Document:

exv10w7

	 	 	 	 	 

Exhibit 10.7

PARK STERLING BANK

2010 STOCK OPTION PLAN FOR DIRECTORS

     1. Purpose.

     The purposes of this 2010 Stock Option Plan for Directors (this “Plan”) are to provide for
grants of stock options (“Options”) to non-employee directors of Park Sterling Bank (the “Bank”) to
purchase shares of common stock of the Bank (“Common Stock”) as incentives to selected non-employee
directors of the Bank to stimulate their efforts toward the continued success of the Bank and to
operate and manage the business in a manner that will provide for the long-term growth and
profitability of the Bank; to encourage stock ownership by selected non-employee directors by
providing them with a means to acquire a proprietary interest in the Bank; and to provide a means
of obtaining, rewarding and retaining non-employee directors.

     2. Effective Date.

     The effective date (the “Effective Date”) of this Plan shall be the later to occur of the
following: (i) the adoption of this Plan by the Board of Directors of the Bank; (ii) the approval
of this Plan by the affirmative vote of two-thirds (2/3) of the outstanding shares of voting stock
of the Bank; and (iii) the approval of this Plan by the Commissioner of Banks of the State of North
Carolina (the “Commissioner”).

     3. Administration.

     This Plan shall be administered by the Bank’s Board of Directors (the “Board”) or by a
committee of the Board (the “Committee”) designated by the Board (in such capacity, the Board or
the Committee is referred to as the “Plan Administrator”). This Plan shall be interpreted, applied
and administered so that the Options do not constitute the deferral of compensation within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the “Code”).

     The Plan Administrator shall have complete authority to: (i) interpret all terms and
provisions of this Plan consistent with law; (ii) select from the group of non-employee directors
of the Bank to whom Options may be granted; (iii) within the limits established herein, determine
the number of shares to be subject to, the exercise price of, and the term of each Option granted
to each of such directors; (iv) prescribe the form of instrument(s) evidencing Options granted
under this Plan; (v) determine the time or times at which Options shall be granted to directors;
(vi) provide, if appropriate, for the exercisability of Options granted to directors in
installments or subject to specified conditions; (vii) determine the method of exercise of Options
granted to directors under this Plan; (viii) adopt, amend, and rescind general and special rules
and regulations for this Plan’s administration; and (ix) make all other determinations necessary or
advisable for the administration of this Plan.

     Any action that the Board or the Committee, acting as Plan Administrator, is authorized to
take may be taken without a meeting if all the members of the Board or Committee, as the

 

 

case may be, sign a written document authorizing such action to be taken, unless different
provision is made by the Bylaws of the Bank.

     The Plan Administrator may designate selected Board or Committee members or certain employees
of the Bank to assist the Plan Administrator in the administration of this Plan and may grant
authority to such persons to execute documents, including Options, on behalf of the Plan
Administrator.

     No member or the Board or Committee or employee of the Bank assisting the Plan Administrator
pursuant to the preceding paragraph shall be liable for any action taken or determination made in
good faith.

     4. Stock Subject to Plan.

     The stock to be offered under this Plan shall be authorized but unissued shares of Common
Stock. An aggregate of Two Hundred Sixty-Four Thousand Five Hundred (264,500) of the shares of
Common Stock are reserved for grants under this Plan. The number of shares that may be granted
under this Plan may be adjusted to reflect any change in the capitalization of the Bank as
contemplated by Section 8 of this Plan and occurring after the adoption of this Plan. The Plan
Administrator will maintain records showing the cumulative total of all shares subject to Options
outstanding under this Plan.

     5. Grant of Options.

     a. Eligibility; Allotment; and Vesting.

     The Board may grant to any non-employee director of the Bank, upon such person’s
election to the Board or otherwise, an Option (each, an “Option”) to purchase shares of
Common Stock in an amount to be determined by the Board; provided that no one person may
receive Options to purchase forty percent (40%) or more of the shares reserved under this
Plan. Options shall not be exercisable immediately upon granting and, unless a longer
vesting schedule is specifically determined by the Board at the time of grant and set forth
in any memorandum or agreement evidencing Options, shall become exercisable and vest in
increments of one-third (1/3) of the number of Options granted on each anniversary of the
date of grant until the Options are fully exercisable and vested (i.e., on the third
anniversary of the date of grant). The date of grant of an Option under this Plan shall,
for all purposes, be the date on which the Plan Administrator makes the determination of
granting such Option, including specifying its material terms. Notice of the determination
shall be given to each non-employee director to whom an Option is so granted promptly after
the date of such grant.

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     b. Reorganizations.

     Unless otherwise determined by the Plan Administrator, upon consummation of a merger,
conversion or share exchange (a “Reorganization”) in which shares of Common Stock are
converted into the right to receive cash or other assets, the securities of another entity
or a combination of any of the foregoing (“Reorganization Consideration”), all outstanding
Options, to the extent not exercised, shall terminate and cease to be outstanding, except to
the extent expressly assumed by the surviving or acquiring entity (or parent thereof) in
which event such Options shall become exercisable into, on a per share basis, the amount of
Reorganization Consideration into which one share of Common Stock is converted in such
Reorganization, subject to further adjustment pursuant to Section 8 hereof in the event of
any subsequent recapitalization, reclassification, combination, stock dividend, stock split
or other relative change with respect to the Reorganization Consideration.

     Unless otherwise determined by the Plan Administrator and subject to Section 8 hereof,
upon consummation of a Reorganization in which shares of Common Stock are not converted into
cash or other assets, the securities of another entity or a combination of any of the
foregoing, all Awards shall remain outstanding in full force and effect on the same terms
and conditions.

     c. Change in Control.

     Notwithstanding any provision herein to the contrary, unless otherwise specifically
determined by the Board at the time of grant and set forth in any memorandum of Option or
agreement evidencing the Option, in the event of a “change in control,” all Options
outstanding as of the date such change in control is determined to have occurred, and which
are not then exercisable and vested, shall become fully exercisable and vested to the full
extent of the original grant.

     A “change in control” shall be deemed to occur upon the occurrence of any of the
following events:

     (i) A tender offer or exchange offer is made whereby the effect of such offer
is to take over and control the affairs of the Bank and such offer is consummated
for the ownership of securities of the Bank representing 25% or more of the combined
voting powers of the Bank’s then outstanding voting securities.

     (ii) The adoption by the Bank’s stockholders of a plan of merger or
consolidation providing for the merger or consolidation of the Bank with another
corporation and, as a result of such merger or consolidation, less than a majority
of the outstanding voting securities of the surviving or resulting corporation would
then be owned in the aggregate by the former stockholders of the Bank.

     (iii) The Bank transfers substantially all of its assets to another corporation
or entity that is not a wholly owned subsidiary of the Bank.

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     (iv) Any “person” (as such term is used in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, as amended) is or becomes the beneficial owner,
directly or indirectly, of securities of the Bank representing 25% or more of the
combined voting power of the Bank’s then outstanding securities, and the effect of
such ownership is to take over and control the affairs of the Bank; provided,
however, that a change in control shall not be deemed to occur as the result of the
formation of a bank holding company in which the stockholders of the Bank would
immediately after such transaction own the capital stock of the bank holding company
in the same proportion as such stockholders owned the Common Stock immediately prior
to such transaction.

     (v) As the result of a tender offer, merger, consolidation, sale of assets, or
contested election, or any combination of the foregoing in a series of related
transactions, the persons who were members of the Board of Directors of the Bank
immediately before the transaction, cease to constitute at least a majority thereof.

     d. Forfeiture of Upon Termination of Service.

     Unless otherwise specified in a resolution adopted by the Board prior to the cessation
of an Option holder’s termination of service as a director, all Options that are not
exercisable immediately prior to the date the holder ceases to serve as a director shall be
thereby cancelled and forfeited. Unless otherwise specified in a resolution adopted by the
Board prior to the cessation of an Option holder’s termination of service as a director, all
Options that are exercisable immediately prior to the date the holder ceases to serve as a
director shall terminate in full three (3) months after the date the director ceases to
serve as a director, unless the director shall:

     (i) die while a director of the Bank, in which case the director’s legatee(s)
under his or her last will or the director’s personal representative or
representatives may exercise all or part of the previously unexercised portion of
such Option at any time within one year after the director’s death to the extent the
director could have exercised the Option immediately prior to his or her death or in
the amount purchasable under the Option immediately after the death of the director,
whichever is greater;

     (ii) become permanently or totally disabled within the meaning of Section
22(e)(3) of the Code (or any successor provision) while a director of the Bank, in
which case the director or his or her personal representative may exercise the
previously unexercised portion of such Option at any time within one year after
termination of his or her cessation of service as a director to the extent the
director could have exercised the Option immediately prior to cessation of service;

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      (iii) retire with the consent of the Bank after the director has reached his or
her 55th birthday but prior to his or her 65th birthday and
has at least ten (10) years of service as a director, in which case the director may
exercise the previously unexercised portion of such Option at any time prior to the
expiration of its fixed term to the extent the director could have exercised the
Option immediately prior to such retirement;

     (iv) retire with the consent of the Bank after the director has reached his or
her 65th birthday, in which case the director may exercise the previously
unexercised portion of such Option at any time prior to the expiration of its fixed
term to the extent the director could have exercised the Option immediately prior to
such retirement; or

     (v) retire with the consent of the Bank in any circumstance not covered by the
preceding clauses (iv) or (v), in which case the director may exercise the
previously unexercised portion of such Option at any time within one year after the
director’s retirement to the extent the director could have exercised the Option
immediately prior to such retirement.

In no event, however, may an Option be exercised after the expiration of its fixed term
established in accordance with Section 7.

     e. Forfeiture Following Regulatory Notice.

     In the event that the Commissioner or the Bank’s primary federal determines that the
Bank’s capital is below the applicable minimum capital requirements and upon the direction
by the Bank’s primary federal regulator that plan participants must exercise or forfeit
their Options, the Bank shall promptly mail written notice of such event to holders of
Options. Options that are not exercised within ten (10) days of the mailing of such notice
shall be automatically cancelled and shall be of no further force or effect. The receipt
of such notice shall not accelerate the vesting of any unvested Options.

6. Exercise Price.

     The exercise price per share of Options issued under this Plan shall not be less than 100% of
the fair market value of a share of Common Stock on the date of grant; provided, however, that such
fair market value shall be no less than the par value of the Common Stock. If the Bank’s shares of
Common Stock are:

     (a) actively traded on any national securities exchange that reports their sales
prices, fair market value shall be the average of the high and low sales prices per share on
the date the Option is granted;

     (b) otherwise traded over the counter, fair market value shall be the average of the
final bid and asked prices for the shares of Common Stock as reported for the date the
Option is granted; or

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     (c) not traded, the Board of Directors of the Bank shall consider any factor or factors
that it believes affects fair market value, and shall determine fair market value
without regard to any restriction other than a restriction which by its terms will
never lapse.

The Board may not reduce the exercise price of any Option after it is awarded, except adjustments
permitted by Section 8, nor may the Board agree to exchange a new lower-priced Option for an
outstanding higher-priced Option.

7. Term of Options.

     The term of each Option granted under this Plan shall be ten years from the date of the grant
unless a shorter term is specifically determined by the Board at the time of grant and set forth in
any memorandum of Option or agreement evidencing the Option.

8. Recapitalization.

     In the event of any change in the outstanding Common Stock of the Bank by reason of a stock
dividend, stock split, stock consolidation, recapitalization, reorganization, merger, split up or
the like, the shares available for purposes of this Plan and the number and kind of shares under
option in outstanding option agreements pursuant to this Plan and the option price under such
agreements shall be appropriately adjusted so as to preserve, but not increase, the benefits of
this Plan to the Bank and the benefits to the holders of such Options. Adjustments under this
Section shall be made by the Plan Administrator, whose determination as to what adjustments shall
be made and the extent thereof, shall be final, binding and conclusive.

9. Transfer of Options.

     An Option granted to a participant under this Plan shall not be transferable by him or her
except: (i) by will; or (ii) by the laws of descent and distribution.

10. Method of Exercise.

     Each Option granted under this Plan shall be deemed exercised when the holder (a) shall
indicate the decision to do so in writing delivered to the Bank, and (b) shall at the same time
tender to the Bank payment in full in cash of the exercise price for the shares for which the
Option is exercised, and (c) shall comply with such other reasonable requirements as the Plan
Administrator may establish.

     No person, estate, or other entity shall have any of the rights of a shareholder with
reference to shares subject to an Option until a certificate for the shares has been delivered.

     An Option may be exercised for any lesser number of shares than the full amount for which it
could be exercised, and any partial exercise shall not affect the right to exercise the Option for
the remaining shares.

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11. Termination.

     An Option granted under this Plan shall be considered terminated in whole or in part, to the
extent that, in accordance with the provisions of this Plan or such Option, it can no longer be
exercised for any shares originally subject to the Option. The shares subject to any Option or
portion thereof, which terminates without being exercised, shall no longer be charged against the
applicable limitation or limitations provided in Section 3 of this Plan and may again become shares
available for the purposes, and subject to the same applicable limitations, of this Plan.

12. Amendment.

     The Board may at any time suspend, amend, or terminate this Plan. The Plan Administrator may
make such modifications of the terms and conditions of a holder’s Option as it shall deem
advisable. No Option may be granted during any suspension of this Plan or after such termination.
Notwithstanding the foregoing, no action may be taken that would materially impair any rights under
any outstanding Option without the consent of the holder of the Option.

     In addition to Board approval of an amendment, if the amendment would: (i) materially increase
the benefits accruing to participants, including to permit one person to receive Options to
purchase forty percent (40%) or more of the shares authorized under this Plan or to permit a
director who is also an employee of the Bank to receive Options to purchase shares under this Plan;
(ii) increase the number of securities issuable under this Plan (other than an increase pursuant to
Section 10 hereof); (iii) change the class or classes of individuals eligible to receive Options;
or (iv) otherwise materially modify the requirements for eligibility, then such amendment must be
approved by the holders of the Bank’s capital stock and the Commissioner in the manner required by
Chapter 53 of the North Carolina General Statutes.

13. Indemnification of Board or Committee.

     In addition to such other rights of indemnification as they may have as members of the Board,
the members of the Board or Committee shall to the fullest extent permitted by law, be indemnified
by the Bank against the reasonable expenses, including attorney’s fees, actually and necessarily
incurred in connection with the defense of any action, suit, or proceeding, or in connection with
any appeal therein, to which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with this Plan or any Option granted thereunder, and against
all amounts paid by them in settlement thereof (provided the settlement is approved by independent
legal counsel selected by the Bank) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such
action, suit, or proceeding that such Board member or Committee member is liable for gross
negligence or misconduct in the performance of his duties; provided that within 60 days after
institution of any such action, suit or proceeding the Board member or Committee member shall in
writing offer the Bank the opportunity, at its own expense, to handle and defend the same.

14. Compliance with Securities Laws and Other Requirements.

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     No certificate(s) for shares shall be executed and delivered upon exercise of an Option until
the Bank shall have taken such action, if any, as is then required to comply with the provisions of
the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, Chapter 53
of the North Carolina General Statutes and the regulations of the North Carolina Banking Commission
thereunder, the regulations of the Federal Deposit Insurance Corporation, the North Carolina
Uniform Securities Act, as amended, any other applicable state securities law(s) and the
requirements of any exchange on which the Common Stock may, at the time, be listed.

     In the case of the exercise of an Option by a person or estate acquiring the right to exercise
the Option by bequest or inheritance, the Board or Committee may require reasonable evidence as to
the ownership of the Option and may require such consents and releases of taxing authorities as it
may deem advisable.

15. No Right to Continued Service.

     Neither the adoption of this Plan nor its operation, nor any document describing or referring
to this Plan, or any part thereof, shall confer upon any director or plan participant under this
Plan any right to continue in the service of the Bank or shall in any way affect the right and
power of the Bank to terminate the service relationship with the Bank of any participant under this
Plan at any time with or without assigning a reason therefor, to the same extent as the Bank might
have done if this Plan had not been adopted.

16. Duration of Plan.

     Unless previously terminated by the Board, this Plan shall terminate at the close of business
the tenth anniversary of the Effective Date, and no Option shall be granted under it thereafter,
but such termination shall not affect any Option theretofore granted under this Plan.

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NONQUALIFIED STOCK OPTION AWARD

PURSUANT TO THE PARK STERLING BANK

2010 STOCK OPTION PLAN FOR DIRECTORS

     THIS AGREEMENT, made effective as of the ___ day of ________, 20__ (the “Grant Date”), by and
between Park Sterling Bank (the “Bank”), and ___________________ (the “Holder”).

     WHEREAS, the Bank has adopted, subject to approval by its stockholders and the State of North
Carolina Commissioner of Banks, the 2010 Stock Option Plan for Directors (the “Plan”); and

     WHEREAS, Section 5(a) of the Plan provides for the award of Options to non-employee directors
of the Bank; and

     WHEREAS, the Holder and the Bank are entering into this Agreement to memorialize the terms and
conditions of Options awarded to the Holder pursuant to the Plan;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Grant of Option. Pursuant to Section 5(a) of the Plan, the Bank hereby grants to
the Holder an option (the “Option”) to purchase all or any part of an aggregate of ____ shares of
Common Stock (the “Shares”), subject to, and in accordance with, the terms and conditions set forth
in this Agreement and the Plan. The Option and this Agreement are subject to all of the terms and
conditions of the Plan, which terms and conditions are hereby incorporated by reference, and,
except as otherwise expressly set forth herein, the capitalized terms used in this Agreement shall
have the same definitions as set forth in the Plan.

     2. Exercise Price. The price at which the Holder shall be entitled to purchase
Shares upon the exercise of the Option shall be $ _.__ per share.

     3. Duration of Option. Subject to the terms of the Plan, including those provisions
providing for the expiration of the Option upon an earlier date, the Option shall remain
exercisable for ten years after the Grant Date.

     4. Vesting of Option.

     a. Subject to the terms of the Plan, this Option shall vest in accordance with
Subsection (b) below if the Bank closes on an initial public offering of its Common Stock
within ten (10) calendar days after the Grant Date. If the Bank fails to close on an
initial public offering of its Common Stock within ten (10) calendar days after the Grant
Date, the Option shall not vest and shall be forfeited.

     b. If the Bank closes on an initial public offering of its Common Stock within ten (10)
calendar days after the Grant Date, the Option shall vest ratably on each anniversary of the
Grant Date, commencing with the first anniversary of the Grant Date, in increments of
one-third (1/3) of the total number of shares purchasable under the Option.

 

 

     5. Acceleration of Vesting Upon a Change in Control. In the event of a “change in
control” after the closing of an initial public offering of the Bank’s Common Stock within ten (10)
calendar days after the Grant Date, the Option shall become fully exercisable and vested to the
full extent of the original grant.

     6. Non-Transferability of Option. The Option shall not be transferable by the Holder
except to the extent permitted under the Plan.

     7. No Rights as a Stockholder. The Holder shall not have any rights or privileges of
a stockholder with respect to any shares of Common Stock by virtue of the Option until the date of
issuance by the Bank of a certificate for such shares pursuant to the exercise of the Option.

     8. Holder Bound by the Plan. The Holder hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all the terms and provisions thereof, including Section 5(e)
providing for the forfeiture of the Option upon specified circumstances. A determination of the
Plan Administrator as to any questions which may arise with respect to the interpretation of the
provisions of this Agreement and of the Plan shall be final. The Plan Administrator may authorize
and establish such rules, regulations and revisions thereof not inconsistent with the provisions of
the Plan, as it may deem advisable.

     9. Modification of Agreement. This Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only by a written instrument executed by
the parties hereto.

     10. Severability. Each provision of this Agreement is intended to be severable.
Should any provision of this Agreement be held by a court of competent jurisdiction to be
unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be
affected by such holding and shall continue in full force in accordance with their terms.

     11. Governing Law; Jurisdiction. This Agreement shall be governed and construed in
accordance with the laws of the State of North Carolina, without regard to the principles of
conflicts of law, except to the extent governed by federal law. Each party hereby irrevocably
submits to the jurisdiction of the state and federal courts sitting in Mecklenburg County, State of
North Carolina, for the adjudication of any dispute hereunder.

     12. Successors in Interest. This Agreement shall inure to the benefit of and be
binding upon any successor to the Bank. This Agreement shall inure to the benefit of the Holder’s
legal representatives. All obligations imposed upon the Holder and all rights granted to the Bank
under this Agreement shall be final, binding and conclusive upon the Holder’s heirs, executors,
administrators and successors.

     13. Option Subject to Shareholder and Regulatory Approval. The grant of this Option
is subject to shareholder approval of the Plan within twelve (12) months following the adoption of
the plan by the Board of Directors and also subject to the approval of the State of North Carolina
Commissioner of Banks, and if such approvals are not timely obtained, the grant of this Option
shall become null and void and the Holder shall have no recourse against the Bank as a result of
such occurrence.

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     IN WITNESS WHEREOF, this Agreement has been executed by the Bank and the Holder effective as
of the date and year first written above.

	 	 	 	 	 
	 	PARK STERLING BANK

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 
	 	 	 
	 	 	 
	 	[Holder] 	 
	 	 	 	 

3exv10w8

Exhibit 10.8

PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

SECTION I. DEFINITIONS

     1.1 Definitions. Whenever used herein, the masculine pronoun
will be deemed to include the feminine, and the singular to include the plural, unless the context
clearly indicates otherwise, and the following capitalized words and phrases are used herein with
the meaning thereafter ascribed:

     (a) “Affiliate” means:

     (1) Any Subsidiary or Parent;

     (2) An entity that directly or through one or more intermediaries controls, is
controlled by, or is under common control with the Company, as determined by the
Company; or

     (3) Any entity in which the Company has such a significant interest that the
Company determines it should be deemed an “Affiliate”, as determined in the sole
discretion of the Company.

     (b) “Award Agreement” means any written agreement, contract, or other
instrument or document as may from time to time be designated by the Company as evidencing
an Award granted under the Plan.

     (c) “Award Program” means a written program established by the Committee,
pursuant to which Awards are granted under the Plan under uniform terms, conditions and
restrictions set forth in such written program.

     (d) “Awards” means, collectively, Cash Performance Awards, Incentive Stock
Options, Nonqualified Stock Options, Other Stock-Based Awards, and Stock Appreciation
Rights.

     (e) “Bank” means Park Sterling Bank, a North Carolina bank, or any successor
thereto.

     (f) “Board of Directors” means the board of directors of the Company.

     (g) “Cash Performance Award” means an Award described in Section 3.5 that is
settled in cash and does not have a value that is derivative of the value of, determined by
reference to a number of shares of, or determined by reference to dividends payable on,
Stock.

     (h) “Change in Control” unless otherwise defined by the Committee in the
applicable Award Agreement, means and shall be deemed to have occurred upon the occurrence
of any one or more of the following events arising after the date a Participant is granted
an Award: (i) a “change in the ownership or effective control of a corporation, or (ii) a
change in the ownership of a substantial portion of the assets of a corporation” within the
meaning of Code Section 409A, provided, however, that for purposes of determining an
“effective change of control,” “50 percent” shall be used instead of “30 percent” and for
purposes of determining a “substantial portion of the assets of a corporation,” “85 percent”
shall be used instead of “40 percent.”

