Document:

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                                                              EXHIBIT NO.10.(ii)

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is executed on the 19th day of November, 2003, but
effective as of the 1st day of January, 2003 ("Effective Date"), by and between
GREENE COUNTY BANCSHARES, INC. AND GREENE COUNTY BANK (referred to herein
collectively as the "Company") and KENNETH R. VAUGHT (the "Employee").

                                  INTRODUCTION

         The Board of Directors of Company (the "Board") has determined that it
is in the best interests of Company to retain Employee's services and to
reinforce and encourage the continued attention and dedication of Employee to
his assigned duties, without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of Company or the assertion
of claims and actions against employees.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Company and Employee hereby agree as follows:

1.       Employment. Upon the terms and subject to the conditions contained in
this Agreement, Employee agrees to provide full-time services for Company during
the term of this Agreement. Employee agrees to devote his best efforts to the
business of Company, and shall perform his duties in a diligent, trustworthy,
and business-like manner, all for the purpose of advancing the business of
Company. Notwithstanding the above, Employee may engage in other business
interests or investments which do not materially prevent Employee from
performing his contemplated services hereunder on behalf of Company.

2.       Duties. Employee shall hold the titles of PRESIDENT & CHIEF OPERATING
OFFICER ("COO") of Company and its subsidiary, GREENE COUNTY BANK, and shall
report directly to the Chief Executive Officer of Company. Employee shall render
such administrative and management services for Company as are currently
rendered and as are currently performed by persons situated in a similar
executive capacity. Employee shall also promote, by entertainment or otherwise,
as and to the extent permitted by law, the business of Company. Employee's
duties may, from time to time, be changed or modified at the discretion of the
Board, upon notice to Employee. Provided, however, such change or modification
shall not constitute a demotion or result in the loss or diminution of
Employee's position, title, or compensation under this Agreement without his
prior written consent.

3.       Employment Term. Subject to the terms and conditions hereof, Company
agrees to employ, and Employee hereby accepts Employment, for the 3 years
commencing January 1, 2003 (the "Effective Date"). Additionally, unless either
party notifies the other of a termination at least ninety (90) days prior to the
end of the then current term, the term of this Agreement and Employee's
employment shall automatically renew on the same terms and conditions upon the
expiration date of the initial term and each renewal term on a calendar year to
year basis.

4.       Compensation and Benefits.

         (a)      Base Salary. As of the Effective Date of this Agreement,
         Company agrees to pay Employee during the term of this Agreement an
         initial base salary at the rate of $160,000 (ONE HUNDRED SIXTY THOUSAND
         DOLLARS) per annum (the "Base Salary"), payable in accordance with
         Company's normal payroll practices with such payroll deductions and
         withholdings as are required by law. Employee's Base Salary will also
         be reviewed at least annually by the Board, and may, in the Board's
         sole discretion, be increased (but not reduced) thereafter on the
         anniversary of the Effective Date.

         (b)      Annual Incentive Payment. In addition to other compensation to
         be paid under this SECTION 4, each year during the term of this
         Agreement Employee shall be eligible to receive an annual incentive
         payment (the "Annual Incentive Payment"). The amount of the Annual
         Incentive Payment actually awarded and paid to Employee each year will
         be determined by the Board in its sole discretion based on performance
         criteria to be adopted. Any payments made under this section shall be
         paid as soon as is practicable following the close of Company's
         financial statements for the preceding year.

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                                                              EXHIBIT NO.10.(ii)

         (c)      Stock Options. In addition to other compensation to be paid
         under this SECTION 4, Employee shall have the right to participate in
         any existing stock options plans for which he is eligible and any
         future stock option plans adopted in accordance with law by Company for
         which he is eligible under the terms of plan.

         (d)      Board Fees. In addition to other compensation to be paid under
         this SECTION 4, Company shall pay to Employee fees for services
         provided as a member of the Board at the same level as outside board
         members.

         (e)      Life Insurance. Company shall provide life insurance coverage
         on the life of Employee in an amount not less than $500,000.00.
         Employee understands a portion of this may be taxable.

         (f)      Vacation. Employee shall be entitled to 20 days of paid
         vacation, plus all scheduled bank holidays, during each full year of
         his employment hereunder in accordance with the general terms of the
         vacation policy adopted by Company. In addition, upon any termination
         of Employee's employment under SECTION 5, except for termination for
         cause (as defined herein), Employee will be paid any accrued vacation
         that has not been taken through the date of the termination of his
         employment.

         (g)      Reimbursement of Expenses. Company shall reimburse Employee in
         accordance with Company's expense reimbursement policies for all
         reasonable, ordinary and necessary business expenses incurred by
         Employee in the course of his duties conducted on behalf of Company. In
         addition, Company shall pay Employee's annual dues at a local country
         club, and expenses related to Employee's use of such country club for
         matters related to the business of Company. Company shall also
         reimburse Employee's reasonable expenses for professional development
         courses.

         (h)      Employee Benefits. Employee shall be entitled to participate
         in any employee benefit plans now existing or established hereafter
         generally available to employees of Company or senior or executive
         officers of Company, and to all normal perquisites provided to senior
         or executive officers of Company, provided Employee is otherwise
         qualified to participate in such plans or programs. As part of its
         normal course of business, Company may amend and/or terminate employee
         benefits, except for any benefit that is vested in Employee.

         (i)      Benefits Not in Lieu of Compensation. No benefit or perquisite
         provided to Employee shall be deemed to be in lieu of base salary,
         bonus, or other compensation, provided that the reporting of any
         benefits shall be consistent with IRS regulations.

5.       At-will Employment and Termination. Employment with Company will be
at-will and may be terminated at any time by either party with or without cause,
for any reason, including the reasons set forth in this SECTION 5, or for no
reason at all, but any such termination shall be subject to the terms and
conditions of this Agreement.

