<PAGE>
March 29, 1996
Dear Shareholders:
On behalf of the Board of Directors, you are cordially invited to attend
the Annual Meeting of Shareholders of First Cherokee Bancshares, Inc. (the
"Company"), the bank holding company for First National Bank of Cherokee,
Woodstock, Georgia.
The meeting will be held at the Woodstock Library, 510 North Main Street,
Woodstock, Georgia, on Wednesday, April 17, 1996, at 4:00 p.m. I look forward,
as do the other members of the Board of Directors and our management team, to
the opportunity of personally greeting those shareholders in attendance.
Information about the meeting is provided in the enclosed Notice of Annual
Meeting of Shareholders and Proxy Statement. Also included is the Company's
1995 Annual Report.
Your interest and participation, regardless of the number of shares you
own, are important to the continued success of the Company and First National
Bank of Cherokee. Therefore, please mark, sign and date the enclosed Proxy and
return it to the Company in the postage-paid envelope provided so that your
shares can be voted, whether or not you plan to attend the meeting in person.
Your continued interest and support of the Company and First National Bank
of Cherokee are appreciated.
Sincerely,
Carl C. Hames, Jr.
President and Chief Executive Officer
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
A BANK HOLDING COMPANY FOR
First National Bank of Cherokee
6395 E. Alabama Road
Woodstock, Georgia 30188
(770) 591-9000
___________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 17, 1996
___________________________
To: The Shareholders of First Cherokee Bancshares, Inc.:
The Annual Meeting of Shareholders (the "Annual Meeting") of First Cherokee
Bancshares, Inc. (the "Company") will be held at the Woodstock Library, 510
North Main Street, Woodstock, Georgia, on Wednesday, April 17, 1996, at 4:00
p.m., for the purpose of acting upon the following matters:
1. To elect 12 members to the Board of Directors to serve a one-year term
expiring in 1997; and
2. To consider such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The Board of Directors has set March 7, 1996, as the record date for the
Annual Meeting. Only shareholders of record at the close of business on the
record date are entitled to notice of and to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL AS MORE
PARTICULARLY DESCRIBED IN THE ATTACHED PROXY STATEMENT.
YOUR PROXY IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY TO THE COMPANY IN THE ACCOMPANYING,
POSTAGE-PAID ENVELOPE.
By Order of the Board of Directors
Carl C. Hames, Jr.
President and Chief Executive Officer
March 29, 1996
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
A BANK HOLDING COMPANY FOR
First National Bank of Cherokee
___________________________
PROXY STATEMENT
Annual Meeting of Shareholders
To Be Held April 17, 1996
___________________________
PROXY SOLICITATION AND VOTING
This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of proxies from the shareholders of First Cherokee
Bancshares, Inc. (the "Company") for use at the Annual Meeting of Shareholders
to be held April 17, 1996 (the "Annual Meeting"). This Proxy Statement and the
enclosed form of proxy (the "Proxy") are being mailed to the Company's
shareholders on or about March 29, 1996.
The Board of Directors has set March 7, 1996, as the record date for the
Annual Meeting. Only shareholders of record at the close of business on the
record date are entitled to notice of and to vote at the Annual Meeting. As of
the record date, there were 551,804 shares (the "Shares") of common stock of the
Company issued and outstanding. The number of shares has been adjusted to
reflect a 10% stock split declared on January 17, 1996, and payable on April 1,
1996, effected in the form of a dividend. A quorum for the Annual Meeting
consists of the holders of the majority of the Shares present in person or
represented by Proxy. Each Share is entitled to one vote on each matter to come
before the Annual Meeting.
Directors are elected by a plurality of the Shares present in person or by
Proxy and entitled to vote. Only those votes actually cast will be counted for
the purpose of determining whether a particular nominee received sufficient
votes to be elected. Accordingly, any abstentions and broker non-votes will not
be included in vote totals and will not be considered in determining the outcome
of the vote.
