SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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: |_| Confidential, for Use of
|_| Preliminary proxy statement the Commission Only (as
|X| Definitive proxy statement permitted by Rule
|_| Definitive additional materials 14a-6(e)(2)
|_| Soliciting material pursuant
to Rule 14a-11(c) or Rule 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 Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)Title of each class of securities to which transaction applies:
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(2)Aggregate number of securities to which transactions 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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<PAGE>
REVOCABLE PROXY
FIRST CHEROKEE BANCSHARES, INC.
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
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 26, 2000, and at any adjournments or postponements thereof (the
"Annual Meeting").
1.PROPOSAL: Election of Directors (except as marked to the contrary below):
NOMINEES FOR ELECTION AS DIRECTORS
----------------------------------
Alan D. Bobo Russell L. Flynn Bobby R. Hubbard
Elwin K. Bobo Carl C. Hames, Jr. R.O. Kononen, Jr.
Michael A. Edwards C. Garry Haygood Dennis M. Lord
J. Stanley Fitts Thomas D. Hopkins, Jr. Larry R. Lusk
Dr. Stuart R. Tasman
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee"s name in the space provided below.
________________________________________
The Board of Directors recommends a vote "FOR" the Election as Directors, of
the Nominees.
This proxy revokes all prior dated proxies. The signer hereby acknowledges
receipt of the Company's proxy statement dated March 30, 2000.
Please be sure to sign and date this Proxy
in the box below.
Date___________________________
__________________________ _______________________________
Stockholder sign above Co-holder (if any) sign above
Detach above card, sign, date and mail in postage
paid envelope provided.
FIRST CHEROKEE BANCSHARES, INC.
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.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
<PAGE>
March 30, 2000
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, 7745 Main Street,
Woodstock, Georgia, on Wednesday, April 26, 2000, 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 1999
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.
the 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 26, 2000
___________________________
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, 7745
Main Street, Woodstock, Georgia, on Wednesday, April 26, 2000, at 4:00 p.m., for
the purpose of acting upon the following matters:
1. To elect 13 members to the Board of Directors to serve a one-year term
expiring in 2001; 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 17, 2000, 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 30, 2000
<PAGE>
FIRST CHEROKEE BANCSHARES, INC.
the bank holding company for
First National Bank of Cherokee
___________________________
PROXY STATEMENT
Annual Meeting of Shareholders
To Be Held April 26, 2000
___________________________
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 26, 2000 (the "Annual Meeting"). This Proxy Statement and the
enclosed form of proxy are being mailed to the Company's shareholders on or
about March 30, 2000.
The Board of Directors has set March 17, 2000, 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 745,949 shares (the "Shares") of common stock of the
Company 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
(1) by notice to the Secretary of the Company, (2) by submitting a proxy having
a later date, or (3) by appearing at the Annual Meeting and electing to vote in
person.
<PAGE>
All shares represented by valid proxies received pursuant to this
solicitation and not revoked before they are voted will be voted in the manner
specified in the proxies. 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, by personal contact, letter, telephone or other means
of communication. We will ask brokers, nominees and other custodians and
fiduciaries to forward proxy solicitation material to the beneficial owners of
Company shares, where appropriate, and we will reimburse them for their
reasonable expenses. The Company will bear the costs of soliciting proxies for
the Annual Meeting.
The Company is a bank holding company. It was organized in 1988 under the
laws of the State of Georgia. The Company's subsidiary, First National Bank of
Cherokee (the "Bank"), opened for business on November 27, 1989, in Woodstock,
Georgia.
PROPOSAL FOR ELECTION OF DIRECTORS
Nominees
The members of the Company's Board of Directors are elected by the
shareholders. The Board of Directors presently consists of 13 members, 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, which is the sole
shareholder of the Bank.
The Board of Directors has nominated the 13 incumbent directors listed
below for re-election as directors of the Company to serve one-year terms that
will expire at the 2001 Annual Meeting of Shareholders or when their successors
are elected and qualified. We expect each proxy solicited on behalf of the Board
of Directors to be voted 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, 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, 1999, year
first elected and principal occupation for the last five years of each of the 13
nominees:
<PAGE>
Year
First
Name Age Elected Principal Occupation
- ---- --- ------- --------------------
Alan D. Bobo 48 1988 Mr. Alan Bobo is the owner of
Bobo Plumbing Company,
Woodstock, Georgia.
Elwin K. Bobo 52 1988 Mr. Elwin Bobo is the owner of
Bobo Construction Company,
Woodstock, Georgia.
Michael A. Edwards 41 1988 Mr. Michael Edwards is Vice
President of Edwards Tire Sales,
Inc., Woodstock, Georgia.
