Document:

exv4w1

Exhibit 4.1

Execution Copy

AMENDMENT NO. 3

TO

CREDIT AGREEMENT

          THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT (the “Amendment”) is made as of November 13, 2009 by
and among Steelcase Inc., a Michigan corporation (the “Company”), the institutions listed on the
signature pages hereto and JPMorgan Chase Bank, N.A., as the administrative agent for the “Lenders”
referred to below (the “Administrative Agent”). Capitalized terms used but not otherwise defined
herein shall have the respective meanings given to them in the “Credit Agreement” referred to
below.

WITNESSETH:

          WHEREAS, the signatories hereto are parties to that certain Credit Agreement, dated as of July
26, 2005, among the Company, the Subsidiary Borrowers from time to time parties thereto, the
financial institutions from time to time parties thereto (the “Lenders”), the Administrative Agent,
Bank of America, N.A. and BNP Paribas, as co-syndication agents, and Fifth Third Bank and Société
Générale, as co-documentation agents (as amended by Amendment No. 1 thereto dated as of August 31,
2006 and by Amendment No. 2 thereto dated as of September 21, 2009, and as the same may be further
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);
and

          WHEREAS, the parties hereto have agreed to amend the Credit Agreement on the terms and
conditions set forth herein;

          NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions
contained herein, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company, the Lenders party hereto and the Administrative Agent have
agreed to the following amendment to the Credit Agreement.

          1. Amendment. Effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2 below, the Credit Agreement is hereby amended
as follows:

          (a) The last sentence of Section 7.4(A) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

Notwithstanding anything to the contrary in this Section 7.4(A) or in the Credit
Agreement, for purposes of determining compliance by the Company with the provisions of
this Section 7.4(A) for the fiscal quarter ending August 28, 2009, the Leverage
Ratio shall be calculated on December 18, 2009 (it being agreed that
during the period of time prior to such calculation date, no Unmatured Default shall be
deemed to exist or arise under this Section 7.4(A) with respect to such fiscal quarter);
provided, however, that nothing herein shall waive or eliminate the
Company’s obligation to furnish a
computation of the Leverage Ratio for such fiscal quarter as and when required by the terms
of Section 7.1(A) hereof, including for the purpose of determining the Applicable

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Eurocurrency Margin, the Applicable Floating Rate Margin, the Applicable L/C Fee Percentage
and the Applicable Facility Fee Percentage (as described in the Pricing Schedule).

          (b) Notwithstanding anything to the contrary in the Credit Agreement (including, without
limitation, in Section 2.3, 2.7 or 2.9 thereof), during the period from the
effective date hereof through December 18, 2009, new Revolving Loans shall only be made as, and
outstanding Revolving Loans shall only be converted into or continued as, Floating Rate Loans or
Floating Rate Advances, and no Revolving Loan may be made as, converted into or continued as a
Eurocurrency Rate Loan or Eurocurrency Rate Advance. Nothing in this clause (b) shall affect or
modify the other terms and conditions in the Credit Agreement applicable to Revolving Loans.

          2. Conditions of Effectiveness. This Amendment shall become effective as of the date
hereof when the Administrative Agent shall have received: (a) executed copies of this Amendment
from the Company and the Required Lenders and (b) executed copies of the Reaffirmation attached
hereto in the form of Exhibit A from the existing Subsidiary Guarantors.

          3. Representations and Warranties of the Company. The Company hereby represents and
warrants as follows:

          (a) The Company has the requisite power and authority to execute and deliver this Amendment
and to perform this Amendment and the Credit Agreement (as modified hereby).

          (b) The execution and delivery of this Amendment and the performance of this Amendment and the
Credit Agreement (as modified hereby), and the consummation of the transactions contemplated hereby
and thereby, have been duly authorized by all requisite corporate, partnership or limited liability
company acts, including any required shareholder approval of the Company.

          (c) This Amendment has been duly executed and delivered by the Company and the Credit
Agreement (as modified hereby) constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms (except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights generally and general
equitable principles).

