UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

______________________


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 21, 2014


 
PINNACLE FINANCIAL PARTNERS, INC.
(Exact name of registrant as specified in charter)
 
Tennessee
 
000-31225
 
62-1812853
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
 Identification No.)
 
 
150 Third Avenue South, Suite 900, Nashville, Tennessee
 
 
37201
(Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code:   (615) 744-3700

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

¨      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e) Performance Unit Awards . On January 22, 2014, the Human Resources and Compensation Committee (the "Committee") of the Board of Directors of Pinnacle Financial Partners, Inc. (the "Company") adopted and approved the form of Named Executive Officer 2014 Performance Unit Award Agreement (the "PSU Award Agreement"), which governs grants of Performance Units ("Performance Units") for those employees that are expected to be identified as the Company's "Named Executive Officers" in the Company's proxy statement for its 2014 annual meeting of shareholders (the "Named Executive Officers").

Pursuant to the terms of the PSU Award Agreements, the Committee granted the Named Executive Officers Performance Units that will be settled in shares of the Company's common stock, par value $1.00 per share (the "Common Stock"), based on the Company achieving performance goals for each of the fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016 (each such fiscal year is referred to herein as a "Performance Period").  With respect to each Performance Period, the number of shares of Common Stock that a Named Executive Officer will be entitled to receive, if any, will be determined based on the Company's audited fully diluted net income per share of Common Stock ("FDEPS") for the relevant Performance Period (exclusive of  the impact of items described in more detail in the PSU Award Agreement).

The target and maximum number of shares that each Named Executive Officer will be entitled to receive pursuant to the PSU Award Agreement in each Performance Period are as follows:
 
Employee
  
Target Number of Shares That May Be Earned for Each Performance Period
 
Maximum Number of Shares That May Be Earned for Each Performance Period
M. Terry Turner
  
7,314
 
12,802
Robert A. McCabe, Jr.
  
6,937
 
12,145
Hugh M. Queener
  
1,739
 
3,043
Harold R. Carpenter
  
1,739
 
3,043
Harvey White
  
1,739
 
3,043

All Performance Units to be settled in shares of Common Stock will be settled, as soon as practicable, following the filing of the Company's Annual Report on Form 10-K for the applicable Performance Period, but in no event later than March 15 of the year following the applicable Performance Period. All shares of Common Stock issued to the Named Executive Officers, if any, upon settlement of the Performance Units will be subject to forfeiture restrictions that shall lapse in equal 50% increments (based on the aggregate number of shares of Common Stock issued in settlement of the Performance Units for all Performance Periods) on February 28, 2018 and February 28, 2019 (each a "Vesting Date"); provided, that such Named Executive Officer is employed by the Company on the Vesting Date (unless the Named Executive Officer's failure to be employed is the result of death or disability in which case the forfeiture restrictions will lapse upon the employee's termination resulting therefrom) and the ratio of the Company's non-performing assets to total assets (the "NPA Ratio") in each case as of December 31 of the fiscal year ending immediately prior to each Vesting Date is less than the targeted  NPA Ratio described in the PSU Award Agreement. In the event that the Named Executive Officer's employment terminates by reason of retirement, the Named Executive Officer shall be entitled to receive the number of Performance Units that would have been earned by the Named Executive Officer for the Performance Period in which the retirement occurred, with such Performance Units settling into shares of Common Stock that will be subject to the same forfeiture restrictions related to the NPA Ratio as such shares would have been subject had the Named Executive Officer's employment continued.

Any shares of Common Stock for which the performance targets identified above are not met will be immediately forfeited and the award recipient will have no further rights with respect to such shares of Common Stock (including any dividends attributable thereto); provided, however, that if the Committee determines that an event has occurred during any Performance Period which is outside the ordinary course and has impacted the NPA Ratio for such fiscal year, the Committee will have the right, in its sole and absolute discretion, to increase or decrease the vesting targets to reflect such event for purposes of determining whether the forfeiture restrictions with respect to such shares shall lapse for that fiscal year and for any or all future fiscal years.

No Named Executive Officer shall have voting rights with respect to the Performance Units prior to such units' settlement, if any, into shares of Common Stock.  Certificates representing shares of Common Stock issued in settlement of the Performance Units will be issued to the Named Executive Officers but shall be held by the Company as custodian until the restrictions on such shares lapse.  The Company shall take such action as is necessary to enable the Named Executive Officers to vote any such shares held by the Company as custodian until the restrictions on such shares lapse.  The Performance Units and shares of Common Stock issuable upon settlement of the Performance Units may not be assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of, in each case, prior to the date the forfeiture restrictions with respect to such shares have lapsed, if at all, on any Vesting Date.

Any dividends paid by the Company on shares of Common Stock while the Performance Units remain outstanding or while any shares of Common Stock issued upon settlement of the Performance Units remain subject to forfeiture, shall accrue for the benefit of the Named Executive Officer (and in the case of shares of restricted stock shall be paid into escrow for the benefit of the Named Executive Officer) but shall not be paid to such Named Executive Officer until such time as the restrictions on any shares of Common Stock issuable on settlement of the Performance Share Units shall lapse (and then only to the extent that the dividends are attributable to such shares).

In the event that a Change in Control (as defined in the PSU Award Agreement) occurs prior to the end of any Performance Period, the Compensation Committee shall determine, based on the Company's performance for any Performance Periods prior to such Change in Control, the number of Performance Units that would be expected to be earned by the Named Executive Officer for the remainder of the Performance Periods and the Named Executive Officer will be vested in the greater of such number of Performance Units and the number of Performance Units that the Named Executive Officer would earn based on "target" level of performance. Such Performance Units shall be settled in a like number of shares of Common Stock that shall not be subject to any further forfeiture restrictions.

