SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant |X|
Filed by the Party other than the Registrant [ ]
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
GREENE COUNTY BANCSHARES, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
$125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee Paid:
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Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1. Amount previously paid: _______________________________________________
2. Form, Schedule or Registration Statement No.:__________________________
3. Filing Party:__________________________________________________________
4. Date Filed:____________________________________________________________
[LETTERHEAD OF GREENE COUNTY BANCSHARES GOES HERE]
April 11, 2001
Dear Shareholder:
We invite you to attend the Annual Meeting of Shareholders (the "Annual
Meeting") of Greene County Bancshares, Inc. (the "Company") to be held at the
General Morgan Inn, 111 North Main Street, Greeneville, Tennessee, on Wednesday,
April 25, 2001 at 11:00 a.m., local time.
The Annual Meeting has been called for the election of directors and for
consideration of adoption of an amendment to the Company's Amended and Restated
Charter as set forth herein. Enclosed is a proxy statement, a proxy card and the
Company's Annual Report to Shareholders for the 2000 fiscal year. Directors and
officers of the Company as well as representatives of Crowe, Chizek and Company
LLP, the Company's independent auditors for the 2000 fiscal year, will be
present to respond to any questions shareholders may have.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. On
behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy as soon as possible, even if you currently plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will assure
that your vote is counted if you are unable to attend the Annual Meeting.
Thank you for your cooperation and your continuing support.
Sincerely,
Ralph T. Brown R. Stan Puckett
Chairman of the Board President and Chief Executive Officer
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37743
(423) 639-5111
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 25, 2001
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NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Shareholders (the
"Annual Meeting") of Greene County Bancshares, Inc. (the "Company") will be held
on Wednesday, April 25, 2001 at 11:00 a.m., local time, at the General Morgan
Inn, 111 North Main Street, Greeneville, Tennessee.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon the
following matters:
(1) to elect four directors of the Company;
(2) to consider and vote upon a proposed amendment to the Company's
Amended and Restated Charter to increase the number of authorized
shares to 15,000,000 shares of common stock; and
(3) to transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the Annual Meeting.
Any action may be taken on any one of the foregoing proposals at the Annual
Meeting on the date specified above or on any date or dates to which, by
original or later adjournments, the Annual Meeting may be adjourned.
Shareholders of record at the close of business on March 30, 2001 will be
entitled to vote at the Annual Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and choose to vote in person
at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Davis Stroud
Secretary
Greeneville, Tennessee
April 11, 2001
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IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE, AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37743
(423) 639-5111
----------------------
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2001
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GENERAL
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This Proxy Statement is furnished to shareholders of Greene County
Bancshares, Inc. (the "Company") in connection with the solicitation of proxies
by the Company's Board of Directors to be used at the 2001 Annual Meeting of
Shareholders of the Company (the "Annual Meeting"), to be held on Wednesday,
April 25, 2001 at 11:00 a.m., local time, at the General Morgan Inn, 111 North
Main Street, Greeneville, Tennessee. The accompanying Notice of Annual Meeting
and form of proxy and this Proxy Statement are first being mailed to
shareholders on or about April 11, 2001.
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VOTING AND REVOCABILITY OF PROXIES
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If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
EXECUTED BUT UNMARKED PROXIES WILL BE VOTED FOR ELECTION OF FOUR NOMINEES AS
DIRECTORS OF THE COMPANY AND FOR APPROVAL OF THE AMENDMENT TO THE COMPANY'S
AMENDED AND RESTATED CHARTER TO INCREASE THE NUMBER OF AUTHORIZED SHARES TO
15,000,000 SHARES. The proxy confers discretionary authority on the persons
named therein to vote with respect to the election of any person or a director
where the nominee is unable to serve or for good cause will not serve, and with
respect to any other matter presented to the Annual Meeting if such notice has
not been delivered to the Company in accordance with the Company's Bylaws. If
any other matters are properly brought before the Annual Meeting as to which
proxies confer discretionary authority, the persons named in the proxy will vote
the shares represented by such proxies on such matters as determined by a
majority of the Board of Directors. Except for procedural matters incident to
the conduct of the Annual Meeting, the Company does not know of any other
matters that are to come before the Annual Meeting. Proxies marked as
abstentions and shares held in street name which have been designated by brokers
on proxies as not voted will not be counted as votes cast. Such proxies will be
counted for purposes of determining a quorum at the Annual Meeting.
Shareholders who execute proxies may revoke them at any time prior to their
exercise by filing with the Secretary of the Company a written notice of
revocation, by delivering to the Company a duly executed proxy bearing a later
date, or by attending the Annual Meeting and voting in person. Please note that
the mere presence of a shareholder at the Annual Meeting will not, by itself,
automatically revoke such shareholder's proxy.
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VOTING SECURITIES
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The securities that may be voted at the Annual Meeting consist of shares of
the Company's common stock, par value $10.00 per share (the "Common Stock").
Each share entitles its owner to one vote on all matters. Persons who held
shares of Common Stock on March 30, 2001 (the "Record Date") are entitled to
vote at the Annual Meeting. The number of shares of Common Stock outstanding as
of the Record Date was 1,363,778.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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Persons and groups beneficially owning more than 5% of the Common Stock are
required under federal securities laws to file certain reports with the
Securities and Exchange Commission ("SEC") detailing their ownership. The
following table sets forth the amount and percentage of the Common Stock
beneficially owned by any person or group of persons known to the Company to be
a beneficial owner of more than 5% of the Common Stock as of the Record Date.
Name and Address of Amount and Nature of Percent of Common
Beneficial Owner Beneficial Ownership (a) Stock Outstanding
------------------------------- ------------------------- -------------------
Phil M. Bachman
1330 E. Allen Bridge Road 142,030 (b) 10.41%
Greeneville, Tennessee 37743
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(a) For purposes of this table, an individual is considered to "beneficially
own" any share of Common Stock which he or she, directly or indirectly,
through any contract, arrangement, understanding, relationship, or
otherwise, has or shares: (1) voting power, which includes the power to
vote, or to direct the voting of, such security; and/or (2) investment
power, which includes the power to dispose, or to direct the disposition
of, such security. In addition, an individual is deemed to be the
beneficial owner of any share of Common Stock of which he has the right to
acquire voting or investment power within 60 days of the Record Date.
