EX-10.8.1 8 ex10-81.txt EXHIBIT 10.8.1 EXHIBIT 10.8.1 CNB HOLDINGS, INC. INCENTIVE STOCK OPTION AGREEMENT This Incentive Stock Option Agreement ("Agreement"), dated as of MONTH, DATE, YEAR, (the "Date of Grant"), is made and entered into by CNB HOLDINGS, INC., a Georgia corporation ("CNB"), and (the "Grantee"), who is an employee or officer of CNB or one of its parents or subsidiaries (the Grantee's employer is sometimes referred to herein as the "Employer"). WHEREAS, the Board of Directors of CNB (the "Board") has adopted the CNB Holdings, Inc. 1998 Incentive Stock Option Plan (the "Plan") and the shareholders of CNB have approved the Plan. WHEREAS, the Plan provides for the granting of incentive stock options by the Compensation Committee of the Board of Directors of CNB (the "Committee") to employees of CNB or any parent or subsidiary of CNB to purchase shares of the common stock of CNB, par value one dollar ($1.00) per share (the "Stock"), in accordance with the terms and provisions thereof; and WHEREAS, the Committee considers the Grantee to be a person who is eligible for a grant of incentive stock options under the Plan and has determined that it would be in the best interest of CNB to grant the incentive stock options documented herein. NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows: 1. GRANT OF OPTION Subject to the terms and conditions hereinafter set forth, CNB, with the approval and at the direction of the Committee, hereby grants to the Grantee, as of the Date of Grant, an option to purchase up to shares of Stock at a price of $ per share. Such option is hereinafter referred to as the "Option", and the shares of Stock purchasable upon exercise of the Option are hereto to be, and shall be treated as, an incentive stock option, as such term is defined under section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). Subject to such further limitations as are provided herein, the Option is exercisable commencing on the Date of Grant. 2. TERMINATION OF OPTION The Option and all rights hereunder with respect thereto, to the extent such rights shall not have been exercised, shall terminate and become null and void upon the earlier of: (i) ten (10) years after the Date of Grant; or (ii) the date on which the Grantee shall be convicted of any act of malfeasance or wrongdoing directly or indirectly affecting CNB or any parent or subsidiary of CNB. 3. EXERCISE OF OPTION (a) At any time during the period of this Option commencing with the first anniversary of the Date of Grant, the Grantee may purchase up to 33 1/3% of the shares covered by this Option and may purchase up to an additional 33 1/3% on each of the second and third anniversaries from the Date of Grant so that this Option will be fully vested on the third anniversary of the Date of Grant. (b) The Grantee may exercise the Option with respect to all or any part of the number of Option Shares to the extent then exercisable hereunder, by giving the Secretary of CNB written notice of intent to exercise. The notice of exercise shall specify the number of Option Shares as to which the Option is to be exercised and the date of exercise thereof. (c) Upon a termination of the Grantee's employment for any reason other than as set forth in Section 2(ii) of this Agreement, the Option may be exercised during the following periods, but only to the extent that the Option was outstanding and exercisable on any such date of termination: (i) the one-year period following the date of the Grantee's death, in the case of the Grantee's death during his employment by the Employer, or the one-year period following the termination of employment due to permanent disability (as determined by the Plan) and (ii) the three-month period following the date of such termination in the case of termination of his employment for any reason other than the death or permanent disability of the Grantee or pursuant to Section 2(ii) of this Agreement. A transfer of the Grantee's employment between CNB and any subsidiary of CNB, or between any subsidiaries of CNB, shall not be deemed to be a termination of the Grantee's employment. (d) Full payment (in U.S. dollars) by the Grantee of the option price for the Option Shares purchased shall be made (i) in cash (ii) by delivery of mature Shares having a Fair Market Value, determined as of the date of exercise, equal to the aggregate option price payable by reason of such exercise, on or before the exercise date specified in the notice of exercise. (e) On the exercise date specified in the Grantee's notice or as soon thereafter as is practicable, CNB shall cause to be delivered to the Grantee a certificate or certificates for the Option Shares then being purchased (out of unissued Stock or reacquired Stock, as CNB may elect) upon full payment for such Option Shares. The obligations of CNB to deliver the Stock shall, however, be subject to the condition that if at any time the Committee shall determine in its discretion that the listing, registration or qualification of the Option Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the Option or the issuance or purchase of the Stock thereunder, the Option may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. (f) If the Grantee fails to pay for any of the Option Shares specified in such notice or fails to accept delivery thereof, the Grantee's right to purchase such Option Shares may be terminated by CNB. The date specified in the Grantee's notice as the date of exercise shall be deemed the date of exercise of the Option, provided that payment in full for the Option Shares to be purchased upon such exercise shall have been received by such date. 2 4. LIMITATION ON EXERCISE AND FORFEITURE Notwithstanding any other provision in this Agreement, the Option must be exercised within thirty (30) days after CNB has notified the Grantee that CNB's primary federal regulator has determined that CNB's capital has fallen below such regulator's minimum requirements or it shall terminate and be of no further effect. 