          (d) The execution and delivery of this Amendment and the performance of this Amendment and the
Credit Agreement (as modified hereby) do not and will not (i) conflict with the articles of
incorporation or by-laws of the Company, (ii) conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under any Requirement of Law
(including, without limitation, any Environmental Property Transfer Act) or Contractual Obligation
of the Company, or require termination of any Contractual Obligation, except any such conflict,
breach, default or termination which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, or (iii) result in or require the creation or imposition of any Lien whatsoever upon any of the property or assets of the Company, other
than Liens permitted or created by the Loan Documents. The execution and delivery of this

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Amendment and the performance by the Company of this Amendment and the Credit Agreement (as
modified hereby) do not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by any Governmental Authority (including under any
Environmental Property Transfer Act) or any other third party except such registrations, consents,
approvals, notices and other actions which have been made, obtained or given, or which, if not
made, obtained or given, individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect.

          (e) As of the date hereof, after giving effect to the terms of this Amendment, (i) there
exists no Default or Unmatured Default and (ii) the representations and warranties contained in
Article VI of the Credit Agreement are true and correct in all material respects (unless
such representation and warranty is made as of a specific date, in which case, such representation
and warranty shall be true and correct in all material respects as of such date; it being
understood and agreed that the representations and warranties set forth in Sections 6.5 and
6.7 of the Credit Agreement were only made as of the Closing Date).

          4. Reference to and Effect on the Credit Agreement and Loan Documents.

          (a) Upon the effectiveness of this Amendment, each reference to the Credit Agreement in the
Credit Agreement or any other Loan Document shall mean and be a reference to the Credit Agreement
as modified hereby. This Amendment is a Loan Document pursuant to the Credit Agreement and shall
(unless expressly indicated herein or therein) be construed, administered, and applied, in
accordance with all of the terms and provisions of the Credit Agreement.

          (b) The Company (i) agrees that, except as specifically provided herein, this Amendment and
the transactions contemplated hereby shall not limit or diminish the obligations of the Company
arising under or pursuant to the Credit Agreement and the other Loan Documents to which it is a
party, (ii) reaffirms its obligations under the Credit Agreement and each and every other Loan
Document to which it is a party and (iii) acknowledges and agrees that, except as specifically
modified above, the Credit Agreement and all other Loan Documents executed and/or delivered in
connection therewith shall remain in full force and effect and are hereby ratified and confirmed.

          (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of the Administrative Agent or
the Lenders, nor constitute a waiver of or consent to any modification of any provision of the
Credit Agreement or any other Loan Documents executed and/or delivered in connection therewith.

          5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED IN ACCORDANCE WITH THE INTERNAL
LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF
LAWS PROVISIONS) OF THE STATE OF ILLINOIS.

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          6. Headings. Section headings in this Amendment are included herein for convenience
of reference only and shall not constitute a part of this Amendment for any other purpose.

          7. Counterparts. This Amendment may be executed by one or more of the parties hereto
on any number of separate counterparts (including by means of facsimile or electronic
transmission), and all of said counterparts taken together shall be deemed to constitute one and
the same instrument.

*******

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          IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above
written.

	 	 	 	 	 
	 	STEELCASE INC.,

as the Company

 	 
	 	By:  	/s/ Gary P. Malburg
 	 
	 	 	Name:  	Gary P. Malburg 	 
	 	 	Title:  	VP, Finance & Treasurer 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

as the Administrative Agent, the Issuing Bank, the Swing Line
Bank and as a Lender

 	 
	 	By:  	/s/ Gregory T. Martin
 	 
	 	 	Name:  	Gregory T. Martin 	 
	 	 	Title:  	Vice President 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

(including as successor to STANDARD FEDERAL BANK, N.A.),

as the Syndication Agent and as a Lender

 	 
	 	By:  	/s/ Scott Hitchens
 	 
	 	 	Name:  	Scott Hitchens 	 
	 	 	Title:  	Vice President 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BNP PARIBAS,

as a Syndication Agent and as a Lender

 	 
	 	By:  	/s/ Chad Watkins
 	 
	 	 	Name:  	Chad Watkins 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                  /s/ Michael Pearce
 	 
	 	 	Name:  	Michael Pearce 	 
	 	 	Title:  	Director 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	SOCIÉTÉ GÉNÉRALE,

as a Documentation Agent and as a Lender

 	 
	 	By:  	/s/ Eric E.O. Siebert Jr.
 	 