Approval of any other matter that may properly come before the Annual
Meeting requires the affirmative vote of a majority of the Shares present in
person or by Proxy and entitled to vote on such matter. Abstentions will be
counted in determining the minimum number of votes required for approval and,
therefore, have the effect of negative votes. Broker non-votes will not be
counted as votes for or against approval of any other matter properly brought
before the Annual Meeting.
The Proxy is solicited for use at the Annual Meeting if a shareholder is
unable to attend the Annual Meeting in person or wishes to have his Shares voted
by proxy, even if he or she attends the Annual Meeting. Any Proxy may be
revoked by the person giving it at any time before its exercise, by notice to
the Secretary of the Company, by submitting a Proxy having a later date, or by
such person appearing at the Annual Meeting and electing to vote in person. All
Shares represented by valid Proxies received pursuant to this solicitation and
not revoked before their exercise will be voted in the manner specified therein.
If a Proxy is signed and no specification is made, the Shares
<PAGE>
represented by the Proxy will be voted in favor of the Proposal described below
and in accordance with the best judgment of the persons exercising the Proxy
with respect to any other matters properly presented for action at the Annual
Meeting.
In addition to this solicitation by mail, the officers and employees of the
Company and the Bank, without additional compensation, may solicit Proxies in
favor of the Proposal, if deemed necessary, by personal contact, letter,
telephone or other means of communication. Brokers, nominees and other
custodians and fiduciaries will be requested to forward Proxy solicitation
material to the beneficial owners of the Shares, where appropriate, and the
Company will reimburse them for their reasonable expenses incurred in connection
with such transmittals. The Company will bear costs of solicitation of Proxies
for the Annual Meeting.
The Company is a bank holding company organized in 1988 under the laws of
the State of Georgia. The Company's subsidiary, First National Bank of Cherokee
(the "Bank"), commenced commercial banking operations on November 27, 1989 in
Woodstock, Georgia.
ELECTION OF DIRECTORS
NOMINEES
The members of the Board of Directors of the Company are elected by the
shareholders. The Board of Directors of the Company presently consists of 12
members, each of whom has served since 1988 and each of whom also serves as a
director of the Bank. The members of the Board of Directors of the Bank are
elected annually by the Company, acting as sole shareholder of the Bank.
The Board of Directors has nominated the 12 incumbent directors listed
below for re-election as directors of the Company to serve one-year terms which
will expire at the 1997 Annual Meeting of Shareholders or when their successors
are elected and qualified. It is intended that each Proxy solicited on behalf
of the Board of Directors will be voted only for the election of the nominees
designated below. At this time, the Board of Directors knows of no reason why a
nominee might be unable to serve, but if that should occur before the Annual
Meeting, it is intended that the Proxies will be voted for the election of such
other person or persons as the Board of Directors may recommend.
The following table sets forth the name, age at December 31, 1995, and
principal occupation for the last five years of each of the 12 nominees.
<TABLE>
<CAPTION>
Name Age Principal Occupation
- ---- --- --------------------
<S> <C> <C>
Alan D. Bobo 44 Mr. Alan Bobo is the owner of Bobo
Plumbing Company, Woodstock, Georgia.
Elwin K. Bobo 48 Mr. Elwin Bobo is the owner of Bobo
Construction Company, Woodstock,
Georgia.
-2-
<PAGE>
Name Age Principal Occupation
- ---- --- --------------------
<S> <C> <C>
Michael A. Edwards 37 Mr. Michael Edwards is Vice President
of Edwards Tire Sales, Inc.
J. Stanley Fitts 52 Mr. Stanley Fitts is the owner and
President of Reeves Floral Products,
Inc., Woodstock, Georgia.
Russell L. Flynn 63 Mr. Russell Flynn has been a sales
associate at Cherokee Realty since
1988 and served as a Cherokee County
Commissioner through 1992. Mr. Flynn
is the past owner and President of
Mar-Lyn Printing, Inc.
