<PAGE>
<PAGE>
Registration No. 333-18665
As filed with the Securities and Exchange Commission on
December 9, 1997
________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________
POST-EFFECTIVE AMENDMENT NO. 1
UNDER COVER OF
FORM S-8
TO FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
________________________________________________________________
CUMBERLAND MOUNTAIN BANCSHARES, INC.
------------------------------------
(Exact name of Registrant as Specified in Its Charter)
Tennessee 31-1499488
--------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1431 Cumberland Avenue
Middlesboro, Kentucky 40965
---------------------------
(Address of Principal Executive Offices)
Cumberland Mountain Bancshares, Inc. 1993 Stock Option Plan
-----------------------------------------------------------
(Full Title of the Plan)
James J. Shoffner, President
Cumberland Mountain Bancshares, Inc.
1431 Cumberland Avenue
Middlesboro, Kentucky 40965
---------------------------------------
(Name and Address of Agent For Service)
(606) 248-4585
--------------
(Telephone number, including area code, of agent for service)
Copies to:
Gary R. Bronstein, Esquire
James C. Stewart, Esquire
J. Mark Poerio, Esquire
Housley Kantarian & Bronstein, P.C.
1220 19th Street N.W., Suite 700
Washington, D.C. 20036
Note. This Post-Effective Amendment No. 1 on Form S-8 to
the Registrant's Registration Statement on Form SB-2 relates to
23,994 previously registered shares of the Registrant's common
stock, $.01 par value per share (the "Common Stock"), held under
the former Middlesboro Federal Bank, Federal Savings Bank 1993
Stock Option Plan which the Registrant assumed upon consummation
of its acquisition of Middlesboro Federal Bank, Federal Savings
Bank (the "Bank") pursuant to the Plan of Conversion and
Agreement and Plan of Reorganization, dated December 12, 1996
and amended on February 3, 1997, by and among the Registrant,
Cumberland Mountain Bancshares, M.H.C., and the Bank (the "Plan
of Conversion").
________________________________________________________________
<PAGE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION
10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
INFORMATION*
*Documents containing the information required by Part I
of this Registration Statement will be sent or given to
participants in the Cumberland Mountain Bancshares, Inc. 1993
Stock Option Plan (the "Plan") in accordance with Rule
428(b)(1). In accordance with Note to Part I of Form S-8, such
documents are not filed with the Securities and Exchange
Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus
supplements.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Cumberland Mountain Bancshares, Inc. (the "Company") is
subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and, accordingly, files
periodic reports and other information with the Commission.
Reports, proxy statements and other information concerning the
Company filed with the Commission may be inspected and copies
may be obtained (at prescribed rates) at the Commission's Public
Reference Section, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a Web
site that contains reports, proxy and information statements and
other information regarding registrants that file electronically
with the Commission, including the Company. The address for the
Commission's Web site is "http://www.sec.gov".
The following documents are incorporated by reference
in this Registration
Statement:
(a) The Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1997 as filed with the Commission on
September 29, 1997 (Commission File No. 0-22287).
(b) The description of the Company's securities as
contained in the Company's Form 8-A, as filed with the
Commission on March 25, 1997 (Commission File No. 0-22287).
All documents filed by the Company pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of
1934 after the date hereof and prior to the termination of the
offering of the shares of common stock, par value $.01 per share
("Common Stock") shall be deemed to be incorporated by reference
in this Registration Statement, and to be a part hereof from the
date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable, as the Common Stock is registered under
Section 12 of the Securities Exchange Act of 1934.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
<PAGE>
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The directors and officers of the Company are entitled
to indemnification in certain circumstances. Such
indemnification arises from Article XIII of the Company's
Charter, separate indemnification agreements entered into
between the Company and the Bank and the directors, and the
Tennessee Business Corporation Act. In addition, the Bank
currently maintains a directors and officers liability policy to
which the Company will become party. These provisions and
contracts are described briefly below.
ARTICLE XIII OF THE CHARTER
Article XIII of the Company's Charter provides that
directors, officers, employees and agents may be indemnified in
certain circumstances against liability which they may incur in
their capacities. Article XIII requires that the Company
indemnify any director who is made a party to any threatened,
pending, or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative ("proceeding"),
because he is or was a director against liability incurred in
such proceeding as long as he conducted himself in good faith,
he reasonably believed, (i) in the case of conduct in his
official capacity with the Company, that his conduct was in the
Company's best interests and (ii) in all other cases, that his
conduct was at least not opposed to its best interests; and, in
the case of any criminal proceeding, he had no reasonable cause
to believe his conduct was unlawful. The Company must also
indemnify any director and any officer who is not a director if
he was wholly successful, on the merits or otherwise, in the
defense of any proceedings to which he was a party because he is
or was a director or officer of the Company against reasonable
expenses incurred by him in connection with the proceeding.
However, the Company may not indemnify a director in connection
with a proceeding by or in the right of the Company in which the
director was adjudged liable to the Company or in connection
with any other proceeding charging improper personal benefit to
him, whether or not involving action in his official capacity,
in which he was adjudged liable on the basis that personal
benefit was improperly received by him.
