Exhibit 10.1

Execution Version

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is made and entered into this 22nd day of May, 2017, by and between SmartBank, a banking corporation organized under the laws of the State of Tennessee (“ Bank ”), and Robert W. Kuhn, Jr., a resident of the State of Alabama (“ Employee ”). Bank and Employee are sometimes referred to herein collectively as the “ Parties ,” and each is sometimes referred to herein individually as a “ Party .”

R E C I T A L S

A. Simultaneously with the Parties’ execution of this Agreement, SmartFinancial, Inc., a Tennessee corporation (“ SmartFinancial ”), Bank, Capstone Bancshares, Inc., an Alabama corporation (“ Bancshares ”), and Capstone Bank, a banking corporation organized under the laws of the State of Alabama (“ Capstone ”), have entered into an Agreement and Plan of Merger dated May 22, 2017, which contemplates the merger of Bancshares with and into SmartFinancial (the “ Holding Company Merger ”), with SmartFinancial to be the corporation to survive the Holding Company Merger, and the subsequent merger of Capstone with and into Bank immediately following the Holding Company Merger (the “ Bank Merger ”), with Bank to the banking corporation to survive the Bank Merger.

B. Employee is currently employed as President and Chief Executive Officer of Capstone, and the Parties desire to provide in this Agreement for Employee’s employment by Bank as Regional President of Bank following the Bank Merger and to set forth in writing in this Agreement the terms and conditions of Employee’s employment with Bank.

AGREEMENT

In consideration of the premises set forth above, the mutual agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. Definitions . When used in this Agreement, the following terms and their variant forms shall have the meanings set forth below:

(a) “ Affiliate ” shall mean, with respect to any entity, any other entity that controls, is controlled by, or is under common control with such entity. For this purpose, “control” means ownership of more than 50% of the ordinary voting power of the outstanding equity securities of an entity.

(b) “ Agreement ” shall mean this Employment Agreement together with any amendments hereto made in the manner described in this Agreement.

(c) “ Area ” shall mean (i) during the period of Employee’s employment, a radius of 50 miles from each banking office (whether a main office, branch office, or loan or deposit production office) in the State of Alabama maintained by Bank or its Affiliates from time to time during the period of Employee’s employment and (ii) following the period of Employee’s employment, a radius of 50 miles from each banking office (whether a main office, branch office, or loan or deposit production office) in the State of Alabama maintained by Bank or its Affiliates as of the last day of Employee’s employment.

(d) “ Board of Directors ” shall mean the board of directors of Bank or, where appropriate, any committee or other designee thereof.

(e) “ Business of Bank ” shall mean any business conducted by Bank or any of its Affiliates, including the business of commercial, retail, and consumer banking.

(f) “ Cause ” shall mean, in the context of the termination of this Agreement by Bank:

(i) a breach of the terms of this Agreement by Employee not cured by Employee within 15 business days after Employee’s receipt of Bank’s written notice thereof, including without limitation failure by Employee to perform Employee’s duties and responsibilities in the manner and to the extent required under this Agreement;

(ii) any act by Employee of fraud against, misappropriation from, or dishonesty to Bank or any Affiliate of Bank;

(iii) the conviction of Employee of, or Employee’s plea of guilty or nolo contendere to, a felony or any crime involving fraud or moral turpitude;

(iv) conduct by Employee that amounts to willful misconduct, gross neglect, or a material failure to perform Employee’s duties and responsibilities hereunder, including prolonged absences without the written consent of the President or Chief Executive Officer of Bank; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to Employee who shall have 15 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the President or Chief Executive Officer of Bank, susceptible to a cure;

(v) the exhibition by Employee of a standard of behavior within the scope of or related to Employee’s employment that is in violation of (i) any written policy of Bank or any Affiliate of Bank, which violation results in or is reasonably likely to result in a material loss or regulatory criticism, (ii) any board committee charter of Bank or any Affiliate of Bank, or (iii) any code of ethics or business conduct (or similar code) of Bank or any Affiliate of Bank; provided that in each case the nature of such behavior shall be set forth with reasonable particularity in a written notice to Employee who shall have 15 business days following delivery of such notice to cure such alleged behavior, provided that such behavior is, in the reasonable discretion of the President or Chief Executive Officer of Bank, susceptible to a cure;

(vi) conduct or behavior by Employee that has harmed the business or reputation of Bank or any Affiliate of Bank, including without limitation conduct or behavior that is unethical or involves moral turpitude;

(vii) receipt of any form of written notice that any regulatory agency or authority having jurisdiction over Bank or any Affiliate of Bank has instituted any form of regulatory action against Employee; or

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

(g) “ Change in Control ” shall mean:

(i) a change in the ownership of Bank or SmartFinancial within the meaning of Treasury Regulations § 1.409A-3(i)(5)(v); or

2

(ii) a change in the ownership of a substantial portion of Bank’s or

SmartFinancial’s assets within the meaning of Treasury Regulations § 1.409A-3(i)(5)(vii), substituting 80% for 40% under Treasury Regulations § 1.409A-3(i)(5)(vii)(A).

(h) “ Code ” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

(i) “ Competing Business ” shall mean any person (other than an Affiliate of Bank) that is conducting any business that is the same or substantially the same as the Business of Bank.

(j) “ Confidential Information ” shall include, without limitation, all information not generally known to the public, in spoken, printed, electronic, or any other form or medium, relating directly or indirectly to business processes, practices, methods, policies, plans, publications, documents, research, operations, services, strategies, techniques, agreements, contracts, terms of agreements, transactions, potential transactions, negotiations, pending negotiations, know-how, trade secrets, computer programs, computer software, applications, operating systems, software design, web design, work-in-process, databases, manuals, records, articles, systems, material, sources of material, supplier information, vendor information, financial information, results, accounting information, accounting records, legal information, marketing information, advertising information, pricing information, credit information, design information, payroll information, staffing information, personnel information, employee lists, supplier lists, vendor lists, developments, reports, internal controls, security procedures, graphics, drawings, sketches, market studies, sales information, revenue, costs, formulae, notes, communications, algorithms, product plans, designs, styles, models, ideas, audiovisual programs, inventions, unpublished patent applications, original works of authorship, discoveries, experimental processes, experimental results, specifications, customer information, customer lists, client information, and client lists of Bank or any Affiliate of Bank, or relating to their respective businesses, or of any other person that has entrusted information to Bank or any Affiliate of Bank in confidence. The foregoing list is not exhaustive, and the term “Confidential Information” shall also include other information that is marked or otherwise identified as confidential or proprietary or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and under the circumstances in which the information is known or used. The term “Confidential Information” shall include information developed by Employee in the course of Employee’s employment by Bank. The term “Confidential Information” shall not include information that, through no direct or indirect fault of Employee or person(s) acting on Employee’s behalf, is generally available to and known by the public at the time of disclosure to Employee or thereafter becomes generally available to and known by the public.

(k) “ Disability ” shall mean the inability of Employee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

(l) “ Good Reason ” shall mean, in the context of the termination of this Agreement by Employee:

(i) a material diminution in Employee’s authority, duties, or responsibilities which is not consented to by Employee in writing;

(ii) a material diminution in Employee’s Annual Base Salary which is not consented to by Employee in writing;

(iii) a change in the location of Employee’s primary office such that Employee is required to report regularly to an office located outside of a 50-mile radius from the location of Employee’s primary office as of the Effective Date, which change is not consented to by Employee in writing; or

3

(iv) a material breach by Bank of any material provision of this Agreement

(m) “ IRS ” shall mean the United States Internal Revenue Service.

(n) “ Post-Termination Period ” shall mean a period of 36 months following the effective date of the termination of Employee’s employment.

(o) “ Separation from Service ” shall have the meaning set forth in, and whether Employee has experienced a Separation from Service shall be determined by Bank in accordance with, Treasury Regulations § 1.409A-1(h).

2. Employee Duties .

(a) Position(s); Reporting. Employee shall be employed as Regional President of Bank and shall perform and discharge faithfully the duties and responsibilities which may be assigned to Employee from time to time in connection with the conduct of the business of Bank. The duties and responsibilities of Employee shall be commensurate with those of individuals holding similar positions at other banks similarly organized. Employee shall report to the Chief Lending Officer of Bank.

(b) Full-Time Status. In addition to the duties and responsibilities specifically assigned to Employee under Section 2(a) , Employee shall:

(i) subject to Section 2(c) , during regular business hours, devote substantially all of Employee’s time, energy, attention, and skill to the performance of the duties and responsibilities of Employee’s employment (reasonable vacations, approved leaves of absence, and reasonable absences due to illness excepted) and faithfully and industriously perform such duties and responsibilities;

(ii) diligently follow and implement all reasonable and lawful policies and decisions communicated to Employee; and

(iii) timely prepare and forward to the requesting party(ies) all reports and accountings as may be reasonably requested of Employee.

(c) Permitted Activities. Employee shall devote substantially all of Employee’s business time, attention, and energies to the Business of Bank and shall not during the Term be engaged (whether or not during normal business hours) in any other significant business or professional activity, whether or not such activity is pursued for gain, profit, or other pecuniary advantage, provided that, as long as the following activities do not interfere with Employee’s obligations to Bank, this Section 2(c) shall not be construed as preventing Employee from:

(i) investing Employee’s personal assets in any manner which will not require any services on the part of Employee in the operations or affairs of the subject entity and in which Employee’s participation is solely that of an investor, provided that such investment activity following the Effective Date shall not result in Employee owning beneficially at any time 2% or more of the equity securities of any Competing Business; or

4

(ii) participating in civic and professional affairs and organizations and conferences, preparing or publishing papers or books, or teaching, so long as any such activities do not interfere with the ability of Employee to effectively discharge Employee’s duties and responsibilities hereunder, provided that the President or Chief Executive Officer of Bank may direct Employee in writing to resign from any such organization and/or cease any such activities should the President or Chief Executive Officer of Bank reasonably conclude that continued membership in such organization and/or activities of the type identified would not be in the best interests of Bank.

3. Term of Employment . The effectiveness of this Agreement is expressly contingent upon the consummation of the Bank Merger. Accordingly, the initial term of this Agreement (the “ Initial Term ”), and the Parties’ employment relationship hereunder, shall commence on and as of the calendar day immediately following the effective date of the Bank Merger (the “ Effective Date ”) and, unless this Agreement is sooner terminated in accordance with its terms, shall end on the date which is the third anniversary of the Effective Date. At the end of the Initial Term (and the end of any one-year renewal term), this Agreement will automatically renew for an additional, successive term of one year, unless either Party gives the other Party written notice of such Party’s intent to terminate this Agreement as of the end of the Initial Term (or then-current renewal term) at least 90 days prior to the end of the Initial Term (or then-current renewal term). The Initial Term and any and all renewal terms are referred to together herein as the “ Term .”

4. Compensation . Bank shall compensate Employee as follows during Employee’s period of employment hereunder, except as otherwise provided below:

(a) Annual Base Salary. Employee shall be compensated at a base annual rate of $259,560 per year (the “ Annual Base Salary ”). Employee’s Annual Base Salary will be reviewed by the compensation committee of SmartFinancial’s board of directors at least annually, in accordance with the compensation committee’s charter and any procedures adopted by the compensation committee, for adjustment based on an evaluation of Employee’s performance. Employee’s Annual Base Salary shall be payable in accordance with Bank’s normal payroll practices.

(b) Annual Incentive Compensation.

(i) Employee shall be eligible to receive such annual incentive compensation, if any, as may be determined by, and based on performance measures established by, the board of directors of SmartFinancial (or its designee) consistent with the strategic plan of SmartFinancial, pursuant to any incentive compensation plan or program that may be adopted from time to time by the board of directors of SmartFinancial (“ Incentive Compensation ”).

