**Exhibit 10.12**

 

**SALARYCONTINUATION AGREEMENT**

 

This Salary Continuation Agreement (the “Agreement”)is made this 19th day of January, 2005, by and among FirstCapital Bank Holding Corporation, a Florida corporation (the “Company”), FirstNational Bank of Nassau County, a national bank organized under the laws of theUnited States (the “Bank”) (the “Company and the Bank being referred to hereincollectively as the “Employer”) and Leo Deas III (the “Executive”).

 

**WITNESSETH**

 

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

 

WHEREAS, Executive is the Executive VicePresident of Employer; and

 

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

 

NOW, THEREFORE, in consideration of Executive’sservices to Employer, the mutual covenants contained herein, and other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto, intending to be legally bound, do herebyagree as follows:

 

1.                                       Definitions

 

a.                                       **“Cause”** shall mean (A) the commission by the Executiveof a willful act (including, without limitation, a dishonest or fraudulent act)or a grossly negligent act, or the willful or grossly negligent omission to actby the Executive, which is intended to cause, causes, or is reasonably likelyto cause material harm to the Employer (including harm to its businessreputation); (B) the indictment of the Executive for the commission orperpetration by the Executive of any felony or any crime involving dishonesty,moral turpitude or fraud; (C) the material breath by the Executive of thisAgreement that, if susceptible of cure, remains uncured 10 days followingwritten notice to the Executive of such breach; (D) the exhibition by theExecutive of a standard of behavior within the scope of his employment that ismaterially disruptive to the orderly conduct of the Employer’s businessoperations (including, without limitation, substance abuse or sexualmisconduct) to a level which, in the Board of Directors’ good faith andreasonable judgment, is materially detrimental to the Employer’s best interest,that, if susceptible of cure, remains uncured 10 days following written noticeto the Executive of such specific inappropriate behavior; (E) the receiptof any form of notice, written or otherwise, that any regulatory agency havingjurisdiction over the Employer intends to institute any form of formal orinformal (e.g., a memorandum of understanding which relates to theExecutive’s performance) regulatory action against the Executive or theEmployer if the Board of Directors in good faith determines that the subjectmatter of such action involves acts or omissions by or under the supervision ofthe Executive or that termination of the Executive would advance the Employer’scompliance with the purpose of the action or would assist the Employer inavoiding or reducing the restrictions or adverse effects to the Employerrelated to the regulatory action; or 

 

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(F) the failure of the Executive to render the services hereunderin accordance with an appropriate performance standard determined in the solediscretion of the Board of Directors;

 

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

 

(i)                                     Theindividuals who, as of the date of this Agreement, are members of the Board ofDirectors of the Company (the **“Incumbent Board”**)cease for any reason to constitute at least 50% of the Board of Directors ofthe Company; provided, however, that if the election, ornomination for election by the Company’s shareholders, of any new director wasapproved in advance by a vote of at least 50% of the Incumbent Board, such newdirector shall, for purposes of this Agreement, be considered as a member of theIncumbent Board; provided, further, that no individual shall beconsidered a member of the Incumbent Board if such individual initially assumedoffice as a result of either an actual or threatened election contest, or otheractual or threatened solicitation of proxies, proxy contest, or consents by oron 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 electioncontest or proxy contest.

 

(ii)                                  Anacquisition (other than directly from the Company) of any voting securities ofthe Company (the **“Voting Securities”**) by any **“Person”** (as the term “person” is used for purposes of Section 13(d) or14(d) of the Exchange Act) immediately after which such Person has **“Beneficial Ownership”** (within the meaning of Rule l3d-3promulgated under the Exchange Act) of 50% or more of the combined voting powerof the Company’s then outstanding Voting Securities; provided, however,that in determining whether a Change in Control has occurred, Voting Securitieswhich are acquired in a Non-Control Acquisition shall not constitute anacquisition which would cause a Change in Control.

 

(iii)                               Consummationof:  (i) a merger, consolidation, orreorganization involving the Company (ii) a complete liquidation ordissolution of the Company; or (iii) the sale or other disposition of allor substantially all of the assets of the Company to any Person (other than atransfer to a Subsidiary).

 

(iv)                              Anotice of an application is filed with the Office of Comptroller of theCurrency (the **“OCC”**) or the Federal ReserveBoard or any other bank or thrift regulatory approval (or notice of nodisapproval) is granted by the Federal Reserve, the OCC, the Federal DepositInsurance Corporation, or any other regulatory authority for permission toacquire control of the Company or any of its banking subsidiaries; providedthat if the application is filed in connection with a transaction which hasbeen approved by the Board, then the Change in Control shall not be deemed tooccur until consummation of the transaction.