The foregoing summary of the PSU Award Agreement is qualified in its entirety by reference to the form of PSU Award Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
2014 Cash Incentive Plan . On January 21, 2014, the Committee approved the Pinnacle Financial Partners, Inc. 2014 Annual Cash Incentive Plan (the "Plan"). Pursuant to the Plan, all employees of the Company compensated via a predetermined salary or hourly wage, including the Named Executive Officers, are eligible to receive cash incentive payments ranging from 10 percent to 125 percent of the participant's base salary in the event that Pinnacle Bank's ratio of classified assets to the sum of Pinnacle Bank's tier 1 risk-based capital and its allowance for loan losses (the "Classified Asset Ratio") is not more than a predetermined ratio and (i) the Company meets or exceeds (A) targeted levels of FDEPS and (B) targeted levels of total revenue, expressed as the sum of the Company's net interest income plus noninterest income excluding gains (or losses) on the sale of investment securities (or any other unusual items as determined by the Committee), and (ii) in certain cases, the employee meets certain individual performance objectives. Each participant will be assigned an "award tier" based on their position within the Company, their experience level or other factors. Participant awards may be increased or decreased by the participant's performance evaluation for 2014 such that the participant's target award may be adjusted up or down based on their final performance rating.
The foregoing summary is qualified in its entirety by reference to the Plan, a copy of which is filed herewith as Exhibit 10.2 and is incorporated herein by reference.

Item 9.01                            Financial Statements and Exhibits.

(d)              Exhibits

10.1              Form of Named Executive Officers 2014 Performance Unit Award Agreement

10.2              Pinnacle Financial Partners, Inc. 2014 Annual Cash Incentive Plan






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PINNACLE FINANCIAL PARTNERS, INC.
 
 
By:
/s/Harold R. Carpenter
 
Name:
Harold R. Carpenter
 
Title:
Executive Vice President and Chief Financial Officer




Date:              January 24, 2014





EXHIBIT INDEX

Exhibit No.
 
Description
 
 
10.1
Form of Named Executive Officers 2014 Performance Unit Award Agreement
10.2
Pinnacle Financial Partners, Inc. 2014 Annual Cash Incentive Plan



PINNACLE FINANCIAL PARTNERS, INC.

NAMED EXECUTIVE OFFICERS
2014 PERFORMANCE UNIT AWARD AGREEMENT

THIS PERFORMANCE UNIT AWARD AGREEMENT (the "Agreement") is by and between Pinnacle Financial Partners, Inc., a Tennessee corporation (the "Company"), and ___________ (the "Grantee").  Capitalized terms used but not defined in this Agreement shall have the meaning ascribed to such terms in the Pinnacle Financial Partners, Inc. 2004 Amended and Restated Equity Incentive Plan, as amended (the "Plan").

Section 1.  Performance Unit Award .

(a) Grant of Performance Units .  The Company hereby grants to the Grantee, subject to the terms and conditions set forth in this Agreement and in the Plan, [     ] Performance Units (the "Target Amount of Performance Units") (subject to adjustment under Section 4.2 of the Plan) which may be earned by the Grantee in the event that the Company's audited fully diluted earnings per share ("FDEPS") for each of the fiscal years ended December 31, 2014, December 31, 2015 and December 31, 2016 (each such fiscal year a "Performance Period" and collectively, the "Performance Periods") exceed those levels set forth in the Performance Measures attached hereto as Exhibit A ; provided that to the extent that the Grantee vests in greater than one hundred percent (100%) of the Target Amount of Performance Units (as provided for in this Section 1(a) and Exhibit A ), additional Performance Units will be issued to the Grantee hereunder.  For purposes of clarity and for the avoidance of doubt, the actual number of Performance Units earned by the Grantee pursuant to this Agreement may be a higher or lower number of Performance Units than the Target Amount of Performance Units.   Subject to adjustment under Section 4.2 of the Plan and as provided for in Section 5 of this Agreement, the maximum number of Performance Units that the Grantee may earn under this Agreement shall be [    ] (the "Maximum Amount of Performance Units"). Pursuant to terms of Section 1(b) of this Agreement, the Company shall issue to the Grantee one share of the Company's common stock, $1.00 par value per share (the "Common Stock") for each Performance Unit that is earned by the Grantee pursuant to the terms of this Agreement.  Each share of Common Stock issued to the Grantee in settlement of a Performance Unit (the "Restricted Stock") shall be subject to the further restrictions set forth in this Agreement, including Section 1(c) of this Agreement.

(b)
Settlement of Performance Units .  Subject to the Compensation Committee's certification of the Company's FDEPS for a Performance Period, as soon as practicable following the filing of the Company's Annual Report on Form 10-K for each Performance Period with the Securities and Exchange Commission on a date selected by the Company, but in no event later than March 15 th of the year following the Performance Period, and subject to the requirements of Section 12 hereof, the Company shall issue, or cause the Company's stock transfer agent to issue, in the name of the Grantee, a stock certificate representing the number of shares of Restricted Stock into which the Performance Units (and any additional Performance Units issued pursuant to Section 5 of this Agreement) are to be settled for such Performance Period in accordance with Section 1(a) of this Agreement and the Performance Measures attached hereto as Exhibit A . Until shares of the Restricted Stock are delivered to the Grantee in settlement of the Performance Units (and any additional Performance Units issued pursuant to Section 5 of this Agreement), the Grantee shall have none of the rights of a stockholder of the Company with respect to such shares of the Restricted Stock issuable in settlement of the Performance Units (and the additional Performance Units, if any), including the right to vote such shares, other than as set forth herein with respect to distributions and dividends. The Grantee's rights with respect to distributions and dividends are set forth in Section 5 of this Agreement.

(c) Lapse of Restrictions on Restricted Stock .  Subject to Sections 5 and 8 hereof, the shares of the Restricted Stock issued to the Grantee in settlement of the Performance Units earned by the Grantee pursuant to Section 1(a) of this Agreement and the Performance Measures attached hereto as Exhibit A (and any additional Performance Units issued pursuant to Section 5 of this Agreement) shall be restricted and subject to forfeiture until such restrictions lapse as provided for in this Section 1(c) . The restrictions associated with 50% of the aggregate number of shares of the Restricted Stock issued pursuant to Section 1(b) of this Agreement shall lapse on each of February 28, 2018 and February 28, 2019 (each a "Vesting Date"),  provided (i) the Grantee is employed by the Company or any Subsidiary or Affiliate of the Company on the Vesting Date and (ii) the ratio of Pinnacle Bank's non-performing assets to its total assets as described on Exhibit A (the "NPA Ratio") is not more than ­­[     ] in each case as of December 31 of the fiscal year ending immediately prior to each Vesting Date.  Any shares of the Restricted Stock for which the performance targets identified in this Section 1(c) are not met shall be forfeited immediately following the applicable Vesting Date and the Grantee shall have no further rights with respect to such shares of the Restricted Stock.

