<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
UnionBancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
UNIONBANCORP, INC.
March 18, 1997
Dear Fellow Stockholder:
You are cordially invited to attend UnionBancorp, Inc.'s Annual Meeting of
Stockholders at the Pitstick Pavilion, 3307 North Route 23, Ottawa, Illinois, on
Friday, April 25, 1997, at 10:00 a.m. At the meeting, I will report to you on
the progress of our Company and respond to your comments or questions.
Moreover, several of our management people will be available to talk
individually with you about our record of achievement and plans for the future.
Your Board of Directors has nominated five persons to serve as Class II
directors on the Board of Directors. Their names appear in the enclosed proxy
material. All five of the nominees are incumbent directors. We recommend that
you vote your shares for the nominees.
We encourage you to attend the meeting in person. Because it is important
that your shares be represented at the meeting, please sign and return the
enclosed proxy, whether or not you plan to attend the meeting.
We look forward with pleasure to seeing and visiting with you at the
meeting.
With best personal wishes,
R. Scott Grigsby
Chairman of the Board
and President
<PAGE>
[LOGO]
UNIONBANCORP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 1997
------------------------------------------------------------
TO HOLDERS OF COMMON STOCK:
The Annual Meeting of Stockholders of UnionBancorp, Inc., a Delaware
corporation (the "Company"), will be held at the Pitstick Pavilion, 3307 North
Route 23, Ottawa, Illinois, on Friday, April 25, 1997, at 10:00 a.m., local
time, for the purpose of considering and voting upon the following matters:
1. to elect five (5) Class II directors.
2. to transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The Board of Directors is not aware of any other business to come before
the meeting. Only those stockholders of record as of the close of business on
March 11, 1997, shall be entitled to notice of the meeting and to vote at the
meeting and any adjournments or postponements thereof.
By Order of the Board of Directors
R. Scott Grigsby
Chairman of the Board and President
Ottawa, Illinois
March 18, 1997
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE
AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON. IT IS HOPED THAT YOU WILL BE ABLE TO ATTEND THE MEETING, AND IF YOU DO
YOU MAY VOTE YOUR STOCK IN PERSON IF YOU WISH. THE PROXY MAY BE REVOKED AT ANY
TIME PRIOR TO ITS EXERCISE.
<PAGE>
UNIONBANCORP, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of UnionBancorp, Inc. (the "Company") of proxies to be
voted at the Annual Meeting of Stockholders to be held at the Pitstick Pavilion,
3307 North Route 23, Ottawa, Illinois, on Friday, April 25, 1997, at 10:00 a.m.,
local time, or at any adjournments or postponements thereof.
The Company, a Delaware corporation, is a multi-bank holding company which
owns all of the issued and outstanding capital stock of UnionBank, an Illinois
bank located in Streator, Illinois, and UnionBank/Sandwich, an Illinois bank
located in Sandwich, Illinois. During 1996, the Company acquired all of the
issued and outstanding capital stock of Prairie Bancorp, Inc. ("Prairie"), a
multi-bank holding company with six bank subsidiaries located in the Illinois
communities of Carthage, Hanover, Ladd, Manlius, Tampico and Tiskilwa, and also
acquired Country Bancshares, Inc. ("Country"), a one-bank holding company having
an Illinois bank subsidiary located in Macomb, Illinois (UnionBank,
UnionBank/Sandwich and the bank subsidiaries of Prairie and Country are
sometimes collectively referred to as the "Banks").
The Company also has three non-bank subsidiaries, UnionData Corp.
("UnionData"), which provides data processing services, Union Corporation
("Union Corporation"), which primarily serves as an owner and lessor of banking
offices to certain of the Banks, and LaSalle County Collections, Inc.
("LaSalle"), a debt collection agency located in Ottawa, Illinois. The Banks
and the three non-bank subsidiaries are collectively referred to as the
"Subsidiaries."
The Proxy Statement and the accompanying Notice of Meeting and proxy are
first being mailed to holders of shares of common stock, par value $1.00 per
share, (the "Common Stock"), on or about March 18, 1997. The 1996 Annual Report
of the Company, including financial statements, is enclosed.
