-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EPSZ6suxAtwKm5laW5K4QfI0fQsFyetvhQIMGAesBXN0IPYHhQw52GUoDFCuzIi9 w3LQE7rGDgagVokYNbB2TQ== /in/edgar/work/20000727/0000950144-00-009107/0000950144-00-009107.txt : 20000921 0000950144-00-009107.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950144-00-009107 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20000727 EFFECTIVENESS DATE: 20000727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMUNITY FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000852677 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 621626938 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-42332 FILM NUMBER: 679771 BUSINESS ADDRESS: STREET 1: 401 CHURCH ST STREET 2: PO BOX 198986 CITY: NASHVILLE STATE: TN ZIP: 37219 BUSINESS PHONE: 6152712025 MAIL ADDRESS: STREET 1: PO BOX 198986 CITY: NASHVILLE STATE: TN ZIP: 37219-8986 S-8 1 s-8.txt COMMUNITY FINANCIAL GROUP,INC. 1 As filed with the Securities and Exchange Commission on July 27, 2000. Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------- COMMUNITY FINANCIAL GROUP, INC. (Exact name of registrant as specified in its charter) TENNESSEE 62-1626938 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification number) 401 Church Street Nashville, Tennessee 37219-2213 (615) 271-2000 (Address, including zip code and telephone number, including area code of registrant's principal executive offices) COMMUNITY FINANCIAL GROUP, INC. 1997 NONSTATUTORY STOCK OPTION PLAN (Full title of the plan) J. Hunter Atkins, President And Chief Executive Officer COMMUNITY FINANCIAL GROUP, INC. 401 CHURCH STREET NASHVILLE, TENNESSEE 37219-2213 (615) 271-2000 (615) 271-2149 (Facsimile) Copies of Communications To: J. Franklin McCreary, Esq. GERRISH & MCCREARY, P.C. Washington Square 222 Second Avenue North - Suite 424 Nashville, Tennessee 37201 (615) 251-0900 (615) 251-0975 (Facsimile) (Name, address, including zip code and telephone number, including area code, of agent for service) CALCULATION OF REGISTRATION FEE
Maximum Proposed Maximum Title of Securities Amount to be Offering Price Aggregate Offering Amount of to be Registered Registered(1) Per Share(2) Price(2) Registration Fee - ------------------------------------------------------------------------------------------------------ Common Stock, 542,091 $12.6875 $6,877,780 $1,815.73 ($6.00 par value) - ------------------------------------------------------------------------------------------------------
- -------- (1) The Registration Statement also includes an indeterminable number of additional shares that may become issuable as a result of terminated, expired or surrendered options for Common Stock, or pursuant to the antidilution provisions of the Plan. This Registration Statement covers, pursuant to Rule 416(a), any increases in the number of shares offered under the Plan to prevent dilution resulting from stock splits, stock dividends or similar transactions. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and (h), based upon the average of the high and low prices reported on July 24, 2000, as reported on the Nasdaq Stock Market. 2 PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The documents containing the information required by PART I of this Registration Statement on Form S-8 (the "Registration Statement") will be sent or given to Plan participants as specified by Rule 428(b)(1) under the Securities Act of 1933, as amended. Such documents and the documents incorporated by reference herein pursuant to Item 3 of PART II hereof, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE The following documents have been filed with the Securities and Exchange Commission by Community Financial Group, Inc. (the "Company") and are incorporated herein by reference and made a part hereof: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1999, provided that any information included or incorporated by reference in response to Items 402(a)(8), (i), (k) or (l) of Regulation S-K of the Securities and Exchange Commission shall not be deemed to be incorporated herein and is not a part of the Registration Statement. 2. The description of the Common Stock of the Company contained in the Company's Registration Statement No. 333-24309 on Form S-2 filed with the Commission on April 1, 1997. 3. All reports filed by the Company pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 since the end of the fiscal year covered by the financial statements in the Annual Report on Form 10-K referred to in paragraph 1 above. 4. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be part hereof from the date of the filing of such documents. Any statement contained in a document incorporated by reference herein and filed prior to the filing hereof shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein modifies or supersedes such statement, and any statement contained herein or in any other document 3 incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in any other subsequently filed document which also is incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS Tennessee law provides that a corporation's charter may contain a provision eliminating or limiting the personal liability of a director to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (A) for any breach of the directory's duty of loyalty to the corporation or its shareholders; (B) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or (C) under ss. 48-18-304, Tennessee Code Annotated, for unlawful distributions. The By-Laws of the Company contain the following liability and indemnification provisions: LIABILITY OF OFFICERS AND DIRECTORS. No person shall be liable to the Corporation for any loss or damage suffered by it on account of any action taken or omitted to be taken by him as a director or officer of the Corporation in good faith, if such person exercised or used the same degree of care and skill as a prudent man would have exercised or used in the circumstances in the conduct of his own affairs. INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Corporation shall indemnify to the fullest extent permitted by law, any and all persons who may serve or who have served at any time as directors or officers, or who, at the request of the Board of Directors of the Corporation, may serve or, at any time have served, as directors or officers of another corporation in which the Corporation, at such time, owned or may own shares of stock or of which it was or may be a creditor, and their respective heirs, administrators, successors and assigns, against any and all expenses, including amounts paid upon judgments, counsel fees and amounts paid in settlement (before or after suit is commenced), actually and necessarily incurred by such persons in connection with the defense or settlement of any claim, action, suit or proceeding in which they, or any of them, are made parties, or a party, or which may be asserted against them or any of them, by reason of being or having been directors or officers or a director or officer of the Corporation, or of such other corporation, except in relationship to matters as to which any such 2 4 director or officer or former director or officer or person shall be adjudged in any action, suit or proceeding to be liable for his own negligence or misconduct in the performance of his duty. Such indemnification shall be in addition to any other rights to which those indemnified may be entitled under any law, by-law, agreement, vote of shareholders or otherwise. The Charter of the Company contains the following liability and indemnification provisions: (a) To the fullest extent that the law of the State of Tennessee, as it exists on the date hereof or as it may hereafter be amended, permits the limitation or elimination of the liability of directors, no director of the Corporation shall be personally liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. (b) The Corporation shall have the power to indemnify any director, officer, employee, agent of the Corporation or any other person who is serving at the request of the Corporation in any such capacity with another corporation, partnership, joint venture, trust or other enterprises to the fullest extent permitted by the law of the State of Tennessee as it exists on the date hereof or as it may hereafter be amended, and any such indemnification may continue as to any person who has ceased to be a director, officer, employee or agent and may inure to the benefit of the heirs, executors and administrators of such a person. (c) If the Tennessee Business Corporation Act is amended after approval of the Article to authorize corporate action, further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Tennessee Business Corporation Act, as so amended. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not applicable. ITEM 8. EXHIBITS See the Exhibit Index which is incorporated herein by reference. ITEM 9. UNDERTAKINGS (a) The Company hereby undertakes: (1) 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; 3 5 (ii) to reflect in the prospectus any facts or events arising after the effective date of this 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; (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; Provided, however, that paragraph (a)(1)(i) and (a)(1)(ii) shall not apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement. (2) 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 such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) 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. (b) The undersigned Company hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's Annual Report pursuant to Section 13(a) or Section 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 this 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. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions or otherwise, the Company 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 4 6 liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling persons of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling persons in connection with the securities being registered, the Company 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 indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Nashville, State of Tennessee, on July 18, 2000. COMMUNITY FINANCIAL GROUP, INC. (Registrant) By: /s/ J. Hunter Atkins ---------------------------------------- J. Hunter Atkins, President and Chief Executive officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints, jointly and severally, J. Hunter Atkins and Mack S. Linebaugh, Jr., and each of them, attorneys-in-fact for the undersigned, each with the power of substitution, for the undersigned in any and all capacities, to sign any and all amendments to this Registration Statement (including post-effective amendments), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming that each of the attorneys-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-8 has been signed by the following persons in the capacities and on the dates indicated. Dated: July 18, 2000 /s/ J. Hunter Atkins -------------------------------------------- J. Hunter Atkins, President, Chief Executive Officer, Director (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) 5 7 Dated: July 18, 2000 /s/ Mack S. Linebaugh, Jr. -------------------------------------------- Mack S. Linebaugh, Jr., Chairman Of the Board Dated: July 18, 2000 /s/ J.B. Baker -------------------------------------------- J.B. Baker, Director Dated: July 18, 2000 /s/ Jo D. Federspiel -------------------------------------------- Jo D. Federspiel, Director Dated: , 2000 --------- -------------------------------------------- Richard H. Fulton, Director Dated: July 18, 2000 /s/ Leon Moore -------------------------------------------- Leon Moore, Director Dated: July 18, 2000 /s/ Perry W. Moskovitz -------------------------------------------- Perry W. Moskovitz, Director Dated: July 18, 2000 /s/ C. Norris Nielsen -------------------------------------------- C. Norris Nielsen, Director Dated: July 18, 2000 /s/ David M. Resha -------------------------------------------- David M. Resha, Director Dated: , 2000 --------- -------------------------------------------- G. Edgar Thornton, Director 6 8 EXHIBIT INDEX TO REGISTRATION STATEMENT ON FORM S-8 4.1 Articles of Incorporation filed as an exhibit to the Company's Annual Report on Form 10-KSB for the year ended December 31, 1996, and Articles of Amendment thereto filed as an exhibit to the Company's Form S-8 filed July 25, 2000, both of which are incorporated by this reference. 5.1 Opinion of Gerrish & McCreary, P.C. as to the legality of the securities being registered (including consent of counsel).* 23.1 Consent of KPMG LLP.* 23.2 Consent of Counsel (included in the opinion of Gerrish & McCreary, P.C. filed as Exhibit 5.1)* 99.1 1997 Nonstatutory Stock Option Plan, as amended.* - ---------- * Filed herewith 7 EX-5.1 2 ex5-1.txt OPINION OF GERRISH & MCCREARY,P.C. 1 EXHIBIT 5.1 [LETTERHEAD OF GERRISH & MCCREARY, P.C.] WASHINGTON SQUARE 222 SECOND AVENUE NORTH - SUITE 424 NASHVILLE, TN 37201 TELEPHONE: (615) 251-0900 TELECOPIER: (615) 251-0975 July 25, 2000 Community Financial Group, Inc. 401 Church Street Nashville, TN 37219-2213 Re: Legality of Securities to be Issued Ladies and Gentlemen: We have acted as your counsel in connection with the registration by Community Financial Group, Inc. (the "Company") under the Securities Act of 1933, as amended (the "Act"), of up to 542,091 shares of the Company's Common Stock, $6.00 par value (the "Shares"), to be issued by the Company pursuant to the exercise of options under the 1997 Nonstatutory Stock Option Plan, as amended (the "Plan"). The shares will be sold in the manner set forth in the Registration Statement on Form S-8 ("Registration Statement") that is being filed under the Act with respect to the offering of the Shares. In connection with the offering of the shares, we have examined (1) the Company's Charter and amendments filed thereto, (2) the Registration Statement, (3) the Plan, and (4) such other documents as we have deemed necessary to form the opinion expressed below. As to various questions of fact independent established, we have relied upon statements of officers of the Company. Based on this examination, we advise you that, in our opinion, the shares to be issued upon exercise of Options have been duly authorized and, when issued by the Company in the manner described in the Registration Statement and the Plan, will be validly issued, fully paid and non-assessable. The foregoing opinion is limited to the federal laws of the United States and the laws of the State of Tennessee and we express no opinion as to the effect of the laws of any other jurisdiction. 8 2 We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference in the prospectus delivered pursuant to Form S-8 to this firm under the caption "Legal Matters" as having passed upon the validity of the shares. In giving this consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Securities and Exchange Commission adopted under the Act. Very truly yours, GERRISH & MCCREARY, P.C. 9 EX-23.1 3 ex23-1.txt CONSENT OF KPMG LLP. 