Section 2.  Compensation Committee Discretionary Authority .  In the event that the Compensation Committee determines that an event has occurred during any fiscal year after fiscal 2013 which is outside the ordinary course and has impacted the Company's NPA Ratio for such fiscal year, the Compensation Committee shall have the right, in its sole and absolute discretion, to increase or decrease the vesting targets to reflect such event for purposes of calculating the vesting of shares of Restricted Stock under Section 1(c) hereof for such fiscal year and for any or all future fiscal years.

Section 3.  Distribution of Unrestricted Shares .  Subject to the Compensation Committee's certification of the Company's NPA Ratio as of December 31, 2017 and December 31, 2018, certificates representing shares of the Restricted Stock for which the forfeiture restrictions shall have lapsed under Section 1(c) of this Agreement will be distributed to the Grantee as soon as practicable after each Vesting Date on a date selected by the Company but in no event later than March 15 th of the year following the year in which the Vesting Date occurs.

Section 4.  Voting Rights .  Certificates representing shares of the Restricted Stock will not be issued prior to the issuance of the shares of the Restricted Stock into which the Performance Units (and any additional Performance Units issued pursuant to Section 5 of this Agreement) shall be settled pursuant to Section 1(b) hereof, and Grantee will have no voting rights with respect to the Performance Units (and any additional Performance Units issued pursuant to Section 5 of this Agreement) or such shares of the Restricted Stock prior to such date.  Prior to the distribution of unrestricted shares pursuant to Section 3 , certificates representing shares of the Restricted Stock issued pursuant to this Agreement will be held by the Company (the "Custodian") in the name of the Grantee.  The Custodian will take such action as is necessary and appropriate to enable the Grantee to vote shares of the Restricted Stock (but not the Performance Units) from and after the issuance thereof and prior to the distribution of unrestricted shares pursuant to Section 3 of this Agreement.

Section 5.  Dividend Equivalents and Dividends .

(a) Crediting of Dividend Equivalents on Performance Units . Subject to this Section 5 , dividend equivalents shall be credited on the Grantee's Performance Units (other than Performance Units that, at the relevant record date, previously have been settled or forfeited) as follows:

(i) Cash Dividends . If the Company declares and pays a dividend or distribution on shares of the Company's Common Stock in the form of cash, then the Grantee shall be credited with an amount equal to (A) the amount of such dividend on each outstanding share of Common Stock, multiplied by (B) the Maximum Amount of Performance Units that may still vest under this Agreement as of the record date for such dividend or distribution.

(ii) Non-Share Dividends . If the Company declares and pays a dividend or distribution on shares of the Company's Common Stock in the form of property other than shares, then a number of additional Performance Units shall be credited to the Grantee as of the payment date for such dividend or distribution equal to (A) the Maximum Amount of Performance Units that may still vest under this Agreement as of the record date for such dividend or distribution multiplied by (B) the fair market value (as determined by the Compensation Committee) of such property actually paid as a dividend or distribution on each outstanding share of Common Stock at such payment date, divided by (C) the Fair Market Value of a share of the Company's Common Stock at such payment date.

(iii) Common Stock Dividends and Splits . If the Company declares and pays a dividend or distribution on shares of the Company's Common Stock in the form of additional shares of Common Stock, or there occurs a forward split of the Company's Common Stock, then a number of additional Performance Units shall be credited to the Grantee as of the payment date for such dividend or distribution or forward split equal to (A) the Maximum Amount of Performance Units that may still vest under this Agreement as of the record date for such dividend or distribution, multiplied by (B) the number of additional shares actually paid as a dividend or distribution or issued in such split in respect of each outstanding share of Common Stock.

(b) Adjustment of Dividend Equivalents on Performance Units . If any Performance Unit granted under this Agreement is not earned (or is otherwise forfeited) for any reason, including as a result of the failure of the Company to achieve FDEPS for any Performance Period at or above any minimum or threshold level required pursuant to the Performance Measures attached hereto as Exhibit A , any dividend or distribution previously credited with respect to such Performance Unit, whether in the form of cash or additional Performance Units, shall be forfeited on the date on which the underlying Performance Units are forfeited.

(c) Payment of Dividend Equivalents on Performance Units . Any cash credited to the Grantee under Section 5(a) of this Agreement prior to the vesting of the Performance Units on which such cash is credited shall be accrued (without interest and earnings) rather than paid to the Grantee when such dividend or distribution is paid.  At the time a Performance Unit is settled into shares of the Restricted Stock pursuant to Section 1(b) of this Agreement, the Company shall pay any amounts accrued in respect of dividends or distributions on those Performance Units as shall have been so settled to the Custodian who shall hold such amounts in escrow for payment to the Grantee in the event that, and in such percentage as, the forfeiture restrictions with respect to the shares of the Restricted Stock issued in settlement of such Performance Units shall lapse in accordance with Section 1(c) of this Agreement. In the event that the forfeiture restrictions applicable to any of the shares of the Restricted Stock pursuant to Section 1(c) of this Agreement do not lapse, any cash previously credited pursuant to Section 5(a) of this Agreement in respect of such shares of the Restricted Stock or Performance Units from which such shares of the Restricted Stock were settled shall be forfeited by the Grantee. Any additional Performance Units credited to the Grantee pursuant to Section 5(a)(ii) or (iii) of this Agreement shall vest and, thereafter be settled in a like number of shares of the Restricted Stock, only if the performance measures applicable to the Performance Units on which such additional Performance Units were payable are achieved.  Any shares of the Restricted Stock issued in settlement of such additional Performance Units shall be subject to the forfeiture restrictions set forth in Section 1(c) of this Agreement and shall be held by the Custodian until such time as unrestricted shares shall be distributed to the Grantee pursuant to Section 3 of this Agreement. In the event that the forfeiture restrictions applicable to any of the shares of the Restricted Stock pursuant to Section 1(c) of this Agreement do not lapse, any shares of the Restricted Stock issued in settlement of any additional Performance Units issued pursuant to Section 5(a)(ii) or (iii) of this Agreement shall be forfeited by the Grantee.

