<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant [X]
Filed by the Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
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.
$125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
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:
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2. Aggregate number of securities to which transaction applies:
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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:
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4. Date Filed:
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<PAGE> 2
[LETTERHEAD OF GREENE COUNTY BANCSHARES GOES HERE]
April 3, 2000
Dear Shareholder:
We invite you to attend the Annual Meeting of Shareholders (the "Annual
Meeting") of Greene County Bancshares, Inc. (the "Company") to be held at the
General Morgan Inn, 111 North Main Street, Greeneville, Tennessee, on Monday,
April 24, 2000 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 Company's Annual Report to
Shareholders for the 1999 fiscal year. Directors and officers of the Company as
well as representatives of PricewaterhouseCoopers, the Company's independent
auditors for the 1999 fiscal year, will be present to respond to any questions
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 your continuing support.
Sincerely,
/s/ RALPH T. BROWN /s/ R. STAN PUCKETT
--------------------- ------------------------
Ralph T. Brown R. Stan Puckett
Chairman of the Board President and Chief Executive Officer
<PAGE> 3
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37743
(423) 639-5111
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 24, 2000
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders (the
"Annual Meeting") of Greene County Bancshares, Inc. (the "Company") will be held
on Monday, April 24, 2000 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 the
following matters:
(1) to elect five directors of the Company; and
(2) to transact such 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 may be 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 29, 2000 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 3, 2000
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> 4
PROXY STATEMENT
OF
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37743
(423) 639-5111
----------------------
ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 2000
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 2000 Annual Meeting of
Shareholders of the Company (the "Annual Meeting"), to be held on Monday, April
24, 2000 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 first being mailed to shareholders on
or about April 3, 2000.
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 ELECTION OF FIVE 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 any other matter presented to the Annual Meeting if such
notice has not been delivered to the Company in accordance with the Company's
Bylaws. If any other matters are properly brought before the Annual Meeting as
to which proxies confer discretionary authority, 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. Please note that
the mere presence of a shareholder at the Annual Meeting will not, by itself,
automatically revoke such shareholder's proxy.
VOTING SECURITIES
The securities that may be voted at the Annual Meeting consist of shares
of the Company's common stock, par value $10.00 per share (the "Common Stock").
Each share entitles its owner to one vote on all matters. Persons who held
shares of Common Stock on March 29, 2000 (the "Record Date") are entitled to
vote at the Annual Meeting. The number of shares of Common Stock outstanding as
of the Record Date was 1,363,043.
<PAGE> 5
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 their ownership. The
following table sets forth the amount and percentage of the Common Stock
beneficially owned by any person or group of persons known to the Company to be
a beneficial owner of more than 5% of the Common Stock as of the Record Date.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address of Beneficial Ownership Common Stock
Beneficial Owner (a) Outstanding
--------------------------- ---------------------- ------------------
<S> <C> <C>
Phil M. Bachman
1330 E. Allen Bridge Road
Greeneville, Tennessee 37743 141,807(b) 10.40%
</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 5,153 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 10.06%.
The following table sets forth, as of the Record Date, certain
information known to the Company as to Common Stock beneficially owned by each
director and executive officer of the Company and by all directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Beneficial Ownership Common Stock
Name and Position (a)(b) Outstanding
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Ralph T. Brown, Chairman of the Board 17,860 1.31%
R. Stan Puckett, President, Chief
Executive Officer and Director 20,100 (c) 1.47
Davis Stroud, Secretary and
Director 4,578 *
Phil M. Bachman, Director 141,807 (d) 10.40
Terry Leonard, Director 10,858 *
James A. Emory, Director 10,018 *
W.T. Daniels, Director 1,500 *
Charles S. Brooks, Director 90 *
J.W. Douthat, Director 5,168 *
Jerald K. Jaynes, Director 1,650 *
H.J. Moser, III, Director 2,100 *
William F. Richmond, Senior Vice
President and Chief Financial Officer 589 (e) *
All directors and executive
officers as a group (12 persons) 216,318 15.79%
(Footnotes on following page)
</TABLE>
2
<PAGE> 6
- --------------
* 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 7,200 shares of Common Stock currently
exercisable by Mr. Puckett at an exercise price equal to 150% of the book
value of the Common Stock at the date of grant (a weighted average price of
approximately $58.60 per share).