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS The Board of Directors Community Financial Group, Inc.: We consent to the use of our reports incorporated herein by reference. KPMG LLP Nashville, Tennessee July 19, 2000 10 EX-99.1 4 ex99-1.txt 1997 NONSTATUTORY STOCK OPTION PLAN 1 EXHIBIT 99.1 COMMUNITY FINANCIAL GROUP, INC. 1997 NONSTATUTORY STOCK OPTION PLAN 1. Purpose. The purpose of this Community Financial Group, Inc. 1997 Statutory-Nonstatutory Stock Option Plan (the "Plan") is to motivate Participants (as defined herein), thereby benefiting the stockholders of Community Financial Group, Inc. a Tennessee corporation ("Corporation"). In furtherance of this purpose, the Plan is to advance the interests of Corporation by stimulating the efforts of key employees, increasing their desire to continue in their employment with Corporation, assisting Corporation in competing effectively with other enterprises for the services of new employees and directors necessary for the continued improvement of operations, and to attract and retain the best possible personnel for service as employees, officers and directors of Corporation. Accordingly, the Plan is designed to promote the interests of Corporation and its stockholders, and, by facilitating stock ownership on the part of such directors, officers and employees, to encourage them to acquire a proprietary interest in Corporation and to remain in its employ and service. 2. Definitions. "Board" means the Board of Directors of Corporation. "Code" means the Internal Revenue Code of 1986, as amended. "Committee" means the Compensation Committee chosen by the Board to administer the Plan, as provided in Section 5(a) hereof. "Fair Market Value of Stock" shall be determined under the Plan as follows: (a) If the Stock is principally traded on an exchange or market in which prices are reported on a bid and asked basis, the average of the mean between the bid and the asked price for the Stock at close of trading for the 10 consecutive trading days immediately preceding such given date; (b) If the Stock is principally traded listed on a national securities exchange, the average of the closing prices of the Stock for the 10 consecutive trading days immediately preceding such given date; and (c) If the Stock is neither traded on the over-the-counter market nor listed on a national securities exchange, such value as the Board, in good faith, shall determine. "Option" means an award of a Stock Option pursuant to this Plan. "Option Agreement" means the written instrument from the Committee to Participant describing the terms of the Option. 1 2 "Option Price" means the exercise price of an Option. "Option Stock" or "Stock" means the common stock of Corporation. "Participant" means a person to whom an Option has been granted. 3. Effective Date of Plan: Term. The Plan is effective March 25, 1997, the date on which the Board of Corporation approved the Plan. 4. Shares Subject to the Plan. The aggregate number of shares of Stock available for grant under the Plan is 150,000 (plus 10% of any additional shares of Stock issued after the effective date of this Plan) subject to adjustments as provided in Section 9 herein. Stock issued pursuant to the Plan may be either authorized but unissued shares of shares held in the treasury of Corporation. In the event that, prior to the end of the period during which Options may be granted under the Plan, any Option under the Plan expires unexercised or is terminated or surrendered without being exercised, in whole or in part, the number of shares theretofore subject to such Option or the unexercised or terminated portion thereof, shall be added to the remaining number of shares of Stock available for grant as an Option under the Plan, including a grant to a former holder of such Option, upon such terms and conditions as the Committee shall determine, which terms may be more or less favorable than those applicable to such former Option. 5. Administration of the Plan by the Committee. (a) The Committee. The Plan shall be administered by the Committee, whose members shall be appointed from time to time by, and shall serve at the pleasure of, the Board. The members of the Committee need not be members of the Board or employees of Corporation. No member of the Committee shall be liable for any action taken, or determination made, hereunder in good faith. Service on the Committee shall constitute service as a director of Corporation so that members of the Committee shall be entitled to indemnification and reimbursement as directors of Corporation pursuant to its Charter and Bylaws. The Committee may take action only upon the agreement of a majority of the entire Committee. Any action which the Committee takes through a written instrument signed by a majority of its members shall be as effective as though taken at a meeting duly called and held. (b) Powers of the Committee. Subject to the express provisions of the Plan, the Committee may interpret the Plan, prescribe, amend and rescind rules and regulations relating to it and make all determinations it deems necessary or advisable for the administration of the Plan. The powers of the Committee shall include plenary authority to administer and interpret the Plan, and subject to the provisions hereof, to determine the persons to whom Options shall be granted, the number of shares subject to each Option, the terms and provisions of each Option, and the date on which Options shall be granted. In making such determinations, the Committee may take into account the nature of the services rendered by such Participants, or classes of Participants, their present and potential