	 	 	Name:  	Eric E.O. Siebert Jr. 	 
	 	 	Title:  	Managing Director 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	FIFTH THIRD BANK,

as a Documentation Agent and as a Lender

 	 
	 	By:  	/s/ Randal Wolffis
 	 
	 	 	Name:  	Randal Wolffis 	 
	 	 	Title:  	Vice President 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	HSBC BANK USA, N.A.,

as a Lender

 	 
	 	By:  	/s/ Andrew Bicker
 	 
	 	 	Name:  	Andrew Bicker 	 
	 	 	Title:  	Vice President 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE NORTHERN TRUST COMPANY,

as a Lender

 	 
	 	By:  	/s/ Rebecca H. Pasquesi
 	 
	 	 	Name:  	Rebecca H. Pasquesi 	 
	 	 	Title:  	Vice President 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA,

as a Lender

 	 
	 	By:  	/s/ Paula Czach
 	 
	 	 	Name:  	Paula Czach 	 
	 	 	Title:  	Director and Execution Head 	 

Signature Page to Amendment No. 3 to Credit Agreement

 

 

	 	 	 	 	 

EXHIBIT A

Reaffirmation

          Each of the undersigned hereby acknowledges receipt of a copy of Amendment No. 3, dated as of
November 13, 2009 (the “Amendment”), to the Credit Agreement, dated as of July 26, 2005, by and
among Steelcase Inc., a Michigan corporation (the “Company”), the Subsidiary Borrowers from time to
time parties thereto, the institutions from time to time parties thereto (the “Lenders”), JPMorgan
Chase Bank, National Association, as the administrative agent for the Lenders (the “Administrative
Agent”), Bank of America, N.A. and BNP Paribas, as co-syndication agents, and Fifth Third Bank and
Société Générale, as co-documentation agents (as amended by Amendment No. 1 thereto dated as of
August 31, 2006 and by Amendment No. 2 thereto dated as of September 21, 2009, and as the same may
from time to time hereafter be amended, restated, supplemented or otherwise modified, the “Credit
Agreement”). Capitalized terms used in this Reaffirmation and not defined herein shall have the
meanings given to them in the Credit Agreement.

          Each of the undersigned, by its signature below, hereby (a) acknowledges and consents to the
execution and delivery of the Amendment by the parties thereto, (b) agrees that, except as
specifically provided therein, the Amendment and the transactions contemplated thereby shall not
limit or diminish the obligations of such Person arising under or pursuant to the Loan Documents to
which it is a party (including, without limitation, the Subsidiary Guaranty), (c) reaffirms all of
its obligations under the Loan Documents to which it is a party, and (d) acknowledges and agrees
that each Loan Document executed by it remains in full force and effect and is hereby reaffirmed,
ratified and confirmed. All references to the Credit Agreement contained in any Loan Document
shall be a reference to the Credit Agreement as so modified by the Amendment and as the same may
from time to time hereafter be amended, restated, supplemented or otherwise modified. The
Amendment is a Loan Document pursuant to the Credit Agreement and shall (unless expressly indicated
therein) be construed, administered, and applied, in accordance with all of the terms and
provisions of the Credit Agreement.

Dated as of November 13, 2009

[Signatures Appear on Following Page]

 

 

          IN WITNESS WHEREOF, this Reaffirmation has been duly executed as of the day and year first
above written.

	 	 	 	 	 
	 	ANDERSON DESK, INC.

BRAYTON INTERNATIONAL, INC.

IDEO LLC, successor by merger to IDEO INC.

POLYVISION CORPORATION

THE DESIGN TEX GROUP INC.

 	 
	 	By:  	/s/ Gary P. Malburg
 	 
	 	 	Name:  	Gary P. Malburg 	 
	 	 	Title:  	Treasurer 	 
	 
	 	STEELCASE FINANCIAL SERVICES INC.

 	 
	 	By:  	/s/ Gary P. Malburg
 	 
	 	 	Name:  	Gary P. Malburg 	 
	 	 	Title:  	President 	 
	 
	 	STEELCASE EUROPE, L.L.C.

 	 
	 	By:  	/s/ Fred W. Brenner Jr.
 	 
