiences a Separation from Service (a) by the Executive for any
reason within twelve (12) months following a Change in Control; (b) by the
Executive for Good Reason pursuant to Section 1(c)(iv); or (c) by the Employer
without Cause following a Change in Control, then in addition to other rights
and remedies available in law or equity, the Executive shall be entitled to the
following (i) any sums due him as base salary and/or reimbursement of expenses
through the date of such Separation from Service, plus any bonus earned or
accrued under the Bonus Plan, but not yet paid through the date of Separation
from Service; (ii) any bonus earned or accrued under the Bonus Plan through the
date of Separation from Service (including any amounts awarded for

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previous years but which were not yet vested) and a pro rata share of any bonus
with respect to the current fiscal year which had been earned as of the date of
the Executive’s Separation from Service (and any forfeiture or similar
restrictive provisions applicable to each award shall not apply); and (iii) one
lump sum payment in an amount equal to the sum of (1) the Executive’s then
current annual base salary, and (2) the average bonuses paid to the Executive
during the three preceding fiscal years.  Such amounts in clauses (i), (ii), and
(iii) shall be paid in cash within fifteen (15) days of the Executive’s
Separation from Service; provided, however, that if the Executive has a
voluntary Separation from Service for Good Reason prior to a Change in Control
in accordance with the flush language at the end of Section 1(c), then the
Employer shall pay the amounts described in clauses (ii) and (iii) of this
paragraph within fifteen (15) days following the Change in Control.

Notwithstanding any provision in the Agreement to the contrary, to the extent
necessary to avoid the imposition of tax on the Executive under Code Section
409A, any payments that are otherwise payable to the Executive within the first
six (6) months following the effective date of the Executive’s termination of
employment, shall be suspended and paid as soon as practicable following the end
of the six-month period following such effective date if, immediately prior to
the Executive’s termination of employment, the Executive is determined to be a
Specified Employee.  All payments of severance and other benefits under this
Agreement shall accrue from the date of the Executive’s termination of
employment, to the extent not then paid due to this paragraph. Any payments
suspended by operation of this paragraph shall be paid as a lump sum on the
first (1st) day following the end of such six-month period.  Payments (or
portions thereof) that would be paid latest in time during the six-month period
will be suspended first.”

Except as specifically amended hereby the Agreement will remain in full force
and effect as prior to this amendment.

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IN WITNESS WHEREOF, the Employer and the Executive have executed and delivered
this amendment as of the date first shown above.  

         

EMPLOYER

 

 

 

COASTAL BANKING COMPANY

 

a South Carolina corporation

 

 

  

 

 

 

 

By:  

/s/ Suellen Garner

 

 

Signature

 

 

 

 

 

Suellen Garner

 

 

Print Name

 

 

 

 

 

Chairman

 

 

Title

 

 

 

 

 

 

 

CBC NATIONAL BANK

 

 

 

 

 

 

By:  

/s/ Suellen Garner

 

 

Signature

 

 

 

 

 

Suellen Garner

 

 

Print Name

 

 

 

 

 

Chairman

 

 

Title

 

 

 

 

 

/s/ Leo Deas III

 

 

LEO DEAS III