EXHIBIT 10.1
COMMUNITY FIRST, INC.
MANAGEMENT STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the
_____ day of ___________________________, 2002, by and between COMMUNITY FIRST,
INC. (the "Company"), a Tennessee corporation and bank holding company with its
principal place of business in Columbia, Tennessee, and
_______________________________________ (the "Optionee").
WHEREAS, the Company is the sole shareholder of Community First Bank &
Trust (the "Bank"); and
WHEREAS, the Company became the sole shareholder of the Bank pursuant
to a share exchange effective as of August 1, 2002 (the "Share Exchange"); and
WHEREAS, prior to the Share Exchange, the Bank had in place the
Community First Bank & Trust Stock Option Plan (the "Bank Plan"); and
WHEREAS, pursuant to the Bank Plan, the Bank had entered into an
Amended Management Stock Option Agreement, dated as of ____________________,
1999, with Optionee pursuant to which the Bank granted Optionee the option to
purchase certain stock of the Bank (the "Bank Option Agreement"); and
WHEREAS, in connection with the Share Exchange, the Company and the
Bank entered into an agreement pursuant to which the Company assumed the
obligations of the Bank under the Bank Plan and under all stock option
agreements entered into by the Bank pursuant to the Bank Plan and further agreed
to amend and restate the Bank Plan and all such option agreements so that they
would be on substantially the same terms as immediately before the Share
Exchange, except that such option agreements would provide for options to
acquire stock in the Company rather than stock in the Bank and all obligations
of the Bank thereunder would be obligations of the Company rather than the Bank;
and
WHEREAS, the Company has adopted the Community First, Inc. Stock Option
Plan (the "Plan") to amend, restate, replace, and supersede the Bank Plan in
accordance with the foregoing; and
WHEREAS, the Company and the Optionee desire to enter into this
Agreement to amend, restate, replace, and supersede the Bank Option Agreement;
and
WHEREAS, the Company desires to further the business objectives of the
Bank and the Company by affording the Optionee an opportunity to acquire shares
of the Company's common stock (the "Common Stock") by making this grant of stock
options under the Plan which grant is intended to provide additional financial
incentive to the Optionee and to intensify his or her interest in the success of
the Bank and the Company, as well as award Optionee's contribution to the
Company's and the Bank's performance;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of all of which are hereby acknowledged, the parties agree as
follows:
1. Replacement of the Bank Option Agreement and Bank Plan. The
Plan amends, restates, replaces, and supersedes the Bank Plan and this Agreement
amends, restates, replaces, and supersedes the Bank Option Agreement. Neither
the Company nor the Bank shall have any further obligations under the Bank Plan
or under the Bank Option Agreement, and the Optionee shall have no rights under
the Bank Plan or the Bank Option Agreement. The Optionee hereby waives any right
he may have had to receive notice of the Share Exchange or the
amendment, restatement, replacement, and/or superseding of the Bank Plan or the
Bank Option Agreement. The Optionee agrees that neither the Share Exchange nor
the amendment, restatement, replacement, or superseding of the Bank Plan or the
Bank Option Agreement result in the vesting of any options to acquire stock of
the Bank or the Company.
2. The Option. Upon the terms and subject to the conditions of
this Agreement, the Company hereby grants to the Optionee the right and option
(the "Option") to purchase ________________ shares of its Common Stock (the
"Shares"). The Option is intended to be an Incentive Stock Option as set forth
in Section 422 of the Internal Revenue Code.
3. Purchase Price. The purchase price of the Shares shall be
Twenty and No/100 Dollars ($20.00) per share, which price represents the
original issue price of the Bank's common stock, and shall be paid in cash or
any other form acceptable to the Board.
4. Vesting of Options. The Option granted pursuant to this
Agreement shall vest as follows:
(a) The Option will vest at a rate of one-sixth (1/6) of
the total number of shares granted under this Agreement per vesting
year, for a period of six (6) years.
(b) The first vesting year (the "Beginning Year") began
on May 17, 1999.
5. Regulation. Notwithstanding anything contained in this
Agreement, all, or any portion of, the Option whether vested or unvested, shall
be forfeited in the event that the primary state or federal regulator of the
Company or the Bank orders such forfeiture, after proper notice and opportunity
for hearing.
6. Duration of the Option. The Option shall expire ten (10) years
from the date of the Bank Option Agreement.
7. Exercise of Option.
(a) Except as provided in subparagraphs (b) and (c)
below, the Optionee may exercise any vested portion of the Option any
time prior to the expiration of the Option as long as he or she is an
"Employee" as defined in the Plan ("Employee").
(b) In the event that the active employment of the
Optionee terminates (other than by reason of death), any vested portion
of the Option may be exercised at any time within three (3) months
after such termination, unless otherwise determined by the Board of
Directors.
(c) Subject to the provisions of Paragraph 5, in the
event of the Optionee's death while he or she is an Employee or within
three (3) months after the termination of his employment, any vested
portion of the Option may be exercised at any time within twelve (12)
months after the date of his death by the executors or administrators
of the estate of the Optionee or by any person who shall have acquired
the Option from the Optionee by bequest or inheritance.
8. Manner of Exercise. Subject to the terms and conditions
hereof, the Option may be exercised by giving written notice to the Company,
attention of the secretary, which notice shall state the election to exercise
the Option and the number of Shares in respect of which it is being exercised,
and by tendering a check for payment in full of the Option Price of said Shares.
In addition, the Company shall have the right to require a cash payment upon the
exercise of the Option in connection with any obligation of the Company to
withhold taxes.