	 	 	Name:  	Fred W. Brenner Jr. 	 
	 	 	Title:  	Manager 	 
	 
	 	STEELCASE SAS

 	 
	 	By:  	/s/ Yvan Stehly
 	 
	 	 	Name:  	Yvan Stehly 	 
	 	 	Title:  	President 	 

Signature Page to ReaffirmationExhibit 10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made effective as of October 8, 2009 by and between MOUNTAIN NATIONAL BANK
and MOUNTAIN NATIONAL BANCSHARES, INC. (the “Bank”), Sevierville, Tennessee; and Dwight B. Grizzell
(the “Executive”).

WHEREAS, the Bank wishes to assure itself of the services of Executive for the period provided
in the Agreement; and

WHEREAS, the Executive is willing to serve in the employment of the Bank on a full-time basis
for said period.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

1. POSITION AND RESPONSIBILITIES.

During the period of his employment hereunder, Executive agrees to serve as President and
Chief Executive Officer of the Bank.

2. TERMS AND DUTIES.

(a) The term of this Agreement shall be deemed to have commenced as of the date first above
written and shall continue for a period of thirty-six (36) full calendar months thereafter. This
agreement will automatically renew for an additional period of thirty-six (36) full calendar months
unless either party gives written notice of non-renewal at least one-hundred and twenty days (120)
prior to the end of the initial thirty-six (36) month term.

(b) During the period of his employment hereunder, except for periods of absence occasioned by
illness, vacation periods, and leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his duties hereunder
including activities and services related to the organization, operation and management of the
Bank; provided, however that, subject to the terms of this Agreement, from time to time, Executive
may serve, or continue to serve, on the boards of directors of, and hold any other offices or
positions in, companies or organizations, which will not materially affect the performance of
Executive’s duties pursuant to this Agreement.

3. COMPENSATION AND REIMBURSEMENT.

(a) The compensation specified under this Agreement shall constitute the salary and benefits
paid for the duties described in Sections 1 and 2. The Bank shall pay Executive as compensation a
salary of Two Hundred and Forty-Five Thousand Dollars ($242,500.00) per year (“Base Salary”). Such
Base Salary shall be payable in accordance with the customary payroll practices of the Bank. During
the period of this Agreement, Executive’ Base Salary shall be reviewed at least annually; the first
such review will be made no later than one year from the date of this Agreement. Such review shall
be conducted by Chairman of the Board of the Bank, and the Chairman of the Board may increase
Executive’s Base Salary. In addition to the Base Salary provided in this Section 3(a), the Bank shall provide to Executive at no additional cost to
Executive all such other benefits as are provided to regular full-time employees of the Bank.

 

 

 

(b) Executive will be entitled to participate in or receive benefits under any employee
benefit plans including, but not limited to, stock options, retirement plans, supplemental
retirement plans, pension plans, profit-sharing plans, health-and-accident plans, medical coverage
or any other employee benefit plan or arrangement made available by the Bank in the future to its
key management employees, subject to, and on a basis consistent with, the terms, conditions and
overall administration of such plans and arrangements. Executive will be entitled to incentive
compensation and bonuses as provided in any plan, or pursuant to any arrangement of the Bank, in
which Executive is eligible to participate. Nothing paid to the Executive under any such plan or
arrangement will be deemed to be in lieu of other compensation to which the Executive is entitled
under this Agreement, except as provided under Section 5(e).

(c) Executive will be reimbursed for reasonable travel and entertainment expenses.

4. PAYMENTS TO EMPLOYEE UPON AN EVENT OF TERMINATION.

(a) Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s
term of employment under this Agreement, the provisions of this Section shall apply. As used in
this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the termination by the Bank of Executive’s full-time employment hereunder for any reason other
than Cause, as defined in Section 8 hereof Disability, as defined in Section 6(a) hereof; death; or
Retirement, as defined in Section 7 hereof; or (ii) Executive’s resignation from the Bank’s
employment, upon not less than thirty (30) days prior written notice to the Bank.

(b) Upon the occurrence of an Event of Termination, the Bank shall pay Executive, or, in the
event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be,
as severance pay or liquidated damages, or both, a lump sum payment equal to 2.99 times Executive’s
Base Salary if such termination occurs prior to Executive obtaining the age of 60, 1.99 times
Executive’s Base Salary if such termination occurs prior to the Executive obtaining the age of 6l,
and 1 tines Executive’s Base Salary if such termination occurs thereafter; provided, however, that
such lump sum payment shall equal only six (6) months Base Salary in event that the Event of
Termination is the result of Executive’s resignation from employment as provided in Section
4(a)(ii).