Article XIII permits the Company to pay the reasonable
expenses incurred by a director who is a party to a proceeding
in advance of final disposition of the proceeding as long as:
(1) the director furnishes the Company a written affirmation of
his good faith belief that he has met the requisite standard of
conduct; (2) he provides the Company with a written undertaking
to repay such amounts if it is ultimately determined that he is
not entitled to indemnification; and (3) a determination is made
based on the facts then known, that indemnification is
permissible.
The Company may not indemnify a director unless authorized
in the specific case after a determination has been made that
indemnification of the director is permissible in the
circumstances because he has met the required standards. The
determination must be made: (1) by the board of directors by
majority vote of a quorum consisting of directors not at the
time parties to the proceeding; (2) if a quorum cannot be
obtained, by majority vote of a committee duly designated by the
board of directors (in which designation directors who are
parties may participate), consisting solely of two or more
directors not at the time parties to the proceeding; (3) by
independent special legal counsel; or (4) by the shareholders,
but shares owned by or voted under the control of directors who
are at the time parties to the proceeding may not be voted on
the determination.
The Company may indemnify and advance expenses to an
officer, employee or agent of the Company who is not a director
to the same extent as a director.
INDEMNIFICATION AGREEMENTS
The Company and the Bank have entered into written
indemnification agreements (the "Indemnification Agreements")
with each director of the Company and the Bank pursuant to which
the Company and the Bank will indemnify such individuals against
any and all expenses incurred by such individuals in connection
with any proceeding of any type to which such individual is made
or threatened to be made a party, as a result of or in
connection with any action or inaction on the part of a director
while the director was or is a director or while the director
was or is serving at the request of the Company or the Bank as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or
other enterprise. Expenses covered by such agreements include,
without limitation, any judgment, amounts paid in settlement of
a proceeding, reasonable attorney's fees actually paid and
incurred in connection with a proceeding and reasonable
attorneys's fees, costs and expenses, if any, actually paid or
incurred in connection with a proceeding to enforce his rights
under the Indemnification Agreement. The Indemnification
Agreements also provide for the prompt advancement of expenses
to the director in connection with investigating, defending or
being a witness in any proceeding. The Indemnification
Agreements further provide a mechanism through which a director
may seek court relief in the event that the Company's or the
Bank's Board of Directors (or other person appointed by the
Board) determines that the directors would not be permitted to
be indemnified under applicable law.
<PAGE>
<PAGE>
Notwithstanding the foregoing, no indemnification may
be made under the Indemnification Agreements for any of the
following: (i) any act or omission for which the Bank is
prohibited to provide indemnification under federal law; (ii) to
the extent indemnification is prohibited by applicable
regulation or order properly issued by the FDIC or OTS under
Section 18(k) of the Federal Deposit Insurance Act; (iii) to the
extent either the Bank or the Company has received a written
objection from the OTS to indemnification of the director, which
written objection is authorized by applicable law, regulation or
order relating specifically to indemnification, until such time
as it is permitted by the OTS; (iv) for any proceeding for which
the director is adjudged in a proceeding to be liable to the
Bank or the Company in the performance of his duty to the Bank,
the Company or their stockholders unless, and only to the extent
that, the court in which such proceeding is or was pending
determines that, in view of the circumstances, the director is
fairly and reasonably entitled to indemnity; (v) proceedings or
claims initiated or brought voluntarily by the director and not
by way of defense, except with respect to proceedings brought to
establish or enforce a right to indemnification under the
Indemnification Agreement or any other statute or law unless
otherwise determined by the Board of Directors; and (vi) any
amounts which have been paid directly to the director by an
insurance carrier under a policy of directors' liability
insurance maintained by the Bank or the Company.
TENNESSEE BUSINESS CORPORATION ACT
The Tennessee Business Corporation Act requires Tennessee
corporations such as the Company to indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of
any proceeding to which he was a party because he is or was a
directors of the corporation against reasonable expenses
incurred by him, unless the corporation's charter provides
otherwise. The Tennessee Business Corporation Act also
generally permits Tennessee corporations to indemnify directors
and officers in the same manner as Article XIII of the Company's
Charter provides. In no event, however, may a Tennessee
corporation indemnify a director if a judgment or other final
adjudication adverse to the director establishes his liability:
(i) for any breach of the duty of loyalty to the corporation or
its stockholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation
of law; or (iii) for the approval of unlawful distributions.
DIRECTORS AND OFFICERS LIABILITY INSURANCE
Pursuant to its Charter and Tennessee law, the Company
is permitted to purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee, or agent
of the Company. The Bank currently maintains such a policy and
it is intended that the Company will become a party to such
policy.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
For a list of all exhibits filed or included as part of
this Registration Statement, see "Index to Exhibits" at the end
of this Registration Statement.
ITEM 9. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement --
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
<PAGE>
<PAGE>
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8,
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(b) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of the securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(d) If the registrant is a foreign private issuer,
to file a post-effective amendment to the registration statement
to include any financial statements required by Rule 3-19 of
this chapter at the start of any delayed offering or throughout
a continuous offering. Financial statements and information
otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the
prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph and other
information necessary to ensure that all other information in
the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with
respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act or Rule 3-19
of this chapter if such financial statements and information are
contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
2. The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation
S-X are not set forth in the prospectus, to deliver, or cause to
be delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such
interim financial information.
4. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnifi-
cation by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, the registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, in the City of
Middlesboro, Commonwealth of Kentucky, on December 8, 1997.
CUMBERLAND MOUNTAIN BANCSHARES, INC.
By:/s/ James J. Shoffner
----------------------
James J. Shoffner
President and Chief Managing Officer
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
*/s/ J. Roy Shoffner Chairman of the Board
- -------------------- and Chief Executive Officer
J. Roy Shoffner (Principal Executive Officer)
/s/ James J. Shoffner President and Chief December 8, 1997
- --------------------- Managing Officer;
James J. Shoffner Director
*/s/ Robert R. Long Vice Chairman;
- ------------------- Director
Robert R. Long
*/s/ Reecie Stagnolia, Jr. Vice President;
- -------------------------- Branch Manager;
Reecie Stagnolia, Jr. Director
*/s/ Raymond C. Walker Director
- ----------------------
Raymond C. Walker
*/s/ J. D. Howard Vice President; Chief
- ----------------- Financial Officer;
J. D. Howard Corporate Secretary
(Principal Financial and
Accounting Officer)
* By: /s/ James J. Shoffner December 8, 1997
---------------------
James J. Shoffner
Attorney-in-fact
<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
5 Opinion of Housley Kantarian & Bronstein, P.C.
as to the legality of the Common Stock being
registered
23.1 Consent of Housley Kantarian & Bronstein, P.C.
(appears in their opinion filed as Exhibit 5)
23.2 Consent of Independent Certified Public Accountants
24 Power of Attorney (contained in the signature page
to this registration statement as originally filed)
99.1 Cumberland Mountain Bancshares, Inc. 1993 Stock
Option Plan As Amended
99.2 Form of Stock Option Agreement to be entered into
with Optionees with respect to Incentive Stock
Options granted under the Cumberland Mountain
Bancshares, Inc. 1993 Stock Option Plan
99.3 Form of Stock Option Agreement to be entered into
with Optionees with respect to Non-Incentive Stock
Options granted under the Cumberland Mountain
Bancshares, Inc. 1993 Stock Option Plan
December 8, 1997
Board of Directors
Cumberland Mountain Bancshares, Inc.
1431 Cumberland Avenue
Middlesboro, Kentucky 40965
Re: Post-Effective Amendment No. 1 on Form S-8 to
Form SB-2 Cumberland Mountain Bancshares, Inc.
1993 Stock Option Plan
Dear Board Members:
We have acted as special counsel to Cumberland Mountain
Bancshares, Inc., a Tennessee Corporation (the "Company"), in
connection with the preparation of the Post-Effective Amendment
No. 1 on Form S-8 to Form SB-2 filed with the Securities and
Exchange Commission (the "Registration Statement") under the
Securities Act of 1933, as amended, relating to shares of common
stock, par value $.01 per share (the "Common Stock") of the
Company which may be issued pursuant to the Cumberland Mountain
Bancshares, Inc. 1993 Stock Option Plan (the "Plan"), all as
more fully described in the Registration Statement. You have
requested the opinion of this firm with respect to certain legal
aspects of the proposed offering.
We have examined such documents, records and matters of law
as we have deemed necessary for purposes of this opinion and
based thereon, we are of the opinion that the Common Stock when
issued pursuant to and in accordance with the terms of the Plan
will be legally issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Post-Effective Amendment No. 1 on Form S-8 to
Form SB-2 and to references to our firm included under the
caption "Legal Opinion" in the Prospectus which is part of the
Registration Statement.
Very truly yours,
Housley Kantarian & Bronstein, P.C.
By: /s/ J. Mark Poerio
------------------
J. Mark Poerio, Esquire
[Marr, Miller & Myers, PSC Letterhead]
December 8, 1997
Board of Directors
Cumberland Mountain Bancshares, Inc.
1431 Cumberland Avenue
Middlesboro, Kentucky 40965
Re: Post-effective Amendment No. 1 on Form S-8 to
Form SB-2 Cumberland Mountain Bancshares, Inc.
1993 Stock Option Plan
We consent to the incorporation by reference in this
registration statement of our report dated July 28, 1997, on our
audits of the consolidated financial statements and financial
statement schedules of Cumberland Mountain Bancshares, Inc. as
of June 30, 1997 and 1996 and the related consolidated
statements of income, changes in stockholders' equity, and cash
flows, for each of the years in the three-year period ended June
30, 1997, which reports were included in Cumberland Mountain
Bancshares, Inc. Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1997. We also consent to the reference to
our firm under the caption "Experts."
/s/ Marr, Miller & Myers, PSC
Marr, Miller & Myers, PSC
<PAGE>
CUMBERLAND MOUNTAIN BANCSHARES, INC.
1993 STOCK OPTION PLAN
AS AMENDED*
1. PURPOSE OF PLAN.
The purpose of this Cumberland Mountain Bancshares, Inc.