(b) Includes 5,288 shares of Common Stock held directly or indirectly by Mr.
Bachman's wife as to which Mr. Bachman disclaims beneficial ownership. Had
such shares not been included, Mr. Bachman's ownership percentage would
have been 10.03%.
The following table sets forth, as of the Record Date, certain information
known to the Company as to Common Stock beneficially owned by each director and
executive officer of the Company and by all directors and executive officers of
the Company as a group.
Amount and Nature of Percent of Common
Name and Position Beneficial Ownership (a)(b) Stock Outstanding
- ---------------------------------------------- ------------------------------ ----------------------
Ralph T. Brown, Chairman of the Board 17,860 1.31%
R. Stan Puckett, President, Chief
Executive Officer and Director 20,900 (c) 1.52%
Davis Stroud, Secretary and Director 4,578 *
Phil M. Bachman, Director 142,030 (d) 10.41%
Terry Leonard, Director 9,666 *
James A. Emory, Director 10,018 *
W.T. Daniels, Director 1,500 *
Charles S. Brooks, Director 90 *
J.W. Douthat, Director 4,826 *
Jerald K. Jaynes, Director 1,650 *
H.J. Moser, III, Director 2,100 *
Bruce Campbell, Director 970 *
Charles H. Whitfield, Jr., Director 646 *
William F. Richmond, Senior Vice
President and Chief Financial Officer 836 (e) *
All directors and executive officers as a
group (14 persons) 217,670 15.86%
(Footnotes on following page)
2
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* Less than 1% of the outstanding Common Stock.
(a) For the definition of "beneficial ownership," see Note (a) to the above
table.
(b) Includes shares owned directly by directors and executive officers of the
Company as well as shares held by their spouses and children, trusts of
which certain directors are trustees and corporations in which certain
directors own a controlling interest. Includes shares of Common Stock
subject to outstanding options which are exercisable within 60 days of the
Record Date.
(c) Includes options to acquire 9,000 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 $60.74 per share).
(d) Includes 5,288 shares of Common Stock held directly or indirectly by Mr.
Bachman's wife as to which Mr. Bachman disclaims beneficial ownership. Had
such shares not been included, Mr. Bachman's ownership percentage would
have been 10.03%.
(e) Includes options to acquire 836 shares of Common Stock currently
exercisable by Mr. Richmond at an exercise price equal to the estimated
fair market value of the Common Stock at date of grant (a weighted average
exercise price of approximately $98.04).
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PROPOSAL 1 -- ELECTION OF DIRECTORS
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The Company's Board of Directors is currently composed of 13 members, 12 of
whom are listed in the table below and J.W. Douthat, who will retire at the
Annual Meeting. The Board of Directors has unanimously approved a reduction in
the size of the Board of Directors from 13 members to 12 members effective upon
the retirement of Mr. Douthat. The Company's Amended and Restated Charter
requires that directors be divided into three classes, as nearly equal in number
as possible, the members of each class to serve for a term of three years and
until their successors are elected and qualified, with one-third of the
directors elected each year. The Board of Directors, acting in its capacity as a
nominating committee, has nominated for election as directors, Phil M. Bachman,
Ralph T. Brown, James A. Emory and Terry Leonard, each of whom are currently
members of the Board, to serve until his respective successor is elected and
qualified. Under Tennessee law, directors are elected by a plurality of the
votes cast at an election.
It is intended that the persons named in the proxies solicited by the Board
of Directors will vote for the election of each of the nominees. If any nominee
is unable to serve, the shares represented by all properly executed proxies
which have not been revoked will be voted for the election of a substitute
nominee as the Board of Directors may recommend. In the alternative, the Board
of Directors may, at its discretion, reduce its size to eliminate the vacancy.
At this time, the Board knows of no reason why any nominee might be unable to
serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION AS DIRECTORS OF ALL
THE NOMINEES LISTED BELOW.
3
The following table sets forth certain information with respect to each of
the Company's current directors whose term of office as a director will or,
assuming re-election, is expected to continue after the Annual Meeting. Each of
the Company's directors also currently serves as a director of Greene County
Bank (the "Bank"), the wholly owned subsidiary of the Company. There are no
arrangements or understandings between the Company and any director pursuant to
which such person has been selected as a director or nominee for director of the
Company, and no director or nominee is related to any other director, nominee or
executive officer by blood, marriage or adoption.
Director Current Term to Previous Five-Years Business
Name Age(a) Since (b) Expire Experience
- ---- ------ --------- ------ ----------
BOARD NOMINEE FOR TERM TO EXPIRE IN 2004
Phil M. Bachman 63 1968 2001 President, Bachman-Bernard Motors
(automobile dealer)
Ralph T. Brown 68 1979 2001 Dentist; retired 1996
James A. Emory 67 1983 2001 Retired; former President, J.A.E. Foods,
Inc. (restaurant management)
Terry Leonard 62 1975 2001 Owner/Operator, Leonard & Associates
(manufacturing)
DIRECTORS CONTINUING IN OFFICE
Bruce Campbell 49 2000 2002 President and Chief Operating Officer,
Forward Air Corporation (transportation)
Jerald K. Jaynes 63 1992 2002 Retired; former President & CEO, Unaka
Co. Inc. (manufacturing)
R. Stan Puckett 44 1989 2002 President and Chief Executive Officer
of the Company and the Bank
Charles S. Brooks 62 1990 2003 Chairman of the Board, McInturff,
Milligan & Brooks (insurance agency)
W.T. Daniels 56 1987 2003 Property management
H.J. Moser, III 53 1999 2003 President, Tennessee Valley Resources,
Inc. (limestone and sand distributor)
Davis Stroud 67 1989 2003 Secretary of the Company and the Bank;
Retired; former Executive Vice President
of the Company and the Bank
Charles H. Whitfield, Jr. 42 2000 2003 President and Chief Executive Officer,
Laughlin Memorial Hospital (hospital
management)
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(a) As of December 31, 2000.