(ii) Any Incentive Compensation earned shall be payable in cash not later than March 15th of the year following the year in which the Incentive Compensation is earned in accordance with Bank’s normal practices for the payment of short-term incentives. The payment of any Incentive Compensation shall be subject to and conditioned on Employee being employed by Bank on December 31st of the year in which the Incentive Compensation is earned, Employee’s employment with Bank having not been terminated by Bank for Cause prior to the payment of such Incentive Compensation, and any approvals or non-objections required from or by any regulatory authority having jurisdiction over Bank or any Affiliate of Bank, and it is understood by the Parties that it is contemplated that Employee may not be eligible to receive any such Incentive Compensation or other short-term incentive compensation if Bank or any Affiliate of Bank is subject to restrictions imposed by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Tennessee Department of Financial Institutions, or any other regulatory authority, or if Bank is otherwise restricted from making payment of such compensation under applicable law.

5

(c) Automobile . Bank will provide Employee with an automobile owned or leased by Bank for use by Employee in the course of his employment. Employee acknowledges that Bank makes no representation with respect to the taxability or non-taxability of the benefits provided under this Section 4(c) .

(d) Cellular Telephone . Bank will provide Employee with a cellular telephone for use by Employee in the course of his employment. Employee acknowledges that Bank makes no representation with respect to the taxability or non-taxability of the benefits provided under this Section 4(d) .

(e) Club Dues . Bank will pay on Employee’s behalf or reimburse Employee for, at the election of Bank, club dues in an amount not to exceed $1,000 per month. Employee acknowledges that Bank makes no representation with respect to the taxability or non-taxability of the benefits provided under this Section 4(e) .

(f) Business Expenses . Subject to the reimbursement policies of Bank in effect from time to time and consistent with the annual budget approved for the period during which an expense is incurred, Bank will reimburse Employee for reasonable and necessary business expenses incurred by Employee in the performance of Employee’s duties hereunder; provided , however , that, as a condition to any such reimbursement, Employee shall submit verification of the nature and amount of such expenses in accordance with said reimbursement policies. Employee acknowledges that Bank makes no representation with respect to the taxability or non-taxability of the benefits provided under this Section 4(f) .

(g) Paid Leave . On a non-cumulative basis, Employee shall be entitled to 25 days paid leave per calendar year, prorated for any partial calendar year of service. The provisions of this Section 4(g) shall apply notwithstanding any less generous paid leave policy then maintained by Bank, but Employee’s use of such paid leave shall otherwise be in accordance with Bank’s paid leave policy as in effect from time to time.

(h) Other Benefits . In addition to the benefits specifically described in this Agreement, Employee shall be entitled to such other benefits as may be available from time to time to similarly situated employees of Bank, including, by way of example only, retirement plan and health, dental, life, and disability insurance benefits. All such benefits shall be awarded and administered in accordance with the written terms of any applicable benefit plan or, if no written terms exist, Bank’s standard policies and practices relating to such benefits.

(i) Reimbursement of Expenses; In-Kind Benefits . All expenses eligible for reimbursement described in this Agreement must be incurred by Employee during the Term of this Agreement to be eligible for reimbursement. Any in-kind benefits provided by Bank must be provided during the Term of this Agreement. The amount of reimbursable expenses incurred, and the amount of any in-kind benefits provided, in one taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits provided, in any other taxable year. Each category of reimbursement shall be paid as soon as administratively practicable, but in no event shall any such reimbursement be paid after the last day of the calendar year following the calendar year in which the expense was incurred. Neither rights to reimbursement, nor in-kind benefits, shall be subject to liquidation or exchange for other benefits.

(j) Claw Back of Compensation . Employee agrees to repay any compensation previously paid or otherwise made available to Employee that is subject to recovery under any applicable law, rule, or regulation (including any rule of any exchange or service on or through which any securities

6

of SmartFinancial are listed or traded). Employee agrees to repay promptly any such compensation identified by Bank or SmartFinancial. If Employee fails to repay any such compensation promptly, Employee agrees that the amount of such compensation may be deducted from any and all other compensation owed to Employee under this Agreement or otherwise. Employee acknowledges that Bank may take appropriate disciplinary action (up to, and including, termination of employment) if Employee fails to repay any such compensation. The provisions of this Section 4(j) shall be modified to the extent, and remain in effect for the period, required by applicable law, rule, or regulation.

5. Termination of Employment .

(a) Termination by Bank. During the Term, Employee’s employment, and this Agreement, may be terminated by Bank:

(i) at any time for Cause (as determined by the President or Chief Executive Officer of Bank); or

(ii) at any time without Cause, provided that (A) Bank shall give Employee at least 30 days prior written notice of its intent to terminate and (B) if Employee’s employment, and this Agreement, is terminated by Bank without Cause during the Initial Term, Bank shall be required to (1) pay to Employee a severance benefit equal to 2.99 times Employee’s Annual Base Salary as of the date of termination, said benefit to be paid in equal monthly installments, each such payment to be considered a separate and distinct payment for purposes of Section 409A of the Code, commencing (subject to Section 23(b), if applicable) on the first pay period following the Employee’s date of termination and continuing over the course of the following 36-month period in accordance with Bank’s normal payroll practices, and (2) reimburse Employee for the monthly premium paid by Employee for health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“ COBRA ”) for himself and his dependents (such reimbursement to be paid to Employee on the 15th day of the month immediately following the month in which Employee timely remits the premium payment) until the earlier of (x) the 18-month anniversary of the date of termination of Employee’s employment and (y) the date Employee is no longer eligible to receive COBRA continuation coverage (as applicable, the “ COBRA End Date ”), and, during the period beginning on the COBRA End Date and ending on the 36-month anniversary of the date of termination of Employee’s employment (the “Extended Coverage Period”), reimburse Employee up to $1,500 per month for premiums paid by Employee for individual health insurance coverage for Employee or for family health insurance coverage for Employee, his spouse and his dependents (such reimbursement to be paid to Employee on the 15th day of the month immediately following the month in which Employee timely remits the premium payment). During the Extended Coverage Period, (i) Employee shall have no right to accelerate or defer any reimbursement, (ii) reimbursement will be available only for health insurance premiums described above, (iii) reimbursements made for any month will not affect reimbursements for any other month, (iv) Employee shall have no right to any other payment or benefit in lieu of reimbursement and (v) reimbursement must be made no later than the end of the year following the year in which the reimbursable expense was incurred. Reimbursements under this Section are intended to be and shall be interpreted in such a manner as to comply with or be exempt from Section 409A of the Code and regulations issued thereunder. Notwithstanding the foregoing, (y) Bank’s reimbursement obligations under clause (B)(2) of this Section 5(a)(ii) shall cease on the date on which Employee becomes eligible to receive substantially similar coverage from another employer or other source and (z) if Bank making payments under clause (B)(2) of this Section 5(a)(ii) would violate the nondiscrimination rules applicable to non-grandfathered plans under the Affordable Care Act (the “ ACA ”), or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder, the Parties agree to reform this Section 5(a)(ii) in such manner as is necessary to comply with the ACA.

7

(b) Termination by Employee. During the Term, Employee’s employment, and this Agreement, may be terminated by Employee:

(i) at any time for Good Reason, provided that (A) before terminating this Agreement for Good Reason, (1) Employee shall give notice to Bank of the existence of Good Reason for termination, which notice must be given by Employee to Bank within 60 days of the initial existence of the condition(s) giving rise to Good Reason for termination and shall state with reasonable detail the condition(s) giving rise to Good Reason for termination and (2) Bank shall have 30 days from the effective date of such notice to remedy the condition(s) giving rise to Good Reason for termination and (B) such termination must occur with 12 months of the initial existence of the condition(s) giving rise to Good Reason for termination. In the event of the termination of Employee’s employment, and this Agreement, for Good Reason during the Initial Term, Bank shall be required to (A) pay to Employee a severance benefit equal to (1) if termination is for Good Reason as defined in Section 1(l)(i) , Section 1(l)(iii) , or Section 1(l)(iv) , 2.99 times Employee’s Annual Base Salary as of the date of termination, said benefit to be paid in equal monthly installments, each such payment to be considered a separate and distinct payment for purposes of Section 409A of the Code, commencing (subject to Section 23(b), if applicable) on the first pay period following the Employee’s date of termination and continuing over the course of the following 36 month period in accordance with Bank’s normal payroll practices, or (2) if termination is for Good Reason as defined in Section 1(l)(ii) , 2.99 times Employee’s Annual Base Salary immediately prior to the diminution in Annual Base Salary giving rise to termination, said benefit to be paid in equal monthly installments, each such payment to be considered a separate and distinct payment for purposes of Section 409A of the Code, commencing (subject to Section 23(b), if applicable) on the first pay period following the Employee’s date of termination and continuing over the course of the following 36-month period in accordance with Bank’s normal payroll practices, and (B) reimburse Employee for the monthly premium paid by Employee for health continuation coverage under COBRA for himself and his dependents (such reimbursement to be paid to Employee on the 15th day of the month immediately following the month in which Employee timely remits the premium payment) until the COBRA End Date, and, during the Extended Coverage Period, reimburse Employee up to $1,500 per month for premiums paid by Employee for individual health insurance coverage for Employee or for family health insurance coverage for Employee, his spouse and his dependents (such reimbursement to be paid to Employee on the 15th day of the month immediately following the month in which Employee timely remits the premium payment). During the Extended Coverage Period, (i) Employee shall have no right to accelerate or defer any reimbursement, (ii) reimbursement will be available only for health insurance premiums described above, (iii) reimbursements made for any month will not affect reimbursements for any other month, (iv) Employee shall have no right to any other payment or benefit in lieu of reimbursement and (v) reimbursement must be made no later than the end of the year following the year in which the reimbursable expense was incurred. Reimbursements under this Section are intended to be and shall be interpreted in such a manner as to comply with or be exempt from Section 409A of the Code and regulations issued thereunder. Specifically, the provisions of Treasury Regulations Sections 1.409A-1(b)(9)(v)(A)-(B) and 1.409A-3(i)(1)(iv) are incorporated herein by reference.    Notwithstanding the foregoing, (y) Bank’s reimbursement obligations under clause (B) of the second sentence of this Section 5(b)(i) shall cease on the date on which Employee becomes eligible to receive substantially similar coverage from another employer or other source and (z) if Bank making payments under clause (B) of the second sentence of this Section 5(b)(i) would violate the nondiscrimination rules applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA and the related regulations and guidance promulgated thereunder, the Parties agree to reform this Section 5(b)(i) in such manner as is necessary to comply with the ACA; or

(ii) at any time without Good Reason ( provided that Employee shall give Bank at least 60 days prior written notice of Employee’s intent to terminate).

8

(c) Termination Upon Disability. During the Term, Employee’s employment, and this Agreement, may be terminated by Bank upon the Disability of Employee ( provided that Bank shall give Employee at least 30 days prior written notice of its intent to terminate). For the avoidance of doubt, termination for Disability under this Section 5(c) shall not be considered termination without Cause.

(d) Termination Upon Death. Employee’s employment, and this Agreement, shall terminate automatically upon the death of Employee. For the avoidance of doubt, termination of Employee’s employment, and this Agreement, upon the death of Employee under this Section 5(d) shall not be considered termination without Cause.

(e) Termination by Mutual Agreement. During the Term, Employee’s employment, and this Agreement, may be terminated at any time by mutual written agreement of the Parties.

(f) Effect of Termination; Resignation. Upon the termination of Employee’s employment hereunder, Bank shall have no further obligations to Employee or Employee’s estate, heirs, beneficiaries, executors, administrators, or legal or personal representatives with respect to this Agreement, except for the payment of any amounts earned and owing under Sections 4(a) - 4(b) hereof as of the effective date of the termination of Employee’s employment and any payment(s) required by Section 5(a)(ii) or Section 5(b)(i) of this Agreement. Further, upon the termination of Employee’s employment hereunder, if Employee is a member of the Board of Directors or the board of directors of SmartFinancial, or the board of directors of any Affiliate of Bank or SmartFinancial, Employee shall, at the request of Bank, resign from Employee’s position(s) on such boards, with any and all such resignations to be effective not later than the date on which Employee’s employment is terminated.

(g) Non-Renewal of Agreement. For the avoidance of doubt, the Parties expressly acknowledge and agree that the election by a Party to not renew this Agreement pursuant to Section 3 shall not give rise to any severance or other payment to Employee.

