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As filed with the Securities and Exchange Commission on September 30, 1998
Registration File No.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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JACKSONVILLE BANCORP, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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Florida 6711 59-
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(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
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13245 Atlantic Boulevard Suite #5,
Jacksonville, Florida 32225
(904) 220-3001
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(Address, including zip code, and telephone number, including
area code, of Registrant principal executive offices)
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Victor M. George
President, Chief Executive Officer
13245 Atlantic Boulevard, Suite #5
Jacksonville, Florida 32225
(904) 220-3001
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COPIES REQUESTED TO:
A. George Igler, Esquire
Igler & Dougherty, P.A.
1501 Park Avenue East
Tallahassee, Florida 32301
(904) 878-2411
(904) 878-1230 (facsimile)
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to rule 415 under the Securities Act of
1933 check the following box. [X]
If this Form is filed to register additional securities for an Offering pursuant
to rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of Proposed Proposed
each class Amount maximum maximum
of securities to be Offering aggregate Amount of
to be registered registered price per share Offering Price (1) registration fee
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Common Stock $.01 par value 1,500,000 $10.00 $15,000,000 $4,425
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(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the proposed maximum offering price per unit.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
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UP TO 1,500,000 SHARES
COMMON STOCK
MINIMUM: 750,000 SHARES -- MAXIMUM: 1,500,000 SHARES
[LOGO] JACKSONVILLE BANCORP, INC.
A PROPOSED BANK HOLDING COMPANY
FOR
THE JACKSONVILLE BANK
JACKSONVILLE, FLORIDA
A PROPOSED STATE-CHARTERED BANK
JACKSONVILLE BANCORP, INC., a Florida corporation ("Company"), hereby
offers for sale a minimum of 750,000 shares and a maximum of 1,500,000 shares at
a price of $10.00 per share (the "Offering").
During the Offering Period, which is defined as the 45-day period
following the effective date ("Effective Date") of the Registration Statement
filed under the Securities Act of 1933 as amended ("33 Act"), and any extension
by the Company in its sole discretion not to exceed 135 days, 1,500,000 shares
of common stock, par value $0.01 ("Common Stock"), will be offered at a price of
$10.00 per share. The minimum number of shares that may be purchased is 250
($2,500). Certificates for Common Stock will be issued in connection with the
Offering. The minimum number of shares offered is 750,000 and the Organizers
intend to purchase, in the aggregate, at least 171,500 shares (22.9% of the
total minimum Offering). See "TERMS OF THE OFFERING -- Purchases by Organizers
of the Company."
Actual sales of Common Stock to the public are expected to be made
beginning on or about , 1998, and end on or about ,
1998. The Offering of shares will be made on a continuous basis under Securities
and Exchange Commission ("SEC" or "Commission") Rule 415. The Company has
engaged Keefe, Bruyette & Woods, Inc. ("KBW") and Robert W. Baird & Co.
("Baird"), both registered as broker-dealer, to consult with and advise the
Company with respect to the Offering. Both KBW and Baird have agreed to use
their best efforts to solicit subscriptions and purchase orders for shares of
Common Stock in the Offering. Neither KBW nor Baird shall have any obligation
to take or purchase any shares of Common Stock in the Offering. All
subscription funds tendered during the Offering Period will be deposited in an
interest-bearing escrow account with the Independent Banker's Bank of Florida
("Escrow Agent"). The Offering will be terminated and all subscription funds,
together with any interest earned thereon, will be promptly returned if all
required conditional regulatory approvals have not been obtained or the minimum
number of shares have not been subscribed to by the end of the Offering Period.
1999 is the latest date on which the subscription funds
might be held in escrow prior to their return in the event the minimum is not
reached or the Company has not satisfied the conditional regulatory approvals.
Subscriptions obtained in the Offering may be accepted or rejected in whole or
in part by the Company for any reason. After a subscription is accepted by the
Company, however, it cannot be withdrawn. The Company reserves the absolute
right to cancel all subscriptions and return all subscription funds, together
with any income realized from the investment of such funds, for any reason
whatsoever, at any time prior to the time that the Company withdraws
subscription funds from the Subscription Escrow Account. See "TERMS OF THE
OFFERING."
ONCE SUBSCRIPTION FUNDS HAVE BEEN RELEASED BY THE ESCROW AGENT AND SHARES
OF THE COMPANY'S COMMON STOCK ARE ISSUED, IN THE EVENT THE OFFERING IS
TERMINATED BECAUSE OF THE COMPANY'S FAILURE TO SATISFY THE CONDITIONAL
REGULATORY APPROVALS, SUBSCRIBERS WILL NOT RECEIVE A FULL REFUND OF THEIR
SUBSCRIPTION PAYMENT. SEE "TERMS OF THE OFFERING -- FAILURE OF BANK TO COMMENCE
OPERATIONS."
The Company is a "development stage company" with no prior operating
history. See "RISK FACTORS -- Start-up Enterprise -- Lack of Operating History."
Prior to this Offering, there has been no public market for the Common Stock.
KBW and Baird have advised the Company that they anticipate making a market for
the Common Stock following completion of the offering. The Company expects that
quotations for its Common Stock will be reported on the "Over-the-Counter
Bulletin Board" under the symbol "JXBC". There can be no assurance that an
active trading market for such stock will develop since the Company presently
does not intend to seek to list the Common Stock on a national securities
exchange or to qualify such Common Stock for quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ").
The date of this Prospectus is , 1998.
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(Continuation of front cover)
INVESTMENT IN THE COMPANY INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD
NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE THEIR
ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF
THOSE RISKS THAT MANAGEMENT BELIEVES PRESENT THE SUBSTANTIAL RISKS TO AN
INVESTOR IN THIS OFFERING.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SEC PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS OFFERING IS BEING MADE ON A 750,000 SHARE MINIMUM BASIS.
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PRICE UNDERWRITING
TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) THE COMPANY(3)
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Per Share Minimum................................ $ 10.00 $ .67 $ 9.33
Per Share Maximum................................ $ 10.00 .77 $ 9.23
Per Share Minimum................................ $ 7,500,000.00 $ 500,000.00 $ 7,000,000.00
August 28, 1998 Maximum Offering................. $15,000,000.00 $1,150,000.00 $13,850,000.00
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(1) Prior to this Offering, there has been no established market for the Shares
of the Company's Common Stock. The Offering price was arbitrarily determined
by the Board of Directors of the Company and does not bear any relationship
to the Company's assets, book value, net worth or any other recognized
criteria of value. In the event a market should develop for the Common Stock
after completion of this Offering, there can be no assurance that the market
price will equal or exceed the Offering price herein.
(2) Consists of estimated expenses to be incurred by KBW and Baird in connection
with the Offering, estimated at $500,000 if the minimum amount of shares is
sold, and $1,150,000 if the maximum amount of shares is sold, including
commissions. No underwriter's commission will be paid for sales to officers,
directors, and family members of officers and directors of both the Company
and the Bank. A 5.5% underwriter's commission will be paid for sales to the
public. For the purposes of the above table, the amount is based upon the
number of shares committed to be purchased by the Organizers ($1,715,000 or
171,500 shares) for which no commission is being charged. Excluded from the
above amount are the organizational expenses of the Company, which are
estimated to be approximately $400,000. See "USE OF PROCEEDS" for the
assumptions used to arrive at these estimates.
(3) These securities are offered on a best-efforts, 750,000 shares minimum
basis. If payment in cash for 750,000 shares is not received prior to the
end of the Offering Period, the Offering will terminate and all subscription
funds, together with any interest earned thereon, will be promptly returned
to subscribers. All purchases of shares by the Company's Organizers will be
subject to affiliate resale limitations under the 33 Act and Organizer's
purchases as described herein will be made on the same terms, as those made
by other investors. The Organizers of the Company have represented to the
Company that all purchases of Common Stock will be made for investment
purposes only and not with a view to resell such shares See "RISK FACTORS,"
"TERMS OF THE OFFERING," and "ORGANIZERS AND PRINCIPAL SHAREHOLDERS."
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[FLORIDA/JACKSONVILLE MAP]
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AVAILABLE INFORMATION
Prior to the Offering, the Company has not been required to file reports
under the Securities Exchange Act of 1934 ("Exchange Act").
The Company has filed electronically with the SEC through its Electronic
Data Gathering Analysis and Retrieval ("EDGAR") system, a Registration Statement
on Form SB-1 (together will all exhibits and schedules thereto, the
"Registration Statement") under the Securities Act of 1933, as amended with
respect to the registration of the shares offered by this Prospectus. This
Prospectus does not contain all of the information set forth in such
Registration Statement and the exhibits thereto, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information pertaining to the shares offered by this Prospectus and
related matters, reference is made to the Registration Statement, including the
exhibits filed as a part thereof. Each statement in this Prospectus referring to
a document filed as an exhibit to such Registration Statement is qualified by
reference to the exhibit for a complete statement of its terms and conditions.
The Registration Statement filed electronically with EDGAR by the Company
can be inspected and copied at the public reference facilities maintained by the
Commission at its Public Reference Section, 450 Fifth Street, N.W., Washington,
D.C. 20549. The Commission maintains a web site that contains registration
statements, reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
Company's complete Registration Statement is available for review on this Web
Site. The address of the Web Site is http://www.sec.gov. Copies of exhibits may
also be obtained by written request addressed to: Victor M. George, President
and Chief Executive Officer, Jacksonville Bancorp, Inc., 13245 Atlantic
Boulevard, Suite 5, Jacksonville, Florida 32225, telephone number (904)
220-3001.
REPORTS TO SECURITY HOLDERS
The Company intends to furnish annual reports to its shareholders which
will contain audited financial statements and quarterly reports which contain
unaudited financial statements. In addition, the Company will be required, under
section 15(d) of the Exchange Act, to file annual and quarterly reports with the
Commission. Copies of such reports will be available to the Company's
shareholders.
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PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus and is qualified in its entirety by the more detailed information and
financial statements appearing elsewhere in this Prospectus. Prospective
investors are urged to read the entire Prospectus carefully.
RISK FACTORS
The securities offered hereby may be deemed to be speculative and involve
certain risks such as:
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o Start-up Enterprise o Anti-takeover Provision in Company's
o Dependency on Key Management Articles of Incorporation
o Failure to Receive Regulatory Approvals o No Established Market for Shares
o Financial Position of the Company and Expected o Arbitrary Determination of Offering Price
Lack of Initial Profitability o Absence of Preemptive Rights
o Highly Competitive Banking Market o Future Capital Needs of the Bank
o Unpredictable Economic Conditions o Maximum Lending Limits
o Governmental Regulation o Need for Technological Change; Year 2000
o No Plans to Pay Dividends in the Compliance
Foreseeable Future
o Intended Purchases by Organizers
o Failure of the Bank to Commence Operations;
Return of Subscription Funds
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For these and other reasons, the purchase of the Common Stock is highly
speculative and involves significant investment risks. A prospective investor
should carefully consider the matters set forth under "RISK FACTORS" and should
be prepared to lose his or her entire investment.
THE COMPANY
Jacksonville Bancorp, Inc. was organized under the laws of the State of
Florida on October 24, 1997, for the purpose of operating as a bank holding
company pursuant to the Federal Bank Holding Company Act of 1956, as amended
("BHC Act"). In order to fund the organizational and preopening expenses of the
proposed bank, The Jacksonville Bank ("Bank") estimated to be approximately
$400,000. One Organizer, R.C. Mills, has loaned the Company $150,000, which the
other ten Organizers have, on a pro-rata basis, guaranteed to pay if the minimum
Offering is not raised. The loan is at 8.5% interest and will be repaid from the
proceeds of the Offering. Through June 30, 1998, the Company has expended
$226,000 for such expenses. See "TERMS OF THE OFFERING -- Purchases by
Organizers of the Company." The Company intends to use the minimum net proceeds
of this Offering to purchase 100% of the common stock to be issued by the Bank,
to repay organizational expenses and for other general corporate purposes.
Neither the Company nor the Bank has commenced business operations, and neither
will do so until the Offering Period is completed and the requisite approvals of
the Florida Department of Banking and Finance ("Department"), the Federal
Deposit Insurance Corporation ("FDIC") and the Board of Governors of the Federal
Reserve System ("Federal Reserve") are obtained. The main office of the Company
and the Bank will be located in Jacksonville, Duval County, Florida. The
Company's mailing address during the organizational period is 13245 Atlantic
Boulevard, Suite 5, Jacksonville, Florida 32225 and the telephone number is
(904) 220-3001. See "THE COMPANY."
THE BANK
It is anticipated that the Bank will commence business operations sometime
during the fourth quarter of 1998, or as soon thereafter as practicable. The
Bank will engage in a general commercial and retail banking business with
primary emphasis upon high quality service to meet the financial needs of the
individuals and businesses residing and located in and around Jacksonville,
Florida. As part of its regular business operations, the Bank will offer a full
compliment of loans, including commercial, consumer/installment and real estate
loans. The Organizers expect that commercial loans will account for
approximately one-half of the Bank's estimated total loan portfolio. Commercial
loans are loans made to individual, partnership or corporate borrowers for a
variety of business purposes. Because of the nature of these types of loans,
there exists a higher risk of loss in this category of loan. To the extent that
borrowers fail to repay their loans, such failure may have a material adverse
effect on the Bank's and the Company's earnings and overall financial condition,
as well as, the value of the Common Stock. See "BUSINESS OF THE BANK."
4
<PAGE> 7
The Bank will initially open with two full-service bank facilities. The
Bank's main office facility, which is expected to be ready for occupancy on or
about January 29, 1997, is located at 10325 San Jose Boulevard, Jacksonville,
Florida 32257. The main facility was purchased by the Company and has been
leased to the Bank, with the lease starting on January 29, 1998. The Bank's
branch office (currently used as the organizational offices) is located at 13245
Atlantic Boulevard, Suite 5, Jacksonville, Florida 32225. The Company has
entered into a lease agreement with Joandy Road Partnership Corporation, d/b/a
Harbour Village, for the branch facility. See "BUSINESS OF THE COMPANY --
Premises" and "BUSINESS OF THE BANK -- General."
TERMS AND CONDITIONS OF THE OFFERING
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Shares offered ................................ Up to 1,500,000 shares are being offered. A minimum of 750,000
Shares are required to be sold in this Offering. See "TERMS OF
THE OFFERING."
Common Stock
Outstanding After the Offering................. Minimum - 750,000 Shares
Maximum - 1,500,000 Shares
Price.......................................... $10.00 per share.
Use of Proceeds................................ Proceeds of the Offering will be used to purchase
100% of the issued and outstanding capital stock
of the Bank; to provide working capital for the
Bank to commence its business operations
(including officers' and employees' salaries); to
pay expenses in connection with the formation of
the Company, the organization of the Bank, and
this Offering; to pay commissions to KBW and
Baird; and for other corporate purposes of the
Company. Proceeds not used to purchase Bank stock
will be retained by the Company and will be used
as working capital for general corporate purposes
and to pay operating expenses and to fund future
capital requirements of the Bank. See "USE OF
PROCEEDS."
Conditions of the Offering..................... The Offering will expire 45 days from the
Effective Date of Registration unless extended for
up to an additional 135 days by the Company. Funds
received by the Company during the Offering Period
will be deposited with the Escrow Agent. Funds so
deposited may be released to the Company only in
accordance with the terms of the Escrow Agreement
between the Company and the Escrow Agent. The
Offering will be terminated by the Company at the
end of the Offering Period if subscriptions for
750,000 Shares have not been received and
deposited with the Escrow Agent or if all
conditional regulatory approvals have not been
received by the Company and the Bank, or the
Company has canceled the Offering prior to
withdrawing funds from the Subscription Account.
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RISK FACTORS
PROSPECTIVE INVESTORS IN THE COMMON STOCK SHOULD GIVE CAREFUL ATTENTION TO
THE FOLLOWING STATEMENTS RESPECTING CERTAIN RISKS APPLICABLE TO THE OFFERING,
WHICH RISKS INCLUDE BUT ARE NOT LIMITED TO THOSE NOTED BELOW. OTHER FACTORS OF
IMPORTANCE ARE SET OUT ELSEWHERE IN THIS PROSPECTUS.
START-UP ENTERPRISE -- LACK OF OPERATING HISTORY
Neither the Company nor the Bank has commenced business operations. Both
are newly organized entities with no operating history. The business of the
Company and the Bank is therefore subject to the risks associated with new
businesses. In addition, because the Bank has not commenced operations,
investors will not have the information normally associated with investments in
a financial institution with a history of operations. The Company's
profitability will depend primarily on the operations of the Bank. Therefore,
without any operating history there can be no assurance the Company will ever be
profitable.
DEPENDENCY ON KEY MANAGEMENT
Regulatory approval to establish and operate a state-chartered bank is,
among other things, dependent upon the Department's approval of such bank's
proposed chief executive officer. Generally, the chief executive officer of a
start-up financial institution is deemed to be vital to the potential success of
the new institution. The Bank's application for a charter filed with the
Department proposes Victor M. George as the Bank's Chief Executive Officer. In
the event of death, disability, resignation or other event causing the
unavailability of Mr. George, final regulatory approval to commence banking
operations would be delayed until such time as a suitable replacement is
approved by the Department. The Company has obtained a $1,000,000 "key-man" life
insurance policy on Mr. George which is payable to the Bank in the event of his
death.
FAILURE TO RECEIVE REGULATORY APPROVALS
Although the Company and the Bank have applied for all regulatory
approvals required to commence operations, final regulatory approval to commence
banking operations will not be obtained until the Company has expended a portion
of the proceeds of this Offering to employ personnel, rent temporary office
space and pay other pre-opening expenses. The Company is awaiting conditional
approval of the Bank's charter from the Department and FDIC approval of its
application for deposit insurance. Upon receipt of the conditional approval from
the Department, the Company will file an application to become a one-bank
holding company with the Federal Reserve Bank of Atlanta. While management of
the Company is confident that all of the necessary regulatory approvals will be
obtained there can be no assurance that the foregoing approvals will be
obtained. In the event that the Company issues the shares of Common Stock and
final approval to commence banking operations is not granted within 12 months
after receipt of preliminary regulatory approvals, the Company will solicit
shareholder approval for its dissolution and liquidation. In such event, the
Company will promptly return to subscribers all subscription funds and interest
earned thereon, less all expenses incurred by the Company, including the
Offering expenses, the organizational and pre-opening expenses of the Company
and the Bank. In the event of dissolution and liquidation, it is likely that
subscribers will receive only a portion of their initial investment due to the
foregoing expenses. See "TERMS OF THE OFFERING -- Failure of Bank to Commence
Operations."
FINANCIAL POSITION OF THE COMPANY AND EXPECTED LACK OF INITIAL PROFITABILITY
The initial activity of the Company will be to act as the sole shareholder
of the Bank. Thus, the profitability of the Company will be dependent upon the
successful operation of the Bank. Typically, new banks are not profitable in the
first year of operation and sometimes are not profitable for several years. The
Bank will incur significant expenses in establishing itself as a going concern
and there can be no assurance that the Bank will be operated profitably or that
future earnings, if any, will meet the levels of earnings prevailing in the
banking industry. Although there can be no assurance of success, the Organizers
believe the Bank will be operating in a favorable market area and further, the
experience and personal contacts of its Board of Directors and senior
management, will provide the Bank with the ability to successfully implement its
business plan.
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HIGHLY COMPETITIVE BANKING MARKET
The Bank will engage in a general commercial and retail banking business
in Jacksonville, Duval County, Florida. Competition among financial institutions
in the Bank's primary market area is intense. The Bank will compete with other
state banks, consumer finance companies, money market mutual funds, and other
financial institutions which have far greater financial resources than those
available to the Bank. Additionally, the Bank will compete with banks, savings
institutions and credit unions located in nearby markets which solicit business
from the Bank's primary service area. If the Bank is unable to compete for
deposits effectively in its primary service area, such inability would likely
have an adverse effect on the Bank's potential for growth and profitability. See
"BUSINESS OF THE BANK -- Market Area and Competition."
UNPREDICTABLE ECONOMIC CONDITIONS
Commercial banks and other financial institutions are affected by economic
and political conditions, both domestic and international, and by governmental
monetary policies. Conditions such as inflation, recession, unemployment, high
interest rates, short money supply, international disorders and other factors
beyond the control of the Company and the Bank may adversely affect their
profitability. See "BUSINESS OF THE BANK -- Monetary Policies."
GOVERNMENTAL REGULATIONS
The Company and the Bank will operate in a highly regulated environment
and will be subject to supervision by several governmental regulatory agencies,
including the Federal Reserve, the Department, the FDIC and the Commission. The
regulations governing the Company and the Bank are intended to protect
depositors, not shareholders. The Company and the Bank will be vulnerable to
future legislation and government policy, including bank deregulation and
interstate expansion, which could adversely affect the banking industry as a
whole, including the operations of the Company and the Bank. See "SUPERVISION
AND REGULATION."
NO PLANS TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE
It is not anticipated that the Company will distribute any dividends to
shareholders in the foreseeable future. Earnings of the Bank, if any, are
expected to be retained by the Bank to enhance its capital structure or
distributed to the Company to defray its operating costs. Dividend distributions
of state banks are restricted by statute and regulation. See "DIVIDEND POLICY."
INTENDED PURCHASES BY ORGANIZERS
The Organizers intend to purchase 171,500 shares in the Offering, which
will equal 22.9% of the minimum of 750,000 shares required in order to release
subscription proceeds from the Subscription Escrow Account. See "ORGANIZERS AND
PRINCIPAL SHAREHOLDERS." The Organizers may purchase additional shares in the
Offering. The ownership of more than 25% of the Company's shares will virtually
assure control of the election of directors of the Company in future years. The
Organizers have represented to the Company that all purchases of Common Stock
will be made for investment purposes only and not with a view to resell such
shares. See "TERMS OF THE OFFERING -- Purchases by Organizers of the Company."
FAILURE OF THE BANK TO COMMENCE OPERATIONS; RETURN OF SUBSCRIPTION FUNDS
Before the Bank can open for business it must obtain final approval from
both the Department and the FDIC. In the event that the Company issues shares of
Common Stock and such approvals are not obtained, the Company will return to
subscribers only those funds remaining after deduction for expenses incurred by
the Company for this Offering and the organizational and preopening expenses of
the Company and the Bank. In the event final regulatory approvals are not
obtained, subscribers will be entitled to a return of only a portion of their
subscription funds. As of June 30, 1998, the Company's accumulated deficit was
$226,181, and the Company will continue to incur pre-opening expenses until the
Bank commences operations. It is estimated that the Company will expend as much
as $400,000 during the organizational stage and in the event of liquidation,
incur other costs of as much as $300,000 or a total of $.93 per share based upon
the minimum of 750,000 Shares. No assurances can be given that such expenses and
costs will not significantly exceed this estimate. See, "TERMS OF THE OFFERING
- -- Failure of Bank to Commence Operations."
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<PAGE> 10
ANTI-TAKEOVER PROVISIONS IN THE COMPANY'S ARTICLES OF INCORPORATION
The Company's Articles of Incorporation ("Articles") contain provisions
requiring supermajority shareholder approval to effect certain extraordinary
corporate transactions which are not approved by the Board of Directors. The
effect of these provisions is to make it more difficult to effect a merger, sale
of control or similar transaction involving the Company even though a majority
of the Company's shareholders may vote in favor of such a transaction. In
addition, the Company's Articles provide for classes of Directors, whereby
one-third of the members of the Board of Directors shall be elected each year
and each director of the Company will serve for a term of three years. Finally,
the Company's Articles provide that Florida's Control-Share Acquisition Statute
shall apply to acquisitions of control shares, as defined therein, of the
Company's Common Stock. The effect of these provisions is to make it more
difficult to effect a change in control of the Company through the acquisition
of a large block of the Company's Common Stock. See "SUMMARY OF ARTICLES OF
INCORPORATION" and "Appendix A."
NO ESTABLISHED MARKET FOR SHARES
Presently there is no established market for the Common Stock. The Company
expects that the quotations for the Common Stock will be reported on the
Over-the-Counter Bulletin Board under the symbol "JXBC". KBW and Baird have
advised the Company that, upon completion of this Offering, they presently
intend to act as market makers in the Common Stock, subject to applicable laws
and regulatory requirements. Making a market in securities involves maintaining
bid and ask quotations and being able, as principal, to effect transactions in
reasonable quantities at those quoted prices, subject to various securities laws
and other regulatory requirements. The development of a public trading market
depends, however, upon the existence of willing buyers and sellers, the presence
of which is not within the control of the Company or any market maker. Even with
a market maker, factors such as the limited size of the Offering, the lack of
earnings history for the Company and the absence of a reasonable expectation of
dividends within the near future mean that there can be no assurance of the
development in the foreseeable future of an active and liquid market for the
Common Stock. Even if a market develops, there can be no assurance that a market
will continue, or that shareholders will be able to sell their shares at or
above the offering price of $10.00 per share. Furthermore, KBW and Baird have no
obligation to make a market in the Common Stock, and, if commenced, may cease
market making activities at any time. The potential size of a secondary market
for the Common Stock might, at least initially, be limited to some extent by the
requirement of a $2,500 minimum investment imposed in connection with the
Offering. The minimum investment requirement may act to restrict the number of
shareholders and make subsequent trading of small numbers of shares less likely.
Purchasers of Common Stock should carefully consider the potential illiquid and
long-term nature of their investment in the shares being offered hereby.
ARBITRARY DETERMINATION OF OFFERING PRICE
The offering price of $10.00 per share was arbitrarily determined by the
Board of Directors of the Company, and does not bear any relationship to the
Company's assets, book value, net worth or any other recognized criteria of
value. In determining the offering price of the Shares, the Department's capital
requirements for the Bank and general market conditions for the sale of such
securities were considered. In the event a market should develop for the Common
Stock after completion of this Offering, there can be no assurance that the
market price will equal or exceed the offering price herein.
ABSENCE OF SHAREHOLDER PREEMPTIVE RIGHTS
No holder of the Common Stock of the Company will have preemptive rights
with respect to the issuance of shares of any class of stock. The total number
of shares of all classes of capital stock which the Company shall have the
authority to issue is 10,000,000 shares of Common Stock, par value $0.01 per.
Each share of Common Stock is entitled to one vote per share in all matters
requiring a vote of shareholders. The Board of Directors of the Company could
from time to time determine to issue additional shares of the authorized Common
Stock in addition to the shares offered hereby, and in such event the ownership
interest of the subscribers in this Offering may be diluted.
FUTURE CAPITAL NEEDS OF THE BANK
The Board of Directors of the Company may determine from time to time to
obtain additional capital through the issuance of additional shares of the
authorized Common Stock of the Company. There can be no assurance that such
shares will be issued at prices or on terms equal to the offering price and
terms of this Offering.
8
<PAGE> 11
MAXIMUM LENDING LIMITS
Florida law allows a state bank to extend credit to any one borrower in an
amount up to 25% of its capital accounts, provided that the unsecured portion of
any such loan may not exceed 15% of the capital accounts of the state bank.
Based upon the proposed investment of $6,450,000 in capital stock of the Bank,
the maximum loan the Bank will be permitted to make is $1,612,500, provided that
the unsecured portion may not exceed $967,500. Assuming the maximum proceeds of
the Offering, the maximum loan the Bank would be permitted to make would be
approximately $3,000,000 provided that the unsecured portion could not exceed
$1,800,000.
NEED FOR TECHNOLOGICAL CHANGE; YEAR 2000 COMPLIANCE
The banking industry is undergoing rapid technological changes with
frequent introductions of new technology-driven products and services. In
addition to better serving customers, the effective use of technology increases
efficiency and enables financial institutions to reduce costs. The Company's
future success will depend in part on its ability to address the needs of its
clients by using technology to provide products and services that will satisfy
client demands for convenience as well as to create additional efficiencies in
the Bank's operations. Many of the Bank's competitors have substantially greater
resources to invest in technological improvements. There can be no assurance
that the Bank will be able to effectively implement new technology-driven
products and services or be successful in marketing such products and services
to its clients.
The Company is taking steps to ensure that its operational and financial
systems will not be adversely affected by year 2000 software failures due to
processing errors arising from calculations using the year 2000 date. The Bank
has contracted with a software vendor which is currently installing its
renovated software which is expected to be Year 2000 compliant. It is recognized
that any Year 2000 compliance failures could result in additional expenses to
the Company.
THE COMPANY
Jacksonville Bancorp, Inc. was incorporated under the laws of the State of
Florida on October 24, 1997, to operate as a bank holding company pursuant to
the BHC Act, and to purchase 100% of the issued and outstanding capital stock of
The Jacksonville Bank, a state-chartered commercial bank to be organized under
the laws of Florida which will conduct a general banking business in
Jacksonville, Florida. The Organizers filed an Application for Authority to
Organize with the Department on February 17, 1998, and is awaiting conditional
approval. The Company also filed its application for federal deposit insurance
with the FDIC on July 10, 1998, and is awaiting conditional approval. The
Company will file an application to become a one-bank holding company with the
Federal Reserve Bank of Atlanta upon receipt of its conditional approval of the
bank charter.
The Bank expects to commence operations sometime in the latter part of the
fourth quarter of 1998. See "BUSINESS OF THE BANK." The Organizers of the
Company are eleven individuals. See "ORGANIZERS AND PRINCIPAL SHAREHOLDERS." All
of the Organizers of the Company will serve on the initial Board of Directors of
the Company and nine of the Organizers will serve on the initial Board of
Directors of the Bank. See "MANAGEMENT."
Initially the principal offices of the Company and the Bank will be
located at 10325 San Jose Boulevard, Jacksonville, Florida. See "BUSINESS OF THE
COMPANY -- Premises." The mailing address of the Company's present office, which
it will occupy until the Bank opens for business, is 13245 Atlantic Boulevard,
Suite 5, Jacksonville, Florida 32225, and its telephone number is (904)
220-3001.
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<PAGE> 12
TERMS OF THE OFFERING
GENERAL
The Company is Offering hereunder up to 1,500,000 shares of its Common
Stock for cash at a price of $10.00 per share. A minimum subscription of 250
shares is required for each subscription hereunder. No single individual
investor, other than individual Organizers, may subscribe for more than 37,500
shares or more than 5% of the total number of shares issued or subscribed for at
the time a subscription is received by the Company during the Offering Period.
The purchase price of $10.00 per share shall be paid in full upon execution and
delivery of the Subscription Agreement. All subscriptions tendered by investors
are subject to acceptance by the Board of Directors of the Company through its
duly authorized Subscription Committee, and the Company reserves the absolute
and unqualified right to reject or reduce any subscription for any reason prior
to acceptance. Furthermore, the Company reserves the right to cancel this
Offering at any time prior to the time the Company withdraws funds from the
Subscription Escrow Account, for any reason whatsoever.
NO ESTABLISHED MARKET
Prior to this Offering there has been no established public market for the
shares of the Common Stock and there can be no assurance that an established
market for such stock will develop. The offering price has been arbitrarily
determined and is not a reflection of the Company's book value, net worth or any
other such recognized criteria of value. In determining the offering price of
the Common Stock, the capital requirements of the Department for the Bank and
general market conditions for the sale of such securities were considered. There
can be no assurance that, if a market should develop for the Common Stock, the
post-Offering market price will equal or exceed the initial offering price.
PLAN OF DISTRIBUTION
Pursuant to Commission Rule 415 (17 C.F.R. Section 230.415) the Company
intends to offer the shares on a continuous basis for a period of up to 180 days
from the effective date.
Beginning on the Effective Date the Company will offer the shares to the
public for a period of 45 days, unless extended by the Company for up to 135
days in its sole discretion (the Offering Period). During this period the
Company will offer up to 1,500,000 Shares at a price of $10.00 per share. The
Company has engaged KBW and Baird, both registered as broker-dealer, to consult
with and advise the Company with respect to the Offering. Both KBW and Baird
have agreed to use their best efforts to solicit subscriptions and purchase
orders for shares of Common Stock in the Offering. Neither KBW nor Baird shall
have any obligation to take or purchase any shares of Common Stock in the
Offering. Shares will be offered primarily to persons who reside in the State of
Florida. Persons indicating an interest in acquiring Common Stock will be
provided with a copy of this Prospectus prior to the Company accepting
subscription funds. Subscriptions will be accepted only if accompanied by a
proper Subscription Agreement. During this Offering Period the Company will
conduct its first Closing if the conditions required to Close have been met.
CONDITIONS OF THE OFFERING
The Offering will expire at 5:00 p.m. Eastern Time, on , 1998
(the "Expiration Date"), unless extended by the Company for up to an additional
135 days. The Offering is expressly conditioned upon fulfillment of the
following conditions ("Offering Conditions") within the Offering Period. The
Offering Conditions, which may not be waived, are as follows:
(i) Subscriptions for not less than $7,500,000 shall have been
deposited with the Escrow Agent;
(ii) The Company shall have received conditional approval from the
Federal Reserve of its application to become a one-bank holding
company, the Organizers shall have received conditional approval
from the Department to charter the Bank and the proposed Bank
shall have received conditional approval of its application for
deposit insurance from the FDIC; and
(iii) The Company shall not have canceled this Offering prior to the
time funds are withdrawn from the Subscription Escrow Account.
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<PAGE> 13
ESCROW OF SUBSCRIPTION FUNDS
All subscription funds and documents tendered by investors will be placed
in the Subscription Escrow Account with the Independent Bankers' Bank of
Florida, Orlando, Florida ("Escrow Agent"), pursuant to the terms of the Escrow
Agreement, the form of which is attached to this Prospectus as Appendix "B."
Upon receipt of a certification from the Company during the Offering Period
that: (i) the required conditional regulatory approvals have been received; and
(ii) subscriptions totaling not less than $7,500,000 have been received, the
Escrow Agent will release all subscription funds, and any income received
thereon, to the Company.
Pending disposition of the Subscription Escrow Account under the Escrow
Agreement, the Escrow Agent is authorized, upon instructions to be given by
Victor M. George to invest subscription funds in direct obligations of the
United States Government, in short-term insured certificates of deposit and/or
money market management trusts for short-term obligations of the United States
Government, with maturities not to exceed 90 days. The Company will invest the
subscription funds in a similar manner after breaking escrow and prior to the
time that the Company infuses capital into the Bank. The Offering proceeds will
be used to purchase capital stock of the Bank and to repay expenses incurred in
the organization of the Company and the Bank. See "USE OF PROCEEDS."
In the event the Offering Conditions are not met within the Offering
Period or the Offering is terminated by the Company prior to withdrawing the
Subscription Funds, the Escrow Agent shall promptly return to the subscribers
their subscription funds, together with their allocated share of income, if any,
earned on the investment of the Subscription Escrow Account. Each Subscriber's
proportionate share of Subscription Escrow Account earnings shall be that
fraction (i) the numerator of which is the dollar amount of such subscriber's
tendered subscription multiplied by the number of days between the date of
acceptance of the investor's subscription and the date of the termination of the
Offering, inclusive (the subscriber's "Time Subscription Factor"), and (ii) the
denominator of which is the aggregate Time Subscription Factor of all investors
depositing subscription funds in the Subscription Escrow Account. The latest
date to which the subscription funds might be held in escrow prior to their
return in the event the minimum is not reached or the required regulatory
approvals are not received is January 18, 1999.
