**Exhibit 10.11**
**EMPLOYMENT AGREEMENT**
**BY AND AMONG**
**JACKSONVILLE BANCORP, INC.,**
**JACKSONVILLE SAVINGS BANK, SSB**
**and**
**CHAN CAMPSEY**
**__________________________**
     AGREEMENT made this 18th day of March, 2003, by and among JacksonvilleBancorp, Inc., a Texas corporation (the “Company”), Jacksonville Savings Bank,SSB, a Texas chartered savings bank with its principal office in Jacksonville,Texas (the “Bank”) and Chan Campsey (“Employee”).
**WITNESSETH:**
     WHEREAS, Employee is the First Vice President of the Company and the Bank(hereinafter the Company and the Bank are referred to collectively as the“Employer”) and has developed an intimate and thorough knowledge of Employer’sbusiness methods and operations; and
     WHEREAS, the retention of Employee’s services for and on behalf ofEmployer is of material importance to the preservation and enhancement of thevalue of Employer’s business;
     NOW THEREFORE, in consideration of the mutual covenants herein set forth,Employer and Employee do hereby agree as follows:
     I.     TERMOF EMPLOYMENT
     1.1      Employer hereby employs Employee as the First Vice President ashereinafter provided, and Employee hereby accepts said employment and agrees torender such services to Employer on the terms and conditions set forth in thisAgreement for a term of three years commencing on the date hereof andterminating March, 2006, unless further extended or terminated in accordancewith the terms and conditions hereinafter set forth. During the term of thisAgreement, Employee agrees to perform such duties as are customarily performedby one holding the position of First Vice President. On the date of the firstanniversary of this Agreement and on each anniversary date thereafter (“AnnualAnniversary Date”), this Agreement may be extended by the Employer’s Board ofDirectors for an additional year only if the Employer’s Board of Directors,after a complete evaluation of the Employee’s performance, concludes that theEmployee has satisfactorily performed pursuant to the terms of this Agreement.References herein to the term of this Agreement shall refer both to the initialterm and successive terms.
     1.2      During the term of this Agreement, Employee shall perform suchexecutive services for Employer as may be consistent with his title and fromtime to time be assigned to him by the Employer’s Boards of Directors.
     1.3      During the term of this Agreement, Employee shall devote his bestefforts, including such portion of his time and effort to the affairs andbusiness of the Employer as he has customarily provided as First VicePresident.
     1.4      The services of Employee shall be rendered principally inJacksonville, Texas but he shall do such traveling on behalf of the Employer asmay be reasonably required.
 

 

     II.     COMPETITIVEACTIVITIES
     2.1      Employee agrees that during the term of his employment hereunder,except with the express consent of the Board of Directors he will not, directlyor indirectly, engage or participate in, become a director of, or renderadvisory or other services for, or in connection with, or become interested in,or make any financial investment in any firm, corporation, business entity orbusiness enterprise competitive with or to any business of Employer;provided, however, that Employee shall not thereby be precluded or prohibited from owningpassive investments, including investments in the securities of other financialinstitutions, so long as such ownership does not require him to devotesubstantial time to management or control of the business or activities inwhich he has invested.
     2.2      Employee agrees and acknowledges that by virtue of his employmenthereunder, he will maintain an intimate knowledge of the activities and affairsof Employer, including trade secrets and other confidential matters. As aresult, and also because of the special, unique, and extraordinary servicesthat Employee is capable of performing for Employer or one of its competitors,Employee recognizes that the services to be rendered by him hereunder are of acharacter giving them a peculiar value, the loss of which cannot be adequatelyor reasonably compensated for by damages. Employee therefore agrees thatduring the term of this Agreement, Employee shall not divulge any matterpertaining to the activities and affairs of the Employer, including withoutlimitation, trade secrets and other confidential matters except as may berequired by law. Employee agrees that breach of any of these covenants byEmployee shall constitute irreparable harm to the Employer for which Employerdoes not have an adequate remedy at law, and that Employer is thereforeentitled to immediate injunctive or other equitable relief to restrain Employeefrom violating the provisions of this Agreement. The right to such injunctiveand equitable relief shall survive the termination for cause of Employee byEmployer or the voluntary termination of this Agreement by Employee except ifsuch termination is effected pursuant to the provisions of Section 7.9 hereof.
     III. COMPENSATION
     3.1      Employer will compensate and pay Employee for Employee’s servicesduring the term of the Agreement at a minimum base salary of $ 66,912 per yearfor the fiscal year ending September 30, 2003, with annual salary increases, ifany, thereafter in an amount determined by the Board of Directors each year;provided, however, that such annual increases shall be no less than the cost ofliving percentage as used by the U.S. Government in determining annualincreases in social security payments and at no time shall such annual basesalary be reduced below the amount for the fiscal year ending September 30,2003, without Employee’s consent.
     3.2      Any bonuses awarded Employee by Employer from time to time shall notconstitute part of Employee’s base salary for purposes of this Agreement.
     IV.     PARTICIPATION IN RETIREMENT AND MEDICALPLANS, LIFE INSURANCE AND DISABILITY
     4.1      Employee shall be entitled to participate in and receive the benefitsof any plans of Employer relating to pension, profit-sharing, or otherretirement benefits and medical coverage or reimbursement plans that Employermay adopt for the benefit of its employees.
     4.2(a)  If Employee shall become disabled or incapacitated to the extentthat he is unable to perform the duties of First Vice President, he shallnevertheless continue to receive the following percentages of his compensation,exclusive of any benefits which may be in effect for employees of Employer,under Section 3.1 of this Agreement for the following periods of hisdisability: 100% for the first 6 months, 75% for the next 12 months, and 60%thereafter for the remaining term of this Agreement. Upon returning to activeduties, Employee’s full compensation as set forth in this Agreement shall bereinstated. In the event that Employee returns to active employment on otherthan a full-time basis, then his compensation (as set forth in Section 3.1 ofthis Agreement) shall be reduced in proportion to the time spent in saidemployment.
     (b)      There shall be deducted from the amounts paid to Employee hereunderduring any period of disability, as described in Section 4.2(a) hereof, anyamounts actually paid to Employee pursuant to any disability insurance or other
 

