<PAGE>
September 27, 1996
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
Jacksonville Bancorp, Inc. The meeting will be held at the office of
Jacksonville Bancorp, Inc., located at Commerce and Neches Streets,
Jacksonville, Texas, on Tuesday, October 22, 1996 at 10:00 a.m., Central Time.
The matters to be considered by stockholders at the Special Meeting are
described in the accompanying materials.
It is very important that you be represented at the Special Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. We urge you to mark, sign, and date your proxy card today
and return it in the envelope provided, even if you plan to attend the Special
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of and interest in Jacksonville Bancorp, Inc. are
sincerely appreciated.
Sincerely,
Charles Broadway
Chief Executive Officer
<PAGE>
JACKSONVILLE BANCORP, INC.
COMMERCE AND NECHES STREETS
JACKSONVILLE, TEXAS 75766
(903) 586-9861
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 22, 1996
NOTICE IS HEREBY GIVEN that an Special Meeting of Stockholders of
Jacksonville Bancorp, Inc. (the "Company") will be held at the Company's office
located at Commerce and Neches Streets, Jacksonville, Texas on Tuesday, October
22, 1996, at 10:00 a.m., Central Time, for the following purposes, all of which
are more completely set forth in the accompanying Proxy Statement:
1. To consider and approve the 1996 Stock Option Plan;
2. To consider and approve the 1996 Management Recognition Plan and
Trust; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors of the Company has fixed September 20, 1996 as the
voting record date for the determination of stockholders entitled to notice of
and to vote at the Special Meeting. Only those stockholders of record as of the
close of business on that date will be entitled to vote at the Special Meeting
or at any such adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
Sandra Thompson, Secretary
September 27, 1996
Jacksonville, Texas
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING,
YOU MAY VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED
BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
JACKSONVILLE BANCORP, INC.
----------------------------
PROXY STATEMENT
----------------------------
SPECIAL MEETING OF STOCKHOLDERS
OCTOBER 22, 1996
GENERAL
This Proxy Statement is being furnished to the stockholders of the Company
in connection with the solicitation of proxies by the Board of Directors for use
at its Special Meeting of Stockholders ("Special Meeting") to be held at the
Company's office located at Commerce and Neches Streets, Jacksonville, Texas, on
Tuesday, October 22, 1996, at 10:00 a.m., Central Time, and at any adjournment
thereof, for the purposes set forth in the Notice of Special Meeting of
Stockholders. This Proxy Statement is first being mailed to stockholders on or
about September 27, 1996.
VOTING RIGHTS
Only the holders of record of the outstanding shares of the common stock,
$0.01 par value per share, of the Company ("Common Stock") at the close of
business on September 20, 1996 (the "Voting Record Date") will be entitled to
notice of and to vote at the Special Meeting. At such date, there were
2,664,405 shares of Common Stock issued and outstanding.
Each share of Common Stock is entitled to one vote at the Special Meeting
on all matters properly presented at the meeting. The affirmative vote of the
holders of a majority of the total votes eligible to be cast in person or by
proxy at the Special Meeting is required for approval of the proposals to
approve the 1996 Stock Option Plan ("Option Plan") and the 1996 Management
Recognition Plan and Trust ("Recognition Plan"). Because of the required votes,
abstentions will have the same effect as a vote against the proposals. Under
rules of the New York Stock Exchange, the proposals to approve the Option Plan
and the Recognition Plan, are considered "non-discretionary" items upon which
brokerage firms may not vote in their discretion on behalf of their clients if
such clients have not furnished voting instructions and for which there may be
"broker non-votes." Because of the required votes, abstentions and broker non-
votes will have the same effect as a vote against the proposals to approve the
Option Plan and the Recognition Plan.
<PAGE>
2
PROXIES
Shares of Common Stock represented by properly executed proxies, if such
proxies are received in time and not revoked, will be voted in accordance with
the instructions indicated on the proxies. If no instructions are indicated,
such proxies will be voted for the matters described below and, in the
discretion of the proxy holder, as to any other matter which may properly come
before the Special Meeting. Any holder of Common Stock who returns a signed
proxy but fails to provide instructions as to the manner in which such shares
are to be voted will be deemed to have voted in favor of the matters set forth
in the preceding sentence.
An Company stockholder who has given a proxy may revoke it at any time
prior to its exercise at the Special Meeting by (i) giving written notice of
revocation to the Secretary of the Company, (ii) properly submitting to the
Company a duly-executed proxy bearing a later date, or (iii) attending the
Special Meeting and voting in person. All written notices of revocation and
other communications with respect to revocation of proxies should be addressed
as follows: Jacksonville Bancorp, Inc., Commerce and Neches Streets,
Jacksonville, Texas 75766, Attention: Secretary.
<PAGE>
3
BENEFICIAL OWNERSHIP
The following table sets forth information as to the Common Stock
beneficially owned, as of September 20, 1996, by (i) the only persons or
entities known to the Company to be the beneficial owners of more than 5% of the
Common Stock, (ii) the directors of the Company, and (iii) all directors and
officers of the Company as a group.
Amount and
Nature Percent
of Beneficial of
Name of Beneficial Owner Ownership(1) Class
- ------------------------ ------------- -------
Jacksonville Bancorp, Inc.
Employee Stock Ownership Trust 202,048 7.58
Directors:
Jerry M. Chancellor 28,336 1.06
Bill W. Taylor 29,729 1.12
Dr. Joe Tollett 31,348 1.18
Ray W. Beall 45,885 1.72
Robert F. Brown 12,500 0.47
Charles Broadway 40,127 1.51
W.G. Brown 57,825 2.17
All directors and officers
of the Company as a
group (seven persons) 245,750(2) 9.22%
- --------------------------
(1) Pursuant to rules promulgated by the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), a person or entity is considered to beneficially own shares of
Common Stock if the person or entity has or shares (i) voting power, which
includes the power to vote or to direct the voting of the shares, or (ii)
investment power, which includes the power to dispose or direct the
disposition of the shares. Unless otherwise indicated, a person or entity
has sole voting and sole investment power with respect to the indicated
shares. Shares which are subject to stock options and which may be
exercised within 60 days of the Voting Record Date are deemed to be
outstanding for the purpose of computing the percentage of Common Stock
beneficially owned by such person.
(2) Includes in the case of all directors and officers of the Company as a
group, (i) exercisable options to purchase 69,981 shares pursuant to the
Company's 1994 Stock Incentive Plan and 1994 Directors' Stock Option Plan;
(ii) 41,472 shares of Common
<PAGE>
4
Stock which were awarded to certain officers of the Company pursuant to the
Company's 1994 Management Recognition Plan ("MRP"); and (iii) 4,102 shares
of Common Stock allocated to the account of the officer in the Company's
Employee Stock Ownership Plan (the "ESOP"). The exercisable options
consist of 7,775 for each of Messrs. Beall and W.G. Brown and Dr. Tollett
and 18,989, 15,349 and 12,318 for Messrs. Broadway, Chancellor and Taylor,
respectively.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who own more than 10% of the Company's Common Stock to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Officers, directors and greater than 10% stockholders are required by regulation
to furnish the Company with copies of all forms they file pursuant to Section
16(a) of the Exchange Act. The Company knows of no person who owns 10% or more
of the Company's Common Stock.
Based solely on review of the copies of such forms furnished to the
Company, or written representations from its officers and directors, the Company
believes that during the fiscal year ended September 30, 1996, the Company's
officers and directors complied in all respects with the reporting requirements
promulgated under Section 16(a) of the 1934 Act.
<PAGE>
5
PROPOSAL TO ADOPT THE 1996 STOCK OPTION PLAN
GENERAL
The Board of Directors has adopted the Option Plan which is designed to
attract and retain qualified personnel in key positions, provide officers and
key employees with a proprietary interest in the Company as an incentive to
contribute to the success of the Company and reward key employees for
outstanding performance and the attainment of targeted goals. The Option Plan
is also designed to retain qualified directors for the Company. The Option Plan
provides for the grant of incentive stock options intended to comply with the
requirements of Section 422 of the Code ("incentive stock options"), non-
incentive or compensatory stock options and stock appreciation rights
(collectively "Awards"). Awards will be available for grant to directors and
key employees of the Company and any subsidiaries, except that non-employee
directors will be eligible to receive only non-incentive stock options pursuant
to a set formula. If stockholder approval is obtained, options to acquire
shares of Common Stock will be awarded to key employees of the Company and
Jacksonville Savings and Loan Association (the "Association") and directors of
the Company with an exercise price equal to the fair market value of the Common
Stock on the date of such approval. The Option Plan complies with applicable
OTS regulations and is required to be submitted to the OTS after approval by
stockholders. No assurance can be given as to whether the OTS will raise any
objections to the Option Plan as presented to stockholders or whether the OTS
may require modifications to be made to the Option Plan. A vote for approval of
the Option Plan shall be deemed to be a vote for approval of the Option Plan as
the same may be required to be modified by the OTS, provided that the change is
not material as determined by the Company. The Company will not make any
modification to the Option Plan which would increase the level of benefits from
that presented. Non-objection to the Option Plan by the OTS shall not
constitute approval or endorsement of the Option Plan by the OTS.
