<PAGE> 1
This is a Confirming Electronic File Copy Originally filed on January 26, 1996
As Filed with the Securities and Exchange Commission on January 26, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-2
Registration Statement
Under the
Securities Act of 1933
GREENE COUNTY BANCSHARES, INC.
(Exact Name of Registrant as Specified in Its Charter)
TENNESSEE 62-1222567
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
MAIN AND DEPOT STREETS
GREENEVILLE, TENNESSEE 37743
423/639-5111
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
R. STAN PUCKETT, PRESIDENT
MAIN AND DEPOT STREETS
GREENEVILLE, TENNESSEE 37743
423/639-5111
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
__________________
Copy to:
ANN W. LANGSTON
GERRISH & MCCREARY, P.C.
700 COLONIAL, SUITE 200
MEMPHIS, TN 38117
901/767-0900
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Effective Date of this Registration Statement.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ ]
If the registrant elects to deliver its latest annual report to
security holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this form, check the following box. [ ]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Title of Each Class of Proposed Maximum
Securities to be Amount to be Proposed Maximum Offering Aggregate Offering Amount of
Registered Registered Price Per Share Price Registration Fee (1)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$10 par value 6,000 shares $170.00 $1,020,000.00 $351.72
================================================================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(a).
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
Exhibit Index on sequentially numbered page 34.
<PAGE> 2
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Items in Part I of Form S-2 Prospectus Caption or Location
- --------------------------- ------------------------------
<S> <C> <C>
Item 1. Forepart of the Registration Facing Page, Cross
Statement and Outside Front Reference Sheet and
Cover Page of Prospectus Outside Front Cover Page
Item 2. Inside Front and Outside Inside Front Cover and
Back Cover Pages of Prospectus Table of Contents
Item 3. Summary Information, Risk Summary and Risk Factors
Factors and Ratio of Earnings
to Fixed Charges
Item 4. Use of Proceeds Use of Proceeds
Item 5. Determination of Offering Price Determination of Offering
Price
Item 6. Dilution *
Item 7. Selling Security Holders *
Item 8. Plan of Distribution Plan of Distribution
Item 9. Description of Securities Description of Common
to be Registered Stock
Item 10. Interests of Named Experts Legal Matters and Experts
and Counsel
Item 11. Information with Respect Information Regarding the
to the Registrant Company
Item 12. Incorporation of Certain Incorporation of Certain
Information by Reference Information by Reference
Item 13. Disclosure of Commission Indemnification
Position on Indemnification
for Securities Act Liabilities
</TABLE>
* Omitted because answer is negative or the Item is inapplicable
<PAGE> 3
6,000 SHARES
GREENE COUNTY BANCSHARES, INC.
Common Stock
__________
Greene County Bancshares, Inc. (the "Company"), a Tennessee
corporation, hereby offers for sale 6,000 shares of its Common Stock, par value
$10 per share ("Common Stock"). Prior to this offering, there has been a
limited public market for the Common Stock of the Company. The 6,000 shares of
Common Stock are offered at a price of $170.00 per share.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE INFORMATION
DISCUSSED UNDER "RISK FACTORS," AT PAGE 10.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
============================================================================================================
Underwriting Proceeds to
Price to Public Commissions Company (1)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.............................. $170.00 Not applicable $170.00
- ------------------------------------------------------------------------------------------------------------
Total (2).............................. $1,020,000.00 Not applicable $1,020,000.00
============================================================================================================
</TABLE>
(1) Before deducting offering expenses payable by the Company estimated at
$49,790.
(2) Assumes the sale of all 6,000 shares of Common Stock offered hereby.
THE DATE OF THIS PROSPECTUS IS ________________, 1996.
<PAGE> 4
AVAILABLE INFORMATION
Green County Bancshares, Inc. is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder, and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission" or the "SEC"). Such
reports and other information filed by the Company with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, NW. Washington, DC 20549 and its regional
offices located at 75 Park Place, New York, New York 10007, and Everett
McKinley Dirkson Building, Room 1204, 219 South Dearborn Street, Chicago,
Illinois 60604. Copies of such materials may be obtained at prescribed rates
from the public reference facilities maintained by the Commission at its
Washington, DC address.
The Company has filed with the Commission, Washington, DC, a
Registration Statement on Form S-2 ("Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Common Shares offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the schedules and
exhibits thereto, certain parts of which have been omitted pursuant to the
rules of the Commission. Statements herein concerning the contents of any
contract or other document are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed with the
Commission as an exhibit to the Registration Statement or otherwise, each such
statement being qualified in all respects by such reference. For further
information about the Company and such securities, reference is made to the
Registration statement and the schedules and exhibits filed as part thereof.
The Registration Statement, together with schedules and exhibits, may be
inspected without charge, and copied at the principal or regional offices of
the Commission at the addresses indicated above. Copies also may be obtained
at prescribed rates from the public reference facilities maintained by the
Commission at its Washington, DC address.
The Company will furnish annual reports to its stockholders which will
contain audited financial statements certified by its independent public
accountants. The Company may distribute unaudited quarterly reports and other
interim reports to its stockholders as it deems appropriate.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents previously filed by the Company with the
Commission (Commission File No. 0-14289) pursuant to the Exchange Act are
hereby incorporated by reference in this Prospectus:
2
<PAGE> 5
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1994;
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31 and September 30, 1995 and on Form 10-QA for
the quarter ended June 30, 1995;
3. The Company's Current Reports on Form 8-K dated September 11,
1995 and January 12, 1996.
The Company's Annual Report on Form 10-K for the year ended December
31, 1994 incorporates by reference specific portions of the Company's Proxy
Statement dated and mailed to stockholders of the Company on April 5, 1995
("1995 Proxy Statement"), but does not incorporate other portions of the 1995
Proxy Statement. The portions of the 1995 Proxy Statement not specifically
incorporated into the Annual Report on Form 10-K are NOT incorporated herein
and are not a part of the Registration Statement.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the shares
of the Company's Common Stock offered hereby shall likewise be incorporated
herein by reference and shall become a part hereof from and after the time such
documents are filed. Any statement contained herein or in a document
incorporated herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or 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 Prospectus.
ON THE WRITTEN OR ORAL REQUEST OF EACH PERSON TO WHOM THIS PROSPECTUS
IS DELIVERED, THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF ANY OR ALL OF
THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH
DOCUMENTS. WRITTEN OR TELEPHONE REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO
ALEX JOHNSON, GREENE COUNTY BANCSHARES, INC., MAIN AND DEPOT STREETS,
GREENEVILLE, TENNESSEE 37743, (423) 639-5111.
3
<PAGE> 6
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS DOCUMENT NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Summary Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Determination of Offering Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Description of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Information with Respect to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>
4
<PAGE> 7
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements, including the notes thereto,
appearing elsewhere in this Prospectus or incorporated herein by reference.
THE COMPANY
Greene County Bancshares, Inc. (the "Company"), a Tennessee
corporation incorporated January 18, 1985, is a registered bank holding company
under the Bank Holding Company Act of 1956, as amended ("BHCA"), and is the
bank holding company for Greene County Bank, Greeneville, Tennessee, American
Fidelity Bank, Alcoa, Tennessee, and Premier Bancshares, Inc., Niota,
Tennessee, which is itself the one bank holding company for Premier Bank of
East Tennessee, Niota, Tennessee ("Premier"). The Company, through its
ownership of Greene County Bank, American Fidelity Bank and Premier Bancshares,
Inc. (the "Banks"), is engaged in a general commercial banking business and its
primary source of earnings is derived from income generated by its subsidiary
banks. As of September 30, 1995, the Company had total assets of $389,046,000
and shareholders' equity of $41,835,000, which was prior to the Company's
acquisition of Premier. As of September 30, 1995, Premier had total assets of
$26,730,000 and shareholders' equity of $1,883,000. Unless the context
otherwise requires, references herein to the Company include the Company and
its wholly-owned subsidiaries, Greene County Bank, American Fidelity Bank and
Premier Bancshares, Inc. on a consolidated basis.
Greene County Bank was established in 1890 as a Tennessee state
chartered bank. As a commercial bank, Greene County Bank provides complete
banking services which include checking and savings accounts for individuals,
partnerships, corporations, municipalities, banks and others; business, real
estate, interim construction, personal and installment loans; collection
services, safe deposit box facilities; and a number of special services. At
September 30, 1995, Greene County Bank had seven full service banking offices
located in Greene County, Tennessee, with two full service banking offices
located in Washington County, Tennessee, one full service banking office
located in Hamblen County, Tennessee, and one full service banking office
located in Sullivan County, Tennessee. On November 20, 1995, Greene County
Bank opened a full service branch in Hawkins County, Tennessee after acquiring
the deposits of an existing branch of another bank and the facilities for this
new branch location. The Company owns 100% of the stock of Greene County Bank.
American Fidelity Bank is a Tennessee state chartered banking
corporation organized in 1977. American Fidelity Bank also offers the
customary banking services provided by most full service banks. It conducts
its business from a main office located in Alcoa, Tennessee and two branch
offices, one located in Maryville and another in Knoxville, Tennessee. The
Company also owns 100% of the stock of American Fidelity Bank.
5
<PAGE> 8
Premier Bancshares, Inc. is a Tennessee corporation and a registered
bank holding company under the Bank Holding Company Act of 1956, as amended.
Premier Bancshares, Inc. owns 100% of the stock of Premier Bank of East
Tennessee. The Company acquired all the stock of Premier Bancshares, Inc.
(and, thereby, indirectly all the shares of Premier Bank of East Tennessee) on
January 1, 1996. The Company has accounted for this acquisition as a purchase
under generally accepted accounting principles. Premier Bank of East Tennessee
conducts its business from its main office in Niota, Tennessee and from its
full service branch in Athens, Tennessee. See "Use of Proceeds."
Management responsibility for the Banks resides with the Board of
Directors and officers of each respective bank. Management services rendered
to each of the Banks by the Company are intended to supplement the internal
management of each of the Banks and to expand the scope of banking services
normally offered by each of the Banks.
The banking industry in which the Company competes through its
subsidiaries is highly competitive with other banks for both loans and
deposits. Other financial institutions, including savings and loans
associations and credit unions, also compete with the Banks for depository
accounts and loans.
On September 30, 1995, Greene County Bank had total deposits of
$267,484,000 and total assets of $311,707,000. Greene County Bank ranks as the
largest financial institution in its market area, which is generally considered
to be Greene County, Tennessee. In the Greene County area, there are six
commercial banks, operating 22 branches and holding an aggregate of
approximately $605,563,000 in deposits as of December 31, 1994.
On September 30, 1995, American Fidelity Bank had total deposits of
$68,162,000 and total assets of $75,875,000. The primary market area of
American Fidelity Bank is the cities of Alcoa and Maryville and Blount and
Southern Knox Counties, Tennessee. American Fidelity Bank competes primarily
with five commercial banks, two of which are subsidiaries of the largest bank
holding companies located in Tennessee.
On September 30, 1995, Premier Bank of East Tennessee had total
deposits of $21,961,000 and total assets of $24,256,000. The primary
market area of Premier Bank of East Tennessee is McMinn County, Tennessee which
includes the cities of Niota and Athens, Tennessee. Premier Bank competes
primarily with four commercial banks and one savings and loan association in
its market area.
The income of the Banks, and thus the Company, is derived primarily
from the interest and fees earned in connection with the Banks' lending
activities, interest and dividends from investment securities and short-term
investments. The main expenses of the Bank are the interest paid on deposits
and operating expenses. The Banks' deposits are insured up to the applicable
limits by the Federal Deposit Insurance Corporation ("FDIC").
The Company has its principal executive offices at Main and Depot
Streets, Greeneville, Tennessee 37743, Telephone (423) 639-5111.
6
<PAGE> 9
THE OFFERING
<TABLE>
<S> <C>
Common Shares Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 Shares
Common Shares Outstanding after the Offering . . . . . . . . . . . . . . . . . . . . . 448,444 (1)
Estimated Net Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,020,000 (1)(2)
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Working capital and
general corporate
purposes, including
investments in the
Banks. See "Use of
Proceeds."
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prospective
investors in the
Common Stock should
consider the
information
discussed under the
heading "Risk
Factors."
</TABLE>
(1) Assumes that all 6,000 shares offered hereby are sold,
including shares issued to the New Shareholders whose shares
are subject to the Rescission Offer. See "Simultaneous
Rescission Offer."
(2) Before deducting expenses of this offering.
7
<PAGE> 10
GREENE COUNTY BANCSHARES, INC.
SUMMARY FINANCIAL INFORMATION (1)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
NINE MONTHS YEARS ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
(UNAUDITED) ---------------
----------------------
1995 1994 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
SUMMARY OF INCOME STATEMENT DATA:
Interest income $23,365 $17,282 $23,625 $21,638
Interest expense 9,660 5,968 8,497 8,197
------- ------- ------- -------
Net interest income 13,705 11,314 15,128 13,441
Provision for loan losses 493 277 994 834
------- ------- ------- -------
Net interest income after provision
for loan losses 13,212 11,037 14,134 12,607
Non-interest income 2,094 1,554 2,538 1,966
Non-interest expense 7,996 6,614 9,660 8,035
------- ------- ------- -------
Income before income taxes 7,310 5,977 7,012 6,538
Income tax expense 2,763 2,193 2,510 2,221
------- ------- ------- -------
Income before cumulative effect in
method of accounting for income taxes 4,547 3,784 4,501 4,317
Cumulative effect of change in
method of accounting for income taxes -- -- -- (52)
------- ------- ------- -------
Net income $ 4,547 $ 3,784 $ 4,501 $ 4,265
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
AS OF AND FOR
---------------------------------------------
NINE MONTHS YEARS ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
(UNAUDITED) ----------------
-------------------
1995 1994 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
PER COMMON SHARE DATA:
Net income per share $10.22 $ 8.56 $ 9.56 $ 8.41
Book value per share at period end(2) $93.50 $84.33 $84.06 $79.27
SELECTED BALANCE SHEET DATA:
Total assets $389,046 $332,223 $345,525 $313,577
Cash and cash equivalents $ 12,737 $ 15,885 $ 15,086 $11,120
Loans receivable, net $281,096 $222,363 $241,253 $192,127
Investment securities and other interest
earning assets $ 67,487 $ 76,353 $ 70,374 $88,694
Deposits $335,646 $294,928 $298,162 $267,281
Retained earnings $ 33,653 $ 30,353 $ 30,442 $27,737
Total shareholders' equity $ 41,835 $ 37,295 $ 37,190 $35,045
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
AS OF AND FOR
-------------------------------------------------
NINE MONTHS YEARS ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
(UNAUDITED) ----------------
-------------------
1995 1994 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
SELECTED FINANCIAL RATIOS AND OTHER DATA:
Return on average assets 1.64%(3) 1.56%(3) 1.38% 1.41%
Return on average equity 15.43%(3) 13.85%(3) 12.32% 12.34%
Allowance for loan losses to total loans 1.36% 1.21% 1.41% 1.57%
Allowance for loan losses as a percentage
of non-accrual loans 438.00% 408.00% 531.00% 553.00%
Average interest-earning assets to average
interest-bearing liabilities 1.18% 1.12% 1.14% 1.13%
Net yield on average earnings assets (4) 9.02% 7.60% 7.75% 7.79%
Asset quality ratio (non-performing loans
and other real estate owned to average
total assets) (5) .29% .44% .23% 1.41%
Non-interest expense to average total assets 2.78% 2.73% 2.95% 2.66%
Net interest income to non-interest expense 171.00% 171.00% 157.00% 167.00%
Risk-based capital ratios (fully phased-in
guidelines):
Tier I capital 14.86% 16.46% 15.45% 14.41%
Total capital 16.24% 17.65% 16.89% 15.45%
Leverage ratio (6) 10.75% 10.41% 10.76% 11.16%
Period-end equity
to period-end total assets 10.75% 10.76% 10.76% 11.18%
</TABLE>
____________________
(1) Excludes any financial data regarding Premier Bancshares, Inc. and its
subsidiary, Premier Bank of East Tennessee, which the Company acquired on
January 1, 1996. The Company has accounted for this acquisition as a
purchase under generally accepted accounting principles.
(2) Common shareholders' equity divided by the number of outstanding shares of
common stock at period end.
(3) Annualized.
(4) Represents net interest income as a percent of average total
interest-earning assets.