Carl C. Hames, Jr. 47 Mr. Carl Hames is President and Chief
Executive Officer of the Company and
the Bank. He was employed from 1976
until 1987 by Cherokee Federal
Savings, where he attained the
position of Senior Vice President and
was President of its subsidiary,
Cherokee Financial Services
Corporation. From November 1987 until
June of 1988, Mr. Hames was the
President, Chief Executive Officer,
and a member of the Board of Directors
of First Federal Savings Bank,
Ashburn, Georgia. Mr. Hames was an
owner of South Main Properties and co-
owner of South Main Systems, Watkins
Marble, and Hydrotec, Inc., in
Woodstock, Georgia, until becoming
President and Chief Executive Officer
of the Company in 1990 and President
and Chief Executive Officer of the
Bank in January of 1991.
C. Garry Haygood 45 Mr. Garry Haygood is the Executive
Vice President of Haygood Hauling and
Grading, Woodstock, Georgia.
Thomas D. Hopkins, Jr. 61 Mr. Thomas Hopkins is President of
Hopkins and Son, Inc. He also is a
Georgia Real Estate Broker and owner
of Tom Hopkins Realty in Woodstock.
Bobby R. Hubbard 52 Mr. Bobby Hubbard is a Flight
Equipment Instructor for Lockheed
Aeronautical Systems in Marietta,
Georgia.
-3-
<PAGE>
Name Age Principal Occupation
- ---- --- --------------------
<S> <C> <C>
Dennis M. Lord 54 Mr. Dennis Lord serves as Secretary of
Bay, Lingerfelt and Lord, Inc., a
grading contracting company in
Atlanta, Georgia.
Larry R. Lusk 46 Mr. Larry Lusk was the owner and
President of Lusk Construction, Inc.,
a commercial construction company in
Canton, Georgia from 1977 to 1995. He
now is a commercial/industrial
developer and serves part-time as
Sales Engineer for Lusk Construction,
Inc.
Dr. Stuart R. Tasman 43 Dr. Stuart Tasman is an optometrist in
private practice in Cherokee County,
Georgia.
</TABLE>
There are no arrangements or understandings between the Company and any
person pursuant to which any of the above persons have been or will be elected a
director. No director is a director of another bank or bank holding company.
Alan D. Bobo and Elwin K. Bobo are brothers.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
ELECTION AS DIRECTORS OF THE 12 NOMINEES NAMED ABOVE.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held six meetings during 1995. Each
of the meetings was attended by at least 75% of the directors of the Company.
The Board of Directors of the Company does not have standing committees.
EXECUTIVE OFFICERS
The following table sets forth the name, age at December 31, 1995, and
principal occupation for the last five years of each of the executive officers
of the Company.
<TABLE>
<CAPTION>
Name Principal Occupation
- ---- --------------------
<S> <C>
Carl C. Hames, Jr. Mr. Hames, age 47, has been President and
Chief Executive Officer of the Company
since 1990. Prior thereto, he was
employed from 1976 until 1987 by Cherokee
Federal Savings, where he attained the
position of Senior Vice President and was
President of its subsidiary, Cherokee
Financial Services Corporation. From
November 1987 until June of 1988, Mr.
Hames was the President, Chief Executive
Officer, and a member of the Board of
Directors of First Federal
-4-
<PAGE>
Name Principal Occupation
- ---- --------------------
<S> <C>
Savings Bank, Ashburn, Georgia. Mr. Hames
was owner of South Main Properties and co-
owner of South Main Systems, Watkins
Marble, and Hydrotec, Inc., in Woodstock,
Georgia, until becoming President and
Chief Executive Officer of the Company in
1990 and President and Chief Executive
Officer of the Bank in January of 1991.
Kitty A. Kendrick Ms. Kendrick, age 37, joined the Bank in
February 1993 as a Senior Vice President
and became the Company's Chief Financial
Officer effective April 1, 1993. Prior to
joining the Bank, she was a Senior Vice
President and Chief Financial Officer of
Cobb Federal Savings Bank from February
1983 to February 1993.