DESCRIPTION OF THE OPTION PLAN
The following description of the Option Plan is a summary of its terms and
is qualified in its entirety by reference to the Option Plan, a copy of which is
attached hereto as Appendix A.
ADMINISTRATION. The Option Plan will be administered and interpreted by a
committee of the Board of Directors ("Committee") that is comprised solely of
two or more "Non-Employee Directors. The Company's existing MRP-Stock Option
Committee will serve in such capacity. The current members of the Committee are
Messrs. W.G. Brown, Robert Brown and Beall and Dr. Tollett.
STOCK OPTIONS. Under the Option Plan, the Board of Directors or the
Committee will determine which officers and key employees will be granted
options, whether such options will be incentive or compensatory options, the
number of shares subject to each option, the
<PAGE>
6
exercise price of each option, whether such options may be exercised by
delivering other shares of Common Stock and when such options become
exercisable. The per share exercise price of an incentive stock option shall at
least equal to the fair market value of a share of Common Stock on the date the
option is granted, and the per share exercise price of a compensatory stock
option shall at least equal the greater of par value or the fair market value of
a share of Common Stock on the date the option is granted.
Stock options shall become vested and exercisable in the manner specified
by the Board of Directors or the Committee. However, OTS regulations require
that stock options granted pursuant to a plan approved by stockholders within
one year of the consummation of a mutual-to-stock conversion not vest at a rate
in excess of 20% per year commencing one year from the date of the grant, except
in the event of death or disability. Each stock option or portion thereof shall
be exercisable at any time on or after it vests and will be exercisable until
ten years after its date of grant or three months after the date on which the
optionee's employment or his service as a board member terminates, unless
extended by the Board of Directors or the Committee to a period not to exceed
one year from such termination. If an optionee's employment or his service as a
board member is terminated due to death or disability, the optionee or his
estate will have up to one year following the termination of employment to
exercise the option. Stock options are non-transferable except by will or the
laws of descent and distribution.
STOCK APPRECIATION RIGHTS. Under the Option Plan, the Board of Directors
or the Committee is authorized to grant rights to optionees ("stock appreciation
rights") under which an optionee may surrender any exercisable incentive stock
option or compensatory stock option or part thereof in return for payment by the
Company to the optionee of cash or Common Stock in an amount equal to the excess
of the fair market value of the shares of Common Stock subject to option at the
time over the option price of such shares, or a combination of cash and Common
Stock. Stock appreciation rights may be granted concurrently with the stock
options to which they relate or at any time thereafter which is prior to the
exercise or expiration of such options.
GRANTS TO DIRECTORS. Options granted to non-employee directors under the
Option Plan will be awarded under a formula pursuant to which each non-employee
director other than Robert F. Brown will receive an option to purchase 8,092
shares of Common Stock upon approval of the Option Plan by stockholders. An
option granted to directors will be exercisable until ten years after its date
of grant. However, if an optionee dies while serving as a non-employee director
without having fully exercised his options, the optionee's executors,
administrators legatees or distributes of his estate shall have the right to
exercise such options during the twelve-month period following such death,
provided no option will be exercisable more than ten years from the date it was
granted.
NUMBER OF SHARES COVERED BY THE OPTION PLAN. A total of 161,840 shares of
Common Stock has been reserved for future issuance pursuant to the Option Plan.
In the event of a stock split, reverse stock split or stock dividend, the number
of shares of Common Stock
<PAGE>
7
under the Option Plan, the number of shares to which any Award relates and the
exercise price per share under any option or stock appreciation right shall be
adjusted to reflect such increase or decrease in the total number of shares of
Common Stock outstanding.
AMENDMENT AND TERMINATION OF THE OPTION PLAN. Unless sooner terminated,
the Option Plan shall continue in effect for a period of ten years from
September 12, 1996, the date that the Option Plan was adopted by the Board of
Directors. Termination of the Option Plan shall not affect any previously
granted Awards.
FEDERAL INCOME TAX CONSEQUENCES. Under current provisions of the Code, the
federal income tax treatment of incentive stock options and compensatory stock
options is different. As regards incentive stock options, an optionee who meets
certain holding period requirements will not recognize income at the time the
option is granted or at the time the option is exercised, and a federal income
tax deduction generally will not be available to the Company any time as a
result of such grant or exercise. With respect to compensatory stock options,
the difference between the fair market value on the date of exercise and the
option exercise price generally will be treated as compensation income upon
exercise, and the Company will be entitled to a deduction in the amount of
income so recognized by the optionee. Upon the exercise of a stock appreciation
right, the holder will realize income for federal income tax purposes equal to
the amount received by him, whether in cash, shares of stock or both, and the
Company will be entitled to a deduction for federal income tax purposes in the
same amount.
The above description of tax consequences under federal law is necessarily
general in nature and does not purport to be complete. Moreover, statutory
provisions are subject to change, as are their interpretations, and their
application may vary in individual circumstances. Finally, the consequences
under applicable state and local income tax laws may not be the same as under
the federal income tax laws.
ACCOUNTING TREATMENT. Stock appreciation rights will, in most cases,
require a charge against the earnings of the Company each year representing
appreciation in the value of such rights over periods in which they become
exercisable. Such charge is based on the difference between the exercise price
specified in the related option and the current market price of the Common
Stock. In the event of a decline in the market price of the Common Stock
subsequent to a charge against earnings related to the estimated costs of stock
appreciation rights, a reversal of prior charges is made in the amount of such
decline (but not to exceed aggregate prior charges).
Neither the grant nor the exercise of an incentive stock option or a non-
qualified stock option under the Option Plan currently requires any charge
against earnings under GAAP. This treatment currently is being evaluated by the
Financial Accounting Standards Board, which has issued an exposure draft which
would require the recognition of expense under GAAP based upon the fair market
value of stock compensation awards when stock options and similar awards are
granted, and thus could change in the future. In certain
<PAGE>
8
circumstances, shares issuable pursuant to outstanding options under the Option
Plan might be considered outstanding for purposes of calculating earnings per
share.
STOCKHOLDER APPROVAL. No Awards will be granted under the Option Plan
unless the Option Plan is approved by stockholders. Stockholder ratification of
the Option Plan will enable recipients of Awards under the Option Plan to
qualify for certain exemptive treatment from the short-swing profit provisions
of Section 16(b) of the Exchange Act as well as satisfy Nasdaq Stock Market
listing and federal tax requirements.
AWARDS TO BE GRANTED. The Board of Directors of the Company adopted the
Option Plan and approved the grant of the non-incentive options to non-employee
directors other than Robert F. Brown pursuant to the formula set forth therein
and the Committee established thereunder approved the grant of incentive options
to executive officers and employees of the Company. The grants shall be
effective upon stockholder approval of the Option Plan with a per share exercise
price equal to the fair market value of a share of Common Stock on the date of
such approval. The following table sets forth certain information with respect
to such grants.
<PAGE>
NUMBER OF SHARES
NAME OF INDIVIDUAL OR SUBJECT TO
NUMBER OF PERSONS IN GROUP TITLE STOCK OPTIONS
- -------------------------- --------------- ----------------
Charles Broadway Chief Executive Officer 18,885
Jerry M. Chancellor President 30,050
All executive officers as 77,453
a group (three persons)
All non-employee directors 24,276
as a group (four persons)
All employees, not 60,111
including executive officers,
as a group (eight persons)
The terms of the options granted to all recipients provide that they will
be vested and exercisable 20% per year over a five-year period commencing on the
first anniversary of the date of grant.
On September 18, 1996, the closing price of a share of Common Stock as
reported by the Nasdaq National Market System was $12.13.
The Board of Directors recommends that stockholders vote FOR adoption of
the 1996 Stock Option Plan.
