Document:

EX-10.1 2008 CASH INCENTIVE PLAN

 

Exhibit 10.1

PINNACLE FINANCIAL PARTNERS, INC.

2008 ANNUAL CASH INCENTIVE PLAN

CONFIDENTIAL

For internal use only, not for

distribution outside of Pinnacle Financial Partners, Inc.

As approved by the Human Resources and Compensation

Committee of Pinnacle Financial Partners on

January 18, 2008

 

 

PINNACLE FINANCIAL PARTNERS, INC.

2008 Annual Cash Incentive Plan

PLAN OBJECTIVES:

The overall objectives of the 2008 Annual Cash Incentive Plan (the “Plan”) are to:

	 	1.	 	Motivate participants in order to ensure that important corporate soundness
thresholds and corporate profitability objectives for 2008 are achieved, and
	 
	 	2.	 	Provide a reward system that encourages teamwork and cooperation in the achievement
of firm-wide goals.

This Plan shall be administered pursuant to the Pinnacle Financial Partners, Inc. 2004 Equity
Incentive Plan; it is the intention of the Company that all awards hereunder to Covered Officers
shall qualify for “performance-based exception” to the deduction limitation imposed by Section
162(m) of the Code. All provisions hereof shall be interpreted accordingly. Capitalized terms not
otherwise defined herein shall have the meaning set forth in the Pinnacle Financial Partners, Inc.
2004 Equity Incentive Plan.

EFFECTIVE DATES OF THE PLAN:

The Plan is effective from January 18, 2008 (Effective Date) through December 31, 2008.

ADMINISTRATION:

The Human Resources and Compensation Committee of the Board of Directors (the “HRC”) is responsible
for the overall administration of the Plan and shall have the authority to select the associates
who shall be eligible for participation in the Plan. The CFO, with the oversight of the CEO,
provides periodic updates as to the status of the Plan as follows:

	 	•	 	Produces status reports on a periodic basis to Plan participants, the Leadership Team
and the HRC in order to ensure the ongoing effectiveness of the Plan.
	 
	 	•	 	Makes recommendations for any Plan modifications (including target performance or
payout awards) as a result of substantial changes to the organization or participants’
responsibilities to ensure fairness to all Plan participants.
	 
	 	•	 	At the end of the Plan period, prepares, verifies, approves and submits the appropriate
award calculations and payout authorizations to the CEO and, ultimately the HRC, for
approval and distribution.

The HRC is authorized to interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan and to make any other determinations that it deems necessary or
desirable for the administration of the Plan. The HRC may correct any defect or omission or
reconcile any inconsistency in the Plan in the manner and to the extent the HRC
deems necessary or desirable. Any decision of the HRC in the interpretation and

	 	 	 
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	 	Pinnacle Financial Partners, Inc.

2008 Annual Cash Incentive Plan

 

 

administration of
Plan, as described herein, shall lie within its sole and absolute discretion and shall be final
conclusive and binding on all parties concerned.

ELIGIBILITY:

All associates which are compensated via a predetermined salary or hourly wage are eligible for
participation in the Plan. Additionally, in order to be eligible for incentive awards,
participants shall achieve a rating of at least “Meets Expectations” for overall performance for
2008. Participants who are not eligible for an award due to their performance evaluation shall be
notified by their Leadership Team member as soon as possible prior to distribution of awards.

Certain associates that are compensated via a commission schedule or commission grid have an
opportunity to achieve significant variable pay compensation due to escalating payouts pursuant to
the commission scheduled or grid based on their individual performance. As a result, such
commission-based associates are not eligible for participation in the Plan.

FORFEITURE OF AWARDS:

Any participant who terminates employment for any reason (e.g., voluntary separation or termination
due to misconduct) prior to distribution of awards in January 2009 will not be eligible for
distribution of awards under the Plan.

ETHICS:

The intent of this Plan is to fairly reward individual and team achievement. Any associate who
manipulates or attempts to manipulate the Plan for personal gain at the expense of clients, other
associates or Company objectives will be subject to appropriate disciplinary action.

PLAN FUNDING:

The Plan assets will be funded from the results of operations of the Company with all assets
being commingled with the assets of the Company.

TIMING OF AWARDS:

During January 2009, the HRC will review all proposed awards pursuant to the Plan. Any awards to be
distributed pursuant to the Plan shall be distributed prior to January 31, 2009 or
as soon as possible thereafter, but in no event later than March 15, 2009. No award will be
distributed prior to January 1, 2009.