(d) Includes 5,153 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 10.06%.
(e) Includes options to acquire 489 shares of Common Stock currently
exercisable by Mr. Richmond at an exercise price equal to the estimated
fair market value of the Common Stock at date of grant (a weighted average
exercise price of approximately $88.62).
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of 11 members,
all of whom are listed in the table below. The Company's Amended and Restated
Charter requires that directors be divided into three classes, as nearly equal
in number as possible, the members of each class to serve for a term of three
years and until their successors are elected and qualified, with one-third of
the directors elected each year. The Board of Directors, acting in its capacity
as a nominating committee, has nominated for election as directors, W.T.
Daniels, R. Stan Puckett, Davis Stroud, H.J. Moser, III and Charles S. Brooks,
each of whom are currently members of the Board, to serve until his respective
successor is elected and qualified. Messrs. Daniels, Stroud, Brooks and Moser
are standing for election to a three-year term, and Mr. Puckett is standing for
election to a two-year term. Under Tennessee law, directors are elected by a
plurality of the votes cast at an election.
It is intended that the persons named in the proxies solicited by the
Board of Directors will vote for the election of each of the nominees. If any
nominee is unable to serve, the shares represented by all properly executed
proxies which have not been revoked will be voted for the election of a
substitute nominee as the Board of Directors may recommend. In the alternative,
the Board of Directors may, at its discretion, reduce its size to eliminate the
vacancy. 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.
The following table sets forth certain information with respect to each
of the Company's current directors whose term of office as a director will or,
assuming re-election, is expected to continue after the Annual Meeting. Each of
the Company's directors also currently serves as a director of Greene County
Bank (the "Bank"), the 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.
3
<PAGE> 7
<TABLE>
<CAPTION>
Current Term
Name Age(a) Director Since (b) to Expire Previous Five-Years Business Experience
---- ------ ------------------ --------- ---------------------------------------
<S> <C> <C> <C> <C>
BOARD NOMINEE FOR TERM TO EXPIRE IN 2002
R. Stan Puckett 43 1989 2000 President and Chief Executive
Officer of the Company and the Bank
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2003
W.T. Daniels 55 1987 2000 Property management
Davis Stroud 66 1989 2000 Secretary of the Company and the Bank
Retired; former Executive Vice
President of the Company and the Bank
Charles S. Brooks 61 1990 2000 Chairman of the Board, McInturff,
Milligan & Brooks (insurance agency)
H.J. Moser, III 52 1999 2000 President, Tennessee Valley
Resources, Inc. (limestone and
sand distributor)
DIRECTORS CONTINUING IN OFFICE
Phil M. Bachman 62 1968 2001 President, Bachman-Bernard Motors
(automobile dealer)
Terry Leonard 61 1975 2001 Owner/Operator, Leonard & Associates
(manufacturing)
Ralph T. Brown 67 1979 2001 Dentist; retired 1996
James A. Emory 66 1983 2001 Retired; former President, J.A.E.
Foods, Inc. (restaurant management)
J.W. Douthat 69 1990 2002 Retired; former President, Tri
State Tractor & Turf (tractor and
farm equipment dealer)
Jerald K. Jaynes 62 1992 2002 Retired; former President & CEO,
Unaka Co. Inc. (manufacturing)
</TABLE>
- --------------
(a) As of December 31, 1999.
(b) Indicates year that director first served as a director of either the
Company or the Bank.
