SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
x Preliminary Proxy Statement | ||||
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||||
o Definitive Proxy Statement | ||||
o Definitive Additional Materials | ||||
o Soliciting Material Pursuant to §240.14a-12 |
Greene County Bancshares, Inc.
Payment of Filing Fee (Check the appropriate box):
o | No fee required. |
o | 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: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
x | Fee paid previously with preliminary materials. |
o | 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: $3,150 |
(2) | Form, Schedule or Registration Statement No.: S-4, No. 333-141409 |
(3) | Filing Party: Greene County Bancshares, Inc. |
(4) | Date Filed: 3/19/07 |
The information in this joint proxy statement/prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary joint proxy statement/prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
• | In the merger, subject to the allocation procedures and adjustments described in this document, you may elect to receive for each Civitas share that you own either (1) 0.2674 (subject to adjustment as described below) shares of Greene County common stock for each share of Civitas stock owned by you; (2) $10.25 in cash; or (3) a combination of cash and Greene County common stock. For purposes of illustration only, if the merger had occurred on January 25, 2007, the last trading day prior to announcement of the proposed merger, or on April [ ], 2007, the last trading date prior to the date of this document, the exchange ratio on both dates for each Civitas share would have been 0.2674 Greene County shares having a value of $9.80 and $[9.07], respectively, as of those dates. Because Greene County stock represents 70% of the merger consideration, with the remaining 30% of the merger consideration being represented by $10.25 per share, the implied value of the overall merger consideration to Civitas shareholders on those dates, respectively, was $9.94 per share and $[9.42] per share. |
• | Although it is subject to adjustment as described in this document, the exchange ratio will not exceed 0.2968 or be less than 0.2380. |
• | Although you may elect whether to receive cash, stock or a combination of cash and stock for your Civitas shares, elections will be limited by the requirement that 70% of the total merger consideration will be in the form of Greene County common stock. As a result, the allocation of cash and Greene County common stock that you will receive will depend upon the elections of other Civitas shareholders. |
• | We expect the merger to be tax-free with respect to Greene County common shares you receive. If you receive cash in the merger you may have to recognize income or gain for tax purposes. |
• | Your Greene County shares will be unaffected by the merger and the merger will be tax-free to you. |
Stan Puckett | Richard Herrington | |
Chairman and Chief Executive Officer | President and Chief Executive Officer | |
Greene County Bancshares, Inc. | Civitas BankGroup, Inc. |
through 12 of this document.
• | consider and vote upon a proposal to approve the merger agreement, dated as of January 25, 2007, between Greene County and Civitas BankGroup, Inc. (“Civitas”), a copy of which is attached asAppendix Ato the joint proxy statement/prospectus accompanying this notice, pursuant to which Civitas will merge with Greene County, and to approve the issuance of Greene County common stock in connection with the merger; | |
• | elect five persons to serve as directors of Greene County, each for a three-year term and until their respective successors are elected and qualified; | |
• | consider and vote upon a proposal to ratify the appointment of Dixon Hughes PLLC as Greene County’s independent registered public accounting firm for 2007; | |
• | consider and vote upon a proposal to amend the Greene County Amended and Restated Charter to increase the number of authorized shares from 15 million to 20 million shares of common stock; | |
• | consider and vote upon a proposal to amend the Greene County Amended and Restated Charter to change the corporate name of Greene County to Green Bankshares, Inc.; | |
• | consider and vote upon a proposal to approve the adjournment of the annual meeting, including, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the annual meeting for any of the foregoing proposals; and | |
• | transact any other business that may properly come before the Greene County annual meeting or any adjournment or postponement thereof. |
To Be Held on April 26, 2007
• | to consider and vote upon a proposal to approve the merger agreement, dated as of January 25, 2007, between Greene County Bancshares, Inc. (“Greene County”) and Civitas, a copy of which is attached asAppendix Ato the joint proxy statement/prospectus accompanying this notice, pursuant to which Civitas will merge with Greene County; | |
• | to consider and vote upon a proposal to approve the adjournment of the special meeting, including, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting for the foregoing proposal; and | |
• | to transact any other business that may properly come before the Civitas special meeting or any adjournment or postponement thereof. |
If you are a Greene County shareholder: | If you are a Civitas shareholder: | |
Greene County Bancshares, Inc. 100 North Main Street Greeneville, TN37743-4992 Attention: Chief Financial Officer (423) 639-5111 | Civitas BankGroup, Inc. 4 Corporate Centre 810 Crescent Centre Drive, Suite 320 Franklin, TN 37067 Attention: Investor Relations (615) 263-9500 | |
TO OBTAIN TIMELY DELIVERY OF GREENE COUNTY DOCUMENTS, YOU MUST MAKE YOUR REQUEST ON OR BEFORE APRIL 16, 2007. | TO OBTAIN TIMELY DELIVERY OF CIVITAS DOCUMENTS, YOU MUST MAKE YOUR REQUEST ON OR BEFORE APRIL 16, 2007. |
QUESTIONS AND ANSWERS ABOUT VOTING AND THE MERGER | iv | |||
SUMMARY | 1 | |||
Civitas Will Merge With and Into Greene County | 1 | |||
What Civitas Shareholders Will Receive In the Merger | 1 | |||
Treatment of Civitas Stock Options | 2 | |||
What Greene County Shareholders Will Receive | 2 | |||
Our Reasons for the Merger | 2 | |||
Opinions of Financial Advisors | 2 | |||
Material United States Federal Income Tax Consequences | 3 | |||
Our Recommendations | 3 | |||
Interests of Certain Directors and Officers in the Merger That Differ From Your Interests | 4 | |||
Conditions to Completion of the Merger | 4 | |||
Regulatory Approvals | 4 | |||
Termination of the Merger Agreement; Fees Payable | 5 | |||
We May Amend the Terms of the Merger and Waive Rights Under the Merger Agreement | 5 | |||
Accounting Treatment | 5 | |||
No Dissenters’ and Appraisal Rights | 5 | |||
Comparison of the Rights of Civitas Shareholders and Greene County Shareholders | 6 | |||
The Shareholder Meetings | 6 | |||
Record Dates; Votes Required | 6 | |||
Information about Greene County and Civitas | 7 | |||
RISK FACTORS RELATING TO THE MERGER | 9 | |||
The Combined Company Will Incur Significant Transaction and Merger-Related Costs in Connection With the Merger | 9 | |||
Greene County May Not Be Able To Successfully Integrate Civitas or To Realize the Anticipated Benefits of the Merger | 9 | |||
Civitas Shareholders Are Not Guaranteed to Receive The Mix of Consideration That They Request on Their Election Form | 10 | |||
Persons Who Receive All Cash In The Merger Will Not Participate in Future Growth | 10 | |||
The Market Value of The Consideration Received by Civitas Shareholders in The Merger Will Change Based Upon Changes In The Prices of Greene County Stock And Changes In The Exchange Ratio That Could Be Caused By Changes That Occur After The Shareholders’ Meetings; Accordingly, Civitas Shareholders Cannot be Sure of The Value of The Merger Consideration They Will Receive | 10 | |||
Fluctuations in The Trading Price of Greene County Common Stock That Either Do Not Result In An Adjustment of The Exchange Ratio or That Occur After The Exchange Ratio Has Been Set Will Change The Value Of The Shares of Greene County Common Stock You Receive in The Merger | 11 | |||
If Fluctuations in The Average Closing Price of Greene County Common Stock Would Otherwise Cause The Exchange Rate to Fall Outside the Agreed Upon Range, Neither Party Has a Right to Terminate the Agreement And, as a Result, the Implied Value of The Merger to Civitas Shareholders Will Either Increase or Decrease Depending Upon The Trading Price of Greene County’s Stock | 11 | |||
Civitas Shareholders Will Have Less Influence as a Shareholder of Greene County Than as a Shareholder of Civitas | 12 | |||
Failure to Complete The Merger Could Cause Greene County’s or Civitas’ Stock Price to Decline | 12 | |||
Directors and Officers of Civitas Have Interests in the Merger That Differ From The Interests ofNon-directors or Non-management Shareholders | 12 | |||
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS | 13 |
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INFORMATION ABOUT THE COMPANIES | 15 | |||
Greene County Bancshares, Inc. | 15 | |||
Civitas BankGroup, Inc. | 15 | |||
Additional Information about Greene County and Civitas | 16 | |||
SELECTED FINANCIAL DATA | 17 | |||
COMPARATIVE MARKET PRICES | 24 | |||
Greene County Shares | 24 | |||
Civitas Shares | 25 | |||
THE PROPOSED MERGER | 26 | |||
General | 26 | |||
Transaction Structure | 26 | |||
Background of the Merger | 27 | |||
Greene County’s Reasons for the Merger; Recommendation of the Greene County Board of Directors | 29 | |||
Civitas’ Reasons for the Merger; Recommendation of the Civitas Board of Directors | 31 | |||
Dissenters’ and Appraisal Rights | 32 | |||
Opinion of Greene County’s Financial Advisor | 32 | |||
Opinion of Civitas’ Financial Advisor | 38 | |||
Accounting Treatment | 45 | |||
Material United States Federal Income Tax Consequences of the Merger | 45 | |||
Interests of Certain Civitas Executive Officers and Directors in the Merger | 48 | |||
Regulatory Approvals | 49 | |||
Election Procedures; Surrender and Exchange of Stock Certificates | 51 | |||
Restrictions on Resales of Greene County Stock by Affiliates | 53 | |||
THE MERGER AGREEMENT | 54 | |||
General | 54 | |||
Merger Consideration | 54 | |||
Adjustment to Conversion Ratio for Changes in Greene County Stock Price | 54 | |||
Proration Procedures | 55 | |||
Dividends and Distributions | 56 | |||
Withholding | 56 | |||
Effective Time | 57 | |||
Conditions to the Completion of the Merger | 57 | |||
Representations and Warranties | 58 | |||
Conduct of Business Pending the Merger | 59 | |||
Reasonable Best Effort to Obtain Required Shareholder Vote | 60 | |||
No Solicitation of Alternative Transactions | 60 | |||
Termination of the Merger Agreement | 61 | |||
Extension, Waiver and Amendment of the Merger Agreement | 63 | |||
Employee Benefit Plans and Existing Agreements | 63 | |||
Stock Exchange Listing; Delisting of Civitas Common Stock | 64 | |||
Expenses | 64 | |||
THE GREENE COUNTY ANNUAL MEETING | 65 | |||
THE CIVITAS SPECIAL MEETING | 68 | |||
DESCRIPTION OF GREENE COUNTY CAPITAL STOCK | 71 | |||
COMPARISON OF THE RIGHTS OF SHAREHOLDERS | 71 | |||
OTHER MATTERS TO BE CONSIDERED AT GREENE COUNTY’S ANNUAL MEETING | 79 | |||
LEGAL MATTERS | 101 | |||
EXPERTS | 101 |
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FUTURE SHAREHOLDER PROPOSALS | 101 | |||
OTHER MATTERS | 102 | |||
WHERE YOU CAN FIND MORE INFORMATION | 102 | |||
APPENDIX A — Agreement and Plan of Merger | ||||
APPENDIX B — Scott & Stringfellow Opinion | ||||
APPENDIX C — Keefe, Bruyette & Woods Opinion |
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Q: | Why are you receiving this document? | |
A: | You are receiving this document because you were a shareholder of record of either or both Greene County or Civitas on March 16, 2007. Greene County and Civitas have agreed to the combination of Civitas with Greene County under the terms of a merger agreement that is described in this document. A copy of the merger agreement is attached to this document asAppendix A. | |
In order to complete the merger, both Greene County and Civitas shareholders must vote to approve these respective proposals: |
• Greene County shareholders must approve the merger agreement and the related issuance of shares of Greene County common stock in connection with the merger. Pursuant to the Marketplace Rules of the Nasdaq Stock Market, shareholder approval is required when the issuance may exceed 20% of the outstanding shares of Greene County common stock prior to the merger. |
• Civitas shareholders must approve the merger agreement. |
This document contains important information about the merger and the meetings of the respective shareholders of Greene County and Civitas, and you should read it carefully. Among the matters discussed in greater detail in this document are: |
• | the reasons why Greene County and Civitas are proposing to merge; |
• | the nature and the value of what Civitas shareholders will receive in the merger; |
• | the effect of the merger upon outstanding Civitas stock options; and |
• | the federal income tax consequences of the merger. |
Greene County and Civitas will hold separate shareholders’ meetings to obtain these approvals. Greene County shareholders will consider other proposals in addition to the merger-related proposals as more fully described below under “OTHER MATTERS TO BE CONSIDERED AT GREENE COUNTY’S ANNUAL MEETING.” The enclosed voting materials allow you to vote your shares without attending your respective shareholders’ meeting. |
Your vote is important. We encourage you to vote as soon as possible. | ||
Q: | Why is your vote important? | |
A: | First, both Greene County and Civitas, in order to conduct a lawful meeting, must obtain a quorum — the presence in person or proxy of a majority of their outstanding shares. Also, under the Tennessee Business Corporation Act, or TBCA, which applies to both Greene County and Civitas, the merger agreement must be approved by the holders of a majority of the outstanding shares of both Greene County and Civitas common stock entitled to vote. Accordingly, if a Greene County or Civitas shareholder fails to vote, or if a Greene County or Civitas shareholder abstains, that will make it more difficult for Greene County and Civitas to obtain the approval of the merger agreement. | |
Because approval of the merger of Greene County and Civitas requires the approval of a majority of the outstanding shares of both Greene County and Civitas, your failure to vote or your abstention on the merger will have the same effect as a vote against the approval of the merger. |
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Q: | When and where will the shareholders’ meetings be held? | |
A: | The Greene County annual meeting will be held the General Morgan Inn, 100 North Main Street, Greeneville, Tennessee 37743, at 11:00 a.m. local time on April 25, 2007. | |
The Civitas special meeting will be held at the Embassy Suites Hotel located at 820 Crescent Centre Drive, Franklin, Tennessee 37067, at 3:00 p.m. local time on April 26, 2007. | ||
Q: | How do you vote? | |
A: | If you are a shareholder of record of Greene County as of the record date for the Greene County annual meeting or a shareholder of record of Civitas as of the record date for the Civitas special meeting, you may vote in person by attending your shareholders’ meeting or, to ensure your shares are represented at the meeting, you may vote by: | |
• accessing the Internet website specified on your proxy card; | ||
• calling the toll-free number specified on your proxy card; or | ||
• signing and returning the enclosed proxy card in the postage-paid envelope provided. | ||
If you hold either Greene County or Civitas shares in the name of a bank or broker, please see the discussion below. | ||
If you are a participant in the Civitas Employee Stock Purchase Plan, you will receive a proxy card to vote your shares. | ||
Q: | What happens if you fail to vote or you abstain from voting? | |
A: | If you are either a Greene County or Civitas shareholder and fail to vote or vote to abstain with respect to the proposed merger of Greene County and Civitas, it will have the same effect as a vote “Against” the proposal to approve and adopt the merger agreement. Otherwise, your failure to vote or your vote to abstain as to any other proposal at either of the meetings will have no effect on those proposals, assuming a quorum is present. | |
Q: | Your shares are held in your broker’s (also known as “street”) name. How do you vote those shares? | |
A: | Copies of this joint proxy statement/prospectus were sent to you by your broker. The broker will request instructions from you as to how you want your shares to be voted, and the broker will vote your shares according to your instructions. | |
Q: | If your shares are held in “street name” by a broker, won’t your broker vote those shares for you? | |
A: | Not unless you provide your broker with instructions on how to vote your “street name” shares. Without instructions from you, your broker will not be permitted to vote them, in the case of Civitas shareholders, on the approval of the merger agreement by Civitas shareholders, or, in the case of Greene County shareholders, on the approval of the merger agreement and the issuance of Greene County common stock in connection with the merger. You should therefore be sure to provide your broker with instructions on how to vote your shares. Please check the voting form used by your broker to see if it offers telephone or Internet submission of proxies. | |
Q: | What if you fail to instruct your broker? | |
A: | If you hold your shares in “street name” and fail to instruct your broker to vote your shares and the broker submits an unvoted proxy, the resulting broker “non-vote” will be counted toward a quorum at the respective annual or special meeting, but it will otherwise have the consequences of a vote “Against” approval of the merger agreement, and, for Greene County shareholders, it also will have the consequences of a vote “Against” the issuance of Greene County common stock in connection with the merger. See “— What happens if you fail to vote or you abstain from voting?” |
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Q: | What happens if you return your proxy card without indicating how to vote? | |
A: | If you return your signed proxy card without indicating how to vote on any particular proposal, the Greene County or Civitas stock represented by your proxy will be voted on each proposal presented at your shareholders’ meeting in accordance with the board’s recommendation on that proposal. | |
Q: | Can you change your vote after you have delivered your proxy card? | |
A: | Yes. You may change your vote at any time before your proxy is voted at your meeting. You can do this in any of the three following ways: | |
• by sending a written notice to the corporate secretary of Greene County or Civitas, as appropriate, in time to be received before your shareholders’ meeting stating that you would like to revoke your proxy; | ||
• by completing, signing and dating another proxy card bearing a later date and returning it by mail in time to be received before your annual or special meeting or, if you submitted your proxy through the Internet or by telephone, you can change your vote by submitting a proxy card at a later date, in which case your later-submitted proxy will be recorded and your earlier proxy revoked; or | ||
• if you are a holder of record, by attending the annual or special meeting, as the case may be, and voting in person. | ||
If your shares are held in an account at a broker or bank, you should contact your broker or bank to change your vote. |
Q: | If you’ve lost your Civitas stock certificate, can you receive consideration in the merger? |
A: | Yes. However, you will have to provide an affidavit attesting to the fact that you lost your Civitas stock certificate. Additionally, you may have to give Greene County or the exchange agent a bond to indemnify Greene County against a loss in the event someone finds or has your lost certificate and is able to transfer it. To avoid these measures, you should do everything you can to find your lost certificate before the time comes to send it in. |
Q: | Will shareholders have dissenters’ or appraisal rights? |
A: | Neither Civitas nor Greene County shareholders will have any right to dissent from the merger and demand an appraisal of their shares of either Civitas or Greene County common stock. |
Q: | If you are a Civitas shareholder, will you be able to sell the Greene County shares that you receive in the merger? |