 

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

 

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

 

(ii)                                  areduction in the Executive’s base salary or any failure to pay the Executiveany compensation or benefits to which he is entitled within 10 days of the datedue;

 

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

 

(iv)                              thefailure by the Employer to (A) continue in effect (without reduction inbenefit level and/or reward opportunities) any material compensation oremployee benefit plan in which the Executive was participating at any timewithin 90 days preceding the date of a Change in Control or at any timethereafter, unless such plan is replaced with a plan that providessubstantially equivalent compensation or benefits to the Executive, or (B) providethe Executive with compensation and benefits, in the aggregate, at least equal(in terms of benefit levels and/or reward opportunities) to those provided forunder each other employee benefit plan, program and practice in which theExecutive was participating at any time within 90 days preceding the date of aChange in Control or at any time thereafter;

 

(v)                                 theinsolvency 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 isnot dismissed within 60 days;

 

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

 

(vii)                           anypurported termination of the Executive’s employment for Cause by the Employerwhich does not comply with the terms of’ this Agreement; or

 

(viii)                        thefailure of the Employer to obtain an agreement, satisfactory to the Executive,from any successor or assign to assume and agree to perform thisAgreement, 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 theExecutive reasonably demonstrates (A) was at the request of a third party,or (B) otherwise arose in connection with, or in anticipation of, a Changein Control which actually occurs, shall constitute Good Reason for purposes ofthis Agreement, notwithstanding that it occurred prior to the Change in Control.The Executive’s right to terminate his employment for Good Reason shall not beaffected by his incapacity due to physical or mental illness.

 

d.                                      **“Non-Control Transaction”** shall mean a transaction describedbelow:

 

(i)                                     theshareholders of the Company, immediately before such merger, consolidation orreorganization, own, directly or indirectly, immediately following such merger,consolidation or reorganization, at least 50% of the combined voting power ofthe outstanding voting securities of the corporation resulting from suchmerger, consolidation or reorganization (the **“SurvivingCorporation”**) in substantially the same proportion as theirownership of the Voting Securities immediately before such merger,consolidation or reorganization; and

 

(ii)                                  immediatelyfollowing such merger, consolidation or reorganization, the number of directorson the board of directors of the Surviving Corporation who were members of theIncumbent Board shall at least equal the number of directors who wereaffiliated with or appointed by the other party to the merger, consolidation orreorganization.

 

e.                                       **“Notice of Termination”** shall mean a written notice of terminationfrom the Employer or the Executive which specifies an effective date oftermination, indicates the specific termination provision in this Agreementrelied 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 providea basis for termination of the Executive’s employment under the provision soindicated.

 

2.                                       Paymentsto Executive.

 

If Executive’s employment is terminated (a) Upona Change in Control, for any reason upon delivery of notice to the Employerwithin a 12 month period after the occurrence of a Change in Control; (b) forGood Reason pursuant to Section 1(c)(iv); or (c) if the Employerterminates the Executive Without Cause after a Change in Control, then, inaddition to other 

 

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rights and remedies available in law or equity, the Executive shall beentitled to the following (i) the Employer shall pay the Executive in cashwithin 15 days of such termination date any sums due him as base salary and/orreimbursement of expenses through the date of such termination, plus any bonusearned or accrued under the Bonus Plan through the date of termination(including any amounts awarded for previous years but which were not yetvested) and a prorata share of any bonus with respect to thecurrent fiscal year which had been earned as of the date of the Executive’stermination (and any forfeiture in other restrictive provisions applicable toeach award shall not apply); and (ii) the Employer shall pay the Executivein cash within 15 days of such termination date one lump sum payment in anamount equal to the sum of (1) the Executive’s then current annual basesalary, and (2) the average bonuses paid to Executive during the threepreceding fiscal years.

 

3.                                       GoverningLaw; Jurisdiction and Venue.

 

This Agreement shall be governed by andconstrued and enforced in accordance with the laws of the State of Floridawithout giving effect to the conflict of laws principles thereof. The partiesagree to the exclusive jurisdiction and venue of the federal courts sitting inNassau County, Florida with regard to any actions that arise out of thisAgreement.

 

4.                                       Successors;Binding Agreement.

 

This Agreement shall be binding upon andshall inure to the benefit of Employer and its successors and assigns. Neitherthis Agreement nor any right or interest hereunder shall be assignable ortransferable by Executive, his beneficiaries or legal representatives, exceptby will or by the laws of descent and distribution. This Agreement shall inureto the benefit of and be enforceable by Executive’s legal personalrepresentative.

 

5.                                       EntireAgreement.

 

This Agreement constitutes the entireagreement between the parties hereto and supersedes all prior agreements, ifany, understandings and arrangements, oral or written, between the partieshereto with respect to the subject matter hereof.

 

6.                                       Counterparts.

 

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

 

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|   | EMPLOYER                                                          |
|--------|-------------------------------------------------------------------|
|   |                                                              |
|   | FIRST CAPITAL BANK   HOLDING CORPORATION, a   Florida corporation |
|   |                                                              |
|   | By:                                                               | /s/ Suellen R. Garner |   |
|   |                                                              | Name: Suellen R. Garner |
|   |                                                              | Title: Chairman |
|   |                                                              |
|   | FIRST NATIONAL BANK OF   NASSAU COUNTY                            |
|   |                                                              |
|   | By:                                                               | /s/ Michael G. Sanchez |   |
|   |                                                              | Name: Michael G. Sanchez |
|   |                                                              | Title: President and CEO |
|   |                                                              |
|   | EXECUTIVE                                                         |
|   |                                                              |
|   | /s/ Leo Deas III                                                  |   |
|   | Name: Leo Deas III                                                |

 

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