In the event that the Company issues the shares of Common Stock and the
Department does not authorize the Bank to commence banking operations within 12
months after the Bank's receipt of preliminary conditional approval from the
Department, the Company will promptly return to subscribers all subscription
funds and interest earned thereon, less all expenses incurred by the Company,
including the expenses of the Offering and the organizational and pre-opening
expenses of the Company and the Bank. See "TERMS OF THE OFFERING -- Failure of
Bank to Commence Operations."
NO ASSURANCE CAN BE GIVEN THAT SUBSCRIPTION FUNDS CAN OR WILL BE INVESTED
AT THE HIGHEST RATE OF RETURN AVAILABLE OR THAT ANY INCOME WILL BE REALIZED FROM
THE INVESTMENT OF SUBSCRIPTION FUNDS.
If all Offering Conditions are satisfied, and the Company withdraws the
subscription funds from the Subscription Escrow Account, all earnings on such
account shall belong to the Company.
The Independent Bankers' Bank of Florida, by accepting appointment as the
Escrow Agent under the Escrow Agreement, in no way endorses the purchase of the
Company's securities by any person.
FAILURE OF BANK TO COMMENCE OPERATIONS
The Department requires that a new state bank open for business (i.e.,
obtain a certificate of authorization) within 12 months after receipt of
preliminary approval from the Department. The Organizers anticipate that the
Bank will open for business sometime in the latter part of the fourth quarter of
1998. Because final approval of the Bank's charter will be conditioned on the
Company's raising funds to capitalize the Bank at $6,450,000, the Company
expects to issue the shares of Common Stock before it has obtained all final
regulatory approvals for the Bank. In the event that the Company issues the
shares of Common Stock and the Department does not grant the Bank final
regulatory approval to commence banking operations within 12 months after the
Bank's receipt of preliminary approval from the Department, the Company will
promptly return to subscribers all subscription funds and interest earned
thereon, less all expenses incurred by the Company, including the expenses of
the Offering and the organizational and pre-opening
11
<PAGE> 14
expenses of the Company and the Bank. It is probable that this return will be
further reduced by amounts paid to satisfy claims of creditors, as discussed in
the following paragraph.
After the Company issues the shares of Common Stock offered hereby, the
Offering proceeds may be considered part of general corporate funds and thus may
be subject to the claims of creditors of the Company, including claims against
the Company that may arise out of actions of the Company's officers, directors,
or employees. It is possible, therefore, that one or more creditors may seek to
attach the proceeds of the Offering prior to the Bank's commencement of banking
operations. If such an attachment occurs and it becomes necessary to pay the
subscription funds to shareholders because of failure to obtain all necessary
regulatory approvals, the payment process might by delayed; and if it becomes
necessary to pay creditors from the subscription funds, the payment to
shareholders will be further reduced. As of June 30, 1998, the Company's
accumulated deficit was $226,181, and the Company will continue to incur
pre-opening expenses until the Bank commences operations. It is estimated that
the Company will expend as much as $400,000 in organizational expenses and in
the event of any liquidation, incur other costs of as much as $300,000, or $.93
per Share based upon the minimum of 750,000 Shares. No assurances can be given
that such expenses and costs will not significantly exceed this estimate.
PURCHASES BY ORGANIZERS OF THE COMPANY
The Organizers have indicated they intend to purchase 171,500 shares in
the Offering. The Organizers may purchase additional shares in the Offering. All
additional purchases will be made on the same terms, as those made by other
investors. Any such purchases of shares by the Organizers will be subject to
affiliate resale limitations of the 33 Act. The Organizers have represented to
the Company that all purchases will be made for investment purposes only and not
with a view to resell such shares. See "ORGANIZERS AND PRINCIPAL SHAREHOLDERS."
During the organizational stage, the Organizers to date have loaned the
Company $150,000 in order to provide funds to pay organizational and pre-opening
expenses, estimated to be approximately $400,000. The loan bears interest at 10%
annually and will be repaid from the proceeds of the Offering. Through June 30,
1998, the Company has expended approximately $226,000 (net of interest income)
for such expenses. The remainder of these proceeds will be used by the Company
to fund ongoing expenses during the offering and pre-opening periods. The
Company has also obtained a line of credit that has been committed to the
Company by the Independent Bankers' Bank on terms and conditions as follows:
Loan Amount: up to $450,000; Terms: on demand, interest monthly; Rate: Wall
Street Journal Prime minus 1% floating; Fee: None; and Guarantees: Organizing
Directors, limited to $62,500 for each director.
OTHER TERMS AND CONDITIONS/HOW TO SUBSCRIBE
The Company may cancel this Offering for any reason at any time prior to
the release of subscription funds from the Subscription Escrow Account, and
accepted subscriptions are subject to cancellation in the event that the Company
elects to cancel the Offering in its entirety.
Shares will be marketed on a best-efforts basis. The Company has engaged
KBW and Baird, both registered broker-dealer, to consult with and advise the
Company with respect to the Offering. Both KBW and Baird have agreed to use
their best efforts to solicit subscriptions and purchase orders for shares of
Common Stock in the Offering. Neither KBW nor Baird shall have any obligation to
take or purchase any shares of Common Stock in the Offering. It is anticipated
that commissions paid to KBW and Baird will not exceed 5.5% of the $10.00 per
share sales price. The terms of the agreements entered into with KBW and Baird
are contained in Sales Agency Agreements which have been included as exhibits to
the Registration Statement that will be filed with the SEC. In the event that
the Offering Conditions have not been satisfied by the end of the Offering
Period, this Offering will be terminated and the subscription funds promptly
returned to the subscribers, together with their allocated share of earnings, if
any, earned on the investment of the Subscription Escrow Account as described
herein. See "TERMS OF THE OFFERING -- Escrow of Subscription Funds."
As soon as practicable, but no more than ten-business days after receipt
of a subscription, the Company will accept or reject such subscription.
Subscriptions not rejected by the Company within this ten-day period shall be
deemed accepted. Once a subscription is accepted by the Company, it cannot be
withdrawn by the subscriber. Payment from any subscriber for shares in excess of
the number of shares allocated to such subscriber, if any, will be refunded by
mail, without interest within ten days of the date of rejection.
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<PAGE> 15
Certificates representing shares of Common Stock of the Company, duly
authorized and fully paid, will be issued as soon as practicable after
subscription funds are released to the Company from the Subscription Escrow
Account.
Subscriptions to purchase shares of Common Stock can be made by completing
the Stock Order Form attached to this Prospectus (Appendix C) and delivering the
same to the Company at its offices, 13245 Atlantic Boulevard, Suite 5,
Jacksonville, Florida 32225, or mailing the same in the enclosed self-addressed
envelope. Full payment of the purchase price must accompany the subscription.
Failure to pay the full subscription price shall entitle the Company to
disregard the subscription. No Subscription Agreement is binding until accepted
by the Company, which may, in its sole discretion, refuse to accept any
subscription for shares, in whole or in part, for any reason whatsoever. After a
subscription is accepted and proper payment received, the Company shall not
cancel such subscription unless all accepted subscriptions are canceled. Unless
otherwise agreed by the Company, all subscription amounts must be paid in United
States currency by check, bank draft or money order payable to "IBBF, FOR
JACKSONVILLE BANCORP, INC." A subscription will be accepted in writing by the
Company only in the Form of Acceptance attached to this Prospectus.
USE OF PROCEEDS
The gross proceeds from the sale of shares offered by the Company are
estimated to be a minimum of $7,500,000. This estimate is based upon the
assumption that the sale of 750,000 shares occurs prior to the expiration of the
Offering Period. However, if 750,000 shares are not sold, prior to the
expiration of the Offering Period, then the Offering will terminate and all
funds received from subscribers, adjusted for any income thereon, will be
promptly refunded. See "TERMS OF THE OFFERING."
The gross proceeds from the Offering will be applied as follows:
<TABLE>
<CAPTION>
MINIMUM PROCEEDS MAXIMUM PROCEEDS
ASSUMING ASSUMING SALE OF
SALE 750,000 SHARES 1,500,000 SHARES
-------------------- ----------------
<S> <C> <C>
Purchase of capital stock of the Bank ............. $6,450,000 $12,000,000
Offering expenses of the Company(1) ............... 500,000 1,100,000
Pre-Opening Expenses(1) ........................... 400,000 400,000
Working capital(2) ................................ 150,000 1,500,000
---------- -----------
Proceeds .......................................... $7,500,000 $15,000,000
========== ===========
</TABLE>
- ----------------
(1) The organizational expenses are estimated to reach $400,000, while the
Offering expenses are approximated to be $500,000 if the minimum amount of
shares is sold, or 1,100,000 if the maximum amount of shares is sold.
(2) These amounts are calculated by subtracting the amounts spent for the
purchase of capital stock of the Bank and for organizational and offering
expenses from the proceeds of the Offering.
All of the above expenses will be incurred whether or not the Bank
conducts operations. If, however, the Offering is terminated prior to the
release of subscription funds by the Escrow Agent, none of these expenses will
be deducted from the funds to be returned to subscribers. If, however,
subscription funds are released by the Escrow Agent and the Bank does not
commence business operations all of the above expenses, as well as additional
expenses which will be incurred following such release, will be deducted from
the subscription funds. Expenses related to a successful Offering will be
deducted from the Offering proceeds and expenses related to organization of the
Company will be expensed as incurred. A substantial portion of the proceeds of
this Offering ($7,500,000) assuming the minimum number of shares is sold will be
used by the Company for the purchase of 100% of the issued and outstanding
capital stock of the Bank and to repay the expenses of this Offering and the
expenses incurred in the organization of the Company and the Bank.
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<PAGE> 16
A portion of the proceeds of this Offering, see table above, will be
retained by the Company for the purpose of funding any required future additions
to the capital of the Bank. Since state banks are regulated with respect to the
ratio that their total assets may bear to their total capital, if the Bank
experiences greater growth than anticipated, it may require the infusion of
additional capital to support that growth. Management of the Company anticipates
that the proceeds of the Offering will be sufficient to support the Bank's
immediate capital needs and will seek, if necessary, long and short-term debt
financing to support any additional needs; however, management can give no
assurance that such financing, if needed, will be available or if available will
be on terms acceptable to management.
DIVIDEND POLICY
Due to the fact that the Company and the Bank are both start-up
operations, it will be the policy of the Board of Directors of the Company to
reinvest earnings for such period of time as is necessary to ensure the
successful operations of the Company and of the Bank. There are no current plans
to initiate payment of cash dividends, and future dividend policy will depend on
the Bank's earnings, capital requirements, financial condition and other factors
considered relevant by the Board of Directors of the Company.
The Bank will be restricted in its ability to pay dividends under Florida
banking laws and by regulations of the Department. Pursuant to Section 658.37,
Florida Statutes, a state bank may not pay dividends from its capital. All
dividends must be paid out of current net profits then on hand plus retained net
profits of the preceding two years, after deducting bad debts, depreciation and
other worthless assets, and after making provision for reasonably anticipated
future losses on loans and other assets. Payments of dividends out of net
profits is further limited by Section 658.37, which prohibits a bank from
declaring a dividend on its shares of common stock until its surplus equals its
stated capital, unless there has been transferred to surplus not less than 20%
of a bank's net profits for the preceding year (in the case of an annual
dividend). Finally, a state bank may not declare a dividend which would cause
the capital accounts of a bank to fall below the minimum amount required by law,
regulation, order or any written agreement with the Department or any Federal
regulatory agency.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company is still in the development stage, and will remain in that
state until the Offering of the Company's Common Stock is complete. The Company
has initially funded its organizational expenses through a loan from one of the
Organizers, R.C. Mills, in the amount of $150,000. In March, 1998, the Company
obtained a line of credit of $450,000 from a financial institution at an
interest rate of Prime minus 1%. The line is guaranteed by the Company's Board
of Directors. At June 30, 1998, there was $175,000 outstanding under this line
of credit. As of June 30, 1998, the Company has expended $226,000 for
organizational expenses including attorney fees, employee compensation and
filing fees. The remaining funds will be used to fund costs and expenses during
the Offering Period. Subscription funds during the Offering Period contemplated
herein will be placed in the Subscription Escrow Account and invested in direct
obligations of the United States Government, in short-term insured certificates
of deposits and/or money market Management trusts for short-term obligations of
the United States Government, with maturities not to exceed 90 days.
In May 1998, the Company obtained a $200,000 loan at an interest rate of
Prime minus 1/2%, and an additional letter of credit of $500,000 from Columbus
Bank & Trust Company. The loan and letter of credit are guaranteed by the
Organizers, and are for the acquisition and renovation of the Bank's main
office. On June 11, 1998, the Company purchased the main office quarters, a
former Kenny Rodgers restaurant, from Florida's Finest Chicken, Inc. The main
office is located at 10325 San Jose Boulevard, Jacksonville, Florida. The main
office will be expanded from 2,777 square feet to 3,015 square feet, with three
drive through teller stations. The Company borrowed funds to purchase the
building and make the necessary improvements. The outstanding balance of the
loan is $625,000 as of June 30, 1998. The Organizers have guaranteed the loan.
The proceeds from the Offering will be used to repay the loan. The Bank will
lease the building from the Company.
On April 23, 1998, the Company entered into a lease agreement with Joandy
Road Partnership Corporation to lease the Bank's temporary quarters, which will
also serve as a branch office of the Bank.
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<PAGE> 17
Management of the Company believes that the net proceeds from the Offering
will satisfy the cash requirements of the Company and the Bank for their
respective first years of operation. It is not anticipated that the Company will
find it necessary to raise additional funds to meet expenditures required to
operate the business of the Company and the Bank over the next 12 months. All
anticipated material expenditures for such period have been identified and
provided for out of the proceeds of this Offering. See "USE OF PROCEEDS."
GENERAL
The Company was incorporated under the laws of the State of Florida on
October 24, 1997, for the purpose of organizing the Bank and purchasing 100% of
the outstanding capital stock of the Bank. The Company has been organized as a
mechanism to enhance the Bank's ability to serve its future customers'
requirements for financial services. The holding company structure will also
provide flexibility for expansion of the Company's banking business through
acquisition of other financial institutions and provision of additional
banking-related services which the traditional commercial bank may not provide
under present laws. Finally, banking regulations require that the Bank maintain
a minimum ratio of capital to assets. In the event that the Bank's growth is
such that this minimum ratio is not maintained, the Company may borrow funds,
subject to the capital adequacy guidelines of the Federal Reserve, and
contribute them to the capital of the Bank and otherwise raise capital in a
manner which is unavailable to the Bank under existing banking regulations.
The Company has no present plans to acquire any operating subsidiaries
other than the Bank; however, the Company may make additional acquisitions in
the event that such acquisitions are deemed to be in the best interest of the
Company and its shareholders. Such acquisitions, if any, will be subject to
certain regulatory approvals and requirements. See "SUPERVISION AND
REGULATION."
PREMISES
The Bank's permanent headquarters will be located at 10325 San Jose
Boulevard, Jacksonville, Florida. The Bank will occupy approximately 3,015 sq.
ft., plus a drive in teller area. The building is currently under renovation and
is expected to be ready for occupancy on January 29, 1998.
Pending commencement of operations, the Bank has a temporary address at
Harbour Village, 13245 Atlantic Boulevard, Suite 5, Jacksonville, Florida 32225.
The Harbour Village Office will be a full-service branch office when the Bank
commences operations. The telephone number at the Bank's temporary address is
(904) 220-3001.
BUSINESS OF THE BANK
GENERAL
The Jacksonville Bank ("Bank") will seek to be the premier community based
financial institution in its market area by providing personalized bank products
and traditional bank services to individuals, small to medium-sized businesses,
professionals and other local organizations; by providing a maximum return to
shareholders and by employing professional, energetic sales oriented individuals
who will provide exceptional, personalized services.
The Bank's operating principle will be to focus on customers, products and
services in its market area and to a lesser extent in surrounding counties where
local directors and management know the customers and understand their
businesses. As other banks in the market continue to merge, consolidate and grow
outside the area, the Bank will focus and rely on its base of local directors,
shareholders, management and employees for business development. Policies and
procedures will be tailored to the local market rather than to the regional and
statewide markets of other financial institutions. The bank is committed to be
locally owned and managed and on providing friendly, personal service.
The directors and management believe that the Bank's principal niche will
be the existing and expanding small to medium size businesses within the market
area and to a lesser extent the surrounding counties; the active residential
real estate mortgage market within the area; and the growing consumer loan
market.
15
<PAGE> 18
Generally, customers will have one account officer to serve all of their
banking needs and will have access to senior management when necessary. The
Board of Directors and management will be responsible for maintaining a visible
profile of the Bank in the local community. The Directors and management will be
able to actively promote the Bank within the market due to their established
reputations and banking relationships in the local community.
PRODUCTS AND SERVICES
The Bank intends to provide a full range of competitive banking services.
The directors and management of the Bank intend to focus their efforts to close
the void caused by the dwindling service provided by larger banks to small
businesses. In order to compete with the financial institutions in the market,
the Bank intends to use its independent status to the fullest extent possible.
This will include an emphasis on specialized services for the small business
person and professional, personal contacts by the officers, directors and
employees of the Bank. Loan participations will be arranged for customers whose
loan demands exceed the Bank's lending limits.
The Bank intends to concentrate its marketing effort on the advantages
of local ownership and management, as well as, fiscal responsibility, personal
service and customer relations at the local level. The marketing program will be
directed toward all sizes of businesses, as well as all types of consumers.
Particular emphasis will be placed on newspaper and radio advertising, and
direct mail on a selective basis.
MARKET AREA AND COMPETITION
The Bank's primary service area all of Duval County (including primarily
the Southside, Arlington, Mandarin and Beaches areas of Jacksonville).
Jacksonville is the largest city in the United States as measured by land area
and ranks as the largest city as measured by population according to the 1997
Florida Statistical Abstract. Jacksonville is home to the Jacksonville Jaguars,
one of the newest NFL franchises and is the corporate headquarters to a number
of regional and national companies. Duval County has a strong commercial and
industrial base which has been steadily expanding in recent years. The largest
employers in the county are: Naval Air Station Jax (16,845), Naval Station
Mayport (12,156), Duval County School System (11,591), State of Florida
(10,465), Duval County Government (8,860), City of Jacksonville (8,180), and
AT&T (8,000).
According to the 1997 Florida Statistical Abstract, the population of
Duval County increased from 672,971 in 1990 to 730,258 in 1997, representing a
compound annual growth rate of 1.2 % (slightly faster than the U.S. average of
1.1% per year). The population is projected to increase to 769,775 by 2002. In
1997, the median age in Duval County was 33.3 years (nearly five years younger
than the state's average), and the median household income in 1996 was $35,506
(the state median was $32,489). In 1997, the unemployment rate in the County was
3.3%, as compared to a national average of 4.9%.
Competition among financial institutions within the Bank's market area is
intense. According to the Florida Bankers Association, as of June 1997 there
were 47 financial institutions in the market with deposits of nearly $12.9
billion. Deposits in the market increased about $3.8 billion from 1995 to 1997,
at an annual rate of 19.2%.
Financial institutions primarily compete with one another for deposits. In
turn, a bank's deposit base directly affects such bank's loan activities and
general growth. Primary methods of competition include interest rates on
deposits and loans, service charges on deposit accounts and the availability of
unique financial services products. The Bank will be competing with financial
institutions which have much greater financial resources than the Bank, and
which may be able to offer more services and unique services and possibly better
terms to their customers. The Organizers, however, believe that the Bank will be
able to attract sufficient deposits to enable the Bank to compete effectively
with other area financial institutions.
The Bank will be in competition with existing area financial institutions
other than commercial banks and thrift institutions, including insurance
companies, consumer finance companies, brokerage houses, credit unions and other
business entities which target traditional banking markets. Due to the growth of
the Jacksonville area, it can be anticipated that additional competition will
continue from existing, as well, new entrants to the market.
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BOARD OF DIRECTORS AND BOARD COMMITTEES
The Bank believes that its board is composed of the highest quality,
knowledgeable and proven business and banking professionals. Initially there
will be 11 members on the Bank's board of directors. Additional directors may be
added when and as deemed necessary. In order to fulfill their responsibilities
to the customers and shareholders of the Bank, it is anticipated that the board
of directors of the Bank will meet on a monthly basis, or more often as needed,
to review the operations of the Bank and provide appropriate direction to
management.
The Bank's board of directors intends to appoint committees to oversee
particular aspects of the Bank's operations will be conducted by committees of
the board of directors. These committees will consist of the Executive
Committee, Executive Loan Committee, Asset/Liability and Investment Committee,
Audit Committee and Compensation Committee.
The Executive Committee will be responsible for defining and implementing
the overall strategy and policies of the Bank. It will also be responsible for
monitoring the financial performance of the Bank. The committee will review and
recommend marketing plans, capital plans, major capital expenditures and bank
expansion plans.
The Loan Committee will be responsible for ensuring the soundness of the
Bank's credit policy; conformance to lending policies and compliance with
applicable laws, rules and regulations. To fulfill these responsibilities, the
Executive Loan Committee will review the adequacy of the credit policy on at
least an annual basis, review all large loans and monitor the performance of the
loan portfolio on an ongoing basis.
The Asset/Liability and Investment Committee will be responsible for
ensuring the soundness of the Bank's investment policy and asset/liability
management policy; conformance to these policies and compliance to applicable
laws, rules and regulations. To fulfill these responsibilities, the committee
will review the adequacy of the investment and asset/liability management
policies on at least an annual basis. The committee will also monitor
performance of the investment portfolio, the Bank's liquidity position and the
interest rate sensitivity position.
The Audit Committee will consist solely of outside directors and will be
responsible for ensuring that an adequate audit program exists and that Bank
personnel are operating in conformance with all applicable laws, rules and
regulations. All auditors employed or engaged by the Bank will report directly
to the Audit Committee. To fulfill its responsibilities, the Audit Committee
will recommend the selection of auditors, review the audit program on at least
an annual basis to ensure the adequacy of its scope, and will review all reports
of auditors and examiners as well as management's responses to such reports to
ensure the effectiveness of internal controls and the implementation of remedial
action. The Audit committee will also be responsible for the integrity of the
internal loan review system.
The Compensation Committee will be responsible for ensuring that the
Bank's compensation policy is effectively meeting its objectives. Compensation
will be reviewed on an annual basis, or more frequently if necessary.
DEPOSITS
The Bank intends to offer a wide range of interest-bearing and
noninterest-bearing deposit accounts, including commercial and retail checking
accounts, money market accounts, individual retirement accounts, regular
interest-bearing statement savings accounts and certificates of deposit with
fixed and variable rates and a range of maturity date options. The sources of
deposits will primarily be residents, businesses and employees of businesses
within the Bank's market area, obtained through the personal solicitation of the
Bank's officers and directors, direct mail solicitation and advertisements
published in the local media. The Bank intends to pay competitive interest rates
on time and savings deposits up to the maximum permitted by law or regulation.
In addition, the Bank will implement a service charge fee schedule competitive
with other financial institutions in the Bank's market area covering such
matters ad maintenance fees on checking accounts, per item processing fees on
checking accounts and returned check charges.
LOAN PORTFOLIO
The Bank intends to provide for the financing needs of the community it
serves by offering a variety of loans. Commercial loans will include both
collateralized and uncollateralized loans for working capital (including
inventory and receivables), business expansion (including real estate
acquisitions and improvements), and purchase of equipment and machinery. The
Bank expects to originate a variety of residential real estate loans, including
conventional
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mortgages collateralized by first mortgage liens to enable borrowers to
purchase, refinance, construction upon or improve real property. Consumer loans
will include collateralized and uncollateralized loans for financing
automobiles, boats, home improvements, and personal investments. The Bank will
primarily enter into lending arrangements for its portfolio loans with
individuals who are familiar to the Bank and are residents of the Bank's primary
service area. It is anticipated that 20-25% of the loans will come from outside
the Bank's primary service area.
The Bank's commercial loans primarily will be underwritten on the basis of
the borrowers' ability to service such debt from income. As a general practice,
the Bank will take as collateral a security interest in any available real
estate, equipment, or other chattel although such loans may also be made on an
uncollateralized basis. Collateralized working capital loans will be primarily
collateralized by short term assets whereas term loans will be primarily
collateralized by long term assets.
Unlike residential mortgage loans, which generally are made on the basis
of the borrowers' ability to make repayment from his employment and other
income, and which are collateralized by real property whose value tends to be
easily ascertainable, commercial loans typically will be underwritten on the
basis of the borrower's ability to make repayment from the cash flow of the
business and generally will be collateralized by business assets, such as
accounts receivable, equipment and inventory.
Fixed and adjustable rate mortgage loans collateralized by single family
residential real estate generally will be generated in amounts of no more than
80% of appraised value. The Bank may, however, lend up to 95% of the value of
the property collateralizing the loan, but if such loans are required to be made
in excess of 80% of the value of the property, they must be insured by private
or federally guaranteed mortgage insurance. In the case of mortgage loans, the
Bank will require mortgagees title insurance to protect against defects in its
lien on the property which may collateralize the loan. The Bank in most cases
will require title, fire and extended casualty insurance to be obtained by the
borrower, and, where required by applicable regulations, flood insurance. The
Bank will maintain its own errors and omissions insurance policy to protect
against loss in the event of failure of a mortgagor to pay premiums on fire and
other hazard insurance policies.
The Bank will finance the construction of individual, owner-occupied
houses on the basis of written underwriting and construction loan management
guidelines. Construction loans will be structured either to be converted to
permanent loans with the Bank at the end of the construction phase or to be paid
off upon receiving financing from another financial institution. Construction
loans on residential properties will be generally made in amounts up to 95%
(along with mortgage insurance) of appraised value. Construction loans to
contractors will generally have terms of up to 12 months. The maximum loan
amounts for construction loans will be based on the lessor of the current
appraised value or the purchase.
The Bank will originate residential construction contractor loans to
finance the construction of single family dwellings. Most of the residential
construction loans will be made to individuals who intend to erect
owner-occupied housing on a purchased parcel of real estate. The Bank's
construction loans to individuals will typically range in size from $50,000 to
$200,000. Construction loans to contractors will be generally offered on the
same basis as other residential real estate loans except that a larger
percentage down payment will typically be required.
Consumer loans made by the Bank will include automobiles, recreation
vehicles, boats, second mortgages, home improvements, home equity lines of
credit, personal (collateralized and uncollateralized) and deposit account
collateralized loans. Consumer loans will be made at fixed and variable interest
rates and may be made based on up to a 10-year amortization schedule but which
become due and payable in full and are generally refinanced in 36 to 60 months.
Consumer loans will be attractive to the Bank because they typically have a
shorter term and carry higher interest rates than that charged on other types of
loans.
With its loan portfolio, the Bank recognizes that credit losses will be
experienced and the risk of loss will vary with, among other things, the type of
loan being made, the creditworthiness of the borrower over the term of the loan
and, in the case of a collateralized loan, the quality of the collateral for the
loan as well as the general economic conditions. Management will maintain an
adequate allowance for loan losses based on, among other things, industry
standards, management's experience, the Bank's historical loan loss experience,
evaluation of economic conditions and regular reviews of delinquencies and loan
portfolio quality.
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The Bank intends to follow a conservative lending policy, but one which
permits prudent risks to assist businesses and consumers primarily in the Bank's
primary service area. It is not expected that loan participations will be
required from correspondent banks. However, participations will likely be sold,
particularly with regard to real estate lending. Interest rates will vary
depending on the cost of funds to the Bank, the loan maturity, and the degree of
risk. Whenever possible, interest rates will be adjustable with fluctuations in
the "prime" rate. The long-term target loan-to-deposit ratio will be
approximately 75%. This ratio is expected to meet the credit needs of customers
while allowing prudent liquidity through the investment portfolio.
INVESTMENTS
The primary objective of the Bank's investment portfolio will be to
develop a mixture of investments with maturities and compositions so as to earn
an acceptable rate of return while meeting the liquidity requirements of the
Bank. This will be accomplished by matching the maturity of assets with
liabilities to the greatest extent possible.
The Bank intends to invest primarily in U.S. obligations guaranteed as to
principal and interest. The Bank will also enter into federal funds transactions
with its principal correspondent banks and anticipates that it will be a net
seller of funds. All investments with a maturity in excess of one year will be
readily salable on the open market.
ASSET/LIABILITY MANAGEMENT
It will be the objective of the Bank to manage assets and liabilities to
provide a satisfactory, consistent level of profitability within the framework
of established cash management, loan, investment, borrowing and capital
policies. Designated Officers of the Bank will be responsible for monitoring
policies and procedures that are designed to ensure acceptable composition of
the asset-liability mix, stability and leverage of all sources of funds while
adhering to prudent banking practices. It is the overall philosophy of
management to support asset growth primarily through growth of core deposits,
which include deposits of all categories made by individuals, partnerships and
corporations. Management of the Bank will seek to invest the largest portion of
it's assets in commercial, consumer and real estate loans. The asset/liability
mix will likely be monitored on a daily basis with a monthly report reflecting
interest-sensitive assets and interest-sensitive liabilities being prepared and
presented to the Bank's board of directors. The objective of this policy is to
control interest-sensitive assets and liabilities so as to minimize the impact
of substantial movements in interest rates on the Bank's earnings.
CORRESPONDENT BANKING
The Bank intends to purchase certain services from correspondent banks.
Such services are available on a statewide or regional basis from commercial
banks, banker's banks, the Federal Reserve Bank of Atlanta and the Atlanta
Federal Home Loan Bank. The Bank will determine the availability of such
services and evaluate the quality and pricing of the services available and
based upon the above will select one or more providers for the services the Bank
will require. The Bank will then purchase from time to time, correspondent
services offered by such banks, including some of the following: check
collections, purchase or sale of Federal Funds, security safekeeping, investment
services, coin and currency supplies, overline and liquidity loan participations
and sales of loans to or participations with correspondent banks.
The Bank anticipates that it will sell loan participations to
correspondent banks with respect to loans which exceed the Bank's lending limit.
As compensation for services provided by a correspondent, the Bank may maintain
certain balances with such correspondents in non-interest bearing accounts, or
may elect to pay for such fees directly.
DATA PROCESSING
The Bank has signed a data processing servicing agreement with an outside
service bureau. The servicing agreement provides for the Bank to receive a full
range of data processing services, including an automated general ledger,
deposit accounting, commercial, real estate and installment loan processing,
payroll, central information file and ATM processing and investment portfolio
accounting.
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STAFFING
It is the goal of the Bank to maintain a competently trained staff of
local bankers. A primary complaint about large regional banks is the constant
turnover of personnel. This prevents building long-term personal relationships
with local customers. The Bank intends to employ competent individuals who are
already living in the community or who intend to live in the community on a
permanent basis. Personnel will be required to take banking courses and other
seminars to maintain and enhance their overall banking knowledge.
MONETARY POLICIES
The results of operations of the Bank will be affected by credit policies
of monetary authorities, particularly the Federal Reserve. The instruments of
monetary policy employed by the Federal Reserve include open market operations
in U.S. Government securities, changes in the discount rate on member bank
borrowings, changes in reserve requirements against member bank deposits and
limitations on interest rates which member banks may pay on time and savings
deposits. In view of changing conditions in the national economy and in the
money markets, as well as the effect of action by monetary and fiscal
authorities, including the Federal Reserve, no accurate prediction can be made
as to possible future changes in interest rates, deposit levels, loan demand or
the business and earnings of the Bank.
REGULATION AND SUPERVISION
GENERAL
As a one-bank holding company registered under the BHC Act, the Company
will be subject to regulation and supervision by the Federal Reserve. Under the
BHC Act, the Company's activities and those of its Bank subsidiary are limited
to banking, managing or controlling banks, furnishing services to or performing
services for its subsidiaries or engaging in any other activity that the Federal
Reserve determines to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. As a state-chartered
commercial bank, the Bank will be subject to extensive regulation by the
Department and the FDIC.
The Company and the Bank will be required to file reports with the Federal
Reserve, the Department and the FDIC concerning their activities and financial
condition, in addition to obtaining regulatory approvals prior to entering into
certain transactions such as mergers with or acquisitions of other financial
institutions. Periodic examinations are performed by the Federal Reserve, the
Department and the FDIC to monitor the Company's and the Bank's compliance with
the various regulatory requirements. The Bank's deposits will be insured up to
the applicable limits by the FDIC under the Bank Insurance Fund ("BIF"). The
Bank will be subject to regulation by the Federal Reserve and the Department
with respect to reserves required to be maintained against transaction deposit
accounts and certain other matters.
REGULATION OF THE COMPANY
GENERAL. The BHC Act prohibits the Company from acquiring direct or
indirect control of more than 5% of any class of outstanding voting stock or
acquiring substantially all of the assets of any bank or merging or
consolidating with another bank holding company without prior approval of the
Federal Reserve. The BHC Act also prohibits the Company from acquiring control
of any bank operating outside the State of Florida, unless such action is
specifically authorized by the statutes of the state where the bank to be
acquired is located. Additionally, the BHC Act prohibits the Company from
engaging in or from acquiring ownership or control of more than 5% of the
outstanding voting stock of any company engaged in a non-banking business,
unless such business is determined by the Federal Reserve to be so closely
related to banking or managing or controlling banks as to be properly incident
thereto. The BHC Act generally does not place territorial restrictions on the
activities of such non-banking related activities.
TRANSACTIONS BETWEEN THE COMPANY AND THE BANK. The Company's authority to
engage in transactions with related parties or "affiliates," or to make loans to
certain insiders, is limited by certain provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 ("FIRREA"). Specifically, Sections
23A and 23B of the Federal Reserve Act apply to all transactions by an
insured-state nonmember bank or a holding company with any affiliate. Sections
23A and 23B generally define an "affiliate" as any company that controls or is
under common control with an institution. Subsidiaries of a financial
institution, however, are generally exempted from the definition of
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"affiliate." Section 23A limits the aggregate amount of transactions with any
individual affiliate to 10% of the capital and surplus of the Company and also
limits the aggregate amount of transactions with all affiliates to 20% of the
Company's capital and surplus. Certain transactions with affiliates, such as
loans to affiliates or guarantees, acceptances and letters of credit issued on
behalf of affiliates, are required to be collateralized by collateral in an
amount and of a type described in the statute. The purchase of low quality
assets from affiliates is prohibited. Section 23B provides that certain
transactions with affiliates, including loans and asset purchases, must be on
terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to the institution as those
prevailing at the time for comparable transactions with nonaffiliated companies.