contributions to Corporation's success and such other factors as the Committee, in its discretion, shall deem relevant. Accordingly, the Committee shall determine, 2 3 as soon as practicable after the effective date of the Plan and at any time and from time to time thereafter, (i) the persons who are eligible, (ii) the number of shares of Stock which an eligible person may purchase pursuant to an Option, (iii) the price of each share of Stock subject to the Option and (iv) the terms on which each share of Stock subject to the Option may be purchased. (c) Conclusiveness of Determinations. Any action taken by the Committee or by the Board with respect to the implementation, interpretation, or administration of the Plan shall be final, conclusive and binding. The Committee's determinations under the Plan, including, without limitation, determinations as to the persons to receive awards, the terms and provisions of such awards and the agreements evidencing the same, need not be uniform and may be made by it selectively among persons who receive or are eligible to receive awards under the Plan, whether or not such persons are similarly situated. 6. Options. (a) Grant of Options. Options may be granted to Participants under the Plan by the Committee from time to time. Options shall be subject to such terms and conditions, shall be exercisable at such times, and shall be evidenced by such form of written option agreement between Participant and Corporation, as the Committee shall determine; provided, that such determinations are not inconsistent with the other provisions of the Plan. The Committee shall have authority to grant Options exercisable in whole or in part at any time during their term. Option Agreements need not be identical, but generally shall be similar to the form attached to this Plan. (b) Persons Eligible to Receive Options. The persons who shall be eligible to receive Options granted hereunder shall be employees, directors, and officers of Corporation. A Participant may hold more than one Option. The Committee shall determine the terms for payment by each Participant for his shares of Option Stock. Such terms shall be set forth in the Option Agreement. The terms for payment so set by the Committee may vary from one Participant to another. 7. Terms and Exercise of Options. (a) Option Price. The Option Price to be paid by Participant to Corporation upon exercise of the Option shall be determined by the Committee on the date of the grant of the Option and shall be set forth in the Option Agreement. No Option shall have an Option Price less than the Fair Market Value of the Stock on the date of the grant. (b) Term. Each Option granted under the Plan shall be exercisable only during a term commencing on the date when the Option was granted and ending (unless the Option shall have terminated earlier under other provisions of the Plan) on a date to be fixed by the Committee, subject to the limitation that any Option may not be exercisable more than three (3) months after Participant ceases to be an employee of Corporation, except as set forth in Section 7(c), and only to the extent that the Option would otherwise have been exercisable by Participant upon the date 3 4 of termination. At the time of termination, the Committee may extend the exercise period for up to the earlier of three (3) years after termination or the original termination date. (c) Death or Disability. Upon the death or disability (within the meaning of Section 22(e)(3) of the Code) of a Participant holding an Option, in the absence of terms in the Option Agreement to the contrary, the Option may be exercised, to the extent not previously exercised, by the Participant, the Participant's legal representative, the legatees of the Option under Participant's Will or the distributees of the Option under the applicable laws of descent and distribution until the Termination Date, but only to the extent that the Option would otherwise have been exercisable by Participant upon the date of death or termination related to the disability. (d) Vesting. The Committee may establish a vesting schedule for any particular or all Options which may be different for different Participants and/or different Options. The Committee may accelerate the vesting schedule in its discretion. (e) Exercise of Options. Options shall be exercised by delivering or mailing to the Committee (i) a notice and "investment letter" in the form prescribed by the Committee, specifying the number of shares to be purchased; and (ii) a check payable to Corporation, shares of Common Stock of the Corporation, or such other medium of payment as the Committee shall approve, in an amount or with a fair market value (the average between the bid and asked price) equal to the Option Price multiplied by the number of Option Shares being purchased plus any withholding tax required by law as determined by Corporation. Additionally, the Participant may choose a "dry option" whereby the Participant receives a number of shares of Stock equal to the fair market value of the Stock times the number of shares exercisable under the Option divided by the value of the Option. The value of the Option is the difference between