(d)   Payment of Dividends on Shares of Restricted Stock .  All dividends (whether paid in cash, shares of Common Stock or other property) paid by the Company following the date that shares of the Restricted Stock are issued in settlement of the Performance Units (and any additional Performance Units issued pursuant to Section 5 of this Agreement) pursuant to Section 1(c) of this Agreement shall be paid to the Custodian to be held in escrow for the benefit of the Grantee, and shall not be remitted to the Grantee until such time as the forfeiture restrictions with respect to the shares of the Restricted Stock on which such dividends were paid lapse in accordance with Section 1(c) of this Agreement.  Stock dividends issued with respect to the shares of the Restricted Stock issued in settlement of the Performance Units shall be treated as additional shares of the Restricted Stock that are subject to the same restrictions and other terms and conditions that apply to the shares of Restricted Stock on which such dividends were paid.  Notwithstanding the foregoing, no dividend rights shall inure to the Grantee following the forfeiture of the Restricted Stock pursuant to Section 1(c) of this Agreement and any dividends or other distributions previously paid on shares of the Restricted Stock for which the forfeiture restrictions did not lapse or Performance Units which were settled into such shares of the Restricted Stock shall be forfeited by the Grantee and promptly remitted to the Company by the Custodian.

Section 6.  Termination/Change of Status .

(a) Termination Other Than for Death, Disability or Retirement .  In the event that the Grantee's employment by the Company (or any Subsidiary or Affiliate of the Company) terminates for any reason, other than death, Disability or Retirement, all Performance Units for which the Performance Measures set forth in Exhibit A have not been achieved and all shares of the Restricted Stock issued in settlement of any Performance Units for which the forfeiture restrictions have not lapsed prior to the date of termination shall be immediately forfeited and the Grantee shall have no further rights with respect to such Performance Units or shares of the Restricted Stock.

(b) Termination for Death or Disability . In the event that the Grantee's employment terminates by reason of death or Disability (i) all the shares of the Restricted Stock the Grantee had been issued in settlement of Performance Units (including those shares being held by the Custodian), or that were then issuable with respect to a completed Performance Period, shall as of the date of the Grantee's death or the date that the Company determines that the Grantee is disabled, as applicable, be deemed vested and the restrictions under the Plan and this Agreement with respect to such shares of the Restricted Stock, including the restriction on transferability set forth in Section 6 of this Agreement, shall automatically expire, and shall be of no further force or effect; and (ii) the Grantee shall as of the date of the Grantee's death or the date that the Company determines that the Grantee is disabled, as applicable, vest in the number of Performance Units granted under this Agreement for which the Performance Period was not completed as of such date as the Compensation Committee determines, based on the Company's actual performance in respect of the performance goals related to the Performance Units for the period from the date of this Agreement through the date the Grantee dies or the Company determines that the Grantee has become disabled, as applicable, would be expected to vest for those Performance Periods that are not yet completed, or if such number of Performance Units is not then determinable, in the Target Amount of Performance Units, and such Performance Units, and any shares of the Restricted Stock issuable in settlement thereof, shall be deemed vested and the restrictions under the Plan and this Agreement with respect to such Performance Units, and shares of the Restricted Stock, including the restriction on transferability set forth in Section 6 of this Agreement shall expire and be of no further force or effect.

(c) Termination for Retirement .  In the event that the Grantee's employment by the Company (or any Subsidiary or Affiliate of the Company) terminates by reason of Retirement, the forfeiture restrictions on a pro rata portion of the Performance Units that would have vested for the Performance Period in which the Grantee's Retirement occurred but for the fact that the Grantee was not employed for the entire Performance Period shall lapse as of the date that such Performance Units would have been settled pursuant to Section 1(b) of this Agreement if the Grantee's employment had not terminated by reason of Retirement and such Performance Units shall be deemed vested in an amount equal to the product of (i) the number of  Performance Units granted under this Agreement for the Performance Period in which the Grantee's employment terminates by reason of Retirement that would have vested based on the Company's actual performance for the Performance Period and (ii) the quotient, expressed as a percentage, resulting from dividing (A) the number of days that have lapsed as of the Grantee's date of Retirement from the first day of the applicable Performance Period and (B) 365.  Shares of the Restricted Stock shall be issued to the Custodian for the benefit of the Grantee in settlement of the Performance Units that are vested pursuant to this Section 6(c) in accordance with the terms of Section 1(b) of this Agreement, and such shares shall remain subject to the forfeiture restrictions set forth in Section 1(c) of this Agreement and such other restrictions, including the restriction on transferability set forth in Section 6 of this Agreement, applicable to shares of the Restricted Stock issued hereunder.  Any shares of the Restricted Stock issued to the Grantee prior to the termination of his employment by reason of Retirement, or otherwise issued to the Grantee in settlement of the Performance Units as provided for in this Section 6(c) , shall not be (except as provided in the following sentence) forfeited by the Grantee upon his Retirement, but shall remain issued in the name of the Grantee (and held by the Custodian for the benefit of the Grantee) and shall be released to the Grantee as uncertificated shares in accordance with Section 3 of this Agreement in the event that the NPA Ratios do not exceed [     ] as of the Vesting Dates. In the event that the NPA Ratio as of December 31, 2017 or the NPA Ratio as of December 31, 2018 exceed [    ] the Grantee shall forfeit 50% or 100%, as applicable, of the shares of the Restricted Stock issued pursuant to this Section 6(c) . In the event that the Grantee dies following the termination of his employment for Retirement but before shares of the Restricted Stock are released to the Grantee in accordance with Sections 1(c) and 3 of this Agreement, all such shares shall, as of the date of the Grantee's death, be deemed vested and the restrictions under the Plan and this Agreement with respect to such shares, including the restriction on transferability set forth in Section 6 of this Agreement, shall expire and be of no further force or effect.