J. Stanley Fitts 56 1988 Mr. Stanley Fitts is the owner
and President of Reeves Floral
Products, Inc., Woodstock,
Georgia.
Russell L. Flynn 67 1988 Mr. Russell Flynn has been a
Sales Associate at Century 21
Cherokee Realty since 1988 and
is currently a partner and
associate broker.
Carl C. Hames, Jr. 51 1988 Mr. Carl Hames became President
and Chief Executive Officer of
the Company in 1990 and Chief
Executive of the Bank in 1991.
C. Garry Haygood 49 1988 Mr. Garry Haygood is the
Executive Vice President of
Haygood Contracting, Inc., a
grading contracting company,
Woodstock, Georgia.
Thomas D. Hopkins, Jr. 65 1988 Mr. Thomas Hopkins is retired.
He is the President of Hopkins
and Son, Inc., which formerly
operated two NAPA Auto Parts
Stores in Georgia. He also is a
Georgia Real Estate Broker and
owner of Tom Hopkins Realty,
Woodstock, Georgia.
Bobby R. Hubbard 56 1988 Mr. Bobby Hubbard is a Flight
Equipment Instructor/Operations
Analyst for Lockheed Martin
Aeronautical Systems, Marietta,
Georgia.
<PAGE>
R. O. Kononen, Jr. 49 1998 Mr. Rick Kononen joined the Bank
as President in January 1997,
and was elected to the Bank's
Board of Directors in May 1997
and to the Company's Board of
Directors in April 1998. He
served as Executive Vice
President of Security State
Bank, Canton, Georgia, from 1990
through 1996.
Dennis M. Lord 58 1988 Mr. Dennis Lord was the
Secretary of Bay, Lingerfelt and
Lord, Inc., a grading
contracting company, Atlanta,
Georgia, from 1972 to 1997. He
presently develops properties.
Larry R. Lusk 50 1988 Mr. Larry Lusk was the owner and
President of Lusk Construction,
Inc., a commercial construction
company, Canton, Georgia, from
1977 to 1995. He currently does
contract sales/design work and
property development.
Dr. Stuart R. Tasman 47 1988 Dr. Stuart Tasman is an
optometrist in private practice
in Cobb County, Georgia.
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 13 NOMINEES NAMED ABOVE.
Meetings of the Board of Directors
The Board of Directors of the Company held seven meetings during 1999.
During 1999, each director attended at least 75% of the total number of meetings
of the Company's Board of Directors. The Board of Directors of the Company does
not have standing committees.
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the name, age at December 31, 1999, 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 51, has been President and
Chief Executive Officer of the Company since
1990 and Chief Executive Officer of the Bank
since 1991.
Kitty A. Kendrick Ms. Kendrick, age 41, joined the Bank in 1993
as a Senior Vice President and Chief Financial
Officer of the Company. She was promoted to
Executive Vice President in January 1997.
R. O. Kononen, Jr. Mr. Kononen, age 49, joined the Bank as
President in January 1997, and was elected to
the Bank's Board of Directors in May 1997 and
to the Company's Board of Directors in April
1998. Prior to joining the Bank, Mr. Kononen
was an Executive Officer at Security State
Bank, Canton, Georgia.
DIRECTOR AND EXECUTIVE COMPENSATION
Director Compensation
The Company does not compensate its directors for their services as members
of the Board of Directors. During 1999, directors of the Bank received $300 per
board meeting attended and between $45 and $75 per committee meeting attended,
depending on the type of committee that was meeting. Mr. Hames and Mr. Kononen
do not receive fees for Bank board and Bank committee meetings that are held
during the normal business hours of the Bank.
All of the Bank's directors participate in a retirement plan. (Mr. Kononen
has participated in a retirement plan since January 1997 in his capacity as an
executive officer of the Bank.) The purpose of the retirement plan is to provide
an annual retirement benefit to each director when he retires from the Board.
The plan provides retirement benefits in two ways, with an index formula and
with fee deferrals. The index formula consists of the earnings on a specific
life insurance policy, reduced by an amount equal to the Bank's opportunity
cost. At retirement, the Bank pays the accumulated excess earnings to the
director over a specified number of years. During retirement, the Bank pays the
earnings in excess of the opportunity cost to the director annually. These
payments continue for the life of the director. The fee deferral part of the
retirement plan is optional. Each director may elect to defer all or a portion
of his current director's fees for a ten-year period which began in 1995. In
addition, deferred fees will be
<PAGE>
credited with interest at a rate indexed to current market conditions. The
Bank's obligations under the retirement plan are unfunded. However, the Bank has
purchased life insurance policies on each insurable director that are
actuarially designed to offset the annual expenses associated with the indexed
formula benefit. The Bank is the sole owner of all of the policies.