In the absence of comparable transactions, such transactions may only occur
under terms and circumstances, including credit standards, that in good faith
would be offered to or would apply to nonaffiliated companies. The Company does
not expect these provisions will have any effect on its proposed operations.
SUPPORT OF SUBSIDIARY DEPOSITORY INSTITUTIONS. In accordance with Federal
Reserve policy, the Company is expected to act as a source of financial strength
and to commit resources to support the Bank. This support may be required at
times when the Company might not be inclined to provide such support. Such
support would include the infusion of additional capital into an under
capitalized bank subsidiary in situations where an additional investment in a
troubled bank might not ordinarily be made by a prudent investor. In addition,
any capital loans by a bank holding company to any of its subsidiary banks must
be subordinate in right of payment to deposits and to certain other indebtedness
of such subsidiary banks. In the event of bankruptcy, any commitment by a bank
holding company to a federal bank regulatory agency to maintain the capital of
its subsidiary bank will be assumed by the bankruptcy trustee and will be
entitled to a priority of payment.
Under the Federal Deposit Insurance Act ("FDIA") a subsidiary bank of a
bank holding company, can be held liable for any loss incurred by, or reasonably
expected to be incurred by the FDIC in connection with (i) the default of a
commonly controlled FDIC-insured depository institution or (ii) any assistance
provided by the FDIC to any commonly controlled FDIC insured depository
institution "in danger of default." "Default" is defined generally as the
appointment of a conservator or a receiver and "in danger of default" is defined
generally as the existence of certain conditions indicating that a default is
likely to occur in the absence of regulatory assistance.
CONTROL OF A BANK HOLDING COMPANY. FRB Regulation Y, adopted pursuant to
Section 225.41 of 12 U.S.C. Section 1817(j), requires persons acting directly or
indirectly or in concert with one or more persons to give the Board of Governors
of the Federal Reserve 60 days advanced written notice before acquiring control
of a bank holding company. Under the Regulation, control is defined as the
ownership or control with the power to vote 25% or more of any class of voting
securities of the Holding Company. The Regulation also provides for a
presumption of control if a person owns, controls, or holds with the power to
vote 10% or more (but less than 25%) of any class of voting securities, and
if: (i) the Holding Company's securities are registered securities under Section
12 of the Securities and Exchange Act of 1934; or (ii) no other person owns a
greater percentage of that class of voting securities. It is not anticipated
that any purchaser of the securities offered herein, including any of the
Organizers, will acquire 10% of more of the Company's Common Stock.
LEGISLATION AND REGULATIONS OF THE BANK
GENERAL. From time to time, various bills are introduced in the United
States Congress with respect to the regulation of financial institutions. Recent
banking legislation, particularly the FIRREA and the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), has broadened the regulatory
powers of the federal bank regulatory agencies and restructured the nation's
banking system. The following is a brief discussion of certain portions of these
laws and how they would effect the Company or the Bank.
The FDICIA revised sections of the FDIA affecting bank regulation, deposit
insurance and provisions for funding of the BIF administered by the FDIC. The
FDICIA also revised bank regulatory structures embodied in several other federal
banking statutes, strengthened the bank regulators' authority to intervene in
cases of deterioration of a bank's capital level, placed limits on real estate
lending and imposes detailed audit requirements.
PROMPT AND CORRECTIVE ACTION. The FDICIA required the federal banking
regulatory agencies to set certain capital and other criteria which would define
the category under which a particular financial institution would be classified.
The FDICIA imposes progressively more restrictive constraints on operations,
management, and capital distributions depending on the category in which an
institution is classified. Pursuant to the FDICIA, undercapitalized
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institutions must submit recapitalization plans to their respective federal
banking regulatory agencies, and a company controlling a failing institution
must guarantee such institution's compliance with its plan in order for the plan
to be accepted.
The FDIC's prompt and corrective action regulations define, among other
things, the relevant capital measures for the five capital categories. For
example, a bank is deemed to be "well-capitalized" if it has a total risk-based
capital ratio (total capital to risk-weighted assets) of 10% or greater, a Tier
1 risk-based capital ratio (Tier 1 capital to risk-weighted assets) of 6% or
greater, and a Tier 1 leverage capital ratio (Tier 1 capital to adjusted total
assets) of 5% or greater, and is not subject to a regulatory order, agreement or
directive to meet and maintain a specific capital level for any capital measure.
A bank is deemed to be "adequately capitalized" if it has a total risk-based
capital ratio of 8% or greater, and (generally) a Tier 1 leverage capital ratio
of 4% or greater, and the bank does not meet the definition of a
"well-capitalized" institution. A bank is deemed to be "critically
undercapitalized" if it has a ratio of tangible equity (as defined in the
regulations) to total assets that is equal to or less than 2%. In addition, the
FDIC is authorized effectively to downgrade a bank to a lower capital category
than the bank's capital ratios would otherwise indicate, based upon safety and
soundness considerations (such as when the bank has received a less than
satisfactory examination rating for any of the CAMELS rating categories other
than capital: i.e. Asset Quality, Management, Earnings or Liquidity). As a bank
drops to lower capital levels, the extent of action to be taken by the
appropriate regulator increases, restricting the types of transactions in which
the bank may engage. The new capital standards are designed to bolster and
protect the deposit insurance fund. Based upon its proposed capital, the Bank
would be considered to be well capitalized.
INSURANCE ON DEPOSIT ACCOUNTS. In response to the requirements of the
FDICIA, the FDIC established a risk-based assessment system for insured
depository institutions that takes into account the risks attributable to
different categories and concentrations of assets and liabilities. The FDIC
assigns a financial institution to one of three capital categories based on the
institution's financial information, as of the reporting period ending seven
months before the assessment period. These categories consist of well
capitalized, adequately capitalized or undercapitalized, and one of three
supervisory subcategories within each capital group. The supervisory subgroup to
which an institution is assigned is based on a supervisory evaluation provided
to the FDIC by the financial institution's primary regulator, in the Bank's case
the Department, and information which the FDIC determines to be relevant to the
institution's financial condition and the risk posed to the deposit insurance
funds. A financial institution's assessment rate depends on the capital category
and supervisory category to which it is assigned. There are nine assessment risk
classifications (i.e., combinations of capital groups and supervisory subgroups)
to which different assessment rates are applied. BIF assessment rates range from
0 basis points on deposits for a financial institution in the highest category
(i.e., well-capitalized and financially sound with only a few minor weaknesses)
to 31 basis points on deposits for an institution in the lowest category (i.e.,
undercapitalized and posing a substantial probability of loss to the BIF, unless
effective corrective action is taken). The Bank does not expect any assessment
for its first year of operation.
STANDARDS FOR SAFETY AND SOUNDNESS. The FDICIA requires each federal
banking agency to prescribe for all insured depository institutions and their
holding companies standards relating to internal controls, information systems
and audit systems, loan documentation, credit underwriting, interest rate risk
exposure, asset growth, compensation, fees and benefits and such other
operational and managerial standards as the agency deems appropriate. In
addition, the federal banking regulatory agencies are required to prescribe by
regulation standards specifying: (i) maximum classified assets to capital
ratios; (ii) minimum earnings sufficient to absorb losses without impairing
capital; (iii) to the extent feasible, a minimum ratio of market value to book
value for publicly traded shares of depository institutions or the depository
institution holding companies; and (iv) such other standards relating to asset
quality, earnings and valuation as the agency deems appropriate. Finally, each
federal banking agency is required to prescribe standards for employment
contracts and other compensation arrangements of executive officers, employees,
directors and principal shareholders of insured depository institutions that
would prohibit compensation and benefits and other arrangements that are
excessive or that could lead to a material financial loss for the institution.
If an insured depository institution or its holding company fails to meet any of
its standards described above, it will be required to submit to the appropriate
federal banking agency a plan specifying the steps that will be taken to cure
the deficiency. If an institution fails to submit an acceptable plan or fails to
implement the plan, the appropriate federal banking agency will require the
institution or holding company, to correct the deficiency and until corrected,
may impose restrictions on the institution or the holding company including any
of the restrictions applicable under the prompt corrective action provisions of
the FDICIA.
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The FDICIA also requires each appropriate federal banking agency to adopt
uniform regulations prescribing standards for extensions of credit secured by
real estate or made for the purpose of financing the construction of
improvements on real estate. In prescribing these standards, the banking
agencies must consider the risk posed to the deposit insurance funds by real
estate loans, the need for safe and sound operation of insured depository
institutions and the availability of credit.
CAPITAL REQUIREMENTS. The Federal Reserve and the FDIC have adopted
capital regulations which establishes a Tier 1 core capital definition and a
minimum 3% leverage capital ratio requirement for the most highly-rated banks
and holding companies (i.e., those banks and holding companies with a composite
CAMELS rating of 1 under the Uniform Financial Institutions Rating System
established by the Federal Financial Institutions Examination Council) that are
not anticipating or experiencing significant growth. All other state nonmember
banks are required to meet a minimum leverage ratio that is at least 100 to 200
basis points above 3%. A holding company or bank that is not in the
highest-rated category or that is anticipating or experiencing significant
growth will have to meet a minimum leverage ratio of at least 4%. Based upon the
Bank's Business Plan, the minimum capital with which the Bank will be permitted
to open is $6.4 million.
Under the Federal Reserve's and the FDIC's risk-based regulations, a
holding company or bank must classify its assets and certain off-balance sheet
activities into categories and maintain specified levels of capital for each
category. The least capital is required for the category deemed by the Federal
Reserve and the FDIC to have the least risk, and the most capital is required
for the category deemed by the Federal Reserve and the FDIC to have the greatest
risk. The regulations require a holding company or bank to have a total risk
based capital ratio of 8% and a Tier 1 risk based capital ratio of 4%. Under the
statement of policy, certain assets are required to be deducted from risk-based
capital. Such assets include intangible assets, unconsolidated banking and
finance subsidiaries, investments in securities subsidiaries, ineligible equity
investments and reciprocal holding of capital instruments with other banks. In
addition, the Federal Reserve or the FDIC may consider deducting other assets on
a case-by-case basis or investments in other subsidiaries on a case-by-case
basis or based on the general characteristics or functional nature of the
subsidiaries.
LOANS TO ONE BORROWER. Florida law allows a state bank to extend credit to
any one borrower in an amount up to 25% of its capital accounts, which are
defined as unimpaired capital, surplus and undivided profits, provided that the
unsecured portion may not exceed 15% of the capital accounts of the bank. The
law permits exemptions for loans collateralized by accounts maintained with the
Bank and for loans guaranteed by the Small Business Administration, the Federal
Housing Administration and the Veterans Administration. The Bank will be subject
to these limits.
PAYMENT OF DIVIDENDS. While not the only source of income, the primary
source of income to the Company will be dividends from the Bank. A Florida
chartered commercial bank may not pay cash dividends that would cause the bank's
capital to fall below the minimum amount required by federal or Florida law.
Otherwise, a commercial bank may pay a dividend out of the total of current net
profits plus retained net profits of the preceding two years to the extent it
deems expedient, except as described below. Twenty percent of the net profits in
the preceding two year period may not be paid in dividends, but must be retained
to increase capital surplus until such surplus equals the amount of common and
preferred stock issued and outstanding. In addition, no bank may pay a dividend
at any time that net income in the current year when combined with retained net
income from the preceding two years produces a loss. The ability of the Bank to
pay dividends to the Company will depend in part on the FDIC capital
requirements in effect at such time and the ability of the Bank to comply with
such requirements.
BROKERED DEPOSITS. In accordance with the FDICIA, the FDIC has implemented
restrictions on the acceptance of brokered deposits. In general, an
"undercapitalized" institution may not accept, renew or roll over any brokered
deposits. "Adequately capitalized" institutions may request a waiver from the
FDIC to do so, while "well-capitalized" institutions may accept, renew or roll
over such deposits without restriction. The rule requires registration of
deposit brokers and imposes certain recordkeeping requirements. Institutions
that are not "well-capitalized" (even if meeting minimum capital requirements)
are subject to limits on rates of interest they may pay on brokered and other
deposits. The Bank does not expect to acquire any brokered deposits.
LIQUIDITY. A state-chartered commercial bank is required under Florida law
to maintain a liquidity reserve of at least 15% of its total transaction
accounts and 8% of its total nontransaction accounts subject to certain
restrictions. This reserve may consist of cash-on-hand, demand deposits due from
correspondent banks, and other investments and short-term marketable securities.
The Bank will be subject to these requirements.
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<PAGE> 26
COMMUNITY REINVESTMENT. Under the Community Reinvestment Act ("CRA"), as
implemented by Federal Reserve and FDIC regulations, holding companies and state
nonmember banks have a continuing and affirmative obligation consistent with
their safe and sound operation to help meet the credit needs of their entire
community, including low- and moderate-income neighborhoods. The CRA does not
establish specific lending requirements or programs for financial institutions
nor does it limit an institution's discretion to develop the types of products
and services that it believes are best suited to its particular community,
consistent with the CRA. The CRA requires the Federal Reserve and the FDIC, in
connection with their examination of holding companies or state nonmember banks,
to assess the Company's record of meeting the credit needs of their communities
and to take such record into account in its evaluation of certain applications
by such institution. The FIRREA amended the CRA to require public disclosure of
an institution's CRA rating and to require that the Federal Reserve and the FDIC
provide a written evaluation of an institution's CRA performance utilizing a
four-tiered descriptive rating system in lieu of the then existing five-tiered
numerical rating system. The Company and the Bank will be subject to these
regulations.
DEPOSIT INSURANCE FUNDS ACT OF 1996. On September 30, 1996, Congress
passed and the President signed in to law the Deposit Insurance Funds Act of
1996 ("DIFA"). Among other things, the DIFA, and rules promulgated thereunder by
the FDIC, provide for banks and thrifts to share the annual interest expense for
the Finance Corp. Bonds which were issued in the late 1980s to help pay the
costs of the savings and loan industry restructuring. The approximate annual
interest expense is $780 million of which BIF insured banks are expected to pay
approximately $322 million or 41%, while SAIF insured thrifts will pay
approximately $458 million or 59% of the interest expense. It is estimated that
the annual assessment for BIF insured institutions will be approximately 1.2
cents per $100 of deposits, while SAIF insured institutions will pay 6.5 cents
per $100 of deposits. These payments are to begin in 1997 and run through 1999.
Beginning in the year 2000 and continuing through the year 2017, banks and
thrifts will each pay 2.43 cents per $100 of deposits. These assessments will be
in addition to any regular deposit insurance assessments imposed by the FDIC
under FDICIA. See REGULATION AND SUPERVISION -- Insurance on Deposit Accounts.
INTERSTATE BANKING. Under the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, existing restrictions on interstate acquisitions of
banks by bank holding companies were repealed on September 29, 1995, such that
the Company and any other bank holding company would be able to acquire any
Florida-based bank, subject to certain deposit percentage and other
restrictions. The legislation also provides that, unless an individual state
elects beforehand either (i) to accelerate the effective date or (ii) to
prohibit out-of-state banks from operating interstate branches within its
territory, on or after June 1, 1997, adequately capitalized and managed bank
holding companies will be able to consolidate. De novo branching by an
out-of-state bank would be permitted only if it is expressly permitted by the
laws of the host state. The authority of a bank to establish and operate
branches within a state will continue to be subject to applicable state
branching laws. Florida has adopted legislation which will permit interstate
acquisitions and interstate branching effective June 1, 1997. Florida law
prohibits de novo branching by out of state banks.
DEPARTMENT ASSESSMENT. State-chartered commercial banks are required by
Department regulation to pay assessments to the Department to fund the
operations of the Department. The general assessment, to be paid semiannually,
is computed upon a bank's total assets, including consolidated subsidiaries, as
reported in the bank's latest quarterly call report. The Bank will be required
to pay such assessments semi-annually.
THE FEDERAL RESERVE SYSTEM
The Federal Reserve regulations require banks to maintain non
interest-earning reserves against their transaction accounts (primarily NOW and
regular checking accounts). The Federal Reserve regulations generally require
that reserves of 3% must be maintained against aggregate transaction accounts of
$49.3 million or less (subject to adjustment by the Federal Reserve) plus 10%
(subject to adjustment by the Federal Reserve between 8% and 14%) against that
portion of total transaction accounts in excess of $49.3 million. The first $4.4
million of otherwise reservable balances (subject to adjustments by the Federal
Reserve) are exempted from the reserve requirements. The balances maintained to
meet the reserve requirements imposed by the Federal Reserve may be used to
satisfy liquidity requirements. Because required reserves must be maintained in
the form of either vault cash, a noninterest-bearing account at a Federal
Reserve Bank or a pass-through account as defined by the Federal Reserve,
interest-earning assets of the Bank are reduced. The Company and the Bank will
be subject to these requirements.
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<PAGE> 27
FEDERAL SECURITIES LAWS
The Company, in connection with this Offering, filed with the SEC a
registration statement under the Securities Act for the registration of the
Company's Common Stock. The registration under the Securities Act of shares of
the Common Stock issued in this Offering does not cover the resale of such
Shares. Shares of the Common Stock purchased by persons who are not affiliates
of the Company may be resold without further registration. Shares purchased by
an affiliate of the Company will be subject to the resale restrictions of Rule
144 under the Securities Act. If the Company meets the current public
information requirements of Rule 144 under the Securities Act, each affiliate of
the Company who complies with the other conditions of Rule 144 (including the
holding period and those that require the affiliate's sale to be aggregated with
those of certain other persons) may be able to sell in the public market,
without registration, a number of shares not to exceed, in any three-month
period, the greater of (i) 1% of the outstanding Shares of the Company, or (ii)
the average weekly volume of trading in such Shares during the preceding four
calendar weeks. Provision may be made in the future by the Company to permit
affiliates to have their Shares registered for sale under the Securities Act
under certain circumstances.
The scope of regulation, supervision and permissible activities of the
Company and the Bank is subject to change by future federal and state
legislation.
ORGANIZERS AND PRINCIPAL SHAREHOLDERS
The following persons are Organizers of both the Company and Bank: D.
Michael Carter, Victor M. George, James M. Healey, David C. Keasler, Rudolph A.
Kraft, William L. Kyle, R. C. Mills, Charles F. Spencer, John R. Schultz, John
W. Rose, Bennett A. Tavar, and Gary L. Winfield, M.D. The Organizers, as a
group, intend to subscribe for 171,500 shares in the Offering which will equal
22.9% of the 750,000 minimum shares required to be sold in order to release
funds from the Subscription Escrow Agreement. In addition to the subscriptions
committed to by the Organizers, the Organizers have indicated that they may be
willing to subscribe for additional shares in the Offering if necessary to help
the Company complete the Offering and release the proceeds from the Subscription
Escrow Account. In any event, total purchases by the Organizers will not exceed
8,575 shares in the aggregate, which would equal approximately 5% of the 750,000
minimum shares required to be sold in order to release funds from the
Subscription Escrow Account.
All organizational expenses of the Company and the Bank have been financed
by the Company Organizers, or by loans guaranteed by the Organizers. In order to
fund the organizational and preopening expenses of the proposed bank, estimated
to be approximately $400,000, one of the Organizers, R.C. Mills, has loaned the
Company $150,000, as evidenced by a Promissory Note dated October 10, 1997. The
loan is at 8.5% interest and will be repaid from the proceeds of the Offering.
Pre-opening expenses exceeding the $150,000 loaned to the Company by the
Organizer will be funded through a line of credit that has been extended to the
Company by the Independent Banker's Bank on terms and conditions as follows:
<TABLE>
<S> <C>
Loan Amount:.......................... up to $450,000
Terms:................................ On demand, interest monthly, due on or before April 10, 1999.
Rate:................................. Wall Street Journal prime minus 1%, floating
Fee:.................................. None
Guarantors:........................... Organizing Directors - limited to $62,500 per direct
</TABLE>
[TABLE TO FOLLOW THIS PAGE]
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<PAGE> 28
<TABLE>
<CAPTION>
% OF OWNERSHIP
NUMBER OF % OF OWNERSHIP BASED ON BASED ON
NAME(1) SHARES(2) MINIMUM OFFERING(3) MAXIMUM OFFERING(3)
------- --------- ----------------------- -------------------
<S> <C> <C> <C>
D. Michael Carter 11,100 1.67% 0.83%
Victor M. George 12,500 1.67% 0.83%
James M. Healey 17,500 2.33% 1.17%
Rudolph A. Kraft 19,000 2.53% 1.26%
William L. Kyle, Jr. 16,700 2.33% 1.17%
R.C. Mills 30,000 4.00% 2.00%
John W. Rose 26,500 3.53% 1.77%
John R. Schultz 15,000 2.0% 1.00%
Charles F. Spencer 10,000 1.33% 0.67%
Bennett A. Tavar 15,000 2.00% 1.00%
Gary L. Winfield, M.D. 12,500 1.67% 0.83%
------- ----- -----
TOTAL 171,500 22.87% 11.43%
======= ===== =====
</TABLE>
- ----------------
(1) Each of the Organizers will acquire their shares during the Offering
Period and in accordance with the terms set forth herein.
(2) Number of Shares to be purchased in the Offering.
(3) Individual percentages based upon 750,000 Shares outstanding and
1,500,000, respectively.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY AND THE BANK
COMPANY. The initial Board of Directors of the Company consists of 11
directors. The directors will be divided into three classes, designated Class I,
Class II and Class III. Each class will consist, as nearly as may be possible,
of one-third of the total number of directors constituting the entire Board of
Directors. The term of the Company's initial directors will expire at the first
meeting of shareholders at which directors are elected. It is expected that the
Company will hold an organizational meeting of the shareholders shortly after
the Bank commences operations at which time the shareholders will be asked to
elect Directors. Following the subsequent election of the Company's directors,
the term of the Company's Class I directors will expire at the Company's next
annual meeting of shareholders; the term of the Company's Class II directors
will expire at the Company's second annual meeting of shareholders; and the term
of the Company's Class III directors will expire at the Company's third annual
meeting of shareholders. At each annual meeting of shareholders, successors to
the class of directors whose term expires at the annual meeting will be elected
for a three-year term. If the number of directors is changed, an increase or
decrease will be apportioned among the classes so as to maintain the number of
directors in each class as nearly equal as possible, and any additional director
of any class elected to fill a vacancy resulting from an increase in such class
will hold office for a term that will coincide with the remaining term of that
class, but in no event will a decrease in the number of directors shorten the
term of any incumbent director. Any director elected to fill a vacancy not
resulting in an increase in the number of directors will have the same remaining
term as that of his predecessor. Except in the case of removal from office, any
vacancy on the Board of Directors will be filled by a majority vote of the
remaining directors then in office. The effect of the
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<PAGE> 29
classified Board of Directors is to make it more difficult for a person, entity
or group to effect a change in control of the Company through the acquisition of
a large block of the Company's voting stock.
Any director may be removed, with or without cause, at any regular or
special meeting of shareholders called for that purpose, and the position filled
by another person nominated and elected for that purpose by the affirmative vote
of the holders of at least 66% of the outstanding shares of the Company's Common
Stock. The Company's officers are appointed by the Board of Directors and hold
office at the will of the Board.
BANK. Each of the Bank's proposed directors will, upon approval of the
Department, serve until the Bank's first shareholders meeting, which meeting
will be held shortly after the Bank commences operations. It is anticipated that
each interim director will be nominated to serve as director of the Bank at that
meeting. The Company will be the sole shareholder of the Bank. After the first
shareholder meeting, directors of the Bank will serve for a term of one year and
will be elected each year at the Bank's annual meeting of shareholders. The
Bank's officers will be appointed by its Board of Directors and will hold office
at the will of the Board.
Effective upon organization of the Company, all Organizers served as
initial directors of the Company. See, "Appendix A" herein. The proposed
directors and executive officers for the Company and the Bank are as follows:
<TABLE>
<CAPTION>
NAME POSITION WITH COMPANY POSITION WITH BANK
- ---- --------------------- ------------------
<S> <C> <C>
D. Michael Carter Director Director
President, Chairman, CEO and Chief
Victor M. George Chairman, President, CEO Loan Officer
James M. Healey Director --
David C. Keasler N/A Vice President, Senior Loan Officer
Rudolph A. Kraft Director --
William L. Kyle, Jr. Director Director
R. C. Mills Director Director
John W. Rose Director Director
Lynn H. Sandberg N/A Senior Vice President of Operations
John R. Schultz Director Director
Charles F. Spencer Director Director
Bennett A. Tavar Director Director
Gary L. Winfield, M.D. Director Director
</TABLE>
INITIAL DIRECTORS. The following is a brief description of the business,
civic and educational experience of the initial Directors:
D. MICHAEL CARTER, age 45, is a Certified Public Accountant and a graduate
of Florida State University. Mr. Carter has lived in Jacksonville, Florida since
1975 and has an active accounting practice under Carter, Merolle & Company, P.A.
Tax and audit clients include businesses, business owners and executives, as
well as professionals. Prior to forming his own firm in 1980, Mr. Carter was a
public accountant with two national accounting firms.
VICTOR M. GEORGE, age 57, will be the President and CEO of the Company and
the Bank. He will serve as the Company's Interim Chairman of the Board until the
first annual meeting of shareholders. Mr. George has over 30 years of experience
in the banking industry which began in 1971 with The Fifth Third Bank in
Cincinnati, Ohio. Mr. George was the Vice President and Senior Commercial
Regional Lender when he left Fifth Third Bank in 1980 to form VMG & Associates,
Inc., an international financial firm. Mr. George moved to Orlando, Florida in
1983 to join Barnett Bank
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<PAGE> 30
of Central Florida, N.A., where he served as Senior Vice President, Corporate
Banking. Mr. George left Barnett Bank of Central Florida in 1988 to join First
Florida Bank, N.A., Orange County, Florida, were after a series of promotions he
became the President for First Florida Bank of Orange County, Florida. In 1993,
after First Florida Banks, Inc. was acquired by Barnett Banks, Inc., Mr. George
joined Community First Bank, a $320 million community bank located in
Jacksonville, Florida. He was Executive Vice President responsible for
commercial lending and consumer lending and the oversight of 10 branches. While
at Community First Bank, commercial loan growth increased 30% annually, and
consumer loans grew 212% through an indirect lending program implemented by Mr.
George. When Community First Bank was acquired by Compass Bank in August 1996,
Mr. George became the President of Fields Motor Cars of Florida, Inc. He
resigned his position in October 1997 to organize the Bank. Mr. George received
his B.A. degree in Economics from Georgetown University in Washington, D.C. He
also attended George Washington University for graduate study and has attended
numerous banking and management courses with the American Institute of Banking
and the American Management Association, respectively. Mr. George has lived in
the Jacksonville area for four years where he is active and well known in the
community. His civic and social activities include membership in the Meninak
Club of Jacksonville, Sawgrass Country Club, former member of the University
Club and a fund raising committee member of the Methodist Medical Center
Hospice. Mr. George has been active in sponsoring the Senior Olympics in
Jacksonville. From 1983 to 1993, Mr. George was involved in the Central Florida
community where he was active in the Mid-Florida Economic Development
Commission.
JAMES M. HEALEY, age 41, is a partner in the Jacksonville Mint, Inc., a
direct-mailed advertising vehicle, and has served as the company's Vice
President since 1991. Prior to his association with the Jacksonville Mint, Mr.
Healey worked with Carnation Food Products, Inc. and International Harvester.
Mr. Healey attended Purdue University where he received a B.A. degree from
Purdue's Business School with special studies in Marketing and Personnel. Mr.
Healey and his wife, Cathy, of 19 years, have been residents and active members
of the Jacksonville community since 1984.
RUDOLPH A. KRAFT, age 63, Part Owner of Kraft Motorcar Company, Inc.,
Jacksonville, Florida, a Mercedes-Benz, Jeep, Eagle and Buick Dealership from
November of 1988 to June 1998. President and Chief Executive Officer of Kraft
Holdings, Inc., a real estate investment and rental company. Mr. Kraft has
served on the board of a number of civic organizations. He currently sits on the
President's Council for Kettering University in Flint, Michigan.
WILLIAM L. KYLE, JR., age 70, is the past Chairman, President and CEO of
Voyager Insurance Companies. Mr. Kyle continues to be active with the company
and sits as consultant to its board of directors. Mr. Kyle's career with Voyager
Insurance Companies extended over a period of more than 30 years in
Jacksonville, Florida. Mr. Kyle was an Organizer and Director of Enterprise
National Bank of Jacksonville from 1987 until its acquisition by Compass Bank
effective January, 1997. Mr. Kyle served on the Loan Committee at Enterprise
National Bank of Jacksonville. He should be a source of extensive knowledge and
experience to the Board of Directors of the Bank and the Holding Company. Mr.
Kyle is well known in the Jacksonville community as a business and civic leader.
He is a long-standing member of Timuquana Country Club and the Meninak Club of
Jacksonville, the community's oldest civic organization, which was founded in
1919.
R.C. MILLS, age 61, is Executive Vice President and Chief Operating
Officer of Heritage Holdings, Inc., a national distributor of propane gas. Mr.
Mills is a native of Tallahassee, Florida and a graduate of the University of
Sarasota. Mr. Mills was instrumental in building Heritage Holdings, Inc. into a
national, publicly-traded company which is listed on the New York Stock
Exchange. Mr. Mills has an extensive business background and is experienced in
business mergers and acquisitions, corporate finance and personnel management.
Mr. Mills resides in the Jacksonville area and is a member of the First Baptist
Church of Jacksonville.
JOHN W. ROSE, age 49, has been a financial services executive, advisor,
and investor for over 25 years. Mr. Rose is the Founder/President of McAllen
Capital Partners, Inc., a boutique firm providing a select range of financial,
economic and management services, as well as capital resources exclusively to
the financial services industry. Mr. Rose continues to serve as a special
advisor to F.N.B. Corporation (Hermitage, Pennsylvania). Mr. Rose is also a
general partner and chairman of the investment committee of Castle Creek Capital
(California), a series of funds that invests in financial service companies.
Prior to forming McAllen Capital, Mr. Rose served in various capacities with the
following Chicago-based firms: President, Livingston Financial Group; Senior
Vice President, ABN/LaSalle National Bank; Associate, William Blair & Co.;
Principal, Dwyer, Rose & Associates; and Vice President, First National Bank. He
currently serves on the board of directors of Regent Bancshares, Philadelphia,
Pennsylvania, and First County Bank, Chardon, Ohio. Mr. Rose earned his
undergraduate degree from Case Western Reserve University. He received his
M.B.A. degree from Columbia University.
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<PAGE> 31
JOHN R. SCHULTZ, age 34, is a fourth generation native of Jacksonville,
Florida. Mr. Schultz is Chief Executive Officer of the Schultz Companies. He is
the Founder and Chairman of Schultz Construction, Inc., a commercial/residential
contractor and is Co-owner of Schultz Properties, Inc., a commercial real estate
brokerage firm. Mr. Schultz is a graduate of The Bolles School and attended the
University of Florida. Mr. Schultz is a director of numerous companies and
community organizations, including First Coast Venture Capital Corp.,
Southeast-Atlantic Corp. (Canada Dry bottler/distributor for Florida and
Georgia), Junior Achievement of Jacksonville, St. Vincent's Foundation, Museum
of Science and History, Jacksonville Museum of Contemporary Art, Volunteer
Jacksonville and Visador Company. Mr. Schultz is also a member of various
professional and civic organizations, including the Northeast Florida Builders
Association, Jacksonville Association of Realtors, Rotary Club of West
Jacksonville and Jacksonville Community Council, Inc. Mr. Schultz is an alumni
of the 1994 Class of Leadership Jacksonville.
CHARLES F. SPENCER, age 55, is President of the International
Longshoremen's Association, Local 1408 in Jacksonville, Florida. In addition,
Mr. Spencer is Vice President of the South Atlantic and Gulf Coast District of
I.L.A. and Vice President at Large of the Florida AFL-CIO. Mr. Spencer is a
member of the Jacksonville Sports Development Authority appointed by the Mayor.
He also serves as Secretary-Treasurer, elected by board members of the J.S.D.A.
A native of Jacksonville, Mr. Spencer is very active in the community. He is a
member of the West Side Church of Christ, where he teaches and is a member of
the finance committee. Mr. Spencer is a board member of Edward Waters College
where he attended school and is a former board member of the Florida Community
College at Jacksonville Foundation, which he also attended.
GARY L. WINFIELD, M.D., age 41, is a physician. Dr. Winfield has had an
active family practice in Jacksonville, Florida since 1989, operating under
Sandcastle Family Practice, P.A. From 1986 to 1989, Dr. Winfield completed his
residency requirements at St. Vincent's Hospital in Jacksonville. Dr. Winfield
is also Vice President of Medical Affairs for Anthem Health Plans of Florida, a
provider of health insurance. Dr. Winfield received his undergraduate degree
from the University of Oklahoma and is a graduate of the College of Medicine of
the University of Oklahoma.
OFFICERS. The following is a brief description of the business, civic and
educational experience of the initial Officers:
TIMOTHY R. HILYER, age 47, will be Vice President/Credit Administrator of
the Bank. Mr. Hilyer has over ten years of experience with the financial
services industry, including credit administration positions with community and
large regional banks. Prior to joining the Bank, he was Vice President and
Senior Credit Officer with Gulf Coast National Bank (Naples, Florida). Mr.
Hilyer's prior employment has included: Senior Credit Officer, Community First
Bank (Jacksonville), Credit Administration Officer, Bank South (Waycross,
Georgia), and Senior Credit Analyst, First Union National Bank (Columbus,
Georgia). A native of Georgia, he holds a bachelors of business administration
from the University of Georgia.
DAVID C. KEASLER, age 41, will be Senior Vice President and Senior Loan
Officer of the Bank. Mr. Keasler has 17 years financial services experience,
with specific expertise in the areas of credit production, underwriting and
administration. Most recently, he was President of Ponte Vedra Capital, Inc., a
Jacksonville-based mortgage brokerage business. His prior financial institutions
affiliations include: Vice President-Corporate Banking, Southeast Bank (Miami,
Florida), Vice President, American National Bank of Florida. A native of
Florida, Mr. Keasler holds a B.S.B.A. in Finance and Banking from the University
of Arkansas. His civic responsibilities included: Treasurer of River Region
Human Services and Committee Chairman for the Tournament Players Championship.
Mr. Keasler has been a resident of Jacksonville for 42 years.
LYNN H. SANDBERG, age 42, will be Vice President and Chief Operations
Officer of the Bank. Ms. Sandberg has nearly 25 years of financial institution
experience, focused primarily in the areas of financial management, operations,
and information technology. Ms. Sandberg was most recently Vice
President/Cashier with Enterprise National Bank, a community bank based in
Jacksonville, Florida. At Enterprise National Bank, Ms. Sandberg was responsible
for item processing, bookkeeping, and information systems. Her previous
financial services positions included: Senior Product Manager, Nation or (a
financial services software firm), Vice President-Operations, FloridaBank
(Jacksonville), Operations Officer, Barnett Operations Company (Jacksonville),
and Assistant Vice President, Florida National Bank (Jacksonville). A Florida
native, Ms. Sandberg is a graduate of Santa Fe Community College (Gainesville)
and is presently attending Jacksonville University.