6. Change in Control .    

(a) In the event of a Change in Control, Bank (or its successor) shall be required to pay to Employee an amount equal to 2.99 times Employee’s Annual Base Salary immediately prior to such Change in Control (the “ Change in Control Benefit ”), such Change in Control Benefit to be payable in one lump sum payment not later than 30 days following such Change in Control.

(b) In the event of a Change in Control, the Change in Control Benefit payable under Section 6(a) shall be the sole and exclusive benefit payable to Employee and, for the avoidance of doubt, in no event shall Employee be entitled to any additional benefit under Section 5 of this Agreement as a result of the termination of Employee’s employment and this Agreement (with or without Cause, for Good Reason, or otherwise) following such Change in Control.

7. Confidential Information .

(a) Employee understands and acknowledges that, during the course of Employee’s employment with Bank, Employee will have access to and learn of and about Confidential Information. Employee acknowledges and agrees that all Confidential Information of Bank or its Affiliates that Employee accesses, receives, learns of, or develops while Employee is employed by Bank shall be and will remain the sole and exclusive property of Bank and its Affiliates.

(b) Employee understands and acknowledges that Bank or its Affiliates have invested, and continue to invest, substantial time, money, and specialized knowledge into developing their

9

resources, creating a customer base, generating customer and potential customer lists, training their employees, and improving their offerings in the field of banking and financial services. Employee understands and acknowledges that, as a result of these efforts, Bank and its Affiliates have created and continue to use and create Confidential Information, and that the Confidential Information provides Bank and its Affiliates with a competitive advantage over others in the marketplace.

(c) Employee covenants and agrees (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate, or make available Confidential Information, or allow it to be disclosed, published, communicated, or made available, in whole or in part, to any person whatsoever (including other employees of Bank or its Affiliates) not having a need to know and authority to know and use the Confidential Information in connection with the business of Bank or its Affiliates, and, in any event, not to anyone outside of the direct employ of Bank or its Affiliates except as required in the performance of Employee’s authorized employment duties to Bank or with the prior consent of the President or Chief Executive Officer of Bank in each instance (in which case such disclosure shall be made only within the limits and to the extent of such duties or consent); and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media, or other resources containing any Confidential Information, or remove any such documents, records, files, media, or other resources from the premises or control of Bank or any of its Affiliates, except as required in the performance of Employee’s authorized employment duties to Bank or with the prior consent of the President or Chief Executive Officer of Bank in each instance (in which case such access, use, copying, or removal shall be only within the limits and to the extent of such duties or consent). Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law, rule, or regulation or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, rule, regulation, or order. Employee shall promptly provide written notice of any such order to the President and Chief Executive Officer of Bank.

(d) Notwithstanding any other provision of this Agreement:

(i) Employee will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law, or (B) is made in a complaint or other document filed under seal in a lawsuit or other proceeding; and

(ii) If Employee files a lawsuit for retaliation by Bank for reporting a suspected violation of law, Employee may disclose trade secrets to Employee’s attorney and use the trade secret information in the court proceeding if Employee (A) files any document containing trade secrets under seal and (B) does not disclose trade secrets, except pursuant to court order.

(e) Employee understands and acknowledges that Employee’s obligations under this Agreement with regard to any particular Confidential Information shall commence immediately upon Employee first having access to such Confidential Information (whether before or after Employee begins employment with Bank) and shall continue during and after Employee’s employment by Bank until such time as such Confidential Information has become public knowledge other than as a result of Employee’s breach of this Agreement or a breach by any person acting in concert with Employee or on Employee’s behalf.

(f) At any time upon request by Bank, and in any event upon termination of Employee’s employment with Bank, Employee will promptly deliver to Bank all property of or belonging to Bank, including without limitation all Confidential Information, then in Employee’s possession or control.

10

8. Non-Competition; Non-Solicitation; Non-Disparagement .

(a) Non-Competition . Employee agrees that, during the period of Employee’s employment by Bank hereunder and, following the termination of Employee’s employment for any reason, for the duration of the Post-Termination Period, Employee will not (except on behalf of or with the prior written consent of Bank):

(i) within the Area, either directly or indirectly, on Employee’s own behalf or in the service of or on behalf of others, engage in any business, activity, enterprise, or venture competitive with the Business of Bank;

(ii) within the Area, either directly or indirectly, perform for any Competing Business any services that are the same as, or substantially the same as, the services Employee performs or performed for Bank;

(iii) within the Area, accept employment with or be employed by any person engaged in any business, activity, enterprise, or venture competitive with the Business of Bank; or

(iv) work for or with, consult for, or otherwise be affiliated with or be employed by any person or group of persons proposing to establish a new bank or other financial institution within the Area.

(b) Non-Solicitation of Customers. Employee agrees that, during the period of Employee’s employment by Bank hereunder and, in the event of the termination of Employee’s employment for any reason, for the duration of the Post-Termination Period, Employee will not directly or indirectly (except on behalf of or with the prior written consent of Bank), on Employee’s own behalf or in the service of or on behalf of others, solicit, divert, or appropriate, or attempt to solicit, divert, or appropriate, any business from any of Bank’s customers or any customers of any Affiliate of Bank, including prospective customers actively sought by Bank or any Affiliate of Bank with whom Employee has or had contact during the last two years of Employee’s employment with Bank, for purposes of selling, offering, or providing products or services that are competitive with those sold, offered, or provided by Bank or any Affiliate of Bank.

(c) Non-Solicitation of Employees. Employee agrees that, during the period of Employee’s employment by Bank hereunder and, following the termination of Employee’s employment for any reason, for the duration of the Post-Termination Period, Employee will not directly or indirectly (except on behalf of or with the prior written consent of Bank), on Employee’s own behalf or in the service of or on behalf of others, solicit, recruit, or hire away, or attempt to solicit, recruit, or hire away, any employee of Bank or any Affiliate of Bank with whom Employee had contact during the last two years of Employee’s employment, regardless of whether such employee is a full-time, part-time, or temporary employee of Bank or an Affiliate of Bank or such employee’s employment is pursuant to a written agreement, for a determined period, or at will.

(d) Non-Disparagement. Employee agrees that, both during the period of

Employee’s employment by Bank hereunder and following the termination of Employee’s employment, Employee will not make any disparaging statements or remarks (written or oral) about Bank or any Affiliate of Bank or any of their respective officers, directors, employees, shareholders, agents, or representatives. Bank agrees that, both during the period of Employee’s employment by Bank hereunder

11

and following the termination of Employee’s employment, Bank shall cause its directors and senior executive officers to refrain from making any disparaging statements or remarks (written or oral) about Employee.

(e) Modification. The Parties agree that the provisions of this Agreement represent a reasonable balancing of their respective interests and have attempted to limit the restrictions imposed on Employee to those necessary to protect Bank from inevitable disclosure of Confidential Information and unfair competition. The Parties agree that, if the scope or enforceability of this Agreement is in any way disputed at any time and an arbitrator, court, or other trier of fact determines that the scope of the restrictions contained in this Agreement is overbroad, then such arbitrator, court, or other trier of fact may modify the scope of the restrictions contained in this Agreement.

(f) Tolling. Employee agrees that, in the event Employee breaches this Section 8 , the Post-Termination Period shall be tolled during the period of such breach and shall be extended to 36 months after all breaches of this Agreement have ceased.

(g) Remedies. Employee agrees that the covenants contained in Section 7 and Section 8 of this Agreement are of the essence of this Agreement; that each of such covenants is reasonable and necessary to protect the business, interests, and properties of Bank and its Affiliates; and that irreparable loss and damage will be suffered by Bank should Employee breach any of such covenants. Therefore, Employee agrees and consents that, in addition to all other remedies provided by or available at law or in equity, Bank shall be entitled to a temporary restraining order and temporary and permanent injunctions to prevent a breach or contemplated or threatened breach of any of the covenants contained in Section 7 or Section 8 of this Agreement and that, in such event, Bank shall not be required to post a bond. Bank and Employee agree that all remedies available to Bank shall be cumulative.

9. Severability . The Parties agree that each of the provisions included in this Agreement is separate, distinct, and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law, rule, regulation, or public policy, the provision shall be redrawn to make the provision consistent with, and valid and enforceable under, such law, rule, regulation, or public policy.

10. No Set-Off by Employee . The existence of any claim, demand, action, or cause of action by Employee against Bank or any Affiliate of Bank, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by Bank of any of its rights under this Agreement.

11. Notices . All notices, requests, waivers, and other communications required or permitted hereunder shall be in writing and shall be either personally delivered; sent by national overnight courier service, postage prepaid, next-business-day delivery guaranteed; or mailed by first class United States Mail, postage prepaid return receipt requested, to the recipient at the address below indicated:

12

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

12. Assignment . Bank may assign this Agreement and its rights hereunder, and may delegate is duties and obligations under this Agreement, in each case without the consent of Employee, including by way of merger. This Agreement is a personal contract, and neither this Agreement nor the rights, interest, duties, or obligations of Employee hereunder may be assigned or delegated by Employee. Subject to the preceding provisions of this Section 12 , this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.

13. Waiver . A waiver by a Party of any provision of this Agreement or of any breach of this Agreement by any other Party shall not be effective unless in a writing signed by the Party granting such waiver, and no waiver shall operate or be construed as a waiver of the same or any other provision or breach on any other occasion.

14. Mediation . Except with respect to Section 7 , Section 8 , and Section 22 and except as provided in Section 15 , in the event of any dispute arising out of or relating to this Agreement or a breach hereof, which dispute cannot be settled through direct discussions between the Parties, the Parties agree to first endeavor to settle the dispute in an amicable manner by non-binding, confidential mediation before resorting to any other process for resolving the dispute.

15. Applicable Law and Choice of Forum . This Agreement shall be governed by and construed and enforced under and in accordance with the laws of the State of Tennessee, without regard to or the application of principles of conflicts of laws. The Parties agree that any litigation, suit, action, or proceeding arising out of or related to this Agreement shall be instituted exclusively in the United States District Court for the Eastern District of Tennessee, Knoxville Division, or the courts of the State of Tennessee sitting in Knoxville, Knox County, Tennessee, and each Party irrevocably submits to the exclusive jurisdiction of and venue in such courts and waives any objection it might otherwise have to the jurisdiction of or venue in such courts.

16. Interpretation . Words used herein importing any gender include all genders. Words used herein importing the singular shall include the plural and vice versa. When used herein, the terms “herein,” “hereunder,” “hereby,” “hereto,” and “hereof,” and any similar terms, refer to this Agreement. When used herein, the term “person” shall include an individual, a corporation, a limited liability company, a partnership, an association, a trust, and any other entity or organization, whether or not incorporated. Any captions, titles, or headings preceding the text of any section or subsection of this Agreement are solely for convenience of reference and shall not constitute part of this Agreement or affect its meaning, construction, or effect.

17. Entire Agreement . This Agreement embodies the entire and final, integrated agreement of the Parties on the subject matter stated in this Agreement and supersedes all prior understandings and agreements (oral and written) of the Parties relating to the subject matter of this Agreement. No amendment or supplement to or modification of this Agreement shall be valid or binding upon any Party unless made in writing and signed by all Parties.

13

18. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original manually signed copy of this Agreement.

19. Rights of Third Parties . Nothing herein expressed is intended to or shall be construed to confer upon or give to any person, other than the Parties hereto and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

20. Legal Fees . In the event of any claim, action, suit, or proceeding arising out of or in any way relating to this Agreement, the prevailing Party shall be entitled to recover from the non-prevailing Party all reasonable fees, expenses, and disbursements, including without limitation reasonable attorneys’ fees and court costs, incurred by such prevailing Party in connection with such claim, action, suit, or proceeding, in addition to any other relief to which such prevailing Party may be entitled at law or in equity.

21. Survival . The rights and obligations of the Parties under Sections 4(j) , 5(a)(ii) , 5(b)(i) , 5(f) , 6 , 7 , 8 , 14 , 15 , 20 , 21 , 23 , 24 , and 26 shall survive the expiration and/or termination of this Agreement and the termination of Employee’s employment hereunder for the periods expressly designated in such sections or, if no such period is designated, for the maximum period permissible under applicable law.