Section 7.  No Transfer or Pledge of Restricted Stock .  The Performance Units issued hereunder may not be assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of.  No shares of the Restricted Stock issued pursuant to Sections 1(c) or 5 hereof may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of prior to the date the forfeiture restrictions with respect to such shares have lapsed, if at all, on any Vesting Date.

Section 8.  Withholding of Taxes .   If the Grantee makes an election under section 83(b) of the Code with respect to the shares of Restricted Stock issued pursuant to Section 1(c) hereof, the issuance of such shares shall be conditioned upon the Grantee making prompt payment to the Company of any applicable withholding obligations or withholding taxes by the Grantee ("Withholding Taxes").  Failure by the Grantee to pay such Withholding Taxes will render this Agreement and the shares of the Restricted Stock issued pursuant to Section 1(c) hereof null and void ab initio and the shares of the Restricted Stock granted hereunder will be immediately cancelled.  If the Grantee does not make an election under section 83(b) of the Code with respect to the shares of Restricted Stock issued pursuant to Section 1(c) hereof, upon a Vesting Date with respect to any portion of such shares (or property distributed with respect thereto), the Company shall cancel such shares of the Restricted Stock (or withhold property) having an aggregate Fair Market Value, on the date next preceding the Vesting Date, in an amount required to satisfy the required Withholding Taxes as set forth by Internal Revenue Service guidelines for the employer's minimum statutory withholding with respect to the Grantee.  The Company shall deduct from any distribution of cash (whether or not related to the Award including, without limitation, salary payments) to the Grantee an amount as shall be reasonably required to satisfy the required Withholding Taxes as set forth by Internal Revenue Service guidelines for the employer's minimum statutory withholding with respect to the Grantee pertaining to cash payments under the Award (including any cash dividends made in respect of Performance Units or shares of the Restricted Stock subject to the Award).

Section 9.  Change in Control .  Upon the occurrence of a Change in Control (as defined in the Plan) prior to the vesting of a portion of the Performance Units awarded hereunder, the Compensation Committee, prior to consummation of such Change in Control, shall determine, based on the Company's actual performance in respect of the performance goals related to the Performance Units for the period from the date of this Agreement through the date the Compensation Committee makes such determination, the number of Performance Units that would be expected to vest for the Performance Periods that are not yet completed at such time as the Committee makes its determination and the Grantee shall vest in the greater of (i) such number of Performance Units as the Compensation Committee shall determine and (ii) the Target Amount of Performance Units for such Performance Periods as are not then completed.  The Grantee shall be issued the shares to which he would be entitled under Section 1(c) hereof in respect of the Performance Units that are vested in accordance with this Section 9 , and such shares shall not be subject to forfeiture as provided for in Section 1(c) hereof or subject to any other restrictions under the Plan or this Agreement, including the restriction on transferability set forth in Section 6 hereof.  Upon the occurrence of a Change in Control (as defined in the Plan) all of the shares of the Restricted Stock issued pursuant to Section 1(c) hereof prior to such Change in Control shall be deemed vested and the restrictions under the Plan and the Agreement with respect to such shares of the Restricted Stock, including the restriction on transferability set forth in Section 6 hereof, shall automatically expire and shall be of no further force or effect.

Section 10.  Stock Subject to Award .  In the event that the shares of Common Stock of the Company should, as a result of a stock split or stock dividend or combination of shares or any other change, redesignation, merger, consolidation, recapitalization or otherwise, be increased or decreased or changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation, the number of shares of the Restricted Stock issued to Grantee pursuant to Section 1(c) hereof shall be equitably and proportionately adjusted to reflect such action.  If any such adjustment shall result in a fractional share, such fraction shall be disregarded.

Section 11.  Stock Power .  Concurrently with the execution of this Agreement, the Grantee shall deliver to the Company a stock power, endorsed in blank, relating to the shares of the Restricted Stock that may be issued to the Grantee pursuant to Section 1(c) hereof.  Such stock power shall be in the form attached hereto as Exhibit B .

Section 12.  Legend .  Each certificate representing shares of the Restricted Stock shall bear a legend in substantially the following form:

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

Section 13.  No Right to Continued Employment .  This Agreement shall not be construed as giving the Grantee the right to be retained in the employ of the Company (or any Subsidiary or Affiliate of the Company), and the Company (or any Subsidiary or Affiliate of the Company) may at any time dismiss the Grantee from employment, free from any liability or any claim under the Plan or this Agreement.

Section 14.  Modification to Earlier Awards.   By the acceptance of the benefits of this Agreement, the Grantee and the Company agree that the provisions of any other agreement that the Grantee and the Company have previously entered into providing for the award of restricted stock or restricted stock units to the Grantee are hereby amended and modified to provide (i) that any cash or stock dividends paid to the Grantee prior to the date of this Agreement pursuant to the terms of any such agreements with respect to shares of restricted stock for which the forfeiture restrictions had not yet lapsed at the time that the dividend was paid, or if not yet paid, declared, and did not subsequently lapse prior to the forfeiture of any portion of such award will be recouped, recovered and recaptured by the Company; (ii) that the Company shall be entitled to set off (out of amounts otherwise payable or paid to the Grantee by the Company or any Subsidiary or Affiliate thereof) or otherwise require the Grantee to repay to the Company the amount of any such dividends; and (iii) that any cash or stock dividends paid to the Grantee subsequent to the date of this Agreement pursuant to the terms of any such agreements with respect to shares of restricted stock for which the forfeiture restrictions have not yet lapsed at the time that the dividend is paid and did not subsequently lapse prior to the forfeiture of any portion of such award shall be held in an escrow account (which may be established at Pinnacle Bank), to be released to the Grantee if and when the forfeiture restrictions on the underlying shares of restricted stock lapse.