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<PAGE> 32
EXECUTIVE COMPENSATION
The Organizers entered into an employment agreement with Victor M. George
in February 27, 1998, to assist the Organizers with the formation of the Company
and the Bank. Under the terms of the Agreement, Victor M. George will serve as
the President and Chief Executive Officer of the Company, subject to selection
by the Board of Directors, and as President, Chief Executive Officer of the
Bank, subject to selection by the Bank's Board of Directors. Mr. George will be
paid a base salary of $95,000 and will be entitled to a fixed performance bonus
equal to 3% of the Company's quarterly consolidated net income before taxes
(excluding extraordinary gains or losses) and without consideration of the
performance bonus computed in accordance with generally accepted accounting
principles. The Bank will also provide Mr. George with an automobile for use
during the term of employment. Under the employment agreement, the base salary
and any bonus is paid by the Bank. Mr. George may participate in all employee
benefits, stock option plans, pension plans, insurance plans and other fringe
benefits commensurate with his position. On or before each December 31, the
Board of Directors shall review the employment agreements and the employees'
performance and vote whether to extend the term of the employment agreements for
an additional year. The decision to extend the employment agreements is within
the sole discretion of the Board of Directors.
The Employment agreement provides for termination by the Bank for "cause."
In the event the Bank chooses to terminate Mr. George's employment for reasons
other than for cause, they (or in the event of death, their respective
beneficiaries) would be entitled to a severance payment equal to the total
annual compensation for the remainder of the term of the respective employment
agreement. In the event of a change of control of the Company or the Bank, Mr.
George will be entitled to three times his annual compensation.
In the event Mr. George voluntarily terminates his employment, other than
for reasons mentioned herein, all rights and benefits under the respective
employment agreement shall immediately terminate upon the effective date of
termination.
CERTAIN TRANSACTIONS
ORGANIZATIONAL ADVANCES
An Organizer of the Company and the Bank, R.C. Mills, has advanced in the
form of a loan, $150,000 in connection with organizational and capital raising
expenses. The loan bears 8.5% annualized interest. Each of the Organizers has
guaranteed his pro-rata share of the $150,000 loan, plus interests if the
minimum Offering is not raised. In addition, the Organizers have guaranteed the
$450,000 line of credit with the Independent Banker's Bank of Florida to pay for
additional organizational expenses. The Organizers have also signed as
guarantors for a loan of up to $1.8 million for the purchase and renovation of
the main office facility, furniture, fixtures and equipment.
BANKING TRANSACTIONS
It is anticipated that the directors and officers of the Company and the
Bank and the companies with which they are associated will have banking and
other transactions with the Company and the Bank in the ordinary course of
business. All transactions between the Company and affiliated persons, including
5% shareholders, will be on terms no less favorable to the Company than could be
obtained from independent third parties. Any loans and commitments to lend to
such affiliated persons or entities included in such transaction will be made in
accordance with all applicable laws and regulations and on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with unaffiliated persons of similar
creditworthiness.
FINANCIAL ADVISORS
On June 10, 1998, the Company engaged McAllen Capital Partners, Inc.
("McAllen Capital") as a financial advisor to assist the Company with its
marketing efforts and future strategic planning. McAllen Capital is a
diversified consulting firm providing financial, economic and management
consulting services to the financial services industry. McAllen Capital is
providing financial advice to the Company in connection with the Offering and
has been retained to provide post-capitalization strategic planning services.
McAllen Capital was chosen because of its specific expertise in the financial
services industry and experience in corporate recapitalization, including
transactions involving shareholder rights offerings and community offerings.
Following the Offering, McAllen Capital will assist management and the Board of
Directors in the post-capitalization phase by analyzing and monitoring the
Company's program in
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<PAGE> 33
implementing its new corporate strategies. John W. Rose, an Organizer and
director for both the Company and the Bank, is the President of McAllen Capital,
which will receive 1.5% fee of the gross proceeds of the public offering
(excluding the amount raised from directors and employees) for its advisory
service in connection with this Offering. McAllen Capital has not been retained
to, and will not, solicit the sale or purchase nor will it purchase or sell
Common Stock in connection with the Offering and will not otherwise act as an
underwriter with respect to the Offering.
MARKETING ARRANGEMENTS
The Company has engaged KBW and Baird as its "Sales Agents" in connection
with the offering pursuant to Sales Agency Agreements executed between the
Company, KBW and Baird (the "Agency Agreements"). KBW and Baird were chosen
because of their general experience in the financial services industry and
because of their experience in transactions involving community offerings.
KBW and Baird have provided advice to the Company regarding the structure
of the Offering, as well as with respect to marketing the shares of Common Stock
to be issued in the Offering. KBW and Baird will use their best efforts to
solicit subscriptions and purchase orders for shares of Common Stock in the
Offering.
KBW and Baird have not prepared any report or opinion constituting a
recommendation or advice to the Company, nor have they prepared an opinion as to
the fairness of the offering price or the terms of the Offering to the Company.
KBW and Baird express no opinion as to the prices at which shares to be
distributed in connection with the Offering may trade if and when they are
issued at any future time. See "DETERMINATION OF OFFERING PRICE."
As compensation for its services, the Company has agreed to pay KBW and
Baird: (i) no marketing fee for the Common Stock subscribed for or purchased by
the Company's officers, directors, or employees, and (ii) a marketing fee of
5.5% of the aggregate offering price of the Common Stock sold in the Community
Offering and the Syndicated Community Offering, excluding shares subscribed for
or purchased by the Company's officers, directors or employees. KBW and Baird
will pass on to such selected broker-dealers who participate in the Syndicated
Community Offering an amount of stock sold at a comparable price per share in a
similar market environment. Fees with respect to purchases affected with the
assistance of broker-dealers other than KBW or Baird will be transmitted by KBW
or Baird to such broker-dealer. In connection with its engagement of KBW and
Baird, the Company has agreed to indemnify KBW and Baird against certain
liability arising out of its engagement or, in the event indemnification is
unavailable, to contribute payments that KBW and Baird may be required to make
in respect thereof.
INDEMNIFICATION
The Articles of Incorporation and Bylaws of the Company provide for the
indemnification of directors and officers of the Company and the Bank, including
reasonable legal fees, incurred by such directors and officers while acting for
or on behalf of the Company or the Bank as a director, officer, employee or
agent, subject to certain limitations. See "Description of Capital Stock --
Certain Anti-Takeover and Indemnification Provisions." The Company expects to
purchase directors' and officers' liability insurance for directors and offers
of the Company and the Bank.
STOCK OPTION PLANS
The Board of Directors intends to present, at the Company's first annual
meeting of shareholders after the Bank opens for business, for shareholder
approval, a Directors' Stock Option Plan and a Key Employee Stock Option Plan
(collectively, the "Plans"), which will be designed to provide incentive
compensation to directors and key employees of the Company. The detail of the
Plans have not yet been determined, but such details would be disclosed to
shareholders in the Company's Proxy Statement issued in connection with
solicitation of shareholder approval of such Plans. It is anticipated that 15%
of the shares of the outstanding shares resulting from this Offering will be set
aside for stock options under the Plans, 8% to the Employees of the Company, and
5.5% to the directors of the Company, based pro-rata on the number of shares of
the Company that each director purchased. Under Mr. George's employment
agreement, he will be granted a stock option for 50,000 shares.
KEY-MAN LIFE INSURANCE
The Company has obtained a $1,000,000 "key-man" life insurance policy on
Mr. George which is payable to the Bank in the event of his death. Should Mr.
George die during the organizational process the Company may elect
31
<PAGE> 34
to terminate the Offering and refund all subscription proceeds to the
Subscribers or the Company may seek a qualified replacement which would delay
the commencement of operations and increase pre-opening expenses.
SUMMARY OF THE ARTICLES OF INCORPORATION
This following sets forth a general summary of certain provisions of the
Company's Articles which may be deemed to have an "anti-takeover effect or
otherwise restrict sales of the Company's Common Stock." The description below
is necessarily general and, with respect to the provision contained in the
Company's Articles, reference should be made to such documents. See Exhibit A.
GENERAL. Despite the belief of the Board of Directors of the Company that
these restrictive provisions are in the best interest of the shareholders, these
provisions may have the effect of discouraging a future takeover attempt which
would not be approved by the Company's Board of Directors, but pursuant to which
shareholders might receive a premium for their Common Stock over current market
prices or the effect of precluding other corporate action that a majority of the
shareholders felt were in their best interest. As a result, shareholders who
might desire to participate in such a transaction may not have any opportunity
to do so. Such provisions may also render the removal of the Board of Directors
of the Company and management more difficult. Finally, certain restrictive
provisions might make it difficult or impossible to sell Common Stock to persons
other than existing shareholder or the Company or might delay such a sale to
such an extent as to cause a substantial hardship on the selling shareholder.
AUTHORIZED SHARES. The Articles authorize the issuance of ten million
shares of stock consisting of eight million shares of Common Stock and two
million shares of Preferred Stock. The authorized shares of Common Stock were
authorized in an amount greater than that to be issued in this Offering to
provide the Company's Board of Directors with as much flexibility as possible to
effect, among other things, financing, acquisitions, stock dividends, stock
splits and employee stock option transactions. However, these additional
authorized shares may also be used by the Board of Directors consistent with its
fiduciary duty to deter future attempts to gain control of the Company. The
Company's Board currently has no plans for the issuance of any Preferred Stock
or any additional Common Stock other than the issuance of shares of Common Stock
in this Offering.
SPECIAL MEETINGS OF SHAREHOLDERS. A special meeting of the shareholders
may be called by a resolution adopted by a majority of the Board of Directors,
the Chairman of the Board or the President of the Company, or by shareholders
holding at least 20% of the outstanding shares of the Company.
DIRECTORS. The Company's directors are divided into three classes, with
the term of office of the first class (Class I) to expire at the 1998 Annual
Meeting of Shareholders, the term of office of the second class (Class II) to
expire at the 1999 Annual Meeting, and the term of office of the third class
(Class III) to expire at the 2000 Annual Meeting. Any director, or the entire
Board of Directors, may be removed from office by the affirmative vote of the
holders of at least 60% of the voting power of all of the then outstanding
shares of capital stock of the Company entitled to vote generally in the
election of directors, voting together as a single class.
AFFILIATED TRANSACTIONS AND BUSINESS COMBINATIONS. The Company's Articles
contain provisions requiring supermajority shareholder approval to effect
certain extraordinary corporate transactions which are not approved by a
majority of the disinterested members of the Board of Directors. The Articles
require the affirmative vote or consent of the holders of at least 66% of the
shares of voting stock, voting together as a single class, to approve any
merger, consolidation, disposition of all or a substantial part of the assets of
the Company or a subsidiary of the Company, exchange of securities requiring
shareholder approval or liquidation of the Company ("Affiliated Transaction"),
if any person who together with his affiliates and associates owns beneficially
10% or more of any voting stock of the Company ("Interested Shareholder") is a
party to the transaction; provided that a majority of the Disinterested
Directors of the Company has not approved the transaction.
CONTROL SHARE ACQUISITIONS. Control Shares acquired by a person acting
alone or as part of a group, with certain exceptions, have only such voting
rights as may be granted by a resolution approved by the holders of other than
interested shares of the Company. Additionally, such Control Shares are subject
to redemption by the Company within sixty days after the last acquisition if no
Acquiring Person Statement is filed. Dissenting shareholders to any Control
Share Acquisition shall have the right to obligate the Acquiring Person to
purchase their shares for the highest amount proposed to be paid per share in
the Control Share Acquisition.
32
<PAGE> 35
ACQUISITION OFFERS. The Board of Directors of the Company, when evaluating
any offer of another "Person" (as defined in the Articles) to: (i) make a tender
or exchange offer for any equity security of the Company; (ii) merge or
consolidate the Company with another corporation or entity; or (iii) purchase or
otherwise acquire all or substantially all of the properties and assets of the
Company, shall, in connection with the exercise of its judgement in determining
what is in the best interest of the Company and its shareholders, give due
consideration to all relevant factors, including, without limitation: (1) the
social and economic effect of acceptance of such offer on the Company's present
and future customers and employees and those of its subsidiaries in the
communities in which its subsidiaries operate or are located; (2) on the ability
of the Company to fulfill its corporate objectives as a financial bank holding
company; and (3) on the ability of its subsidiary financial banks to fulfill the
objectives of such banks under applicable statutes and regulations.
INDEMNIFICATION. The Company's Articles provide for the indemnification of
directors and executive officers to the maximum extent permitted by Florida law
as authorized by the Board of Directors and for the advancement of expenses
incurred in connection with the defense of any action, suit or proceeding that
the director or executive officer was a party to by reason of the fact that he
or she is or was a director of the Company upon the receipt of an undertaking to
repay such amount, unless it is ultimately determined that such director is not
entitled to indemnification.
AMENDMENT OF THE ARTICLES. Generally, amendments to the Articles must be
approved by a majority affirmative vote of its Board of Directors and also by a
majority of the outstanding shares of its voting stock. However, the affirmative
vote of 66% of the outstanding shares held by shareholders entitled to vote is
required to amend sections of the Articles which deal with Special Meetings of
Shareholders, Number and Classes of Directors, Affiliated Transactions and
Business Combinations, Acquisition Offers, and Indemnification.
LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or
the proposed Bank is a party or of which any of their properties are subject;
nor are there material proceedings known to the Company contemplated by any
governmental authority; nor are there material proceedings known to the Company,
pending or contemplated, in which any director, officer or affiliate or any
proposed principal security holder of the Company, or any associate of any of
the foregoing is a party or has an interest adverse to the Company or the Bank.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed upon for the Company by Igler & Dougherty, P.A.,
1501 Park Avenue East, Tallahassee, Florida 32301, counsel to the Company.
is acting as counsel for KBW and Baird regarding certain legal
matters.
EXPERTS
The financial statements of the Company as of December 31, 1997, and for
the period from October 24, 1997 (date of incorporation) to December 31, 1997,
included elsewhere in the Registration Statement, have been included in reliance
upon the reports of Hacker, Johnson, Cohen & Grieb, PA, independent certified
public accountants, and upon the authority of said firm as experts in accounting
and auditing matters.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission, 450
Fifth Street Northwest, Washington, D.C. 20549, a Form SB-2 Registration
Statement (herein, together with all amendments thereto, called the
"Registration Statement") under the 33 Act, as amended, with respect to the
shares of Common Stock offered hereby. This filing was made electronically
through EDGAR. This Prospectus does not contain all of the information included
in the Registration Statement. For further information with respect to the
Company and the Common Stock, reference is hereby made to the Registration
Statement and the exhibits and schedules thereto. A complete copy of the
document may be obtained at the Securities and Exchange Commission's web site
located at http://www.sec.gov.
33
<PAGE> 36
JACKSONVILLE BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report F-2
Balance Sheets at June 30, 1998 (unaudited) and December 31, 1997 F-3
Statements of Operations for the Periods from January 1, 1998 to June 30, 1998
(unaudited) and October 24, 1997 (Date of Incorporation)
to December 31, 1997 F-4
Statements of Changes in Stockholders' Deficit for the Periods from January 1,
1998 to June 30, 1998 (unaudited) and October 24, 1997 (Date of
Incorporation) to December 31, 1997 F-5
Statements of Cash Flows for the Periods from January 1, 1998 to June 30, 1998
(unaudited) and October 24, 1997
(Date of Incorporation) to December 31, 1997 F-6
Notes to Financial Statements as of June 30, 1998 (unaudited) and December
31, 1997 and for the Periods from January 1, 1998 to June 30, 1998
(unaudited) and October 24, 1997 (Date
of Incorporation) to December 31, 1997 F-7 - F-8
</TABLE>
All schedules have been omitted because of the absence of the conditions under
which they are required or because the required information is included in the
financial statements and related notes.
F-1
<PAGE> 37
INDEPENDENT AUDITORS' REPORT
Board of Directors
Jacksonville Bancorp, Inc.:
We have audited the accompanying balance sheet of Jacksonville Bancorp, Inc. (a
development stage company) (the "Company") at December 31, 1997, and the related
statements of operations, changes in stockholders' deficit, and cash flows for
the period from October 24, 1997 (Date of Incorporation) to December 31, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company at December 31,
1997, and the results of its operations and its cash flows for the period from
October 24, 1997 (Date of Incorporation) to December 31, 1997, in conformity
with generally accepted accounting principles.
/s/ HACKER, JOHNSON, COHEN & GRIEB PA
- --------------------------------------
HACKER, JOHNSON, COHEN & GRIEB PA
Orlando, Florida
August 28, 1998
F-2
<PAGE> 38
JACKSONVILLE BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
-------- ------------
1998 1997
---- ----
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash $ 114,533 $ 88,616
Premises and equipment 641,962 --
Other assets 2,410 --
--------- ---------
Total $ 732,988 114,533
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Line of credit 175,000 --
Note payable 625,000 --
Note payable to related party (Note 3) 150,000 150,000
Accrued interest payable 9,169 2,125
--------- ---------
Total liabilities 959,169 152,125
--------- ---------
Commitments (Note 4)
Stockholders' deficit:
Preferred stock, $.01 par value, 2,000,000 shares authorized, none
issued and outstanding -- --
Common stock, $.01 par value, 8,000,000 shares
authorized, none issued and outstanding -- --
Additional paid-in capital -- --
Accumulated deficit (226,181) (37,592)
--------- ---------
Total stockholders' deficit (226,181) (37,592)
--------- ---------
Total $ 732,988 114,533
--------- ---------
</TABLE>
See Accompanying Notes to Financial Statements.
F-3
<PAGE> 39
JACKSONVILLE BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM
PERIOD FROM OCTOBER 24, 1997
JANUARY 1, (DATE OF
1998 TO INCORPORATION) TO
JUNE 30, DECEMBER 31,
-------- ------------
1998 1997
---- ----
(UNAUDITED)
<S> <C> <C>
Interest income $ 1,225 1,054
Organizational expenses (189,814) (38,646)
--------- -------
Net loss $(188,589) (37,592)
--------- -------
</TABLE>
See Accompanying Notes to Financial Statements.
F-4
<PAGE> 40
JACKSONVILLE BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
PERIODS FROM OCTOBER 24, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997
AND FROM JANUARY 1, 1998 TO JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN ACCUMULATED STOCKHOLDERS'
STOCK CAPITAL DEFICIT DEFICIT
------ ---------- ----------- -------------
<S> <C> <C> <C> <C>
Balance at October 24, 1997
(date of incorporation) $ -- -- -- --
Net loss -- -- (37,592) (37,592)
----- ----- -------- --------
Balance at December 31, 1997 -- -- (37,592) (37,592)
Net loss (unaudited) -- -- (188,589) (188,589)
----- ----- -------- --------
Balance at June 30, 1998 (unaudited) $ -- -- (226,181) (226,181)
----- ----- -------- --------
</TABLE>
See Accompanying Notes to Financial Statements.
F-5
<PAGE> 41
JACKSONVILLE BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM
PERIOD FROM OCTOBER 24, 1997
JANUARY 1, (DATE OF
1998 TO INCORPORATION) TO
JUNE 30, DECEMBER 31,
1998 1997
---- ----
(UNAUDITED)
<S> <C> <C>
Cash flows used in administrative activities during the development stage:
Net loss $(188,589) (37,592)
Adjustments to reconcile net loss to net cash used by administrative
activities during the development stage:
Increase in other assets (2,410) --
Increase in accrued interest payable 7,044 2,125
--------- --------
Net cash used in administrative activities
of the development stage (183,955) (35,467)
--------- --------
Cash flows from investing activities:
Acquisition of premises and equipment (641,962) --
--------- --------
Cash flows from financing activities:
Proceeds from issuance of debt 800,000 150,000
--------- --------
Net (decrease) increase in cash (25,917) 114,533
Cash at beginning of period 114,533 --
--------- --------
Cash at end of period $ 88,616 114,533
--------- --------
Supplemental disclosures of cash flow information-
Cash paid during period for
Interest $ -- --
--------- --------
Income taxes $ -- --
--------- --------
</TABLE>
See Accompanying Notes to Financial Statements.
F-6
<PAGE> 42
JACKSONVILLE BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND JUNE 30, 1998 (UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL. Jacksonville Bancorp, Inc. (the "Company") was incorporated on
October 24, 1997 in the State of Florida. The Company has applied to the
Board of Governors of the Federal Reserve System ("Board of Governors")
to become a one-bank holding company and plans to acquire 100% of the
outstanding shares of The Jacksonville Bank (the "Bank"), which is
planned to be incorporated and organized in Jacksonville, Florida. The
operations of the Company, which initially are intended to consist
solely of the ownership of the Bank, have not commenced as of June 30,
1998. Therefore, with the exception of organizational costs which are
being expensed when incurred, accounting policies have not been
established. The Company has adopted a fiscal year end of December 31.
The accompanying financial statements at June 30, 1998 and for the six-month
period then ended is unaudited; however, in the opinion of management,
all adjustments necessary for the fair presentation of the financial
statements have been included. All such adjustments are of a normal
recurring nature. The results for the six months ended June 30, 1998 are
not necessarily indicative of the results which may be expected for the
entire year.
ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
(2) ORGANIZATION
In February, 1998, the Company filed an application for authority to
organize a state-chartered bank with the Comptroller of the State of
Florida, Department of Banking and Finance. The approval of this
application will be contingent upon certain conditions being met. These
conditions include, among other things, the establishment of total
capital accounts of the Bank of not less than $4,050,000 with not less
than $2,100,000 allocated to common capital, after all organizational
and preopening expenses, and the approval by the Board of Governors of
the Federal Reserve System of the Company's application to acquire the
stock of the Bank as a registered bank holding company.
(3) RELATED PARTIES
The Company has appointed one of its Organizers as the President and Chief
Executive Officer of the Company. The Company also has a $150,000 note
payable to one of its Organizers; the note bears interest at an annual
rate of 8.5%, and is expected to be repaid from the proceeds of the
stock offering.
(4) PREMISES AND EQUIPMENT
In May 1998, the Company purchased a former fast-food restaurant site which
will be renovated and used as the Bank's main office. The purchase price
was $625,000, and the Company expects to spend an additional $250,000
for renovations of the existing building. This facility is expected to
open in early 1999.
A summary of premises and equipment at June 30, 1998 (unaudited) follows:
<TABLE>
<S> <C>
Building and leasehold improvements $ 616,017
Furniture, fixtures and equipment 25,948
---------
Total, at cost $ 641,965
---------
</TABLE>
The premises and equipment set forth above are pledged to collateralize the
note payable discussed in Note 8.
Office facilities, which will serve as the main office until the main office
renovation is complete, have been leased under an operating lease which
commenced in July 1998. The leased office facilities will serve as a
branch office when the main office renovation is completed.
(continued)
F-7
<PAGE> 43
JACKSONVILLE BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(4) PREMISES AND EQUIPMENT, CONTINUED
The lease, which provides for a term of sixty months, requires the Company
to pay utilities, insurance, taxes and other operating expenses. Future
minimum rental commitments under the noncancelable lease are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------
<S> <C>
1998 $ 10,500
1999 21,420
2000 22,278
2001 23,172
2002 24,096
Thereafter 12,282
---------
$ 113,748
---------
</TABLE>
(5) SALE OF COMMON SHARES
The Company plans to offer a minimum of 750,000 shares and a maximum of
1,500,000 shares of its common stock to the public. The price per share
is expected to be $10. The Company expects to incur offering costs
ranging from $500,000 to $1.2 million relating to this sale.
(6) INCENTIVE STOCK OPTION PLAN
The Company's Board of Directors has adopted an Incentive Stock Option Plan
("Plan"). The Plan will be contingent upon approval by the Company's
shareholders. The Plan will provide for the grant of options at the
discretion of a committee designated by the Board of Directors to
administer the Plan. The option exercise price must be at least 100%
(110% in the case of a holder of 10% or more of the Common Stock) of the
fair market value of the stock on the date the option is granted and the
options will be exercisable by the holder thereof in full at any time
following a vesting period and prior to their expiration in accordance
with the terms of the Plan. The Company has entered into an Employment
Contract with its chief executive officer whereby he has been granted an
option to purchase 50,000 shares of the Company's common stock under
this Plan.
(7) LINE OF CREDIT
In April 1998, the Company obtained a line of credit of $450,000 from a
financial institution at an interest rate of Prime +1%. The line is
guaranteed by the Company's Board of Directors. At June 30, 1998,
$175,000 was outstanding under this line of credit. These amounts will
be used to fund organizational and other costs incurred by the Company
and to repay advances from organizers. It is intended that amounts
outstanding under this line of credit will be repaid from the proceeds
of the Company's common stock offering.
(8) NOTE PAYABLE
In May 1998, the Company obtained credit availability from another
financial institution, which provides for a short-term line of credit, a
loan for the acquisition of the Bank's main office, and a loan for the
purchase of furniture, fixtures and equipment. Each of these loans are
guaranteed by certain directors of the Company. The arrangement provides
for: (i) a $200,000 line of credit which bears interest at prime plus
1/2%, with an additional $500,000 letter of credit, with a term of 180
days; (ii) a loan of up to $850,000 for the purchase and renovation of
the Bank's main office, with provisions for a first lien on the
underlying real estate and an interest rate of prime minus 1/2%; and,
(iii), a loan of up to $250,000 to purchase furniture, fixtures and
equipment, bearing interest at prime minus 1/2% and a term of 180 days.
It is intended that each of these loans will be repaid from the proceeds
of the Company's common stock offering. At June 30, 1998, $625,000 was
outstanding under this credit facility.
F-8
<PAGE> 44
APPENDIX "A"
ARTICLES OF INCORPORATION
<PAGE> 45
STATE OF FLORIDA
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of
Incorporation of JACKSONVILLE BANCORP, INC., a Florida corporation, filed on
October 24, 1997, as shown by the records of this office.
The document number of this corporation is P97000091697.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee, the Capitol, this the
Twenty-fourth day of October, 1997
/s/ SANDRA B. MORTHAM
------------------------------
Sandra B. Mortham
Secretary of State
[SEAL]
<PAGE> 46
ARTICLES OF INCORPORATION
OF
JACKSONVILLE BANCORP, INC.
The undersigned incorporators, for the purpose of forming a corporation
under Chapter 607, the Florida Business Corporation Act, hereby adopt the
following Articles of Incorporation.
ARTICLE I - NAME
The name of the Corporation is "Jacksonville Bancorp, Inc."
("Corporation"). The principal place of business of the Corporation shall be
2275 Spanish Moss Drive, Jacksonville, Florida 32246, or at such other place
within the State of Florida as the Board of Directors may designate. The name of
the registered agent is Igler & Dougherty, P.A., 1501 Park Avenue East,
Tallahassee, Florida 32301, which address is also the address of the Registered
Office of the Corporation.
ARTICLE II - NATURE OF BUSINESS
The Corporation may engage in or transact any or all lawful activities or
business permitted under the laws of the United States and the State of Florida,
or any other state, county, territory or nation.
ARTICLE III - CAPITAL STOCK
SECTION 1 - CLASSES OF STOCK: The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is 10,000,000,
consisting of:
A. 2,000,000 shares of preferred stock, par value one cent ($0.01) per
share ("Preferred Stock"); and
B. 8,000,000 shares of common stock, par value one cent ($0.01) per
share ("Common Stock"). Each holder of shares of Common Stock shall be
entitled to one vote per share.
SECTION 2 - PREFERRED STOCK: The Board of Directors is authorized, subject
to any limitations prescribed by law, to provide for the issuance of the shares
of Preferred Stock in series,
<PAGE> 47
and by filing a certificate pursuant to the applicable laws of the State of
Florida (such certificate being hereinafter referred to as a "Preferred Stock
Designation"), to establish from time to time the number of shares to be
included in each such series and to fix the designation, powers, preferences and
rights of the shares of each such series and any qualifications, limitations or
restrictions thereof. The number of authorized shares of Preferred Stock may be
increased or decreased (but not below the number of shares then outstanding) by
the affirmative vote of the holders of a majority of the Common Stock, without a
vote of the holders of the Preferred Stock, or of any series thereof, unless a
vote of any such holders is required pursuant to the terms of any Preferred
Stock Designation.
ARTICLE IV - TERM OF EXISTENCE
This Corporation is to exist perpetually.
ARTICLE V - OFFICERS AND DIRECTORS
The names and street addresses of the initial officers and directors who
shall hold office the first year of the Corporation's existence or until their
successors are elected are:
<TABLE>
<CAPTION>
Name Address Title
- ---- ------- -----
<S> <C>
Victor M. George 126 Willow Pond Lane President/Chief Executive Officer
Ponte Vedra Beach, FL 32082 and Director
David C. Keasler 2275 Spanish Moss Drive Secretary and
Jacksonville, FL 32246 Director
Richard D. Spence 339 Ponte Vedra Boulevard Director
Ponte Vedra Beach, FL 32082
Harold S. O'Steen 759 North Edgewood Avenue Director
Jacksonville, FL 32205
Anthony T. Sleiman 4347-10 South University Blvd. Director
Jacksonville, FL 32216
</TABLE>
2
<PAGE> 48
ARTICLE VI - INCORPORATORS
The name and street address of the incorporator to these Articles of
Incorporation is Igler & Dougherty, P.A., 1501 Park Avenue East, Tallahassee,
Florida 32301.
ARTICLE VII - MANAGEMENT OF THE BUSINESS OF THE COMPANY
SECTION 1 - AUTHORITY OF THE BOARD. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors. In addition to the powers and authority expressly conferred upon them
by the Florida Statutes or by these Articles of Incorporation or the Bylaws of
the Corporation, the directors are hereby empowered to exercise all such powers
and do all such acts and things as may be exercised or done by the Corporation.
SECTION 2 - ACTION BY SHAREHOLDERS. Any action required or permitted to be
taken by the shareholders of the Corporation must be effected at a duly called
Annual or Special Meeting of Shareholders of the Corporation and may not be
effected by any consent in writing by such shareholders.
SECTION 3 - SPECIAL MEETINGS OF SHAREHOLDERS. Special Meetings of
shareholders of the Corporation may be called by the Board of Directors pursuant
to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board for
adoption), the Chairman of the Board or the President of the Corporation, or by
shareholders holding at least 20% of the outstanding shares of the Corporation.
ARTICLE VIII - NUMBER OF DIRECTORS
SECTION 1 - NUMBER OF DIRECTORS: The Board of Directors of the Corporation
shall be comprised of not less than three (3) nor more than fifteen (15)
directors and shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the Full Board as
set forth in the Corporation's Bylaws. The Board of Directors is authorized to
increase the number of directors by no more than two and to immediately appoint
persons to fill the new director positions until the next Annual Meeting of
Shareholders, at which meeting the new director positions shall be filled by
persons elected by the shareholders of the Corporation.
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However, this paragraph shall not be construed to limit the authority of the
shareholders of the Corporation to increase the number of directors in
accordance with the Bylaws of the Corporation.
SECTION 2 - ELECTION AND TERM: Directors shall be elected by a plurality
of the votes cast by the shares entitled to vote in the election at a meeting at
which a quorum is present. The term of the initial directors of the Corporation
expires at the first shareholders' meeting at which directors are elected.
SECTION 3 - CLASSES: The directors shall be divided into three classes, as
nearly equal in number as reasonably possible, with the term of office of the
first class (Class I) to expire at the 1998 Annual Meeting of Shareholders, the
term of office of the second class (Class II) to expire at the 1999 Annual
Meeting of Shareholders and the term of office of the third class (Class III) to
expire at the 2000 Annual Meeting of Shareholders. At each Annual Meeting of
Shareholders following such initial classification and election, directors
elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding Annual Meeting of Shareholders
after their election.
SECTION 4 - VACANCIES: Subject to the rights of the holders of any series
of Preferred Stock then outstanding, newly created directorships resulting from
any increase in the authorized number of directors or any vacancies in the Board
of Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled only by a majority vote of the
directors then in office, though less than a quorum. Directors so chosen shall
hold office for a term expiring at the next Annual Meeting of Shareholders. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
SECTION 5 - NOTICE: Advance notice of shareholder nominations for the
election of directors and of business to be brought by shareholders before any
meeting of the shareholders of the Corporation shall be given in the manner
provided in the Bylaws of the Corporation.
SECTION 6 - REMOVAL BY SHAREHOLDERS: Subject to the rights of the holders
of any series of Preferred Stock then outstanding, any director, or the entire
Board of Directors, may be removed from office at any time by the affirmative
vote of the holders of at least 60% of the
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voting power of all of the then-outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class.
ARTICLE IX - SPECIAL VOTING PROVISIONS FOR AFFILIATED
TRANSACTIONS AND BUSINESS COMBINATIONS
SECTION 1 - DEFINITIONS: The terms defined below shall apply for purposes
of this Article IX:
A. "Affiliated Transaction," when used in reference to the
Corporation and any Interested Shareholder (as hereinafter defined), means
any of the following situations:
(l) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested
Shareholder or (ii) any other corporation (whether or not itself
an Interested Shareholder) which is, or after such merger or
consolidation would be, an Affiliate of an Interested Shareholder.
(2) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions)
of assets of the Corporation or any Subsidiary of the Corporation
to or with any Interested Shareholder, or any Affiliate or
Associate of any Interested Shareholder:
a. Having an aggregate fair market value equal to 5% or
more of the aggregate fair market value of all assets,
determined on a consolidated basis, of the Corporation; or
b. Having an aggregate fair market value equal to 5% or
more of the aggregate fair market value of all outstanding
shares of the Corporation; or
c. Representing 5% or more of the earning power or net
income determined on a consolidated basis, of the Corporation.
(3) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any
shares of the Corporation or any Subsidiary to any Interested
Shareholder or any Affiliate of any Interested Shareholder in
exchange for cash, securities or other property (or a combination
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thereof) having an aggregate Fair Market Value (as hereinafter
defined) equaling or exceeding 5% or more of all the outstanding
shares of the Corporation and its Subsidiaries, except pursuant to
the exercise of warrants or rights to purchase stock offered, or a
dividend or distribution paid or made, pro rata to all
shareholders of the Corporation.
(4) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of an
Interested Shareholder or any Affiliate of any Interested
Shareholder.
(5) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or into
or otherwise involving an Interested Shareholder) which has the
effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which
is, directly or indirectly, owned by any Interested Shareholder or
any Affiliate of any Interested Shareholder.
(6) any receipt by the Interested Shareholder or any Affiliate
or Associate of the Interested Shareholder of the benefit,
directly or indirectly (except proportionately as a shareholder of
the Corporation), of any loans, advances, guaranties, pledges, or
other financial assistance or any tax credits or other tax
advantages provided by or through the Corporation.