         (a)      Cause. Notwithstanding any provision of this Agreement to the
                  contrary, Company shall not pay any benefit under this
                  Agreement if Company determines that Employee committed one of
                  the following acts while in the employment of Company prior to
                  the Normal Retirement date:

                  (i)      Gross negligence or gross neglect of duties;

                  (ii)     Commission of a felony or of a misdemeanor involving
                           moral turpitude; or

                  (iii)    Fraud, disloyalty, dishonesty or willful violation of
                           any law or significant Company policy committed in
                           connection with Employee's employment and resulting
                           in an adverse effect on Company.

         (b)      Death. This Agreement shall be terminated automatically upon
         the death of Employee. Within ten (10) business days of termination,
         Company shall pay to Employee's beneficiary a sum equal to one month of
         Base Salary at the then-effective rate paid to Employee, plus an amount
         of Annual Incentive as determined under SECTION 4(b).

                  (i)      Employee shall designate a beneficiary by filing a
                  written designation with Company. Employee may revoke or
                  modify the designation at any time by filing a new
                  designation. However, designations will only be effective if
                  signed by Employee and received by Company

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                                                              EXHIBIT NO.10.(ii)

                  during Employee's lifetime. Employee's beneficiary designation
                  shall be deemed automatically revoked if the beneficiary
                  predeceases Employee, or if Employee names a spouse as
                  beneficiary and the marriage is subsequently dissolved. If
                  Employee dies without a valid beneficiary designation, all
                  payments shall be made to Employee's estate.

                  (ii)     If a benefit is payable to a minor, to a person
                  declared incompetent, or to a person incapable of handling the
                  disposition of his or her property, Company may pay such
                  benefit to the guardian, legal representative or person having
                  the care or custody of such minor, incapacitated person or
                  incapable person. Company may require proof of incompetence,
                  minority or guardianship as it may deem appropriate prior to
                  distribution of the benefit. Such distribution shall
                  completely discharge Company from all liability with respect
                  to such benefit.

         (c)      Disability. Company may terminate Employee's employment for
         Disability as defined under Company's long-term disability policy. If
         Company does not have a long-term disability policy, disability shall
         be defined as Employee's inability through physical or mental illness
         or other cause to perform the essential functions of Employee's
         position, with or without reasonable accommodation, in the opinion of
         Company, for the continuous period of six (6) months. Within ten (10)
         business days of termination, Company shall pay to Employee a sum equal
         to one month of Base Salary at the then-effective rate paid to
         Employee, plus an amount of Annual Incentive as determined under
         SECTION 4(b).

         (d)      Voluntary Resignation or Termination for Cause. If Employee
         shall voluntarily terminate his employment for any reason, or if
         Company shall discharge Employee for Cause, as defined in Section 5(a),
         this Agreement shall terminate immediately and Company shall have no
         further obligation to make any payment under this Agreement except for
         the prorata portion of Base Salary that has been earned through the
         termination date of Employee's employment, but that has not yet been
         paid; provided, however, that with respect to any stock options,
         restricted stock, incentive plans, deferred compensation arrangements,
         or other plans or programs in which Employee is participating at the
         time of termination of his employment, Employee's rights and benefits
         under each such plan shall be determined in accordance with the terms,
         conditions, and limitations of the plan and any separate agreement
         executed by Employee which may then be in effect. Termination for Cause
         shall only occur after the Board, in its sole and absolute discretion,
         has made a full and thorough determination of "Cause," which shall be
         noticed to Employee in writing within three (3) business days of such
         determination.

         (e)      Involuntary Termination Without Cause. If during the term of
         this Agreement, Employee's employment is terminated by Company without
         Cause other than through a voluntary resignation by Employee, the
         following shall apply:

                  (i)      Base Salary. Within ten (10) business days of
                  termination, Company shall pay Employee the accrued Based
                  Salary through the date of termination and an additional lump
                  sum amount equal to twelve (12) months of Employee's Base
                  Salary under this agreement in effect at the time of
                  termination.

                  (ii)     Annual Incentive. In addition to Base Salary as
                  described above in Section 5(e)(i), Company shall also pay to
                  Employee in a lump sum an amount not less than the average of
                  the Annual Incentive Payments Employee received under this
                  Agreement for the two years prior to termination.

                  If such termination occurs within eighteen (18) months
                  following, or six (6) months prior to, a Change in Control,
                  then the benefit under SECTION 6 shall apply.

6.       Termination After Change in Control Benefit. If within eighteen (18)
months after, or six (6) months prior to, a Change in Control of Company as
defined in SECTION 6(a), Company terminates Employee's employment for reasons
other than those under SECTION 5(a) herein, or Employee voluntarily resigns
following a demotion in position, a reduction in title, and/or a significant
reduction in the duties which he is to perform for Company, then Company shall
pay to Employee a benefit as defined in SECTION 6(b).

         (a)      Change in Control. The term Change in Control shall have the
         following meaning:

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                                                              EXHIBIT NO.10.(ii)

                  (i)      Any person or entity or group of affiliated persons
                  or entities (other than Company) becomes a beneficial owner,
                  directly or indirectly, of 20% or more of Company's voting
                  securities or all or substantially all of the assets of
                  Company;

                  (ii)     Company enters into a definitive agreement which
                  contemplates the merger, consolidation or combination of
                  Company with an unaffiliated entity in which either or both of
                  the following is to occur: (i) the Board of Directors of
                  Company, as applicable, immediately prior to such merger,
                  consolidation or combination will constitute less than a
                  majority of the board of directors of the surviving, new or
                  combined entity; or (ii) less than 75% of the outstanding
                  voting securities of the surviving, new or combined entity
                  will be beneficially owned by the stock holders of Company
                  immediately prior to such merger, consolidation or
                  combination; provided, however, that if any definitive
                  agreement to merge, consolidate or combine is terminated
                  without consummation of the transaction, then no Change in
                  Control shall be deemed to have occurred pursuant to this
                  paragraph;

                  (iii)    Company enters into a definitive agreement which
                  contemplates the transfer of all or substantially all of
                  Company's assets, other than to a wholly-owned Subsidiary of
                  Company; provided, however, that if any definitive agreement
                  to transfer assets is terminated without consummation of the
                  transfer, then no Change in Control shall be deemed to have
                  occurred pursuant to this paragraph; or

                  (iv)     A majority of the members of the Board of Directors
                  of Company shall be persons who: (i) were not members of such
                  Board on the date this plan is approved by the stock holders
                  of Company ("current members"); and (ii) were not nominated by
                  a vote of such Board which included the affirmative vote of a
                  majority of the current members on such Board at the time of
                  their nomination ("future designees") and (iii) were not
                  nominated by a vote of such Board which included the
                  affirmative vote of a majority of the current members and
                  future designees, taken as a group, on such Board at the time
                  of their nomination.