VOTING RIGHTS AND PROXY INFORMATION
The Board of Directors has fixed the close of business on March 11, 1997,
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the annual meeting. The transfer books of the Company will not
be closed. The Board of Directors hopes that all stockholders can be
represented at the annual meeting. Whether or not you expect to be present,
please sign and mail your proxy in the enclosed self-addressed, stamped envelope
to UnionBancorp, Inc., 122 West Madison Street, Ottawa, Illinois 61350,
Attention: Ms. Debra M. Tombaugh, Vice President/Director of Investor
Relations. Stockholders giving proxies retain the right to revoke them at any
time before they are voted by written notice of revocation to the Secretary of
the Company, and stockholders present at the meeting may revoke their proxy and
vote in person.
On March 11, 1997, the Company had 4,116,001 issued and outstanding shares
of Common Stock. For the election of directors and for all other matters to be
voted upon at the annual meeting, each share of Common Stock is entitled to one
vote. A majority of the outstanding shares of the Common Stock must be present
in person or represented by proxy to constitute a quorum for purposes of the
annual meeting. Abstentions and broker non-votes will be counted for purposes
of determining a quorum. Directors will be elected by a plurality of the votes
present in person or represented by proxy at the meeting and entitled to vote.
In all other matters, the affirmative vote of the majority of shares of Common
Stock present in person or represented by proxy at the annual meeting and
entitled to vote on the subject matter shall be required to constitute
stockholder approval. Abstentions will be treated as votes against a proposal
and broker non-votes will have no effect on the vote.
<PAGE>
ELECTION OF DIRECTORS
The Company has a staggered Board of Directors divided into three classes.
One class is elected annually to serve for three years. Stockholders will be
entitled at the annual meeting to be held on April 25, 1997, to elect five Class
II directors for terms of three years or until their successors are elected and
qualified. Each of the nominees for election as Class II directors are
incumbent directors.
The proxy provides instructions for voting for all director nominees or for
withholding authority to vote for one or more director nominees. Unless
instructed to the contrary, the persons acting under the proxy solicited hereby
will vote for the nominees listed below. In the event, however, that any
nominee shall be unable to serve, which is not now contemplated, the proxy
holders reserve the right to vote at the annual meeting for a substitute
nominee.
INFORMATION ABOUT DIRECTORS AND NOMINEES
Set forth below is information concerning the nominees for election and for
the other directors whose terms of office will continue after the meeting,
including the age, year first elected a director and business experience of each
during the previous five years, as of March 11, 1997. Unless otherwise
indicated, each person has held the positions shown for at least five years.
The five nominees, if elected at the annual meeting, will serve as Class II
directors for three year terms expiring in 2000. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE YOUR SHARES FOR ALL FIVE NOMINEES.
NOMINEES
NAME POSITION WITH THE COMPANY
(AGE) DIRECTOR SINCE AND PRINCIPAL OCCUPATION
- ----- -------------- -------------------------
CLASS II
(TERM EXPIRES 2000)
L. Paul Broadus 1986 Director of the Company;
(Age 62) Founder and President, Broadus
Oil Company
John Michael Daw 1991 Director and Senior
(Age 49) Agriculture Representative
(since 1996) of the Company;
President, Farmers Grain
Service (1969-1996)
Robert J. Doty 1996 Director of the Company,
(Age 69) Chairman of Prairie (1989-
1996); Consultant, Farm
Management
Jimmie D. Lansford 1988 Director and Senior Vice
(Age 57) President, Organizational
Development and Planning
(since 1996) of the Company;
Chief Executive Officer, St.
Mary's Hospital (1987-1996)
I. J. Reinhardt, Jr. 1991 Director of the Company;
(Age 59) Director and General Manager,
St. Louis Beverage Company
2
<PAGE>
CONTINUING DIRECTORS
NAME POSITION WITH THE COMPANY AND
(AGE) DIRECTOR SINCE PRINCIPAL OCCUPATION
- ----- -------------- -----------------------------
CLASS III
(TERM EXPIRES 1998)
R. Scott Grigsby 1983 Chairman of the Board,
(Age 45) President and Chief Executive
Officer of the Company
H. Dean Reynolds 1981 Director of the Company; Owner
(Age 68) (1966-1995) and Consultant
(1996-present), Reynolds-West
& Associates, Inc.
