CNB Bancorp, Inc. Long-Term Incentive Compensation Plan

2.1

"Act" means the Securities and Exchange Act of 1934, as amended.

2.2

"Award" means Options, Restricted Stock or Stock Awards granted pursuant to the Plan.

2.3

"Bank" means City National Bank and Trust Company.

2.4

"Board" means the Board of Directors of CNB.

2.5

"Cause" means, with respect to any certain Participant:

 

(a)

the willful and continued failure by such Participant to substantially perform his or her duties with respect to CNB or any Subsidiary (other than any such failure resulting from his or her incapacity due to physical or mental illness), or

 

(b)

the conviction of the Participant of a felony involving moral turpitude, or

 

(c)

the willful engaging by such Participant in conduct which is demonstrably and materially injurious to CNB or a Subsidiary, monetarily or otherwise. For purposes of this Section 2.5, no act or failure to act shall be deemed "willful" if done by the Participant either in good faith and in the reasonable belief that such act or omission was in the best interest of CNB, or before the Board provides the Participant with a written notice and reasonable opportunity to cure the actions or omissions that the Board considers to be grounds for a finding of Cause for purposes of this Plan.

2.6

"Change in Control" means the occurrence of any of the following events:

 

(a)

Any person or group (as such terms are used in connection with Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 and 13d-5 under the Act), directly or indirectly, of securities of CNB representing 50% or more of the combined voting power of CNB's then outstanding securities provided that notwithstanding anything in this definition of beneficial owner to the contrary, no person shall be deemed to be the beneficial owner of, or to beneficially own, any security beneficially owned by another person solely by reason of revocable proxy given in response to a public proxy or consent solicitation or any agreement, arrangement or understanding with such other person relating to the solicitation of revocable proxies made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, provided that such other person retains the right at any time to withdraw from, revoke or terminate any such agreement, arrangement or understanding and further provided that such persons would not otherwise be deemed to be a group under Section 13(d) of the Exchange Act or otherwise be deemed to be acting in concert; or

 

(b)

CNB is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or

 

(c)

During any period of 24 consecutive months, individuals who at the beginning of such period constitute the Board (including for this purpose any new director whose election or nomination for election by CNB's stockholders was approved by a vote of at least one-half of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board.; or

 

(d)

CNB is party to a merger, consolidation or reorganization with any other corporation in which the shareholders of CNB immediately prior to the merger, consolidation or reorganization do not immediately thereafter directly or indirectly own more than fifty percent (50%) of the combined voting power of the voting securities entitled to vote in the selection of directors of the merged, consolidated or reorganized entity.

2.7

"CNB" means CNB Bancorp, Inc., a New York corporation.

2.8

"Code" means the Internal Revenue Code of 1986, as amended.

2.9

"Committee" means the members of the Compensation Committee as appointed and maintained by the Board who are outside directors within the meaning of Section 162(m) of the Code.

2.10

"Common Shares" means the common shares, $2.50 par value per share, of CNB, which CNB may authorize and issue from time to time.

2.11

"Director" means a member of the Board or the board of directors of any Subsidiary.

2.12

"Disability" means permanent and total disability as defined under Section 22(e)(3) of the Code.

2.13

"Effective Date" means the date the Plan becomes effective.

2.14

"Fair Market Value" means that if the Common Shares are listed on a national securities exchange (including the NASDAQ National Market System) on the date in question, then the Fair Market Value per Common Share shall be the average of the highest and lowest selling price on such exchange on such date, or if there were no sales on such date, then the Fair Market Value on such date shall be the mean between the bid and asked price on such date. If the Common Shares are traded otherwise than on a national securities exchange on the date in question, then the Fair Market Value per Common Share shall be the mean between the bid and asked price on such date, or, if there is no bid and asked price on such date, then on the next prior business day on which there was a bid and asked price. If no such bid and asked price is available, then the Fair Market Value per Common Share shall be the fair market value as determined by the Board, in its sole and absolute discretion. In making such determination, the Board may use any of the reasonable valuation methods defined in Treasury Regulation Section 1.421-7(e)(2).

2.15

"Grant Date" as used with respect to Options, means the date as of which such Options are granted by the Committee, pursuant to the Plan.

2.16

"Immediate Family" has the meaning set forth in Section 6.7 hereof.

2.17

"Incentive Stock Option" or "ISO" means an Option conforming to the requirements of Section 422 of the Code.

2.18

"Nonqualified Stock Option" or "NQO" means an Option granted pursuant to the Plan other than an Incentive Stock Option.

2.19

"Option" means an option to purchase Common Shares granted by the Board or the Committee pursuant to the Plan, which may be designated as either an "Incentive Stock Option" or a "Nonqualified Stock Option."

2.20

"Option Agreement" has the meaning set forth in Section 6.2 hereof.

2.21

"Option Price" has the meaning set forth in Section 6.3 hereof.

2.22

"Participant" means a person described in Section V hereof.

