JACKSONVILLE BANCORP INC
DEF 14A, 1998-12-28
SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED
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<PAGE>   1
 
                                  SCHEDULE 14A
                                 (RULE 14a-101)
 
                    INFORMATION REQUIRED IN PROXY STATEMENT
 
                            SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                     EXCHANGE ACT OF 1934 (AMENDMENT NO.  )
 
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     Check the appropriate box:
 
     [ ] Preliminary Proxy Statement        [ ] Confidential, for Use of the
                                                Commission Only (as permitted by
                                                Rule 14a-6(e)(2))
 
     [X] Definitive Proxy Statement
 
     [ ] Definitive Additional Materials
 
     [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
 
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     [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
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<PAGE>   2
                                                               December 26, 1998

Dear Stockholder:

       You are cordially invited to attend the Annual Meeting of Stockholders of
Jacksonville Bancorp, Inc. The meeting will be held at the Norman Activity
Center, located at 526 East Commerce Street, Jacksonville, Texas, on Tuesday,
January 26, 1999 at 10:00 a.m., Central Time. The matters to be considered by
stockholders at the Annual Meeting are described in the accompanying materials.

       It is very important that you be represented at the Annual 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 Annual
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,
                     /s/ JERRY M. CHANCELLOR

                     Jerry M. Chancellor
                     President and Chief Executive Officer


<PAGE>   3



                           JACKSONVILLE BANCORP, INC.
                           COMMERCE AND NECHES STREETS
                            JACKSONVILLE, TEXAS 75766
                                 (903) 586-9861

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON JANUARY 26, 1999

       NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of
Jacksonville Bancorp, Inc., ("Company") will be held at the Norman Activity
Center, located at 526 East Commerce Street, Jacksonville, Texas on Thursday,
January 26, 1999, 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 elect three directors of the Company for a three-year term and
              until their successors are elected and qualified;

       2      To ratify the appointment of Henry & Peters, P.C. as the Company's
              independent auditors for the fiscal year ending September 30,
              1999; 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 December 11, 1998 as the
voting record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting. Only those stockholders of record as of the
close of business on that date will be entitled to vote at the Annual Meeting or
at any such adjournment.

                           BY ORDER OF THE BOARD OF DIRECTORS

                           /s/ SANDRA THOMPSON

                           Sandra Thompson, Secretary

December 26, 1998
Jacksonville, Texas


<PAGE>   4


                           JACKSONVILLE BANCORP, INC.

                           ---------------------------

                                 PROXY STATEMENT

                           ---------------------------


                         ANNUAL MEETING OF STOCKHOLDERS

                                JANUARY 26, 1999

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 Annual Meeting of Stockholders ("Annual Meeting") to be held at
the Norman Activity Center, located at 526 East Commerce Street, Jacksonville,
Texas, on Tuesday, January 26, 1999, at 10:00 a.m., Central Time, and at any
adjournment thereof, for the purposes set forth in the Notice of Annual Meeting
of Stockholders. This Proxy Statement is first being mailed to stockholders on
or about December 26, 1998.

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 December 11, 1998 (the "Voting Record Date") will be entitled to
notice of and to vote at the Annual Meeting. At such date, there were 2,367,547
shares of Common Stock issued and outstanding.

       Each share of Common Stock is entitled to one vote at the Annual Meeting
on all matters properly presented at the meeting. Directors are elected by a
plurality of the votes cast with a quorum present. The affirmative vote of the
holders of a majority of the total votes present, in person or by proxy, at the
Annual Meeting is required for approval of the proposal to ratify the
independent auditors. The presence, either in person or by proxy, of the holders
of a majority of the shares of Common Stock outstanding on the Voting Record
Date is necessary to constitute a quorum at the Annual Meeting. Abstentions are
considered in determining the presence of a quorum, but abstentions and broker
non-votes will not affect the vote required to approve the proposals presented
at the Annual Meeting.

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.


<PAGE>   5


                                        2

       IF NO INSTRUCTIONS ARE INDICATED, SUCH PROXIES WILL BE VOTED FOR THE
NOMINEES FOR DIRECTOR DESCRIBED HEREIN, FOR RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS, AND IN THE DISCRETION OF THE PROXY HOLDER, AS TO ANY OTHER
MATTER WHICH MAY PROPERLY COME BEFORE THE ANNUAL 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.