John A. Shinkle 1997 Director and Senior Vice
(Age 45) President, Synovus Securities,
Inc. (1986-present)
Scott C. Sullivan 1996 Director of the Company;
(Age 42) Attorney, Williams &
McCarthy); Director of Prairie
(1995-1996)
CLASS I
(TERM EXPIRES 1999)
Richard J. Berry 1985 Director of the Company;
(Age 44) Attorney; Myers, Daugherity,
Berry, O'Connor & Kuzma, Ltd.
Walter E. Breipohl 1993 Director of the Company; Co-
(Age 43) Owner, Kaszynski/Breipohl
Realtors/Developers
Lawrence J. McGrogan 1987 Director of the Company;
(Age 59) Owner, Handy Foods, Inc.
John A. Trainor 1985 Director of the Company;
(Age 66) Owner, Trainor Grain & Supply
Company, Inc.
All of the Company's directors will hold office for the terms indicated, or
until their respective successors are duly elected and qualified. There are no
arrangements or understandings between the Company and any other person pursuant
to which any director has been selected, except that Messrs. Doty and Sullivan
were appointed to the Board pursuant to the terms of the agreement regarding the
acquisition of Prairie. No member of the Board of Directors is related to any
other member of the Board of Directors.
BOARD COMMITTEES AND MEETINGS
Meetings of the Company's Board of Directors are generally held on a
monthly basis. The Board of Directors met 11 times during 1996. During 1996,
all directors attended at least 75 percent of the meetings of the Board and the
committees on which they served. The Board of Directors of the Company has
standing executive, audit, compensation and marketing committees.
The Executive Committee is comprised of Messrs. Broadus (Chair), Berry,
Grigsby, McGrogan and Trainor. The Executive Committee meets on an as needed
basis and exercises the power of the Board of Directors between Board meetings.
This committee met four times in 1996.
The Audit Committee recommends independent auditors to the Board, reviews
the results of the auditors' services, reviews with management and the internal
auditor the systems of internal control and internal audit reports
3
<PAGE>
and assures that the books and records of the Company are kept in accordance
with applicable accounting principles and standards. The members of the Audit
Committee are Messrs. Reynolds (Chair), Breiphohl and Reinhardt. Mr. Grigsby
serves as an EX OFFICIO member of this committee. During 1996, the Audit
Committee met four times.
The Compensation Committee establishes compensation and benefits for the
Chief Executive Officer and reviews and recommends compensation and benefits for
the other officers and employees of the Company and the Subsidiaries. The
Committee also administers and oversees the Company's stock-based incentive
compensation plans. The members of the Compensation Committee are Messrs.
McGrogan (Chair), Breiphol and Broadus. Mr. Grigsby also serves as an EX
OFFICIO member of this committee. The Compensation Committee met four times in
1996.
The Marketing Committee develops long term goals and policies with respect
to marketing the Company and the Subsidiaries, and reviews strategies and plans
developed by the management of the respective entities for consistency with
Company policies and objectives. The members of the Marketing Committee are
Messrs. Breiphol (Chair), Grigsby and Reinhardt. The Marketing Committee met
four times in 1996.
COMPENSATION OF DIRECTORS
Through October, 1996, each of the Company's directors was paid a fee of
$100 for each Board meeting attended and $100 for each committee meeting
attended. Beginning in November, 1996, Board meeting fees were increased to
$500. Each of the Company's directors also receives an annual grant of options
to purchase shares of Common Stock under the Company's Stock Option Plan.
Through 1996, such grants have generally been made with an exercise price equal
to 75% of the most recently appraised per share fair market value of the Common
Stock on the date of grant, and become exercisable in equal portions over five
years. For the fiscal year ended December 31, 1996, each director was granted
options to purchase between 1,800 and 3,000 shares of Common Stock at a price of
$7.25 per share. Beginning in 1997, the Stock Option Plan provides for annual
formula grants to each of the Company's directors of options to purchase up to
3,000 shares of Common Stock with an exercise price of 75% of the then current
market price of the Common Stock on the date of the grant. Such options also
will become exercisable over five years.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Corporation's Common Stock at March 11, 1997, by
each person known by the Company to be the beneficial owner of more than 5% of
the outstanding Common Stock, by each director or nominee, by each executive
officer named in the Summary Compensation Table, and by all directors and
executive officers of the Company as a group.