(5) Non-performing loans consist of non-accrual loans and accruing loans
contractually past due 90 days or more.
(6) The leverage ratio is defined as the ratio of Tier I capital to average
total assets.
9
<PAGE> 12
RISK FACTORS
A prospective investor should review and consider carefully the following
factors, together with the other information contained in this Prospectus, in
evaluating an investment in the Common Stock.
SIMULTANEOUS RESCISSION OFFER
On May 31, 1995, the Company forwarded a letter to several hundred
potential subscribers for common stock of the Company. The response to the
letter resulted in a sale of 5,009 shares of the Company's common stock to 192
new shareholders (the "New Shareholders"). The Company received approximately
$851,530 in payment for the newly issued common shares. No commissions or
other fees were paid or received by the Company or any other person in
connection with the sale of such shares. The Company, simultaneously with this
offering, is making a rescission offer to the New Shareholders (the "Rescission
Offer"). The need for the Rescission Offer arises from the sale of the common
stock to the New Shareholders without registration with the Securities and
Exchange Commission and the necessary state securities divisions or the
availability of an exemption from registration.
In the Rescission Offer the Company is offering to rescind the sale of the
shares issued to the New Shareholders and to refund the consideration paid for
such shares, plus interest at a rate of 10% per annum from the date of payment
through the date the Company receives notice of a New Shareholder's election to
rescind, less any amount of income received on such stock by the New
Shareholders. The Rescission Offer is being made pursuant to the applicable
securities laws in the states in which the New Shareholders reside.
ASSET/LIABILITY MANAGEMENT
The operations and profitability of the Banks are largely impacted by
changes in interest rates and their managements' ability to control interest
rate sensitivity of the Banks' assets and liabilities. Management believes
that their asset/liability strategy reduces the risk of the Banks' exposure due
to fluctuation in interest rates. However, there can be no assurance that the
Banks' asset/liability strategies will be successful. Despite the
implementation of strategies to achieve such matching objectives and to reduce
the exposure of the Banks to fluctuating interest rates during this period, the
results of operations of the Banks will remain subject to the level and
movement of interest rates. Increases in interest rates may continue to be
reflected more quickly in increases in the cost of funds for the Banks than in
their interest income.
10
<PAGE> 13
ADEQUACY OF ALLOWANCE FOR LOAN LOSSES
The success of a bank depends to a significant extent upon the quality of
its assets, particularly its loans. In originating loans, there is a
substantial likelihood that credit losses will be experienced. The risk of
loss will vary with, among other things, general economic conditions, the types
of loans being made, the creditworthiness of the borrower over the term of the
loan and, in the case of a collateralized loan, the quality of the collateral
for the loan. Management maintains an allowance for loan losses based on,
among other things, industry standards, managements' experience, historical
experience with borrowers and the loan portfolio, an evaluation of economic
conditions, and regular reviews of delinquencies and loan portfolio quality.
Based upon such factors, management makes various assumptions and judgments
about the ultimate collectability of the loan portfolio and provides an
allowance for potential loan losses based upon a percentage of the outstanding
balances and for specific loans when their ultimate collectability is
considered questionable. Since certain lending activities involve greater
risks, the percentage applied to specific loan type may vary.
The Banks actively manage their past due and non-performing loans in an
effort to minimize credit losses and monitor their asset quality to maintain an
adequate loan loss allowance. Although management of each Bank believes that
its allowance for loan losses is adequate, there can be no assurance that the
allowance will prove sufficient to cover future loan losses. Further, although
management uses the best information available to make determinations with
respect to the allowance for loan losses, future adjustments may be necessary
if economic conditions differ substantially from the assumptions used or
adverse developments arise with respect to the non-performing or performing
loans of either Bank. Accordingly, there can be no assurance that the
allowance for loan losses will be adequate to cover loan losses or that
significant increases to the allowance will not be required in the future if
economic conditions should worsen. Material additions to the allowance for
loan losses of the Banks would result in a decrease of the net income of the
Banks and capital of the Company and the Banks and could result in the
inability to pay dividends, among other adverse consequences.
LIMITED TRADING MARKET
There has been a limited public market for the Company's Common Stock. The
offering price of the shares of the Common Stock has been determined by the
Board of Directors of the Company based upon several factors and this does not
necessarily bear any relationship to the Company's assets, book value, results
of operations, net worth, or any other generally accepted criteria of value and
should not be considered as indicative of the actual value of the Company.
11
<PAGE> 14
COMPETITION
The banking business is highly competitive, the Banks compete with other
commercial banks, savings and loan associations, credit unions, finance
companies and other financial entities operating locally and elsewhere. Some
of these competitors have substantially greater resources and lending limits
than the Banks and may offer certain services that the Banks do not provide at
this time. The profitability of the Company depends upon the Banks' ability to
compete in their market areas.
SUPERVISION AND REGULATION
Bank holding companies and banks operate in a highly regulated environment
and are subject to the supervision and examination by several federal and state
regulatory agencies. The Company is subject to the Bank Holding Company Act of
1956, as amended, and to regulation and supervision by the Federal Reserve, and
the Banks are subject to the regulation and supervision of the Tennessee
Department of Financial Institutions (the "Department") and the FDIC. These
laws and regulations govern matters ranging from the regulation of certain debt
obligations, changes in the control of bank holding companies, and the
maintenance of adequate capital to the general business operations and
financial condition of the Banks, including permissible types, amounts and
terms of loans and investments, the amount of reserves against deposits,
restrictions on dividends, establishment of branch offices, and the maximum
rate of interest that may be charged by law. The Federal Reserve and the FDIC
and the Department also possess cease and desist powers over bank holding
companies and banks, respectively, to prevent or remedy unsafe or unsound
practices or violations of law. These and other restrictions limit the manner
in which the Company and the Banks may conduct their business and obtain
financing. Furthermore, the commercial banking business is affected not only
by general economic conditions, but also by the monetary policies of the
Federal Reserve. These monetary policies have had and are expected to continue
to have significant effects on the operating results of commercial banks.
Changes in monetary or legislative policies may affect the ability of the Banks
to attract deposits and make loans.
LACK OF DIVERSIFICATION
The sole business activity of the Company consists of its ownership of the
common stock of the Banks. As a result, the Company lacks diversification as
to business activities and market areas, and any event affecting the Banks will
have a direct impact on the Company.
12
<PAGE> 15
PAYMENT OF DIVIDENDS
The payment of dividends by the Banks to the Company is regulated by
various state and federal laws which restrict the payment of dividends under
certain circumstances. In addition, such laws also impose certain minimum
capital requirements which affect the amount of cash available for the payment
of dividends by a regulated banking institution such as the Banks. Even if the
Banks are able to generate sufficient earnings to satisfy the currently
established capital requirements, there is no assurance that the Boards of
Directors of the Banks might not decide or be required to retain a greater
portion of the earnings of the Banks in order to maintain or achieve the
capital necessary because of any (i) increase in the capital requirements
established by the FDIC or the Department, (ii) significant increase in the
total of risk-weighted assets held by either of the Banks, (iii) significant
decreases in the income of either of the Banks, or (iv) compliance with new
unforeseen federal or state regulations. In addition, in some cases, the FDIC
or the Department could take the position that it has the power to prohibit the
Banks from paying dividends if, in its view, such payments would constitute
unsafe or unsound banking practices. Further, the determination of whether
dividends are paid and their frequency and amount will depend on the financial
condition and performance of the Banks and other factors deemed appropriate by
the Boards of Directors of the Banks. Accordingly, there can be no assurance
that any dividends will be paid in the future by the Banks or the Company.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Common Stock offered
hereby is estimated to be $970,210, after deducting the estimated offering
expenses.
The net proceeds of the offering will be used for general corporate
purposes, including capital contributions to the Banks, the financing of
possible future acquisitions of other financial institutions, the possible
repayment of borrowings, and additional working capital.
On September 11, 1995, the Company entered into a Stock Purchase Agreement
with William C. Adams, Sr., Ann S. Adams and William C. Adams, Jr. (the
"Sellers"), the sole shareholders of Premier Bancshares, Inc., the one bank
holding company for Premier Bank of East Tennessee, Niota, Tennessee. This
Agreement provided for the Company's acquisition from the Sellers of 100% of
the outstanding shares of Premier Bancshares, Inc. for a purchase price of
$3,140,000. This acquisition was consummated on January 1, 1996 with the
Company delivering cash to the Sellers of $708,582 and the Company's promissory
notes to the Sellers in the aggregate principal amounts of $2,431,418.
13
<PAGE> 16
The Company currently has no plans, understandings, arrangements or
agreements, written or oral, with respect to any specific acquisition prospect,
and is not presently negotiating with any other party with respect thereto.
After the consummation of this offering, the net proceeds may be invested
by the Company in short-term interest- bearing securities or certificates of
deposits. Although the Company does not currently anticipate significant
changes in the allocation of net proceeds described above, the allocation may
vary as necessary to respond to changing circumstances.
DETERMINATION OF OFFERING PRICE
In May 1995, the Board of Directors of the Company approved offering the
Common Stock of the Company at a price of $170 a share, with such price being
based solely on recent trading prices in the Common Stock. In determining the
offering price of $170 per share, the Board considered that from January 2,
1995 to the date of commencement of the initial offering in May 1995, there
were fifteen stock transactions involving 645 shares of the Common Stock of the
Company. Each of these transactions was at $170 per share.
PLAN OF DISTRIBUTION
On May 31, 1995, the Company forwarded a letter to several hundred
potential subscribers for common stock of the Company. The response to the
letter resulted in the sale of 5,009 shares of the Company's common stock to
New Shareholders. The Company received approximately $851,530 in payment for
the newly issued common shares. No commissions or other fees were paid or
received by the Company or any other person in connection with the sale of such
shares. The Company, simultaneously with this offering, is making a rescission
offer to the New Shareholders. The need for the Rescission Offer arises from
the sale of the common stock to the New Shareholders without registration with
the Securities and Exchange Commission and the necessary state securities
divisions or the availability of an exemption from registration. See "Risk
Factors - Simultaneous Rescission Offer."
The New Shareholders will receive the Rescission Offer along with a copy of
this Prospectus. Other potential subscribers for the Common Stock will be
contacted by the Company's direct distribution of a copy of this Prospectus to
them. No commissions or other fees will be paid or received by the Company or
any other person in connection with the sale of the Common Stock.
14
<PAGE> 17
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 1,000,000 shares of Common Stock, par
value $10 per share. As of September 30, 1995, 447,453 shares of Common Stock
of the Company were issued and outstanding, including approximately 5,009
shares issued to New Shareholders and subject to the Rescission Offer. See
"Risk Factors - Simultaneous Rescission Offer." The holders of Common Stock are
entitled to one vote per share and do not have any preemptive rights to
purchase any securities subsequently issued by the Company. The absence of
preemptive rights could cause the dilution of the shareholder's interest in the
Company without the specific authority of the shareholders.
The holders of Common Stock are entitled to receive dividends as may be
declared by the Board of Directors of the Company with respect to the Common
Stock out of funds legally available therefore. In the event of liquidation,
dissolution or winding-up of the affairs of the Company, the holders of
outstanding shares of Common Stock will be entitled to share pro rata according
to their respective interests in the Company's assets and funds remaining after
payment or provision for payment of all debts and other liabilities of the
Company.
The shareholders of the Company have no cumulative voting rights. The
absence of cumulative voting rights means that Company shareholders
representing a plurality of the Company's shares will be able to elect the
entire Board of Directors and the remaining shareholders representing a
minority of the Company's shares will not be able to elect any directors.
The outstanding shares of Common Stock are, and those shares to be issued
by the Company in connection with this offering will be, when issued, fully
paid and nonassessable.
INFORMATION WITH RESPECT TO THE COMPANY
ANNUAL REPORT FOR YEAR ENDED DECEMBER 31, 1994
This Prospectus is accompanied by a copy of the Company's latest report on
Form 10-K to the Securities and Exchange Commission.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE NINE MONTH PERIODS AND THREE MONTH PERIODS ENDED AS OF
SEPTEMBER 30, 1995 AND 1994, RESPECTIVELY.
The following is management's discussion and analysis of financial
condition and results of operations of Greene County Bancshares, Inc. and
Subsidiaries for the nine month periods and three month periods ended as of
September 30, 1995 and 1994, respectively.
15
<PAGE> 18
This commentary should be read in conjunction with the financial statements for
the nine month periods and the three month periods ended as of September 30,
1995 and 1994, respectively, and the related notes contained herein.
The Company is not aware of any recommendations by the bank regulatory
authorities which if implemented would have a material effect on the Company's
liquidity, capital resources or operations.
EARNINGS
The Company's earnings for the three months and nine months ended September
30, 1995 were $1,496,000 and $4,547,000, respectively. This represents a 19.6%
and a 20.2% increase when compared to $1,251,000 and $3,784,000 in earnings for
the respective periods in 1994.
NET INTEREST INCOME
The largest source of earnings for the Company is net interest income,
which is the difference between interest income on interest-bearing assets and
interest paid on deposit and other interest-bearing liabilities. The primary
factors which affect net interest income are changes in volume and yields of
earning assets and interest-bearing liabilities, and the ability to respond to
changes in interest rates through asset/liability management. During the three
and nine months ended September 30, 1995, net interest income after provision
for loan losses, was $4,565,000 and $13,212,000, respectively, as compared to
$3,826,000 and $11,037,000 for the same periods in 1994, increases of 19.3% and
19.7%, respectively. The increases are primarily attributable to an increase
in volume of earning assets and only small increases in the effective rates
paid on interest-bearing deposits.
Loans produced the largest component of interest income, contributing
$7,106,000 and $19,902,000 for the three and nine months ended September 30,
1995, respectively, as compared to $5,032,000 and $13,832,000 for the same
periods in 1994, representing increases of 41.2% and 43.9%, respectively. The
increases are attributable to both rate and volume increases of earning assets.
Earnings on securities and federal funds sold provided the balance of
interest income, producing $1,116,000 and $3,463,000 for the three and nine
month periods ended September 30, 1995, respectively, as compared to $1,031,000
and $3,450,000 for the same periods in 1994.
Total interest expense for the Company increased 62.9% and 61.9% during the
three and nine month periods ended September 30, 1995, respectively, as
compared to the same periods in 1994. Interest expense, which consisted
primarily of interest paid on deposits, totalled $3,475,000 and $9,660,000
during the three and nine months ended September 30, 1995, respectively, as
compared to $2,132,000 and $5,968,000 for the same periods in 1994. The cost
of interest-bearing liabilities increased due to both rate and volume
increases.
16
<PAGE> 19
The deregulation of interest rates has given banks more opportunity to
attract deposits and has created a public which is more interest rate
sensitive. As a result, banks are paying interest on a continually increasing
portion of their deposit base. The Company's ability to maintain a favorable
spread between interest income and interest expense is a major factor in
generating earnings; therefore, it is necessary to effectively manage earning
assets and interest- bearing liabilities. As the percentage of
interest-bearing deposits compared to total deposits increases and rates become
more competitive, it becomes increasingly more difficult to maintain the
Company's spread.
NON-INTEREST INCOME AND EXPENSE
Income that is not related to interest-bearing assets, consisting primarily
of service charges, commissions and fees, has become more important as
increases in levels of interest-bearing deposits make it more difficult to
maintain net interest income spreads.
Total other income for the three and nine month periods ended September 30,
1995 was $620,000 and $2,094,000, respectively, as compared to $548,000 and
$1,554,000 for the same periods in 1994. The increases of 13.1% and 34.8%
resulted in part from an increase in service charges on deposit accounts and
commissions earned.
Control of operating expenses also is an important aspect in managing net
income. Operating expenses include personnel, occupancy, and other expenses
such as data processing, printing and supplies, legal and professional fees,
postage, and FDIC assessment. Total other operating expenses were $2,756,000
and $7,996,000 for the three and nine months periods ended September 30, 1995,
respectively, as compared to $2,337,000 and $6,614,000 for the same periods in
1994. Personnel costs are the primary element of the Company's other operating
expenses. During the three and nine months ended September 30, 1995, salaries
and benefits represented $1,632,000 and $4,396,000 of other operating expenses,
respectively. This was an increase of $437,000 and $1,000,000 or 36.6% and
29.4% over the same periods in 1994. These increases were due to opening new
branches requiring increased staff levels, and increased employee benefit
costs, including heath insurance and pension costs.