         (b)      Amount. Upon a termination of Employee's employment under the
         circumstances described in this SECTION 6, and subject to the
         provisions of SECTIONS 9 AND 10, Employee will receive a Change in
         Control Benefit equal to three (3) times Employee's Current Annual
         Compensation, which is defined as follows as of the date of the Change
         in Control:

                  Employee's current annualized Base Salary amount being paid by
                  Company as of the time of Employee's termination plus the
                  total amount of the Annual Incentive paid to Employee in the
                  twelve month period immediately preceding his termination.
                  This definition covers amounts includible in compensation,
                  i.e., the Base Salary and cash Annual Incentive prior to any
                  cash or deferred arrangements.

         Company shall also pay to Employee any amounts due under SECTION 4(c)
         according with the terms, conditions and limitations of the plans and
         any separate agreements under SECTION 4(c) without regard to "vesting"
         thereunder.

         (c)      Consideration of Benefit. As consideration for the benefit
         paid in this SECTION 6, at the request of the successors as described
         in SECTION 15(a), Employee will work with the new organization for a
         period of at least six (6) months at his Base Salary, which payments
         shall be in addition to all sums due Employee pursuant to Section 6(b)
         of this Agreement. If Employee is requested to work with the new
         organization for a period of six (6) months and fails to do so, then no
         benefits will be provided to Employee.

         (d)      Limitation of Benefit. Notwithstanding anything to the
         contrary in this Agreement, if any benefit payable under this Agreement
         would create an excise tax under the excess parachute rules of Section
         4999 of the Code, Company shall pay to Employee the amount of such
         excise tax and all federal and state income or other taxes with respect
         to any such additional amount (the "Gross-up"). If, as a result of any
         Gross-up payments made to Employee, Employee incurs additional tax
         liability, Company shall provide an additional Gross-up payment to
         Employee to offset any such tax liability ("Double Gross-up").

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                                                              EXHIBIT NO.10.(ii)

         (e)      Payment of Benefit. Company shall pay the Change in Control
         Benefit provided herein in a lump sum to Employee within 30 days
         following a termination of Employee's employment under the
         circumstances described in the first sentence of this Section 6.

7.       Confidential Information. Employee recognizes and acknowledges that he
will have access to certain information of Company and that such information is
confidential and constitutes valuable, special and unique property of Company.
Employee shall not at any time, either during or subsequent to the term of this
Agreement, disclose to others, use, copy or permit to be copied, except as
directed by law or in pursuance of Employee's duties for or on behalf of
Company, its successors, assigns or nominees, any Confidential Information of
Company (regardless of whether developed by Employee), without the prior written
consent of Company.

The term "Confidential Information" with respect to any person means any secret
or confidential information or know-how and shall include, but shall not be
limited to, the plans; customers; customer specific information; customer
specific loan pricing, loan needs, and maturity dates; costs, prices, rates,
uses, and applications of products and services; customer specific deposit
information; results of investigations; studies owned or used by such person;
and all products, processes, compositions, computer programs, and servicing,
marketing or operational methods and techniques at any time used, developed,
investigated, made or sold by such person, before or during the term of this
Agreement, that are not readily available to the public or that are maintained
as confidential by such person. Employee shall maintain in confidence any
Confidential Information of third parties received as a result of Employee's
employment with Company in accordance with Company's obligations to such third
parties and the policies established by Company.

8.       Delivery of Documents upon Termination. Employee shall deliver to
Company or its designee at the termination of Employee's employment all
correspondence, memoranda, notes, records, drawings, sketches, plans, customer
lists, product compositions, and other documents and all copies thereof, made,
composed or received by Employee, solely or jointly with others, that are in
Employee's possession, custody, or control at termination and that are related
in any manner to the past, present, or anticipated business or any member of
Company.

9.       No Solicitation. Throughout the term of this Agreement and for a period
of twelve (12) months immediately following the later to occur of (1) the
termination of Employee's employment with Company following a Change in Control
as set forth in SECTION 6(a), or (2) termination of Employee's service to the
successor organization following a Change in Control as required by SECTION 6(c)
of this Agreement, Employee shall not directly or indirectly for the benefit of
any bank or financial institution or any company or other entity affiliated,
directly or indirectly, with another bank or financial institution other than
Company, solicit the employment or services of, hire, or assist in the hiring of
any person eligible for Company's compensation or benefit plans for senior
officers or executives.

10.      No Tampering. Throughout the term of this Agreement and for a period of
twelve (12) months immediately following the later to occur of (1) the
termination of Employee's employment with Company following a Change in Control
as set forth in SECTION 6(A), or (2) termination of Employee's service to the
successor organization following a Change in Control as required by SECTION 6(c)
of this Agreement, Employee shall not directly or indirectly (a) request, induce
or attempt to influence any existing or prospective customers, vendors or
licensors of Company to curtail or cancel any business they may transact with
Company; or (b) request, induce or attempt to influence any senior or executive
employee of Company to terminate that employee's employment with Company. For
purposes of this Section 10, "prospective customers" shall mean individuals or
entities whom Company or its affiliates have contacted within the twelve (12)
months immediately preceding the termination of Employee's employment under this
Agreement.