 

similar such program which Employer has instituted or may institute on behalfof its employees for the purpose of compensating employees in the event ofdisability.
     (c)      For purposes of this Agreement, Employee shall be deemed disabled orincapacitated if Employee, due to physical or mental illness, shall have beenabsent from his duties with Employer on a full-time basis for three consecutivemonths; provided, that, if Employee shall not agree with a determination toterminate him because of disability or incapacity, the question of Employee’sability shall be submitted to an impartial and reputable physician selected bythe parties hereto and such physician’s determination on the question ofdisability or incapacity shall be binding.
     V.     ADDITIONALCOMPENSATION AND BENEFITS
     5.1      During the term of this Agreement, Employee will be entitled toparticipate in and receive the benefits of any stock option, stock ownership,profit-sharing, or other plans, benefits and privileges given to employees andexecutives of Employer or its subsidiaries and affiliates which may come intoexistence hereafter, to the extent commensurate with his then duties andresponsibilities, as fixed by Employer’s Boards of Directors or any committeeof such Boards or of Employer selected for such purpose; and, to the extentEmployee is otherwise eligible and qualifies, to so participate in and receivesuch benefits or privileges. Employer shall not make any changes in suchplans, benefits or privileges which would adversely affect Employee’s rights orbenefits thereunder, unless such change occurs pursuant to a program applicableto all executive officers (Vice President or above) of Employer and does notresult in a proportionately greater adverse change in the rights of or benefitsto Employee as compared with any other executive officer of Employer. Nothingpaid to Employee under any plan or arrangement presently in effect or madeavailable in the future shall be deemed to be in lieu of the salary payable toEmployee pursuant to Section 3.1 hereof.
     VI.     EXPENSES
     6.1      Employer shall reimburse Employee or otherwise provide for or pay forall reasonable expenses incurred by Employee in furtherance or in connectionwith the business of Employer including, but not by way of limitation,automobile and traveling expenses, and all reasonable entertainment expenses(whether incurred at Employee’s residence, while traveling, or otherwise)subject to such reasonable limitations as may be established by Employer’sBoards of Directors, provided such expenses are deductible by Employer forpurposes of federal income taxation. If such expenses are paid in the firstinstance by Employee, Employer will reimburse Employee therefor.
     VII.TERMINATION
     7.1      Employer shall have the right, at any time upon prior written Noticeof Termination satisfying the requirements of Section 7.9(c) hereunder, toterminate Employee’s employment hereunder, including termination for justcause. For the purpose of this Agreement, “termination for just cause” shallinclude termination because of the Employee’s personal dishonesty,incompetence, willful misconduct, breach of fiduciary duty involving personalprofit, intentional failure to perform the duties stated in this Agreement,willful violation of any law, rule or regulation (other than traffic violationsor similar offenses) or of any final cease-and-desist order, willful orintentional breach or neglect by Employee of his duties hereunder or materialbreach of any provision of this Agreement. For purposes of this Section 7.1,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 withoutreasonable belief that his action or omission was in the best interest ofEmployer; provided that any act or omission to act on Employee’s behalf inreliance upon an opinion of counsel to Employer or counsel to Employee shallnot be deemed to be willful.
     7.2      In the event Employee is terminated for just cause pursuant to Section7.1 hereof, Employee shall have no right to compensation or other benefits forany period after such date of termination. If Employee is terminated byEmployer other than for just cause pursuant to Section 7.1 hereof and otherthan in connection with a change in control of Employer, as defined herein,Employee’s right to compensation and other benefits under this Agreement shallbe as set forth in Sections 7.9(e) and (f) hereof. In the event Employee isterminated by Employer other than for just causepursuant to Section 7.1 hereof, but in connection with a change in controlof Employer, as defined herein, Employee’s right to compensation and otherbenefits under this Agreement shall be as set forth in Sections 7.9(d) and (f)hereof.
 