2.23

"Permissible Transferees" and "Permissible Transferee" have the meanings set forth in Section 6.7 hereof.

2.24

"Plan" means the CNB Bancorp, Inc. Long-Term Incentive Compensation Plan as set forth herein and as may be amended from time to time, subject to Section 12.1 hereof.

2.25

"Restricted Stock Award" or "Restricted Stock" means an award of Common Shares with restrictions placed on the sale, transfer or pledging of the shares, and a risk of forfeiture during the restriction period.

2.26

"Retirement" means a Participant's voluntarily leaving the employment of CNB or a Subsidiary on or after attainment of the minimum age of sixty-two (62).

2.27

"Section 16 Persons" has the meaning set forth in Section 1.2 hereof.

2.28

"Stock Award" means an award of the Common Shares.

2.29

"Subsidiary" means a corporation at least 50% of the total combined voting power of all classes of stock of which is owned by CNB, either directly or through one or more other Subsidiaries.

 

(a)

For Employees

 

(i)

The date for termination of such Option set forth in the Option Agreement applicable to such Option.

 

(ii)

The expiration of ten (10) years from the date such Option was granted, except as outlined in 6.3.

 

(iii)

The expiration of one year from the date of the Participant's termination of employment for reason other than Retirement or termination for Cause, it being understood that the exercise of an Incentive Stock Option at any time after ninety (90) days from the date of termination of employment for reasons other than death or Disability shall convert the Option to a Nonqualified Stock Option.

 

(iv)

The expiration of one year from the later of the Participant's Retirement or termination of service as a Director for a reason other than for Cause.

 

(v)

Termination of employment for Cause.

 

(b)

For Non-employee Directors

 

(i)

The date for termination of such Option set forth in the Option Agreement applicable to such Option.

 

(ii)

The expiration of ten (10) years from the date such Option was granted.

 

(iii)

The expiration of one year following the non-employee Director's termination of service as a Director for a reason other than for Cause.

 

(iv)

Termination of a non-employee Director's service as a Director for Cause.

 

(v)

One year following a Change in Control.

 

(i)

any member of the Immediate Family of the Participant to whom such Option was granted, (ii) any trust solely for the benefit of members of the Participant's Immediate Family, or (iii) any partnership whose only partners are members of the Participant's Immediate Family; and further provided that: (1) the transferee shall remain subject to all of the terms and conditions applicable to such Options prior to and after such transfer; and (2) any such transfer shall be subject to and in accordance with the rules and regulations prescribed by the Committee. Any such transfer to a Permissible Transferee shall consist of one or more options covering a minimum of one hundred (100) Common Shares. An Option may not be retransferred by a Permissible Transferee except by will or the laws of descent and distribution and then only to another Permissible Transferee. In the case of (b) and (c) set forth in the immediately preceding sentence, the Option shall only be exercisable by the trustee or Permissible Transferee, as applicable. For the purposes hereof, "Immediate Family" means, with respect to a particular Participant, such Participant's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.

 

(a)

The aggregate Fair Market Value (determined at the time the Option is granted) of the Common Shares with respect to which ISOs are exercisable for the first time by any Participant during any calendar year shall not exceed $100,000.

 

(b)

ISOs may be granted only to persons who are employees of CNB or a Subsidiary at the time of grant.

 

(c)

No ISO may be exercised after the expiration of ten years from the date such ISO was granted; provided, however, that if the ISO is granted to a Participant who, together with Persons whose Common Share ownership is attributed to the Participant pursuant to Section 424(d) of the Code, owns shares possessing more than 10% of the total combined voting power of all classes of CNB's or any of its Subsidiaries' capital shares, the ISO may not be exercised after the expiration of five years from the date that it was granted.

 

(a)

Cash Remittance. Whenever Common Shares are to be issued upon the exercise of an Option or payment of Award, the Company shall have the right to require the Participant and/or his or her transferees to remit to the Company in cash an amount sufficient to satisfy federal, state and local withholding tax requirements, if any, attributable to such exercise or payment, prior to the delivery of any certificate or certificates for such shares. In addition, CNB shall have the right to withhold from any cash payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state and local withholding tax requirements.

 

(b)

Share Withholding or Remittance. In lieu of the remittance required by Section X(a) hereof, a Participant who is granted an Award may, to the extent approved by the Committee, irrevocably elect by written notice to CNB at the office of CNB designated for that purpose, to (i) have CNB withhold Common Shares from any Award hereunder, or (ii) deliver other previously owned Common Shares, the Fair Market Value of which as of the date on which any such tax is determined shall be equal to the amount of the required tax withholding amount, if any, rounded down to the nearest whole share attributable to such exercise, occurrence or grant; provided, however, that no election to have Common Shares withheld from any Award shall be in excess of the minimum statutory withholding tax or shall be effective with respect to an Award which was transferred by such Participant to a Permitted Transferee or otherwise.