<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 2)
Filed by the Registrant [x]
Filed by the Party other than the Registrant
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[x] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
GREENE COUNTY BANCSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
5. Total fee Paid:
---------------------------------------------------------------------
Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount previously paid:
---------------------------------------------
2. Form, Schedule or Registration Statement No.:
---------------------------------------------
3. Filing Party:
---------------------------------------------
4. Date Filed:
---------------------------------------------
<PAGE>
[COMPANY LETTERHEAD]
April 11, 1997
Dear Shareholder:
We invite you to attend the Annual Meeting of Shareholders of Greene
County Bancshares, Inc. to be held at the General Morgan Inn, 111 North Main
Street, Greeneville, Tennessee, on Tuesday, April 22, 1997 at 11:00 a.m.,
local time.
The Annual Meeting has been called for the election of directors.
Enclosed is a proxy statement, a proxy card and the Annual Report to
Shareholders for the 1996 fiscal year. Directors and officers of the Company
as well as representatives of Coopers & Lybrand, the Company's independent
auditors for the 1996 fiscal year, will be present to respond to any questions
the shareholders may have.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. On
------------------------------------------------------------------
behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy as soon as possible, even if you currently plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
assure that your vote is counted if you are unable to attend the Annual
Meeting.
Thank you for your cooperation and continuing support.
Sincerely,
/s/ F. Harrison Lamons /s/ R. Stan Puckett
F. Harrison Lamons R. Stan Puckett
Chairman of the Board President and Chief Executive Officer
<PAGE>
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37743
(423) 639-5111
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS
TO BE HELD ON APRIL 22, 1997
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the 1997 annual meeting of shareholders (the
"Annual Meeting") of Greene County Bancshares, Inc. (the "Company") will be
held on Tuesday, April 22, 1997 at 11:00 a.m., local time, at the General
Morgan Inn, 111 North Main Street, Greeneville, Tennessee.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
(1) The election of thirteen directors of the Company; and
(2) The transaction of other business as may properly come before the
Annual Meeting or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the Annual Meeting.
Any action maybe taken on any one of the foregoing proposals at the
Annual Meeting on the date specified above or on any date or dates to which,
by original or later adjournments, the Annual Meeting may be adjourned.
Shareholders of record at the close of business on March 25, 1997 will be
entitled to vote at the Annual Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which
is solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and choose to vote in
person at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Davis Stroud
Davis Stroud
Secretary
Greeneville, Tennessee
April 11, 1997
- --------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE, AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37743
(423) 639-5111
______________________
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1997
- --------------------------------------------------------------------------------
GENERAL
- --------------------------------------------------------------------------------
This Proxy Statement is furnished to shareholders of Greene County
Bancshares, Inc. (the "Company") in connection with the solicitation of proxies
by the Company's Board of Directors to be used at the 1997 annual meeting of
shareholders of the Company (the "Annual Meeting"), to be held on Tuesday, April
22, 1997 at 11:00 a.m., local time, at the General Morgan Inn, 111 North Main
Street, Greeneville, Tennessee. The accompanying Notice of Annual Meeting and
form of proxy and this Proxy Statement are being first mailed to shareholders on
or about April 11, 1997.
- --------------------------------------------------------------------------------
VOTING AND REVOCABILITY OF PROXIES
- --------------------------------------------------------------------------------
If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
EXECUTED BUT UNMARKED PROXIES WILL BE VOTED FOR THE PROPOSAL TO ELECT THIRTEEN
NOMINEES AS DIRECTORS OF THE COMPANY. The proxy confers discretionary authority
on the persons named therein to vote with respect to the election of any person
or a director where the nominee is unable to serve or for good cause will not
serve, and with respect to matters incident to the conduct of the Annual
Meeting. If any other matters are properly brought before the Annual Meeting,
the persons named in the proxy will vote the shares represented by such proxies
on such matters as determined by a majority of the Board of Directors. Except
for procedural matters incident to the conduct of the Annual Meeting, the
Company does not know of any other matters that are to come before the Annual
Meeting. Proxies marked as abstentions and shares held in street name which
have been designated by brokers on proxies as not voted will not be counted as
votes cast. Such proxies will be counted for purposes of determining a quorum
at the Annual Meeting.
