Exhibit 10.41









Exhibit 10.41




December 4, 2009




Via Hand Delivery




Kenneth R. Vaught

100 North Main Street

Greeneville, Tennessee 37743




Dear Mr. Vaught,




Green Bankshares, Inc. (the “Company”) has entered into a Securities Purchase Agreement (the
“Participation Agreement”), with the United States Department of Treasury (“Treasury”) pursuant to
which the Company is a participant in the Treasury’s TARP Capital Purchase Program (the “CPP”). If
the Company ceases at any time to participate in the CPP, this letter shall be of no further force
and effect.




In connection with the closing of the Treasury’s investment in the Company under the CPP, you
executed a letter agreement (the “Initial Letter”) in which, in consideration of the benefits that
you were to receive as a result of the Company’s participation in the CPP, you agreed to certain
modifications and limitations on your compensation arrangement with the Company during the TARP
Period (as defined below). Subsequent to the closing of the Treasury’s investment in the Company
under the CPP, the United States Congress amended the executive compensation limitations applicable
to entities participating in the CPP and instructed the Treasury to adopt rules and regulations
implementing these modified limitations. On June 15, 2009, the Treasury issued an interim final
rule (the “IFR”) providing guidance on these modified compensation provisions. To comply with
these modified requirements, and in consideration of the benefits that you will receive as a result
of the Company’s continued participation in the CPP, you agree as follows:





	 	(1)	 	No Golden Parachute Payments. Under the terms of the EESA Restrictions, the
Company is prohibited from paying any golden parachute payment to a senior executive
officer or any of the next five most highly compensated employees of the Company during
the TARP Period. Accordingly, the Company is prohibiting any golden parachute payment
to you during the TARP Period if you are a senior executive officer or one of the next
five most highly compensated employees of the Company. Whether you are a senior
executive officer or one of the next five most highly compensated employees will be
determined by reference to the definitions thereof contained in the IFR, as amended
from time to time.

	 
	 	(2)	 	Recovery of Bonus, Incentive Compensation and Retention Award. Under the terms
of the EESA Restrictions, the Company must ensure that any payment that is, or is in
the nature of a bonus incentive compensation or retention award, made to a senior
executive officer or the next twenty most highly compensated employees of the Company
during the TARP Period is subject to a provision for recovery or “clawback” by the
Company if the bonus payment was based on materially inaccurate financial statements
(which includes, but is not limited to, statements of earnings, revenues, or gains) or
any other potentially inaccurate performance metric criteria. Accordingly, any bonus,
incentive compensation or retention award made to you during the TARP Period is subject
to recovery or “clawback” by the Company if the payments were based on materially
inaccurate financial statements (which includes but is not limited to statements of
earnings, revenues, or gains) or any other materially inaccurate performance metric
criteria. Whether you are a senior executive officer or one of the next twenty most
highly compensated
employees of the Company, and thus subject to this clawback
provision, will be determined by reference to the definitions thereof contained in the
IFR, as amended from time to time.




 


 









 







Kenneth R. Vaught

December 4, 2009

Page 2





	 	(3)	 	Limitation on Bonus, Incentive and Retention Awards. Under the terms of the
EESA Restrictions, the Company is prohibited from paying or accruing during the TARP
Period any payment that is, or is in the nature of, a bonus, incentive compensation or
retention award to at least the five most highly compensated employees of the Company.
Accordingly, for so long as you are one of the five most highly compensated employees
of the Company or any other employee to which this restriction applies under the IFR,
as amended from time to time, except for any bonus payment, incentive compensation or
retention award required to be paid to you pursuant to a written employment contract
executed on or before February 11, 2009, as such valid employment contracts are
determined by the Secretary of the Treasury or his designee, by regulation or
otherwise, the Company may not during the TARP Period pay to you or accrue on your
behalf any payment that is, or is in the nature of, a bonus, incentive compensation or
retention award (as such terms are defined in the IFR, as amended from time to time)
except for as permitted under the IFR, as amended from time to time, which permits
long-term restricted stock that (i) does not fully vest during the TARP Period; (ii)
has a value in an amount that is not greater than 1/3 of the total amount of your
annual compensation for the fiscal year in which the award is granted; and (iii) is
subject to such other terms and conditions as the Secretary of the Treasury may
determine is in the public interest, including the limitations set forth in the IFR, as
amended from time to time. Whether you are one of the five most highly compensated
employees of the Company or an employee to whom the Company may not pay, or for whom
the Company may not accrue, a payment that is, or is in the nature of, a bonus,
incentive compensation or retention award, will be determined by reference to the IFR,
as amended from time to time.