4
<PAGE>
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF PERCENT
NUMBER OF INDIVIDUALS IN GROUP BENEFICIAL OWNERSHIP(1)(2) OF CLASS
------------------------------ -------------------------- --------
5% STOCKHOLDERS
UnionBank/Streator, as Trustee for 450,918(3) 11.0%
the UnionBancorp, Inc. Employee
Stock Ownership Plan ("ESOP")
201 East Main Street
Streator, Illinois 61364
Dennis J. McDonnell 355,288(4) 8.6%
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Wayne H. Whalen 355,288(4) 8.6%
333 W. Wacker Drive, Suite 2100
Chicago, Illinois 60606
DIRECTORS AND NOMINEES
Richard J. Berry 33,714(5) *
Walter E. Breipohl 12,914 *
L. Paul Broadus 19,099 *
John Michael Daw 18,990 *
Robert Doty 1,000 *
R. Scott Grigsby 778,169(6) 18.9%
Jimmie D. Lansford 15,614 *
Lawrence J. McGrogan 22,738(7) *
I.J. Reinhradt, Jr. 25,800(8) *
H. Dean Reynolds 26,875(9) *
John A. Shinkle 3,964(10) *
Scott Sullivan 5,000 *
John A. Trainor 21,588(11) *
OTHER NAMED EXECUTIVE OFFICERS
Charles J. Grako 24,826(12) *
Wayne L. Bismark 12,588(13) *
All directors and executive officers as
a group (15 persons) 1,075,973(14) 26.0%
- -------------------------------
* Indicates less than one percent.
(1) The information contained in this column is based upon information
furnished to the Company by the persons named above and the members of the
designated group and reflects the three-for-one stock split in the form of
a stock dividend which took effect on May 20, 1996. Amounts reported
include shares held directly as well as shares which are held in retirement
accounts and shares held by certain members of the named individuals'
families or held by trusts of which the named individual is a trustee or
substantial beneficiary, with respect to which shares the respective
individual may be deemed to have sole or shared voting and/or investment
power. The nature of beneficial ownership for shares shown in this column
is sole voting and investment power, except as set forth in the footnotes
below. Inclusion of shares shall not constitute an admission of beneficial
ownership or voting and investment power over included shares.
5
<PAGE>
(2) Amounts shown include interests in a general partnership held by Messrs.
Berry, Broadus, Breipohl, Grigsby, Daw, Lansford, McGrogan, Shinkle and
Trainor which holds an aggregate of 32,400 shares of Common Stock
representing 3,564 shares by each director. Mr. Grako also has an interest
in the partnership amounting to 324 shares. Voting and investment power
over shares held in this partnership is shared. The information also
includes shares presently obtainable through the exercise of options to
purchase shares of Common Stock granted under the Company's Stock Option
Plan as follows: Mr. Berry - 2,250 shares; Mr. Breipohl - 2,250 shares;
Mr. Broadus - 1,950 shares; Mr. Daw - 2,250 shares; Mr. Grigsby - 6,464
shares; Mr. Lansford - 2,250 shares; Mr. McGrogan - 2,250 shares;
Mr. Reinhardt - 1,950 shares; Mr. Reynolds - 1,950 shares; Mr. Trainor -
2,250 shares; Mr. Grako - 2,472 shares; and Mr. Bismark - 852 shares.
Option holders have the sole power to exercise their respective options and
would also be entitled to exercise sole voting and investment power over
the shares issued upon the exercise of such options.
(3) All of the shares held by the ESOP are allocated to particular
participants' accounts and over which shares the ESOP trustee has shared
voting and no investment power over such shares.
(4) As reported to the Securities and Exchange Commission on a Schedule 13D
dated October 9, 1996. Pursuant to the terms of an agreement executed by
the Company and these individuals in connection with the Company's
acquisition of Prairie, the President of the Company has a limited proxy
with respect to such shares until August 6, 2000.
(5) Includes 13,800 shares held jointly by Mr. Berry and his spouse, 3,000
shares held individually by Mr. Berry's spouse and 11,100 shares held in
trusts for which Mr. Berry is a co-trustee, over all of which shares Mr.