Section 15.  Governing Provisions .  This Agreement is made under and subject to the provisions of the Plan, and all of the provisions of the Plan are also provisions of this Agreement.  If there is a difference or conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan will govern.  By signing this Agreement, the Grantee confirms that he or she has received a copy of the Plan.

Section 16.  Section 409A .  Notwithstanding anything herein to the contrary, to the maximum extent permitted by applicable law, the compensation to be paid to the Grantee pursuant to this Agreement is intended to qualify as a "short-term deferral" pursuant to Section 1.409A-1(b)(4) of the Regulations or to otherwise be exempt from the scope of "deferred compensation" under Section 409A of the Code as restricted property governed by Section 83 of the Code, and this Agreement shall be interpreted consistently therewith.  However, to the extent the payment of any compensation hereunder in connection with the Grantee's termination of employment does not qualify for an exception from treatment as "deferred compensation" subject to Section 409A of the Code, then (a) such amount shall not be payable unless the Grantee's termination of employment constitutes a "separation from service" within the meaning of Section 1.409A-1(h) of the Regulations and (b) if the Grantee is a "specified employee" at such time for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed payment of any portion of the Performance Units or shares of the Restricted Stock to which the Grantee is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Performance Units or shares of the Restricted Stock shall not be paid to Grantee prior to the earlier of (x) the expiration of the six-month period measured from the date of the Grantee's "separation from service" with the Company or (y) the date of the Grantee's death.  Upon the earlier of such dates, settlement of all Performance Units or shares of the Restricted Stock shall occur as otherwise provided in this Agreement.  In the event compensation payable pursuant to this Agreement is otherwise determined to constitute "deferred compensation" within the meaning of Section 409A of the Code, this Agreement shall be interpreted and administered consistently with the terms thereof.

Section 17.  Miscellaneous .

17.1  Entire Agreement .  This Agreement and the Plan contain the entire understanding and agreement between the Company and the Grantee concerning the Performance Unit and the shares of the Restricted Stock that may be issued pursuant to this Agreement, and supersede any prior or contemporaneous negotiations and understandings.  The Company and the Grantee have made no promises, agreements, conditions or understandings relating to the Performance Units or the shares of the Restricted Stock that may be issued pursuant to this Agreement, either orally or in writing, that are not included in this Agreement or the Plan.

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

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

17.4  Compliance With Laws and Regulations .  The award of Performance Units (and, if issued in settlement of Performance Units, shares of the Restricted Stock) evidenced hereby shall be subject to all applicable federal and state laws, rules, and regulations, and to such approvals by any governmental or regulatory agency as may be required.

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

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

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

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


[Signature page to follow.]


IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement to be effective as of ________ __, 2014.

PINNACLE FINANCIAL PARTNERS, INC.:

 
By:
/s/ Hugh M. Queener
 
 
Name:
Hugh M. Queener
 
 
Title:
Chief Administrative Officer and Corporate Secretary
 


GRANTEE:

 
By:
 
 
 
Name:
 
 

EXHIBIT A

Performance Measures

Award Tied to Fiscal 2014 Performance . Should the Company's FDEPS for the fiscal year ended December 31, 2014 ("Fiscal 2014") be less than [     ] (the "Fiscal 2014 Threshold Amount of FDEPS"), then one-third of the Performance Units awarded under the Agreement shall be forfeited as of the earlier of the date that the Company's Annual Report on Form 10-K for Fiscal 2014 is filed with the Securities and Exchange Commission (the "SEC") or the last date that such Form 10-K could be timely filed with the SEC and no shares of the Restricted Stock shall be issued to the Grantee in regards to the portion of the Performance Units granted hereunder related to the Company's Fiscal 2014 Performance Period. Should the Company's FDEPS for Fiscal 2014 equal $[    ] (the "Fiscal 2014 Target Amount of FDEPS"), then the portion of the Performance Units granted pursuant to the Agreement related to the Company's Fiscal 2014 Performance Period shall be settled by the issuance to the Custodian for the benefit of the Grantee of [      ] shares of the Restricted Stock in accordance with Section 1(b) of the Agreement. Should the Company's FDEPS for Fiscal 2014 be equal to or greater than [    ] (the "Fiscal 2014 Maximum Amount of FDEPS"), then the portion of the Performance Units granted pursuant to the Agreement related to the Company's Fiscal 2014 Performance Period shall be settled by the issuance to the Custodian for the benefit of the Grantee of [    ] shares of the Restricted Stock in accordance with Section 1(b) of the Agreement.  In the event that the Company's FDEPS for the Fiscal 2014 Performance Period is between the Fiscal 2014 Threshold Amount of FDEPS and the Fiscal 2014 Target Amount of FDEPS or between the Fiscal 2014 Target Amount of FDEPS and the Fiscal 2014 Maximum Amount of FDEPS, straight line interpolation, rounded up to the next whole share of Common Stock, will be used to determine the number of Performance Units that shall vest and be settled in shares of the Restricted Stock based on the Fiscal 2014 Performance Period.

Award Tied to Fiscal 2015 Performance . Should the Company's FDEPS for the fiscal year ended December 31, 2015 ("Fiscal 2015") be less than [    ] the "Fiscal 2015 Threshold Amount of FDEPS"), then one-third of the Performance Units awarded under the Agreement shall be forfeited as of the earlier of the date that the Company's Annual Report on Form 10-K for Fiscal 2015 is filed with the SEC or the last date that such Form 10-K could be timely filed with the SEC and no shares of the Restricted Stock shall be issued to the Grantee in regards to the portion of the Performance Units granted hereunder related to the Company's Fiscal 2015 Performance Period. Should the Company's FDEPS for Fiscal 2015 equal $[    ] (the "Fiscal 2015 Target Amount of FDEPS"), then the portion of the Performance Units granted pursuant to the Agreement related to the Company's Fiscal 2015 Performance Period shall be settled by the issuance to the Custodian for the benefit of the Grantee of [   ] shares of the Restricted Stock in accordance with Section 1(b) of the Agreement. Should the Company's FDEPS for Fiscal 2015 be equal to or greater than $[     ] (the "Fiscal 2015 Maximum Amount of FDEPS"), then the portion of the Performance Units granted pursuant to the Agreement related to the Company's Fiscal 2015 Performance Period shall be settled by the issuance to the Custodian for the benefit of the Grantee of [     ] shares of the Restricted Stock in accordance with Section 1(b) of the Agreement.  In the event that the Company's FDEPS for the Fiscal 2015 Performance Period is between the Fiscal 2015 Threshold Amount of FDEPS and the Fiscal 2015 Target Amount of FDEPS or between the Fiscal 2015 Target Amount of FDEPS and the Fiscal 2015 Maximum Amount of FDEPS, straight line interpolation, rounded up to the next whole share of Common Stock, will be used to determine the number of Performance Units that shall vest and be settled in shares of the Restricted Stock based on the Fiscal 2015 Performance Period.
 