TARGET AWARD:

Each participant will be assigned an “award tier” based on their position within the Company, their
experience level or other factors. Each participant’s Leadership Team

	 	 	 
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2008 Annual Cash Incentive Plan

 

 

member is responsible for
notifying each participant of his or her “award tier”. The “award tier” will be expressed as a
percentage ranging from 10% to 100%. In order to determine the “target award”, participants will
multiply their “award tier percentage” by their annualized base salary as of December 31, 2007
(e.g., monthly salary times 12) or, for hourly paid associates, their hourly compensation as of
December 31, 2008 multiplied by 2,080 hours (52 weeks x 40 hours per week). Overtime or other wage
components are not considered in these calculations.

Participants that join the company during the period from January 1, 2008 through December 31, 2008
will be assigned a pro rata target award based on the number of days in the calendar year they were
employed by the Company divided by the total number of days in the calendar year.

Example: An associate joins the firm on July 1, 2008. As a result, this associate is
employed for 184 days of a 365-day year or 50.4% of the year. Assuming their award
tier is the 10% tier, the award amount for this associate would be 10% x 50.4% or
5.04% of their annualized base salary on December 31, 2008.

AWARDS

Awards under the Plan shall be conditioned on the attainment of one or more written performance
goals which may be recommended by the Chief Executive Officer and shall be determined and approved
by the HRC for the 2008 fiscal year. The HRC shall determine whether and to what extent each
performance goal has been met. In determining whether and to what extent a performance goal has
been met, the HRC may consider such matters as the HRC deems appropriate.

DISCRETIONARY INCREASES AND REDUCTIONS:

The CEO may award up to an additional 10% of base pay based on extraordinary individual
performance. Likewise, the CEO may reduce a participant’s award by up to 50% of the calculated
award for individual performance which may have “met expectation”, but whereby the participant did
not exhibit a strong commitment to Pinnacle’s mission or values or the participant did not achieve
certain individual performance commitments for the year.

Discretionary awards outside these parameters shall be approved by the HRC prior to distribution;
however any discretionary awards to the Company’s executive officers shall be approved by the HRC
prior to distribution.

AMENDMENTS, TERMINATIONS AND OTHER MATTERS:

The HRC retains the right to amend or terminate this Plan in any manner they may deem necessary at
any time including the ability to include or exclude any associate or group of associates from
participation in the Plan. Additionally, should the firm enter into any merger agreement or
significant market expansion, the HRC retains the right to amend the Plan as they may deem
appropriate under the circumstances. Furthermore, this Plan does not, nor should any participant
imply that it shall, create a contractual relationship between the Plan,

	 	 	 
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	 	Pinnacle Financial Partners, Inc.

2008 Annual Cash Incentive Plan

 

 

the Company or any
associate of the Company. No associate should rely on this Plan as to any awards that the
associate believes they might otherwise be entitled to receive. This Plan shall be governed by and
construed in accordance with the laws of the State of Tennessee, without regard to any conflicts of
laws or principles.

	 	 	 
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	 	Pinnacle Financial Partners, Inc.

2008 Annual Cash Incentive PlanEX-10.2 FORM OF RESTRICTED STOCK AWARD AGREEMENT

 

Exhibit 10.2

PINNACLE FINANCIAL PARTNERS, INC.

RESTRICTED STOCK AGREEMENT

     THIS RESTRICTED STOCK AGREEMENT (the “Agreement”) is by and between Pinnacle Financial
Partners, Inc., a Tennessee corporation (the “Company”), and                      (the “Grantee”).
Capitalized terms used but not defined in this Agreement shall have the meaning ascribed to such
terms in the Pinnacle Financial Partners, Inc. 2004 Equity Incentive Plan (the “Plan”).

     Section 1. Restricted Stock Award. The Grantee is hereby granted the right to
receive
                     shares (the “Restricted Stock”) of the Company’s common stock, $1.00 par value
per share (the “Common Stock”), subject to the terms and conditions of this Agreement and the Plan.

     Section 2. Lapse of Restrictions. Subject to Sections 5 and 9
hereof, the restrictions associated with the shares of Restricted Stock granted pursuant to
Section 1 hereof shall lapse at such times (each, a “Vesting Date”) and in the amounts set
forth below so long as the Company reports net income greater than $0 in the fiscal year preceding
each Date of Vesting noted below:

	 	 	 	 	 	 	 	 	 	 	 
	Cumulative	 	 	 	 	 	Cumulative
	Percentage Vested	 	Date of Vesting	 	Shares Vested
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 
	 	                     	%	 	 	                                        ,                     	 	 	 	                    	 

     Should the Grantee become 65 years of age before the last Date of Vesting as noted above then
all restrictions with respect to the shares of Restricted Stock granted hereunder which would have
otherwise vested subsequent to the Grantee becoming 65 years of age shall lapse in equal increments
on each Date of Vesting noted above during the period from the effective date of this Agreement
thru the Date of Vesting as noted above which occurs immediately prior to the date the Grantee
becomes age 65.