Berry has shared voting and investment power.
(6) Includes 710,576 shares over which Mr. Grigsby, as President of the
Company, is entitled to exercise a limited proxy pursuant to an agreement
entered into between the Company and Messrs. McDonnell and Whalen in
connection with the Company's acquisition of Prairie. Also includes 17,853
shares held by Mr. Grigsby jointly with his spouse, over which shares Mr.
Grigsby has shared voting and investment power, 205 shares held solely by
Mr. Grigsby's spouse, over which shares Mr. Grigsby has no voting or
investment power, and 34,807 shares allocated to Mr. Grigsby under the
Company's ESOP. Excludes the remaining 418,506 shares held by the ESOP but
allocated to other participants' accounts. Mr. Grigsby, as trustee of the
ESOP, has shared voting power over such shares.
(7) Includes 11,040 shares held by Mr. McGrogan jointly with his spouse, over
which shares Mr. McGrogan has shared voting and investment power, and also
includes 1,884 shares owned solely by his spouse, over which shares Mr.
McGrogan has no voting or investment power.
(8) Includes 6,000 shares held by Mr. Reinhardt jointly with his spouse and
15,000 shares held in a retirement account, over all of which shares Mr.
Reinhardt has shared voting and investment power.
(9) Includes 1,200 shares held by a relative of Mr. Reynolds, over which shares
Mr. Reynolds has shared voting and investment power.
(10) Includes 400 shares held by members of Mr. Shinkle's family. Mr. Shinkle
has no voting or investment power over 100 of such shares and has shared
voting and investment power over the remaining 300 shares.
(11) Includes 1,200 shares held solely by Mr. Trainor's spouse, over which
shares Mr. Trainor has no voting or investment power.
(12) Includes 17,730 shares allocated to Mr. Grako under the ESOP.
(13) Includes 2,252 shares allocated to Mr. Bismark under the ESOP.
(14) Includes 710,576 shares over which Mr. Grigsby, as President of the
Company, is entitled to exercise a limited proxy pursuant to an agreement
entered into between the Company and Messrs. McDonnell and Whalen in
connection with the Prairie acquisition.
6
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's executive officers, directors and persons who own more than 10% of the
Company's Common Stock file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Such persons are also required to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on the Company's review of the copies of such forms, and, if appropriate,
representations made to the Company by any such reporting person concerning
whether a Form 5 was required to be filed for 1996, the Company is not aware
that any of its directors, executive officers or 10% stockholders failed to
comply with the filing requirements of Section 16(a) during the period
commencing January 1, 1996 through December 31, 1996.
VOTING AGREEMENTS
Pursuant to the terms of a Standstill Agreement entered into between the
Company and Messrs. McDonnell and Whalen, the President of the Company has sole
voting power with respect to all 710,566 shares of Common Stock held by such
persons in any election of directors of the Company. The proxy will further
pertain to any additional shares of Common Stock obtained by either party. The
proxy expires on August 6, 2000.
EXECUTIVE COMPENSATION
CASH COMPENSATION
The following table shows the compensation earned for the last three fiscal
years by the Chief Executive Officer and those executive officers of the Company
(including those employed by the Subsidiaries) whose 1996 salary and bonus
exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------------------------
(a) (b) (c) (d) (g) (i)
SECURITIES ALL OTHER
NAME AND UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS (#)(1) ($)(2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
R. Scott Grigsby 1996 $149,100 $32,000 5,550 $15,597
Chairman of the Board, 1995 142,000 12,800 3,036 21,832
President and Chief Executive Officer 1994 127,952 23,725 6,900 24,855
- -----------------------------------------------------------------------------------------------------------------------------------
Charles J. Grako 1996 $ 99,225 $11,000 2,100 $17,439
Executive Vice President and 1995 94,500 7,675 1,080 14,929
Chief Financial Officer 1994 71,459 9,000 2,700 13,810
- -----------------------------------------------------------------------------------------------------------------------------------
Wayne L. Bismark 1996 $ 99,225 $11,000 2,100 $ 9,525
Executive Vice President and 1995 94,500 7,675 1,080 12,895
Chief Credit Officer 1994 75,000 7,500 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
(1) Options vest at a rate of 20% per year on or about each anniversary of the
date of grant.