A-1
Award Tied to Fiscal 2016 Performance . Should the Company's FDEPS for the fiscal year ended December 31, 2016 ("Fiscal 2016") be less than [    ] (the "Fiscal 2016 Threshold Amount of FDEPS"), then one-third of the Performance Units awarded under the Agreement shall be forfeited as of the earlier of the date that the Company's Annual Report on Form 10-K for Fiscal 2016 is filed with the SEC or the last date that such Form 10-K could be timely filed with the SEC and no shares of the Restricted Stock shall be issued to the Grantee in regards to the portion of the Performance Units granted hereunder related to the Company's FDEPS for the Fiscal 2016 Performance Period. Should the Company's FDEPS for Fiscal 2016 equal $[     ] (the "Fiscal 2016 Target Amount of FDEPS"), then the portion of the Performance Units granted pursuant to the Agreement related to the Company's Fiscal 2016 Performance Period shall be settled by the issuance to the Custodian for the benefit of the Grantee of [     ] shares of the Restricted Stock in accordance with Section 1(b) of the Agreement. Should the Company's FDEPS for Fiscal 2016 be equal to or greater than $[     ] (the "Fiscal 2016 Maximum Amount of FDEPS"), then the portion of the Performance Units granted pursuant to the Agreement related to the Company's Fiscal 2016 Performance Period shall be settled by the issuance to the Custodian for the benefit of the Grantee of [     ] shares of the Restricted Stock in accordance with Section 1(b) of the Agreement.  In the event that the Company's FDEPS for the Fiscal 2016 Performance Period is between the Fiscal 2016 Threshold Amount of FDEPS and the Fiscal 2016 Target Amount of FDEPS or between the Fiscal 2016 Target Amount of FDEPS and the Fiscal 2016 Maximum Amount of FDEPS, straight line interpolation, rounded up to the next whole share of Common Stock, will be used to determine the number of Performance Units that shall vest and be settled in shares of the Restricted Stock based on the Fiscal 2016 Performance Period.

FDEPS . For purposes of this Exhibit A , "FDEPS" means the Company's audited fully diluted earnings per share for the Performance Period, as adjusted to eliminate the effects of the following: (a) gains or losses on the sale of a business or a business segment, (b) gains or losses on the extinguishment of debt or the sale of investment securities, (c) asset or investment impairment charges (other than those related to the Company's loan portfolio in the ordinary course of business), (d) restructuring charges, (e) changes in law or accounting principles, and (f) any other expenses or losses resulting from significant, unusual and/or nonrecurring events, as described in management's discussion and analysis of financial condition and results of operations appearing in the Company's annual report for the Performance Period, in each case as determined in good faith by the Compensation Committee. Moreover, FDEPS will be adjusted to appropriately account for the effects of any merger or acquisition affecting the Company, any change in the capital structure of the Company or any other corporate transaction affecting the shares of the Company's Common Stock as described in Section 4.2 of the Plan.
A-2
NPA Ratio . When calculating the NPA Ratio for purposes of the Agreement, in the event that the Company or a subsidiary of the Company acquires a financial institution or a holding company of a financial institution or a branch office thereof, by way of merger or otherwise, or in the event the Company or a subsidiary of the Company shall acquire in an arms-length purchase from a third party any low-quality asset, such acquired non-performing assets or purchased low-quality assets shall be excluded from the calculation.


A-3





EXHIBIT B
STOCK POWER
FOR VALUE RECEIVED , the undersigned does hereby sell, assign and transfer to Pinnacle Financial Partners, Inc. (the "Company"), ___________ shares of the Company's common stock represented by Certificate No. _____.  The undersigned authorizes the Secretary of the Company to transfer the stock on the books of the Company in the event of the forfeiture of any shares issued under the Performance Unit Award Agreement dated ______________, 2014 between the Company and the undersigned.

Dated:              __________, 2014

Signed:

 
By:
 
 
 
Name:
 
 

B- 1
PINNACLE FINANCIAL PARTNERS, INC.
2014 ANNUAL CASH INCENTIVE PLAN

As approved by the Human Resources and Compensation
Committee of Pinnacle Financial Partners on
January 21, 2014

PLAN OBJECTIVES:

The overall objectives of the 2014 Annual Cash Incentive Plan (the "Plan") are to:

1.
Motivate participants to ensure that important corporate soundness thresholds and corporate profitability objectives for 2014 are achieved, and
2.
Provide a reward system that encourages teamwork and cooperation in the achievement of firm-wide goals.

This Plan shall be administered pursuant to the Pinnacle Financial Partners, Inc. 2004 Amended and Restated Equity Incentive Plan, as amended (the "2004 Equity Incentive Plan").  All provisions hereof shall be interpreted accordingly.  Capitalized terms not otherwise defined herein shall have the meaning set forth in the 2004 Equity Incentive Plan.

EFFECTIVE DATES OF THE PLAN:

The Plan is effective from January 1, 2014 (Effective Date) through December 31, 2014 (the "Performance Period").