B. "Interested Shareholder" means any Person who is the
Beneficial Owner, directly or indirectly, of more than 10% of the
outstanding voting shares of the corporation. However, the term
"Interested Shareholder" shall not include the Corporation or any
Subsidiary; any savings, employee stock ownership, or other employee
benefit plan of the Corporation or any Subsidiary; or any fiduciary of any
such plan when acting in such capacity. For the purpose of determining
whether a person is an Interested Shareholder pursuant to this Section,
the number of shares of Voting Stock deemed to be outstanding shall
include shares deemed owned through application of Article III, Section
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3, but shall not include any other shares of Voting Stock that may be
issuable pursuant to any contract, arrangement or understanding, upon
exercise of conversion rights, warrants, options, or otherwise.
C. "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Shareholder set forth in Paragraph B of this Section 1, the
term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly, by the
Corporation.
D. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Shareholder and was a
member of the Board of Directors prior to the time that the Interested
Shareholder became an Interested Shareholder, and any successor of a
Disinterested Director who is unaffiliated with the Interested Shareholder
and is recommended to succeed a Disinterested Director by a majority of
Disinterested Directors then on the Board of Directors.
E. "Fair Market Value" means: (i) the Fair Market Value of a
share on the date in question shall be determined by a majority of
Disinterested Directors, appropriately adjusted for any dividend or
distribution in shares of such stock or any combination or
reclassification of outstanding shares of such stock into a smaller number
of shares of such stock; and (ii) in the case of property other than cash
or shares, the Fair Market Value of such property on the date in question
as determined by a majority of the Disinterested Directors.
F. Reference to "Highest Per Share Price" shall in each case with
respect to any class of stock reflect an appropriate adjustment for any
dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding share of such stock into a greater number
of shares of such stock or any combination or reclassification of
outstanding shares of such stock into a smaller number of shares of such
stock.
G. "Affiliate" shall have the meaning set forth in Section
607.0901, Florida Statutes.
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H. "Person" shall mean any individual, a group acting in concert,
a corporation, a partnership, an association, a joint venture, an
investors' pool, a joint stock company, a trust, an unincorporated
organization or similar company, a syndicate or any other group formed for
the purpose of acquiring, holding or disposing of the equity securities of
the Corporation.
I. "Beneficial Ownership" is defined herein to mean a Person who,
directly or indirectly, has the:
(1.) voting power, which includes the power to vote or to
direct the voting of the "Voting Stock" as that term is defined
herein;
(2.) investment power, which includes the power to dispose of
or to direct the disposition of the Voting Stock; or
(3.) the right to acquire the voting power or investment
power, whether such right is exercisable immediately or only after
the passage of time, pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, warrants
or options, or otherwise.
J. "Acting in Concert" means (i) knowing participation in a joint
activity or conscious parallel action towards a common goal whether or not
pursuant to an express agreement; or (ii) a combination or pooling of
voting or other interests in the securities of an issuer for a common
purpose pursuant to any contract, understanding, relationship, agreement
or other arrangements, whether written or otherwise.
K. "Voting Stock" means the outstanding shares of all classes or
series of the Corporation entitled to vote generally in the election of
directors.
SECTION 2 - AFFILIATED TRANSACTIONS: In addition to any affirmative vote
required by law or these Articles of Incorporation, and except as otherwise
expressly provided in this Section, any Affiliated Transaction shall be approved
by the affirmative vote of the holders of two-thirds of the Voting Stock, voting
together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required or that a lesser
percentage may be specified by law or in any agreement with any national
securities exchange or otherwise.
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SECTION 3 - EXCEPTIONS: The voting provisions of Section 2 of this Article
IX shall not be applicable to a particular Affiliated Transaction if all of the
conditions specified in either of the following Paragraphs A and B are met:
A. The Affiliated Transaction has been approved by a majority of
the Disinterested Directors; or
B. In the Affiliated Transaction, consideration shall be paid to
the holders of each class of voting shares and all of the following
conditions shall be met:
(1) The aggregate amount of the cash and the Fair Market
Value, as of the valuation date of consideration, other than cash
to be received per share by the holders of Common Stock in such
Affiliated Transaction are at least equal to the higher of the
following:
a. if applicable, the Highest Per Share Price (as
previously defined herein), including any brokerage
commissions, transfer taxes and soliciting dealers' fees, paid
by the Interested Shareholder for any shares of Common Stock
acquired by it (i) within the two-year period immediately
prior to the first public announcement date of the Affiliated
Transaction ("Announcement Date"), or (ii) in the transaction
in which it became an Interested Shareholder, whichever is
higher;
b. the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested
Shareholder became an Interested Shareholder (such latter date
is referred to in this Article IX as the "Determination
Date"), whichever is higher;
c. if applicable, the price per share equal to the Fair
Market Value per share of such class or series determined
pursuant to sub-paragraph b. of this Section 3, multiplied by
the ratio of the Highest Per Share Price, including any
brokerage commissions, transfer taxes and soliciting dealers'
fees, paid by the Interested
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Shareholder for any shares of Voting Stock acquired by it
within the two-year period immediately prior the Announcement
Date (the numerator), to the Fair Market Value per share of
such class or series on the first day in such two-year period
on which the Interested Shareholder acquired the Voting Stock
(the denominator); or
d. if applicable, the highest preferential amount per
share to which the holders of shares of such Voting Stock are
entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation.
(2) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common
Stock) shall be in cash or in the same form as the Interested
Shareholder has previously paid for shares of such Voting Stock.
If the Interested Shareholder has paid for shares of any class of
Voting Stock with varying forms of consideration, the form of
consideration for such class of Voting Stock shall be either cash
or the form used to acquire the largest number of shares of such
class of Voting Stock previously acquired by it. The consideration
to be received pursuant to this provision shall be subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination of shares or similar event.
(3) During such portion of the three-year period preceding the
announcement date that such Interested Shareholder has become an
Interested Shareholder and except as approved by a majority of the
Disinterested Directors:
a. there shall have been no failure to declare and pay at
the regular date any full quarterly dividends (whether or not
cumulative) on any outstanding stock having preference over
the Common Stock as to dividends or liquidation;
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b. there shall have been (i) no reduction in the annual
rate of dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common Stock), and
(ii) an increase in such annual rate of dividends as necessary
to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of
outstanding shares of the Common Stock, and (iii) no such
Interested Shareholder who has become the Beneficial Owner of
any additional shares of Voting Stock except as part of the
transaction which results in such Interested Shareholder
becoming an Interested Shareholder.
(4) Unless approved by a majority of the Disinterested
Directors, no Interested Shareholder shall have received the
benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages
provided by the Corporation, whether in anticipation of or in
connection with such Affiliated Transaction or otherwise, during
the three-year period preceding the date the Interested
Shareholder became an Interested Shareholder.
(5) A proxy or information statement describing the proposed
Affiliated Transaction and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules
or regulations) shall be mailed to shareholders of the Corporation
at least 30 days prior to the consummation of such business
combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent
provisions).
SECTION 4 - BOARD DISCRETION: A majority of the Disinterested Directors of
the Corporation shall have the power and duty to determine for the purposes of
this Article IX, on the basis of information known to them after reasonable
inquiry, (i) whether a person is an Interested Shareholder; (ii) the number of
shares of Voting Stock beneficially owned by any person; (iii)
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whether a person is an Affiliate or Associate of another; and (iv) whether the
assets which are the subject of any Affiliated Transaction have, or the
consideration to be received for the issuance or transfer of securities by the
Corporation or any Subsidiary in any Affiliated Transaction has, an aggregate
Fair Market Value equal to or greater than 25% of the combined assets of the
Corporation and its Subsidiaries. A majority of the Disinterested Directors
shall have the further power to interpret all of the terms and provisions of
this Article IX.
SECTION 5 - INTERESTED SHAREHOLDER'S DUTY: Nothing contained in this
Article IX shall be construed to relieve any Interested Shareholder from any
fiduciary obligation imposed by law.
SECTION 6 - AMENDMENT: Notwithstanding any other provisions of these
Articles of Incorporation, or any provision of law which might otherwise permit
a lesser vote or no vote, but in addition to any affirmative vote of the holders
of any particular class or series of the Voting Stock required by law, these
Articles of Incorporation or any Preferred Stock Designation, the affirmative
vote of the holders of at least 66% of the voting power of all of the
then-outstanding shares of the Voting Stock (after giving effect to the
provisions of Article III of these Articles of Incorporation), voting together
as a single class, shall be required to alter, amend or repeal this Article IX.
ARTICLE X - CONTROL SHARE ACQUISITIONS
It is the intent of the Organizers of the Corporation that the provisions
of the "Florida Control-Share Acquisitions" statute, Section 607.0902, Florida
Statutes shall apply to acquisitions of the Corporation's shares by a person
acting alone or as part of a group which would result in an Acquiring Person, as
defined herein, owning Control Shares of the Company, except for those
acquisitions defined in Section 1 F.(2) and (3) of this Article.
SECTION 1 - DEFINITIONS: The following terms when used in this section
shall mean:
A. "Acquiring Person" means a person who makes or proposes to
make, or persons acting as a "group" as defined in sec. 13(d)(3) of the
Securities Exchange Act of 1934 who make or propose to make, a
Control-Share Acquisition; but "Acquiring Person" does not include the
Corporation.
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B. "Acquiring Person Statement" means the statement provided for
in Section 607.0902(6), Florida Statutes which shall set forth all of the
following:
(1) The identity of the Acquiring Person and each other member
of any group of which the Acquiring Person is a part for purposes
of determining Control Shares.
(2) A statement that the Acquiring Person Statement is given
pursuant to Section 607.0902(6), Florida Statutes.
(3) The number of shares of the Corporation owned, directly or
indirectly following the acquisition, by the Acquiring Person and
each other member of the group.
(4) The range of voting power under which the Control-Share
Acquisition falls or would, if consummated, fall.
(5) If the Control-Share Acquisition has not taken place:
(i) A description in reasonable detail of the terms of the
proposed Control-Share Acquisition; and
(ii) Representations of the Acquiring Person, together
with a statement, in reasonable detail of the facts upon which
they are based, that the proposed Control-Share Acquisition,
if consummated, will not be contrary to law and that the
Acquiring Person, has the financial capacity to make the
proposed Control-Share Acquisition, including the acquisition
of dissenter's shares, if any.
C. "Affiliate" means a person who directly or indirectly controls
the Corporation. "Control" means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies
of the Corporation, whether through the ownership of voting securities, by
contract, or otherwise. A person's beneficial ownership of ten percent or
more of the voting power of a Corporation's outstanding shares entitled to
vote in the election of directors (except a person holding voting power in
good faith as an agent, bank, broker, nominee, custodian or trustee for
one or more beneficial owners who do not individually or as a group
control the Corporation) creates a presumption that the person controls
the Corporation.
D. "All voting power" means the aggregate voting power that the
shareholders of the Corporation would have in the election of directors,
except for this Article.
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E. "Control Shares" means issued and outstanding shares of the
Corporation that, except for this section, would have voting power when
added to all other shares of the Corporation owned of record or
beneficially by an Acquiring Person or in respect to which that Acquiring
Person may exercise or direct the exercise of voting power, that would
entitle the Acquiring Person, immediately after acquisition of the shares
(directly or indirectly), to exercise or direct the exercise of the voting
power of the Corporation in the election of directors within any of the
following ranges of voting power:
(1) One-fifth (1/5) or more but less than one-third (1/3) of
all voting power;
(2) One-third (1/3) or more but less than a majority of all
voting power; or
(3) A majority or more of all voting power.
F. (1) "Control-Share Acquisition" means acquisition by any
person of ownership of, or the power to direct the exercise of voting
power with respect to, Control Shares.
(2) A person who acquires shares in the ordinary course of
business for the benefit of others in good faith and not for the
purpose of circumventing this section has not made a
Control-Shares Acquisition of shares in respect of which that
person is not able to exercise or direct the exercise of votes
without further instruction from others.
(3) The acquisition of any Control Shares does not constitute
a Control-Share Acquisition if the acquisition is made in good
faith and not for the purpose of circumventing this section in any
of the following circumstances:
a. Shares acquired in any distribution conducted by the
Corporation through any public or private offering or acquired
pursuant to any warrant certificate, stock option plan or
other employee benefit plan.
b. Pursuant to the laws of descent and distribution.
c. By a donee under an inter vivos gift.
d. Pursuant to a transfer between or among immediate
family members, or between or among persons under direct
common control. An "immediate family member" is any relative
or spouse of a person, or any relative of such spouse, who has
the same home as such person.
e. Pursuant to the satisfaction of a pledge or other
security interest.
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f. Pursuant to a merger or plan of consolidation or share
exchange effected in compliance with the Florida Statutes, if
the Corporation is a party to the agreement of merger or plan
of consolidation or share exchange.
g. From any person whose previous acquisition of Control
Shares would have constituted a Control-Shares Acquisition but
for this Section 1(e)(3) (other than this subsection
1(e)(3)(G), provided the acquisition does not result in the
Acquiring Person holding voting power within a higher range of
voting power than that of the person from whom the Control
Shares were acquired.
h. Acquisition by a person of additional shares within the
range of voting power for which such person has received
approval pursuant to the Control Share Statute or within the
range of voting power resulting from shares acquired in a
transaction described in Section 1 E.(3) herein.
i. An increase in voting power resulting from any action
taken by the Corporation, provided the person whose voting
power is thereby affected is not an Affiliate of the
Corporation.
j. Pursuant to the solicitation of proxies subject to
Regulation 14A under the Securities Exchange Act of 1934 or
Chapter 607, Florida Statutes.
G. "Interested Shares" means the shares of the Corporation in
respect of which any of the following persons may exercise or direct the
exercise, as of the applicable record date, of the voting power of the
Corporation in the election of directors, other than solely by the
authority of a revocable proxy:
(1) The Acquiring Person.
(2) Any officer of the Corporation.
(3) Any employee of the Corporation who is also a director of
the Corporation.
H. "Person" means any individual, Corporation, partnership,
unincorporated association or other entity.
SECTION 2 - VOTING RIGHTS: Control Shares of the Corporation acquired in a
Control-Share Acquisition shall have only such voting rights as are granted by
resolution approved by the holders of other than Interested Shares of the
Corporation, as provided for in Section 607.0902(a), Florida Statutes.
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SECTION 3. - REDEMPTION OF CONTROL SHARES BY THE COMPANY: Control Shares
acquired in a Control-Share Acquisition with respect to which no Acquiring
Person Statement has been filed with the Corporation are subject to redemption
by the Corporation at any time during the period ending sixty (60) days after
the last acquisition of Control Shares by such Acquiring Person or persons. Such
shares are also subject to redemption by the Corporation in the event the
Control Shares are not accorded full voting rights by the shareholders as
provided for in Section 607.0902 (10)(b) and Section 607.0902(9) of the Florida
Statutes. Such shares shall be subject to redemption at the fair value thereof.
Fair value shall be the higher of, the average price paid for all shares of the
Corporation, exclusive of the Control Shares, for the ninety (90) days prior to
the date of redemption by the Corporation or book value of the Corporation's
shares on the last day of the month preceding the date of redemption by the
Corporation, as calculated by Generally Accepted Accounting Procedures ("GAAP").
SECTION 4 - RIGHTS OF DISSENTING SHAREHOLDERS: If the Control-Share
Acquisition is approved by the required vote at the meeting of shareholders at
which it was voted upon, then any shareholder who did not vote in favor of the
Control-Share Acquisition shall have the right to file with the Corporation a
written demand for payment for his/her shares within ten (10) days after the
date of the shareholder meeting. A shareholder may demand payment for less than
all of the shares registered in his/her name. The Corporation shall deliver all
such demands for payment to the Acquiring Person immediately following the
expiration of the ten (10) day period. The Acquiring Person shall then be
obligated to purchase all shares subject to the demand for payment for the
highest amount he has proposed to pay per share in the Control-Share
Acquisition. Payment to shareholders making demand must be made on the day upon
which the Control-Share Acquisition is consummated or upon surrender of the
certificate or certificates representing shares for which demand has been made
to the Acquiring Person, whichever is later. Any shareholder failing to make
demand within the applicable ten (10) day period shall remain a shareholder of
the Corporation.
SECTION 5 - ALTERATION OR REPEAL OF THIS SECTION: This Section shall not
be altered, amended, or repealed, except by an affirmative vote of at least
66 2/3% of the total number of shares of the Corporation entitled to vote on
such matter.
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ARTICLE XI - ACQUISITION OFFERS
The Board of Directors of the Corporation, when evaluating any offer of
another Person to (i) make a tender or exchange offer for any equity security of
the Corporation, (ii) merge or consolidate the Corporation with another
corporation or entity or (iii) purchase or otherwise acquire all or
substantially all of the properties and assets of the Corporation, shall, in
connection with the exercise of its judgment in determining what is in the best
interest of the Corporation and its shareholders, give due consideration to all
relevant factors, including, without limitation, the social and economic effect
of acceptance of such offer on the Corporation's present and future customers
and employees and those of its Subsidiaries (as defined in Article IX); on the
communities in which the Corporation and its Subsidiaries operate or are
located; on the ability of the Corporation to fulfill its corporate objectives
as a financial institution holding company and on the ability of its subsidiary
financial institutions to fulfill the objectives of such institutions under
applicable statutes and regulations.
ARTICLE XII - INDEMNIFICATION
SECTION 1 - GENERAL: The Corporation shall indemnify any officer,
director, employee or agent of the Corporation to the fullest extent authorized
by Section 607.0850, Florida Statutes (1995) as it now exists or may hereafter
be amended, but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
said law permitted the Corporation to provide prior to such amendment. This
includes, but is not limited to, any person who was or is made a party or is
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative ("Proceeding"), by reason of the fact
that he or she, or a person of whom he or she is the legal representative, is or
was a director or officer of the Corporation or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such Proceeding is alleged action in an official capacity as a
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director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, reasonably incurred or suffered by such
person in connection therewith. Such indemnification shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of his or her heirs, executors and administrators;
provided, however, that the Corporation shall indemnify any such person seeking
indemnity in connection with an action, suit or Proceeding (or part thereof)
initiated by such person only if such action, suit or Proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation. Such right
shall be a contract right and shall include the right to be paid by the
Corporation for all expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, the payment of such
expenses incurred by a director or officer in his or her capacity as a director
or officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of such
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it should be determined ultimately that such director or officer
is not entitled to be indemnified under this Article or otherwise.
SECTION 2 - FAILURE TO PAY CLAIM: If a claim under Section 1 of this
Article is not paid in full by the Corporation within ninety (90) days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
Section 607.0850, Florida Statutes, for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
18
<PAGE> 64
applicable standard of conduct set forth in Section 607.0850, Florida Statutes,
nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that claimant has not met the applicable standard of
conduct.
SECTION 3 - OTHER RIGHTS: The rights conferred on any individual by
Sections 1 and 2 of this Article shall not be exclusive of any other right which
such individual may have or hereafter acquire under any statute, provision of
these Articles of Incorporation, Bylaws of the Corporation, agreement, vote of
shareholders or Disinterested Directors or otherwise.
SECTION 4 - INSURANCE: The Corporation may maintain insurance, at its
expense, to protect itself and any such director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under Section 607.0850, Florida Statutes.
SECTION 5 - PERSONAL LIABILITY: A director of the Corporation shall not be
personally liable to the Corporation or its shareholders for monetary damages
for any statement, vote, decision or failure to act regarding corporate
management or policy except as provided in Section 607.0850, Florida Statutes.
If Section 607.0850, Florida Statutes, is amended after adoption of these
Articles of Incorporation and such amendment further eliminates or limits the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
Section 607.0850, Florida Statutes, as so amended.
Any repeal or modification of the foregoing paragraph by the shareholders
or the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
ARTICLE XIII - AMENDMENT
The Corporation reserves the right to amend or repeal any provision
contained in these Articles of Incorporation in the manner prescribed by the
laws of the State of Florida, and all rights conferred upon shareholders are
granted subject to this reservation; provided, however, that, notwithstanding
any other provision of these Articles of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, the affirmative vote of
the holders of at least 66%
19
<PAGE> 65
of the voting power of all of the then-outstanding shares of the capital stock
of the Corporation entitled to vote generally in the election of directors
(after giving effect to the provisions of Article III), voting together as a
single class, shall be required to amend or repeal this Article XII, Section 3
of Article VII, Article VIII, Article IX or Article XI.
In witness of the foregoing, the undersigned has executed these Amended
Articles of Incorporation on behalf of the Board of Directors this 22nd day of
October, 1997.
/s/ A. George Igler
-----------------------------------------
A. GEORGE IGLER
GENERAL COUNSEL
STATE OF FLORIDA )
COUNTY OF LEON )
BEFORE ME, the undersigned Notary Public, in and for the State of Florida
at large, personally appeared A. George Igler, known personally to me to be the
individual described in and who executed the foregoing Amended Articles of
Incorporation of Jacksonville Bancorp, Inc. and after being duly sworn,
acknowledged that he executed the same for the uses and purposes therein
expressed.
(SEAL) /s/ Cristina H. Marshall
-----------------------------------------
NOTARY PUBLIC
Cristina H. Marshall
-----------------------------------------
NAME TYPED OR PRINTED
20
<PAGE> 66
CERTIFICATE DESIGNATING
REGISTERED AGENT/REGISTERED OFFICE
In accordance with Section 48.091, Florida Statutes, the following
designation and acceptance are being submitted in compliance thereof.
DESIGNATION:
Pursuant to the provision of Section 607.0501, Florida Statutes,
Jacksonville Bancorp, Inc. (Corporation") desires to organize under the laws of
the State of Florida, and in connection therewith, hereby designates Igler &
Dougherty, P.A. as its registered agent whose address is 1501 Park Avenue East,
Tallahassee, Florida 32301, which address shall also be the address of the
Registered Office of the Corporation.
ACCEPTANCE:
Having been named to accept service of process for the above-stated
corporation, at the place designated in this certificate, we hereby agree to act
in this capacity, and we further agree to comply with the provisions of all
statutes relative to the proper and complete performance of our duties, and we
accept the duties and obligations of Section 607.0501, Florida Statutes.
IGLER & DOUGHERTY, P.A.
By: /s/ A. George Igler
----------------------------------
A. George Igler
Dated: October 22, 1997
<PAGE> 67
APPENDIX "B"
ESCROW AGREEMENT
<PAGE> 68
Independent Bankers' Bank of Florida
ESCROW AGREEMENT
This Escrow Agreement is entered into and effective this day of
, 1998, by and between Jacksonville Bancorp, Inc., a
Florida corporation ( the "Company") and the Independent Bankers' Bank of
Florida ("Escrow Agent" or "Agent").
W I T N E S S E T H:
WHEREAS, the Company, proposes to offer for sale up to 1,500,000 shares of
its $0.01 par value common stock (the "Common Stock"), which shares shall be
registered under the Securities Act of 1933, as amended, at a price of $10.00
each, in minimum subscriptions of 250 shares ("Offering"); and
WHEREAS, the Company has requested the Escrow Agent to serve as the
depository for the payment of subscription proceeds ("Subscription Payment(s) or
Funds") received by the Company from investor(s) who are subscribing to purchase
shares of Common Stock in the Company pursuant to, and in accordance with, the
terms and conditions contained in the Company's Prospectus dated _________, 1998
and an executed Stock Order Form and Certification ("Stock Order Form"); and
WHEREAS, the Offering will terminate at 5:00 P.M., Local Time, 45 Days
after the Effective Date of the Company's Registration Statement, unless
extended by the Company for up to an additional 135 days ("Offering Period").
NOW THEREFORE, in consideration of the premises and understandings contained
herein, the parties agree as follows:
(1) The Company hereby appoints and designates the Escrow Agent for the
purposes set forth herein. The Escrow Agent acknowledges and accepts said
appointment and designation. The Company understands that the Escrow Agent, by
accepting said appointment and designation, in no way endorses the merits of the
offering of the shares described herein. The Company agrees to notify any person
acting on its behalf that the position of Escrow Agent does not constitute such
an endorsement, and to prohibit said persons from the use of the Agent's name as
an endorser of such offering. The Company further agrees to allow the Escrow
Agent to review any sales literature in which the Agent's name appears and which
is used in connection with such offering.
(2) The Company shall deliver all Subscription Payments received to the
Escrow Agent (Independent Bankers' Bank of Florida, Attn: Customer Service
Group) in the form in which they are received by noon of the fifth (5th)
business day after their receipt by the Company, and the Company shall deliver
to the Escrow Agent within fifteen (15) calendar days after receipt, copies of
written acceptances of the Company for shares in the Company for which the
Subscription Funds represent payment. Upon receipt, the Escrow Agent shall
immediately deposit such funds into the escrow account. The Company shall also
deliver to the Escrow Agent completed copies of Stock Order Forms for each
subscriber, along with such subscriber's name, address, number of shares
subscribed and social security or taxpayer identification number.
(3) Subscription Funds shall be held and disbursed by the Escrow Agent in
accordance with the terms of this Agreement.
(4) In the event any Subscription Payment is dishonored for payment for
any reason, the Escrow Agent agrees to orally notify the Company thereof as soon
as practicable and to confirm same in writing and to return the dishonored
Subscription Funds to the Company in the form in which they were delivered.
(5) Should the Company elect to accept a subscription for less than the
number of shares shown in the purchaser's Stock Order Form, by indicating such
lesser number of shares on the written acceptance of the
Page 1 of 6
<PAGE> 69
Company transmitted to the Escrow Agent, the Escrow Agent shall, upon separate
instruction from the Company, remit within ten (10) days to such subscriber at
the address shown in his Stock Order Form that amount of his Subscription
Payment in excess of the amount which constitutes full payment for the number of
subscribed shares accepted by the Company as shown in the Company's written
acceptance, without interest or diminution. Said address shall be provided by
the Company to the Escrow Agent as requested.
(6) Definitions as used herein:
(a) "Total Receipts" shall mean the sum of all Subscription Payments
delivered to the Escrow Agent pursuant to Paragraph (3) hereof, less: (i)
all Subscription Funds returned pursuant to Paragraphs (4) and (5) hereof;
and (ii) all Subscription Funds which have not been paid by the financial
institution upon which they are drawn.
(b) "Expiration Date" shall mean 5:00 P.M., Local Time, 45 days after
the Effective Date of the Company's Registration Statement dated
_____________, 1998; provided, however, in the event that the Escrow Agent
is given oral notification followed in writing, by the Company that it has
elected to extend the offering to a date not later than 135 additional
days, then the Expiration Date shall mean 5:00 P.M., Local Time, on the
date to which the offering has been extended. The Company will notify the
Escrow Agent of the effective date of the Prospectus as soon as
practicable after such date has been determined.
(c) "Closing Date" shall mean the business day on which the Company,
after determining that all of the Offering conditions have been met,
selects in its sole discretion. The Closing Date shall be confirmed to the
Escrow Agent in writing by the Company.
(d) "Escrow Release Conditions" shall mean that (i) the Company has
not canceled the Offering, and (ii) that the Company has received
preliminary approval from the appropriate regulatory entity to charter the
Bank as well as preliminary approval for deposit insurance from the FDIC.
(7) If, on or before the Expiration Date, (i) the Total Receipts held by
the Escrow Agent equal or exceed $7,500,000 and (ii) the Company has certified
to the Agent that, upon receipt of the net proceeds of the offering (after the
deduction of all fees, commissions, and other expenses of the offering): (a) the
Company will have stockholders' equity of at least $6,450,000; and (b) the
Escrow Release Conditions have been consummated, the Escrow Agent shall:
(a) No later than 10:00 A.M., Local Time, one day prior to Closing
Date (as that term is defined herein), deliver to the Company all
Subscription Documents provided to the Escrow Agent; and
(b) On the Closing Date, no later than 10:00 o'clock A.M., Local
Time, upon receipt of 24-hour written instructions from the Company, remit
all amounts representing Subscription Funds, plus any profits or earnings,
held by the Escrow Agent pursuant hereto to the Company in accordance with
such instructions.
(8) If (i) the Escrow Release Conditions are not met by the Expiration
Date, or (ii) the offering is canceled by the company at any time prior to the
Expiration Date, then the Escrow Agent shall promptly remit to each subscriber
at the address set forth in his Stock Order Form an amount equal to the amount
of his Subscription Payments thereunder, plus any profits or earnings thereon to
the extent that such profits or earnings are not payable to the Company under
paragraph (9) of this Escrow Agreement. The earnings accruing to any individual
subscriber under this paragraph shall be a prorated share of the gross earnings
on all funds under escrow, weighted by the amount and the duration of the funds
tendered for the individual subscription. Under no circumstances will earnings
accrue to any subscription canceled for any reason other than those provided for
in this paragraph.
(9) Pending disposition of the Subscription Funds under this Agreement,
the Escrow Agent will invest collected Subscription Funds, in $1,000 increments
above a maintained balance of $50,000, in overnight repurchase agreements
collateralized at 102% with obligations of the United States Treasury or United
States Government Agencies. These repurchase agreement transactions will earn
interest at a rate of 35 basis points below the daily Overnight Fed Funds Sold
rate. The Escrow Agent shall pay such investment interest to the Company upon
written instruction from the Company for the purpose of paying or reimbursing
the Company for pre-opening or organizing expenses.
Page 2 of 6
<PAGE> 70
(10) The obligations as Escrow Agent hereunder shall terminate upon the
Agents transferring all funds held hereunder pursuant to the terms of Paragraphs
(7) or (8) herein, as applicable.
(11) The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, certificate, receipt, authorization, or other
paper or document which the Agent believes to be genuine and what it purports to
be.
(12) The Escrow Agent shall not be liable for anything which the Agent may
do or refrain from doing in connection with this Escrow Agreement, except for
the Agent's own gross negligence or willful misconduct.
(13) The Escrow Agent may confer with legal counsel in the event of any
dispute or questions as to the construction of any of the provisions hereof, or
the Agent's duties hereunder, and shall incur no liability and shall be fully
protected in acting in accordance with the opinions and instructions of such
counsel. Any and all expenses and legal fees in this regard will be paid by the
Company.
(14) In the event of any disagreement between the Company and any other
person resulting in adverse claims and demands being made in connection with any
Subscription Funds involved herein or affected hereby, the Agent shall be
entitled to refuse to comply with any such claims or demands as long as such
disagreement may continue, and in so refusing, shall make no delivery or other
disposition of any Subscription Funds then held under this Agreement which are
the subject of such disagreement, and in so doing shall be entitled to continue
to refrain from acting until (a) the right of adverse claimants shall have been
finally settled by binding arbitration or finally adjudicated in a court in
Orange County, Florida assuming and having jurisdiction of the Subscription
Funds involved herein or affected hereby or (b) all differences shall have been
adjusted by agreement and the Agent shall have been notified in writing of such
agreement signed by the parties hereto. In the event of such disagreement, the
Agent may, but need not, tender into the registry or custody of any court of
competent jurisdiction in Orange County, Florida all money or property in the
Agent's hands under the terms of this Agreement, together with such legal
proceedings as the Agent deems appropriate and thereupon to be discharged from
all further duties under this Agreement. The filing of any such legal proceeding
shall not deprive the Agent of compensation earned prior to such filing. The
Escrow Agent shall have no obligation to take any legal action in connection
with this Agreement or towards its enforcement, or to appear in, prosecute or
defend any action or legal proceeding which would or might involve the Agent in
any cost, expense, loss or liability unless indemnification shall be furnished.
(15) The Escrow Agent may resign for any reason, upon thirty (30) days
written notice to the Company. Upon the expiration of such thirty (30) day
notice period, the Escrow Agent may deliver all Subscription Funds and Stock
Order Forms in possession under this Escrow Agreement to any successor Escrow
Agent appointed by the Company, or if no successor Escrow Agent has been
appointed, to any court of competent jurisdiction. Upon either such delivery,
the Escrow Agent shall be released from any and all liability under this Escrow
Agreement. A termination under this paragraph shall in no way change the terms
of Paragraphs (14) and (16) affecting reimbursement of expenses, indemnity and
fees.
(16) The Escrow Agent will charge the Company for services hereunder a fee
of $1,500, plus an additional fee of $5.00 for each check issued, $10.00 for
each wire and $.50 for each photo copy necessitated in the performance of
duties, with total fees for services not to exceed $2,500. All actual expenses
and costs incurred by the Agent in performing obligations under this Escrow
Agreement will be paid by the Company. All fees and expenses shall be paid on
the Closing Date by the Company. Any subsequent fees and expenses will be paid
by the Company upon receipt of invoice.
Page 3 of 6
<PAGE> 71
(17) All notices and communications hereunder shall be in writing and
shall be deemed to be duly given if sent by registered or certified mail, return
receipt requested, to the respective addresses set forth herein. The Escrow
Agent shall not be charged with knowledge of any fact, including but not limited
to performance or non-performance of any condition, unless the Escrow Agent has
actually received written notice thereof from the Company or its authorized
representative clearly referring to this Escrow Agreement.
(18) The rights created by this Escrow Agreement shall inure to the
benefit of, and the obligations created hereby shall be binding upon the
successors and assigns of the Escrow Agent and the parties hereto.
(19) This Escrow Agreement shall be construed and enforced according to
the laws of the State of Florida.
(20) This Escrow Agreement shall terminate and the Escrow Agent shall be
discharged of all responsibility hereunder at such time as the Escrow Agent
shall have completed all duties hereunder.
(21) This Escrow Agreement may be executed in several counterparts, which
taken together shall constitute a single document. (22) This Escrow Agreement
constitutes the entire understanding and agreement of the parties hereto with
respect to the transactions described herein and supersedes all prior agreements
or understandings, written or oral, between the parties with respect thereto.
(23) If any provision of this Escrow Agreement is declared by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.
(24) The Company shall provide the Escrow Agent with its Employer
Identification Number as assigned by the Internal Revenue Service. Additionally,
the Company shall complete and return to the Escrow Agent any and all tax forms
or reports required to be maintained or obtained by the Escrow Agent.
(25) The authorized signature of the Escrow Agent hereto is consent that a
signed copy hereof may be filed with the various regulatory authorities of the
State of Florida and with any Federal regulatory authorities.
Page 4 of 6
<PAGE> 72
IN AGREEMENT AND ACCEPTANCE OF THE INDEPENDENT BANKERS' BANK OF FLORIDA ESCROW
AGREEMENT BETWEEN JACKSONVILLE BANCORP, INC. (COMPANY), FOR THE PURPOSE OF
ORGANIZING A FINANCIAL INSTITUTION TO BE KNOWN AS THE JACKSONVILLE BANK, AND THE
INDEPENDENT BANKERS' BANK OF FLORIDA (ESCROW AGENT).
JACKSONVILLE BANCORP, INC.