7
<PAGE>
(2) Amounts represent the dollar value of allocations under the Company's ESOP
for Messrs. Grigsby and Grako and, with respect to Messrs. Grako and
Bismark, fees for services provided to the Company's Board of Directors and
directors' fees for serving on the Boards of various Subsidiaries of $6,075
and $9,525, respectively. Such amounts also include payments of $2,901 and
$2,034 for premiums for split dollar life insurance policies for Messrs.
Grigsby and Grako, respectively, for each year.
STOCK OPTION INFORMATION
The following table sets forth certain information concerning the number
and value of stock options granted in the last fiscal year to the
individuals named above in the Summary Compensation Table:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- -----------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM
- -----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% OF TOTAL
OPTIONS OPTIONS GRANTED
GRANTED TO EMPLOYEES IN EXERCISE OR BASE PRICE EXPIRATION
NAME (#)(1) FISCAL YEAR ($/Sh) DATE 5%($) 10%($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. Scott Grigsby 3,000 24% $9.66 02/23/06 $18,225 $46,185
2,550 19% $7.25 02/23/06 11,625 29,464
- -----------------------------------------------------------------------------------------------------------------------------------
Charles J. Graco 2,100 17% $9.66 02/23/06 $12,758 $32,330
- -----------------------------------------------------------------------------------------------------------------------------------
Wayne L. Bismark 2,100 17% $9.66 02/23/06 $12,758 $32,330
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Options vest at a rate of 20% per year on or about each anniversary of the
date of grant.
(2) Represents non-qualified options granted for service on the Board of
Directors.
The following table sets forth certain information concerning the
exercisable and nonexercisable stock options at December 31, 1996 held by the
individuals named in the Summary Compensation Table:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SHARES NUMBER OF SECURITIES
ACQUIRED UNDERLYING UNEXERCISED VALUE OF UNEXERCISABLE IN-
ON VALUE OPTIONS AT FY-END THE- MONEY OPTIONS
NAME EXERCISED REALIZED (#)(d) AT FY-END ($)(e)
(#)(a) (#)(b) ($)(c) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. Scott Gingsby -- $-- 6,464 9,022 $55,796 $61,933
- ------------------------------------------------------------------------------------------------------------------------------
Charles J. Grako -- -- 2,472 3,408 $17,253 $20,499
- ------------------------------------------------------------------------------------------------------------------------------
Wayne L. Bismark -- -- 852 2,328 $4,698 $12,129
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
EMPLOYMENT AGREEMENTS
The Company and certain of the Subsidiaries have entered into three-year
employment agreements with Messrs. Grigsby, Bismark and Grako. Unless earlier
terminated by the Company (or the Subsidiary, if applicable) or the respective
employee, the employment term under each agreement extends for an additional
year on each anniversary of the agreement. Each agreement specifies a minimum
annual salary for the initial year of the agreement and provides for an
automatic minimum four percent annual increase for each subsequent year. Each
agreement also provides that the respective employee is entitled to participate
in any executive bonus plan and other incentive compensation or benefit plan
established by the Company or the applicable Subsidiary.
Each agreement is terminable by the employee upon thirty days' prior
written notice and automatically terminates upon the death or disability of the
employee. The Company may terminate each agreement at any time for "cause"
without incurring any additional obligations. Each agreement provides severance
benefits in the event the employee is terminated without cause or
"constructively discharged," as defined in each agreement. The severance
benefits are equal to the salary and benefits the terminated employee would have
received through the end of the normal term of the agreement. If any of the
employment agreements are terminated in connection with a "change in control,"
as defined in each agreement, the employee is entitled to receive severance
compensation equal to three times his annual salary and other compensation at
the rates then in effect at the time of termination. The terminated employee in
such case will also be entitled to continuation of participation in other
benefit plans for the remaining term of his agreement. In addition, each
officer would be entitled to receive other benefits for such periods. The
employment agreements also require the Company to provide each employee with
indemnification insurance and indemnification for any expenses arising out of
each person's employment with the Company or the applicable Subsidiary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the members of the Compensation Committee were Messrs.
McGrogan, Breiphol and Broadus. None of these individuals was an officer or
employee of the Company or any of the Subsidiaries during 1996, and none of
these individuals is a former officer or employee of the Company or any of the
Subsidiaries.