A: | Generally, yes. Shares of Greene County common stock that you receive in the merger will be freely transferable, unless you are an “affiliate” of Civitas (or become an “affiliate” of Greene County) under applicable federal securities laws. Affiliates generally include directors, certain executive officers or holders of 10% or more of a company’s common stock. Generally, all shares of Greene County common stock received by affiliates of Civitas (including shares they beneficially own for others) may only be sold by them only upon compliance with certain requirements of the Securities Act of 1933, as amended (the “Securities Act”). For more detail regarding this subject, see page 51. | |
Q: | Where will your shares be listed after the merger? | |
A: | Shares of Greene County’s common stock issued in the transaction will be listed on the Nasdaq Global Select Market and will trade under the symbol “GCBS.” However, if the Greene County shareholders approve the proposal to change Greene County’s corporate name to Green Bankshares, Inc., it is expected that the trading symbol will change to “GRNB.” |
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Q: | What else other than the merger are you being asked to vote upon and how does your board recommend you vote? |
A: | The Greene County board of directors unanimously recommends that you vote in favor of each of the proposals on which you will be voting at the Greene County annual meeting. At that meeting, along with the proposal to approve the merger with Civitas and the related issuance of Greene County shares, Greene County shareholders are also being asked to: |
• elect five persons to serve as directors of Greene County; | ||
• consider and vote upon a proposal to ratify the appointment of Greene County’s independent registered public accounting firm for 2007; | ||
• consider and vote upon a proposal to amend Greene County’s charter to increase the number of authorized shares from 15 million to 20 million shares of common stock; | ||
• consider and vote upon a proposal to amend Greene County’s charter to change the corporate name of Greene County to Green Bankshares, Inc.; | ||
• consider and vote upon a proposal to approve the adjournment of the annual meeting, including, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the annual meeting for any of the foregoing proposals; and | ||
• transact any other business that may properly come before the Greene County annual meeting or any adjournment or postponement thereof. |
The only other matter that Civitas shareholders are being asked to vote upon is a proposal to adjourn the Civitas special meeting in the event additional time is necessary to solicit additional proxies, either to obtain a quorum or to attempt to obtain the requisite votes to approve the merger with Greene County. Although two members of the Civitas board of directors voted against the proposed merger with Greene County, the remaining members of the board are fully supportive of the proposed merger and determined it to be in the best interests of Civitas and it shareholders. Additionally, one of the Civitas board members who voted against the proposed merger was the Civitas Chief Executive Officer, who has since indicated to Civitas that he intends to vote his shares in favor of the Greene County merger.Accordingly, the required majority of the Civitas board of directors recommends that you vote in favor of the proposed merger with Greene County. |
Neither Greene County nor Civitas is aware of any other business to be considered at their respective meetings. | ||
Q: | What do you need to do now? | |
A: | After you carefully read and consider the information contained in and incorporated by reference into this document, please respond as soon as possible by completing, signing and dating your proxy card and returning it in the enclosed postage-paid return envelope, or, by submitting your proxy or voting instruction by telephone or through the Internet so that your shares will be represented and voted at your shareholders’ meeting. This will not prevent you from attending and voting in person; however in order to assist us in tabulating the votes at your shareholders’ meeting, we encourage you to vote by proxy even if you do plan to attend your meeting in person. |
Q: | What must Civitas shareholders do to elect to receive cash, stock or a combination of both? |
A: | A form for making an election will be sent to you separately after the effective time of the merger. For your election to be effective, your properly completed election form, along with your Civitas stock certificates or an appropriate guarantee of delivery, must be sent to and received by the exchange agent no later than the election deadline specified in the election form (which will not in any event be less than twenty (20) business days after the form is mailed to Civitas shareholders). Do not send your stock certificates to Civitas, Greene County or Greene County’s exchange agent until you receive the transmittal materials with instructions from the exchange agent. If you do not make a timely election you will be deemed to have elected to receive the mixed consideration of cash and stock. |
vii
Q: | Should you send in your Civitas stock certificates now? |
A: | No. After the merger is completed, the combined company will send Civitas shareholders written instructions for exchanging their stock certificates for merger consideration. You should not send in your stock certificates until you receive these instructions. If you are a Greene County shareholder, you are not required to take any action with respect to your Greene County stock certificates. |
Q: | Who can help answer any other questions that you might have? |
A: | If you want additional copies of this document, or if you want to ask any questions about the merger, you should contact: |
If you are a Greene County shareholder: Chief Financial Officer Greene County Bancshares, Inc. 100 North Main Street Greeneville, TN37743-4992 (423) 639-5111 | or | If you are a Civitas shareholder: Investor Relations Civitas BankGroup, Inc. 4 Corporate Centre 810 Crescent Centre Drive, Suite 320 Franklin, TN 37067 (615) 263-9500 |
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• | 0.2674 (subject to adjustment as described below) shares of Greene County common stock; |
• | $10.25 in cash, without interest; or |
• | a combination of cash and Greene County common stock designated by you. |
• | The Greene County common stock component is fixed at 70% of aggregate merger consideration, which likely will result in the form and relative allocation of merger consideration to Civitas shareholders being different from that requested; |
• | The exchange ratio can be adjusted based upon changes in Greene County stock price relative to the NASDAQ Bank Index, which results in the possibility that the number of shares of Greene County shares received by Civitas shareholders could change; |
• | The exchange ratio is subject to a cap of 0.2968 and a floor of 0.2380, which results in the possibility that the implied value to Civitas shareholders, respectively, will decrease or increase if Greene County’s stock trades at a level that would otherwise require an adjustment to the exchange ratio but for the cap and the floor; and |
• | Civitas shareholders will not receive any fractional shares of Greene County common stock. Instead, they will receive cash, without interest, for any fractional share of Greene County common stock they might otherwise have been entitled to receive based on fractional share interest multiplied by $10.25. |
1
• | it provides accelerated entry in the Davidson County and Williamson County markets; | |
• | increased size and scale — the combined company is expected to have pro forma assets of approximately $2.8 billion, a pro forma market capitalization of approximately $288 million and offices in some of the fastest growing areas in the Nashville MSA; | |
• | enhanced geographic market; | |
• | the board believes that the merger may result in synergies and cost savings through the centralization of operations and corporate functions; | |
• | the anticipated effect of the merger on the earnings per share of Greene County following the merger; and | |
• | increased float — pro forma shares outstanding of the combined company would increase from approximately 9.8 million shares to approximately 12.9 million shares. |
• | the consideration to be received by Civitas shareholders, as indicated by the opinion of Keefe, Bruyette & Woods, is fair, from a financial point of view; |
• | the per share value of the merger consideration to Civitas shareholders and the fact that up to 30% of the merger consideration can be in cash; |
• | the alternatives to the merger, including Civitas remaining an independent financial institution; |
• | the merger allows Civitas shareholders who elect to become shareholders of Greene County to be part owner of a larger, more diversified financial services institution; and |
• | the anticipated positive impact of the merger on Civitas customers. |
2
3
• | Certain officers of Civitas and Cumberland Bank will enter into new employment, consulting or change of control agreements with Greene County or Greene County Bank, which become effective as of the closing of the merger. These agreements provide for the payment of additional payments and benefits to these officers and contain covenants not to compete. The aggregate of all payments associated with these agreements is approximately $1 million. |
• | Greene County has agreed that it will maintain a policy of directors’ and officers’ liability insurance coverage for the benefit of Civitas’ directors and officers serving at the effective time of the merger for three years following completion of the merger. |
• | Greene County shareholders’ approval of the merger agreement and the issuance of shares in the merger; |
• | Civitas shareholders’ approval of the merger agreement; |
• | approval of the merger by the necessary federal and state regulatory authorities; | |
• | the absence of any burdensome condition, requirement or restriction imposed in connection with regulatory approval of the merger; | |
• | the absence of any order, injunction, decree, law or regulation that would prohibit the merger or make it illegal; and | |
• | receipt by Greene County and Civitas of the opinion of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC that, for United States federal income tax purposes, the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. |
4
• | a governmental authority that must grant a regulatory approval denies approval of the merger (although this termination right is not available to a party whose failure to comply with the merger agreement resulted in those actions by a governmental authority); | |
• | a governmental entity of competent jurisdiction issues a final nonappealable order enjoining or otherwise prohibiting the merger; | |
• | the merger is not completed on or before June 30, 2007 (although this termination right is not available to a party whose failure to comply with the merger agreement resulted in the failure to complete the merger by that date); | |
• | the other party’s board of directors adversely changes its recommendation that its shareholders vote “FOR” approval of the merger agreement (in the case of Civitas) or the approval of the merger agreement and the issuance of Greene County common stock in connection with the merger (in the case of Greene County), or the other party breaches its obligation to hold its shareholders’ meeting to approve the transactions contemplated by the merger agreement; | |
• | the other party is in breach of its representations, warranties, covenants or agreements set forth in the merger agreement and the breach rises to a level that would excuse the terminating party’s obligation to complete the merger and is either incurable or is not cured within 10 days; | |
• | the shareholders of Civitas do not approve the merger agreement at the Civitas shareholders meeting; or | |
• | the shareholders of Greene County do not approve the merger agreement and the issuance of Greene County common stock in connection with the merger at the Greene County shareholders’ meeting. |
5
• | to consider and vote upon a proposal to approve the merger between Greene County and Civitas, and the issuance of Greene County common stock in connection with the merger; | |
• | to elect five directors; | |
• | to consider and vote upon a proposal to ratify the appointment of Greene County’s independent registered public accounting firm for 2007; | |
• | to consider and vote upon a proposal to amend Greene County’s charter to increase the number of authorized shares from 15 million to 20 million shares of common stock; | |
• | to consider and vote upon a proposal to amend Greene County’s charter to change the corporate name of Greene County to Green Bankshares, Inc.; | |
• | to consider and vote upon a proposal to approve the adjournment of the meeting, if necessary; and | |
• | to transact any other business that may properly come before the meeting. |
• | to consider and vote upon a proposal to approve the merger between Greene County and Civitas; | |
• | to consider and vote upon a proposal to approve the adjournment of the meeting, if necessary; and | |
• | to transact any other business that may properly come before the meeting. |
6
7
8
• | the loss of key employees and customers; | |
• | the disruption of operations and business; | |
• | inability to maintain and increase competitive presence; | |
• | deposit attrition, customer loss and revenue loss; | |
• | possible inconsistencies in standards, control procedures and policies; | |
• | unexpected problems with costs, operations, personnel, technology and credit; and/or | |
• | problems with the assimilation of new operations, sites or personnel, which could divert resources from regular banking operations. |
9
• | first, to holders of less than 200 Civitas shares and to Civitas option holders; and |
• | second, pro-rata to Civitas shareholders who elected to receive cash based upon the ratio that the number of your shares for which you elected to receive cash bears to the total number of Civitas shares as to which Civitas shareholders elected to receive cash. |
10
11
12
• | difficulties in obtaining required shareholder and regulatory approvals for the merger and related transactions; | |
• | the level and timeliness of realization, if any, of expected cost savings from the merger; | |
• | difficulties related to the consummation of the merger and the integration of the businesses of Greene County and Civitas; | |
• | a materially adverse change in the financial condition of Greene County or Civitas; | |
• | greater than expected deposit attrition, customer loss, or revenue loss following the merger; | |
• | loan losses that exceed the level of allowance for loan losses of the combined company; | |
• | lower than expected revenue following the merger; | |
• | management of the combined company’s growth; | |
• | the risks inherent or associated with possible or completed acquisitions; | |
• | increases in competitive pressure in the banking industry; | |
• | changes in the interest rate environment that reduce margins; | |
• | changes in deposit flows, loan demand or real estate values; | |
• | changes in accounting principles, policies or guidelines; | |
• | legislative or regulatory changes; | |
• | general economic conditions, either nationally or in our markets, that are less favorable than expected resulting in, among other things, a deterioration of the quality of the combined company’s loan portfolio and the demand for its products and services; | |
• | dependence on key personnel; |
13
• | changes in business conditions and inflation; and | |
• | changes in the securities markets. |
14
15
• | directors and executive officers, | |
• | executive compensation, | |
• | principal shareholders, | |
• | certain relationships and related transactions, and | |
• | other related matters concerning Greene County and Civitas |
16
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
(In thousands, except ratios and share data) | ||||||||||||||||||||
Total interest income | $ | 117,357 | $ | 87,191 | $ | 65,076 | $ | 56,737 | $ | 59,929 | ||||||||||
Total interest expense | 45,400 | 28,405 | 16,058 | 15,914 | 18,680 | |||||||||||||||
Net interest income | 71,957 | 58,786 | 49,018 | 40,823 | 41,249 | |||||||||||||||
Provision for loan losses | (5,507 | ) | (6,365 | ) | (5,836 | ) | (5,775 | ) | (7,065 | ) | ||||||||||
Net interest income after provision for loan losses | 66,450 | 52,421 | 43,182 | 35,048 | 34,184 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||
Investment securities gains | — | — | — | — | 46 | |||||||||||||||
Other income | 20,778 | 14,756 | 13,028 | 11,588 | 10,484 | |||||||||||||||
Noninterest expense | (52,776 | ) | (44,340 | ) | (36,983 | ) | (30,618 | ) | (29,199 | ) | ||||||||||
Income before income taxes | 34,452 | 22,837 | 19,227 | 16,018 | 15,515 | |||||||||||||||
Income tax expense | (13,190 | ) | (8,674 | ) | (7,219 | ) | (5,781 | ) | (5,702 | ) | ||||||||||
Net income | $ | 21,262 | $ | 14,163 | $ | 12,008 | $ | 10,237 | $ | 9,813 | ||||||||||
Per Share Data: | ||||||||||||||||||||
Net income, basic | $ | 2.17 | $ | 1.73 | $ | 1.57 | $ | 1.48 | $ | 1.44 | ||||||||||
Net income, assuming dilution | $ | 2.14 | $ | 1.71 | $ | 1.55 | $ | 1.47 | $ | 1.43 | ||||||||||
Dividends declared | $ | .64 | $ | .62 | $ | 0.61 | $ | .59 | $ | .58 | ||||||||||
Book value | $ | 18.80 | $ | 17.20 | $ | 14.22 | $ | 13.31 | $ | 10.94 | ||||||||||
Tangible book value(1) | $ | 14.87 | $ | 13.15 | $ | 11.12 | $ | 10.57 | $ | 10.53 | ||||||||||
Financial Condition Data: | ||||||||||||||||||||
Assets | $ | 1,772,654 | $ | 1,619,989 | $ | 1,233,403 | $ | 1,108,522 | $ | 899,396 | ||||||||||
Loans, net of unearned interest | $ | 1,539,629 | $ | 1,378,642 | $ | 1,046,867 | $ | 952,225 | $ | 750,257 | ||||||||||
Cash and investments | $ | 91,997 | $ | 104,872 | $ | 76,637 | $ | 80,910 | $ | 61,980 | ||||||||||
Federal funds sold | $ | 25,983 | $ | 28,387 | $ | 39,921 | $ | 5,254 | $ | 39,493 | ||||||||||
Deposits | $ | 1,332,505 | $ | 1,295,879 | $ | 988,022 | $ | 907,115 | $ | 719,323 | ||||||||||
FHLB advances and notes payable | $ | 177,571 | $ | 105,146 | $ | 85,222 | $ | 63,030 | $ | 82,359 | ||||||||||
Subordinated debentures | $ | 13,403 | $ | 13,403 | $ | 10,310 | $ | 10,310 | $ | — | ||||||||||
Federal funds purchased and repurchase agreements | $ | 42,165 | $ | 17,498 | $ | 13,868 | $ | 12,896 | $ | 10,038 | ||||||||||
Shareholders’ equity | $ | 184,471 | $ | 168,021 | $ | 108,718 | $ | 101,935 | $ | 74,595 | ||||||||||
Tangible shareholders’ equity(1) | $ | 145,930 | $ | 128,399 | $ | 85,023 | $ | 80,965 | $ | 71,799 | ||||||||||
Selected Ratios: | ||||||||||||||||||||
Interest rate spread | 4.32 | % | 4.30 | % | 4.53 | % | 4.59 | % | 4.99 | % | ||||||||||
Net interest margin(2) | 4.77 | % | 4.61 | % | 4.75 | % | 4.83 | % | 5.29 | % | ||||||||||
Return on average assets | 1.28 | % | 1.02 | % | 1.06 | % | 1.12 | % | 1.17 | % | ||||||||||
Return on average equity | 11.91 | % | 11.09 | % | 11.23 | % | 12.59 | % | 13.40 | % | ||||||||||
Return on average tangible equity(1) | 15.25 | % | 14.04 | % | 13.95 | % | 13.38 | % | 13.93 | % | ||||||||||
Average equity to average assets | 10.78 | % | 9.20 | % | 9.47 | % | 8.87 | % | 8.72 | % | ||||||||||
Dividend payout ratio | 29.49 | % | 35.84 | % | 38.85 | % | 39.86 | % | 40.28 | % | ||||||||||
Ratio of nonperforming assets to total assets | 0.29 | % | 0.65 | % | 0.69 | % | 0.79 | % | 1.48 | % | ||||||||||
Ratio of allowance for loan losses to nonperforming loans | 635.93 | % | 293.56 | % | 227.64 | % | 321.57 | % | 161.73 | % | ||||||||||
Ratio of allowance for loan losses to total loans, net of unearned income | 1.45 | % | 1.43 | % | 1.50 | % | 1.53 | % | 1.68 | % |
(1) | Tangible shareholders’ equity is shareholders’ equity less goodwill and intangible assets. | |
(2) | Net interest margin is the net yield on interest earning assets and is the difference between the interest yield earned on interest-earning assets less the interest rate paid on interest bearing liabilities. |
17
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
(In thousands, except ratios and share data) | ||||||||||||||||||||
Summary of Operations | ||||||||||||||||||||
Interest income | $ | 53,456 | $ | 40,357 | $ | 32,940 | $ | 31,622 | $ | 31,761 | ||||||||||
Interest expense | 29,309 | 19,107 | 13,123 | 12,162 | 13,505 | |||||||||||||||
Net interest income | 24,147 | 21,250 | 19,817 | 19,460 | 18,256 | |||||||||||||||