the fair market value of the shares and the Option Price multiplied by the number of shares exercisable under the Option. Upon receipt of each of the foregoing, Corporation shall promptly deliver to Participant a certificate or certificates for the Stock purchased, without charge to Participant for issue or transfer tax, but in the event participant has not made a cash payment sufficient to cover applicable withholding taxes, the Corporation may retain, sufficient stock to liquidate and pay such taxes. The stock certificate may, at the request of Participant, be issued in Participant's name and the name of another person as joint tenants with the right of survivorship, provided that any restrictions upon such Stock shall apply equally to such joint tenant. In the event that such shares are not registered under the Securities Act of 1933, such certificates shall bear the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES ACT ("STATE ACTS"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SHARES ARE REGISTERED UNDER SUCH ACT AND EACH RELEVANT STATE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO CORPORATION IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT NECESSARY. 4 5 (f) Transferability of Options. No Option may be transferred, assigned, pledged or hypothecated (whether by operation of law or otherwise), except that an Option may be transferred upon the death of a Participant as provided by Participant's Will or the applicable laws of descent or distribution. No Option shall be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of an Option, or levy of attachment or similar process upon the Option not specifically permitted herein shall be null and void and without effect. Notwithstanding the provisions of this Section, a Participant, at any time prior to his death, may assign all or any portion of an Option to (i) his spouse or lineal descendant, (ii) the trustee of a trust for the primary benefit of his spouse and lineal descendant, (iii) a partnership of which his spouse and lineal descendants are the only partners, or (iv) a tax exempt organization as described in Section 501(c)(3) of the Code. In such event, the permitted transferee will be entitled to all of the rights of Participant with respect to the assigned portion of such Option, and such portion of the Option will continue to be subject to all of the terms, conditions and restrictions applicable to the Option, as set forth herein and in the related Option Agreement, immediately prior to the effective date of the assignment. Any such assignment will be permitted only if (i) Participant does not receive any consideration therefore, and (ii) the assignment is expressly permitted by the applicable Option Agreement, as approved by the Committee. Any such assignment shall be evidenced by a written document executed by Participant, and a copy thereof shall be delivered to Corporation prior to the assignment. (g) Obligation to Exercise Option. The granting of an Option shall impose no obligation upon a Participant to exercise such Option. 8. Participant's Rights. No person shall have the rights of a stockholder by virtue of an Option except with respect to Stock actually issued to the stockholder, and issuance of Stock shall confer no retroactive rights to dividends. Nothing in the Plan or any Option Agreement entered into pursuant to the Plan shall confer upon any Participant the right to continue as a member of the Board of Corporation or affect any right which Corporation may have to remove such Participant as a director of Corporation. Nothing in this Plan or in any Option Agreement shall confer upon any employee any right to continue in the employ of Corporation or interfere in any way with the right of Corporation to terminate his employment at any time. 9. Adjustments. In the event of the declaration of any stock dividend on the Stock or in the event of any reorganization, merger, consolidation, acquisition, separation, recapitalization, split-up, combination or exchange of shares of Stock, or like adjustment, the number of shares of Stock and the class of shares of Stock available pursuant to the Plan, and the Option Prices, shall be adjusted by appropriate changes in the Plan and in any Option Agreement outstanding pursuant to the Plan. Any such adjustment to the Plan or to Option Agreements or Option Prices shall be made by action of the Committee, whose determination shall be conclusive. Notwithstanding the foregoing, in the event of such a reorganization, merger, consolidation, acquisition, separation, recapitalization, split-up, combination or exchange of shares of stock, or like adjustment which results in substantially all the shares of the Stock of Corporation being exchanged for, or converted into cash or other property, the Committee shall have the right to terminate the Plan as of the date 5 6 of the exchange or conversion in which case the Options shall convert into the right to receive such cash or property net of the exercise price of the Options. 