PROPOSAL TO ADOPT THE 1996 MANAGEMENT
RECOGNITION PLAN AND TRUST
GENERAL
The Board of Directors of the Company has adopted the Recognition Plan, the
objective of which is to enable the Company to provide officers, key employees
and directors with a proprietary interest in the Company as an incentive to
contribute to its success. Officers and key employees of the Company who are
selected by members of a committee appointed by the Board of Directors of the
Company will be eligible to receive benefits under the Recognition Plan. Non-
employee directors of the Company are eligible to participate in the Recognition
Plan, which sets forth a formula for awards to be made pursuant thereto. If
stockholder approval is obtained, shares will be granted to employees as
determined by the Committee and non-employee directors will be awarded shares
<PAGE>
10
pursuant to a formula. The Recognition Plan complies with applicable OTS
Regulations and is required to be submitted to the OTS after approval by
stockholders. No assurance can be given as to whether the OTS will raise any
objections to the Recognition Plan as presented to stockholders or whether it
may require modifications to be made to the Recognition Plan. A vote for
approval of the Recognition Plan shall be deemed to be a vote for approval of
the Recognition Plan as the same may be required to be modified by the OTS,
provided that the change is not material as determined by the Company. The
Company will not make any modification to the Recognition Plan which would
increase the level of benefits from that presented. Non-objection to the
Recognition Plan by the OTS shall not constitute approval or endorsement of the
Recognition Plan by the OTS.
DESCRIPTION OF THE RECOGNITION PLAN
The following description of the Recognition Plan, is a summary of its
terms and is qualified in its entirety by reference to the Recognition Plan, a
copy of which is attached hereto as Appendix B.
ADMINISTRATION. A committee of the Board of Directors of the Company will
administer the Recognition Plan and the initial members of that committee also
will serve as trustees of the trust established pursuant to the Recognition Plan
("Trust"). The Company's existing MRP-Stock Options Committee will serve in
such capacity. The trustees will have the responsibility to invest all funds
contributed by the Company to the Trust.
Upon stockholder approval of the Recognition Plan, the Company will acquire
Common Stock on behalf of the Recognition Plan, in an amount necessary to
purchase the number of shares of Common Stock equal to 4% of the Common Stock
sold in its 1996 public stock offering, or 64,736 shares. These shares will be
acquired through open market purchases or from authorized but unissued shares.
GRANTS. Under the Recognition Plan, the Board of Directors or the
Committee will determine which officers and key employees will be Common Stock
and the number of shares awarded. Shares of Common Stock granted pursuant to
the Recognition Plan generally will be in the form of restricted stock payable
over a five-year period at a rate of 20% per year unless otherwise specified by
the Board of Directors or the Committee. The shares, while restricted, may not
be sold, pledged or otherwise disposed of and are required to be held in the
Trust. Under the terms of the Recognition Plan, the trustees will be authorized
to vote all Recognition Plan shares which have not yet been earned and allocated
in its sole discretion. If a recipient terminates employment for reasons other
than death, retirement or disability, the recipient will forfeit all rights to
the allocated shares under restriction. If the recipient's termination is
caused by death or disability, all restrictions will expire and all allocated
shares will become unrestricted. The Board of Directors of the Company can
terminate the Recognition Plan at any time, and if it does so, any shares not
allocated will revert to the Company.
<PAGE>
11
Pursuant to the terms of the Recognition Plan, each of the non-employee
directors of the Company other than Robert F. Brown will receive 3,236 shares
upon approval of the Recognition Plan by stockholders.
FEDERAL INCOME TAX CONSEQUENCES. Pursuant to Section 83 of the Code,
recipients of Recognition Plan awards will recognize ordinary income in an
amount equal to the fair market value of the shares of Common Stock granted to
them at the time that the shares vest and become transferable. A recipient of a
Recognition Plan award may also elect, however, to accelerate the recognition of
income with respect to his or her grant to the time when shares of Common Stock
are first transferred to him or her, notwithstanding the vesting schedule of
such awards. The Company will be entitled to deduct as a compensation expense
for tax purposes the same amounts recognized as income by recipients of
Recognition Plan awards in the year in which such amounts are included in
income.
ACCOUNTING TREATMENT. For accounting purposes, the Company will also
recognize a compensation expense as shares of Common Stock granted pursuant to
the Recognition Plan vest. Unlike the treatment of Recognition Plan awards for
tax purposes, however, the compensation expense recognized for accounting
purposes is limited to the fair market value of the Common Stock at the date of
grant to recipients, rather than the fair market value of the Common Stock at
the time that a Recognition Plan grant vests.
STOCKHOLDER APPROVAL. No shares will be granted under the Recognition Plan
unless the Recognition Plan is approved by stockholders. Stockholder
ratification of the Recognition Plan will enable recipients of shares under the
Recognition Plan to qualify for certain exemptive treatment from the short-swing
profit provisions of Section 16(b) of the Exchange Act.
SHARES TO BE GRANTED. The Board of Directors of the Company adopted the
Recognition Plan and approved the awards of shares to non-employee directors
other than Robert F. Brown pursuant to the formula set forth therein and the
Committee established thereunder approved the grant of shares to executive
officers and employees of the Association. The awards shall be effective upon
stockholder approval of the Recognition Plan. The following table sets forth
certain information with respect to such grants.
<PAGE>
12
NAME OF INDIVIDUAL OR NUMBER OF SHARES
NUMBER OF PERSONS IN GROUP TITLE AWARDED
- -------------------------- --------------- ----------------
Charles Broadway Chief Executive Officer 7,554
Jerry M. Chancellor President 12,020
All executive officers as 30,981
a group (three persons)
All non-employee directors 9,708
as a group (four persons)
All employees, not including 24,047
executive officers, as a
group (eight persons)
The above grants of restricted stock to all recipients will vest over five
years at the rate of 20% per year commencing on the first anniversary of the
date of grant.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION OF THE
1996 MANAGEMENT RECOGNITION PLAN AND TRUST.
<PAGE>
13
EXECUTIVE COMPENSATION
SUMMARY
The following table sets forth a summary of certain information concerning
the compensation awarded to or paid by the Company for services rendered in all
capacities during the last two fiscal years to the President and Chief Executive
Officer and any other executive officer who received salary and bonuses
aggregating more than $100,000 during the last fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------------------------------------
OTHER AWARDS PAYOUTS
NAME AND FISCAL ANNUAL ---------------------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION (2) COMPENSATION (5)
RESTRICTED LTIP
OPTIONS STOCK PAYOUTS
(3) AWARDS(4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles Broadway 1995 $116,816 $20,323 -- -- $ -- -- $9,597
President and Chief 1994 113,672 29,596 -- 13,393 48,670 -- 9,597
Executive Officer 1993 113,672 9,291 -- -- -- -- 9,597
Jerry M. Chancellor 1995 $94,856 16,408 -- $ -- -- $4,602
Executive Vice President 1994 94,676 23,897 -- 10,826 37,060 -- 4,602
1993 94,676 7,443 -- -- -- -- 4,602
</TABLE>
(1) Includes directors fees and fees for services as an officer and director of
JS&L Corp., a subsidiary of the Association.
(2) Does not include amounts attributable to miscellaneous benefits received by
the named executive officer, including the payment of club membership dues.
The costs to the Company of providing such benefits to the named executive
officer during the year ended September 30, 1995 did not exceed the lesser
of $50,000 or 10% of the total of annual salary and bonus reported for such
individual.
(3) Consists of awards granted pursuant to the 1994 Stock Incentive Plan during
the year ended September 30, 1994.
(4) Represents the grant of 4,867 and 3,706 shares of restricted Common Stock
during the year ended September 30, 1994 to Messrs. Broadway and Chancellor
pursuant to the 1994 Management Recognition Plan, which shares had a fair
market value of approximately $75,429 and $57,443 at September 30, 1995,
respectively. Such shares
<PAGE>
14
vest over a three-year period at the rate of 33% per year, commencing on
March 31, 1995, and the named executive officer is entitled to all voting
and other stockholder rights (including the right to receive dividends)
with respect to such shares.
(5) Includes life insurance premiums paid on behalf of executive officers by
the Company and matching contributions by the Company under a defined
contribution thrift plan.
DIRECTORS' COMPENSATION
During the fiscal year ended September 30, 1995, each member of the Board
of Directors was paid $600 for each Board meeting attended. During the same
period, each member of a Board Committee described above, who is an outside
director was paid $200 per meeting attended. Committee members otherwise do not
receive any fees for committee meetings.
The Company also maintains the 1994 Directors' Stock Option Plan pursuant
to which non-employee directors of the Association were granted options to
purchase an aggregate of 21,936 shares of Common Stock at an exercise price of
$10.00 per share.
STOCK OPTIONS
No grants of stock options pursuant to the 1994 Stock Incentive Plan were
awarded to any executive officers during the year ended September 30, 1995.