(b) Indicates year that director first served as a director of either the
Company or the Bank.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Company conducts its business through meetings of the Board of
Directors. There are no standing committees of the Board of Directors of the
Company. The business of the Bank is conducted through its Board of Directors,
which met 13 times in 2000, 12 of which were regular meetings and one was a
specially called meeting, and also held no meetings via telephone. Each member
of the Board of Directors of the Company and of the Bank attended at least 75%
or more of the aggregate of (a) the total number of meetings of the boards of
directors and (b) the total number of meetings held by all committees on which
they served, with the exception of Mr. Moser, who attended 69% of the aggregate
of such meetings.
4
The Board of Directors of the Company acts as a nominating committee for
selecting management's nominees for election as directors. Nominations may also
be made by shareholders, provided such nominations are made in writing and
submitted to the Secretary or the President of the Company in accordance with
the Company's Amended and Restated Charter. During 2000, the Board of Directors
met once in its capacity as a nominating committee.
The Audit Committee of the Bank also serves as the audit committee for the
Company. The Audit Committee of the Bank consists of Messrs. Leonard, Brown,
Stroud and Jaynes (Chairman) Each of the directors who serve on the Audit
Committee are "independent" of the Company, as the term "independent" is defined
under Rule 4200 of the listing standards of the National Association of Security
Dealers, Inc. For 2001, the Chairman of the Audit Committee will be Mr. Jaynes.
This committee meets quarterly to (1) monitor the accounting and financial
reporting practices of the Company, and (2) determine whether the Company has
adequate administrative, operating and internal accounting controls. The
Company's Board of Directors has adopted a written charter for the Audit
Committee. A copy of the Audit Committee charter is attached as Appendix A. This
committee met seven times during 2000 in its capacity as the Audit Committee for
the Company. A copy of the Audit Committee Report is attached as Appendix B.
The Bank's Compensation Committee also serves as the compensation committee
for the Company. The Compensation Committee consists of Messrs. Leonard
(Chairman), Brown, Bachman, Brooks, Daniels, Douthat and Campbell. It meets
periodically to evaluate the compensation and fringe benefits of the directors,
officers and employees of the Bank and the Company and recommend changes to the
respective Boards of Directors. The Compensation Committee met two times during
2000.
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DIRECTORS' COMPENSATION
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Directors of the Company are compensated in their capacity as such at $400
for each quarterly meeting of the Company's Board of Directors. During 2000, the
Company's Board of Directors met eight times, three of which were paid meetings.
Directors of the Company are also directors of the Bank and are compensated
by the Bank in their capacity as directors of the Bank. Directors of the Bank
receive $400 for each regular monthly Board meeting attended, plus payment of
such fee for up to two absences during a year, and $400 for each specially
called meeting attended. Each Bank director also receives an annual retainer fee
of $6,000, paid in equal quarterly amounts. Members of the Executive Committee
of the Bank's Board of Directors also receive $435 for each twice-monthly
meeting of the Committee attended, and the two permanent members of the
Committee receive an annual retainer of $1,500. Members of the Bank's Audit
Committee received $200 for each quarterly meeting. Compensation for all other
committee meetings is $200.
The Bank maintains a deferred compensation plan (the "Plan") pursuant to
which directors may elect to defer receipt of a portion of their fees by
entering into deferred fee agreements with the Bank. The agreements also provide
for payment of benefits under certain events of disability, early retirement,
termination of employment or death. The Bank is the beneficiary of life
insurance acquired with respect to participating directors for purposes of the
Plan.
5
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EXECUTIVE COMPENSATION AND OTHER BENEFITS
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SUMMARY COMPENSATION TABLE. The following table sets forth cash and noncash
compensation for each of the last three fiscal years awarded to or earned by the
Chief Executive Officer and each of the other executive officers of the Company.
No other officer of the Bank serves as an executive officer of the Company.
Long-Term Compensation
---------------------------------------
Annual Compensation Awards Payouts
-------------------------------------------- ---------------------------- ---------
Restricted Securities
Name and Principal Other Annual Stock Underlying LTIP All Other
Position Year Salary Bonus(a) Compensation(b) Award(s) Options/SARs(#) Payouts Compensation (c)
- -------------------- ---- ------ -------- --------------- -------- --------------- ------- ----------------
R. Stan Puckett 2000 $200,000 $35,300 -- -- 1,800(d) -- $38,192
President and 1999 190,000 69,500 -- -- 1,800(d) -- 38,550
Chief Executive 1998 176,400 61,500 -- -- 1,800(d) -- 37,050
Officer of the
Company and
the Bank
William F. Richmond 2000 $92,788 $11,300 -- -- 490(e) -- $13,918
Senior Vice 1999 88,900 21,500 -- -- 490(e) -- 13,335
President and Chief 1998 85,072 14,000 -- -- 441(e) -- 12,760
Financial Officer
of the Company
and the Bank
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(a) Bonus amounts reflect amounts earned during the stated fiscal year, even if
paid in the subsequent fiscal year. All amounts have been restated to
reflect this presentation.
(b) Executive officers of the Company receive indirect compensation in the form
of certain perquisites and other personal benefits. The amount of such
benefits in 2000, 1999 and 1998 received by the named executive officers
did not exceed 10% of the respective executive's annual salary and bonus.
(c) Reflects contributions by the Company to its retirement plans for the
benefit of each named officer and payments of directors' fees to Mr.
Puckett. Directors' fees paid to Mr. Puckett were $12,692 for 2000, $14,550
for 1999 and $13,050 for 1998. Contributions to retirement plans made by
the Company on behalf of Messrs. Puckett and Richmond for the years 2000,
1999 and 1998 are as follows: $25,500 in 2000, $24,000 in 1999 and 1998 for
Mr. Puckett; and $13,918, $13,335 and $12,760, respectively, for Mr.
Richmond. A portion of such directors' fees paid to Mr. Puckett is deferred
pursuant to agreements entered into individually with an insurance company.