 

 

Notwithstanding the foregoing, in the event of a merger, consolidation, reorganization,
share exchange or other transaction as to which the holders of the capital stock of the Bank
or the Company before the transaction continue after the transaction to hold, directly or
indirectly through a holding company or otherwise, shares of capital stock of the Bank or
the Company (or other surviving company) representing more than fifty percent (50%) of the
value or ordinary voting power to elect directors of the capital stock of the Bank or the
Company (or other surviving company), such transaction shall not constitute a Change in
Control.

     (i) “Code” means the Internal Revenue Code of 1986, as amended, and the
applicable rules and regulations promulgated thereunder.

     (j) “Committee” means the committee appointed by the Board of Directors to
administer the Plan; provided that, if no such committee is appointed, the Board of
Directors in its entirety shall constitute the Committee. The Board of Directors shall
consider the advisability of whether the members of the Committee shall consist solely of
two or more members of the Board of Directors who are “outside directors” as defined in
Treas. Reg. § 1.162-27(e) as promulgated by the Internal Revenue Service and “non-employee
directors” as defined in Rule 16b-3(b)(3) as promulgated under the Exchange Act, and if
applicable, who satisfy the requirements of the national securities exchange or nationally
recognized quotation or market system on which the Stock is then traded. Notwithstanding
the foregoing, with respect to Awards granted by an officer or officers of the Company
and/or the Chairperson of the Committee pursuant to Section 2.3(b), the “Committee” as used
in the Plan shall mean such officer or officers and/or such Chairperson, unless the context
would clearly indicate otherwise.

     (k) “Company” means Park Sterling Corporation, a bank holding company
incorporated under the laws of the State of North Carolina.

     (l) “Disability” unless otherwise defined by the Committee in the applicable
Award Agreement or Award Program, has the same meaning as provided in the long-term
disability plan or policy maintained or, if applicable, most recently maintained, by the
Company or, if applicable, any Affiliate of the Company for the Participant. If no
long-term disability plan or policy was ever maintained on behalf of the Participant or, if
the determination of Disability relates to an Incentive Stock Option, Disability means that
condition described in Code Section 22(e)(3), as amended from time to time. In the event of
a dispute, the determination of Disability will be made by the Committee and will be
supported by advice of a physician competent in the area to which such Disability relates.

     (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time.

     (n) “Exercise Price” means the exercise price per share of Stock purchasable
under an Option.

     (o) “Fair Market Value” refers to the determination of the value of a share of
Stock as of a date, determined as follows:

     (1) if the shares of Stock are actively traded on any national securities
exchange or any nationally recognized quotation or market system (including, without
limitation NASDAQ), Fair Market Value shall mean the closing price at which Stock
shall have been sold on such date (unless the Committee determines otherwise), as

 

 

reported by any such exchange or system selected by the Committee on which the
shares of Stock are then traded;

     (2) if the shares of Stock are not actively traded but are reported on any such
exchange or system, Fair Market Value shall mean the closing price for the Stock on
such date (unless the Committee determines otherwise), as reported by such exchange
or system; or

     (3) if the shares of Stock are not actively traded or reported on any exchange
or system on such date or on the business day immediately preceding such date, Fair
Market Value shall mean the fair market value of a share of Stock as determined by
the Committee taking into account such facts and circumstances deemed to be material
by the Committee to the value of the Stock in the hands of the Participant.

     Notwithstanding the foregoing, for purposes of Paragraph (1), (2), or (3) above, the
Committee may use the average price or value as of the indicated date or for a period certain
ending on the indicated date, the price determined at the time the transaction is processed,
the tender offer price for shares of Stock, or any other method which the Committee
determines is reasonably indicative of the fair market value of the Stock; provided, however,
that for purposes of granting Nonqualified Stock Options or Stock Appreciation Rights, Fair
Market Value of Stock shall be determined in accordance with the requirements of Code Section
409A, and for purposes of granting Incentive Stock Options, Fair Market Value of Stock shall
be determined in accordance with the requirements of Code Section 422.

     (p) “Incentive Stock Option” means an incentive stock option within the meaning
of Section 422 of the Code.

     (q) “Nonqualified Stock Option” means a stock option that is not an Incentive
Stock Option.

     (r) “Option” means a Nonqualified Stock Option or an Incentive Stock Option.

     (s) “Other Stock-Based Award” means an Award described in Section 3.4 that has
a value that is derivative of the value of, determined by reference to a number of shares
of, or determined by reference to dividends payable on, Stock and may be settled in cash or
in Stock. Other Stock-Based Awards may include, but not be limited to, grants of Stock,
grants of rights to receive Stock in the future, or dividend equivalent rights.

     (t) “Over 10% Owner” means an individual who at the time an Incentive Stock
Option to such individual is granted owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its Parent or Subsidiaries,
determined by applying the attribution rules of Code Section 424(d).

     (u) “Parent” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if, with respect to Incentive Stock Options,
at the time of the granting of the Option, each of the corporations other than the Company
owns stock possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. A Parent shall include any
entity other than a corporation to the extent permissible under Code Section 424(f) or
regulations and rulings thereunder.

 

 

     (v) “Participant” means an individual who receives an Award hereunder.

     (w) “Performance Goals” means performance goals intended by the Committee to
constitute objective goals, either individually, alternatively or in any combination,
applied to either the Company as a whole or to a business unit or Affiliate, either
individually, alternatively or in combination, and measured either quarterly, annually or
cumulatively over a period of quarters or years, on an absolute basis or relative to a
pre-established target, to previous quarters’ or years’ results or to a designated
comparison group, in each case as specified by the Committee in the Award, including, but
not limited to, the following:

	 	(i)	 	earnings per share;
	 
	 	(ii)	 	book value per share;
	 
	 	(iii)	 	operating cash flow;
	 
	 	(iv)	 	free cash flow:
	 
	 	(v)	 	cash flow return on investments;
	 
	 	(vi)	 	cash available;
	 
	 	(vii)	 	net income (before or after taxes);
	 
	 	(viii)	 	revenue or revenue growth;
	 
	 	(ix)	 	total shareholder return;
	 
	 	(x)	 	return on invested capital;
	 
	 	(xi)	 	return on shareholder equity;
	 
	 	(xii)	 	return on assets;
	 
	 	(xiii)	 	return on common book equity;
	 
	 	(xiv)	 	market share;
	 
	 	(xv)	 	economic value added;
	 
	 	(xvi)	 	operating margin;
	 
	 	(xvii)	 	profit margin;
	 
	 	(xviii)	 	stock price;
	 
	 	(xix)	 	operating income;
	 
	 	(xx)	 	EBIT or EBITDA;

 

 

	 	(xxi)	 	expenses or operating expenses;
	 
	 	(xxii)	 	productivity of employees as measured by revenues, costs, or earnings per
employee;
	 
	 	(xxiii)	 	working capital;
	 
	 	(xxiv)	 	improvements in capital structure;
	 
	 	(xxv)	 	cost reduction goals;
	 
	 	(xxvi)	 	level of loan loss reserve; or
	 
	 	(xxvii)	 	any combination of the foregoing.

The Committee may appropriately adjust any evaluation of performance under a
Performance Goal to remove the effect of equity compensation expense under Financial
Accounting Standards No. 123R; amortization of acquired technology and intangibles; asset
write-downs; litigation or claim judgments or settlements; changes in or provisions under
tax law, accounting principles or other such laws or provisions affecting reported results;
accruals for reorganization and restructuring programs; discontinued operations; and any
items that are extraordinary, unusual in nature, non-recurring or infrequent in occurrence,
except where such action would result in the loss of the otherwise available exemption of
the Award under Code Section 162(m), if applicable.

     (x) “Performance Period” means, with respect to an Award, a period of time
within which the Performance Goals relating to such Award are to be measured. The
Performance Period will be established by the Committee at the time the Award is granted.

     (y) “Plan” means the Park Sterling Corporation 2010 Long-Term Incentive Plan.

     (z) “Separation from Service” shall mean a termination of a Participant’s
employment or other service relationship with the Company, subject to the following
requirements:

     (1) in the case of a Participant who is an employee of the Company, a
termination of the Participant’s employment where either (i) the Participant has
ceased to perform any services for the Company and all affiliated companies that,
together with the Company, constitute the “service recipient” within the meaning of
Code Section 409A (collectively, the “Service Recipient”) or (ii) the level of bona
fide services the Participant performs for the Service Recipient after a given date
(whether as an employee or as an independent contractor) permanently decreases
(excluding a decrease as a result of military leave, sick leave, or other bona fide
leave of absence if the period of such leave does not exceed six months, or if
longer, so long as the Participant retains a right to reemployment with the Service
Recipient under an applicable statute or by contract) to no more than twenty percent
(20%) of the average level of bona fide services performed for the Service Recipient
(whether as an employee or an independent contractor) over the immediately preceding
36-month period (or the full period of service if the Participant has been providing
services to the Service Recipient for less than 36 months); or

 

 

     (2) in the case of a Participant who is an independent contractor engaged by
the Service Recipient, a termination of the Participant’s service relationship with
the Service Recipient where (i) the contract (or in the case of more than one
contract, all contracts) under which services are performed for the Service
Recipient expires, if the
expiration constitutes a good-faith and complete termination of the contractual
relationship; or (ii) with respect to amounts payable to the Participant under an
Award upon the termination of the independent contractor’s relationship with the
Service Recipient, no amount will be paid to the Participant before a date that is
at least twelve (12) months after the day on which the contract expires under which
the Participant performs services for the Service Recipient (or, in the case of more
than one contract, all such contracts expire) and no amount payable to the
Participant on that date will is actually paid to the Participant if, after the
expiration of the contract (or contracts) and before that date, the Participant
performs services for the Service Recipient as an independent contractor or an
employee; or

     (3) in any case, as may otherwise be permitted under Code Section 409A.

     (aa) “Stock” means the Company’s common stock, $1.00 par value per share.

     (bb) “Stock Appreciation Right” means a stock appreciation right described in
Section 3.3.

     (cc) “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the relevant time, each of the
corporations other than the last corporation in the unbroken chain owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in
one of the other corporations in the chain. A “Subsidiary” shall include any entity other
than a corporation to the extent permissible under Code Section 424(f) or regulations or
rulings thereunder.

     (dd) “Termination of Employment” means the termination of the employment
relationship between a Participant and the Company and its Affiliates, regardless of whether
severance or similar payments are made to the Participant for any reason, including, but not
by way of limitation, a termination by resignation, discharge, death, Disability or
retirement. The Committee will, in its absolute discretion, determine the effect of all
matters and questions relating to a Termination of Employment as it affects an Award,
including, but not by way of limitation, the question of whether a leave of absence
constitutes a Termination of Employment.

SECTION 2 THE LONG-TERM INCENTIVE PLAN

     2.1 Purpose of the Plan. The Plan is intended to (a)
provide incentives to certain officers, employees, directors, consultants, and other service
providers of the Company and its Affiliates to stimulate their efforts toward the continued success
of the Company and to operate and manage the business in a manner that will provide for the
long-term growth and profitability of the Company; (b) encourage stock ownership by certain
officers, employees, directors, consultants, and other service providers by providing them with a
means to acquire a proprietary interest in the Company, acquire shares of Stock, or to receive
compensation which is based upon appreciation in the value of Stock; and (c) provide a means of
obtaining, rewarding and retaining officers, employees, directors, consultants, and other service
providers.

 

 

     2.2 Stock Subject to the Plan. Subject to
adjustment in accordance with Section 5.2, One Million Sixteen Thousand Four Hundred (1,016,400)
shares of Stock (the “Maximum Plan Shares”) are hereby reserved exclusively for issuance upon
exercise, settlement, or payment pursuant to Awards, all or any of which may be pursuant to any one
or more Award, including without limitation, Incentive Stock Options. Shares of Stock shall
not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that
is settled in cash. The shares of Stock attributable to the nonvested, unpaid, unexercised,
unconverted or otherwise unsettled portion of any Award that is forfeited or cancelled or expires
or terminates for any reason without becoming vested, paid, exercised, converted or otherwise
settled in full will again be available for purposes of the Plan. For purposes of determining the
number of shares of Stock issued upon the exercise, settlement or grant of an Award under this
Section, any shares of Stock withheld to satisfy tax withholding obligations or the Exercise Price
shall be considered issued under the Plan.

     2.3 Administration of the Plan.

     (a) The Plan is administered by the Committee. The Committee has full authority in its
discretion to determine the officers, employees, directors, consultants, and other service
providers of the Company or its Affiliates to whom Awards will be granted and the terms and
provisions of Awards, subject to the Plan. Subject to the provisions of the Plan, the
Committee has full and conclusive authority to interpret the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms and provisions of
the respective Award Agreements and Award Programs and to make all other determinations
necessary or advisable for the proper administration of the Plan. The Committee’s
determinations under the Plan need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Awards under the Plan (whether or not such
persons are similarly situated). The Committee’s decisions are final and binding on all
Participants. Each member of the Committee shall serve at the discretion of the Board of
Directors and the Board of Directors may from time to time remove members from or add
members to the Committee. Vacancies on the Committee shall be filled by the Board of
Directors.

     (b) Notwithstanding any other provision of this Plan, the Board of Directors may by
resolution authorize one or more officers of the Company and/or the Chairman of the
Committee to do one or both of the following: (1) designate individuals (other than officers
or directors of the Company or any Affiliate who are subject to Section 16 of the Exchange
Act) to receive Awards under the Plan, and (2) determine the number of shares of Stock
subject to such Awards; provided however, that the resolution shall specify the total number
of shares of Stock that may be granted subject to such Awards.

     2.4 Eligibility and Limits. Awards may be granted
only to officers, employees, directors, consultants, and other service providers of the Company or
any Affiliate of the Company; provided, however, that an Incentive Stock Option may only be granted
to an employee of the Company or any Parent or Subsidiary. In the case of Incentive Stock Options,
the aggregate Fair Market Value (determined as of the date an Incentive Stock Option is granted) of
Stock with respect to which stock options intended to meet the requirements of Code Section 422
become exercisable for the first time by an individual during any calendar year under all plans of
the Company and its Parents and Subsidiaries may not exceed $100,000; provided further, that if the
limitation is exceeded, the Incentive Stock Option(s) which cause the limitation to be exceeded
will be treated as Nonqualified Stock Option(s). To the extent required under Section 162(m) of
the Code and the regulations thereunder, as applicable, for compensation to be treated as qualified
performance-based compensation, subject to adjustment in accordance with Section 5.2, the maximum
number of shares of Stock with respect to which (a) Options, (b) Stock Appreciation Rights, or (c)
other Stock-Based Awards, to the extent they are granted with the

 

 

intent that they qualify as
qualified performance-based compensation under Section 162(m) of the Code, may be granted during
any calendar year to any employee may not exceed One Hundred Seventy-Five Thousand (175,000), and
the maximum aggregate dollar amount that may be paid in any calendar year to any employee with
respect to Cash Performance Awards may not exceed Seven Hundred and Fifty Thousand Dollars
($750,000). If, after grant, an Option
or Stock Appreciation Right is cancelled, the shares subject to the cancelled Award shall continue
to be counted against the maximum number of shares for which Options and Stock Appreciation Rights
may be granted to an employee as described in this Section 2.4. In addition, if the Exercise Price
of an Option or strike price of a Stock Appreciation Right is reduced, the transaction shall be
treated as a cancellation in accordance with the immediately preceding sentence.

SECTION 3 TERMS OF AWARDS

     3.1 Terms and Conditions of All Awards.

     (a) The number of shares of Stock as to which an Award may be granted or the amount of
an Award will be determined by the Committee in its sole discretion, subject to the
provisions of Section 2.2 as to the total number of shares available for grants under the
Plan and subject to the limits in Section 2.4.

     (b) Each Award will either be evidenced by an Award Agreement in such form and
containing such terms, conditions and restrictions as the Committee may determine to be
appropriate, including without limitation, Performance Goals or other performance criteria,
if any, that must be achieved as a condition to vesting or settlement of the Award, or be
made subject to the terms of an Award Program, containing such terms, conditions and
restrictions as the Committee may determine to be appropriate, including without limitation,
Performance Goals or other performance criteria, if any, that must be achieved as a
condition to vesting or settlement of the Award. Each Award Agreement or Award Program is
subject to the terms of the Plan and any provisions contained in the Award Agreement or
Award Program that are inconsistent with the Plan are null and void. Performance Goals, if
any, shall be established before twenty-five percent (25%) of the Performance Period has
elapsed, but in no event later than within ninety (90) days after the first day of a
Performance Period. At the time any Performance Goals are established, the outcome as to
whether the Performance Goals will be met must be substantially uncertain. If any
Performance Goals are established as a condition to vesting or settlement of an Award and
such Performance Goal is not based solely on the increase in the Fair Market Value of the
Stock, the Committee shall certify in writing that the applicable Performance Goals were in
fact satisfied before such Award is vested or settled, as applicable. Each Award Agreement
or Award Program is subject to the terms of the Plan and any provisions contained in the
Award Agreement or Award Program that are inconsistent with the Plan are null and void. To
the extent an Award is subject to Performance Goals with the intent that the Award
constitute performance-based compensation under Code Section 162(m), the Committee shall
comply with all applicable requirements under Code Section 162(m) and the rules and
regulations promulgated thereunder in granting, modifying, and settling such Award. The
Committee may, but is not required to, structure any Award so as to qualify as
performance-based compensation under Code Section 162(m).

     (c) The date as of which an Award is granted will be the date on which the Committee
has approved the terms and conditions of the Award and has determined the recipient of the
Award and the number of shares, if any, covered by the Award, and has taken all such

 

 

other
actions necessary to complete the grant of the Award or such later date as may be specified
in the approval of such Award.

     (d) Any Award may be granted in connection with all or any portion of a previously or
contemporaneously granted Award. Exercise or vesting of an Award granted in connection
with another Award may result in a pro rata surrender or cancellation of any related
Award, as specified in the applicable Award Agreement or Award Program.

     (e) Awards are not transferable or assignable except by will or by the laws of descent
and distribution governing the State in which the Participant was domiciled at the time of
the Participant’s death, and are exercisable, during the Participant’s lifetime, only by the
Participant; or in the event of the Disability of the Participant, by the legal
representative of the Participant; or in the event of death of the Participant, by the legal
representative of the Participant’s estate or if no legal representative has been appointed
within ninety (90) days of the Participant’s death, by the person(s) taking under the laws
of descent and distribution governing the State in which the Participant was domiciled at
the time of the Participant’s death; except to the extent that the Committee may provide
otherwise as to any Awards other than Incentive Stock Options.

     (f) After the date of grant of an Award, the Committee may, in its sole discretion,
modify the terms and conditions of an Award, except to the extent that such modification
would be inconsistent with other provisions of the Plan or would adversely affect the rights
of a Participant under the Award (except as otherwise permitted under the Plan or Award) or
would be inconsistent with other provisions of the Plan.

     3.2 Terms and Conditions of Options. Each
Option granted under the Plan must be evidenced by an Award Agreement. At the time any Option is
granted, the Committee will determine whether the Option is to be an Incentive Stock Option
described in Code Section 422 or a Nonqualified Stock Option, and the Option must be clearly
identified as to its status as an Incentive Stock Option or a Nonqualified Stock Option. Incentive
Stock Options may only be granted to employees of the Company or any Subsidiary or Parent. At the
time any Incentive Stock Option granted under the Plan is exercised, the Company will be entitled
to legend the certificates representing the shares of Stock purchased pursuant to the Option to
clearly identify them as representing the shares purchased upon the exercise of an Incentive Stock
Option. An Incentive Stock Option may only be granted within ten (10) years from the earlier of
the date the Plan is adopted or approved by the Company’s stockholders.

     (a) Option Price. Subject to adjustment in accordance with Section 5.2 and the
other provisions of this Section 3.2, the Exercise Price must be as set forth in the
applicable Award Agreement, but in no event may it be less than the Fair Market Value on the
date the Option is granted. With respect to each grant of an Incentive Stock Option to a
Participant who is an Over 10% Owner, the Exercise Price may not be less than one hundred
and ten percent (110%) of the Fair Market Value on the date the Option is granted.

     (b) Option Term. Any Incentive Stock Option granted to a Participant who is
not an Over 10% Owner is not exercisable after the expiration of ten (10) years after the
date the Option is granted. Any Incentive Stock Option granted to an Over 10% Owner is not
exercisable after the expiration of five (5) years after the date the Option is granted.
The term of any Nonqualified Stock Option shall be as specified in the applicable Award
Agreement.

     (c) Payment. Payment for all shares of Stock purchased pursuant to exercise of
an Option will be made in any form or manner authorized by the Committee in the Award
Agreement or by amendment thereto, including, but not limited to, cash, cash equivalents,
or, if

 

 

the Award Agreement provides, but in any case subject to such procedures or
restrictions as the Committee may impose:

     (1) by delivery to the Company of a number of shares of Stock owned by the
holder having an aggregate Fair Market Value of not less than the product of the
Exercise
Price multiplied by the number of shares the Participant intends to purchase
upon exercise of the Option on the date of delivery;

     (2) in a cashless exercise through a broker, except if and to the extent
prohibited by law as to officers and directors, including without limitation, the
Sarbanes-Oxley Act of 2002, as amended; or

     (3) by having a number of shares of Stock withheld, the Fair Market Value of
which as of the date of exercise is sufficient to satisfy the Exercise Price.

Payment must be made at the time that the Option or any part thereof is exercised, and no
shares may be issued or delivered upon exercise of an Option until full payment has been
made by the Participant. The holder of an Option, as such, has none of the rights of a
stockholder.

     (d) Conditions to the Exercise of an Option. Each Option granted under the
Plan is exercisable by whom, at such time or times, or upon the occurrence of such event or
events, and in such amounts, as the Committee specifies in the Award Agreement; provided,
however, that subsequent to the grant of an Option, the Committee, at any time before
complete termination of such Option, may modify the terms of an Option to the extent not
prohibited by the terms of the Plan, including, without limitation, accelerating the time or
times at which such Option may be exercised in whole or in part, including, without
limitation, upon a Change in Control and may permit the Participant or any other designated
person to exercise the Option, or any portion thereof, for all or part of the remaining
Option term, notwithstanding any provision of the Award Agreement to the contrary.

     (e) Termination of Incentive Stock Option. With respect to an Incentive Stock
Option, in the event of Termination of Employment of a Participant, the Option or portion
thereof held by the Participant which is unexercised will expire, terminate, and become
unexercisable no later than the expiration of three (3) months after the date of Termination
of Employment; provided, however, that in the case of a holder whose Termination of
Employment is due to death or Disability, one (1) year will be substituted for such three
(3) month period; provided, further that such time limits may be exceeded by the Committee
under the terms of the grant, in which case, the Incentive Stock Option will be a
Nonqualified Option if it is exercised after the time limits that would otherwise apply. For
purposes of this Subsection (e), a Termination of Employment of the Participant will not be
deemed to have occurred if the Participant is employed by another corporation (or a parent
or subsidiary corporation of such other corporation) which has assumed the Incentive Stock
Option of the Participant in a transaction to which Code Section 424(a) is applicable.

     (f) Special Provisions for Certain Substitute Options. Notwithstanding
anything to the contrary in this Section 3.2, any Option issued in substitution for an
option previously issued by another entity, which substitution occurs in connection with a
transaction to which Code Section 424(a) is applicable, may provide for an exercise price
computed in accordance with such Code Section and the regulations thereunder and may contain
such other terms and conditions as the Committee may prescribe to cause such substitute
Option to contain as nearly as possible the

 

 

same terms and conditions (including the
applicable vesting and termination provisions) as those contained in the previously issued
option being replaced thereby.