Provision for loan losses | 2,375 | 993 | 1,446 | 3,083 | 4,663 | |||||||||||||||
Noninterest income | 10,352 | 7,571 | 7,793 | 6,261 | 6,830 | |||||||||||||||
Noninterest expense | 21,882 | 22,209 | 22,917 | 20,382 | 18,690 | |||||||||||||||
Income before income taxes | 10,242 | 5,619 | 3,247 | 2,256 | 1,733 | |||||||||||||||
Income tax expense | 3,557 | 1,715 | 941 | 823 | 596 | |||||||||||||||
Income from continuing operations | 6,685 | 3,904 | 2,306 | 1,433 | 1,137 | |||||||||||||||
Basic earnings per share — continuing operations | 0.42 | 0.24 | 0.13 | 0.09 | 0.08 | |||||||||||||||
Diluted earnings per share — continuing operations | 0.42 | 0.24 | 0.13 | 0.09 | 0.08 | |||||||||||||||
Cash dividends per common share | 0.06 | 0.00 | 0.03 | 0.06 | 0.06 | |||||||||||||||
Book value per common share | 3.39 | 2.98 | 3.28 | 3.19 | 2.96 | |||||||||||||||
Selected Period-End Balances | ||||||||||||||||||||
Total assets of continuing operations | $ | 898,166 | $ | 749,516 | $ | 703,678 | $ | 643,543 | $ | 534,183 | ||||||||||
Loans, net of unearned income | 614,037 | 476,421 | 430,617 | 412,609 | 391,934 | |||||||||||||||
Allowance for loan losses | 6,298 | 4,765 | 4,427 | 5,688 | 5,761 | |||||||||||||||
Total deposits | 732,520 | 600,766 | 566,873 | 520,505 | 437,607 | |||||||||||||||
Other borrowings and subordinated debt | 105,906 | 97,452 | 90,451 | 79,565 | 60,688 | |||||||||||||||
Shareholders’ equity | 53,945 | 47,225 | 57,736 | 54,741 | 45,473 | |||||||||||||||
Selected Operating Ratios | ||||||||||||||||||||
Annual % change in loans | 28.89 | % | 10.64 | % | 4.36 | % | 5.28 | % | 6.50 | % | ||||||||||
Annual % change in assets | 19.83 | % | 6.51 | % | 9.34 | % | 20.47 | % | 13.64 | % | ||||||||||
Return on assets from continuing operations | 0.74 | % | 0.52 | % | 0.33 | % | 0.22 | % | 0.21 | % | ||||||||||
Return on equity from continuing operations | 12.39 | % | 8.27 | % | 3.99 | % | 2.62 | % | 2.50 | % |
18
December 31, 2006
Greene County | Civitas | Pro Forma | ||||||||||||||
Bancshares, | Bank-Group, | Acquisition | Pro Forma | |||||||||||||
Inc. | Inc. | Adjustments | Combined | |||||||||||||
(In thousands except share amounts) | ||||||||||||||||
ASSETS | ||||||||||||||||
Cash and cash equivalents | $ | 70,640 | $ | 38,608 | (a) | $ | (50,517 | ) | $ | 109,679 | ||||||
(c) | 56,000 | |||||||||||||||
(d) | (5,052 | ) | ||||||||||||||
Investment securities: | ||||||||||||||||
Held to maturity | 2,545 | 110,758 | (f) | (110,758 | ) | 2,545 | ||||||||||
Available for sale | 37,740 | 99,098 | (f) | 110,758 | 246,587 | |||||||||||
(e) | (1,009 | ) | ||||||||||||||
Loans held for sale | 1,772 | 4,246 | — | 6,018 | ||||||||||||
Loans, net of unearned income | 1,539,629 | 614,037 | (e) | (1,020 | ) | 2,152,646 | ||||||||||
Allowance for loan losses | (22,302 | ) | (6,298 | ) | — | (28,600 | ) | |||||||||
Goodwill | 31,327 | — | (a) | 114,446 | 145,553 | |||||||||||
(b) | (6,512 | ) | ||||||||||||||
(d) | 5,052 | |||||||||||||||
(d) | (1,920 | ) | ||||||||||||||
(e) | 3,160 | |||||||||||||||
Other intangibles | 7,213 | 508 | (b) | 10,503 | 18,224 | |||||||||||
Premises and equipment, net | 57,258 | 14,875 | — | 72,133 | ||||||||||||
Other assets | 46,832 | 22,334 | — | 69,166 | ||||||||||||
Total assets | $ | 1,772,654 | $ | 898,166 | $ | 123,131 | $ | 2,793,951 | ||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||
Deposits | $ | 1,332,505 | $ | 732,520 | (e) | $ | 2,681 | $ | 2,067,706 | |||||||
Federal funds purchased and repurchase agreements | 42,165 | 58,406 | — | 100,571 | ||||||||||||
FHLB advances and notes payable | 177,571 | 30,500 | (e) | 75 | 208,146 | |||||||||||
Subordinated debentures | 13,403 | 17,000 | (c) | 56,000 | 86,715 | |||||||||||
(e) | 312 | |||||||||||||||
Other liabilities | 22,539 | 5,795 | (b) | 3,991 | 28,468 | |||||||||||
(d) | (1,920 | ) | ||||||||||||||
(e) | (1,937 | ) | ||||||||||||||
Total liabilities | 1,588,183 | 844,221 | 59,202 | 2,491,606 | ||||||||||||
Shareholders’ equity: | ||||||||||||||||
Common stock | 19,622 | 7,956 | (a) | (7,956 | ) | 25,772 | ||||||||||
(a) | 6,150 | |||||||||||||||
Additional paid-in capital | 71,828 | 24,666 | (a) | (24,666 | ) | 183,552 | ||||||||||
(a) | 111,724 | |||||||||||||||
Retained earnings | 93,150 | 22,390 | (a) | (22,390 | ) | 93,150 | ||||||||||
Accumulated other comprehensive loss | (129 | ) | (1,067 | )(a) | 1,067 | (129 | ) | |||||||||
Total shareholders’ equity | 184,471 | 53,945 | 63,929 | 302,345 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 1,772,654 | $ | 898,166 | $ | 123,131 | $ | 2,793,951 | ||||||||
19
Calculation | ||||||||||||
(a) | To reflect the impact of the issuance of Greene County common stock for outstanding Civitas common stock. Values are as of January 25, 2007, the announcement date of the acquisition | |||||||||||
Goodwill before Fair Value Adjustments and Deal Cost: | ||||||||||||
Number of Civitas shares outstanding | 15,911,750 | |||||||||||
Purchase price per Civitas share | $ | 10.25 | ||||||||||
Deal value for Civitas shares outstanding | $ | 163,095 | ||||||||||
Cash paid for Civitas options: | ||||||||||||
Number of options outstanding | 1,811,235 | |||||||||||
Dollar amount per option ($10.25 less average exercise price $7.326) | $ | 2.924 | ||||||||||
Total cash to be paid for options | 5,296 | |||||||||||
Aggregate acquisition cost | 168,391 | |||||||||||
Less: Civitas stockholders’ equity | (53,945 | ) | ||||||||||
Goodwill before Fair Value Adjustments and Deal Cost | $ | 114,446 | ||||||||||
Greene County Bancshares shares to be issued: | ||||||||||||
Number of Civitas shares outstanding | 15,911,750 | |||||||||||
(less) Shares that will be purchased with cash | (4,411,805 | ) | ||||||||||
Shares exchanged for Greene County common stock | 11,499,945 | |||||||||||
Exchange ratio | 0.2674 | |||||||||||
Shares to be issued | 3,075,085 | |||||||||||
Cash paid: | ||||||||||||
Aggregate consideration | 168,391 | |||||||||||
30% cash consideration | 30.00 | % | ||||||||||
Total cash paid | $ | 50,517 | ||||||||||
(less) cash paid for options | (5,296 | ) | ||||||||||
Cash available to purchase shares | $ | 45,221 | ||||||||||
Purchase price | $ | 10.25 | ||||||||||
Shares that can be purchased with cash | 4,411,805 | |||||||||||
Entries/Account | Debit | Credit | ||||||||||
Goodwill | 114,446 | |||||||||||
Common Stock of Civitas | 7,956 | |||||||||||
Additional paid-in capital Civitas | 24,666 | |||||||||||
Retained earnings Civitas | 22,390 | |||||||||||
Other comprehensive income | 1,067 | |||||||||||
Common stock (3,075,085 @ $2 par) | 6,150 | |||||||||||
Additional paid-in capital | 111,724 | |||||||||||
Cash — for 30% consideration | 50,517 |
20
Entries/Account | Debit | Credit | ||||||||||
(b) | To reflect the estimated value of | Core deposit intangible | 10,503 | |||||||||
core deposit intangible asset associated with the core deposits | Other liabilities (deferred income taxes) | 3,991 | ||||||||||
of Civitas. For purpose of the pro | Goodwill | 6,512 | ||||||||||
forma condensed financial statements, such intangible will amortized using the straight line method over nine (9) years | ||||||||||||
(c) | Issuance of Trust Preferred | Cash | 56,000 | |||||||||
Securities to handle the cash consideration paid to Civitas shareholders and merger related cost | Subordinated debentures | 56,000 | ||||||||||
(d) | Merger related cost — 3% of total | Goodwill | 5,052 | |||||||||
deal cost using effective tax rate of | Other liabilities (Taxes Payable) | 1,920 | ||||||||||
38% | Goodwill | 1,920 | ||||||||||
Cash | 5,052 | |||||||||||
(e) | Estimated purchase accounting | Goodwill | 3,160 | |||||||||
entries to adjust Civitas financial information to their fair value | Investment securities: available for sale — to mark to FMV reclassified HTM securities | 1,009 | ||||||||||
Loans | 1,020 | |||||||||||
Bank premises & Equipment — N/A at this time | — | |||||||||||
Time deposits | 2,681 | |||||||||||
FHLB Advances | 75 | |||||||||||
Subordinated Debentures | 312 | |||||||||||
Other liabilities (deferred income taxes) | 1,937 | |||||||||||
(f) | Upon acquisition all investments held to maturity will be | Investment securities: Available for sale | 110,758 | |||||||||
reclassified to available for sale | Investment securities: Held to maturity | 110,758 |
21
Greene County | Civitas | Pro Forma | ||||||||||||||
Bancshares, | Bank-Group, | Acquisition | Pro Forma | |||||||||||||
Inc. | Inc. | Adjustments | Combined | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Interest income | $ | 117,357 | $ | 53,456 | (a) | $ | 204 | $ | 171,017 | |||||||
Interest expense | 45,400 | 29,309 | (a) | (1,341 | ) | 77,096 | ||||||||||
(a) | (30 | ) | ||||||||||||||
(a) | (78 | ) | ||||||||||||||
(c) | 3,836 | |||||||||||||||
Net interest income | 71,957 | 24,147 | (2,183 | ) | 93,921 | |||||||||||
Provision for loan losses | 5,507 | 2,375 | — | 7,882 | ||||||||||||
Net interest income after provision for loan losses | 66,450 | 21,772 | (2,183 | ) | 86,039 | |||||||||||
Noninterest income | 20,778 | 10,352 | — | 31,130 | ||||||||||||
Noninterest expense | 51,694 | 21,737 | (d) | (5,689 | ) | 67,742 | ||||||||||
Amortization of intangible assets | 1,082 | 145 | (b) | 1,167 | 2,394 | |||||||||||
Income before income taxes | 34,452 | 10,242 | 2,339 | 47,033 | ||||||||||||
Income taxes | 13,190 | 3,557 | (e) | 889 | 17,636 | |||||||||||
Net income | $ | 21,262 | $ | 6,685 | $ | 1,450 | $ | 29,397 | ||||||||
(a) | Amortization of fair value adjustments for the following items: | |||||
Increase in interest income — Accretion of discount | 204 | |||||
Decrease in interest expense — Amortization of deposit premium | 1,341 | |||||
Decrease in interest expense — Amortization of FHLB Advance premium | 30 | |||||
Decrease in interest expense — Amortization of subordinated debentures premium | 78 | |||||
Increase in noninterest expense — Depreciation related to premise & equipmentwrite-up. (N/A at this time) | — | |||||
(b) | Increase in amortization of intangible assets — Amortization of core deposit intangible over nine years using a straight-line method | 1,167 | ||||
(c) | Interest expense for subordinated debentures | 3,836 | ||||
(d) | The projected cost savings for the acquisition is 26% of total non-interest expense for Civitas | 5,689 | ||||
(e) | Increase in tax expense due to tax impact of above items | 889 |
22
Civitas | ||||||||||||||||
Greene County | Civitas | Combined Pro | Equivalent | |||||||||||||
Bancshares, Inc. | Bancorp, Inc. | Forma Per | Pro Forma Per | |||||||||||||
Common Stock | Common Stock | Share Data | Share Data(1) | |||||||||||||
Year ended December 31, 2006 | ||||||||||||||||
Net income, basic | $ | 2.17 | $ | 0.42 | (2) | $ | 2.29 | $ | 0.61 | |||||||
Net income, diluted | 2.14 | 0.42 | (2) | 2.26 | 0.60 | |||||||||||
Cash Dividends | 0.64 | 0.06 | 0.64 | 0.17 | ||||||||||||
Book value | 18.80 | 3.39 | 23.46 | 6.27 | ||||||||||||
Weighted average shares, basic | 9,788,004 | 15,888,219 | 12,863,089 | |||||||||||||
Weighted average shares, diluted | 9,933,278 | 15,959,011 | 13,008,363 | |||||||||||||
Actual shares outstanding | 9,810,867 | 15,911,750 | 12,885,952 | |||||||||||||
Shares to be issued in conjunction with the Civitas acquisition | 3,075,085 |
(1) | Equivalent pro forma per share data represents the pro forma per share amounts attributed to one share of Civitas common stock that has been exchanged for stock consideration. Equivalent pro forma per share amounts are calculated by multiplying the pro forma combined amounts by the exchange ratio of 0.2674. | |
(2) | From continuing operations. |
23
Greene County | Equivalent Price Per | |||||||||||
Bancshares, Inc. | Civitas BankGroup, Inc. | Civitas BankGroup, | ||||||||||
Date | Common Stock | Common Stock | Inc. Share | |||||||||
January 25, 2007 | $ | 36.67 | $ | 8.00 | $ | 9.94 | ||||||
April , 2007 | $ | [33.91] | $ | [9.30] | $ | [9.42] |
Cash Dividends | ||||||||||||
Per Share | ||||||||||||
High | Low | Declared | ||||||||||
2005: | ||||||||||||
First Quarter | $ | 28.50 | $ | 25.88 | $ | 0.12 | ||||||
Second Quarter | 29.75 | 23.75 | 0.12 | |||||||||
Third Quarter | 29.50 | 25.09 | 0.12 | |||||||||
Fourth Quarter | 28.32 | 25.65 | 0.26 | |||||||||
2006: | ||||||||||||
First Quarter | $ | 29.93 | $ | 27.01 | $ | 0.12 | ||||||
Second Quarter | 32.20 | 27.90 | 0.12 | |||||||||
Third quarter | 37.77 | 29.28 | 0.12 | |||||||||
Fourth Quarter | 39.73 | 35.06 | 0.28 | |||||||||
2007: | ||||||||||||
First Quarter | $ | [40.50] | $ | [32.83] | $ | 0.13 | ||||||
Second Quarter (through April [ ], 2007) | [ ] | [ ] | [ ] |
24
Cash Dividends | ||||||||||||
Per Share | ||||||||||||
High | Low | Declared | ||||||||||
2005: | ||||||||||||
First Quarter | $ | 8.50 | $ | 7.32 | $ | 0.00 | ||||||
Second Quarter | 7.75 | 6.50 | 0.00 | |||||||||
Third Quarter | 8.40 | 7.05 | 0.00 | |||||||||
Fourth Quarter | 8.15 | 7.50 | 0.00 | |||||||||
2006: | ||||||||||||
First Quarter | $ | 7.65 | $ | 6.90 | $ | 0.00 | ||||||
Second Quarter | 7.75 | 6.95 | 0.02 | |||||||||
Third Quarter | 8.00 | 7.40 | 0.02 | |||||||||
Fourth Quarter | 8.24 | 7.11 | 0.02 | |||||||||
2007: | ||||||||||||
First Quarter | $ | [9.95] | $ | [7.40] | $ | [0.02] | ||||||
Second Quarter (through April [ ], 2007) | [ ] | [ ] | [ ] |
25
• | 0.2674 (subject to adjustment as described below) shares of Greene County common stock; |
• | $10.25 in cash, without interest; or |
• | a combination of cash and Greene County common stock designated by you. |
26
27
28
29
• | the financial analyses presented by Scott & Stringfellow to the Greene County board of directors and the opinion delivered by Scott & Stringfellow, to the effect that, as of January 25, 2007, and based upon and subject to the assumptions made, matters considered and limitations set forth in the opinion, the merger consideration specified in the merger agreement was fair from a financial point of view to the holders of shares of Greene County common stock; |
• | the two institutions have potential synergies estimated at $5.89 million before taxes — Greene County will be utilizing Civitas’ current work force and locations, in essence, to take the place of Greene County’s planned 2007 branch expansion and associated development expenses; |
• | the merger enables Greene County to significantly accelerate its penetration of the targeted market, specifically Davidson and Williamson County; | |
• | the merger will enable Greene County to increase its size and scale; | |
• | the merger is anticipated to enhance the franchise value of Greene County, both in the short-run and in the long-run; | |
• | the merger is expected to enhance Greene County’s geographic market coverage; | |
• | the merger is expected to be accretive to Greene County’s earnings; | |
• | the merger enables Greene County to diversify its revenue mix in a meaningful way; | |
• | the merger brings to Greene County’s team a number of outstanding bankers; | |
• | the merger valuation multiples are similar to those of recent business combinations involving southeastern financial institutions, either announced or completed, during the past few years; | |
• | the merger will generally be a tax-free transaction for Greene County and its new shareholders to the extent such shareholders receive solely shares of Greene County common stock; and | |
• | the merger will result in Greene County and its bank subsidiary being well-capitalized institutions, the financial positions of which would be in excess of all applicable regulatory capital requirements. |
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• | its analysis of the business, operations, financial condition, earnings and prospects of the combined company, taking into account the results of its due diligence review; | |
• | the strategic nature of the business combination, the complimentary businesses of Greene County and Civitas, the potential prospects of the combined company, including anticipated savings derived from potential synergies; | |
• | the financial analyses presented by KBW to the Civitas board of directors and the oral opinion delivered by KBW, to the effect that, as of January 25, 2007 (which opinion was confirmed in a written opinion dated January 25, 2007), and based upon and subject to the assumptions made, matters considered and limitations set forth in the opinion, the merger consideration specified in the merger agreement was fair from a financial point of view to the holders of shares of Civitas common stock; |
• | the value of the consideration to be received by Civitas shareholders in the merger, including the historical market prices and trading information for the shares of Greene County’s common stock and that the exchange ratio represents a premium of approximately 22.6% over the closing sales price for Civitas common stock on January 25, 2007, the day the Civitas board approved the merger agreement; |
• | the fact that Civitas shareholders would own approximately 23.8% of the combined company; | |
• | its belief that a majority of Civitas’ existing employees would be offered employment with the combined company and become eligible to participate in the combined company’s equity incentive plan; | |
• | the expected treatment of the merger as a tax-free transaction for United States federal income tax purposes which would generally allow Civitas shareholders receiving solely Greene County common stock in the merger to avoid recognizing gain or loss upon conversion of shares of Civitas common stock into shares of Greene County common stock; | |
• | the risks described under the section of this joint proxy statement/prospectus above entitled “RISK FACTORS RELATING TO THE MERGER,” including the risk that the proposed transaction would not be completed; | |
• | the limitations imposed in the merger agreement on Civitas’ business and the selection by Civitas of alternative business combinations prior to the completion of the merger; | |
• | the fact that the merger agreement provides for a fixed exchange ratio and that the value of the consideration to be received in the merger by the Civitas shareholders depends on the value of the Greene County common stock at the effective time of the merger and that there can be no assurances that future results, including results expected or considered in the factors listed above would be achieved; | |
• | the possibility that the merger might not be completed and the effect of the resulting public announcement of termination of the merger agreement on Civitas’ stock price, its operating results, particularly in light of the expenses related to the transaction, and its continued ability to attract and retain key personnel; and | |
• | its belief that a combination with Greene County would allow Civitas shareholders to participate in a combined company that would have better future prospects than Civitas could achieve either on a |
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stand-alone basis or through a combination with other potential merger partners, with greater market penetration and more diversified customer bases and revenue sources. |
32
• | reviewed, among other things: |
• | the merger agreement; | |
• | annual reports to stockholders and annual reports onForm 10-K of Greene County for the three years ended December 31, 2005; | |
• | annual reports to stockholders and annual reports onForm 10-K of Civitas for the three years ended December 31, 2005; | |
• | recent quarterly reports onForm 10-Q of Greene County; | |
• | recent quarterly reports onForm 10-Q of Civitas; | |
• | other recent communications from Greene County and Civitas; |
• | other financial information concerning the businesses and operations of Greene County and Civitas (consisting of independent stock analysts’ projections and forecasts available to the general public, aggregated over a 12 month period of time) furnished to Scott & Stringfellow by Greene County and Civitas for the purposes of Scott & Stringfellow’s analysis; |
• | certain publicly available information concerning the trading of, and the trading market for, the common stock of Greene County and Civitas; and | |
• | certain publicly available information with respect to publicly traded companies and the nature and terms of certain other transactions that Scott & Stringfellow considered relevant to its inquiry; |
• | reviewed the market prices, valuation multiples, publicly reported financial conditions and results of operations for Greene County and for Civitas and compared them with those of certain publicly traded companies that Scott & Stringfellow deemed to be relevant; | |