Address:
Phone:
ATTEST: Fax:
<TABLE>
<S> <C>
By: By:
-------------------------------- ----------------------------------------
Authorized Signature
Title: Title:
------------------------------- ----------------------------------------
(Type Name and Title) (Type Name and Title)
</TABLE>
ATTEST: ADDITIONAL AUTHORIZED SIGNER
<TABLE>
<S> <C>
By: By:
------------------------------ ----------------------------------------
Authorized Signature
Title: Title:
------------------------------- ----------------------------------------
(Type Name and Title) (Type Name and Title)
</TABLE>
(CORPORATE SEAL)
Page 5 of 6
<PAGE> 73
IN AGREEMENT AND ACCEPTANCE OF THE INDEPENDENT BANKERS' BANK OF FLORIDA ESCROW
AGREEMENT BETWEEN JACKSONVILLE BANCORP, INC. (COMPANY), FOR THE PURPOSE OF
ORGANIZING A FINANCIAL INSTITUTION TO BE KNOWN AS THE JACKSONVILLE BANK, AND THE
INDEPENDENT BANKERS' BANK OF FLORIDA (ESCROW AGENT).
INDEPENDENT BANKERS' BANK OF FLORIDA
Address: 109 E. Church Street
Suite BB
P.O. Box 4998
Orlando, FL 32802-4998
Phone: (407) 423-2002
ATTEST: Fax: (407) 843-4817
<TABLE>
<S> <C>
By: By:
------------------------------- ----------------------------------------
Authorized Signature
Title: Title: James H. McKillop, Senior Vice President
------------------------------- ----------------------------------------
(Type Name and Title) (Type Name and Title)
</TABLE>
ATTEST: ADDITIONAL AUTHORIZED SIGNER
<TABLE>
<S> <C>
By: By:
------------------------------ ---------------------------------------
Authorized Signature
Title: Title:
------------------------------- ----------------------------------------
(Type Name and Title) (Type Name and Title)
</TABLE>
(CORPORATE SEAL)
Page 6 of 6
<PAGE> 74
APPENDIX "C"
STOCK ORDER FORM
<PAGE> 75
STOCK ORDER FORM & JACKSONVILLE BANCORP, INC.
CERTIFICATION
(Holding Company for The Jacksonville Bank)
Note: Please read the Stock Order Form Guide and Instructions on the back of
this form before completion
- --------------------------------------------------------------------------------
DEADLINE: The Offering began __________, 1998. A condition of the Offering is
that the Minimum Offering (sale of 750,000 shares of Common Stock) must be
completed on or before ______________, 1998, or the Offering will be terminated.
If the Minimum Offering is consummated, the Offering will continue so long as
shares remain available or until 5:00 p.m. Local Time, on ___________, 1999,
whichever occurs first, unless terminated by the Company beforehand.
- --------------------------------------------------------------------------------
(1) NUMBER OF SHARES BEING PURCHASED
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
(1) Number of Shares Price Per Unit (2) Total Amount Due
------------------- ----------------
x $10.00 = $
------------------- ----------------
</TABLE>
The minimum number of shares that may be subscribed for is 250. The maximum any
individual and their Related Party may subscribe for in the Offering is 75,000
shares. The total any individual may purchase in the Offering (excluding
employees and the Organizers of JBI) is 75,000 shares. In addition, no person,
together with associates of, and persons acting in concert with such persons,
may purchase more than 5% of the total number of shares outstanding following
the completion of the Offering. See the Section entitled "THE OFFERING --
General" on page 8 of the Prospectus dated __________, 1998.
- --------------------------------------------------------------------------------
METHOD OF PAYMENT AND PURCHASER INFORMATION
- --------------------------------------------------------------------------------
(2) [ ] Enclosed is a check, bank draft or money order payable to INDEPENDENT
BANKERS' BANK OF FLORIDA FBO JBI of $___________.
(3) [ ] Check here if you are an Organizer, director, or employee of JBI or a
member of such person's immediate family.
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
(4) [ ] If purchasing through a broker/dealer, Name:
please list the name, address, and --------------------------------------------------------------------------
phone number in the space provided. Street Address:
----------------------------------------------------------------
City:
--------------------------------------------------------------------------
State: Zip Code:
------------------------------------------------- --------------
Phone Number ( )
------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
STOCK REGISTRATION
- --------------------------------------------------------------------------------
(5) Form of stock ownership
<TABLE>
<S> <C> <C>
[ ] Individual [ ] Uniform Transfer to Minors [ ] Partnership
[ ] Joint Tenants [ ] Uniform Gift to Minors [ ] Individual Retirement Account
[ ] Tenants in Common [ ] Corporation [ ] Fiduciary/Trust (Under Agreement Dated ________)
</TABLE>
<TABLE>
<S> <C> <C> <C>
----------------------------------------------------------------------------- --------------------------------------------
Name Social Security or Tax I.D.
----------------------------------------------------------------------------- --------------------------------------------
Name Daytime Telephone
-------------------------------------------------------- -----------------------------------------------------------------
Street Address Evening Telephone
----------------------------------------------------------------------------- --------------------------------------------
City State Zip Code State of Residence
----------------------------------------------------------------------------- --------------------------------------------
</TABLE>
================================================================================
OFFICE USE Batch # _______
Date Rec'd ___/____/____ Order # ____________
Check # _____________ Category ____________
Amount $____________ Initials ____________
================================================================================
<PAGE> 76
- --------------------------------------------------------------------------------
NASD AFFILIATION (This section only applies to those individuals who meet the
delineated criteria)
- --------------------------------------------------------------------------------
[ ] Check here if you are a member of the National Association of Securities
Dealers, Inc. ("NASD"), a person associated with an NASD member, a member of the
immediate family of any such person to whose support such person contributes,
directly or indirectly, or the holder of an account in which an NASD member or
person associated with an NASD member has a beneficial interest. To comply with
conditions under which an exemption from the NASD's Interpretation with Respect
to Free-Riding and Withholding is available, you agree, if you have checked the
NASD affiliation box: (1) not to sell, transfer or hypothecate the shares
subscribed for herein for a period of three months following the issuance, and
(2) to report this subscription in writing to the applicable NASD member within
one day of the payment therefor.
- --------------------------------------------------------------------------------
ACKNOWLEDGMENTS
- --------------------------------------------------------------------------------
1. By signing below, I understand that I may not change or revoke my order
once it is received by JBI. I also certify that this stock order is for
my account and there is no agreement or understanding regarding any
further sale or transfer of these shares.
2. Under penalties of perjury, I further certify that:
(i) the social security number or taxpayer identification number given
above is correct; and
(ii) I am not subject to backup withholding.
If you have been notified by the Internal Revenue Service that you are
subject to backup withholding because of under-reporting interest or
dividends on your tax return, you must cross out Item (ii) above.
3. By signing below, I also acknowledge that I have not waived any rights
under the Securities Act of 1933 and the Securities Exchange Act of 1934.
4 By signing below, I hereby represent to JBI that the purchase of shares
subscribed for complies with the "Purchase Limitation" set forth in the
Prospectus dated __________, 1998.
5. By signing below, I certify that before purchasing the Common Stock of JBI
that I received a copy of the Prospectus dated, ___________, 1998, which
discloses the nature of the Common Stock being offered thereby and
describes certain risks involved in an investment in the Common Stock under
the heading "Risk Factors" beginning on page 5 of the Prospectus.
- --------------------------------------------------------------------------------
SIGNATURE
- --------------------------------------------------------------------------------
THIS FORM MUST BE SIGNED AND DATED. THIS ORDER IS NOT VALID IF THE STOCK ORDER
FORM IS NOT SIGNED. YOUR ORDER WILL BE FILLED IN ACCORDANCE WITH THE PROVISIONS
OF THE PROSPECTUS.
When purchasing as a custodian, corporate officer, etc.; include your full
title. An additional signature is required only if payment is by withdrawal from
an account that requires more than one signature to withdraw funds.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Signature Title (if applicable) Date
- --------------------------------------------------------------------------------
<S> <C> <C>
1.
- --------------------------------------------------------------------------------
2.
- --------------------------------------------------------------------------------
3.
- --------------------------------------------------------------------------------
</TABLE>
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS AND ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.
RETURN THIS FORM TO: Jacksonville Bancorp, Inc.
Attn: Stock Sales Center
13245 Atlantic Boulevard, Suite #5
Jacksonville, Florida 32225
<PAGE> 77
JACKSONVILLE STOCK ORDER FORM GUIDE
BANCGROUP, INC. AND INSTRUCTIONS
- --------------------------------------------------------------------------------
INSTRUCTIONS
- --------------------------------------------------------------------------------
ITEMS 1 AND 2 - Fill in the number of shares that you wish to purchase and the
total payment due. The amount due is determined by multiplying the number of
shares by the Subscription Price of $10.00 per share. The minimum purchase is
250 shares. With the exception of employees and Organizers of the Company, the
maximum amount any participant may purchase in the Offering is 75,000 shares. In
addition, no person, together with associates of, and persons acting in concert
with such person, may purchase more than 5% of the total number of shares
outstanding following the completion of the Offering.
JBI has reserved the right to reject the subscription of any order received in
the Offering, if any, in whole or in part.
ITEM 3 - Please check this box if you are an Organizer, director, officer, or
employee of JBI or a member of such person's immediate family.
ITEM 4 - If purchasing through a broker/dealer, please list the name, address
and phone number in this box.
ITEM 5 - The stock transfer industry has developed a uniform system of
shareholder registrations that we will use in the issuance of JBI common stock.
Print the name(s) in which you want the shares registered and the mailing
address of the registration. Include the first name, middle initial and last
name of the shareholder. Avoid the use of two initials. Please omit words that
do not affect ownership rights, such as "Mrs.," "Mr.," "Dr.," "special account,"
etc.
SEE YOUR LEGAL OR FINANCIAL ADVISOR IF YOU ARE UNSURE ABOUT THE CORRECT
REGISTRATION OF YOUR STOCK.
INDIVIDUAL - The shares are to be registered in an individual's name only.
You may not list beneficiaries for this ownership.
TENANTS IN COMMON - Tenants in common may also identify two or more owners. When
shares are held by tenants in common, upon the death of one co-tenant, ownership
of the shares will be held by the surviving co-tenant(s) and by the heirs of the
deceased co-tenant. All parties must agree to the transfer or sale of shares
held by tenants in common. You may not list beneficiaries for this ownership.
INDIVIDUAL RETIREMENT ACCOUNT - Individual Retirement Account ("IRA") holders
may make share purchases from their deposits through a pre-arranged
"trustee-to-trustee" transfer. Shares may only be held in a self-directed IRA.
Jacksonville Bank does not offer a self-directed IRA. Please contact the Stock
Sales Center if you have any questions about your IRA account. There will be no
early withdrawal or IRS penalties incurred in these transactions.
(Front)
<PAGE> 78
UNIFORM GIFT TO MINORS - For residents of many states, shares may be held in
the name of a custodian for the benefit of a minor under the Uniform Transfers
to Minors Act. For residents in other states, shares may be held in a similar
type of ownership under the Uniform Gift to Minors Act of the individual states.
For either type of ownership, the minor is the actual owner of the shares with
the adult custodian being responsible for the investment until the child reaches
legal age.
On the first line, print the first name, middle initial and last name of the
custodian, with the abbreviation "CUST" and "Unif Tran Min Act" or "Unif Gift
Min Act" after the name. Print the first name, middle initial and last name of
the minor on the second "NAME" line. Standard U.S. Postal Service state
abbreviations should be used to describe the appropriate state. For example,
shares held by John Doe as custodian for Susan Doe under the Ohio Transfer to
Minors Act will be abbreviated John Doe, CUST Susan Doe Unif Tran Min Act. OH.
USE THE MINOR'S SOCIAL SECURITY NUMBER. Only one custodian and one minor may be
designated.
JOINT TENANTS - Joint Tenants with right of survivorship identifies two or more
owners. When shares are held by joint tenants with rights of survivorship,
ownership automatically passes to the surviving joint tenant(s) upon the death
of any joint tenant. You may not list beneficiaries for this ownership.
CORPORATION/PARTNERSHIP - Corporations/Partnerships may purchase shares. Please
provide the Corporation's/Partnership's legal name and Tax I.D.
FIDUCIARY/TRUST - Generally, fiduciary relationships (such as trusts, estates,
guardianships, etc.) are established under a form of trust agreement or pursuant
to a court order. Without a legal document establishing a fiduciary
relationship, your shares may not be registered in a fiduciary capacity.
On the first "NAME" line, print the first name, middle initial and last name of
the fiduciary if the fiduciary is an individual. If the fiduciary is a
corporation, list the corporate title on the first "NAME" line. Following the
name, print the fiduciary "title" such as trustee, executor, personal
representative, etc.
On the second "NAME" line, print either the name of the maker, donor or testator
OR the name of the beneficiary. Following the name, indicate the type of legal
document establishing the fiduciary relationship (agreement, court order, etc.).
In the blank after "Under Agreement Dated," fill in the date of the document
governing the relationship. The date of the document need not be provided for a
trust created by a will.
An example of fiduciary ownership of stock in the case of a trust is: "John D.
Smith, Trustee for Thomas A. Smith Trust Under Agreement Dated June 9, 1987."
- --------------------------------------------------------------------------------
DEFINITION OF ASSOCIATE
- --------------------------------------------------------------------------------
A person's Associates consist of the following: (a) any corporation or other
organization (other than Jacksonville Bancorp, Inc. ["JBI"] or The Jacksonville
Bank ["Bank"]) of which such person is a director, officer or partner or is
directly or indirectly the beneficial owner of 10% or more of any class of
equity securities; (b) any trust or other estate in which such person has a
substantial beneficial interest or as to which such person serves as trustee or
in a similar fiduciary capacity, provided, however, that such term shall not in
include any tax-qualified employee stock benefit plan of JBI or the Bank in
which such person has a substantial beneficial interest or serves as a trustee
or in a similar fiduciary capacity; and (c) any relative or spouse of such
person, or any relative of such person, who either has the same home as such
person or who is a director or officer of JBI or the Bank.
<PAGE> 79
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR AN OFFER TO BUY, ANY
SECURITIES OTHER THAN THE SHARES TO WHICH IT RELATES, OR ANY OFFER OF SUCH
SHARES TO ANY PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ANY OF THE DATES AS OF
OFFERS OR SALES ARE BEING MADE HEREUNDER, THE COMPANY IS REQUIRED TO UPDATE THE
PROSPECTUS TO REFLECT ANY FACTS OR EVENTS ARISING AFTER THE EFFECTIVE DATE OF
THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WHICH REPRESENT A FUNDAMENTAL CHANGE IN THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENT.
UNTIL 1998, ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
--------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUMMARY............................. 4
RISK FACTORS................................... 6
THE COMPANY.................................... 9
TERMS OF THE OFFERING.......................... 10
USE OF PROCEEDS................................ 13
DIVIDEND POLICY................................ 14
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS ............................ 14
BUSINESS OF THE COMPANY........................
BUSINESS OF THE BANK........................... 15
REGULATION AND SUPERVISION..................... 20
ORGANIZERS AND PRINCIPAL SHAREHOLDERS.......... 25
MANAGEMENT..................................... 26
CERTAIN TRANSACTIONS........................... 30
ARTICLES OF INCORPORATION -- SUMMARY........... 32
LEGAL PROCEEDINGS.............................. 33
LEGAL MATTERS.................................. 33
EXPERTS........................................ 33
ADDITIONAL INFORMATION......................... 33
INDEX TO FINANCIAL STATEMENTS................. F-1
APPENDIX A - ARTICLES OF INCORPORATION
APPENDIX B - ESCROW AGREEMENT
APPENDIX C - ORDER FORM
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MINIMUM 750,000 SHARES
MAXIMUM 1,500,000 SHARES
[LOGO]
JACKSONVILLE BANCORP, INC.
KEEFE, BRUYETTE & WOODS, INC.
AND
ROBERT W. BAIRD & CO.
--------------------
PROSPECTUS
--------------------
_______________, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 80
PART - II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24: INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Florida Business Corporation Act (Chapter 607, Florida Statutes)
("Florida Act") authorizes Florida corporations to indemnify any person who
was or is a party to any proceeding (other than an action by, or in the right
of, the corporation) by reason of the fact that he or she is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation or other entity, against liability incurred in connection with such
proceeding, including any appearance thereof, if he or she acted in good faith
and in a manner he or she reasonably believed to be in, or not opposed to, the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
In the case of an action by or on behalf of a corporation, indemnification may
not be made if the person seeking indemnification is ad- judged liable, unless
the court in which such action was brought determines such person is fairly and
reasonably entitled to indemnification. The indemnification provisions of the
Florida Act require indemnification if a director or officer has been successful
on the merits or otherwise in defense of any action, suit or proceeding to which
he or she was party by reason of the fact that he or she is or was a director or
officer of the Corporation. The indemnification authorized under Florida law is
not exclusive and is in addition to any other rights granted to officers and
directors under the Articles of Incorporation or Bylaws of the corporation or
any agreement between officers and directors under the Articles of Incorporation
or Bylaws of the corporation or any agreement between officers and directors and
the corporation. A corporation may purchase and maintain insurance or furnish
similar protection on behalf of any officer or director against any liability
asserted against the director or officer and incurred by the director or officer
in such capacity, or arising out of the status, as an officer or director,
whether or not the corporation would have the power to indemnify him or her
against such liability under the Florida act.
The Articles of Incorporation of Jacksonville Bancorp, Inc. ("Jacksonville
Bancorp") provide for the indemnification of directors and executive officers to
the maximum extent permitted by Florida law as authorized by the Board of
Directors, and for the advancement of expenses incurred in connection with the
defense of any action, suit or proceeding that the director or executive officer
was a party to be reason of the fact that he or she is or was a director of
Jacksonville Bancorp upon the receipt of an undertaking to repay such amount,
unless it is ultimately determined that such director is not entitled to
indemnification.
ITEM 25: OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the sale of the Common Stock, other than
the sales agents' commissions are estimated as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $ 4,425
National Association of Securities Dealers, Inc. filing fee 2,000
Printing and engraving 8,000
Legal fees and expenses 30,000
Accounting fees and expenses 2,000
Blue Sky qualifications 5,000
Miscellaneous 5,000
-------
Total $56,425
=======
</TABLE>
II-1
<PAGE> 81
ITEM 27: EXHIBITS
(a) Listing of Exhibits
EXHIBIT
<TABLE>
<S> <C>
*1.1 Form of Sale Agency Agreement with Keefe, Bruyette & Woods, Inc.
*1.2 Form of Sale Agency Agreement with Robert W. Baird & Co.
3.1 Articles of Incorporation of Jacksonville Bancorp.
(Incorporated by Reference in Appendix A to the Prospectus)
3.2 Bylaws of Jacksonville Bancorp.
4.0 Specimen Common Stock certificate.
5.0 Opinion of Igler & Dougherty, P.A. regarding legality of shares of Jacksonville Bancorp.
10.1 Employment Agreement between Jacksonville Bancorp and Victor M. George.
10.2 Agreement between McAllen Capital Partners, Inc. and Jacksonville Bancorp.
10.3 Escrow Agreement with Independent Bankers' Bank of Florida.
(Incorporated by Reference in Appendix B to the Prospectus)
21.0 Subsidiaries of Jacksonville Bancorp.
23.1 Consent of Igler & Dougherty, P.A.
23.2 Consent of McAllen Capital Partners, Inc.
23.3 Consent of Hacker, Johnson, Cohen & Grieb.
24.0 Power of Attorney.
*27.0 Financial Data Schedule
99.1 Letter to Prospective Investor.
99.2 Stock Order Form.
(Incorporated by Reference in Appendix C to the Prospectus)
</TABLE>
*To be filed by supplement.
ITEM 28: UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes that
(1) for the purpose of determining any liability under the
Securities Act of 1933 ("Exchange Act"), the information omitted from the form
of Prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared effective.
(2) for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted for directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
II-2
<PAGE> 82
whether such indemnification by it is against policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes to supplement the
Prospectus, after the expiration of the subscription period, to set forth the
results of the subscription offer, the transactions by the underwriters during
the subscription period, the amount of unsubscribed securities to be purchased
by the underwriters, and the terms of any subsequent reoffering thereof. If any
public offering by the underwriters is to be made on terms differing from those
set forth on the cover page of the Prospectus, a post-effective amendment will
be filed to set forth the terms of such offering.
II-3
<PAGE> 83
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Form SB-2 Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Jacksonville, State of Florida, on September 29, 1998.
JACKSONVILLE BANCORP, INC.
By: /s/ Victor M. George
----------------------------------------------
Victor M. George
President (Principal Executive Officer)
of the Company: Jacksonville Bancorp, Inc.
Pursuant to the requirements of the Securities Act of 1933, this Form
SB-2 Registration Statement has been signed by the following persons in the
capacities and as of the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Victor M. George Chairman of the Board, September 29, 1998
- --------------------------------- Chief Executive Officer, ------------------
Victor M. George President and Chief Financial Date
Officer, (Principal Financial Officer)
/s/ C. Michael Carter Director September 29, 1998
- --------------------------------- ------------------
C. Michael Carter Date
/s/ James M. Healey Director September 29, 1998
- --------------------------------- ------------------
James M. Healey Date
/s/ Rudolph A. Kraft Director September 29, 1998
- --------------------------------- ------------------
Rudolph A. Kraft Date
Director
- --------------------------------- ------------------
William L. Kyle, Jr. Date
/s/ R. C. Mills Director September 29, 1998
- --------------------------------- ------------------
R.C. Mills Date
</TABLE>
II-4
<PAGE> 84
<TABLE>
<S> <C> <C>
/s/ John W. Rose Director September 29, 1998
- --------------------------------- ------------------
John W. Rose Date
/s/ John R. Schultz Director September 29, 1998
- --------------------------------- ------------------
John R. Schultz Date
/s/ Charles F. Spencer Director September 29, 1998
- --------------------------------- ------------------
Charles F. Spencer Date
/s/ Bennett A. Tavar Director September 29, 1998
- --------------------------------- ------------------
Bennett A. Tavar Date
/s/ Gary L. Winfield, MD Director September 29, 1998
- --------------------------------- ------------------
Gary L. Winfield, MD Date
</TABLE>
II-5
<PAGE> 85
EXHIBIT INDEX
FORM SB-2
<TABLE>
<CAPTION>
Exhibit Subsequently
Number Numbered Page
- ------- -------------
<S> <C> <C>
*1.1 Form of Sales Agency Agreement with Keefe, Bruyette
& Woods, Inc.
*1.2 Form of Sales Agency Agreement with Robert W. Baird
& Co.
3.1 Articles of Incorporation of Jacksonville Bancorp, Inc.
(Incorporated by Reference in Appendix A to the Prospectus)
3.2 Bylaws of Jacksonville Bancorp, Inc.
4.0 Specimen Common Stock Certificate
5.0 Opinion of Igler & Dougherty, P.A. regarding legality of
shares
10.1 Employment Agreement between Jacksonville Bancorp, Inc. and
Victor M. George
10.2 Agreement between McAllen Capital Partners, Inc. and Jacksonville
Bancorp, Inc.
10.3 Escrow Agreement with Independent Bankers' Bank of Florida
(Incorporated by Reference in Appendix B to the Prospectus)
21.0 Subsidiaries of Jacksonville Bancorp, Inc.
23.1 Consent of Igler & Dougherty, P.A.
23.2 Consent of McAllen Capital Partners, Inc.
23.3 Consent of Hacker, Johnson, Cohen & Grieb
24.0 Power of Attorney
*27.0 Financial Data Schedule
99.1 Letter to Prospective Investor
99.2 Stock Order Form
(Incorporated by Reference in Appendix C to the Prospectus)
</TABLE>
- -------------------------
* To be filed by supplement.
<PAGE> 1
EXHIBIT 3.2
BYLAWS OF
JACKSONVILLE BANCORP, INC.
<PAGE> 2
BYLAWS
OF
JACKSONVILLE BANCORP, INC.
ARTICLE I
OFFICES
The home office of Jacksonville Bancorp, Inc. ("Bank") shall be located
at 13245 Atlantic Boulevard, Suite #5, Jacksonville, Florida 32225. The Bank may
establish other facilities, offices or branches at such place or places as the
Board of Directors may determine from time to time.
ARTICLE II
STOCKHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders shall
be held in the fourth month following the end of each fiscal year on such date
as the Board of Directors shall determine, for the purpose of electing directors
and for the transaction of such other business as may lawfully come before the
meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may
be called by the President or the Chairman of the Board of Directors, for any
purpose, and a special meeting shall be called by the President or Chief
Financial Officer at the request, in writing, of a majority of the Board of
Directors then in office, or at the request in writing, of shareholders owning
not less than 10% of the entire capital stock of the Bank issued and
outstanding. Such request shall state the purpose or purposes of the proposed
meeting and shall be delivered at the home office of the Bank addressed to
Chairman of the Board, the President, or the Chief Financial Officer. Business
transacted at any special meeting of shareholders shall be limited to the
purposes stated in the notice thereof.
<PAGE> 3
SECTION 3. PLACE OF MEETING. All meetings of the shareholders of the
Bank shall be held at the home office of the Bank or such other place within the
State of Florida as shall be designated from time to time by the Board of
Directors and stated in the notice of such meeting.
SECTION 4. NOTICE OF MEETING. Written notice, signed by the Chief
Financial Officer or Chief Financial Officer of the Bank, stating the place, day
and hour of the meeting and in the case of a special meeting the purpose or
purposes for which the meeting is called, shall be mailed not less than 5 nor
more than 30 days before the date of the meeting to each shareholder of record
entitled to vote at such meeting. Such notice shall be mailed to each
shareholder at his address as it appears on the records of the Bank. Any
shareholder may waive notice of a meeting either before, at or after the
meeting.
SECTION 5. VOTING LISTS. The officer or agent having charge of the
stock transfer books for shares of the Bank shall, at least five days before
each meeting of shareholders, make a complete list of the shareholders entitled
to vote at such meeting or any adjournment thereof. The list shall be arranged
in alphabetical order, with the address and the number of shares held by each
shareholder. The list of shareholders shall be produced at any shareholders'
meeting at the request of any shareholder.
SECTION 6. QUORUM. Except as otherwise provided in these Bylaws, or the
Bank's Articles of Incorporation, a majority of the outstanding shares of the
Bank entitled to vote shall constitute a quorum at a meeting of shareholders. If
less than a majority of the outstanding shares is represented at a meeting, a
majority of the shares so represented may adjourn the meeting from time to time
without further notice. At any such reconvened meeting at which a quorum shall
be present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The shareholders present at a
duly convened meeting may continue
2
<PAGE> 4
to transact business until adjournment thereof, notwithstanding the subsequent
withdrawal of shareholders sufficient to leave less than a quorum.
SECTION 7. VOTING OF SHARES. Each shareholder entitled to vote shall be
entitled to one vote in person or by proxy for each share of voting stock
recorded in his name on the books of the Bank. Such right to vote shall be
subject to the right of the Board of Directors to close the transfer books or to
fix a record date for voting shareholders, as hereinafter provided.
SECTION 8. PROXIES. At any meeting of shareholders, a shareholder may
be represented by a proxy appointed by an instrument executed in writing by the
shareholder or by his duly authorized attorney-in-fact; but no proxy shall be
valid after one year from its date, unless the instrument appointing the proxy
provides for a longer period. Such instrument shall be filed with the Chief
Financial Officer of the Bank before or at the time of the meeting. In the event
that any such instrument shall designate two or more persons to act as proxies,
a majority of such persons present at the meeting, or if only one be present,
that one shall have all of the powers conferred by the instrument upon all
persons so designated unless the instrument shall otherwise provide.
SECTION 9. RECORD DATE. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment, or shareholders entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purpose, the
Board of Directors shall fix in advance a date as the record date for any such
determination of shareholders. Such date in any case shall be not more than 30
days and, in case of a meeting of shareholders, not fewer than 5 days prior to
the date on which the particular action, requiring such determination of
shareholders, is to be taken. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply equally to any adjournment.
3
<PAGE> 5
SECTION 10. INSPECTOR OF ELECTION. The Board of Directors may appoint
any person(s) other than nominees for office, as inspector(s) of election to act
at a meeting of shareholders or any adjournment thereof. The number of
inspectors shall be either one or three. Any such appointment shall not be
altered at the meeting except as hereinafter provided. If inspectors of election
are not so appointed, the Chairman of the Board or the President may, or at the
request of 10% of the votes represented at the meeting shall, make such
appointment at the meeting. If appointed at the meeting, the majority of the
votes present shall determine whether one or three inspector(s) are to be
appointed. In case any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by the Board of Directors in advance
of the meeting or at the meeting by the Chairman of the Board or the President.
Unless otherwise prescribed by law or regulation, the duties of such
inspector(s) shall include: (i) determining the number of shares entitled to
vote, the number of shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies; (ii) receiving
votes, ballots, or consents; (iii) hearing and determining all challenges and
questions arising in connection with the right to vote; (iv) counting and
tabulating all votes, ballots or consents; (v) determining and certifying the
results of balloting; and (vi) such other acts as may be proper or necessary in
order to conduct the election or vote, with fairness to all shareholders.
SECTION 11. NOMINATING COMMITTEE. The shareholders may appoint a
nominating committee for selecting management nominees to stand for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver written nominations to the Chief Financial Officer at least 20 days
prior to the date of the annual meeting. No nominations for director, except
those made by the nominating committee, shall be voted upon at the annual
meeting unless other nominations are made
4
<PAGE> 6
by shareholders in writing and delivered to the Chief Financial Officer of the
Bank at least five days prior to the date of the annual meeting. Ballots bearing
the names of all persons nominated shall be provided for use at the annual
meeting. If the nominating committee shall fail or refuse to act at least 20
days prior to the annual meeting, nominations for directors may be made at the
annual meeting by any shareholder entitled to vote.
SECTION 12. NEW BUSINESS. Any new business to be taken up at the annual
meeting shall be stated in writing and filed with the Chief Financial Officer of
the Bank at least five days before the date of the annual meeting, and all
business so stated, proposed, and filed shall be considered at the annual
meeting; but no other proposal shall be acted upon at the annual meeting. Any
shareholder may make any other proposal at the annual meeting and the same may
be discussed and considered, but unless stated in writing and filed with the
Chief Financial Officer at least five days before the meeting, such proposal
shall not be acted upon except at an adjourned, special, or future annual
meeting of the stockholders, taking place at least 30 days or more thereafter.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the Bank shall
be conducted under the direction of its Board of Directors. The Board of
Directors shall elect annually from among its members a Chairman of the Board.
The Chairman shall preside at meetings of the Board of Directors and meetings of
shareholders.
SECTION 2. NUMBER & TERM. The Board of Directors shall consist of no
less than 5 nor more than 15 members who shall serve until the next annual
meeting or until their successors are elected and qualified. At each annual
election thereafter directors shall be chosen for a term of one year.
5
<PAGE> 7
SECTION 3. QUALIFICATIONS. Not less than a majority of the directors
must, during their whole term of service, be citizens of the United States, and
at least three-fifths of the directors must have resided in this state for at
least 1 year preceding their election and must be residents therein during their
continuance in office. Except with the written prior consent of the Florida
Department of Banking & Finance, no person shall be eligible for election or
shall serve as a director or officer of the Bank who has been adjudicated a
bankrupt or convicted of a criminal offense involving dishonesty or a breach of
trust. A director shall automatically cease to be a director when he is
adjudicated a bankrupt or is convicted of a criminal offense involving
dishonesty or a breach of trust, but no action of the Board of Directors shall
be invalidated because of the participation of any such director in such action.
SECTION 4. REMOVAL OF DIRECTORS.
Directors may be removed:
(a) for any reason at a meeting of shareholders, noticed and called
expressly for that purpose, by a vote of the holders of a majority of the shares
then entitled to vote at an election of directors; or
(b) for cause, by a vote of not less than a majority of the
disinterested directors entitled to vote, at a meeting noticed and called
expressly for that purpose. The term "cause" is defined to mean the commission
of an act of willful misconduct, self-dealing, malfeasance, gross negligence,
personal dishonesty, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, or willful violation of any law,
rule or regulation (other than traffic violations or similar offenses). A
"disinterested director" is defined to be a director who is not the subject of
the removal action.
6
<PAGE> 8
SECTION 5. DIRECTOR'S OATH. Each director, upon assuming office, shall
take an oath that he will diligently and honestly administer the affairs of the
Bank and will not knowingly violate or willfully permit to be violated, any of
the provisions of Chapter 655 or Chapter 668, of the Florida Statutes.
SECTION 6. ANNUAL MEETING. The Board of Directors shall hold its annual
meeting immediately following the annual meeting of shareholders, for the
purpose of the election of officers and the transaction of such other business
as may come before the meeting; and, if a majority of the directors be present
at such place and time, no other notice of such meeting shall be required to be
given to the directors. The place and time of such meeting may also be fixed by
written consent of all of the directors.
SECTION 7. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held, without notice at the home office of the Bank or such other
places within the State of Florida, and at such times, as shall be determined,
from time to time, by the Board of Directors.
SECTION 8. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the Chairman of the Board, the President,
or any three (3) directors. The person or persons authorized to call special
meetings of the Board of Directors may reasonably fix the time and place for
holding any special meetings of the Board of Directors called by them.
SECTION 9. NOTICE. Notice of any special meeting shall be given at
least three (3) days prior thereto by telephone or by written notice delivered
personally or by telefax, telegram or mailgram to each director at his home or
business address. If notice be given by telegram or mailgram, such notice shall
be deemed to be delivered when the telegram or mailgram is delivered to the
telegraph company. Any director may give a waiver of notice of any such meeting.
The attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except
7
<PAGE> 9
where a director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 10. QUORUM. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business of any meeting of the Board of Directors, but a smaller number may
adjourn a meeting, from time to time, without further notice until a quorum is
secured.
SECTION 11. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors unless a greater number is required by law or these bylaws.
SECTION 12. VACANCIES ON BOARD. In the event of any vacancy on the
Board of Directors, including any vacancy created by a failure to qualify or by
any increase in the number of directors authorized, the Board of Directors may,
but shall not be required to, fill such vacancy by the affirmative vote of a
majority of the remaining directors.
SECTION 13. COMPENSATION. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, for attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors, or a stated salary for their service as
directors. No such payment, however, shall preclude any director from serving
the Bank in any other proper capacity and receiving reasonable compensation
therefor.
SECTION 14. PRESENCE AT MEETINGS. Members of the Board of Directors or
members of any committee established in accordance with Article V herein, shall
be deemed present in person at a meeting of such board or committee if a
conference telephone or similar communication equipment call in which all
persons participating in the meeting can hear each other is used.
8
<PAGE> 10
SECTION 15. ACTION WITHOUT A MEETING. Any action of the Board of
Directors or of any committee thereof, which is required or permitted to be
taken at a meeting, may be taken without a meeting if consent in writing,
setting forth the action to be taken, and signed by all members of the Board of
Directors or of the committee, as the case may be, is filed in the minutes of
the proceedings of the Board of Directors or such committee.