</TABLE>
DIRECTOR AND EXECUTIVE COMPENSATION
DIRECTOR COMPENSATION
The Company does not compensate its directors for their services as members
of the Board of Directors of the Company. Effective October 1, 1993, the Bank
began compensating its directors for their services as directors and as members
of committees of the Bank. Directors currently receive $300 per board meeting
attended and between $45 and $75 per committee meeting attended, depending on
the type of committee which is meeting. Director Hames does not receive fees
for board and committee meetings which are held during the normal business hours
of the Bank. Payment of these fees is made monthly, depending on the financial
performance of the Bank.
The Bank has implemented a director retirement benefit deferred compensation
plan with an endorsement split-dollar life insurance plan for the benefit of all
members of the Board of Directors of the Bank.
The retirement benefit and deferred compensation plan is called the Indexed
Director Fee Continuation Plan and is designed to provide an annual retirement
benefit, to be paid to each director upon retirement from the board. This plan
provides retirement benefits in two ways, with an indexed formula and with fee
deferrals.
This Indexed Plan is also designed to provide these benefits with the least risk
to the Bank's safety and soundness and at the least possible cost. The amount
of a portion of the benefits is determined by an indexed formula. The index
used in this plan to calculate the amount of the retirement benefit is the
earnings on a specific life insurance policy. The Bank "keeps" the opportunity
costs on the premiums paid. Any earnings in excess of the opportunity costs are
accrued to a liability reserve account for the benefit of the director. At
retirement, this liability reserve account is paid out over
-5-
<PAGE>
a specified period of years. In addition, the annual earnings in excess of the
opportunity costs are paid out annually after retirement. These payments will
continue for the life of the director.
The deferred compensation part of the plan is optional. Each director may elect
to defer a portion or all of his current directors' fees for the next ten years.
The Bank will establish a liability reserve account for each director that
elects to defer income and credit that account in an amount equal to those
deferrals. In addition, that liability account will be credited with interest
at a rate that is indexed to current market conditions.
The amount of the deferred compensation part of the retirement benefit is a
function of the percentage of directors' fees that is deferred by each director
and the floating rate of interest applied to those deferrals until retirement.
The Bank's obligations under the retirement benefit portion of this plan are
unfunded; however, the Bank has purchased life insurance policies on each
insurable director which are actuarially designed to offset the annual expenses
associated with the plan and will, given reasonable actuarial assumptions,
offset all of the plan's costs during the life of each director and provide a
complete recovery of all plan costs at each director's death. The Bank is the
sole owner of all policies.
The life insurance benefit for each insurable director is being provided by an
Endorsement Split Dollar Plan whereby the Bank endorses eighty percent (80%) of
the net-at-risk life insurance portion of a policy on the life of each insurable
director for payment to the designated beneficiary of that director. The policy
and its entire surrender value, as well as the remainder of the net-at-risk life
insurance is owned by the Bank.
EXECUTIVE COMPENSATION
The compensation described below is paid for all services rendered to the
Company and the Bank. The Company does not separately compensate its executive
officers for services rendered for the benefit of the Company.
Mr. Hames also receives retirement benefits under the same plan as
described above for his services rendered as an Executive Officer of the Bank in
addition to those he receives as a director of the Bank.
The following Summary Compensation Table presents the total compensation
paid during 1995 and 1994 to Mr. Hames.
-6-
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
---------------------------------------------- ----------------------------------------
Other Restricted All
Annual Stock Options/ LTIP Other
Salary Bonus Compensation Awards SARs Payouts Compensation
Name and Position Year ($) ($) ($) ($) (#) ($) ($)
- ----------------- ---- ------- ------- -------------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carl C. Hames 1995 $90,625 $50,000 $3,641(1) 0 0 0 $6,000(2)
Chief Executive Officer
1994 $75,000 $37,500 0 0 0 0 $6,000(2)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of the Company's matching of Mr. Hames' contribution to the bank's
401K plan.
(2) Consists of an automobile allowance of $6,000 per year.
During fiscal 1995, Mr. Hames was not granted any options, and the Company
had no outstanding stock appreciation rights and granted no stock appreciation
rights.