• | compared the proposed financial terms of the merger with the financial terms of certain other transactions that Scott & Stringfellow deemed to be relevant; and | |
• | performed such other analyses that it considered appropriate. |
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• | the merger will be completed substantially in accordance with the terms set forth in the merger agreement; | |
• | the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement are true and correct; | |
• | each party to the merger agreement and all related documents will perform all of the covenants and agreements required to be performed by such party under such documents; | |
• | all conditions to the completion of the merger will be satisfied without any waivers; and | |
• | in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger, no restrictions, including any divestiture requirements or amendments or modifications will be imposed that will have a material adverse effect on the future results of operations or financial condition of Greene County, Civitas or the combined entity, as the case may be, or the contemplated benefits of the merger. |
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Transaction Multiples (Civitas data as of1/23/06) | ||||
Premium to Market Price ($7.99) | 24.0 | % | ||
Price/Last 12 Months’ Reported Earnings per Share ($0.40) | 24.5 | x | ||
Price/FY 2007 Management’s Projected Earnings per Share ($0.44) | 22.4 | x | ||
Price/Book Value per Share ($3.31) | 299.2 | % | ||
Price/Tangible Book Value per Share ($3.31) | 299.2 | % | ||
Price/Total Assets | 18.2 | % | ||
Price/Total Deposits | 22.8 | % | ||
Tangible Premium/Core Deposits | 31.4 | % |
Name (Ticker) | Name (Ticker) | |
American National Bankshares Inc. (AMNB) | First South Bancorp, Inc. (FSBK) | |
Appalachian Bancshares, Inc. (APAB) | First Security Group, Inc. (FSGI) | |
Auburn National Bancorporation, Inc. (AUBN) | National Bankshares, Inc. (NKSH) | |
BNC Bancorp (BNCN) | Nexity Financial Corporation (NXTY) | |
Cooperative Bankshares, Inc. (COOP) | Old Point Financial Corporation (OPOF) | |
Crescent Financial Corporation (CRFN) | Porter Bancorp, Inc. (PBIB) | |
Crescent Banking Company (CSNT) | People Bancorp of North Carolina, Inc. (PEBK) | |
Eastern Virginia Bankshares, Inc. (EVBS) | Peoples Financial Corporation (PFBX) | |
First Community Corporation (FCCO) | Premier Community Bankshares, Inc. (PREM) | |
First Financial Service Corporation (FFKY) | Tennessee Commerce Bancorp, Inc. (TNCC) |
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Comparable | ||||||||
Companies | ||||||||
Civitas | Median | |||||||
Price to: | ||||||||
Book value per share | 241.4 | % | 157.3 | % | ||||
Tangible book value per share | 241.4 | % | 199.6 | % | ||||
LTM earnings per share | 19.0 | x | 16.2 | x | ||||
2007E earnings per share | 18.1 | x | 14.0 | x | ||||
Market capitalization (January 23, 2007) | $ | 127.0 million | $ | 121.2 million |
• | Total assets of $500 million to $1.5 billion, and | |
• | Prior year return on average assets greater than or equal to 0.50%. |
Acquiror | Acquiree | |
Park National Corp. | Vision Bancshares Inc. | |
IBERIA BANK Corp. | Pulaski Investment Corp. | |
Alabama National BanCorp. | PB Financial Services Corp. | |
Mercantile Bankshares Corp. | James Monroe Bancorp Inc. | |
BB&T Corp. | First Citizens Bancorp | |
Pinnacle Financial Partners | Cavalry Bancorp Inc. | |
Synovus Financial Corp. | Riverside Bancshares Inc. | |
FLAG Financial Corp. | First Capital Bancorp, Inc. | |
Mercantile Bankshares Corp. | Community Bank of N. Virginia | |
South Financial Group Inc. | Florida Banks Inc. | |
South Financial Group Inc. | CNB Florida Bancshares Inc. | |
Synovus Financial Corp. | Trust One Bank | |
Fulton Financial Corp. | Resources Bankshares Corp. | |
South Financial Group Inc. | MountainBank Financial Corp. | |
SunTrust Banks Inc. | Lighthouse Financial Services |
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Tennessee | ||||||||
Greene County/ | Region Bank | |||||||
Civitas | Transactions | |||||||
Transaction | Median | |||||||
Deal Price/Book Value | 299.2 | % | 330.8 | % | ||||
Deal Price/Tangible Book Value | 299.2 | % | 332.5 | % | ||||
Deal Price/Last 12 Months’ Reported EPS | 24.5 | x | 23.0 | x | ||||
Premium to Market Price | 24.0 | % | 24.2 | % | ||||
Deal Premium/Core Deposits | 31.4 | % | 26.4 | % |
Discount Rate | 22.0x | 23.0x | 24.0x | 25.0x | ||||||||||||
10.0% | $ | 10.53 | $ | 10.98 | $ | 11.43 | $ | 11.88 | ||||||||
11.0% | $ | 10.07 | $ | 10.50 | $ | 10.94 | $ | 11.37 | ||||||||
12.0% | $ | 9.64 | $ | 10.05 | $ | 10.46 | $ | 10.88 | ||||||||
13.0% | $ | 9.23 | $ | 9.62 | $ | 10.02 | $ | 10.41 |
Greene | ||||||||
Category | County | Civitas | ||||||
2005A Core Net Income | 78.4 | % | 21.6 | % | ||||
2006E Core Net Income | 85.0 | % | 15.0 | % | ||||
2007E Core Net Income | 77.3 | % | 22.7 | % | ||||
Total Assets | 66.6 | % | 33.4 | % | ||||
Gross Loans | 71.4 | % | 28.6 | % | ||||
Deposits | 64.3 | % | 35.7 | % | ||||
Shareholders’ Equity | 77.5 | % | 22.5 | % | ||||
Tangible Equity | 73.1 | % | 26.9 | % | ||||
Market Value as of1/23/07 | 73.8 | % | 26.2 | % | ||||
Average Contribution | 73.8 | % | 27.2 | % | ||||
Implied Stock Ownership (70% stock) | 76.1 | % | 23.9 | % | ||||
Implied Stock Ownership (100% stock) | 69.7 | % | 30.3 | % |
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• | reviewed, among other things, |
• | the merger agreement, | |
• | Annual Reports onForm 10-K for the three years ended December 31, 2005, 2004 and 2003 of Civitas, | |
• | Annual Reports to Shareholders and Annual Reports onForm 10-K for the three years ended December 31, 2005, 2004 and 2003 of Greene County, | |
• | certain interim reports to shareholders and Quarterly Reports onForms 10-Q of Civitas for the fiscal quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 and certain other communications from Civitas to its respective shareholders, | |
• | certain interim reports to shareholders and Quarterly Reports onForm 10-Q of Greene County for the fiscal quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 and certain other communications from Greene County to its respective shareholders, and |
• | other financial information concerning the businesses and operations of Civitas and Greene County (consisting of independent stock analysts’ projections and forecasts available to the general public, aggregated over a 12 month period of time) furnished to KBW by Civitas and Greene County for purposes of KBW’s analysis; |
• | held discussions with members of senior management of Civitas and Greene County regarding |
• | past and current business operations, | |
• | regulatory relationships, | |
• | financial condition, and | |
• | future prospects of the respective companies; |
• | reviewed the market prices, valuation multiples, publicly reported financial condition and results of operations for Greene County and compared them with those of certain publicly traded companies that KBW deemed to be relevant; | |
• | reviewed the publicly reported financial condition and results of operations for Civitas and compared them with those of certain companies that KBW deemed to be relevant; | |
• | compared the proposed financial terms of the merger with the financial terms of certain other transactions that KBW deemed to be relevant; and | |
• | performed other studies and analyses that it considered appropriate. |
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• | the merger will be completed substantially in accordance with the terms set forth in the merger agreement; | |
• | the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement are true and correct; | |
• | each party to the merger agreement and all related documents will perform all of the covenants and agreements required to be performed by such party under such documents; | |
• | all conditions to the completion of the merger will be satisfied without any waivers; and | |
• | in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, will be imposed that will have a material adverse effect on the future results of operations or financial condition of the combined entity or the contemplated benefits of the merger, including the cost savings, revenue enhancements and related expenses expected to result from the merger. |
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Greene County/ | ||||||||||||||||
Median | Low | High | Civitas Merger | |||||||||||||
Price/Stated Book Value | 304 | % | 167 | % | 448 | % | 302 | % | ||||||||
Price/Tangible Book Value | 328 | % | 167 | % | 448 | % | 302 | % | ||||||||
Price/Latest Twelve Months’ Earnings Per Share | 23.0 | x | 14.3 | x | 38.1 | x | 38.4 | x | ||||||||
Core Deposit Premium | 28.3 | % | 20.4 | % | 39.7 | % | 27.0 | % |
Median | Low | High | Civitas | |||||||||||||
Equity/Assets | 8.23 | % | 6.20 | % | 17.37 | % | 6.08 | % | ||||||||
Non-Performing Assets/Assets | 0.29 | 0.00 | 0.86 | 0.27 | ||||||||||||
Return on Average Assets(Year-to-Date Annualized) | 1.18 | 0.78 | 1.57 | 0.56 | ||||||||||||
Return on Average Equity(Year-to-Date Annualized) | 13.26 | 5.26 | 21.07 | 9.02 | ||||||||||||
Efficiency Ratio (Last Twelve Months) | 57 | 43 | 66 | 71 |
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Terminal Multiple (x) | ||||||||||||||||||||||||||||||
14.0 | 14.5 | 15.0 | 15.5 | 16.0 | ||||||||||||||||||||||||||
Discount Rate (%) | 13.0 | $ | 8.82 | $ | 9.09 | $ | 9.37 | $ | 9.64 | $ | 9.92 | |||||||||||||||||||
14.0 | 8.47 | 8.74 | 9.00 | 9.27 | 9.53 | |||||||||||||||||||||||||
15.0 | 8.15 | 8.40 | 8.65 | 8.91 | 9.16 | |||||||||||||||||||||||||
16.0 | 7.84 | 8.08 | 8.33 | 8.57 | 8.81 | |||||||||||||||||||||||||
17.0 | 7.55 | 7.78 | 8.01 | 8.24 | 8.48 |
Greene County | 35.2 | % | ||
Keefe Bank Index | 13.6 |
• | various financial measures including: | |
• | earnings performance | |
• | operating efficiency | |
• | capital | |
• | asset quality | |
• | various measures of market performance including: | |
• | price to book value | |
• | price to earnings | |
• | dividend yield |
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Median | Low | High | Greene County | |||||||||||||
Return on Average Equity (GAAP) | 10.31 | % | 7.27 | % | 27.81 | % | 11.16 | % | ||||||||
Return on Average Assets (GAAP) | 1.09 | 0.68 | 2.38 | 1.20 | ||||||||||||
Return on Average Tangible Equity (Cash) | 18.58 | 9.21 | 32.38 | 14.57 | ||||||||||||
Return on Average Tangible Assets (Cash) | 1.20 | 0.68 | 2.43 | 1.27 | ||||||||||||
Net Interest Margin | 4.24 | 3.70 | 5.09 | 4.66 | ||||||||||||
Efficiency Ratio | 59 | 52 | 64 | 59 | ||||||||||||
Leverage Ratio | 8.71 | 7.33 | 10.63 | 9.56 | ||||||||||||
Tangible Equity/Assets | 7.13 | 5.72 | 10.19 | 8.42 | ||||||||||||
Loans/Deposits | 94 | 63 | 101 | 116 | ||||||||||||
Non-Performing Assets/Assets | 0.46 | 0.10 | 1.24 | 0.29 | ||||||||||||
Loan Loss Reserve/Non-Performing Assets | 196 | 71 | 786 | 432 | ||||||||||||
Loan Loss Reserve/Total Loans | 1.19 | 1.04 | 1.72 | 1.45 |
Median | Low | High | Greene County | |||||||||||||
Price/Stated Book Value Per Share | 181 | % | 128 | % | 300 | % | 197 | % | ||||||||
Price/Tangible Book Value Per Share | 277 | 196 | 367 | 249 | ||||||||||||
Price/2006 GAAP Estimated Earnings Per Share | 17.3 | x | 14.2 | x | 26.3 | x | 17.3 | x | ||||||||
Price/2006 Cash Estimated Earnings Per Share | 17.0 | 13.9 | 24.5 | 16.7 | ||||||||||||
Price/2007 GAAP Estimated Earnings Per Share | 15.7 | 14.1 | 20.3 | 15.4 | ||||||||||||
Price/2007 Cash Estimated Earnings Per Share | 15.2 | 13.8 | 19.2 | 14.9 | ||||||||||||
Dividend Yield | 1.8 | % | 0.0 | % | 3.0 | % | 1.7 | % |
• | earnings performance | |
• | operating efficiency | |
• | capital | |
• | asset quality |
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Median | Low | High | Civitas | |||||||||||||
Return on Average Equity (GAAP) | 11.07 | % | 6.20 | % | 15.39 | % | 9.24 | % | ||||||||
Return on Average Assets (GAAP) | 1.00 | 0.61 | 1.53 | 0.55 | ||||||||||||
Return on Average Tangible Equity (Cash) | 13.88 | 9.21 | 18.37 | 9.24 | ||||||||||||
Return on Average Tangible Assets (Cash) | 1.10 | 0.65 | 1.55 | 0.55 | ||||||||||||
Net Interest Margin | 4.31 | 3.32 | 5.09 | 3.10 | ||||||||||||
Efficiency Ratio | 60 | 47 | 69 | 65 | ||||||||||||
Leverage Ratio | 9.38 | 8.18 | 12.08 | 8.97 | ||||||||||||
Tangible Equity/Assets | 7.26 | 6.09 | 11.56 | 6.08 | ||||||||||||
Loans/Deposits | 94 | 87 | 101 | 87 | ||||||||||||
Non-Performing Assets/Assets | 0.53 | 0.25 | 1.64 | 0.27 | ||||||||||||
Loan Loss Reserve/Total Loans | 1.31 | 1.04 | 2.17 | 1.00 |
Category | Greene County | Civitas | ||||||
Assets | 67.2 | % | 32.8 | % | ||||
Gross Loans | 72.0 | 28.0 | ||||||
Deposits | 65.8 | 34.2 | ||||||
Equity | 77.8 | 22.2 | ||||||
Tangible Equity | 73.5 | 26.5 | ||||||
Latest Twelve Months’ Earnings (GAAP) | 83.0 | 17.0 | ||||||
Latest Twelve Months’ Earnings (Cash) | 83.4 | 16.6 | ||||||
Estimated Pro Forma Ownership | 76.2 | 23.8 |
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• | an individual who is a citizen or resident of the United States; | |
• | a corporation created or organized under the laws of the United States or any of its political subdivisions; | |
• | a trust that (1) is subject to the supervision of a court within the United States and the control of one or more United States persons or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person; or | |
• | an estate that is subject to United States federal income tax on its income regardless of its source. |
• | a financial institution; |
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• | a tax-exempt organization; | |
• | an S corporation or other pass-through entity; | |
• | an insurance company; | |
• | a mutual fund; | |
• | a dealer in securities or foreign currencies; | |
• | a trader in securities who elects themark-to-market method of accounting for your securities; | |
• | a Civitas shareholder whose shares are qualified small business stock for purposes of Section 1202 of the Internal Revenue Code or who may otherwise be subject to the alternative minimum tax provisions of the Internal Revenue Code; | |
• | a Civitas shareholder who received Civitas common stock through the exercise of employee stock options or otherwise as compensation or through a tax-qualified retirement plan; | |
• | a person who has a functional currency other than the U.S. dollar; or | |
• | a Civitas shareholder who holds Civitas common stock as part of a hedge, straddle or a constructive sale or conversion transaction. |
• | the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; | |
• | no gain or loss will be recognized by Greene County or Civitas by reason of the merger; | |
• | you will not recognize gain or loss if you exchange your Civitas common stock solely for Greene County common stock, except to the extent of any cash received in lieu of a fractional share of Greene County common stock. |
• | you will recognize gain or loss if you exchange your Civitas common stock solely for cash in the merger (or receive cash in lieu of fractional shares) in an amount equal to the difference between the amount of cash you receive and your tax basis in your shares of Civitas common stock; |
• | subject to the following, if you exchange your Civitas common stock for a combination of Greene County common stock and cashyou will recognize gain (but not loss) in an amount equal to the lesser of: (i) the excess, if any, of: (a) the sum of the cash (excluding any cash received in lieu of a fractional share of Greene County common stock) and the fair market value of the Greene County common stock you receive (including any fractional share of Greene County common stock you are deemed to receive and exchange for cash) (b) over your tax basis in the Civitas common stock surrendered in the merger or (ii) the cash that you receive in the merger (other than cash received in lieu of fractional shares). In certain circumstances, the exchange of your Civitas common stock for a combination of Greene County common stock and cash may not be treated as a sale of a portion of your Civitas common stock and may be treated as a dividend of the cash instead. See below under “— Additional Considerations — Recharacterization of Gain as a Dividend.” |
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• | your tax basis in the Greene County common stock that you receive in the merger (including any fractional share interest you are deemed to receive and exchange for cash), will equal your tax basis in the Civitas common stock you surrendered, increased by the amount of taxable gain, if any, you recognize on the exchange and decreased by the amount of any cash received by you in the merger; and | |
• | your holding period for the Greene County common stock that you receive in the merger will include your holding period for the shares of Civitas common stock that you exchange in the merger. |
47
48
• | would result in a monopoly; | |
• | would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any part of the United States; or | |
• | may have the effect in any part of the United States of substantially lessening competition, tending to create a monopoly or otherwise resulting in a restraint of trade, unless the FRB finds that the public interest created by the probable effect of the transaction in meeting the convenience and needs of the communities to be served clearly outweighs the anticompetitive effects of the proposed merger. |
49
• | Restrictions on the Payment of Dividends: Greene County and Civitas are legal entities separate and distinct from their banking and other subsidiaries, but depend principally on dividends from their subsidiary depository institutions for cash flow to pay any dividends to their respective shareholders. There are statutory and regulatory limitations on the payment of dividends by these subsidiary depository institutions to Greene County and Civitas, as the case may be, as well as by Greene County and Civitas to their respective shareholders. The subsidiary banks of Greene County and Civitas are subject to dividend restrictions imposed by the applicable state and federal regulators. The payment of dividends by Greene County and Civitas also may be affected or limited by other factors, such as the requirement to maintain adequate capital above state or federal regulatory guidelines. | |
• | Capital Adequacy: Greene County and Civitas and their banking subsidiaries are required by state and federal regulators to comply with certain capital adequacy standards related to risk exposure and the leverage position of financial institutions. Any bank or savings institution that fails to meet its capital guidelines may be subject to a variety of enforcement remedies and certain other restrictions on its business. As of January 25, 2007, Greene County, Civitas and their banking subsidiaries were in compliance with all such capital adequacy standards. | |
• | Support of Subsidiary Institutions: Under FRB policy, Greene County and Civitas are expected to act as sources of financial strength for, and commit their resources to support, Greene County Bank and Cumberland Bank, respectively, and any other banking subsidiaries, even in times when Greene County or Civitas might not be inclined to provide such support. | |
• | Prompt Corrective Action: Federal banking regulators are required to audit Greene County, Civitas, Greene County Bank and Cumberland Bank to determine whether they are adequately capitalized. If a banking institution is deemed by regulators to be insufficiently capitalized, the regulators are required to take certain actions designed to improve the capitalization of the financial institution. | |
• | Non-Banking Activities: The Bank Holding Company Act also prohibits, subject to certain exceptions, a bank holding company from engaging in or acquiring direct or indirect control of more than 5% of the voting stock of any company engaged in non-banking activities. An exception to this prohibition is for activities expressly found by the FRB to be so closely related to banking or managing or controlling banks as to be a proper incident thereto or financial in nature. | |
• | Out-of-State Acquisitions: A bank holding company and its subsidiaries also are prohibited from acquiring any voting shares of, or interest in, any banks located outside of the state in which the operations of the bank holding company’s subsidiaries are located, unless the acquisition is specifically authorized by the statutes of the state in which the target is located. |