22. Representations Regarding Restrictive Covenants and other Agreements . Employee represents and warrants to Bank that (a) the execution, delivery, and performance of this Agreement by Employee do not and will not conflict with, breach, violate, or cause a default under any contract, agreement, instrument, order, judgment, or decree to which Employee is a party or by which Employee is bound and (b) Employee is not, and will not become, a party to or bound by (i) any employment, non-competition, non-solicitation, or confidentiality agreement with any other person or (ii) any other agreement which would prohibit or impair Employee from providing or performing for Bank the services contemplated by this Agreement.

23. Code Section 409A . Notwithstanding anything in this Agreement to the contrary, the following provisions shall apply to all benefits and payments provided under this Agreement by Bank to Employee:

(a) The payment (or commencement of a series of payments) hereunder of any non-qualified deferred compensation (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Employee has also undergone a Separation from Service, at which time such non-qualified deferred compensation (calculated as of the date of Employee’s termination of employment hereunder) shall be paid (or commence to be paid) to Employee as set forth in this Agreement as if Employee had undergone such termination of employment (under the same circumstances) on the date of Employee’s ultimate Separation from Service.

(b) If Employee is a specified employee (as determined by Bank in accordance with Section 409A of the Code and Treasury Regulations § 1.409A-3(i)(2)) as of Employee’s Separation from Service with Bank, and if any payment, benefit, or entitlement provided for in this Agreement or otherwise both (i) constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code) and (ii) cannot be paid or provided in a manner otherwise provided herein without subjecting Employee to additional tax or interest (or both) under Section 409A of the Code, then any such payment, benefit, or entitlement that is payable during the first six months following the Separation from Service shall be paid or provided to Employee in a lump sum cash payment to be made on the earlier of (x) Employee’s death and (y) the first business day of the seventh month immediately following Employee’s Separation from Service.

14

(c) Any payment or benefit paid or provided under this Agreement due to a Separation from Service that is exempt from Section 409A of the Code pursuant to Treasury Regulations § 1.409A-1(b)(9)(v) will be paid or provided to Employee only to the extent that expenses are not incurred or the benefits are not provided beyond the last day of Employee’s second taxable year following Employee’s taxable year in which the Separation from Service occurs, provided that Bank reimburses such expenses no later than the last day of the third taxable year following Employee’s taxable year in which Employee’s Separation from Service occurs.

(d) It is the Parties’ intent that the payments, benefits, and entitlements to which Employee could become entitled in connection with Employee’s employment under this Agreement be exempt from or comply with Section 409A of the Code and the regulations and other guidance promulgated thereunder, and, accordingly, this Agreement will be interpreted to be consistent with such intent. For purposes of the limitations on non-qualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying the exclusion under Section 409A of the Code for short-term deferral amounts, the separation pay exception, or any other exception or exclusion under Section 409A of the Code.

(e) While the payments and benefits provided for hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall Bank or its Affiliates be liable for any additional tax, interest, or penalties that may be imposed on Employee as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

(f) No deferred compensation payments provided for under this Agreement shall be accelerated to Employee.

24. Tax Matters .

(a) Withholding of Taxes. Bank may deduct and withhold from any amounts payable under this Agreement all federal, state, city, or other taxes Bank is required to deduct or withhold pursuant to applicable law, rule, regulation, or ruling.

(b) Excise Tax.

(i) In the event that any payments or benefits provided or to be provided by Bank or its Affiliates to Employee or for Employee’s benefit pursuant to the terms of this Agreement or otherwise (“ Covered Payments ”) constitute “parachute payments” within the meaning of Section 280G of the Code (or any successor provision thereto) and would, but for this Section 24(b) , be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “ Excise Tax ”), then the Covered Payments shall be reduced (but not below zero) to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax.

(ii) The Covered Payments shall be reduced in a manner that maximizes Employee’s economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A of the Code, and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.

15

(iii) If, notwithstanding any reductions described in this Section 24(b) , the IRS determines that any Covered Payment constitutes an excess parachute payment (as defined by Section 280G(b) of the Code), then this Section 24(b) shall be reapplied based on the IRS’ determination and Employee shall be obligated to pay back to Bank, within 30 days after a final IRS determination or, in the event that Employee challenges the final IRS determination, a final judicial determination, the portion of the Covered Payment required to avoid imposition of the Excise Tax.

(iv) Any determination required under this Section 24(b) , including whether any payments or benefits are parachute payments, shall be made by Bank in its sole discretion. Employee shall provide Bank with such information and documents as Bank may reasonably request in order to make a determination under this Section 24(b) . Bank’s determinations shall be final and binding on Bank and Employee.

25. Regulatory Restrictions . The Parties expressly acknowledge and agree that (a) any and all payments contemplated by this Agreement are subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k) and 12 C.F.R. Part 359, as such laws and regulations may be amended from time to time, and (b) the obligations of the Parties under this Agreement are generally subject to such conditions, restrictions, and limitations as may be imposed from time to time by applicable state or federal banking laws, rules, and regulations.

26. Right to Contact . Employee acknowledges and agrees that Bank shall retain and have the right to contact any new or potential employer of Employee (or other business) and apprise such person of Employee’s responsibilities and obligations owed under this Agreement.

27. Effectiveness of Agreement . For the avoidance of doubt, this Agreement shall not become effective and shall have no force or effect, and the Parties shall have no obligations or liability hereunder, in the event the Bank Merger is not consummated.

(Signature Page Follows)

16

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement on the date first written above.

(Signature Page to Employment Agreement)

Exhibit 10.2

CAPSTONE BANCSHARES, INC.

2008 LONG-TERM INCENTIVE PLAN

Capstone Bancshares, Inc. (the “Corporation”) has established this Capstone Bancshares, Inc. 2008 Long-Term Incentive Plan to provide an additional inducement for Eligible Individuals to provide services to the Corporation or an Affiliate as an employee, consultant, non-employee director, or independent contractor, to reward such Eligible Individuals by providing an opportunity to acquire incentive awards, and to provide a means through which the Corporation may attract able persons to enter the employment of or engagement with the Corporation or one of its Affiliates. Awards may, in the discretion of the Board or Committee, and subject to such restrictions as the Board or Committee may determine or as provided herein, consist of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock, Restricted Stock Units, Performance Units, Stock Appreciation Rights, or any combination of the foregoing.

ARTICLE 1

DEFINITIONS

Whenever used in the Plan, the following terms have the meanings set forth below, and when the meaning is intended, the initial letter of the word is capitalized:

“Affiliate” means any corporation that is a parent or subsidiary corporation (as Code Sections 424(e) and (f) define those terms) with respect to the Corporation.

“Award” means an Incentive Stock Option, Non-Qualified Stock Option, Restricted Stock Award, Stock Appreciation Rights, Performance Units, or Restricted Stock Units granted under the Plan.

“Award Agreement” means an agreement entered into between the Corporation and the applicable Participant, setting forth the terms and provisions applicable to the Award then being granted under the Plan, as further described in Section 2.4 of the Plan.

“Award Date” means, with respect to any Award, the date of the grant or award specified by the Committee in a resolution or other writing, duly adopted, and as set forth in the Award Agreement, provided that such Award Date will not be earlier than the date of the Committee action.

“Board” means the Board of Directors of the Corporation.

“Cause” will have the meaning set forth in any employment, consulting, or other written agreement between the Participant and the Corporation. If there is no employment, consulting, or other written agreement between the Corporation or an Affiliate and the Participant or if such agreement does not define “Cause,” then “Cause” will have the meaning specified in the Award Agreement; provided that, if the Award Agreement does not so specify, “Cause” will mean, as determined by the Committee in its sole discretion, the Participant’s: (i) willful and continued failure to substantially perform his material duties as an executive of the Corporation (other than any such failure resulting from incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Participant by the Board, (ii) willful misconduct, which is demonstrably and materially injurious to the Corporation, monetarily or otherwise, (iii) engaging in egregious misconduct involving serious moral turpitude to the extent that his creditability and reputation no longer conforms to the standard of senior executive officers of the Corporation (iv) conviction of, or plea of guilty or nolo contendere to, a felony, (v) material breach of a material written policy of the Corporation, (vi) failure to reasonably cooperate with any audit or investigation involving the Corporation or its business practices; or (vii) material breach of this Agreement. The Board must give the Participant at least thirty (30)

Page 1 of 18

days written notice of its intent to terminate him for Cause, specifying the act(s) or omission(s) alleged to justify the for Cause termination, and an opportunity to cure such act(s) or omission(s), where feasible, within the thirty (30) day period. In addition, the Participant’s Service will be deemed to have terminated for Cause if, after the Participant’s Service has terminated, facts and circumstances are discovered that would have justified a termination for Cause. For purposes of this Plan, no act or failure to act on the Participant’s part will be considered “knowing” or “willful” unless it is done, or omitted to be done, by him or her in bad faith or without reasonable belief that his or her action or omission was in the best interests of the Corporation or an Affiliate. Any act, or failure to act, based upon authority given pursuant to a resolution duly of the Board or based upon the advice of counsel for the Corporation will be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the Corporation or an Affiliate. In no event will a termination be deemed to occur for “Cause” unless such termination occurs within 90 days after the Board becomes aware of the circumstance or event giving rise thereto.

“Change in Control” means the first to occur of the following:

“Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code will include reference to any successor provision of the Code.

“Committee” means the Compensation Committee, if any, or such similar or successor committee appointed by the Board. If the Board has not appointed a Committee, the Board will function in place of the Committee.

“Consultant” means an individual who is not an Employee or Director of the Corporation or an Affiliate, but who is providing services to the Corporation or an Affiliate as an independent contractor.

“Corporation” means Capstone Bancshares, Inc.

“Director” means any individual who is a member of the Board.

“Disabled Participant” means the Participant becoming unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expect to last for a continuous period of not less than 12 months, within the meaning of Code Section 422(c)(6).

“Dividend Equivalent” means a right to receive on the payment date for any dividend on the shares of Stock underlying an Award, cash compensation from the Corporation equal to the dividend that would have been paid on such shares of Stock (or the Fair Market Value of such dividend, if such dividend would not have been paid in cash), if such shares had been issued and outstanding, fully vested and held by the Participant on the record date for payment of such dividend. Notwithstanding the foregoing, if such dividend would not have been paid in cash, the Dividend Equivalent with respect thereto will not be paid unless and until certificates evidencing the shares of Stock with respect to which it is paid are issued to the Participant. Dividend Equivalents may be provided, in the Committee’s discretion, in connection with any Award under the Plan, subject to Section 2.6.

“Eligible Individual” means any Employee, Consultant, or non-employee Director.

Page 2 of 18

“Employee” means any common law employee of the Corporation or one of its Affiliates.

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

“Fair Market Value” will mean (a) if the Common Stock is readily tradeable on a national securities exchange or other market system, the closing sales price of the Common Stock on the Award Date, time of exercise, or other date of calculation (or on the last preceding trading date if Common Stock was not traded on such date), or (b) if the Common Stock is not readily tradeable on a national securities exchange or other market system, the fair market value as determined in good faith by the Board or the Committee, by the reasonable application of a reasonable valuation method consistent with the Code, or Treasury Regulations thereunder, as the Board or the Committee will in its discretion select and apply at the time of the Award Date, time of exercise, or other date of calculation.

“Freestanding SAR” means a Stock Appreciation Right that is granted independently of any Options, as described in Article 6.

“Incentive Stock Option” or “ISO” means an option that is intended to qualify as an “Incentive Stock Option” within the meaning of Code Section 422. Any Option that does not qualify under Code Section 422 will be treated as a Non-Qualified Stock Option.

“Non-Qualified Stock Option” means an Option that is not an Incentive Stock Option.

“Option” means an option to purchase Stock at an Exercise Price determined on the Award Date, subject to the applicable provisions of Article 3, awarded in accordance with the terms of the Plan, and which may be an Incentive Stock Option or a Non-Qualified Stock Option.