       A Company stockholder who has given a proxy may revoke it at any time
prior to its exercise at the Annual 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
Annual 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>   6


                                        3

BENEFICIAL OWNERSHIP

       The following table sets forth information as to the Common Stock
beneficially owned, as of December 11, 1998, by the only persons or entities
known to the Company to be the beneficial owners of more than 5% of the Common
Stock and by all directors and officers of the Company as a group.
<TABLE>
<CAPTION>

                                           AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL             BENEFICIAL OWNERSHIP(1)      PERCENT OF CLASS
- --------------------------------------------------------------------------------------------
<S>                                                     <C>                  <C>  
Jacksonville Bancorp, Inc.                              202,048(2)           8.53%
Employee Stock Ownership Plan
Commerce and Neches Streets
Jacksonville, Texas  75766

First Union Corporation                                 191,400(3)           8.08%
One First Union Center
Charlotte, North Carolina
28288-0137

Directors:

Jerry M. Chancellor                                      42,778              1.81%

Bill W. Taylor                                           49,352              2.08%

Dr. Joe Tollett                                          35,878              1.52%

Ray W. Beall                                             18,921              0.80%

Robert F. Brown                                          19,962              0.84%

Charles Broadway                                         53,751              2.27%

W. G. Brown                                              72,638              3.07%

Officers:

Jerry Hammons                                            24,329              1.03%

All directors and officers of the
Company as a group (seven
persons)                                                317,609(4)          13.42%
</TABLE>
- ----------------
(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


<PAGE>   7

                                       4


       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)    The Jacksonville Bancorp, Inc., Employee Stock Ownership Plan Trust
       ("Trust") was established pursuant to the Jacksonville Bancorp, Inc.,
       Employee Stock Ownership Plan ("ESOP") by an agreement between the
       Company and Messrs. Broadway, Chancellor, Beall, and Dr. Tollett, who act
       as trustees of the plan ("Trustees"). As of the Voting Record Date,
       86,899, shares held in the Trust had been allocated to the accounts of
       participating employees. Under the terms of the ESOP, the Trustees will
       generally vote the allocated shares held in the ESOP in accordance with
       the instructions of the participating employees. Unallocated shares held
       in the ESOP will generally be voted in the same ratio on any matter as
       those allocated shares for which instructions are given, subject in each
       case to the fiduciary duties of the ESOP Trustees and applicable law. Any
       allocated shares which either abstain on the proposal or are not voted
       will be disregarded in determining the percentage of stock voted for and
       against each proposal by the participants and beneficiaries. The amount
       of Common Stock beneficially owned by directors who serve as Trustees of
       the ESOP and by all directors and executive officers as a group does not
       include the unallocated shares held by the Trust.

(3)    Based upon a Schedule 13G filed on February 10, 1998, by First Union
       Corporation. First Union Corporation filed its ownership interests
       pursuant to Rule 13d-1(b)(ii)(G). The relevant subsidiaries are Evergreen
       Asset Management Group (IA) and Lieber and Company (IA). Evergreen Asset
       Management Group and Lieber and Company are investment advisors for
       mutual funds and other clients; the securities reported by these
       subsidiaries are beneficially owned by such mutual funds or other
       clients.

(4)    Includes in the case of all directors and officers of the Company as a
       group, (i) exercisable options to purchase 23,094 shares pursuant to the
       Company's 1994 Stock Incentive Plan, 1994 Directors' Stock Option Plan,
       and 1996 Stock Option Plan; (ii) 18,480 shares of Common Stock which were
       awarded to certain officers of the Company pursuant to the Company's 1994
       Management Recognition Plan ("MRP"), and; the Company's 1996 MRP; and
       (iii) 17,522 shares of Common Stock allocated to the account of the
       officers in the Company's Employee Stock Ownership Plan (the "ESOP").


                  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 SEC 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, 1998, the


<PAGE>   8


                                        5

Company's officers and directors complied in all respects with the reporting
requirements promulgated under Section 16(a) of the 1934 Act.

                INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR

                       AND DIRECTORS WHOSE TERMS CONTINUE

ELECTION OF DIRECTORS

       The Bylaws of the Company provide that the Board of Directors shall be
divided into three classes which are as equal in number as possible, and that
the members of each class of directors are to be elected for a term of three
years and until their successors are elected and qualified.

