Document:

Exhibit 10.8

EXHIBIT No. 10.8

GREEN BANKSHARES, INC.

Amended and Restated

2004 LONG-TERM INCENTIVE PLAN

Originally Adopted April 22, 2004

Amended and Restated for Section 409A and

Final Regulations Thereunder

Effective August 20, 2007

	1.	 	Establishment, Purpose, and Types of Awards. Green Bankshares, Inc., a Tennessee corporation
(the “Company”), previously established this incentive compensation plan to be known as the “Green
Bankshares, Inc. 2004 Long-Term Incentive Plan” (hereinafter referred to as the “Plan”) during 2004
for the purpose of attracting, retaining and motivating employees, officers and directors for the
Company and its Affiliates and to provide incentives and awards for superior performance. The
Company, pursuant to action by its Board dated August 20, 2007, hereby amends and restates the Plan
in order to ensure its compliance with new Code Section 409A and Treasury regulations issued
thereunder.

The Plan permits the granting of the following types of awards (“Awards”), according to the
Sections of the Plan listed here:

	 	 	 
	Section 8

	 	Options
	 
	 	 
	Section 9

	 	Share Appreciation Rights
	 
	 	 
	Section 10

	 	Restricted Shares and Restricted Share Units
	 
	 	 
	Section 11

	 	Deferred Share Units
	 
	 	 
	Section 12

	 	Performance Awards

The Plan is not intended to affect and shall not affect any stock options, equity-based
compensation, or other benefits that the Company or its Affiliates may have provided, or may
separately provide in the future pursuant to any agreement, plan, or program that is independent of
this Plan.

	2.	 	Compliance with Code Section 409A. It is the intention of the Company that this Plan, following
its amendment and restatement, conform now and in the future with the requirements of Code
Section 409A and any Treasury regulations issued thereunder, and the provisions of this Plan shall
be liberally construed to achieve such intent; no right, power, or discretion granted the
Committee, a Participant, or any beneficiary of a Participant hereunder, whether granted by the
Plan or by law, shall be exercisable, if at all, in a manner that would cause the deferral which is
the subject of this Plan to violate the provisions of Code Section 409A or the Treasury regulations
issued thereunder.

	3.	 	Defined Terms. Terms in the Plan that begin with an initial capital letter have the defined
meaning set forth in Exhibit A, unless defined elsewhere in this Plan or the context of their use
clearly indicates a different meaning.

	4.	 	Shares Subject to the Plan. Subject to the provisions of Section 15 of the Plan, the maximum
number of Shares that the Company may issue pursuant to Awards is 500,000. These Shares shall be
authorized but unissued Shares.

Shares that are subject to an Award that for any reason expires, is forfeited, is cancelled, or
becomes unexercisable, and Shares that are for any other reason not paid or delivered under the
Plan shall again, except to the extent prohibited by Applicable Law, be available for subsequent
Awards under the Plan. In addition, the Committee may make future Awards with respect to Shares
that the Company retains from otherwise delivering pursuant to an Award either (i) as payment of
the exercise price of an Award, or (ii) in order to satisfy the withholding or employment taxes due
upon the grant, exercise, vesting, or distribution of an Award. Notwithstanding the foregoing, but
subject to adjustments pursuant to Section 15 below, the number of Shares that are available for
ISO Awards shall be determined, to the extent required under applicable tax laws, by reducing the
number of Shares designated in the preceding paragraph by the number of Shares granted pursuant to
Awards (whether or not Shares are issued pursuant to such Awards); provided that any Shares that
are either purchased under the Plan and forfeited back to the Plan, or surrendered in payment of
the Exercise Price for an Award shall be available for issuance pursuant to ISO Awards.

 

 

 

	5.	 	Administration.

	 	(a)	 	General. The Committee shall administer the Plan in accordance with its
terms, provided that the Board may act in lieu of the Committee on any matter. The
Committee shall hold meetings at such times and places as it may determine and make
such rules and regulations for the conduct of its business as it deems advisable. In
the absence of a duly appointed Committee or if the Board otherwise chooses to act in
lieu of a Committee, the Board shall function as the Committee for all purposes of the
Plan.

	 	(b)	 	Committee Composition. The Board shall appoint the members of the Committee.
If and to the extent permitted by Applicable Law, the Committee may authorize one or
more Reporting Persons (or other officers) to make Awards to Eligible Persons who are
not Reporting Persons (or other officers whom the Committee has specifically
authorized to make Awards). The Board may at any time appoint additional members to
the Committee, remove and replace members of the Committee with or without Cause, and
fill vacancies on the Committee however caused.

	 	(c)	 	Powers of the Committee. Subject to the provisions of the Plan, the
Committee shall have the authority, in its sole discretion:

	 	(i)	 	to determine Eligible Persons to whom Awards shall be
granted from time to time and the number of Shares, units, or SARs to be
covered by each Award;

	 	(ii)	 	to determine, from time to time, the Fair Market
Value of Shares;

	 	(iii)	 	to determine, and to set forth in Award Agreements,
the terms and conditions of all Awards, including any applicable exercise
or purchase price, the installments and conditions under which an Award
shall become vested (which may be based on performance), terminated,
expired, cancelled, or replaced, and the circumstances for vesting
acceleration or waiver of forfeiture restrictions, and other restrictions
and limitations;

	 	(iv)	 	to approve the forms of Award Agreements and all
other documents, notices and certificates in connection therewith which
need not be identical either as to type of Award or among Participants;

	 	(v)	 	to construe and interpret the terms of the Plan and
any Award Agreement, to determine the meaning of their terms, and to
prescribe, amend, and rescind rules and procedures relating to the Plan
and its administration; and

	 	(vi)	 	in order to fulfill the purposes of the Plan and
without amending the Plan, modify, cancel, or waive the Company’s rights
with respect to any Awards, to adjust or to modify Award Agreements for
changes in Applicable Law, and to recognize differences in foreign law,
tax policies, or customs; and

	 	(vii)	 	to make all other interpretations and to take all
other actions that the Committee may consider necessary or advisable to
administer the Plan or to effectuate its purposes.

	 	(d)	 	Delegation. Subject to Applicable Law and any restrictions set forth herein,
the Committee may delegate administrative functions to individuals who are Reporting
Persons, officers, or Employees of the Company or its Affiliates.

	 	(e)	 	Deference to Committee Determinations. The Committee shall have the
discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms
in any fashion it deems to be appropriate in its sole discretion, and to make any
findings of fact needed in the administration of the Plan or Award Agreements. The
Committee’s prior exercise of its discretionary authority shall not obligate it to
exercise its authority in a like fashion thereafter. The Committee’s interpretation
and construction of any provision of the Plan, or of any Award or Award Agreement,
shall be final, binding, and conclusive. The validity of any such interpretation,
construction, decision or finding of fact shall not be given de novo review if
challenged in court, by arbitration, or in any other forum, and shall be upheld unless
clearly arbitrary or capricious.

 

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	 	(f)	 	No Liability; Indemnification. Neither the Board nor any Committee member,
nor any Person acting at the direction of the Board or the Committee, shall be liable
for any act, omission, interpretation, construction or determination made in good
faith with respect to the Plan, any Award or any Award Agreement. The Company and its
Affiliates shall pay or reimburse any member of the Committee, as well as any
Director, Employee, or Consultant who takes action in connection with the Plan, for
all expenses incurred with respect to the Plan, and to the full extent allowable under
Applicable Law shall indemnify each and every one of them for any claims, liabilities,
and costs (including reasonable attorney’s fees) arising out of their good faith
performance of duties under the Plan. The Company and its Affiliates may obtain
liability insurance for this purpose.

	 	(g)	 	Payments to Specified Employees. Notwithstanding anything to the contrary in
this Plan, in the event that Participant is a “Specified Employee,” as that term is
defined by Code Section 409A(a)(2)(B)(i) (including applicable regulations or other
published IRS guidance), distributions of any lifetime benefits to the Participant may
not and shall not be made before the date which is six (6) months and one (1) day
after the date of the Participant’s termination of Continuous Service or, if earlier,
any date allowed under Code Section 409A and Treasury regulations issued thereunder,
or the date of the Participant’s death.

	 	(h)	 	Delays in Payments under the Plan. Consistent with regulations issued by
Treasury pursuant to Code Section 409A, the Company and/or the Committee may, in the
case of payments to a Participant, the deduction for which would be limited or
eliminated by the application of Code Section 162(m), payments which would violate
Federal securities laws or other applicable laws, or payments which would violate loan
covenants or other contractual terms to which the Company was a party where such
violation would result in material harm to the Company, unilaterally elect to delay
such payments. This amendment shall not become effective until the expiration of
twelve (12) months from the date such amendment is adopted by the Company’s Board.
Any payments delayed pursuant to this provision must be reinstated and made in the
first calendar year in which the Company and/or the Committee reasonably anticipate
that the payment would not violate such loan covenant(s) or contractual term(s), would
not result in material harm to the Company, or would not result in a violation of
Federal securities laws or other applicable laws.

	 	(i)	 	Payments. Consistent with Treasury regulations issued pursuant to
Section 409A, individual payments in a series of payments made to Participant pursuant
to this Agreement shall be treated for all purposes under the Agreement as a series of
separate payments.

	 	(j)	 	Recordkeeping.

	 	1.	 	The Committee shall maintain suitable records
of each Participant’s Account which, among other things, shall show
separately deferrals and the earnings credited thereon, as well as
distributions and withdrawals therefrom and records of its
deliberations and decisions.

