8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 25, 2005

GREENE COUNTY BANCSHARES, INC.

(Exact Name of Registrant as Specified in Charter)

Tennessee	0-14289	62-1222567
(State or Other Jurisdiction of	(Commission	(I.R.S. Employer
Incorporation)	File Number)	Identification No.)
100 North Main Street
Greeneville, Tennessee		37743-4992
(Address of Principal Executive Offices)		(Zip Code)

(423) 639-5111

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry Into a Material Definitive Agreement

On January 25, 2005, the Compensation Committee (the “Committee”) of the Board of Directors of Greene County Bancshares, Inc. (the “Company”) granted options to purchase shares of the Company’s common stock to employees of the Company, including the executive officers of the Company, pursuant to the Greene County Bancshares, Inc. 2004 Long-Term Incentive Plan (the "Plan"). Stock options were granted to executive officers of the Company as follows:

Name	Title	Number of Shares Subject to Options Granted
R. Stan Puckett	Chairman of the Board and Chief Executive Officer	9,000
Kenneth R. Vaught	President and Chief Operating Officer	10,000
Steve L. Droke	Senior Vice President and Chief Credit Officer	2,760
William F. Richmond	Senior Vice President, Chief Financial Officer and Assistant Secretary	2,605
Ronald E. Mayberry	Regional President, Sumner, Rutherford and Lawrence Counties	2,500

Each option award vests ratably 20% per year over five years, except that Mr. Puckett's option award vests immediately. In the event of a change in control of the Company, as defined in the Plan, the option will fully vest and become immediately exercisable immediately prior to the effective date of the transaction giving rise to the change in control. The options were granted at exercise prices equal to the closing price of the Company's common stock on the date of grant, except for Mr. Puckett's which was granted at 150% of the Company's book value per share, and expire ten years from the date of grant. Each recipient's option award agreement contains provisions dealing with, among other things, (i) the effect of the termination of the recipient's employment with the Company on the award; (ii) the option's transferability; and (iii) the manner in which the recipient can exercise the option.

The form of Stock Option Award Agreement for the options granted is attached hereto as Exhibit 10.1.

Item 9.01. Financial Statements and Exhibits.

(c)       Exhibits

10.1       Form of Stock Option Award Agreement

 2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GREENE COUNTY BANCSHARES, INC.
	By:	/s/ R. Stan Puckett
		R. Stan Puckett
		Chairman of the Board and Chief Executive Officer
		(Duly Authorized Representative)
Date: February 24, 2005

3 

EXHIBIT INDEX

10.1 Form of Stock Option Award Agreement.

4 

EX-10.1

Exhibit 10.1

GREENE COUNTY BANCSHARES, INC.

2004 LONG-TERM INCENTIVE PLAN

______________________________

Stock Option Award Agreement

______________________________

Award No.  _______

You (the “Participant”) are hereby awarded the following stock option (the “Option”) to purchase Shares of Greene County Bancshares, Inc. (the “Company”), subject to the terms and conditions set forth in this Stock Option Award Agreement (the “Award Agreement”) and in the Greene County Bancshares, Inc. 2004 Long-Term Incentive Plan (the “Plan”), which is attached hereto as Exhibit A. A summary of the Plan appears in its Prospectus, which is attached as Exhibit B. You should carefully review these documents, and consult with your personal financial advisor, in order to fully understand the implications of this Award, including your tax alternatives and their consequences.

By executing this Award Agreement, you agree to be bound by all of the Plan’s terms and conditions as if they had been set out verbatim in this Award Agreement. In addition, you recognize and agree that all determinations, interpretations, or other actions respecting the Plan and this Award Agreement shall be made by the Board of Directors (the “Board”) of Greene County Bancshares, Inc., or any Committee appointed by the Board to administer the Plan, and shall be final, conclusive and binding on all parties, including you and your successors in interest. Capitalized terms are defined in the Plan or in this Award Agreement.