9. Adjustment Upon Changes in Capitalization.
(a) If at any time or from time to time after the date of
this Agreement, the Company shall increase or decrease the outstanding
Common Stock by way of stock dividend, stock split, or combination, the
per share option price shall be adjusted, or further adjusted, as of
the close of business on the record date for such transaction, to a
price (rounded down to the nearest cent) determined by dividing (i) an
amount equal to the number of shares of Common Stock outstanding
immediately prior to such transaction multiplied by the per share
option price in effect immediately prior to such transaction by (ii)
the total number of shares of Common Stock outstanding immediately
after such transaction. Upon any adjustment in the per share option
price, the Optionee shall thereafter be entitled to purchase at the per
share option price resulting from such adjustment, the number of Shares
obtained by multiplying the per share option price in effect
immediately prior to such adjustment by the number of Shares that could
have been purchased pursuant to the Option immediately prior to such
adjustment and dividing the product thereof by the per share option
price resulting from such adjustment. Notice of any such adjustment
shall be delivered promptly to the Optionee.
(b) If the Company shall be consolidated with or merged
with or into another entity (whether or not the Company shall be the
surviving entity), or shall enter into a share exchange, or shall sell
all or substantially all of its assets as part of a reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986,
as amended, or shall reclassify or reorganize its capital structure
(except a stock dividend, split, or combination covered by Section 9(a)
hereof), the number and kind of Shares subject to the Option shall be
increased or decreased to reflect the number of Shares which the
Optionee would have been entitled to receive in connection with such
transaction if the shares subject to the Option had been issued and
held by Optionee on the record date for such transaction. Notice of
such consolidation, merger, sale, share exchange, reclassification, or
reorganization and of said provisions proposed to be made shall be
delivered to the Optionee not less than thirty (30) days prior to such
record date. As a condition to any reorganization, reclassification,
consolidation, merger or sale, in which the Company is not the
survivor, or any share exchange in which the shareholders exchange or
are deemed to have exchanged all of their shares of stock in the
Company for shares of stock of some other entity, the Company or any
successor, surviving, acquiring, or purchasing entity or other party to
an exchange, as the case may be, shall agree that it is bound by this
Option, that it will satisfy all of the obligations of the Company
hereunder and that the Optionee shall have the right, upon exercise of
this Option, on the terms and conditions hereof, to receive the kind
and amount of stock, securities or assets receivable upon such
reorganization, reclassification, consolidation, merger, sale, or share
exchange by a shareholder of the number of Shares issuable upon
exercise of this Option immediately prior to such reorganization,
reclassification, consolidation, merger, sale, or share exchange,
subject to adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9;
provided, however, that Optionee shall be required to exercise all such
options within twenty-four (24) months from the date of such
reorganization, reclassification, consolidation, merger, sale, or share
exchange.
(c) If, at any time, the Company increases the number of
shares of Common Stock, including those events causing adjustment as
set forth herein, this Option shall be modified so as to grant
additional Options on the number of Shares necessary to bring the total
number of Shares under the Options equal to five percent (5%) of the
outstanding shares of Common Stock of the Company. Such additional
Options shall be on the same terms as provided in this Agreement, with
adjustments in the vesting schedule if needed to preserve the status of
the additional Options as Incentive Stock Options. The purchase price
to the Optionee for any subsequent purchase of Shares under this Plan
shall be determined by the Board of Directors of the Company at the
time of such issue, but in no event shall the purchase price of those
shares be less than Fair Market Value on the date of their issue.
10. No Rights as a Shareholder. The Optionee shall have none of
the rights of a shareholder with respect to any Shares subject to the Option
until such Shares shall be issued to him upon the exercise of the Option.
11. No Employment Rights. Nothing in this Agreement shall confer
on the Optionee any right to continue in the active employment of the Company or
the Bank or any subsidiary of either the Company or the Bank or interfere in any
way with the right of the Company or the Bank or any subsidiary of either the
Company or the Bank at any time to terminate or modify the terms or conditions
of such service.
12. Transferability. The Options granted hereunder shall not be
transferable by the Optionee otherwise than by will or by the laws of descent
and distribution, and the Options granted hereunder may be exercised during his
or her lifetime only by the Optionee or his or her guardian or legal
representative. Without limiting the generality of the foregoing, the Option may
not be assigned, transferred, pledged or hypothecated (whether by operation of
law or otherwise) and shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Options granted hereunder contrary to the provisions hereof,
or by the levy of any attachment or similar process upon the Options granted
hereunder, shall be void and of no force or effect. Notwithstanding the
foregoing, to the extent that the Options granted hereunder must be pledged by
the Optionee to finance the acquisition of the shares upon exercise, the Options
granted hereunder may be pledged for such purpose.
13. Rule 16b-3. This Agreement shall be limited and construed in
such respects as may be necessary in order that it will receive the full benefit
of the exemption from liability provided by Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, or any successor rule or regulation to the
extent applicable.
14. Governing Law. This Agreement shall be construed under the
substantive laws and procedural provisions of the state of Tennessee, without
regard to principles of conflict of laws, unless otherwise governed by federal
law.
15. Plan Terms. The terms of the Plan, pursuant to which this
Agreement is made, are incorporated herein by reference and expressly made a
part of this Agreement.
16. Entire Agreement. This Agreement and the Plan represent the
entire agreement with respect to the subject matter hereof and supersede all
previous agreements, including without limitation the Bank Option Agreement.
IN WITNESS WHEREOF, the Company and the Optionee have duly executed
this Option Agreement as of the day and year first above written.
COMMUNITY FIRST, INC.
By:
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Title:
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OPTIONEE
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