Shareholders who execute proxies may revoke them at any time prior to
their exercise by filing with the Secretary of the Company a written notice of
revocation, by delivering to the Company a duly executed proxy bearing a later
date, or by attending the Annual Meeting and voting in person. The mere presence
of a shareholder at the Annual Meeting will not, by itself, automatically revoke
such shareholder's proxy.
- --------------------------------------------------------------------------------
VOTING SECURITIES
- --------------------------------------------------------------------------------
The securities which can be voted at the Annual Meeting consist of
shares of common stock, par value $10.00 per share (the "Common Stock"), of the
Company. Each share entitles its owner to one vote on all matters. The close
of business on March 25, 1997 (the "Record Date") has been fixed by the Board of
Directors as the Record Date for determination of shareholders entitled to vote
at the Annual Meeting. The number of shares of Common Stock outstanding as of
the Record Date was 451,500.
<PAGE>
- --------------------------------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------------------------
Persons and groups beneficially owning more than 5% of the Common
Stock are required under federal securities laws to file certain reports with
the Securities and Exchange Commission ("SEC") detailing such ownership. The
following table sets forth, as of the Record Date, certain information as to the
Common Stock beneficially owned by any person or group of persons who is known
to the Company to be the beneficial owners of more than 5% of the Common Stock.
Other than as disclosed below, management knows of no person who beneficially
owned more than 5% of the Common Stock at the Record Date.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of Common
Beneficial Owner Beneficial Ownership (a) Stock Outstanding
--------------------------------------------------------------------------------
<S> <C> <C>
Phil M. Bachman
1330 E. Allen Bridge Road 45,158 (b) 10.00%
Greeneville, Tennessee 37743
</TABLE>
- ---------------
(a) For purposes of this table, an individual is considered to "beneficially
own" any share of Common Stock which he or she, directly or indirectly,
through any contract, arrangement, understanding, relationship, or
otherwise, has or shares: (1) voting power, which includes the power to
vote, or to direct the voting of, such security; and/or (2) investment
power, which includes the power to dispose, or to direct the disposition of,
such security. In addition, an individual is deemed to be the beneficial
owner of any share of Common Stock of which he has the right to acquire
voting or investment power within 60 days of the Record Date.
(b) Includes 1,479 shares of Common Stock held directly or indirectly by Mr.
Bachman's wife as to which Mr. Bachman disclaims beneficial ownership. Had
such shares not been included, Mr. Bachman's ownership percentage would have
been 9.67%.
The following table sets forth, as of the Record Date, certain
information as to Common Stock beneficially owned by each director and nominee
for director of the Company and by all directors and executive officers of the
Company as a group. This information is based on filings with the SEC or
information furnished to the Company by such persons.
<TABLE>
<CAPTION>
Amount and Nature of Percent of Common
Name and Position Beneficial Ownership (a)(b) Stock Outstanding
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Harrison Lamons, Chairman of the Board 2,000 *
R. Stan Puckett, President, Chief
Executive Officer and Director 4,900 (c) 1.08%
Davis Stroud, Executive Vice President
and Secretary 763 (d) *
Phil M. Bachman, Director 45,158 (e) 10.00%
Terry Leonard, Director 3,429 *
Ralph T. Brown, Director 5,920 1.31%
James A. Emory, Director 4,240 *
W.T. Daniels, Director 400 *
Charles S. Brooks, Director 30 *
J.W. Douthat, Director 1,245 *
Patrick A. Norris, Director 1,426 *
Helen Horner, Director 19,166 4.24%
Jerald K. Jaynes, Director 550 *
All directors and executive officers as a
group (14 persons) 89,227 19.72%
</TABLE>
(Footnotes on following page)
2
<PAGE>
- ------------------
* Less than 1% of the outstanding Common Stock.
(a) For the definition of "beneficial ownership," see Note (a) to the above
table.
(b) Includes shares owned directly by directors and executive officers of the
Company as well as shares held by their spouses and children, trusts of
which certain directors are trustees and corporations in which certain
directors own a controlling interest. Includes shares of Common Stock
subject to outstanding options which are exercisable within 60 days of the
Record Date.