The Bank also furnishes its insurable directors with a life insurance plan.
This plan is provided by a life insurance policy for each insurable director.
The life insurance plan generally provides that the Bank will pay each
director's beneficiary 80% of the life insurance policy's death benefit. The
Bank owns the policy and its entire cash surrender value as well as the
remainder of the death benefit.
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. The following Summary Compensation Table presents the total
compensation paid during 1999, 1998 and 1997 to the Company's Chief Executive
Officer and each of the other executive officers of the Company and the Bank who
earned more than $100,000 in compensation during the year ended December 31,
1999.
<TABLE>
<CAPTION>
Summary Compensation Table
- ----------------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
----------------------------------------
Awards Payouts
----------------------------------------
Other
Annual Restricted All Other
Name and Compensation Stock Options/ LTIP Payouts Compensation
Principal Position Year Salary ($) Bonus ($) ($)/2/ Awards ($) SARs (#) ($) ($)
- -------------------------- ------- -------------- ------------ ------------ ---------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carl C. Hames, Jr. 1999 $110,096 $33,405 $6,000/3/ 0 0 0 $4,800/4/
President and Chief 1998 $109,457 /1/ $43,159 $6,000/3/ 0 0 0 $3,510/4/
Executive Officer of the 1997 $108,474 /1/ 0 $6,000/3/ 0 0 0 $3,562/4/
Company
- -------------------------- ------- -------------- ------------ ------------ ------------- ----------- -------------- -------------
R. O. Kononen, Jr. 1999 $95,000 $9,500 $8,400/3/ 0 0 0 $3,570/4/
President of the Bank 1998 $90,000 $13,500 $8,400/3/ 0 0 0 $1,754/4/
1997 $91,096 /1/ 0 $8,400/3/ 0 0 0 0
- -------------------------- ------- -------------- ------------ ------------ ------------- ----------- -------------- -------------
</TABLE>
/1/ Includes cash paid to Mr. Hames in lieu of accrued vacation in the amount of
$2,490 (1998) and $4,049 (1997) and cash paid to Mr. Kononen in lieu of accrued
vacation in the amount of $2,077(1997).
/2/ We have omitted information on "perks" and other personal benefits because
the aggregate value of these items does not meet the minimum amount required for
disclosure under Securities and Exchange Commission regulations.
/3/ Consists of an automobile allowance.
/4/ Consists of the Company's matching of Mr. Hames' and Mr. Kononen's
contribution to the Bank's 401K plan.
During fiscal 1999, Mr. Hames and Mr. Kononen were not granted any options and
the Company had no outstanding stock appreciation rights and granted no stock
appreciation rights.
<PAGE>
Fiscal Year-End Option Values
The following table contains information, with respect to the executives
named in the Summary Compensation Table, concerning unexercised options held as
of the end of 1999. Neither of the executive officers exercised options during
1999.
<TABLE>
<CAPTION>
- ------------------------------------- ---------------------------------------------------------------------------------
Fiscal Year-End Option Values
- ------------------------------------- ---------------------------------------------------------------------------------
Value of Unexercised
Number of Unexercised In-the-Money Options at
Name Options Held at 12/31/99 12/31/99
- ------------------------------------- ------------------------------------- -------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------- ---------------- -------------------- ------------------ ------------------------
<S> <C> <C> <C> <C>
Carl C. Hames, Jr. 3,540 960 $29,933/1/ $403/1/
- ------------------------------------- ---------------- -------------------- ------------------ ------------------------
R.O. Kononen, Jr. 6,000 4,000 $21,070/1/ $1,680/1/
- ------------------------------------- ---------------- -------------------- ------------------ ------------------------
</TABLE>
/1/ At December 31, 1999, the per share fair market value of the Company's
common stock ($18.13 per share), exceeded the per share exercise
prices of $9.09, $14.00 and $17.71 of the options. Fair market value is
based on the final trade of 1999.
Employment Agreements
Mr. Hames' employment agreement provides for:
(1) 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;
(2) An annual performance bonus determined by the Bank's Board of Directors;
(3) An automobile allowance;
(4) 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;
(5) Reimbursement for business-related expenses and country club dues; and
(6) The establishment of a retirement plan.