Mr. Hames exercised no options to purchase shares of Common Stock during
1995. The following table presents information regarding the number of
unexercised options held by him at December 31, 1995, adjusted for the 10% stock
split declared January 17, 1996, and payable April 1, 1996.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
OPTIONS HELD AT 12/31/95
------------------------
NAME EXERCISABLE/UNEXERCISABLE
---- -------------------------
<S> <C> <C>
Carl C. Hames, Jr. 3,300 0
</TABLE>
During 1995, the Company and the Bank renewed Mr. Hames' contract agreeing
that Mr. Hames will continue to serve as President and Chief Executive Officer,
and as a director of the Company and the Bank until May 11, 2000, unless sooner
terminated for cause or by reason of death or disability. The agreement
provides for Mr. Hames to receive (a) a base salary (currently $100,000) to be
adjusted annually by not more than 8% based upon the change in the consumer
price index for the metropolitan Atlanta area, (b) an annual performance bonus
as may be determined by the Bank's Board of Directors, (c) an automobile
allowance, (d) term life insurance providing benefits in an amount of at least
two times annual salary, group health and hospital insurance, and long term
disability insurance benefits with benefits equal to 60% of annual salary,
(e) reimbursement for business-related expenses and country club dues, (f) the
establishment of a pension plan, and (g) options to acquire 3,300 shares of the
Company's common stock.
-7-
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the Shares
owned, as of March 7, 1996, (a) by each person who beneficially owns more than
5% of the Shares, (b) by each of the Company's directors and executive officers,
and (c) by all of the Company's directors and executive officers as a group.
The table incorporates the effect of a 10% stock split effected in the form of a
dividend declared by the Company on January 17, 1996, and payable April 1, 1996.
<TABLE>
<CAPTION>
Number of Adjusted
Number Percent Shares Subject Percent
Name of of of to Warrants of
Beneficial Owner(1) Shares(2) Class and Options(3) Class(4)
------------------- --------- ------- -------------- --------
DIRECTORS
- ---------
<S> <C> <C> <C> <C>
Alan D. Bobo 15,965(5) 2.9 9,900 4.6
Elwin K. Bobo 18,555(6) 3.4 14,850 5.9
Michael A. Edwards 8,360(7) 1.5 8,250 3.0
J. Stanley Fitts 22,902(8) 4.2 19,250 7.4
Russell L. Flynn 9,900(9) 1.8 11,000 3.7
Carl C. Hames, Jr. 21,172(10) 3.8 30,800(11) 8.9
Morgan Harvill, Jr. 2,011(12) 0.04 27,500 5.1
C. Garry Haygood 28,428(13) 5.2 13,750 7.5
Thomas D. Hopkins, Jr. 15,434(14) 2.8 11,000 4.7
Bobby R. Hubbard 11,268(15) 2.0 9,900 3.8
Dennis M. Lord 31,240(16) 5.7 16,500 8.4
Larry R. Lusk 17,901(17) 3.2 8,800 4.8
Dr. Stuart R. Tasman 11,876(18) 2.2 8,800 3.7
OFFICERS
- --------
Kitty A. Kendrick 132(19) 0.02 2,200(20) 0.4
All directors and 213,133 38.6 165,000 52.8
executive officers
as a group
(14 persons)(21)
____________________________
</TABLE>
(1) Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to all shares shown as
beneficially owned by them. The information shown above is based upon
information furnished to the Company by the named persons. Information
relating to beneficial ownership of the Shares is based upon "beneficial
ownership" concepts set forth in rules promulgated under the Securities Act
of 1934, as amended. Under such rules a person is deemed to be a
"beneficial owner" of a security if that person has or shares "voting
power," which includes the power to dispose or to direct the disposition of
such security. A person is also deemed to be a beneficial owner of any
security of which that person has the right to acquire beneficial ownership
within sixty (60) days. Under the rules, more than one person may be
deemed to be a beneficial owner of the same securities.