1993 Stock Option Plan (the "Plan") is to advance the interests
of Cumberland Mountain Bancshares, Inc. through providing select
key Employees and Directors of the Savings Bank with the
opportunity to purchase shares of Common Stock of the Savings
Bank. By encouraging such stock ownership, the Savings Bank
seeks to attract, retain and motivate the best available
personnel for positions of substantial responsibility and to
provide additional incentive to key Employees and Directors of
the Savings Bank or any present or future Parent or Subsidiary
of the Savings Bank to promote the success of the business. It
is intended that options issued pursuant to this Plan may
constitute either ISOs or Non-ISOs.
2. DEFINITIONS.
As used herein, the following definitions shall apply.
(a) "Savings Bank" shall mean the Middlesboro Federal
Bank, Federal Savings Bank, Middlesboro, Kentucky.
(b) "Board" shall mean the Board of Directors of the
Company.
(c) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(d) "Committee" shall mean the Stock Option Committee
appointed by the Board in accordance with paragraph 4(a) of the
Plan hereof.
(e) "Common Stock" shall mean the common stock, par value
$.01 per share, of the Company.
(e.1) "Company" shall mean Cumberland Mountain
Bancshares, Inc.
(f) "Continuous Employment" or "Continuous Status as an
Employee" shall mean the absence of any interruption or
termination of employment by the Savings Bank or any present or
future Parent or Subsidiary of the Savings Bank. Employment
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Savings Bank or in the case of transfers between payroll
locations of the Savings Bank, its Parent, its Subsidiaries or a
successor.
(g) "Director" shall mean any member of the Board of
Directors.
____________
* Includes the 1996 Amendment, Second 1996 Amendment, and 1997
Amendment.
<PAGE>
<PAGE>
(h) "Effective Date" shall mean the date specified in
paragraph 12 hereof.
(i) "Employee" shall mean any person employed by the
Savings Bank or any present or future Parent or Subsidiary of
the Savings Bank.
(i.1) "OTS Award Limitations" shall mean the following
percentage limitations,
determined with respect to the total Shares reserved for awards
under this Plan and the
Cumberland Mountain Bancshares, Inc. 1997 Stock Option and
Incentive Plan: 25% for total
Options to any particular Employee, 5% for total Options to any
particular non-employee
Director, and 30% for total Options to the non-employee
Directors as a group.
(j) "Non-Employee Director" shall have the meaning
provided in Rule 16b-3.
(k) "Option" shall mean an option to purchase Shares
granted pursuant to the Plan, whether the option is an incentive
stock option within the meaning of Section 422 of the Code (an
"ISO"), or an option that does not so qualify (a "Non-ISO").
(l) "Option Price" shall mean the price per Option Share
at which an Option may be exercised.
(m) "Optionee Shares" shall mean Shares subject to an
Option granted pursuant to this Plan.
(n) "Optionee" shall mean any person who receives an
Option pursuant to the Plan.
(o) "Parent" shall mean any present or future corporation
which would be a "parent corporation" as defined in Subsections
424(e) and (g) of the Code.
(p) "Plan" shall mean the Cumberland Mountain Bancshares,
Inc. 1993 Stock Option Plan.
(q) "Share" shall mean one share of Common Stock.
(r) "Subsidiary" shall mean any present or future
corporation which would be a "subsidiary corporation" as defined
in Subsections 424(f) and (g) of the Code.
3. SHARES SUBJECT TO THE PLAN.
Except as otherwise required by the provisions of
paragraph 11 hereof, the aggregate number of Shares deliverable
upon the exercise of Options pursuant to the Plan shall not
exceed
-2-<PAGE>
<PAGE>
23,994 (1) Shares. Such Shares may either be authorized
but unissued Shares or Shares held in treasury.
If Options should expire, become unexercisable or be
forfeited for any reason without having been exercised in full,
the Option Shares shall, unless the Plan shall have been
terminated, be available for the grant of additional Options
under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) Composition of Committee. The Plan shall be
administered by the Committee, which shall consist of not less
than two (2) Directors appointed by the Board. All persons
designated as members of the Committee shall be "Non-Employee
Directors" within the meaning of Rule 16b-3 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as
amended ("Rule 16b-3"). Members of the Committee shall serve at
the pleasure of the Board. In the absence at any time of a duly
appointed Committee, the Plan shall be administered by those
Directors who are "Non-Employee Directors" within the meaning of
Rule 16b-3.
(b) Powers of the Committee. The Committee shall have
discretionary authority (but only to the extent not contrary to
the express provisions of the Plan or to resolutions adopted by
the Board) to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine
the form and content of Options to be issued under the Plan and
to make other determinations necessary or advisable for the
administration of the Plan, and shall have and may exercise such
other power and authority as may be delegated to it by the Board
from time to time. A majority of the entire Committee shall
constitute a quorum and the action of a majority of the members
present at any meeting at which a quorum is present shall be
deemed the action of the Committee.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Committee shall be
final and conclusive on all persons affected thereby.
5. ELIGIBILITY.
(a) General Rule. In its sole discretion, the Committee
may grant Options to Employees of the Company, or any present or
future Parent or Subsidiary. Each nonemployee director shall be
granted Non-ISOs only in accordance with paragraph 11 hereof.