     (g) No Reload Grants. Options shall not be granted under the Plan in
consideration for and shall not be conditioned upon the delivery of shares of Stock to the
Company in payment of the exercise price and/or tax withholding obligation under any other
option held by a Participant.

     (h) No Repricing. Except as provided in Section 5.2, without the approval of
the Company’s stockholders the Exercise Price of an Option may not be reduced, directly or
indirectly, after the grant of the Option, including any surrender of the Option in
consideration of, or in exchange for: (1) the grant of a new Option having an Exercise Price
below that of the Option that was surrendered; (2) Stock; (3) cash; or (4) any other Award.

     3.3 Terms and Conditions of Stock Appreciation Rights. Each Stock Appreciation Right granted under the Plan must be
evidenced by an Award Agreement. A Stock Appreciation Right entitles the Participant to receive
the excess of (i) the Fair Market Value of a specified or determinable number of shares of the
Stock at the time of payment or exercise over (ii) a specified or determinable price, which may not
be less than the Fair Market Value on the date of grant. A Stock Appreciation Right granted in
connection with an Award may only be exercised to the extent that the related Award has not been
exercised, paid or otherwise settled.

     (a) Settlement. Upon settlement of a Stock Appreciation Right, the Company
must pay to the Participant, at the discretion of the Committee, the appreciation in cash or
shares of Stock (valued at the aggregate Fair Market Value on the date of payment or
exercise) as provided in the Award Agreement or, in the absence of such provision, as the
Committee may determine.

     (b) Conditions to Exercise. Each Stock Appreciation Right granted under the
Plan is exercisable or payable at such time or times, or upon the occurrence of such event
or events, and in such amounts, as the Committee specifies in the Award Agreement; provided,
however, that subsequent to the grant of a Stock Appreciation Right, the Committee, at any
time before complete termination of such Stock Appreciation Right, may accelerate the time
or times at which such Stock Appreciation Right may be exercised or paid in whole or in
part.

     (c) No Repricing. Except as provided in Section 5.2, without the approval of
the Company’s stockholders the price of a Stock Appreciation Right may not be reduced,
directly or indirectly, after the grant of the Stock Appreciation Right, including any
surrender of the Stock Appreciation Right in consideration of, or in exchange for: (1) the
grant of a new Stock Appreciation Right having a price below that of the Stock Appreciation
Right that was surrendered; (2) Stock; (3) cash, or (4) any other Award.

     3.4 Terms and Conditions of Other Stock-Based Awards. An Other Stock-Based Award shall entitle the Participant to receive,
at a specified future date, payment of an amount equal to all or a portion of either (i) the value
of a specified or determinable number of shares of Stock granted by the Committee, (ii) a
percentage or multiple of the value of a specified number of shares of Stock determined by the
Committee or (iii) dividend equivalents on a specified, or a determinable number, or a percentage
or multiple of a specified number, of shares of Stock determined by the Committee. At the time of
the grant, the Committee must determine the specified number of shares of Stock or the percentage
or multiple of the specified number of shares of Stock, as may be applicable; and the Performance
Goals or other performance criteria, if any, applicable to the determination of the ultimate
payment value of the

 

 

Other Stock-Based Award. The Committee may provide for an alternate percentage
or multiple under certain specified conditions.

     (a) Payment. Payment in respect of Other Stock-Based Awards may be made by the
Company in cash or shares of Stock (valued at Fair Market Value as of the date payment is
owed) as provided in the applicable Award Agreement or Award Program or, in the absence of
such provision, as the Committee may determine.

     (b) Conditions to Payment. Each Other Stock-Based Award granted under the Plan
shall be payable at such time or times, or upon the occurrence of such event or events, and
in such amounts, as the Committee may specify in the applicable Award Agreement or Award
Program; provided, however, that subsequent to the grant of an Other Stock-Based Award, the
Committee, at any time before complete termination of such Other Stock-Based Award, may
accelerate the time or times at which such Other Stock-Based Award may be paid in whole or
in part.

     3.5 Terms and Conditions of Cash Performance Awards. A Cash Performance Award shall entitle the Participant to receive, at
a specified future date, payment of an amount equal to all or a portion of either (i) the value of
a specified or determinable number of units (stated in terms of a designated or determinable dollar
amount per unit) granted by the Committee, or (ii) a percentage or multiple of a specified amount
determined by the Committee. At the time of the grant, the Committee must determine the base value
of each unit; the number of units subject to a Cash Performance Award, the specified amount and the
percentage or multiple of the specified amount, as may be applicable; and the Performance Goals or
other performance criteria, if any, applicable to the determination of the ultimate payment value
of the Cash Performance Award. The Committee may provide for an alternate base value for each unit
or an alternate percentage or multiple under certain specified conditions.

     (a) Payment. Payment in respect of Cash Performance Awards shall be made by
the Company in cash.

     (b) Conditions to Payment. Each Cash Performance Award granted under the Plan
shall be payable at such time or times, or upon the occurrence of such event or events, and
in such amounts, as the Committee may specify in the applicable Award Agreement or Award
Program; provided, however, that subsequent to the grant of a Cash Performance Award, the
Committee, at any time before complete termination of such Cash Performance Award, may
accelerate the time or times at which such Cash Performance Award may be paid in whole or in
part.

     3.6 Treatment of Awards on Termination of Service. Except as otherwise provided by Section 3.2(e), any Award under this
Plan to a Participant who has experienced a Termination of Employment, Separation from Service, or
termination of some other service relationship with the Company and its Affiliates may be
cancelled, accelerated, paid or continued, as provided in the applicable Award Agreement or Award
Program, or, as the Committee may otherwise subsequently determine to the extent not prohibited by
the Plan. The portion of any Award exercisable in the event of continuation or the amount of any
payment due under a continued Award may be adjusted by the Committee to reflect the Participant’s
period of service from the date of grant through the date of the Participant’s Termination of
Employment, Separation from Service or termination of some other service relationship or such other
factors as the Committee determines are relevant to its decision to continue the Award.

 

 

SECTION 4 RESTRICTIONS ON STOCK

     4.1 Escrow of Shares. Any certificates representing the
shares of Stock issued under the Plan will be issued in the Participant’s name, but, if the
applicable Award Agreement or Award Program so provides, the shares of Stock will be held by a
custodian designated by the Committee (the “Custodian”). Each applicable Award Agreement or Award
Program providing for transfer of shares of Stock to the Custodian may require a Participant to
complete an irrevocable stock power appointing the Custodian or the Custodian’s designee as the
attorney-in-fact for the Participant for the term specified in the applicable Award Agreement or
Award Program, with full power and authority in the Participant’s name, place and stead to
transfer, assign and convey to the Company any shares of Stock held by the Custodian for such
Participant, if the Participant forfeits the shares under the terms of the applicable Award
Agreement or Award Program. During the period that the Custodian holds the shares subject to this
Section, the Participant is entitled to all rights, except as provided in the applicable Award
Agreement or Award Program, applicable to shares of Stock not so held. Any dividends declared on
shares of Stock held by the Custodian must, as provided in the applicable Award Agreement or Award
Program, be paid directly to the Participant or, in the alternative, be retained by the Custodian
or by the Company until the expiration of the term specified in the applicable Award Agreement or
Award Program and shall then be delivered, together with any proceeds, with the shares of Stock to
the Participant or to the Company, as applicable.

     4.2 Restrictions on Transfer. The Participant
does not have the right to make or permit to exist any disposition of the shares of Stock issued
pursuant to the Plan except as provided in the Plan or the applicable Award Agreement or Award
Program. Any disposition of the shares of Stock issued under the Plan by the Participant not made
in accordance with the Plan or the applicable Award Agreement or Award Program will be void. The
Company will not recognize, or have the duty to recognize, any disposition not made in accordance
with the Plan and the applicable Award Agreement or Award Program, and the shares so transferred
will continue to be bound by the Plan and the applicable Award Agreement or Award Program.

SECTION 5 GENERAL PROVISIONS

     5.1 Withholding. The Company shall deduct from all cash
distributions under the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or transfer shares of Stock
under the Plan or upon the vesting of any Award, the Company has the right to require the recipient
to remit to the Company an amount sufficient to satisfy any federal, state and local tax
withholding requirements prior to the delivery of any certificate or certificates for such shares
or the vesting of such Award. A Participant may satisfy the withholding obligation in cash, cash
equivalents, or if and to the extent the applicable Award Agreement, Award Program, or Committee
procedure so provides, a Participant may elect to have the number of shares of Stock the
Participant is to receive reduced by, or tender back to the Company, the smallest number of whole
shares of Stock which, when multiplied by the Fair Market Value of the shares of Stock, is
sufficient to satisfy federal, state and local, if any, withholding obligation arising from
exercise or payment of an Award.

     5.2 Changes in Capitalization; Merger; Liquidation.

     (a) The number of shares of Stock reserved for the grant of Options, Stock Appreciation
Rights and Other Stock-Based Awards; the number of shares of Stock reserved for issuance
upon the exercise, settlement, vesting, grant or payment, as applicable, of each outstanding
Option, Stock Appreciation Right, and Other Stock-Based Award (if any); the Exercise Price
of each outstanding Option, the threshold price of each outstanding Stock Appreciation
Right, and the specified number of shares of Stock to which each outstanding Option, Stock
Appreciation Right, and Other Stock-Based Award pertains shall be

 

 

proportionately adjusted
for any nonreciprocal transaction between the Company and the holders of capital stock of
the Company that causes the per share value of the shares of Stock underlying
an Award to change, such as a stock dividend, stock split, spinoff, rights offering, or
recapitalization through a large, nonrecurring cash dividend (each, an “Equity
Restructuring”).

     (b) In the event of a merger, consolidation, reorganization, extraordinary dividend,
sale of substantially all of the Company’s assets, other change in capital structure of the
Company, tender offer for shares of Stock, or a Change in Control, that in each case does
not constitute an Equity Restructuring, the Committee may make such adjustments with respect
to Awards and take such other action as it deems necessary or appropriate, including,
without limitation, the substitution of new Awards, the assumption of awards not originally
granted under the Plan, or the adjustment of outstanding Awards, the acceleration of Awards,
the removal of restrictions on outstanding Awards, or the termination of outstanding Awards
in exchange for the cash value determined in good faith by the Committee of the vested
and/or unvested portion of the Awards, all as may be provided in the applicable Award
Agreement or Award Program or, if not expressly addressed therein, as the Committee
subsequently may determine in its sole discretion. Any adjustment pursuant to this Section
5.2 may provide, in the Committee’s discretion, for the elimination without payment therefor
of any fractional shares that might otherwise become subject to any Award, but except as set
forth in this Section may not otherwise diminish the then value of the Award.

     (c) Notwithstanding any other provision of this Plan to the contrary, in taking any
action pursuant to Subsection (a) or (b) with respect to a Nonqualified Stock Option or a
Stock Appreciation Right, the Committee shall consider any provisions of Code Section 409A
and the regulations thereunder that are required to be followed as a condition of the
Nonqualified Stock Option and the Stock Appreciation Right not being treated as the grant of
a new Option or Stock Appreciation Right or a change in the form of payment. Any adjustment
described in the preceding sentence may include a substitution in whole or in part of other
equity securities of the issuer in lieu of the shares of Stock that are subject to the
Award.

     (d) The existence of the Plan and the Awards granted pursuant to the Plan shall not
affect in any way the right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding.

     5.3 Cash Awards. The Committee may, at any time and in its
discretion, grant to any holder of an Award the right to receive, at such times and in such amounts
as determined by the Committee in its discretion, a cash amount which is intended to reimburse such
person for all or a portion of the federal, state and local income taxes imposed upon such person
as a consequence of the receipt of the Award or the exercise of rights thereunder.

     5.4 Compliance with Code.

     (a) Code Section 422. All Incentive Stock Options to be granted hereunder are
intended to comply with Code Section 422, and all provisions of the Plan and all Incentive
Stock Options granted hereunder must be construed in such manner as to effectuate that
intent.

     (b) Code Section 409A. Except to the extent provided otherwise by the
Committee, Awards under the Plan are intended to satisfy the requirements of Section 409A of

 

 

the Code (and the Treasury Department guidance and regulations issued thereunder) so as to
avoid the imposition of any additional taxes or penalties under Code Section 409A. If the
Committee determines that an Award, Award Agreement, Award Program, payment,
distribution, deferral election, transaction or any other action or arrangement contemplated
by the provisions of the Plan would, if undertaken, cause a Participant to become subject to
any additional taxes or other penalties under Code Section 409A, then unless the Committee
provides otherwise, such Award, Award Agreement, Award Program, payment, distribution,
deferral election, transaction or other action or arrangement shall not be given effect to
the extent it causes such result and the related provisions of the Plan, Award Agreement,
and / or Award Program will be deemed modified, or, if necessary, suspended in order to
comply with the requirements of Code Section 409A to the extent determined appropriate by
the Committee, in each case without the consent of or notice to the Participant.

     5.5 Compliance with Banking Regulations. The Plan and all Awards granted pursuant to the Plan are subject to and shall be
administered in accordance with all applicable federal and state banking regulations and
limitations. If any provision in the Plan or any Award granted pursuant to the Plan is contrary to
applicable federal and state banking regulations and limitations, such banking regulations and
limitations shall govern and any and all contravening provisions of the Plan and / or Award shall
be deemed void to the extent necessary to resolve the conflict.

     5.6 Right to Terminate Employment or Service. Nothing in the Plan or in any Award Agreement confers upon any Participant the right
to continue as an officer, employee, director, consultant, or other service provider of the Company
or any of its Affiliates or affect the right of the Company or any of its Affiliates to terminate
the Participant’s employment or services at any time.

     5.7 Non-Alienation of Benefits. Other than as
provided herein, no benefit under the Plan may be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge; and any attempt to do so
shall be void. No such benefit may, prior to receipt by the Participant, be in any manner liable
for or subject to the debts, contracts, liabilities, engagements or torts of the Participant.

     5.8 Restrictions on Delivery and Sale of Shares; Legends. Each Award is subject to
the condition that if at any time the Committee, in its discretion, shall determine that the
listing, registration or qualification of the shares covered by such Award upon any securities
exchange or under any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Award or the purchase or delivery of shares thereunder, the
delivery of any or all shares pursuant to such Award may be withheld unless and until such listing,
registration or qualification shall have been effected. If a registration statement is not in
effect under the Securities Act of 1933 or any applicable state securities laws with respect to the
shares of Stock purchasable or otherwise deliverable under Awards then outstanding, the Committee
may require, as a condition of exercise of any Option or as a condition to any other delivery of
Stock pursuant to an Award, that the Participant or other recipient of an Award represent, in
writing, that the shares received pursuant to the Award are being acquired for investment and not
with a view to distribution and agree that the shares will not be disposed of except pursuant to an
effective registration statement, unless the Company shall have received an opinion of counsel that
such disposition is exempt from such requirement under the Securities Act of 1933 and any
applicable state securities laws. The Company may include on certificates representing shares
delivered pursuant to an Award such legends referring to the foregoing representations or
restrictions or any other applicable restrictions on resale as the Company, in its discretion,
shall deem appropriate.

     5.9 Listing and Legal Compliance. The Committee may suspend the exercise or payment of any
Award so long as it determines that securities exchange listing or registration or qualification
under

 

 

any securities laws is required in connection therewith and has not been completed on terms
acceptable to the Committee.

     5.10 Termination and Amendment of the Plan. The Board of Directors at any time may amend or terminate the Plan without stockholder
approval; provided, however, that the Board of Directors may condition any amendment on the
approval of stockholders of the Company if such approval is necessary or advisable with respect to
tax, securities or other applicable laws. No such termination or amendment without the consent of
the holder of an Award may adversely affect the rights of the Participant under such Award. The
Board of Directors shall consider that to preserve the Plan’s ability to grant Incentive Stock
Options, stockholder approval is required for any amendment to the Plan that increases the number
of shares of Stock available for the grant of Incentive Stock Options under the Plan or changes the
class of employees eligible to receive Incentive Stock Options, or if the Plan is assumed in
connection with a corporate transaction which results in a change in either the granting
corporation or the stock available for purchase or grant under the Plan; provided, however, in the
case of a consolidation or similar transaction, if the Plan is fully described in the agreement or
other document reflecting the transaction and the transaction is approved by shareholders, no
further stockholder approval of the Plan shall be required.

     5.11 Stockholder Approval. The Plan shall be
submitted to the stockholders of the Company for their approval within twelve (12) months before or
after the adoption of the Plan by the Board of Directors of the Company. If such approval is not
obtained, any Award granted hereunder will be void.

     5.12 Choice of Law. The laws of the State of North
Carolina shall govern the Plan, to the extent not preempted by federal law, without reference to
the principles of conflict of laws.

     5.13 Effective Date of Plan. The Plan shall become
effective as of the date the Plan was approved by the Board of Directors, regardless of the date
the Plan is signed.

 

 

NONQUALIFIED STOCK OPTION AWARD

PURSUANT TO THE PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

     THIS NONQUALIFIED STOCK OPTION AWARD is made as of the Grant Date by and between PARK STERLING
CORPORATION (the “Company”), a bank holding company organized under the laws of the State of North
Carolina; and ________________________ (the “Optionee”).

     Upon and subject to the Terms and Conditions attached hereto and incorporated herein by
reference and further subject to the provisions of the Park Sterling Corporation 2010 Long-Term
Incentive Plan, the Company hereby awards as of the Grant Date to Optionee a nonqualified stock
option (the “Option”), as described below, to purchase the Option Shares.

	 	A.	 	Grant Date: ________________.
	 
	 	B.	 	Type of Option: Nonqualified Stock Option.
	 
	 	C.	 	Plan under which granted: Park Sterling Corporation 2010 Long-Term Incentive Plan.
	 
	 	D.	 	Option Shares: All or any part of ___________ shares of the Company’s
non-voting common stock, $____ par value per share (the “Common Stock”), subject to
adjustment as provided in the attached Terms and Conditions.
	 
	 	E.	 	Exercise Price: $______ per share, subject to adjustment as provided in the
attached Terms and Conditions. The Exercise Price is, in the judgment of the Committee,
not less than 100% of the Fair Market Value of a share of Common Stock on the Grant
Date.
	 
	 	F.	 	Option Period: The Option may be exercised only during the Option Period which
commences on the Grant Date and ends, generally, on the earlier of (a) the tenth (10th)
anniversary of the Grant Date; or (b) the earliest of (i) immediately upon the
Optionee’s involuntary Termination of Employment for Cause, (ii) three (3) months
following the date the Optionee ceases to be an employee of the Company (including any
Affiliate) for reasons other than for Cause or due to death or Disability, or (iii) one
(1) year following the date the Optionee ceases to be an employee of the Company
(including any Affiliate) due to death or Disability. Note that other limitations to
exercising the Option, as described in the attached Terms and Conditions, may apply.
	 
	 	G.	 	Vesting Schedule: The Option may be exercised only to the extent of Vested
Option Shares (as defined in Schedule 1). Option Shares shall become vested in
accordance with Schedule 1 hereto (the “Vesting Schedule”). Any portion of the
Option which is not vested at the time of Optionee’s Termination of Employment shall be
forfeited to the Company.

     IN WITNESS WHEREOF, the parties have signed this Award as of the Grant Date set forth above.

	 	 	 	 	 	 	 

	PARK STERLING CORPORATION:	 	 	 	OPTIONEE:
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

 

 

TERMS AND CONDITIONS

TO THE

NONQUALIFIED STOCK OPTION AWARD

PURSUANT TO THE PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

     1. Exercise of Option. Subject to the provisions provided in the Award, these
accompanying Terms and Conditions and the provisions of the Plan, the Option may be exercised with
respect to all or any portion of the Vested Option Shares at any time during the Option Period by:

     (a) the delivery to the Company, at its principal place of business, of a written
notice of exercise in substantially the form attached hereto as Exhibit 1, which
shall be actually delivered to the Company no earlier than thirty (30) days and no later
than ten (10) days prior to the date upon which Optionee desires to exercise all or any
portion of the Option, unless prior notice is waived by the Committee;

     (b) payment to the Company of the Exercise Price multiplied by the number of Vested
Option Shares being purchased (the “Purchase Price”), as provided in Section 3; and

     (c) satisfaction of the withholding tax obligations under Section 2.

     (d) Notwithstanding any other provision of this Award, in the event that the capital of
Park Sterling Bank (the “Bank”) falls below the minimum requirements determined by the
primary federal regulator of the Bank (the “Regulator”), the Regulator may direct the Bank
to require the Optionee to exercise, or otherwise forfeit, the Option in whole or in part.
If the Regulator gives such direction, the Bank will notify the Optionee within forty-five
(45) days from the date the Regulator notifies the Bank in writing that the Optionee must
exercise, or otherwise forfeit, the Option in whole or in part. If the Optionee does not
exercise the Option in accordance with the Bank’s direction within twenty-one (21) days of
the Bank’s notification to the Optionee, the Committee may provide for the cancellation of
the Option.

Upon acceptance of such notice and receipt of payment in full of the Purchase Price and, if
applicable, withholding taxes, the Company shall cause to be issued a certificate representing the
Vested Option Shares purchased. Notwithstanding the foregoing, in the event the Optionee is given
notice of Termination of Employment for Cause, the Optionee’s ability to exercise the Option shall
be suspended from the giving of such notice until such time as the Optionee cures the
circumstance(s) constituting Cause, if expressly permitted by the applicable employment or services
agreement or otherwise, or, if there is no opportunity to cure or no cure is timely effected, from
and after the giving of such notice through and including the effective date of the Optionee’s
Termination of Employment.

     2. Withholding. The Optionee must satisfy applicable federal, state and local, if
any, withholding taxes imposed by reason of the exercise of the Option either by paying to the
Company the full amount of the withholding obligation (a) in cash; (b) by electing, irrevocably and
in writing in substantially the form of Exhibit 2 (a “Withholding Election”) to (i) tender
shares of Common Stock owned by the Optionee prior to the date of exercise having a Fair Market
Value equal to the withholding obligation; or (ii) have the smallest number of whole shares of
Common Stock withheld by the Company which, when multiplied by the Fair Market Value of the Common
Stock as of the date the Option is exercised, is sufficient to satisfy the amount of minimum
required withholding tax obligations; or (c) by any combination of the above. Optionee may make a
Withholding Election only if the following conditions are met:

 

 

     (i) the Withholding Election is made on or prior to the date on which the amount of tax
required to be withheld is determined (the “Tax Date”) by executing and delivering to the
Company a properly completed Notice of Withholding in substantially the form attached hereto
as Exhibit 2; and

     (ii) any Withholding Election will be irrevocable; however, the Committee may, in its
sole discretion, disapprove and give no effect to the Withholding Election.

     3. Purchase Price. Payment of the Purchase Price for all Vested Option Shares
purchased pursuant to the exercise of an Option shall be made:

     (a) in cash or certified or bank cashier’s check;

     (b) at the discretion of the Committee, by electing to have the number of shares of
Common Stock to be issued upon exercise reduced by the number of shares of Common Stock
having a Fair Market Value, as determined under the Plan, on the date of exercise either
equal to the Purchase Price or in combination with cash or check equal to the Purchase
Price; in such case, the Optionee will be deemed to have elected to receive a taxable
payment of cash equal to the excess of the Fair Market Value of the number of shares of
Common Stock withheld to pay the Purchase Price (less any cash or check payment actually
paid by the Optionee) over the portion of the Purchase Price attributable to the shares
withheld, which amount shall be used to pay the Purchase Price, in exchange for cancellation
of the portion of the vested Option attributable to the number of shares of Common Stock the
Company has withheld to satisfy the Purchase Price; or

     (c) if and when the Common Stock becomes traded by brokers, whether on a national
securities exchange or otherwise, by receipt of the Purchase Price in cash from a broker,
dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of
the Federal Reserve System following delivery by the Optionee to the Committee of
instructions in a form acceptable to the Committee regarding delivery to such broker, dealer
or other creditor of that number of Vested Option Shares with respect to which the Option is
exercised; or

     (d) in any combination of the foregoing.