       At the Annual Meeting, stockholders of the Company will be asked to elect
three directors of the Company for a three-year term and until their successors
are elected and qualified. The nominees for election as directors were selected
by the Nominating Committee of the Board of Directors and, each nominee
currently serves as a director of the Company. There are no arrangements or
understandings between the persons named and any other person pursuant to which
such person was selected as a nominee for election as a director at the Annual
Meeting. No director or nominee for director is related to any other director or
executive officer of the Company by blood, marriage or adoption, other than that
W.G. Brown and Dr. Joe Tollett are cousins and that Robert F. Brown is the son
of W.G. Brown and the nephew of Dr. Joe Tollett.

       If any person named as nominee should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will nominate and vote
for any replacement nominee or nominees recommended by the Board of Directors of
the Company. At this time, the Board of Directors knows of no reason why any of
the nominees may not be able to serve as a director if elected.

       The following tables present information concerning each nominee for
director and each director whose term continues and reflects his tenure as a
director of the Company (including service as a director of Jacksonville Savings
Bank ("Jacksonville" or the "Bank")), his principal occupation during the past
five years as well as the number of shares of Common Stock beneficially owned by
each such person as of the Voting Record Date. Except for Jerry Hammons, each
nominee and each director has been a director of the Company since its formation
in 1996.


<PAGE>   9


                                        6

                    NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM

<TABLE>
<CAPTION>
                                                                                             Common Stock
                                                                                        Beneficially Owned as of
                                                                                          December 11, 1998(1)
                                                                                       ----------------------------
                                         Position with the Bank and
                                            Principal Occupation         Director
    Name                   Age           During the Past Five Years        Since        No.                 %

- -------------------------------------------------------------------------------------------------------------------
<S>                        <C>                                              <C>        <C>                <C>
Charles Broadway           65             Director, Chief Executive         1981       53,751(1)          2.27%
                                          Officer of the Company
                                          (since 1983 of the Bank)
                                          President of the Company
                                          and of the Bank until July
                                          1, 1996.  Mr. Broadway
                                          retired as Chief Executive
                                          Officer of the Company and
                                          the Bank in December of
                                          1996

W. G. Brown                82             Chairman of the Board and         1953       72,638(2)          3.07%
                                          Director; Owner of Brown
                                          Lumber Industries,
                                          Jacksonville, Texas

Jerry Hammons              55             Senior Vice President of             -       24,329(3)          1.03%
                                          Jacksonville Savings Bank
                                          since June 1996, Director of
                                          Jacksonville Savings Bank
                                          since January 1998, and
                                          First Vice President of
                                          Jacksonville Savings Bank
                                          since October 1, 1993

</TABLE>

<PAGE>   10


                                        7

                   THE BOARD OF DIRECTORS RECOMMENDS THAT THE

                        NOMINEES BE ELECTED AS DIRECTORS

                      DIRECTORS WITH TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>

                                                                                              Common Stock
                                                                                         Beneficially Owned as of
                                                                                           December 11, 1998(1)
                                                                                       ----------------------------
                                         Position with the Bank and
                                          Principal Occupation           Director
    Name                   Age           During the Past Five Years      Since         No.                 %

- -------------------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>                            <C>           <C>                <C>
Jerry M. Chancellor        57             Director, Chief Executive      1984          42,778(4)          1.81%
                                          Officer of the Company and
                                          the Bank since December
                                          1996.  Executive Vice
                                          President (from 1983 until
                                          1996) of the Bank;
                                          President of the Company
                                          and the Bank since July,
                                          1996.

Bill W. Taylor             58             Director and Senior Vice       1993          49,352(5)          2.08%
                                          President (since 1984) of
                                          the Bank, and Executive
                                          Vice President of the
                                          Company and the Bank
                                          since July, 1996.