5. ADJUSTMENT OF AND CHANGES IN STOCK OF CNB (a) In the event of a reorganization, recapitalization, change of shares, stock split, spin-off, stock dividend, reclassification, subdivision or combination of shares, rights offering or any other change in the corporate structure or shares of capital stock of CNB, the Committee shall make such adjustment as appropriate in the number and kind of shares of Stock subject to the Option or in the option price; provided, however, that no such adjustment shall give the Grantee any additional benefits under the Option. (b) In the event that CNB shall be a party to any reorganization involving a merger, consolidation or acquisition of the Stock or the assets of CNB, the Committee, in its sole discretion, may: (i) declare that the Option granted hereunder shall become exercisable immediately notwithstanding the provisions of the Agreement regarding exercisability and that the Option shall terminate thirty (30) days after the Committee gives written notice to Grantee of his immediate right to exercise the Option and of the Committee's decision to terminate the Option if not exercised within such thirty-day period; or (ii) notify the Grantee that the Option granted hereunder shall apply with appropriate adjustments as determined by the Committee to the securities of the resulting corporation to which holders of the number of shares of Stock subject to the Option would have been entitled. (c) The adoption of a plan of dissolution or liquidation by the Board of Directors and the shareholders of CNB shall cause the Option to terminate to the extent not exercised prior to the adoption of the plan of dissolution or liquidation by the shareholders of CNB; provided, however, that the Committee, in its discretion, may declare that the Option shall become exercisable immediately notwithstanding the provisions of this Agreement regarding exercisability; and provided further that in the event of the adoption of a plan of dissolution or liquidation in connection with a reorganization as described in the first sentence of subparagraph (b), the Option shall be governed by and be subject to the provisions of such sentence. (d) If any rights or warrants to subscribe for additional shares are given pro rata to holders of outstanding shares of the Stock, the Grantee shall be entitled to the same rights or warrants on the same basis as holders of the outstanding shares with respect to such portion of the Grantee's Option that may be exercised on or prior to the date of the expiration of such rights or warrants. 3 6. FAIR MARKET VALUE For purposes of the Plan, the "fair market value" of the shares of Stock shall be the mean between the high "bid" and the low "asked" prices of the Stock in the over-the-counter market on the day on which such value is to be determined or, if no shares were traded on such day, on the first day immediately preceding such day on which shares were traded. If the Stock is not regularly traded in the over-the-counter market but is registered on a national securities exchange, the "fair market value" of the shares of Stock shall mean the closing price of the Stock on such national securities exchange on the day on which such value is to be determined or, if no shares were traded on such day, on the first day immediately preceding such day on which shares were traded. If the Stock is not regularly traded in the over-the-counter market or registered on a national securities exchange the Committee shall determine the fair market value of the Stock in good faith in accordance with Code section 422(c)(1) and accompanying Treasury Regulations. 7. NO RIGHTS OF SHAREHOLDERS Neither the Grantee nor any personal representative shall be, or shall have any of the rights and privileges of, a shareholder of CNB with respect to any shares of Stock purchasable or issuable upon the exercise of the Option, in whole or in part, prior to becoming the holder of record of such shares. 