(d) Mr. Puckett is granted options each year to purchase 1,800 shares of Common
Stock with an exercise price equal to 150% of the Common Stock's book value
at the time of grant and with a term of 10 years. Such options are granted
pursuant to a 1989 stock option plan adopted by the Company and as to which
Mr. Puckett is the sole participant.
(e) Granted pursuant to the Company's 1995 Stock Option Plan as to which
options are granted with an exercise price equal to fair market value at
date of grant and are exercisable for ten years from date of grant.
OPTION GRANTS IN FISCAL YEAR 2000. The following table contains information
concerning the grant of stock options to Mr. Puckett under a 1989 stock option
plan and to Mr. Richmond under the 1995 Stock Option Plan. Neither plan provides
for the grant of stock appreciation rights.
Number of Percent of
Securities Total Options
Underlying Granted to Exercise
Options Granted Employees in Price Grant Date
Name Number of Shares Fiscal Year ($ per share) Expiration Date Present Value
---- ---------------- ----------- ------------- --------------- -------------
R. Stan Puckett 1,800 (a) 17.62% 69.30 12/10 $167,886(b)
William F. Richmond 490 4.80% 160.00 12/10 $ 16,096(b)
6
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(a) Options are granted with an exercise price equal to 150% of the book value
of the underlying stock on the date of grant.
(b) Represents the present value of the option at the date of grant as
determined using the Black-Scholes option pricing model. In calculating the
present value of the option grant, the following assumptions were utilized:
(i) the current market price of the underlying Common Stock at the date of
grant was $160.00; (ii) the continuously compounded risk-free rate of
return expressed on an annual basis was 5.10%; (iii) the risk of the
underlying Common Stock, measured by the standard deviation of the
continuously compounded annual rate of return of the Common Stock, was
9.62%; and (iv) dividends on the underlying Common Stock increased at an
annual rate of 5%. These assumptions are used for illustrative purposes
only. No assurance can be given that actual experience will correspond to
the assumptions utilized.
AGGREGATED OPTION EXERCISES IN 2000 AND YEAR-END OPTION VALUES. The
following table sets forth information concerning the value of options held by
the named executive officers at the end of the fiscal year.
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year-End In-the-Money Options at
Shares Acquired Value Exercisable/Unexercisable Fiscal Year-End (a)
Name on Exercise (#) Realized ($) (Number of Shares) Exercisable/Unexercisable
---- --------------- ------------ ------------------ -------------------------
R. Stan Puckett -- -- 9,000 / -- $893,340 / --
William F. Richmond -- -- 836 / 1,386 $ 51,798 / $27,620
- --------------------------
(a) Represents the difference between fair market value of underlying Common
Stock at year-end (based on the most recent sales price known to
management) and the exercise price. Options are in-the-money if the fair
market value of the underlying securities exceeds the exercise price of the
Option and out-of-the-money if the exercise price of unexercisable options
exceeds current fair market value.
RETIREMENT PLANS. The Company maintains a contributory Profit Sharing Plan
("PSP") and a non-contributory Money Purchase Plan ("MPP") covering certain
employees with more than one year of service.
Employees participating in the PSP may contribute up to 10% of their
monthly salary, with the Company contributing 3% of participating employees'
salary (not to exceed 10% of profit before taxes). Employees of the Bank, but
not its subsidiaries, participate in the MPP, in which the Company contributes
12% to fund the MPP. The 3% Company contribution to the PSP vests immediately,
while the 12% Company contribution to the MPP vests after two years of
employment.
Contributions in the amount of $25,500 and $13,918 were made for the
accounts of Messrs. Puckett and Richmond, respectively, under both retirement
plans in 2000. Mr. Puckett and Mr. Richmond are fully vested under the Plan.
EMPLOYMENT CONTRACTS. The Company entered into an employment agreement with
Mr. Puckett effective January 23, 1996, without any specified term, to serve as
President and Chief Executive Officer of the Company. The agreement, which is
terminable by either party at any time, provides for a base salary plus
directors' fees, life insurance, participation in benefit plans and other fringe
benefits. If Mr. Puckett's employment is not continued by mutual agreement
following a merger or acquisition involving the Company, Mr. Puckett shall be
entitled to a payment equal to two years' compensation (defined to include his
base salary plus fringe benefits and the value of his stock options). The
payment that would be made to Mr. Puckett, assuming his termination of
employment under the foregoing circumstances at December 31, 2000, would have
been approximately $763,600. This provision may have an anti-takeover effect by
making it more expensive for a potential acquiror to obtain control of the
Company.
7
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REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
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Decisions on compensation of the Company's executives generally are made by
a seven-member Compensation Committee of the Board of Directors of the Bank.
Each member of the Compensation Committee is a non-employee director and is
appointed annually.
The Committee is responsible for developing and making recommendations to
the Board of Directors concerning compensation paid to the Chief Executive
Officer and, based upon the recommendation of the Chief Executive Officer, all
other employees. The Committee is further responsible for administering all
aspects of the Company's executive compensation program. Executive compensation
is intended to be set at levels that the Compensation Committee believes is
consistent with others in the Company's industry, and the Committee also
considers general economic conditions and other external factors.
Base salaries for executive officers are determined initially by evaluating
the responsibilities of the position held, and by reference to the competitive
marketplace for management talent, including a comparison of base salaries for
comparable positions at comparable companies within the financial services
industry. Annual salary adjustments are determined by evaluating the competitive
marketplace, the performance of the Company and the performance of the
executive. Compensation paid during 2000 to executive officers consisted of base
salary, bonus, stock options and contributions paid with respect to the
Company's retirement plans. It is the philosophy of the Compensation Committee
that stock options should be awarded only to the key employees of the Company to
promote long-term interests between such employees and the Company's
shareholders and to assist in the retention of such employees. For 2000, based
on the factors discussed above and a review by the Committee, Mr. Puckett and
Mr. Richmond received a 5.3% and 4.4% increase in base pay, respectively.
Payments to the Company's retirement plans are made to certain employees on a
non-discriminatory basis.