Other operating expenses during the three and nine month periods ended
September 30, 1995 were $1,124,000 and $3,600,000, a decrease of $18,000 and an
increase of $400,000, respectively, from the same periods in 1994.
LOANS
At September 30, 1995, loans, net of unearned income and allowance for loan
losses, were $281,100,000 compared to $241,300,000 for the same period in 1994.
This increase is primarily due to increases in commercial lending. Nonaccural
loans increased by $236,382 during the nine month period ended September 30,
1995. This change is deemed to be immaterial by management.
17
<PAGE> 20
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Because the loan portfolio represents the Company's largest earning asset,
the Company continually monitors the quality of its loan portfolio. Greene
County Bancshares, Inc. operates in a diverse economy of manufacturing and
agriculture and, accordingly, most loans are made to commercial enterprises or
consumers who are directly supported by these enterprises. During the three
and nine month periods ended September 30, 1995, the Company charged-off
$173,000 and $436,000 in loans, and recovered $90,000 and $376,000 in
charged-off loans, respectively. All loans identified by management or
regulatory authorities as losses are charged-off against the allowance for loan
losses. All other loans classified for regulatory purposes do not require
disclosure since in management's opinion they do not (i) represent or result
from trends or uncertainties which management expects to materially impact
future operating results, liquidity or capital resources, or (ii) represent
material credits which cause management to have serious doubts as to the
ability of such borrowers to comply with the loan repayment terms. The
Company's allowance for loan losses increased to $3,880,000 at September 30,
1995 from $2,694,000 for the same period in 1994. This increase is due to an
overall increase in the total loan portfolio.
INVESTMENTS
The Company maintains an investment portfolio to provide liquidity and
earnings. Investments at September 30, 1995 with a carrying value of
$67,500,000 had a market value of $67,800,000. During the same period in 1994,
investments totalled $76,400,000 with a market value of $76,400,000. This
decrease was used to fund increases in the loan portfolio.
In 1993, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 115 (SFAS 115), "Accounting for Certain
Investments in Debt and Equity Securities." SFAS 115 requires that investments
in certain debt and equity securities be classified as either Held to Maturity
(reported at amortized cost), Trading (reporting at fair value with unrealized
gains and losses included in earnings), or Available for Sale (reported at fair
value with unrealized gains and losses excluded from earnings and reported as a
separate component of stockholders' equity). SFAS 115 was required to be
implemented for fiscal years beginning after December 15, 1993. Management
adopted SFAS 115 on January 1, 1994 and currently classifies a portion of the
portfolio as available for sale.
DEPOSITS
The funds to support the Company's asset growth have been provided by
increased deposits, which amounted to $335,600,000 at September 30, 1995. This
represents a 18.2% increase from the deposits at September 30, 1994 of
$283,900,000. The increase is primarily the result of Greene County
Bancshares, Inc. aggressive efforts to attract new time deposit customers,
along with the opening of new branches.
18
<PAGE> 21
STOCKHOLDERS' EQUITY AND CAPITAL ADEQUACY
Sufficient levels of capital are necessary to sustain growth and absorb
losses. The Company exceeds all regulatory capital requirements. The
Company's primary source of new capital is undivided profits.
The Federal Reserve Board, the FDIC and other agencies which regulate
financial institutions have adopted capital adequacy standards applicable to
financial institutions. These standards are intended to reflect the degree of
risk associated with both on and off balance sheet items and to assure that
even whose institutions that invest predominately in low risk assets, maintain
a certain minimum level of capital. The following table provides the Company's
best collective understanding of the regulatory capital requirements as
currently published. These understandings are based upon regulations,
guidelines and interpretations now in effect or proposed, all of which are
subject to change.
<TABLE>
<CAPTION>
Capital Ratio's at September 30, 1995
-------------------------------------
Required Minimum Ratio Company's Ratio
---------------------- ---------------
<S> <C> <C>
Tier 1 risk-based capital 4.00% 14.86%
Total risk-based capital 8.00% 16.24%
Leverage Ratio 3.00% 10.75%
</TABLE>
The Company believes it was in compliance with all minimum regulatory capital
guidelines at September 30, 1995 and continues to be so.
LIQUIDITY AND GROWTH
Liquidity refers to the ability of the Company to generate sufficient funds
to meet its financial obligations and commitments without significantly
impacting net interest income. One of the Company's objectives is to maintain
a high level of liquidity, and this goal continues to be met. Maintaining
liquidity ensures that funds will be available for reserve requirements,
customer demand for loans, withdrawal of deposit balances and maturities of
other deposits and liabilities. These obligations can be met by existing cash
reserves of funds from maturing loans and investments, but in the normal course
of business are met by deposit growth. Increased deposits and retained
earnings also are the sources for the Company's continued growth of liquidity.
During the nine month period ended September 30, 1995, operating activities
of the Company provided $5,574,000 of cash flow. Net income of $4,547,000,
adjusted for non-cash operating activities, provided the majority of cash
generated from operations.
19
<PAGE> 22
Investing activities, predominantly lending, used $45,817,000 of the
Company's cash flow. This resulted in a $3,063,000 net increase in the
investment portfolio, whereas loans originated, net of principal collected,
used $39,843,000 in funds.
Net cash inflows of $37,894,000 were provided by financing activities. Net
deposit growth accounted for $37,484,000 of the increase, along with an
increase in securities sold under agreements to repurchase of $895,000, and the
sale to the New Shareholders of common stock of $851,000 which is subject to
the Rescission Offer. Offsetting this increase were the cash dividends paid to
shareholders of $1,336,000.
The Company's liquid assets include investment securities, federal funds
sold, and cash and due from banks. These assets represented 26.7% of total
deposits at September 30, 1995, a decrease from 33.3% at September 30, 1994.
INTEREST SENSITIVITY
Deregulation of interest rates and short-term, interest-bearing deposits
which are more volatile have created a need for shorter maturities of earnings
assets. An increasing percentage of commercial and installment loans are being
made with variable rates or shorter maturities to increase liquidity and
interest rate sensitivity. The difference between interest sensitive asset and
interest sensitive liability repricing within time periods is referred to as
the interest rate sensitivity gap. Gaps are identified as either positive
(interest sensitive assets in excess of interest sensitive liabilities) or
negative (interest sensitive liabilities in excess of interest sensitive
assets). The Company monitors its interest rate sensitivity gap on a monthly
basis to maintain a positive position.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Gerrish & McCreary, P.C, Memphis, Tennessee.
EXPERTS
The balance sheet as of December 31, 1994 and the statement of income,
shareholders' equity, and cash flow for the year ended December 31, 1994,
incorporated by reference and delivered with this Prospectus, have been
included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The balance sheet as of December 31, 1993 and the statements of income,
changes in shareholders' equity, and cash flows for each of the two years in
the period ended December 31, 1993, incorporated by reference and delivered
with this Prospectus, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in accounting and auditing.
20
<PAGE> 23
GREENE COUNTY BANCSHARES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets - September 30, 1995 and December 31,
1994.
Condensed Consolidated Statements of Earnings - For the three months ended
September 30, 1995 and 1994 and for the nine months ended September
30, 1995 and 1994.
Condensed Consolidated Statement of Changes in Stockholders' Equity for the
nine months ended September 30, 1995.
Condensed Consolidated Statements of Cash Flows - For the nine months ended
September 30, 1995 and 1994.
Notes to Condensed Consolidated Financial Statements.
F - 1
<PAGE> 24
GREENE COUNTY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
(UNAUDITED) *
SEPTEMBER 30, DECEMBER 31,
1995 1994
ASSETS (IN THOUSANDS)
------
-------- --------
<S> <C> <C>
Cash and Due from Banks $ 12,737 $ 15,086
Federal Funds sold 9,500 3,550
Securities available-for-sale 33,381 38,109
Securities held-to-maturity (with a market value of $34,379
on September 30, 1995 and $32,215 on December 31, 1994). 34,106 32,265
Loans 284,976 244,700
Less: Allowance for Loan Losses 3,880 3,447
-------- --------
Net Loans 281,096 241,253
-------- --------
Bank Premises and Equipment, Net of Accumulated Depreciation 7,939 7,042
Other Assets 10,287 8,220
-------- --------
$389,046 $345,525
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deposits $335,646 $298,162
Federal funds purchased and Securities sold under agreements to repurchase 4,774 3,879
Other Borrowings 3,509 3,688
Other Liabilities 3,282 2,606
-------- --------
Total Liabilities 347,211 308,335
-------- --------
STOCKHOLDERS' EQUITY
--------------------
Common Stock, par value $10, authorized 1,000,000 shares; issued and
outstanding 447,453 and 442,444 shares on September 30, 1995 and
December 31, 1994, respectively 4,474 4,424
Surplus 3,716 2,915
Retained Earnings 33,653 30,442
Net unrealized holding gains (losses) on available-for-sale securities (8) (591)
-------- --------
Total Stockholders' Equity 41,835 37,190
-------- --------
$389,046 $345,525
======== ========
</TABLE>
* Condensed from Audited Financial Statements.
See accompanying notes to Consolidated Financial Statements (Unaudited)
F - 2
<PAGE> 25
GREENE COUNTY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30 SEPTEMBER 30
(DOLLARS IN THOUSANDS EXCEPT PER SHARE) 1995 1994 1995 1994
--------------------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income:
Interest and Fees on Loans $ 7,106 $ 5,032 $19,902 $13,832
Interest on Investment Securities 1,024 955 3,082 3,285
Interest on Federal Funds Sold 92 76 381 165
------- ------- ------- -------
Total Interest Income 8,222 6,063 23,365 17,282
Interest Expense:
Interest on Deposits 3,371 2,015 9,335 5,662
Interest on Short Term Borrowings 104 117 325 306
------- ------- ------- -------
Total Interest Expense 3,475 2,132 9,660 5,968
------- ------- ------- -------
Net Interest Income 4,747 3,931 13,705 11,314
Provision for Loan Losses 182 105 493 277
------- ------- ------- -------
Net Interest Income after Provision for Loan Losses 4,565 3,826 13,212 11,037
------- ------- ------- -------
Other Income:
Income from Fiduciary Activities 10 11 28 41
Service Charges on Deposit Accounts 430 415 1,326 1,248
Security Gains (Losses) 0 33 6 (35)
Other Income 180 89 734 300
------- ------- ------- -------
620 548 2,094 1,554
Other Expenses:
Salaries and Employee Benefits 1,632 1,195 4,396 3,396
Premises and Fixed Assets Expense 483 293 1,247 864
Other Operating Expenses 641 849 2,353 2,354
------- ------- ------- -------
2,756 2,337 7,996 6,614
------- ------- ------- -------
Earnings Before Income Taxes 2,429 2,037 7,310 5,977
Income Taxes 933 786 2,763 2,193
------- ------- ------- -------
Net Income $ 1,496 $ 1,251 $ 4,547 $ 3,784
======= ======= ======= =======
Average Number of Shares 446,282 442,253 445,110 442,253
Per Share of Common Stock:
Net Earnings $ 3.35 $ 2.83 $ 10.22 $ 8.56
------- ------- ------- -------
Dividends $ 1.00 $ 0.88 $ 3.00 $ 2.64
------- ------- ------- -------
</TABLE>
See accompanying notes to Consolidated Financial Statements (Unaudited)
F - 3
<PAGE> 26
GREENE COUNTY BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
NET
UNREALIZED
DEPRECIATION
ON AVAILABLE
COMMON RETAINED FOR SALE
STOCK SURPLUS EARNINGS SECURITIES TOTAL
----- ------- -------- ---------- -----
<S> <C> <C> <C> <C> <C>
January 1, 1995 $4,424 $2,915 $30,442 $ (591) $37,190
Issuance of 5,009 shares 50 801 - - 851
Net income - - 4,547 - 4,547
Change in unrealized depreciation,
net of tax - - - 583 583
Dividends paid - - (1,336) - (1,336)
------ ------ ------- ------ -------
September 30, 1995 $4,474 $3,716 $33,653 $ (8) $41,835
====== ====== ======= ====== =======
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
(Unaudited).
F - 4
<PAGE> 27
GREENE COUNTY BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED 9/30/95 AND 9/30/94
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPT 30, SEPT 30,
1995 1994
---- ----
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net Income $ 4,547 $ 3,784
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for Loan Losses 493 277
Provision for Depreciation & Amortization 500 387
Amortization of investment security discounts, net of accretion 256 828
Increase in interest receivable (852) (347)
Decrease in unearned income (372) (1,214)
Increase in other assets (2,067) (943)
Increase in Accrued Interest Payable and other 3,069 8,384
------- -------
Net cash provided by operating activities 5,574 11,156
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease of securities and federal funds (3,063) 12,341
Net increase in loans (39,843) (30,236)
Proceeds (improvements) other real estate owned and other (1,751) 1,020
Fixed assets additions (1,160) (911)
------- -------
Net cash used by investing activities (45,817) (17,786)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand deposits, NOW, money market and savings accounts 37,484 16,629
Cash dividends paid (1,336) (1,168)
Increase (decrease) in securities sold under agreements to repurchase 895 (1,680)
Proceeds from issuances of common stock 851 14
------- -------
Net cash provided by financing activities 37,894 13,795
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,349) 7,165
CASH AND CASH EQUIVALENTS AT JANUARY 1, 1995 15,086 11,020
------- -------
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30, 1995 $12,737 $18,185
======= =======
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
(Unaudited)
F - 5
<PAGE> 28
GREENE COUNTY BANCSHARES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 - PRINCIPLES OF CONSOLIDATION AND PRESENTATION
The consolidated financial statements include the accounts of Greene County
Bancshares, Inc. (the "Company") and its wholly owned subsidiaries, Greene
County Bank and American Fidelity Bank. All material intercompany balances and
transactions have been eliminated in the consolidation.
SUMMARY OF ACCOUNTING POLICIES
The accompanying Condensed Consolidated Financial Statements have been
prepared, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations.
In the opinion of management, the accompanying financial statements contain all
adjustments, consisting only of normal recurring accruals, necessary to
summarize fairly the consolidated financial position of the Company as of
September 30, 1995 and the results of operations, stockholders' equity and cash
flows for the periods presented.
2 - ALLOWANCE FOR LOAN LOSSES
Transactions in the Allowance for Loan Losses were as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
(IN THOUSANDS) 1995 1994
-------------- ---- ----
<S> <C> <C>
Balance, January 1 $3,447 $2,962
Add (Deduct):
Losses charged to allowance (436) (1,067)
Recoveries credited to allowance 376 522
Provision for loan losses 493 277
------ ------
Balance, September 30 $3,880 $2,694
====== ======
</TABLE>
F - 6
<PAGE> 29
PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses of this offering include:
<TABLE>
<S> <C>
SEC Registration Fees $ 351.72
Accounting Fees and Expenses* 12,500.00
Costs of Printing and Engraving* 3,500.00
Legal Fees and Expenses* 30,000.00
Blue Sky Fees and Expenses 2,438.33
Miscellaneous Expenses* 1,000.00
----------
Total $49,790.05
==========
</TABLE>
(*) Indicates estimated amount
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Tennessee Business Corporation Act (the "Tennessee Act") empowers a
corporation to indemnify an individual made a party to a proceeding because he
is or was a director against liability incurred in the proceeding if: (i) he
conducted himself in good faith; and (ii) he reasonably believed: (a) in the
case of conduct in his official capacity with the corporation, that his conduct
was in its best interests; (b) in all other cases, that his conduct was at
least not opposed to its best interests; and (c) in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
The termination of a proceeding by a judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent is not, of itself,
determinative that the director did not meet the required standard of conduct.
A corporation may not indemnify a director in connection with: (i) a
proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation; or (ii) 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.
Indemnification is limited to reasonable expenses incurred in connection with
the proceeding.
The Tennessee Act further provides that unless limited by its charter, a
corporation shall 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 director of the corporation against reasonable expenses incurred
by him in connection with the proceeding.
The Tennessee Act also provides that a corporation may pay for or reimburse the
reasonable expenses incurred by a director who is a party to a proceeding in
advance of
II - 1
<PAGE> 30
final disposition of the proceeding if the director furnishes the corporation a
written: (i) affirmation of his good faith belief that he has met the required
standard of conduct; and (ii) undertaking, executed personally or on his
behalf, to repay the advance if it is ultimately determined that he is not
entitled to indemnification. In addition, a corporation may pay for or
reimburse the reasonable expenses incurred if a determination is made that the
facts then known to those making the determination would not preclude
indemnification.