     4. Rights as Shareholder. Until the stock certificates reflecting the Option Shares
accruing to the Optionee upon exercise of the Option are issued to the Optionee, the Optionee shall
have no rights as a shareholder with respect to such Option Shares. The Company shall make no
adjustment for any dividends or distributions or other rights on or with respect to Option Shares
for which the record date is prior to the issuance of that stock certificate, except as the Plan or
the attached Award otherwise provides.

     5. Restriction on Transfer of Option.

     (a) General Restrictions. The Optionee (and any subsequent holder of the
Option) may not sell, pledge or otherwise directly or indirectly transfer (whether with or
without consideration and whether voluntarily or involuntarily or by operation of law) any
interest in or any beneficial interest in the Option except pursuant to the provisions of
this Award. Any sale, pledge or other transfer (or any attempt to effect the same) of the
Option in violation of any provision of this Award shall be void, and the Company shall not
record such transfer, assignment, pledge or other disposition on its books or treat any
purported transferee or pledgee of the Option as the owner or pledgee of the Option for any
purpose.

2

 

     (b) Certain Permitted Transfers of Options. The restrictions contained in this
Section will not apply with respect to transfers of the Option pursuant to applicable laws
of descent and distribution; provided that the restrictions contained in this Section will
continue to be applicable to the Option after any such transfer; and provided further that
the transferee(s) of the Option must agree in writing to be bound by the provisions of this
Award.

     6. Changes in Capitalization.

     (a) The number of Option Shares and the Exercise Price shall be proportionately
adjusted for nonreciprocal transactions between the Company and the holders of capital stock
of the Company that cause the per share value of the shares of Common Stock underlying the
Option to change, such as a stock dividend, stock split, spinoff, rights offering, or
recapitalization through a large, nonrecurring cash dividend (each, an “Equity
Restructuring”).

     (b) In the event of a merger, consolidation, reorganization, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in the capital
structure of the Company, or a tender offer for shares of Common Stock, or a Change in
Control, that in each case is not an “Equity Restructuring,” the Committee shall take such
action to make such adjustments in the Option or the terms of this Award as the Committee,
in its sole discretion, determines in good faith is necessary or appropriate, including,
without limitation, adjusting the number and class of securities subject to the Option, with
a corresponding adjustment in the Exercise Price, substituting a new option to replace the
Option, accelerating the termination of the Option Period or terminating the Option in
consideration of a cash payment to the Optionee in an amount equal to the excess of the then
Fair Market Value of the Option Shares over the aggregate Exercise Price of the Vested
Option Shares. Any determination made by the Committee pursuant to this Subsection (b) will
be final and binding on the Optionee. Any action taken by the Committee need not treat all
optionees equally.

     (c) The existence of the Plan and the Option granted pursuant to this Award shall not
affect in any way the right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Common Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding. Any adjustment pursuant to this Section
may provide, in the Committee’s discretion, for the elimination without payment therefor of
any fractional shares that might otherwise become subject to any Option.

     7. Special Limitation on Exercise. No purported exercise of the Option shall be
effective without the approval of the Committee, which may be withheld to the extent that the
exercise, either individually or in the aggregate together with the exercise of other previously
exercised stock options and/or offers and sales pursuant to any prior or contemplated offering of
securities, would, in the sole and absolute judgment of the Committee, require the filing of a
registration statement with the United States Securities and Exchange Commission or with the
securities commission of any state. If a registration statement is not in effect under the
Securities Act of 1933 or any applicable state securities law with respect to shares of Common
Stock purchasable or otherwise deliverable under the Option, the Optionee (a) shall deliver to the
Company, prior to the exercise of the Option or as a condition to the delivery of Common Stock
pursuant to the exercise of an Option, such information, representations and warranties as the
Company may reasonably request in order for the Company to be able to satisfy itself that the
Option Shares are being acquired in accordance with the terms of an applicable exemption from the
securities registration requirements of applicable federal and state securities laws and (b) shall
agree that the shares of Common Stock so acquired will not be disposed of except pursuant to an
effective registration

3

 

statement, unless the Company shall have received an opinion of counsel that such disposition is
exempt from such requirement under the Securities Act of 1933 and any applicable state securities
law.

     8. Lock-up Agreement. The Optionee hereby agrees that Optionee will not, directly or
indirectly, sell, offer, contract to sell, grant of options for the purchase of, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise dispose of any Option
Shares during the thirty (30) days prior to and the one hundred eighty (180) days (or any shorter
period permitted by the managing underwriter) after the effectiveness of any underwritten public
offering, except as part of such underwritten public offering or if otherwise permitted by the
Company; provided, all similarly situated shareholders become subject to the same restrictions.
The Optionee hereby agrees to execute and deliver any additional document or acknowledgement
reflecting the foregoing provisions or containing similar restrictions as may be requested by the
Company or its managing underwriters in connection with the initial public offering of Common
Stock. The Company may place a legend on any stock certificates representing Option Shares and may
impose stop-transfer instructions with respect to the Option Shares in order to enforce the
foregoing restrictions.

     9. Legend on Stock Certificates. Certificates evidencing the Option Shares, to the
extent appropriate at the time, shall have noted conspicuously on the certificate legends intended
to give all persons full notice of the existence of the conditions, restrictions, rights and
obligations set forth herein and in the Plan, and the Optionee shall not make any transfer of the
Option Shares without first complying with the restrictions on transfer described in such legends.
Such legends may include the following:

transfer is restricted

  The shares evidenced by this certificate have been issued pursuant to an exemption
from registration under the Securities Act of 1933, as amended (the “Securities Act”) and
applicable state securities laws and as such may only be sold or otherwise transferred: (1)
pursuant to registration or an exemption from registration under the Securities Act, including
but not limited to Rule 144 thereunder, and the securities laws of any applicable state or
other jurisdiction; or (2) if, in the opinion of counsel, in form and substance satisfactory
to the issuer, such transfer is exempt from registration or is otherwise in compliance with
applicable federal and state securities laws. 

The securities evidenced by this certificate are subject to restrictions on transfer
which also apply to the transferee as set forth in a Nonqualified Stock Option Award, dated
_____________, 2010, a copy of which is available from the Company.

     10. Governing Laws. This Award and these Terms and Conditions shall be construed,
administered and enforced according to the laws of the State of North Carolina; provided, however,
the Option may not be exercised except in compliance with exemptions available under applicable
state securities laws of the state in which the Optionee resides and/or any other applicable
securities laws.

     11. Successors. This Award and these Terms and Conditions shall be binding upon and
inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the
Optionee and the Company.

     12. Notice. Except as otherwise specified herein, all notices and other
communications required or permitted under this Award shall be in writing and, if mailed by prepaid
first-class mail or certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after the postmarked
date thereof. In addition, notices

4

 

hereunder may be delivered by hand, facsimile transmission or overnight courier, in which event the
notice shall be deemed effective when delivered or transmitted. All notices and other
communications under this Agreement shall be given to the parties hereto at the following
addresses: to the Company (attention of the Secretary), at 1043 E. Morehead Street, Suite 201,
Charlotte, NC 28204, or at any other address as the Company, by notice to Optionee, may designate
in writing from time to time; and to Optionee, at Optionee’s address as shown on the records of the
Company, or at any other address as Optionee, by notice to the Company, may designate in writing
from time to time.

     13. Severability. In the event that any one or more of the provisions or portion
thereof contained in the Award and these Terms and Conditions shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the same shall not invalidate or otherwise affect
any other provisions of the Award and these Terms and Conditions, and the Award and these Terms and
Conditions shall be construed as if the invalid, illegal or unenforceable provision or portion
thereof had never been contained herein.

     14. Entire Agreement. Subject to the terms and conditions of the Plan, the Award and
the Terms and Conditions express the entire understanding of the parties with respect to the
Option. Optionee acknowledges that the grant of this Option discharges the obligations of the Bank
for the initial option grant contemplated by Schedule A of that certain Employment Agreement by and
between the Bank and the Optionee, dated _______________, 2010.

     15. Violation. Except as provided in Section 5, any transfer, pledge, sale,
assignment, or hypothecation of the Option or any portion thereof shall be a violation of the terms
of the Award or these Terms and Conditions and shall be void and without effect.

     16. Headings and Capitalized Terms. Section headings used herein are for convenience
of reference only and shall not be considered in construing the Award or these Terms and
Conditions. Capitalized terms used, but not defined, in either the Award or the Terms and
Conditions shall be given the meaning ascribed to them in the Plan.

     17. Specific Performance. In the event of any actual or threatened default in, or
breach of, any of the terms, conditions and provisions of the Award and these Terms and Conditions,
the party or parties who are thereby aggrieved shall have the right to specific performance and
injunction in addition to any and all other rights and remedies at law or in equity, and all such
rights and remedies shall be cumulative.

     18. No Right to Continued Retention. Neither the establishment of the Plan nor the
award of Option Shares hereunder shall be construed as giving the Optionee the right to continued
employment with the Company or any Affiliate.

     19. Option Subject to Shareholder Approval. The grant of this Option is subject to
shareholder approval of the Plan within twelve (12) months following the adoption of the Plan by
the Board of Directors and if such approval is not timely obtained, the grant of this Option shall
become null and void and the Optionee shall have no recourse against the Company as a result of
such occurrence.

     20. Definitions. For purposes of this Award, the following terms shall have the
meanings ascribed to them below:

     (a) For purposes of this Award, the term “Cause” has the same meaning as provided in
the employment agreement between the Optionee and the Company and/or, if applicable, any
Affiliate on the date of Termination of Employment, or if no such definition or employment
agreement exists, “Cause” means:

5

 

     (i) any act by the Optionee of fraud against, material misappropriation from,
or material dishonesty to either the Company or any Affiliate;

     (ii) conviction of the Optionee of a crime involving breach of trust or moral
turpitude or any felony;

     (iii) conduct by the Optionee that amounts to willful misconduct, gross and
willful insubordination, gross neglect or inattention to or material failure to
perform the Optionee’s duties and responsibilities in the manner and to the extent
required by his position(s) with the Company or any Affiliate, including prolonged
absences; provided that the nature of such conduct shall be set forth with
reasonable particularity in a written notice to the Optionee who shall have ten (10)
days following delivery of such notice to cure such alleged conduct, provided that
such conduct is, in the reasonable discretion of the Company, susceptible to a cure;

     (iv) exhibition by the Optionee of a standard of behavior within the scope of
or related to his employment that is materially disruptive to the orderly conduct of
the business operations of the Company or any Affiliate (including, without
limitation, substance abuse, sexual harassment or sexual misconduct) in the
reasonable opinion of the Company;

     (v) receipt of any form of notice, written or otherwise, that any regulatory
agency having jurisdiction over the Company or any Affiliate intends to institute
any form of formal or informal regulatory action against the Optionee; or

     (vi) the Optionee’s removal and/or permanent prohibition from participating in
the conduct of the affairs of the Company or any Affiliate by an order issued under
Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(4) and (g)(1)).

     (b) For purposes of this Award, the term “Good Reason” has the same meaning as provided
in the employment agreement between the Optionee and the Company and/or, if applicable, any
Affiliate on the date of Termination of Employment, or if no such definition or employment
agreement exists, “Good Reason” means:

     (i) a material reduction of the Optionee’s annual base salary from its then
current rate without the Optionee’s consent, other than a reduction that also is
applied to substantially all other executive officers of the Company or Affiliate if
Optionee’s reduction is substantially proportionate to, or no greater than, the
reduction applied to substantially all other executive officers; or

     (ii) a material diminution in the authority, responsibilities or duties of the
Optionee hereunder without the Optionee’s consent;

provided, however, that for a Termination of Employment by the Optionee to be for Good
Reason, the Optionee must notify the Company or, if applicable, Affiliate in writing of the
event giving rise to Good Reason within thirty (30) days following the occurrence of the
event (or, if later, thirty (30) days following the Optionee’s knowledge of occurrence of
the event), the event must remain uncured after the expiration of sixty (60) days following
the delivery of written notice of such event to the Company (or Affiliate) by the Optionee,
and the Optionee must resign effective no later than sixty (60) days following the Company’s
(or Affiliate’s) failure to cure the

6

 

 event and must give at least thirty (30) days advance written notice prior to the Optionee’s
effective date of resignation.

     (c) Other capitalized terms that are not defined herein have the meaning set forth in
the Plan or the Award, except where the context does not reasonably permit.

#6070271 v1

7

 

EXHIBIT 1

NOTICE OF EXERCISE OF

STOCK OPTION TO PURCHASE

COMMON STOCK OF

PARK STERLING CORPORATION

	 	 	 	 	 

	 

	 	Name	 	 
	 

	 	 	 	 
	 

	 	Address	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	Date	 	 

Park Sterling Corporation

1043 E. Morehead Street, Suite 201

Charlotte, NC 28204

Attn: Corporate Secretary

Re:     Exercise of Nonqualified Stock Option

Gentlemen:

     Subject to acceptance hereof by Park Sterling Corporation (the “Company”) and pursuant to the
provisions of the Park Sterling Corporation 2010 Long-Term Incentive Plan (the “Plan”), I hereby
give notice of my election to exercise options granted to me to purchase ______________ shares of
Common Stock of the Company under the Nonqualified Stock Option Award (the “Award”) dated as of
_____________, 2010. The purchase shall take place as of __________, 20___ (the “Exercise Date”).

	 	 	On or before the Exercise Date, I will pay the applicable purchase price as follows:
	 
	o	 	by delivery of cash or a certified (or bank cashier’s) check for
$___________ for the full purchase price payable to the order of Park
Sterling Corporation.
	 
	o	 	by having a number of Option Shares withheld, the Fair Market Value
of which as of the date of exercise is sufficient to satisfy the
Exercise Price; I understand that as a result of this election, I
will be deemed to have elected to receive a taxable payment of cash
equal to the excess of the Fair Market Value of the number of shares
of Common Stock withheld to pay the Purchase Price (less any payment
I make by check) over the portion of the purchase price attributable
to the shares withheld, which amount shall be used to pay the
purchase price, in exchange for a cancellation of the portion of the
vested Option attributable to the number of shares of Common Stock
the Company has withheld to satisfy the purchase price;
	 
	o	 	by delivery of the purchase price by _________________________, a
broker, dealer or other “creditor” as defined by Regulation T issued
by the Board of Governors of the Federal Reserve System. I hereby
authorize the Company to issue a stock certificate for the number of
shares indicated above in the name of said broker, dealer or other
creditor or its nominee pursuant to instructions received by the
Company and to deliver said stock certificate directly to that
broker, dealer or other creditor (or to such other party specified in
the instructions received by the Company from the broker, dealer or
other creditor) upon receipt of the purchase price. Note: This
choice is available only if and when the Common Stock becomes traded
by brokers; or
	 
	o	 	by delivery of shares of Common Stock that I own and that are
represented by a stock certificate I will surrender to the Company
with my endorsement. If the number of shares of Common Stock

Exhibit 1 — Page 1 of 3

 

represented by such stock certificate exceed the number to be applied against the purchase
price, I understand that a new stock certificate will be issued to me reflecting the excess
number of shares.

     The required federal, state, and local income tax withholding obligations on the exercise of
the Award shall be paid on or before the Exercise Date in cash or with previously owned shares of
Common Stock, as provided in the Award, or in the manner provided in the Withholding Election
previously tendered or to be tendered to the Company no later then the Exercise Date.

     I understand that I am not permitted to exercise the Option if I have been given notice that
my employment will be terminated for Cause. I understand that if my ability to exercise is
suspended in the manner provided for in the foregoing sentence, my ability to exercise may only be
reinstated in the event that I cure the circumstances specified in such notice that was the basis
for my termination for Cause and only if such ability to cure is expressly provided for in the
applicable employment agreement or otherwise.

     As soon as the stock certificate is registered in my name, please deliver it to me at the
above address.

     If the Common Stock being acquired is not registered for issuance to and resale by the
Optionee pursuant to an effective registration statement on Form S-8 (or successor form) filed
under the Securities Act of 1933, as amended (the “1933 Act”), I hereby represent, warrant,
covenant, and agree with the Company as follows:

The shares of the Common Stock being acquired by me will be acquired for my own account
without the participation of any other person, with the intent of holding the Common Stock
for investment and without the intent of participating, directly or indirectly, in a
distribution of the Common Stock and not with a view to, or for resale in connection with,
any distribution of the Common Stock, nor am I aware of the existence of any distribution of
the Common Stock;

I am not acquiring the Common Stock based upon any representation, oral or written, by any
person with respect to the future value of, or income from, the Common Stock but rather upon
an independent examination and judgment as to the prospects of the Company;

The Common Stock was not offered to me by means of publicly disseminated advertisements or
sales literature, nor am I aware of any offers made to other persons by such means;

I am able to bear the economic risks of the investment in the Common Stock, including the
risk of a complete loss of my investment therein;

I understand and agree that the Common Stock will be issued and sold to me without
registration under any state law relating to the registration of securities for sale, and
will be issued and sold in reliance on the exemptions from registration under the 1933 Act,
provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated
thereunder;

The Common Stock cannot be offered for sale, sold or transferred by me other than pursuant
to: (A) an effective registration under the 1933 Act or in a transaction otherwise in
compliance with the 1933 Act; and (B) evidence satisfactory to the Company of compliance
with the applicable securities laws of other jurisdictions. The Company shall be entitled
to rely upon an opinion of counsel satisfactory to it with respect to compliance with the
above laws;

Exhibit 1 — Page 2 of 3

 

The Company will be under no obligation to register the Common Stock or to comply with any
exemption available for sale of the Common Stock without registration or filing, and the
information or conditions necessary to permit routine sales of securities of the Company
under Rule 144 under the 1933 Act are not now available and no assurance has been given that
it or they will become available. The Company is under no obligation to act in any manner
so as to make Rule 144 available with respect to the Common Stock;

I have and have had complete access to and the opportunity to review and make copies of all
material documents related to the business of the Company, including, but not limited to,
contracts, financial statements, tax returns, leases, deeds and other books and records. I
have examined such of these documents as I wished and am familiar with the business and
affairs of the Company. I realize that the purchase of the Common Stock is a speculative
investment and that any possible profit therefrom is uncertain;

I have had the opportunity to ask questions of and receive answers from the Company and any
person acting on its behalf and to obtain all material information reasonably available with
respect to the Company and its affairs. I have received all information and data with
respect to the Company which I have requested and which I have deemed relevant in connection
with the evaluation of the merits and risks of my investment in the Company;

I have such knowledge and experience in financial and business matters that I am capable of
evaluating the merits and risks of the purchase of the Common Stock hereunder and I am able
to bear the economic risk of such purchase; and

The agreements, representations, warranties and covenants made by me herein extend to and
apply to all of the Common Stock of the Company issued to me pursuant to this Award.
Acceptance by me of the certificate representing such Common Stock shall constitute a
confirmation by me that all such agreements, representations, warranties and covenants made
herein shall be true and correct at that time.

     I understand that the certificates representing the shares being purchased by me in accordance
with this notice shall bear a legend referring to the foregoing covenants, representations and
warranties and restrictions on transfer, and I agree that a legend to that effect may be placed on
any certificate which may be issued to me as a substitute for the certificates being acquired by me
in accordance with this notice. I further understand that capitalized terms used in this Notice of
Exercise without definition shall have the meanings given to them in the Award or the Plan, as
applicable.

	 	 	 	 	 	 	 

	Very truly yours,	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	AGREED TO AND ACCEPTED:	 	 	 	 
	 
	 	 	 	 	 	 
	PARK STERLING CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Number of Shares Exercised:                               	 	Number of Shares Remaining:                               

Exhibit 1 — Page 3 of 3

 

EXHIBIT 2

NOTICE OF WITHHOLDING ELECTION

PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

	 	 	 	 	 

	TO:

	 	Park Sterling Corporation	 	 
	 
	 	 	 	 
	FROM:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	RE:

	 	Withholding Election	 	 

This election relates to the Option identified in Paragraph 3 below. I hereby certify that:

	(1)	 	My correct name and social security number and my current address are set forth at the end of
this document.
	 
	(2)	 	I am (check one, whichever is applicable).

	 	o	 	the original recipient of the Option.
	 
	 	o	 	the legal representative of the estate of the original recipient of the Option.
	 
	 	o	 	a legatee of the original recipient of the Option.
	 
	 	o	 	the legal guardian of the original recipient of the Option.

	(3)	 	The Option to which this election relates was issued under the Park Sterling Corporation 2010
Long-Term Incentive Plan (the “Plan”) in the name of ________________ for the purchase of a
total of _______________ shares of Common Stock of the Company. This election relates to
_______________ shares of Common Stock issuable upon exercise of the Option, provided that the
numbers set forth above shall be deemed changed as appropriate to reflect the applicable Plan
provisions.
	 
	(4)	 	In connection with any exercise of the Option with respect to the Common Stock, I hereby
elect:

	 	o	 	to have certain of the shares otherwise issuable pursuant to the exercise
withheld by the Company for the purpose of having the value of the shares applied to
pay federal, state, and local, if any, taxes arising from the exercise.
	 
	 	o	 	to tender shares of Common Stock owned by me prior to the exercise of the
Option for the purpose of having the value of the shares applied to pay such taxes.

	 	 	The shares to be withheld or tendered, as applicable, shall have, as of the Tax Date
applicable to the exercise, a Fair Market Value equal to the minimum statutory tax
withholding requirement under federal, state, and local law in connection with the exercise.
	 
	(5)	 	This Withholding Election is made no later than the Tax Date and is otherwise timely made
pursuant to the Plan.

Exhibit 2 — Page 1 of 2 

 

	(6)	 	I understand that this Withholding Election may not be revised, amended or revoked by me.
	 
	(7)	 	The Plan has been made available to me by the Company. I have read and understand the Plan
and I have no reason to believe that any of the conditions to the making of this Withholding
Election have not been met.
	 
	(8)	 	Capitalized terms used in this Notice of Withholding Election without definition shall have
the meanings given to them in the Plan.

	 	 	 	 	 	 	 

	Dated:
	 	 	 	 	 	 
	 

	 	 

	 	 

Signature
	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	Social Security Number	 	Name (Printed)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Street Address
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

City, State, Zip Code
	 	 

Exhibit 2 — Page 2 of 2 

 

SCHEDULE 1

VESTING SCHEDULE

NONQUALIFIED STOCK OPTION AWARD

ISSUED PURSUANT TO THE

PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

	A.	 	“Vested Option Shares” means only that percentage of the number of Option Shares subject to
the Option as to which the Option becomes exercisable if the Optionee continues, at all times,
as an officer or employee of the Company or any Affiliate from the Grant Date to the
applicable anniversary of the Grant Date below.