Dr. Joe Tollett            69             Director; Retired              1973          35,878(6)          1.52%
                                          pediatrician

</TABLE>

                      DIRECTORS WITH TERMS EXPIRING IN 2001

<TABLE>
<CAPTION>
                                                                                              Common Stock
                                                                                         Beneficially Owned as of
                                                                                           December 11, 1998(1)
                                                                                       ----------------------------
                                           Position with the Bank and
                                            Principal Occupation         Director
    Name                   Age            During the Past Five Years     Since          No.                %

- -------------------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>                            <C>           <C>                <C>
Ray W. Beall               69             Director, Retired, formerly    1966          18,921(7)          0.80%
                                          senior executive for Beall's
                                          Department Store
                                                          
Robert F. Brown            50             Chief Operating Officer,       1995          19,962(8)          0.84%
                                          Brown Lumber Industries,
                                          Jacksonville, Texas, since
                                          1994; partner of Shapiro-
                                          Brown, Dallas, Texas, a
                                          management company for
                                          multi-family properties
</TABLE>

- ---------------------


<PAGE>   11


                                        8

(1)    Includes 15,947 shares held jointly with Mr. Broadway's wife, 22,766
       shares which may be acquired upon the exercise of stock options,
       1,511 shares of restricted stock granted pursuant to the Company's
       management recognition plans, 4,739 shares allocated to his account in
       the ESOP, 1,511 shares of restricted stock granted pursuant to the
       Company's management recognition plans which vested on October 22, 1998,
       and 3,777 shares which may be acquired upon the exercise of stock options
       that vested on October 22, 1998.

(2)    Includes 282 shares held as custodian for Mr. Brown's children, 35,446
       shares held by a company which Mr. Brown owns, 24,886 shares held in a
       family trust, 9,393 shares which may be acquired upon the exercise of
       stock options, 648 shares of restricted stock granted pursuant to the
       Company's management recognition plan, 647 shares of restricted stock
       granted pursuant to the Company's management recognition plan that vested
       on October 22, 1998 and 1,618 shares which may be acquired upon the
       exercise of stock options that vested on October 22, 1998

(3)    Includes 2,834 shares held jointly with his wife, 1,200 shares held by
       his wife, 6,819 shares which may be acquired upon the exercise of
       outstanding stock options, 1,100 shares of restricted stock granted
       pursuant to the Company's management recognition plans, 2,750 shares
       which may be acquired upon the exercised stock options that vested on
       October 22, 1998, and 3,607 shares allocated to his account in the ESOP.

(4)    Includes 15,360 shares which may be acquired upon the exercise of
       outstanding stock options, 2,404 shares of restricted stock granted
       pursuant to the Company's management recognition plan, 2,404 shares of
       restricted stock granted pursuant to the Company's management recognition
       plans that vested on October 22, 1998 and 6,010 shares which may be
       acquired upon the exercise of stock options that vested on October 22,
       1998, and 4,945 shares allocated to his account in the ESOP.

(5)    Includes 808 shares held jointly with Mr. Taylor's children, 383 shares
       held jointly with his wife, 18,021 shares which may be acquired upon the
       exercise of outstanding stock options, 2,282 shares of restricted stock
       granted pursuant to the Company's management recognition plans, 2,282
       shares of restricted stock granted pursuant to the Company's management
       recognition plans that vested on October 22, 1998 and 5,703 shares which
       may be acquired upon the exercise of stock options that vested on October
       22, 1998, and 4,231 shares allocated to his account in the ESOP.

(6)    Includes 9,393 shares which may be acquired upon the exercise of stock
       options, 648 shares of restricted stock granted pursuant to the Company's
       management recognition plans, 647 shares of restricted stock granted
       pursuant to the Company's management recognition plans that vested on
       October 22, 1998 and 1,618 shares which may be acquired upon the exercise
       of stock options that vested on October 22, 1998, 9,030 shares held in
       trust with his wife, 3,804 shares held by a limited partnership, and
       3,630 shares owned by his wife.

(7)    Includes 7,102 shares which may be acquired upon the exercise of stock
       options, and 648 shares of restricted stock granted pursuant to the
       Company's management recognition plans, 648 shares of restricted stock
       granted pursuant to the Company's management recognition plans that
       vested on October 22, 1998 and 1,618 shares which may be acquired upon
       the exercise of stock options that vested on October 22, 1998.


<PAGE>   12


                                        9

(8)    Includes 7,659 shares held jointly with his wife and 10,000 shares held
       in trust for his children.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

       Regular meetings of the Board of Directors of the Company are held once a
month and special meetings of the Board of Directors of the Company are held
from time-to-time as needed. There were 12 meetings of the Board of Directors of
the Company held during fiscal 1998. No director attended fewer than 75% of the
total number of meetings of the Board of Directors of the Company held during
fiscal 1998 and the total number of meetings held by all committees of the Board
on which the director served during such year.