A corporation may not indemnify a director unless authorized in the specific
case after the proper determination has been made by the Board of Directors, by
special legal counsel or by the shareholders owning the requisite number of
shares.
A corporation also may indemnify and advance expenses to an officer, employee
or agent of the corporation who is not a director to the same extent as a
director. The Charter of Greene County Bancshares, Inc. contains the following
indemnification provision:
The corporation from time to time may provide either directly, or
indirectly through the purchase of insurance, for the indemnification of
directors, officers, employees and agents of the corporation and of any
of its subsidiaries to the fullest extent permitted by law.
The directors and officers of the Company are covered by an insurance policy in
the amount of $5,000,000 by the CNA insurance company.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
3.1 Charter of the Company, as amended
3.2 Bylaws of the Company, as amended
4.1 See Exhibits 3.1 and 3.2 for provisions of the Charter, as amended, and the Bylaws, as amended, of
the Company defining rights of holders of the Company's Common Stock
4.2 Form of Rescission Offer
5 Opinion of Gerrish and McCreary, P.C. re: legality
10.1 Employment Agreement between Company and R. Stan Puckett*
10.2 Employment Agreement between Company and Davis Stroud**
10.3 Employment Agreement between Company, Premier Bank of East Tennessee and William C. Adams, Jr.,
dated January 1, 1996.
10.4 Noncompetition Agreement between Company and William C. Adams, Sr., dated January 1, 1996.
10.5 Noncompetition Agreement between Company and William C. Adams, Jr., dated January 1, 1996.
</TABLE>
II - 2
<PAGE> 31
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
21 Subsidiaries of the Company
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Gerrish and McCreary, P.C. (contained in Exhibit 5 to the Registration Statement)
24 Power of Attorney (contained in the Signature section of the Registration Statement)
* Incorporated herein by reference to exhibits filed with Form 10-K Annual Report for year ended December 31,
1994.
** Incorporated herein by reference to exhibits filed with Form S-14 Registration Statement under the
Securities Act of 1933, Registration No. 2-96273.
</TABLE>
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"), 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 Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company 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
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 Securities Act and will be governed by the final adjudication
of such issue.
The Company hereby undertakes that for purposes of determining any liability
under the Securities Act, the Company will treat the information omitted from
the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the Company
under Rule 434(b)(1), or (4), or 497(h) under the Securities Act as part of
this registration statement as of the time the Commission declared it
effective.
The Company hereby undertakes that for purposes of determining any liability
under the Securities Act, the Company will treat each post-effective amendment
that contains a form of prospectus as a new registration statement for the
securities offered in the registration statement, and the offering of the
securities at that time as the initial bona fide offering of those securities.
II - 3
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Greene
County Bancshares, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-2 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Greeneville, State of
Tennessee, on January 23, 1996.
GREENE COUNTY BANCSHARES, INC.
By: /s/ R. Stan Puckett
---------------------------
R. Stan Puckett
President
POWER OF ATTORNEY
We, the undersigned directors and officers of Greene County Bancshares,
Inc., do hereby constitute and appoint R. Stan Puckett our true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for us and in our name, place and stead, in any and all capacities, to sign any
and all amendments to this Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and we do hereby ratify and confirm all
that said attorney-in-fact and agent, or his substitute, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Capacity Date
- ---- -------- ----
<S> <C>
/s/ R. Stan Puckett President January 23, 1996
- ------------------------------------------- and Director
R. Stan Puckett
/s/ Alex Johnson Chief Financial Officer January 23, 1996
- -------------------------------------------
Alex Johnson
/s/ Phil M. Bachman, Jr. Director January 23, 1996
- -------------------------------------------
Phil M. Bachman, Jr.
/s/ Helen Horner Director January 23, 1996
- -------------------------------------------
Helen Horner
</TABLE>
II - 4
<PAGE> 33
<TABLE>
<CAPTION>
Name Capacity Date
- ---- -------- ----
<S> <C>
/s/ J.W. Douthat Director January 23, 1996
- ------------------------------------------- ----------------
J.W. Douthat
/s/ Harrison Lamons Director January 23, 1996
- ------------------------------------------- ----------------
Harrison Lamons
/s/ Terry Leonard Director January 23, 1996
- ------------------------------------------- ----------------
Terry Leonard
/s/ Ralph T. Brown Director January 23, 1996
- ------------------------------------------- ----------------
Ralph T. Brown
/s/ James A. Emory Director January 23, 1996
- ------------------------------------------- ----------------
James A. Emory
Director
- ------------------------------------------- ----------------
Patrick Norris
/s/ Jerald K. Jaynes Director January 23, 1996
- ------------------------------------------- ----------------
Jerald K. Jaynes
/s/ Charles S. Brooks Director January 23, 1996
- ------------------------------------------- ----------------
Charles S. Brooks
/s/ Davis Stroud Director January 23, 1996
- ------------------------------------------- ----------------
Davis Stroud
/s/ W.T. Daniels Director January 23, 1996
- ------------------------------------------- ----------------
W.T. Daniels
</TABLE>
II - 5
<PAGE> 34
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
3.1 Charter of the Company, as amended
3.2 Bylaws of the Company, as amended
4.1 See Exhibits 3.1 and 3.2 for provisions of the Charter, as amended, and the Bylaws, as amended,
of the Company defining rights of holders of the Company's Common Stock
4.2 Form of Rescission Offer
5 Opinion of Gerrish and McCreary, P.C. re: legality
10.1 Employment Agreement between Company and R. Stan Puckett*
10.2 Employment Agreement between Company and Davis Stroud**
10.3 Employment Agreement between Company, Premier Bank of East Tennessee and William C. Adams, Jr.,
dated January 1, 1996.
10.4 Noncompetition Agreement between Company and William C. Adams, Sr., dated January 1, 1996.
10.5 Noncompetition Agreement between Company and William C. Adams, Jr., dated January 1, 1996.
21 Subsidiaries of the Company
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Gerrish and McCreary, P.C. (contained in Exhibit 5 to the Registration Statement)
24 Power of Attorney (contained in the Signature section of the Registration Statement)
* Incorporated herein by reference to exhibits filed with Form 10-K Annual Report for year ended December
31, 1994.
** Incorporated herein by reference to exhibits filed with Form S-14 Registration Statement under the
Securities Act of 1933, Registration No. 2-96273.
</TABLE>
<PAGE> 1
EXHIBIT 3.1
STATE OF TENNESSEE
(ART)
Department of State
Certificate
The undersigned, as Secretary of State of the State of Tennessee,
hereby certifies that the attached document was received for filing on behalf
of GREENE COUNTY BANCSHARES, INC. was duly executed in accordance with the
Tennessee General Corporation Act, was found to conform to law, and was filed
by the undersigned, as Secretary of State, on the date noted on the document.
Therefore, the undersigned, as Secretary of State, and by virtue of
the authority vested in him by law, hereby issues this certificate and attaches
hereto the document which was duly filed on January 18th, 1985.
/s/
-----------------------------
Secretary of State
/s/
-----------------------------
Deputy
<PAGE> 2
CHARTER
OF
GREENE COUNTY BANCSHARES, INC.
The undersigned natural person, having capacity to contract and acting
as the Incorporator of a corporation under the Tennessee General Corporation
Act, adopts the following Charter for such corporation:
1. The name of the Corporation is Greene County Bancshares, Inc.
2. The duration of the corporation is perpetual.
3. The address of the principal office of the corporation in the
State of Tennessee shall be Main and Depot Streets, Greeneville, Greene County,
Tennessee.
4. The corporation is for profit.
5. The purposes for which the corporation is organized are:
(a) To carry on the business of a bank holding company,
as defined in the Federal Bank Holding Company Act of
1956, as amended, and to do all acts and things now
and hereinafter permitted to be done by such a
company.
(b) To acquire by purchase, subscription, or otherwise,
and to receive, hold, own, guarantee, sell, assign,
exchange, transfer, mortgage, pledge, or otherwise
dispose of or deal in and with any and all
securities, as such term is hereinafter defined,
issued or created by any corporation, firm,
association or other entity, public or private,
whether formed under the laws of the United States of
America or of any state, commonwealth, territory,
dependency or possession thereof, or of any foreign
country or of any governmental subdivision, territory,
<PAGE> 3
dependency, possession or municipality thereof, or issued or created
by the United States of America or any state or commonwealth thereof
or any foreign country, or by any agency, subdivision, territory,
dependency, possession or municipality of any of the foregoing; and
as owner thereof to possess and exercise all the rights, powers and
privileges of ownership, including the right to execute consents and
vote thereon. The term "securities" as used in this Charter shall
mean any and all notes, stocks, treasury stocks, bonds, debentures,
evidences of indebtedness, certificates of interest or participation
in any profit-sharing agreement, collateral trust certificates,
preorganization certificates or subscriptions, transferable shares,
investment contracts, voting trust certificates, certificates of
deposit for a security, or, in general, any interests or instruments
commonly known as "securities" or any and all certificates of interest
or participation in, temporary or interim certificates for, receipts
for, guaranties of, or warranties or rights to subscribe to or
purchase, any of the foregoing.
(c) To make, establish and maintain investments in securities, and to
supervise and manage such investments.
(d) To cause to be organized under the laws of the United States of
America or of any state, commonwealth, territory, dependency or
possession thereof, or of any foreign country or of any political
subdivision, territory, dependency, possession or municipality
thereof, one or more corporations, firms, organizations associations
or other entity.
<PAGE> 4
dissolved, wound up, liquidated, merged or consolidated.
(e) To acquire by purchase or exchange, or by transfer to, or by merger or
consolidation with, the corporation or any corporation, firm
organization, association, or other entity owned or controlled,
directly or indirectly, by the corporation, or to otherwise acquire,
the whole or any part of the business, good will, rights, or other
assets of any corporation, firm, organization, association or other
entity; to operate and/or carry on the business of same, and to
undertake or assume in connection therewith the whole or any part of
the liabilities and obligations thereof; to effect any such
acquisition in whole or in part by delivery of cash or other property,
including securities issued by the corporation, or by any other lawful
means.
(f) To aid by loan, subsidy, guaranty or in any other lawful manner any
corporation, firm, organization, association or other entity of which
any securities are in any manner directly or indirectly held by the
corporation or in which the corporation or any such corporation, firm,
organization, association or entity may be or become otherwise
interested; to guarantee the payment of dividends of any stock issued
by any such corporation, firm, organization, association or entity; to
guarantee with or without recourse against any such corporation, firm
or organization, association or entity or to assume the payment of the
principal of, or the interest on, any obligations issued or incurred
by such corporation, firm, organization, association or entity, to do
any and all other acts and things
<PAGE> 5
for the enhancement, protection or preservation of any securities
which are in any manner, directly or indirectly held, guaranteed or
assumed by the corporation, and to do any and all acts and things
designed to accomplish any such purpose.
(g) To borrow money for any business, object or purpose of the corporation
from time to time, without limit as to amount; to issue any kind of
evidence of indebtedness, whether or not in connection with borrowing
money, including evidences of indebtedness convertible into stock of
the corporation, to secure the payment of any evidence of indebtedness
by the creation of any interest in any of the property or rights of
the corporation, whether at that time owned or thereafter acquired.
(h) To render service, assistance, counsel and advice to, and to act in
any capacity as representative or agent (whether managing, operating,
financial, purchasing, selling, advertising or otherwise) of, any
corporation, firm, organization, association, or other entity.
(i) To engage in any lawful business and in connection therewith to do any
lawful act in furtherance of or otherwise necessary or convenient to
such business.
The corporation shall possess and may exercise all powers and
privileges necessary or convenient to effect any or all of
the foregoing purposes, or to further any or all of the foregoing
powers, and the enumeration herein of any specific purposes or powers
shall not be held to limit or restrict in any manner the exercise by
the corporation of the general powers of the
<PAGE> 6
State of Tennessee conferred upon corporations formed
under the Tennessee General Corporation Act.
6. The maximum number of shares which the corporation shall have
the authority to issue is
(a) One Hundred Thirty (130) shares of Organizational
Common Stock with a par value of Ten Dollars
($10.00) per share, which stock shall be callable by
the corporation at any time at the par value thereof
by action of a majority of the board of directors.
(b) Three Hundred Thousand (300,000) shares of Common
Stock, with a par value of Ten Dollars ($10.00) per
share.
7. The corporation will not commence business until consideration
of One Thousand Dollars ($1,000.00) has been received for the issuance of
shares.
8. (a) The Board of Directors may take, on written consent
without a meeting, any action which it could take by means of a regularly
called and held meeting, provided that such written consent sets forth the
action so taken and is signed by all of the Directors.
(b) The Board of Directors shall have the power by majority
vote of the Directors present at a meeting at which a quorum is present to
adopt, amend, or repeal any of the By-Laws of the Corporation, but any By-Law
adopted by the Board may be amended or repealed by affirmative vote of the
holders of a majority of all outstanding shares entitled to vote thereon.
(c) The corporation from time to time may provide either
directly, or indirectly through the purchase of insurance, for the
indemnification of directors, officers, employees and agents of the corporation
and of any of its subsidiaries to the fullest extent permitted by law.
(d) The indemnification of the corporation shall not have
preemptive rights.
(e) The Board of Directors shall have authority to issue
bonds, debentures, notes or other obligations of this corporation and to fix
all the terms thereof, including without limitation the convertibility or
nonconvertibility thereof.
<PAGE> 7
(f) Any part of the authorized capital stock and any
bonds, debentures, notes or other obligations of the corporation may at any
time, to the extent permitted by law, be issued, optioned or reserved for sale,
sold or disposed of by the corporation pursuant to appropriate action by the
Board of Directors, to such parties and upon such terms as the board shall deem
proper.
(g) The corporation shall have the right to purchase its
own shares and to pay dividends and make distributions of property to the
extent of unreserved and unrestricted earned or capital surplus available
therefor.
DATED: January 18, 1985
/s/
---------------------------
John L. Unger, Incorporator
State of Tennessee, Greene County Register's Office
This instrument recorded in Charter book page
Received for record at 3:48 p.m. on the 14th day of February, 1985.
State Tax X C.F. X Rec'd Fee 5.00 Total 5.00. Noted in
Book A Page No.
<PAGE> 8
ARTICLES OF AMENDMENT TO THE
CHARTER OF
GREENE COUNTY BANCSHARES, INC.
Pursuant to the provisions of Section 48-303 of the Tennessee General
Corporation Act, the undersigned Corporation adopts the following articles of
amendment to its charter:
1. The name of the Corporation is Greene County Bancshares, Inc.
2. The amendment adopted is:
A new Section 9 shall be added to the charter in the form set
forth below:
"9.A. Voting Requirement. In addition to any affirmative
vote required by law or any other Section of this Charter, and
except as otherwise expressly provided in Subsection B of this
Section 9, any Business Combination (as defined herein) shall
require an affirmative vote of (i) eighty percent (80%) of the
votes entitled to be cast by all holders of Voting Stock (as
defined herein) voting together as a single class at a meeting
of shareholders called for such purpose and in addition
thereto, (ii) a majority of the votes entitled to be cast by
all holders of Voting Stock, other than shares of Voting Stock
which are Beneficially Owned (as defined herein) by the
Interested Shareholder (as defined herein), voting together as
a single class at a meeting of shareholders called for such
purpose. Such affirmative vote shall be required
notwithstanding the fact that a vote would not otherwise be
required, or that a lesser percentage may be specified by law
or in any agreement with any national securities exchange or
otherwise.
B. When Voting Requirement Not Applicable. The provisions of
Subsection A of this Section 9 shall not be applicable to any
Business Combination which shall have been approved by a
majority of the Disinterested Directors (as defined herein) or
as to which all of the conditions specified in subsections
B(1), B(2) and B(3) shall have been met:
(1) Fair Prices. The aggregate amount per share of
the cash and the Fair Market Value (as defined
herein), as of the Announcement Date (as defined
herein), of the consideration other than cash to be
received in such Business Combination by holders of
shares of the respective classes and series of
outstanding capital stock of the Corporation shall be
at least equal to the highest of the following:
(a) if applicable, the highest per share
price (adjusted for any subsequent stock
dividends, splits, combinations,
recapitalizations, reclassifications or other
such reorganizations) paid to acquire any
shares of such respective classes and series
Beneficially Owned (as defined herein) by the
Interested Shareholder
<PAGE> 9
defined herein);
(b) The highest per share price (adjusted
for any subsequent stock dividends, splits,
combinations, recapitalizations,
reclassifications or other such
reorganizations) paid to acquire any shares
of such respective classes and series
Beneficially Owned by the interested
Shareholder in the transaction in which the
Interested Shareholder became an Interested
Shareholder;
(c) The Fair Market Value per share of such
respective classes and series on the
Announcement Date (as defined herein);
(d) The Fair Market Value per share of such
respective classes and series on the
Determination Date (as defined herein)
(e) The amount per share of any preferential
payment to which shares of such respective
classes and series are entitled in the event
of a liquidation, dissolution or winding up
of the Corporation.