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. The business of the Bank is conducted through its Board of Directors,
which met thirty times in 1999, twelve of which were regular meetings and twelve
of which were specially called meetings, and also held six meetings via
telephone. Each member of the Board of Directors of the Company and of the Bank
attended at least 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 in accordance with
the Company's Amended and Restated Charter. During 1999, the Board of Directors
met once in its capacity as a nominating committee.
The Audit Committee of the Bank also serves as the audit committee for
the Company. The Audit Committee of the Bank consists of Messrs. Leonard, Brown,
Bachman and Jaynes (Chairman). For 2000, Mr. Jaynes will continue to serve as
Chairman of the Audit Committee. This committee meets quarterly to (1) monitor
the accounting and financial reporting
4
<PAGE> 8
practices of the Company, and (2) determine whether the Company has adequate
administrative, operating and internal accounting controls. This committee met
four times during 1999 in its capacity as the audit committee for the Company.
The Bank's Compensation Committee also serves as the compensation
committee for the Company. The Compensation Committee consists of Messrs.
Leonard (Chairman), Brown, Bachman, Brooks, Daniels and Douthat. It meets
periodically to evaluate the compensation and fringe benefits of the directors,
officers and employees of the Bank and the Company and recommend changes to the
respective Boards of Directors. The Compensation Committee met three times
during 1999.
DIRECTORS' COMPENSATION
Directors of the Company are compensated in their capacity as such at
$400 for each quarterly meeting of the Company's Board of Directors. During
1999, the Company's Board of Directors met four times.
Directors of the Company are also directors of the Bank and are
compensated by the Bank in their capacity as directors of the Bank. Directors of
the Bank receive $400 for each regular monthly Board meeting attended, plus
payment of such fee for up to two absences during a year, and $400 for each
specially called meeting attended, which amount was increased from $200
effective January 2000. Each Bank director also receives an annual retainer fee
of $6,000, paid in equal quarterly amounts. Members of the Executive Committee
of the Bank's Board of Directors also receive $435 for each twice-monthly
meeting of the Committee and the two permanent members of the Committee receive
an annual retainer of $1,500. Members of the Bank's Audit Committee received
$200 for each quarterly meeting. Compensation for all other committee meetings
is $200.
In January 1993 the Bank established a deferred compensation plan (the
"Plan") pursuant to which directors may elect to defer receipt of a portion of
their fees by entering into deferred fee agreements with the Bank. The
agreements also provide for payment of benefits under certain events of
disability, early retirement, termination of employment or death. The Bank is
the beneficiary of life insurance acquired with respect to participating
directors for purposes of the Plan.
On February 23, 1999, the Bank revised the terms of the Plan. The
revisions allow the participation of directors that had previously elected not
to defer, increased the maximum limit of fees that may be deferred, and
increased the rate of return on deferred amounts during the period prior to
retirement from the prime rate, adjusted annually, to a fixed rate of ten
percent (10%). The Bank acquired additional life insurance with respect to these
participating directors. The Bank paid $2,156,733 in 1999 as a result of the
Plan's revision in 1999. As of March 2000, all directors were participating in
this Plan.
5
<PAGE> 9
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 each of the other executive officers
of the Company. No other officer of the Bank serves as an executive officer of
the Company.