If either party give notice of non-renewal as set forth in paragraph 2(a) hereof or upon the
occurrence of an Event of Termination, the Bank will continue in full force and effect at its
expense the Amended and Restated Executive Salary Continuation Agreement dated 1/19/07 until the
Executive attains the age of 65 so that the Executive may begin receiving the full benefits of the
program at age 65.

(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued life,
medical, dental and disability coverage substantially identical to the coverage maintained by the
Bank for Executive prior to his termination for a period of twelve (12) months at the Bank’s
expense; provided, however, that such coverage shall be continued for a period of only six (6)
months in the event that the Event of Termination is the result of Executive’s

 

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resignation from employment as provided in Section 4(a)(ii). A COBRA notice will be issued
upon the date of termination. The period during which the Bank pays for the Executive’s
COBRA-mandated coverage shall run concurrently with the applicable COBRA-mandated coverage period.
The Executive shall be solely responsible for any premiums for any COBRA-mandated coverage periods
beyond the first twelve (12) months or six (6) months of coverage, as the case may be. The
Executive’s failure to pay such premiums shall result in a cancellation of such coverage during the
remaining period.

5. CHANGE IN CONTROL.

(a) No benefit shall be paid under this Section 5 unless there shall have occurred a Change in
Control of the Bank. For purposes of this Agreement, a “Change in Control” of the Bank shall be
deemed to occur if and when:

(i) there occurs an acquisition in one of more transactions of at least 15 percent but
less than 25 percent of the Common Stock by any Person, or by two or more Persons acting as
a group (excluding officers and directors of the Bank), and the adoption by the Board of
Directors of a resolution declaring that a change in control of the Bank has occurred; or

(ii) there occurs a merger, consolidation, reorganization, recapitalization or similar
transaction involving the securities of the Bank upon the consummation of which more than 50
percent in voting power of the voting securities of the surviving corporation(s) is held by
Person(s) other than former shareholders of the Bank; or

(iii) 25 percent or more of the directors elected by shareholders of the Bank to the
Board of Directors are persons who were not listed as nominees in the Bank’s then most
recent proxy statement.

(b) If any of the events described in Section 5(a) hereof constituting a Change in Control
have occurred or the Board of the Bank has determined that a Change in Control has occurred,
Executive shall be entitled to the benefits provided in paragraphs (c), (d) and (e) of this Section
5, in lieu of any benefits under Section 4(b) or (c), upon his subsequent involuntary termination
of employment at any time during the term of this Agreement (other than for Cause, Disability,
death or Retirement) or voluntary termination following a Change of Control following any demotion,
loss of title, office or significant authority, reduction in his annual compensation or benefits,
or relocation of his principal place of employment by more than 50 miles from its location
immediately prior to the Change in Control.

(c) Upon the occurrence of a Change in Control followed by the termination of Executive’s
employment in the manner set forth in Section 5(b), the Bank shall pay Executive, or in the event
of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to 2.99 times the Executive’s “base
amount,” within the meaning of 280G(b)(3) of the Internal Revenue Code of 1986 (“Code”), as
amended. Such payment shall be made in thirty-six equal monthly installments beginning on the first
day of the month following the month in which the Executive is terminated and thereafter payable on
the first day of each month thereafter until paid in full.

 

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(d) Upon the occurrence of a Change in Control followed by the termination of Executive’s
employment in the manner set forth in Section 5(b), the Bank will cause to be continued life,
medical, dental and disability coverage substantially identical to the coverage maintained by the
Bank for Executive prior to his severance for a period of three years from such Date of
Termination; provided, however, that Executive shall no longer be entitled to receive such benefits
if Executive competes with the Bank or the surviving financial institution in the manner prohibited
by Section 11 during such three-year period. In addition, Executive shall be entitled to receive
the value of employer contributions that would have been made on the Executive’s behalf over the
remaining term of the agreement to any tax-qualified retirement plan sponsored by the Bank as of
the Date of Termination.

(e) Upon the occurrence of a Change in Control, the Executive shall be entitled to receive
benefits due to him under, or contributed by the Bank or his behalf, pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other employee benefit plan maintained
by the Bank on the Executive’s behalf to the extent that such benefits are not otherwise paid to
the Executive upon a Change in Control.