“Participant” means an Eligible Individual who the Committee has selected to participate in the Plan in accordance with Section 2.2 of the Plan.

“Performance Unit” means a performance unit subject to the requirements of Article 4 and awarded in accordance with the terms of the Plan.

“Performance Goals” will mean performance goals established by executive management or the Committee prior to the grant of an Award based on the attainment of one or any combination of the following, in each case of the Corporation, an Affiliate, or business unit by or within which the Participant is primarily employed or a combination: (a) net income; (b) asset growth; (c) deposit growth; (d) loan growth; (e) return on average assets (ROAA); (f) return on average equity (ROAE); (g) efficiency ratio; and (h) asset quality;> in each case, absolute or relative to peer-group comparative.

The Committee also may base Performance Goals upon attaining specified levels of Corporation performance under one or more of the measures described above relative to the performance of other corporations. The Committee will have the discretion to adjust targets set for pre-established performance objectives.

“Plan” means the Capstone Bancshares, Inc. 2008 Long-Term Incentive Plan, as set forth herein, as the same may be amended, administered or interpreted from time to time.

“Restricted Stock” means an award of shares of Stock delivered under the Plan subject to the requirements of Article 5 and such other restrictions as the Committee deems appropriate or desirable, including restrictions on transferability, a risk of forfeiture, and certain other terms and conditions under the Plan or specified by the Committee. The restrictions on, and risk of forfeiture of, Restricted Stock generally will expire on a specified date, upon the occurrence of an event or achievement of Performance Goals, or on an accelerated basis under certain circumstances specified in the Plan or the Award Agreement.

Page 3 of 18

“Restricted Stock Unit” or “RSU” means a notional account established pursuant to an Award granted to a Participant, as described in Article 5, that is (a) valued solely by reference to shares of Stock, (b) subject to restrictions specified in the Award Agreement, and (c) payable only in Stock. The RSUs awarded to the Participant will vest according to the time-based or performance-based criteria specified in the Award Agreement.

“Service” means the provision of personal services to the Corporation or its Affiliates in the capacity of (i) an Employee, (ii) a Director, or (iii) a Consultant.

“Stock” means the Common Stock of the Corporation.

“Stock Appreciation Right” or “SAR” means the award of the contingent right to receive Stock or cash, as specified in the Award Agreement, in the future, based on the value or the appreciation in the value of Stock, pursuant to the terms of Article 6. The Committee may grant SARs alone or in connection with a related Option. Stock Appreciation Rights may be either Freestanding SARs or Tandem SARs.

“Tandem SAR” means a SAR that is granted in connection with a related Option pursuant to Article 6, the exercise of which requires forfeiture of the right to purchase a share of Stock under the related Option (and when a share of Stock is purchased under the Option, the Tandem SAR similarly will be canceled).

“Termination” means a cessation of the employee-employer relationship between a Participant and the Corporation and its Affiliates (other than by reason of transfer of the Employee among the Corporation and its Affiliates), a cessation of an individual’s Director or Consultant relationship with the Corporation, or the consummation of a transaction whereby a Participant’s employer (other than the Corporation) ceases to be an Affiliate of the Corporation.

ARTICLE 2

PLAN ADMINISTRATION

Section 2.1 Administration . The Committee will administer the Plan. The Committee will interpret the Plan and prescribe such rules, regulations, and procedures in connection with the operation of the Plan, as it will deem to be necessary and advisable for the administration of the Plan consistent with the purposes of the Plan. Without limiting the foregoing, the Committee will have the authority and complete discretion to:

Page 4 of 18

The Committee will keep records of action taken at its meetings. A majority of the Committee will constitute a quorum at any meeting, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority of the Committee, will be the acts of the Committee.

Section 2.2 Eligibility. Those Eligible Individuals, who share the responsibility for the management, growth or protection of the business of the Corporation or any Affiliate or who, in the opinion of the Committee, provide services yielding significant benefits to the Corporation or any Affiliate will be eligible to receive Awards as described herein. Subject to the provisions of the Plan, the Committee will have full and final authority, in its discretion, to grant Awards as described herein and to determine the Eligible Individuals to whom Awards will be granted.

Section 2.3 Shares Available Under the Plan . Subject to adjustment as set forth in Section 2.5, the maximum number of shares of Stock that may be issued or delivered and as to which Awards may be granted under the Plan will be equal to the sum of: (i) six hundred thousand (600,000) shares of Stock; and (ii) shares of Stock delivered (either actually or by attestation) to or withheld by the Corporation in connection with the exercise of an Option awarded under the Plan, or in payment of any required income tax withholding for the exercise of an Option or the vesting of Restricted Stock awarded under the Plan.

Notwithstanding anything to the contrary in this Section 2.3, in no event will more than three hundred thousand (300,000) shares of Stock be cumulatively available for Awards other than Options or Stock Appreciation Rights.

If any Award granted under the Plan is canceled by mutual consent or terminates or expires for any reason without having been exercised in full, or, if and to the extent that an award of Performance Units, or RSUs is paid in cash rather than the issuance of shares of Stock, the number of shares subject to such Award (or in the case of Performance Units or RSUs, the number of shares of Stock for which payment was made in cash) will again be available for purposes of the Plan, except that, to the extent that Stock Appreciation Rights granted in conjunction with an Option under the Plan are exercised and the related Option surrendered, the number of shares available for purposes of the Plan will be reduced by the number of shares, if any, of Stock issued or delivered upon exercise of such Stock Appreciation Rights.

Page 5 of 18

The shares that may be issued or delivered under the Plan may be either authorized but unissued shares, repurchased shares, or partly each.

If, in connection with an acquisition of another company or all or part of the assets of another company by the Corporation or an Affiliate, or in connection with a merger or other combination of another company with the Corporation or an Affiliate, the Corporation either (A) assumes stock options or other stock incentive obligations of such other company, or (B) grants stock options or other stock incentives in substitution for stock options or other stock incentive obligations of such other company, then none of the shares of Stock that are issuable or transferable pursuant to such stock options or other stock incentives that are assumed or granted in substitution by the Corporation will be charged against the limitations set forth in this Section.

Section 2.4 Award Agreement . Each Award granted under the Plan will be evidenced by a written Award Agreement, in a form approved by the Committee. Such Award Agreement will be subject to and incorporate the express terms and conditions, if any, required under the Plan or as required by the Committee for the form of Award granted and such other terms and conditions as the Committee may specify, and will be executed by the Chief Executive Officer, the President (if other than the Chief Executive Officer), or any person designated as an executive officer by the Board, on behalf of the Corporation, and by the Participant to whom such Award is granted. With the consent of the Participant to whom such Award is granted, the Board may at any time and from time to time amend an outstanding Award Agreement in a manner consistent with the Plan. Without consent of the Participant, the Board of Directors may at any time and from time to time modify or amend Award Agreements with respect to Options intended as of the Award Date to be Incentive Stock Options in such respects as it deems necessary in order that Incentive Stock Options granted under the Plan will comply with the appropriate provisions of the Code and regulations thereunder which are in effect from time to time with respect to Incentive Stock Options.

Section 2.5 Adjustment and Substitution of Shares . If a dividend or other distribution will be declared upon the Stock, payable in shares of Stock, the number of shares of Stock then subject to any outstanding Award or by reference to which the amount of any other Award is determined and the number of shares that may be issued or delivered under the Plan will be adjusted by adding thereto the number of shares that would have been distributable thereon if such shares had been outstanding on the date fixed for determining the stockholders entitled to receive such stock dividend or distribution. An increase in the number of shares subject to an Award will not occur when the Committee has awarded Dividend Equivalent with respect to such Award.

If the outstanding shares of Stock will be changed into or exchangeable for a different number or kind of shares of Stock or other securities of the Corporation or another corporation, whether through reorganization, reclassification, recapitalization, stock split-up, combination of shares, merger or consolidation, then the Committee will substitute for each share of Stock subject to any then outstanding Award and for each share of Stock, which may be issued or delivered under the Plan but is not then subject to an outstanding Award, the number and kind of shares of Stock or other securities into which each outstanding share of Stock is so changed or for which each such share is exchangeable; provided, that, in the event of a merger, acquisition or other business combination of the Corporation with or into another entity, any adjustment provided for in the applicable agreement and plan of merger (or similar document) will be conclusively deemed to be appropriate for purposes of this Section 2.5.

In the case of any adjustment or substitution as provided for in this Section 2.5, the aggregate Exercise Price for all shares subject to each then outstanding Option prior to such adjustment or substitution will be the aggregate Exercise Price for all shares of Stock or other securities

Page 6 of 18

(including any fraction) to which such shares will have been adjusted or which will have been substituted for such shares. Any new Exercise Price per share will be carried to at least three decimal places with the last decimal place rounded upwards to the nearest whole number. No adjustment or substitution provided for in this Section 2.5 will require the Corporation to issue or sell a fraction of a share or other security.

If any such adjustment or substitution provided for in this Section 2.5 requires the approval of stockholders in order to enable the Corporation to grant Incentive Stock Options, then no such adjustment or substitution of ISOs will be made without prior stockholder approval. If the effect of any adjustment or substitution would be to cause an Option to fail to continue to qualify as an ISO or to cause a modification, extension or renewal of such Option within the meaning of Code Sections 409A or 424, the Committee may elect that such adjustment or substitution not be made but rather will use reasonable efforts to effect such other adjustment of each then outstanding Option as the Committee in its sole discretion will deem equitable and which will not result in any disqualification, modification, extension or renewal (within the meaning of Code Sections 409A or 424) of such Incentive Stock Option.

Section 2.6 Corporation’s Obligation to Deliver Stock . The obligation of the Corporation to issue or deliver shares of Stock under the Plan will be subject to (i) the effectiveness of a registration statement under the Securities Act of 1933, as amended, with respect to such shares, if deemed necessary or appropriate by counsel for the Corporation; (ii) the condition that the shares will have been listed (or authorized for listing upon official notice of issuance) upon each stock exchange on which such shares may then be listed; and (iii) all other applicable laws, regulations, rules and orders which may then be in effect.

ARTICLE 3

STOCK OPTIONS

Section 3.1 Grant of Stock Options . The Committee will have authority, in its discretion, to grant Incentive Stock Options, Non-Qualified Stock Options or both types of Options. Notwithstanding the above, the Committee may grant Incentive Stock Options to Employees only.

Section 3.2 Terms and Conditions of Options . Options granted under the Plan will be subject to the following terms and conditions:

Page 7 of 18

If the Exercise Price is paid in whole or in part in shares of Stock, any portion of the Exercise Price representing a fraction of a share must be paid in cash. The date of exercise of an Option will be determined under procedures established by the Committee, and the Exercise Price will be payable at such time or times as the Committee, in its discretion, will determine. No shares will be issued or delivered upon exercise of an Option until full payment of the Exercise Price has been made, provided that, for this purpose, if permitted by the Committee, tender of a promissory note will constitute full payment of the principal amount of such promissory note. When full payment of the Exercise Price has been made, the Participant will be considered for all purposes to be the owner of the shares with respect to which payment has been made, subject to the restrictions set forth in Article 7.

Section 3.3 Special Provisions Applicable to ISOs . Notwithstanding any other provision of this Article 3, the following special provisions will apply to any award of Incentive Stock Options:

Page 8 of 18

ARTICLE 4

PERFORMANCE UNITS

Section 4.1 Performance Period and Objectives . The Committee will have authority, in its discretion, to award Performance Units to Eligible Individuals. The Committee will determine a performance period (the “Performance Period”) of one or more years and will determine the Performance Goals for grants of Performance Units. Performance Goals may vary from Participant to Participant. Performance Periods may overlap and Participants may participate simultaneously with respect to Performance Units for which different Performance Periods are prescribed.

Section 4.2 Eligibility . At the beginning of a Performance Period, the Committee will determine for each Participant or group of Participants eligible for Performance Units with respect to that Performance Period the range of dollar values, if any, which may be fixed or may vary in accordance with such performance or other criteria specified by the Committee, which will be paid to a Participant as an Award if the relevant Performance Goals for the Performance Period are met.