An Optionee who has been granted an Option may, if otherwise
eligible, be granted an additional Option or Options. However,
no Employee or Director shall have a right to be granted an
Option or, having received an option, the right to again be
granted an Option. Notwithstanding the foregoing, no Employee
or non-employee Director shall receive Options in excess of the
OTS Award Limitations.
___________
(1) Equal to 10% of the total number of shares of Common Stock
sold in the formation of a mutual holding company by the
Savings Bank.
-3-<PAGE>
<PAGE>
(b) Special Rules. The aggregate fair market value
(determined in accordance with paragraph 7 hereof), as of the
date the Option is granted, of the Shares with respect to which
incentive stock options are exercisable for the first time by an
Employee during any calendar year (under all incentive stock
option plans, as defined in Section 422 of the Code, of the
Savings Bank or any present or future Parent or Subsidiary of
the Savings Bank) shall not exceed $100,000. Notwithstanding
the prior provisions of this paragraph, the Committee may grant
Options in excess of the foregoing limitations, in which case
such Options granted in excess of such limitation shall be
Options which are not incentive stock options, as defined in
Section 422 of the Code, pursuant to Section 422(d) of the Code.
Furthermore, in no event shall Shares subject to Options granted
to non-employee Directors under this Plan exceed in the
aggregate more than 20% of the total number of Shares authorized
(not to exceed the OTS Award Limitations) for issuance pursuant
to paragraph 3 hereof.
6. TERM OF PLAN; TERM OF OPTIONS.
(a) The Plan shall continue in effect for a term of ten
years from the Effective Date, unless sooner terminated pursuant
to paragraph 17 hereof. No Option shall be granted under the
Plan after ten years from the Effective Date.
(b) The term of each Option granted under the Plan shall
be established by the Committee, but shall not exceed 10 years;
provided, however, that in the case of an Employee who owns
Shares representing more than 10% of the outstanding Common
Stock at the time the Option is granted, the term of such Option
shall not exceed five (5) years.
7. OPTION PRICE.
(a) The Option Price as to any particular Option granted
under the Plan shall not be less than the fair market value of
the Optioned Shares on the date of grant. In the case of an
Employee who owns Shares representing more than 10% of the
Company's outstanding Shares of Common Stock at the time an ISO
is granted, the Option Price shall not be less than 110% of the
fair market value of the Optioned Shares at the time the ISO is
granted.
(b) Determination of Option Price. If the Common Stock
is traded otherwise than on a national securities exchange at
the time of the granting of an Option, then the Option Price per
Share shall be not less than the mean between the bid and asked
price on the date the Option is granted or, if there is no bid
and asked price on said 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 Option Price per Share
shall be determined by the Committee, in its sole and absolute
discretion. If the Common Stock is listed on a national
securities exchange (including the NASDAQ National Market
System) at the time of granting an Option, then the Option Price
per share shall be not less than the average of the highest and
lowest selling price on such exchange on the date such Option is
granted or if there were no sales on said date, then the Option
Price shall be not less than the mean between the bid and asked
price on such date.
-4-<PAGE>
<PAGE>
(c) Reissuance of Options. Notwithstanding anything
herein to the contrary, the Committee shall have the authority
to cancel outstanding Options with the consent of the Optionee
and to reissue new Options at a lower Option Price equal to the
then fair market value per share of Common Stock in the event
that the fair market value per share of Common Stock at any time
prior to the date of exercise of outstanding Options falls below
the Option Price of such Options; provided that the Option price
of the reissued Options shall in no event be less than 75% of
the Option Price of the Option when first issued.
8. EXERCISE OF OPTION.
(a) Procedure of Exercise. Any Opinion granted
hereunder shall be exercisable at such times and under such
conditions as shall be permissible under the terms of the Plan
and of the Option granted to an Optionee. An Option may not be
exercised for a fractional Share.
An Optionee may exercise Options granted pursuant to the
Plan, subject to provisions relative to its termination and
limitations on its exercise, only by (1) written notice of
intent to exercise the Option with respect to a specified number
of Shares, and (2) payment to the Company (contemporaneously
with delivery of such notice) in cash, in Common Stock, or a
combination of cash and Common Stock, of the amount of the
Option Price for the number of Shares with respect to which the
Option is then being exercised. Each such notice and payment
shall be delivered, or mailed by prepaid registered or certified
mail, addressed to the Treasurer of the Company at the Company's
executive offices. Common Stock utilized in full or partial
payment of the Option Price shall be valued at its fair market
value at the date of exercise.
(b) Exercise During Employment or Following Death or
Disability. Except as may be specifically provided for by the
terms of an Option as may be authorized by the Committee at the
time of such grant, an Option may be exercised by an Optionee
only while he is an Employee and has maintained Continuous
Status as an Employee since the date of the grant of the Option
or within three months after termination of status as an
Employee (but not later than the date on which the Option would
otherwise expire), except if the Savings Bank terminates his
Continuous Employment by reason of (1) "Just Cause" (which for
purposes hereof shall have the same meaning as defined in the
then existing employment agreement between the Optionee and the
Savings Bank or any of its Parent or Subsidiaries and, in the
absence of any such agreement, shall have the meaning defined in
12 C.F.R. Subsection 563.39(b)(1) as in effect on the Effective
Date), then the Optionee's rights to exercise such Option shall
expire on the date of such termination; (2) death, then to the
extent that the Optionee would have been entitled to exercise
the Option immediately prior to his death, such Option of the
deceased Optionee may be exercised within two years from the
date of his death (but not later than the date on which the
option would otherwise expire) by the personal representatives
of his estate or person or persons to whom his rights under such
Option shall have passed by will or by laws of descent and
distribution; or (3) Permanent and Total Disability (as such
term is defined in Section 22(e)(3) of the Code), then to the
extent that the Optionee would have been entitled to exercise
the Option immediately prior to his Permanent and Total
Disability, such Option may be exercised within one year from
the date of such Permanent and Total Disability, but not later
than the date on which the Option would otherwise expire.