Mr. Puckett receives a bonus award based upon increases in the per-share
price of the Common Stock, return on average equity of the Bank and overall
performance reviews. Mr. Richmond receives a bonus award based upon the
discretion of the President and Chief Executive Officer of the Company. The
bonus awarded to Messrs. Puckett and Richmond in 2000 totaled 17.6% and 12.2%,
respectively, of their base salaries for 2000.
The Committee believes that Mr. Puckett's total compensation for 2000
appropriately reflected his contribution to the Company's financial results. The
Committee believes that the Company's overall performance was indicative of a
well-managed company during a challenging business climate.
COMPENSATION COMMITTEE
Terry Leonard (Chairman) Charles Brooks
Ralph Brown W. T. Daniels
J.W. Douthat Bruce Campbell
Philip M. Bachman, Jr.
April 11, 2001
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- --------------------------------------------------------------------------------
The Compensation Committee consists of Messrs. Leonard, Bachman, Brown,
Brooks, Daniels, Douthat and Campbell.
Except for Directors Bachman and Brooks, no member of the Compensation
Committee of the Board of Directors of the Company was (a) either (i) an officer
or employee of the Company or any of its subsidiaries during the fiscal year
ended December 31, 2000, (ii) a former officer of the Company or any of its
subsidiaries, or (iii) an insider (i.e., director, officer, director or officer
nominee, greater than 5% shareholder, or immediate family member of the
foregoing) of the Company or any of its subsidiaries that (b) engaged in
transactions with the Company or any subsidiary involving more than $60,000
during the fiscal year ended December 31, 2000, except for the transactions
described below.
8
The Company purchases insurance coverage from McInturff, Milligan and
Brooks of which Mr. Brooks is Chairman of the Board. During 2000, premiums
totaling $211,825 were paid by the Company to McInturff, Milligan and Brooks.
Management believes the fees paid are fair and reasonable and do not exceed
those premiums that would be paid to a third party firm.
The Company purchases vehicles from Bachman-Bernard Motors, as to which Mr.
Bachman serves as President. The Company paid Bachman-Bernard Motors $116,416
during 2000, which was for five vehicles. Management believes the price paid was
fair and reasonable and does not exceed amounts that would have otherwise been
paid in an arm's-length transaction to a third party.
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CUMULATIVE STOCK PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The following graph shows the cumulative total return on the Common Stock
of the Company over the last five years, compared with (1) the Standard & Poor's
Bank Composite Index and (2) the Standard & Poor's Major Regional Bank Index.
Cumulative total return on the stock or the index equals the total increase in
value since December 31, 1995 assuming reinvestment of all dividends paid into
the stock or the index, respectively. The graph was prepared assuming that $100
was invested on December 31, 1995 in the Common Stock and also in the securities
included in the indices used for comparison purposes. There is no established
public trading market in which shares of the Common Stock are regularly traded,
nor are there any uniformly quoted prices for the shares of Common Stock.
CUMULATIVE TOTAL SHAREHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDICES
AT DECEMBER 31, 1995 THROUGH 2000
[GRAPH SHOWING TOTAL SHAREHOLDER RETURN]
PERIOD ENDING
- ------------------------------------------------------------------------------------------------------------------------------
Index 1995 1996 1997 1998 1999 2000
- ------------------------------------------------------------------------------------------------------------------------------
Greene County Bancshares, Inc. 100.00 119.34 170.33 199.90 265.64 288.41
Standard & Poor's Bank Composite Index 100.00 137.31 193.69 201.88 171.05 195.50
Standard & Poor's Major Regional Bank Index 100.00 132.41 194.32 210.16 175.98 218.99
9
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CERTAIN TRANSACTIONS
- --------------------------------------------------------------------------------
The Company and its subsidiaries have had, and expect to have in the
future, transactions in the ordinary course of business with directors and
executive officers and members of their immediate families, as well as with
principal shareholders. All loans included in such transactions were made in the
ordinary course of business on substantially the same terms, including interest
rates and collateral, as those prevailing for comparable transactions with
non-affiliated persons. It is the belief of management that such loans neither
involved more than the normal risk of collectability nor presented other
unfavorable features.
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PROPOSAL 2 -- INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
GENERAL
The Company's Amended and Restated Charter currently authorizes the
issuance of a total of 5,000,000 shares of capital stock, all of which are
Common Stock. As of the Record Date, there were 1,363,778 shares of Common Stock
issued and outstanding. Under Tennessee law, the number of authorized shares may
only be increased by an amendment to the charter of the Company and, except for
increases to reflect stock dividends, the amendment must be approved by
shareholders.
PROPOSED AMENDMENT
The proposed amendment to the Company's Charter would increase the number
of shares of authorized capital stock from 5,000,000 shares to 15,000,000
shares, increasing the total number of shares of authorized Common Stock from
5,000,000 to 15,000,000.
CONSIDERATIONS IN SUPPORT OF THE AMENDMENT
Although the Company has no present intention of issuing additional shares
of Common Stock, the Board of Directors believes that the availability of
increased shares of Common Stock will provide the Company with needed
flexibility in structuring possible future financing and acquisitions and in
meeting other corporate needs that may arise. In the future, additional
authorized shares of Common Stock would be available for general corporate
purposes, including but not limited to possible issuances as stock dividends or
stock splits, in future mergers or acquisitions, in a future public offering or
private placement, or under a stock benefit plan. The Board of Directors does
not intend to issue any additional shares of capital stock except on terms that
the Board of Directors deems to be in the best interests of the Company and its
shareholders.
OTHER CONSIDERATIONS
The proposed increase in the number of shares of Common Stock authorized
for issuance will not affect the rights, such as voting and liquidation rights,
of the outstanding shares of Common Stock. If, however, additional shares were
issued, the percentage ownership interests of existing shareholders would be
reduced and, depending upon the terms pursuant to which the new shares were
issued, the book value of outstanding shares could be diluted. Each share of the
Common Stock will have the same rights and will be identical in all respects
with each other share of Common Stock. Holders of Common Stock do not have any
preemptive right to subscribe for or purchase any additional securities issued
by the Company.