Page 9 of 18

Section 4.3 Significant Event . If during the course of a Performance Period there will occur a significant event or events (a “Significant Event”) as determined by the Committee, including, but not limited to, a reorganization of the Corporation or a Change in Control, which the Committee expects to have a substantial effect on a Performance Goal during such period, the Committee may revise such objective.

Section 4.4 Termination . If a Participant terminates Service with the Corporation or any of its Affiliates during a Performance Period because of death or becoming a Disabled Participant, as determined by the Committee, that Participant (or the Participant’s beneficiary) will be entitled to payment in settlement of each Performance Unit for which the Performance Period was prescribed (i) based upon the Performance Goals satisfied at the end of such period; and (ii) prorated for the portion of the Performance Period during which the Participant was in Service with the Corporation or any of its Affiliates; provided, however, the Committee may provide for an earlier payment in settlement of such Performance Unit in such amount or amounts and under such terms and conditions as the Committee deems appropriate or desirable with the consent of the Participant. If a Participant terminates Service with the Corporation or any of its Affiliates during a Performance Period for any other reason, the Participant will not be entitled to any payment with respect to that Performance Period unless the Committee will otherwise determine.

Section 4.5 Award . Each Performance Unit will be paid in cash either as a lump sum payment or in annual installments, as the Committee will determine at the time of grant of the Performance Unit or otherwise, commencing as soon as practicable after the end of the relevant Performance Period.

Section 4.6 Section 409A . If required, Performance Units granted under this Article 4 will be subject to and conform to the requirements of Code Section 409A.

ARTICLE 5

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

Section 5.1 Award. Subject to the terms and provisions of the Plan, the Committee may grant, at any time and from time to time, Restricted Stock or Restricted Stock Units to any Eligible Individual in the number and form, and subject to such restrictions on transferability and other restrictions as the Committee may determine in its discretion, including without limitation the achievement of Performance Goals. Restricted Stock also may be received by a Participant as the result of an exercise of an Option, when such award has not vested. Restricted Stock and RSUs will be subject to a restriction period (after which restrictions will lapse), which means a period commencing on the Award Date and ending on such date or upon the achievement of such Performance Goals or other criteria as the Committee will determine (the “Restriction Period”). The Committee may provide for the lapse of restrictions in installments where it deems appropriate.

Section 5.2 Restriction Period . Except as otherwise provided in this Article 5, no shares of Restricted Stock received by a Participant will be sold, exchanged, transferred, pledged, hypothecated, or otherwise disposed of during the Restriction Period. Except as otherwise provided in the Award Agreement, the Restriction Period for any recipient of Restricted Stock or RSUs will expire and all restrictions on shares of Restricted Stock will lapse upon a Participant’s Death or becoming a Disabled Participant.

Page 10 of 18

Section 5.3 Termination . Except as otherwise provided in Section 5.2 above, if a Participant’s Termination occurs before the expiration of the Restriction Period, all shares of Restricted Stock still subject to restriction, will be forfeited by the recipient, unless the Committee otherwise determines, and will be reacquired by the Corporation. In the case of Restricted Stock purchased through the exercise of an Option, the Corporation will refund the Exercise Price paid on the exercise of the Option. Such forfeited shares of Restricted Stock will again become available for award under the Plan.

Section 5.4 Exchange of Shares . Nothing in this Article 5 will preclude a recipient of Restricted Stock from exchanging any shares of Restricted Stock subject to the restrictions contained herein for any other shares of Stock that are similarly restricted.

Section 5.5 Dividend Equivalents . Any Award of Restricted Stock under the Plan may earn, in the discretion of the Committee and if the shares are unissued, Dividend Equivalents. In respect of any such Award that is outstanding on a dividend record date for Stock, the Participant may be credited with an amount equal to the cash or stock dividends or other distributions that would have been paid on the shares of Stock covered by such Award had such covered shares been issued and outstanding on such dividend record date. The Committee will establish such rules and procedures governing the crediting of Dividend Equivalents, including the timing, form of payment and payment contingencies of such Dividend Equivalents, as it deems are appropriate or necessary.

Section 5.6 Deferral of Restricted Stock . If the applicable Award Agreement so provides, a Participant may elect, in accordance with such procedures as the Committee may specify from time to time, to defer the delivery of such Restricted Stock and, if the deferral election so specifies, of the Dividend Equivalents with respect thereto, until the date or dates specified in such election. Any deferral under this Section must comply with the provisions of Code Section 409A. Deferred Restricted Stock will not be issued until the date or dates that it is to be delivered to the Participant in accordance with his or her deferral election, at which time certificates evidencing Stock will be delivered to the Participant (unless such Deferred Restricted Stock has previously been forfeited pursuant to Section 5.3). From the Award Date of Deferred Restricted Stock through the earlier of (i) the date such Deferred Restricted Stock is forfeited, and (ii) the date certificates evidencing such Deferred Restricted Stock are delivered to the Participant, the Participant will be entitled to receive Dividend Equivalents with respect thereto, but will have none of the rights of a stockholder with respect to such shares; provided, that if the deferral election made with respect to such Deferred Restricted Stock specifies that the Dividend Equivalents will be deferred, the Dividend Equivalents will not be paid until the date or dates specified in such deferral election.

ARTICLE 6

STOCK APPRECIATION RIGHTS

Section 6.1 Grant of Stock Appreciation Rights . The Committee will have the authority, in its discretion, to grant Stock Appreciation Rights to Participants at any time and from time to time. Within the limits of Article 2 and this Article 6, the Committee will have sole discretion to determine the number of SARs granted to each Participant and, consistent with the provisions of the Plan, to determine the terms and conditions pertaining to SARs. The Committee may grant Freestanding SARs, Tandem SARs or any combination of the two, as specified in the Award Agreement. Stock Appreciation Rights granted in conjunction with a Non-Qualified Stock Option may be granted either at the time such Non-Qualified Stock Option is granted or at any time thereafter during the term of such Non-Qualified Stock Option. Stock Appreciation Rights granted in conjunction with an Incentive Stock Option may only be granted at the time such Incentive Stock Option is granted.

Page 11 of 18

The Exercise Price of a Freestanding SAR will equal the Fair Market Value of a share of Stock on the Award Date of the SAR. If a Tandem SAR is granted after the grant of the related Option, or if an Option is granted after the grant of the Tandem SAR, the later granted Award will have the same Exercise Price as the earlier granted Award, but the Exercise Price for the later granted Award may be less than the Fair Market Value of the Stock at the time of such grant. SARs may be subject to Code Section 409A.

Section 6.2 Exercise of Tandem SARs . Tandem SARs may be exercised for all or part of the shares subject to the related Option, upon the surrender of the right to exercise the equivalent portion of the related Option. A Tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable.

Section 6.3 Exercise of Freestanding SARs . Freestanding SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes, and sets forth in the Award Agreement.

Section 6.4 Term of SARs . The Committee will determine the term of an SAR, in its sole discretion, which it will set forth in the Award Agreement. The term of an SAR may not exceed ten (10) years.

Section 6.5 Payment of SAR Amount . Upon exercise of an SAR, a Participant will be entitled to receive payment from the Corporation in an amount determined by multiplying:

The Committee will set forth in the Award Agreement whether the payment upon SAR exercise will be made in cash, in shares of Stock of equivalent Fair Market Value or in some combination of the two.

ARTICLE 7

CERTIFICATES FOR AWARDS OF STOCK

Section 7.1 Stock Certificates . Except as otherwise provided in this Section 7.1, each Participant entitled to receive shares of Stock under the Plan will be issued a certificate for such shares. Such certificate will be registered in the name of the Participant and will bear an appropriate legend reciting the terms, conditions and restrictions, if any, applicable to the Stock and will be subject to appropriate stop-transfer orders. To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. If the issuance of shares under the Plan is effected on a non-certificated basis, the issuance of shares to a Participant will be reflected by crediting (by means of a book entry) the applicable number of shares of Stock to an account maintained by the Corporation in the name of such Participant, which account may be an account maintained by the Corporation for such Participant under any dividend reinvestment program offered by the Corporation. The Committee may require, under such terms and conditions as it deems appropriate or desirable, that the certificates for Restricted Stock delivered under the Plan be held in custody by a third-party institution, or that the Corporation may itself hold such shares in custody until the Restriction Period expires or until restrictions thereon otherwise lapse, and may require, as a condition of any receipt of Restricted Stock, that the recipient will have delivered a stock power endorsed in blank relating to the Restricted Stock. Certificates for shares of unrestricted Stock may be delivered to the Participant after, and only after, the Restricted Period will have expired without forfeiture in respect of such shares of Restricted Stock.

Page 12 of 18

Section 7.2 Compliance With Laws and Regulations . The Corporation will not be required to issue or deliver any certificates for shares of Stock, or to effect the issuance of any non-certificated shares as provided in Section 7.1, prior to (a) the listing of such shares on any stock exchange or quotation system on which the Stock may then be listed; and (b) the completion of any registration or qualification of such shares under any Federal or state law, or any ruling or regulation of any government body which the Corporation will, in its sole discretion, determine to be necessary or advisable.

Section 7.3 Restrictions. All certificates for shares of Stock delivered under the Plan (and all non-certificated shares credited to a Participant’s account as provided in Section 7.1) also will be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange or quotation system upon which the Stock is then listed and any applicable Federal or state securities laws; and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. The foregoing provisions of this Section 7.3 will not be effective if and to the extent that the shares of Stock delivered under the Plan are covered by an effective and current registration statement under the Securities Act of 1933, or if and so long as the Committee determines that application of such provisions is no longer required or desirable. In making such determination, the Committee may rely upon an opinion of counsel for the Corporation.

Section 7.4 Rights of Stockholders . Except for the restrictions on Restricted Stock under Article 5, each Participant who receives an award of Restricted Stock may, at the discretion of the Committee have all of the rights of a stockholder with respect to such shares, including the right to vote the shares and receive dividends and other distributions. No Participant awarded an Option, a Stock Appreciation Right, a Performance Unit or an RSU will have any right as a stockholder with respect to any shares subject to such Award prior to the date of issuance to him or her of a certificate or certificates for such shares, or if applicable, the crediting of non-certificated shares to an account maintained by the Corporation in the name of such Participant.

ARTICLE 8

NORMAL OR EARLY RETIREMENT

At the time of any Awards, the Committee, in its sole discretion, may add such provisions, including, but not limited to, provisions for fully or partial vesting and lapse of restrictions, to Participants’ Awards relating to an Employee’s normal or early retirement, which the Committee shall define.

ARTICLE 9

CHANGE IN CONTROL

The Committee will have the discretion to provide in applicable Award Agreements that, in the event of a Change in Control or Significant Event, the following provisions will apply:

Page 13 of 18

provided that, full vesting of all outstanding Awards will occur upon consummation of a Change in Control unless the Corporation is the surviving entity and any adjustments reasonably necessary to preserve the value of the Participant’s outstanding Awards have been made, or the Corporation’s successor at the time of the Change in Control irrevocably assumes the Corporation’s obligations under this Plan or replaces each Participant’s outstanding Award with an award of equal or greater value and having terms and conditions no less favorable to the Participant than those applicable to the Participant’s Award immediately prior to the Change in Control.

In the event of a Change in Control or Significant Event, the Committee will have the discretion to provide for (a) the termination of any or all outstanding Options and SARs as of the effective date of such Change in Control or Significant Event and/or (b) the settlement and termination of any or all outstanding Options and SARs for consideration equal to the consideration paid to holders of Stock (in their capacity as such) in such Change in Control or Significant Event over the Exercise Price for such Option or SAR being settled and terminated (and, if the Exercise Price exceeds such price per share, at no consideration); provided, that, no Option or SAR will be terminated (without the consent of the Participant) pursuant to clause (a) foregoing prior to the expiration of the later of (x) twenty (20) days following the date on which the Participant received written notice of the Change in Control or Significant Event and (y) the date of consummation of such Change in Control or Significant Event.

