<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. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<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>