<TABLE>
<CAPTION>
Annual Compensation
-------------------------------------------
Other Annual
Name and Principal Position Year Salary Bonus(a) Compensation(b)
--------------------------- ---- ------ -------- ---------------
<S> <C> <C> <C> <C>
R. Stan Puckett 1999 $190,000 $69,500 --
President and 1998 176,400 61,500 --
Chief Executive 1997 168,000 43,500 --
Officer of the
Company and
the Bank
Davis Stroud 1999 $160,000 $36,500 --
Executive Vice 1998 140,910 31,500 --
President, 1997 128,000 26,500 --
Secretary of the
Company and
the Bank(f)
William F. Richmond 1999 $88,900 $21,500 --
Senior Vice 1998 85,072 14,000 --
President and Chief 1997 81,600 11,500 --
Financial Officer
of the Company
and the Bank
<CAPTION>
Long-Term Compensation
---------------------------------------------------------
Awards Payouts
------------------------------------------- ------------
Restricted Securities Underlying
Name and Principal Position Stock Award(s) Options/SARs(#) LTIP Payouts All Other Compensation (c)
--------------------------- -------------- ------------------ ------------ --------------------------
<S> <C> <C> <C> <C>
R. Stan Puckett -- 1,800(d) -- $38,550
President and -- 1,800(d) -- 37,050
Chief Executive -- 1,800(d) -- 35,650
Officer of the
Company and
the Bank
Davis Stroud -- 840(e) -- $38,450
Executive Vice -- 715(e) -- 34,400
President, -- 611(e) -- 33,264
Secretary of the
Company and
the Bank(f)
William F. Richmond -- 490(e) -- $13,335
Senior Vice -- 441(e) -- 12,760
President and Chief -- 396(e) -- 6,120
Financial Officer
of the Company
and the Bank
</TABLE>
(a) Bonus amounts reflect amounts earned during the stated fiscal year, even if
paid in the subsequent fiscal year. All amounts have been restated to
reflect this presentation.
(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 1999, 1998 and 1997 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 retirement plans for the
benefit of each named officer and payments of directors' fees to Messrs.
Puckett and Stroud. Directors' fees paid to Messrs. Puckett and Stroud
were, respectively, $14,550 and $14,450 for 1999, $13,050 and $13,050 for
1998 and $11,650 and $11,450 for 1997. Contributions to retirement plans
made by the Company on behalf of Messrs. Puckett, Stroud and Richmond for
the years 1999, 1998 and 1997 are as follows: $24,000 each year for Mr.
Puckett; $24,000, $21,137 and $19,215, respectively, for Mr. Stroud; and
$13,335, $12,760 and $6,120, respectively, for Mr. Richmond. A portion of
such directors' fees is deferred pursuant to agreements entered into
individually with an insurance company. In addition, includes $0, $213 and
$2,599 paid to Mr. Stroud in 1999, 1998 and 1997, respectively, as
commissions on insurance policy sales.
(d) Mr. Puckett is granted options each year to purchase 1,800 shares of Common
Stock with an exercise price equal to 150% of the Common Stock's book value
at the time of grant and with a term of 10 years. Such options are granted
pursuant to a 1989 stock option plan adopted by the Company and as to which
Mr. Puckett is the sole participant.
(e) Granted pursuant to the Company's 1995 Stock Option Plan as to which
options are granted with an exercise price equal to fair market value at
date of grant and are exercisable for ten years from date of grant.
(f) Mr. Stroud retired from the Company and the Bank as of January 3, 2000.
6
<PAGE> 10
OPTION GRANTS IN FISCAL YEAR 1999. The following table contains information
concerning the grant of stock options to Mr. Puckett under a 1989 stock option
plan and to Mr. Stroud and Mr. Richmond under the 1995 Stock Option Plan.
Neither plan provides for the grant of stock appreciation rights.
<TABLE>
<CAPTION>
Number of
Securities Percent of Total
Underlying Options Granted to
Options Granted Employees in Fiscal Exercise Price Grant Date
Name Number of Shares Year ($ per share) Expiration Date Present Value
---- ---------------- ---- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
R. Stan Puckett 1,800(a) 18.85% 67.05 12/09 $ 155,124(b)
Davis Stroud 840 8.80% 150.00 12/09 $ 29,644(b)
William F. Richmond 490 5.13% 150.00 12/09 $ 17,292(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 $150.00; (ii) the continuously compounded risk-free rate of
return expressed on an annual basis was 6.45%; (iii) the risk of the
underlying Common Stock, measured by the standard deviation of the
continuously compounded annual rate of return of the Common Stock, was
10.07%; and (iv) dividends on the underlying Common Stock increased at an
annual rate of 15%. These assumptions are used for illustrative purposes
only. No assurance can be given that actual experience will correspond to
the assumptions utilized.