-8-
<PAGE>
(2) Excludes shares deemed to be beneficially owned through the right to
exercise warrants or options within 60 days of the record date.
(3) In recognition of the efforts and financial risks undertaken by the
directors in organizing the Company and the Bank, the directors were
granted warrants to purchase one share of common stock for each share
purchased in the Company's initial public offering. The exercise price of
the warrants is $10.00 per share, and the warrants may be exercised at any
time within 10 years of the date that the Bank commenced business as a
national bank (i.e., November 27, 1989).
(4) Adjusted to reflect shares beneficially owned and shares deemed to be
beneficially owned through the right to exercise warrants or stock options
within 60 days of the record date.
(5) Consists of (a) 11,407 shares owned directly by Mr. Bobo; (b) 660 shares
owned by Mr. Bobo's children, as to which Mr. Bobo disclaims beneficial
ownership; (c) 2,857 shares owned by Mr. Bobo's wife, as to which Mr. Bobo
disclaims beneficial ownership; and (d) 1,041 shares held in an IRA for the
benefit of Mr. Bobo's wife, as to which Mr. Bobo disclaims beneficial
ownership. Mr. Bobo's address is P.O. Box 1092, Woodstock, Georgia.
(6) Consists of (a) 17,182 shares owned directly by Mr. Bobo; and (b) 1,373
shares held in an IRA for Mr. Bobo's benefit. Mr. Bobo's address is P.O.
Box 1092, Woodstock, Georgia.
(7) Consists of (a) 8,250 shares owned directly by Mr. Edwards; and (b) 110
shares held by Mr. Edwards' daughter, as to which Mr. Edwards disclaims
beneficial ownership. Mr. Edwards' address is 7767 Turner Road, Woodstock,
Georgia.
(8) Consists of (a) 13,530 shares owned directly by Mr. Fitts; (b) 7,150 shares
held by Reeves Greenhouse, Inc. Profit Sharing Plan; and (c) 2,222 shares
held by Reeves Greenhouse, Inc. Mr. Fitts' address is 5669 E. Alabama Road,
Woodstock, Georgia.
(9) As to the indicated shares, Mr. Flynn shares voting power with his wife.
Mr. Flynn's address is 28 Lake Arrowhead Station # 2024, Waleska, Georgia.
(10) Consists of (a) 10,065 shares owned directly by Mr. Hames; (b) 2,585 shares
held in an IRA for Mr. Hames benefit; (c) 7,092 shares held by Mr. Hames'
wife, as to which Mr. Hames disclaims beneficial ownership; (d) l,265
shares held in an IRA for the benefit of Mr. Hames' wife, as to which Mr.
Hames disclaims beneficial ownership; and (e) 165 shares held by Mr. Hames'
son, as to which Mr. Hames disclaims beneficial ownership. Mr. Hames'
address is 2461 South Cherokee Lane, Woodstock, Georgia.
(11) Includes 27,500 shares subject to warrants and 3,300 shares subject to
options granted pursuant to the Company's Stock Option Plan.
(12) Consists of (a) 110 shares owned directly by Mr. Harvill; (b) 1,037 shares
held in a Keogh plan for the benefit of Mr. Harvill; (c) 609 shares held in
an IRA for the benefit of Mr. Harvill; and (d) 255 shares owned by Mr.
Harvill's wife, as to which he disclaims beneficial ownership. Mr.
Harvill's address is P. O. Box 1059, Woodstock, Georgia.
-9-
<PAGE>
(13) Consists of (a) 26,355 shares owned directly by Mr. Haygood; (b) 1,021
shares held in an IRA for the benefit of Mr. Haygood; (c) 550 shares held
by Mr. Haygood's wife as custodian for his daughters, as to which Mr.
Haygood disclaims beneficial ownership; and (d) 502 shares held in an IRA
for the benefit of Mr. Haygood's wife, as to which Mr. Haygood disclaims
beneficial ownership. Mr. Haygood's address is 1472 Johnson Brady Road,
Canton, Georgia.
