EXHIBIT 10.3
COMMUNITY FIRST, INC.
EMPLOYEE STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this
_____ 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
___________________________________________________, ("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") which among
other things authorized the grant of options to acquire stock of the Bank to
certain employees of the Bank at the discretion of the board of directors of the
Bank; and
WHEREAS, pursuant to the Bank Plan, the Bank had entered into an
Employee Stock Option Agreement, dated as of ____________________, ____, (the
"Original Grant Date") 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;
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. 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 or she 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 Company hereby grants to Optionee, and Optionee hereby
accepts, an option to purchase ________________________________ (________)
shares of common stock, Ten and No/100 Dollars ($10.00) par value of the Company
(the "Stock"), at an option price of _______________________________ Dollars
($_______) per share of stock (the "Employee Options"). This Agreement shall be
limited and construed as necessary in order that the Employee Options may be
treated as Non-Qualified Stock Options for federal income tax purposes and not
be treated as Incentive Stock Options.
3. The Employee Options granted herein shall vest at the rate of
one-third (1/3) of the total number of shares granted under this Agreement,
rounded down to the nearest whole number of shares, on each of the first and
second anniversaries of the Original Grant Date and the remainder shall vest on
the third anniversary of the Original Grant Date.
4. Subject to the terms of paragraphs 5 and 6, any vested
Employee Options may be exercised at any time during the period between their
vesting date and the close of the business day coinciding with, or immediately
following, the tenth anniversary of the Original Grant Date. Any Employee
Options that are unexercised after such time shall expire immediately as of that
date.
5. Subject to the terms of paragraph 6, in the event of the
Optionee's death, the transferee of the Employee Options granted by this
Agreement shall have one year after the date of the Optionee's death to exercise
all, or any portion of, such Employee Options which have become vested, and any
Employee Options that are unexercised as of the close of the business day
coinciding with, or immediately following, such date shall expire immediately.
6. Notwithstanding any provision of this Agreement, in the event
the Company or the Bank fails to satisfy the minimum regulatory requirements
relating to its capitalization, vested and unvested Employee Options shall be
subject to one or more of the following actions by the primary state or federal
regulator:
(a) The requirement of immediate exercise of all, or any
portion of, Optionee's unexercised Employee Options;
(b) The suspension of the right to exercise all, or any
portion of, Optionee's unexercised Employee Options;
(c) The forfeiture of all, or any portion of, Optionee's
unexercised Employee Options.
7. Payment of the option price shall be made in cash or any other
form acceptable to the Board of Directors of the Company.
8. In the event of any increase in the number of issued shares of
the Stock by reason of stock dividends or stock splits, the Company, in its
discretion, may make any such adjustment that it deems appropriate in the total
number of shares covered by any unexercised Employee Options and the exercise
price thereof.
9. 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 8 hereof), the number and kind of shares subject to the Employee Options
shall be increased or decreased to reflect the number and kind of shares to
which the Optionee would have been entitled to receive in connection with such
transaction if the shares subject to the Employee Options 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 mailed 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 corporation, or other party to an exchange,
as the case may be, shall agree that it is bound by this Agreement, that it will
satisfy all of the obligations of the Company hereunder and that the Optionee
shall have the right, upon exercise of the Employee Options, 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 exchange by a shareholder of the number of shares of Stock issuable
upon exercise of this Option immediately prior to such reorganization,
reclassification, consolidation, merger, or sale, 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 exchange.
10. When the transfer of the Stock covered by the Employee Options
may, in the opinion of the Company, conflict or be inconsistent with any
applicable law or regulation of any governmental agency having jurisdiction over
the Company or the Bank or any subsidiary of either the Company or the Bank, the
Company reserves the right to refuse to transfer such Stock, and shall return
any tendered option price therefore.
11. The Optionee shall have none of the rights of a shareholder
with respect to any Stock subject to the Employee Options until such Stock shall
be issued upon exercise of such Option.
12. The Optionee may freely assign or transfer the Options granted
in this Agreement to the extent permitted by law. Options so transferred or
assigned shall remain subject to the provisions of Paragraphs 5 and 6 of this
Agreement.
13. 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.
14. 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. This Agreement and the Plan represent the entire agreement
with respect to the subject matter hereof and supercede all previous agreements,
including without limitation, the Bank Option Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and Optionee has accepted the Employee
Options, subject to the terms and conditions herein set forth, as of the date
first written above.
COMMUNITY FIRST, INC. OPTIONEE
By:
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Title: Print Name:
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