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• | Anti-Tying: A bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with the extension of credit or provision of any property or service. Thus, an affiliate of a bank holding company may not extend credit, lease, sell property, or furnish any services or fix or vary the consideration for these on the condition that (i) the customer must obtain or provide some additional credit, property or services from or to its bank holding company or subsidiaries thereof or (ii) the customer may not obtain some other credit, property, or services from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of the credit extended. | |
• | Other Requirements: Banks also are required to file annual reports and such additional information as the banking regulations require. Banks are subject to certain restrictions on loan amounts, interest rates, “insider” loans to officers, directors and principal shareholders, transactions with affiliates and many other matters. Strict compliance at all times with state and federal banking laws will be required. |
51
52
• | the further registration under the Securities Act of the Greene County common stock to be transferred; | |
• | compliance with Rule 145 promulgated under the Securities Act, which permits limited sales under certain circumstances; or | |
• | the availability of another exemption from registration. |
53
• | 0.2674 (subject to adjustment as described below) shares of Greene County common stock; |
• | $10.25 in cash, without interest; or |
• | a combination of cash and Greene County common stock designated by you. |
54
55
• | first, to holders of less than 200 Civitas shares and to Civitas option holders; and |
• | second, pro-rata to Civitas shareholders who elected to receive cash based upon the ratio that the number of your shares for which you elected to receive cash bears to the total number of Civitas shares as to which Civitas shareholders elected to receive cash. |
56
• | approval of the merger agreement by both the Civitas shareholders and Greene County shareholders; |
• | approval by the Nasdaq Global Select Market of listing of the shares of Greene County common stock to be issued in the merger, subject to official notice of issuance; | |
• | receipt of all required regulatory approvals and expiration of all related statutory waiting periods; | |
• | effectiveness of the registration statement, of which this joint proxy statement/prospectus constitutes a part, for the Greene County shares to be issued in the merger; | |
• | absence of any order, injunction or decree of a court or agency of competent jurisdiction which prohibits completion of the merger; | |
• | absence of any statute, rule, regulation, order, injunction or decree which prohibits or makes illegal completion of the merger; | |
• | the receipt by each party of an opinion of counsel, dated the closing date of the merger, substantially to the effect that the merger will be treated as a reorganization under Section 368(a) of the Code and that no tax gain or loss will be recognized by Greene County, Civitas or Civitas shareholders who exchange their Civitas common stock solely for Greene County common stock; | |
• | accuracy of the other party’s representations and warranties contained in the merger agreement, except, in the case of most of such representations and warranties, where the failure to be accurate would not be reasonably likely to have a material adverse effect on the party making the representations and warranties (see “— Representations and Warranties” immediately below), and the performance by the other party of its obligations contained in the merger agreement in all material respects; |
57
• | Greene County Bank and Cumberland Bank shall have received all required regulatory approvals and shareholder and other approvals necessary to be merged; | |
• | there are no Civitas regulatory agreements in effect that would have a material adverse effect on Greene County after the merger; and | |
• | Civitas will have given to GCBS access to their premises and books and records during normal business hours for any reasonable purpose related to the merger. |
• | corporate existence, good standing and qualification to conduct business; | |
• | capital structure; | |
• | due authorization, execution, delivery and enforceability of the merger agreement; | |
• | absence of any violation of agreements or law or regulation as a result of the merger; | |
• | governmental and third party consents necessary to complete the merger; | |
• | SEC, banking and other regulatory filings; | |
• | financial statements; | |
• | fees payable to financial advisors in connection with the merger; | |
• | absence of material adverse changes; | |
• | legal proceedings and regulatory actions; | |
• | tax matters; | |
• | employee matters; | |
• | compliance with laws; | |
• | contracts; | |
• | agreements with regulatory agencies; | |
• | interest rate risk management instruments; | |
• | undisclosed liabilities; | |
• | insurance coverage; | |
• | environmental matters; | |
• | state takeover laws; | |
• | tax treatment as a reorganization; | |
• | accuracy of information to be included in SEC filings and proxy statements; | |
• | disclosure of internal controls and procedures; and | |
• | receipt of fairness opinions. |
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• | conduct its business in the ordinary course; | |
• | preserve its business organization, employees, and business relationships; | |
• | retain the services of its key officers and key employees; and | |
• | take no action to adversely affect or delay obtaining regulatory approval of the merger, performing the covenants under the merger agreement, or consummating the merger. |
• | other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity; |
• | (i) adjust, split, combine or reclassify any shares of Civitas capital stock; (ii) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of Civitas capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, except (1) for regular quarterly cash dividends declared and payable in 2007 at a rate not in excess of $0.02 per share, (2) dividends paid by or to any of the subsidiaries of Civitas, (3) the acceptance of shares of Civitas common stock as payment of the exercise price of stock options, and (4) the acceptance of shares of Civitas common stock upon forfeiture of any restricted shares pursuant to an award of restricted shares under any stock option plan; (iii) grant any stock appreciation rights or grant any individual, corporation or other entity any right to acquire any shares of Civitas capital stock; or (iv) issue any additional shares of capital stock except pursuant to the exercise of stock options outstanding as of the date of the merger agreement or issued thereafter if permitted and the ESPP; |
• | except for normal increases made in the ordinary course of business consistent with past practice, or as required by applicable law or an existing agreement, increase the wages, salaries, compensation, pension, or other fringe benefits or perquisites payable to any officer, employee, or director of Civitas; | |
• | pay any pension or retirement allowance not required by any existing plan or agreement or by applicable law; | |
• | pay any bonus approved as exception; | |
• | become a party to, amend or commit itself to, any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee, other than as required by applicable law or an existing agreement; |
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• | sell, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets that are material to Civitas and its subsidiaries, taken as a whole, to any individual, corporation or other entity other than a subsidiary or cancel, release or assign any indebtedness that is material to Civitas and its subsidiaries, taken as a whole, to any such person or any claims held by any such person that are material to Civitas and its subsidiaries, taken as a whole, in each case other than in the ordinary course of business consistent with past practice or pursuant to contracts in force at the date of the merger agreement; | |
• | enter into any material new line of business or make any material change in its lending, investment, underwriting, risk and asset liability management or other banking and operating policies, except as required by applicable law, regulation or policies imposed by any governmental entity; | |
• | make capital expenditures other than in the ordinary course of business consistent with past practice, which individually exceed $10,000 or in the aggregate $50,000, except for certain approved expenses for two new branch facilities; | |
• | knowingly take any action, or knowingly fail to take any action, which action or failure to act is reasonably likely to prevent the merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; | |
• | amend its charter or bylaws, or otherwise take any action to exempt any person or entity (other than Greene County) or any action taken by any such person or entity from any takeover statute or similarly restrictive provisions of its organizational documents, or terminate, amend or waive any provisions of any confidentiality or standstill agreements in place with any third parties; | |
• | restructure or materially change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported; | |
• | settle any material claim, action or proceeding, except in the ordinary course of business consistent with past practice; | |
• | take any action or fail to take any action that is intended or may reasonably be expected to result in any of the Civitas’ representations and warranties being or becoming untrue in any material respect, or in any conditions to the merger not being satisfied; | |
• | change its methods of tax and financial accounting, subject to limited exceptions; | |
• | take any action that would materially impede or delay the ability of the parties to obtain any necessary approvals of any regulatory agency or governmental entity required for the transactions contemplated by the merger agreement; or | |
• | agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by the preceding bullet points. |
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• | the board of directors of Civitas receives the acquisition proposal prior to Civitas’ shareholders meeting; | |
• | the board of directors of Civitas, after consultation with outside legal counsel, reasonably determines in good faith that the failure to engage in those discussions or provide information would cause it to violate its fiduciary duties under applicable law; | |
• | the board of directors of Civitas concludes in good faith that the acquisition proposal constitutes or is reasonably likely to result in a superior proposal (as described below); and | |
• | Civitas notifies Greene County promptly, and in any event within 24 hours of Civitas’ receipt of any acquisition proposal or any request for nonpublic information relating to Civitas by any third party considering making, or that has made, an acquisition proposal, of the identity of the third party, the material terms and conditions of any inquiries, proposals or offers, and updates on the status of the terms of any proposals, offers, discussions or negotiations on a current basis. |
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• | by mutual consent of Greene County and Civitas; | |
• | by either Greene County or Civitas, if any request or application for a required regulatory approval is denied by the governmental entity which must grant such approval and such denial has become final and non-appealable, or a governmental entity has issued an order decree, or ruling to permanently prohibit the merger and such prohibition has become final and non-appealable, except that no party may so terminate the merger agreement if the denial is a result of the failure of such party to the merger agreement; | |
• | by either Greene County or Civitas, if the merger is not completed on or before June 30, 2007, subject to extension for regulatory or court delay, unless the failure of the closing to occur by this date is due to the failure of the party seeking to terminate the merger agreement to comply with the merger agreement; | |
• | by either Greene County or Civitas, if any approval of the shareholders of Greene County or Civitas required for completion of the merger has not been obtained upon a vote taken at a duly held meeting of shareholders or at any adjournment or postponement thereof provided the party seeking to terminate the merger agreement has complied with the requirements in the merger agreement to call a meeting of shareholders and recommend approval of the merger agreement; | |
• | by either Greene County or Civitas, if (1) the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement and (2) there has been a breach of any of the covenants, agreements, representations or warranties of the other party in the merger agreement, which breach is not cured within 10 days following written notice to the party committing the breach, or which breach, by its nature, cannot be cured prior to the closing date of the merger, and which breach, individually or together with all other breaches, would, if occurring or continuing on the closing date, result in the failure of the condition relating to the performance of obligations or breaches of representations or warranties described under “ — Conditions to the Completion of the Merger” above; | |
• | by either Greene County or Civitas, if (1) the board of directors of the other does not publicly recommend that its shareholders either approve the merger agreement, (2) after recommending that such shareholders approve the merger agreement, such board of directors has withdrawn, modified or amended such recommendation in any manner adverse to the other party, or (3) the other party materially breaches its obligations under the merger by reason of a failure to call a meeting of its shareholders or a failure to prepare and mail to its shareholders this document; or | |
• | by Greene County, if the board of directors of Civitas authorizes, recommends, proposes or publicly announces its intention to authorize, recommend or propose an acquisition proposal with any person other than Greene County. |
• | either party may seek all legal and equitable remedies to which such party may be entitled, including specific performance of the provisions of the merger agreement in the event of a termination resulting from a breach of a representation, warranty, covenant, or agreement, the failure to recommend, call, or support the shareholders’ vote at a shareholders’ meeting, or the pursuit by Civitas of another acquisition proposal; and |
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• | designated provisions of the merger agreement, including the payment of fees and expenses, the confidential treatment of information. Publicity concerning the merger, and, if applicable, the termination fee described below, will survive the termination. |
• | If Greene County terminates the merger agreement because Civitas authorized, recommended, proposed or publicly announced its intention to authorize, recommend or propose an Acquisition Transaction (as defined below) with any person other than Greene County; | |
• | If (1) the merger agreement is terminated by either party because the required shareholder vote of Civitas was not obtained at Civitas’ shareholders meeting and (2) a bona fide acquisition transaction with respect to Civitas was publicly announced or otherwise communicated to the board of directors of Civitas before its shareholders meeting that has not been withdrawn; or | |
• | If (1) the merger agreement is terminated by either party because the merger has not been completed by June 30, 2007, or by Greene County because of a material breach by Civitas that causes a condition to the merger to not be satisfied, (2) a public proposal with respect to an acquisition transaction involving Civitas was made and not withdrawn before the merger agreement was terminated and (3) after the announcement of the public proposal, Civitas intentionally breached any of its representations, warranties, covenants or agreements and the breach materially contributed to the failure of the merger to become effective. |
• | the direct or indirect acquisition, purchase or assumption of all or a substantial portion of the assets or deposits of Civitas; | |
• | the acquisition by any person of direct or indirect beneficial ownership of 10% or more of the outstanding shares of voting stock of Civitas; or | |
• | a merger, consolidation, business combination, liquidation, dissolution or similar transaction involving Civitas, other than a merger, business combination or similar transaction of Civitas if (1) the shareholders of Civitas immediately before the transaction own at least 90% of the voting stock of the entity surviving the transaction (or the parent of the surviving entity) immediately following the transaction and (2) as a result of the transaction no person or group owns or controls 10% or more of the voting stock of the surviving entity (or parent of the surviving entity) immediately following the transaction. |
• | extend the time for the performance of any of the obligations or other acts of the other party under the merger agreement; | |
• | waive any inaccuracies in the other party’s representations and warranties contained in the merger agreement; and | |
• | waive the other party’s compliance with any of its agreements contained in the merger agreement, or waive compliance with any conditions to its obligations to complete the merger. |
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• | consider and vote upon a proposal to approve the merger agreement between Greene County and Civitas, a copy of which is attached asAppendix Ato this document, pursuant to which Civitas will merge with Greene County, and to approve the issuance of Greene County common stock in connection with the merger; | |
• | elect five persons to serve as directors of Greene County, each for a three-year term, those persons to serve until the end of their respective terms and until their respective successors are elected and qualified; | |
• | consider and vote upon a proposal to ratify the appointment of Dixon Hughes PLLC as Greene County’s independent registered public accounting firm for 2007; | |
• | consider and vote upon a proposal to amend the Greene County Amended and Restated Charter to increase the number of authorized shares from 15 million to 20 million shares of common stock; | |
• | consider and vote upon a proposal to amend the Greene County Amended and Restated Charter to change the corporate name of Greene County to Green Bankshares, Inc.; | |
• | consider and vote upon a proposal to approve the adjournment of the annual meeting, including, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the annual meeting for any of the foregoing proposals; and | |
• | transact any other business that may properly come before the Greene County annual meeting or any adjournment or postponement thereof. |
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• | submitting a written revocation prior to the meeting to Phil M. Bachman, Corporate Secretary, Greene County Bancshares, Inc., 100 North Main Street, Greeneville, Tennessee37743-4992; | |
• | submitting another proxy by mail that is dated later than the original proxy; or | |
• | attending the annual meeting and voting in person. |
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• | consider and vote upon a proposal to approve the merger agreement between Greene County and Civitas, a copy of which is attached asAppendix Ato this document, pursuant to which Civitas will merge with Greene County; | |
• | consider and vote upon a proposal to approve the adjournment of the special meeting, including, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting for any of the foregoing proposals; and | |
• | transact any other business that may properly come before the Civitas special meeting or any adjournment or postponement thereof. |
• | submitting a written revocation prior to the meeting to Danny Herron, Corporate Secretary, Civitas BankGroup, Inc., 810 Crescent Centre Drive, Suite 230, Franklin, Tennessee 37067; | |
• | submitting another proxy by mail that is dated later than the original proxy; or | |
• | attending the special meeting and voting in person. |
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Rights of Greene County Shareholders and the Rights of Civitas Shareholders
Greene County Shareholder Rights | Civitas Shareholder Rights | |||
