<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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 a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
FIRST CHEROKEE BANCSHARES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[FIRST NATIONAL BANK OF CHEROKEE LOGO APPEARS HERE]
March 24, 1997
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 16, 1997, at 4:00 p.m. The Board
of Directors of the Company and our management team look forward 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 1996 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, whether or not you plan to attend the
meeting in person, 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.
Your continued interest in and support of the Company and First
National Bank of Cherokee are appreciated.
Sincerely,
/s/ Carl C. Hames, Jr.
--------------------------------
Carl C. Hames, Jr.
Chief Executive Officer
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
a bank holding company for
First National Bank of Cherokee
9860 Highway 92
Woodstock, Georgia 30188
(770) 591-9000
___________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 16, 1997
___________________________
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 16, 1997, 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 1998; 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 3, 1997, 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
/s/ Carl C. Hames, Jr.
-----------------------------------
Carl C. Hames, Jr.
Chief Executive Officer
March 24, 1997
<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 16, 1997
___________________________
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 16, 1997 (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 24, 1997.
The Board of Directors has set March 3, 1997, 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 582,304 shares (the "Shares") of common stock of the
Company issued and outstanding. 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 or her
Shares voted by proxy, even if he or she attends the Annual Meeting. A
shareholder who signs a proxy has the right to revoke it before it is voted (a)
by notice to the Secretary of the Company, (b) by submitting a Proxy having a
later date, or (c) 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 they are voted will be voted in the
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manner specified therein. If a Proxy is signed and no specification is made,
the Shares 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 its subsidiary, 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 1998 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, 1996, and
principal occupation for the last five years of each of the 12 nominees:
2
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<TABLE>
<CAPTION>
Name Age Principal Occupation
- ---- --- --------------------
<S> <C> <C>
Alan D. Bobo 45 Mr. Alan Bobo is the owner of Bobo Plumbing
Company, Woodstock, Georgia.
Elwin K. Bobo 49 Mr. Elwin Bobo is the owner of Bobo
Construction Company, Woodstock, Georgia.
Michael A. Edwards 38 Mr. Michael Edwards is Vice President of
Edwards Tire Sales, Inc., Woodstock, Georgia.
J. Stanley Fitts 53 Mr. Stanley Fitts is the owner and President of
Reeves Floral Products, Inc., Woodstock, Georgia.
Russell L. Flynn 64 Mr. Russell Flynn has been a Sales Associate at
Century 21 Cherokee Realty since 1988 and is
currently a partner and managing broker. He served
as a Cherokee County Commissioner through 1992.
Carl C. Hames, Jr. 48 Mr. Carl Hames became 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 46 Mr. Garry Haygood is the Executive Vice President of
Haygood Hauling and Grading, Woodstock, Georgia.
Thomas D. Hopkins, Jr. 62 Mr. Thomas Hopkins is President of Hopkins and Son, Inc.
He also is a Georgia Real Estate Broker and
owner of Tom Hopkins Realty, Woodstock, Georgia.
Bobby R. Hubbard 53 Mr. Bobby Hubbard is a Flight Equipment Instructor for
Lockheed Aeronautical Systems, Marietta, Georgia.
Dennis M. Lord 55 Mr. Dennis Lord serves as Secretary of Bay, Lingerfelt
and Lord, Inc., a grading contracting company, Atlanta,
Georgia.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
Larry R. Lusk 47 Mr. Larry Lusk was the owner and President of
Lusk Construction, Inc., a commercial
construction company in Canton, Georgia, from
1977 to 1995. He currently does contract
sales/design work.
Dr. Stuart R. Tasman 44 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 seven meetings during 1996.
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, 1996, and
principal occupation for the last five years of each of the executive officers
of the Company.
Name Principal Occupation
- ---- --------------------
Carl C. Hames, Jr. Mr. Hames, age 48, has been President and Chief
Executive Officer of the Company since 1990, and
President and Chief Executive Officer of the Bank in
January of 1991.
Kitty A. Kendrick Ms. Kendrick, age 38, joined the Bank in February
1993 as a Senior Vice President and became the
Company's Chief Financial Officer effective April 1,
1993. She was promoted to Executive Vice President
in January 1997. 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.
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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. Directors of the Bank
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 (the "Retirement 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 the Retirement Plan to calculate the amount of the retirement benefit is
the earnings on a specific life insurance policy. The Bank retains 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 to the
director over a specified period of years. In addition, the annual earnings in
excess of the opportunity costs are paid to the director annually after
retirement. These payments will continue for the life of the director.
The deferred compensation part of the Retirement 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, the 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 the Retirement
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
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<PAGE>
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 where 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 Retirement Plan
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 1996, 1995 and 1994 to Mr. Hames.
<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 1996 $101,813 $20,580 $3,620/1/ 0 0 0 $6,000/2/
Chief Executive Officer
1995 $ 90,625 $50,000 $3,641/1/ 0 0 0 $6,000/2/
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 1996, 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 1996.
The following table presents information regarding the number of unexercised
options held by him at December 31, 1996.
6
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FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT 12/31/96 IN-THE-MONEY OPTIONS AT 12/31/96
------------------------- --------------------------------
<S> <C> <C>
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
Carl C. Hames, Jr. 3,300/1/ 0 $19,500/2/ $0
</TABLE>
/1/ Consists of options granted under Mr. Hames' original contract dated May
11, 1990.