	 	2.	 	The Committee shall appoint a secretary, and
at its discretion, an assistant secretary, to keep the record of
proceedings, to transmit its decisions, instructions, consents or
directions to any interested party, to execute and file, on behalf of
the Committee, such documents, reports or other matters as may be
necessary or appropriate and to perform ministerial acts.

	 	3.	 	The Committee shall not be required to
maintain any records or accounts which duplicate any records or
accounts maintained by the Company.

	 	(k)	 	Inspection of Records. Copies of the Plan and records of a Participant’s
Account shall be open to inspection by the Participant or the Participant’s duly
authorized representatives at the office of the Committee at any reasonable business
hour.

	 	(l)	 	Identification of Fiduciaries. The Committee shall be the named fiduciary of
the Plan and, as permitted or required by law, shall have exclusive authority and
discretion to operate and administer the Plan.

 

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	 	(m)	 	Procedure for Allocation of Fiduciary Responsibilities. Fiduciary
responsibilities under the Plan are allocated as follows:

	 	(i)	 	The sole duties, responsibilities and powers
allocated to the Board, any Committee and any fiduciary shall be those
expressly provided in the relevant Sections of the Plan.

	 	(ii)	 	All fiduciary duties, responsibilities, and
powers not allocated to the Board, any Committee or any fiduciary, are
hereby allocated to such body, subject to delegation.

	 	(iii)	 	Fiduciary duties, responsibilities and
powers under the Plan may be reallocated among fiduciaries by amending
the Plan in the manner prescribed below, followed by the fiduciaries’
acceptance of, or operation under, such amended Plan.

	 	(n)	 	Claims Procedure.

	 	(i)	 	Any Participant or beneficiary of a
Participant has the right to make a written claim for benefits under
the Plan. If such a written claim is made and the Committee wholly or
partially denies the claim, the Committee shall provide the claimant
with written notice of such denial, setting forth, in a manner
calculated to be understood by the claimant:

	 	•	 	the specific reason or reasons for such denial;

	 	•	 	specific reference to pertinent Plan provisions or
pertinent legal and regulatory authority(ies) upon which the
denial is based;

	 	•	 	a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary;
and

	 	•	 	an explanation of the Plan’s claims review procedure and
time limits applicable to those procedures.

	 	(ii)	 	The written notice of any claim denial
pursuant to this Section 5(n) shall be given not later than
thirty (30) days after receipt of the claim by the Committee, unless
the Committee determines that special circumstances require an
extension of time for processing the claim, in which event:

	 	•	 	written notice of the extension shall be given by the
Committee to the claimant prior to thirty (30) days after
receipt of the claim;

	 	•	 	the extension shall not exceed a period of thirty (30) days
from the end of the initial thirty (30) day period for giving
notice of a claim denial; and

	 	•	 	the extension notice shall indicate (A) the special
circumstances requiring an extension of time and (B) the date
by which the Committee expects to render the benefit
determination.

	 	(iii)	 	The decision of the Committee shall be final
unless the claimant, within sixty (60) days after receipt of notice of
the claims denial from the Committee, submits a written request to the
Board, or its delegate, for an appeal of the denial. During that sixty
(60) day period, the claimant shall be provided, upon request and free
of charge, reasonable access to, and copies of, all documents, records
and other information relevant to the claim for benefits. The claimant
shall be provided the opportunity to submit written comments,
documents, records, and other information relating to the claim for
benefits as part of the claimant’s appeal. The claimant may act in
these matters individually, or through his/her authorized
representative.

 

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	 	(iv)	 	After receiving the written appeal, the Board
or its delegate shall issue a written decision notifying the claimant
of its decision on review not later than thirty (30) days after
receipt of the written appeal, unless the Board or its delegate
determines that special circumstances require an extension of time for
reviewing the appeal, in which event:

	 	•	 	written notice of the extension shall be given by the Board
or its delegate prior to thirty (30) days after receipt of the
written appeal;

	 	•	 	the extension shall not exceed a period of thirty (30) days
from the end of the initial thirty (30) day review period; and

	 	•	 	the extension notice shall indicate (A) the special
circumstances requiring an extension of time and (B) the date
by which the Board or its delegate expects to render the
appeal decision.

	 	(v)	 	The period of time within which a benefit
determination on review is required to be made shall begin at the time
an appeal is received by the Board or its delegate, without regard to
whether all the information necessary to make a benefit determination
on review accompanies the filing of the appeal. If the period of time
for reviewing the appeal is extended as permitted above due to a
claimant’s failure to submit information necessary to decide the claim
on appeal, then the period for making the benefit determination on
review shall be tolled from the date on which the notification of the
extension is sent to the claimant until the date on which the claimant
responds to the request for additional information.

	 	(vi)	 	In conducting the review on appeal, the Board
or its delegate shall take into account all comments, documents,
records, and other information submitted by the claimant relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination. If the Board or its
delegate upholds the denial, the written notice of decision from the
Board or its delegate shall set forth, in a manner calculated to be
understood by the claimant:

	 	•	 	the specific reason or reasons for the denial;

	 	•	 	specific reference to pertinent Plan provisions or
pertinent legal and regulatory authority(ies) upon which the
denial is based; and

	 	•	 	a statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant to
the claim for benefits.

	 	(vii)	 	If the Plan or any of its representatives
fails to follow any of the above claims procedures, the claimant shall
be deemed to have duly exhausted the administrative remedies available
under the Plan and shall be entitled to pursue any available remedies
under applicable law.

	 	(o)	 	Arbitration. Any controversy or claim arising out of or relating to this
Plan, or the breach of any of its terms or of the terms of any Award Agreement, shall
be resolved by binding arbitration conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association by an arbitrator mutually
acceptable to the parties. If the parties cannot agree upon a single arbitrator, each
shall appoint a disinterested arbitrator and the two arbitrators so chosen shall
choose a third arbitrator. In such event, the decision of a majority of the
arbitrators shall be the decision of the panel. The arbitrator shall be authorized to
grant injunctive relief and further shall be authorized to award the costs of
arbitration, including reasonable attorneys’ fees, to the prevailing party in the
arbitration. The arbitrator’s decision may be enforced in any court having
jurisdiction. The parties intend that this arbitration agreement be enforceable under
the Tennessee Uniform Arbitration Act.

	 	(p)	 	Conflicting Claims. If the Committee is confronted with conflicting claims
concerning a Participant’s Account, the Committee may interplead the claimants in an
action at law, or in an arbitration conducted in accordance with Section 5(o)
above and the rules of the American Arbitration Association, as the Committee shall
elect in its sole discretion, and in either case, the attorneys’ fees, expenses and
costs reasonably incurred by the Committee in such proceeding shall be paid from the
Participant’s Account.

 

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	 	(q)	 	Service of Process. The Secretary of Green Bankshares, Inc. is hereby
designated as agent of the Plan for the service of legal process.

	 	(r)	 	Fees. Any fees associated with ongoing plan administration shall be paid by
the Company.

	6.	 	Eligibility.

	 	(a)	 	General Rule. The Committee may grant ISOs only to Employees (including
officers who are Employees), and may grant all other Awards to any Eligible Person. A
Participant who has been granted an Award may be granted an additional Award or Awards
if the Committee shall so determine, if such person is otherwise an Eligible Person
and if otherwise in accordance with the terms of the Plan.

	 	(b)	 	Grant of Awards. Subject to the express provisions of the Plan, the
Committee shall determine from the class of Eligible Persons those individuals to whom
Awards under the Plan may be granted, the number of Shares subject to each Award, the
price (if any) to be paid for the Shares or the Award and, in the case of Performance
Awards, in addition to the matters addressed in Section 12 below, the specific
objectives, goals and performance criteria that further define the Performance Award.
Each Award shall be evidenced by an Award Agreement signed by the Company and, if
required by the Committee, by the Participant. The Award Agreement shall set forth the
material terms and conditions of the Award established by the Committee.

	 	(c)	 	Limits on Awards. No Participant may receive Options and SARs that relate to
more than One Hundred Twenty-Five Thousand (125,000) Shares. The Committee will
adjust these limitations subject to adjustment pursuant to Section 15 below.

	 	(d)	 	Replacement Awards. The Committee may, in its sole discretion and upon such
terms as it deems appropriate, require as a condition of the grant of an Award to a
Participant that the Participant surrender for cancellation some or all of the Awards
that have previously been granted to the Participant under this Plan or otherwise. An
Award that is conditioned upon such surrender may or may not be the same type of
Award, may cover the same (or a lesser or greater) number of Shares as such
surrendered Award, may have other terms that are determined without regard to the
terms or conditions of such surrendered Award, and may contain any other terms that
the Committee deems appropriate. In the case of Options, these other terms may not
involve an Exercise Price that is lower than the Exercise Price of the surrendered
Option unless either the new grant will not create any material financial expense for
the Company or the Company’s shareholders approve the grant itself or the program
under which it is made pursuant to the Plan.

	7.	 	Payment on Behalf of Minors, Etc. In the event any amount becomes payable under the Plan to
a minor or a person who, in the sole judgment of the Committee, is considered by reason of
physical or mental condition to be unable to give a valid receipt therefor, the Committee may
direct that such payment be made to any person found by the Committee, in its sole judgment,
to have assumed the care of such minor or other person. Any payment made pursuant to such
determination shall constitute a full release and discharge of the Company, the Board, the
Committee and their officers, directors and employees.