8. NON-TRANSFERABILITY OF OPTION During the Grantee's lifetime, the Option hereunder shall be exercisable only by the Grantee or a legal representative of the Grantee, and the Option shall not be transferable except, in case of the death of the Grantee, by will or the laws of descent and distribution, nor shall the Option be subject to attachment, execution or other similar process. In the event of (a) any attempt by the Grantee to alienate, assign, pledge, hypothecate or otherwise dispose of the Option, except as provided for herein, or (b) the levy of any attachment, execution or similar process by any third party upon the rights or interest hereby conferred, CNB may terminate the Option by notice to the Grantee, and it shall thereupon become null and void. 9. EMPLOYMENT NOT AFFECTED Neither the granting of the Option nor its exercise shall be construed as granting to the Grantee any right with respect to continuance of employment by the Employer. Except as may otherwise be limited by a written agreement between the Employer and the Grantee, the right of the Employer to terminate at will the Grantee's employment with it at any time (whether by dismissal, discharge, retirement or otherwise) is specifically reserved by CNB, as the Employer or on behalf of the Employer (whichever the case may be), and acknowledged by the Grantee. 10. AMENDMENT OF OPTION This Agreement and the terms of the Option may be amended by the Board or the Committee at any time (i) if the Board or the Committee determines, in its sole discretion, that amendment is necessary or advisable due to any addition to or change in the Code or in the regulations issued thereunder, or any federal or state securities law or other law or regulation, 4 which change occurs after the Date of Grant and by its terms applies to the Option; or (ii) other than in the circumstances described in clause (i), with the consent of CNB and the Grantee. 11. SECURITIES LAWS This Option may not be exercised if the issuance of shares of Stock of CNB upon such exercise would constitute a violation of any applicable Federal or State securities or other law or valid regulation. The Grantee, as a condition to his exercise of this Option, shall represent to CNB that the shares of Stock of CNB that he acquires under this Option are being acquired by him for investment and not with a present view to distribution or resale, unless counsel for CNB is then of the opinion that such a representation is not required under the Securities Act of 1933, as amended (the "Securities Act"), or any other applicable law, regulation or rule of any governmental agency. The Grantee represents and warrants that he will be acquiring the Option Shares for investment purposes and not with a view to distribution. The Grantee further represents and warrants that he is aware that the Option Shares have not been registered under the Securities Act or under the provisions of Georgia law and that the Option Shares may not be sold, transferred or otherwise assigned without registration or an exemption therefrom. Grantee acknowledges being informed by CNB that the Option Shares are restricted securities and that each certificate for shares of Stock issued upon exercise of the Option shall be stamped or otherwise imprinted with a restrictive legend in form and context deemed necessary by CNB. The undersigned further acknowledges that he is a shareholder of CNB and is aware of the business and operations of CNB. 12. NOTICE Any notices or other communications to any party pursuant to or relating to this Agreement and the transactions provided for herein shall be deemed to be given, delivered or received when delivered personally or three days after being deposited in the United States Mail, registered or certified, and with proper postage and registration and certification fees prepaid, addressed to the parties for whom intended at the addresses indicated for each party as set forth below: CNB: CNB Holdings, Inc. 7855 North Point Parkway, Suite 200 Alpharetta, Georgia 30022 Attention: H.N. Padget, Jr., President and Chief Executive Officer with a copy to: Thomas O. Powell, Esquire Troutman Sanders LLP 600 Peachtree Street, N.E., Suite 5200 Atlanta, Georgia 30308 Grantee: At the latest address listed for the Grantee in the Company's records. 5 13. INCORPORATION OF PLAN BY REFERENCE The Option is granted pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and the Option shall in all respects be interpreted in accordance with the Plan. The Committee shall interpret and construe the Plan and this instrument, and its interpretations and determinations shall be conclusive and binding on the parties hereto and any other person claiming an interest hereunder, with respect to any issue arising hereunder or thereunder. 14. GOVERNING LAW The validity, construction, interpretation and effect of this Agreement shall exclusively be governed by and determined in accordance with the law of the State of Georgia. 15. COUNTERPARTS The Agreement may be executed with counterpart signature pages, all of which together shall constitute one and the same Agreement. 16. SUCCESSORS AND ASSIGNS This Agreement shall insure to the benefit of and be enforceable by and binding upon the permitted successors and assigns of each party, including the personal or legal representatives, executors, administrators, heirs and legatees of the Grantee. IN WITNESS WHEREOF, CNB has caused its duly authorized officers to execute and attest this Agreement, and to apply the corporate seal hereto, and the Grantee has placed his or her signature hereon, effective as of the date written above. ATTEST: CNB HOLDINGS, INC. By: _______________________________ By: _____________________________ Its: _____________________________ Its: _______________________ [CORPORATE SEAL] GRANTEE ----------------------------------- -------------------------------- Witness 6