The following table sets forth certain information concerning exercises of
stock options granted pursuant to the 1994 Stock Incentive Plan by the named
executive officers during the year ended September 30, 1995 and options held at
September 30, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION
VALUES
- --------------------------------------------------------------------------------
Number of Value of
Shares Exercisable Exercisable
Acquired Options at Options at
Name on Exercise Value Realized Year End(1) Year End(2)
- --------------------------------------------------------------------------------
Charles Broadway $ -- $ -- 13,393 $73,717
Jerry M. Chancellor $ -- $ -- 10,826 $59,527
(1) Such options became exercisable on September 30, 1994.
(2) Based on a per share market price of $15.50 as of September 30, 1995 and an
exercise price of $10.00 per share.
<PAGE>
15
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements will Messrs. Broadway,
Chancellor and Taylor (the "Executives"). The employment agreements provide
each officer with a three-year term of employment subject to additional one-year
extensions at the discretion of the Board of Directors.
The employment agreements are terminable with or without cause by the
Company. The Executives have no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary termination
or termination by the Company for cause, disability, retirement or death.
However, in the event that (i) an Executive terminates his employment because of
failure of the Company to comply with any material provision of the employment
agreement or (ii) the employment agreement was terminated by an Executive for
Good Reason, as defined, an Executive would be entitled to 3.00 or 2.99 times,
respectively, the average annual compensation, as defined, paid to him by the
Company during the five most recent taxable years ending during the calendar
year in which the notice of termination occurs or such portion of such period in
which the Executive served as an employee of the Company as well as continued
participation in employee benefit plans of the Company until the expiration of
the remaining term of employment. "Good Reason" is generally defined in the
employment agreements to include failure to comply with a material portion of
the agreements or the assignment by the Company to the Executive of any duties
which are materially inconsistent with the Executive's positions, duties,
responsibilities and status with the Association prior to a change of control of
the Company.
The employment agreements provide that in the event that any of the
payments to be made thereunder or otherwise upon termination of employment by
the Executive following a change in control are deemed to constitute "excess
parachute payments" within the meaning of Section 280G of the Code, then such
payments and benefits received thereunder would be reduced, in the manner
determined by the Company, by the amount, if any, which is the minimum necessary
to result in no portion of the payments and benefits being non-deductible by the
Company for federal income tax purposes. Excess parachute payments generally
would be defined as payments in excess of three times the recipient's average
annual compensation from the Company includable in the recipient's gross income
during the most recent five taxable years ending before the date on which a
change in control of the Company or other triggering events occurred ("base
amount"). A recipient of excess parachute payments is subject to a 20% excise
tax on the amount by which such payments exceed the base amount, in addition to
regular income taxes, and payments in excess of the base amount would not be
deductible by the Company as compensation expense of federal income tax
purposes.
Although the above-described employment agreements could increase the cost
of any acquisition of control of the Company, management does not believe that
the terms thereof
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16
would have a significant anti-takeover effect. Moreover, because of the mutual
holding company structure that exists, such a takeover is highly unlikely.
INDEBTEDNESS OF MANAGEMENT
The Association, in the ordinary course of business, makes available to its
directors and executive officers mortgage loans on their primary residences,
consumer loans and loans on their savings accounts. Such loans are made on the
same terms as comparable loans to other borrowers. Prior to the enactment of
FIRREA, the Association had in effect a policy that offered preferential loans,
in limited situations, to its directors, officers and employees. As a result of
FIRREA's application of Section 22(h) of the Federal Reserve Act to savings
institutions, any credit extended after the enactment of FIRREA by a savings
association, such as the Association, to its executive officers, directors and,
to the extent otherwise permitted, principal stockholder(s), or any related
interest of the foregoing, must be (i) on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions by the savings association with non-affiliated parties
and (ii) not involve more than the normal risk of repayment or present other
unfavorable features.
In accordance with FIRREA, the Association no longer provides rates of
interest on loans to executive officers or directors which are lower than the
rates of interest charged on loans made to any unaffiliated persons. During the
year ended September 30, 1995, no director or executive officer of the
Association had a loan or loans with such a preferential rate aggregating
$60,000 or more.
OTHER MATTERS
Management is not aware of any business to come before the Special Meeting
other than those matters described in this Proxy Statement. However, if any
other matters should properly come before the Special Meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Company. The
Company intends to engage a professional proxy solicitation firm to assist in
the solicitation of proxies. The Company anticipates the cost of such services
will be approximately $5,000. 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 the Common Stock.
In addition to solicitations by mail, directors, officers and employees of the
Company may solicit proxies personally or by telephone without additional
compensation.
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17
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
solicitation materials to be used in connection with the next Annual Meeting of
Stockholders of the Company must have been received at the main office of the
Company no later than September 4, 1996. If such proposal is in compliance
with all of the requirements of Rule 14a-8 under the Exchange Act, it will be
included in the Proxy Statement and set forth on the form of proxy issued for
the next Special Meeting of Stockholders. It is urged that any such proposals
be sent by certified mail, return receipt requested.
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APPENDIX A
JACKSONVILLE BANCORP, INC.
1996 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Jacksonville Bancorp, Inc. (the "Corporation") hereby establishes this 1996
Stock Option Plan (the "Plan") upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of the
Corporation and its Subsidiary Companies by providing Employees and Non-Employee
Directors with a proprietary interest in the Corporation as an incentive to
contribute to the success of the Corporation and its Subsidiary Companies, and
rewarding those Employees for outstanding performance and the attainment of
targeted goals. All Incentive Stock Options issued under this Plan are intended
to comply with the requirements of Section 422 of the Code, and the regulations
thereunder, and all provisions hereunder shall be read, interpreted and applied
with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Association" means Jacksonville Savings and Loan Association, the
wholly owned subsidiary of the Corporation.
3.02 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.
3.03 "Board" means the Board of Directors of the Corporation.
3.04 "Code" means the Internal Revenue Code of 1986, as amended.
3.05 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, each of whom shall be a Non-Employee
Director.
3.06 "Common Stock" means shares of the common stock, $0.01 par value per
share, of the Corporation.
3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Corporation or a Subsidiary Company, or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.
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3.08 "Effective Date" means the day upon which the Board adopts this
Plan.
3.09 "Employee" means any person who is employed by the Corporation or a
Subsidiary Company, or is an Officer of the Corporation or a Subsidiary Company,
but not including directors who are not also Officers of or otherwise employed
by the Corporation or a Subsidiary Company.
3.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
3.11 "Fair Market Value" shall be equal to the fair market value per
share of the Corporation's Common Stock on the date an Award is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of the markets, if more than one) or national quotation system in which such
shares are then traded, or if no such closing prices are reported, the mean
between the high bid and low asked prices that day on the principal market or
national quotation system then in use, or if no such quotations are available,
the price furnished by a professional securities dealer making a market in such
shares selected by the Committee.
3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.
3.13 "Non-Employee Director" means a member of the Board on the Effective
Date who is not an Officer or Employee of the Corporation or any Subsidiary
Company other than Robert F. Brown.
3.14 "Non-Qualified Option" means any Option granted under this Plan
which is not an Incentive Stock Option.
3.15 "Offering" means the offering of Common Stock to the public pursuant
to a Plan of Conversion and Agreement and Plan of Reorganization adopted by the
Bank and Jacksonville Federal Mutual Holding Company.
3.16 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.17 "OTS" means the Office of Thrift Supervision.
3.18 "Option" means a right granted under this Plan to purchase Common
Stock.
3.19 "Optionee" means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.
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3.20 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Company or a Subsidiary Company, or, if no such plan is applicable, which
would constitute "retirement" under any qualified pension benefit plan
maintained by the Company or a Subsidiary Company, if such individual were a
participant in such plan.
3.21 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Corporation in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.11.
3.22 "Subsidiary Companies" means those subsidiaries of the Corporation,
including the Association, which meet the definition of "subsidiary
corporations" set forth in Section 425(f) of the Code, at the time of granting
of the Option in question.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority to adopt,
amend and rescind such rules, regulations and procedures as, in its opinion, may
be advisable in the administration of the Plan, including, without limitation,
rules, regulations and procedures which (i) deal with satisfaction of an
Optionee's tax withholding obligation pursuant to Section 12.02 hereof, (ii)
include arrangements to facilitate the Optionee's ability to borrow funds for
payment of the exercise or purchase price of an Award, if applicable, from
securities brokers and dealers, and (iii) include arrangements which provide for
the payment of some or all of such exercise or purchase price by delivery of
previously owned shares of Common Stock or other property and/or by withholding
some of the shares of Common Stock which are being acquired. The interpretation
and construction by the Committee of any provisions of the Plan, any rule,
regulation or procedure adopted by it pursuant thereto or of any Award shall be
final and binding in the absence of action by the Board of Directors.