Section 3. Distribution of Restricted Stock. Certificates representing the shares of
Restricted Stock that have vested under Section 2 will be distributed to the Grantee as
soon as practicable after each Vesting Date.

     Section 4. Voting Rights and Dividends. Prior to the distribution of the Restricted
Stock, certificates representing shares of Restricted Stock will be held by the Company (the

 

 

“Custodian”) in the name of the Grantee. The Custodian will take such action as is necessary and
appropriate to enable the Grantee to vote the Restricted Stock. All cash dividends received by the
Custodian, if any, with respect to the Restricted Stock will be remitted to the Grantee. Stock
dividends issued with respect to the Restricted Stock shall be treated as additional shares of
Restricted Stock that are subject to the same restrictions and other terms and conditions that
apply to the shares of Restricted Stock. Notwithstanding the foregoing, no voting rights or
dividend rights shall inure to the Grantee following the forfeiture of the Restricted Stock
pursuant to Section 5.

     Section 5. Termination/Change of Status. In the event that the Grantee’s employment
by the Company (or any Subsidiary or Affiliate of the Company) terminates for any reason, other
than death or Disability, all shares of Restricted Stock for which the forfeiture restrictions have
not lapsed prior to the date of termination shall be immediately forfeited and Grantee shall have
no further rights with respect to such shares of Restricted Stock. In the event that the Grantee’s
employment terminates by reason of death or Disability all Restricted Stock shall be deemed vested
and the restrictions under the Plan and this Agreement with respect to the Restricted Stock,
including the restriction on transfer set forth in Section 6 hereof, shall automatically
expire and shall be of no further force or effect.

     Section 6. No Transfer or Pledge of Restricted Stock. No shares of Restricted Stock
may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of
prior to the date the forfeiture restrictions with respect to such shares have lapsed, if at all,
on any Vesting Date.

     Section 7. Withholding of Taxes. If the Grantee makes an election under section
83(b) of the Code with respect to the Award, the Award made pursuant to this Agreement shall be
conditioned upon the Grantee making prompt payment to the Company of any applicable withholding
obligations or withholding taxes by the Grantee (“Withholding Taxes”). Failure by the Grantee to
pay such Withholding Taxes will render this Agreement and the Award granted hereunder null and void
ab initio and the Restricted Shares granted hereunder will be immediately cancelled. If the
Grantee does not make an election under section 83(b) of the Code with respect to the Award, upon a
Vesting Date with respect to any portion of the Restricted Shares (or property distributed with
respect thereto), the Company shall cancel such Restricted Shares (or withhold property) having an
aggregate Fair Value, on the date next preceding the Vesting Date, in an amount required to satisfy
the required Withholding Taxes as set forth by Internal Revenue Service guidelines for the
employer’s minimum statutory withholding with respect to Grantee. The Company shall deduct from
any distribution of cash (whether or not related to the Award including, without limitation, salary
payments) to the Grantee an amount required to satisfy the required Withholding Taxes as set forth
by Internal Revenue Service guidelines for the employer’s minimum statutory withholding with
respect to Grantee pertaining to cash payments under the Award (including any cash dividends made
in respect of the Shares subject to the Award). For purposes of this Agreement, “Fair Value” means
the closing sales price of the Shares on the Nasdaq Global Select Market on such date, or in the
absence of reported sales on such date, the closing sales price of the Shares on the immediately
preceding date for which sales were reported.

 

 

     Section 8. Change of Control. Upon the occurrence of a Change in Control as defined
in the Plan, all Restricted Stock shall be deemed vested and the restrictions under the Plan and
the Agreement with respect to the Restricted Stock, including the restriction on transfer set forth
in Section 6 hereof, shall automatically expire and shall be of no further force or effect.

     Section 9. Stock Subject to Award. In the event that the shares of Common Stock of
the Company should, as a result of a stock split or stock dividend or combination of shares or any
other change, redesignation, merger, consolidation, recapitalization or otherwise, be increased or
decreased or changed into or exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation, the number of shares of Restricted Stock that
have been awarded to Grantee shall be adjusted in an equitable and proportionate manner to reflect
such action. If any such adjustment shall result in a fractional share, such fraction shall be
disregarded.