THE INCORPORATION BY REFERENCE OF THIS PROXY STATEMENT INTO ANY DOCUMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY THE COMPANY SHALL NOT BE
DEEMED TO INCLUDE THE FOLLOWING REPORT UNLESS SUCH REPORT IS SPECIFICALLY STATED
TO BE INCORPORATED BY REFERENCE INTO SUCH DOCUMENT.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company is
composed of three outside directors and is responsible for recommendations to
the Board of Directors of the Company for compensation of executive officers of
the Subsidiaries and the Company. In determining compensation, the following
factors are generally taken into consideration:
1. The performance of the executive officers in achieving the short and
long term goals of the Company.
2. Payment of compensation commensurate with the ability and expertise of
the executive officers.
3. Attempt to structure compensation packages so that they are
competitive with similar companies.
The committee considers the foregoing factors, as well as others, in determining
compensation. There is no assigned weight given to any of these factors.
9
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Additionally, the Compensation Committee considers various benefits, such
as the ESOP and the Stock Option Plan, together with perquisites in determining
compensation. The committee believes that the benefits provided through the
stock based plans more closely tie the compensation of the officers to the
interests of the stockholders and provide significant additional performance
incentives for the officers which directly benefit the stockholders through an
increase in the stock value.
Annually, the Compensation Committee evaluates four primary areas of
performance in determining Mr. Grigsby's level of compensation. These areas
are: long-range strategic planning and implementation; Company financial
performance; Company compliance with regulatory requirements and relations with
regulatory agencies; and effectiveness of managing relationships with
stockholders and the Board of Directors. When evaluating the financial
performance of the Company, the committee considers profitability, asset growth
and risk management. The primary evaluation criteria are considered to be
essential to the long-term viability of the Company and are given equal weight
in the evaluation. Finally, the committee reviews compensation packages of peer
institutions, as well as compensation surveys provided by independent third
parties, to ensure that Mr. Grigsby's compensation is competitive and
commensurate with his level of performance.
The 1996 compensation of Mr. Grigsby was based upon the factors described
above and his substantial experience and length of service with the
organization. During 1996, Mr. Grigsby successfully headed the Company's
acquisition program, which included planning and analysis, contacting a number
of financial institutions and investment bankers, acquiring Prairie, Country and
LaSalle and initiating the consolidation of the operations of the Banks. The
Compensation Committee also considered the continuing additional duties required
in completing the Company's initial public offering and becoming a publicly
traded institution. Mr. Grigsby serves on the Compensation Committee EX
OFFICIO, but did not participate in any decisions pertaining to his
compensation.
Members of the Compensation Committee are Messrs. McGrogan (Chair),
Breipohl and Broadus.
THE INCORPORATION BY REFERENCE OF THIS PROXY STATEMENT INTO ANY DOCUMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY THE COMPANY SHALL NOT BE
DEEMED TO INCLUDE THE FOLLOWING PERFORMANCE GRAPH AND RELATED INFORMATION UNLESS
SUCH GRAPH AND RELATED INFORMATION ARE SPECIFICALLY STATED TO BE INCORPORATED
BY REFERENCE INTO SUCH DOCUMENT.
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The following graph shows a comparison of cumulative total returns for the
Company, the Nasdaq Stock Market (US Companies) and an index of Nasdaq Bank
Stocks for the period commencing January 10, 1996, the date the Company's shares
were first quoted on the OTC Bulletin Board. The Common Stock of the Company was
first listed for quotation on the Nasdaq Stock Market on October 1, 1996, and
prior to such date was quoted on the OTC Bulletin Board. The graph was prepared
at the Company's request by Research Holdings Limited, San Francisco,
California.