10. Termination, Suspension or Amendment of Plan. The Committee may at any time terminate, suspend or amend the Plan. 11. Postponement of Exercise. The Committee may postpone any exercise of an Option for such time as the Committee may deem necessary in order to permit Corporation (i) to obtain any required approvals of the exercise from bank or bank holding company regulators, (ii) to effect, amend or maintain any necessary registration of the Plan or the shares of Stock issuable upon the exercise of an Option under the Securities Act of 1933, as amended, or the securities laws of any applicable jurisdiction, (iii) to permit any action to be taken in order to (A) list such shares of Stock on a stock exchange if shares of Stock are then listed on such exchange or (B) comply with restrictions or regulations incident to the maintenance of a public market for its shares of Stock, including any rules or regulations of any stock exchange on which the shares of Stock are listed, or (iv) to determine that such shares of Stock and the Plan are exempt from such registration or that no action of the kind referred to in (iii)(B) above needs to be taken; and Corporation shall not be obligated by virtue of any terms and conditions of any Option Agreement or any provision of the Plan to recognize the exercise of an Option or to sell or issue shares of Stock in violation of the Securities Act of 1933 or the law of any government having jurisdiction thereof. Any such postponement may extend the terms of an Option if necessary to permit the exercise of any Option. 12. Application of Proceeds. The proceeds received by Corporation from the sale of its Stock under the Plan shall be used for general corporate purposes. 13. Elimination of Fractional Shares. If under any provision of the Plan that requires a computation of the number of shares of Stock subject to an Option, the number so computed is not a whole number of shares of Stock, such number of shares of Stock shall be rounded down to the next whole number. 14. Validity. In the event that any provision of the Plan or any related agreement is held to be invalid, void or unenforceable, the Board shall have the right to declare the entire Plan void and unenforceable, taking such action as shall be deemed to be in the best interest of the stockholders of Corporation. 15. Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan. 16. Governing Law. All questions pertaining to the validity, construction and administration of the Plan and Options granted hereunder shall be determined in conformity with the laws of the State of Tennessee. 6 7 AMENDMENT NO. 1 COMMUNITY FINANCIAL GROUP, INC. 1997 NONSTATUTORY STOCK OPTION PLAN This Amendment to the Community Financial Group, Inc. 1997 Nonstatutory Stock Option Plan (the "Plan") is adopted effective as of the 1st day of June, 2000. WHEREAS, the Board of Directors of Community Financial Group, Inc. (the "Corporation") adopted the Plan effective March 25, 1997 to promote the interests of the Corporation and its stockholders, and, by facilitating stock ownership on the part of the directors, officers and employees, to encourage them to acquire a proprietary interest in the Corporation and to remain in its employ and services; and WHEREAS, Section 4 of the Plan currently provides that the aggregate number of shares of stock available under the Plan is 150,000 (plus 10% of any additional shares of stock issued after the effective date of the Plan) subject to adjustments as provided in Section 9 thereof; and WHEREAS, the Board of Directors of the Corporation has determined that it would be in the best interests of the Corporation for the Plan to be amended to provide for a greater number of shares of stock to be available for grant under the Plan. NOW, THEREFORE, in consideration of the premises and in the best interests of the Corporation, the Plan is hereby amended as follows: 1. The first sentence of Section 4 of the Plan is deleted in its entirety, and the following new provisions are adopted in its place: 4. Shares Subject to the Plan. The aggregate number of shares of stock available under the Plan as of June 1, 2000 is 542,091, including shares underlying outstanding options. The available shares shall be reduced by an amount equal to 15% of shares repurchased by the Corporation after June 1, 2000, and increased by an amount equal to 15% of shares issued by the Corporation after June 1, 2000, such that the number of shares available under the Plan shall at all times by an amount equal to 15% of the Corporation's total issued and outstanding shares. Options may be granted based on the number of the Corporation's issued and outstanding shares on the date of grant, and the validity of options so granted shall not be affected by a subsequent repurchase of shares by the Corporation. The shares of Stock available under the Plan are subject to adjustments as provided in Section 9 of the Plan. 2. All other provisions of Section 4 of the Plan and all other provisions of the other sections of the Plan not specifically amended hereby shall continue in full force and effect. 8 This Amendment shall be effective as of the day and year first written above. COMMUNITY FINANCIAL GROUP, INC. By: /s/ Mack S. Linebaugh, Jr. -------------------------- Mack S. Linebaugh, Jr., Chairman President and Chief Executive Officer 2 -----END PRIVACY-ENHANCED MESSAGE-----