	 	 	 	 	 
	 	 	Percentage of Option Shares
	                        Vesting Date	 	which are Vested Option Shares
	Prior to the first anniversary of the Grant Date
	 	 	0	%
	First anniversary of the Grant Date
	 	 	331/3	%
	Second anniversary of the Grant Date
	 	 	662/3	%
	Third anniversary of the Grant Date
	 	 	100	%

	B.	 	The Optionee shall continue to have the opportunity to vest in Option Shares so long as the
Optionee remains in the continuous service of the Company and its Affiliates without incurring
a Termination of Employment. Notwithstanding the requirements of the Vesting Schedule, the
continuous service condition will be deemed satisfied as to all of the Option Shares if the
Optionee provides continuous services to the Company and/or any Affiliate following the Grant
Date through the date of any of the earlier events listed below:

     (a) in the event of the Optionee’s involuntary Termination of Employment
without Cause; or

     (b) in the event of the Optionee’s Termination of Employment due to a
resignation for Good Reason.

	 	 	The Option Shares which have satisfied (or are deemed to have satisfied) the conditions of
the Vesting Schedule are herein referred to as the “Vested Option Shares.” Any portion of
the Option Shares which have not become Vested Option Shares in accordance with this Vesting
Schedule before or at the time of Optionee’s Termination of Employment shall be forfeited.
There will be no proration of the Vesting Schedule for partial years of service.

Schedule 1 — Page 1 of 1 

 

INCENTIVE STOCK OPTION AWARD

PURSUANT TO THE PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

     THIS INCENTIVE STOCK OPTION AWARD is made as of the Grant Date by and between PARK STERLING
CORPORATION (the “Company”), a bank holding company organized under the laws of the State of North
Carolina; and ________________________ (the “Optionee”).

     Upon and subject to the Terms and Conditions attached hereto and incorporated herein by
reference and further subject to the provisions of the Park Sterling Corporation 2010 Long-Term
Incentive Plan, the Company hereby awards as of the Grant Date to Optionee an incentive stock
option (the “Option”), as described below, to purchase the Option Shares.

	 	A.	 	Grant Date: ________________.
	 
	 	B.	 	Type of Option: Incentive Stock Option.
	 
	 	C.	 	Plan under which granted: Park Sterling Corporation 2010 Long-Term Incentive Plan.
	 
	 	D.	 	Option Shares: All or any part of ___________ shares of the Company’s
non-voting common stock, $____ par value per share (the “Common Stock”), subject to
adjustment as provided in the attached Terms and Conditions.
	 
	 	E.	 	Exercise Price: $______ per share, subject to adjustment as provided in the
attached Terms and Conditions. The Exercise Price is, in the judgment of the Committee,
not less than 100% of the Fair Market Value of a share of Common Stock on the Grant
Date or, in the case of an Over 10% Owner, not less than 110% of the Fair Market Value
of a share of Common Stock on the Grant Date.
	 
	 	F.	 	Option Period: The Option may be exercised only during the Option Period which
commences on the Grant Date and ends, generally, on the earlier of (a) the tenth (10th)
anniversary of the Grant Date (unless the Optionee is an Over 10% Owner, in which case
the fifth (5th) anniversary of the Grant Date); or (b) the earliest of (i) immediately
upon the Optionee’s involuntary Termination of Employment for Cause, (ii) three (3)
months following the date the Optionee ceases to be an employee of the Company
(including any Affiliate) for reasons other than for Cause or due to death or
Disability, or (iii) one (1) year following the date the Optionee ceases to be an
employee of the Company (including any Affiliate) due to death or Disability. Note
that other limitations to exercising the Option, as described in the attached Terms and
Conditions, may apply.
	 
	 	G.	 	Vesting Schedule: The Option may be exercised only to the extent of Vested
Option Shares (as defined in Schedule 1). Option Shares shall become vested in
accordance with Schedule 1 hereto (the “Vesting Schedule”). Any portion of the
Option which is not vested at the time of Optionee’s Termination of Employment shall be
forfeited to the Company.

 

 

     IN WITNESS WHEREOF, the parties have signed this Award as of the Grant Date set forth above.

	 	 	 	 	 

	PARK STERLING CORPORATION:	 	OPTIONEE:
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

2

 

TERMS AND CONDITIONS

TO THE

INCENTIVE STOCK OPTION AWARD

PURSUANT TO THE PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

     1. Exercise of Option. Subject to the provisions provided in the Award, these
accompanying Terms and Conditions and the provisions of the Plan, the Option may be exercised with
respect to all or any portion of the Vested Option Shares at any time during the Option Period by:

     (a) the delivery to the Company, at its principal place of business, of a written
notice of exercise in substantially the form attached hereto as Exhibit 1, which
shall be actually delivered to the Company no earlier than thirty (30) days and no later
than ten (10) days prior to the date upon which Optionee desires to exercise all or any
portion of the Option, unless prior notice is waived by the Committee;

     (b) payment to the Company of the Exercise Price multiplied by the number of Vested
Option Shares being purchased (the “Purchase Price”), as provided in Section 3; and

     (c) satisfaction of the withholding tax obligations under Section 2, if
applicable.

     (d) Notwithstanding any other provision of this Award, in the event that the capital of
Park Sterling Bank (the “Bank”) falls below the minimum requirements determined by the
primary federal regulator of the Bank (the “Regulator”), the Regulator may direct the Bank
to require the Optionee to exercise, or otherwise forfeit, the Option in whole or in part.
If the Regulator gives such direction, the Bank will notify the Optionee within forty-five
(45) days from the date the Regulator notifies the Bank in writing that the Optionee must
exercise, or otherwise forfeit, the Option in whole or in part. If the Optionee does not
exercise the Option in accordance with the Bank’s direction within twenty-one (21) days of
the Bank’s notification to the Optionee, the Committee may provide for the cancellation of
the Option.

Upon acceptance of such notice and receipt of payment in full of the Purchase Price and, if
applicable, withholding taxes, the Company shall cause to be issued a certificate representing the
Vested Option Shares purchased. Notwithstanding the foregoing, in the event the Optionee is given
notice of Termination of Employment for Cause, the Optionee’s ability to exercise the Option shall
be suspended from the giving of such notice until such time as the Optionee cures the
circumstance(s) constituting Cause, if expressly permitted by the applicable employment or services
agreement or otherwise, or, if there is no opportunity to cure or no cure is timely effected, from
and after the giving of such notice through and including the effective date of the Optionee’s
Termination of Employment.

     2. Withholding. To the extent the Option is deemed to be a Nonqualified Stock Option
in accordance with Section 19 hereof, the Optionee must satisfy applicable federal, state and
local, if any, withholding taxes imposed by reason of the exercise of the Option either by paying
to the Company the full amount of the withholding obligation (a) in cash; (b) by electing,
irrevocably and in writing in substantially the form of Exhibit 2 (a “Withholding
Election”) to (i) tender shares of Common Stock owned by the Optionee prior to the date of exercise
having a Fair Market Value equal to the withholding obligation; or (ii) have the smallest number of
whole shares of Common Stock withheld by the Company which, when multiplied by the Fair Market
Value of the Common Stock as of the date the Option is exercised, is sufficient to satisfy the
amount of minimum required withholding tax obligations; or (c) by any combination of the above.
Optionee may make a Withholding Election only if the following conditions are met:

 

 

     (i) the Withholding Election is made on or prior to the date on which the amount of tax
required to be withheld is determined (the “Tax Date”) by executing and delivering to the
Company a properly completed Notice of Withholding in substantially the form attached hereto
as Exhibit 2; and

     (ii) any Withholding Election will be irrevocable; however, the Committee may, in its
sole discretion, disapprove and give no effect to the Withholding Election.

     3. Purchase Price. Payment of the Purchase Price for all Vested Option Shares
purchased pursuant to the exercise of an Option shall be made:

     (a) in cash or certified or bank cashier’s check;

     (b) at the discretion of the Committee, by electing to have the number of shares of
Common Stock to be issued upon exercise reduced by the number of shares of Common Stock
having a Fair Market Value, as determined under the Plan, on the date of exercise either
equal to the Purchase Price or in combination with cash or check equal to the Purchase
Price; in such case, the Optionee will be deemed to have elected to receive a taxable
payment of cash equal to the excess of the Fair Market Value of the number of shares of
Common Stock withheld to pay the Purchase Price (less any cash or check payment actually
paid by the Optionee) over the portion of the Purchase Price attributable to the shares
withheld, which amount shall be used to pay the Purchase Price, in exchange for cancellation
of the portion of the vested Option attributable to the number of shares of Common Stock the
Company has withheld to satisfy the Purchase Price; or

     (c) if and when the Common Stock becomes traded by brokers, whether on a national
securities exchange or otherwise, by receipt of the Purchase Price in cash from a broker,
dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of
the Federal Reserve System following delivery by the Optionee to the Committee of
instructions in a form acceptable to the Committee regarding delivery to such broker, dealer
or other creditor of that number of Vested Option Shares with respect to which the Option is
exercised; or

     (d) in any combination of the foregoing.

     4. Rights as Shareholder. Until the stock certificates reflecting the Option Shares
accruing to the Optionee upon exercise of the Option are issued to the Optionee, the Optionee shall
have no rights as a shareholder with respect to such Option Shares. The Company shall make no
adjustment for any dividends or distributions or other rights on or with respect to Option Shares
for which the record date is prior to the issuance of that stock certificate, except as the Plan or
the attached Award otherwise provides.

     5. Restriction on Transfer of Option.

     (a) General Restrictions. The Optionee (and any subsequent holder of the
Option) may not sell, pledge or otherwise directly or indirectly transfer (whether with or
without consideration and whether voluntarily or involuntarily or by operation of law) any
interest in or any beneficial interest in the Option except pursuant to the provisions of
this Award. Any sale, pledge or other transfer (or any attempt to effect the same) of the
Option in violation of any provision of this Award shall be void, and the Company shall not
record such transfer, assignment, pledge or other disposition on its books or treat any
purported transferee or pledgee of the Option as the owner or pledgee of the Option for any
purpose.

2

 

     (b) Certain Permitted Transfers of Options. The restrictions contained in this
Section will not apply with respect to transfers of the Option pursuant to applicable laws
of descent and distribution; provided that the restrictions contained in this Section will
continue to be applicable to the Option after any such transfer; and provided further that
the transferee(s) of the Option must agree in writing to be bound by the provisions of this
Award.

     6. Changes in Capitalization.

     (a) The number of Option Shares and the Exercise Price shall be proportionately
adjusted for nonreciprocal transactions between the Company and the holders of capital stock
of the Company that cause the per share value of the shares of Common Stock underlying the
Option to change, such as a stock dividend, stock split, spinoff, rights offering, or
recapitalization through a large, nonrecurring cash dividend (each, an “Equity
Restructuring”).

     (b) In the event of a merger, consolidation, reorganization, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in the capital
structure of the Company, or a tender offer for shares of Common Stock, or a Change in
Control, that in each case is not an “Equity Restructuring,” the Committee shall take such
action to make such adjustments in the Option or the terms of this Award as the Committee,
in its sole discretion, determines in good faith is necessary or appropriate, including,
without limitation, adjusting the number and class of securities subject to the Option, with
a corresponding adjustment in the Exercise Price, substituting a new option to replace the
Option, accelerating the termination of the Option Period or terminating the Option in
consideration of a cash payment to the Optionee in an amount equal to the excess of the then
Fair Market Value of the Option Shares over the aggregate Exercise Price of the Vested
Option Shares. Any determination made by the Committee pursuant to this Subsection (b) will
be final and binding on the Optionee. Any action taken by the Committee need not treat all
optionees equally.

     (c) The existence of the Plan and the Option granted pursuant to this Award shall not
affect in any way the right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Common Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding. Any adjustment pursuant to this Section
may provide, in the Committee’s discretion, for the elimination without payment therefor of
any fractional shares that might otherwise become subject to any Option.

     7. Special Limitation on Exercise. No purported exercise of the Option shall be
effective without the approval of the Committee, which may be withheld to the extent that the
exercise, either individually or in the aggregate together with the exercise of other previously
exercised stock options and/or offers and sales pursuant to any prior or contemplated offering of
securities, would, in the sole and absolute judgment of the Committee, require the filing of a
registration statement with the United States Securities and Exchange Commission or with the
securities commission of any state. If a registration statement is not in effect under the
Securities Act of 1933 or any applicable state securities law with respect to shares of Common
Stock purchasable or otherwise deliverable under the Option, the Optionee (a) shall deliver to the
Company, prior to the exercise of the Option or as a condition to the delivery of Common Stock
pursuant to the exercise of an Option, such information, representations and warranties as the
Company may reasonably request in order for the Company to be able to satisfy itself that the
Option Shares are being acquired in accordance with the terms of an applicable exemption from the
securities registration requirements of applicable federal and state securities laws and (b) shall
agree that the shares of Common Stock so acquired will not be disposed of except pursuant to an
effective registration

3

 

statement, unless the Company shall have received an opinion of counsel that such disposition is
exempt from such requirement under the Securities Act of 1933 and any applicable state securities
law.

     8. Lock-up Agreement. The Optionee hereby agrees that Optionee will not, directly or
indirectly, sell, offer, contract to sell, grant of options for the purchase of, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise dispose of any Option
Shares during the thirty (30) days prior to and the one hundred eighty (180) days (or any shorter
period permitted by the managing underwriter) after the effectiveness of any underwritten public
offering, except as part of such underwritten public offering or if otherwise permitted by the
Company; provided, all similarly situated shareholders become subject to the same restrictions.
The Optionee hereby agrees to execute and deliver any additional document or acknowledgement
reflecting the foregoing provisions or containing similar restrictions as may be requested by the
Company or its managing underwriters in connection with the initial public offering of Common
Stock. The Company may place a legend on any stock certificates representing Option Shares and may
impose stop-transfer instructions with respect to the Option Shares in order to enforce the
foregoing restrictions.

     9. Legend on Stock Certificates. Certificates evidencing the Option Shares, to the
extent appropriate at the time, shall have noted conspicuously on the certificate legends intended
to give all persons full notice of the existence of the conditions, restrictions, rights and
obligations set forth herein and in the Plan, and the Optionee shall not make any transfer of the
Option Shares without first complying with the restrictions on transfer described in such legends.
Such legends may include the following:

transfer is restricted

  The shares evidenced by this certificate have been issued pursuant to an exemption
from registration under the Securities Act of 1933, as amended (the “Securities Act”) and
applicable state securities laws and as such may only be sold or otherwise transferred: (1)
pursuant to registration or an exemption from registration under the Securities Act, including
but not limited to Rule 144 thereunder, and the securities laws of any applicable state or
other jurisdiction; or (2) if, in the opinion of counsel, in form and substance satisfactory
to the issuer, such transfer is exempt from registration or is otherwise in compliance with
applicable federal and state securities laws. 

The securities evidenced by this certificate are subject to restrictions on transfer
which also apply to the transferee as set forth in an Incentive Stock Option Award, dated
_____________, 2010, a copy of which is available from the Company.

     10. Governing Laws. This Award and these Terms and Conditions shall be construed,
administered and enforced according to the laws of the State of North Carolina; provided, however,
the Option may not be exercised except in compliance with exemptions available under applicable
state securities laws of the state in which the Optionee resides and/or any other applicable
securities laws.

     11. Successors. This Award and these Terms and Conditions shall be binding upon and
inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the
Optionee and the Company.

     12. Notice. Except as otherwise specified herein, all notices and other
communications required or permitted under this Award shall be in writing and, if mailed by prepaid
first-class mail or certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after the postmarked
date thereof. In addition, notices

4

 

hereunder may be delivered by hand, facsimile transmission or overnight courier, in which event the
notice shall be deemed effective when delivered or transmitted. All notices and other
communications under this Agreement shall be given to the parties hereto at the following
addresses: to the Company (attention of the Secretary), at 1043 E. Morehead Street, Suite 201,
Charlotte, NC 28204, or at any other address as the Company, by notice to Optionee, may designate
in writing from time to time; and to Optionee, at Optionee’s address as shown on the records of the
Company, or at any other address as Optionee, by notice to the Company, may designate in writing
from time to time.

     13. Severability. In the event that any one or more of the provisions or portion
thereof contained in the Award and these Terms and Conditions shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the same shall not invalidate or otherwise affect
any other provisions of the Award and these Terms and Conditions, and the Award and these Terms and
Conditions shall be construed as if the invalid, illegal or unenforceable provision or portion
thereof had never been contained herein.

     14. Entire Agreement. Subject to the terms and conditions of the Plan, the Award and
the Terms and Conditions express the entire understanding of the parties with respect to the
Option. Optionee acknowledges that the grant of this Option discharges the obligations of the Bank
for the initial option grant contemplated by Schedule A of that certain Employment Agreement by and
between the Bank and the Optionee, dated _______________, 2010.

     15. Violation. Except as provided in Section 5, any transfer, pledge, sale,
assignment, or hypothecation of the Option or any portion thereof shall be a violation of the terms
of the Award or these Terms and Conditions and shall be void and without effect.

     16. Headings and Capitalized Terms. Section headings used herein are for convenience
of reference only and shall not be considered in construing the Award or these Terms and
Conditions. Capitalized terms used, but not defined, in either the Award or the Terms and
Conditions shall be given the meaning ascribed to them in the Plan.

     17. Specific Performance. In the event of any actual or threatened default in, or
breach of, any of the terms, conditions and provisions of the Award and these Terms and Conditions,
the party or parties who are thereby aggrieved shall have the right to specific performance and
injunction in addition to any and all other rights and remedies at law or in equity, and all such
rights and remedies shall be cumulative.

     18. No Right to Continued Retention. Neither the establishment of the Plan nor the
award of Option Shares hereunder shall be construed as giving the Optionee the right to continued
employment with the Company or any Affiliate.

     19. Option Subject to Shareholder Approval. The grant of this Option is subject to
shareholder approval of the Plan within twelve (12) months following the adoption of the Plan by
the Board of Directors and if such approval is not timely obtained, the grant of this Option shall
become null and void and the Optionee shall have no recourse against the Company as a result of
such occurrence.

     20. Qualified Status of Option.

     (a) In accordance with Section 2.4 of the Plan, the aggregate Fair Market Value
(determined as of the date an Incentive Stock Option is granted) of the Option Shares which
become exercisable for the first time by an individual during any calendar year shall not
exceed $100,000. If the foregoing limitation is exceeded with respect to any portion of the
Option Shares, that portion of the Option Shares which cause the limitation to be exceeded
shall be

5

 

treated as a Nonqualified Stock Option.

     (b) In the event the Optionee’s employment is transferred to an Affiliate that is not a
Parent or Subsidiary of the Company, the Option shall become a Nonqualified Stock Option no
later than three (3) months following such transfer and shall remain a Nonqualified Stock
Option for the remainder of the Option Period.

     20. Definitions. For purposes of this Award, the following terms shall have the
meanings ascribed to them below:

     (a) For purposes of this Award, the term “Cause” has the same meaning as provided in
the employment agreement between the Optionee and the Company and/or, if applicable, any
Affiliate on the date of Termination of Employment, or if no such definition or employment
agreement exists, “Cause” means:

     (i) any act by the Optionee of fraud against, material misappropriation from,
or material dishonesty to either the Company or any Affiliate;

     (ii) conviction of the Optionee of a crime involving breach of trust or moral
turpitude or any felony;

     (iii) conduct by the Optionee that amounts to willful misconduct, gross and
willful insubordination, gross neglect or inattention to or material failure to
perform the Optionee’s duties and responsibilities in the manner and to the extent
required by his position(s) with the Company or any Affiliate, including prolonged
absences; provided that the nature of such conduct shall be set forth with
reasonable particularity in a written notice to the Optionee who shall have ten (10)
days following delivery of such notice to cure such alleged conduct, provided that
such conduct is, in the reasonable discretion of the Company, susceptible to a cure;

     (iv) exhibition by the Optionee of a standard of behavior within the scope of
or related to his employment that is materially disruptive to the orderly conduct of
the business operations of the Company or any Affiliate (including, without
limitation, substance abuse, sexual harassment or sexual misconduct) in the
reasonable opinion of the Company;

     (v) receipt of any form of notice, written or otherwise, that any regulatory
agency having jurisdiction over the Company or any Affiliate intends to institute
any form of formal or informal regulatory action against the Optionee; or

     (vi) the Optionee’s removal and/or permanent prohibition from participating in
the conduct of the affairs of the Company or any Affiliate by an order issued under
Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(4) and (g)(1)).

     (b) For purposes of this Award, the term “Good Reason” has the same meaning as provided
in the employment agreement between the Optionee and the Company and/or, if applicable, any
Affiliate on the date of Termination of Employment, or if no such definition or employment
agreement exists, “Good Reason” means:

     (i) a material reduction of the Optionee’s annual base salary from its then
current rate without the Optionee’s consent, other than a reduction that also is
applied to

6

 

substantially all other executive officers of the Company or Affiliate if
Optionee’s reduction is substantially proportionate to, or no greater than, the
reduction applied to substantially all other executive officers; or

     (ii) a material diminution in the authority, responsibilities or duties of the
Optionee hereunder without the Optionee’s consent;

provided, however, that for a Termination of Employment by the Optionee to be for Good
Reason, the Optionee must notify the Company or, if applicable, Affiliate in writing of the
event giving rise to Good Reason within thirty (30) days following the occurrence of the
event (or, if later, thirty (30) days following the Optionee’s knowledge of occurrence of
the event), the event must remain uncured after the expiration of sixty (60) days following
the delivery of written notice of such event to the Company (or Affiliate) by the Optionee,
and the Optionee must resign effective no later than sixty (60) days following the Company’s
(or Affiliate’s) failure to cure the event and must give at least thirty (30) days advance
written notice prior to the Optionee’s effective date of resignation.

     (c) Other capitalized terms that are not defined herein have the meaning set forth in
the Plan or the Award, except where the context does not reasonably permit.

7

 

EXHIBIT 1

NOTICE OF EXERCISE OF

STOCK OPTION TO PURCHASE

COMMON STOCK OF

PARK STERLING CORPORATION

	 	 	 	 	 

	 

	 	Name	 	 
	 

	 	 	 	 
	 

	 	Address	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	Date	 	 
	 

	 	 	 	 

Park Sterling Corporation

1043 E. Morehead Street, Suite 201

Charlotte, NC 28204

Attn: Corporate Secretary

Re: Exercise of Incentive Stock Option

Gentlemen:

     Subject to acceptance hereof by Park Sterling Corporation (the “Company”) and pursuant to the
provisions of the Park Sterling Corporation 2010 Long-Term Incentive Plan (the “Plan”), I hereby
give notice of my election to exercise options granted to me to purchase ______________ shares of
Common Stock of the Company under the Incentive Stock Option Award (the “Award”) dated as of
_____________, 20____. The purchase shall take place as of __________, 20___ (the “Exercise Date”).