(c) Includes options to acquire 600 shares of Common Stock which Mr. Puckett
has the right to exercise at any time at an exercise price equal to 150% of
the book value of the Common Stock at the date of grant (approximately $152
per share).
(d) Includes options to acquire 394 shares of Common Stock which Mr. Stroud has
the right to exercise at any time at an exercise price equal to the
estimated fair market value of the Common Stock at date of grant with a
weighted average exercise price of approximately $155.
(e) Includes 1,479 shares of Common Stock held directly or indirectly by Mr.
Bachman's wife as to which Mr. Bachman disclaims beneficial ownership. Had
such shares not been included, Mr. Bachman's ownership percentage would
have been 9.67%.
- --------------------------------------------------------------------------------
PROPOSAL I -- ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
The Company's Board of Directors is currently composed of thirteen
members, each of whom are listed in the table below. The Board of Directors has
nominated for election as directors all current directors to each serve for a
term of one year and until their successors are elected and qualified.
Directors are elected to serve until the next Annual Meeting and until their
successors are elected and qualified. Under Tennessee law, directors are
elected by a plurality of the votes cast at an election.
It is the intention of the persons named in the proxy to vote the
shares represented by each properly executed proxy for the election as directors
of each of the thirteen nominees listed below, unless otherwise directed by the
shareholder. The Board of Directors believes that each of such nominees will
stand for election and will serve if elected as a director. However, if any
person nominated by the Board of Directors fails to stand for election or is
unable to accept election, the proxies will be voted for the election of such
other person or persons as the Board of Directors may recommend. At this time,
the Board knows of no reason why any nominee might be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION AS DIRECTORS
OF ALL THE NOMINEES LISTED BELOW.
3
<PAGE>
The following table sets forth certain information with respect to
each of the Company's directors. Each of the Company's directors, with the
exception of Mr. Norris, also currently serves as a director of Greene County
Bank ("GCB"), a wholly-owned subsidiary of the Company. There are no
arrangements or understandings between the Company and any director pursuant to
which such person has been selected as a director or nominee for director of the
Company, and no director or nominee is related to any other director, nominee or
executive officer by blood, marriage or adoption.
<TABLE>
<CAPTION>
Name Age(a) Director Since (b) Previous Five-Years Business Experience
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Phil M. Bachman 59 1968 President, Bachman-Bernard Motors
(automobile dealer)
Harrison Lamons 68 1971 President, Lamons Sales (manufacturers'
representative)
Terry Leonard 58 1975 Owner/Operator, Leonard & Associates
(manufacturing)
Ralph T. Brown 64 1979 Dentist; retired 1996
James A. Emory 63 1983 President, J.A.E. Foods, Inc. (restaurant
management)
W.T. Daniels 52 1987 Property management
R. Stan Puckett 40 1989 President & Chief Executive Officer of the
Company and GCB
Davis Stroud 63 1989 Executive Vice President and Secretary of
the
Company and GCB
Charles S. Brooks 58 1990 Chairman of the Board, McInturff, Milligan &
Brooks (insurance agency)
J.W. Douthat 66 1990 President, Tri State Tractor & Turf
Patrick A. Norris 69 1992 Retired President, Mountain Life Insurance
Helen Horner 68 1992 Director of Tourism, Greene County
Partnership
Jerald K. Jaynes 59 1992 President & CEO, Unaka Co. Inc.
(manufacturing)
</TABLE>
- -----------------
(a) As of December 31, 1996.
(b) Indicates year that director first served as a director of either the
Company or GCB.
- --------------------------------------------------------------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
The Company conducts its business through meetings of the Board of
Directors. There are no standing committees of the Board of Directors of the
Company. During the year ended December 31, 1996, the Board of Directors held
15 meetings. Each member of the Board of Directors attended 75% or more of the
aggregate of (a) the total number of meetings of the boards of directors and (b)
the total number of meetings held by all committees on which they served.