SECTION 16. RESIGNATION. Any director may resign at any time by sending
or delivering a written notice of such resignation to the Chief Financial
Officer of the Bank, addressed to the Chairman of the Board or the President.
Unless otherwise specified, such resignation shall take effect upon receipt by
the Chairman of the Board or the President. Three consecutive absences, or a
total of four absences in any one fiscal year, from regular meetings of the
Board of Directors, unless excused by resolution of the board, shall
automatically constitute a resignation effective when such resignation is
accepted by the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. POSITIONS. The officers of the Bank shall be a President,
one or more Vice Presidents, and a Chief Financial Officer, each of whom shall
be elected by the Board of Directors. The Board of Directors may also elect or
authorize the appointment of such other officers as the business of the Bank may
require. No person may hold more than two offices simultaneously.
SECTION 2. ELECTION AND TERM OF OFFICE. Except as otherwise provided in
any written employment agreement which has been approved by the Board of
Directors, the officers of the Bank shall be elected annually by the Board of
Directors at its annual meeting. Each officer shall hold office for the term set
forth in his written employment agreement, if any, or until his successor shall
have been duly elected and shall have qualified, or until his death, or until he
shall resign or
9
<PAGE> 11
shall have been removed in the manner hereinafter provided. Election or
appointment of an officer, employee, or agent shall not of itself create
contractual rights. The Board of Directors may authorize the Bank to enter into
an employment contract with any officer, but no such contract shall impair the
right of the Board of Directors to remove any officer at any time in accordance
with Section 3 of this Article.
SECTION 3. REMOVAL. Any officer elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever, in its judgment,
the best interests of the Bank will be served thereby, but such removal, other
than for cause, shall be without prejudice to the contract rights, if any, of
the person so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
SECTION 5. DUTIES OF OFFICERS. The President shall be the Chief
Executive Officer of the Bank. Subject to the foregoing, the officers of the
Bank shall have such authority and perform such duties as usually pertain to
their respective offices and such additional powers and duties specifically
conferred by law, by the Articles of Incorporation, by these Bylaws, or as may
be assigned to them from time to time by the Board of Directors.
SECTION 6. DELEGATION OF DUTIES. In the absence of or the disability of
any officer of the Bank, or for any other reason deemed sufficient by the Board
of Directors, the board may delegate the officer's powers or duties to any other
officer or to any other director.
SECTION 7. REMUNERATION. The remuneration of the executive officers
shall be fixed from time to time by the Board of Directors.
10
<PAGE> 12
SECTION 8. GENERAL POWERS. The officers are authorized to do and
perform such acts as are necessary in the carrying on of the business of the
Bank, subject always to any limitations imposed by the Board of Directors.
ARTICLE V
COMMITTEES
SECTION 1. CREATION OF COMMITTEES. The Board of Directors may by
resolution designate an Executive Committee and one or more other committees,
including but not limited to an Audit Committee and a Loan Committee, each to
consist of three or more of the directors of the Bank. Members of such
committees shall serve until the next annual meeting of the Board of Directors
or until a successor is appointed. Members may be removed from any such
committee by the Board of Directors whenever, in its judgment, the best
interests of the Bank will be served thereby.
SECTION 2. EXECUTIVE COMMITTEE. The Executive Committee, if such a
committee shall be created, shall consult with and advise the officers of the
Bank in the management of its business, and shall have and may exercise to the
extent provided in the resolution of the Board of Directors creating such
Executive Committee such powers of the Board of Directors as can be lawfully
delegated by the Board.
SECTION 3. OTHER COMMITTEES. Other committees created by the Board of
Directors shall have such functions and may exercise such powers of the Board of
Directors as can be lawfully delegated and to the extent provided in the
resolution or resolutions creating such committee or committees.
SECTION 4. MEETINGS OF COMMITTEES. Regular meetings of any committee
may be held without notice of such time and at such place as shall from time to
time be determined by
11
<PAGE> 13
the majority of the members such committee. Special meetings of any such
committee may be called by the Chairman of the Board, the President, the
Chairman of such committee, or a majority of the members of such committee upon
two (2) days notice to each of the other members of such committee, or on such
shorter notice as may be agreed to in writing by each of the other members of
such committee. Such notice shall be given either personally or in the manner
provided in Section 9 of Article III of these Bylaws.
SECTION 5. VACANCIES ON COMMITTEES. Vacancies on any committee shall be
filled by the Board of Directors then in office at any regular or special
meeting.
SECTION 6. QUORUM OF COMMITTEES. At all meetings of any such committee,
a majority of the committee's members then serving shall constitute a quorum for
the transaction of business.
SECTION 7. MANNER OF ACTING OF COMMITTEES. The act of the majority of
the members of any committee, present at a meeting at which there is a quorum,
shall be the act of such committee.
SECTION 8. MINUTES OF COMMITTEES. Each committee shall keep regular
minutes of its proceedings and report the same to the Board of Directors at the
board's next regularly scheduled meeting.
SECTION 9. COMPENSATION. Members of committees may be paid compensation
for service on such committees in any manner prescribed by the Board of
Directors.
12
<PAGE> 14
ARTICLE VI
STOCK CERTIFICATES
SECTION 1. GENERAL. Every holder of capital stock in the Bank shall be
entitled to have a certificate, signed by the President or Vice President and
the Chief Financial Officer or a Chief Financial Officer. Such certificate shall
be dated and sealed with the seal of the Bank, exhibit the holder's name and
certify the number of shares owned by him in the Bank. The certificates shall be
consecutively numbered and entered in the books of the Bank as they are issued.
SECTION 2. TRANSFER OF SHARES. Transfer of shares of the capital stock
of the Bank shall be made upon its stock transfer books. Authority for such
transfer shall be given only by the holder of record of the shares or by his
lawfully constituted representative. Such transfer shall be made only upon
surrender of the certificate for shares. The person in whose name the
certificate for shares of capital stock stands on the books of the Bank shall be
deemed by the Bank to be the owner thereof for all purposes and the Bank shall
not be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person whether or not it shall have express or
other notice thereof, save as expressly provided by the laws of the State of
Florida.
SECTION 3. STOLEN OR LOST CERTIFICATES. The Board of Directors may
authorize a new certificate or certificates to be issued in place of any
certificate or certificates issued by the Bank and which are alleged to have
been stolen, lost or destroyed, only upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be stolen, lost or
destroyed. When authorizing the issuance of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such stolen, lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the Bank a bond in such sum as
it may direct as indemnity
13
<PAGE> 15
against any claim that may be made against the Bank with respect to the
certificate alleged to have been stolen, lost, or destroyed.
ARTICLE VII
CORPORATE SEAL
The seal of the Bank shall be two concentric circles between which
shall be the name of the Bank. The year of incorporation and the name of this
state shall, and an emblem may, appear in the center.
ARTICLE VIII
FISCAL YEAR
The Bank's fiscal year end date shall be December 31.
ARTICLE IX
INDEMNIFICATION
SECTION 1 - GENERAL: The Bank shall indemnify its officers, directors,
employees but not its agents unless specifically approved in writing by the
Board of Directors to the fullest extent authorized by Section 607.0850 of the
Florida Business Bank Act as it now exists or may hereafter be amended (the
"FBCA") but, in the case of any such amendment, only to the extent that such
amendment permits the Bank to provide broader indemnification rights than said
law permitted the Bank to provide prior to such amendment. This includes, but is
not limited to, any person who was or is made a party or is threatened to be
made a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative ("Proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
director or officer of the Bank or is or was serving at the request of the Bank
as a director, officer, employee or agent of another Bank or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee
14
<PAGE> 16
benefit plans, whether the basis of such Proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, reasonably
incurred or suffered by such person in connection therewith. Such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that the Bank shall indemnify
any such person seeking indemnity in connection with an action, suit or
Proceeding (or part thereof) initiated by such person only if such action, suit
or Proceeding (or part thereof) was authorized by the Board of Directors of the
Bank. Such right shall be a contract right and shall include the right to be
paid by the Bank for all expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, the payment of such
expenses incurred by a director or officer in his or her capacity as a director
or officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of such
proceeding, shall be made only upon delivery to the Bank of an undertaking, by
or on behalf of such director or officer, to repay all amounts so advanced if it
should be determined ultimately that such director or officer is not entitled to
be indemnified under this Article or otherwise.
SECTION 2 - FAILURE TO PAY CLAIM: If a claim under Section 1 of this
Article is not paid in full by the Bank within 90 days after a written claim has
been received by the Bank, the claimant may at any time thereafter bring suit
against the Bank to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition
15
<PAGE> 17
where the required undertaking, if any, has been tendered to the Bank) that the
claimant has not met the standards of conduct which make it permissible under
the FBCA for the Bank to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the Bank. Neither the failure of the
Bank (including its Board of Directors, independent legal counsel, or its
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
FBCA, nor an actual determination by the Bank (including its Board of Directors,
independent legal counsel, or its shareholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant has not met the applicable standard of conduct.
SECTION 3 - OTHER RIGHTS: The rights conferred on any individual by
Sections 1 and 2 of this Article shall not be exclusive of any other right which
such individual may have or hereafter acquire under any statute, provision of
these Bylaws of the Bank, agreement, vote of shareholders or Disinterested
Directors or otherwise.
SECTION 4 - INSURANCE: The Bank may maintain insurance, at its expense,
to protect itself and any such director, officer, employee or agent of the Bank
or another Bank, partnership, joint venture, trust or other enterprise against
any such expense, liability or loss, whether or not the Bank would have the
power to indemnify such person against such expense, liability or loss under the
FBCA.
SECTION 5 - PERSONAL LIABILITY: A director of the Bank shall not be
personally liable to the Bank or its shareholders for monetary damages for any
statement, vote, decision or failure to act regarding corporate management or
policy except as provided in the FBCA or other applicable state or Federal law
governing the Bank. If the FBCA is amended after adoption of these Bylaws and
16
<PAGE> 18
such amendment further eliminates or limits the personal liability of directors,
then the liability of a director of the Bank shall be eliminated or limited to
the fullest extent permitted by the FBCA, as so amended.
Any repeal or modification of the foregoing paragraph by the
shareholders or the Bank shall not adversely affect any right or protection of a
director of the Bank existing at the time of such repeal or modification.
ARTICLE X
AMENDMENTS
These Bylaws may be altered, amended or repealed in a manner consistent
with the laws of the State of Florida at any time by a majority of the full
Board of Directors or by a majority of the votes cast by the shareholders of the
Bank at any legal meeting. Only the shareholders may alter, amend or repeal a
Bylaw previously adopted by the shareholders.
17
<PAGE> 19
ARTICLE XI
SEVERABILITY
Each provision of these Bylaws shall be separable from any and all
other provisions of these Bylaws, and if any such provision shall be adjudged to
be invalid or unenforceable, such validity or unenforceability shall not affect
any other provision hereof or the powers granted by the Articles of
Incorporation or Bylaws.
These Bylaws have been adopted by the Board of Directors as the Bylaws
of the Bank on this 8th day of July 1998, and shall be effective as of said
date.
By: /s/ Victor M. George
-------------------------------------------------
VICTOR M. GEORGE
PRESIDENT
18
<PAGE> 1
EXHIBIT 4.0
SPECIMEN COMMON STOCK CERTIFICATE OF
JACKSONVILLE BANCORP, INC.
<PAGE> 2
NUMBER SHARES
000 1000
- -------- --------
JACKSONVILLE BANCORP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
COMMON STOCK
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT ____________________
IS THE OWNER OF:
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK OF
JACKSONVILLE BANCORP, INC.
$.01 PAR VALUE PER SHARE
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE TRANSFERABLE ONLY ON THE STOCK
TRANSFER BOOKS BY THE HOLDER OF RECORD HEREOF, OR BY HIS DULY AUTHORIZED
ATTORNEY OR LEGAL REPRESENTATIVE, UPON THE SURRENDER OF THIS CERTIFICATE
PROPERLY ENDORSED. THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE ISSUED
AND SHALL BE HELD SUBJECT TO ALL THE PROVISIONS OF THE ARTICLES OF INCORPORATION
OF ANY AMENDMENTS THERETO (COPIES OF WHICH ARE ON FILE WITH THE SECRETARY), TO
ALL OF WHICH PROVISIONS THE HOLDER BY ACCEPTANCE HEREOF, ASSENTS. THE SHARES
EVIDENCED BY THIS CERTIFICATE ARE NOT OF AN INSURABLE TYPE AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION.
IN WITNESS WHEREOF, JACKSONVILLE BANCORP, INC. HAS CAUSED THIS
CERTIFICATE TO BE EXECUTED BY THE SIGNATURE OF ITS DULY AUTHORIZED OFFICERS AND
HAS CAUSED ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED.
DATED: ______________, 1998
SEAL
___________________________________ ___________________________________
PRESIDENT SECRETARY/TREASURER
<PAGE> 1
EXHIBIT 5.0
OPINION OF IGLER & DOUGHERTY, P.A.
REGARDING LEGALITY OF SHARES OF THE COMPANY
<PAGE> 2
[IGLER & DOUGHERTY, P.A. LETTERHEAD]
September 30, 1998
Board of Directors
Jacksonville Bancorp, Inc.
13245 Atlantic Boulevard, Suite #5
Jacksonville, Florida 32225
Gentlemen:
You have requested our opinion in connection with the proposed stock
offering of up to 1,500,000 shares of Common Stock, par value $.01 per share
(the "Common Stock") by Jacksonville BancGroup, Inc., ("Company") through a
public offering.
In preparation of this opinion, we have reviewed the Company's Articles
of Incorporation, its Bylaws, Registration Statement on Form SB-2 filed on
behalf of the Company with the Securities and Exchange Commission ("SEC") on
September 30, 1998, and all exhibits thereto (the "Registration Statement"). We
have also examined the originals or copies, certified or otherwise identified to
our satisfaction, of such documents and corporate and other records, have
obtained such certificates, letters, representations, and information from the
officers and directors of the Company and from others, and made such
examinations of law as we have deemed necessary. In connection with rendering
the opinions set forth below, we have assumed that the Company will conduct
business primarily in Florida.
Based upon the foregoing, it is our opinion that:
1. The Company has been duly organized and is validly existing in good
standing as a corporation under the laws of Florida, with corporate power and
authority to own its property and conduct its business as now conducted as
described in the Registration Statement;
2. The shares of Common Stock of the Company to be issued in accordance
with the terms set forth in the Prospectus constituting a part of the
Registration Statement are validly authorized and, when (a) the pertinent
provisions of the Securities Act of 1933 and such "blue-sky" and securities law
as may be applicable have been complied with, (b) the subscription agreements
for such shares have been properly accepted, and (c) such shares have been duly
delivered against payment therefore as contemplated by the Prospectus, such
shares will be validly issued, fully paid, and nonassessable.
<PAGE> 3
Board of Directors
September 30, 1998
Page 2
We understand that you may wish to include this Opinion as an exhibit
to the Registration Statement, and we consent to such inclusion. Furthermore, we
consent to the references to this firm's name in the Company's Prospectus and
any and all amendments thereto.
Sincerely,
IGLER & DOUGHERTY, P.A.
/s/ Igler & Dougherty, P.A.
<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT BETWEEN
JACKSONVILLE BANCORP, INC. AND VICTOR M. GEORGE
<PAGE> 2
EMPLOYMENT AGREEMENT
BY AND AMONG
JACKSONVILLE BANCORP, INC.
AND
JACKSONVILLE BANK (IN ORGANIZATION)
AND
VICTOR M. GEORGE
THIS EMPLOYMENT AGREEMENT ("Agreement") is being entered into this 27th
day of February, 1998, by and among Jacksonville Bancorp, Inc., a Florida
Corporation ("Bancorp"), Jacksonville Bank, In Organization ("Bank"), and Victor
M. George ("Employee"). Bancorp and The Bank are collectively referred to herein
as the "Company" and the Company and Employee are collectively referred to
herein as the "Parties".
R E C I T A L S
WHEREAS, the Company wishes to retain Employee as its President and
Chief Executive Officer to perform the duties and responsibilities as are
described in this Agreement and as the Company's Boards of Directors ("Board")
may assign to Employee from time to time; and
WHEREAS, Employee desires to be employed by the Company and to serve as
the President and Chief Executive Officer in accordance with the terms and
provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto represent, warrant, undertake,
covenant and agree as follows:
ARTICLE I.
TERM OF EMPLOYMENT
Bancorp shall employ Employee and Employee shall be employed pursuant
to the terms of this Agreement to perform the services specified in Section 2
herein. The term of employment shall be for three years, commencing on January
1, 1998 (the "Effective Date"), and terminating on December 31, 2001, unless
extended or terminated pursuant to the provisions set forth herein. The Board of
Directors of Bancorp shall review this Agreement and the Employee's performance
hereunder on or before December 31, 1998, and annually thereafter, in order to
determine whether to extend the Agreement for a one-year period. The decision to
extend the term of this Agreement for an additional year is within the sole
discretion of the Board.
<PAGE> 3
ARTICLE II.
POSITION, RESPONSIBILITIES AND DUTIES
During the term of this Agreement, Employee shall serve in the
following capacities and shall fulfill the following responsibilities and
duties:
SECTION 2.1. BANCORP. Employee shall serve as President and Chief
Executive Officer of Bancorp, subject to selection by the Board. In such
capacity, Employee shall provide leadership, direction and guidance of Bancorp's
activities to assure short and long-range profitability. Initially, Employee
shall work diligently in the formation of the Jacksonville Bank, a new
state-chartered commercial bank to be located in Jacksonville, Florida.
SECTION 2.2. BANK. Employee shall also serve as the Bank's President
and Chief Executive Officer when the Bank commences operations, subject to
selection by the Board. In such capacity, Employee shall have the same powers,
duties and responsibilities of supervision and management of the Bank usually
accorded to the President and Chief Executive Officer of similar financial
institutions. In addition, Employee shall use his best efforts to perform the
duties and responsibilities enumerated in this Agreement and any other duties
assigned to Employee by the Board and to utilize and develop contacts and
customers to enhance the business of the Bank. Specifically, Employee shall
devote his full business time and attention and use his best efforts to
accomplish and fulfill the following duties and responsibilities, as well as
other duties assigned to Employee from time to time by the Board:
(i) manage all personnel of the Bank;
(ii) serve as a member of the Board of Directors (if and when
elected to such a position);
(iii) serve on such committees of the Board as appointed to from
time to time;
(iv) keep the Board informed of important developments concerning
the Bank, industry developments and regulatory initiatives
affecting the Bank;
(v) maintain adequate expense records relating to Employee's
activities on the Bank's behalf;
(vi) establish and implement marketing efforts to increase the
business of the Bank;
(vii) supervise all loans and assist in their proper servicing and
resolution;
(viii) improve the profitability of the Bank in accordance with the
Annual Business Plan as prepared by management and adopted by
the Board; and
(ix) coordinate with the Bank's attorneys and accountants and other
service providers to the extent necessary to further the
business of the Bank, keeping in compliance with government
laws and regulations and otherwise keeping the Bank in as good
a financial and legal posture as possible.
2
<PAGE> 4
SECTION 2.3. POLICIES AND MANUAL. Employee agrees to comply with the
policies and procedures that are adopted by the Company and implemented from
time to time as described in the Employee Manual, including any policies
relating to a "drug free work place". In that regard Employee agrees to submit
to the same testing procedures, if any, which apply to all employees of the
Company. Employee has read and understands the contents of the Employee Manual
and acknowledges that the Employee Manual may be modified, amended, supplemented
and updated from time to time as may be deemed appropriate.
ARTICLE III.
COMPENSATION
During the term of this Agreement, Employee shall be compensated as
follows:
SECTION 3.1. BASE SALARY. Until the Bank commences operations, Employee
shall be compensated by Bancorp. Employee shall receive an annual salary of
Ninety-Five Thousand Dollars ($95,000) (the "Base Salary") in bimonthly
installments, in accordance with standard payroll practices, reduced
appropriately by deductions for federal income withholding taxes, social
security taxes and other deductions required by applicable laws. Such Base
Salary shall be reviewed annually by the Board of Directors.
SECTION 3.2. ADDITIONAL COMPENSATION. Upon completion of the Bank's
first full-quarter of operation, Employee shall be entitled to a fixed
performance bonus ("Performance Bonus") equal to 3% of the Company's quarterly
consolidated net income before taxes (excluding extraordinary gains or losses)
and without consideration of the Performance Bonus computed in accordance with
generally accepted accounting principles. The Performance Bonus amount shall be
determined at the close of each calendar quarter and shall be paid to the
Employee within 45 days of each quarter end. In addition, Employee may be
granted an annual incentive bonus which is solely at the discretion of the
Board. Aggregate Performance Bonuses in any one calendar year shall not exceed
the amount of Employee's Base Salary for such calendar year.
SECTION 3.3. OTHER BENEFIT PLANS. During the term of this Agreement,
the Employee will be entitled to participate in and receive the benefits of any
profit-sharing plans, 401(k) plans, deferred compensation plans, or other plans,
benefits and privileges given to employees and executives of the Company which
are currently in effect at the execution of this Agreement or which may come
into existence thereafter to the extent the Employee is otherwise eligible and
qualifies to so participate in and receive such benefits or privileges. Nothing
paid to the Employee under any plan or arrangement presently in effect or made
available in the future shall be deemed to be in lieu of the Base Salary payable
to the Employee pursuant to Section 3.1. herein.
SECTION 3.4. INCENTIVE STOCK OPTIONS. The Company will designate
Employee as a key employee eligible for the grant of incentive stock options
under the Jacksonville Bancorp, Inc. 1997 Stock Option Plan (the "Stock Option
Plan"). In that connection, the Company will grant to Employee under the terms
of the Stock Option Plan, an option to acquire up to 50,000 shares of Bancorp
common stock, over a ten-year period. The grant of the stock options shall be
made strictly in accordance with the terms of the Stock Option Plan and in
accordance with the Company's standard form of Stock Option Agreement. The
options will contain an exercise price of $9.00 per
3
<PAGE> 5
share and will vest 20% per year beginning with the year of grant. As part of
the consideration for the Stock Options, Employee agrees that for a period of
one year following any event of termination defined herein, Employee will not
accept employment with any existing or proposed business organization which then
competes or intends to compete with the Company in any Florida County where the
Bank has a full service branch office.
SECTION 3.5. VACATION. During the first full-two years of the Bank's
operation, Employee shall be entitled to three weeks paid vacation per year.
Thereafter, Employee shall be entitled to four weeks paid vacation. The vacation
time is non-cumulative and cannot be taken in increments of more than two weeks.
ARTICLE IV.
MEDICAL, LIFE & DISABILITY COVERAGES
SECTION 4.1. MEDICAL BENEFITS. Employee is entitled to participate in
all medical and health care benefit plans through health insurance, corporate
funds, medical reimbursement plans or other plans, if any, provided by the Bank
for its employees.
SECTION 4.2. DISABILITY/ILLNESS. Employee shall be paid his full Base
Salary for any period of his illness or incapacity: provided that such illness
or incapacity does not render Employee unable to perform his duties under this
Agreement for a period longer than three consecutive months. At the end of such
three-month period, the Bank may terminate Employee's employment and this
Agreement. If the Bank terminates this Agreement due to Employee's disability,
the Bank shall pay to Employee, as a disability payment, an amount equal to 100%
of Employee's monthly Base Salary for the first three months and 70% thereafter
for the remainder of the term of this Agreement. The disability payment shall be
payable in accordance with the Bank's standard payroll practices, commencing on
the effective date of Employee's termination for the disability and ending on
the earlier of: (i) the date Employee returns to full time employment in his
capacity as the Bank's President; (ii) Employee's full time employment by
another financial institution; or (iii) the date of Employee's death.
The Company may satisfy its obligations under this Section, at its
option, through the purchase of disability insurance. The provisions of such
policy will control the amounts paid to Employee.
SECTION 4.3. CONTINUATION OF COVERAGES. During any period of illness or
disability, the Bank will continue any other life, health and disability
coverages for Employee substantially identical to the coverages maintained prior
to Employee's termination for disability. Such coverages shall cease upon the
earlier of: (i) Employee's full time employment by another financial
institution; (ii) one year after the date of such termination (with the
exception of disability insurance coverage); or (iii) the date of Employee's
death.
SECTION 4.4. DEATH DURING EMPLOYMENT. In the event of Employee's death
during the term of this Agreement, the Company's obligation to Employee shall be
limited to the portion of Employee's compensation which would be payable up to
the first working day of the first month
4
<PAGE> 6
after Employee's death, except that any compensation payable to Employee under
any benefit plan maintained by the Company will be paid pursuant to its terms.
ARTICLE V.
EXPENSES
SECTION 5.1. GENERAL. Employee is authorized to incur reasonable
expenses in performing his duties. The Company will reimburse Employee for
authorized expenses, according to the Company's established policies, promptly
after Employee's presentation of an itemized account of such expenditures.
SECTION 5.2. AUTOMOBILE. The Bank will provide Employee with an
automobile for transportation and use during Employee's term of employment.
SECTION 5.3. CLUB AND ORGANIZATION MEMBERSHIPS. The Bank will pay an
annual membership fee for the Employee to be a member at a business club and a
country club located in Jacksonville, Florida, as approved by the Board of
Directors. Employee shall comply with all applicable federal income tax laws and
regulations governing Employee's personal use of these memberships. The Bank
will also pay Employee's membership costs in other clubs or organizations when
such membership will benefit the Bank as determined in advance by the Board of
Directors. Employee shall maintain records of both business and personal use of
such facilities and shall submit those records to the Bank monthly.
ARTICLE VI.
TERMINATION
SECTION 6.1. FAILURE OF BANK TO COMMENCE OPERATIONS. In the event the
Bank fails to commence operations for any reason on or before December 31, 1998,
this Agreement may be terminated by Bancorp upon 30 days written notice to
Employee.
SECTION 6.2. ILLNESS, INCAPACITY OR DEATH. This Agreement shall
terminate upon Employee's illness, incapacity or death in accordance with the
provisions of Article IV herein.
SECTION 6.3. TERMINATION FOR JUST CAUSE. The Company shall have the
right, at any time, upon prior written notice of termination satisfying the
requirements of Article VII herein, to terminate the Employee's employment
hereunder, including termination for just cause. For the purpose of this
Agreement, termination for just cause shall mean any of the following acts
committed by Employee:
(i) Personal dishonesty;
(ii) Incompetence;
(iii) A pattern of socially unacceptable behavior;
(iv) Willful misconduct;
5
<PAGE> 7
(v) Breach of fiduciary duty involving personal profit;
(vi) Intentional failure to perform stated duties;
(vii) Willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or any final
cease-and-desist order; or
(viii) Material breach of any provision of this Agreement.
For purposes of this Section, no act, or failure to act, on the
Employee's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company; provided that any act or
omission to act by the Employee in reasonable reliance upon an opinion of
counsel to the Company shall not be deemed to be willful. In the event Employee
is terminated for just cause, Employee shall have no right to compensation or
other benefits for any period after such date of termination.
SECTION 6.4. EFFECTIVE DATE OF TERMINATION. The termination of this
Agreement and Employee's employment shall be effective upon the delivery to
Employee of written notice or at such later time as may be specified in such
notice, and Employee shall immediately vacate the Bank premises on or before
such effective date.
SECTION 6.5. INVOLUNTARY TERMINATION. If the Employee is terminated by
the Company, other than for just cause. Employee's right to compensation and
other benefits under this Agreement shall be as set forth in Sections 6.8(i) and
6.9 herein. In the event the Employee is terminated in connection with a change
in control of the Company, Employee's right to compensation and other benefits
under this Agreement shall be as set forth in Sections 6.8(ii) and 6.9 herein.
SECTION 6.6. TERMINATION FOR GOOD REASON. Employee may terminate his
employment hereunder for good reason by giving written notice to the Board of
Directors or the Chairman thereof. For purposes of this Agreement, "good reason"
shall mean (i) a failure by the Company to comply with any material provision of
this Agreement, which failure has not been cured within 15 days after a notice
of such noncompliance has been given by the Employee to Bancorp or the Company;
or (ii) subsequent to a change in control as defined in Section 6.7 herein and
without the Employee's express written consent, any of the following shall
occur: the assignment to the Employee of any duties inconsistent with the
Employee's positions, duties, responsibilities and status with Bancorp and the
Bank immediately prior to a change in control; a change in the Employee's
reporting responsibilities, titles or offices as in effect immediately prior to
a change in control of Bancorp or the Bank; any removal of the Employee from, or
any failure to re-elect the Employee to, any of such positions, except in
connection with a termination of employment for just cause, disability, death,
or removal pursuant to Sections 6.3 or 6.2 herein; a reduction in the Employee's
annual salary as in effect immediately prior to a change in control; the failure
of the Bank to continue in effect any bonus, benefit or compensation plan, life
insurance plan, health and accident plan or disability plan in which the
Employee is participating at the time of a change in control of Bancorp or the
Bank, or the taking of any action by Bancorp or the Bank which would adversely
affect the Employee's participation in or materially reduce the Employee's
benefits under
6
<PAGE> 8
any of such plans, or the transfer of the Employee to any location outside of
Duval County, Florida or the assignment of substantial duties to the Employee to
be completed outside Duval County, Florida.
SECTION 6.7. CHANGE IN CONTROL. For purposes of this Agreement, a
"change in control" shall mean a change in ownership of stock in Bancorp or the
Bank whereby a person:
(i) Acquires more than 25% of any class of voting stock of Bancorp
or the Bank through direct or indirect ownership or proxy; or
(ii) Controls in any manner the election of a majority of the
directors of the Company.
SECTION 6.8. SEVERANCE PAYMENT.
(i) If the Employee shall terminate his employment for good reason
as defined in Section 6.6 herein, or if the Employee is
terminated by the Company for other than just cause as defined
in Section 6.3 herein, then in lieu of any further salary
payments to the Employee for periods subsequent to the date of
termination, Employee shall be paid, as severance, an amount
which would equal Employee's total annual compensation for the
remainder of the term of the Agreement, plus any Performance
Bonus or other incentive compensation which Employee would
have been entitled to hereunder;
(ii) In the event Employee's employment is terminated as a result
of a change in control of Bancorp or the Bank, Employee shall
be entitled to a severance payment equal to two times
Employee's Base Salary as of the date of termination, plus any
Performance Bonus or other incentive compensation which
Employee would have been entitled to hereunder. The Agreement
Not to Compete, Section 9.3. herein shall be limited to six
months in the event of a termination as a result of a change
in control; and
(iii) Any payment under Section 6.8(i) and 6.8(ii) shall be made in
substantially equal semi-monthly installments on the fifteenth
and last days of each month until paid in full.
SECTION 6.9. ADDITIONAL SEVERANCE BENEFITS. Unless Employee is
terminated for just cause pursuant to Section 6.3 herein or because of illness,
incapacity or death pursuant to Section 6.2 herein, the Company shall maintain
in full force and effect, for the continued benefit of the Employee for the
remaining term of this Agreement, or one year (whichever is longer), all
employee benefit plans and programs in which the Employee was entitled to
participate immediately prior to the date of termination; provided, however,
that the Employee's continued participation is possible under the general terms
and provisions of such plans and programs. Further, the Company shall pay for
the same or similar benefits if such benefits are available to the employee on
an individual or group basis as a result of contractual or statutory provisions
requiring or permitting such availability including, but not limited to, health
insurance covered under COBRA.
7
<PAGE> 9
SECTION 6.10. MITIGATION. Employee shall not be required to mitigate
the amount of any payment provided for in Sections 6.8(i) and 6.8(ii) of this
Agreement by seeking other employment.
ARTICLE VII.
SUSPENSION/TERMINATION PURSUANT TO REGULATOR ACTION
SECTION 7.1. SUSPENSION. If the Employee is suspended from office
and/or temporarily prohibited from participating in the conduct of the Bank's
affairs pursuant to actions taken by the Florida Department of Banking and
Finance ("DOBF") or by notice served under Section 8(e)(3) or Section 8(g)(1) of
the Federal Deposit Insurance Act ("FDIA") (12 U.S.C. Section 1818[e][3] and
Section 1818[g][1]), the Bank's obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may, in its discretion: (i)
pay the Employee all or part of the compensation withheld while its obligations
under this Agreement were suspended, and (ii) reinstate (in whole or in part)
any of its obligations which were suspended.
SECTION 7.2. PERMANENT PROHIBITION. If the Employee is removed from
office and/or permanently prohibited from participating in the conduct of
Bancorp and the Bank's affairs by an order issued by the DOBF or by an order
issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. Sections
1818[e](4] and [g][1]), all obligations of Bancorp and the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the Employee as of the date of termination shall not be affected.
SECTION 7.3. DEFAULT UNDER FDIA. If the Bank is in default, as defined
in Section 3(x)(1) of the FDIA (12 U.S.C. Section 1813[x][1]) to mean an
adjudication or other official determination by any court of competent
jurisdiction, the appropriate federal banking agency or other public authority
pursuant to which a conservator, receiver or other legal custodian is appointed
for the Bank, all obligations under this Agreement shall terminate as of the
date of default, but vested rights of the Employee and the Bank as of the date
of termination shall not be affected.
SECTION 7.4. GOLDEN PARACHUTE: Any payments made to the Employee
pursuant to this Agreement, or otherwise, are subject to and conditioned upon
their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated
thereunder.
ARTICLE VIII.
NOTICES
SECTION 8.1. GENERAL. Employee shall have the right, upon prior written
notice of termination of not less than 30 days, to terminate his employment
hereunder. In such event, Employee shall have no right after the date of
termination to compensation or other benefits as provided in this Agreement,
unless such termination is for "good reason", as defined in Section 6.6 herein.
If the Employee provides a notice of termination for good reason, the date of
termination shall be the date on which the notice of termination is given.
SECTION 8.2. SPECIFICITY. Any termination of the Employee's employment
by the Company or by Employee shall be communicated by written notice of
termination to the other party hereto.
8
<PAGE> 10
For purposes of this Agreement, a "notice of termination" shall mean a dated
notice which shall: (i) indicate the specific termination provision in the
Agreement relied upon; (ii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated; and (iii) set forth the date of
termination, which shall be not less than 30 days nor more than 45 days after
such notice of termination is given, except in the case of termination of the
Employee's employment for just cause, in which case date of termination shall be
the date such notice of termination is given.
SECTION 8.3. DELIVERY OF NOTICES. All notices given or required to be
given herein shall be in writing, sent by United States first-class certified or
registered mail, postage prepaid, by way of overnight carrier or by hand
delivery. If to the Employee (or to the Employee's spouse or estate upon the
Employee's death) notice shall be sent to Employee's last-known address, and if
to Employer, notice shall be sent to the Chairman of the Board or the Vice
Chairman at the main office of Bancorp. All such notices shall be effective when
deposited in the mail if sent via first-class certified or registered mail, or
upon delivery if by hand delivery or sent via overnight carrier. The Parties, by
notice in writing, may change or designate the place for receipt of all such
notices.