4.02 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, each of whom shall be a Non-Employee Director. The
Committee shall act by vote or written consent of a majority of its members.
Subject to the express provisions and limitations of the Plan, the Committee may
adopt such rules, regulations and procedures as it deems appropriate for the
conduct of its affairs. It may appoint one of its members to be chairman and
any person, whether or not a member, to be its secretary or agent. The
Committee shall report its actions and decisions to the Board at appropriate
times but in no event less than one time per calendar year.
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4.03 REVOCATION FOR MISCONDUCT. The Board of Directors or the Committee
may by resolution immediately revoke, rescind and terminate any Option, or
portion thereof, to the extent not yet vested, or any Stock Appreciation Right,
to the extent not yet exercised, previously granted or awarded under this Plan
to an Employee who is discharged from the employ of the Corporation or a
Subsidiary Company for cause, which, for purposes hereof, shall mean termination
because of 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.
Options granted to a Non-Employee Director who is removed for cause pursuant to
the Corporation's Certificate of Incorporation or Bylaws shall terminate as of
the effective date of such removal.
4.04 LIMITATION ON LIABILITY. Neither the members of the Board of
Directors nor any member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan, any rule, regulation
or procedure adopted by it pursuant thereto or any Awards granted under it. If
a member of the Board of Directors or the Committee is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of anything done or not done by him in such capacity under or with respect to
the Plan, the Corporation shall, subject to the requirements of applicable laws
and regulations, indemnify such member against all liabilities and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in the best interests of the Corporation and its Subsidiary Companies and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
4.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency as may be required.
The Corporation shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of or obtaining of consents or approvals with respect to such
shares under any Federal or state law or any rule or regulation of any
government body, which the Corporation shall, in its sole discretion, determine
to be necessary or advisable. Moreover, no Option or Stock Appreciation Right
may be exercised if such exercise would be contrary to applicable laws and
regulations.
4.06 RESTRICTIONS ON TRANSFER. The Corporation may place a legend upon
any certificate representing shares acquired pursuant to an Award granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.
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ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees or Non-Employee Directors of the
Corporation and its Subsidiary Companies as may be designated from time to time
by the Board of Directors or the Committee. Awards may not be granted to
individuals who are not Employees or Non-Employee Directors of either the
Corporation or its Subsidiary Companies. Non-Employee Directors shall be
eligible to receive only Non-Qualified Options.
ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 OPTION SHARES. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 161,840 shares, which is equal to 10.0% of the shares of
Conversion Stock issued in the Offering. None of such shares shall be the
subject of more than one Award at any time, but if an Option as to any shares is
surrendered before exercise, or expires or terminates for any reason without
having been exercised in full, or for any other reason ceases to be exercisable,
the number of shares covered thereby shall again become available for grant
under the Plan as if no Awards had been previously granted with respect to such
shares. Notwithstanding the foregoing, if an Option is surrendered in
connection with the exercise of a Stock Appreciation Right, the number of shares
covered thereby shall not be available for grant under the Plan. During the
time this Plan remains in effect, grants to each Employee and each Non-Employee
Director shall not exceed 25% and 5% of the shares of Common Stock available
under the Plan, respectively.
6.02 SOURCE OF SHARES. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Corporation on the open market or from private sources for use under the
Plan.
ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Board of Directors or the Committee shall, in its discretion, determine
from time to time which Employees will be granted Awards under the Plan, the
number of shares of Common Stock subject to each Award, and whether each Option
will be an Incentive Stock Option or a Non-Qualified Stock Option. In making
all such determinations there shall be taken into account the duties,
responsibilities and performance of each respective Employee, his present and
potential contributions to the growth and success of the Corporation, his salary
and such other factors as the Board of Directors or the Committee shall deem
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relevant to accomplishing the purposes of the Plan. Non-Employee Directors
shall be eligible to receive only Non-Qualified Options pursuant to Section 8.02
of the Plan.
ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
8.01 STOCK OPTION AGREEMENT. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which shall
set forth the total number of shares of Common Stock to which it pertains, the
exercise price, whether it is a Non-Qualified Option or an Incentive Stock
Option, and such other terms, conditions, restrictions and privileges as the
Board of Directors or the Committee in each instance shall deem appropriate,
provided they are not inconsistent with the terms, conditions and provisions of
this Plan. Each Optionee shall receive a copy of his executed Stock Option
Agreement.
8.02 (a) INITIAL GRANTS TO NON-EMPLOYEE DIRECTORS. Each Non-Employee
Director of the Corporation as of the day that the Plan is approved by
stockholders of the Corporation shall be granted an Option to purchase _____
shares of Common Stock effective at such time and with a per share exercise
price equal to the Fair Market Value of a share of Common Stock on such date.
8.03 OPTION EXERCISE PRICE.
(a) INCENTIVE STOCK OPTIONS. The per share price at which the
subject Common Stock may be purchased upon exercise of an Incentive Stock Option
shall be no less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock at the time such Incentive Stock Option is granted, except
as provided in Section 8.10(b).
(b) NON-QUALIFIED OPTIONS. The per share price at which the
subject Common Stock may be purchased upon exercise of a Non-Qualified Option
shall be no less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock at the time such Non-Qualified Option is granted.
8.04 VESTING AND EXERCISE OF OPTIONS.
(a) GENERAL RULES. Incentive Stock Options and Non-Qualified
Options granted hereunder shall become vested and exercisable at the rate of 20%
per year on each anniversary of the date the Option was granted, and the right
to exercise shall be cumulative. Notwithstanding the foregoing, no vesting
shall occur on or after an Employee's employment with the Corporation and all
Subsidiary Companies is terminated for any reason other than his death,
Retirement or Disability. In determining the number of shares
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of Common Stock with respect to which Options are vested and/or exercisable,
fractional shares will be rounded up to the nearest whole number if the fraction
is 0.5 or higher, and down if it is less.
(b) ACCELERATED VESTING UPON DEATH OR DISABILITY. Unless the
Committee shall specifically state otherwise at the time an Option is granted,
all Options granted hereunder shall become vested and exercisable in full on the
date an Optionee terminates his employment with or service to the Corporation or
a Subsidiary Company because of his death or Disability.
8.05 DURATION OF OPTIONS.
(a) GENERAL RULE. Except as provided in Sections 8.05(b) and 8.10,
each Option or portion thereof granted to Employees and Non-Employee Directors
shall be exercisable at any time on or after it vests and becomes exercisable
until the earlier of (i) ten (10) years after its date of grant or (ii) three
(3) months after the date on which the Optionee ceases to be employed (or in the
service of the Board of Directors) by the Corporation and all Subsidiary
Companies, unless the Board of Directors or the Committee in its discretion
decides at the time of grant or thereafter to extend such period of exercise to
a period not exceeding three (3) years.
(b) EXCEPTION FOR TERMINATION DUE TO DEATH OR DISABILITY. If an
Employee dies while in the employ of the Corporation or a Subsidiary Company or
terminates employment with the Corporation or a Subsidiary Company as a result
of Disability without having fully exercised his Options, the Optionee or the
executors, administrators, legatees or distributees of his estate shall have the
right, during the twelve-month period following the earlier of his death or
Disability, to exercise such Options to the extent vested on the date of such
death or Disability. If a Non-Employee Director dies while serving as a Non-
Employee Director without having fully exercised his Options, the Non-Employee
Director's executors, administrators, legatees or distributees of his estate
shall have the right, during the twelve-month period following such death, to
exercise such Options. In no event, however, shall any Option be exercisable
more than ten (10) years from the date it was granted.
8.06 NONASSIGNABILITY. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative.
8.07 MANNER OF EXERCISE. Options may be exercised in part or in whole
and at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided for in Section 8.01 above.
8.08 PAYMENT FOR SHARES. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall be
made to the Corporation upon exercise of the Option. All shares sold under the
Plan shall be fully paid and nonassessable. Payment for shares may be made by
the Optionee in cash or, at the
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discretion of the Board of Directors or the Committee in the case of Awards to
Employees, by delivering shares of Common Stock (including shares acquired
pursuant to the exercise of an Option) or other property equal in Fair Market
Value to the purchase price of the shares to be acquired pursuant to the Option,
by withholding some of the shares of Common Stock which are being purchased upon
exercise of an Option, or any combination of the foregoing.
8.09 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.
8.10 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.09 above, to those contained in this
Section 8.10.
(a) Notwithstanding any contrary provisions contained elsewhere in
this Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock option plan or plans maintained by the Corporation (or any parent or
Subsidiary Company), shall not exceed $100,000.