(14) Consists of (a) 12,451 shares owned directly by Mr. Hopkins; (b) 2,701
shares held by Mr. Hopkins' wife, as to which Mr. Hopkins disclaims
beneficial ownership; and (c) 282 shares held in an IRA for Mr. Hopkins'
benefit. Mr. Hopkins' address is 2611 Beckwith Trail, Marietta, Georgia.
(15) Consists of (a) 9,900 shares owned directly by Mr. Hubbard; (b) 519 shares
held in an IRA for Mr. Hubbard's benefit; (c) 519 shares held in an IRA for
the benefit of Mr. Hubbard's wife, as to which Mr. Hubbard disclaims
beneficial ownership; and (d) 330 shares held by Mr. Hubbard's daughter, as
to which Mr. Hubbard disclaims beneficial ownership. Mr. Hubbard's address
is 803 Upland Estates Drive, Woodstock, Georgia.
(16) Consists of (a) 16,500 shares owned directly by Mr. Lord; (b) 11,000 shares
held by Bay Lingerfelt and Lord Inc. Profit Sharing Plan, as to which Mr.
Lord shares voting power; (c) 880 shares held in an IRA for Mr. Lord's
benefit; and (d) 2,860 shares owned jointly by Mr. Lord and his wife.
Mr. Lord's address is 3155 Trickum Road, Woodstock, Georgia.
(17) Consists of (a) 8,800 shares owned directly by Mr. Lusk; (b) 7,146 shares
held by his children, as to which Mr. Lusk disclaims beneficial ownership;
(c) 1,189 shares held in an IRA for Mr. Lusk's benefit; and (d) 766 shares
held by Mr. Lusk's wife, as to which Mr. Lusk disclaims beneficial
ownership. Mr. Lusk's address is Route 10, Gaddis Road, Canton, Georgia.
(18) Consists of (a) 7,943 shares owned directly by Dr. Tasman; (b) 1,100 shares
held by Dr. Tasman's daughters, as to which Dr. Tasman disclaims beneficial
ownership; (c) 1,379 shares held in an IRA for Dr. Tasman's benefit; and
(d) 1,454 shares held in a SEP IRA for Dr. Tasman's benefit. Dr. Tasman's
address is 1147 Alabama Road, Acworth, Georgia.
(19) As to the indicated shares, Ms. Kendrick shares voting power with her
husband. Ms. Kendrick's address is 187 Knollwood Drive, Marietta, Georgia.
(20) Consists of 2,200 shares subject to options granted pursuant to the
Company's Key Employee Stock Option Plan.
(21) Morgan Harvill, Jr., is neither a director nor an executive officer of the
Company. Accordingly, his Shares and Shares Subject to Warrants and
Options are not included in these totals.
-10-
<PAGE>
SECTION 16 REPORTS
Section 16 of the Securities Exchange Act of 1934 requires the Company's
officers, directors, and greater than 10% shareholders ("Reporting Persons") to
file certain reports ("Section 16 Reports") with respect to beneficial ownership
of the Company's equity securities. Based on its review of the Section 16
Reports furnished to the Company by its Reporting Persons and, where applicable,
any written representation by any Reporting Person that no Form 5 was required,
all Section 16 filing requirements applicable to the Company's Reporting Persons
during and with respect to 1995 have been complied with on a timely basis.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain of the executive officers and directors of the Company and the
Bank, and principal shareholders of the Company and affiliates of such persons
have, from time to time, engaged in banking and other business transactions with
the Bank and are expected to continue such relationships in the future. All
loans or other extensions of credit made by the Bank to such individuals were
made in the ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with unaffiliated third parties and are believed by
management not to involve more than the normal risk of collectibility or present
other unfavorable features. As of December 31, 1995, loans to directors of the
Company and the Bank, and principal shareholders of the Company and affiliates
of such persons, aggregated to approximately $1,423,000.
The Company leases the land upon which the Bank building is located from J.