 

     7.3      Employee shall have the right, upon prior written Notice ofTermination of not less than thirty (30) days satisfying the requirements ofSection 7.9(c) hereof, to terminate his employment hereunder, but in suchevent, Employee shall have no right after the date of termination tocompensation or other benefits as provided in this Agreement, unless suchtermination is for good reason, as defined, pursuant to Section 7.9(a) hereof.If Employee provides a Notice of Termination for good reason, as defined, thedate of termination shall be the date on which a Notice of Termination isgiven.
     7.4      If Employee is suspended from office and/or temporarily prohibitedfrom participating in the conduct of Employer’s affairs pursuant to noticeserved under Section 8(e)(3) or Section 8(g)(1) of the Federal DepositInsurance Act (“FDIA”) (12 U.S.C. sections 1818(e)(3) and 1818(g)(1)),Employer’s obligations under this Agreement shall be suspended as of the dateof service, unless stayed by appropriate proceedings. If the charges in thenotice are dismissed, Employer may, in its discretion: (i) pay Employee all orpart of the compensation withheld while its obligations under this Agreementwere suspended, and (ii) reinstate (in whole or in part) any of its obligationswhich were suspended.
     7.5      If Employee is removed from office and/or permanently prohibited fromparticipating in the conduct of Employer’s affairs by an order issued underSection 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 Employer under this Agreement shall terminateas of the effective date of the order, but vested rights of Employee andEmployer as of the date of termination shall not be affected.
     7.6      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 officialdetermination by any court of competent jurisdiction, the appropriate federalbanking agency or other public authority pursuant to which a conservator,receiver or other legal custodian is appointed for the Bank, all obligationsunder this Agreement shall terminate as of the date of default, but vestedrights of Employee and Employer as of the date of termination shall not beaffected.
     7.7      In the event that Employee is terminated in a manner which violatesthe provisions of Section 7.1, as determined by a court of competentjurisdiction, Employee shall be entitled to reimbursement for all reasonablecosts, including attorneys fees, in challenging such termination. Suchreimbursement shall be in addition to all rights to which Employee is otherwiseentitled under this Agreement.
     7.8      This Agreement shall be terminated upon the death of Employee duringthe term of this Agreement; providedthat, if Employee has heirs, the estate ofEmployee shall be entitled to receive payment in an amount equal to one-half ofEmployee’s total annual compensation, at the date of death, as calculated inaccordance with Section 3.1 of this Agreement. Unless alternative arrangementsare made by Employer and the legal representative of Employee’s estate, suchpayment shall be divided into six equal installments with the first installmentdue and payable within 30 days of Employee’s death and the remaininginstallments due monthly thereafter.
     7.9(a)  Employee may terminate his employment hereunder for good reason.For purposes of this Agreement, “good reason” shall mean (i) a failure byEmployer to comply with any material provision of this Agreement, which failurehas not been cured within ten (10) days after a notice of such noncompliancehas been given by Employee to Employer; (ii) subsequent to a change in controlof Employer and without Employee’s express written consent, any of thefollowing shall occur: the assignment to Employee of any duties inconsistentwith Employee’s positions, duties, responsibilities and status with Employerimmediately prior to a change in control of Employer; a change in Employee’sreporting responsibilities, titles or offices as in effect immediately prior toa change in control of Employer; any removal of Employee from, or any failureto re-elect Employee to, any of such positions, except in connection with atermination of employment for just cause, disability, death or retirementpursuant to Sections 7.1 or 7.5 hereof; a reduction by Employer in Employee’sannual salary as in effect immediately prior to a change in control or as thesame may be increased from time to time; or the failure of Employer to continuein effect any bonus, benefit or compensation plan, life insurance plan, healthand accident plan or disability plan in which Employee is participating at thetime of a change in control of Employer, or the taking of any action byEmployer which would adversely affect Employee’s participation in or materiallyreduce Employee’s benefits under any of such plans; or (iii) any purportedtermination of Employee’s employment whichis not effected pursuant to a Notice of Termination satisfying therequirements of Section 7.9(c) hereof (and for purposes of this Agreement nosuch purported termination shall be effective).
 