(2) Form of Consideration. The consideration to be
received by holders of each particular class and
series of outstanding capital stock of the
Corporation in a Business Combination shall be (i)
cash or (ii) if the majority of the shares of any
particular class or series of the capital stock of
the Corporation Beneficially Owned by the Interested
Shareholder shall have been acquired for a
consideration in a form other than cash, the same
form of consideration used to acquire the largest
number of shares of such class or series previously
acquired and Beneficially Owned by the Interested
Shareholder.
(3) Other Requirements. After such interested
Shareholder has become an Interested Shareholder and
prior to the consummation of such Business
Combination, except as approved by a majority of the
Disinterested Directors, there shall have been:
(a) No failure to declare and pay in full,
when and as due, any dividends on any class
or series of Preferred Stock (as defined
herein) (whether cumulative or not), except
on any class or series of Preferred Stock as
to which dividends were in arrears on the
Determination Date;
(b) No reduction in the periodic rate of
dividends on the Corporation's Common Stock
below the dividends paid during the dividend
period of the Corporation ended immediately
prior to the Determination Date, except any
reduction in dividends necessary to fairly
reflect any stock dividend, split,
recapitalization, reclassification or other
such reorganization;
2
<PAGE> 10
(c) No failure to increase the periodic rate
of any dividends per share paid on the
Corporation's Common Stock to fairly reflect
any stock combination, recapitalization,
reclassification or other such reorganization
which has the effect of reducing the number
of outstanding shares of Common Stock;
(d) No increase in the number of shares of
the capital stock of the Corporation
Beneficially Owned by the Interested
Shareholder, except (i) as a part of the
transaction that resulted in the Interested
Shareholder becoming an Interested
Shareholder or (ii) to consummate the
Business Combination in compliance with the
provisions of this Section 9;
(e) No loans, advances, guarantees, pledges
or other financial assistance or tax credits
or other tax advantages provided by the
Corporation or its subsidiaries for the
benefit, directly or indirectly, of the
Interested Shareholder, whether in
anticipation of or in connection with such
Business Combination or otherwise;
(f) No material change in the Corporation's
business or capital structure or the business
or capital structure of any subsidiary of the
Corporation effected, directly or indirectly,
by or for the benefit of the Interested
Shareholder; and
(g) A proxy or information statement mailed
at least thirty (30) days prior to the
completion of the Business Combination to all
the holders of Voting Stock (whether or not
shareholder approval of the Business
Combination is required) which proxy or
information statement shall (i) describe the
Business Combination, (ii) include in a
prominent place the recommendations, if any,
of a majority of the Disinterested Directors
as to the advisability or inadvisability of
the Business Combination, (iii) if deemed
advisable by a majority of the Disinterested
Directors, include an opinion of a reputable
investment banking firm or other expert as to
the fairness or unfairness of the terms of
the Business Combination from the point of
view of the shareholders other than the
Interested Shareholder (such investment
banking firm to be selected by a majority of
the Disinterested Directors and to be paid a
reasonable fee for their services by the
Corporation upon receipt of such opinion),
and (iv) be responsive to the pertinent
provisions of the Securities Exchange Act of
1934, as amended, and the rules and
regulations thereunder, or any laws
supplementing or superseding such Act, rules
and regulations, whether or not such proxy or
information statement is required by law to
be furnished to any holders of Voting Stock.
3
<PAGE> 11
C. Definitions. As used in this Section 9:
(1) "Business Combination" means any of the
transactions described below:
(a) Any merger or consolidation of the
Corporation or any Subsidiary (as defined
herein) with (i) any Interested Shareholder
or (ii) any corporation (whether or not
itself an Interested Shareholder) which is,
or after such merger or consolidation would
be, an Affiliate (as defined herein) of an
Interested Shareholder;
(b) Any sale, lease, exchange, mortgage,
pledge, transfer or other disposition, in one
transaction or a series of transactions, (i)
to or with any Interested Shareholder or any
Affiliate of any Interested Shareholder of
any assets (including securities) of the
Corporation or any Subsidiary having an
aggregate Fair Market Value of $1,000,000 or
more or (ii) to or with the Corporation or
any Subsidiary of any assets (including
securities) of any Interested Shareholder or
any Affiliate of an Interested Shareholder
having an aggregate Fair Market Value of
$1,000,000 or more;
(c) The issuance or transfer by the
Corporation or any Subsidiary in one
transaction or a series of transactions, of
any securities of the Corporation or any
Subsidiary to any Interested Shareholder or
an Affiliate of any Interested Shareholder in
exchange for cash, securities or other
property, or a combination thereof, having an
aggregate Fair Market Value of $1,000,000 or
more;
(d) The adoption of any plan or proposal for
the liquidation or dissolution of the
Corporation proposed by or on behalf of an
Interested Shareholder or any Affiliate of
any Interested Shareholder;
(e) Any reclassification of securities
(including any reverse stock split) or any
recapitalization or reorganization of the
Corporation, or any merger or consolidation
of the Corporation with any of its
Subsidiaries or any other transaction
(whether or not with or into or otherwise
involving an Interested Shareholder) which
has the effect, directly or indirectly, of
increasing the proportionate share of the
outstanding shares of any class of equity
securities of the Corporation or any
Subsidiary (including securities convertible
into equity securities) which is directly or
indirectly owned by any Interested
Shareholder or any Affiliate of any
Interested Shareholder;
(f) Any other transaction or series of
transactions that is similar in purpose or
effect to those referred to in (a) through
(e) of this Subsection C(1).
4
<PAGE> 12
(2) "Voting Stock" means the Common Stock and those
classes of Preferred Stock which would then be
entitled to vote in the election of directors.
(3) "Beneficially Owned," with respect to any
securities, means the right or power (directly or
indirectly through any contract, understanding or
relationship) (i) to vote or direct the voting of
such securities, (ii) to dispose or direct the
disposition of such securities, or (iii) to acquire
such voting or investment power, whether such right
or power is exercisable immediately or only after the
passage of time.
(4) "Interested Shareholder" means any Person (as
defined herein) or member of a Group of Persons (as
defined herein) who or which, together with any
Affiliate or Associate (as defined herein) of such
Person or member, Beneficially Owns (within the
meaning of subsection C(3) above) ten percent or more
of the outstanding Voting Stock of the Corporation.
(5) "Person" means any individual, firm,
corporation, partnership, joint venture or other
entity.
(6) "Group of Persons" means any two or more Persons
who or which are acting or have agreed to act
together for the purpose of acquiring, holding,
voting or disposing of any Voting Stock of the
Corporation.
(7) "Disinterested Director" means any member of the
board of directors of the Corporation who is not an
Interested Shareholder or an Affiliate or Associate
of an Interested Shareholder and who (i) was a member
of the board of directors prior to the time the
Interested Shareholder became an Interested
Shareholder or (ii) was elected or recommended to
succeed a Disinterested Director by a majority of the
Disinterested Directors then on the board of
directors.
(8) "Fair Market Value" means: (i) in the case of
stock, the highest sale price during the 30-day
period immediately preceding the date in question of
a share of such stock on the NASDAQ National Market
System, or if such stock is listed on an exchange
registered under the Securities Exchange Act of 1934,
on the principal exchange on which such stock is
listed, or if no such quotations are available, the
fair market value on the date in question of a share
of such stock as determined by a majority of the
Disinterested Directors in good faith; and (ii) in
the case of property other than cash or stock, the
fair market value of such property on the date in
question as determined by a majority of the
Disinterested Directors in good faith.
(9) "Pre-announcement Period" means the two-year
period ending at 11:59 P.M., Greeneville time, on the
Announcement Date.
(10) "Announcement Date" means the date of the first
public announcement of the proposal of the Business
Combination.
5
<PAGE> 13
(11) "Determination Date" means the date on which the
Interested Shareholder becomes an Interested
Shareholder.
(12) "Subsidiary" means any corporation of which a
majority of any class of equity security is owned,
directly or indirectly, by the Corporation.
(13) "Affiliate," used to indicate a relationship
with a specified Person, means another Person that
directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is
under common control with, such specified Person.
(14) "Associate," used to indicate a relationship
with a specified Person, means (i) any corporation or
other similar organization (other than the
Corporation or a Subsidiary) of which such specified
Person is an officer or partner or is, directly or
indirectly, the beneficial owner of ten percent or
more of any class of equity securities, (ii) any
trust or estate in which such specified Person has a
substantial beneficial interest or as to which such
specified Person serves as trustee or in a similar
fiduciary capacity, (iii) any relative or spouse of
such specified Person, or any relative of such spouse
who has the same home as such Person and (iv) any
other Person or Affiliate of a Person who directly or
indirectly has received more than $50,000 for
services or property from the specified Person or
from an Affiliate of the specified Person during any
year of the preceding five calendar years or who can
reasonably be expected to receive more than such
amount in the current calendar year under any
existing agreement or agreements or understandings
with such specified Person or an Affiliate of such
specified Person.
(15) "Preferred Stock" means all classes or series
of the Corporation's capital stock other than Common
Stock.
D. Powers of Disinterested Directors. A majority of the
Disinterested Directors of the Corporation
shall have power and duty to determine, on the basis of
information known to them after reasonable inquiry, all facts
necessary to determine compliance with this Section 9,
including without limitation (i) whether a Person is an
Interested Shareholder, (ii) the number of shares of Voting
Stock beneficially owned by any Person, (iii) whether a
Person is an Affiliate or Associate of another, (iv) whether
the requirements of Section B have been met with respect to
any Business Combination, and (v) whether the assets which are
the subject of any Business Combination have, or the
consideration to be received for the issuance or transfer of
securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of
$1,000,000 or more. The good faith determination of a
majority of the Disinterested Directors on such matters shall
be conclusive and binding for all purposes of this Section 9.
E. No Effect on Preferential Rights. The provisions of this
Section 9 shall not affect in any way the amount or form of
consideration that any
6
<PAGE> 14
holder of shares of the Corporation's capital stock is
entitled to receive upon the liquidation or dissolution of the
Corporation or any other preferential rights of the holders of
such shares.
F. No Effect on Fiduciary Obligations of Interested
Shareholders. Nothing contained in this Section 9 shall be
construed to relieve any Interested Shareholder from any
fiduciary obligation imposed by law.
G. Amendment or Repeal. In addition to any affirmative
vote required by law, an affirmative vote at least equal to
the vote of eighty percent (80%) of the votes entitled to be
cast by all holders of Voting Stock voting together as a
single class, and, in addition thereto (ii) a majority of the
votes entitled to be cast by all holders of Voting Stock,
other than shares of Voting Stock which are Beneficially Owned
by an Interested Shareholder, voting together as a single
class, shall be required to amend or repeal, or adopt any
charter provisions inconsistent with, this Section 9. Such
affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may
be specified, by law or in any agreement with any national
securities exchange or otherwise."
3. The amendment was duly adopted by written consent action of
the shareholders of the Corporation on February 19, 1985.
4. This amendment will be effective when these articles are filed
by the Secretary of State.
DATED: February 19, 1985
GREENE COUNTY BANCSHARES, INC.
By: /s/
--------------------------
State of Tennessee, Greene County Register's Office
This instrument recorded in Charter book 13 page 703
Received for record at 3:35 p.m. on the 9th day of April, 1985.
State Tax X C.F. X Rec'd Fee 25.00 Total 25.00
Noted in Book A Page 335 No. 8852 Ted Holt, Charlotte Wallace Deputy
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
GREENE COUNTY BANCSHARES, INC.
OFFICE
1. Principal Office
The principal office of the Corporation shall be in Greeneville,
Tennessee, and the Corporation shall have such other offices at such
other places within or without the State of Tennessee as the Board of
Directors may from time to time determine or as the business of the
Corporation may require.
SHAREHOLDERS' MEETING
2. Annual Meeting
An annual meeting of the shareholders of the Corporation shall be held
on such date as may be determined by the Board of Directors. The
business to be transacted at such meeting shall be the election of
directors and such other business as shall be properly brought before
the meeting. If the election of directors shall not be held on the day
designated by the Board of Directors for any annual meeting, or at any
adjournment of such meeting, the Board of Directors shall call a
special meeting of the shareholders as soon as conveniently possible
thereafter. At such special meeting the election of directors shall
take place and such election and any other business transacted thereat
shall have the same force and effect as if transacted at an annual
meeting duly called and held.
3. Special Meetings
Special meetings of the shareholders, unless otherwise required by
law, may be called at any time by the Chairman, President or Secretary
and shall be called by the Chairman, President or Secretary at the
request in writing of a majority of the Board of Directors or of
shareholders owning 10% or more of the entire capital stock of the
Corporation issued and outstanding and entitled to vote at such
meeting. Such request must state the purpose for which the meeting is
called and the person or persons calling the meeting.
<PAGE> 2
4. Place of Meetings
Annual and special meetings of the shareholders shall be held at the
Corporation's principal office or at such other place within or
without the State of Tennessee as may be designated by the Board of
Directors.
5. Notice of Meetings; Waiver
(a) Annual Meetings. Written or printed notice stating the place,
day and hour of the annual meeting of shareholders shall be given in
person or by mail to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be delivered not less than
ten (10) days nor more than sixty (60) days before the meeting.
Mailed notice shall be deemed to be delivered when deposited, with
postage prepaid, in the United States mail addressed to the
shareholder at his address as it appears on the records of the
Corporation at the close of business on the record date established
for such meeting. If delivered personally, such notice shall be
delivered not less than five (5) nor more than sixty (60) days before
the date of the meeting and shall be deemed delivered when actually
received by the shareholder.
(b) Special Meetings. Written or printed notice of every special
meeting of shareholders shall be given in person or by mail to
each shareholder of record entitled to vote at such meeting. Such
notice shall state the place, day, hour, purpose or purposes for which
the meeting is called, and the person or persons calling the meeting.
If mailed, such notice shall be delivered not less than ten (10) days
nor more than sixty (60) days before the meeting. Mailed notice shall
be deemed to be delivered when deposited, with postage prepaid, in the
United States mail addressed to the shareholder at his address as it
appears on the records of the Corporation at the close of business on
the record date established for such meeting. If delivered
personally, such notice shall be delivered not less than five (5) nor
more than sixty (60) days before the date of the meeting and shall be
deemed delivered when actually received by the shareholder.
(c) Waiver. A shareholder may waive the notice of either
an annual or a special meeting by the submission by the shareholder or
his proxy holder of a written waiver of notice either before or after
such meeting.
2
<PAGE> 3
6. Quorum
Except as otherwise required by law or provided in these Bylaws, a
quorum at any meeting of shareholders shall consist of the holders of
record of a majority of the shares issued and outstanding and entitled
to vote thereat, present in person or by proxy. If, however, such
majority shall not be present or represented at any meeting of the
shareholders, the shareholders present in person or by proxy and
entitled to vote thereat shall have power to adjourn the meeting from
time to time, and to any other place, without notice other than
announcement at the meeting of the time and place to which the meeting
is adjourned. At any adjourned meeting at which the requisite amount
of voting stock to constitute a quorum shall be represented, any
business may be transacted which might have been transacted at the
meeting as originally called.
7. Record Date
The record date for the determination of shareholders entitled to
notice of and entitled to vote at any meeting of shareholders or any
adjournment thereof, shall be such date as shall be determined by the
Board of Directors, but which in any event shall not be less than ten
(10) days prior to the date of such meeting. If the Board of
Directors does not fix such record date, the record date for the
determination of shareholders entitled to notice of and entitled to
vote at any meeting of shareholders of any adjournment thereof shall
be the close of business on the day next preceding the day on which
notice is given.