During 1995, the Company and the Bank renewed Mr. Hames' employment
agreement confirming that Mr. Hames will continue to serve as President and
Chief Executive Officer of the 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 Mr. Hames' death or disability. The Company
anticipates renewing Mr. Hames' employment agreement at that time. During 1999,
the Bank's Board of Directors increased Mr. Hames' base salary to $111,351 based
upon a 3.2% increase in the consumer price index for metropolitan Atlanta.
Neither the Company nor the Bank has entered into an employment agreement
with Mr. Kononen.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table lists information regarding the shares beneficially
owned, as of March 17, 2000 (1) by each of the Company's directors, (2) by its
executive officers, (3) by all of the Company's directors and executive officers
as a group, and (4) by any other person who beneficially owns more than 5% of
the Shares. According to rules adopted by the Securities and Exchange
Commission, a "beneficial owner" of securities has or shares the power to vote
the securities or to direct their investment. Unless otherwise indicated, each
person is the record owner of, and has sole voting and investment power with
respect to, his or her shares. The number of issued and outstanding shares used
to calculate the adjusted percent of total class ownership for a given
individual or group includes any shares covered by options issued to that
individual or group and exercisable within 60 days of March 17, 2000.
Number of Adjusted
Number Percent Shares Subject Percent
Name of of of to of
Beneficial Owner Shares/1/ Class Options/2/ Class/3/
- ---------------- --------- ------- -------------- --------
Directors
- ---------
Alan D. Bobo 25,865/4/ 3.5 480 3.5
Elwin K. Bobo 33,405/5/ 4.5 480 4.5
Michael A. Edwards 15,860/6/ 2.1 480 2.2
J. Stanley Fitts 42,152/7/ 5.7 480 5.7
Russell L. Flynn 15,010/8/ 2.0 480 2.1
Carl C. Hames, Jr. 53,422/9/ 7.2 3,780 7.6
C. Garry Haygood 37,178/10/ 5.0 480 5.0
Thomas D. Hopkins, Jr. 26,694/11/ 3.6 480 3.6
Bobby R. Hubbard 21,168/12/ 2.8 480 2.9
R. O. Kononen, Jr. 6,975/13/ 0.9 7,000 1.9
Dennis M. Lord 36,740/14/ 4.9 480 5.0
Larry R. Lusk 22,908/15/ 3.1 480 3.1
Dr. Stuart R. Tasman 16,646/16/ 2.2 480 2.3
Executive Officers
- ------------------
Kitty A. Kendrick 1,207/17/ 0.2 4,200 0.7
All Directors and 355,230 47.6 20,260 49.0
Executive Officers
as a Group (14 persons)
- -----------------------
<PAGE>
/1/ Does not include shares deemed to be beneficially owned through the right to
exercise options within 60 days of the record date.
/2/ Includes shares deemed to be beneficially owned through the right to
exercise options within 60 days of the record date.
/3/ Adjusted to reflect shares beneficially owned and shares deemed to be
beneficially owned through the right to exercise stock options within 60 days of
the record date.
/4/ Consists of (a) 21,307 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.
/5/ Consists of (a) 32,032 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.
/6/ Consists of (a) 15,750 shares owned directly by Mr. Edwards; and (b) 110
shares owned by Mr. Edwards' daughter, as to which Mr. Edwards disclaims
beneficial ownership. Mr. Edwards' address is 7775 Turner Road, Woodstock,
Georgia.
/7/ Consists of (a) 41,502 shares owned directly by Mr. Fitts; and (b) 650
shares held by Reeves Greenhouse, Inc. Profit Sharing Plan. Mr. Fitts' address
is 10288 Highway 92, Woodstock, Georgia.
/8/ As to the indicated shares, Mr. Flynn shares voting power with his wife. Mr.
Flynn's address is 830 Lake Arrowhead Drive, LA Station # 2024, Waleska,
Georgia.
/9/ Consists of (a) 37,565 shares owned directly by Mr. Hames; (b) 2,585 shares
held in an IRA for Mr. Hames' benefit; (c) 7,092 shares owned 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; (e) 165 shares owned by Mr. Hames' son, as to
which Mr. Hames disclaims beneficial ownership; and (f) 4,750 acquired through
deferrals to the "First National Bank of Cherokee 401k Plan." Mr. Hames' address
is 2461 South Cherokee Lane, Woodstock, Georgia. Mr. Hames is also an Executive
Officer of the Company.
<PAGE>
/10/ Consists of (a) 35,105 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.
/11/ Consists of (a) 23,411 shares owned directly by Mr. Hopkins; (b) 3,001
shares owned 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.
/12/ Consists of (a) 19,800 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 owned by Mr. Hubbard's daughter, as to which Mr.
