CUMBERLAND MOUNTAIN BANCSHARES, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
____________________________
Agreement for
for Non-incentive Stock Options
____________________________
STOCK OPTION (the "Option") for a total of __________
shares of Common Stock, par value $.01 per share, of
Cumberland Mountain Bancshares, Inc. (the "Company")
is hereby granted to _____________________ (the "Optionee") at
the price set forth herein, and in all respects subject to the
terms, definitions and provisions of the Cumberland Mountain
Bancshares, Inc. 1998 Stock Option and Incentive Plan (the
"Plan") which has been adopted by the Company and which is
incorporated by reference herein, receipt of which is hereby
acknowledged. Such Stock Options do not comply with Options
granted under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
1. Exercise Price. The exercise price per share is
--------------
$______, which equals 100% of the fair market value,
as determined by the Committee, of the Common Stock on the date
of grant of this Option.
2. Exercise of Option. This Option shall be
------------------
exercisable in accordance with the Plan and the following
provisions:
(i) Schedule of rights to exercise.
------------------------------
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
------------------------------- ---------------------------
Upon Grant 0%
1 year but less than 2 years 33 1/3%
2 years but less than 3 years 33 1/3%
3 years or more 33 1/3%
NON-ISO Agreement
Page 2
(ii) Method of Exercise. This Option shall be
------------------
exercisable by a written notice which shall:
(a) state the election to exercise the Option, the number
of shares with respect to which it is being exercised, the
person in whose name the stock certificate or certificates
for such shares of Common Stock is to be registered, his
address and Social Security Number (or if more than one,
the names, addresses and Social Security Numbers of such
persons);
(b) contain such representations and agreements as to the
holders' investment intent with respect to such shares of
Common Stock as may be satisfactory to the Company's
counsel;
(c) be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised
by any person or persons other than the Optionee, be
accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to
exercise the Option; and
(d) be in writing and delivered in person or by certified
mail to the Treasurer of the Company.
Payment of the purchase price of any shares with respect
to which the Option is being exercised shall be by cash, Common
Stock, or such combination of cash and Common Stock as the
Optionee elects. In addition, the Optionee may elect to pay for
all or part of the exercise price of the shares by having the
Company withhold a number of shares having a fair
market value equal to the exercise price. The certificate or
certificates for shares of Common Stock as to which the Option
shall be exercised shall be registered in the name of the person
or persons exercising the Option.
(iii) Restrictions on exercise. The Option may not be
------------------------
exercised if the issuance of the shares upon such exercise would
constitute a violation of any applicable federal or state
securities or other law or valid regulation. As a condition to
his exercise of this Option, the Company may require the person
exercising this Option to make any representation and warranty
to the Company as may be required by any applicable law or
regulation.
3. Withholding. The Optionee hereby agrees that the
-----------
exercise of the Option or any installment thereof will not be
effective, and no shares will become transferable to the
Optionee, until the Optionee makes appropriate arrangements with
the Company for such tax withholding as may be required of the
Company under federal, state, or local law on account of such
exercise.
4. Non-transferability of Option. This Option may not
-----------------------------
be transferred in any manner otherwise than by will or the laws
of descent or distribution. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors
and assigns of the Optionee. Notwithstanding any other terms of
this agreement, to the extent permissible under Rule 16b-3 of
the Securities Exchange Act of 1934, as amended, this Option may
be transferred to the Optionee's
NON-ISO Agreement
Page 3
spouse, lineal ascendants,
lineal descendants, or to a duly established trust, provided
that such transferee shall be permitted to exercise this Option
subject to the same terms and conditions applicable to the
Optionee.
5. Term of Option. This Option may not be exercisable
--------------
for more than ten years from the date of grant of this Option,
as set forth below, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.
_______________________
Date of Grant CUMBERLAND MOUNTAIN BANCSHARES, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
COMMITTEE
By: __________________________________
Authorized Member of the Committee
Witness: _________________________
CUMBERLAND MOUNTAIN BANCSHARES, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
_____________________________
Form for Exercise of
Non-incentive Stock Options
_____________________________
Treasurer
Cumberland Mountain Bancshares, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: 1998 Stock Option and Incentive Plan
------------------------------------
Dear Sir:
The undersigned elects to exercise his Non-Incentive Stock
Option to purchase ___________ shares, par value $.01, of
Common Stock of Cumberland Mountain Bancshares, Inc. under and
pursuant to a Stock Option Agreement dated ___________, 199_.
Delivered herewith is a certified or bank cashier's or
tellers check and/or shares of Common Stock, valued at the fair
market value of the stock on the date of exercise, as set forth
below.
$______ of cash or check
$______ in the form of _______ shares of Common
Stock, valued at $____ per share
$______ in the form of the Company's withholding
of _______ shares of Common Stock,
valued at $ ____ per share, that are
subject to this Option
$ TOTAL
======
The name or names to be on the stock certificate or
certificates and the address and Social Security Number of such
person(s) is as follows:
Name ________________________________________________________
Address _____________________________________________________
Social Security Number ______________________________________
_____________________
Date
Very truly yours,
__________________________