1.Variable Terms. This Option shall have, and be interpreted according to, the following terms, subject to the provisions of the Plan in all instances:

Name of Participant:
Type of Stock Option:
	¨ Stock Option (ISO)1
	¨ Non-Incentive Stock Option2
Number of Shares subject to Option:
Option Exercise Price per Share:
Grant Date:
Expiration Date:	¨ ____ years after Grant Date
	¨ 10 years after Grant Date
Vesting Schedule:	(Establishes the Participant’s rights to exercise this Option with respect to the Number of Shares stated above.)
¨	___% on Grant Date.
¨	___% on each of the first __(#) annual (_quarterly/__monthly) anniversary dates of the Participant’s Continuous Service after the Grant Date.

¹If an ISO is awarded to a person owning more than 10% of the voting power of all classes of stock of the Company or of any Subsidiary, then the term of the Option cannot exceed 5 years and the exercise price must be at least 110% of the Fair Market Value of a Share (100% for any other employee who is receiving ISO awards).

²The exercise price of a non-ISO must be at least 50% of the Fair Market Value.

1 

Exhibit 10.1

Stock Option Award Agreement

Greene County Bancshares, Inc.

2004 Long-Term Incentive Plan

2.Term of Option. The term of the Option shall expire at 5:00 p.m. (E.D.T. or E.S.T., as applicable) on the Expiration Date.

3.Manner of Exercise. The Option shall be exercised in the manner set forth in the Plan and as determined by the Committee. The amount of Shares for which the Option may be exercised is cumulative; that is, if you fail to exercise the Option for all of the Shares vested under the Option during any period set forth above, then any Shares subject to the Option that are not exercised during such period may be exercised during any subsequent period, until the expiration or termination of the Option pursuant to Sections 2 and 5 of this Award Agreement and the terms of the Plan. Fractional Shares may not be purchased.

4.Special ISO Provisions. If designated as an ISO, this Option shall be treated as an ISO to the extent allowable under Section 422 of the Code, and shall otherwise be treated as a Non-ISO. If you sell or otherwise dispose of Shares acquired upon the exercise of an ISO within 1 year from the date such Shares were acquired or 2 years from the Grant Date, you agree to deliver a written report to the Company within 10 days following the sale or other disposition of such Shares detailing the net proceeds of such sale or disposition.

5.Termination of Continuous Service.

5.1If your Continuous Service with the Company is terminated for any reason other than as a result of your death, disability, retirement or termination for Cause, you shall have the right to exercise this at any time within three months following your termination of Continuous Service to the extent that you are entitled to exercise such Option at the date of such termination.

5.2If your Continuous Service with the Company is terminated because you retire or become disabled (each, as contemplated in Section 6 (h) of the Plan), you shall have the right to exercise the Option at any time within one year following your termination of Continuous Service to the extent your are entitled to exercise such Option at the date of your termination.

5.3If you die during your Continuous Service with the Company (or within 30 days after termination of your Continuous Service), then your estate or the person who has the right to exercise the Option may exercise the Option at any time within one year of your death, but only to the extent that you were entitled to exercise the Option on the date of your death or, if earlier, the date when your Continuous Service was terminated.

5.4If your Continuous Service is terminated due to Cause (as determined by the Committee in accordance with the Plan), you shall immediately forfeit the right to exercise this Option.

6.Occurrence of a Change in Control. In the event of a Change in Control, your Option shall fully vest and become fully exercisable as to the Shares then subject to the Option. This shall occur immediately prior to the effective date of the transaction giving rise to the Change in Control.

 2

Exhibit 10.1

Stock Option Award Agreement

Greene County Bancshares, Inc.

2004 Long-Term Incentive Plan

7.Designation of Beneficiary. Notwithstanding anything to the contrary contained herein or in the Plan, following the execution of this Award Agreement, you may expressly designate a beneficiary (the “Beneficiary”) to his or her interest in the Option awarded hereby. You shall designate the Beneficiary by completing and executing a designation of beneficiary agreement substantially in the form attached hereto as Exhibit C (the “Designation of Beneficiary”) and delivering an executed copy of the Designation of Beneficiary to the Company.

8.Notices.Any notice or communication required or permitted by any provision of this Award Agreement to be given to you shall be in writing and shall be delivered personally or sent by certified mail, return receipt requested, addressed to you at the last address that the Company had for you on its records. Each party may, from time to time, by notice to the other party hereto, specify a new address for delivery of notices relating to this Award Agreement. Any such notice shall be deemed to be given as of the date such notice is personally delivered or properly mailed.