The Board of Directors of the Company acts as a nominating committee
for selecting management's nominees for election as directors. Nominations may
also be made by shareholders, provided such nominations are made in writing and
submitted to the Secretary or the President of the Company at any time prior to
the date of the Annual Meeting. No further nominations shall be accepted unless
the shareholders, by majority vote, determine that additional nominations are to
be accepted, in which event further nominations as so determined by the
shareholders may be made at the Annual Meeting. During 1996, the Board of
Directors met once in its capacity as a nominating committee.
The Audit Committee of GCB also serves as the audit committee for the
Company. The Audit Committee of GCB consists of Messrs. Leonard (Chairman),
Brown, Lamons and Jaynes. This committee meets quarterly to (1) monitor the
accounting and financial reporting practices of the Company, (2) determine
whether the Company has adequate administrative, operating and internal
accounting controls, and (3) review the Company's financial information. This
committee met four times during 1996 in its capacity as the audit committee for
the Company.
4
<PAGE>
The Company's Compensation Committee, which consists of Messrs.
Leonard, Brown, Bachman, Brooks, Daniels and Douthat and Ms. Horner, meets
periodically to evaluate the compensation and fringe benefits of the directors,
officers and employees and recommend changes to the Board of Directors. The
Compensation Committee met twice during 1996.
- --------------------------------------------------------------------------------
DIRECTORS' COMPENSATION
- --------------------------------------------------------------------------------
Except for Mr. Norris, directors of the Company are also directors of
GCB and are compensated by GCB. Mr. Norris is compensated by the Company. In
each case, directors receive $400 for each regular monthly meeting, provided
that a member will not be paid for more than two meetings not attended. Each
director also receives a quarterly retainer fee of $1,300. Members of the
Board's Executive Committee receive $250 for each weekly meeting of the
Committee and also receive an annual retainer fee of $1,500. Members of GCB's
Audit Committee receive $200 for each quarterly meeting.
Certain directors have elected to defer receipt of a portion of their
fees by entering into deferred fee agreements with an unrelated insurance
company.
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION AND OTHER BENEFITS
- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE. The following table sets forth cash and
noncash compensation for each of the last three fiscal years awarded to or
earned by the Chief Executive Officer and certain named executive officers of
the Company.
<TABLE>
<CAPTION>
Long-Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
------------------------------------------- ----------------------------- -------
Restricted Securities
Name and Principal Other Annual Stock Underlying LTIP All Other
Position(a) Year Salary Bonus Compensation(b) Award(s) Options/SARs(#) Payouts Compensation (c)
---- ----------- --------- -------------- ---------- --------------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. Stan Puckett 1996 $160,000 $52,300 $ 281,804(f) -- 600 (d) -- $33,275
President and 1995 160,000 68,266 -- -- 600 (d) -- 32,085
Chief Executive 1994 145,000 21,750 -- -- 600 (d) -- 28,989
Officer of the
Company and GCB
Davis Stroud 1996 $122,000 $16,467 -- -- 206 (e) -- $32,843
Executive Vice 1995 116,000 30,440 -- -- 204 (e) -- 29,920
President, 1994 105,829 10,610 -- -- 187 (e) -- 25,670
Secretary of the
Company and GCB
</TABLE>
(Footnotes on following page)
5
<PAGE>
- -----------------
(a) No other executive officer earned in excess of $100,000 in salary and bonus
in 1996.
(b) Executive officers of the Company receive indirect compensation in the form
of certain perquisites and other personal benefits. The amount of such
benefits in 1996, 1995 and 1994 received by the named executive officers did
not exceed 10% of the respective executive's annual salary and bonus.
(c) Reflects contributions by the Company to its profit-sharing plan for the
benefit of the named officer and payments of directors' fees to such
officer. Directors' fees paid to Messrs. Puckett and Stroud were,
respectively, $10,775 and $10,775 for 1996, $9,585 and $9,285 for 1995 and
$6,150 and $6,150 for 1994. Contributions to profit-sharing plans made by
the Company on behalf of Messrs. Puckett and Stroud were, respectively,
$22,500 and $18,300 for 1996, $22,500 and $17,400 for 1995 and $21,750 and
$15,874 for 1994. A portion of such directors' fees are deferred pursuant to
agreements entered into individually with an insurance company. In addition,
includes $3,768, $3,235 and $3,646 paid to Mr. Stroud in 1996, 1995 and
1994, respectively, as commissions on insurance policy sales. Also reflects
$89 paid to Mr. Puckett in 1994 as commissions on insurance policy sales.