	8.	 	Option Awards.

	 	(a)	 	Types; Documentation. The Committee may in its discretion grant ISOs to any
Employee and Non-ISOs to any Eligible Person, and shall evidence any such grants in an
Award Agreement that is delivered to the Participant. Each Option shall be designated
in the Award Agreement as an IS0 or a Non-ISO. At the sole discretion of the
Committee, any Option may be exercisable, in whole or in part, immediately upon the
grant thereof, or only after the occurrence of a specified event, or only in
installments, which installments may vary. Options granted under the Plan may contain
such terms and provisions not inconsistent with the Plan that the Committee shall deem
advisable in its sole and absolute discretion.

	 	(b)	 	ISO $100,000 Limitation. To the extent that the aggregate Fair Market Value
of Shares with respect to which Options designated as ISOs first become exercisable by
a Participant in any calendar year (under this Plan and any other plan of the Company
or any Affiliate) exceeds One Hundred Thousand Dollars ($100,000), such excess Options
shall be treated as Non-ISOs. For purposes of determining whether the One Hundred
Thousand Dollar ($100,000) limit is exceeded, the Fair Market Value of the Shares
subject to an ISO shall be determined as of the Grant Date. In reducing the number of
Options treated as ISOs to meet the One Hundred Thousand Dollar
($100,000) limit, the most recently granted Options shall be reduced first. In the
event that Section 422 of the Code is amended to alter the limitation set forth
therein, the limitation of this Section 8(b) shall be automatically adjusted
accordingly.

 

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	 	(c)	 	Term of Options. Each Award Agreement shall specify a term at the end of
which the Option automatically expires, subject to earlier termination provisions
contained in Section 8(h) hereof; provided, that, the term of any Option may not
exceed ten (10) years from the Grant Date. In the case of an ISO granted to an
Employee who is a Ten Percent Holder on the Grant Date, the term of the ISO shall not
exceed five (5) years from the Grant Date.

	 	(d)	 	Exercise Price. The exercise price of an Option shall be determined by the
Committee in its discretion and shall be set forth in the Award Agreement, subject to
the following special rules:

	 	(i)	 	ISOs. If an ISO is granted to an Employee
who on the Grant Date is a Ten Percent Holder, the per Share exercise
price shall not be less than 110% of the Fair Market Value per Share
on such Grant Date. If an ISO is granted to any other Employee, the
per Share exercise price shall not be less than 100% of the Fair
Market Value per Share on the Grant Date.

	 	(ii)	 	Non-ISOs. The per Share exercise price for
the Shares to be issued pursuant to the exercise of a Non-ISO shall
not be less than one hundred percent (100%) of the Fair Market Value
per Share on the Grant Date, and may be offered pursuant to a deferred
compensation program on terms the Committee in its discretion
determines. Non-ISOs issued pursuant to a deferred compensation
program involving elective deferrals by participants will be
immediately exercisable.

	 	(iii)	 	Named Executives. The per Share exercise
price shall not be less than one hundred percent (100%) of the Fair
Market Value per Share on the Grant Date of an Option if (A) on such
Grant Date, the Participant is subject to the limitations set forth in
Section 162(m) of the Code, and (B) the grant is intended to qualify
as performance-based compensation under Section 162(m) of the Code.

	 	(iv)	 	Repricing. The Committee may at any time
unilaterally reduce the exercise price for any Option, but only if
(A) the reduction will not cause material financial expense for the
Company, and (B) the Committee promptly provides a written notice to
any Participant affected by the reduction.

	 	(e)	 	Exercise of Option. The times, circumstances and conditions under which an
Option shall be exercisable shall be determined by the Committee in its sole
discretion and set forth in the Award Agreement. The Committee shall have the
discretion to determine whether and to what extent the vesting of Options shall be
tolled during any unpaid leave of absence; provided, however, that in the absence of
such determination, vesting of Options shall be tolled during any such leave approved
by the Company.

	 	(f)	 	Minimum Exercise Requirements. An Option may not be exercised for a fraction
of a Share. The Committee may require in an Award Agreement that an Option be
exercised as to a minimum number of Shares, provided that such requirement shall not
prevent a Participant from purchasing the full number of Shares as to which the Option
is then exercisable.

 

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	 	(g)	 	Methods of Exercise. Prior to its expiration pursuant to the terms of the
applicable Award Agreement, each Option may be exercised, in whole or in part
(provided that the Company shall not be required to issue fractional shares), by
delivery of written notice of exercise to the secretary of the Company accompanied by
the full exercise price of the Shares being purchased. In the case of an ISO, the
Committee shall determine the acceptable methods of payment on the Grant Date and it
shall be included in the applicable Award Agreement. The methods of payment that the
Committee may in its discretion accept or commit to accept in an Award Agreement
include:

	 	(i)	 	cash or check payable to the Company (in U.S.
dollars);

	 	(ii)	 	other Shares that (A) are owned by the
Participant who is purchasing Shares pursuant to an Option, (B) have a
Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which the Option is being
exercised, (C) were not acquired by such Participant pursuant to the
exercise of an Option, unless such Shares have been owned by such
Participant for at least six (6) months or such other longer period as
the Committee may determine, (D) are all, at the time of such
surrender, free and clear of any and all claims, pledges, liens and
encumbrances, or any restrictions which would in any manner restrict
the transfer of such shares to or by the Company (other than such
restrictions as may have existed prior to an issuance of such Shares
by the Company to such Participant), and (E) are duly endorsed for
transfer to the Company;

	 	(iii)	 	a cashless exercise program that the
Committee may approve, from time to time in its discretion, pursuant
to which a Participant may concurrently provide irrevocable
instructions (A) to such Participant’s broker or dealer to effect the
immediate sale of the purchased Shares and remit to the Company, out
of the sale proceeds available on the settlement date, sufficient
funds to cover the exercise price of the Option plus all applicable
taxes required to be withheld by the Company by reason of such
exercise and (B) to the Company to deliver the certificates for the
purchased Shares directly to such broker or dealer in order to
complete the sale; or

	 	(iv)	 	any combination of the foregoing methods of
payment.

The Company shall not be required to deliver Shares pursuant to the exercise of an Option until
payment of the full exercise price therefore is received by the Company.

	 	(h)	 	Termination of Continuous Service. The Committee may establish and set forth
in the applicable Award Agreement the terms and conditions on which an Option shall
remain exercisable, if at all, following termination of a Participant’s Continuous
Service. The Committee may waive or modify these provisions at any time. To the extent
that a Participant is not entitled to exercise an Option at the date of his or her
termination of Continuous Service, or if the Participant (or other person entitled to
exercise the Option) does not exercise the Option to the extent so entitled within the
time specified in the Award Agreement or below (as applicable), the Option shall
terminate and the Shares underlying the unexercised portion of the Option shall revert
to the Plan and become available for future Awards. In no event may any Option be
exercised after the expiration of the Option term as set forth in the Award Agreement.

The following provisions shall apply to the extent an Award Agreement does not specify
the terms and conditions upon which an Option shall terminate when there is a
termination of a Participant’s Continuous Service:

	 	(i)	 	Termination other than Upon Disability or
Death or for Cause. In the event of termination of a Participant’s
Continuous Service (other than as a result of Participant’s death,
disability, retirement or termination for Cause), the Participant
shall have the right to exercise an Option at any time within three
(3) months following such termination to the extent the Participant
was entitled to exercise such Option at the date of such termination.

	 	(ii)	 	Disability. In the event of termination of a
Participant’s Continuous Service as a result of his or her
“disability” within the meaning of Section 22(e)(3) of the Code, the
Participant shall have the right to exercise an Option at any time
within one (1) year following such termination to the extent the
Participant was entitled to exercise such Option at the date of such
termination.

	 	(iii)	 	Retirement. In the event of termination of
a Participant’s Continuous Service as a result of Participant’s
retirement, the Participant shall have the right to exercise the
Option at any time within one (1) year following such
termination to the extent the Participant was entitled to exercise
such Option at the date of such termination.

 

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	 	(iv)	 	Death. In the event of the death of a
Participant during the period of Continuous Service since the Grant
Date of an Option, or within thirty days following termination of the
Participant’s Continuous Service, the Option may be exercised, at any
time within one (1) year following the date of the Participant’s
death, by the Participant’s estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to
the extent the right to exercise the Option had vested at the date of
death or, if earlier, the date the Participant’s Continuous Service
terminated.

	 	(v)	 	Cause. If the Committee determines that a
Participant’s Continuous Service terminated due to Cause, the
Participant shall immediately forfeit the right to exercise any
Option, and it shall be considered immediately null and void.

	 	(i)	 	Reverse Vesting. The Plan Administrator in its discretion may allow a
Participant to exercise unvested Options, in which case the Shares then issued shall
be Restricted Share Units having analogous vesting restrictions to the unvested
Options.

	 	(j)	 	Buyout Provisions. The Committee may at any time offer to buy out an Option,
in exchange for a payment in cash or Shares, based on such terms and conditions as the
Committee shall establish and communicate to the Participant at the time that such
offer is made. In addition, if the Fair Market Value for Shares subject to an Option
is more than thirty-three percent (33%) below their exercise price for more than
thirty (30) consecutive business days, the Committee may unilaterally terminate and
cancel the Option either (i) by paying the Participant, in cash or Shares, an amount
not less than the Black-Scholes value of the vested portion of the Option, or (ii) by
irrevocably committing to grant a new Option, on a designated date more than six (6)
months after such termination and cancellation of such Option (but only if the
Participant’s Continuous Service has not terminated prior to such designated date), on
substantially the same terms as the cancelled Option, provided that the per Share
exercise price for the new Option shall equal the per Share Fair Market Value of a
Share on the date the new grant occurs.