AGGREGATED OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES. The
following table sets forth information concerning the value of options held by
the named executive officers at the end of the fiscal year.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year End In-the-Money Options at
Shares Acquired Value Exercisable/Unexercisable Fiscal Year End (a)
Name on Exercise (#) Realized ($) (Number of Shares) Exercisable/Unexercisable
---- --------------- ------------ ------------------ -------------------------
<S> <C> <C> <C> <C>
R. Stan Puckett -- -- 7,200 / -- $658,080 / $ --
Davis Stroud 1,059 105,179 1,248 / 2,148 $90,365 / $68,698
William F. Richmond -- -- 489 / 1,243 $30,014 / $36,944
</TABLE>
(a) Represents the difference between fair market value of underlying Common
Stock at 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.
RETIREMENT PLANS. The Company maintains a contributory Profit Sharing Plan
("PSP") and a non-contributory Money Purchase Plan ("MPP") covering certain
employees with more than one year of service.
Employees participating in the PSP may contribute up to 10% of their
monthly salary, with the Company contributing 3% of participating employees'
salary (not to exceed 10% of profit before taxes). Employees of the Bank, but
not its subsidiaries, participate in the MPP, in which the Company contributes
12% to fund the MPP. The 3% Company contribution to the PSP vests immediately,
while the 12% Company contribution to the MPP vests after two years of
employment.
Contributions in the amount of $24,000, $24,000 and $13,335 were made for
the accounts of Messrs. Puckett, Stroud and Richmond, respectively, under both
retirement plans in 1999. Mr. Puckett, Mr. Stroud and Mr. Richmond are fully
vested under the Plan.
7
<PAGE> 11
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, 1999, would have
been approximately $737,000. This provision may have an anti-takeover effect by
making it more expensive for a potential acquiror to obtain control of the
Company.
The Bank contracted with Mr. Stroud, Executive Vice President of the Bank,
to provide for his employment by the Bank at least until reaching the age of 65.
Pursuant to such agreement, Mr. Stroud agreed not to compete with the Bank after
leaving the employment of the Bank. In consideration of this agreement, the Bank
has agreed to pay Mr. Stroud the sum of $16,600 per year for 10 years after his
retirement. Mr. Stroud retired on January 3, 2000. In the event Mr. Stroud dies
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. The Bank maintains a life insurance policy on Mr. Stroud's life
as to which the Bank is the beneficiary to pay or reimburse the Bank for these
benefits.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executives generally are made by
a six-member Compensation Committee of the Board of Directors of the Bank. 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 1999 to executive officers consisted of base
salary, bonus, stock options and contributions paid with respect to the
Company's retirement plans. 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. For 1999, based
on the factors discussed above and a review by the Committee, Mr. Puckett, Mr.
Stroud and Mr. Richmond received a 7.7%, 15.5% and 4.5% increase in base pay,
respectively. Payments to the Company's retirement plans are made to certain
employees on a non-discriminatory basis.
Messrs. Puckett and Stroud receive bonus awards based upon increases in the
per-share price of the Common Stock, return on average equity of the Bank and
overall performance reviews. Mr. Richmond receives a bonus award based upon the
discretion of the President and Chief Executive Officer of the Company. The
bonus awarded to Messrs. Puckett, Stroud and Richmond in 1999 totaled 36.6%,
22.8% and 24.2%, respectively, of their base salaries for 1999.
The Committee believes that Mr. Puckett's total compensation for 1999
appropriately reflected his contribution to the Company's financial results. The
Committee believes that the Company's overall performance was indicative of a
well-managed company during a challenging business climate.