(d) Mr. Puckett is granted options each year to purchase 600 shares of Common
stock with an exercise price equal to 150% of the Common Stock's book value
at the time of grant and with a term of 10 years. Such options are granted
pursuant to a 1989 stock option plan adopted by the Company and as to which
Mr. Puckett is the sole participant.
(e) Granted pursuant to the Company's 1995 Stock Option Plan as to which options
are granted with an exercise price equal to fair market value at date of
grant and are exercisable for ten years from date of grant.
(f) Reflects exercise of non-incentive stock options.
OPTION GRANTS IN FISCAL YEAR 1996. The following table contains
information concerning the grant of stock options to Mr. Puckett under a 1989
stock option plan and to Mr. Stroud under the 1995 Stock Option Plan. Neither
plan provides for the grant of stock appreciation rights.
<TABLE>
<CAPTION>
Number of Percent of
Securities Total Options Grant Date Value
Underlying Granted to Exercise of -----------------
Options Granted Employees in Base Price Grant Date
Name Number of Shares Fiscal Year ($ per share) Expiration Date Present Value
- ----------------- ----------------- --------------- ------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
R. Stan Puckett 600 (a) 26.55% $152 12/06 $ 48,090 (b)
Davis Stroud 206 9.12% $215 12/06 $ 8,636 (b)
</TABLE>
- -------------
(a) Options are granted with an exercise price equal to 150% of the book value
of the underlying stock on the date of grant.
(b) Represents the present value of the option at the date of grant as
determined using the Black-Scholes option pricing model. In calculating the
present value of the option grant, the following assumptions were utilized:
(i) the current market price of the underlying Common Stock at the date of
grant was $215; (ii) the continuously compounded risk-free rate of return
expressed on an annual basis was 6.60%; (iii) the risk of the underlying
Common Stock, measured by the standard deviation of the continuously
compounded annual rate of return of the Common Stock, was 7.75%; and (iv)
dividends on the underlying Common Stock increased at an annual rate of
12.0%. These assumptions are used for illustrative purposes only. No
assurance can be given that actual experience will correspond to the
assumptions utilized.
AGGREGATED OPTION EXERCISES IN 1996 AND YEAR-END OPTION VALUES. The
following table sets forth information concerning the value of options held by
the named executive officers at the end of the fiscal year.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year End In-the-Money Options at
Shares Acquired Value Exercisable/Unexercisable Fiscal Year End (a)
Name on Exercise (#) Realized ($) (Number of Shares) Exercisable/Unexercisable
- ------------ --------------- ----------- -------------------- -------------------------
<S> <C> <C> <C> <C>
R. Stan Puckett 3,748 $281,804 600 / -- $37,848 / $ --
Davis Stroud -- $ -- 394 / 369 23,656 / $ 5,705
</TABLE>
(Footnote on following page)
- ---------------------
6
<PAGE>
(a) Represents the difference between fair market value of underlying Common
Stock at fiscal year-end (based on the most recent sales price known to
management) and the exercise price. Options are in-the-money if the fair
market value of the underlying securities exceeds the exercise price of the
Option and out-of-the-money if the exercise price of unexercisable options
exceeds current fair market value.
PROFIT SHARING PLAN. The Company, through its subsidiary banks, has
a contributory Profit Sharing Plan (the "Plan") covering certain employees with
more than one year of service. Participating employees may contribute up to 7%
of their monthly salary and the Company contributes 15% of participating
employee's salary (not to exceed 10% of profit before taxes) to fund the Plan.
The Plan has a vesting schedule that fully vests each employee after two years
of employment.
Contributions in the amount of $22,500 and $18,300 were made for the
accounts of Mr. Puckett and Mr. Stroud under the Plan in 1996. Mr. Puckett and
Mr. Stroud are fully vested under the Plan.