(f) Notwithstanding the preceding paragraphs of this Section 5, in the event that the
aggregate payments or benefits to be made or afforded to the Executive under this Section would be
deemed to include an “excess parachute payment” under 280G of the Code, such payments or benefits
shall be payable or provided to Executive in equal monthly installments over the minimum period
necessary to reduce the present value of such payments or benefits to an amount which is one dollar
($1.00) less than three (3) times the Executive’s “base amount” under 280G(b)(3) of the Code.

(g) Upon the occurrence of a Change in Control followed by the termination of Executive’s
employment for any reason other than Cause, the Executive agrees that he will not compete with the
Bank or the surviving financial institution for the longer of (i) the period of time during which
he is receiving benefits pursuant to Section 4(b) or (c); or (ii) the period of time during which
Executive is accepting benefits pursuant to Section 5(d) hereof, in each case in any city or town
in which the Bank operates a branch or main office. For purposes of this paragraph, the term
“compete” shall have the meaning as more fully defined in Section 11, Non-Competition.

6. TERMINATION FOR DISABILITY.

(a) If the Executive shall become disabled as defined in the Bank’s then current disability
plan (or, if no such plan is then in effect, if the Executive is disabled within the meaning of
Section 409(A)(a)(2)(c) of the Code as determined by a physician designated by the Board), the Bank
may terminate Executive’s employment for “Disability.”

(b) Upon the Executive’s termination of employment for Disability, the Bank will pay
Executive, as disability pay, a bi-weekly payment equal to two-thirds (2/3) of Executive’s biweekly
rate of Base Salary on the effective date of such termination. These disability payments shall
commence on the effective date of Executive’s termination and will, end of the earlier of (i) the
date Executive returns to the full-time employment of the Bank in the same capacity as he was
employed prior to his termination for Disability and pursuant to an employment agreement between
Executive and the Bank; (ii) Executive’s full-time employment by another employer;

 

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(iii) Executive attaining the normal expected retirement age or age 65 if the Executive so
elects; or (iv) Executive’s death. The disability pay shall be reduced by the amount, if any, paid
to the Executive under any plan of the Bank providing disability benefits to the Executive.

(c) The Bank will cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Bank for Executive prior to his
termination for Disability. This coverage and payments shall cease upon the earlier of (i) the date
Executive returns to the full-time employment of the Bank, in the same capacity as he was employed
prior to his termination for Disability and pursuant to an employment agreement between Executive
and the Bank; (ii) Executive’s full-time employment by another employer; (iii) Executive’s
attaining normal retirement age or age 65 if the Executive so elects; or (iv) the Executive’s
death.

(d) Notwithstanding the foregoing, there will be no reduction in the compensation otherwise
payable to Executive during any period during which Executive is incapable of performing his duties
hereunder by reason of temporary disability.

(e) Executive agrees that he will not compete with the Bank in any city or town in which the
Bank operates a branch or main office for a period of twelve (12) months following his termination
for “Disability” from his employment by the Bank. For purposes of this paragraph, the term
“compete” shall have the same meaning as more fully defined in Section 11, Non-Competition.

7. TERMINATION UPON RETIREMENT, DEATH OF EXECUTIVE.

Termination by the Bank of Executive based on “Retirement” shall mean termination at age 65 or
such other age determined in accordance with any retirement arrangement established with
Executive’s consent with respect to him. Upon termination of Executive upon Retirement, Executive
shall be entitled to all benefits under any retirement plan of the Bank and other plans to which
Executive is a party. Upon the death of the Executive during the term of this Agreement, the Bank
shall pay to Executive’s estate, within ten (10) days of the end of such month, the compensation
due to the Executive through the last day of the calendar month in which his death occurred.