       The Company's business is primarily conducted through Jacksonville, a
Texas-chartered savings bank and a wholly owned subsidiary of the Company. The
Board of Directors of Jacksonville has established various committees, including
Audit, Investment, REO Disposition and Salary committees.

       The Audit Committee reviews and makes recommendations regarding
Jacksonville's annual audit and meets on an as needed basis. The Audit Committee
currently consists of Messrs. Brown and Taylor. The Audit Committee met once in
fiscal 1998.

       The REO Disposition Committee reviews proposed real estate owned ("REO")
transactions and marketing strategies for approval and approves the disposition
of particular parcels of real estate owned. The REO Disposition Committee
currently consists of each member of the Board of Directors. The REO Disposition
Committee meets quarterly and met four times in fiscal 1998.

       The Compensation Committee reviews and makes recommendations to the Board
on employee salaries. The Compensation Committee currently consists of Ray
Beall, Dr. Joe Tollett, Jerry Chancellor and Bill W. Taylor. The Compensation
Committee meets on an as needed basis and met once in fiscal 1998.

       Jacksonville's Board of Directors generally reviews and makes
recommendations with respect to investment policies and practices. In the
absence of such Board action, the Investment Committee, currently consisting of
Messrs. Chancellor and Taylor and Dr. Tollett, has the authority to act in such
capacity. In fiscal 1998, there were 19 meetings of the Investment Committee.

       The entire board of directors serves as the Nominating Committee and each
year nominates individuals for election as directors of the Company. The
Nominating Committee met once time during fiscal 1998. The Nominating Committee
will consider nominations made by shareholders in conformance with the Company's
Articles of Incorporation.

DIRECTORS' COMPENSATION

       During the fiscal year ended September 30, 1998, each member of the Board
of Directors was paid $700 for each Board meeting attended of the Bank attended,
and beginning January 1, 1998, $100 for each Company meeting attended. Committee
members otherwise do not receive any fees for committee meetings.


<PAGE>   13


                                       10

       Outside directors received $250 per loan committee meeting and, after
January 1, 1998, $275 per meeting. All directors receive an annual director's
fee of $2,000 as director of Jacksonville Savings and Loan Corporation. The
wholly owned subsidiary of Jacksonville Savings Bank.

       The Company also maintains the 1996 Stock Option Plan pursuant to which
non-employee directors of the Company (other than Robert F. Brown) were granted
options to purchase an aggregate of 24,276 shares of Common Stock at an exercise
price of $12.625 per share. In addition, the Company maintains the 1996 MRP
pursuant to which non-employee directors of the Company (other than Robert F.
Brown) were granted an aggregate of 9,708 shares of restricted stock and Messrs.
Broadway, Chancellor and Taylor were granted 7,554, 12,020, and 11,407 shares of
restricted stock, respectively.

                             EXECUTIVE COMPENSATION

SUMMARY

       The following table sets forth a summary of certain information
concerning the compensation awarded to or paid by Jacksonville for services
rendered in all capacities during the last three fiscal years to the President
and Chief Executive Officer of Jacksonville and any other executive officer of
Jacksonville who received salary and bonuses aggregating more than $100,000
during the last fiscal year.


<PAGE>   14


                                       11

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                     ANNUAL COMPENSATION                LONG TERM COMPENSATION
                                                     -------------------                ----------------------
                                                                                                                          ALL OTHER
                                                                                             AWARDS          PAYOUTS    COMPENSATION
                                                                                             ------          -------    ------------
NAME AND PRINCIPAL         FISCAL                             OTHER ANNUAL
     POSITION               YEAR     SALARY(1)      BONUS    COMPENSATION(2)
- ------------------         ------    ---------      -----    ---------------                 RESTRICTED
                                                                                OPTIONS     STOCK AWARDS       LTIP
                                                                                     (3)             (4)     PAYOUTS
                                                                                --------    ------------     -------
<S>                         <C>      <C>          <C>              <C>          <C>            <C>            <C>        <C>
Jerry M. Chancellor(5)      1998     $115,406     $26,089           -                --              --        $--        $33,945(6)
Chief Executive             1997      109,269      16,408           -            30,050        $152,752          -         65,200
Officer                     1996       97,244      16,408           -                --              --          -         29,340

Bill W. Taylor              1998      $96,050     $21,241           -                --              --        $--        $37,194(7)
Executive Vice              1997       89,221      13,159           -            28,518        $144,013          -         59,393
President and Chief         1996       80,996      13,159           -                 -                         --         30,272
Financial Officer
Jerry Hammons               1998      $84,116     $18,249           -             6,819         $21,038        $--        $32,486(8)
Senior Vice President
</TABLE>


(1)    Includes directors fees and fees for services as an officer and director
       of JS&L Corp., a subsidiary of Jacksonville.