EMPLOYMENT CONTRACTS. The Company entered into an employment
agreement with Mr. Puckett effective January 23, 1996, without any specified
term, to serve as President and Chief Executive Officer of the Company. The
agreement, which is terminable by either party at any time, provides for a base
salary plus directors' fees, life insurance, participation in benefit plans and
other fringe benefits. If Mr. Puckett's employment is not continued by mutual
agreement following a merger or acquisition involving the Company, Mr. Puckett
shall be entitled to a payment equal to two years' compensation (defined to
include his base salary plus fringe benefits and the value of his stock
options). The payment that would be made to Mr. Puckett assuming his
termination of employment under the foregoing circumstances at December 31, 1996
would have been approximately $395,000. This provision may have an anti-
takeover effect by making it more expensive for a potential acquiror to obtain
control of the Company.
GCB has contracted with Davis Stroud, Executive Vice President of GCB,
to provide for his employment by GCB until he reaches the age of 65. Pursuant to
such agreement, Mr. Stroud has agreed not to compete with GCB after leaving the
employment of GCB. In consideration of this agreement, GCB has agreed to pay
Mr. Stroud the sum of $16,600 per year for 10 years after his retirement at age
65. In the event Mr. Stroud dies prior to reaching the retirement age of 65, the
same amounts will be paid to his beneficiaries over a 10 year period. In the
event Mr. Stroud dies after retirement but prior to the expiration of the full
10 year term, the remainder of such benefits will be paid to his beneficiaries
on the same terms for the remainder of the ten-year term. A life insurance
policy on Mr. Stroud's life of which GCB is the beneficiary is coordinated to
pay or reimburse GCB for these benefits.
- --------------------------------------------------------------------------------
REPORT OF THE COMPENSATION COMMITTEE
- --------------------------------------------------------------------------------
Decisions on compensation of the Company's executives generally are
made by a seven-member Compensation Committee of the Board of Directors. Each
member of the Compensation Committee is a non-employee director and is appointed
annually.
The Committee is responsible for developing and making recommendations
to the Board of Directors concerning compensation paid to the Chief Executive
Officer and Executive Vice President and, based upon the recommendation of the
Chief Executive Officer, all other employees. The Committee is further
responsible for administering all aspects of the Company's executive
compensation program. Executive compensation is intended to be set at levels
that the Compensation Committee believes is consistent with others in the
Company's industry, and the Committee also considers general economic conditions
and other external factors.
Base salaries for executive officers are determined initially by
evaluating the responsibilities of the position held, and by reference to the
competitive marketplace for management talent, including a comparison of base
salaries for comparable positions at comparable companies within the financial
services industry. Annual salary adjustments are determined by evaluating the
competitive marketplace, the performance of the Company and the performance of
the executive. Compensation paid during 1996 to executive officers consisted of
base salary, bonus, stock options and contributions paid with respect to the
Company's Profit Sharing Plan. For 1996, based on the factors discussed above
and a review by the Committee, Mr. Puckett did not receive an increase in base
pay and Mr. Stroud received a 5.2% increase in base pay. Payments to the
Company's Profit Sharing Plan are made to certain employees on a non-
discriminatory basis.
7
<PAGE>
Messrs. Puckett and Stroud have a performance goal with the Company
whereby bonus awards are issued. The performance goal is based on the Company's
return on average assets ("ROAA") of Greene County Bank, the Company's largest
subsidiary. The bonus awarded in 1996 totaled 32.7% and 13.5%, respectively, of
their base salaries for 1996.
It is the philosophy of the Compensation Committee that stock options
should be awarded only to the key employees of the Company to promote long-term
interests between such employees and the Company's shareholders and to assist in
the retention of such employees.
COMPENSATION COMMITTEE
Terry Leonard (Chairman) Philip M. Bachman, Jr.
Ralph Brown Charles Brooks
Helen Horner W.T. Daniels
J.W. Douthat
March 14, 1997
- --------------------------------------------------------------------------------
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- --------------------------------------------------------------------------------
The Compensation Committee of the Company consists of Messrs. Leonard,
Brown, Bachman, Brooks, Daniels and Douthat and Ms. Horner.