8. Voting of Shares
Unless otherwise provided in the Charter, each shareholder of the
Corporation shall be entitled, at each meeting of the shareholders and
upon each proposal presented at such meeting, to one vote for each
share of the capital stock having voting power registered in his name
on the books of the Corporation on the record date. Each shareholder
having the right to vote shall be entitled to vote in person or by
proxy appointed by an instrument in writing executed by such
shareholder or his duly authorized attorney-in-fact and bearing a date
not more than eleven (11) months prior to said meeting, unless said
instrument provides for a longer period. Unless the Charter, these
Bylaws or applicable law specifically provide otherwise, the
affirmative vote of a majority of shares represented and entitled to
vote at a meeting at which quorum is present shall be the act of the
3
<PAGE> 4
shareholders, except that directors shall be elected by a plurality of
the votes cast in the election. At each election of directors, every
shareholder shall have the right to vote the number of shares which he
is entitled to vote at such meeting for as many persons as there are
directors to be elected at said meeting, but cumulative voting for
such nominees shall not be permitted unless the Charter otherwise
provides.
9. Presiding Officer
Meetings of the shareholders shall be presided over by the Chairman,
or if he is not present, by the President, or if he is not present, by
a Vice President, or if neither the Chairman, President nor a Vice
President is present, by a chairman to be chosen by a majority of the
shareholders entitled to vote at such meeting. The Secretary of the
Corporation or, in his absence, an Assistant Secretary shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the shareholders entitled to vote at
such meeting shall choose any person present to act as secretary of
the meeting.
DIRECTORS
10. Powers and Duties
The business and affairs of the Corporation shall be managed by the
Board of Directors. In addition to the powers and authority expressly
conferred upon them by these Bylaws, the Board may exercise all the
powers of the Corporation and do all lawful acts and things as are not
by applicable law, by the Charter of the Corporation or by these
Bylaws directed or required to be exercised or done by the
shareholders.
11. Number, Classification, Term, Qualification, and Vacancies
(a) Number. The Board of Directors shall consist of not less than
three (3) or more than fifteen (15) members, unless all of the
outstanding stock of the Corporation is owned of record by less than
three (3) shareholders, in which case the number of directors may be
less than three (3), but not less than the number of shareholders of
record. Subject to the provisions of paragraph 11 (c), the exact
number within such maximum and minimum numbers shall be determined
from time to time by resolution adopted by majority of the entire
Board of Directors.
4
<PAGE> 5
(b) Term of Office. Except as otherwise provided by law or by
these bylaws, the directors of the Corporation shall be elected at the
annual meeting of shareholders in each year, and shall hold office for
a period of one year or until their successors are duly elected and
qualified.
(c) Increase in Number. The number of members of the Board of
Directors may be increased from time to time by either the directors
or the shareholders. The number of directors may be increased by the
Board of Directors upon the affirmative vote of a majority of the
entire Board. If the number of directors is increased by the Board, a
vacancy or vacancies caused by such increase shall be filled by the
vote of a majority of the directors then in office although less than
a quorum exists. The number of directors may also be increased by the
shareholders at any meeting thereof by a majority vote of the shares
represented and entitled to vote. If the number of directors be
increased by action of the shareholders, a vacancy or vacancies caused
by such increase shall be filled by the shareholders in the same
manner as at an annual meeting.
(d) Decrease in Number. The number of members of the Board of
Directors may be decreased by either the directors or the shareholders
at any time there is an unfilled vacancy or there are unfilled
vacancies on the Board of Directors, provided that the number of
members may be decreased only to the extent of the number of vacancies
on the Board of Directors existing at that time. If the number of
directors is decreased by the Board, such action shall be taken by the
vote of a majority of the directors then in office although less than
a quorum exists. If the number of directors is decreased by the
shareholders, such action shall be taken by a majority vote of the
shares represented at any meeting and entitled to vote thereat.
(e) Vacancies. In case there are vacancies on the Board of
Directors, other than vacancies created by the removal of a director
or directors (which shall be governed by paragraph 15(c)) and other
than vacancies created by an increase in the number of directors
(which shall be governed by paragraph 11(b)), the remaining directors
may by a majority vote of the directors then in office elect a
successor or successors who shall hold office until the next annual
meeting of shareholders and until his or their successors are elected
and qualified.
5
<PAGE> 6
(f) Qualification. Directors must be of legal age but need not be
shareholders of the Corporation.
(g) Retirement of Directors. The mandatory retirement age for
Directors of the Corporation shall be the first day of the month
following their 75th birthday. The Board of Directors, at its
discretion, may name retired directors to the classification of
Director Emeritus, who could attend meetings and have no vote or
liability for serving.
12. Quorum
A majority of the total number of directors in office shall constitute
a quorum for the transaction of business. If, at any meeting of the
Board of Directors, there shall be less than a quorum present, a
majority of those present may adjourn the meeting, without further
notice, from time to time until a quorum shall have been obtained.
13. Manner of Acting
The act of a majority of the directors present at a meeting at which a
quorum is present shall, unless otherwise provided by applicable law
or these Bylaws, be the act of the Board of Directors. Any action
required or permitted to be taken at a meeting of directors may be
taken without a meeting if a consent in writing, setting forth the
action so taken, is signed by all the directors. Such written consent
shall have the same force and effect as a unanimous vote at a meeting
of the Board of Directors.
14. Meetings; Notice
Meetings of the Board of Directors may be held either within or
without the State of Tennessee. Notice of a meeting of the Board of
Directors need not state the purpose of, nor the business to be
transacted at, such meeting.
(a) Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times as are fixed from time to time by
resolution of the Board, and may be held without notice of the time
or place therefor.
(b) Special Meetings. Special meetings may be held at any time
upon call of the Chairman, the President, a Vice President or any two
(2) directors. Notice of the time and place of each special meeting
shall be given to each director at either his business or residence
address, as shown by the records of the Corporation, at least
forty-eight (48) hours prior thereto if mailed and on the day prior
thereto if delivered or given in person or by telephone or telegraph.
If mailed, such notice shall be deemed to be delivered when deposited,
so addressed and with postage
6
<PAGE> 7
prepaid, in the United States mail. If notice is given by telegram,
such notice shall be deemed to be delivered when the telegram, so
addressed, is delivered to the telegraph company. If notice is given
in person, such notice shall be deemed to have been given when it is
hand delivered to the director at his business or residence address.
Any director may waive notice of any meeting before, at or after such
meeting and the attendance of a director at a meeting shall constitute
a waiver of notice of such meeting except when a director attends for
the sole, express purpose of objecting to the transaction of business
thereat, on the ground that the meeting is not lawfully called or
convened, and so states in writing prior to the conduct of any
business at the meeting.
15. Removal
(a) By Shareholders. Unless the Charter otherwise provides, at
any meeting of the shareholders, the entire Board of Directors or any
number of directors may be removed from office, with or without cause,
by a majority vote of the shares represented and entitled to vote
thereat.
(b) By Directors. At any meeting of the Board of Directors, any
director or directors may be removed from office for cause, as that
term is defined by applicable law, by a majority of the entire Board
of Directors.
(c) Replacement. When any director or directors are removed,
new directors may be elected to fill the vacancies created thereby at
the same meeting of the shareholders or Board of Directors, as the
case may be, for the unexpired term of the director or directors
removed. If the shareholders fail to elect persons to fill the
unexpired term or terms of the director or directors removed by them,
such unexpired terms shall be considered vacancies on the Board to be
filled by the remaining directors as provided in paragraph 11(d).
16. Compensation
Directors, and members of any committee of the Board of Directors,
shall be entitled to such reasonable compensation for their services
as directors and members of any such committee as shall be fixed from
time to time by resolution of the Board of Directors, and shall also
be entitled to reimbursement for any reasonable expenses incurred in
attending such meetings. Any director receiving compensation under
these provisions shall not be barred from serving the Corporation in
any other capacity and receiving reasonable compensation for such
other services.
7
<PAGE> 8
COMMITTEES
17. Finance Committee
There may be, if so determined by a resolution adopted by a majority
of the entire Board of Directors, a Finance Committee of the Board
consisting of two (2) or more directors. The Board of Directors may
delegate to such Finance Committee all the power and authority of the
Board that it deems desirable, except for any matters which cannot by
law be delegated by the Board of Directors. Unless specifically
authorized by the Board, the Finance Committee shall not have the
power to adopt, amend or repeal these Bylaws, to submit to
shareholders any matter that by law requires their authorization, to
fill vacancies in the Board of Directors or in any committee or to
declare dividends or make other corporate distributions.
18. Other Committees
The Board of Directors may create such other committees as it may
determine to be helpful in discharging its responsibilities for the
management and administration of the Corporation. Each such committee
shall consist of such persons, whether directors, officers of others,
as may be elected thereto by the Board of Directors, and each
committee shall perform such functions as may be lawfully assigned to
it by the Board of Directors.
OFFICERS
19. Number
The officers of the Corporation shall be a Chairman, a President, a
Secretary and such other officers as may be from time to time elected
by the Board of Directors. One person may hold more than one office
except the President may not hold the office of Secretary.
20. Election and Term of Office
The principal officers shall be elected annually by the Board of
Directors at the first meeting of the Board following the
shareholders' annual meeting, or as soon thereafter as is conveniently
possible. Subordinate officers may be elected from time to time.
Each officer shall serve at the pleasure of the Board for such term as
the Board of Directors may set and until his successor shall have been
elected and qualified, or until his death, resignation or removal.
8
<PAGE> 9
21. Removal
Any officer may be removed from office by the Board of Directors
whenever in its judgment the best interests of the Corporation will be
served thereby, but such removal shall not prejudice the contract
rights, if any, of the persons so removed.
22. Vacancies
Any vacancy in an office from any cause may be filled for the
unexpired portion of the term by the Board of Directors.
23. Duties
(a) Chairman. The Chairman shall preside at all meetings of the
shareholders and the Board of Directors and shall see that all orders
and resolutions of the Board of Directors are carried into effect.
(b) President. The President shall be the Chief Executive Officer
of the Corporation and shall have general supervision over the active
management of the business of the Corporation. He shall have the
general powers and duties of supervision and management usually vested
in the office of the President of a corporation and shall perform such
other duties as the Board of Directors may from time to time
prescribe.
(c) Vice President. The Vice President or Vice Presidents (if
any) shall be active executive officers of the Corporation, shall
assist the President in the active management of the business, and
shall perform such other duties as the Board of Directors may from
time to time prescribe.
(d) Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the shareholders and record all
votes and the minutes of all proceedings in a book to be kept for that
purpose; he shall perform like duties for any committee when required.
The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board of Directors when required, and
unless directed otherwise by the Board of Directors, shall keep a
stock record containing the names of all persons who are shareholders
of the Corporation, showing their place of residence and the number of
shares held by them respectively. The Secretary shall perform such
other duties as may be prescribed from time to time by the Board of
Directors.
(e) Cashier. The Cashier shall have the custody of the
Corporation's funds and securities, shall keep or cause to be kept
full and accurate account of receipts and disbursements in books
belonging to the Corporation, and shall deposit or cause to be
deposited all moneys and
9
<PAGE> 10
other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of
Directors. The Cashier shall disburse or cause to be disbursed the
funds of the Corporation as required in the ordinary course of
business or as may be ordered by the Board, taking proper vouchers for
such disbursements, and shall render to the President and directors at
the regular meetings of the Board, or whenever they may require it,
an account of all of his transactions as Cashier and the financial
condition of the Corporation. He shall perform such other duties as
may be incident to his office or as prescribed from time to time by
the Board of Directors. The Cashier shall give the Corporation a
bond, if required by the Board of Directors, in a sum and with one or
more sureties satisfactory to the Board for the faithful performance
of the duties of his office and for the restoration to the Corporation
in case of his death, resignation, retirement, or removal from office,
of all books, paper, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the
Corporation.
(f) Other Officers. Other officers appointed by the Board of
Directors shall exercise such powers and perform such duties as may be
delegated to them.
(g) Delegation of Duties. In case of the absence or disability of
any officer of the Corporation or of any person authorized to act in
his place, the Board of Directors may from time to time delegate the
powers and duties of such officer to any officer, or any director, or
any other person whom it may select, during such period of absence or
disability.
24. Indemnification of Officers and Directors
The Corporation shall indemnify each present and future director and
officer of the Corporation, or any person who may have served at its
request as a director or officer of another company (and, in either
case, his heirs, executors and administrators) to the full extent
allowed by the laws of the State of Tennessee, both as now in effect
and as hereafter adopted.
CERTIFICATES FOR SHARES OF STOCK
25. Form
(a) Stock Certificates. The interest of each shareholder of the
Corporation shall be evidenced by a certificate or certificates for
shares of stock. The certificate shall include the following on its
10
<PAGE> 11
face: (i) the Corporation's name, (ii) the fact that the Corporation
is organized under the laws of the State of Tennessee, (iii) the name
of the owner of record of the shares represented thereby, (iv) the
number of shares represented thereby, (v) the class of shares and the
designation of the series, if any, which the certificate represents,
(vi) the par value of each share or a statement that the shares are
without par value, and (vii) such other information as applicable law
may require or as may be lawful.
(b) Signatures. The certificates for stock shall be signed by the
Chairman, the President or a Vice President, and by the Secretary, an
Assistant Secretary, the Cashier, or an Assistant Cashier. Where any
certificate is manually countersigned by a transfer agent or
registered by a registrar who is not an officer or employee of the
Corporation, the signatures of the Chairman, the President, Vice
President, Secretary, Assistant Secretary, and/or Cashier upon such
certificate may be facsimiles, engraved or printed. In case any
officer who has signed, or whose facsimile signature has been placed
upon, any certificate shall have ceased to be such before the
certificate is issued, it may be issued by the Corporation with the
same effect as if such officer had not ceased to be such at the time
of its issue.
26. Subscriptions for Shares
Subscriptions for shares of the Corporation shall be valid only if
they are in writing, signed and delivered by the subscriber. Unless
the subscription agreement provides otherwise, subscriptions for
shares, regardless of the time when they are made, shall be paid in
full at such time, or in such installments and at such periods, as
shall be determined by the Board of Directors. All calls for payments
on subscriptions shall be uniform as to all shares of the same class
or of the same series.
27. Transfers
Transfers of shares of the capital stock of the Corporation shall be
made only on the books of the Corporation by (i) the holder of record
thereof, (ii) by his legal representative, who shall furnish proper
evidence of authority to transfer, or (iii) his attorney, authorized
by a power of attorney duly executed and filed with the Secretary of
the Corporation or a duly appointed transfer agent. Such transfers
shall be made only upon surrender of the certificate or certificates
for such shares properly endorsed and with all taxes thereon paid.
11
<PAGE> 12
28. Lost, Destroyed, or Stolen Certificates
No certificate for shares of stock of the Corporation shall be issued
in place of any certificate alleged to have been lost, destroyed, or
stolen except on production of evidence, satisfactory to the Board of
Directors, of such loss, destruction or theft, and, if the Board of
Directors so requires, upon the furnishing of an indemnity bond in
such amount (but not to exceed twice the value of the shares
represented by the certificate) and with such terms and such surety as
the Board of Directors may in its discretion require.
CORPORATE ACTIONS
29. Contracts
Unless otherwise required by the Board of Directors, the Chairman, the
President or any Vice President shall execute contracts or other
instruments on behalf of and in the name of the Corporation. The
Board of Directors may from time to time authorize any other officer or
officers or agent or agents to enter into any contract or execute any
instrument in the name of and on behalf of the Corporation as it may
deem appropriate, and such authority may be general or confined to
specific instances.
30. Loans
No loans shall be contracted on behalf of the Corporation and no
evidence of indebtedness shall be issued in its name unless authorized
by the Board of Directors. Such authority may be general or confined
to specific instances.
31. Checks, Drafts, etc.
Unless otherwise required by the Board of Directors, all checks,
drafts, bills of exchange and other negotiable instruments of the
Corporation shall be signed by either the Chairman, the President, a
Vice President or such other officer or agent of the Corporation as
may be authorized so to do by the Board of Directors. Such authority
may be general or confined to specific business, and, if so directed
by the Board, the signatures of two or more such officers may be
required.
12
<PAGE> 13
32. Deposits
All funds of the Company not otherwise employed shall be deposited
from time to time to the credit of the Corporation in such banks or
other depositories as the Board of Directors may authorize.