8
<PAGE> 12
COMPENSATION COMMITTEE
Terry Leonard (Chairman) Philip M. Bachman, Jr.
Ralph Brown Charles Brooks
J.W. Douthat W.T. Daniels
April 3, 2000
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Leonard, Brown, Bachman,
Brooks, Daniels and Douthat.
Except for Directors Bachman and Brooks, no member of the Compensation
Committee of the Board of Directors of the Company was (a) either (i) an officer
or employee of the Company or any of its subsidiaries during the fiscal year
ended December 31, 1999, (ii) a former officer of the Company or any of its
subsidiaries, or (iii) 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 that (b) engaged in
transactions with the Company or any subsidiary involving more than $60,000
during the fiscal year ended December 31, 1999, 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 1999, premiums
totaling $142,855 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. The Company paid Bachman-Bernard Motors $152,201
during 1999, which was for six vehicles. Management believes the price paid was
fair and reasonable and does not exceed amounts that would have otherwise been
paid in an arm's-length transaction to a third party. The Company also paid
premiums during 1999 of $97,962 to Greeneville Insurance Agency, as to which Mr.
Bachman is part owner.
9
<PAGE> 13
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, 1994 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, 1994 in the Common Stock and also 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 INDICES
AT DECEMBER 31, 1994 THROUGH 1999
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
-------------------------------------------------------------------------------------------
Index 1994 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Greene County
Bancshares, Inc. 100 123.18 150.91 215.39 252.79 335.91
Standard & Poor's Bank
Composite Index 100 153.72 211.07 297.74 310.33 262.94
Standard & Poor's Major
Regional Bank Index 100 151.66 200.81 294.70 318.72 266.88
</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.
10
<PAGE> 14
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 and with
respect to the year ended December 31, 1999, all such filing requirements were
complied with, except that Messrs. Puckett, Stroud and Richmond each
inadvertently filed one report late, which reports showed the receipt of grants
of stock options in 1999.
INDEPENDENT AUDITORS
The Board of Directors has appointed the public accounting firm of
PricewaterhouseCoopers to continue as independent auditors for the Company for
the fiscal year ending December 31, 2000. PricewaterhouseCoopers served as the
Company's independent auditors for the year ended December 31, 1999. A
representative of PricewaterhouseCoopers 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
Stockholder proposals for inclusion in the Company's proxy statement and
form of proxy statement relating to the Company's 2001 Annual Meeting of
Shareholders must be received by December 5, 2000. If the Company is not
notified of a stockholder proposal by March 15, 2001, then the Company may have
the discretion to vote the proxies against such stockholder proposal, even
though such proposal is not discussed in the proxy statement. Stockholder
proposals should be addressed to Secretary, Greene County Bancshares, Inc., 100
North Main Street, Greeneville, Tennessee 37743. Nothing in this paragraph shall
be deemed to require the Company to include in its proxy statement and form of
proxy relating to the Company's 2001 Annual Meeting of Shareholders any
stockholder proposal that does not satisfy the requirements for inclusion as
established by the Securities and Exchange Commission at the time of receipt.
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 are properly brought before the
Annual Meeting, it is intended that 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.
11
<PAGE> 15
The Company's 1999 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 3, 2000
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, 1999 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 OR BY CALLING (423) 639-5111.
12
<PAGE> 16
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37743
REVOCABLE PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS
APRIL 24, 2000
The undersigned hereby constitutes and appoints Stan Puckett and William F.
Richmond, 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 Monday, April 24, 2000 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 AND TO THE EXTENT THIS PROXY CONFERS DISCRETIONARY AUTHORITY.
<TABLE>
<S> <C> <C>
1. The Election of Directors: W.T. Daniels, R. Stan Puckett,
Davis Stroud, Charles S. Brooks and H.J. Moser, III.
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to
(except as marked to the contrary below). vote for all nominees listed above.
</TABLE>
(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,
1999, 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,
<PAGE> 17
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.