10
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COMPARISON OF CUMULATIVE TOTAL RETURN*
(ASSUMES $100 INVESTED ON JANUARY 10, 1996)
[GRAPH]
*TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
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Cumulative Total Return
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1/10/96 12/31/96
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UnionBancorp Inc. $100 $147
Nasdaq Stock Market - US $100 $131
Nasdaq Bank Index $100 $135
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TRANSACTIONS WITH MANAGEMENT
Certain directors and executive officers of the Company (including their
affiliates, families and companies in which they are principal owners, officers
or directors) were loan customers of, and had other transactions with, the
Company and the Subsidiaries in the ordinary course of business. Such loans and
lines of credit were made in the ordinary course of business on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for transactions with other persons and did not involve more than the
normal risk of collectibility or present other unfavorable features. During
1996, the Company and the Subsidiaries paid
11
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approximately $86,200 to the law firm of Myers, Daugherity, Berry, O'Connor &
Kuzma, Ltd. for legal services. Richard J. Berry, a director of the Company, is
a principal of that firm. Additionally, the Company paid premiums of
approximately $75,700 in 1996 to American Bankers Professional Fidelity
Insurance Company, Ltd. ("ABFIC") for a Blanket Bond Insurance Policy. R. Scott
Grigsby, the Company's Chairman and President, is a director of ABFIC.
Management believes such legal services and insurance were obtained on terms no
less favorable than would have been obtained from unaffiliated third-parties.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
For inclusion in the Company's Proxy Statement and form of proxy relating
to the 1998 Annual Meeting of Stockholders, stockholder proposals must be
received by the Company on or before November 18, 1997. In order to be
presented at such meeting, notice of the proposal must be received by the
Company on or before November 18, 1997, and must otherwise comply with the
Company's bylaws.
OTHER MATTERS
Management does not intend to present any other business at the meeting and
knows of no other matters which will be presented. However, if any other matters
come before the meeting, it is the intention of the persons named in the
accompanying proxy to vote in accordance with their best judgment on those
matters.
Your proxy is solicited by the Board of Directors and the cost of
solicitation will be paid by the Company. In addition to the solicitation of
proxies by use of the mails, officers, directors and regular employees of the
Company or the Subsidiaries, acting on the Company's behalf, may solicit proxies
by telephone, telegraph or personal interview. The Company will, at its
expense, upon the receipt of a request from brokers and other custodians,
nominees and fiduciaries, forward proxy soliciting material to the beneficial
owners of shares held of record by such persons.
FAILURE TO INDICATE CHOICE
If any stockholder fails to indicate a choice with respect to any of the
proposals on the proxy included herewith, the shares of such stockholder shall
be voted FOR the nominees listed under proposal 1.
By Order of the Board of Directors
R. Scott Grigsby
Chairman of the Board and President
Ottawa, Illinois
March 18, 1997
ALL STOCKHOLDERS ARE URGED TO SIGN
AND MAIL THEIR PROXIES PROMPTLY
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PROXY PROXY
UNIONBANCORP, INC.
Proxy is Solicited By the Board of Directors
For the Annual Meeting of Stockholders -- April 25, 1997
The undersigned hereby appoints John Michael Daw and R. Scott Grigsby,
or either of them acting in the absence of the others, with power of
substitution, attorneys and proxies, for and in the name and place of the
undersigned, to vote the number of shares of Common Stock that the
undersigned would be entitled to vote if then personally present at the
Annual Meeting of the Stockholders of UnionBancorp, Inc., to be held at the
Pitstick Pavilion, Route 23 North, Ottawa, Illinois, on Friday, April 25,
1997, at 10:00 a.m., local time, or any adjournments or postponements
thereof, upon the matters set forth in the Notice of Annual Meeting and Proxy
Statement (receipt of which is hereby acknowledged) as designated on the
reverse side, and in their discretion, the proxies are authorized to vote
upon such other business as may come before the meeting:
/ / Check here for address change. / / Check here if you plan to attend the
meeting.
New Address:_______________________
___________________________________
___________________________________
(Continued and to be signed on reverse side.)
<PAGE>
UNIONBANCORP, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /X/
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. Election of Directors: / / / / / /
L. Paul Broadus, John Michael Daw,
Robert J. Doty, Jimmie D. Lansford ___________________________
and I.J. Reinhardt, Jr.
The Board of Directors recommends a vote FOR all nominees.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATION MADE. IF NO CHOICES
ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES.
Note: Please sign exactly as your name(s) appears. For joint accounts, each
owner should sign. When signing as executor, administrator, attorney, trustee
or guardian, etc., please give your full title.
Dated:___________________________________, 1997
Signature(s)__________________________________
__________________________________
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FOLD AND DETACH HERE