(b) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at which
shares of Common Stock may be purchased upon exercise of an Incentive Stock
Option granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Corporation or any Subsidiary Company, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of the
Corporation at the time of grant, and such Incentive Stock Option shall by its
terms not be exercisable after the earlier of the date determined under Section
8.04 or the expiration of five (5) years from the date such Incentive Stock
Option is granted.
(c) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An Optionee shall
immediately notify the Corporation in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Corporation shall be entitled to withhold from any
compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of Federal
or state law or regulation and, further, to
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collect from the Optionee any additional amounts which may be required for such
purpose. The Committee may, in its discretion, require shares of Common Stock
acquired by an Optionee upon exercise of an Incentive Stock Option to be held in
an escrow arrangement for the purpose of enabling compliance with the provisions
of this Section 8.10(c).
8.11 STOCK APPRECIATION RIGHTS.
(a) GENERAL TERMS AND CONDITIONS. The Board of Directors or the
Committee may, but shall not be obligated to, authorize the Corporation, on such
terms and conditions as it deems appropriate in each case, to grant rights to
Optionees to surrender an exercisable Option, or any portion thereof, in
consideration for the payment by the Corporation of an amount equal to the
excess of the Fair Market Value of the shares of Common Stock subject to the
Option, or portion thereof, surrendered over the exercise price of the Option
with respect to such shares (any such authorized surrender and payment being
hereinafter referred to as a "Stock Appreciation Right"). Such payment, at the
discretion of the Board of Directors or the Committee, may be made in shares of
Common Stock valued at the then Fair Market Value thereof, or in cash, or partly
in cash and partly in shares of Common Stock.
The terms and conditions set with respect to a Stock Appreciation Right may
include (without limitation), subject to other provisions of this Section 8.11
and the Plan, the period during which, date by which or event upon which the
Stock Appreciation Right may be exercised (which shall be on the same terms as
the Option to which it relates pursuant to Section 8.04 hereunder); the method
for valuing shares of Common Stock for purposes of this Section 8.11; a ceiling
on the amount of consideration which the Corporation may pay in connection with
exercise and cancellation of the Stock Appreciation Right; and arrangements for
income tax withholding. The Board of Directors or the Committee shall have
complete discretion to determine whether, when and to whom Stock Appreciation
Rights may be granted. Notwithstanding the foregoing, the Corporation may not
permit the exercise of a Stock Appreciation Right issued pursuant to this Plan
until the Corporation has been subject to the reporting requirements of Section
13 of the Exchange Act for a period of at least one year prior to the exercise
of any such Stock Appreciation Right and until a Stock Appreciation Right issued
pursuant to this Plan has been outstanding for at least six months from the date
of grant.
(b) TIME LIMITATIONS. If a holder of a Stock Appreciation Right
terminates service with the Corporation as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period, if any, within which
the Option to which it relates may be exercised. Notwithstanding the foregoing,
any election by an Optionee to exercise the Stock Appreciation Rights provided
in this Plan shall be made during the period beginning on the third business day
following the release for publication of quarterly or annual financial
information required to be prepared and disseminated by the Corporation pursuant
to the requirements of the Exchange Act and ending on the twelfth business day
following such date. The required release of information shall be deemed to
have been satisfied when
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the specified financial data appears on or in a wire service, financial news
service or newspaper of general circulation or is otherwise first made publicly
available.
(c) EFFECTS OF EXERCISE OF STOCK APPRECIATION RIGHTS OR OPTIONS.
Upon the exercise of a Stock Appreciation Right, the number of shares of Common
Stock available under the Option to which it relates shall decrease by a number
equal to the number of shares for which the Stock Appreciation Right was
exercised. Upon the exercise of an Option, any related Stock Appreciation Right
shall terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.
(d) TIME OF GRANT. A Stock Appreciation Right may be granted
concurrently with the Option to which it relates or at any time thereafter prior
to the exercise or expiration of such Option.
(e) NON-TRANSFERABLE. The holder of a Stock Appreciation Right may
not transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.
ARTICLE IX
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance under
this Plan, the number of shares to which any Award relates and the exercise
price per share of Common Stock under any Option shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of this Plan resulting
from a split, subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend, or other increase or decrease in
such shares effected without receipt or payment of consideration by the
Corporation. If, upon a merger, consolidation, reorganization, liquidation,
recapitalization or the like of the Corporation, the shares of the Corporation's
Common Stock shall be exchanged for other securities of the Corporation or of
another corporation, each recipient of an Award shall be entitled, subject to
the conditions herein stated, to purchase or acquire such number of shares of
Common Stock or amount of other securities of the Corporation or such other
corporation as were exchangeable for the number of shares of Common Stock of the
Corporation which such optionees would have been entitled to purchase or acquire
except for such action, and appropriate adjustments shall be made to the per
share exercise price of outstanding Options.
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ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate or amend the Plan with
respect to any shares of Common Stock as to which Awards have not been granted,
subject to regulations of the OTS and any required stockholder approval or any
stockholder approval which the Board may deem to be advisable for any reason,
such as for the purpose of obtaining or retaining any statutory or regulatory
benefits under tax, securities or other laws or satisfying any applicable stock
exchange listing requirements. The Board may not, without the consent of the
holder of an Award, alter or impair any Award previously granted or awarded
under this Plan as specifically authorized herein.
ARTICLE XI
EMPLOYMENT RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action taken
by the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee or Non-Employee Director of the Corporation or a
Subsidiary Company to continue in such capacity.
ARTICLE XII
WITHHOLDING
12.01 TAX WITHHOLDING. The Corporation may withhold from any cash payment
made under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of such cash payment is insufficient, the
Corporation may require the Optionee to pay to the Corporation the amount
required to be withheld as a condition to delivering the shares acquired
pursuant to an Award. The Corporation also may withhold or collect amounts with
respect to a disqualifying disposition of shares of Common Stock acquired
pursuant to exercise of an Incentive Stock Option, as provided in Section
8.10(c).
12.02 METHODS OF TAX WITHHOLDING. The Board of Directors or the Committee
is authorized to adopt rules, regulations or procedures which provide for the
satisfaction of an Optionee's tax withholding obligation by the retention of
shares of Common Stock to which the Employee would otherwise be entitled
pursuant to an Award and/or by the Optionee's delivery of previously owned
shares of Common Stock or other property.
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ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
13.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on the
Effective Date, and Awards may be granted hereunder as of or after the Effective
Date and prior to the termination of the Plan, provided that no Incentive Stock
Option issued pursuant to this Plan shall qualify as such unless this Plan is
approved by the requisite vote of the holders of the outstanding voting shares
of the Corporation at a meeting of stockholders of the Corporation held within
twelve (12) months of the Effective Date. Notwithstanding the foregoing or
anything to the contrary in this Plan, the implementation of this Plan and any
Awards granted pursuant hereto are subject to the non-objection of the OTS and
approval of the Corporation's stockholders.
13.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
ARTICLE XIV
MISCELLANEOUS
14.01 GOVERNING LAW. To the extent not governed by Federal law, this Plan
shall be construed under the laws of the State of Texas.
14.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall include
the feminine pronoun, and the singular shall include the plural.
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APPENDIX B
JACKSONVILLE BANCORP, INC.
1996 MANAGEMENT RECOGNITION PLAN AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Jacksonville Bancorp, Inc. (the "Corporation") hereby establishes a
Management Recognition Plan (the "Plan") and Trust (the "Trust") upon the terms
and conditions hereinafter stated in this 1996 Management Recognition Plan and
Trust Agreement (the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to retain personnel of experience and
ability in key positions by providing Employees and Non-Employee Directors of
the Corporation and of Jacksonville Savings and Loan Association (the
"Association") with a proprietary interest in the Corporation as compensation
for their contributions to the Corporation, the Association, and any other
Subsidiaries and as an incentive to make such contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Agreement with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meanings set forth below. Wherever appropriate, the masculine pronouns shall
include the feminine pronouns and the singular shall include the plural.
3.01 "Association" means Jacksonville Savings and Loan Association, the
wholly owned subsidiary of the Corporation.
3.02 "Beneficiary" means the person or persons designated by a Recipient
to receive any benefits payable under the Plan in the event of such Recipient's
death. Such person or persons shall be designated in writing on forms provided
for this purpose by the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his estate.
3.03 "Board" means the Board of Directors of the Corporation.
<PAGE>
3.04 "Code" means the Internal Revenue Code of 1986, as amended.
3.05 "Committee" means the committee appointed by the Board pursuant to
Article IV hereof.
3.06 "Common Stock" means shares of the common stock, $0.01 par value per
share, of the Corporation.
3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Corporation or any Subsidiary or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.