Notwithstanding the provisions of any Option which provides for
its exercise in
-5-<PAGE>
<PAGE>
installments as designated by the Committee, such Option shall
become immediately exercisable upon death or Permanent and Total
Disability, as defined herein, of the Optionee.
The Committee's determination whether an Optionee's
Continuous Employment has ceased, and the effective date thereof
shall be final and conclusive on all persons affected thereby.
(c) Notwithstanding anything herein to the contrary, in
no event shall any Option granted pursuant to the Plan be
exercisable for six months from the date of grant, except in the
event of the death, retirement or Permanent and Total Disability
of the Optionee.
9. CHANGE IN CONTROL.
Notwithstanding the provisions of any Option which provides
for its exercise in installments as designated by the Committee,
such Option shall become immediately exercisable in the event of
a change in control (or immediately prior to the occurrence of a
change in control of the Bank or the Company if such change
would cause the Optionee's rights under the Option to be
extinguished for any reason). At such time, the Optionee shall,
at the discretion of the Committee, be entitled to receive cash
in an amount equal to the excess of the fair market value of the
Common Stock (determined in accordance with paragraph 7)
subject to such Option over the Option Price of such shares, in
exchange for the surrender of such Options by the Optionee. A
"Change in Control" shall mean an event of a nature that:
(I) would be required to be reported in response to Item I of
the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 ("Exchange Act"); or (II) results in a Change in Control
of the Bank or the Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations
promulgated by the Office of Thrift Supervision (or its
predecessor agency), as in effect on the date hereof; or (III)
without limitation, such a Change in Control shall be deemed to
have occurred at such time as (a) any "person" (as the term is
used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of the Bank or the Company representing twenty
percent (20%) or more of the combined voting power of the Bank's
or the Company's outstanding securities except for any
securities of the Company purchased by the Company's employee
stock ownership plan and trust; or (b) individuals who
constitute the Board of the Bank or the board of directors of
the Company on the date hereof ("Incumbent Board") cease for any
reason to constitute at least a majority thereof; provided that
any person becoming a director subsequent to the date hereof
whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board, or whose
nomination for election by the Company's stockholders was
approved by the same nominating committee serving under an
Incumbent Board, shall be, for purposes of this clause (b),
considered as though he were a member of the Incumbent Board; or
(c) the occurrence of a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of
the Bank or the Company or similar transaction in which the Bank
or the Company is not the resulting entity. Provided, however,
that a Change in Control shall not be deemed to occur as the
result of acquisitions of common stock of the Company by Messrs.
J. Roy Shoffner and James J. Shoffner.
-6-<PAGE>
<PAGE>
10. NON-TRANSFERABILITY OF OPTIONS.
Awards may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or
by the laws of descent and distribution. Notwithstanding
the foregoing, or any other provision of this Plan, a
Participant who holds Awards may transfer such Awards (but not
ISOs) to his or her spouse, lineal ascendants, lineal
descendants, or to a duly established trust for the benefit of
one or more of these individuals. Awards so transferred may
thereafter be transferred only to the Participant who originally
received the grant or to an individual or trust to whom the
Participant could have initially transferred the Awards pursuant
to this Paragraph 10. Awards which are transferred pursuant to
this Paragraph 10 shall be exercisable by the transferee
according to the same terms and conditions as applied to the
Participant.
11. GRANTS FOR NONEMPLOYEE DIRECTORS.
(a) Grants to Nonemployee Directors. Notwithstanding
any other provisions of this Plan, each Director who is not an
Employee at the Effective Date shall receive on the Effective
Date, Options to purchase _____ (2) Shares of Common Stock (not
to exceed the OTS Award Limitations) at an Option Price equal to
the initial offering price of such Common Stock, and each
Director who is not an Employee and who first joins the Board
after the Effective Date shall receive, on the date he becomes a
Director, Options to purchase 100 Shares of Common Stock at an
Option Price equal to the then fair market value of such Common
Stock.