Description of Common Stock: | Greene County is authorized to issue 15,000,000 shares of common stock, par value $2.00 per share, and 130 shares of Organizational Stock, par value $10.00 per share. | Civitas is authorized to issue 40,000,000 shares of common stock, with $0.50 par value. | ||
Description of Preferred Stock: | No shares of preferred stock are authorized or outstanding. | No shares of preferred stock are authorized or outstanding. | ||
Special Meeting of Shareholders: | Under the TBCA, the board of directors, any person authorized by the charter or bylaws, or (unless the charter provides otherwise) the holders of at least ten percent (10%) of the votes entitled to be cast may call a special meeting of shareholders. | Under the TBCA, the board of directors, any person authorized by the charter or bylaws, or (unless the charter provides otherwise) the holders of at least ten percent (10%) of the votes entitled to be cast may call a special meeting of shareholders. | ||
Greene County’s bylaws provide that only the board of directors or a committee duly authorized by the board may call a special meeting of the shareholders. Written notice must be delivered not less than ten (10) days nor more than two (2) months before the meeting. | Civitas bylaws also provide that the President, Secretary or any officer instructed by the board to call the meeting may do so. Written notice must state the purpose of the meeting and be delivered not less than ten (10) days nor more than sixty (60) days before the meeting. | |||
Shareholder Rights Plan: | Greene County does not have a shareholder rights plan as a part of its charter, bylaws, or by separate agreement. | Same as Greene County. | ||
Control Share Acquisitions: | The Tennessee Control Share Acquisition Act generally provides that, except as stated below, “control shares” will not have any voting rights. Control shares are shares acquired by a person under certain circumstances which, when added to other shares owned, would give such person effective control over one-fifth or more, or a majority of all voting power (to the extent such acquired shares cause such person to exceed one-fifth or one-third of all voting power) in the election of Greene County’s directors. However, voting rights will be restored to control shares by resolution approved by the affirmative vote of the holders of a majority of Greene County’s voting stock, other than shares held by the owner of the control shares. If voting | The Tennessee Control Share Acquisition Act generally provides that, except as stated below, “control shares” will not have any voting rights. Control shares are shares acquired by a person under certain circumstances which, when added to other shares owned, would give such person effective control over one-fifth or more, or a majority of all voting power (to the extent such acquired shares cause such person to exceed one-fifth or one-third of all voting power) in the election of Civitas’ directors. However, voting rights will be restored to control shares by resolution approved by the affirmative vote of the holders of a majority of Civitas’ voting stock, other than shares held by the owner of the control shares. If voting rights are granted to control |
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Greene County Shareholder Rights | Civitas Shareholder Rights | |||
rights are granted to control shares which give the holder a majority of all voting power in the election of Greene County’s directors, then Greene County’s other shareholders may require Greene County to redeem their shares at fair value. | shares which give the holder a majority of all voting power in the election of Civitas’ directors, then Civitas’ other shareholders may require Civitas to redeem their shares at fair value. | |||
The Tennessee Control Share Acquisition Act is applicable to Greene County because the Greene County charter contains a specific provision “opting in” to the Control Share Acquisition Act. | The Tennessee Control Share Acquisition Act does not apply to Civitas because the Civitas charter does not contain a specific provision “opting in” to the Control Share Acquisition Act. | |||
Investor Protection Act: | The Tennessee Investor Protection Act (“TIPA”) provides that unless a Tennessee corporation’s board of directors has recommended a takeover offer to shareholders, no offeror beneficially owning five percent (5%) or more of any class of equity securities of the offeree company, any of which was purchased within the preceding year, may make a takeover offer for any class of equity security of the offeree company if after completion the offeror would be a beneficial owner of more than ten percent (10%) of any class of outstanding equity securities of the company unless the offeror, before making such purchase: (i) makes a public announcement of his or her intention with respect to changing or influencing the management or control of the offeree company; (ii) makes a full, fair and effective disclosure of such intention to the person from whom he or she intends to acquire such securities; and (iii) files with the Tennessee Commissioner of Commerce and Insurance (the “Commissioner”) and the offeree company a statement signifying such intentions and containing such additional information as may be prescribed by the Commissioner. | Same as Greene County. | ||
The offeror must provide that any equity securities of an offeree company deposited or tendered pursuant to a takeover offer may be withdrawn by an offeree at any time within seven days from the date the offer has become effective following filing with the Commissioner and the offeree company and public announcement of the terms or after sixty (60) days from the date the offer has become effective. If the takeover offer is for less than all the outstanding equity securities of any class, such an offer must also provide for |
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Greene County Shareholder Rights | Civitas Shareholder Rights | |||
acceptance of securities pro rata if the number of securities tendered is greater than the number the offeror has offered to accept and pay for. If such an offeror varies the terms of the takeover offer before its expiration date by increasing the consideration offered to offerees, the offeror must pay the increased consideration for all equity securities accepted, whether accepted before or after the variation in the terms of the offer. | ||||
The TIPA does not apply to Greene County, as it does not apply to bank holding companies subject to regulation by a federal agency and does not apply to any offer involving a vote by holders of equity securities of the offeree company. | ||||
Business Combinations Involving Interested Shareholders: | The Tennessee Business Combination Act generally prohibits a “business combination” by Greene County or a subsidiary with an “interested shareholder” within five (5) years after the shareholder becomes an interested shareholder. Greene County or a subsidiary can, however, enter into a business combination within that period if, before the interested shareholder became such, Greene County’s board of directors approved the business combination or the transaction in which the interested shareholder became an interested shareholder. After that five (5) year moratorium, the business combination with the interested shareholder can be consummated only if it satisfies certain fair price criteria or is approved by two-thirds (2/3) of the other shareholders. | Civitas is also subject to the Tennessee Business Combination Act, but its charter and bylaws do not contain any specific provisions dealing with these transactions. | ||
For purposes of the Tennessee Business Combination Act, a “business combination” includes mergers, share exchanges, sales and leases of assets, issuances of securities, and similar transactions. An “interested shareholder” is generally any person or entity that beneficially owns ten percent 10% or more of the voting power of any outstanding class or series of Greene County stock. | ||||
Greene County’s charter has several provisions involving these transactions. The transaction must either be approved by a majority of the “disinterested |
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Greene County Shareholder Rights | Civitas Shareholder Rights | |||
directors” as defined in the charter or it must meet several qualifications including (i) a fair price as determined by various metrics, (ii) the form of consideration must be cash or whatever other consideration the Interested Shareholder receives, (iii) there may not be a failure to pay dividends to preferred members nor may there a reduction in the periodic rate of dividends to common stock holders, (iv) there may not be any loans to the Interested Shareholder, and (v) there can be no material change in the business of the company. | ||||
Greenmail Act: | The Tennessee Greenmail Act applies to a Tennessee corporation that has a class of voting stock registered or traded on a national securities exchange or registered with the SEC pursuant to Section 12(g) of the Exchange Act. Under the Tennessee Greenmail Act, Greene County may not purchase any of its shares at a price above the market value of such shares from any person who holds more than three percent (3%) of the class of securities to be purchased if such person has held such shares for less than two years, unless the purchase has been approved by the affirmative vote of a majority of the outstanding shares of each class of voting stock issued by Greene County or Greene County makes an offer, of at least equal value per share, to all shareholders of such class. | Same as Greene County. | ||
Election and Size of Board of Directors: | The election of board members will generally take place at the annual meeting. | The election of board members will generally take place at the annual meeting. | ||
The board of directors must not consist of less than three (3) nor more than fifteen (15) members, unless all of the company’s common stock is owned by less than 3 holders of record, then there may be less than three (3) members. The number of directors may be fixed or changed from time to time, by the affirmative vote of two-thirds (2/3) of the issued and outstanding shares of the corporation entitled to vote in an election of directors, or by the affirmative vote of two-thirds (2/3) of all directors then in office. | The board of directors must consist of no fewer than three (3) or more that seventeen (17) members. The number of directors may by changed by amendment of the bylaws or by the directors or the shareholders, but in no case will a change in this number shorten the term of any director. Each director elected at an annual meeting or in the interim will serve until the next successive annual meeting or until his successor had been appointed. | |||
The board of directors is divided into three (3) classes, Class I, Class II and Class III, which are nearly equal in number as possible. Each Class of |
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Greene County Shareholder Rights | Civitas Shareholder Rights | |||
director serves a three (3) year term. No person over the age of seventy (70) is eligible for election. | ||||
Presently, Greene County’s board of directors consists of 14 members. After the merger, Greene County’s board of directors will have fourteen (14) members. | ||||
Vacancies on the Board of Directors: | The TBCA provides that vacancies on the board of directors may be filled by the shareholders or directors, unless the charter provides otherwise. | The TBCA provides that vacancies on the board of directors may be filled by the shareholders or directors, unless the charter provides otherwise. | ||
Greene County’s bylaws provide that directors shall fill all vacancies unless the vacancy was caused by removal by the shareholders in which case the vacancy must be filled by the shareholders. | Civitas’ bylaws provide that any director vacancy may be filled by an affirmative vote of the remaining directors even if a quorum does not exist. | |||
Removal of Directors: | The TBCA provides that shareholders may remove directors with or without cause unless the charter provides that directors may be removed only for cause. However, if a director is elected by a particular voting group, that director may only be removed by the requisite vote of that voting group. | The TBCA provides that shareholders may remove directors with or without cause unless the charter provides that directors may be removed only for cause. However, if a director is elected by a particular voting group, that director may only be removed by the requisite vote of that voting group. | ||
Greene County’s bylaws provide that a director may be removed with or without cause by a majority of the shares entitled to vote or with cause by a majority of the directors. | At a meeting of the shareholders called expressly for the purpose of director removal, one or all of the directors may be removed with or without cause. | |||
Indemnification: | The Greene County charter provides that Greene County shall have the power to indemnify any director or officer of the corporation to the fullest extent permitted by the TBCA. Greene County may also indemnify and advance expenses to any employee or agent of Greene County who is not a director or officer to the same extent as a director or officer, if the board of directors determines that to do so is in the best interests of Greene County. | The Civitas charter provide that Civitas shall have the power to indemnify any director, officer, employee or agent of Civitas or any other person who is serving in a similar capacity in another corporate entity at the request of Civitas, to the fullest extent permitted by the TBCA. This indemnification shall continue to any person who has ceased to serve Civitas in any of the above fashions. | ||
Personal Liability of Directors: | Greene County’s charter provides that, to the fullest extent permitted by the TBCA, a director of Greene County shall not be liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. | Same as Greene County. | ||
The TBCA provides that a corporation may not indemnify a director for liability 1) for any breach of the director’s duty of loyalty to the corporation or its shareholders; 2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of |
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Greene County Shareholder Rights | Civitas Shareholder Rights | |||
law; or 3) under Sec.48-18-304 of the TBCA (with respect to the unlawful payment of dividends), as the same exists or hereafter may be amended. | ||||
Dissenters’ Rights: | The TBCA provides that a shareholder of a corporation is generally entitled to receive payment of the fair value of his or her stock if the shareholder dissents from transactions including a proposed merger, share exchange or a sale of substantially all of the assets of the corporation. However, dissenters’ rights generally are not available to holders of shares, such as shares of Greene County common stock, that are registered on a national securities exchange or quoted on a national market security system. | Same as Greene County. | ||
Votes on Extraordinary Corporate Transactions: | Under the TBCA, a sale or other disposition of all or substantially all of the corporation’s assets, a merger of the corporation with and into another corporation, or a share exchange involving one or more classes or series of the corporation’s shares or a dissolution of the corporation must be approved by the board of directors (except in certain limited circumstances) plus, with certain exceptions, the affirmative vote of the holders of a majority of all shares of stock entitled to vote thereon. | Under the TBCA, a sale or other disposition of all or substantially all of the corporation’s assets, a merger of the corporation with and into another corporation, or a share exchange involving one or more classes or series of the corporation’s shares or a dissolution of the corporation must be approved by the board of directors (except in certain limited circumstances) plus, with certain exceptions, the affirmative vote of the holders of a majority of all shares of stock entitled to vote thereon. | ||
Neither Greene County’s charter nor bylaws have any provisions dealing with extraordinary corporate transactions. | Neither Civitas’ charter nor bylaws have any provisions dealing with extraordinary corporate transactions. | |||
Consideration of Other Constituencies: | The TBCA provides that no corporation (nor its officers or directors) registered or traded on a national securities exchange or registered with the SEC shall be held liable for either having failed to approve the acquisition of shares by an interested shareholder on or before such interested shareholder’s share acquisition date, or for opposing any proposed merger, exchange, tender offer or significant disposition of the assets of the corporation or any of its subsidiaries because of a good faith belief that such merger, exchange, tender offer or significant disposition of assets would adversely affect the corporation’s employees, customers, suppliers, the communities in which such corporation or its subsidiaries operate or are located or any other relevant factor if such factors are permitted to be considered by the board of directors under the charter | Same as Greene County. |
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Greene County Shareholder Rights | Civitas Shareholder Rights | |||
for such corporation in connection with a merger, exchange, tender offer or significant disposition of assets. | ||||
Greene County’s charter does not contain an “opt- out” provision, and therefore, the Tennessee Business Combination Act will apply. | ||||
Amendment of Charter: | The TBCA provides that certain relatively technical amendments to a corporation’s charter may be adopted by the directors without shareholder action. Generally, the TBCA provides that a corporation’s charter may be amended by a majority of votes entitled to be cast on an amendment, subject to any condition the board of directors may place on its submission of the amendment to the shareholders. Greene County’s charter provides that any amendment or repeal of any part of Section 9 of the charter discussing transactions with Interested Shareholders shall require an affirmative vote of eighty percent (80%) of all voting stock voting as a class. | The TBCA provides that certain relatively technical amendments to a corporation’s charter may be adopted by the directors without shareholder action. Generally, the TBCA provides that a corporation’s charter may be amended by a majority of votes entitled to be cast on an amendment, subject to any condition the board of directors may place on its submission of the amendment to the shareholders. The Civitas charter does not have any provisions dealing with amendments thereto. | ||
Amendment of Bylaws: | Under the TBCA, shareholder action is generally not necessary to amend the bylaws, unless the charter provides otherwise or the shareholders in amending or repealing a particular bylaw provide expressly that the board of directors may not amend or repeal that bylaw. The shareholders may amend or repeal Greene County’s bylaws even though the bylaws may also be amended or repealed by its board of directors. | Under the TBCA, shareholder action is generally not necessary to amend the bylaws, unless the charter provides otherwise or the shareholders in amending or repealing a particular bylaw provide expressly that the board of directors may not amend or repeal that bylaw. The shareholders may amend or repeal Civitas’ bylaws even though the bylaws may also be amended or repealed by its board of directors. | ||
Greene County’s bylaws may be altered or amended, and new bylaws may be adopted by the shareholders at any annual or special meeting of the shareholders by a majority of the stock represented at that meeting or by the board of directors at any regular or special meeting of the board of directors by a majority of the board present. However, any amendment changing the number of directors requires an affirmative vote of a majority of all the directors currently serving. | The board of directors and the shareholders may adopt, alter, amend or repeal any bylaw. Shareholders may stipulate that any bylaw adopted by them may not be altered, amended or repealed by the board. |
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Phil M. Bachman;
Charles S. Brooks;
Bruce Campbell;
W.T. Daniels;
Robin Haynes;
Jerald K. Jaynes;
Robert K. Leonard;
Terry Leonard;
John Tolsma; and
Charles H. Whitfield, Jr.