The additional authorized but unissued shares of Common Stock authorized
under this proposal could, consistent with the fiduciary responsibility of the
Company's directors, be issued without shareholder approval in transactions that
might dilute the percentage ownership of current shareholders and/or render more
difficult a change in control of the Company. For example, such shares could be
used to create a substantial voting block favorable to the Board of Directors to
effect an acquisition that would preclude an acquiror's gaining control or to
dilute an acquiror's voting power. The Board of Directors, however, is not aware
of any effort to obtain control of the Company and does not currently
contemplate the issuance of the authorized shares for the foregoing purposes.
10
VOTE REQUIRED
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED ADOPTION OF THIS PROPOSAL
AND UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THIS PROPOSAL. APPROVAL OF
THE PROPOSAL REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE TOTAL VOTES
REPRESENTED AND ENTITLED TO BE CAST AT THE ANNUAL MEETING AT WHICH A QUORUM IS
PRESENT.
ALTHOUGH THE COMPANY BELIEVES THAT THE MATERIAL PROVISIONS OF THE AMENDMENT
TO THE COMPANY'S AMENDED AND RESTATED CHARTER AND BYLAWS ARE SET FORTH ABOVE,
REFERENCE SHOULD BE MADE TO THE TEXT OF THE AMENDMENT, A COPY OF WHICH IS
ATTACHED TO THIS PROXY STATEMENT AS APPENDIX C.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater-than-10% shareholders
are required to furnish the Company with copies of all such reports. Based
solely on its review of copies of such reports received by it, or written
representations from certain reporting persons that no annual report of change
in beneficial ownership is required, the Company believes that, during and with
respect to the year ended December 31, 2000, all such filing requirements were
timely satisfied except that Messrs. Campbell, Whitfield and Moser filed their
respective Form 3 late, and Messrs. Stroud and Moser filed their respective Form
4 late.
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INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors entered into a three-year agreement with the
certified public accounting firm of Crowe, Chizek and Company LLP to serve as
independent auditors for the Company, beginning with the fiscal year ended
December 31, 2000. Crowe, Chizek and Company LLP served as the Company's
independent auditors for the year ended December 31, 2000.
On October 18, 2000, PricewaterhouseCoopers LLP was dismissed as the
principal accountants of the Company and Crowe, Chizek and Company LLP was
engaged as its principal accountants. The decision to change accountants was
approved by the Audit Committee. The audit reports of PricewaterhouseCoopers LLP
on the consolidated financial statements of the Company as of and for the years
ended December 31, 1999 and 1998, did not contain any adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope or accounting principle. In connection with the audits of the two
most recent fiscal years ended December 31, 1999 and 1998, and the subsequent
interim period through October 18, 2000, there have been no disagreements with
PricewaterhouseCoopers LLP on any matter of accounting principles or practices,
financial statement disclosures, or auditing scope or procedure, which, if not
resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused
them to make reference thereto in their reports on the financial statements for
such years.
A representative of Crowe, Chizek and Company LLP is expected to be present
at the Annual Meeting and available to respond to appropriate questions, and
will have the opportunity to make a statement if he so desires.
During the year ended December 31, 2000, the Company incurred the following
principal independent auditor fees:
Audit Fees(a): $ 71,000
Financial Information Systems Design
and Implementation Fees: $ 0
All Other Fees: $ 6,750(b)
- ---------------------
(a) Includes fees related to annual report on Form 10-K and quarterly reports on
Form 10-Q.
(b) The Audit Committee has considered whether the provision of these services
is compatible with maintaining the principal accountant's independence.
11
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SHAREHOLDER PROPOSALS
- --------------------------------------------------------------------------------
Stockholder proposals for inclusion in the Company's proxy statement and
form of proxy statement relating to the Company's 2002 Annual Meeting of
Shareholders must be received by December 5, 2001. If the Company is not
notified of a stockholder proposal by March 15, 2002, then the Company may have
the discretion to vote the proxies against such stockholder proposal, even
though such proposal is not discussed in the proxy statement. Stockholder
proposals should be addressed to Secretary, Greene County Bancshares, Inc., 100
North Main Street, Greeneville, Tennessee 37743. Nothing in this paragraph shall
be deemed to require the Company to include in its proxy statement and form of
proxy relating to the Company's 2002 Annual Meeting of Shareholders any
stockholder proposal that does not satisfy the requirements for inclusion as
established by the Securities and Exchange Commission at the time of receipt.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any other business to be presented
for action by the shareholders at the Annual Meeting other than those matters
described in this Proxy Statement and matters incident to the conduct of the
Annual Meeting. If, however, any other matters are properly brought before the
Annual Meeting, it is intended that the persons named in the accompanying proxy
will vote such proxy on such matters as determined by a majority of the Board of
Directors.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone number without additional compensation.
The Company's 2000 Annual Report to Shareholders (the "Annual Report"),
including financial statements, has been mailed to all persons who were
shareholders of record as of the close of business on the Record Date. Any
shareholder who has not received a copy of the Annual Report may obtain a copy
by writing to the Secretary of the Company. The Annual Report is not to be
treated as a part of this proxy solicitation material or as having been
incorporated herein by reference.
BY ORDER OF THE BOARD OF DIRECTORS
Davis Stroud
Secretary
Greeneville, Tennessee
April 11, 2001
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ANNUAL REPORT ON FORM 10-K
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2000 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE
FURNISHED WITHOUT CHARGE TO PERSONS WHO WERE SHAREHOLDERS AS OF THE RECORD DATE
UPON WRITTEN REQUEST TO THE SECRETARY, GREENE COUNTY BANCSHARES, INC., 100 NORTH
MAIN STREET, GREENEVILLE, TENNESSEE 37743 OR BY CALLING (423) 639-5111.
- --------------------------------------------------------------------------------
12
APPENDIX A
GREENE COUNTY BANCSHARES, INC.
AUDIT COMMITTEE CHARTER
The Board of Directors of Greene County Bancshares, Inc. ("GCBI") establishes an
Audit Committee with authority, responsibility and specific duties as described
below.