33. Voting Securities Held by the Corporation
Unless otherwise required by the Board of Directors, the Chairman or
the President shall have full power and authority on behalf of the
Corporation to attend any meeting of security holders, or to take
action on written consent as a security holder, of other corporations
in which the Corporation may hold securities. In connection therewith
the Chairman or the President shall possess and may exercise any and
all rights and powers incident to the ownership of such securities
which the Corporation possesses. The Board of Directors may, from
time to time, confer like powers upon any other person or persons.
34. Dividends
The Board of Directors may, from time to time, declare, and the
Corporation may pay, dividends on its outstanding shares of capital
stock in the manner and upon the terms and conditions provided by
applicable law. The record date for the determination of shareholders
entitled to receive the payment of any dividend shall be determined by
the Board of Directors, but which in any event shall not be less than
ten (10) days prior to the date of such payment.
FISCAL YEAR
35. The fiscal year of the Corporation shall be determined by the Board of
Directors, and in the absence of such determination, shall be the
calendar year.
CORPORATE SEAL
36. The Corporation shall not have a corporate seal.
13
<PAGE> 14
AMENDMENT OF BYLAWS
37. These Bylaws may be altered, amended or repealed, and new Bylaws may
be adopted at any meeting of the shareholders by the affirmative vote
of a majority of the stock represented at such meeting, or by the
affirmative vote of a majority of the members of the Board of
Directors who are present at any regular or special meeting;
provided, however, that any amendment to these Bylaws changing the
number of directors, if adopted by the Board of Directors, shall
require the affirmative vote of a majority of the members of the
entire Board of Directors.
14
<PAGE> 1
EXHIBIT 4.2
TENNESSEE FORM OF NOTICE OF RESCISSION OFFER
GREENE COUNTY BANCSHARES, INC.
MAIN AND DEPOT STREETS
GREENEVILLE, TENNESSEE 37743
BY CERTIFIED MAIL
RETURN RECEIPT REQUESTED
[Name and Address of New Shareholder]
Re: Offer of Rescission
Dear _______________:
On ______________, 1995, Greene County Bancshares, Inc. (the "Company") sold to
you _______ shares of its Common Stock, par value $10 per share (the "Shares"),
at a price of $170 per share.
The Tennessee Securities Act of 1980, as amended (the "Act"), provides in
Section 48-2-104 that it is unlawful for any person to sell any security in
Tennessee unless the security is registered or exempt from the registration
requirements under the Act. The Shares sold to you were neither registered nor
exempt from registration; therefore, the offer and sale of these Shares were
made in violation of Sections 48-2-104 and 48-2-107 of the Act.
Pursuant to Section 48-2-122 of the Act and the November 14, 1986 Policy
Statement of the Tennessee Securities Division on rescission offers, the
Company is offering to rescind the sale of its common stock to you and refund
to you, upon tender of the stock certificate for the Shares, the consideration
you paid for the stock, plus interest at a rate of 10% per annum from the date
of payment through the date the Company receives notice of your election to
rescind, less any amount of income you have received on the stock.
This rescission offer will remain open for 30 days from the date you receive
this letter.
Should you elect to rescind, you must respond within 30 days to the Company,
Attention: Alex Johnson, Chief Financial Officer of the Company, by so
indicating on the enclosed "Election Form" and by tendering your original stock
certificates. The "Election Form" must be returned to the Company by certified
mail, return receipt requested. The Company will promptly tender the amount
owed to you under the terms of this rescission offer.
A Prospectus is enclosed regarding the offer of the Shares pursuant to a
registration statement that has been filed with and declared effective by the
Securities and Exchange Commission. The
<PAGE> 2
registration statement also has been filed with the Tennessee Securities
Division and its effectiveness with that Division is conditioned upon the
concurrent delivery of this rescission offer with the enclosed Prospectus. The
Prospectus describes the offer, the Shares and the Company. You should review
the Prospectus carefully before you decide if you want to elect to retain your
Shares.
Should you elect to retain your shares, please record your election on the
enclosed "Election Form," sign the Rejection of Rescission, along with the
Acknowledgement that you received and have had the opportunity to review the
Prospectus, and the Confirmation of your decision to purchase the Shares, and
return the "Election Form" to the Company, Attention: Alex Johnson, Chief
Financial Officer of the Company. The "Election Form" must be returned to the
Company by certified mail, return receipt requested.
If upon the expiration of 30 days from your receipt of this letter, the
Company has not received a response requesting rescission, this offer of
rescission will be deemed to have been rejected, and the Company will be
entitled to assume that you have received the Prospectus regarding the shares,
have had the opportunity to review it and have elected to retain your shares.
You may wish to consult with independent counsel before deciding whether to
accept or reject this rescission offer in order to be fully informed about the
tax and legal consequences related to either choice.
Very truly yours,
GREENE COUNTY BANCSHARES, INC.
<PAGE> 3
GREENE COUNTY BANCSHARES INC.
BOX 1120
GREENEVILLE, TENNESSEE 37744
PLEASE EXECUTE EITHER THE
DEMAND FOR RESCISSION
OR
REJECTION OF RESCISSION AND ACKNOWLEDGEMENT OF RECEIPT OF PROSPECTUS
AND CONFIRMATION OF PURCHASE
- --------------------------------------------------------------------------------
DEMAND FOR RESCISSION
The undersigned elects to rescind my investment in the common stock of
Greene County Bancshares Inc. AA (the "Company") of $_______ made by me on
________ and hereby accepts the rescission offer of the Company to repurchase
all my shares in accordance with the Notice of Rescission Offer.
- ------------------------------
Name of Investor (Please Print)
- ------------------------------- ---------------
Signature Date
Please provide the address to which your check should be sent in the event of
your rescission.
--------------------------
--------------------------
--------------------------
- --------------------------------------------------------------------------------
REJECTION OF RESCISSION ACKNOWLEDGEMENT OF RECEIPT OF PROSPECTUS
AND CONFIRMATION OF PURCHASE
The undersigned elects not to rescind my investment in the common
stock of Greene County Bancshares Inc. of $______ made by me on _________ and
hereby rejects such rescission in accordance with the Notice of Rescission
Offer dated ________; and acknowledges that I have received and had the
opportunity to review the Prospectus for Common Stock of the Company dated
________ 1995, and confirms my decision to purchase ________ shares of Common
Stock of the Company.
- -------------------------------
Name of Investor (Please Print)
- ------------------------------- --------------
Signature Date
RETURN BY
CERTIFIED MAIL RETURN RECEIPT REQUESTED TO:
Greene County Bancshares Inc.
Attention: Alex Johnson
Box 1120
Greeneville, Tennessee 37744
IF NO CHOICE IS MADE PRIOR TO THE EXPIRATION OF 30 DAYS FROM YOUR RECEIPT OF
THIS RESCISSION OFFER THIS RESCISSION OFFER WILL BE DEEMED TO HAVE BEEN
REJECTED AND THE COMPANY WILL BE ENTITLED TO ASSUME THAT YOU HAVE RECEIVED AND
HAD THE OPPORTUNITY TO REVIEW THE PROSPECTUS AND HAVE ELECTED TO RETAIN YOUR
SHARES.
<PAGE> 1
EXHIBIT 5
GERRISH & McCREARY, P.C.
Attorneys
700 Colonial Road, Suite 200
Memphis, Tennessee 38117
P.O. Box 242120
Memphis, Tennessee 38124-2120
Telephone: (901) 767-0900
Telecopier:(901) 684-2339
January 23, 1996
Greene County Bancshares, Inc.
Main and Depot Streets
Greeneville, TN 37743
Gentlemen:
You have requested our opinion as to the legality of the shares of Common Stock
to be issued by Greene County Bancshares, Inc. (the "Company") in connection
with its offering of 6,000 shares of its Common Stock pursuant to a
Registration Statement on Form S-2, as filed with the Securities and Exchange
Commission (the "Offering").
Except as indicated below, we have examined such corporate records and other
documents and have made such examinations of law as we have deemed relevant.
Based on and subject to the above, and subject to the qualifications below, it
is our opinion that the authorized and outstanding shares of Common Stock of
the Company will be validly authorized and issued, fully paid and
nonassessable when issued to purchasers of the Offering.
In arriving at this opinion, we have relied upon the corporation documentation
of the Company, and our opinion is based upon the foregoing and upon such
examination of federal and Tennessee laws (to which our opinion is limited) as
we have deemed appropriate, and subject to the discussions and qualifications
stated herein.
We hereby consent to the inclusion in whole or in part of, or reference to,
this opinion in connection with the Registration Statement on Form S-2
regarding the shares of Common Stock of the Company, which has been filed with
the Securities and Exchange Commission.
Very truly yours,
GERRISH & McCREARY, P.C.
/s/ Gerrish & McCreary, P.C.
- ----------------------------
mg
<PAGE> 1
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, effective the 1st day of January, 1996, is
made by and between PREMIER BANK OF EAST TENNESSEE (the "Bank"), GREENE COUNTY
BANCSHARES, INC. ("Bancshares") and WILLIAM C. ADAMS, JR. (the "Executive").
WITNESSETH:
WHEREAS, Bancshares owns 100% of the outstanding common stock of the
Bank; and
WHEREAS, the Bank, Bancshares and the Executive desire to enter into
an employment relationship with the other; and
WHEREAS, the Bank and the Executive each deem it necessary and
desirable to execute a written document setting forth the terms and conditions
of said relationship.
NOW, THEREFORE, in consideration of the employment of the
Executive by the Bank, of the mutual covenants, promises and agreements herein
made, and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. The Bank hereby employs Executive's full-time
services as President, Chief Executive Officer and Director of Bank, for a term
of one year commencing on January 1, 1996 (the "Commencement Date"). Executive
hereby accepts such employment. This Employment Agreement shall automatically
be extended for additional one year terms one year from the Commencement Date
and annually thereafter, unless terminated by thirty (30) days advance written
notice given by either the Executive or the Bank. Executive shall diligently
perform the duties customarily performed by such officer, subject to the
authority of the Board of Directors (the "Board") of the Bank, and shall hold
and perform all of the responsibilities and duties prescribed by the Board and
by the Bylaws of the Bank. During the term of this Agreement, Executive will
devote his full time and effort to his duties hereunder, to the exclusion of
all other employment or business interests other than passive personal
investments, charitable, religious or civic activities.
2. BASE SALARY. As compensation for his services to the Bank,
the Bank agrees to pay Executive an annual salary of Seventy Five Thousand and
No/100 Dollars ($75,000.00) commencing on the Commencement Date (the Base
Salary"). The annual salary shall be paid according to the normal payroll
practices of the Bank for other employees. Effective one year from the
Commencement Date, Executive shall be paid such Base Salary, which shall not be
less than Seventy Five Thousand and No/100 Dollars, and compensation as the
Board of the Bank may recommend. Any such salary and compensation recommended
by the Board of the Bank must be ratified and approved by Greene County
Bancshares, Inc.
<PAGE> 2
Payment will be in accordance with the Bank's payroll policies in effect from
time to time. In addition Executive will receive the normal Bank Board fee for
attendance at board of directors and committee meetings.
3. BONUS.
(a) Employee shall be entitled to receive an additional annual
bonus compensation (the "Bonus") determined by the Executive and the
President of Greene County Bank after taking into consideration the
earnings and growth of the Bank. For the five consecutive years
following the Commencement Date, the Bonus shall amount to not less
than twenty percent (20%) of the Base Salary nor greater than
thirty-five percent (35%) of the Base Salary.
(b) In addition, the Bank, in its discretion, may, with respect
to any year during the term hereof, award a bonus or bonuses to the
Executive in addition to the Bonus provided for in Section 3(a). The
compensation provided for in this Section and Section 3(a) shall be
in addition to any pension or profit sharing payments set aside or
allocated for the benefit of the Executive.
4. BENEFITS. The Bank agrees to provide Executive with the
following benefits, commencing with the Commencement Date, or as soon
thereafter as practicable, and continuing for so long as Executive is employed
under this Employment Agreement or any extension thereof:
(a) An insurance program (or similar programs) which is maintained
for all Bank personnel. In addition, the Bank shall provide major
medical, hospitalization, disability and dental insurance paid
consistent with normal practices for executive employees for the
benefit of the Executive and Executive's dependents.
(b) An annual paid vacation according to normal policies of the
Bank for senior executives.
(c) Use of a six-passenger sedan automobile including all
operating and maintenance expenses.
(d) Reimbursement of monthly dues and Bank-related expenses of
Executive at Springbrook Country Club.
(e) Participation in the Bank's 401-K Plan;
(f) Other benefits as the Board may approve from time to time.
5. INVESTMENT IN STOCK OF BANCSHARES. Bancshares and the
Executive agree and acknowledge that upon the date of this Employment
Agreement, Executive shall
-2-
<PAGE> 3
immediately become a fully vested participant in the existing Greene County
Bancshares, Inc. Senior Management Stock Option Plan.
6. EXPENSES. Executive is authorized to incur necessary and
customary expenses in connection with the business of the Bank, including
expenses for entertainment, trade association meetings, travel, promotion and
similar matters. The Bank will pay or reimburse Executive, pursuant to Bank
policy, for such expenses upon presentation by Executive of the appropriate
records which verify such expenses.
7. TERMINATION. This Agreement shall terminate upon the first
to occur of the following:
(a) The death of Executive;
(b) Termination by Bank "for cause," as defined in paragraph 8;
(c) Termination by Executive; provided, that Executive shall give
not less than thirty (30) days' written notice of termination. Upon
receipt of notice of intended termination given by Executive, the
Bank reserves the right to terminate the Executive's employment
effective immediately, provided that in such instance, the Bank shall
pay an amount equal to Executive's Base Salary due for the remainder
of the thirty (30) day notice period to the termination date, or
thirty (30) days, whichever is less.
In the event of termination for any cause outlined in 8(a) through
(c), no severance or other payment shall be made to Executive; however, nothing
contained in this paragraph 8 shall be construed to abrogate the obligations to
Executive, or his personal representative, or his heirs, as the case may be, in
respect to all rights which shall accrue prior to termination.
8. TERMINATION FOR CAUSE. As used in paragraph 8(c), termination
"for cause" shall include acts of dishonesty; conviction of a felony; breach of
this Agreement by Executive; or willful or gross negligence in carrying out the
activities for which employed. "For cause" is not intended to include
disagreements over management philosophy or other such intangibles.
9. DISCLOSURE OF CONFIDENTIAL INFORMATION. Executive
acknowledges that the Bank possesses certain methods of operation and
information concerning its business affairs, including customer lists and other
customer information, which are valuable, special and unique assets of its
business. Without prior Board approval, Executive agrees not to disclose,
during or after the term of his employment, any such information, or any part
thereof to any bank, person, firm, corporation, association or other entity for
any reason or purpose whatsoever.
-3-
<PAGE> 4
10. NON-INTERFERENCE WITH PERSONNEL RELATIONS. Except for
Executive's personal executive secretary, Executive shall not, directly or
indirectly, during his employment and for a period of twenty-four (24) months
immediately following the termination of his employment with the Bank,
knowingly solicit, entice or persuade any other employees or agents of the Bank
to leave the services of the Bank to engage in the business of providing
banking or investment banking services for any corporation, partnership,
association trust or other entity or person carrying on business in McMinn
County, Tennessee.
11. ASSIGNMENT. The rights and obligations of the Bank and
Executive (except the Executive's obligation to perform services) under this
Agreement shall inure to the benefit of and shall be binding upon their
respective successors, if any. The rights and obligations of Executive under
this Agreement shall inure only to the benefit of Executive, are not
assignable by Executive to any other person or entity by virtue of the unique
and personal nature of Executive's services.
12. ENTIRE AGREEMENT. Except for the Employment Agreement with
Greene County Bancshares, Inc. and Noncompetition Agreement executed
contemporaneously herewith, this Agreement contains the entire agreement
between the parties and supersedes all prior discussion, understanding and
commitments, whether oral or written. This Agreement cannot be amended or
modified except by subsequent written agreement signed by all parties hereto.
13. ATTORNEYS' FEES AND COSTS. If an action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which he may be
entitled.
14. CONTROLLING LAW. This Agreement is being executed in and will
be performed in the State of Tennessee and shall be construed, controlled and
interpreted according to the laws of Tennessee.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PREMIER BANK OF EAST TENNESSEE
By: /s/ William C. Adams, Sr.
---------------------------------------
Its: Chairman
---------------------------------------
EXECUTIVE:
/s/ William C. Adams, Jr.
--------------------------------------------
WILLIAM C. ADAMS, JR.