(b) Terms of Exercise. Options received under the
provisions of this paragraph may be exercised by (i) written
notice of intent to exercise the Option with respect to a
specified number of Shares, and (ii) payment to the Company
(contemporaneously with the delivery of such notice) in cash, in
Common Stock, or a combination of cash and Common Stock, of the
amount of the Option Price for the number of Shares with respect
to which the Option is then being exercised. Each such notice
and payment shall be delivered, or mailed by prepaid registered
or certified mail, addressed to the Treasurer of the Company at
the Company's executive offices. A nonemployee Director who
exercises Options pursuant to this paragraph may satisfy all
applicable federal, state and local income and employment tax
withholding obligations, in whole or in part, by irrevocably
electing to have the Company withhold shares of Common Stock, or
to deliver to the Company shares of Common Stock that he already
owns, having a value equal to the amount required to be
withheld; provided that to the extent not inconsistent herewith,
such election otherwise complies with those requirements or
Paragraphs 8(a) or 20 hereof. Such Options may be exercised
only while the Optionee is a Director of the Company, or within
one year after termination of the Optionee's status as a
Director but not later than the date on which such Options would
otherwise expire, or in the event of such person's death during
the term of his directorship, by the personal representatives of
his estate or person or persons to whom his
____________
(2) To be determined as follows: 20% of the aggregate number
of Shares subject to the Plan, pursuant to paragraph 3,
shall be divided in equal numbers between all Directors
who are not Employees at the Effective Date.
-7-<PAGE>
<PAGE>
rights under such Option shall have passed by will or by laws of
descent and distribution. Such Options of a deceased Director
may be exercised within two years from the date of his death,
but not later than the date on which the Option would otherwise
expire. Unless otherwise inapplicable, or inconsistent with the
provisions of this paragraph, the Options to be granted to
Directors hereunder shall be subject to all other provisions of
this Plan.
12. EFFECT OF CHANGE IN COMMON SHARES SUBJECT TO THE
PLAN.
In the event that each of the outstanding shares of Common
Stock (other than Shares held by dissenting shareholders) shall
be changed into or exchanged for a different number or kind of
shares of capital stock of the Company or of another corporation
(whether by reason or merger, consolidation, recapitalization,
reclassification, stock dividend, split-up, combination of
shares, or otherwise), then there shall be substituted for each
Share of Common Stock then under Option or available for Option
the number and kind of shares of capital stock into which each
outstanding Share of Common Stock (other than Shares held by
dissenting stockholders) shall be so changed or for which each
such Share shall be so exchanged, together with an appropriate
adjustment of the Option Price.
In the event there shall be any change in the number of,
or kind of, issued shares of Common Stock, or of any capital
stock or other securities into which such Common Stock shall
have been changed, or for which it shall have been exchanged,
then if the Committee shall, in its discretion, determine that
such change equitably requires an adjustment in the number, or
kind, or Option Price of Shares then subject to an Option or
available for Option, such adjustment shall be made by the Board
and shall be effective and binding for all purposes of the Plan.
13. TIME OF GRANTING OPTIONS.
The date of grant of an Option under the Plan shall, for
all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the
determination shall be given to each Optionee to whom an Option
is so granted within a reasonable time after the date of such
grant.
14. EFFECTIVE DATE.
The Plan shall become effective upon the effective date of
the formation of the Mutual Holding Company by the Savings Bank.
Options may be granted prior to approval of the Plan by the
stockholders of the Savings Bank if the exercise of such Options
is subject to such stockholder approval of the Plan. The Plan
shall continue in effect for a term of ten years from the
Effective Date, unless sooner terminated under paragraph 17
hereof.
15. APPROVAL BY STOCKHOLDERS.
The Plan shall be approved by stockholders of the Savings
Bank within twelve (12) months before or after the Effective
Date.
-8-<PAGE>
<PAGE>
16. MODIFICATION OF OPTIONS.
At any time, and from time to time, the Board may
authorize the Committee to direct execution of an instrument
providing for the modification of any outstanding Option,
provided no such modification, extension or renewal shall confer
on the holder of said Option any right or benefit which could
not be conferred on him by the grant or a new Option at such
time, or impair the Option without the consent of the holder of
the Option.
17. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may from time to time amend, modify or terminate
the Plan, except that no action of the Board may materially
increase (other than as provided in Paragraph 12) the maximum
number of Shares permitted to be optioned or become available
for the granting of Options under the Plan, materially increase
the benefits accruing to Optionees, or materially modify the
requirements for eligibility for participation in the Plan,
unless such action of the Board shall be subject to approval or
ratification by the stockholders of the Company.
No amendment, suspension or termination of the Plan shall,
without the consent of any affected Optionee, alter or impair
any rights or obligations under any Option theretofore granted
to such Optionee under the Plan.
18. CONDITIONS UPON ISSUANCE OF SHARES.
Shares of Common Stock shall not be issued with respect to
any Option granted under the Plan unless the issuance and
delivery of such Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may
then be listed.
The inability of the Company to obtain approval from any
regulatory body or authority deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares
hereunder shall relieve the Company of any liability in respect
of the non-issuance or sale of such Shares. As a condition to
the exercise of an Option, the Company may require the person
exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an
exemption from the registration requirements of federal and
state securities law.
19. RESERVATION OF SHARES.
The Company, during the term of the Plan, will reserve and
keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
-9-<PAGE>
<PAGE>
20. WITHHOLDING TAX.
The Company's obligation to deliver shares of Common Stock
upon exercise of Options, in whole or in part, shall be subject
to the Optionee's satisfaction of all applicable federal, state
and local income and employment tax withholding obligations.