8. TERMINATION FOR CAUSE.

For purposes of this Agreement, “Termination for Cause” shall mean termination because of the
Executive’s personal dishonesty, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any law, rule, or
regulation which negatively impacts the Bank (other than traffic violations or similar offenses) or
willful violation of any final cease-and-desist order. For purposes of this Section, the term
“willful” is defined to include any act or omission which demonstrates an intentional or reckless
disregard for the duties and responsibilities owed to the business of the Bank by Executive.
Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than three-fourths of the members of the Board at a meeting of the
Board called and held for that purpose, finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying termination for Cause and specifying the reasons

 

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thereof. Notwithstanding such determination, Executive shall have the right to challenge said
termination as per paragraph 10(c) below, and at all times during such proceedings, the burden will
be on the Bank to show grounds for cause termination by clear and convincing proof The Executive
shall not have the right to receive any compensation or other benefits, including those provided
for herein, for any period after the Date of Termination for any Termination for Cause unless the
for cause termination is successfully challenged as per paragraph 10 (c) below. Any stock options
granted to Executive under any stock option plan or any unvested awards granted under any other
stock benefit plan of the Bank, or any subsidiary or affiliate thereof, shall become null and void
effective upon Executive’s receipt of Notice of Termination for Cause pursuant to Section 9 hereof,
and shall not be exercisable by Executive at any time subsequent to such Termination for Cause
unless the for cause termination is successfully challenged as per paragraph 10(c) below.

9. SIX MONTH DELAY OF CERTAIN PAYMENTS.

Notwithstanding any other provision of this Agreement, in the event that the receipt of
amounts payable pursuant to Sections 4, 5, 6 or 10 of this Agreement within six months of the Date
of Termination would cause Executive to incur any penalty under Section 409A of the Code then
payment of such amounts shall be delayed until the date that is six months following Executive’s
Date of Termination (the “Earliest Payment Date”). If this provision becomes applicable, it is
anticipated that payments that would have been made prior to the Earliest Payment Date in the
absence of this provision would be paid as a lump sum on the Earliest Payment Date and the
remaining severance benefits or other payments would be paid according to the schedule otherwise
applicable to the payments.

10. NOTICE.

(a) Any purported termination by the Bank or by Executive shall be communicated by Notice of
Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination”
shall mean a written notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive’s employment under the provision so indicated.

(b) “Date of Termination” shall mean (A) if Executive’s employment is terminated for
Disability, thirty (30) days after a Notice of Termination is given (provided that he shall not
have returned to the performance of his duties on a full-time basis during such thirty (30) day
period); and (B) if his employment is terminated for any other reason, the date specified in the
Notice of Termination.

(c) The Executive and the Bank shall resolve any claim, controversy or dispute arising out of
or in connection with this Agreement, or relating to or arising out of Executive’s employment with
the Bank, by compulsory, binding arbitration in Knoxville, Tennessee. Any such arbitration shall be
conducted according to the Commercial Arbitration Rules of the AAA. Either party hereto may demand
arbitration and such arbitration shall take place within ninety (90) days of such demand unless the
parties otherwise agree. Notwithstanding the provisions of this Section 10(c), the Bank may seek
and obtain appropriate restraining orders and temporary or permanent injunctions in a court proceeding without engaging in arbitration with respect to
any alleged violation of the covenants contained in Section 11.

 

6

 

(d) In any dispute which is finally resolved through arbitration, the prevailing party (as
defined below) shall be entitled to reimbursement for all reasonable attorneys’ fees, witness
expenses and all fees and expenses of the arbitrators. The “prevailing party” shall be determined
by the arbitrator.

(e) Any payments under this Agreement which are delayed due to a dispute hereunder must be
paid to the Executive (if so determined to be due and owing to the Executive as provided above)
during the first calendar year in which the Executive and the Bank enter into a legally binding
settlement of such dispute, the Bank concedes that such disputed amount is payable to the Executive
or the Bank is required to make such payment as a result of any determination of an arbitrator in
any binding arbitration required by Section 10(c) hereof.

11. NON-COMPETITION.

Upon any termination of Executive’s employment hereunder pursuant to an Event of Termination
as provided in Section 4 hereof, Executive agrees not to compete with the Bank for a period of
twelve months following such Date of Termination in any city or town in which the Bank operates a
branch or main office, determined as of the Date of Termination. Executive agrees that during such
period and within such cities or towns, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose business materially competes with
the depository, lending or other business activities of the Bank. The parties hereto, recognizing
that irreparable injury will result to the Bank, its business and property in the event of
Executive’s breach of this Section 11, agree that, notwithstanding anything to the contrary in this
Agreement, in the event of any such breach by Executive, the Bank will be entitled, in addition to
any other remedies and damages available, to an injunction to restrain the violation hereof by
Executive, Executive’s partners, agents, servants, employers, employees and all persons acting for
or with Executive. Executive represents and admits that in the event of termination of his
employment pursuant to Section 8 hereof, Executive’s experience and capabilities are such that
Executive can obtain employment in a business engaged in other lines and/or of a different nature
than the Bank, and that the enforcement of a remedy by way of injunction will not prevent Executive
from earning a livelihood. Nothing herein will be construed as prohibiting the Bank from pursuing
any other remedies available to the Bank for such breach or threatened breach, including the
recovery of damages from Executive.