Hubbard disclaims beneficial ownership. Mr. Hubbard's address is 803 Upland
Estates Drive, Woodstock, Georgia.
/13/ Consists of (a) 5,625 shares owned directly by Mr. Kononen and (b) 1,350
shares acquired through deferrals to the "First National Bank of Cherokee 401k
Plan." Mr. Kononen's address is 5525 Old Highway 5, Woodstock, Georgia. Mr.
Kononen is also an Executive Officer of the Company.
/14/ 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) 19,360 shares owned jointly by
Mr. Lord and his wife. Mr. Lord's address is 3155 Trickum Road, Woodstock,
Georgia.
/15/ Consists of (a) 17,600 shares owned directly by Mr. Lusk; (b) 3,353 shares
owned 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 owned by
Mr. Lusk's wife, as to which Mr. Lusk disclaims beneficial ownership. Mr. Lusk's
address is Route 10, Gaddis Road, Canton, Georgia.
/16/ Consists of (a) 12,713 shares owned directly by Dr. Tasman; (b) 1,100
shares owned 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.
/17/ Consists of (a) 132 shares owned jointly by Ms. Kendrick and her husband;
and (b) 1,075 shares acquired through deferrals to the "First National Bank of
Cherokee 401k Plan." Ms. Kendrick's address is 187 Knollwood Drive, Marietta,
Georgia. Ms. Kendrick is also an Executive Officer of the Company.
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16 (a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who beneficially own
more than 10% of the Company's outstanding common stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in their ownership of the Company's common stock. Directors, executive
officers and greater than 10% shareholders are required to furnish the Company
with copies of the forms they file. To our knowledge, based solely on a review
of the copies of these reports furnished to the Company, during the fiscal year
ended December 31, 1999, our directors, executive officers and greater than 10%
shareholders complied with all applicable Section 16(a) filing requirements.
RELATED PARTY TRANSACTIONS
Some of our directors, officers, principal shareholders and their
associates were customers of, or had transactions with, the Company or the Bank
in the ordinary course of business during 1999. Some of our directors are also
directors, officers, trustees or principal securities holders of corporations or
other organizations that also were customers of, or had transactions with, the
Company and the Bank in the ordinary course of business during 1999.
All outstanding loans and other transactions with our directors, officers
and principal shareholders 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 other persons and, when
made, did not involve more than the normal risk of collectability or present
other unfavorable features. In addition to banking and financial transactions,
the Company and the Bank may have had additional transactions with, or used
products or services of, various organizations with which directors of the
Company and its subsidiaries were associated. The amounts involved in these
non-credit transactions have not been material in relation to the business of
the Company, the Bank or such other organizations. We expect that the Company
and the Bank will continue to have similar transactions in the ordinary course
of business with such individuals and their associates in the future.
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, 1999, the Company paid
approximately $61,000 in rentals under the ground lease.
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has ratified management's selection of Porter Keadle
Moore, LLP 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.
SHAREHOLDERS' PROPOSALS FOR 2001 ANNUAL MEETING
Director nominations and other proposals of shareholders intended to be
presented at the 2001 Annual Meeting of Shareholders must be submitted to the
Company in accordance with the procedures set forth in the Company's bylaws and
in accordance with applicable rules of the Securities and Exchange Commission.
The effect of these provisions is that shareholders must submit such
nominations and proposals, together with the related information specified in
the bylaws, in writing to the Company on or before December 1, 2000 in order for
such matters to be included in the Company's proxy materials for, and to be
voted upon at, the 2001 annual meeting. All such proposals, nominations and
related information should be submitted on or before December 1, 2000, by
certified mail, return receipt requested, to Secretary, First Cherokee
Bancshares, Inc., 9860 Highway 92, Woodstock, Georgia 30188. The Company will
provide you a copy of its bylaws upon written request to its Secretary.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company knows of no matters other than those
referred to in the accompanying Notice of Annual Meeting of Shareholders which
may properly come before the Annual Meeting. However, if any other matter should
be properly presented for consideration and voting at the Annual Meeting, or any
adjournments thereof, it is the intention of the persons named as proxies on the
enclosed form of proxy card to vote the shares represented by all valid proxy
cards in accordance with their judgment of what is in the best interests of the
Company.
ANNUAL REPORTS
Copies of the Company's 1999 Annual Report to Shareholders 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.
We will furnish our shareholders with a copy of the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1999 (without exhibits) as
filed with Securities and Exchange Commission. To receive the Annual Report on
Form 10-KSB, shareholders should send a letter request to the Secretary, First
Cherokee Bancshares, Inc., 9860 Highway 92, Woodstock, Georgia 30188.