ADMINISTRATION:

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

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

The Company's Chief Risk Officer at least annually shall evaluate, report and discuss with the HRCC whether features of the Plan should be limited in order to ensure that the Plan does not pose imprudent risks to the Company and that the Plan does not encourage the manipulation of reported earnings of the Company to enhance any employee's compensation.

The HRCC is authorized to interpret the Plan, to establish, amend and / or rescind any rules and regulations relating to the Plan and to make any other determinations that it deems necessary or desirable for the administration of the Plan.  The HRCC may correct any defect or omission or reconcile any inconsistency in the Plan in the manner and to the extent the HRCC deems necessary or desirable.  Any decision of the HRCC in the interpretation and administration of Plan, as described herein, shall lie within its sole and absolute discretion and shall be final conclusive and binding on all parties concerned.  Nothing in this Plan shall preclude the HRCC from granting awards to participants pursuant to other compensation arrangements of the Company.

ELIGIBILITY:

Except as otherwise provided below, all associates who are compensated via a predetermined salary or hourly wage and are not included in any other annual cash incentive or performance-based compensation program or plan are eligible for participation in the Plan.   Participants who are not eligible for a full award due to their performance evaluation (see below – Target Award) should be notified by their Leadership Team member as soon as possible prior to distribution of awards.

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

FORFEITURE OF AWARDS:

Any participant whose employment terminates for any reason (e.g., voluntary separation or termination due to misconduct) prior to distribution of awards in January 2015 will not be eligible for distribution of awards under the Plan unless approved by the HRCC.

ETHICS:

The intent of this Plan is to fairly reward individual and team achievement.  Any associate who manipulates or attempts to manipulate the Plan for personal gain at the expense of clients, other associates or Company objectives will be subject to appropriate disciplinary action, including the non-payment of any award otherwise due or paid to such associate under this Plan.

In addition and upon the approval of the Company's board of directors or the HRCC, payments under the Plan paid to an associate will be subject to recovery and "clawback" by the Company, and repaid by such employee, if the payments are based on materially inaccurate financial statements or other materially inaccurate performance metric criteria.

PLAN FUNDING:

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

TIMING OF AWARDS:

During January 2015, the HRCC will review all proposed awards pursuant to the Plan and shall certify whether the performance goal for the Performance Period has been achieved (within the meaning of Section 162(m) of the Code). Any awards to be distributed pursuant to the Plan shall be distributed prior to January 31, 2015 or as soon as possible thereafter, but in no event later than March 15, 2015.  No award will be distributed prior to January 1, 2015.

TARGET AWARD:

Each participant will be assigned an "award tier" based on their position within the Company, their experience level or other factors.  Each participant's Leadership Team member is responsible for notifying each participant of his or her "award tier".  The "award tier" will be expressed as a percentage of the participant's base salary ranging from 10% to 100%.  In order to determine the "target award", participants will multiply their "award tier percentage" by their actual YTD base salary paid for 2014 as of December 31, 2014. Overtime or other wage components are not considered in these calculations.

The incentive for participants that begin their employment with the Company during the period from January 1, 2014 through December 31, 2014 will be calculated using the same formula.

PERFORMANCE CRITERIA

Awards under the Plan shall be conditioned on the attainment of one or more corporate performance goals recommended by the CEO and approved by the HRCC for the 2014 fiscal year.  Additionally, the CEO, based on input from any participant's team leader, may include performance criteria for any individual or groups of participants as he deems appropriate, subject to the review of the HRCC.  Notwithstanding the foregoing, the Committee shall have the sole discretion to establish such goals for Covered Officers and other Named Executive Officers and the CEO shall have no involvement in setting the performance goals applicable to participation in the Plan for himself or the other Covered Officers or Named Executive Officers, and such goals shall be established solely by the HRCC.

After December 31, 2014, the HRCC shall determine whether and to what extent each performance goal has been met.  In determining whether and to what extent a performance goal has been met, the HRCC may consider such matters as the HRCC deems appropriate.

DISCRETIONARY INCREASES AND REDUCTIONS:

The CEO may award up to an additional 10% of base pay to any participant in the Plan, other than the CEO, based on extraordinary individual performance.  Likewise, the CEO may reduce a participant's, other than the CEO's, award by up to 100% of the calculated award for individual performance, if the participant did not exhibit a strong commitment to the Company's mission or values.  Notwithstanding the foregoing, the HRCC shall have the sole discretion to accept the CEO's recommendations for increases or decreases of awards pursuant to this paragraph with respect to Covered Officers (as defined in the 2004 Equity Incentive Plan).

Discretionary adjustments outside these parameters shall be approved by the HRCC prior to distribution; however any discretionary adjustment with respect to payments to the Company's Named Executive Officers, including the CEO, must be approved by the HRCC prior to distribution.

AMENDMENTS, TERMINATIONS AND OTHER MATTERS:

The HRCC has the right to amend or terminate this Plan in any manner they may deem appropriate in its discretion at any time, including, but not limited to the ability to include or exclude any associate or group of associates from participation in the Plan, modify the award tiers or percentages or modify or waive performance targets.

Should the Company enter into any merger or purchase agreement (including a change of control of the Company), significant market expansion or other materially significant strategic event, the HRCC may amend the Plan (including the performance criteria) as it may deem appropriate under the circumstances; in addition, the HRCC may amend the Plan (including the performance criteria) for any non-recurring transaction which may materially impact the Company's financial position or results of operations for the fiscal year (e.g., capital transactions, divestiture of assets at gains or losses, branch acquisitions, etc.) and in each case as may be consistent with the terms of the Plan.

Furthermore, the Committee may amend the Plan, including the performance goals, at any time to consider the impact of regulatory matters or if required or appropriate to conform to regulatory requirements, guidance or advice or if a change in regulations or regulatory guidance materially impacts performance criteria as may be consistent with the terms of the Plan.

Furthermore, this Plan does not, nor should any participant imply that it shall, create a contractual relationship or rights between the Plan, the Company or any associate of the Company.  No associate should rely on this Plan as to any awards that the associate believes they might otherwise be entitled to receive.  This Plan shall be governed by and construed in accordance with the laws of the State of Tennessee, without regard to any conflicts of laws or principles.