ARTICLE 10

MISCELLANEOUS

Section 10.1 Effect of the Plan on the Rights of Employees and Employer . Neither the adoption of the Plan nor any action of the Board or the Committee pursuant to the Plan will be deemed to give any Eligible Individual any right to be granted an Award under the Plan and nothing in the Plan, in any Award granted under the Plan or in any Award Agreement will confer any right to any Participant to continue in the employment of the Corporation or any Affiliate or to continue to be retained to provide Services to the Corporation or any Affiliate as a Director, or Consultant or interfere in any way with the rights of the Corporation or any Affiliate to terminate a Participant’s Service at any time.

Section 10.2 Amendment . The Board specifically reserves the right to alter and amend the Plan at any time and from time to time and the right to revoke or terminate the Plan or to suspend the granting of Awards pursuant to the Plan; provided always that no such revocation, termination, alteration or suspension of any Award will terminate any outstanding Award theretofore granted under the Plan, unless there is a liquidation or a dissolution of the Corporation; and provided further that no such alteration or amendment of the Plan will, without prior stockholder approval (i) increase the total number of shares which may be issued or delivered under the Plan; (ii) make any changes in the class of Eligible Individuals; (iii) extend the period set forth in the Plan during which Awards may be granted; or (iv) make any changes that require stockholder approval under the rules and regulations of any securities exchange or market on which the Stock is traded. No alteration, amendment, revocation, or termination of the Plan or suspension of any Award will adversely affect, without the written consent of the holder of an Award theretofore granted under the Plan, the rights of such holder with respect to such Award. The Committee may not amend any Award to extend the exercise period beyond a date that is later than the earlier of the latest date upon which the Award could have expired by its original terms under any circumstances or the tenth anniversary of the original date of grant of the Award, or otherwise cause the Award to become subject to Code Section 409A. However, if the exercise period of an Option is extended at a time when the Exercise Price of the Option equals or exceeds the Fair Market Value of the Stock that could be purchased (in the case of an Option) or the Fair Market Value of the Stock used to determine the payment to the Participant (in the case of a Stock Appreciation Right), it is not an extension of the original Award.

Page 14 of 18

Section 10.3 Effective Date and Duration of Plan . The Plan will be effective as of April 29, 2008 (the “Effective Date”), the date of its adoption by the Board, provided that the stockholders of the Corporation thereafter approve it at a duly held stockholders’ meeting. If the Plan is not so approved by stockholders, the Plan (and any Award granted under the Plan) will be null, void and of no force or effect. If so approved, the Plan will remain in effect until the earliest of the date (i) all shares authorized to be issued or transferred hereunder have been issued or transferred (ii) the Plan is terminated by the Board of Directors, or (iii) the tenth anniversary of the Effective Date, and will continue in effect thereafter with respect to any Awards outstanding at the time of such termination. In no event will an Incentive Stock Option be granted under the Plan more than ten (10) years from the date the Plan is adopted by the Board, or the date the Plan is approved by the Corporation’s stockholders, whichever is earlier, unless within such ten year period stockholders approve an increase in the number of shares available for grants under the Plan, in which case more than ten (10) years from the last date on which the stockholders so approve any such increase.

Section 10.4 Unfunded Status of Plan . The Plan will be unfunded. The Corporation will not be required to establish any special or separate fund nor to make any other segregation of assets to assume the payment of any benefits under the Plan. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award will give any such Participant any rights that are greater than those of a general unsecured creditor of the Corporation; provided, however, that the Committee may authorize the creation of trusts or make other arrangements to meet the Corporation’s obligations under the Plan to deliver cash, shares or other property pursuant to any Award, which trusts or other arrangements will be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines. Any provision of this Plan that becomes subject to Code Section 409A, will be interpreted and applied consistent with that Section.

Section 10.5 Employee Status . For purposes of determining questions of Termination and exercise of an Option or Stock Appreciation Right after a Participant’s Termination, a leave of absence for military service, illness, short-term disability or other reasons approved by a duly authorized officer of the Corporation will not be treated as Termination or interruption of Service; provided, however, that, with respect to an Incentive Stock Option, if such leave of absence exceeds ninety (90) days, such Option will be deemed a Non-Qualified Stock Option unless the Eligible Individual’s right to reemployment with the Corporation or a Affiliate following such leave of absence is guaranteed by statute or by contract. Notwithstanding anything in the Plan to the contrary, the Committee, in its sole discretion, reserves the right to designate a Participant’s leave of absence longer than ninety (90) consecutive days, other than for illness or short-term disability, as “Personal Leave,” provided that military leaves and approved family or medical leaves will not be considered Personal Leave. A Participant’s unvested Awards will remain unvested during a Personal Leave and the time spent on a Personal Leave will not count towards the vesting of such Awards. A Participant’s vested Options or SARs that may be exercised will remain exercisable upon commencement of Personal Leave until the earlier of (i) a period of one year from the date of commencement of such Personal Leave; or (ii) the remaining exercise period of such Options.

Section 10.6 Tax Withholding . Whenever the Corporation proposes or is required to distribute Stock under the Plan, the Corporation may require the recipient to remit to the Corporation an amount sufficient to satisfy any Federal, state and local tax withholding requirements prior to the delivery of any certificate for such shares or, in the discretion of the Committee, the Corporation may withhold from the shares to be delivered the minimum number

Page 15 of 18

of shares sufficient to satisfy all or a portion of such tax withholding requirements. Whenever under the Plan payments are to be made in cash, such payments may be net of an amount sufficient to satisfy any Federal, state and local tax withholding requirements.

Any Award may provide that the Participant may elect, in accordance with any conditions set forth in such Award, to pay any withholding taxes in shares of Stock; provided that, the Participant, by accepting the Award will be deemed to instruct and authorize the Corporation or its delegatee for such purpose to sell on his or her behalf a whole number of shares of Stock from those shares of Stock issuable to the Participant in payment of vested shares of Restricted Stock or units as the Corporation or its delegatee determines to be appropriate to generate cash proceeds sufficient to satisfy the minimum tax withholding obligation. This direction and authorization is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act, and to be interpreted to comply with the requirements of Rule 10b5-1(c). Such shares will be sold on the day the Restricted Stock or units become vested, which is the date the tax-withholding obligation arises, or as soon thereafter as practicable. The Participant will be responsible for all brokerage fees and other costs of sale, and the Participant will agree to indemnify and hold the Corporation harmless from any losses, costs, damages, or expenses relating to any such sale. To the extent the proceeds of such sale exceed the Participant’s minimum tax withholding obligation ( e.g., because of the need to sell whole shares), the Corporation or its delegatee will pay such excess in cash to the Participant through payroll as soon as practicable. The Corporation is under no obligation to arrange for such sale at any particular price. The Participant agrees to pay to the Corporation as soon as practicable, including through additional payroll withholding, any amount of the tax withholding obligation that is not satisfied by the sale of shares described above.

Section 10.7 Benefits . Amounts received under the Plan are not to be taken into account for purposes of computing benefits under other plans.

Section 10.8 Successors and Assigns . The terms of the Plan will be binding upon the Corporation and its successors and assigns.

Section 10.9 Headings . Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

Section 10.10 Federal and State Laws, Rules and Regulations . The Plan and the grant of Awards will be subject to all applicable federal and state laws, rules, and regulations and to such approval by any government or regulatory agency as may be required.

Section 10.11 Governing Law . To the extent not preempted by federal law, this Plan, any Award Agreement, and documents evidencing Awards or rights relating to Awards will be construed, administered and governed in all respects under and by the laws of the State of Alabama, without giving effect to its conflict of laws principles. If any provision of this Plan will be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof will continue to be fully effective. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to), this Plan will be exclusively in the courts in the State of Alabama, County of Tuscaloosa, including the Federal Courts located therein (should Federal jurisdiction exist).

Section 10.12 Beneficiary Designation . Each Participant may name, from time to time, any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die or become a Disabled Participant before receiving any or all of his or her Plan benefits. Each beneficiary designation will revoke all prior designations by the same Participant, must be in a form prescribed by the Committee, and must be made during the Participant’s lifetime. If the Participant’s designated beneficiary predeceases the Participant or no beneficiary has been designated, benefits remaining unpaid at the Participant’s death will be paid to the Participant’s estate or other entity described in the Participant’s Award Agreement.

Page 16 of 18

Section 10.13 Restrictive Covenants . An Award Agreement may provide that, notwithstanding any other provision of this Plan to the contrary, if the Participant breaches the non-compete, non-solicitation, non-disclosure or other restrictive covenants of the Award Agreement, whether during or after Termination, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, the Participant will forfeit:

Section 10.14 Indemnification . Each person who is or has been a member of the Committee or the Board, and any individual or individuals to whom the Committee has delegated authority under Article 2 of the Plan, will be indemnified and held harmless by the Corporation and its Affiliates from and against any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or as a result of any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken, or failure to act, under the Plan to the extent permitted by State law. Each such person will also be indemnified and held harmless by the Corporation and its Affiliates from and against any and all amounts paid by him or her in a settlement approved by the Corporation, or paid by him or her in satisfaction of any judgment, of or in a claim, action, suit or proceeding against him or her and described in the previous sentence, so long as he or she gives the Corporation an opportunity, at its own expense, to handle and defend the claim, action, suit or proceeding before he or she undertakes to handle and defend it. The foregoing right of indemnification will not be exclusive of any other rights of indemnification to which a person who is or has been a member of the Committee or the Board may be entitled under the Corporation’s Articles of Incorporation or By-Laws, as a matter of law, or otherwise, or any power that the Corporation may have to indemnify him or her or hold him or her harmless.

Section 10.15 Notice . Any notice or other communication required or permitted under the Plan must be in writing and must be delivered personally, sent by certified, registered, or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given (i) when delivered personally or, (ii) if mailed, three days after the date of deposit in the United States mail or, (iii) if sent by overnight courier, on the regular business day following the date sent. Notice to the Participant should be sent to the address set forth on the Corporation’s records. Either party may change the address to which the other party must give notice under this Section by giving the other party written notice of such change, in accordance with the procedures described above.

Section 10.16 Awards Not Transferable . Except as otherwise provided by the Committee, Awards under the Plan are not transferable other than to a beneficiary designated by the Participant in the event of a Participant’s death, or by will or the laws of descent and distribution. An Award Agreement for a grant of Non-Qualified Stock Options may permit or may be amended to permit the Participant who received the Option, at any time prior to the Participant’s death, to assign all or any portion of the Option granted to him or her to (a) the Participant’s spouse or lineal descendants; (b) the trustee of a trust for the primary benefit of the

Page 17 of 18

Participant, the Participant’s spouse or lineal descendants, or any combination thereof; (c) a partnership of which the Participant, the Participant’s spouse and/or lineal descendants are the only partners; (d) custodianships for lineal descendants under the Uniform Transfers to Minors Act or any other similar statute; or (e) upon the termination of a trust by the custodian or trustee thereof, or the dissolution or other termination of the family partnership or the termination of a custodianship under the Uniform Transfers to Minors Act or other similar statute, to the person or persons who, in accordance with the terms of such trust, partnership or custodianship are entitled to receive Options held in trust, partnership or custody. In such event, the spouse, lineal descendant, trustee, partnership or custodianship will be entitled to all of the Participant’s rights with respect to the assigned portion of such Option, and such portion of the Option will continue to be subject to all of the terms, conditions and restrictions applicable to the Option, as set forth herein and in the related option agreement. Any such assignment will be permitted only if: (x) the Participant does not receive any consideration therefor; and (y) the applicable Award Agreement expressly permits the assignment. The Committee’s approval of an Award Agreement with assignment rights will not require the Committee to include such assignment rights in an Award Agreement with any other Participant. Any such assignment will be evidenced by an appropriate written document executed by the Participant, and the Participant will deliver a copy thereof to the Committee on or prior to the effective date of the assignment. An assignee or transferee of an Option must sign an agreement with the Corporation to be bound by the terms of the applicable Award Agreement.

Except as otherwise provided in a Participant’s Award Agreement, no Option, SAR, RSU, Restricted Stock or Performance Unit granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, or pursuant to a domestic relations order (as defined in Code Section 414(p)). The Committee may require, in its discretion, a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.