9.Binding Effect. Except as otherwise provided in this Award Agreement or in the Plan, every covenant, term, and provision of this Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns.

10.Modifications. This Award Agreement may be modified or amended at any time, provided that you must consent in writing to any modification that adversely alters or impairs any rights or obligations under this Option.

11.Headings. Section and other headings contained in this Award Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or intent of this Award Agreement or any provision hereof.

12.Severability. Every provision of this Award Agreement and of the Plan is intended to be severable. If any term hereof is illegal or invalid for any reason, such illegality or invalidity shall not affect the validity or legality of the remaining terms of this Award Agreement.

13.Governing Law. The laws of the State of Tennessee shall govern the validity of this Award Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto.

14.Counterparts. This Award Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

15.Plan Governs. By signing this Award Agreement, you acknowledge that you have received a copy of the Plan and that your Award Agreement is subject to all the provisions contained in the Plan, the provisions of which are made a part of this Award Agreement and your Award is subject to all interpretations, amendments, rules and regulations which from time to time may be promulgated and adopted pursuant to the Plan. In the event of a conflict between the provisions of this Award Agreement and those of the Plan, the provisions of the Plan shall control.

3 

Exhibit 10.1

Stock Option Award Agreement

Greene County Bancshares, Inc.

2004 Long-Term Incentive Plan

16.Restrictions on Transfer. This Award Agreement may not be sold, pledged, or otherwise transferred without the prior written consent of the Committee.  Notwithstanding the foregoing, you may transfer this Option (i) by instrument to an inter vivos or testamentary trust (or other entity) in which each beneficiary is a permissible transferee of yours pursuant to the list of persons identified in clause (ii) of this Section, or (ii) by gift to charitable institutions or by gift or transfer for consideration to any of the following relatives of yours (or to an inter vivos trust, testamentary trust or other entity primarily for the benefit of the following relatives of yours): any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.  Any transferee of your rights shall succeed and be subject to all of the terms of this Award Agreement and the Plan.

17.       Taxes. By signing this Award Agreement, you acknowledge that you shall be solely responsible for the satisfaction of any taxes that may arise (including taxes arising under Sections 409A or 4999 of the Code), and that neither the Company nor the Administrator shall have any obligation whatsoever to pay such taxes.

BY YOUR SIGNATURE BELOW on the Grant Date identified above, along with the signature of the Company’s representative, you and the Company agree that this Option is awarded under and governed by the terms and conditions of this Award Agreement and the Plan.

GREENE COUNTY BANCSHARES, INC.
By:	/s/
	Title

PARTICIPANT
The undersigned Participant hereby accepts the terms of this Award Agreement and the Plan.
By:	/s/
	Name of Participant:

 4

Exhibit 10.1

GREENE COUNTY BANCSHARES, INC.

2004 LONG-TERM INCENTIVE PLAN

Exhibit A

Plan Document

5

Exhibit 10.1

GREENE COUNTY BANCSHARES, INC.

2004 LONG-TERM INCENTIVE PLAN

Exhibit B

Plan ProspectusGREENE COUNTY BANCSHARES, INC.

6

Exhibit 10.1

GREENE COUNTY BANCSHARES, INC.

2004 LONG-TERM INCENTIVE PLAN

Exhibit C

Designation of Beneficiary

In connection with the STOCK OPTION AWARD AGREEMENT (the “Award Agreement”) entered into on _______________, 200_ between Greene County Bancshares, Inc. (the “Company”) and _______________, an individual residing at _______________ (the “Participant”), you hereby designate the person specified below as the beneficiary of the Participant’s interest in a stock option to purchase Shares (as defined in the 2004 Long-Term Incentive Plan) of the Company awarded pursuant to the Award Agreement. This designation shall remain in effect until revoked in writing by the Participant.

Name of Beneficiary:

Address:

Social Security No.:

You understand that this designation operates to entitle the above-named beneficiary to the rights conferred by the Award Agreement from the date this form is delivered to the Company until such date as this designation is revoked in writing by you, including by delivery to the Company of a written designation of beneficiary executed by you on a later date.

Date:
By:
	[Participant Name]

Sworn to before me this

____ day of ____________, 200_

___________________________

Notary Public

County of __________________

State of__________________

7