	9.	 	Share Appreciate Rights (SARs).

	 	(a)	 	Grants. The Committee may in its discretion grant Share Appreciation Rights
to any Eligible Person, in any of the following forms:

	 	(i)	 	SARs related to Options. The Committee may
grant SARs either concurrently with the grant of an Option or with
respect to an outstanding Option, in which case the SAR shall extend
to all or a portion of the Shares covered by the related Option. An
SAR shall entitle the Participant who holds the related Option, upon
exercise of the SAR and surrender of the related Option, or portion
thereof, to the extent the SAR and related Option each were previously
unexercised, to receive payment of an amount determined pursuant to
Section 9(e) below. Any SAR granted in connection with an ISO will
contain such terms as may be required to comply with the provisions of
Section 422 of the Code and the regulations promulgated thereunder.

	 	(ii)	 	SARs Independent of Options. The Committee
may grant SARs which are independent of any Option subject to such
conditions as the Committee may in its discretion determine which
conditions will be set forth in the applicable Award Agreement.

	 	(iii)	 	Limited SARs. The Committee may grant SARs
exercisable only upon or in respect of a Change in Control or any
other specified event, and such limited SARs may relate to or operate
in tandem or combination with or substitution for Options or other
SARs, or on a stand-alone basis, and may be payable in cash or Shares
based on the spread between the exercise price of the SAR, and (A) a
price based upon or equal to the Fair Market Value of the Shares
during a specified period, at a specified time within a specified
period before, after or including the date of such event, or (B) a
price related to consideration payable to Company’s shareholders
generally in connection with the event.

 

9

 

	 	(b)	 	Exercise Price. The per Share exercise price of an SAR shall be as
determined by the Committee in its sole discretion, shall be set forth in the
applicable Award Agreement, but may be no less than the Fair Market Value of one
Share, unless the Committee also determines that such Award need not qualify for the
beneficial tax treatment available such arrangements under Code Section 409A. The
exercise price of an SAR related to an Option shall be the same as the exercise price
of the related Option. The exercise price of an SAR shall be subject to the special
rules on pricing contained in paragraphs (iii) and (iv) of Section 8(d) hereof.

	 	(c)	 	Exercise of SARs. Unless the Award Agreement otherwise provides, an SAR
related to an Option will be exercisable at such time or times, and to the extent,
that the related Option will be exercisable. An SAR may not have a term exceeding ten
(10) years from its Grant Date. An SAR granted independently of any other Award will
be exercisable pursuant to the terms of the Award Agreement. Whether an SAR is related
to an Option or is granted independently, the SAR may only be exercised when the Fair
Market Value of the Shares underlying the SAR exceeds the exercise price of the SAR.

	 	(d)	 	Effect on Available Shares. To the extent that an SAR is exercised, only the
actual number of delivered Shares (if any) will be charged against the maximum number
of Shares that may be delivered pursuant to Awards under this Plan. The number of
Shares subject to the SAR and the related Option of the Participant will, however, be
reduced by the number of underlying Shares as to which the exercise relates, unless
the Award Agreement otherwise provides.

	 	(e)	 	Payment. Upon exercise of an SAR related to an Option and the attendant
surrender of an exercisable portion of any related Award, the Participant will be
entitled to receive payment of an amount determined by multiplying —

	 	(i)	 	the excess of the Fair Market Value of a
Share on the date of exercise of the SAR over the exercise price per
Share of the SAR, by

	 	(ii)	 	the number of Shares with respect to which
the SAR has been exercised.

	 	(f)	 	Limitations. Notwithstanding the foregoing, a SAR granted independently of
an Option may limit the amount payable to the Participant to a percentage, specified
in the Award Agreement but not exceeding one-hundred percent (100%), of the amount
determined pursuant to the preceding sentence.

	 	(g)	 	Form and Terms of Payment. Subject to Applicable Law, the Committee may
settle the amount determined under Section 9(e) above solely in cash, solely in Shares
(valued at their Fair Market Value on the date of exercise of the SAR), or partly in
cash and partly in Shares, but always as set forth in the Award Agreement. In any
event, cash shall always be paid in lieu of fractional Shares. Absent a contrary
determination by the Committee, all SARs shall be settled at the time set forth in the
Award Agreement or as soon as practicable after exercise, but in no event later than
the end of the calendar year in which the SARs are exercised. Should the Award
Agreement be silent as to the form of payment, the SARs shall be settled in cash.

	 	(h)	 	Termination of Continuous Service. The Committee shall establish and set
forth in the applicable Award Agreement the terms and conditions on which an SAR shall
remain exercisable, if at all, following termination of a Participant’s Continuous
Service. The provisions of Section 8(h) above shall apply to the extent an Award
Agreement does not specify the terms and conditions upon which an SAR shall terminate
when there is a termination of a Participant’s Continuous Service.

	 	(i)	 	Repricing and Buy-out. The Committee has the same discretion to reprice and
to buy-out SARs as it has to take such actions with respect to Options.

 

10

 

	10.	 	Restricted Shares and Restricted Share Units.

	 	(a)	 	Grants. The Committee may in its discretion grant restricted shares
(“Restricted Shares”) to any Eligible Person and shall evidence such grant in an Award
Agreement that is delivered to the Participant which sets forth the number of
Restricted Shares, the purchase price for such
Restricted Shares only (if any) and the terms upon which the Restricted Shares may
become vested. In addition, the Company may in its discretion grant the right to
receive Shares after certain vesting requirements are met (“Restricted Share Units”) to
any Eligible Person and shall evidence such grant in an Award Agreement delivered to
the Participant which sets forth the number of Shares that the Participant shall be
entitled to receive upon vesting and the terms upon which the Shares subject to a
Restricted Share Unit may become vested. The Committee may condition any Award of
Restricted Shares or Restricted Share Units to a Participant on receiving from the
Participant such further assurances and documents as the Committee may require to
enforce the restrictions.

	 	(b)	 	Vesting and Forfeiture. The Committee shall set forth in an Award Agreement
granting Restricted Shares or Restricted Share Units, the terms and conditions under
which the Participant’s interest in the Restricted Shares or the Shares subject to
Restricted Share Units will become vested. Except as set forth in the applicable Award
Agreement or as the Committee may otherwise determine, upon termination of a
Participant’s Continuous Service for any other reason, the Participant shall forfeit
his or her Restricted Shares and Restricted Share Units; provided that if a
Participant purchases the Restricted Shares and forfeits them for any reason, the
Company shall return the purchase price to the Participant only if and to the extent
set forth in an Award Agreement.

	 	(c)	 	Issuance of Restricted Shares Prior to Vesting. The Company shall issue
stock certificates that evidence Restricted Shares pending the lapse of applicable
restrictions, and that bear a legend making appropriate reference to such
restrictions. Except as set forth in the applicable Award Agreement or as the
Committee otherwise determines, the Company or a third party that the Company
designates shall hold such Restricted Shares and any dividends that accrue with
respect to Restricted Shares pursuant to Section 10(e) below.

	 	(d)	 	Issuance of Shares upon Vesting. As soon as practicable after vesting of a
Participant’s Restricted Shares (or Shares underlying Restricted Share Units) and the
Participant’s satisfaction of applicable tax withholding requirements, the Company
shall release to the Participant, free from the vesting restrictions, one Share for
each vested Restricted Share (or issue one Share free of the vesting restriction for
each vested Restricted Share Unit), unless an Award Agreement provides otherwise. No
fractional shares shall be distributed, and cash shall be paid in lieu thereof.

	 	(e)	 	Dividends Payable on Vesting. Whenever Shares are issued to a Participant or
duly-authorized transferee under Section 10(d) above pursuant to the vesting of
Restricted Shares or the Shares underlying Restricted Share Units, such Participant or
duly-authorized transferee shall also be entitled to receive, with respect to each
Share issued, an amount equal to any cash dividends (plus simple interest at a rate of
five percent (5%) per annum, or such other reasonable rate as the Committee may
determine) and a number of Shares equal to any stock dividends, which were declared
and paid to the holders of Shares between the Grant Date and the date such Share is
issued.

	 	(f)	 	Section 83(b) Elections. If a Participant who has received Restricted Share
Units provides the Committee with written notice of his or her intention to make an
election under Section 83(b) of the Code with respect to the Shares subject to such
Restricted Share Units (the “Section 83(b) Election”), the Committee may in its
discretion convert the Participant’s Restricted Share Units into Restricted Shares, on
a one-for-one basis, in full satisfaction of the Participant’s Restricted Share Unit
Award.

	 	(g)	 	Deferral Elections. At the time at which a Participant who is a member of a
select group of management or highly compensated employees (within the meaning of the
ERISA) receives an Award of either Restricted Shares or Restricted Share Units, the
Committee may permit the Participant to irrevocably elect, on a form provided by and
acceptable to the Committee, to defer the receipt of all or a percentage of the Shares
that would otherwise be transferred to the Participant upon the vesting of such Award.
If the Participant makes this election, the Shares subject to the election, and any
associated dividends and interest, shall be credited to an account established
pursuant to Section 11 hereof on the date such Shares would otherwise have been
released or issued to the Participant pursuant to Section 10(d) above. Notwithstanding
the foregoing, Shares with respect to which a Participant makes a Section 83(b)
Election shall not be eligible for deferral pursuant to Section 11 below.