3.08 "Effective Date" means the day upon which the Board adopts this Plan.
3.09 "Employee" means any person who is employed by the Corporation, the
Association, or any Subsidiary, or is an officer of the Corporation, the
Association, or any Subsidiary, including officers or other employees who may be
directors of the Corporation.
3.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
3.11 "Non-Employee Director" means a member of the Board on the Effective
Date who is not an Employee other than Robert F. Brown.
3.12 "OTS" means the Office of Thrift Supervision.
3.13 "Plan Shares" or "Shares" means shares of Common Stock held in the
Trust which may be distributed to a Recipient pursuant to the Plan.
3.14 "Plan Share Award" or "Award" means a right granted under this Plan
to receive a distribution of Plan Shares upon completion of the service
requirements described in Article VII.
3.15 "Recipient" means an Employee or Non-Employee Director who receives
a Plan Share Award under the Plan.
3.16 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Company or a Subsidiary Company, or, if no such plan is applicable, which
would constitute "retirement" under any qualified pension benefit plan
maintained by the Company or a Subsidiary Company, if such individual were a
participant in such plan.
3.17 "Subsidiary" means Jacksonville Savings and Loan Association and any
other subsidiaries of the Corporation or the Association which, with the consent
of the Board, agree to participate in this Plan.
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3.18 "Trustee" means such firm, entity or persons and approved by the
Board of Directors to hold legal title to the Plan for the purposes set forth
herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, which shall consist of two or more members of the
Board, each of whom shall be a Non-Employee Director. The Committee shall have
all of the powers allocated to it in this and other Sections of the Plan. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Plan Share Award granted hereunder shall be final and binding in the
absence of action by the Board of Directors. The Committee shall act by vote or
written consent of a majority of its members. Subject to the express provisions
and limitations of the Plan, the Committee may adopt such rules, regulations and
procedures as it deems appropriate for the conduct of its affairs. The
Committee shall report its actions and decisions with respect to the Plan to the
Board at appropriate times, but in no event less than one time per calendar
year.
4.02 ROLE OF THE BOARD. The members of the Committee and the Trustee
shall be appointed or approved by, and will serve at the pleasure of, the Board.
The Board may in its discretion from time to time remove members from, or add
members to, the Committee, and may remove or replace the Trustee, provided that
any directors who are selected as members of the Committee shall be Non-Employee
Directors.
4.03 LIMITATION ON LIABILITY. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Plan Shares or Plan Share Awards granted under it. If a member of
the Board or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Corporation
shall, subject to the requirements of applicable laws and regulations, indemnify
such member against all liabilities and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in the best interests of the
Corporation and any Subsidiaries and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
4.04 COMPLIANCE WITH LAWS AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency or stockholders as
may be required.
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ARTICLE V
CONTRIBUTIONS
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall determine the
amount (or the method of computing the amount) and timing of any contributions
by the Corporation and any Subsidiaries to the Trust established under this
Plan. Such amounts may be paid in cash or in shares of Common Stock and shall
be paid to the Trust at the designated time of contribution. No contributions
by Employees or Directors shall be permitted.
5.02 INVESTMENT OF TRUST ASSETS; NUMBER OF PLAN SHARES. Subject to
Section 8.02 hereof, the Trustee shall invest all of the Trust's assets
primarily in Common Stock. The aggregate number of Plan Shares available for
distribution pursuant to this Plan shall be 64,736 shares of Common Stock, which
shares shall be purchased from the Corporation and/or from stockholders thereof
by the Trust with funds contributed by the Corporation. During the time this
Plan remains in effect, Awards to each Employee and each Non-Employee Director
shall not exceed 25% and 5% of the shares of Common Stock available under the
Plan, respectively.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 AWARDS TO NON-EMPLOYEE DIRECTORS. Plan Share Awards equal to 9,708
shares shall be made to Non-Employee Directors.
(a) INITIAL ALLOCATION. A Plan Share Award shall be allocated to
each Non-Employee Director as of the day on which the Plan is approved by
stockholders of the Corporation. Specifically, each Non-Employee Director shall
receive an initial Plan Share Award of _____ shares of Common Stock.
6.02 AWARDS TO EMPLOYEES. Plan Share Awards may be made to such
Employees as may be selected by the Board of Directors or the Committee. In
selecting those Employees to whom Plan Share Awards may be granted and the
number of Shares covered by such Awards, the Board of Directors or the Committee
shall consider the duties, responsibilities and performance of each respective
Employee, his present and potential contributions to the growth and success of
the Corporation, his salary and such other factors as shall be deemed relevant
to accomplishing the purposes of the Plan. The Board of Directors or the
Committee may but shall not be required to request the written recommendation of
the Chief Executive Officer of the Corporation other than with respect to Plan
Share Awards to be granted to him.
6.03 FORM OF ALLOCATION. As promptly as practicable after a
determination is made pursuant to Sections 6.01 or 6.02 that a Plan Share Award
is to be issued, the Board of Directors or the Board of Directors or the
Committee shall notify the Recipient in writing
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of the grant of the Award, the number of Plan Shares covered by the Award, and
the terms upon which the Plan Shares subject to the Award shall be distributed
to the Recipient. The date on which the Board of Directors or the Committee so
notifies the Recipient shall be considered the date of grant of the Plan Share
Award. The Board of Directors or the Committee shall maintain records as to all
grants of Plan Share Awards under the Plan.
6.04 ALLOCATIONS NOT REQUIRED TO ANY SPECIFIC EMPLOYEE. Notwithstanding
anything to the contrary in Section 6.02 hereof, no Employee shall have any
right or entitlement to receive a Plan Share Award hereunder, such Awards being
at the total discretion of the Board of Directors or the Committee.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Subject to the terms hereof, Plan Share Awards
shall be earned by a Recipient at the rate of twenty percent (20%) of the
aggregate number of Shares covered by the Award as of each anniversary of the
date of grant of the Award. If the employment of an Employee or service as a
Non-Employee Director is terminated prior to the fifth (5th) annual anniversary
of the date of grant of a Plan Share Award for any reason other than for death,
Retirement or Disability, the Recipient shall forfeit the right to any Shares
subject to the Award which have not theretofore been earned. In the event of a
forfeiture of the right to any Shares subject to an Award, such forfeited Shares
shall become available for allocation pursuant to Section 6.02 hereof as if no
Award had been previously granted with respect to such Shares. No fractional
shares shall be distributed pursuant to this Plan.
(b) EXCEPTION FOR TERMINATIONS DUE TO DEATH OR DISABILITY.
Notwithstanding the general rule contained in Section 7.01(a), all Plan Shares
subject to a Plan Share Award held by a Recipient whose employment or service
with the Corporation or any Subsidiary terminates due to death or Disability
shall be deemed earned as of the Recipient's last day of employment with the
Corporation or any Subsidiary and shall be distributed as soon as practicable
thereafter; provided, however, that Awards shall be distributed in accordance
with Section 7.03(a).
(c) REVOCATION FOR MISCONDUCT. Notwithstanding anything
hereinafter to the contrary, the Board may by resolution immediately revoke,
rescind and terminate any Plan Share Award, or portion thereof, previously
awarded under this Plan, to the extent Plan Shares have not been distributed
hereunder to the Recipient, whether or not yet earned, in the case of an
Employee who is discharged from the employ of the Corporation or any Subsidiary
for cause (as hereinafter defined). Termination for cause shall mean
termination because of the Employee's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful
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violation of any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order. Plan Share Awards granted to
a Non-Employee Director who is removed for cause pursuant to the Corporation's
Certificate of Incorporation or Bylaws shall terminate as of the effective date
of such removal.
7.02 DISTRIBUTION OF DIVIDENDS. Any cash dividends or stock dividends
declared in respect of each unvested Plan Share Award will be held by the Trust
for the benefit of the Recipient on whose behalf such Plan Share Award is then
held by the Trust and such dividends, including any interest thereon, will be
paid out proportionately by the Trust to the Recipient thereof as soon as
practicable after the Plan Share Awards become earned. Any cash dividends or
stock dividends declared in respect of each vested Plan Share held by the Trust
will be paid by the Trust, as soon as practicable after the Trust's receipt
thereof, to the Recipient on whose behalf such Plan Share is then held by the
Trust.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Plan Shares shall be
distributed to the Recipient or his Beneficiary, as the case may be, as soon as
practicable after they have been earned, provided, however, that no Plan Shares
shall be distributed to the Recipient or Beneficiary pursuant to a Plan Share
Award within six months from the date on which that Plan Share Award was granted
to such person.
(b) FORM OF DISTRIBUTIONS. All Plan Shares, together with any
Shares representing stock dividends, shall be distributed in the form of Common
Stock. One share of Common Stock shall be given for each Plan Share earned and
distributable. Payments representing cash dividends shall be made in cash.