     Section 10. Stock Power. Concurrently with the execution of this Agreement, the
Grantee shall deliver to the Company a stock power, endorsed in blank, relating to the shares of
Restricted Stock. Such stock power shall be in the form attached hereto as Exhibit A.

     Section 11. Legend. Each certificate representing Restricted Stock shall bear a
legend in substantially the following form:

THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN
THE PINNACLE FINANCIAL PARTNERS, INC. 2004 EQUITY INCENTIVE PLAN (THE “PLAN”) AND
THE RESTRICTED STOCK AGREEMENT (THE “AGREEMENT”) BETWEEN THE OWNER OF THE RESTRICTED
STOCK REPRESENTED HEREBY AND PINNACLE FINANCIAL PARTNERS, INC. (THE “COMPANY”). THE
RELEASE OF SUCH STOCK FROM SUCH TERMS AND CONDITIONS SHALL BE MADE ONLY IN
ACCORDANCE WITH THE PROVISIONS OF THE PLAN AND THE AGREEMENT, COPIES OF WHICH ARE ON
FILE AT THE COMPANY.

     Section 12. No Right to Continued Employment. This Agreement shall not be construed
as giving the Grantee the right to be retained in the employ of the Company (or any Subsidiary or
Affiliate of the Company), and the Company (or any Subsidiary or Affiliate of the Company) may at
any time dismiss the Grantee from employment, free from any liability or any claim under the Plan.

     Section 13. Governing Provisions. This Agreement is made under and subject to the
provisions of the Plan, and all of the provisions of the Plan are also provisions of this
Agreement. If there is a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern. By signing this Agreement, the
Grantee confirms that he or she has received a copy of the Plan.

 

 

     Section 14. Miscellaneous.

          14.1 Entire Agreement. This Agreement and the Plan contain the entire understanding
and agreement between the Company and the Grantee concerning the Restricted Stock granted hereby,
and supersede any prior or contemporaneous negotiations and understandings. The Company and the
Grantee have made no promises, agreements, conditions or understandings relating to the Restricted
Stock, either orally or in writing, that are not included in this Agreement or the Plan.

          14.2 Captions. The captions and section numbers appearing in this Agreement are
inserted only as a matter of convenience. They do not define, limit, construe or describe the
scope or intent of the provisions of this Agreement.

          14.3 Counterparts. This Agreement may be executed in counterparts, each of which
when signed by the Company and the Grantee will be deemed an original and all of which together
will be deemed the same Agreement.

          14.4 Notice. Any notice or communication having to do with this Agreement must be
given by personal delivery or by certified mail, return receipt requested, addressed, if to the
Company, to the principal office of the Company, and, if to the Grantee, to the Grantee’s last
known address provided by the Grantee to the Company.

          14.5 Amendment. This Agreement may be amended by the Company, provided that unless
the Grantee consents in writing, the Company cannot amend this Agreement if the amendment will
materially change or impair the Grantee’s rights under this Agreement and such change is not to the
Grantee’s benefit.

          14.6 Successors and Assignment. Each and all of the provisions of this Agreement are
binding upon and inure to the benefit of the Company and the Grantee and their heirs, successors,
and assigns. However, neither the Restricted Stock nor this Agreement may be assigned or
transferred except as otherwise set forth in this Agreement or the Plan.

          14.7 Governing Law. This Agreement shall be governed and construed exclusively in
accordance with the laws of the State of Tennessee applicable to agreements to be performed in the
State of Tennessee.

[Signature page to follow.]

 

 

     IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement to be effective
as of                     .

	 	 	 	 	 	 	 
	 	 	PINNACLE FINANCIAL PARTNERS, INC.:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Hugh M. Queener
	 	 
	 

	 	Title:
	 	Chief Administrative Officer and Corporate
Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	GRANTEE:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 

 

 

EXHIBIT A

STOCK POWER

     FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer to Pinnacle
Financial Partners, Inc. (the “Company”),
                     shares of the Company’s common stock
represented by Certificate No.                     . The undersigned authorizes the Secretary of the Company to
transfer the stock on the books of the Company in the event of the forfeiture of any shares issued
under the Restricted Stock Agreement dated                      between the Company and the undersigned.

Dated:                     

	 	 	 	 	 	 	 
	 	 	Signed:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:

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