	 
	 	(4)	 	Compensation Program Amendments. Each of the Company’s compensation, bonus,
incentive, retention and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) (collectively, “Benefit Plans”)
with respect to you or in which you may participate from time to time is hereby amended
to the extent necessary to give effect to provisions (1), (2) and (3). For reference,
certain affected Benefit Plans are set forth in Appendix A to this letter.

	 
	 	 	 	In addition, the Company is required to review its Benefit Plans to ensure that they
exclude incentives for senior executive officers to take unnecessary and excessive
risks that threaten the value of the Company during the TARP Period. To the extent
any such review requires revisions to any Benefit Plan with respect to you, you and
the Company agree to negotiate such changes promptly and in good faith.

	 
	 	(5)	 	Definitions and Interpretation. This letter shall be interpreted as follows:







	 	•	 	“Senior executive officer” means the Company’s “senior executive
officers” as defined in the IFR, as amended from time to time.

	 
	 	•	 	“Golden parachute payment” is used with same meaning as in the IFR, as
amended from time to time.

	 
	 	•	 	“TARP Period” means the period beginning with the Company’s receipt of any
financial assistance (as defined in the IFR, as amended from time to time) and
ending on the last date upon which an obligation (as defined in the IFR, as
amended from time to time) arising from financial assistance remains
outstanding (disregarding any warrants to purchase common stock of the Company
that the Treasury may hold).




 


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Kenneth R. Vaught

December 4, 2009

Page 3





	 	•	 	“EESA” means the Emergency Economic Stabilization Act of 2008, as amended by
the American Recovery and Reinvestment Act of 2009 (the “ARRA”), and rules,
regulations, guidance or other requirements issued thereunder or agreement
between the Company
and the Treasury with respect thereto, including the IFR, as amended from
time to time (the “ESSA Restrictions”).

	 
	 	•	 	The term “Company” includes any entities treated as a single employer with
the Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). In
connection with your delivery of the Initial Letter, you also delivered a
waiver pursuant to the Participation Agreement, and, as between the Company and
you, the term “employer” in that waiver will be deemed to mean the Company as
used in this letter.

	 
	 	•	 	Provisions (1), (2) and (3) of this letter are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA and
the EESA Restrictions (and, to the maximum extent consistent with the
preceding, to permit operation of the Benefit Plans in accordance with their
terms before giving effect to this letter).







	 	(6)	 	Miscellaneous. To the extent not subject to federal law, this letter will be
governed by and construed in accordance with the laws of Tennessee. This letter may be
executed in two or more counterparts, each of which will be deemed to be an original. A
signature transmitted by facsimile or portable document format (“.pdf”) form will be
deemed an original signature.

	 
	 	(7)	 	Replacement of Initial Letter. This letter supersedes and replaces the Initial
Letter in its entirety.




 


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Kenneth R. Vaught

December 4, 2009

Page 4




The Board appreciates the concessions you are making and looks forward to your continued leadership
during these financially turbulent times.




Yours sincerely,




Green Bankshares, Inc.




	 	 	 	 	 
	By:  
	/s/ Steve D. Ottinger
 


	 	 
	 	Name: 

	Steve D. Ottinger	 	 
	 	Title:

	Senior Vice President and	 	 
	 

	 	Chief Human Resources Officer	 	 





 


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Kenneth R. Vaught

December 4, 2009

Page 5




Intending to be legally bound, I agree with and accept the foregoing terms on the date set forth
below.




	 	 	 
	/s/ Kenneth R. Vaught
 

Kenneth R. Vaught

	 	 
	Date: December 4, 2009
	 	 
	 
	 	 
	cc: Kenneth R. Vaught, via Hand Delivery
	 	 







 


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Appendix A




Green Bankshares, Inc. 2004 Long-Term Incentive Plan and all stock options, stock appreciation
rights and restricted share awards thereunder.




Any cash incentive or cash bonus plan, program or arrangement adopted by the board of directors, or
any committee thereof, of Green Bankshares, Inc.




Employment Agreement by and between Green Bankshares, Inc. and R. Stan Puckett dated December 31,
2007.




Greene County Bancshares, Inc. (n/k/a Green Bankshares, Inc.) Change in Control Protection Plan.



 


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