Except for Directors Bachman and Brooks, no member of the Board of
Directors of the Company was (a) an officer or employee of the Company or any of
its subsidiaries during the fiscal year ended December 31, 1996, (b) a former
officer of the Company or any of its subsidiaries, or (c) an insider (i.e.,
director, officer, director or officer nominee, greater than 5% shareholder, or
immediate family member of the foregoing) of the Company or any of its
subsidiaries and engaged in transactions with the Company or any subsidiary
involving more than $60,000 during the fiscal year ended December 31, 1996
(except for the transactions described below).
The Company purchases insurance coverage from McInturff, Milligan and
Brooks of which Mr. Brooks is Chairman of the Board. During 1996, premiums
totaling $114,012 were paid by the Company to McInturff, Milligan and Brooks.
Management believes the fees paid are fair and reasonable and do not exceed
those premiums that would be paid to a third party firm.
The Company purchases vehicles from Bachman-Bernard Motors, as to
which Mr. Bachman serves as President. Payments for vehicles purchased by the
Company during 1996 totaled $97,179. Management believes the price paid was fair
and reasonable and does not exceed what would have been paid to a third party.
The Company also paid premiums during 1996 of $21,701 to Greeneville Insurance
Agency, as to which Mr. Bachman is part owner.
8
<PAGE>
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CUMULATIVE STOCK PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The following graph shows the cumulative total return on the Common
Stock of the Company over the last five years, compared with (1) the Standard &
Poor's Bank Composite Index and (2) the Standard & Poor's Major Regional Bank
Index. Cumulative total return on the stock or the index equals the total
increase in value since December 31, 1991 assuming reinvestment of all dividends
paid into the stock or the index, respectively. The graph was prepared assuming
that $100 was invested on December 31, 1991 in the Common Stock, and in the
securities included in the indices used for comparison purposes. There is no
established public trading market in which shares of the Common Stock are
regularly traded, nor are there any uniformly quoted prices for the shares of
Common Stock.
CUMULATIVE TOTAL SHAREHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
AT DECEMBER 31, 1991 THROUGH 1996
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
PERIOD ENDING
------------------------------------------------
INDEX 1991 1992 1993 1994 1995 1996
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Greene County
Bancshares, Inc. 100.00 122.43 145.90 165.17 190.74 238.68
Standard & Poor's
Bank Composite Index 100.00 127.93 136.99 125.39 192.75 264.66
Standard & Poor's
Major Regional Bank Index 100.00 123.46 126.92 115.72 175.49 232.36
</TABLE>
- --------------------------------------------------------------------------------
CERTAIN TRANSACTIONS
- --------------------------------------------------------------------------------
The Company and its subsidiaries have had, and expect to have in the
future, transactions in the ordinary course of business with directors and
executive officers and members of their immediate families, as well as with
principal shareholders. All loans included in such transactions were made in
the ordinary course of business on substantially the same terms, including
interest rates and collateral, as those prevailing for comparable transactions
with non-affiliated persons. It is the belief of management that such loans
neither involved more than the normal risk of collectability nor presented other
unfavorable features.
9
<PAGE>
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Officers, directors and
greater-than-10% shareholders are required to furnish the Company with copies of
all such reports. Based solely on its review of copies of such reports received
by it, or written representations from certain reporting persons that no annual
report of change in beneficial ownership is required, the Company believes that,
during the year ended December 31, 1996, all such filing requirements were
complied with, except as follows.
In connection with the grant of stock options, six reports of changes
in beneficial ownership were not filed on a timely basis prior to 1996 by Mr.
Puckett. Also, an initial statement of beneficial ownership of securities was
not filed on a timely basis in 1996 by Mr. William F. Richmond, Chief Financial
Officer of the Company. All such reports were subsequently filed.
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors has appointed the public accounting firm of
Coopers & Lybrand L.L.P. to continue as independent auditors for the Company for
the fiscal year ending December 31, 1997. Coopers & Lybrand L.L.P. served as
the Company's independent auditors for the year ended December 31, 1996. A
representative of Coopers & Lybrand L.L.P. is expected to be present at the
Annual Meeting and available to respond to appropriate questions, and will have
the opportunity to make a statement if he so desires.