Composition
The committee shall be comprised of a minimum of three outside directors who are
independent of management and are free of any relationship that, in the opinion
of the Board of Directors ("the Board"), would interfere with their exercise of
independent judgment as a committee member. The determination of independence
will be made in accordance with the provisions of Section 36 of FDICIA and any
other requirements as may be promulgated from time to time by those regulatory
agencies or other authorities applicable to the governance of GCBI.
The members of the committee shall be financially literate either at the time of
appointment to the committee, or within a reasonable period of time thereafter.
At least one member of the committee should have accounting or related financial
management expertise.
One of the members shall be appointed committee chairman by the chairman of the
Board.
Responsibility
The Audit Committee has a major responsibility to provide assistance to the
Board in fulfilling their fiduciary responsibility to the shareholders and
investment community related to accounting and reporting practices, the quality
and integrity of financial reports, and the quality and effective administration
of loan portfolios for GCBI and all subsidiaries.
The committee is to be the Board's principal agent in ensuring the independence
of the corporation's outside external auditors and internal auditors, the
integrity of management, and the adequacy of disclosures to stockholders. It is
the intention of the Board to adhere to the Securities and Exchange Commission's
("SEC") rule regarding Audit Committee Disclosure that became effective January
31, 2000.
The Audit Committee is also responsible for overseeing that management has
established and maintained processes to assure that an adequate system of
internal controls is in place and functioning as designed within GCBI and all
subsidiaries. In addition, the committee will oversee that management has
established and maintained processes to assure compliance with all applicable
laws, regulations and corporate policies. In so doing, the Audit Committee will
be responsible for handling relations with the outside external auditing firm,
and the Internal Audit and Loan Review functions.
The committee will ensure that its members receive an appropriate degree of
education and training in order to maintain an adequate level of expertise
necessary to discharge their responsibilities on an ongoing basis.
Authority
The Audit Committee may be requested by the Board to investigate any activity of
GCBI, and all employees are directed to cooperate as requested by members of the
committee. The committee is empowered to retain persons having special
competence as necessary to assist the committee in fulfilling its
responsibility.
The committee views the independent auditors, Internal Audit and Loan Review as
important resources. To this end, the Audit Committee should concur in the
appointment or removal of the independent auditors, the Internal Auditors and
the Manager of Loan Review. However, the opportunity for the independent
auditors and Internal Auditors to meet with the entire Board of Directors as
needed is not to be restricted.
To the extent necessary to fulfill its primary responsibilities, the committee
will also communicate with the corporate legal counsel, the Accounting
Department, Credit Administration, and others, as it deems necessary.
Frequency of Meetings
The Audit Committee shall meet as often as deemed necessary in order to fulfill
its responsibilities, but not less than quarterly.
Attendance at Meetings
In addition to the members of the Audit Committee, the chairman of the Audit
Committee may request members of management, the Internal Auditors and
representatives of the independent auditors be present at meetings of the
committee, as deemed appropriate.
Agenda for Meetings
In carrying out their responsibilities, the committee's agenda and procedures
should remain flexible in order that it can best react to changing conditions
and environment and to assure the Board and Shareholders that the accounting and
reporting practices of GCBI and subsidiaries are in accordance with all
requirements and are of the highest quality.
The committee's agenda on an annual basis will include the following:
1. Provide an open avenue of communication between the independent auditors,
the Internal Auditors, and the Board.
2. Confirm and assure the independence of the independent and Internal
Auditors.
3. Review coordination of audit efforts between the independent and Internal
Auditors to assure completeness of coverage, reduction of redundant
efforts, and the effective use of audit resources.
4. Meet periodically with the independent and Internal Auditors and Manager of
Loan Review without members of management present.
5. Review and approve the scope and general extent of the audit examination
performed by the independent auditors, including their engagement letter.
The independent auditors' fees are to be arranged by management and
annually summarized for committee review and approval.
6. Review any other services rendered by the independent audit firm for GCBI
and all subsidiaries.
7. Review with the independent auditors the adequacy and effectiveness of
internal auditing, control of the organization, recommendations for
improvement in control, and any difficulties encountered.
8. Arrange for the independent auditors to review the following items with the
Audit Committee:
a) GCBI's annual report to shareholders and Forms 10K and 10Q, including
the financial statements, and financial statement and supplemental
disclosures required by generally accepted accounting principles and
the SEC.
b) Significant transactions, if any, not a normal part of GCBI's
operations.
c) Changes (pending or proposed), if any, during the year in GCBI's
accounting principles or their application.
d) Significant adjustments, if any, not a normal part of GCBI's
operations.
e) The independent auditors should be instructed to communicate with the
chairman of the Audit Committee if there is a probability that a
pending quarterly review report, if any, will be other than standard.
9. Inquire of the independent auditors whether there have been any
disagreements with management, which if not satisfactorily resolved, would
have caused them to modify their report on GCBI's financial statements.
2
10. Ascertain that the independent auditors understand that:
a) The Audit Committee is the independent auditors' client;
b) The independent auditors are required to provide a timely analysis of
current financial reporting issues and practices;
c) The independent auditors are required to discuss their qualitative
judgments about the appropriateness, not just the acceptability, of
accounting principles and the degree of aggressiveness or
conservativeness of principles and estimates.
11. Evaluate the cooperation received by the independent auditors during their
audit examination, including their access to all requested records, data
and information.
12. Elicit the comments of management regarding the responsiveness of the
independent auditors to GCBI's needs.
13. Review and approve the annual audit plan, including their engagement
letter, prepared by the Internal Auditors.
14. Review and approve the status of completion of and significant changes to
the Internal Audit annual plan and budget.
15. Evaluate internal accounting control through a review of reports prepared
by the Internal Auditors that describe control weaknesses, and determine
that appropriate corrective action is being taken by management.
16. Review the Internal Auditors' compliance with the Institute of Internal
Auditor's Standards for the Professional Practice of Internal Accounting.
17. Review the organizational structure and qualifications of the Internal
Auditors.
18. Review and approve the loan review policy and operating plan of the Loan
Review department.