(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 Jacksonville of providing such benefits to the named
       executive officer during the year ended September 30, 1998 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 Company's 1996 Stock Option
       Plan during the years ended September 30, 1998. Options granted under the
       1996 Stock Option Plan vest over a five year period at the rate of 20%
       per year, beginning on October 22, 1997.

(4)    Represents the value of shares granted under the 1996 Management
       Recognition Plan and Trust. Shares under the 1996 Management Recognition
       Plan and Trust will vest over a five-year period at the rate of 20% per
       year, and commenced on October 22, 1997. Dollar amount is equal to number
       of shares awarded times the market price of the shares at October 22,
       1997 of $19.125.

(5)    Mr. Chancellor became president of the Company and Jacksonville on July
       9, 1996, prior to that date, Mr. Broadway had served as president and
       chief executive officer.

(6)    Includes (i) a premium of $4,602 paid to fund a deferred compensation
       plan, (ii) a matching contribution of $3,905 from Jacksonville pursuant
       to a defined contribution thrift plan and (iii) 1,628 shares allocated to
       Mr. Chancellor's account in the Company's ESOP which shares had a market
       value of $25,438 at September 25, 1998, based on a share price of
       $15.625.



<PAGE>   15


                                       12

(7)    Includes (i) a premium of $10,092 paid to fund a deferred compensation
       plan, (ii) a matching contribution of $3,180 from Jacksonville pursuant
       to a defined contribution thrift plan and (iii) 1,531 shares allocated to
       Mr. Taylor's account in the Company's ESOP which shares had a market
       value of $23,922 at September 25, 1998, based on a share price of
       $15.625.

(8)    Includes (i) a premium of $9,614 paid to fund a deferred compensation
       plan, (ii) a matching contribution of $2,731 from Jacksonville pursuant
       to a defined contribution thrift plan and (iii) 1,289 shares allocated to
       Mr. Hammons' account in the Company's ESOP which shares had a market
       value of $20,141 at September 25, 1998, based on a share price of
       $15.625.

       The following table sets forth certain information concerning exercises
of stock options granted pursuant to the Company's stock option plans by the
named executive officers during the year ended September 30, 1998 and options
held at September 30, 1998.

     AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END VALUES
     -------------------------------------------------------------------

<TABLE>

                    Shares Acquired
                           on                               Number of Exercisable           Value of Exercisable Options
Name                    Exercise      Value Realized          Options at Year End            at September 30, 1998(1)
- ----                ---------------   --------------        ---------------------           ----------------------------
                                                                                Not                              Not
                                                        Exercisable         Exercisable     Exercisable       Exercisable
                                                        -----------         -----------     -----------       -----------
<S>                        <C>              <C>             <C>                 <C>         <C>                <C>     
Jerry M. Chancellor        --               --               15,359              24,040      $239,984           $375,620
Bill W. Taylor             -                 -               18,021              22,815      $281,578           $356,484
Jerry Hammons              -                 -                6,819              11,000      $106,546           $171,875
</TABLE>
(1)    Based on a per share market price of $15.625 as of September 30, 1998 as
       adjusted for the exchange of Jacksonville common stock for Company Common
       Stock in the Conversion and Reorganization, using exercise prices of
       $7.05 and $12.625. Options listed as exercisable include those that
       became exercisable on October 22, 1997. Options granted during fiscal
       year 1998 vest over five years at the rate of 20% per year.

