Exhibit 10.7


 


SALARY CONTINUATION AGREEMENT


 


This Salary Continuation Agreement (the “Agreement”) is made this 19th
day of January 2005, 
by and among First Capital Bank Holding Corporation, a Florida
corporation (the “Company”), First National Bank of Nassau County, a national bank
organized under the laws of the United States (the “Bank”) (the “Company and
the Bank being referred to herein collectively as the “Employer”) and Timothy
S. Ayers (the “Executive”).


 


WITNESSETH


 


WHEREAS, the Bank is a national bank organized under the laws of the
United States and operating in Nassau County, Florida;


 


WHEREAS, Executive is the Executive Vice President of Employer; and


 


WHEREAS, the parties desire to enter into this agreement to provide for
certain severance payments to Executive in the event there is a Change in
Control (as defined herein) and in accordance of the terms and conditions of
this Agreement.


 


NOW, THEREFORE, in consideration of Executive’s services to Employer,
the mutual covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, do hereby agree as follows:


 


1.            Definitions


 


a. “Cause” shall mean (A) the
commission by the Executive of a willful act (including, without limitation, a
dishonest or fraudulent act) or a grossly negligent act, or the willful or
grossly negligent omission to act by the Executive, which is intended to cause,
causes, or is reasonably likely to cause material harm to the Employer
(including harm to its business reputation); (B) the indictment of the
Executive for the commission or perpetration by the Executive of any felony or
any crime involving dishonesty, moral turpitude or fraud; (C) the material
breach by the Executive of this Agreement that, if susceptible of cure, remains
uncured 10 days following written notice to the Executive of such breach; (D)
the exhibition by the Executive of a standard of behavior within the scope of
his employment that is materially disruptive to the orderly conduct of the
Employer’s business operations (including, without limitation, substance abuse
or sexual misconduct) to a level which, in the Board of Directors’ good faith
and reasonable judgment, is materially detrimental to the Employer’s best
interest, that, if susceptible of cure, remains uncured 10 days following
written notice to the Executive of such specific inappropriate behavior; (E)
the receipt of any form of notice, written or otherwise, that any regulatory
agency having jurisdiction over the Employer intends to institute any form of
formal or informal (e.g., a memorandum of understanding which relates to
the Executive’s performance) regulatory action against the Executive or the
Employer if the Board of Directors in good faith determines that the subject
matter of such action involves acts or omissions by or under the supervision of
the Executive or that termination of the Executive would advance the


 


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Employer’s compliance with the
purpose of the action or would assist the Employer in avoiding or reducing the
restrictions or adverse effects to the Employer related to the regulatory
action; or (F) the failure of the Executive to render the services hereunder in
accordance with an appropriate performance standard determined in the sole
discretion of the Board of Directors;


 


b.              “Change in Control” shall mean the occurrence during the Term
of any of the following events, unless such event is a result of a Non-Control
Transaction:


 


(i)               The individuals
who, as of the date of this Agreement, are members of the Board of Directors of
the Company (the “Incumbent Board”)
cease for any reason to constitute at least 50% of the Board of Directors of the Company; provided, however,
that if the election, or nomination for election by the Company’s shareholders,
of any new director was approved in advance by a vote of at least 50% of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered as a member of
the Incumbent Board; provided, further, that no individual shall
be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened election contest,
or other actual or threatened solicitation of proxies, proxy contest, or
consents by or on behalf of any person other than the Board of Directors of the
Company, including by reason of any agreement intended to avoid or settle any
election contest or proxy contest.


 


(ii)          An
acquisition (other than directly from the Company) of any voting securities of the Company (the “Voting Securities”) by
any “Person” (as the term “person”
is used for purposes of Section 13(d) or 14(d) of the Exchange Act) immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more
of the combined voting power of the Company’s
then outstanding Voting Securities; provided,
however, that in determining whether a Change
in Control has occurred, Voting
Securities which are acquired in a Non-Control Acquisition shall not constitute an acquisition which
would cause a Change in Control.


 


(iii) Consummation of: (i) a merger, consolidation, or reorganization
involving the Company; (ii) a complete liquidation or dissolution of the
Company; or (iii) the sale or other disposition of all or substantially all of
the assets of the Company to any Person (other than a transfer to a Subsidiary).


 


(iv) A notice of an application
is filed with the Office of Comptroller of the Currency (the “OCC”)
or the Federal Reserve Board or any other bank or thrift regulatory approval (or notice of no disapproval)
is granted by the Federal Reserve, the 0CC, the Federal Deposit Insurance Corporation, or any other regulatory
authority for permission to acquire control of the Company or any of its
banking subsidiaries; provided that if
the application is filed in connection with a transaction which has been
approved by the Board, then the Change in Control shall not be deemed to occur
until consummation of the transaction.