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Current | ||||||||
Director | Term | |||||||
Name | Age | Since (a) | Expires | Previous Five-Years Business Experience | ||||
BOARD NOMINEES FOR TERM TO EXPIRE IN 2010 | ||||||||
Phil M. Bachman | 69 | 1968 | 2007 | President, Bachman-Bernard Motors (automobile dealership), Secretary of Greene County and the Bank | ||||
Robert K. Leonard | 39 | 2005 | 2007 | President, LMR Plastics (manufacturing) | ||||
Terry Leonard | 69 | 1975 | 2007 | Chairman/Owner, Leonard & Associates (manufacturing) | ||||
Ronald E. Mayberry | 53 | 2003 | 2007 | Regional President, Sumner, Rutherford and Lawrence Counties; previously, President and CEO of Independent Bankshares, Inc. headquartered in Gallatin, Tennessee, which was acquired by Greene County in November 2003 | ||||
Kenneth R. Vaught | 42 | 2002 | 2007 | President and Chief Operating Officer of Greene County and the Bank; previously, Senior Vice-President and Regional Executive for the Bank’s Blount and Knox County, Tennessee offices. | ||||
DIRECTORS CONTINUING IN OFFICE | ||||||||
Martha M. Bachman | 52 | 2005 | 2009 | Co-Owner, Lancaster’s Jewelers, Inc. (retail) | ||||
Charles S. Brooks | 69 | 1990 | 2009 | Chairman of the Board, McInturff, Milligan & Brooks (insurance agency) | ||||
W.T. Daniels | 62 | 1987 | 2009 | Property management | ||||
Robin Haynes | 45 | 2004 | 2009 | Comptroller & Corporate Secretary, Delmar Haynes Pontiac GMC (automobile dealership) | ||||
Charles H. Whitfield, Jr. | 48 | 2000 | 2009 | President and Chief Executive Officer, Laughlin Memorial Hospital (hospital management) | ||||
Bruce Campbell | 55 | 2000 | 2008 | Director, President and Chief | ||||
Jerald K. Jaynes | 69 | 1992 | 2008 | Executive Officer, Forward Air Corporation, from October, 2003 to date; previously, Director, President and Chief Operating Officer, Forward Air Corporation (transportation) Retired; former President & CEO, Unaka Co., Inc. (manufacturing) | ||||
R. Stan Puckett | 51 | 1989 | 2008 | Chairman of the Board and Chief Executive Officer of Greene County and the Bank | ||||
John Tolsma | 33 | 2004 | 2008 | Chief Executive Officer, Knowledge Launch (educational multimedia) |
(a) | Indicates year that director first served as a director of either Greene County or the Bank. |
80
81
82
83
84
85
86
• | Base salaries for executives generally are targeted between the market 40th and 50th percentile. |
• | The annual incentive plan will provide cash compensation at the market 50th percentile when target goals are achieved and between the 60th and 75th percentile, if annual goals are exceeded. No bonuses will be paid if annual performance goals are not met. |
• | Performance-based long term incentives will provide equity compensation at the market 50th percentile when target goals are met, with the potential for awards between the 60th and 75th percentile when long term goals are exceeded. No equity awards will be made if long term performance goals are not met. Vesting periods of five years have been selected based upon the preponderance of proxy data reviewed for the peer group companies. |
87
88
Change in Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Nonqualified | ||||||||||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Name and | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||
Principal Position | Year | ($) | ($) | ($) | (1)($) | (2)($) | (3)($) | (4)($) | ($) | |||||||||||||||||||||||||||
R. Stan Puckett, | 2006 | $ | 265,000 | — | — | — | $ | 184,000 | $ | 7,589 | $ | 127,451 | $ | 584,040 | ||||||||||||||||||||||
Chairman of the Board and Chief Executive Officer of Greene County and the Bank (“CEO”) | ||||||||||||||||||||||||||||||||||||
Kenneth R. Vaught, | 2006 | $ | 225,000 | — | — | $ | 27,333 | $ | 155,000 | $ | 1,537 | $ | 94,174 | $ | 503,044 | |||||||||||||||||||||
Director, President and Chief Operating Officer of Greene County and the Bank (“COO”) | ||||||||||||||||||||||||||||||||||||
James E. Adams, | 2006 | $ | 175,000 | — | — | — | $ | 80,000 | — | $ | 11,809 | $ | 266,809 | |||||||||||||||||||||||
Senior Vice President, Chief Financial Office and Assistant Secretary of Greene County and the Bank (“CFO”) | ||||||||||||||||||||||||||||||||||||
Steve L. Droke, | 2006 | $ | 155,000 | — | — | $ | 11,556 | $ | 52,000 | — | $ | 16,651 | $ | 235,207 | ||||||||||||||||||||||
Senior Vice President and Chief Credit Officer of the Bank (CCO”) | ||||||||||||||||||||||||||||||||||||
William C. Adams, Jr., | 2006 | $ | 146,000 | — | — | $ | 9,921 | $ | 40,500 | — | $ | 11,459 | $ | 207,880 | ||||||||||||||||||||||
Senior Vice President and Chief Information Officer of the Bank (“CIO”) |
89
(1) | The amounts in column captioned “Option Awards” reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2006, in accordance with FAS 123(R) of awards pursuant to Greene County’s equity incentive plans and thus may include amounts from awards granted in and prior to 2006. For a description of the assumptions used by Greene County in valuing these awards please see “Note 12 — Stock Options” to Greene County’s consolidated financial statements included in Greene County’s Annual Report onForm 10-K for the fiscal year ended December 31, 2006 filed with the Securities and Exchange Commission on February 28, 2007. | |
(2) | Payment for 2006 performance paid in January and February 2007. | |
(3) | The amount in the column captioned “Change in Pension Value and Nonqualified Deferred Compensation Earnings” is the deemed above-market interest earned on deferred compensation (8.93% — 6.02% = 2.91%) based upon 120% of the Long Term Annual Applicable Federal Rate (“AFR”) published by the Internal Revenue Service in May 2006. Greene County’s interest rate for 2006 was 8.93%, please see “Note 8 — Benefit Plans” to Greene County’s consolidated financial statements included in Greene County’s Annual Report onForm 10-K for the fiscal year ended December 31, 2006 filed with the Securities and Exchange Commission on February 28, 2007. | |
(4) | The amounts shown as “All Other Compensation” include the following: |
Health and Life | ||||||||||||||||||||||||
Directors Fees | Non-Compete | Company 401(k) | Company Car | Insurance Paid by | Country Club | |||||||||||||||||||
Name | Paid and Earned | Agreement | Contribution | Allowance | Greene County | Dues | ||||||||||||||||||
R. Stan Puckett — CEO | $ | 19,600 | $ | 83,397 | $ | 13,200 | — | $ | 2,925 | $ | 8,329 | |||||||||||||
Kenneth R. Vaught — COO | $ | 19,600 | 58,463 | $ | 13,200 | — | — | $ | 2,911 | |||||||||||||||
James E. Adams — CFO | — | — | — | $ | 9,000 | — | $ | 2,809 | ||||||||||||||||
Steve L. Droke — CCO | — | — | $ | 9,170 | — | $ | 4,672 | $ | 2,809 | |||||||||||||||
William C. Adams — CIO | — | — | $ | 8,650 | — | — | $ | 2,809 |
All Other | ||||||||||||||||||||||||||||||||||||||||||||
All Other | Option Awards: | |||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts | Estimated Future Payouts | Stock Awards: | Number of | Grant Date | ||||||||||||||||||||||||||||||||||||||||
Under Non-Equity | Under Equity | Number of | Securities | Exercise or | Fair Value of | |||||||||||||||||||||||||||||||||||||||
Incentive Plan Awards | Incentive Plan Awards | Shares of | Underlying | Base Price of | Stock and | |||||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | Stock or Units | Options(1) | Option Awards | Option Awards | |||||||||||||||||||||||||||||||||||
Name | Grant Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($) | |||||||||||||||||||||||||||||||||
R. Stan Puckett �� CEO | 2/21/06 | — | — | — | — | — | — | — | 9,000 | $ | 28.90 | $ | 81,100 | |||||||||||||||||||||||||||||||
Kenneth R. Vaught — COO | 2/21/06 | — | — | — | — | — | — | — | 10,000 | $ | 28.90 | $ | 89,000 | |||||||||||||||||||||||||||||||
James E. Adams — CFO | 2/21/06 | — | — | — | — | — | — | — | 3,000 | $ | 28.90 | $ | 26,700 | |||||||||||||||||||||||||||||||
Steve L. Droke — CCO | 2/21/06 | — | — | — | — | — | — | — | 3,302 | $ | 28.90 | $ | 29,388 | |||||||||||||||||||||||||||||||
William C. Adams — CIO | 2/21/06 | — | — | — | — | — | — | — | 3,139 | $ | 28.90 | $ | 27,937 |
(1) | Reflects options awarded to the named executive officer. The term of the options provide for vesting in five equal annual installments commencing one year from the grant date. The options have a life of ten years from the grant date. |
90
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||||||
Equity | Plan | Equity | ||||||||||||||||||||||||||||||||||
Incentive | Awards: | Incentive | ||||||||||||||||||||||||||||||||||
Plan | Number of | Plan Awards: | ||||||||||||||||||||||||||||||||||
Number | Awards: | Market | Unearned | Market or | ||||||||||||||||||||||||||||||||
of | Number of | Number of | Number of | Value of | Shares, | Payout Value of | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | Shares or | Shares or | Units or | Unearned | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Units of | Units of | Other | Shares, Units or | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Stock That | Stock That | Rights That | Other Rights | ||||||||||||||||||||||||||||||
Options | Options | Unearned | Option Exercise | Option | Have Not | Have Not | Have Not | That Have Not | ||||||||||||||||||||||||||||
Exercisable | Unexercisable | Options | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||
Name | (#) | (#)(1) | (#) | ($) | Date(2) | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||
R. Stan Puckett — CEO | 9,000 | — | — | $ | 11.10 | 12/31/07 | — | — | — | — | ||||||||||||||||||||||||||
9,000 | — | — | $ | 12.24 | 12/31/08 | — | — | — | — | |||||||||||||||||||||||||||
9,000 | — | — | $ | 13.41 | 12/31/09 | — | — | — | — | |||||||||||||||||||||||||||
9,000 | — | — | $ | 13.86 | 12/31/10 | — | — | — | — | |||||||||||||||||||||||||||
9,000 | — | — | $ | 15.09 | 12/31/11 | — | — | — | — | |||||||||||||||||||||||||||
9,000 | — | — | $ | 16.41 | 01/13/13 | — | — | — | — | |||||||||||||||||||||||||||
9,000 | — | — | $ | 19.97 | 01/09/14 | — | — | — | — | |||||||||||||||||||||||||||
9,000 | — | — | $ | 26.89 | 01/25/15 | — | — | — | — | |||||||||||||||||||||||||||
— | 9,000 | — | $ | 28.90 | 02/21/16 | — | — | — | — | |||||||||||||||||||||||||||
Kenneth R. Vaught — COO | 670 | — | — | $ | 23.00 | 12/31/08 | — | — | — | — | ||||||||||||||||||||||||||
1,455 | — | — | $ | 30.00 | 12/31/09 | — | — | — | — | |||||||||||||||||||||||||||
1,455 | — | — | $ | 32.00 | 12/31/10 | — | — | — | — | |||||||||||||||||||||||||||
1,531 | — | — | $ | 16.00 | 12/31/11 | — | — | — | — | |||||||||||||||||||||||||||
4,000 | 6,000 | — | $ | 23.99 | 02/17/14 | — | — | — | — | |||||||||||||||||||||||||||
2,000 | 8,000 | — | $ | 26.89 | 01/25/15 | — | — | — | — | |||||||||||||||||||||||||||
— | 10,000 | — | $ | 28.90 | 02/21/16 | — | — | — | — | |||||||||||||||||||||||||||
James E. Adams — CFO | — | 3,000 | — | $ | 28.90 | 2/21/16 | — | — | — | — | ||||||||||||||||||||||||||
Steve L. Droke — CCO | 2,500 | — | — | $ | 20.00 | 12/31/07 | — | — | — | — | ||||||||||||||||||||||||||
2,785 | — | — | $ | 23.00 | 12/31/08 | — | — | — | — | |||||||||||||||||||||||||||
2,800 | — | — | $ | 30.00 | 12/31/09 | — | — | — | — | |||||||||||||||||||||||||||
2,800 | — | — | $ | 32.00 | 12/31/10 | — | — | — | — | |||||||||||||||||||||||||||
590 | — | — | $ | 16.00 | 12/31/11 | — | — | — | — | |||||||||||||||||||||||||||
— | 1,179 | — | $ | 19.00 | 01/10/13 | — | — | — | — | |||||||||||||||||||||||||||
1,179 | 1,768 | — | $ | 23.21 | 01/09/14 | — | — | — | — | |||||||||||||||||||||||||||
552 | 2,208 | — | $ | 26.89 | 01/25/15 | — | — | — | — | |||||||||||||||||||||||||||
— | 3,302 | — | $ | 28.90 | 02/21/16 | — | — | — | — | |||||||||||||||||||||||||||
William C. Adams — CIO | 1,860 | — | — | $ | 20.00 | 12/31/07 | — | — | — | — | ||||||||||||||||||||||||||
2,285 | — | — | $ | 23.00 | 12/31/08 | — | — | — | — | |||||||||||||||||||||||||||
2,450 | — | — | $ | 30.00 | 12/31/09 | — | — | — | — | |||||||||||||||||||||||||||
2,450 | — | — | $ | 32.00 | 12/31/10 | — | — | — | — | |||||||||||||||||||||||||||
2,579 | — | — | $ | 16.00 | 12/31/11 | — | — | — | — | |||||||||||||||||||||||||||
1,547 | 1,032 | — | $ | 19.00 | 01/10/13 | — | — | — | — | |||||||||||||||||||||||||||
1,032 | 1,547 | — | $ | 23.21 | 01/09/14 | — | — | — | — | |||||||||||||||||||||||||||
453 | 1,812 | — | $ | 26.89 | 01/25/15 | — | — | — | — | |||||||||||||||||||||||||||
— | 3,139 | — | $ | 28.90 | 02/21/16 | — | — | — | — |
(1) | Options become exercisable in five equal annual installments beginning on the first anniversary date of grant. | |
(2) | The expiration date of each option occurs ten years after the date of grant for each option. |
91
Option Awards | Stock Awards | |||||||||||||||
Number of | Number of | |||||||||||||||
Shares | Shares | |||||||||||||||
Acquired | Value Realized | Acquired | Value Realized | |||||||||||||
on Exercise | on Exercise | on Vesting | on Vesting | |||||||||||||
Name | (#) | ($)(1) | (#) | ($) | ||||||||||||
R. Stan Puckett — CEO | 9,000 | $ | 199,458 | — | — | |||||||||||
Steve L. Droke — CCO | 4,125 | $ | 56,571 | — | — |
(1) | Represents the difference between the exercise price and the fair market value of the common stock on the date of exercise. |
Executive | Registrant | Aggregate | Aggregate Balance | |||||||||||||||||
Contributions in | Contributions in | Aggregate Earnings | Withdrawals/ | at Last | ||||||||||||||||
Last FY(1) | Last FY (1) | in Last FY (1) | Distributions | FYE | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
R. Stan Puckett — CEO Deferred Compensation | $ | 13,800 | $ | — | $ | 23,286 | $ | — | $ | 331,436 | ||||||||||
Non-Compete Agreement | — | 71,100 | 12,297 | — | 234,817 | |||||||||||||||
Kenneth R. Vaught — COO Deferred Compensation | 14,800 | — | 4,715 | — | 84,118 | |||||||||||||||
Non-Compete Agreement | — | 53,184 | 5,279 | — | 113,256 | |||||||||||||||
James E. Adams — CFO | — | — | — | — | — | |||||||||||||||
Steve L. Droke — CCO | — | — | — | — | — | |||||||||||||||
William C. Adams — CIO | — | — | — | — | — |
(1) | All amounts reported in the columns titled “Executive Contributions in Last FY, Registrants Contributions in Last FY and Aggregate Earnings in Last FY” are also reported as compensation to such named executive officer in the Summary Compensation Table on page 89. |
92
Change in | ||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||
and | ||||||||||||||||||||||||||||
Nonqualified | ||||||||||||||||||||||||||||
Fees Earned | Non-Equity | Deferred | ||||||||||||||||||||||||||
or Paid in | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||
Cash | Stock Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Martha M. Bachman | $ | 23,800 | $ | — | $ | — | $ | — | $ | 258 | — | $ | 28,558 | |||||||||||||||
Phil M. Bachman | 39,550 | — | — | — | 62,250 | — | 101,800 | |||||||||||||||||||||
Charles S. Brooks | 30,100 | — | — | — | 7,869 | — | 37,969 | |||||||||||||||||||||
Bruce Campbell | 18,400 | — | — | — | — | — | 18,400 | |||||||||||||||||||||
W.T. Daniels | 36,100 | — | — | — | 15,667 | — | 51,767 | |||||||||||||||||||||
Robin Haynes | 23,800 | — | — | — | — | — | 23,800 | |||||||||||||||||||||
Jerald K. Jaynes | 30,400 | — | — | — | 20,953 | — | 51,353 | |||||||||||||||||||||
Robert K. Leonard | 25,900 | — | — | — | — | — | 25,900 | |||||||||||||||||||||
Terry Leonard | 25,450 | — | — | — | 23,442 | — | 48,892 | |||||||||||||||||||||
Ronald E. Mayberry | 19,600 | — | — | — | 1,626 | $ | 182,492 | (a) | 203,718 | |||||||||||||||||||
John Tolsma | 26,950 | — | — | — | 1,923 | — | 28,873 | |||||||||||||||||||||
Charles H. Whitfield, Jr. | 27,900 | — | — | — | 4,523 | — | 32,423 |
(a) | Includes his salary of $172,000 and his 2006 bonus of $10,492, which was paid in February 2007. |
93
Acceleration | ||||||||||||||||||||
of Equity | ||||||||||||||||||||
Continuation | Awards | |||||||||||||||||||
Cash | of Medical | (Intrinsic | Total | |||||||||||||||||
Severance | and Welfare | Value at | Non-Compete | Termination | ||||||||||||||||
Name | Payment | Benefits | 12/31/06) | Agreement | Benefits | |||||||||||||||
R. Stan Puckett — CEO | ||||||||||||||||||||
• Voluntary termination | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
• Involuntary termination | — | — | — | — | — | |||||||||||||||
• Involuntary or good reason termination after change in control (CIC) | 556,400 | 12,654 | 97,470 | 361,592 | 1,028,116 | |||||||||||||||
Kenneth R. Vaught — COO | ||||||||||||||||||||
• Voluntary termination | — | — | — | — | — | |||||||||||||||
• Involuntary termination | 368,900 | — | — | — | 368,900 | |||||||||||||||
• Involuntary or good reason termination after change in control (CIC) | 1,140,000 | 12,654 | 305,460 | 283,090 | 1,741,204 | |||||||||||||||
James E. Adams — CFO | ||||||||||||||||||||
• Voluntary termination | — | — | — | — | — | |||||||||||||||
• Involuntary termination | — | — | — | — | — | |||||||||||||||
• Involuntary or good reason termination after change in control (CIC) | 348,250 | 12,654 | 32,490 | — | 393,394 | |||||||||||||||
Steve L. Droke — CCO | ||||||||||||||||||||
• Voluntary termination | — | — | — | — | — | |||||||||||||||
• Involuntary termination | — | — | — | — | — | |||||||||||||||
• Involuntary or good reason termination after change in control (CIC) | 318,700 | 9,828 | 117,759 | — | 446,287 | |||||||||||||||
William C. Adams — CIO | ||||||||||||||||||||
• Voluntary termination | — | — | — | — | — | |||||||||||||||
• Involuntary termination | — | — | — | — | — | |||||||||||||||
• Involuntary or good reason termination after change in control (CIC) | 289,600 | 12,654 | 104,211 | — | 406,465 |
94
Amount and | Percent of | |||||||