 

     (b)      For purposes of this Agreement, a “change in control of Employer”shall mean a change in control as defined in 12 C.F.R. sections 574.4(a) or(b), provided, however, such determination of control shall be subject to theprovisions of 12 C.F.R. sections 574.4(c) and 574.3(c) thereof.
     (c)      Any termination of Employee’s employment by Employer or by Employeeshall be communicated by written Notice of Termination to the other partyhereto. For purposes of this Agreement, a “Notice of Termination” shall mean adated notice which shall (i) indicate the specific termination provision in theAgreement relied upon; (ii) set forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of Employee’semployment under the provision so indicated; (iii) specify a date oftermination, which shall be not less than thirty (30) nor more than ninety (90)days after such Notice of Termination is given, except in the case ofEmployer’s termination of Employee’s employment for just cause pursuant toSection 7.1 hereof, in which case the Notice of Termination may specify a dateof termination as of the date such Notice of Termination is given; and (iv) begiven in the manner specified in Section 8.3 hereof.
     (d)      If Employee shall terminate his employment for good reason pursuant toclause (ii) of Section 7.9(a) hereof, then in lieu of any further salarypayments to Employee for periods subsequent to the date of termination,Employer shall pay as severance to Employee an amount equal to the aggregatepresent value of the product of (i) the average aggregate annual compensationpaid to the Employee and includible in the Employee’s gross income for federalincome tax purposes during the five calendar years preceding the taxable yearin which the date of termination occurs (or such lesser amount of time if theEmployee has not been employed by Employer for five years at the time oftermination) by Employer and any of its subsidiaries subject to United Statesincome tax, multiplied by (ii) 2.99, such payment to be made in a lump sum onor before the fifth day following the date of termination; provided, however,that any payments made to the Employee pursuant to this agreement, orotherwise, are subject to and conditioned upon their compliance with 12 U.S.C.Section 1828(k) and any regulations promulgated thereunder. If the lump sumseverance payment under this Section 7.9(d), either alone or together withother payments which the Employee has the right to receive from Employer, wouldconstitute a “parachute payment” (as defined in Section 280G of the InternalRevenue Code of 1986, as amended (the “Code”)), such lump sum severance paymentshall be reduced to the largest amount as will result in no portion of the lumpsum severance payment under this Section 7.9(d) being subject to the excise taximposed by Section 4999 of the Code. The determination of any reduction in thelump sum severance payment under this Section 7.9(d) pursuant to the foregoingprovision shall be made by independent counsel to Employer in consultation withthe independent certified public accountants of Employer.
     (e)      If Employee shall terminate his employment for good reason as definedin clauses (i) or (iii) of Section 7.9(a) hereof or if Employee is terminatedby Employer for other than just cause pursuant to Section 7.1 hereof, then inlieu of any further salary payments to Employee for periods subsequent to thedate of termination, Employer shall pay as severance to Employee an amountequal to the product of (i) Employee’s average annual compensation for the mostrecent five taxable years, multiplied by (ii) the number “three” (3), suchpayment to be made in substantially equal semi-monthly installments on thefifteenth and last days of each month, or if these days are nonbusiness days,the immediately preceding business day, commencing with the month in which thedate of termination occurs and continuing for the number of consecutivesemi-monthly payment dates (including the first such date aforesaid) equal tothe product obtained by multiplying by 24 the number of years (includingpartial years) applicable under Subsection (ii) of this Section 7.9(e). Forpurposes of the immediately preceding sentence, the term “compensation”includes any payment of money or provision of any other thing of value inconsideration of employment, including, without limitation, base salary,commissions, bonuses, pension and profit-sharing plans, severance payments,retirement, director or committee fees, fringe benefits, payment of expenseitems without accountability or business purpose or that do not meetrequirements of the Internal Revenue Service for deductibility by theassociation.
     (f)      Unless Employee is terminated for just cause pursuant to Section 7.1hereof, pursuant to Section 7.5 hereof, or pursuant to a termination ofemployment by Employee for other than good reason, Employer shall maintain infull force and effect, for the continued benefit of Employee for the term ofyears (including partial years) as determined in Section 7.9(e) hereof, allemployee benefit plans and programs in which Employee was entitled toparticipate immediatelyprior to the date of termination, provided that Employee’s continuedparticipation is possible under the general terms and provisions of such plansand programs.
 