- --------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- --------------------------------------------------------------------------------
Any shareholder who intends to present a proposal for action at next
year's annual meeting of the shareholders and would like a copy of the proposal
included in the Company's proxy materials for that meeting must forward a copy
of the proposal or proposals to the Company's principal executive office at 100
North Main Street, Greeneville, Tennessee 37743, and must be received by the
Company not later than December 5, 1997. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and proxy
relating to the 1998 annual meeting any shareholder proposal which does not meet
all of the requirements for inclusion established by the SEC in effect at the
time such proposal is received.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any other business to be
presented for action by the shareholders at the Annual Meeting other than those
matters described in this Proxy Statement and matters incident to the conduct of
the Annual Meeting. If, however, any other matters known are properly brought
before the Annual Meeting, the persons named in the accompanying proxy will vote
such proxy on such matters as determined by a majority of the Board of
Directors.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone number without additional compensation.
10
<PAGE>
The Company's 1996 Annual Report to Shareholders (the "Annual
Report"), including financial statements, has been mailed to all persons who
were shareholders of record as of the close of business on the Record Date. Any
shareholder who has not received a copy of the Annual Report may obtain a copy
by writing to the Secretary of the Company. The Annual Report is not to be
treated as a part of this proxy solicitation material or as having been
incorporated herein by reference.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Davis Stroud
Davis Stroud
Secretary
Greeneville, Tennessee
April 11, 1997
- --------------------------------------------------------------------------------
ANNUAL REPORT ON FORM 10-K
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
FURNISHED WITHOUT CHARGE TO PERSONS WHO WERE SHAREHOLDERS AS OF THE RECORD DATE
UPON WRITTEN REQUEST TO THE SECRETARY, GREENE COUNTY BANCSHARES, INC., 100 NORTH
MAIN STREET, GREENEVILLE, TENNESSEE 37743.
- --------------------------------------------------------------------------------
11
<PAGE>
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37443
REVOCABLE PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS
APRIL 22, 1997
The undersigned hereby constitutes and appoints R. Stan Puckett and Davis
Stroud, and each of them, the proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of Greene County
Bancshares, Inc. (the "Company") to be held at the General Morgan Inn, 111
North Main Street, Greeneville, Tennessee on Tuesday, April 22, 1997 at 11:00
a.m., local time, and any adjournments thereof, and to vote all the shares of
stock of the Company which the undersigned may be entitled to vote, upon the
following matters.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, WILL BE
VOTED IN ACCORDANCE WITH THE INSTRUCTIONS MARKED HEREIN, AND WILL BE VOTED FOR
THE ELECTION OF DIRECTORS AND AS DETERMINED BY A MAJORITY OF THE BOARD OF
DIRECTORS AS TO OTHER MATTERS, IF NO INSTRUCTIONS TO THE CONTRARY ARE MARKED
HEREIN.
1. The Election of Directors: Harrison Lamons; R. Stan Puckett; Philip
M. Bachman, Jr.; Terry Leonard; Ralph T. Brown; James A. Emory; W.T. Daniels;
Davis Stroud; Charles S. Brooks; J.W. Douthat; Patrick A. Norris; Helen Horner
and Jerald Jaynes.
FOR all nominees listed above WITHHOLD AUTHORITY to vote
(except as marked to the contrary below). for all nominees listed above.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT
THAT NOMINEE'S NAME BELOW.)
- --------------------------------------------------------------------------------
2. The transaction of such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The undersigned hereby acknowledges receipt of a copy of the accompanying
Notice of Annual Meeting of the Shareholders and Proxy Statement and the
Annual Report to Shareholders for the fiscal year ended December 31, 1996, and
hereby revokes any proxy heretofore given. THIS PROXY MAY BE REVOKED AT ANY
TIME BEFORE ITS EXERCISE.
Date:__________________________
Signature:_____________________
Signature:_____________________
PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS HEREIN AND RETURN IN THE
ENCLOSED ENVELOPE. If acting as executor, administrator, trustee, guardian,
etc. you should so indicate when signing. If the signor is a corporation,
please sign the full name by duly appointed officer. If a partnership, please
sign in partnership name by authorized person. If shares are held jointly,
each shareholder named should sign.