Nature of | Common | |||||||
Name and Address of | Beneficial | Stock | ||||||
Beneficial Owner | Ownership(a) | Outstanding | ||||||
Phil M. Bachman Martha Bachman 100 N. Main Street P.O. Box 1120 Greeneville, Tennessee 37743 | 879,155 | (b) | 8.99 | % | ||||
Columbia Wanger Asset Management, L.P. 227 West Monroe Street Suite 3000 Chicago, IL 60606 | 538,300 | (c) | 5.49 | % | ||||
Wellington Management Company, LLP 75 State Street Boston, MA 02109 | 513,325 | (d) | 5.23 | % |
(a) | For purposes of this table, an individual or entity is considered to “beneficially own” any share of common stock which he, she or it directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares: (1) voting power, which includes the power to vote, or to direct the voting of, such security;and/or (2) investment power, which includes the power to dispose, or to direct the disposition of, such security. In addition, an individual or entity is deemed to be the beneficial owner of any share of common stock of which he, she or it has the right to acquire voting or investment power within 60 days of the record date. | |
(b) | Phil Bachman and Martha Bachman are husband and wife. Includes 196,195 shares of common stock held directly or indirectly by Martha Bachman as to which Phil Bachman disclaims beneficial ownership, 664,960 shares owned by Phil Bachman individually and 18,000 shares owned by Mr. and Mrs. Bachman jointly. | |
(c) | Based solely on information contained in a Schedule 13G filed by Columbia Wanger Asset Management, L.P. with the Securities and Exchange Commission on January 12, 2007. | |
(d) | Based solely on information contained in a Schedule 13G filed by Wellington Management Company, LLP with the Securities and Exchange Commission on February 14, 2007. |
95
Amount and | ||||||||
Nature of | Percent of | |||||||
Beneficial | Common | |||||||
Ownership | Stock | |||||||
Name, Position and Address | (a)(b) | Outstanding | ||||||
R. Stan Puckett, Chairman of the Board and Chief Executive Officer | 139,802 | (c) | 1.43 | % | ||||
Phil M. Bachman, Secretary and Director | 879,155 | (d) | 8.96 | % | ||||
Martha Bachman, Director | 879,155 | (d) | 8.96 | % | ||||
Charles S. Brooks, Director | 476 | * | ||||||
Bruce Campbell, Director | 5,127 | * | ||||||
W.T. Daniels, Director | 8,500 | * | ||||||
Robin Haynes, Director | 10,360 | * | ||||||
Jerald K. Jaynes, Director | 15,000 | * | ||||||
Bobby Leonard, Director | 8,664 | * | ||||||
Terry Leonard, Director | 46,330 | * | ||||||
John Tolsma, Director | 750 | * | ||||||
Charles H. Whitfield, Jr., Director | 6,281 | * | ||||||
Ronald E. Mayberry, Director, Regional President, Sumner and Lawrence Counties | 76,798 | * | ||||||
Kenneth R. Vaught, Director, President and Chief Operating Officer | 22,111 | * | ||||||
Bill Adams, Senior Vice President and Chief Information Officer | 30,358 | * | ||||||
Steve L. Droke, Senior Vice President and Chief Credit Officer | 26,096 | * | ||||||
James E. Adams, Senior Vice President, Chief Financial Officer and Assistant Secretary | 2,050 | * | ||||||
All directors and executive officers as a group (17) persons) | 1,277,858 | 13.03 | % |
* | Less than 1% of the outstanding common stock. | |
(a) | For the definition of “beneficial ownership,” see Note (a) to the preceding table. | |
(b) | Includes, as indicated below, shares owned directly by directors and executive officers of Greene County as well as shares held by their spouses and children, trusts of which certain directors are trustees and corporations in which certain directors own a controlling interest. Also includes, as indicated below, shares of common stock subject to outstanding options which are exercisable within 60 days of the Record Date as follows: Mr. Mayberry (15,987), Mr. Vaught (17,111), Mr. Bill Adams (16,768), Mr. Droke (15,597), Mr. James Adams (600), all directors and officers as a group (139,863). | |
(c) | Includes options to acquire 63,000 shares of common stock currently exercisable by Mr. Puckett at an exercise price equal to 150% of the book value of the common stock at the date of grant (a weighted average price of approximately $14.58 per share) and 10,800 shares of common stock currently exercisable by Mr. Puckett at an exercise price equal to the fair market value at the date of grant (a weighted average price of approximately $27.23 per share). | |
(d) | Phil Bachman and Martha Bachman are husband and wife. Includes 196,195 shares of common stock held directly or indirectly by Martha Bachman as to which Phil Bachman disclaims beneficial ownership, 664,960 shares owned by Phil Bachman individually and 18,000 shares owned by Mr. and Mrs. Bachman jointly. |
96
2006 | 2005 | |||||||
Audit Fees(a): | $ | 238,120 | $ | 311,380 | ||||
Audit-Related Fees(b): | 37,300 | 39,000 | ||||||
Tax Fees(c) | 21,465 | 10,500 | ||||||
All Other Fees(d): | — | — |
(a) | Includes fees related to the annual independent audit of Greene County’s consolidated financial statements and reviews of Greene County’s annual report onForm 10-K, review of Greene County’s interim financial statements, issuance of consents, Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) attest services, Sarbanes-Oxley Section 404 attest services, review of registration statements and quarterly reports on Form10-Q, report on management’s assertion regarding internal control over financial reporting, services provided in connection with Greene County’s filing of a Registration Statement onForm S-3 and services rendered in connection with Greene County’s common stock offering in 2005. |
(b) | Fees incurred were for (a) general accounting matters and related consultations, (b) certain procedures related to Greene County’s collateral position for its borrowings from the Federal Home Loan Bank of Cincinnati, and (c) an employee benefit plan audit. The Audit Committee has considered whether the provision of these services is compatible with maintaining the independence of Dixon Hughes. |
(c) | Fees incurred were for income tax return preparation and compliance services. The Audit Committee has considered whether the provision of these services is compatible with maintaining the independence of Dixon Hughes. |
(d) | There were no additional fees billed to Greene County by Dixon Hughes for 2006 and 2005. |
97
Name | Age | Title | ||||
R. Stan Puckett | 51 | Chairman of the Board and Chief Executive Officer | ||||
Kenneth R. Vaught | 42 | President and Chief Operating Officer | ||||
James E. Adams | 62 | Senior Vice President, Chief Financial Officer and Assistant Secretary | ||||
Steve L. Droke | 57 | Senior Vice President and Chief Credit Officer | ||||
William C. Adams, Jr. | 50 | Senior Vice President and Chief Information Officer | ||||
Steve D. Ottinger | 57 | Senior Vice President and Chief Human Resources Officer | ||||
G. Frank Snyder | 47 | Senior Vice President and Retail Banking Manager |
98
Total issued and outstanding(*) | 9,818,312 | |||
Reserved for issuance under equity compensation plans | 291,259 |
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100
101
102
• | Greene County’s Annual Report onForm 10-K for the year ended December 31, 2006 filed with the SEC on February 28, 2007; | |
• | Civitas’ Annual Report onForm 10-K for the year ended December 31, 2006 filed with the SEC on March 9, 2007; |
• | Greene County’s Current Reports onForm 8-K filed with the SEC on January 23, 2007, January 26, 2007 and March 23, 2007; |
• | Civitas’ Current Reports onForm 8-K filed with the SEC on January 26, 2007, January 31, 2007, February 1, 2007 and February 5, 2007; |
• | The description of Greene County common stock contained in itsForm 8-K12G3 filed with the SEC on February 20, 1986, as amended and supplemented by Greene County’s Current Report on form8-K/A dated and filed with the SEC on May 25, 2004, and all amendments or reports filed for the purpose of updating such description; and |
• | All documents filed by either Greene County or Civitas under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this document and before the later of: (1) the date of the Greene County annual meeting; and (2) the date of the Civitas special meeting. |
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If you are a Greene County shareholder: | If you are a Civitas shareholder: | |
Greene County Bancshares, Inc. 100 North Main Street Greeneville, TN37743-4992 Attention: Chief Financial Officer (423)639-5111 | Civitas BankGroup, Inc. 4 Corporate Centre 810 Crescent Centre Drive, Suite 320 Franklin, TN 37067 Attention: Investor Relations (615) 263-9500 | |
TO OBTAIN TIMELY DELIVERY OF GREENE COUNTY DOCUMENTS, YOU MUST MAKE YOUR REQUEST ON OR BEFORE APRIL 16, 2007. | TO OBTAIN TIMELY DELIVERY OF CIVITAS DOCUMENTS, YOU MUST MAKE YOUR REQUEST ON OR BEFORE APRIL 16, 2007. |
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Page | ||||||||||||
ARTICLE I. THE MERGER | A-1 | |||||||||||
1.1 | The Merger | A-1 | ||||||||||
1.2 | Effective Time | A-2 | ||||||||||
1.3 | Effects of the Merger | A-2 | ||||||||||
1.4 | Conversion of CVBG Common Stock | A-2 | ||||||||||
1.5 | Election and Allocation Procedures | A-4 | ||||||||||
1.6 | No Fractional Shares | A-5 | ||||||||||
1.7 | Conversion of Stock Options | A-5 | ||||||||||
1.8 | GCBS Capital Stock | A-6 | ||||||||||
1.9 | Charter | A-6 | ||||||||||
1.10 | Bylaws | A-6 | ||||||||||
1.11 | Tax Consequences | A-6 | ||||||||||
1.12 | Certain Post-Closing Matters | A-6 | ||||||||||
1.13 | Headquarters of Surviving Corporation | A-6 | ||||||||||
ARTICLE II. DELIVERY OF MERGER CONSIDERATION | A-6 | |||||||||||
2.1 | Deposit of Merger Consideration | A-6 | ||||||||||
2.2 | Delivery of Merger Consideration | A-7 | ||||||||||
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF GCBS | A-8 | |||||||||||
3.1 | Corporate Organization | A-8 | ||||||||||
3.2 | Capitalization | A-9 | ||||||||||
3.3 | Authority; No Violation | A-9 | ||||||||||
3.4 | Consents and Approvals | A-10 | ||||||||||
3.5 | Reports | A-11 | ||||||||||
3.6 | Financial Statements | A-11 | ||||||||||
3.7 | Broker’s Fees | A-11 | ||||||||||
3.8 | Absence of Certain Changes or Events | A-11 | ||||||||||
3.9 | Legal Proceedings | A-12 | ||||||||||
3.10 | Taxes and Tax Returns | A-12 | ||||||||||
3.11 | Employees | A-12 | ||||||||||
3.12 | SEC Reports | A-13 | ||||||||||
3.13 | Compliance with Applicable Law. | A-13 | ||||||||||
3.14 | Certain Contracts. | A-14 | ||||||||||
3.15 | Agreements with Regulatory Agencies | A-14 | ||||||||||
3.16 | Interest Rate Risk Management Instruments | A-15 | ||||||||||
3.17 | Undisclosed Liabilities | A-15 | ||||||||||
3.18 | Insurance | A-15 | ||||||||||
3.19 | Environmental Liability | A-15 | ||||||||||
3.20 | State Takeover Laws | A-15 | ||||||||||
3.21 | Reorganization | A-15 | ||||||||||
3.22 | Information Supplied | A-15 | ||||||||||
3.23 | Internal Controls | A-16 | ||||||||||
3.24 | Opinion of GCBS Financial Advisor | A-16 | ||||||||||
(i)
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF CVBG | A-16 | |||||||||||
4.1 | Corporate Organization | A-16 | ||||||||||
4.2 | Capitalization | A-17 | ||||||||||
4.3 | Authority; No Violation | A-17 | ||||||||||
4.4 | Consents and Approvals | A-18 | ||||||||||
4.5 | Reports | A-18 | ||||||||||
4.6 | Financial Statements | A-19 | ||||||||||
4.7 | Broker’s Fees | A-19 | ||||||||||
4.8 | Absence of Certain Changes or Events | A-19 | ||||||||||
4.9 | Legal Proceedings | A-19 | ||||||||||
4.10 | Taxes and Tax Returns | A-20 | ||||||||||
4.11 | Employees | A-20 | ||||||||||
4.12 | SEC Reports | A-21 | ||||||||||
4.13 | Compliance with Applicable Law | A-21 | ||||||||||
4.14 | Certain Contracts | A-21 | ||||||||||
4.15 | Agreements with Regulatory Agencies | A-22 | ||||||||||
4.16 | Interest Rate Risk Management Instruments | A-22 | ||||||||||
4.17 | Undisclosed Liabilities | A-23 | ||||||||||
4.18 | Insurance | A-23 | ||||||||||
4.19 | Environmental Liability | A-23 | ||||||||||
4.20 | State Takeover Laws | A-23 | ||||||||||
4.21 | Reorganization | A-23 | ||||||||||
4.22 | Information Supplied | A-23 | ||||||||||
4.23 | Internal Controls | A-23 | ||||||||||
4.24 | Opinion of CVBG Financial Advisor | A-24 | ||||||||||
ARTICLE V. COVENANTS RELATING TO CONDUCT OF BUSINESS | A-24 | |||||||||||
5.1 | Conduct of Businesses Prior to the Effective Time | A-24 | ||||||||||
5.2 | CVBG Forbearances | A-24 | ||||||||||
ARTICLE VI. ADDITIONAL AGREEMENTS | A-26 | |||||||||||
6.1 | Regulatory Matters | A-26 | ||||||||||
6.2 | Access to Information | A-27 | ||||||||||
6.3 | Shareholders’ Approvals | A-27 | ||||||||||
6.4 | Legal Conditions to Merger | A-28 | ||||||||||
6.5 | Affiliates | A-28 | ||||||||||
6.6 | Stock Quotation or Listing | A-28 | ||||||||||
6.7 | Employee Benefit Plans; Existing Agreements | A-28 | ||||||||||
6.8 | Directors’ and Officers’ Insurance | A-29 | ||||||||||
6.9 | Advice of Changes | A-29 | ||||||||||
6.10 | Acquisition Proposals | A-29 | ||||||||||
6.11 | Bank Merger | A-30 | ||||||||||
(ii)
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ARTICLE VII. CONDITIONS PRECEDENT | A-31 | |||||||||||
7.1 | Conditions to Each Party’s Obligation To Effect the Merger | A-31 | ||||||||||
7.2 | Conditions to Obligations of CVBG | A-32 | ||||||||||
7.3 | Conditions to Obligations of GCBS | A-32 | ||||||||||
ARTICLE VIII. TERMINATION AND AMENDMENT | A-32 | |||||||||||
8.1 | Termination | A-34 | ||||||||||
8.2 | Effect of Termination | A-34 | ||||||||||
8.3 | Termination Fee | A-34 | ||||||||||
8.4 | Amendment | A-35 | ||||||||||
8.5 | Extension; Waiver | A-35 | ||||||||||
ARTICLE IX. GENERAL PROVISIONS | A-35 | |||||||||||
9.1 | Closing | A-35 | ||||||||||
9.2 | Standard | A-35 | ||||||||||
9.3 | Nonsurvival of Representations, Warranties and Agreements | A-36 | ||||||||||
9.4 | Expenses | A-36 | ||||||||||
9.5 | Notices | A-36 | ||||||||||
9.6 | Interpretation | A-36 | ||||||||||
9.7 | Counterparts | A-36 | ||||||||||
9.8 | Entire Agreement | A-36 | ||||||||||
9.9 | Governing Law | A-36 | ||||||||||
9.10 | Publicity | A-37 | ||||||||||
9.11 | Assignment; Third Party Beneficiaries | A-37 |
(iii)
A-1
A-2
Example: | Average Closing Price is $45.42 (+18.5% GCBS Price Change Percentage) Index Change Percentage is +3% (resulting in Relative Change Percentage of 15.5%) New Exchange Ratio =10.25/(38.33 times (1 plus .055)) = 0.2535 |
Example: | Average Closing Price is $30.28 (−21% GCBS Price Change Percentage) Index Change Percentage is −5% (resulting in Relative Change Percentage of −16%) New Exchange Ratio =10.25/(38.33 times (1 minus .06)) = 0.2845 |
A-3
1.5 | Election and Allocation Procedures. |
A-4
A-5
A-6
A-7
A-8
A-9
A-10
A-11
A-12
A-13
A-14
A-15
A-16
A-17
A-18
A-19
A-20
A-21
A-22
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A-25
A-26
A-27
A-28
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A-35
(a | ) | if to CVBG, to: | with a copy to: | |||
Richard E. Herrington | Mary Neil Price, Esq. | |||||
President/CEO | Miller & Martin PLLC | |||||
Civitas BankGroup, Inc. | 1200 One Nashville Place | |||||
810 Crescent Centre Drive, Suite 320 | 150 4th Ave. North | |||||
Franklin, TN 37067 | Nashville, TN 37219 | |||||
Fax: (615) 263-9510 | Fax: (615) 256-8197 | |||||
and | ||||||
(b | ) | if to GCBS, to: | with a copy to: | |||
James E. Adams | Steven J. Eisen, Esq. | |||||
Chief Financial Officer | Baker, Donelson, Bearman, | |||||
Greene County Bancshares, Inc. | Caldwell & Berkowitz, PC | |||||
100 North Main Street | 211 Commerce St., Ste. 1000 | |||||
Greeneville, TN 37743 | Nashville, TN 37201 | |||||
Fax: (423) 278-3090 | Fax: (615) 744-5718 |
A-36
A-37
Attest: | GREENE COUNTY BANCSHARES, INC.: | |
By: _ _ | ||
Secretary | Title: | |
Attest: | CIVITAS BANKGROUP, INC.: | |
By: _ _ | ||
Secretary | Title: |
A-38
Member NYSE/SIPC | P.O. Box 1575 Richmond, Virginia 23218-1575 | Tel (804) 782-8721 Toll Free (800) 552-7757 FAX (804) 649-0990 |
Greene County Bancshares, Inc.
100 North Main Street
Greeneville, TN 37743
i. | The Agreement; | |
ii. | Certain publicly available financial statements and other historical financial information of CIVITAS that we deemed relevant; | |
iii. | Certain publicly available financial statements and other historical financial information of Greene County that we deemed relevant; | |
iv. | Internal financial projections for CIVITAS for the year ending December 31, 2007 and December 31, 2008 prepared by and reviewed with senior management of Greene County; |
v. | Median earnings per share estimates for Greene County for the year ending December 31, 2007 published by I/B/E/S and reviewed with the senior management of Greene County; and estimates of long-term earnings per share growth rates published by I/B/E/S; | |
vi. | The estimated pro forma financial impact of the Transaction on Greene County, based on assumptions relating to transaction expenses, purchase accounting adjustments, cost savings, and certain synergies determined by and reviewed with the senior management of Greene County; | |
vii. | The historical market prices and trading activity for CIVITAS Shares and Greene County Shares and a comparison of certain financial and stock market information for CIVITAS and Greene County with similar publicly-traded companies which we deemed to be relevant; | |
viii. | The proposed financial terms of the Transaction and a comparison of such terms with the financial terms, to the extent publicly available, of certain recent business combinations in the commercial banking industry; | |
ix. | The current market environment generally and the banking environment in particular; and, | |
x. | Such other information, financial studies, analyses and investigations, and financial, economic, and market criteria as we deemed appropriate. |