 

11

 

	11.	 	Deferred Share Units.

	 	(a)	 	Elections to Defer. The Committee may permit any Eligible Person who is a
Director or member of a select group of management or highly compensated employees
(within the meaning of the ERISA) to irrevocably elect, on a form provided by and
acceptable to the Committee (the “Election Form”), to forego the receipt of cash or
other compensation (including Restricted Shares for which a Section 83(b) Election has
not been made, and Shares subject to Restricted Share Units), and in lieu thereof,
have the Company credit to an internal Plan account (the “Account”) a number of
deferred share units (“Deferred Share Units”) having a Fair Market Value equal to the
Shares and other compensation deferred. These credits will be made at the end of each
calendar month during which compensation is deferred. Except as otherwise provided in
Code Section 409A, such Election Forms must be delivered to the Company before the
close of the calendar year preceding the year in which the services giving rise to the
compensation so deferred will be performed. Rules consistent with the regulations
under Section 409A shall govern deferral elections made by a Participant in his/her
first year of eligibility and with respect to performance based compensation (as that
term is defined in Code Section 409A and the regulations thereunder).

	 	(b)	 	Vesting. Each Participant shall be one hundred percent (100%) vested at all
times in any Shares subject to Deferred Share Units.

	 	(c)	 	Issuances of Shares. The Company shall provide a Participant with one Share
for each Deferred Share Unit upon occurrence of any of the following events:

	 	(i)	 	Termination of Continuous Service. Upon a
Participant’s termination of Continuous Service, the Shares shall be
distributed in five (5) substantially equal annual installments issued
before the last day of each of the five (5) calendar years that end
after the date on which the Participant’s Continuous Service
terminates, unless the Participant properly elected, at the time of
the original deferral, a different form of distribution on the form
approved by the Committee for such purpose allowing the Participant to
select any combination of lump sum and annual installments so long as
such Company obligations are completed within ten (10) years following
termination of the Participant’s Continuous Service.

	 	(ii)	 	Fixed Period of Time Determined on Date of
Deferral. If the Participant elected at the time of deferral to
receive Shares after a fixed period of time from such deferral, the
Shares will be distributed in full to the Participant after expiration
of such fixed period.

	 	(iii)	 	Change in Control of the Company. In the
event of a Change in Control of the Company, the Shares will be
distributed in full to the Participant at the close of business on the
day immediately preceding such Change in Control.

	 	(iv)	 	Death of Participant. The Shares shall be
distributed in full to the Participant’s estate within thirty (30)
days from the date of Participant’s death.

	 	(v)	 	Disability of Participant. Upon a
determination that Participant is disabled, the Shares shall be
distributed to Participant (or to his attorney-in-fact or conservator
for the Participant’s benefit) or his duly authorized transferee in
five (5) substantially equal annual installments, with such
installments being paid prior to the last day of each of the five (5)
calendar years following the date on which the Participant is
determined to be disabled.

	 	(vi)	 	Fractional Shares. Fractional shares shall
not be issued; instead, such shall be paid out in cash.

	 	(d)	 	Crediting of Dividends. Whenever Shares are issued to a Participant pursuant
to Section 11(c) above, such Participant shall also be entitled to receive, with
respect to each Share issued, a cash amount equal to any cash dividends (plus simple
interest at a rate of five percent (5%) per annum, or such other reasonable rate as
the Committee may determine), and the number of Shares equal to
any stock dividends which were declared and paid to the holders of Shares between the
Grant Date and the date such Share is issued.

 

12

 

	 	(e)	 	Hardship Withdrawals. In the event a Participant suffers an unforeseeable
hardship within the contemplation of this Section 11(e), the Participant may apply to
the Company for an immediate distribution of all or a portion of the Participant’s
Deferred Share Units. The hardship must result from a sudden and unexpected illness or
accident of the Participant or a dependent of the Participant, casualty loss of
property, or other similar conditions beyond the control of the Participant. Examples
of purposes which are not considered hardships include post-secondary school expenses
or the desire to purchase a residence. In no event will a distribution be made to the
extent the hardship could be relieved through reimbursement or compensation by
insurance or otherwise, or by liquidation of the Participant’s nonessential assets to
the extent such liquidation would not itself cause a severe financial hardship. The
amount of any distribution hereunder shall be limited to the amount reasonably
necessary to relieve the Participant’s financial hardship. The Committee shall
determine whether a Participant has a qualifying hardship and the amount which
qualifies for distribution, if any. The Committee may require evidence of the purpose
and amount of the need, and may establish such application or other procedures as it
deems appropriate. Additionally, consistent with final regulations issued by the
Treasury Department pursuant to Code Section 409A, in determining whether and the
extent to which a Hardship exists, the Committee shall first require the termination
of any ongoing deferrals by the Participant under this Plan. Similarly, the Committee
may also terminate any deferral elections hereunder by the Participant in order for
the Participant to obtain a hardship distribution under a cash or deferred arrangement
qualified pursuant to Code Section 401(k). In each of the above situations, the
Participant’s deferral election shall be terminated and may not merely be suspended;
any subsequent deferrals by the Participant pursuant to this Plan shall be treated as
an initial deferral election. The term hardship and any withdrawals allowed hereunder
shall always be and may only be treated in a manner consistent with Code Section 409A
and the regulations thereunder.

	 	(f)	 	Unsecured Rights to Deferred Compensation. A Participant’s right to Deferred
Share Units shall at all times constitute an unsecured promise of the Company to pay
benefits as they come due. The right of the Participant or the Participant’s
duly-authorized transferee to receive benefits hereunder shall be solely an unsecured
claim against the general assets of the Company. Neither the Participant nor the
Participant’s duly-authorized transferee shall have any claim against or rights in any
specific assets, shares, or other funds of the Company.

	12.	 	Performance Awards.

	 	(a)	 	Performance Units. The Committee may in its discretion grant Performance
Units to any Eligible Person and shall evidence such grant in an Award Agreement that
is delivered to the Participant which sets forth the terms and conditions of the
Award. A Performance Unit is an Award which is based on the achievement of specific
goals with respect to the Company or any Affiliate or individual performance of the
Participant, or a combination thereof, over a specified period of time. The maximum
Performance Unit compensation that may be paid to any one Participant with respect to
any one Performance Period (hereinafter defined) shall be one hundred twenty-five
thousand (125,000) Shares and Two Million Five Hundred Thousand Dollars ($2,500,000)
in cash.

	 	(b)	 	Performance Compensation Awards. The Committee may, at the time of grant of
a Performance Unit, designate such Award as a “Performance Compensation Award” in
order that such Award constitutes “qualified performance-based compensation” under
Code Section 162(m), in which event the Committee shall have the power to grant such
Performance Compensation Award upon terms and conditions that qualify it as “qualified
performance-based compensation” within the meaning of Code Section 162(m). With
respect to each such Performance Compensation Award, the Committee shall establish, in
writing within the time required under Code Section 162(m), a “Performance Period,”
“Performance Measure(s),” and “Performance Formula(e)” (each such term being
hereinafter defined). Once established for a Performance Period, the Performance
Measure(s) and Performance Formula(e) shall not be amended or otherwise modified to
the extent such amendment or modification would cause the compensation payable
pursuant to the Award to fail to constitute qualified performance-based compensation
under Code Section 162(m).

 

13

 

A Participant shall be eligible to receive payment in respect of a Performance
Compensation Award only to the extent that the Performance Measure(s) for such Award are
achieved and the Performance Formula(e) as applied against such Performance Measure(s)
determines that all or some portion of such Participant’s Award has been earned for the
Performance Period. As soon as practicable after the close of each Performance Period,
the Committee shall review and certify in writing whether, and to what extent, the
Performance Measure(s) for the Performance Period have been achieved and, if so,
determine and certify in writing the amount of the Performance Compensation Award to be
paid to the Participant and, in so doing, may use negative discretion to decrease, but
not increase, the amount of the Award otherwise payable to the Participant based upon
such performance. Consistent with the limits above, the maximum Performance Compensation
Award for any one Participant for any one Performance Period shall be one hundred
twenty-five thousand (125,000) Shares and Two Million Five Hundred Thousand Dollars
($2,500,000) in cash.

	 	(c)	 	Definitions.

	 	(i)	 	“Performance Formula” means, for a
Performance Period, one or more objective formulas or standards
established by the Committee for purposes of determining whether or
the extent to which an Award has been earned based on the level of
performance attained or to be attained with respect to one or more
Performance Measure(s). Performance Formulae may vary from Performance
Period to Performance Period and from Participant to Participant and
may be established on a stand-alone basis, in tandem or in the
alternative.

	 	(ii)	 	“Performance Measure” means one or more of
the following selected by the Committee to measure Company, Affiliate,
and/or business unit performance for a Performance Period, whether in
absolute or relative terms (including, without limitation, terms
relative to a peer group or index): basic, diluted, or adjusted
earnings per share; sales or revenue; earnings before interest, taxes,
and other adjustments (in total or on a per share basis); basic or
adjusted net income; returns on equity, assets, capital, revenue or
similar measure; economic value added; working capital; total
shareholder return; and product development, product market share,
research, licensing, litigation, human resources, information
services, mergers, acquisitions, sales of assets of Affiliates or
business units. Each such measure shall be to the extent applicable,
determined in accordance with generally accepted accounting principles
as consistently applied by the Company (or such other standard applied
by the Committee) and, if so determined by the Committee, and in the
case of a Performance Compensation Award, to the extent permitted
under Code Section 162(m), adjusted to omit the effects of
extraordinary items, gain or loss on the disposal of a business
segment, unusual or infrequently occurring events and transactions and
cumulative effects of changes in accounting principles. Performance
Measures may vary from Performance Period to Performance Period and
from Participant to Participant, and may be established on a
stand-alone basis, in tandem or in the alternative.

	 	(iii)	 	“Performance Period” means one or more
periods of time (of not less than one (1) fiscal year of the Company),
as the Committee may designate, over which the attainment of one or
more Performance Measure(s) will be measured for the purpose of
determining a Participant’s rights in respect of an Award.