     On or before the Exercise Date, I will pay the applicable purchase price as follows:

	o	 	by delivery of cash or a certified (or bank cashier’s) check for
$___________ for the full purchase price payable to the order of Park
Sterling Corporation.
	 
	o	 	by having a number of Option Shares withheld, the Fair Market Value
of which as of the date of exercise is sufficient to satisfy the
Exercise Price; I understand that as a result of this election, I
will be deemed to have elected to receive a taxable payment of cash
equal to the excess of the Fair Market Value of the number of shares
of Common Stock withheld to pay the Purchase Price (less any payment
I make by check) over the portion of the purchase price attributable
to the shares withheld, which amount shall be used to pay the
purchase price, in exchange for a cancellation of the portion of the
vested Option attributable to the number of shares of Common Stock
the Company has withheld to satisfy the purchase price;
	 
	o	 	by delivery of the purchase price by _________________________, a
broker, dealer or other “creditor” as defined by Regulation T issued
by the Board of Governors of the Federal Reserve System. I hereby
authorize the Company to issue a stock certificate for the number of
shares indicated above in the name of said broker, dealer or other
creditor or its nominee pursuant to instructions received by the
Company and to deliver said stock certificate directly to that
broker, dealer or other creditor (or to such other party specified in
the instructions received by the Company from the broker, dealer or
other creditor) upon receipt of the purchase price. Note: This
choice is available only if and when the Common Stock becomes traded
by brokers; or
	 
	o	 	by delivery of shares of Common Stock that I own and that are
represented by a stock certificate I will surrender to the Company
with my endorsement. If the number of shares of Common Stock

Exhibit 1 — Page 1 of 3

 

	 	 	represented by such stock certificate exceed the number to be applied against the purchase
price, I understand that a new stock certificate will be issued to me reflecting the excess
number of shares.

     The required federal, state, and local income tax withholding obligations, if applicable, on
the exercise of the Award shall be paid on or before the Exercise Date in cash or with previously
owned shares of Common Stock, as provided in the Award, or in the manner provided in the
Withholding Election previously tendered or to be tendered to the Company no later then the
Exercise Date.

     I understand that I am not permitted to exercise the Option if I have been given notice that
my employment will be terminated for Cause. I understand that if my ability to exercise is
suspended in the manner provided for in the foregoing sentence, my ability to exercise may only be
reinstated in the event that I cure the circumstances specified in such notice that was the basis
for my termination for Cause and only if such ability to cure is expressly provided for in the
applicable employment agreement or otherwise.

     As soon as the stock certificate is registered in my name, please deliver it to me at the
above address.

     If the Common Stock being acquired is not registered for issuance to and resale by the
Optionee pursuant to an effective registration statement on Form S-8 (or successor form) filed
under the Securities Act of 1933, as amended (the “1933 Act”), I hereby represent, warrant,
covenant, and agree with the Company as follows:

The shares of the Common Stock being acquired by me will be acquired for my own account
without the participation of any other person, with the intent of holding the Common Stock
for investment and without the intent of participating, directly or indirectly, in a
distribution of the Common Stock and not with a view to, or for resale in connection with,
any distribution of the Common Stock, nor am I aware of the existence of any distribution of
the Common Stock;

I am not acquiring the Common Stock based upon any representation, oral or written, by any
person with respect to the future value of, or income from, the Common Stock but rather upon
an independent examination and judgment as to the prospects of the Company;

The Common Stock was not offered to me by means of publicly disseminated advertisements or
sales literature, nor am I aware of any offers made to other persons by such means;

I am able to bear the economic risks of the investment in the Common Stock, including the
risk of a complete loss of my investment therein;

I understand and agree that the Common Stock will be issued and sold to me without
registration under any state law relating to the registration of securities for sale, and
will be issued and sold in reliance on the exemptions from registration under the 1933 Act,
provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated
thereunder;

The Common Stock cannot be offered for sale, sold or transferred by me other than pursuant
to: (A) an effective registration under the 1933 Act or in a transaction otherwise in
compliance with the 1933 Act; and (B) evidence satisfactory to the Company of compliance
with the applicable securities laws of other jurisdictions. The Company shall be entitled
to rely upon an opinion of counsel satisfactory to it with respect to compliance with the
above laws;

Exhibit 1 — Page 2 of 3

 

The Company will be under no obligation to register the Common Stock or to comply with any
exemption available for sale of the Common Stock without registration or filing, and the
information or conditions necessary to permit routine sales of securities of the Company
under Rule 144 under the 1933 Act are not now available and no assurance has been given that
it or they will become available. The Company is under no obligation to act in any manner
so as to make Rule 144 available with respect to the Common Stock;

I have and have had complete access to and the opportunity to review and make copies of all
material documents related to the business of the Company, including, but not limited to,
contracts, financial statements, tax returns, leases, deeds and other books and records. I
have examined such of these documents as I wished and am familiar with the business and
affairs of the Company. I realize that the purchase of the Common Stock is a speculative
investment and that any possible profit therefrom is uncertain;

I have had the opportunity to ask questions of and receive answers from the Company and any
person acting on its behalf and to obtain all material information reasonably available with
respect to the Company and its affairs. I have received all information and data with
respect to the Company which I have requested and which I have deemed relevant in connection
with the evaluation of the merits and risks of my investment in the Company;

I have such knowledge and experience in financial and business matters that I am capable of
evaluating the merits and risks of the purchase of the Common Stock hereunder and I am able
to bear the economic risk of such purchase; and

The agreements, representations, warranties and covenants made by me herein extend to and
apply to all of the Common Stock of the Company issued to me pursuant to this Award.
Acceptance by me of the certificate representing such Common Stock shall constitute a
confirmation by me that all such agreements, representations, warranties and covenants made
herein shall be true and correct at that time.

     I understand that the certificates representing the shares being purchased by me in accordance
with this notice shall bear a legend referring to the foregoing covenants, representations and
warranties and restrictions on transfer, and I agree that a legend to that effect may be placed on
any certificate which may be issued to me as a substitute for the certificates being acquired by me
in accordance with this notice. I further understand that capitalized terms used in this Notice of
Exercise without definition shall have the meanings given to them in the Award or the Plan, as
applicable.

	 	 	 	 	 	 	 

	Very truly yours,	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 
	AGREED TO AND ACCEPTED:	 	 	 	 
	 
	 	 	 	 	 	 
	PARK STERLING CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Number of Shares Exercised: _____________________	 	Number of Shares Remaining: _____________________

Exhibit 1 — Page 3 of 3

 

EXHIBIT 2

NOTICE OF WITHHOLDING ELECTION

PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

	 	 	 	 	 

	TO:

	 	Park Sterling Corporation
	 	 
	 
	 	 	 	 
	FROM:
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	RE:

	 	Withholding Election	 	 

This election relates to the Option identified in Paragraph 3 below. I hereby certify that:

	(1)	 	My correct name and social security number and my current address are set forth at the end of
this document.
	 
	(2)	 	I am (check one, whichever is applicable).

	 	o	 	the original recipient of the Option.
	 
	 	o	 	the legal representative of the estate of the original recipient of the Option.
	 
	 	o	 	a legatee of the original recipient of the Option.
	 
	 	o	 	the legal guardian of the original recipient of the Option.

	(3)	 	The Option to which this election relates was issued under the Park Sterling Corporation 2010
Long-Term Incentive Plan (the “Plan”) in the name of ________________ for the purchase of a
total of _______________ shares of Common Stock of the Company. This election relates to
_______________ shares of Common Stock issuable upon exercise of the Option, provided that the
numbers set forth above shall be deemed changed as appropriate to reflect the applicable Plan
provisions.
	 
	(4)	 	In connection with any exercise of the Option with respect to the Common Stock, I hereby
elect:

	 	o	 	to have certain of the shares otherwise issuable pursuant to the exercise
withheld by the Company for the purpose of having the value of the shares applied to
pay federal, state, and local, if any, taxes arising from the exercise.
	 
	 	o	 	to tender shares of Common Stock owned by me prior to the exercise of the
Option for the purpose of having the value of the shares applied to pay such taxes.

	 	 	The shares to be withheld or tendered, as applicable, shall have, as of the Tax Date
applicable to the exercise, a Fair Market Value equal to the minimum statutory tax
withholding requirement under federal, state, and local law in connection with the exercise.
	 
	(5)	 	This Withholding Election is made no later than the Tax Date and is otherwise timely made
pursuant to the Plan.

Exhibit 2 — Page 1 of 2

 

	(6)	 	I understand that this Withholding Election may not be revised, amended or revoked by me.
	 
	(7)	 	The Plan has been made available to me by the Company. I have read and understand the Plan
and I have no reason to believe that any of the conditions to the making of this Withholding
Election have not been met.
	 
	(8)	 	Capitalized terms used in this Notice of Withholding Election without definition shall have
the meanings given to them in the Plan.

	 	 	 	 	 	 	 

	Dated:
	 	 	 	 	 	 
	 

	 	 

	 	 	 
	 

Signature
	 
	 	 	 	 	 	 
	 
	 	 	 	 

	Social Security Number	 	 	 	Name (Printed)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Street Address
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

City, State, Zip Code

Exhibit 2 — Page 2 of 2

 

SCHEDULE 1

VESTING SCHEDULE

INCENTIVE STOCK OPTION AWARD

ISSUED PURSUANT TO THE

PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

	A.	 	“Vested Option Shares” means only that percentage of the number of Option Shares subject to
the Option as to which the Option becomes exercisable if the Optionee continues, at all times,
as an officer or employee of the Company or any Affiliate from the Grant Date to the
applicable anniversary of the Grant Date below.

	 	 	 	 	 
	 	 	Percentage of Option Shares
	                            Vesting Date	 	which are Vested Option Shares
	Prior to the first anniversary of the Grant Date
	 	 	0	%
	First anniversary of the Grant Date
	 	 	331/3	%
	Second anniversary of the Grant Date
	 	 	662/3	%
	Third anniversary of the Grant Date
	 	 	100	%

	B.	 	The Optionee shall continue to have the opportunity to vest in Option Shares so long as the
Optionee remains in the continuous service of the Company and its Affiliates without incurring
a Termination of Employment. Notwithstanding the requirements of the Vesting Schedule, the
continuous service condition will be deemed satisfied as to all of the Option Shares if the
Optionee provides continuous services to the Company and/or any Affiliate following the Grant
Date through the date of any of the earlier events listed below:

     (a) in the event of the Optionee’s involuntary Termination of Employment
without Cause; or

     (b) in the event of the Optionee’s Termination of Employment due to a
resignation for Good Reason.

	 	 	The Option Shares which have satisfied (or are deemed to have satisfied) the conditions of
the Vesting Schedule are herein referred to as the “Vested Option Shares.” Any portion of
the Option Shares which have not become Vested Option Shares in accordance with this Vesting
Schedule before or at the time of Optionee’s Termination of Employment shall be forfeited.
There will be no proration of the Vesting Schedule for partial years of service.

Schedule 1 — Page 1 of 1

 

INCENTIVE STOCK OPTION AWARD

PURSUANT TO THE PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

     THIS INCENTIVE STOCK OPTION AWARD is made as of the Grant Date by and between PARK STERLING
CORPORATION (the “Company”), a bank holding company organized under the laws of the State of North
Carolina; and ________________________ (the “Optionee”).

     Upon and subject to the Terms and Conditions attached hereto and incorporated herein by
reference and further subject to the provisions of the Park Sterling Corporation 2010 Long-Term
Incentive Plan, the Company hereby awards as of the Grant Date to Optionee an incentive stock
option (the “Option”), as described below, to purchase the Option Shares.

	 	A.	 	Grant Date: ________________.
	 
	 	B.	 	Type of Option: Incentive Stock Option.
	 
	 	C.	 	Plan under which granted: Park Sterling Corporation 2010 Long-Term Incentive Plan.
	 
	 	D.	 	Option Shares: All or any part of ___________ shares of the Company’s
non-voting common stock, $____ par value per share (the “Common Stock”), subject to
adjustment as provided in the attached Terms and Conditions.
	 
	 	E.	 	Exercise Price: $______ per share, subject to adjustment as provided in the
attached Terms and Conditions. The Exercise Price is, in the judgment of the Committee,
not less than 100% of the Fair Market Value of a share of Common Stock on the Grant
Date or, in the case of an Over 10% Owner, not less than 110% of the Fair Market Value
of a share of Common Stock on the Grant Date.
	 
	 	F.	 	Option Period: The Option may be exercised only during the Option Period which
commences on the Grant Date and ends, generally, on the earlier of (a) the tenth (10th)
anniversary of the Grant Date (unless the Optionee is an Over 10% Owner, in which case
the fifth (5th) anniversary of the Grant Date); or (b) the earliest of (i) immediately
upon the Optionee’s involuntary Termination of Employment for Cause, (ii) three (3)
months following the date the Optionee ceases to be an employee of the Company
(including any Affiliate) for reasons other than for Cause or due to death or
Disability, or (iii) one (1) year following the date the Optionee ceases to be an
employee of the Company (including any Affiliate) due to death or Disability. Note
that other limitations to exercising the Option, as described in the attached Terms and
Conditions, may apply.
	 
	 	G.	 	Vesting Schedule: The Option may be exercised only to the extent of Vested
Option Shares (as defined in Schedule 1). Option Shares shall become vested in
accordance with Schedule 1 hereto (the “Vesting Schedule”). Any portion of the
Option which is not vested at the time of Optionee’s Termination of Employment shall be
forfeited to the Company.

 

 

     IN WITNESS WHEREOF, the parties have signed this Award as of the Grant Date set forth above.

	 	 	 	 	 	 	 

	PARK STERLING CORPORATION:	 	 	 	OPTIONEE:
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

2 

 

TERMS AND CONDITIONS

TO THE

INCENTIVE STOCK OPTION AWARD

PURSUANT TO THE PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

     1. Exercise of Option. Subject to the provisions provided in the Award, these
accompanying Terms and Conditions and the provisions of the Plan, the Option may be exercised with
respect to all or any portion of the Vested Option Shares at any time during the Option Period by:

     (a) the delivery to the Company, at its principal place of business, of a written
notice of exercise in substantially the form attached hereto as Exhibit 1, which
shall be actually delivered to the Company no earlier than thirty (30) days and no later
than ten (10) days prior to the date upon which Optionee desires to exercise all or any
portion of the Option, unless prior notice is waived by the Committee;

     (b) payment to the Company of the Exercise Price multiplied by the number of Vested
Option Shares being purchased (the “Purchase Price”), as provided in Section 3; and

     (c) satisfaction of the withholding tax obligations under Section 2, if
applicable.

     (d) Notwithstanding any other provision of this Award, in the event that the capital of
Park Sterling Bank (the “Bank”) falls below the minimum requirements determined by the
primary federal regulator of the Bank (the “Regulator”), the Regulator may direct the Bank
to require the Optionee to exercise, or otherwise forfeit, the Option in whole or in part.
If the Regulator gives such direction, the Bank will notify the Optionee within forty-five
(45) days from the date the Regulator notifies the Bank in writing that the Optionee must
exercise, or otherwise forfeit, the Option in whole or in part. If the Optionee does not
exercise the Option in accordance with the Bank’s direction within twenty-one (21) days of
the Bank’s notification to the Optionee, the Committee may provide for the cancellation of
the Option.

Upon acceptance of such notice and receipt of payment in full of the Purchase Price and, if
applicable, withholding taxes, the Company shall cause to be issued a certificate representing the
Vested Option Shares purchased. Notwithstanding the foregoing, in the event the Optionee is given
notice of Termination of Employment for Cause, the Optionee’s ability to exercise the Option shall
be suspended from the giving of such notice until such time as the Optionee cures the
circumstance(s) constituting Cause, if expressly permitted by the applicable employment or services
agreement or otherwise, or, if there is no opportunity to cure or no cure is timely effected, from
and after the giving of such notice through and including the effective date of the Optionee’s
Termination of Employment.

     2. Withholding. To the extent the Option is deemed to be a Nonqualified Stock Option
in accordance with Section 19 hereof, the Optionee must satisfy applicable federal, state and
local, if any, withholding taxes imposed by reason of the exercise of the Option either by paying
to the Company the full amount of the withholding obligation (a) in cash; (b) by electing,
irrevocably and in writing in substantially the form of Exhibit 2 (a “Withholding
Election”) to (i) tender shares of Common Stock owned by the Optionee prior to the date of exercise
having a Fair Market Value equal to the withholding obligation; or (ii) have the smallest number of
whole shares of Common Stock withheld by the Company which, when multiplied by the Fair Market
Value of the Common Stock as of the date the Option is exercised, is sufficient to satisfy the
amount of minimum required withholding tax obligations; or (c) by any combination of the above.
Optionee may make a Withholding Election only if the following conditions are met:

 

 

     (i) the Withholding Election is made on or prior to the date on which the amount of tax
required to be withheld is determined (the “Tax Date”) by executing and delivering to the
Company a properly completed Notice of Withholding in substantially the form attached hereto
as Exhibit 2; and

     (ii) any Withholding Election will be irrevocable; however, the Committee may, in its
sole discretion, disapprove and give no effect to the Withholding Election.

     3. Purchase Price. Payment of the Purchase Price for all Vested Option Shares
purchased pursuant to the exercise of an Option shall be made:

     (a) in cash or certified or bank cashier’s check;

     (b) at the discretion of the Committee, by electing to have the number of shares of
Common Stock to be issued upon exercise reduced by the number of shares of Common Stock
having a Fair Market Value, as determined under the Plan, on the date of exercise either
equal to the Purchase Price or in combination with cash or check equal to the Purchase
Price; in such case, the Optionee will be deemed to have elected to receive a taxable
payment of cash equal to the excess of the Fair Market Value of the number of shares of
Common Stock withheld to pay the Purchase Price (less any cash or check payment actually
paid by the Optionee) over the portion of the Purchase Price attributable to the shares
withheld, which amount shall be used to pay the Purchase Price, in exchange for cancellation
of the portion of the vested Option attributable to the number of shares of Common Stock the
Company has withheld to satisfy the Purchase Price; or

     (c) if and when the Common Stock becomes traded by brokers, whether on a national
securities exchange or otherwise, by receipt of the Purchase Price in cash from a broker,
dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of
the Federal Reserve System following delivery by the Optionee to the Committee of
instructions in a form acceptable to the Committee regarding delivery to such broker, dealer
or other creditor of that number of Vested Option Shares with respect to which the Option is
exercised; or

     (d) in any combination of the foregoing.

     4. Rights as Shareholder. Until the stock certificates reflecting the Option Shares
accruing to the Optionee upon exercise of the Option are issued to the Optionee, the Optionee shall
have no rights as a shareholder with respect to such Option Shares. The Company shall make no
adjustment for any dividends or distributions or other rights on or with respect to Option Shares
for which the record date is prior to the issuance of that stock certificate, except as the Plan or
the attached Award otherwise provides.

     5. Restriction on Transfer of Option.

     (a) General Restrictions. The Optionee (and any subsequent holder of the
Option) may not sell, pledge or otherwise directly or indirectly transfer (whether with or
without consideration and whether voluntarily or involuntarily or by operation of law) any
interest in or any beneficial interest in the Option except pursuant to the provisions of
this Award. Any sale, pledge or other transfer (or any attempt to effect the same) of the
Option in violation of any provision of this Award shall be void, and the Company shall not
record such transfer, assignment, pledge or other disposition on its books or treat any
purported transferee or pledgee of the Option as the owner or pledgee of the Option for any
purpose.

2

 

     (b) Certain Permitted Transfers of Options. The restrictions contained in this
Section will not apply with respect to transfers of the Option pursuant to applicable laws
of descent and distribution; provided that the restrictions contained in this Section will
continue to be applicable to the Option after any such transfer; and provided further that
the transferee(s) of the Option must agree in writing to be bound by the provisions of this
Award.

     6. Changes in Capitalization.

     (a) The number of Option Shares and the Exercise Price shall be proportionately
adjusted for nonreciprocal transactions between the Company and the holders of capital stock
of the Company that cause the per share value of the shares of Common Stock underlying the
Option to change, such as a stock dividend, stock split, spinoff, rights offering, or
recapitalization through a large, nonrecurring cash dividend (each, an “Equity
Restructuring”).

     (b) In the event of a merger, consolidation, reorganization, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in the capital
structure of the Company, or a tender offer for shares of Common Stock, or a Change in
Control, that in each case is not an “Equity Restructuring,” the Committee shall take such
action to make such adjustments in the Option or the terms of this Award as the Committee,
in its sole discretion, determines in good faith is necessary or appropriate, including,
without limitation, adjusting the number and class of securities subject to the Option, with
a corresponding adjustment in the Exercise Price, substituting a new option to replace the
Option, accelerating the termination of the Option Period or terminating the Option in
consideration of a cash payment to the Optionee in an amount equal to the excess of the then
Fair Market Value of the Option Shares over the aggregate Exercise Price of the Vested
Option Shares. Any determination made by the Committee pursuant to this Subsection (b) will
be final and binding on the Optionee. Any action taken by the Committee need not treat all
optionees equally.

     (c) The existence of the Plan and the Option granted pursuant to this Award shall not
affect in any way the right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Common Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding. Any adjustment pursuant to this Section
may provide, in the Committee’s discretion, for the elimination without payment therefor of
any fractional shares that might otherwise become subject to any Option.

     7. Special Limitation on Exercise. No purported exercise of the Option shall be
effective without the approval of the Committee, which may be withheld to the extent that the
exercise, either individually or in the aggregate together with the exercise of other previously
exercised stock options and/or offers and sales pursuant to any prior or contemplated offering of
securities, would, in the sole and absolute judgment of the Committee, require the filing of a
registration statement with the United States Securities and Exchange Commission or with the
securities commission of any state. If a registration statement is not in effect under the
Securities Act of 1933 or any applicable state securities law with respect to shares of Common
Stock purchasable or otherwise deliverable under the Option, the Optionee (a) shall deliver to the
Company, prior to the exercise of the Option or as a condition to the delivery of Common Stock
pursuant to the exercise of an Option, such information, representations and warranties as the
Company may reasonably request in order for the Company to be able to satisfy itself that the
Option Shares are being acquired in accordance with the terms of an applicable exemption from the
securities registration requirements of applicable federal and state securities laws and (b) shall
agree that the shares of Common Stock so acquired will not be disposed of except pursuant to an
effective registration

3

 

statement, unless the Company shall have received an opinion of counsel that such disposition is
exempt from such requirement under the Securities Act of 1933 and any applicable state securities
law.

     8. Lock-up Agreement. The Optionee hereby agrees that Optionee will not, directly or
indirectly, sell, offer, contract to sell, grant of options for the purchase of, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise dispose of any Option
Shares during the thirty (30) days prior to and the one hundred eighty (180) days (or any shorter
period permitted by the managing underwriter) after the effectiveness of any underwritten public
offering, except as part of such underwritten public offering or if otherwise permitted by the
Company; provided, all similarly situated shareholders become subject to the same restrictions.
The Optionee hereby agrees to execute and deliver any additional document or acknowledgement
reflecting the foregoing provisions or containing similar restrictions as may be requested by the
Company or its managing underwriters in connection with the initial public offering of Common
Stock. The Company may place a legend on any stock certificates representing Option Shares and may
impose stop-transfer instructions with respect to the Option Shares in order to enforce the
foregoing restrictions.

     9. Legend on Stock Certificates. Certificates evidencing the Option Shares, to the
extent appropriate at the time, shall have noted conspicuously on the certificate legends intended
to give all persons full notice of the existence of the conditions, restrictions, rights and
obligations set forth herein and in the Plan, and the Optionee shall not make any transfer of the
Option Shares without first complying with the restrictions on transfer described in such legends.
Such legends may include the following:

transfer is restricted

  The shares evidenced by this certificate have been issued pursuant to an exemption
from registration under the Securities Act of 1933, as amended (the “Securities Act”) and
applicable state securities laws and as such may only be sold or otherwise transferred: (1)
pursuant to registration or an exemption from registration under the Securities Act, including
but not limited to Rule 144 thereunder, and the securities laws of any applicable state or
other jurisdiction; or (2) if, in the opinion of counsel, in form and substance satisfactory
to the issuer, such transfer is exempt from registration or is otherwise in compliance with
applicable federal and state securities laws. 