ARTICLE IX.
COMPETITIVE ACTIVITIES
SECTION 9.1. LIMITATION ON OUTSIDE ACTIVITIES. Employee agrees that
during the term of this Agreement, except with the express consent of the
Company's Board(s), Employee will not, directly or indirectly, engage or
participate in, become a director of, or render advisory or other services for,
or in connection with, or become interested in, or make any financial investment
in any firm, corporation, business entity or business enterprise competitive
with or to any business of the Company; provided, however, that Employee shall
not be precluded or prohibited from owning passive investments, including
investments in the securities of other financial institutions, so long as such
ownership does not require Employee to devote other than minimal time to
management or control of the business or activities in which Employee has
invested.
SECTION 9.2. MAINTENANCE OF TRADE SECRETS AND CONFIDENTIAL INFORMATION.
Employee shall use his best efforts and utmost diligence to guard and protect
all of the Company's trade secrets and confidential information. Employee shall
not, either during the term or after termination of this Agreement, for whatever
reason, use, in any capacity, or divulge or disclose in any manner, to any
Person, the identity of the Company's customers, or its customer lists, methods
of operation, marketing and promotional methods, processes, techniques, systems,
formulas, programs or other trade secrets or confidential information relating
to the Company's business. Upon termination of this Agreement or Employee's
employment, for any reason, Employee shall immediately return and deliver to the
Company all records and papers and all matters of whatever nature which bear
trade secrets or confidential information relating to the Company.
SECTION 9.3. AGREEMENT NOT TO COMPETE. Employee acknowledges that by
virtue of his employment with the Company, Employee will acquire an intimate
knowledge of the activities and affairs of the Company, including trade secrets
and other confidential matters. Employee, therefore, agrees that during the term
of this Agreement, and for a period of one year following the termination of
Employee's employment hereunder, Employee shall not become employed, directly or
indirectly,
9
<PAGE> 11
whether as an employee, independent contractor, consultant, or otherwise, in the
financial services industry with any business enterprise or business entity, or
person who competes or intends to compete directly or indirectly with any office
of the Company located in Duval County, Florida, or in any other Florida County
where the Bank may have a full service branch office. Employee hereby agrees
that the duration of the anticompetitive covenant set forth herein is
reasonable, and its geographic scope is not unduly restrictive.
ARTICLE X.
REMEDIES FOR BREACH
SECTION 10.1. ARBITRATION. The Parties agree that, except for the
specific remedies for injunctive relief and other equitable relief contained in
Sections 10.2 and 10.3 herein, any controversy or claim arising out of or
relating to this Agreement or any breach thereof, including, without limitation,
any claim that this Agreement or any portion thereof is invalid, illegal or
otherwise voidable, shall be submitted to binding arbitration before and in
accordance with the rules of the American Arbitration Association and judgment
upon the determination and/or award of such arbitrator may be entered in any
court having jurisdiction thereof; provided, however, that this clause shall not
be construed to permit the award of punitive damages to either party. The
prevailing party to said arbitration shall be entitled to an award of reasonable
attorney's fees. The venue of arbitration shall be in Duval County, Florida.
SECTION 10.2. INJUNCTIVE RELIEF. The Parties acknowledge and agree that
the services to be performed by Employee are special and unique and that money
damages cannot fully compensate the Company in the event of Employee's violation
of the provisions of Article IX of this Agreement. Thus, in the event of a
breach of any of the provisions of Article IX, Employee agrees that the Company,
upon application to a court of competent jurisdiction, shall be entitled to an
injunction restraining Employee from any further breach of the terms and
provision of Article IX. Should the Company prevail in an action seeking an
injunction restraining Employee, Employee shall pay all costs and reasonable
attorneys fees incurred by the Company in and relating to obtaining such
injunction. Such injunctive relief may be obtained without bond and Employee's
sole remedy, in the event of the entry of such injunction, shall be the
dissolution of such injunction. Employee hereby waives any and all claims for
damages by reason of the wrongful issuance of any such injunction.
SECTION 10.3. CUMULATIVE REMEDIES. Notwithstanding any other provision
of this Agreement, the injunctive relief described in Section 10.2 herein and
all other remedies provided for in this Agreement which are available to the
Company as a result of Employee's breach of this Agreement, are in addition to
and shall not limit any and all remedies existing at or in equity which may also
be available to the Company.
SECTION 10.4. GOVERNING LAW/VENUE. This Agreement shall be construed in
accordance with and governed by the laws of the State of Florida. Venue for any
litigation involving the Parties and their rights and obligations hereunder
shall be brought in any appropriate court in Duval County, Florida.
10
<PAGE> 12
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. ASSIGNMENT. This Agreement shall inure to the benefit of
and be binding upon the Employee, and to the extent applicable, his heirs,
assigns, executors, and personal representatives, and to the Company, and to the
extent applicable, its successors, and assigns, including, without limitation,
any person, partnership, or corporation which may acquire all or substantially
all of the Company's assets and business, or with or into which the Company may
be consolidated or merged, and this provision shall apply in the event of any
subsequent merger, consolidation, or transfer, unless such merger or
consolidation or subsequent merger or consolidation is a transaction of the type
which would result in termination under Sections 6.5 and 6.6 herein.
SECTION 11.2. AMENDMENT OF AGREEMENT. Unless as otherwise provided
herein, this Agreement may not be modified or amended except in writing signed
by the Parties.
SECTION 11.3. HEADINGS FOR REFERENCE ONLY. The headings of the Articles
and the Sections herein are included solely for convenient reference and shall
not control the meaning of the interpretation of any of the provisions of this
Agreement.
SECTION 11.4. SEVERABILITY. If any of the provisions of this Agreement
shall be held invalid for any reason, the remainder of this Agreement shall not
be affected thereby and shall remain in full force and effect in accordance with
the remainder of its terms.
SECTION 11.5. ENTIRE AGREEMENT. This Agreement and all other documents
incorporated or referred to herein, contain the entire agreement of the Parties
and there are no representations, inducements or other provisions other than
those expressed in writing herein. This Agreement amends, supplants and
supersedes any and all prior agreements between the Parties. No modification,
waiver or discharge of any provision or any breach of this Agreement shall be
effective unless it is in writing signed by both Parties. A Party's waiver of
the other Party's breach of any provision of this Agreement, shall not operate,
or be construed, as a waiver of any subsequent breach of that provision or of
any other provision of this Agreement.
SECTION 11.6. WAIVER. No course of conduct by the Company or Employee
and no delay or omission of the Company or Employee to exercise any right or
power given under this Agreement shall: (i) impair the subsequent exercise of
any right or power; or (ii) be construed to be a waiver of any default or any
acquiescence in or consent to the curing of any default while any other default
shall continue to exist, or be construed to be a waiver of such continuing
default or of any other right or power that shall theretofore have arisen. Any
power and/or remedy granted by law and by this Agreement to any party hereto may
be exercised from time to time, and as often as may be deemed expedient. All
such rights and powers shall be cumulative to the fullest extent permitted by
law.
11
<PAGE> 13
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first written above.
<TABLE>
<S> <C>
JACKSONVILLE BANCORP, INC. THE JACKSONVILLE BANK, IN ORGANIZATION
By: /s/ By: /s/
------------------------------------ ------------------------------------
R.C. Mills R.C. Mills
on behalf of the Board of Directors on behalf of the Board of Directors
/s/ /s/
- ------------------------------------------- -------------------------------------------
Witness Witness
EMPLOYEE
/s/
- -------------------------------------------
Victor M. George
/s/
- -------------------------------------------
Witness
</TABLE>
12
<PAGE> 1
EXHIBIT 10.2
AGREEMENT BETWEEN MCALLEN CAPITAL PARTNERS, INC.
AND JACKSONVILLE BANCORP, INC.
<PAGE> 2
[MCALLEN CAPITAL PARTNERS, INC. LETTERHEAD]
PROPOSAL TO:
JACKSONVILLE
BANCORP,
INC.
JACKSONVILLE, FLORIDA
FOR PROVIDING:
FINANCIAL ADVISORY SERVICES
MAY 1998
<PAGE> 3
[MCALLEN CAPITAL PARTNERS, INC. LETTERHEAD]
May 29, 1998
Mr. Victor M. George
President
Jacksonville Bancorp, Inc.
4337 Pablo Oaks Court
Suite 102
Jacksonville, Florida 32224
Dear Mr. George:
Based on our recent discussions with you, McAllen Capital Partners,
Inc. ("McAllen Capital" or "MCP") is pleased to present this proposal for an
ongoing advisory relationship with Jacksonville Bancorp, Inc. ("Jacksonville
Bancorp" or the "Company") and its subsidiary, The Jacksonville Bank
("Jacksonville Bank" or the "Bank"). This proposal discusses the elements and
pricing of such an engagement. The following pages describe the scope of our
work, our fee schedule and the estimated time frame of the project. Also
included is some background on MCP and the principal who would be advising you.
I would like to note several important general points discussed with your Board
of Directors and/or you in our recent discussions.
- - With the completion of Regency Bancorp's and Federal Trust
Corporation's stock offerings, which were both consummated during the
past six months, we will have participated in 15 successful
transactions involving community banking institutions during the last
five years. These transactions ranged in size from $4 million to over
$100 million in gross proceeds. The majority of these transactions,
however, were less than $15 million, which are the most difficult
transactions to complete. We are not aware of any financial advisory or
investment banking firm that can match this track record. Moreover,
based on our experience with smaller public and private offerings
(under $10 million), we are very confident that most advisors and
investment bankers do not provide the services discussed below.
- - Given our investment banking background, commercial banking expertise,
and regulatory knowledge, we can effectively communicate the most
salient aspects of Jacksonville Bancorp's prospective transaction to
the Company's management, directors and the investment community.
- - Our background is that of independent and objective advisors who will
work exclusively for the Company. Simply put, our SOLE responsibility
is to make certain the best interests of the Company (and its
shareholders) are always being served -- both today and in the future.
- - Finally, we believe strongly enough in the long-term prospects of the
Company that we have developed a fee arrangement that is principally
success fee oriented inasmuch as a significant portion of the payment
is linked to our success in the sale of the stock.
<PAGE> 4
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 2
SCOPE OF THE WORK
Based on our past experience in working with financial institutions, I
believe there are certain fundamental keys to succeeding in the offering we
discussed, specifically, a combination community/public offering. The keys were
summarized in our previous discussions to you, but let us reiterate them for you
again and outline how we would assist in accomplishing each of these. Our
efforts would include, but not be limited to, the following six elements:
(1) DEVELOPING STRATEGIC/CAPITAL PLANS THAT SELL REGULATORS AND
INVESTORS.
This process begins with our analysis of the current strategic
and capital plans, as well as the development of projected
financial and operating data for the Company/Bank. In
addition, we will examine other appropriate background
material and have discussions with the institution's senior
staff. Our analysis of this data will generate a clear
definition of the potential financial resources. It will also
help us understand the current and prospective regional
economic/demographic conditions and competitive operating
environment, as well as, define the true future capabilities
of the institution.
The results of this analysis would be presented in a summary
strategic/capital plan that: a) presents a succinct statement
of corporate goals, direction and objectives; b) represents
realistic and achievable game plan for the post-capitalization
environment; and c) develops regulatory and investor support
for the capital offering. This summary strategic/capital plan
would be incorporated into an informational document
(described below) that would be used to educate and stimulate
interest among the investment community, investment bankers
and investors alike.
(2) DEVELOPING THE COMPANY'S STORY -- HIGHLIGHTING ITS UNIQUE
ATTRIBUTES.
With regard to this key, MCP would develop an informational
document, which would, among other things: (1) establish the
corporate profile of the Company and its role in a
post-capitalization environment; (2) identify those facets of
the Company that will provide long-term investment value; and
(3) focus investor attention towards the ultimate stock
valuation.
This document provides a general description of the Company,
including: an overview of its market (demographics, deposit
growth, market positions of competitive institutions,
financial competitiveness, etc.), its prospective financial
condition and performance (capital status, capital
alternatives, asset quality, quality and predictability of
earnings), its management, and the future potential of the
Company/Bank.
<PAGE> 5
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 3
SCOPE OF THE WORK (CONTINUED)
(2) DEVELOPING THE COMPANY'S STORY ... (CONTINUED)
This document is used to educate and garner the support of the
investment community, investment bankers and investors
(usually a mix of retail and entrepreneurial/high net worth
individuals). In addition, it is used to generate competition
among the investment banking/brokerage community so as to
lower the overall cost of the offering. MCP would actively
participate in the presentations to, negotiations with, and
selection of a team of investment bankers.
(3) DESIGNING EFFECTIVE PRESENTATIONS TAILORED TO THE VARIOUS
TARGET AUDIENCES.
This effort would not only help the Company in its prospective
offering, but would also provide the foundation for its future
investor/public relations efforts. In summary, the effort
provides marketing and sales promotional material designed to
enlighten and gain investor support. MCP creates presentations
of varied sophistication designed to meet the informational
needs of audiences ranging from "community" to
institutional/entrepreneurial investors, and the information
provided tells both the corporate "story", and why the
Company's stock is a compelling investment opportunity.
In this regard, MCP develops presentations that induce
prospective stakeholders (customers, employees and
shareholders). We would, if appropriate, directly participate
in such presentations bringing our independent and objective
perspective on the financial fundamentals and stock valuations
of community banks. We have found that our participation
greatly enhances the "community" offering effort, and
contributes to the public offering as well. This effort
includes assisting with the preparation of certain elements of
the offering prospectus.
(4) STRUCTURING A TRANSACTION THAT ENSURES SHORT-TERM CAPITAL
COMPLIANCE AND LONG-TERM COMPETITIVE VIABILITY.
We have proposed a transaction that incorporates all of the
key considerations of the principal participants (the Company,
its Directors and employees, the regulators and prospective
investors) previously discussed and one that minimizes the
overall cost to the organization. The offering would help
garner support and future business from your local market,
while establishing a lower "offering" fee from the
underwriters for this portion of the offering. The public
offering will be used to, among other things, increase the
liquidity and valuation of the Company's stock and increase
the overall awareness of the market.
<PAGE> 6
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 4
SCOPE OF THE WORK (CONTINUED)
(5) EFFECTIVELY MANAGING THE CAPITAL RAISING PROCESS.
McAllen Capital assists the management of nearly every facet
of the capital raising process. We effectively act as the
bank's inside investment banker, advising on formation,
organization and on-going management of the public offering
"team", including attorneys, accountants, investment bankers,
financial printers, transfer agents, etc. Given our track
record of success in community bank transactions, our
participation: (1) provides confidence to the various parties;
(2) lowers the overall cost of the transaction; and (3)
enhances the after-market support of the equity issue.
(6) POST-CAPITALIZATION MONITORING AND PLANNING.
Having participated directly in or analyzing a significant
portion of the recapitalizations, MCP strongly believes that
the first year after the capitalization is a very critical
period. The foundation for the long-term success or failure of
the recapitalization is developed during this time. As such,
we will help Jacksonville Bancorp's Board by assisting in the
monitoring and planning process during this crucial time
frame. Throughout the first post-capitalization year, we will
participate, at Jacksonville Bancorp's request, in Board
meetings and help facilitate the monitoring and planning
process, which is a basic element of the strategic planning
process. One of the principal objectives will be to ensure
that management and the Board of Directors of both the Company
have been fully informed (in a timely and on a cost effective
basis) as to their various strategic alternatives, and that
both groups fully understand what strategies will advance the
after-market support of the stock and maximize long-term
shareholder value.
TIME FRAME
MCP would be prepared to begin the project immediately upon your
approval. We would need approximately two or three weeks to prepare the
appropriate planning and marketing material, assuming that basic data is readily
available from the Company. During this same period, we would begin the
transaction structuring and marketing process, including the
presentations/negotiations to prospective investment bankers/placement agents.
The entire process from start to consummation of the offering could take as
little as three months or as long as four.
<PAGE> 7
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 5
FEE SCHEDULE
Our standard fee schedule for these types of engagements (Elements 1
through 5 above) includes professional fees charged for work done on the
project, plus normal out-of-pocket expenses. Our fee schedule for Element 6
(post-capitalization monitoring and planning) is outlined below.
Specifically, for Elements 1 through 5, our hourly fees are $150 per
hour worked. Typically, our hourly professional fees would range between $10,000
to $15,000 per month, although the first month would likely be higher due to the
amount of time needed for the front-end effort. Since we are very interested in
continuing to participate in this transaction, we will cap our professional fees
for the first four months of this engagement at $20,000; the entire amount to be
applied to the success fee described below. If the project should go well beyond
this period or our role changes from that of a financial advisor, we would
discuss a new fee arrangement with you.
It is our standard practice to request that each of our clients
maintain a retainer balance with us, against which we charge our fees and
out-of-pocket expenses. In this case, we suggest an initial retainer of $15,000
which will be replenished should the balance in the retainer account fall below
$1,000. At the conclusion of the engagement, we will refund the balance, if any,
in the retainer account. Our fees and out-of-pocket expenses will be billed as
incurred at the end of every month against the retainer account.
For Element 6 of the engagement (Post-Capitalization Monitoring and
Planning), we would charge a nominal professional fee and normal out-of-pocket
expenses. Given our analysis to-date of the Company/Bank and our participation
in the recent capital offerings of community banks (see Capital Raising
Experience below), we would charge a flat fee of $5,000 for the year (or $1,250
for each of the four quarterly Board meetings).
In addition to the professional fees, MCP would receive a success fee
if a successful sale of the shares, or a significant portion thereof, occurs in
a stock offering(s). This success fee would be equal to one and one-half percent
(1.5%) of the gross proceeds from the community and public offerings, which
excludes the amount raised from Directors and employees. For example, if the
gross proceeds were to equal $10 million, our success fee would equal $150,000.
<PAGE> 8
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 6
CORPORATE BACKGROUND - MCALLEN CAPITAL
McAllen Capital sole mission is to provide expert, discrete and
cost-effective advisory services to financial institution managers, directors
and investors. Our firm has a reputation for high quality service, because our
professionals are focused, experienced, work interdependently and produce
successful results.
Our professionals are FOCUSED. McAllen Capital is a specialized
consulting firm providing a select range of financial, economic and management
advisory services exclusively to the financial services industry. Our nationwide
client base includes commercial banks, bank holding companies, thrift
institutions, mortgage banking firms, government regulatory agencies, and
investors in the financial services industry.
Our professionals are EXPERIENCED. Our principals are seasoned
financial service firm professionals. Prior to forming McAllen Capital, our
professionals have worked for or with leading financial service firms, financial
consulting concerns and investment banks. As such, we possess a wealth of
practical industry experience, financial advisory expertise and regulatory
knowledge. In addition, we have, in aggregate, 40 years of financial advisory
and management experience. More specifically, we have a firsthand appreciation
of what it takes to successfully implement organizational change.
Our professionals work INTERDEPENDENTLY. We bring to each engagement an
in-depth understanding of the financial institution's markets, competition,
economics and regulation. In this regard, we act as an independent and objective
counsel to our clients. Yet, we understand that high degree of client consensus,
commitment and involvement are necessary if meaningful results are to be
achieved. Therefore, we work hard to build rich, enduring, and highly productive
partnerships with our clients.
Our professionals PRODUCE SUCCESSFUL RESULTS. By combining our
expertise with our focused and integrated approach, McAllen Capital empowers our
clients to achieve superior economic performance and build sound, efficient
organizations. In short, we help our clients produce practical, concrete results
that optimize financial performance.
With our offices in suburban Washington, D.C., McAllen Capital can stay
abreast of the dynamic regulatory and legislative environment. Our professionals
have an excellent working relationship with all of the major financial
institution regulatory agencies: Federal Deposit Insurance Corporation, Federal
Reserve, Office of the Comptroller of the Currency, Office of Thrift
Supervision, and various state regulators.
<PAGE> 9
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 7
FINANCIAL ADVISORY SERVICES
One of the primary services McAllen Capital provides is effecting
capital and strategic transactions for small to medium size financial
institutions. These transactions include raising both Tier 1 and Tier 2 capital
for insured institutions and providing financial advisory services relating to
mergers and acquisitions. McAllen Capital generally serves insured institutions
with assets of up to $1 billion. The Firm focuses on serving independent banks
for capital transactions and all banks for strategic transactions. Services are
provided to bank holding companies, commercial banks, state-chartered industrial
loan companies, and savings and loan associations.
McAllen Capital may solicit the assistance of private brokerage firms
that assist sophisticated retail and small capitalization institutional
customers, if it is deemed necessary for a particular transaction. MCP will
assist such companies in providing both retail and institutional research to
individuals and portfolio managers who invest in financial service companies.
McAllen Capital focuses exclusively on common, convertible, and straight debt
securities, as opposed to municipals, mutual funds and limited partnerships.
Through MCP's institutional quality research and presentations, McAllen Capital
can illuminate unappreciated, under-followed small capitalization stocks that
provide compelling investment opportunities.
In the area of capital raising, McAllen Capital believes in
"building-block offerings", that is financing the growth of its clients over
time through a series of well-timed, well-structured capital financings. In
addition, we believe that whenever possible, the stock distribution should be
well-balanced, involving retail, entrepreneurial and institutional accounts, and
the creation of underwriting syndicates of local and regional brokerage firms.
McAllen Capital targets $4 million to $15 million offerings for independent
community banks/thrifts. Our investment banking competitors generally will not
manage offerings of this size. Moreover, other local and regional-based
investment banking firms have been less active in raising capital for banks or
other financial service companies.
MCALLEN CAPITAL'S FINANCIAL ADVISORY EXPERIENCE
During the last 25 years, we have provided senior level financial
advisory and investment banking services to financial institution managers,
directors and investors, including bank holding companies, commercial banks,
thrift institutions, mortgage bankers and credit finance companies. The
financial advisory transactions have included mergers/acquisitions,
divestitures, branch transactions, mutual-to-stock conversions, and other
capital raising transactions, including recapitalizations. Other assignments
have included providing fairness opinions, portfolio valuations, profitability
analyses, strategic/corporate development planning, and investment advisory
studies. Our professionals have prepared numerous analyses of debt and equity
issues of financial service firms and presented this material to retail,
entrepreneurial and institutional clients.
<PAGE> 10
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 8
MCALLEN CAPITAL'S CAPITAL RAISING EXPERIENCE
For more than a decade, our professionals have participated in dozens
of capital raising efforts that ranged in size from $4 million to more than $150
million. In recent years, we have focused on smaller capital
formation/enhancement transactions, by raising funds for both troubled and
healthy financial institutions. These smaller transactions, between $4 million
and $15 million, however, are the MOST difficult to complete. Nevertheless,
during the past five years, we completed 15 such offerings for community banks,
a distinction that sets us apart from any major or regional investment banking
firm.
During the last five years, we have helped our clients raise gross
proceeds approaching $400 million through public and private offerings.
Moreover, our knowledge of the capital markets is nationwide in scope. McAllen
Capital has helped raise capital for clients from New England to Southern
California.
SUMMARY
We hope we get the chance to assist you in this project. McAllen
Capital knows the process, the markets and all of the possible participants. We
are a results driven firm, and our record of achieving success with these types
of transactions is outstanding. If you have any questions, please contact John
Rose or me at (724) 983-3767 or (301) 990-4020, respectively. Our standard
confidentiality and indemnification clauses are attached.
Sincerely,
/s/ Alan P. Carruthers
Alan P. Carruthers
Senior Vice President
Attachment
<PAGE> 11
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 9
If the terms described in this letter are satisfactory, please sign in
the space provided below and return a copy along with a check for $15,000 to
McAllen Capital Partners, Inc.
ACCEPTED:
Jacksonville Bancorp, Inc.
BY: /s/ Victor M. George
------------------------------------------------------
TITLE: President & CEO
------------------------------------------------------
DATE: June 10, 1998
------------------------------------------------------
<PAGE> 12
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 10
MCALLEN CAPITAL
CONFIDENTIALITY AND INDEMNIFICATION CLAUSES
The Company and McAllen Capital agree to the following:
1. The Company agrees to make available or to supply to McAllen
Capital such information with respect to its business and financial condition as
McAllen Capital may reasonably request in order to provide the aforesaid
financial advisory services. Such information heretofore or hereafter supplied
or made available to McAllen Capital shall include: annual financial statements,
periodic regulatory filings and material agreements, debt instruments, off
balance sheet assets or liabilities, commitments and contingencies, unrealized
gains or losses and corporate books and records. All information provided by the
Company to McAllen Capital shall remain strictly confidential (unless such
information is otherwise made available to the public other than as a result of
a breach of this Agreement by McAllen Capital), and if the transaction is not
consummated or the services of McAllen Capital are terminated hereunder, McAllen
Capital shall upon request promptly return to the Company the original and any
copies of such information and will destroy any analysis or other work derived
from such information.
2. The Company hereby represents and warrants to McAllen Capital
that any information provided to McAllen Capital does not and will not, to the
best of the Company's knowledge, at the times it is provided to McAllen Capital,
contain any untrue statement of a material fact or fail to state a material fact
necessary to make the statements therein not false or misleading in light of the
circumstances under which they were made.
3. (a) The Company agrees that it will indemnify and hold
harmless McAllen Capital, any affiliates of McAllen Capital, the respective
directors, officers, agents and employees of McAllen Capital or their successors
and assigns who act for or on behalf of McAllen Capital in connection with the
services called for under this agreement (hereinafter referred to as "McAllen
Capital"), from and against any and all losses, claims, damages and liabilities
(including, but not limited to, all losses and expenses in connection with
claims under the federal securities laws) actually incurred by McAllen Capital
and attributable to: (i) any untrue statement or alleged untrue statement of a
material fact contained in the financial statements or other information
furnished or otherwise provided by an authorized officer of the Company to
McAllen Capital, either orally or in writing, (ii) the omission or alleged
omission of a material fact from the financial statements or other information
furnished or otherwise made available by an authorized officer of the Company to
McAllen Capital; (iii) any alleged action or omission to act by the Company, or
the Company's respective officers, directors, employees or agents which alleged
action or omission is willful or negligent; or (iv) McAllen Capital incurs legal
expenses in defending other work product provided for the Company.
Notwithstanding the foregoing, the Company will be under no obligation to
indemnify McAllen Capital hereunder if a court determines that McAllen Capital
was negligent or acted in bad faith or willfully with respect to any actions or
omissions of McAllen Capital related to a matter for which indemnification is
sought hereunder. Any time devoted by employees of McAllen Capital to situations
for which indemnification is provided hereunder, shall be an indemnifiable cost
payable by the Company at the normal hourly professional rate chargeable by such
employee.
<PAGE> 13
Mr. Victor M. George
Jacksonville Bancorp, Inc.
May 29, 1998
Page 11
MCALLEN CAPITAL
CONFIDENTIALITY AND INDEMNIFICATION CLAUSES
3. (b) McAllen Capital shall give written notice to the Company
of such claim or facts within twenty days of the assertion of any claim or
discovery of material facts upon which the McAllen Capital intends to base a
claim for indemnification hereunder. In the event the Company elects, within
seven days of the receipt of the original notice thereof, to contest such claim
by written notice to McAllen Capital, McAllen Capital will be entitled to be
paid any amounts payable by the Company hereunder, together with interest on
such costs from the date incurred at the rate of the prime rate per annum within
five days after the final determination of such contest either by written
acknowledgment of the Company or a final judgment of a court of competent
jurisdiction. If the Company does not so elect, McAllen Capital shall be paid
promptly and in any event within thirty days after receipt by the Company of the
notice of the claim.
(c) The Company shall pay for or reimburse the reasonable
expenses, including attorneys' fees, incurred by McAllen Capital in advance of
the final disposition of any proceeding within thirty days of the receipt of
such request if McAllen Capital furnishes the Company: (1) a written statement
of McAllen Capital's good faith belief that it is entitled to indemnification
hereunder; and (2) a written undertaking to repay the advance if it ultimately
is determined in a final adjudication of such proceeding that it or he is not
entitled to such indemnification.
(d) In the event the Company does not pay any indemnified loss
or make advance reimbursements of expenses in accordance with the terms of this
agreement, McAllen Capital shall have all remedies available at law or in equity
to enforce such obligation.
(e) The Company shall pay for or reimburse McAllen Capital for
all costs and expenditures payable by McAllen Capital in connection with the
engagement of third parties, including but not limited to compensation for such
services, reimbursement of expenses and any indemnification rights, all within
seven (7) days of the receipt of a request for payment thereof from McAllen
Capital.
It is understood that, in connection with McAllen Capital's
above-mentioned engagement, McAllen Capital may also be engaged to act for the
Company in one or more additional capacities, and that the terms of the original
engagement may be embodied in one or more separate agreements. This agreement
constitutes the entire understanding of the Company and McAllen Capital
concerning the subject matter addressed herein. This agreement may not be
modified, supplemented or amended except by written agreement executed by both
parties.
<PAGE> 1
EXHIBIT 21.0
SUBSIDIARIES OF JACKSONVILLE BANCORP, INC.
<PAGE> 2
JACKSONVILLE BANCORP, INC. SUBSIDIARIES
PARENT
- --------------------------------------------------------------------------------
JACKSONVILLE BANCORP, INC.
- --------------------------------------------------------------------------------
SUBSIDIARY
- --------------------------------------------------------------------------------
THE JACKSONVILLE BANK
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 23.1
CONSENT OF IGLER & DOUGHERTY, P.A.
<PAGE> 2
IGLER & DOUGHERTY, P.A.
Attorneys at Law
1501 PARK AVENUE EAST
TALLAHASSEE, FLORIDA 32301
CONSENT
We hereby consent to the references to this firm and our opinions in
the Form SB-2 Registration Statement filed by Jacksonville Bancorp, Inc.
("Company"), and any amendments thereto regarding the issuance and registration
of shares of common stock by the Company.
IGLER & DOUGHERTY, P.A.
/s/ Igler & Dougherty, P.A.
------------------------------
September 29, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF MCALLEN CAPITAL PARTNERS, INC.
<PAGE> 2
MCALLEN CAPITAL PARTNERS, INC.
September 30, 1998
Board of Directors
Jacksonville Bancorp, Inc.
13245 Atlantic Boulevard, Suite #5
Jacksonville, Florida 32225
Gentlemen:
We hereby consent to the references to this firm in the Registration
Statement on Form SB-2 filed by Jacksonville Bancorp, Inc. ("Company"), and all
amendments thereto regarding the issuance and registration of shares of common
stock by the Company.
Sincerely,
McALLEN CAPITAL PARTNERS, INC.
/s/ ALLEN C. CARRUTHERS
<PAGE> 1
EXHIBIT 23.3
CONSENT OF HACKER, JOHNSON, COHEN & GRIEB
<PAGE> 2
HACKER, JOHNSON, COHEN & GRIEB
September 30, 1998
Board of Directors
Jacksonville Bancorp, Inc.
13245 Atlantic Boulevard, Suite #5
Jacksonville, Florida 32225
Gentlemen:
We hereby consent to the references to this firm in the Registration
Statement on Form SB-2 filed by Jacksonville Bancorp, Inc. ("Company"), and all
amendments thereto regarding the issuance and registration of shares of common
stock by the Company.
Sincerely,
HACKER, JOHNSON, COHEN & GRIEB
/s/ HACKER, JOHNSON, COHEN & GRIEB
<PAGE> 1
EXHIBIT 24.0
POWER OF ATTORNEY
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below, being a director of the Registrant (Jacksonville Bancorp, Inc.)
constitute and appoint Victor M. George and Lynn H. Sandberg, or either of them,
as their true and lawful attorneys-in-fact and agents with capacities to sign
any or all amendments to the Form SB-2 Registration Statement of the Registrant,
and to file to the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and things requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as each might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Victor M. George Chairman of the Board, September 29, 1998
- ------------------------------ Chief Executive Officer, --------------------
Victor M. George President and Chief Financial Date
Officer, (Principal Finacial Officer)
/s/ C. Michael Carter Director September 29, 1998
- ------------------------------ --------------------
C. Michael Carter Date
/s/ James M. Healey Director September 29, 1998
- ------------------------------ --------------------
James M. Healey Date
/s/ Rudolph A. Kraft Director September 29, 1998
- ------------------------------ --------------------
Rudolph A. Kraft Date
Director
- ------------------------------ --------------------
William L. Kyle, Jr. Date
/s/ R. C. Mills Director September 29, 1998
- ------------------------------ --------------------
R.C. Mills Date
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
/s/ John W. Rose Director September 29, 1998
- ------------------------------ --------------------
John W. Rose Date
/s/ John R. Schultz Director September 29, 1998
- ------------------------------ --------------------
John R. Schultz Date
/s/ Charles F. Spencer Director September 29, 1998
- ------------------------------ --------------------
Charles F. Spencer Date
/s/ Bennett A. Tavar Director September 29, 1998
- ------------------------------ --------------------
Bennett A. Tavar Date
/s/ Gary L. Winfield, MD Director September 29, 1998
- ------------------------------ --------------------
Gary L. Winfield, MD Date
</TABLE>
2
<PAGE> 1
EXHIBIT 99.1
LETTER TO PROSPECTIVE INVESTOR
<PAGE> 2
JACKSONVILLE BANCORP, INC.
November __, 1998
Dear Prospective Investor:
We are pleased to announce that Jacksonville Bancorp, Inc.
("Jacksonville Bancorp"), a Florida corporation and parent of The Jacksonville
Bank, is offering up to 1,500,000 shares of Common Stock. Jacksonville Bancorp
is offering the shares of Common Stock at a price of $10.00 per share to the
Organizers, directors, employees, the local community, and certain members of
the general public. Net offering proceeds will increase the capital of the Bank
and support future growth of the Bank.
We have enclosed the following materials which will help you learn more
about the merits of Jacksonville Bancorp as an investment. Please read and
review the materials carefully.
PROSPECTUS: This document provides detailed information about
operations of Jacksonville Bancorp and a complete discussion on the
proposed Offering.
QUESTIONS AND ANSWERS: Key questions and answers about the rights
offering are found in this pamphlet.
STOCK ORDER FORM & CERTIFICATION FORM: This form is used to purchase
common stock by returning it with your payment in the enclosed business
reply envelope. The deadline for ordering common stock in the Rights
Offering is 5:00 p.m. Eastern Time _________, 1998. The Offering will
expire on ________, 1998, unless extended by the Company.
We invite Jacksonville Bancorp organizers, directors, employees, the
local community and certain members of the general public to become shareholders
of Jacksonville Bancorp.
If you have additional questions regarding the Offering, please call.
Sincerely,
JACKSONVILLE BANCORP, INC.
Victor M. George
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY STOCK.
THE OFFER IS MADE ONLY BY THE PROSPECTUS.