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,


<PAGE>   16


                                       13

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 Company 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 includible 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 would have a significant anti-takeover effect.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

       The Compensation Committee ("Committee") of the Jacksonville's Board of
Directors, which is comprised of Messrs. Chancellor, Taylor, Beall and Tollett
reviews compensation and benefits and recommends to the Board of Directors
adjustments in such compensation. Neither Mr. Chancellor nor Mr. Taylor
participated or voted on his individual compensation. The report of the
Committee with respect to compensation for the Chief Executive Officer and all
other executive officers for 1998 is set forth below.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

       The charter of the Committee is to assist the Company in carrying out its
responsibility to evaluate, initiate and oversee executive compensation
arrangements and shareholder-approved benefit plans. The overall goals of the
Committee are to assist the Company in attracting and retaining qualified
management and rewarding these individuals for performance goals that are
achieved.

       The Compensation Committee annually evaluates the salary and bonuses paid
to the three executive officers of Jacksonville. Compensation reports of
institutions of comparable size and complexity of operations are reviewed in
setting compensation levels. The overall goal of the Committee is to assist the
Company in attracting and


<PAGE>   17


                                       14

retaining qualified management. We feel the base compensation paid to the
executive officers is commensurate within the financial institution marketplace.

       Incentive bonuses were paid in November of 1998 to all employees of
Jacksonville for financial goals achieved in 1998. All three executive officers
received bonuses in amounts of $26,089, $21,241, and $18,249 for Messrs.
Chancellor, Taylor and Hammons, respectively.

       Following a review and approval by the Committee, all issues pertaining
to executive compensation were submitted to the full Board of Directors for
their approval. Neither Mr. Chancellor nor Mr. Taylor participated or voted on
their individual compensation packages.

                               Jerry M. Chancellor
                                 Bill W. Taylor
                                  Ray W. Beall
                                Dr. Joe Tollett


<PAGE>   18


                                       15

PERFORMANCE GRAPH

       The following graph compares the yearly cumulative total return on the
Common Stock for the period beginning March 29, 1996, the date the Company
converted to a stock company and its stock began trading with (i) the yearly
cumulative total return on the stocks included in the S&P 500 Total Return Index
and (ii) the yearly cumulative total return on the stocks included in the SNL
Securities All Thrifts Index. All of these cumulative returns are computed
assuming the reinvestment of dividends at the frequency with which dividends
were paid during the applicable year.

                                    [GRAPHIC]
<TABLE>
<CAPTION>
                                                           PERIOD ENDING
                                 ---------------------------------------------------------------------
INDEX                                   4/2/96    9/30/96    3/31/97    9/30/97    3/31/98    9/30/98
- ------------------------------------------------------------------------------------------------------
<S>                                     <C>       <C>        <C>        <C>        <C>        <C>
Jacksonville Bancorp, Inc.              100.00     130.24     154.56     182.05     217.63     169.36
S&P 500                                 100.00     106.08     117.92     148.88     174.53     162.37
SNL Thrift Index                        100.00     112.53     138.88     195.54     232.35     175.31
</TABLE>
<PAGE>   19


                                       16

INDEBTEDNESS OF MANAGEMENT

       Jacksonville, 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.

                RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

       The Board of Directors of the Company has appointed Henry & Peters, P.C.
as independent auditors for the Company for the year ending September 30, 1999,
and further directed that the selection of auditors be submitted for
ratification by the stockholders at the Annual Meeting. The Company has been
advised by Henry & Peters, P.C. that neither the firm nor any of its associates
has any relationship with the Company other than the usual relationship that
exists between independent public accountants and clients. Henry & Peters, P.C.
will have representatives at the Annual Meeting who will have an opportunity to
make a statement, if they so desire, and will be available to respond to
appropriate questions.

       THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF HENRY & PETERS, P.C., AS INDEPENDENT AUDITORS FOR THE YEAR
ENDING SEPTEMBER 30, 1999.

                                 OTHER MATTERS

       Management is not aware of any business to come before the Annual Meeting
other than those matters described in this Proxy Statement. However, if any
other matters should properly come before the Annual 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 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.

                              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 be received at the office of the Company no
later than October 27, 1999. 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 Annual
Meeting of Stockholders. It is urged that any such proposals be sent by
certified mail, return receipt requested.