	13.	 	Taxes.

	 	(a)	 	General. As a condition to the issuance or distribution of Shares pursuant
to the Plan, the Participant (or in the case of the Participant’s death, the person
who succeeds to the Participant’s rights) shall make such arrangements as the Company
may require for the satisfaction of any applicable federal, state, local or foreign
withholding tax obligations that may arise in connection with the Award and the
issuance of Shares. The Company shall not be required to issue any Shares until such
obligations are satisfied. If the Committee allows the withholding or surrender of
Shares
to satisfy a Participant’s tax withholding obligations, the Committee shall not allow
Shares to be withheld in an amount that exceeds the minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes.

 

14

 

	 	(b)	 	Default Rule for Employees. In the absence of any other arrangement, an
Employee shall be deemed to have directed the Company to withhold or collect from his
or her cash compensation an amount sufficient to satisfy such tax obligations from the
next payroll payment otherwise payable after the date of the exercise of an Award.

	 	(c)	 	Special Rules. In the case of a Participant other than an Employee (or in
the case of an Employee where the next payroll payment is not sufficient to satisfy
such tax obligations, with respect to any remaining tax obligations), in the absence
of any other arrangement and to the extent permitted under the Applicable Law, the
Participant shall be deemed to have elected to have the Company withhold from the
Shares or cash to be issued pursuant to an Award that number of Shares having a Fair
Market Value determined as of the applicable Tax Date (as defined below) equal to the
amount required to be withheld. For purposes of this Section 13, the Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined under the Applicable Law (the “Tax Date”).

	 	(d)	 	Surrender of Shares. If permitted by the Committee, in its discretion, a
Participant may satisfy the minimum applicable tax withholding and employment tax
obligations associated with an Award by surrendering Shares to the Company (including
Shares that would otherwise be issued pursuant to the Award) that have a Fair Market
Value determined as of the applicable Tax Date equal to the amount required to be
withheld. In the case of Shares previously acquired from the Company that are
surrendered under this Section 13, such Shares must have been owned by the Participant
for more than six months on the date of surrender (or such longer period of time the
Company may in its discretion require).

	14.	 	Non-Transferability of Awards.

	 	(a)	 	General. Except as set forth in this Section 14, or as otherwise approved by
the Committee for a select group of management or highly compensated Employees, Awards
may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent or distribution. The designation
of a beneficiary (“Beneficiary”) by a Participant on a form provided by the Committee
for such purpose will not constitute a transfer. An Award may be exercised, during the
lifetime of the holder of an Award, only by such holder, the duly-authorized legal
representative of a disabled Participant, or a transferee permitted by this
Section 14.

	 	(b)	 	Limited Transferability Rights. Notwithstanding anything else in this
Section 14, the Committee may in its discretion provide in an Award Agreement that the
Award may be transferred by instrument to an intervivos or testamentary trust (or
other entity) in which the Award is to be passed to beneficiaries upon the death of
the trustor (settlor), or by gift to charitable institutions, the Participant’s
“Immediate Family” (as defined below), on such terms and conditions as the Committee
deems appropriate. “Immediate Family” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and
shall include adoptive relationships.

	15.	 	Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

	 	(a)	 	Changes in Capitalization. The Committee may equitably adjust the number of
Shares covered by each outstanding Award, and the number of Shares that have been
authorized for issuance under the Plan but as to which no Awards have yet been granted
or that have been returned to the Plan upon cancellation, forfeiture, or expiration of
an Award, as well as the price per Share covered by each such outstanding Award, to
reflect any increase or decrease in the number of issued Shares resulting from a
stock-split, reverse stock-split, stock dividend, combination, recapitalization or
reclassification of the Shares, or any other increase or decrease in the number of
issued Shares effected without receipt of consideration by the Company. In the event
of any such transaction or event, the Committee may provide in substitution for any or
all outstanding Options under the Plan such alternative consideration (including
securities of any surviving entity) as it may in good faith determine to be equitable
under the circumstances and may require in connection therewith the surrender of all
Options so replaced. In any case, such substitution of
securities shall not require the consent of any person who is granted options pursuant
to the Plan. Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be required to be made with
respect to, the number or price of Shares subject to any Award.

 

15

 

	 	(b)	 	Dissolution or Liquidation. In the event of the dissolution or liquidation
of the Company other than as part of a Change of Control, each Award will terminate
immediately prior to the consummation of such action, subject to the discretion of the
Committee to exercise any discretion authorized in the case of a Change in Control.

	 	(c)	 	Change in Control. In the event of a Change in Control, the vesting of
Awards shall accelerate so that Awards shall immediately fully vest (and, with respect
to Options and SARs, become fully exercisable) as to the Shares subject to the Award,
and any repurchase right applicable to such Shares shall lapse in full. The
acceleration of vesting and lapse of repurchase rights provided for in the previous
sentence shall occur immediately prior to the effective date of the transaction giving
rise to the Change in Control.

	 	(d)	 	Certain Distributions. In the event of any distribution to the Company’s
shareholders of securities of any other entity or other assets (other than dividends
payable in cash or stock of the Company) without receipt of consideration by the
Company, the Committee may, in its discretion, appropriately adjust the price per
Share covered by each outstanding Award to reflect the effect of such distribution.

	16.	 	Time of Granting Awards. The date of grant (“Grant Date”) of an Award shall be the date on
which the Committee makes the determination granting such Award or such other date as is
determined by the Committee, provided that in the case of an ISO, the Grant Date shall be the
later of the date on which the Committee makes the determination granting such ISO or the date
of commencement of the Participant’s employment relationship with the Company.

	17.	 	Modification of Awards and Substitution of Options.

	 	(a)	 	Modification, Extension, and Renewal of Awards. Within the limitations of
the Plan, the Committee may modify an Award, accelerate the rate at which an Option or
SAR may be exercised (including without limitation permitting an Option or SAR to be
exercised in full without regard to the installment or vesting provisions of the
applicable Award Agreement or whether the Option or SAR is at the time exercisable, to
the extent it has not previously been exercised), accelerate the vesting of any Award,
extend or renew outstanding Awards, or accept the cancellation of outstanding Awards
to the extent not previously exercised either for the granting of new Awards or for
other consideration in substitution or replacement thereof. However, before doing so,
the Committee shall determine the impact of such action on the continued qualification
of such Award under Code Section 409A and its regulations.

	 	(b)	 	Substitution of Options. Notwithstanding any inconsistent provisions or
limits under the Plan, in the event the Company or an Affiliate acquires (whether by
purchase, merger or otherwise) all or substantially all of outstanding capital stock
or assets of another corporation or in the event of any reorganization or other
transaction qualifying under Section 424 of the Code, the Committee may, in accordance
with the provisions of that Section, substitute Options for options under the plan of
the acquired company provided (i) the excess of the aggregate fair market value of the
 shares subject to an option immediately after the substitution over the aggregate
option price of such shares is not more than the similar excess immediately before
such substitution and (ii) the new Option does not give persons additional benefits,
including any extension of the exercise period.

	18.	 	Term of Plan. The Plan shall continue in effect for a term of ten (10) years from its
effective date as determined under Section 21 below, unless the Plan is sooner terminated
under Section 19 below.

	19.	 	Amendment and Termination of the Plan.

	 	(a)	 	Authority to Amend or Terminate. Subject to Applicable Laws, the Board may
from time to time amend, alter, suspend, discontinue, or terminate the Plan.

	 	(b)	 	Effect. No amendment, suspension, or termination of the Plan shall
materially and adversely affect Awards already granted unless either it relates to an
adjustment pursuant to Section 15
above, or it is otherwise mutually agreed between the Participant and the Committee,
which agreement must be in writing and signed by the Participant and the Company.
Notwithstanding the foregoing, the Committee may amend the Plan to eliminate provisions
which are no longer necessary as a result of changes in tax or securities laws or
regulations, or in the interpretation thereof.

 

16

 

	20.	 	Conditions Upon Issuance of Shares. Notwithstanding any other provision of the Plan or any
agreement entered into by the Company pursuant to the Plan, the Company shall not be
obligated, and shall have no liability for failure, to issue or deliver any Shares under the
Plan unless such issuance or delivery would comply with Applicable Law, with such compliance
determined by the Company in consultation with its legal counsel.

	21.	 	Reservation of Shares. The Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the requirements of
the Plan.

	22.	 	Effective Date. This Plan shall become effective on the date of its approval by the Board;
provided that this Plan shall be submitted to the Company’s shareholders for approval, and if
not approved by the shareholders within one year from the date of approval by the Board, this
Plan and any Awards shall be null, void, and of no force and effect. Awards granted under this
Plan before approval of this Plan by the shareholders shall be granted subject to such
approval and no Shares shall be distributed before such approval.

	23.	 	Controlling Law. All disputes relating to or arising from the Plan shall be governed by the
internal substantive laws (and not the laws of conflicts of laws) of the State of Tennessee,
to the extent not preempted by United States federal law. If any provision of this Plan is
held by a court of competent jurisdiction to be invalid and unenforceable, the remaining
provisions shall continue to be fully effective.

	24.	 	Limitation on Rights of Participants. The Plan is strictly a voluntary undertaking on the
part of the Company and shall not constitute a contract between the Company and any
Participant, nor shall it constitute consideration for, or an inducement or condition of, the
service of a Participant. Nothing contained in the Plan shall give any Participant the right
to be retained in the service of the Company or to interfere with or restrict the right of the
Company, which is hereby expressly reserved, to discharge or retire any Participant, except as
otherwise provided by a written employment agreement between the Company and the Participant,
at any time without notice and with or without cause. Inclusion under the Plan will not give
any Participant any right or claim to any benefit hereunder except to the extent such right
has specifically become fixed under the terms of the Plan. The doctrine of substantial
performance shall have no application to employees, Participants or any other persons entitled
to payments under the Plan.