12. SOURCE OF PAYMENTS.

All payments provided in this Agreement shall be timely paid in cash or check from the general
funds of the Bank.

13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

This Agreement contains the entire understanding between the parties hereto and supercedes any
prior employment agreement between the Bank or any predecessor of the Bank and Executive, except
that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to
the Executive of a kind elsewhere provided including but not limited to

 

7

 

stock options, the benefits set forth in the Amended And Restated Executive Salary
Continuation Agreement dated 1/19/07 and the benefits set forth in the Life Insurance Endorsement
Method Split Dollar Plan Agreement. No provision of this Agreement shall be interpreted to mean
that Executive is subject to receiving fewer benefits than those available to him without reference
to this Agreement,

14. NO ATTACHMENT; SUCCESSORS AND ASSIGNS.

(a) Except as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and
of no effect.

(b) This Agreement shall be binding upon, and inure to the benefit of, Executive and the Bank
and their respective successors, heirs, executors and assigns.

15. MODIFICATION AND WAIVER.

(a) This Agreement may not be modified or amended except by an instrument in writing signed by
the parties hereto.

(b) No term or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate
only as to the specific term or condition waived and shall not constitute a waiver of such term or
condition for the future as to any act other than that specifically waived.

16. SEVERABILITY.

If, for any reason, any provision of this Agreement, or any part of any provision, is held
invalid, such invalidity shall not affect any other provision of this Agreement or any part of such
provision not held so invalid, and each such other provision and part thereof shall to the full
extent consistent with the law continue in full force and effect.

17. HEADINGS FOR REFERENCE ONLY.

The headings of sections and paragraphs herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the provisions of this
Agreement.

18. GOVERNING LAW.

This Agreement shall be governed by the substantive laws and procedural provisions of the
State of Tennessee, unless otherwise specified herein; provided, however, that in the event of a
conflict between the terms of this Agreement and any applicable federal or state law or regulation,
the provisions of such law or regulation shall prevail.

 

8

 

19. PAYMENT OF LEGAL FEES.

All reasonable legal fees paid or incurred by the Bank or the Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid or reimbursed by the
prevailing party in such judgment, arbitration or settlement.

20. INDEMNIFICATION.

The Bank shall provide Executive with coverage under a standard directors’ and officers’
liability insurance policy at its expense, or in lieu thereof shall indemnify Executive to the
fullest extent permitted under applicable Tennessee and federal law and the Bank’s Articles of
Association against all expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by reason of his having
been a director or officer of the Bank (whether or not he continues to be a director or officer at
the time of incurring such expenses or liabilities), such expenses and liabilities to include, but
to be limited to, judgment, court costs and attorneys’ fees and the cost of reasonable settlements.

21. SUCCESSOR TO THE BANK.

The Bank shall require any successor or assignee, whether direct or indirect, by purchase,
merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank,
expressly and unconditionally to assume and agree to perform the Bank’s obligations under this
Agreement, in the same manner and to the same extent that the Bank would be required to perform if
no such succession or assignment had taken place.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and their
seal to be affixed hereunto by a duly authorized officer or director, and Executive has signed this
Agreement, all on the 8th day of October, 2009.

	 	 	 	 	 
	ATTEST:	 	MOUNTAIN NATIONAL BANCSHARES, INC.
	 
	 	 	 	 
	/s/ Beverly J. Brosch	 	MOUNTAIN NATIONAL BANK
	 

          (SEAL)

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Charlie R. Johnson
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Name: Charlie R. Johnson
	 
	 	 	 	 
	WITNESS:	 	Title: Chairman of the Board of Directors

	 	 	 	 	 
	/s/ Michelle Burroughs

	 	EXECUTIVE:
	 	/s/ Dwight B. Grizzell
	 

	 	 	 	 

 

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