SMARTFINANCIAL INC. — Director's Dealing 2008

Aug 1, 2008

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: CORNERSTONE BANCSHARES INC (CSBQ)
CIK: 0001038773
Period of Report: 2008-07-31

Reporting Person: HUGHES NATHANIEL F (Director, President & COO)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2008-07-31	Common Stock	P	1000	$6	Acquired	3000	Indirect

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	95000	Direct
Common Stock	3000	Indirect

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Stock Options	$3.75	2009-03-01	Cornerstone Bancshares, Inc. (22000)	22000	Direct
Stock Options	$3.25	2010-03-01	Cornerstone Bancshares, Inc. (22000)	44000	Direct
Stock Options	$3.25	2011-03-01	Cornerstone Bancshares, Inc. (20400)	64400	Direct
Stock Options	$3.63	2012-05-01	Cornerstone Bancshares, Inc. (20000)	84400	Direct
Stock Options	$3.63	2013-03-01	Cornerstone Bancshares, Inc. (22000)	106400	Direct
Stock Options	$5.44	2014-03-01	Cornerstone Bancshares, Inc. (26000)	132400	Direct
Stock Options	$9.23	2015-03-01	Cornerstone Bancshares, Inc. (18000)	150400	Direct
Stock Options	$13.25	2016-03-01	Cornerstone Bancshares, Inc. (13000)	163400	Direct
Stock Options	$15.25	2017-03-01	Cornerstone Bancshares, Inc. (6500)	169900	Direct
Stock Options	$7.99	2018-03-01	Cornerstone Bancshares, Inc. (8500)	178400	Direct

Footnotes

F1: The exercise date is determined by the following schedule: 30% after the 2nd anniversary date, 30% after the 3rd anniversary date and 40% after the 4th anniversary date.