/2/ At December 31, 1996, the per share fair market value of the Company's
Common Stock ($15.00 per share), exceeded the per share exercise price of
the exercisable options ($9.10 per share by $5.90 per share). Fair market
value is based on the final trade of 1996.
Mr. Hames' employment agreement provides for (a) a base salary of
$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, and (f)
the establishment of a pension plan. 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 of the Holding Company, Chief Executive
Officer of the Bank, 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.
During 1996, Mr. Hames' base salary was increased to $102,900 based upon a 2.9%
increase in the consumer price index for the metropolitan Atlanta area.
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PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
Shares owned, as of March 3, 1997 (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.
<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/
- ------------------------ ---------- -------------- -------------- --------
<S> <C> <C> <C> <C>
Directors
- ---------
Alan D. Bobo 15,965/5/ 2.7 9,900 4.4
Elwin K. Bobo 18,555/6/ 3.2 14,850 5.6
Michael A. Edwards 8,360/7/ 1.4 8,250 2.8
J. Stanley Fitts 26,752/8/ 4.6 19,250 7.6
Russell L. Flynn 9,010/9/ 1.5 11,000 3.4
Carl C. Hames, Jr. 21,172/10/ 3.6 30,800/11/ 8.5
C. Garry Haygood 28,428/12/ 4.9 13,750 7.1
Thomas D. Hopkins, Jr. 15,394/13/ 2.6 11,000 4.4
Bobby R. Hubbard 11,268/14/ 1.9 9,900 3.6
Dennis M. Lord 20,240/15/ 3.5 16,500 6.1
Larry R. Lusk 17,901/16/ 3.1 8,800 4.5
Dr. Stuart R. Tasman 7,846/17/ 1.3 8,800 2.8
Officers
- --------
Kitty A. Kendrick 132/18/ 0.02 2,200/19/ 0.4
All directors and 201,023 34.5 165,000 49.0
executive officers
as a group
(13 persons)
</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.
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/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 $9.10 per share, and the warrants may be exercised at any
time on or before November 27, 1999.
/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) 15,752 shares owned directly by Mr. Fitts; and (b) 11,000
shares held by Reeves Greenhouse, Inc. Profit Sharing Plan. Mr. Fitts'
address is 10288 Highway 92, 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.
/12/ 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.
/13/ Consists of (a) 12,411 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.
/14/ 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.
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/15/ Consists of (a) 16,500 shares owned directly by Mr. Lord; (b) 880 shares
held in an IRA for Mr. Lord's benefit; and (c) 2,860 shares owned jointly
by Mr. Lord and his wife. Mr. Lord's address is 3155 Trickum Road,
Woodstock, Georgia.
/16/ 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.
/17/ Consists of (a) 3,913 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 1415 Wooten Lake Road, Kennesaw, Georgia.
/18/ As to the indicated shares, Ms. Kendrick shares voting power with her
husband. Ms. Kendrick's address is 187 Knollwood Drive, Marietta, Georgia.
/19/ Consists of 2,200 shares subject to options granted pursuant to the
Company's Key Employee Stock Option Plan.
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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 1996 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, 1996, loans to directors of the
Company and the Bank, and principal shareholders of the Company and affiliates
of such persons, aggregated to approximately $1,382,000.
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, 1996, the Company paid
$55,393 in rentals under the ground lease.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has ratified management's selection of Porter
Keadle Moore, LLP, successor to the practice of Evans, Porter, Bryan & Co., as
its independent certified public accountants for the current fiscal year.
Porter Keadle Moore, LLP, has audited the Company'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.
11
<PAGE>
SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the Company's proxy
material for the 1998 Annual Meeting of Shareholders must be received at the
principal offices of the Company not later than November 21, 1997.
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 1996 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., 9860 Highway 92, Woodstock, Georgia
30188.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1996 (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., 9860 HIGHWAY 92, WOODSTOCK,
GEORGIA 30188.
Woodstock, Georgia
12
<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 16, 1997, 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
<TABLE>
<S> <C> <C> <C>
Alan D. Bobo J. Stanley Fitts C. Garry Haygood Dennis M. Lord
Elwin K. Bobo Russell L. Flynn Thomas D. Hopkins, Jr. Larry R. Lusk
Michael A. Edwards Carl C. Hames, Jr. Bobby R. Hubbard Dr. Stuart R.
Tasman
</TABLE>
The Board of Directors recommends a vote FOR the Election of Directors
PROPOSAL: [_] FOR ALL NOMINEES [_] WITHHOLD
Election of LISTED ABOVE AUTHORITY TO
Directors: (except as VOTE FOR ALL
marked to the NOMINEES LISTED
contrary below) ABOVE
To withhold authority for any nominee(s), write the name(s) of such
nominee(s) in the space provided below.
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CONTINUED ON REVERSE SIDE
<PAGE>
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.
- --------------------------------------------------------------------------------
SIGNATURE
DATE ____________________________________________________________________ , 1997
- --------------------------------------------------------------------------------
SIGNATURE
DATE ____________________________________________________________________ , 1997
- - -
- - -
- - -
- - -
THIS PROXY REVOKES ALL PRIOR DATED PROXIES. THE SIGNER HEREBY ACKNOWLEDGES
RECEIPT OF THE COMPANY'S PROXY STATEMENT DATED MARCH 24, 1997.