 


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c.              “Good Reason” shall mean the occurrence after a Change in
Control of any of the events or conditions described in subsections (i) through
(viii) hereof:


 


(i)           a
change in the Executive’s status, tide, position or responsibilities (including
reporting responsibilities) which, in the Executive’s reasonable judgment, represents an
adverse change from his status, title, position or responsibilities as in effect
at any time within ninety days preceding the date of a Change in Control or at
any time thereafter; the assignment to the Executive of any duties or
responsibilities which, in the Executive’s reasonable judgment, are
inconsistent with his status, title, position or responsibilities as in effect
at any time within ninety days preceding the date of a Change in Control or at
any time thereafter; any removal of the Executive from or failure to reappoint
or reelect him to any of such offices or positions, except in connection with
the termination of his employment for disability or Cause, as a result of his
death, or by the Executive other than for Good Reason, or any other change in
condition or circumstances that in the Executive’s reasonable judgment makes it
materially more difficult for the Executive to carry out the duties and
responsibilities of his office than existed at any time within ninety days
preceding the date of Change in Control or at any time thereafter;


 


(ii)          a
reduction in the Executive’s base salary or any failure to pay the Executive
any compensation or benefits to which he is entitled within 10 days of the date
due;


 


(iii) the Employer’s requiring the Executive to be based at any place
outside a 30-mile radius from the executive offices occupied by the Executive
immediately prior to the Change in Control, except for reasonably required
travel on the Employer’s business which is not materially greater than such
travel requirements prior to the Change in Control;


 


(iv) the failure by the Employer to (A) continue in effect (without
reduction in benefit level and/or reward opportunities) any material
compensation or employee benefit plan in which the Executive was participating
at any time within 90 days preceding the date of a Change in Control or at any
time thereafter, unless such plan is replaced with a plan that provides
substantially equivalent compensation or benefits to the Executive, or (B)
provide the Executive with compensation and benefits, in the aggregate, at
least equal (in terms of benefit levels and/or reward opportunities) to those
provided for under each other employee benefit plan, program and practice in which the Executive
was participating at any time within 90 days preceding the date of a Change in
Control or at any time thereafter;


 


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(v) the insolvency
or the filing (by any party, including the Company or the Employer) of a
petition for bankruptcy of the Company or the Employer, which petition is not
dismissed within 60 days;


 


(vi) any material breach by the Employer of
any material provision of this Agreement;


 


(vii) any purported termination of the
Executive’s employment for Cause by the Employer which does not comply with the
terms of this Agreement; or


 


(viii) the failure of the Employer to obtain an agreement, satisfactory
to the Executive, from any successor or assign to assume and agree to perform
this Agreement, as contemplated in Section 4 hereof.


 


Any event or condition described in clause (i) through (viii) above which
occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a third party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The Executive’s
right to terminate his employment for Good Reason shall not be affected by his
incapacity due to physical or mental illness.


 


d.   “Non-Control Transaction” shall mean a transaction described
below:


 


(i)           the
shareholders of the Company, immediately before such merger, consolidation or
reorganization, own, directly or indirectly, immediately following such merger,
consolidation or reorganization, at least 50% of the combined voting power of
the outstanding voting securities of the corporation resulting from such
merger, consolidation or reorganization (the “Surviving Corporation”) in
substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization; and


 


(ii)          immediately following such merger, consolidation or
reorganization, the number of directors on the board of directors of the
Surviving Corporation who were members of the Incumbent Board shall at least
equal the number of directors who were affiliated with or appointed by the
other party to the merger, consolidation or reorganization.


 


e.              “Notice of Termination” shall mean a written notice of
termination from the Employer or the Executive which specifies an effective
date of termination, indicates the specific termination provision in this
Agreement relied upon, and, in the case of a termination for Good Reason or for
Cause, sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment under the
provision so indicated.


 


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2.            Payments
to Executive,


 


If Executive’s employment is terminated (a) Upon a Change in Control,
for any reason upon delivery of notice to the Employer within a 12 month period
after the occurrence of a Change in Control; (b) for Good Reason pursuant to
Section l(c)(iv); or (c) if the Employer terminates the Executive Without Cause
after 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) the Employer shall pay the Executive in cash within 15 days of such
termination date any sums due him as base salary and/or reimbursement of
expenses through the date of such termination, plus any bonus earned or accrued
under the Bonus Plan through the date of termination (including any amounts
awarded for 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 termination (and any forfeiture in
other restrictive provisions applicable to each award shall not apply); and
(ii) the Employer shall pay the Executive in cash within 15 days of such
termination date 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 Executive during the three preceding fiscal years.


 


3.            Governing
Law; Jurisdiction and Venue.


 


This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Florida without giving effect to the
conflict of laws principles thereof. The parties agree to the exclusive
jurisdiction and venue of the federal courts sitting in Nassau County, Florida
with regard to any actions that arise out of this Agreement.


 


4.            Successors;
Binding Agreement.


 


This Agreement shall be binding upon and shall inure to the benefit of
Employer and its successors and assigns. Neither this Agreement nor any right
or interest hereunder shall be assignable or transferable by Executive, his
beneficiaries or legal representatives, except by will or by the laws of
descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by Executive’s legal personal representative.


 


5.            Entire
Agreement.


 


This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof.


 


6.            Counterparts.


 


This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.


 


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  EMPLOYER

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST
  CAPITAL BANK

  	
   

  
	
   

  	
  HOLDING
  CORPORATION, a

  	
   

  
	
   

  	
  Florida
  corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Suellen E. Garner

  	
   

  
	
   

  	
   

  	
  Name:
  Suellen E. Garner

  	
   

  
	
   

  	
   

  	
  Title:
  Chairman

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FIRST
  NATIONAL BANK OF

  	
   

  
	
   

  	
  NASSAU
  COUNTY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael G. Sanchez

  	
   

  
	
   

  	
   

  	
  Name:
  Michael G. Sanchez

  	
   

  
	
   

  	
   

  	
  Title: President
  & CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/
  Timothy S. Ayers

  	
   

  	
   

  
	
   

  	
  Name: Timothy
  S. Ayers

  	
   

  
						



 


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