	25.	 	Errors and Misstatements. In the event of any misstatement or omission of fact by a
Participant to the Committee or any clerical error resulting in payment of benefits in an
incorrect amount, the Committee shall promptly cause the amount of future payments to be
corrected upon discovery of the facts and shall cause the Company to pay the Participant or
any other person entitled to payment under the Plan any underpayment in cash in a lump sum, or
to recoup any overpayment from future payments to the Participant or any other person entitled
to payment under the Plan in such amounts as the Committee shall direct, or to proceed against
the Participant or any other person entitled to payment under the Plan for recovery of any
such overpayment.

	26.	 	Pronouns and Plurality. The masculine pronoun shall include the feminine pronoun, and the
singular the plural where the context so indicates.

	27.	 	Titles. Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan.

	28.	 	References. Unless the context clearly indicates to the contrary, a reference to a statute,
regulation or document shall be construed as referring to any subsequently enacted, adopted or
executed statute, regulation or document.

	29.	 	Added Exclusion From Benefit Computations. By becoming a Participant under the Plan, each
Participant agrees that any earnings or other benefits inuring to the Participant along with
the subsequent payment of a Participant’s Account shall be deemed special incentive
compensation and that such amounts will not be taken into account as “salary,” “compensation”
or “bonus” in determining the amount of any other payments to Participant under any insurance,
pension, retirement, profit sharing or other benefit plan of the Company. However, the
Committee should interpret the foregoing narrowly and, in all events, only
treat amounts under this Plan and the earnings on such as such special incentive compensation;
specifically, any bonus or other compensation not received under this Plan or for which an
election to defer has not been made shall continue to be treated by the Company as regular
compensation of the Participant, subject to all other calculations and elections normally
available to Participants, including, but not limited to, the Company’s 401(k) plan.

 

17

 

	30.	 	Investment and Tax Representations. The Company does not represent or guarantee any
particular federal or state income, payroll, personal property or other tax consequences will
result from participation in this Plan. A Participant should consult with professional tax
advisors to determine the tax consequences of his/her participation. Additionally, the
Company does not represent or guarantee that any deemed investment of funds will be successful
and shall always result in earnings or additions to a Participant, including Company Shares.
In fact, investments in Company Shares have experienced losses in prior years. Should an
investment or deemed investment experience losses for any Plan Year, the Accounts of those
Participants who have chosen such deemed investment shall also experience losses, and neither
the Company nor the Committee shall be required to restore any loss which may result from such
deemed investment or lack of having elected another investment.

	31.	 	Laws and Regulations.

	 	(a)	 	U.S. Securities Laws. This Plan, the grant of Awards, and the exercise of
Options and SARs under this Plan, and the obligation of the Company to sell or deliver
any of its securities (including, without limitation, Options, Restricted Shares,
Restricted Share Units, Deferred Share Units, and Shares) under this Plan shall be
subject to all Applicable Law. In the event that the Shares are not registered under
the Securities Act of 1933, as amended (the “Act”), or any applicable state securities
laws prior to the delivery of such Shares, the Company may require, as a condition to
the issuance thereof, that the persons to whom Shares are to be issued represent and
warrant in writing to the Company that such Shares are being acquired by him or her
for investment for his or her own account and not with a view to, for resale in
connection with, or with an intent of participating directly or indirectly in, any
distribution of such Shares within the meaning the Act, and a legend to that effect
may be placed on the certificates representing the Shares.

	 	(b)	 	Other Jurisdictions. To facilitate the making of any grant of an Award under
this Plan, the Committee may provide for such special terms for Awards to Participants
who are foreign nationals or who are employed by the Company or any Affiliate outside
of the United States of America as the Committee may consider necessary or appropriate
to accommodate differences in local law, tax policy or custom. The Company may adopt
rules and procedures relating to the operation and administration of this Plan to
accommodate the specific requirements of local laws and procedures of particular
countries. Without limiting the foregoing, the Company is specifically authorized to
adopt rules and procedures regarding the conversion of local currency, taxes,
withholding procedures and handling of stock certificates which vary with the customs
and requirements of particular countries. The Company may adopt sub-plans applicable
to particular locations and countries.

	32.	 	No Shareholder Rights. Neither a Participant nor any transferee of a Participant shall have
any rights as a shareholder of the Company with respect to any Shares underlying any Award
until the date of issuance of a share certificate to a Participant or a transferee of a
Participant for such Shares in accordance with the Company’s governing instruments and
Applicable Law. Prior to the issuance of Shares pursuant to an Award, a Participant shall not
have the right to vote or to receive dividends or any other rights as a shareholder with
respect to the Shares underlying the Award, notwithstanding its exercise in the case of
Options and SARs. No adjustment will be made for a dividend or other right that is determined
based on a record date prior to the date the stock certificate is issued, except as otherwise
specifically provided for in this Plan.

 

18

 

Amended and Restated

2004 Long-Term Incentive Plan

Exhibit A: Definitions

As used in the Plan, the following definitions shall apply:

	1.	 	“Affiliate” means any entity, including any “parent corporation” or “subsidiary corporation”
within the meaning of Section 424 of the Code, which together with the Company is under common
control within the meaning of Section 414 of the Code.

	2.	 	“Applicable Law” means the legal requirements relating to the administration of options and
share-based plans under applicable U.S. federal and state laws, the Code, any applicable stock
exchange or automated quotation system rules or regulations, and the applicable laws of any
other country or jurisdiction where Awards are granted, as such laws, rules, regulations and
requirements shall be in place from time to time.

	3.	 	“Award” means any award made pursuant to the Plan, including awards made in the form of an
Option, an SAR, a Restricted Share, a Restricted Share Unit, a Deferred Share Unit and a
Performance Award, or any combination thereof, whether alternative or cumulative, authorized
by and granted under this Plan.

	4.	 	“Award Agreement” means any written document setting forth the terms of an Award that has
been authorized by the Committee. The Committee shall determine the form or forms of documents
to be used, and may change them from time to time for any reason.

	5.	 	“Board” means the Board of Directors of the Company.

	6.	 	“Cause” for termination of a Participant’s Continuous Service will exist if the Participant
is terminated from employment or other service with the Company or an Affiliate for any of the
following reasons: (i) the Participant’s willful failure to substantially perform his or her
duties and responsibilities to the Company or deliberate violation of a material Company
policy; (ii) the Participant’s commission of any material act or acts of fraud, embezzlement,
dishonesty, or other willful misconduct; (iii) the Participant’s material unauthorized use or
disclosure of any proprietary information or trade secrets of the Company or any other party
to whom the Participant owes an obligation of nondisclosure as a result of his or her
relationship with the Company; or (iv) the Participant’s willful and material breach of any of
his or her obligations under any written agreement or covenant with the Company. The
Committee shall in its discretion determine whether or not a Participant is being terminated
for Cause. The Committee’s determination shall, unless arbitrary and capricious, be final and
binding on the Participant, the Company, and all other affected persons. The foregoing
definition does not in any way limit the Company’s ability to terminate a Participant’s
employment or consulting relationship at any time, and the term “Company” will be interpreted
herein to include any Affiliate or successor thereto, if appropriate.

	7.	 	“Change in Control” means the occurrence of any of the following, provided that said
occurrence has been certified in writing by the Committee or by the Board as qualifying as a
Change of Control:

	 	(a)	 	Dissolution or Liquidation. A vote by the stockholders of the
Company to formally dissolve and/or liquidate the Company;

	 	(b)	 	Change in the Ownership of the Company. A change in the ownership of
the Company will be deemed to occur upon the date that any one person, or more
than one person acting as a group, acquires ownership of 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;

	 	(i)	 	Provided, however, that if such person or
group is already considered to own more than fifty percent (50%) of
the total fair market value or total voting power of the stock, the
acquisition of additional stock by the same person or persons shall
not be considered to be a change in control of the ownership of the
Company; and

	 	(ii)	 	Any increase in the percentage of stock owned
by any one person, or persons acting as a group as a result of a
transaction in which the Company acquires its stock in exchange for
property will be treated as an acquisition of stock for purposes of
this provision.

 

19

 

	 	(c)	 	Change in the Effective Control of the Company. A change in
the effective control of the Company shall be deemed to occur on the date that
either:

	 	(i)	 	Any person or more than one person acting as
a group acquires (or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or
persons) ownership of stock of the Company possessing thirty-five
percent (35%) or more of the total voting power of the stock of the
Company; or

	 	(ii)	 	A majority of the members of the Company’s
Board of Directors is replaced during any twelve (12) month period by
directors whose appointment or election is not endorsed by a majority
of the members of the Company’s Board prior to the date of said
appointment or election;

	 	(iii)	 	Provided, however, that if any one person or
more than one person acting as a group is considered to effectively
control the Company, the acquisition of additional control of the
Company by the same person or persons shall not be considered to cause
the required change in effective control.

	 	(d)	 	Change in Ownership of a Substantial Portion of the Company’s
Assets. A change in the ownership of a substantial portion of the Company’s
assets shall be deemed to occur on the date that any one person or more than
one person acting as a group acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross fair market value
equal to or greater than sixty percent (60%) of the gross fair market value of
all of the assets of the Company immediately prior to such acquisition(s).

	8.	 	“Code” means the U.S. Internal Revenue Code of 1986, as amended.