19. Review and approve the status of completion of and significant changes to
the Loan Review plan and budget.
20. Evaluate asset quality and credit administration through a review of
reports prepared by the Loan Review department that evaluate asset quality,
the adequacy of allowance for loan losses, and management of the loan
portfolios of GCBI and subsidiaries.
21. Review all reports of examination issued by GCBI's regulators.
22. Make, or cause to be made, all necessary inquiries of management and the
independent auditors concerning established standards of corporate conduct
and performance, and deviations therefrom. Legal matters, regulatory and
legal requirements and issues, and insurance concerns, which could
significantly impact the financial statements, should also be reported.
23. Discuss with GCBI and subsidiaries' management the scope and quality of
internal accounting and financial reporting controls in effect.
24. Review with GCBI and subsidiaries' management, Internal Auditors and
independent auditors, GCBI's policies and procedures to reasonably ensure
the adequacy of internal accounting and financial reporting controls.
25. Inquire of management, the independent auditors and Internal Auditors about
significant risks or exposures and assess steps management has taken to
minimize risks.
26. Apprise the Board of significant developments in the course of performing
the above duties.
27. Prepare a written report that describes the Audit Committee's composition
and responsibilities and how they were discharged.
3
28. Review, update and approve the Audit Committee Charter annually.
29. Recommend to the Board any appropriate extensions or changes in the duties
of the committee.
Committee Communications
Minutes of each meeting shall be prepared with copies to be provided to members
of the committee and made available to management, the independent auditors,
Internal Auditors and regulatory examiners.
The chairman of the Audit Committee shall make a report to the Board on the
results of each meeting of the Audit Committee.
APPENDIX B
AUDIT COMMITTEE REPORT
The Board of Directors of the Company has appointed an Audit Committee,
consisting of four directors, which assists the Board of Directors in fulfilling
its responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company.
In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Company that
might bear on the auditors' independence consistent with Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees, as
amended, and has discussed with the auditors any relationships that may impact
their objectivity and independence and satisfied itself as to the auditors'
independence. The Audit Committee also discussed with management, the internal
auditors and the independent auditors the quality and adequacy of the Company's
internal controls and the internal audit function's organization,
responsibilities, budget and staffing. The Audit Committee reviewed with both
the independent and the internal auditors their audit plans, audit scope, and
identification of audit risks.
The Audit Committee reviewed and discussed with the independent auditors
all matters required by generally accepted auditing standards, including those
matters described in Statement on Auditing Standards No. 61, as amended,
Communication with Audit Committees, and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements. The Audit Committee also discussed the results of the
internal audit examinations.
The Audit Committee reviewed and discussed the audited financial statements
of the Company as of and for the fiscal year ended December 31, 2000, with
management and the independent auditors. Management has the responsibility for
the preparation of the Company's financial statements and the independent
auditors have the responsibility for the examination of those statements and
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles. The Audit Committee held seven
meetings during 2000.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Audit Committee recommended to the Board of Directors
that the Company's audited financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2000, for
filing with the Securities and Exchange Commission.
February 20, 2001 Jerald K. Jaynes, Chair
Terry Leonard, Member
Ralph T. Brown, Member
Davis Stroud, Member
APPENDIX C
INCREASED LEVEL OF AUTHORIZED SHARES
It is proposed that Section 6(b) of the Company's Amended and Restated
Charter be deleted in its entirety and substituted as follows:
(b) Fifteen Million (15,000,000) shares of Common Stock, with a par
value of Ten Dollars ($10.00) per share.
GREENE COUNTY BANCSHARES, INC.
100 NORTH MAIN STREET
GREENEVILLE, TENNESSEE 37743
REVOCABLE PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS
APRIL 25, 2001
The undersigned hereby constitutes and appoints R. Stan Puckett and William
F. Richmond, and each of them, the proxies of the undersigned, with full power
of substitution, to attend the Annual Meeting of Shareholders of Greene County
Bancshares, Inc. (the "Company") to be held at the General Morgan Inn, 111 North
Main Street, Greeneville, Tennessee on Wednesday, April 25, 2001 at 11:00 a.m.,
local time, and any adjournments thereof, and to vote all the shares of stock of
the Company which the undersigned may be entitled to vote, upon the following
matters.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, WILL BE
VOTED IN ACCORDANCE WITH THE INSTRUCTIONS MARKED HEREIN, AND WILL BE VOTED (I)
FOR THE ELECTION OF DIRECTORS, (II) FOR APPROVAL OF THE AMENDMENT TO THE
COMPANY'S AMENDED AND RESTATED CHARTER, AND (III) AS DETERMINED BY A MAJORITY OF
THE BOARD OF DIRECTORS AS TO OTHER MATTERS, IF NO INSTRUCTIONS TO THE CONTRARY
ARE MARKED HEREIN AND TO THE EXTENT THIS PROXY CONFERS DISCRETIONARY AUTHORITY.
1. The Election of Directors: Phil M. Bachman, Ralph T. Brown, James A.
Emory and Terry Leonard
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to
(except as marked to the contrary below). vote for all nominees
listed above.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT
THAT NOMINEE'S NAME BELOW.)
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2. Amendment to the Company's Amended and Restated Charter to increase
the number of authorized shares to 15,000,000 shares of common stock.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. The transaction of such other business as may properly come before the
Annual Meeting or any adjournments thereof.
- --------------------------------------------------------------------------------
The undersigned hereby acknowledges receipt of a copy of the accompanying
Notice of Annual Meeting of the Shareholders and Proxy Statement and the Annual
Report to Shareholders for the fiscal year ended December 31, 2000, and hereby
revokes any proxy heretofore given. THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE
ITS EXERCISE.
Date:
----------------------------------------------
Signature:
-----------------------------------------
Signature:
-----------------------------------------
PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS HEREIN AND RETURN IN THE
ENCLOSED ENVELOPE. If acting as executor, administrator, trustee, guardian, etc.
you should so indicate when signing. If the signor is a corporation, please sign
the full name by duly appointed officer. If a partnership, please sign in
partnership name by authorized person. If shares are held jointly, each
shareholder named should sign.