The securities evidenced by this certificate are subject to restrictions on transfer
which also apply to the transferee as set forth in an Incentive Stock Option Award, dated
_____________, 2010, a copy of which is available from the Company.

     10. Governing Laws. This Award and these Terms and Conditions shall be construed,
administered and enforced according to the laws of the State of North Carolina; provided, however,
the Option may not be exercised except in compliance with exemptions available under applicable
state securities laws of the state in which the Optionee resides and/or any other applicable
securities laws.

     11. Successors. This Award and these Terms and Conditions shall be binding upon and
inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the
Optionee and the Company.

     12. Notice. Except as otherwise specified herein, all notices and other
communications required or permitted under this Award shall be in writing and, if mailed by prepaid
first-class mail or certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after the postmarked
date thereof. In addition, notices

4

 

hereunder may be delivered by hand, facsimile transmission or overnight courier, in which event the
notice shall be deemed effective when delivered or transmitted. All notices and other
communications under this Agreement shall be given to the parties hereto at the following
addresses: to the Company (attention of the Secretary), at 1043 E. Morehead Street, Suite 201,
Charlotte, NC 28204, or at any other address as the Company, by notice to Optionee, may designate
in writing from time to time; and to Optionee, at Optionee’s address as shown on the records of the
Company, or at any other address as Optionee, by notice to the Company, may designate in writing
from time to time.

     13. Severability. In the event that any one or more of the provisions or portion
thereof contained in the Award and these Terms and Conditions shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the same shall not invalidate or otherwise affect
any other provisions of the Award and these Terms and Conditions, and the Award and these Terms and
Conditions shall be construed as if the invalid, illegal or unenforceable provision or portion
thereof had never been contained herein.

     14. Entire Agreement. Subject to the terms and conditions of the Plan, the Award and
the Terms and Conditions express the entire understanding of the parties with respect to the
Option. Optionee acknowledges that the grant of this Option discharges the obligations of the Bank
for the initial option grant contemplated by Schedule A of that certain Employment Agreement by and
between the Bank and the Optionee, dated _______________, 2010.

     15. Violation. Except as provided in Section 5, any transfer, pledge, sale,
assignment, or hypothecation of the Option or any portion thereof shall be a violation of the terms
of the Award or these Terms and Conditions and shall be void and without effect.

     16. Headings and Capitalized Terms. Section headings used herein are for convenience
of reference only and shall not be considered in construing the Award or these Terms and
Conditions. Capitalized terms used, but not defined, in either the Award or the Terms and
Conditions shall be given the meaning ascribed to them in the Plan.

     17. Specific Performance. In the event of any actual or threatened default in, or
breach of, any of the terms, conditions and provisions of the Award and these Terms and Conditions,
the party or parties who are thereby aggrieved shall have the right to specific performance and
injunction in addition to any and all other rights and remedies at law or in equity, and all such
rights and remedies shall be cumulative.

     18. No Right to Continued Retention. Neither the establishment of the Plan nor the
award of Option Shares hereunder shall be construed as giving the Optionee the right to continued
employment with the Company or any Affiliate.

     19. Option Subject to Shareholder Approval. The grant of this Option is subject to
shareholder approval of the Plan within twelve (12) months following the adoption of the Plan by
the Board of Directors and if such approval is not timely obtained, the grant of this Option shall
become null and void and the Optionee shall have no recourse against the Company as a result of
such occurrence.

	20.	 	Qualified Status of Option.

     (a) In accordance with Section 2.4 of the Plan, the aggregate Fair Market Value
(determined as of the date an Incentive Stock Option is granted) of the Option Shares which
become exercisable for the first time by an individual during any calendar year shall not
exceed $100,000. If the foregoing limitation is exceeded with respect to any portion of the
Option Shares, that portion of the Option Shares which cause the limitation to be exceeded
shall be

5

 

treated as a Nonqualified Stock Option.

     (b) In the event the Optionee’s employment is transferred to an Affiliate that is not a
Parent or Subsidiary of the Company, the Option shall become a Nonqualified Stock Option no
later than three (3) months following such transfer and shall remain a Nonqualified Stock
Option for the remainder of the Option Period.

     20. Definitions. For purposes of this Award, the following terms shall have the
meanings ascribed to them below:

     (a) For purposes of this Award, the term “Cause” has the same meaning as provided in
the employment agreement between the Optionee and the Company and/or, if applicable, any
Affiliate on the date of Termination of Employment, or if no such definition or employment
agreement exists, “Cause” means:

     (i) any act by the Optionee of fraud against, material misappropriation from,
or material dishonesty to either the Company or any Affiliate;

     (ii) conviction of the Optionee of a crime involving breach of trust or moral
turpitude or any felony;

     (iii) conduct by the Optionee that amounts to willful misconduct, gross and
willful insubordination, gross neglect or inattention to or material failure to
perform the Optionee’s duties and responsibilities in the manner and to the extent
required by his position(s) with the Company or any Affiliate, including prolonged
absences; provided that the nature of such conduct shall be set forth with
reasonable particularity in a written notice to the Optionee who shall have ten (10)
days following delivery of such notice to cure such alleged conduct, provided that
such conduct is, in the reasonable discretion of the Company, susceptible to a cure;

     (iv) exhibition by the Optionee of a standard of behavior within the scope of
or related to his employment that is materially disruptive to the orderly conduct of
the business operations of the Company or any Affiliate (including, without
limitation, substance abuse, sexual harassment or sexual misconduct) in the
reasonable opinion of the Company;

     (v) receipt of any form of notice, written or otherwise, that any regulatory
agency having jurisdiction over the Company or any Affiliate intends to institute
any form of formal or informal regulatory action against the Optionee; or

     (vi) the Optionee’s removal and/or permanent prohibition from participating in
the conduct of the affairs of the Company or any Affiliate by an order issued under
Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(4) and (g)(1)).

     (b) For purposes of this Award, the term “Good Reason” has the same meaning as provided
in the employment agreement between the Optionee and the Company and/or, if applicable, any
Affiliate on the date of Termination of Employment, or if no such definition or employment
agreement exists, “Good Reason” means:

     (i) a material reduction of the Optionee’s annual base salary from its then
current rate without the Optionee’s consent, other than a reduction that also is
applied to

6

 

substantially all other executive officers of the Company or Affiliate if
Optionee’s reduction is substantially proportionate to, or no greater than, the
reduction applied to substantially all other executive officers; or

     (ii) a material diminution in the authority, responsibilities or duties of the
Optionee hereunder without the Optionee’s consent;

provided, however, that for a Termination of Employment by the Optionee to be for Good
Reason, the Optionee must notify the Company or, if applicable, Affiliate in writing of the
event giving rise to Good Reason within thirty (30) days following the occurrence of the
event (or, if later, thirty (30) days following the Optionee’s knowledge of occurrence of
the event), the event must remain uncured after the expiration of sixty (60) days following
the delivery of written notice of such event to the Company (or Affiliate) by the Optionee,
and the Optionee must resign effective no later than sixty (60) days following the Company’s
(or Affiliate’s) failure to cure the event and must give at least thirty (30) days advance
written notice prior to the Optionee’s effective date of resignation.

     (c) Other capitalized terms that are not defined herein have the meaning set forth in
the Plan or the Award, except where the context does not reasonably permit.

#6070172 v1

7

 

EXHIBIT 1

NOTICE OF EXERCISE OF

STOCK OPTION TO PURCHASE

COMMON STOCK OF

PARK STERLING CORPORATION

	 	 	 	 	 	 	 

	 

	 	Name
	 	 	 	 
	 

	 	Address	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Date
	 	 	 	 

Park Sterling Corporation

1043 E. Morehead Street, Suite 201

Charlotte, NC 28204

Attn: Corporate Secretary

			
	Re:	 	Exercise of Incentive Stock Option

Gentlemen:

     Subject to acceptance hereof by Park Sterling Corporation (the “Company”) and pursuant to the
provisions of the Park Sterling Corporation 2010 Long-Term Incentive Plan (the “Plan”), I hereby
give notice of my election to exercise options granted to me to purchase ______________ shares of
Common Stock of the Company under the Incentive Stock Option Award (the “Award”) dated as of
_____________, 20____. The purchase shall take place as of __________, 20___ (the “Exercise Date”).

     On or before the Exercise Date, I will pay the applicable purchase price as follows:

	 	 	 

	[ ]

	 	by delivery of cash or a certified (or bank cashier’s) check for
$___________ for the full purchase price payable to the order of Park
Sterling Corporation.
	 
	 	 
	[ ]

	 	by having a number of Option Shares withheld, the Fair Market Value
of which as of the date of exercise is sufficient to satisfy the
Exercise Price; I understand that as a result of this election, I
will be deemed to have elected to receive a taxable payment of cash
equal to the excess of the Fair Market Value of the number of shares
of Common Stock withheld to pay the Purchase Price (less any payment
I make by check) over the portion of the purchase price attributable
to the shares withheld, which amount shall be used to pay the
purchase price, in exchange for a cancellation of the portion of the
vested Option attributable to the number of shares of Common Stock
the Company has withheld to satisfy the purchase price;
	 
	 	 
	[ ]

	 	by delivery of the purchase price by _________________________, a
broker, dealer or other “creditor” as defined by Regulation T issued
by the Board of Governors of the Federal Reserve System. I hereby
authorize the Company to issue a stock certificate for the number of
shares indicated above in the name of said broker, dealer or other
creditor or its nominee pursuant to instructions received by the
Company and to deliver said stock certificate directly to that
broker, dealer or other creditor (or to such other party specified in
the instructions received by the Company from the broker, dealer or
other creditor) upon receipt of the purchase price. Note: This
choice is available only if and when the Common Stock becomes traded
by brokers; or
	 
	 	 
	[ ]

	 	by delivery of shares of Common Stock that I own and that are
represented by a stock certificate I will surrender to the Company
with my endorsement. If the number of shares of Common Stock

Exhibit 1 — Page 1 of 3

 

	 	 	 

	 

	 	represented by such stock certificate exceed the number to be applied against the purchase
price, I understand that a new stock certificate will be issued to me reflecting the excess
number of shares.

     The required federal, state, and local income tax withholding obligations, if applicable, on
the exercise of the Award shall be paid on or before the Exercise Date in cash or with previously
owned shares of Common Stock, as provided in the Award, or in the manner provided in the
Withholding Election previously tendered or to be tendered to the Company no later then the
Exercise Date.

     I understand that I am not permitted to exercise the Option if I have been given notice that
my employment will be terminated for Cause. I understand that if my ability to exercise is
suspended in the manner provided for in the foregoing sentence, my ability to exercise may only be
reinstated in the event that I cure the circumstances specified in such notice that was the basis
for my termination for Cause and only if such ability to cure is expressly provided for in the
applicable employment agreement or otherwise.

     As soon as the stock certificate is registered in my name, please deliver it to me at the
above address.

     If the Common Stock being acquired is not registered for issuance to and resale by the
Optionee pursuant to an effective registration statement on Form S-8 (or successor form) filed
under the Securities Act of 1933, as amended (the “1933 Act”), I hereby represent, warrant,
covenant, and agree with the Company as follows:

The shares of the Common Stock being acquired by me will be acquired for my own account
without the participation of any other person, with the intent of holding the Common Stock
for investment and without the intent of participating, directly or indirectly, in a
distribution of the Common Stock and not with a view to, or for resale in connection with,
any distribution of the Common Stock, nor am I aware of the existence of any distribution of
the Common Stock;

I am not acquiring the Common Stock based upon any representation, oral or written, by any
person with respect to the future value of, or income from, the Common Stock but rather upon
an independent examination and judgment as to the prospects of the Company;

The Common Stock was not offered to me by means of publicly disseminated advertisements or
sales literature, nor am I aware of any offers made to other persons by such means;

I am able to bear the economic risks of the investment in the Common Stock, including the
risk of a complete loss of my investment therein;

I understand and agree that the Common Stock will be issued and sold to me without
registration under any state law relating to the registration of securities for sale, and
will be issued and sold in reliance on the exemptions from registration under the 1933 Act,
provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated
thereunder;

The Common Stock cannot be offered for sale, sold or transferred by me other than pursuant
to: (A) an effective registration under the 1933 Act or in a transaction otherwise in
compliance with the 1933 Act; and (B) evidence satisfactory to the Company of compliance
with the applicable securities laws of other jurisdictions. The Company shall be entitled
to rely upon an opinion of counsel satisfactory to it with respect to compliance with the
above laws;

Exhibit 1 — Page 2 of 3

 

The Company will be under no obligation to register the Common Stock or to comply with any
exemption available for sale of the Common Stock without registration or filing, and the
information or conditions necessary to permit routine sales of securities of the Company
under Rule 144 under the 1933 Act are not now available and no assurance has been given that
it or they will become available. The Company is under no obligation to act in any manner
so as to make Rule 144 available with respect to the Common Stock;

I have and have had complete access to and the opportunity to review and make copies of all
material documents related to the business of the Company, including, but not limited to,
contracts, financial statements, tax returns, leases, deeds and other books and records. I
have examined such of these documents as I wished and am familiar with the business and
affairs of the Company. I realize that the purchase of the Common Stock is a speculative
investment and that any possible profit therefrom is uncertain;

I have had the opportunity to ask questions of and receive answers from the Company and any
person acting on its behalf and to obtain all material information reasonably available with
respect to the Company and its affairs. I have received all information and data with
respect to the Company which I have requested and which I have deemed relevant in connection
with the evaluation of the merits and risks of my investment in the Company;

I have such knowledge and experience in financial and business matters that I am capable of
evaluating the merits and risks of the purchase of the Common Stock hereunder and I am able
to bear the economic risk of such purchase; and

The agreements, representations, warranties and covenants made by me herein extend to and
apply to all of the Common Stock of the Company issued to me pursuant to this Award.
Acceptance by me of the certificate representing such Common Stock shall constitute a
confirmation by me that all such agreements, representations, warranties and covenants made
herein shall be true and correct at that time.

     I understand that the certificates representing the shares being purchased by me in accordance
with this notice shall bear a legend referring to the foregoing covenants, representations and
warranties and restrictions on transfer, and I agree that a legend to that effect may be placed on
any certificate which may be issued to me as a substitute for the certificates being acquired by me
in accordance with this notice. I further understand that capitalized terms used in this Notice of
Exercise without definition shall have the meanings given to them in the Award or the Plan, as
applicable.

	 	 	 	 	 	 	 	 	 

	Very truly yours,	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AGREED TO AND ACCEPTED:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PARK STERLING CORPORATION	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 

	Number of Shares Exercised: _____________________

	 	Number of Shares Remaining: _____________________

Exhibit 1 — Page 3 of 3

 

EXHIBIT 2

NOTICE OF WITHHOLDING ELECTION

PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

	 	 	 	 	 

	TO:

	 	Park Sterling Corporation	 	 
	 
	 	 	 	 
	FROM:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	RE:

	 	Withholding Election	 	 

This election relates to the Option identified in Paragraph 3 below. I hereby certify that:

	(1)	 	My correct name and social security number and my current address are set forth at the end of
this document.
	 
	(2)	 	I am (check one, whichever is applicable).

	 	o	 	the original recipient of the Option.
	 
	 	o	 	the legal representative of the estate of the original recipient of the Option.
	 
	 	o	 	a legatee of the original recipient of the Option.
	 
	 	o	 	the legal guardian of the original recipient of the Option.

	(3)	 	The Option to which this election relates was issued under the Park Sterling Corporation 2010
Long-Term Incentive Plan (the “Plan”) in the name of ________________ for the purchase of a
total of _______________ shares of Common Stock of the Company. This election relates to
_______________ shares of Common Stock issuable upon exercise of the Option, provided that the
numbers set forth above shall be deemed changed as appropriate to reflect the applicable Plan
provisions.
	 
	(4)	 	In connection with any exercise of the Option with respect to the Common Stock, I hereby
elect:

	 	o	 	to have certain of the shares otherwise issuable pursuant to the exercise
withheld by the Company for the purpose of having the value of the shares applied to
pay federal, state, and local, if any, taxes arising from the exercise.
	 
	 	o	 	to tender shares of Common Stock owned by me prior to the exercise of the
Option for the purpose of having the value of the shares applied to pay such taxes.

	 	 	The shares to be withheld or tendered, as applicable, shall have, as of the Tax Date
applicable to the exercise, a Fair Market Value equal to the minimum statutory tax
withholding requirement under federal, state, and local law in connection with the exercise.
	 
	(5)	 	This Withholding Election is made no later than the Tax Date and is otherwise timely made
pursuant to the Plan.

Exhibit 2 — Page 2 of 2

 

	(6)	 	I understand that this Withholding Election may not be revised, amended or revoked by me.
	 
	(7)	 	The Plan has been made available to me by the Company. I have read and understand the Plan
and I have no reason to believe that any of the conditions to the making of this Withholding
Election have not been met.
	 
	(8)	 	Capitalized terms used in this Notice of Withholding Election without definition shall have
the meanings given to them in the Plan.

	 	 	 	 	 	 

	Dated: 	 
	 	 	 	 
	 

	 	 	 

Signature
	 	 
	 
	 	 	 	 	 
	 

Social Security Number

	 	 

Name (Printed)
	 	 
	 
	 	 	 	 	 
	 

	 	 	 	 	 
	 

	 	 	Street Address	 	 
	 
	 	 	 	 	 
	 

	 	 	 	 	 
	 

	 	 	City, State, Zip Code	 	 

Exhibit 1 — Page 1 of 1

 

SCHEDULE 1

VESTING SCHEDULE

INCENTIVE STOCK OPTION AWARD

ISSUED PURSUANT TO THE

PARK STERLING CORPORATION

2010 LONG-TERM INCENTIVE PLAN

	A.	 	“Vested Option Shares” means only that percentage of the number of Option Shares subject to
the Option as to which the Option becomes exercisable if the Optionee continues, at all times,
as an officer or employee of the Company or any Affiliate from the Grant Date to the
applicable anniversary of the Grant Date below.

	 	 	 	 	 
	 	 	Percentage of Option Shares
	                            Vesting Date	 	which are Vested Option Shares
	Prior to the first anniversary of the Grant Date
	 	 	0	%
	First anniversary of the Grant Date
	 	 	331/3	%
	Second anniversary of the Grant Date
	 	 	662/3	%
	Third anniversary of the Grant Date
	 	 	100	%

	B.	 	The Optionee shall continue to have the opportunity to vest in Option Shares so long as the
Optionee remains in the continuous service of the Company and its Affiliates without incurring
a Termination of Employment. Notwithstanding the requirements of the Vesting Schedule, the
continuous service condition will be deemed satisfied as to all of the Option Shares if the
Optionee provides continuous services to the Company and/or any Affiliate following the Grant
Date through the date of any of the earlier events listed below:

     (a) in the event of the Optionee’s involuntary Termination of Employment
without Cause; or

     (b) in the event of the Optionee’s Termination of Employment due to a
resignation for Good Reason.

	 	 	The Option Shares which have satisfied (or are deemed to have satisfied) the conditions of
the Vesting Schedule are herein referred to as the “Vested Option Shares.” Any portion of
the Option Shares which have not become Vested Option Shares in accordance with this Vesting
Schedule before or at the time of Optionee’s Termination of Employment shall be forfeited.
There will be no proration of the Vesting Schedule for partial years of service.

Schedule 1 — Page 1 of 1

 

PARK STERLING CORPORATION

RESTRICTED STOCK AWARD

     This RESTRICTED STOCK AWARD (the “Award”) is made and entered into as of __________, 20__, by
and between Park Sterling Corporation (the “Company”), a bank holding company organized under the
laws of the State of North Carolina, and ______________________ (the “Employee”).

     Upon and subject to the Additional Terms and Conditions attached hereto and incorporated
herein by reference as part of this Award and further subject to the provisions of the Park
Sterling Corporation 2010 Long-Term Incentive Plan (the “Plan”), the Company hereby awards as of
the Grant Date to the Employee the Restricted Shares in consideration of the Employee’s services
rendered and to be rendered to the Company (including any Affiliate) (the “Restricted Stock
Award”).

	 	A.	 	Grant Date: ________________, 20____.
	 
	 	B.	 	Restricted Shares: __________ shares of the Company’s voting common
stock (“Common Stock”), $_____ par value per share.
	 
	 	C.	 	Plan under which granted: Park Sterling Corporation 2010 Long-Term Incentive Plan
	 
	 	D.	 	Vesting: The Award is subject to two vesting schedules. Fifty percent
(50%) of the Restricted Shares shall vest in accordance with the Table 1 Vesting
Schedule, as set forth below, and the other fifty percent (50%) of the Restricted
Shares shall vest in accordance with the Table 2 Vesting Schedule, also set forth
below.

     1. Table 1 Vesting Schedule. The Restricted Shares subject to the Table 1
Vesting Schedule shall become vested, as and to the extent indicated below, only if the
Employee remains in the continuous service of the Company and its Affiliates (the
“Continuous Service Condition”) through the applicable Service-Based Vesting Date indicated
in the Vesting Schedule below:

	 	 	 	 	 
	 	 	Percentage of Restricted Shares
	          Service-Based Vesting Date	 	which are Vested Shares
	Prior to the first anniversary of the Grant Date
	 	 	0	%
	First anniversary of the Grant Date
	 	 	331/3	%
	Second anniversary of the Grant Date
	 	 	662/3	%
	Third anniversary of the Grant Date
	 	 	100	%

The percentage of Restricted Shares that become vested shall not increase in the intervals
between Service-Based Vesting Dates. Except as provided in Subparagraph D.3. below, the
Restricted Shares subject to the Table 1 Vesting Schedule that are not vested on or before
the Employee’s Termination of Employment shall be forfeited.

     2. Table 2 Vesting Schedule. The Restricted Shares subject to the Table 2
Vesting Schedule shall become vested, as and to the extent indicated below, only if the
Employee satisfies the Continuous Service Condition through the applicable Performance-Based
Vesting Date indicated in the Vesting Schedule below:

 

 

	 	 	 	 	 
	 	 	Percentage of Restricted Shares
	Performance-Based-Vesting Date	 	which are Vested Shares
	Prior to the attainment of any Performance Goal
	 	 	0	%
	Attainment of 125% Performance Goal
	 	 	331/3	%
	Attainment of 140% Performance Goal
	 	 	662/3	%
	Attainment of 160% Performance Goal
	 	 	100	%

Each of the Performance Goals identified above shall be considered attained when the Common
Stock first attains, for a minimum of thirty (30) consecutive trading days, respectively,
125%, 140% and 160% of the price at which the Common Stock was sold to the public pursuant
to the firm commitment underwriting undertaken in 2010. The percentage of Restricted Shares
that become vested shall not increase in the intervals between Performance-Based Vesting
Dates. Except as provided in Subparagraph D.3. below, the Restricted Shares subject to the
Table 2 Vesting Schedule that are not vested on or before the earlier of (i) the Employee’s
Termination of Employment or (ii) August 18, 2020 shall be forfeited.

     3. Vesting Rules applicable to Table 1 and Table 2 Vesting Schedules. The
Employee shall continue to have the opportunity to vest in Restricted Shares so long as the
Employee remains in the continuous service of the Company and its Affiliates without
incurring a Termination of Employment or, if earlier, until August 18, 2020.