	9.	 	“Committee” means one or more committees or subcommittees of the Board appointed by the Board
to administer the Plan in accordance with Section 4 above. With respect to any decision
involving an Award intended to satisfy the requirements of Section 162(m) of the Code, the
Committee shall consist of two or more Directors of the Company who are “outside directors”
within the meaning of Section 162(m) of the Code.

	10.	 	“Company” means Green Bankshares, Inc., a Tennessee corporation.

	11.	 	“Continuous Service” means the absence of any interruption in or termination of service as an
Employee, Director, or Consultant. Whether a Participant has experienced an interruption in
or a termination of Continuous Service shall be determined in a fashion wholly consistent with
the rules set forth under Treasury Regulations Section 1.409A-1(a) or, if different, future
changes to such regulations. As of the date of this amendment to and restatement of the Plan,
such Treasury regulations provide that the employment relationship is treated as continuing
intact and that Continuous Service shall not be considered interrupted while an individual is
on military leave, sick leave, or other bona fide leaves of absence (such as temporary
employment by the government), provided the period of leave does not exceed six (6) months, or
if longer, so long as the individual’s right to re-employment is provided either by statute or
by contract. Thus, for purposes of the Plan, if the Participant’s right to re-employment is
not provided either by statute or by contract, the employment relationship shall be deemed to
terminate on the first day immediately following such six (6) month period and an interruption
in Continuous Service shall be deemed to have occurred.

	12.	 	“Deferred Share Units” mean Awards pursuant to Section 11 of the Plan.

	13.	 	“Director” means a member of the Board, or a member of the board of directors of an
Affiliate.

	14.	 	“Eligible Person” means any Director or Employee and includes non-Employees to whom an offer
of employment has been extended.

	15.	 	“Employee” means any person whom the Company or any Affiliate classifies as an employee
(including an officer) for employment tax purposes. The payment by the Company of a director’s
fee to a Director shall not be sufficient to constitute “employment” of such Director by the
Company.

	16.	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

20

 

	17.	 	“Fair Market Value” means, as of any date (the “Determination Date”): (a) the closing price
of a Share on the New York Stock Exchange or the American Stock Exchange (collectively, the
“Exchange”), on the Determination Date, or, if shares were not traded on the Determination
Date, then on the nearest preceding trading day during which a sale occurred; or (b) if such
stock is not traded on the Exchange but is quoted on NASDAQ or a successor quotation system,
(i) the last sales price (if the stock is then listed as a National Market Issue under The
Nasdaq National Market System) or (ii) the mean between the closing representative bid and
asked prices (in all other cases) for the stock on the Determination Date as reported by
NASDAQ or such successor quotation system; or (c) if such stock is not traded on the Exchange
or quoted on NASDAQ but is otherwise traded in the over-the-counter market, the mean between
the representative bid and asked prices on the Determination Date; or (iv) if
subsections (i)-(iii) do not apply, the fair market value established in good faith by the
Board.

	18.	 	“Grant Date” has the meaning set forth in Section 16 of the Plan.

	19.	 	“Incentive Share Option” or “ISO” hereinafter means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code, as designated in the
applicable Award Agreement.

	20.	 	“Involuntary Termination” means termination of a Participant’s Continuous Service under the
following circumstances occurring on or after a Change in Control: (a) termination without
Cause by the Company or an Affiliate or successor thereto, as appropriate; or (b) voluntary
termination by the Participant within sixty (60) days following (i) a material reduction in
the Participant’s job responsibilities, provided that neither a mere change in title alone nor
reassignment to a substantially similar position shall constitute a material reduction in job
responsibilities; (ii) an involuntary relocation of the Participant’s work site to a facility
or location more than fifty (50) miles from the Participant’s principal work site at the time
of the Change in Control; or (iii) a material reduction in Participant’s total compensation
other than as part of an reduction by the same percentage amount in the compensation of all
other similarly-situated Employees and Directors.

	21.	 	“Non-ISO” means an Option not intended to qualify as an ISO, as designated in the applicable
Award Agreement.

	22.	 	“Option” means any stock option granted pursuant to Section 8 of the Plan.

	23.	 	“Participant” means any holder of one or more Awards, or the Shares issuable or issued upon
exercise of such Awards, under the Plan.

	24.	 	“Performance Awards” mean Performance Units and Performance Compensation Awards granted
pursuant to Section 12 of the Plan.

	25.	 	“Performance Compensation Awards” mean Awards granted pursuant to Section 12(b) of the Plan.

	26.	 	“Performance Unit” means Awards granted pursuant to Section 12(a) of the Plan which may be
paid in cash, in Shares, or such combination of cash and Shares as the Committee in its sole
discretion shall determine.

	27.	 	“Plan” means this Green Bankshares, Inc. Amended and Restated 2004 Long-term Incentive Plan.

	28.	 	“Reporting Person” means an officer, Director, or greater than ten percent shareholder of the
Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file
reports pursuant to Rule 16a-3 under the Exchange Act.

	29.	 	“Restricted Shares” mean Shares subject to restrictions imposed pursuant to Section 10 of the
Plan.

	30.	 	Restricted Share Units” mean Awards pursuant to Section 10 of the Plan. “Rule Ibb-3” means
Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor
provision.

	31.	 	“SAR” or “Share Appreciation Right” means Awards granted pursuant to Section 9 of the Plan.

	32.	 	“Share” means an ordinary voting share of the Company, as adjusted in accordance with
Section 15 of the Plan.

	33.	 	“Ten Percent Holder” means a person who owns stock representing more than ten percent (10%)
of the combined voting power of all classes of stock of the Company or any Affiliate.

 

21Exhibit 10.35

EXHIBIT No. 10.35

Director* Compensation Summary

2009 Annual Retainer

$15,000 annual retainer of which $10,000 was available in the form of Restricted Stock or cash and
$5,000 payable in equal quarterly installments.

Meeting Fees

For each meeting of the board of directors of Green Bankshares, Inc. (the “Company”) a director
receives $600, including payment for up to two missed meetings. Directors must be present at
special meetings to be paid.

For each meeting of the board of directors of GreenBank (the “Bank”) a director receives $600,
including payment for up to two missed meetings.

Committee Meeting Fees

Members of the Executive Committee of the Bank’s board of directors receive $450 for each
twice-monthly meeting of the Executive Committee that they attend. Each of the two permanent
members of the Executive Committee, Martha Bachman and W.T. Daniels, also receive an annual
retainer of $1,500, payable in equal quarterly installments.

Members of the joint Audit Committee of the Bank’s and the Company’s boards of directors receive
$450 per meeting as well as an annual retainer fee of $1,500 paid in equal quarterly installments.
The chairman of the Audit Committee also receives an annual retainer of $6,000.

Members of the joint Compensation Committee of the Bank’s and the Company’s boards of directors
receive $300 per meeting as well as an annual retainer fee of $1,500 paid in equal quarterly
installments. The chairman of the Compensation Committee also receives an annual retainer of
$2,500.

Directors receive $300 per meeting for all other committee meetings attended.

Deferred Compensation

Directors are permitted to defer their director fees pursuant to deferred compensation plans
adopted by the Bank and the Company. The Company paid interest on balances in the Plan from a
formula which provides an annual earnings crediting rate based on 75% of the annual return on
average stockholders’ equity on balances in the plan until the director experiences a separation
from service, and, thereafter, at an earnings crediting rate of 56.25% of the Company’s return on
average stockholders’ equity. Under the second plan, which was adopted in September 2004 and then
amended in December 2005 to comply Section 409A of the Internal Revenue Code of 1986, as amended,
directors are permitted to defer additional board and committee meeting fees, beyond those being
deferred under the original plan, into certain investment vehicles, including a “deemed” investment
in the Company’s common stock.

Equity Incentives

Each director is eligible to participate in the Company’s Amended and Restated 2004 Long-Term
Incentive Plan.

	 	 	 
	*	 	Includes directors that are also employees of the Company or the Bank.

 

 

 

Named Executive Officer Compensation Summary

The following 2009 base salaries have been approved for payment to those persons who are expected
to be the Company’s named executive officers for the year ended December 31, 2009 and the following
cash bonuses were paid for 2008 performance:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	2008	 
	Name	 	Title	 	Salary	 	 	Bonus	 
	 
	R. Stan Puckett
	 	Chairman of the Board and Chief Executive Officer of the Company and the Bank	 	$	325,000	 	 	$	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	Kenneth R. Vaught
	 	President and Chief Operating Officer of the Company and the Bank	 	$	267,000	 	 	$	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	James E. Adams
	 	Executive Vice President, Chief Financial Officer and Secretary of the Company and the Bank	 	$	228,000	 	 	$	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	Steve L. Droke
	 	Senior Vice President and Chief Credit Officer of  the Bank	 	$	183,325	 	 	$	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	William C. Adams
	 	Senior Vice President and Chief Information Officer of the Bank	 	$	172,682	 	 	$	0.00	 

Bonus

Each named executive officer is also eligible to participate in the Company’s cash bonus plan. Any
bonus earned is typically paid in the first quarter of the year following the year in which the
bonus is earned.

Equity Based Incentives

The named executive officers are also eligible to participate in the Company’s 2004 Long-Term
Incentive Plan.

Benefits

The named executive officers are also eligible to participate in the Company’s and the Bank’s
broad-based benefit programs generally available to the Company’s and the Bank’s employees,
including the health, disability and life insurance programs and may defer a portion of their base
salary and bonus under the terms of a deferred compensation plan available to the Company’s
executive officers and members of senior management.

Additional Information

The foregoing information is summary in nature. Additional information regarding director and named
executive officer compensation will be included in the Company’s proxy statement for the Company’s
2009 annual meeting.

 

2

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