11.      Publicity and Advertising. Employee agrees that Company may use
Employee's name, picture, or likeness for any advertising, publicity, or other
business purpose at any time, during the term of the Agreement by Company and
may continue to use materials generated during the term of Employee's employment
pursuant to this Agreement for a period of six months thereafter. Employee shall
receive no additional consideration if Employee's name, picture or likeness is
so used. Employee further agrees that any negatives, prints or other material
for printing or reproduction purposes prepared in connection with the use of
Employee's name, picture or likeness by Company shall be and are the sole
property of Company.

12.      Remedies. Employee acknowledges that a remedy at law for any breach or
attempted breach of Employee's obligations under SECTIONS 7 THROUGH 10 may be
inadequate, agrees that Company may be entitled to

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                                                              EXHIBIT NO.10.(ii)

specific performance and injunctive and other equitable remedies in case of any
such breach or attempted breach and further agrees to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
injunctive or other equitable relief. Employee agrees and stipulates that if
Company can prove a violation of any one covenant, that it shall be entitled to
injunctive relief on all such covenants and that proof of one such violation is
satisfactory to show that Company will suffer immediate and irreparable harm if
injunctive relief is not granted. Company shall have the right to offset against
amounts to be paid to Employee pursuant to the terms hereof any amounts from
time to time owing by Employee to Company. The termination of Employee's
employment pursuant to this Agreement shall not be deemed to be a waiver by
Company of any breach by Employee of this Agreement or any other obligation owed
Company, and notwithstanding such a termination Employee shall be liable for all
damages attributable to such a breach.

13.      Dispute Resolution. Subject to Company's right to seek injunctive
relief in court as provided in SECTION 12 of this Agreement, any dispute,
controversy or claim arising out of or in relation to or connection to this
Agreement, including without limitation any dispute as to the construction,
validity, interpretation, enforceability or breach of this Agreement, including
a claim for indemnification under SECTION 14, shall be resolved either as
provided by applicable law, or, at the option of either party, by impartial
binding arbitration. In the event that either Company or Employee demands
arbitration, Employee and Company agree that such arbitration shall be the
exclusive, final and binding forum for the ultimate resolution of such claims,
subject to any rights of appeal that either party may have under the Federal
Arbitration Act and/or under applicable state law dealing with the review of
arbitration decisions.

         (a)      Arbitration. Arbitration shall be heard and determined by one
         arbitrator, who shall be impartial and who shall be selected by mutual
         agreement of the parties; provided, however, that if the dispute
         involves more than $1,000,000, then the arbitration shall be heard and
         determined by three (3) arbitrators. If three (3) arbitrators are
         necessary as provided above, then (i) each side shall appoint an
         arbitrator of its choice within thirty (30) days of the submission of a
         notice of arbitration and (ii) the party-appointed arbitrators shall in
         turn appoint a presiding arbitrator of the tribunal within thirty (30)
         days following the appointment of the last party-appointed arbitrator.
         If any party fails or refuses to appoint an arbitrator, the arbitration
         shall proceed with one (1) arbitrator.

         (b)      Demand for Arbitration. In the event that Employee or Company
         initially elects to file suit in any court, the other party will have
         60 days from the date that it is formally served with a summons and a
         copy of the suit to notify the party filing the suit of the non-filing
         party's demand for arbitration. In that case, the suit must be
         dismissed by consent of the parties or by the court on motion, and
         arbitration commenced with the arbitrators. In situations where suit
         has not been filed, either Employee or Company may initiate arbitration
         by serving a written demand for arbitration upon the other party. Such
         a demand must be served within twelve months of the events giving rise
         to the dispute. Any claim that is not timely made will be deemed
         waived.

         (c)      Proceedings. Unless otherwise expressly agreed in writing by
         the parties to the arbitration proceedings:

                  (i)      The arbitration proceedings shall be held in the Knox
                  County, Tennessee, area, and at a site chosen by mutual
                  agreement of the parties. If the parties cannot reach
                  agreement on a location within thirty (30) days of the
                  appointment of the last arbitrator, then at a site chosen by
                  the arbitrators;

                  (ii)     The arbitrators shall be and remain at all times
                  wholly independent and impartial;

                  (iii)    The arbitration proceedings shall be conducted in
                  accordance with the Employment Arbitration Rules of the
                  American Arbitration Association, as amended from time to
                  time;

                  (iv)     Any procedural issues not determined under the
                  arbitral rules selected pursuant to item (iii) above shall be
                  determined by the law of the place of arbitration, other than
                  those laws which would refer the matter to another
                  jurisdiction;

                  (v)      The costs of the arbitration proceedings (including
                  attorneys' fees and costs) shall be borne in the manner
                  determined by the arbitrators;

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                                                              EXHIBIT NO.10.(ii)

                  (vi)     The arbitrators may grant any remedy or relief that
                  would have been available to the parties had the matter been
                  heard in court;

                  (vii)    The decision of the arbitrators shall be reduced to
                  writing; final and binding without the right of appeal; the
                  sole and exclusive remedy regarding any claims, counterclaims,
                  issues or accounting presented to the arbitrators; made and
                  promptly paid in United States dollars free of any deduction
                  or offset; and any costs or fees incident to enforcing the
                  award shall to the maximum extent permitted by law, be charged
                  against the party resisting such enforcement;

                  (viii)   The award shall include interest from the date of any
                  breach or violation of this Agreement, as determined by the
                  arbitral award, and from the date of the award until paid in
                  full, at 6% per annum; and

                  (ix)     Judgment upon the award may be entered in any court
                  having jurisdiction over the person or the assets of the party
                  owing the judgment or application may be made to such court
                  for a judicial acceptance of the award and an order of
                  enforcement, as the case may be.

         (d)      Acknowledgment of Parties. Company and Employee understand and
         acknowledge that this Agreement means that neither can pursue an action
         against the other in a court of law regarding any employment dispute,
         except for claims involving workers' compensation benefits or
         unemployment benefits, and except as set forth elsewhere in this
         Agreement, in the event that either party notifies the other of its
         demand for arbitration under this Agreement. Company and Employee
         understand and agree that this SECTION 13, concerning arbitration,
         shall not include any controversies or claims related to any agreements
         or provisions (including provisions in this Agreement) respecting
         confidentiality, proprietary information, non-competition,
         non-solicitation, trade secrets, or breaches of fiduciary obligations
         by Employee, which shall not be subject to arbitration.