<PAGE>   20


                                       17

                     ANNUAL REPORTS AND FINANCIAL STATEMENTS

       Stockholders of the Company as of the record date for the Annual Meeting
are being forwarded a copy of the Company's Annual Report to Stockholders for
the year ended September 30, 1998 ("Annual Report"). Included in the Annual
Report are the financial statements of the Company as of September 30, 1998 and
1997 and for each of the years in the three-year period ended September 30,
1998, prepared in accordance with generally accepted accounting principles, and
the related report of the Company's independent public accountants. The Annual
Report is not a part of this Proxy Statement.

       UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
       STOCKHOLDER WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FILED
       WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE EXCHANGE ACT FOR
       THE YEAR ENDED SEPTEMBER 30, 1998. UPON WRITTEN REQUEST, THE COMPANY WILL
       FURNISH TO ANY SUCH STOCKHOLDER A COPY OF THE EXHIBITS TO THE ANNUAL
       REPORT ON FORM 10-K. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO
       JACKSONVILLE BANCORP, INC., COMMERCE AND NECHES STREETS, JACKSONVILLE,
       TEXAS 75766, ATTENTION: SECRETARY.

       THE ANNUAL REPORT ON FORM 10-K IS NOT A PART OF THIS PROXY STATEMENT.




<PAGE>   21
                                 REVOCABLE PROXY
                           JACKSONVILLE BANCORP, INC.

       THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
       JACKSONVILLE BANCORP, INC. FOR USE ONLY AT THE ANNUAL MEETING OF
       STOCKHOLDERS TO BE HELD ON JANUARY 26, 1999 AND AT ANY ADJOURNMENT
       THEREOF.

       The undersigned hereby appoints the Board of Directors of the Company, or
any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Norman Activity Center, located at 526 East Commerce
Street, Jacksonville, Texas, on January 26, 1999, at 10:00 a.m., Central Time,
or at any adjournment thereof, with all the powers that the undersigned would
possess if personally present, as specified on the reverse side.

       The Board of Directors recommends that you vote FOR the Board of
Directors' nominees listed on the reverse side and FOR Proposal 2. You are
encouraged to specify your choices by marking the appropriate boxes on the
reverse side, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. This proxy may not be voted for
any person who is not a nominee of the Board of Directors of the Company.
PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED.

       Shares of common stock of the Company will be voted as specified. IF NO
SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS, FOR PROPOSAL 2. AND OTHERWISE AT
THE DISCRETION OF THE PROXIES.

                (CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)

FOLD AND DETACH HERE


<PAGE>   22


                   Please mark
                   your vote as     [X]
                   indicated in
                   this example
<TABLE>
<CAPTION>

1.  Election of Directors            Nominees for three-year term: Charles Broadway, W. G. Brown and Jerry Hammons


<S>                                  <C>                                      <C>
FOR all nominees                     WITHHOLD                                 To withhold authority to vote for any individual 
listed to the right (except          authority to vote for all                nominee, write the name of the nominee in the space 
as marked to the contrary)           nominees listed to the                   provided below:
                                     right                                    ______________________________________________________
        [  ]                                  [  ]

2. Proposal to ratify the appointment of Henry & Peters, P.C. as the          In their discretion, the proxies are authorized to  
Company's Independent auditors for the fiscal year ending September 30,       vote person as a director if the nominee is unable  
1999.                                                                         to serve or for good will not serve, matters        
                                                                              incident to the conduct of the meeting, and upon    
                                                                              such other matters as may properly come before the  
                                                                              meeting.                                             
                                                                                                                                  
             FOR                    AGAINST               ABSTAIN             The undersigned hereby acknowledges receipt of the  
                                                                              Notice of Annual Meeting of Stockholders of         
            [  ]                     [  ]                   [  ]              Jacksonville Bancorp, Inc called for January 26,    
                                                                              1999, a Proxy Statement for the Annual Meeting and  
                                                                              the Annual Report to Stockholders.                   
                                                                                                                                  
                                                                              Dated:                            , 1999            
                                                                                    ---------------------------                   
                                                                              ----------------------------------------            
                                                                              ----------------------------------------            
                                                                              Signature(s)                                        
                                                                              PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS  
                                                                              PROXY. ONLY ONE SIGNATURE IS REQUIRED IN THE CASE OF 
                                                                              A JOINT ACCOUNT. WHEN SIGNING IN A REPRESENTATIVE    
                                                                              CAPACITY, PLEASE GIVE TITLE.                         

PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS
PROXY CARD USING THE ENCLOSED ENVELOPE.
</TABLE>





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