(c) WITHHOLDING. The Trustee may withhold from any cash payment or
Common Stock distribution made under this Plan sufficient amounts to cover any
applicable withholding and employment taxes, and if the amount of a cash payment
is insufficient, the Trustee may require the Recipient or Beneficiary to pay to
the Trustee the amount required to be withheld as a condition of delivering the
Plan Shares. The Trustee shall pay over to the Corporation or any Subsidiary
which employs or employed such Recipient any such amount withheld from or paid
by the Recipient or Beneficiary.
(d) RESTRICTIONS ON SELLING OF PLAN SHARES. Plan Share Awards may
not be sold, assigned, pledged or otherwise disposed of prior to the time that
they are earned and distributed pursuant to the terms of this Plan. Following
distribution, the Board of the Directors or the Committee may require the
Recipient or his Beneficiary, as the case may be, to agree not to sell or
otherwise dispose of his distributed Plan Shares except in accordance with all
then applicable Federal and state securities laws, and the Board of Directors or
the Committee may cause a legend to be placed on the stock certificate(s)
representing the distributed Plan Shares in order to restrict the transfer of
the distributed Plan Shares for such period of time or under such circumstances
as the Board of Directors or the Committee, upon the advice of counsel, may deem
appropriate.
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7.04 VOTING OF PLAN SHARES. All Plan Shares which have not yet been
earned and allocated shall be voted by the Trustee in its sole discretion.
ARTICLE VIII
TRUST
8.01 TRUST. The Trustee shall receive, hold, administer, invest and make
distributions and disbursements from the Trust in accordance with the provisions
of the Plan and Trust and the applicable directions, rules, regulations,
procedures and policies established by the Committee pursuant to the Plan.
8.02 MANAGEMENT OF TRUST. It is the intent of this Plan and Trust that
the Trustee shall have complete authority and discretion with respect to the
arrangement, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustee determine that the holding of
monies in cash or cash equivalents is necessary to meet the obligations of the
Trust. In performing their duties, the Trustee shall have the power to do all
things and execute such instruments as may be deemed necessary or proper,
including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust assets
in Common Stock without regard to any law now or hereafter in force limiting
investments for trustees or other fiduciaries. The investment authorized herein
may constitute the only investment of the Trust, and in making such investment,
the Trustee are authorized to purchase Common Stock from the Corporation or from
any other source, and such Common Stock so purchased may be outstanding, newly
issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in accordance
with (a) above, in such deposit accounts, and certificates of deposit,
obligations of the United States Government or its agencies or such other
investments as shall be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at any
time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered in
the name of a nominee, without the addition of words indicating that such
security is an asset of the Trust (but accurate records shall be maintained
showing that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may in the
opinion of the Trustee be reasonable for the proper operation of the Plan and
Trust.
(f) To employ brokers, agents, custodians, consultants and
accountants.
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(g) To hire counsel to render advice with respect to their rights,
duties and obligations hereunder, and such other legal services or
representation as they may deem desirable.
(h) To hold funds and securities representing the amounts to be
distributed to a Recipient or his Beneficiary as a consequence of a dispute as
to the disposition thereof, whether in a segregated account or held in common
with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of court for the exercise of any power
herein contained, or give bond.
8.03 RECORDS AND ACCOUNTS. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Board of Directors or the Committee.
8.04 EXPENSES. All costs and expenses incurred in the operation and
administration of this Plan shall be borne by the Corporation.
8.05 INDEMNIFICATION. Subject to the requirements of applicable laws and
regulations, the Corporation shall indemnify, defend and hold the Trustee
harmless against all claims, expenses and liabilities arising out of or related
to the exercise of the Trustee's powers and the discharge of their duties
hereunder, unless the same shall be due to their gross negligence or willful
misconduct.
ARTICLE IX
MISCELLANEOUS
9.01 ADJUSTMENTS FOR CAPITAL CHANGES. The aggregate number of Plan
Shares available for distribution pursuant to the Plan Share Awards and the
number of Shares to which any Plan Share Award relates shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of the Plan resulting
from any split, subdivision or consolidation of shares or other capital
adjustment, or other increase or decrease in such shares effected without
receipt or payment of consideration by the Corporation.
9.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by resolution, at
any time amend or terminate the Plan, subject to regulations of the OTS and any
required stockholder approval or any stockholder approval which the Board may
deem to be advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying any applicable stock exchange listing requirements. The
Board may not, without the consent of the Recipient,
8
<PAGE>
alter or impair his Plan Share Award except as specifically authorized herein.
Upon termination of the Plan, the Recipient's Plan Share Awards shall be
distributed to the Recipient in accordance with the terms of Article VII hereof.
9.03 NONTRANSFERABLE. Plan Share Awards and rights to Plan Shares shall
not be transferable by a Recipient, and during the lifetime of the Recipient,
Plan Shares may only be earned by and paid to a Recipient who was notified in
writing of an Award by the Committee pursuant to Section 6.03. No Recipient or
Beneficiary shall have any right in or claim to any assets of the Plan or Trust,
nor shall the Corporation or any Subsidiary be subject to any claim for benefits
hereunder.
9.04 EMPLOYMENT OR SERVICE RIGHTS. Neither the Plan nor any grant of a
Plan Share Award or Plan Shares hereunder nor any action taken by the Trustee,
the Committee or the Board in connection with the Plan shall create any right on
the part of any Employee or Non-Employee Director to continue in such capacity.
9.05 VOTING AND DIVIDEND RIGHTS. No Recipient shall have any voting or
dividend rights or other rights of a stockholder in respect of any Plan Shares
covered by a Plan Share Award, except as expressly provided in Sections 7.02 and
7.04 above, prior to the time said Plan Shares are actually earned and
distributed to him.
9.06 GOVERNING LAW. To the extent not governed by Federal law, the Plan
and Trust shall be governed by the laws of the State of Texas.
9.07 EFFECTIVE DATE. This Plan shall be effective as of the Effective
Date, and Awards may be granted hereunder as of or after the Effective Date and
as long as the Plan remains in effect. Notwithstanding the foregoing or
anything to the contrary in this Plan, the implementation of this Plan and any
Awards granted pursuant hereto are subject to the non-objection of the OTS and
approval of the Corporation's stockholders.
9.08 TERM OF PLAN. This Plan shall remain in effect until the earlier of
(1) ten (10) years from the Effective Date, (2) termination by the Board, or (3)
the distribution to Recipients and Beneficiaries of all assets of the Trust.
9.09 TAX STATUS OF TRUST. It is intended that the trust established
hereby be treated as a Grantor Trust of the Corporation under the provisions of
Section 671 ET SEQ. of the Code, as the same may be amended from time to time.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and the corporate seal to be affixed
and duly attested, and the initial Trustee of the Trust established pursuant
hereto have duly and validly executed this Agreement, all on this ____ day of
_____ 1996.
JACKSONVILLE BANCORP, INC.
By:
------------------------------
Charles Broadway
President
ATTEST:
By:
----------------------------
Sandra Thompson
Secretary
TRUSTEES:
-------------------------------------
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REVOCABLE PROXY
JACKSONVILLE BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF JACKSONVILLE
BANCORP, INC. FOR USE AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 22, 1996 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of Jacksonville
Bancorp, Inc. (the "Company") as proxies, each with power to appoint his
substitute, and hereby authorizes them to represent and vote, as designated on
the reverse side, all the shares of Common Stock of the Company held of record
by the undersigned on September 20, 1996 at the Special Meeting of Stockholders
to be held at the Company's office located at Commerce and Neches Streets,
Jacksonville, Texas, on Tuesday, October 22, 1996, at 10:00 a.m., Central Time,
and any adjournment thereof.
1. PROPOSAL to adopt the 1996 Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
2. PROPOSAL to adopt the 1996 Management Recognition Plan and Trust.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued on reverse side)
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. THE SHARES OF THE
COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT OTHERWISE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSALS SPECIFIED IN ITEMS 1 AND 2 AND
OTHERWISE AT THE DISCRETION OF THE PROXIES. YOU MAY REVOKE THIS PROXY AT ANY
TIME PRIOR TO THE TIME IT IS VOTED AT THE SPECIAL MEETING.
Dated:---------------, 1996
------------------------------------------------
Signature
------------------------------------------------
Signature
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS PROXY. WHEN
SIGNING IN A REPRESENTATIVE CAPACITY, PLEASE GIVE TITLE. WHEN SHARES ARE HELD
JOINTLY, ONLY ONE HOLDER NEED SIGN.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