 

     (g)      Employee shall not be required to mitigate the amount of any paymentprovided for in Sections 7.9(d) and (e) of this Agreement by seeking otheremployment or otherwise.
     VIII.MISCELLANEOUS
     8.1      Notwithstanding anything to the contrary herein contained, the paymentor obligation to pay any monies, or granting of any rights or privileges toEmployee as provided in this Agreement shall not be in lieu or derogation ofthe rights and privileges that Employee now has under any plan or benefitpresently outstanding.
     8.2      This Agreement may not be modified, changed, amended, or alteredexcept in writing signed by Employee or by his duly authorized representative,and by a duly authorized officer of Employer.
     8.3      All notices given or required to be given herein shall be in writing,sent by United States first-class certified or registered mail, postageprepaid, to Employee (or to Employee’s spouse or estate upon Employee’s death)at Employee’s last-known address, and to Employer at its principal offices.All such notices shall be effective when deposited in the mail in the mannerspecified in this Section 8.3. Either party by a notice in writing may changeor designate the place for receipt of all such notices.
     8.4      No course of conduct between Employer and Employee and no delay oromission of Employer or Employee to exercise any right or power given underthis 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 orconsent to the curing of any default while any other default shall continue toexist, or be construed to be a waiver of such continuing default or of anyother right or power that shall theretofore have arisen; and, every power andremedy granted by law and by this Agreement to any party hereto may beexercised from time to time, and as often as may be deemed expedient. All suchrights and powers shall be cumulative to the fullest extent permitted by law.
     8.5      All references herein to particular sections of a statute, rule orregulation or to a particular disclosure item or schedule shall also be deemedto be a reference to any successor section, statute, rule, regulation,disclosure item or schedule.
     8.6      The invalidity or unenforceability of any provision or provisions ofthis Agreement shall not affect the validity or enforceability of any otherprovision of this Agreement, which shall remain in full force and effect.
     IX.     SUCCESSORS,ETC.
     9.1      This Agreement shall inure to the benefit of and be binding uponEmployee, and, to the extent applicable, his heirs, assigns, executors, andpersonal representatives, and the Bank and the Bank, their successors, andassigns, including, without limitation, any person, partnership, or corporationwhich may acquire all or substantially all of the Bank’s or the Bank’s assetsand business, or with or into which the Bank or the Bank may be consolidated ormerged, and this provision shall apply in the event of any subsequent merger,consolidation, or transfer unless such merger or consolidation or subsequentmerger or consolidation is a transaction of the type which would result intermination under Sections 7.6 and 7.7 hereof.
     9.2      This Agreement is personal to each of the parties and neither partymay assign or delegate any of its rights or obligations under this Agreementwithout the prior written consent of the other party.
     X.     APPLICABLELAW
     10.1      This Agreement shall be governed in all respects and be interpretedby and under the laws of Texas, except to the extent that such law may bepreempted by applicable federal law, including regulations, opinions or ordersduly issued by the OTS with respect to the Company or IHC or FDIC(“Federal Law”), in which event this Agreement shall be governed and beinterpreted by and under Federal Law.
 

 

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreementas of the day and year first above written.    JACKSONVILLE SAVINGS BANK, SSB    By:/s/ Robert Brown    Robert Brown  Chairman of the Board    JACKSONVILLE BANCORP, INC.    By:/s/ Robert Brown    Robert Brown  Chairman of the Board    EMPLOYEE    /s/ Chan Campsey  Chan Campsey