         (e)      Consultation. Employee has been advised of Employee's right to
         consult with an attorney prior to entering into this Agreement.

14.      Indemnification. Employee shall be indemnified and held harmless from
any and all claims, damages and losses of whatsoever nature, including without
limitation court costs and reasonable attorneys fees through appeal, resulting
from any and all legal actions when he is either a party, witness or a
participant in any legal action brought against Company, its subsidiary
companies, Employee, another employee or director of Company, or any other third
party when such action relates to or arises from Employee's employment with
Company or this Agreement. Employee will also be protected through any
indemnity, insurance or other similar programs that cover the outside Board
members or other employees of Company.

15.      Miscellaneous Provisions.

         (a)      Successors of Company. Company will require any successor
         (whether direct or indirect, by purchase, merger, consolidation or
         otherwise) to all or substantially all of the business and/or assets of
         Company, by agreement in form and substance satisfactory to Employee,
         expressly to assume and agree to perform this Agreement in the same
         manner and to the same extent that Company would be required to perform
         it if no such succession had taken place. Failure of Company to obtain
         such agreement prior to the effectiveness of any such succession shall
         be a breach of this Agreement and shall entitle Employee to
         compensation from Company in the same amount and on the same terms as
         Employee would be entitled hereunder if Company terminated Employee's
         employment without Cause as defined in this Agreement. As used in this
         Agreement, "Company" as hereinbefore defined shall include any
         successor to its business and/or assets as aforesaid which executes and
         delivers the agreement provided for in this SECTION 15 or which
         otherwise becomes bound by all the terms and provisions of this
         Agreement by operation of law.

         (b)      Employee's Heirs, etc. Employee may not assign Employee's
         rights or delegate Employee's duties or obligations hereunder without
         the written consent of Company. This Agreement shall inure to the
         benefit of and be enforceable by Employee's personal or legal
         representatives, executors, administrators, successors, heirs,
         distributees, devisees and legatees. If Employee should die while any
         amounts would still be payable to Employee hereunder as if he had
         continued to live, all such amounts, unless otherwise

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                                                              EXHIBIT NO.10.(ii)

         provided herein, shall be paid in accordance with the terms of this
         Agreement to Employee's designee or, if there be no such designee, to
         Employee's estate.

         (c)      Notices. Any notice or communication required or permitted
         under the terms of this Agreement shall be in writing and shall be
         delivered personally, or sent by registered or certified mail, return
         receipt requested, postage prepaid, or sent by nationally recognized
         overnight carrier, postage prepaid, to Company at Company's principal
         office in Greeneville, Tennessee listed below or to Employee at the
         address listed below with a copy to his attorney. Such notice or
         communication shall be deemed given (a) when delivered if personally
         delivered; (b) five mailing days after having been placed in the mail,
         if delivered by registered or certified mail; and (c) the business day
         after having been placed with a nationally recognized overnight
         carrier, if delivered by nationally recognized overnight carrier. Any
         party may change the address to which notices or communications are to
         be sent to it by giving notice of such change in the manner herein
         provided for giving notice. Until changed by notice, the following
         shall be the address to which notices shall be sent:

                  If to Company, to:      Greene County Bancshares
                                          100 N. Main Street
                                          Greeneville, TN 37743

                  If to Employee, to:     Kenneth R. Vaught
                                          3619 Helmsley Court
                                          Maryville, TN 37803

                  With a copy to:         C. Coulter Gilbert, Esq.
                                          Kennerly, Montgomery & Finley, P.C.
                                          4th Floor, Bank of America Building
                                          550 Main Street
                                          Knoxville, TN 37902

         (d)      Amendment or Waiver. No provisions of this Agreement may be
         modified, waived or discharged unless such waiver, modification or
         discharge is agreed to in writing signed by Employee and an authorized
         officer of Company (other than Employee). No waiver by either party
         hereto at any time of any breach by the other party hereto of or
         compliance with, any condition or provision of this Agreement to be
         performed by such other party shall be deemed a waiver of similar or
         dissimilar provisions or conditions at the same or at any prior or
         subsequent time. No agreements or representations, oral or otherwise,
         express or implied, with respect to the subject matter hereof have been
         made by either party that are not set forth expressly in this
         Agreement.

         (e)      Invalid Provisions. Should any portion of this Agreement be
         adjudged or held to be invalid, unenforceable or void, such holding
         shall not have the effect of invalidating or voiding the remainder of
         this Agreement and the parties hereby agree that the portion so held
         invalid, unenforceable or void shall if possible, be deemed amended or
         reduced in scope, or otherwise be stricken from this Agreement to the
         extent required for the purposes of validity and enforcement thereof.

         (f)      Survival of Employee's Obligations. The parties' obligations
         under this Agreement shall survive regardless of whether Employee's
         employment by Company is terminated, voluntarily or involuntarily, by
         Company or Employee, with or without Cause.

         (g)      Counterparts. This Agreement may be executed in one or more
         counterparts, each of which shall be deemed to be an original but all
         of which together will constitute one and the same instrument.

         (h)      Governing Law. This Agreement and any action or proceeding
         related to it shall be governed by and construed under the laws of the
         State of Tennessee. The parties agree that venue in any litigation
         shall be in Knox County, TN, the parties having agreed and stipulated
         that Knox County, TN is a neutral and fair venue to both sides. The
         parties also hereby agree to waive any objection to or defense against
         Knox County, TN as the place of venue.

                                       8

<PAGE>

                                                              EXHIBIT NO.10.(ii)

         (i)      Captions and Gender. The use of Captions and Section headings
         herein is for purposes of convenience only and shall not effect the
         interpretation or substance of any provisions contained herein.
         Similarly, the use of the masculine gender with respect to pronouns in
         this Agreement is for purposes of convenience and includes either sex
         who may be a signatory.