Notwithstanding the requirements of the Table 1 and Table 2 Vesting Schedules, the
Continuous Service Condition and Performance Goals will be deemed satisfied as to all of the
Restricted Shares if the Employee provides continuous services to the Company and/or any
Affiliate following the Grant Date through the date of any of the earlier events listed
below:

     (a) in the event of the Employee’s involuntary Termination of Employment
without Cause; or

     (b) in the event of the Employee’s Termination of Employment due to a
resignation for Good Reason.

The Restricted Shares which have satisfied (or are deemed to have satisfied) the conditions
of the applicable Vesting Schedule(s) are herein referred to as the “Vested Shares.” Any
portion of the Restricted Shares which have not become Vested Shares in accordance with this
Paragraph D. before or at the time of Employee’s Termination of Employment shall be
forfeited. There will be no proration of either the Table 1 or Table 2 Vesting Schedule for
partial years of service.

     IN WITNESS WHEREOF, the Company and Employee have signed this Award as of the Grant Date set
forth above.

	 	 	 	 	 	 	 	 	 

	Park Sterling Corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 
	 

	 	 	 	 	 	Employee	 	 
	 
	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

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ADDITIONAL TERMS AND CONDITIONS OF

PARK STERLING CORPORATION

RESTRICTED STOCK AWARD

     1. Condition to Delivery of Restricted Shares.

     (a) Employee must deliver to the Company, within two (2) business days after the
earlier of (i) the date (the “Vesting Date”) on which any Restricted Shares become Vested
Shares, or (ii) the date the Employee makes an election pursuant to Section 83(b) of the
Internal Revenue Code as to all or any portion of the Restricted Shares, either cash or a
certified check payable to the Company in the amount of all tax withholding obligations
(whether federal, state or local) imposed on the Company by reason of the vesting of the
Restricted Shares, or the making of an election pursuant to Section 83(b) of the Internal
Revenue Code, as applicable, except as provided in Section 1(b).

     (b) If the Employee does not make an election pursuant to Section 83(b) of the Internal
Revenue Code, in lieu of paying the withholding tax obligations in cash or by certified
check as required by Section 1(a), Employee may elect (the “Withholding Election”) to have
the actual number of shares of Common Stock that become Vested Shares reduced by the
smallest number of whole shares of Common Stock which, when multiplied by the Fair Market
Value of the Common Stock, is sufficient to satisfy the amount of the tax withholding
obligations imposed on the Company by reason of the vesting of the Restricted Shares on the
applicable Vesting Date. Employee may make a Withholding Election only if all of the
following conditions are met:

     (i) the Withholding Election must be made on or prior to the Vesting Date by
executing and delivering to the Company a properly completed Notice of Withholding
Election, in substantially the form of Exhibit A attached hereto; and

     (ii) any Withholding Election made will be irrevocable; however, the Executive
Committee of the Board of Directors of the Company (the “Committee”) may, in its
sole discretion, disapprove and give no effect to any Withholding Election.

     (c) Unless and until the Employee provides for the payment of the tax withholding
obligations in accordance with the provisions of this Section 1, the Company shall have no
obligation to deliver any of the Vested Shares and may take any other actions necessary to
satisfy such obligations, including withholding of appropriate sums from other amounts
payable to the Employee. If the shares of Common Stock are being traded by brokers and the
Employee is not a “director” or “executive officer”, within the meaning of Section 13(k) of
the Securities Exchange Act of 1934 (Section 402 of the Sarbanes-Oxley Act of 2002), at the
time tax withholding obligations become due, at the request of the Employee, the Committee
may make, or authorize the making of, such arrangements with the Employee and a broker,
dealer or other “creditor” (as defined by Regulation T issued by the Board of Governors of
the Federal Reserve System) acting on behalf of the Employee for the receipt from such
broker, dealer or other “creditor” of cash by the Company in an amount necessary to satisfy
the Employee’s tax withholding obligations in exchange for delivery of a number of Vested
Shares directly to the broker, dealer or other “creditor” having a value equal to the cash
delivered.

     2. Issuance of Restricted Shares.

     (a) The Company shall issue the Restricted Shares as of the Grant Date in either manner
described below, as determined by the Committee in its sole discretion:

3

 

     (i) by the issuance of share certificate(s) evidencing Restricted Shares to the
Secretary of the Company or such other agent of the Company as may be designated by
the Committee or the Secretary (the “Share Custodian”); or

     (ii) by documenting the issuance in uncertificated or book entry form on the
Company’s stock records.

Evidence of the Restricted Shares either in the form of share certificate(s) or book entry,
as the case may be, shall be held by the Company or Share Custodian, as applicable, until
the Restricted Shares become Vested Shares in accordance with the Vesting Schedule.

     (b) If the shares of Common Stock are registered under the Securities Act of 1933, as
amended (the “Securities Act”) and the Employee is determined by the Committee to be an
“affiliate” of the Company, as such term is defined in Rule 144 (“Rule 144”) under the
Securities Act, the Restricted Shares (and the Vested Shares resulting therefrom) shall be
evidenced only by physical share certificates.

     (c) When the Restricted Shares become Vested Shares, the Company or the Share
Custodian, as the case may be, shall deliver the Vested Shares to the Employee or, at the
Company’s election, to a broker designated by the Company (the “Designated Broker”) by
either physical delivery of the share certificate(s) or book entry transfer, as applicable,
for the benefit of an account established in the name of the Employee, in either case,
after, to the extent applicable, payment by the Employee of the tax withholding obligations
pursuant to Section 1(a) and/or reduced by any Vested Shares withheld and returned to the
Company pursuant to Section 1(b) above or delivered to a broker, dealer or other “creditor”
as contemplated by Section 1(c) above (such reduced number of Vested Shares are referred to
in this Section 2(c) as the “Net Vested Shares”). If the number of Vested Shares includes a
fraction of a share, neither the Company nor the Share Custodian shall be required to
deliver the fractional share to the Employee, and the Company shall pay the Employee the
amount determined by the Company to be the estimated Fair Market Value therefor. At any
time after receipt by the Designated Broker, the Employee may require that the Designated
Broker deliver the Net Vested Shares to the Employee pursuant to such arrangements or
agreements as may exist between the Designated Broker and the Employee.

     (d) In the event that the Employee forfeits any of the Restricted Shares, the Company
shall cancel the issuance on its stock records and, if applicable, the Share Custodian shall
promptly deliver the share certificate(s) representing the forfeited shares to the Company.

     (e) Employee hereby irrevocably appoints the Share Custodian, and any successor
thereto, as the true and lawful attorney-in-fact of Employee with full power and authority
to execute any stock transfer power or other instrument necessary to transfer any Restricted
Shares to the Company in accordance with this Award, in the name, place, and stead of the
Employee. The term of such appointment shall commence on the Grant Date of this Award and
shall continue until the last of the Restricted Shares are delivered to the Employee as
Vested Shares or are returned to the Company as forfeited Restricted Shares or as Vested
Shares withheld and returned to the Company pursuant to Section 1(b), as provided by the
applicable terms of this Award.

     (f) Unless and until the Restricted Shares become Vested Shares, the Employee shall be
entitled to all rights applicable to holders of shares of Common Stock including, without

4

 

limitation, the right to vote such shares and to receive dividends or other distributions
thereon as provided by Section 4, except as otherwise expressly provided in this Award.

     (g) In the event the number of shares of Common Stock is increased or reduced as a
result of a subdivision or combination of shares of Common Stock or the payment of a stock
dividend or any other increase or decrease in the number of shares of Common Stock or other
transaction such as a merger, reorganization or other change in the capital structure of the
Company, the Employee agrees that any certificate representing shares of Common Stock or
other securities of the Company issued as a result of any of the foregoing shall be
delivered to the Share Custodian or recorded in book entry form, as applicable, and shall be
subject to all of the provisions of this Award as if initially granted hereunder.

     3. Acknowledgement by Employee of Tax Election Opportunity. Employee acknowledges
that the award of the Restricted Shares constitutes a transfer of property for federal income tax
purposes under Section 83 of the Internal Revenue Code and that the Employee shall have the sole
responsibility for determining whether to elect early income tax treatment by making an election
permitted under Subsection (b) of Section 83 of the Internal Revenue Code and the sole
responsibility for effecting any such election in an appropriate and on a timely basis.

     4. Dividends. The Employee shall be entitled to dividends or other distributions paid
or made on Restricted Shares but only as and when the Restricted Shares to which the dividends or
other distributions are attributable become Vested Shares. Dividends paid on Restricted Shares
will be held by the Company and transferred to the Employee, without interest, on such date as the
Restricted Shares become Vested Shares. Dividends or other distributions paid on Restricted Shares
that are forfeited shall be retained by the Company.

     5. Restrictions on Transfer of Restricted Shares.

     (a) General Restrictions. Except as provided by this Award, the Employee shall
not have the right to make or permit to exist any transfer or hypothecation, whether
outright or as security, with or without consideration, voluntary or involuntary, of all or
any part of any right, title or interest in or to any Restricted Shares. Any such
disposition not made in accordance with this Award shall be deemed null and void. The
Company will not recognize, or have the duty to recognize, any disposition not made in
accordance with the Plan and this Award, and any Restricted Shares so transferred will
continue to be bound by the Plan and this Award. The Employee (and any subsequent holder of
Restricted Shares) may not sell, pledge or otherwise directly or indirectly transfer
(whether with or without consideration and whether voluntarily or involuntarily or by
operation of law) any interest in or any beneficial interest in any Restricted Shares except
pursuant to the provisions of this Award. Any sale, pledge or other transfer (or any
attempt to effect the same) of any Restricted Shares in violation of any provision of the
Plan or this Award shall be void, and the Company shall not record such transfer,
assignment, pledge or other disposition on its books or treat any purported transferee or
pledgee of such Restricted Shares as the owner or pledgee of such Restricted Shares for any
purpose.

     (b) Certain Permitted Transfers. The restrictions contained in this Section 5
will not apply with respect to transfers of the Restricted Shares pursuant to applicable
laws of descent and distribution; provided that the restrictions contained in this Section 5
will continue to be applicable to the Restricted Shares after any such transfer; and
provided further that the transferee(s) of such Restricted Shares must agree in writing to
be bound by the provisions of the Plan and this Award, including the provisions of Section
7.

5

 

     6. Additional Restrictions on Transfer.

     (a) Certificates evidencing the Restricted Shares shall have noted conspicuously on the
certificate a legend required under applicable securities laws and reflecting the transfer
restrictions set forth herein in addition to any other legend(s) as the Company deems
appropriate and the Employee shall not make any transfer of the Restricted Shares without
first complying with the restrictions on transfer described in such legends. Such legends
may include the following:

transfer is restricted

The shares evidenced by this certificate have been issued pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the “Securities Act”) and
applicable state securities laws and as such may only be sold or otherwise transferred: (1)
pursuant to registration or an exemption from registration under the Securities Act,
including but not limited to Rule 144 thereunder, and the securities laws of any applicable
state or other jurisdiction; or (2) if, in the opinion of counsel, in form and substance
satisfactory to the issuer, such transfer is exempt from registration or is otherwise in
compliance with applicable federal and state securities laws. 

The securities evidenced by this certificate are subject to restrictions on transfer and
forfeiture provisions which also apply to the transferee as set forth in a restricted stock
Award, dated _____________, 2010, a copy of which is available from the Company.

     (b) Opinion of Counsel. No holder of Restricted Shares may sell, transfer,
assign, pledge or otherwise dispose of (whether with or without consideration and whether
voluntarily or involuntarily or by operation of law) any interest in or any beneficial
interest in any Restricted Shares, except (i) pursuant to an effective registration
statement under the Securities Act or (ii) in a transaction that fully complies with Rule
144, without first delivering to the Company an opinion of counsel (reasonably acceptable in
form and substance to the Company) that neither registration nor qualification under the
Securities Act and applicable state securities laws is required in connection with such
transfer.

     7. Lock-up Agreement. The Employee hereby agrees that he will not, directly
or indirectly, sell, offer, contract to sell, grant of options for the purchase of, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise dispose of any Vested
Shares during the thirty (30) days prior to and the one hundred eighty (180) days (or any shorter
period permitted by the managing underwriter) after the effectiveness of any underwritten public
offering, except as part of such underwritten public offering or if otherwise permitted by the
Company. The Employee hereby agrees to execute and deliver any additional document or
acknowledgement reflecting the foregoing provisions or containing similar restrictions as may be
requested by the Company or its managing underwriters in connection with the initial public
offering of Common Stock. The Company may place a legend on any stock certificates representing
Vested Shares and may impose stop-transfer instructions with respect to the Vested Shares in order
to enforce the foregoing restrictions.

     8. Change in Capitalization.

     (a) The number and kind of Restricted Shares shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting from a

6

 

subdivision or combination of shares or the payment of a stock dividend in shares of Common
Stock to holders of outstanding shares of Common Stock or any other increase or decrease in
the number of shares of Common Stock outstanding effected without receipt of consideration
by the Company. No fractional shares shall be issued in making such adjustment. All
adjustments made by the Committee under this Section shall be final, binding, and
conclusive.

     (b) In the event of a merger, consolidation, extraordinary dividend (including a
spin-off), reorganization, recapitalization, sale of substantially all of the Company’s
assets, other change in the capital structure of the Company, tender offer for shares of
Common Stock or a Change in Control, an appropriate adjustment may be made with respect to
the Restricted Shares such that other securities, cash or other property may be substituted
for the Common Stock held by the Share Custodian or recorded in book entry form pursuant to
this Award.

     (c) The existence of the Plan and the Restricted Stock Award shall not affect the right
or power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger or
consolidation of the Company, any issue of debt or equity securities having preferences or
priorities as to the Common Stock or the rights thereof, the dissolution or liquidation of
the Company, any sale or transfer of all or part of its business or assets, or any other
corporate act or proceeding.

     9. Governing Laws. This Award shall be construed, administered and enforced according
to the laws of the State of North Carolina; provided, however, no Restricted Shares shall be issued
except, in the reasonable judgment of the Committee, in compliance with exemptions under applicable
state securities laws of the state in which the Employee resides, and/or any other applicable
securities laws.

     10. Successors. This Award shall be binding upon and inure to the benefit of the
heirs, legal representatives, successors, and permitted assigns of the parties.

     11. Notice. All notices, requests, waivers and other communications required or
permitted hereunder shall be in writing and shall be either personally delivered, sent by facsimile
or by reputable overnight courier service or mailed by first class mail, return receipt requested,
to the recipient at the address below indicated:

	 	 	 

	If to the Company:

	 	Park Sterling Corporation
	 

	 	Attn: Secretary
	 

	 	1043 E. Morehead Street, Suite 201
	 

	 	Charlotte, NC 28204
	 
	 	 
	If to the Recipient:

	 	                                        
	 

	 	                                        
	 

	 	                                        
	 

	 	                                        

or such other address or to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party. All such notices, requests, waivers and
other communications shall be deemed to have been effectively given: (a) when personally delivered
to the party to be notified; (b) when sent by confirmed facsimile to the party to be notified; (c)
five (5) business days after deposit in the United States Mail postage prepaid by certified or
registered mail with return receipt requested at any time other than during a general
discontinuance of postal service due to strike, lockout, or otherwise (in which case such notice,
request, waiver or other communication shall be effectively given upon receipt) and addressed to
the party to be notified as set forth above; or (d) two (2) business days after deposit with a
national overnight delivery service, postage prepaid, addressed to the party to be notified as set
forth

7

 

above with next-business-day delivery guaranteed. A party may change its or his notice address
given above by giving the other party ten (10) days’ written notice of the new address in the
manner set forth above.

     12. Severability. In the event that any one or more of the provisions or portion
thereof contained in this Award shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, the same shall not invalidate or otherwise affect any other
provisions of this Award, and this Award shall be construed as if the invalid, illegal or
unenforceable provision or portion thereof had never been contained herein.

     13. Entire Agreement. Subject to the terms and conditions of the Plan, this Award
expresses the entire understanding and agreement of the parties with respect to the subject matter.
This Award may be executed in two or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same instrument. Employee acknowledges that the
grant of this Award discharges the obligations of the Bank for the initial restricted stock award
contemplated by Schedule A of that certain Employment Agreement by and between the Bank and the
Employee, dated ______________, 2010.

     14. Headings and Capitalized Terms. Paragraph headings used herein are for
convenience of reference only and shall not be considered in construing this Award. Capitalized
terms used, but not defined, in this Award shall be given the meaning ascribed to them in Section
18 or the Plan, as applicable.

     15. Specific Performance. In the event of any actual or threatened default in, or
breach of, any of the terms, conditions and provisions of this Award, the party or parties who are
thereby aggrieved shall have the right to specific performance and injunction in addition to any
and all other rights and remedies at law or in equity, and all such rights and remedies shall be
cumulative.

     16. No Right to Continued Employment. Neither the establishment of the Plan nor the
grant of the Restricted Stock Award made pursuant to this Award shall be construed as giving
Employee the right to any continued service relationship with the Company or any Affiliate.

     17. Award Subject to Shareholder Approval. The grant of this Award is subject to
shareholder approval of the Plan within twelve (12) months following the adoption of the Plan by
the Board of Directors and if such approval is not timely obtained, the grant of this Award shall
become null and void and the Employee shall have no recourse against the Company as a result of
such occurrence.

     18. Special Definitions.

     (a) For purposes of this Award, the term “Cause” has the same meaning as provided in
the employment agreement between the Employee and the Company and/or, if applicable, any
Affiliate on the date of Termination of Employment, or if no such definition or employment
agreement exists, “Cause” means:

     (i) any act by the Employee of fraud against, material misappropriation from,
or material dishonesty to either the Company or any Affiliate;

     (ii) conviction of the Employee of a crime involving breach of trust or moral
turpitude or any felony;

8

 

     (iii) conduct by the Employee that amounts to willful misconduct, gross and
willful insubordination, gross neglect or inattention to or material failure to
perform the Employee’s duties and responsibilities in the manner and to the extent
required by his position(s) with the Company or any Affiliate, including prolonged
absences; provided that the nature of such conduct shall be set forth with
reasonable particularity in a written notice to the Employee who shall have ten (10)
days following delivery of such notice to cure such alleged conduct, provided that
such conduct is, in the reasonable discretion of the Company, susceptible to a cure;

     (iv) exhibition by the Employee of a standard of behavior within the scope of
or related to his employment that is materially disruptive to the orderly conduct of
the business operations of the Company or any Affiliate (including, without
limitation, substance abuse, sexual harassment or sexual misconduct) in the
reasonable opinion of the Company;

     (v) receipt of any form of notice, written or otherwise, that any regulatory
agency having jurisdiction over the Company or any Affiliate intends to institute
any form of formal or informal regulatory action against the Employee; or

     (vi) the Employee’s removal and/or permanent prohibition from participating in
the conduct of the affairs of the Company or any Affiliate by an order issued under
Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(4) and (g)(1)).

     (b) For purposes of this Award, the term “Good Reason” has the same meaning as provided
in the employment agreement between the Employee and the Company and/or, if applicable, any
Affiliate on the date of Termination of Employment, or if no such definition or employment
agreement exists, “Good Reason” means:

     (i) a material reduction of the Employee’s annual base salary from its then
current rate without the Employee’s consent, other than a reduction that also is
applied to substantially all other executive officers of the Company or Affiliate if
Employee’s reduction is substantially proportionate to, or no greater than, the
reduction applied to substantially all other executive officers; or

     (ii) a material diminution in the authority, responsibilities or duties of the
Employee hereunder without the Employee’s consent;

provided, however, that for a Termination of Employment by the Employee to be for Good
Reason, the Employee must notify the Company or, if applicable, Affiliate in writing of the
event giving rise to Good Reason within thirty (30) days following the occurrence of the
event (or, if later, thirty (30) days following the Employee’s knowledge of occurrence of
the event), the event must remain uncured after the expiration of sixty (60) days following
the delivery of written notice of such event to the Company (or Affiliate) by the Employee,
and the Employee must resign effective no later than sixty (60) days following the Company’s
(or Affiliate’s) failure to cure the event and must give at least thirty (30) days advance
written notice prior to the Employee’s effective date of resignation.

     (c) Other capitalized terms that are not defined herein have the meaning set forth in
the Plan or the Award, except where the context does not reasonably permit.

#6069823 v1

9

 

EXHIBIT A

NOTICE OF WITHHOLDING ELECTION

PARK STERLING CORPORATION

RESTRICTED STOCK AWARD

	 	 	 	 	 

	TO:

	 	Park Sterling Corporation	 	 
	 
	 	 	 	 
	FROM:

	 	 	 	SSN:                                         
	 

	 	 	 	 
	 
	 	 	 	 
	RE:

	 	Withholding Election	 	 

     This election relates to the Restricted Stock Award identified in Paragraph 3 below. I hereby
certify that:

     (1) My correct name and social security number and my current address are set forth at the end
of this document.

     (2) I am (check one, whichever is applicable).

	 	o	 	the original recipient of the Restricted Stock Award.
	 
	 	o	 	the legal representative of the estate of the original
recipient of the Restricted Stock Award.
	 
	 	o	 	a legatee of the original recipient of the Restricted Stock Award.
	 
	 	o	 	the legal guardian of the original recipient of the Restricted Stock Award.

     (3) The Restricted Stock Award pursuant to which this election relates was issued under the
Park Sterling Corporation 2010 Long-Term Incentive Plan in the name of _________________ for a
total of ______________ shares of Common Stock. This election relates to ______ shares of Common
Stock to be delivered upon the vesting of a portion of the Restricted Shares, provided that the
numbers set forth above shall be deemed changed as appropriate to reflect stock splits and other
adjustments contemplated by the applicable provisions of the Restricted Stock Award and the Plan.

     (4) I hereby elect to have certain of the Vested Shares withheld and returned to the Company,
rather than delivered to me, for the purpose of having the value of such shares applied to pay
minimum required federal, state and local, if any, tax withholding obligations arising from the
vesting event.

     The fair market value of the Vested Shares to be withheld and returned to the Company shall be
equal to the minimum statutory tax withholding requirements under federal, state and local law in
connection with the vesting event, reduced by the amount of any cash or certified check payment
tendered by me to the Company in partial payment of such tax withholding obligations.

     (5) I understand that this Withholding Election is made prior to the Vesting Date and is
otherwise timely made pursuant to Section 1 of the Restricted Stock Award and Section 5.1 of the
Plan.

Exhibit A — Page 1 of 2

 

     (6) I further understand that, if this Withholding Election is not disapproved by the
Committee, the Company shall withhold from the Vested Shares a whole number of shares of Common
Stock having the value specified in Paragraph 4 above.

     (7) The Plan has been made available to me by the Company. I have read and understand the
Plan and the provisions of the Restricted Stock Award and I have no reason to believe that any of
the conditions therein to the making of this Withholding Election have not been met. Capitalized
terms used in this Notice of Withholding Election without definition shall have the meanings given
to them in the Plan or Section 18 of the Restricted Stock Award, as applicable.

	 	 	 	 	 

	Dated:
	 	 	 	 
	 

	 	 

	 	 
	Signature:
	 	 	 	 
	 

	 	 

	 	 
	 	 	 
	Name (Printed)	 	 
	 
	 	 	 	 
	 	 	 
	Street Address	 	 
	 
	 	 	 	 
	 	 	 
	City, State, Zip Code	 	 
	 
	 	 	 	 
	 	 	 
	Social Security Number	 	 

#6069823 v1

Exhibit A — Page 2 of 2

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