Stanley Fitts, chairman of the Board of Directors. The initial term of the
ground lease is 20 years, with four separate renewal options to extend the term
of the lease for additional five-year periods. The Company has the option to
purchase the property during the tenth year of the lease term or at each five
year interval thereafter through the end of the lease. Under the terms of the
ground lease the Company also pays property taxes, insurance and maintenance.
During the fiscal year ended December 31, 1995, the Company paid $55,123 in
rentals under the ground lease.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has ratified management's selection of Evans,
Porter, Bryan & Co. as its independent certified public accountants for the
current fiscal year. Evans, Porter, Bryan & Co. has audited the Company's and
the Bank's financial statements since 1991. A representative of that firm is
expected to be present at the Annual Meeting and will be given the opportunity
to make a statement if he or she desires to do so and will be available to
respond to appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the Company's proxy
material for the 1997 Annual Meeting of Shareholders must be received at the
principal offices of the Company not later than November 22, 1996.
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<PAGE>
OTHER MATTERS
At the time of the preparation of this Proxy Statement, the Company was not
aware of any matters to be presented for action at the Annual Meeting other than
the Proposal referred to herein. If other matters are properly presented for
action at the Annual Meeting, it is intended that the persons named as Proxies
will vote or refrain from voting in accordance with their best judgment on such
matters.
ANNUAL REPORTS
Copies of the 1995 Annual Report are being mailed to all shareholders
together with this Proxy Statement. Additional copies may be obtained from the
Secretary, First Cherokee Bancshares, Inc., 6395 E. Alabama Road, Woodstock,
Georgia 30188.
A copy of the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995 (without exhibits) as filed with Securities and Exchange
Commission, will be furnished without charge to shareholders on request to the
Secretary, First Cherokee Bancshares, Inc., 6395 E. Alabama Road, Woodstock,
Georgia 30188.
Woodstock, Georgia
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<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned shareholder of FIRST CHEROKEE BANCSHARES, INC. (the
"Company") hereby constitutes and appoints J. Stanley Fitts, Carl C. Hames, Jr.
and Bobby R. Hubbard, and each of them, as true and lawful attorneys and proxies
of the undersigned, with full power of substitution and resubstitution, to vote
and act with respect to all shares of the Company's Common Stock (the "Shares"),
the undersigned could vote, and with all powers the undersigned would possess,
if personally present, at the Annual Meeting of Shareholders of the Company to
be held on April 17, 1996, and at any adjournments or postponements thereof (the
"Annual Meeting").
IF THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE SHAREHOLDER. IF NO DIRECTION IS MADE,
SUCH SHARES WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF THE NOMINEES LISTED
BELOW AND IN THE DISCRETION OF THE PROXIES NAMED ABOVE ON ALL OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
NOMINEES FOR ELECTION AS DIRECTORS
Alan D. Bobo
Elwin K. Bobo
Michael A. Edwards
J. Stanley Fitts
Russell L. Flynn
Carl C. Hames, Jr.
C. Garry Haygood
Thomas D. Hopkins, Jr.
Bobby R. Hubbard
Dennis M. Lord
Larry R. Lusk
Dr. Stuart R. Tasman
The Board of Directors recommends a vote FOR the Election of Directors
<TABLE>
<S> <C> <C> <C>
PROPOSAL: Election of / / FOR ALL NOMINEES LISTED ABOVE (except as / /
Directors: marked to the contrary below)
<CAPTION>
PROPOSAL: Election of WITHHOLD AUTHORITY TO VOTE FOR ALL
<CAPTION>
Directors: NOMINEES LISTED ABOVE
</TABLE>
To withhold authority for any nominee(s), write the name(s) of such
nominee(s) in the space provided below.
- --------------------------------------------------------------------------------
CONTINUED ON REVERSE SIDE
<PAGE>
<TABLE>
<S> <C>
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY!
Please sign exactly as name appears hereon. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name
by president or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
, 1996
SIGNATURE DATE
, 1996
SIGNATURE DATE
</TABLE>
This proxy revokes all prior dated proxies. The signer hereby acknowledges
receipt of the Company's proxy statement dated March 29, 1996.