         (j)      Entire Agreement. This Agreement, and any attachments,
         represents the entire agreement between Company and Employee concerning
         the subject matter of Employee's employment and supersedes any prior
         agreements. The parties contemplate that at some time in the future,
         they will enter into a stock option plan for key executives of Company
         and other incentive programs which will supplement the terms of this
         Agreement.

IN WITNESS WHEREOF, Employee and a duly authorized Company officer have signed
this Agreement.

                                       9

<PAGE>

                                                              EXHIBIT NO.10.(ii)

THE EMPLOYEE:                               THE COMPANY:

                                            GREENE COUNTY BANCSHARES, INC.

/s/ Kenneth R. Vaught                       By: /s/ Stan Puckett
-------------------------                       --------------------------------
Kenneth R. Vaught                                   Stan Puckett
President & COO                             Title: Chairman & CEO

                                            Greene County Bank

                                            By: /s/ Stan Puckett
                                                --------------------------------
                                                    Stan Puckett

                                            Title: Chairman & CEO

                                       10<PAGE>

                                                             EXHIBIT NO.10.(iii)

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is entered into this 21st day of November 2003, by and
between Greene County Bancshares, Inc. (the "Company"), with its principal
office located at 100 North Main St., Greeneville, Tennessee 37743 and Ronald E.
Mayberry (the "Employee"), with his principal residence located at 801 Haynie
Place, Gallatin, TN 37066, effective as of the date hereof (the "Effective
Date").

         WHEREAS, the Employee is experienced in all phases of the business of
banking as a result of his former position as the President and Chief Executive
Officer of Independent Bankshares Corporation ("Independent"); and

         WHEREAS, the Employee possesses unique and valuable information
obtained while serving as a senior officer of Independent, including
long-standing customer relationships and knowledge of trade secrets of
Independent; and

         WHEREAS, the Employee will have access to the trade secrets of the
Company and, as a senior officer of the Company, will be able to maintain and
further develop his existing relationships with customers in the Tennessee
counties of Sumner and Rutherford, and contiguous counties, which together
comprised the market area of Independent immediately prior to the Merger; and

         WHEREAS, the Board of Directors of the Company believes it is in the
best interests of the Company to enter into this Agreement with the Employee;
and

         WHEREAS, Employee desires to be employed by the Company; and

         WHEREAS, the parties desire by this writing to set forth the employment
relationship of the Company and the Employee.

         NOW, THEREFORE, in consideration of these premises herein and for other
good and valuable consideration, the adequacy and sufficiency of which is hereby
acknowledged, it is AGREED as follows:

         1.       Defined Terms

         When used anywhere in this Agreement, the following terms shall have
the meaning set forth herein.

                           (a)      "Good Reason" shall mean any of the
following events, which has not been consented to in advance by the Employee in
writing: (i) the failure by the Company to continue to provide the Employee with
compensation and benefits as contained in this Agreement; (ii) the assignment to
the Employee of duties and responsibilities materially different from those
normally associated with his position; (iii) a failure to elect or reelect the
Employee to the Board of Directors of the Company or Greene County Bank; or (iv)
a material diminution or reduction in the Employee's responsibilities or
authority (including reporting responsibilities) in connection with his
employment with the Company.

                           (b)      "Just Cause" shall mean, in the good faith
determination of the Company's Board of Directors, the Employee's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order, or material breach of any provision
of this Agreement. No act, or failure to act, on the Employee's part shall be
considered "willful" unless he has acted, or failed to act, with an absence of
good faith and without a reasonable belief that his action or failure to act was
in the best interest of the Company.

         2.       Employment. The Employee is employed as the Regional President
of the Company. The Employee shall render such administrative and management
services for the Company as are currently rendered and as are customarily
performed by persons situated in a similar executive capacity. The Employee
shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Company. The Employee's other duties shall
be such as the Board of Directors (the "Board") of the Company may from time to
time reasonably direct, including normal duties as an officer of the Company.

                                       1

<PAGE>

                                                             EXHIBIT NO.10.(iii)

         3.       Term. The Company hereby employs the Employee, and the
Employee hereby accepts such employment under this Agreement, for the period
commencing on the Effective Date and ending thirty-six (36) months thereafter
("Initial Term"), or such earlier date as is determined in accordance with
Section 8. Assuming this Agreement is not terminated under Section 8 on or
before the completion of the Initial Term, it shall be automatically extended
and renewed for additional one-year terms thereafter (the "Renewal Term"),
unless the Company or the Employee shall have provided written notice to the
other at least sixty (60) days prior to the expiration of the then-current
Initial Term or Renewal Term, as the case may be.

         4.       Compensation and Benefits. During the Initial Term (or such
shorter period ending on such date as is determined in accordance with Section
8) and any Renewal Term in effect, the Company shall pay Employee compensation
and benefits as set forth below:

                  (a).     Base Compensation. During the first twenty-four (24)
         months of the Initial Term of this Agreement, the Company shall pay the
         Employee a salary at the rate of $165,000 per annum, payable in cash
         not less frequently than monthly (together with any periodic increases
         authorized under this Agreement, "Base Compensation"). During the final
         12 months of the Initial Term of this Agreement and any applicable
         Renewal Term thereafter, the Base Compensation shall be increased by an
         amount mutually agreed upon between the parties hereto.

                  (b).     Bonuses. Within thirty (30) days following the first
         annual anniversary date of the Effective Date, and within thirty (30)
         days following each subsequent annual anniversary date, the Employee
         shall be paid a bonus in an amount to be determined by the Company upon
         further discussions with the Employee following each such annual
         anniversary date, provided that in no event shall any such annual bonus
         be less than $10,000 (as determined before tax or any other customary
         or usual payroll withholding amounts).