The Committee, in its discretion, may permit the Optionee to
satisfy the obligation, in whole or part, by irrevocably
electing to have the Company withhold shares of Common Stock, or
to deliver to the Company shares of Common Stock that he already
owns, having a value equal to the amount required to be
withheld. The value of shares to be withheld, or delivered to
the Company, shall be based on the fair market value of the
shares, as determined in accordance with procedures to be
established by the Committee, on the date the amount of tax to
be withheld is to be determined (the "Tax Date"). The
Optionee's election to have shares withheld, or delivered to the
Company, for this purpose will be subject to the following
restrictions:
(1) the election must be made prior to the Tax Date,
(2) the election must be irrevocable,
(3) the election will be subject to the disapproval of
the Committee, and
(4) if an optionee is a person whose transactions in
stock of the Company are subject to Section 16(b) of the
Securities Exchange Act of 1934 and the Plan is then
intended to qualify under Rule 16b-3, such election may
not be made within six months of the date the Option is
granted and must be made during the period beginning on
the third business day and ending on the twelfth business
day that follows the release of the Company's quarterly or
annual summary statement of sales and earnings.
21. GOVERNING LAW.
The Plan shall be governed by and construed in accordance
with the laws of the State of Kentucky, except to the extend
preempted by federal law as now or hereafter in effect.
-10-
STOCK OPTION AGREEMENT
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
CUMBERLAND MOUNTAIN BANCSHARES, INC.
1993 STOCK OPTION PLAN
STOCK OPTION for a total of _____ shares of Common Stock,
par value $.01 per share, of Cumberland Mountain Bancshares,
Inc. (the "Company"), which Option is intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), 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. 1993 Stock Option Plan
(the "Plan") which was adopted by the Company and which is
incorporated by reference herein, receipt of which is hereby
acknowledged.
1. Option Price. The option price is $_____ for each
share, being 100%* of the fair market value, as determined by
the Committee, of the Common Stock on the date of grant of this
Option.
2. Exercises of Option. This Option shall be exercisable
in accordance with provisions of the Plan as follows:
(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 %
1 year but less than 2 years %
2 years but less than 3 years %
3 years but less than 4 years %
4 years but less than 5 years %
5 years or more %
_______________
* 100% in the case of an Optionee who owns shares representing
more than 10% of the outstanding common stock of the Company
on the date of grant of this Option.
<PAGE>
<PAGE>
ISO Agreement
Page 2
(ii) Method of Exercise. This Option shall be exercisable
by a written notice by the Optionee 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
holder's 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. 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. This 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
the Optionee's 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.
<PAGE>
<PAGE>
ISO Agreement
Page 3
5. Term of Option. This Option may not be exercisable
for more than ten years from the date of grant of this Option,
as stated below, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
.
CUMBERLAND MOUNTAIN BANCSHARES, INC
1993 STOCK OPTION PLAN COMMITTEE
By _______________________________
______________________
Date of Grant Attest: ____________________ (Seal)
_______________
** Five years in the case of an Optionee who owns shares
representing more than 10% of the outstanding common stock of
the Company on the date of grant of this Option.
<PAGE>
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
CUMBERLAND MOUNTAIN BANCSHARES, INC.
1993 STOCK OPTION PLAN
_______________
Date
Treasurer
Cumberland Mountain Bancshares, Inc.
1431 Cumberland Avenue
Middlesboro, Kentucky 40965
Re: Cumberland Mountain Bancshares, Inc. 1993 Stock Option Plan
-----------------------------------------------------------
Dear Sir:
The undersigned elects to exercise the 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
teller's 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
_____ _____ shares of Common Stock, valued
at $____ per share
$_____ 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 ________________________________________
Very truly yours,
___________________________
STOCK OPTION AGREEMENT
FOR NON-INCENTIVE STOCK OPTIONS PURSUANT TO THE
CUMBERLAND MOUNTAIN BANCSHARES, INC.
1993 STOCK OPTION PLAN
STOCK 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. 1993 Stock Option 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. Option Price. The option price is $_____ for each
share, being 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 provisions of the Plan as follows:
(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 %
1 year but less than 2 years %
2 years but less than 3 years %
3 years but less than 4 years %
4 years but less than 5 years %
5 years or more %
(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;
<PAGE>
<PAGE>
Non-ISO Agreement
Page 2
(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. 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 w ill 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, this Option may be transferred to the Optionee's
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.
CUMBERLAND MOUNTAIN BANCSHARES, INC.
1993 STOCK OPTION PLAN COMMITTEE
___________________ By ___________________________________
Date of Grant
Attest ________________________ (Seal)
<PAGE>
<PAGE>
NON-INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
CUMBERLAND MOUNTAIN BANCSHARES, INC.
1993 STOCK OPTION PLAN
---------------
Date
Treasurer
Cumberland Mountain Bancshares, Inc.
1431 Cumberland Avenue
Middlesboro, Kentucky 40965
Re: Cumberland Mountain Bancshares, Inc. 1993 Stock Option 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
_____ _____ shares of Common Stock, valued
at $____ per share
$_____ Total
The name or names to be on the stock certificate or
certificates and the address and Social Security Number of such
person is as follows:
Name __________________________________________________________
Address _______________________________________________________
Social Security Number ________________________________________
Very truly yours,
___________________________