Section 10.17 Awards to Foreign Nationals and Employees Outside the United States . To the extent the Committee deems it necessary, appropriate or desirable to comply with foreign law or practice and to further the purposes of this Plan, the Committee may, without amending the Plan, (i) establish rules applicable to Awards granted to Participants who are foreign nationals, are employed outside the United States, or both, including rules that differ from those set forth in this Plan, and (ii) grant Awards to such Participants in accordance with those rules.

Section 10.18 Compliance With Code Section  409A . Notwithstanding any provision of this Plan to the contrary, all Awards made under this Plan are intended to be exempt from or, in the alternative, comply with Code Section 409A and the interpretive guidance thereunder, including the exceptions for stock rights and short-term deferrals. The Plan will be construed and interpreted in accordance with such intent.

Page 18 of 18

Exhibit 10.3

Capstone Bancshares, Inc.

2008 Long-Term Incentive Plan

AWARD AGREEMENT

The Board of Directors (the “ Board ”) of Capstone Bancshares, Inc. (“ Capstone ”) recognizes the important role you play in the success of Capstone. As such, the Board would like to reward you with a stake in the ownership of Capstone conditioned upon the conditions and terms contained within this individual award agreement (this “ Award Agreement ”). Accordingly, Capstone hereby grants you the right to earn the following equity grant:

ARTICLE 8.

BENEFICIARY DESIGNATION

A Participant’s “beneficiary” is the person or persons entitled to receive payments or other benefits or exercise rights that are available under the Plan in the event of the Participant’s death. A Participant may designate a beneficiary or change a previous beneficiary designation at any time by using forms and following procedures approved by the Committee for that purpose. If no beneficiary designated by the Participant is eligible to receive payments or other benefits or exercise rights that are available under the Plan at the Participant’s death the beneficiary shall be the Participant’s estate.

Notwithstanding the provisions above, the Committee may in its discretion, after notifying the affected Participants, modify the foregoing requirements, institute additional

requirements for beneficiary designations, or suspend the existing beneficiary designations of living Participants or the process of determining beneficiaries under this Article 8, or both. If the Committee suspends the process of designating beneficiaries on forms and in accordance with procedures it has approved pursuant to this Article 8, the determination of who is a Participant’s beneficiary shall be made under the Participant’s will and applicable state law.

ARTICLE 9.

RIGHTS OF EMPLOYEES AND INDEPENDENT CONTRACTORS

9.1      Employment . Nothing in the Plan or this Award Agreement shall interfere with or limit in any way the right of Capstone and/or its Affiliates to terminate any Participant’s employment or other service relationship at any time, nor confer upon any Participant any right to continue in the capacity in which he or she is employed or otherwise serves Capstone and/or its Affiliates.

Neither this Award nor any benefits arising under the Plan shall constitute part of an employment contract with Capstone and/or its Affiliates and, accordingly, the Plan, this Award Agreement, and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee, upon any requisite Board approval, without giving rise to liability on the part of Capstone and/or its Affiliates for severance payments.

For purposes of the Plan, transfer of employment of a Participant between Capstone and/or its Affiliates shall not be deemed a termination of employment.

9.2      Participation . No Employee or independent contractor shall have the right to be selected to receive an Award under the Plan, or, having been so selected, to be selected to receive a future Award.

9.3      Rights as a Shareholder . A Participant shall have none of the rights of a shareholder with respect to Stock covered by any Award until the Participant becomes the record holder of such Stock.

ARTICLE 10.

CHANGE IN CONTROL

Upon the occurrence of a Change in Control, unless otherwise specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges:

2

ARTICLE 11.

AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION

11.1      Amendment, Modification, Suspension, and Termination . The Committee, upon approval of the Board, or the Board may, at any time and from time to time, alter, amend, modify, suspend, or terminate the Plan in whole or in part. Notwithstanding anything herein to the contrary, without the prior approval of Capstone’s shareholders, Options issued under the Plan will not be repriced, replaced, or regranted through cancellation, or by lowering the exercise price of a previously granted Option. No amendment of the Plan shall be made without shareholder approval if shareholder approval is required by law, regulation, or stock exchange rule.

11.2      Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events . The Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting Capstone or the financial statements of Capstone or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. The determination of the Committee as to the foregoing adjustments, if any, and upon any required Board approval, shall be conclusive and binding on Participants under the Plan.

11.3      Awards Previously Granted . Notwithstanding any other provision of the Plan to the contrary, no termination, amendment, suspension, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award.

3

ARTICLE 12.

WITHHOLDING

12.1      Tax Withholding . Capstone shall have the power and the right to deduct or withhold, or require a Participant to remit to Capstone, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign (including the Participant’s FICA obligation), required by law or regulation to be withheld with respect to any taxable event arising or as a result of this Award.

12.2      Share Withholding . With respect to withholding required upon the exercise of Options or any other taxable event arising as a result of Awards granted hereunder, Capstone may require or Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having Capstone withhold Stock having a FMV of a share of Stock on the date the tax is to be determined equal to the tax that could be imposed on the transaction, provided that if required by the accounting rules and regulations to maintain favorable accounting treatment for the Awards, the tax is to be determined equal to the minimum statutory total tax that could be imposed on the transaction. All elections shall be irrevocable, made in writing, and signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

ARTICLE 13.

SUCCESSORS

All obligations of Capstone under the Plan with respect to Awards granted hereunder, shall be binding on any successor to Capstone, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of Capstone.

ARTICLE 14.

GENERAL PROVISIONS

14.1      Forfeiture Events . Subject to any Employment Agreement executed in writing by Capstone and the Participant, the Participant’s rights, payments, and benefits with respect to the unvested portions of the Award shall be forfeited upon termination of employment with or without Cause. Upon termination of employment for any reason, except a Participant’s death or disability (as provided below), the Participant may exercise any vested portions of the Award within three (3) months of the date of termination. Any vested portions of the Award must be exercised within twelve (12) months after the Participant’s Termination for death or becoming a Disabled Participant

14.2      Legend . The certificates for Stock may include any legend that the Committee deems appropriate to reflect any restrictions on transfer of such Stock.

14.3      Delivery of Title . Capstone shall have no obligation to issue or deliver evidence of title for Stock issued under the Plan prior to:

4

14.4      Investment Representations . The Committee may require each Participant receiving Stock pursuant to an Award under the Plan to represent and warrant in writing that the Participant is acquiring the Stock for investment and without any present intention to sell or distribute such Stock.

14.5      Uncertificated Stock . To the extent that the Plan provides for issuance of certificates to reflect the transfer of Stock, the transfer of such Stock may be affected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

14.6      Unfunded Plan . Participants shall have no right, title, or interest whatsoever in or to any investments that Capstone and/or its Affiliates may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan or this Award, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between Capstone and/or its Affiliates and any Participant, beneficiary, legal representative, or any other person. To the extent that any person acquires a right to receive payments from Capstone and/or its Affiliates under this Award, such right shall be no greater than the right of an unsecured general creditor of Capstone. All payments to be made hereunder shall be paid from the general funds of Capstone and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to ERISA.

14.7      No Fractional Shares . No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, Awards, or other property shall be issued or paid in lieu of fractional shares of Stock or whether such fractional shares of Stock or any rights thereto shall be forfeited or otherwise eliminated.

14.8      Retirement and Welfare Plans . This Award will not be included as “compensation” for purposes of computing benefits payable to any Participant under Capstone’s retirement plans (both qualified and nonqualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a Participant’s benefit.

5

ARTICLE 15.

LEGAL CONSTRUCTION

15.1      Gender and Number . Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

15.2      Severability . In the event any provision of this Award Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Award Agreement, and this Award Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

15.3      Requirements of Law . The granting of this Award and the issuance of shares of Stock hereunder shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. Capstone shall receive the consideration required by law for the issuance of Awards under the Plan.

The inability of Capstone to obtain authority from any regulatory body having jurisdiction, which authority is deemed by Capstone’s counsel to be necessary to the lawful issuance and sale of any Stock hereunder, shall relieve Capstone of any liability in respect of the failure to issue or sell such Stock as to which such requisite authority shall not have been obtained.

15.4      Securities Law Compliance . Capstone may use reasonable endeavors to register Stock allotted pursuant to the exercise of an Award with the United States Securities and Exchange Commission or to effect compliance with the registration, qualification, and listing requirements of any national or foreign securities laws, stock exchange, or automated quotation system. With respect to Insiders, transactions under this Award Agreement and the Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.

15.5      Governing Law . This Award Agreement shall be governed by the laws of the State of Alabama, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Award Agreement to the substantive law of another jurisdiction. Unless otherwise provided in this Award Agreement, the recipient of this Award is deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Alabama to resolve any and all issues that may arise out of or relate to this Award Agreement. In the event of a conflict between the terms of this Award Agreement and the terms of the Plan, the terms of the Plan shall control.

Dated as of this the      day of             , 20    .

6

CAPSTONE BANCSHARES, LLC

2008 LONG-TERM INCENTIVE PROGRAM

INCENTIVE STOCK OPTIONS

BENEFICIARY DESIGNATION

I hereby designate each of the following as survive me as Beneficiary. Each Beneficiary is entitled to receive payments or other benefits or exercise rights that are available under the Plan in the event of my death. If any named Beneficiary shall fail to survive me, his or her share of the benefits provided under the Plan shall be divided pro rata among those who do survive, in proportion to their designated shares set forth below.

In the event none of the above-named shall survive me, I hereby designate such of the following as survive me as Beneficiary, in the same fashion as set forth above.

7

Exhibit 10.4

Capstone Bank

Salary Continuation Agreement

Capstone Bank

Salary Continuation Agreement

This Salary Continuation Agreement (this “Agreement”) is adopted this 11 day of August, 2010, by and between Capstone Bank, a state bank located in Tuscaloosa, Alabama, (the “Bank”), and Robert W. Kuhn (the “Executive”).

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Bank. This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time.

Article I

Definitions

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

Capstone Bank

Salary Continuation Agreement

2

Capstone Bank

Salary Continuation Agreement

Article 2

Distributions During Lifetime

3

Capstone Bank

Salary Continuation Agreement

4

Capstone Bank

Salary Continuation Agreement

5

Capstone Bank

Salary Continuation Agreement

Article 3

Distribution at Death

Article 4

Beneficiaries

6

Capstone Bank

Salary Continuation Agreement

Article 5

General Limitations

7

Capstone Bank

Salary Continuation Agreement

8

Capstone Bank

Salary Continuation Agreement

financial products sold by the Bank (the preceding hereinafter referred to as “Services”), to or from any person or entity from whom the Executive or the Bank, to the knowledge of the Executive provided banking or other financial services, sold, offered to sell or solicited orders, contracts or accounts for Services during the one (1) year period immediately prior to the termination of the Executive’s employment;

(v) divulges, discloses, or communicates to others in any manner whatsoever, any confidential information of the Bank, to the knowledge of the Executive, including, but not limited to, the names and addresses of customers or prospective customers, of the Bank, as they may have existed from time to time, of work performed or services rendered for any customer, any method and/or procedures relating to projects or other work developed for the Bank, earnings or other information concerning the Bank. The restrictions contained in this subparagraph (v) apply to all information regarding the Bank, regardless of the source who provided or compiled such information. Notwithstanding anything to the contrary, all information referred to herein shall not be disclosed unless and until it becomes known to the general public from sources other than the Executive.

Article 6

Administration of Agreement

9

Capstone Bank

Salary Continuation Agreement

Article 7

Claims And Review Procedures

10

Capstone Bank

Salary Continuation Agreement

11

Capstone Bank

Salary Continuation Agreement

Article 8

Amendments and Termination

12

Capstone Bank

Salary Continuation Agreement

twenty-four (24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Bank takes all necessary action to irrevocably terminate and liquidate the Agreement;

the Bank may distribute the Accrual Balance, determined as of the date of the termination of this Agreement, to the Executive in a lump sum subject to the above terms.

Article 9

Miscellaneous

13

Capstone Bank

Salary Continuation Agreement

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive.

14

Capstone Bank

Salary Continuation Agreement

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement.

15