                  (c).     Stock Options. The Employee shall be entitled to
         participate in the Company's Stock Option Plan of Greene County
         Bancshares, Inc. and Subsidiaries of 1995 (the "Plan") in an equitable
         manner with all other senior executives of the Company. Without
         limiting the foregoing, on each annual anniversary date of the
         Effective Date, the Company shall grant to Employee options under the
         Plan for the purchase of 2,500 shares of the Company's common stock.
         The terms of such options shall be substantially similar to those of
         options under the Plan previously granted to senior management of the
         Company or its subsidiaries.

                  (d).     Other.

                           (1)      Participation in Retirement, Medical and
                  Other Plans. The Employee shall be eligible to participate in
                  the following benefit plans to the extent offered by the
                  Company: group hospitalization, disability, health, dental,
                  sick leave, life insurance, travel and/or accident insurance,
                  retirement, pension, and/or other present or future qualified
                  plans provided by the Company, generally which benefits, taken
                  as a whole, must be at least as favorable as those in effect
                  on the Effective Date.

                           (2)      Employee Benefits; Expenses. The Employee
                  shall be eligible to participate in any fringe benefits that
                  are or may become available to the Company's senior management
                  employees. The Employee shall be reimbursed for all reasonable
                  out-of-pocket business expenses that the Employee shall incur
                  in connection with the Employee's services under this
                  Agreement upon substantiation of such expenses in accordance
                  with the policies of the Company.

                           (3)      Automobile Expenses. The Company shall
                  reimburse the Employee on a monthly basis for Employee's
                  reasonable loan or lease payments, maintenance, and fuel
                  expenses ("Automobile Expenses") in connection with the
                  continued use by the Employee of the same automobile as
                  Employee used while employed by Independent immediately prior
                  to the Merger (the "Automobile"). The Company's obligation as
                  contained in this Section 4(d)(3) shall cease once Employee
                  discontinues use of the Automobile as his primary mode of
                  transportation.

                                       2

<PAGE>

                                                             EXHIBIT NO.10.(iii)

         5.       Loyalty; Noncompetition.

                  (a)      During the period of his employment hereunder,
including the Initial Term (or such shorter period ending on such date as is
determined in accordance with Section 8) and any applicable Renewal Term, and
except for illnesses, reasonable vacation periods, and reasonable leaves of
absence, the Employee shall devote all his full business time, attention, skill
and efforts to the faithful performance of his duties hereunder; provided,
however, from time to time, Employee may serve on the boards of directors of and
hold any other offices or positions in, companies or organizations, provided,
however, that such service does not present any actual or potential conflict of
interest with the Company or any of its subsidiaries or affiliates, does not
unfavorably affect the performance of Employee's duties pursuant to this
Agreement, and does not violate any applicable statute or regulation. "Full
business time" is hereby defined as that amount of time usually devoted to like
companies by similarly situated executive officers. During the term of his
employment under this Agreement, the Employee shall not engage in any business
or activity contrary to the business affairs or interests of the Company or be
gainfully employed in any other position or job other than as provided above.

                  (b)      Nothing contained in this Section shall be deemed to
prevent or limit the Employee's right to invest in the capital stock or other
securities of any business dissimilar to that of the Company's, or solely as a
passive or minority investor, in any business.

                  (c)      For the thirty-six (36) month period following the
Effective Date of this Agreement, whether or not the Employee is employed by the
Company at such time, the Employee will not, without the prior written consent
of the Company, directly or indirectly, engage, assist or have any interest in
(whether as a principal, partner, shareholder, officer, director or otherwise),
enter the employment of or act as an agent for or advisor or consultant to, or
provide services of any nature to, any person, corporation, firm, partnership or
other entity, other than the Company, that is or is about to become directly or
indirectly engaged in the Restricted Business (as defined below) in the
Restricted Territory (as defined below).

                  As used herein, the term "Restricted Business" shall mean the
development, marketing or sale of any product or service that competes with any
product or service of the Company now existing or hereafter developed during the
term of this Agreement, including the origination or sale of loans or lines of
credit secured by real estate, commercial or corporate-business financing,
unsecured loans generally labeled as consumer loans, or other financial services
related business activities. As used herein, the term "Restricted Territory"
shall mean the Tennessee counties of Rutherford and Sumner and any contiguous
counties.

         6.       Standards. The Employee shall perform his duties under this
Agreement in accordance with such reasonable standards as the Board may
establish from time to time. The Company will provide Employee with the working
facilities and staff customary for similar executives and necessary for him to
perform his duties.

         7.       Vacation and Sick Leave. At such reasonable times as the Board
shall in its discretion permit, the Employee shall be entitled, without loss of
pay, to absent himself voluntarily from the performance of his employment under
this Agreement, all such voluntary absences to count as vacation time, provided
that:

                  (a)      The Employee shall be entitled to an annual vacation
in accordance with the policies that the Board periodically establishes for
senior management employees of the Company.

                  (b)      The Employee shall not receive any additional
compensation from the Company on account of his failure to take a vacation or
sick leave, and the Employee shall not accumulate unused vacation or sick leave
from one fiscal year to the next, except in either case to the extent authorized
by the Board.

                  (c)      In addition to the aforesaid paid vacations, the
Employee shall be entitled without loss of pay, to absent himself voluntarily
from the performance of his employment with the Company for such additional
periods of time and for such valid and legitimate reasons as the Board may in
its discretion determine. Further, the Board may grant to the Employee a leave
or leaves of absence, with or without pay, at such time or times and upon such
terms and conditions as such Board in its discretion may determine.

                  (d)      In addition, the Employee shall be entitled to an
annual sick leave benefit as established by the Board.

                                       3

<PAGE>

                                                             EXHIBIT NO.10.(iii)

         8.       Termination and Termination Pay. The Employee's employment
hereunder, during the Initial Term or any subsequent Renewal Term, may be
terminated under any of the following circumstances:

                  (a)      Death. The Employee's employment under this Agreement
shall terminate upon his death during the term of this Agreement, in which event
the Employee's estate shall be entitled to receive the compensation due the
Employee through the last day of the calendar month in which his death occurred.

                  (b)      Disability.