GREENE COUNTY BANCSHARES
By: /s/ Stan Puckett
----------------------------------------
Its: President
----------------------------------------
-5-
<PAGE> 1
EXHIBIT 10.4
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT, made as of this 1st day of January ,
1996, by and between GREENE COUNTY BANCSHARES, INC. of Greeneville, Tennessee,
a bank holding company (the "Company"), and WILLIAM C. ADAMS, SR. ("Adams").
W I T N E S S E T H:
WHEREAS, the Company is a bank holding company controlling
substantially all of the issued and outstanding stock of Premier Bank of East
Tennessee, a Tennessee commercial bank (the "Bank");
WHEREAS, the Adams is the former Chairman of the Board and director of
the Bank; and
WHEREAS, the parties intend that this Agreement shall provide Adams
with an economic incentive not to compete with the Bank and the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Compensation for Noncompetition Agreement. Company agrees to
pay to Adams subject to the terms and conditions set forth in this Agreement an
amount for his agreement not to engage in competition with the Company or the
Bank. Company shall pay to Adams as Noncompetition Compensation an amount
equal to $30,000 payable in three equal installments of $10,000. The first
payment shall be made on January 1, 1996 and then annually thereafter until
paid in full.
2. Noncompetition. Adams covenants and agrees that for a period
of five (5) years from the date of this Agreement he will not directly or
indirectly engage in competition with Company or Bank either as an individual
or as a partner, joint venturer, officer, director, stockholder, employee,
consultant or agent within the Company or Bank's "Primary Service Area" which
is defined as and includes the counties in Tennessee where the Company operates
a subsidiary bank engaged in the business of commercial banking. This covenant
of Adams shall be construed as an agreement independent of any other provision
of this Agreement, and the existence of any claim or cause of action of Adams
against Company or Bank based on this Agreement or otherwise shall not
constitute a defense to the enforcement by Company or Bank of this covenant.
Adams further agrees that during such period he will not (either directly or
indirectly, such as a beneficiary of a trust) be the owner of more than a one
percent (1%) ownership interest of (i) the outstanding capital stock of any
corporation, or (ii) a member of any partnership, or (iii) an owner of any
other business, any of the aforesaid which engages in any type of business or
activity which is of the type
<PAGE> 2
engaged in by the Company or the Bank. Except as set forth herein, nothing
shall prohibit Adams from obtaining employment with any business or activity
which is of the type engaged in by the Bank at the time of Adams's Termination
of employment in which Adams does not have more than a one percent (1%)
ownership interest; provided Adams's employment does not involve Adams's
activities occurring within the Bank's Primary Service Area. In the event that
the provisions of the paragraph 2 should ever be deemed to exceed the time or
geographic limitations permitted by the applicable laws of the State, then such
provision shall be reformed to the maximum time limitations permitted by the
applicable laws of such State.
3. Forfeiture. In the event that Adams shall violate his
covenant not to compete pursuant to paragraph 2 of this Agreement or shall
violate the terms of any confidential information, or invention disclosure or
assignment agreements entered into with Company, then this Agreement shall
immediately terminate and Adams shall forfeit all rights under this Agreement
to Noncompetition Compensation and installments of Noncompetition Compensation
which have not yet been paid pursuant to paragraph 1. The assertion of any
such forfeiture by Company shall not preclude or waive its right to use any and
all other remedies. The right to assert a forfeiture is given in addition to
any other rights Company may have by law, statute, ordinance or otherwise.
4. Amendment and Termination. The Board of Directors of Company
may terminate this Agreement at any time in its sole and absolute discretion;
provided, however, no such termination shall, without the written agreement of
Adams, terminate or reduce Adams's right to compensation pursuant to this
Agreement. No oral amendment of this Agreement shall be binding on the
parties. Except as above provided, this Agreement cannot be amended,
supplemented or modified except by an instrument in writing signed by the party
against whom enforcement of such amendment, supplement or modification is
sought.
5. No Term of Years. Nothing contained in this Agreement shall
be construed to be a contract of employment for any term of years, nor as
conferring upon Adams the right to continue in the employment of Company in any
capacity, except as Company and Adams may otherwise agree separate and apart
from this Agreement or as may be otherwise provided by law. Nothing contained
in this Agreement shall be deemed to exclude Adams from any supplemental
compensation, bonus, pension, group term life insurance, health insurance,
other insurance, severance pay or other benefits to which he otherwise might be
or become entitled as an employee.
6. Unsecured Obligation. Company's obligations to Adams under
this Agreement are general unsecured obligations of Company. Adams shall not
have any interest in any fund or specific asset of Company by reason of this
Agreement. No trust fund shall be created in connection with this Agreement or
any amount of compensation that shall become payable hereunder, and all
payments to Adams shall be made from the general assets of Company.
-2-
<PAGE> 3
7. Tax Withholding. Company shall have the right to deduct from
all cash payments to be made under this Agreement any federal, state or local
taxes required by law to be withheld with respect to such payments.
8. Remedies. The parties hereto acknowledge and agree that upon
the occurrence of a breach by Adams of his covenant not to compete, the
remedies available at law to Company shall be inadequate, and Company shall be
entitled to specific performance of Adams's covenant not to compete. Nothing
herein shall be construed as prohibiting Company from pursuing any and all
other remedies available to it for any such breach of Adams's covenant not to
compete, including the enforcement of the forfeiture provisions in paragraph 3
and/or the recovery of monetary damages. In the event that it is necessary for
either party to employ legal counsel to enforce his or its rights under this
Agreement or to protect his or its interest herein, the party determined to be
in breach shall reimburse the damaged party for any and all reasonable legal
fees, expenses or court costs arising from such legal proceeding. The waiver
by either party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach. The rights and
remedies provided by this Agreement are cumulative and the use of any one
remedy by any party shall not preclude or waive his or its right to use any and
all remedies. Such rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance or otherwise.
9. Severability. Each provision of this Agreement is intended to
be severable and the invalidity, illegality or unenforceability of any portion
of this Agreement shall not affect the validity, legality or enforceability of
the remainder of this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision, there shall be automatically added as a part of
this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and still be legal, valid and
enforceable.
10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
11. Non-assignability. Adams's rights under this Agreement shall
not be transferable or subject to assignment during Adams's lifetime.
Furthermore, Adams shall not have the right or power to anticipate, accelerate,
convey, assign or otherwise alienate, hypothecate, pledge or otherwise encumber
any of his rights under this Agreement, except as expressly provided in
paragraph 12.
12. Beneficiary. Adams shall have the right to designate a
beneficiary to receive any amounts which become payable to Adams under this
Agreement after the date of this death. Any such beneficiary designation shall
be made in the form of Exhibit "B" attached hereto, executed by Adams and
delivered to Company prior to the date of Adams's death. Adams shall have the
right at any time to revoke or change any such beneficiary designation by a
similar instrument delivered to Company.
13. Successors and Assigns. Subject to the foregoing limitations
on assignment by Adams, this Agreement shall be binding upon and inure to the
benefit of the respective
-3-
<PAGE> 4
parties hereto and their executors, administrators, heirs, personal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GREENE COUNTY BANCSHARE, INC.
By: /s/ Stan Puckett
-------------------------------------
Title: President
----------------------------------
W.C. ADAMS, SR.:
/s/ William C. Adams, Sr.
-----------------------------------------
-4-
<PAGE> 1
EXHIBIT 10.5
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT, made as of this 1st day of January,
1996, by and between GREENE COUNTY BANCSHARES, INC. of Greeneville, Tennessee,
a bank holding company (the "Company"), and WILLIAM C. ADAMS, JR.
("Employee").
WITNESSETH:
WHEREAS, the Company is a bank holding company controlling
substantially all of the issued and outstanding stock of Premier Bank of East
Tennessee, a Tennessee commercial bank (the "Bank");
WHEREAS, the Employee is the president and chief executive officer of
the Bank and a director of the Bank; and
WHEREAS, the parties intend that this Agreement shall provide Employee
with an economic incentive not to compete with the Bank and the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Compensation for Noncompetition Agreement. In addition to
such other regular compensation, bonuses and fringe benefits that Company or
Bank may from time to time agree to pay or provide to Employee, Company agrees
to pay to Employee subject to the terms and conditions set forth in this
Agreement an additional amount for his agreement not to engage in competition
with the Company or the Bank. Company shall pay to Employee as Noncompetition
Compensation an amount equal to $200,000 payable in five equal installments of
$40,000. The first payment shall be made on January 1, 1996 and then annually
thereafter until paid in full. The Noncompetition Compensation payments shall
be made to Employee notwithstanding his termination from employment during the
term of this Agreement.
2. Noncompetition. Employee covenants and agrees that for a
period of five (5) years from the date of this Agreement he will not directly
or indirectly engage in competition with Company or Bank either as an
individual or as a partner, joint venturer, officer, director, stockholder,
employee, consultant or agent within the Company or Bank's "Primary Service
Area" which is defined as and includes the counties in Tennessee where the
Company operates a subsidiary bank engaged in the business of commercial
banking. In the event Employee is terminated from his employment for cause as
herein defined, Employee agrees that for a period of two (2) years from date of
termination he will not directly or indirectly engage in competition with
Company or Bank either as an individual or as a partner, joint venturer,
officer, director, stockholder, employee, consultant or agent within
<PAGE> 2
the Company or Bank's "Primary Service Area" which is defined as and
includes the counties in Tennessee where the Company operates a subsidiary bank
engaged in the business of commercial banking. Termination "for cause" shall
include acts of dishonesty; conviction of a felony; breach of this Agreement by
Executive; or willful or gross negligence in carrying out the activities for
which employed. "For cause" is not intended to include disagreements over
management philosophy or other such intangibles. This covenant of Employee
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of Employee
against Company or Bank based on this Agreement or otherwise shall not
constitute a defense to the enforcement by Company or Bank of this covenant.
Employee further agrees that during such period he will not (either directly or
indirectly, such as a beneficiary of a trust) be the owner of more than a one
percent (1%) ownership interest of (i) the outstanding capital stock of any
corporation, or (ii) a member of any partnership, or (iii) an owner of any
other business, any of the aforesaid which engages in any type of business or
activity which is of the type engaged in by the Company or the Bank at the time
of Employee's termination of employment. Except as set forth herein, nothing
shall prohibit Employee from obtaining employment with any business or activity
which is of the type engaged in by the Bank at the time of Employee's
Termination of employment in which Employee does not have more than a one
percent (1%) ownership interest; provided Employee's employment does not
involve Employee's activities occurring within the Bank's Primary Service Area.
In the event that the provisions of this paragraph 2 should ever be deemed to
exceed the time or geographic limitations permitted by the applicable laws of
the State, then such provision shall be reformed to the maximum time
limitations permitted by the applicable laws of such State.
3. Forfeiture. In the event that Employee shall violate his
covenant not to compete pursuant to paragraph 2 of this Agreement or shall
violate the terms of any confidential information, or invention disclosure or
assignment agreements entered into with Company, then this Agreement shall
immediately terminate and Employee shall forfeit all rights under this
Agreement to Noncompetition Compensation and installments of Noncompetition
Compensation which have not yet been paid pursuant to paragraph 1. The
assertion of any such forfeiture by Company shall not preclude or waive its
right to use any and all other remedies. The right to assert a forfeiture is
given in addition to any other rights Company may have by law, statute,
ordinance or otherwise.
4. Amendment and Termination. The Board of Directors of
Company may terminate this Agreement at any time in its sole and absolute
discretion; provided, however, no such termination shall, without the written
agreement of Employee, terminate or reduce Employee's right to compensation
pursuant to this Agreement. No oral amendment of this Agreement shall be
binding on the parties. Except as above provided, this Agreement cannot be
amended, supplemented or modified except by an instrument in writing signed by
the party against whom enforcement of such amendment, supplement or
modification is sought.
5. No Term of Years. Nothing contained in this Agreement
shall be construed to be a contract of employment for any term of years, nor as
conferring upon Employee the right to continue in the employment of Company in
any capacity, except as Company and
- 2 -
<PAGE> 3
Employee may otherwise agree separate and apart from this Agreement or as may
be otherwise provided by law. It is expressly understood by the parties that
this Agreement relates exclusively to additional noncompetition compensation
for Employee's services and is not intended to be a comprehensive employment
contract. Nothing contained in this Agreement shall be deemed to exclude
Employee from any supplemental compensation, bonus, pension, group term life
insurance, health insurance, other insurance, severance pay or other benefits
to which he otherwise might be or become entitled as an employee.
6. Unsecured Obligations. Company's obligations to Employee
under this Agreement are general unsecured obligations of Company. Employee
shall not have any interest in any fund or specific asset of Company by reason
of this Agreement. No trust fund shall be created in connection with this
Agreement or any amount of compensation that shall become payable hereunder,
and all payments to Employee shall be made from the general assets of Company.
7. Tax Withholding. Company shall have the right to
deduct from all cash payments to be made under this Agreement any federal,
state or local taxes required by law to be withheld with respect to such
payments.
8. Remedies. The parties hereto acknowledge and agree that
upon the occurrence of a breach by Employee of his covenant not to compete,
the remedies available at law to Company shall be inadequate, and Company shall
be entitled to specific performance of Employee's covenant not to compete.
Nothing herein shall be construed as prohibiting Company from pursuing any and
all other remedies available to it for any such breach of Employee's covenant
not to compete, including the enforcement of the forfeiture provisions in
paragraph 3 and/or the recovery of monetary damages. In the event that it is
necessary for either party to employ legal counsel to enforce his or its
rights under this Agreementor to protect his or its interest herein, the
party determined to be in breachshall reimburse the damaged party for any
and all reasonable legal fees, expenses or court costs arising from such
legal proceeding. The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any
subsequent breach. The rights and remedies provided by this Agreement are
cumulative and the use of any one remedy by any party shall not preclude or
waive his or its right to use any and all remedies. Such rights and remedies
are given in addition to any other rights the parties may have by law,
statute, ordinance or otherwise.
9. Severability. Each provision of this Agreement is intended
to be severable and the invalidity, illegality or unenforceability of any
portion of this Agreement shall not affect the validity, legality or
enforceability of the remainder of this Agreement. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there shall be automatically
added as a part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and still be
legal, valid and enforceable.
10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
- 3 -
<PAGE> 4
11. Non-assignability. Employee's rights under this
Agreement shall not be transferable or subject to assignment during Employee's
lifetime. Furthermore, Employee shall not have the right or power to
anticipate, accelerate, convey, assign or otherwise alienate, hypothecate,
pledge or otherwise encumber any of his rights under this Agreement, except as
expressly provided in paragraph 12.
12. Beneficiary. Employee shall have the right to designate a
beneficiary to receive any amounts which become payable to Employee under this
Agreement after the date of his death. Any such beneficiary designation shall
be made in the form of Exhibit "B" attached hereto, executed by Employee and
delivered to Company prior to the date of Employee's death. Employee shall
have the right at any time to revoke or change any such beneficiary designation
by a similar instrument delivered to Company.
13. Successors and Assigns. Subject to the foregoing limitations
on assignment by Employee, this Agreement shall be binding upon and inure to
the benefit of the respective parties hereto and their executors,
administrators, heirs, personal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GREENE COUNTY BANCSHARES, INC.
BY: /s/
---------------------------------------
TITLE: President
------------------------------------
EMPLOYEE:
/s/
------------------------------------------
<PAGE> 1
EXHIBIT 21
Subsidiaries of Greene County Bancshares, Inc.
GREENE COUNTY BANK
AMERICAN FIDELITY BANK
PREMIER BANCSHARES, INC.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Greene County Bancshares, Inc.
We consent to the incorporation by reference in the registration statement of
Greene County Bancshares, Inc. on Form S-2 of our report dated January 27,
1995, on our audit of the consolidated financial statements of Greene County
Bancshares, Inc. as of December 31, 1994, and for the year then ended, which
report is included in the 1994 Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS AND LYBRAND L.L.P.
Knoxville, Tennessee
January 19, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Greene County Bancshares, Inc.
We consent to the incorporation by reference in the registration statement of
Greene County Bancshares, Inc. on Form S-2 of our report dated January 27, 1995,
on our audit of the consolidated financial statements of Greene County
Bancshares, Inc. as of December 31, 1994, and for the year then ended, which
report is included in the 1994 Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P
---------------------------
COOPERS & LYBRAND L.L.P
Knoxville, Tennessee
January 19, 1996