                           (1) The Company may terminate the Employee's
employment after having established the Employee's Disability. For purposes of
this Agreement, "Disability" means a physical or mental infirmity which impairs
the Employee's ability to substantially perform his duties under this Agreement
and which results in the Employee becoming eligible for long-term disability
benefits under the Company's long-term disability plan (or, if the Company has
no such plan in effect, which impairs the Employee's ability to substantially
perform his duties under this Agreement for a period of one hundred eighty (180)
consecutive days). The Employee shall be entitled to the compensation and
benefits provided for under this Agreement for (i) any period during the term of
this Agreement and prior to the establishment of the Employee's Disability
during which the Employee is unable to work due to the physical or mental
infirmity, or (ii) any period of Disability which is prior to the Employee's
termination of employment pursuant to this Section 8(b); provided that any
benefits paid pursuant to the Company's long term disability plan will continue
as provided in such plan.

                           (2) During any period that the Employee shall receive
disability benefits and to the extent that the Employee shall be physically and
mentally able to do so, he shall furnish such information, assistance and
documents so as to assist in the continued ongoing business of the Company and,
if able, shall make himself available to the Company to undertake reasonable
assignments consistent with his prior position and his physical and mental
health. The Company shall pay all reasonable expenses incident to the
performance of any assignment given to the Employee during the disability
period.

                  (c)      Just Cause. The Board may, by written notice to the
Employee, immediately terminate his employment at any time, for Just Cause. The
Employee shall have no right to receive from the Company any compensation or any
other benefits for any period after termination for Just Cause.

                  (d)      Without Just Cause; Constructive Discharge. (1) The
Board may, by written notice to the Employee, immediately terminate his
employment at any time for a reason other than Just Cause, in which event the
Employee shall be entitled to receive the following compensation and benefits:
(i) the pro rata portion of his salary provided pursuant to Section 4(a) hereof,
for the period commencing on Employee's termination date and ending on the
expiration date of the Initial Term or Renewal Term (the "Expiration Date"),
whichever shall then be in effect; (ii) any bonuses and stock options due and
owing pursuant to Section 4, respectively; and (iii) continued participation
under Company benefit plans through the Expiration Date, but only to the extent
the Employee continues to qualify for participation therein. All amounts payable
to the Employee under (i) and (ii) above shall be paid, at the option of the
Employee, either (I) in periodic payments through the Expiration Date, or (II)
in one lump sum within ten (10) days of such termination.

                           (2)      The Employee shall be entitled to receive
the compensation and benefits payable under subsection 8(d)(1) hereof in the
event that the Employee voluntarily terminates employment within ninety (90)
days of an event that constitutes Good Reason (as defined in Section 1(a)
above).

                  (e)      Voluntary Termination by Employee. The Employee may
voluntarily terminate employment with the Company during the term of this
Agreement, upon at least ninety (90) days' prior written notice to the Board of
Directors, in which case the Employee shall receive only his compensation,
vested rights and employee benefits up to the date of his termination (unless
such termination occurs pursuant to Section 8(d)(2) hereof in which event the
benefits and compensation provided for in Sections 8(d)(1) shall apply).

         9.       No Mitigation. The Employee shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise and no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to the Employee in any
subsequent employment.

                                       4
<PAGE>

                                                             EXHIBIT NO.10.(iii)

         10.      Indemnification. The Company agrees that its Bylaws shall
continue to provide for indemnification of directors, officers, employees and
agents of the Company, including the Employee during the full term of this
Agreement, and to at all times provide adequate insurance for such purposes.

         11.      Federal Income Tax Withholding. The Company may withhold all
federal and state income or other taxes from any benefit payable under this
Agreement as shall be required pursuant to any law or government regulation or
ruling.

         12.      Successors and Assigns.

                  (a)      Company. This Agreement shall inure to the benefit of
and be binding upon and assumed by any corporate or other successor of the
Company which shall acquire, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets or stock of the
Company.

                  (b)      Employee. Since the Company is contracting for the
unique and personal skills of the Employee, the Employee shall be precluded from
assigning or delegating his rights or duties hereunder without first obtaining
the written consent of the Company; provided, however, that nothing in this
paragraph shall preclude (i) the Employee from designating a beneficiary to
receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of the Employee or his estate
from assigning any rights hereunder to the person or persons entitled thereunto.

                  (c)      Attachment. Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to exclusion, attachment, levy or similar process or assignment
by operation of law, and any attempt, voluntary or involuntary, to effect any
such action shall be null, void and of no effect.

         13.      Amendments. No amendments or additions to this Agreement shall
be binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.

         14.      Applicable Law. Except to the extent preempted by Federal law,
the laws of the state of Tennessee shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.

         15.      Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

         16.      Notices. All notices, requests, demands, and other
communications hereunder must be in writing and shall be deemed to have been
duly given if hand delivered or delivered or mailed, certified or registered
mail with postage prepaid or by a nationally recognized overnight courier, to
the addresses of the parties shown in the preamble to the attention of the
persons executing this Agreement in their respective behalf. The date of receipt
of hand-delivered notices shall be the date of such action. The date of receipt
of mailed or couriered notices shall be the date of delivery shown on postal
service or courier service documentation. Either party shall promptly give
written notice of any change of its address or addresses.

         17.      Entire Agreement. This Agreement, together with any
understanding or modifications thereof as agreed to in writing by the parties,
shall constitute the entire agreement between the parties hereto and shall
supersede any prior agreement between the parties.

                             SIGNATURE PAGE FOLLOWS

                                       5

<PAGE>

                                                             EXHIBIT NO.10.(iii)

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.

ATTEST:                                     GREENE COUNTY BANCSHARES, INC.

/s/ William F, Richmond                     By: /s/ R. Stan Puckett
-----------------------                         --------------------------------
    Assistant Secretary                         Its: Chairman of the Board

WITNESS:

/s/ Dianne Hibdon                               /s/ Ronald E. Mayberry
----------------------                          --------------------------------
    Dianne Hibdon                                   Ronald E. Mayberry

                                       6

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