<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]
March 17, 2000
Dear Fellow Stockholder:
You are cordially invited to attend UnionBancorp, Inc.'s annual meeting
of stockholders at the Starved Rock Lodge and Conference Center located in
Utica, Illinois, on Tuesday, April 25, 2000, at 10:00 a.m. At the meeting, we
will report to you on the progress of UnionBancorp 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 four persons to serve as Class II
directors on the board of directors. Their names appear in the enclosed proxy
material. All four 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,
[SIGNATURE]
Charles J. Grako
President
122 WEST MADISON STREET O OTTAWA ILLINOIS O (815) 433-7030
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 2000
----------------------------------------
TO HOLDERS OF COMMON STOCK:
The annual meeting of stockholders of UnionBancorp, Inc., a Delaware
corporation, will be held at the Starved Rock Lodge and Conference Center
located in Utica, Illinois, on Tuesday, April 25, 2000, at 10:00 a.m., local
time, for the purpose of considering and voting upon the following matters:
1. to elect four (4) Class II directors.
2. to transact such other business as may properly come before the
meeting or any adjournments or postponements of the meeting.
We are not aware of any other business to come before the meeting. Only
those stockholders of record as of the close of business on March 3, 2000, shall
be entitled to notice of the meeting and to vote at the meeting and any
adjournments or postponements of the meeting. In the event there are not
sufficient votes for a quorum or to approve or ratify any of the foregoing
proposals at the time of the meeting, the meeting may be adjourned or postponed
in order to permit our further solicitation of proxies.
By Order of the Board of Directors
[SIGNATURE]
Charles J. Grako
President
Ottawa, Illinois
March 17, 2000
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>
[LOGO]
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
by the board of directors of UnionBancorp of proxies to be voted at the annual
meeting of stockholders to be held at the Starved Rock Lodge and Conference
Center located in Utica, Illinois, on Tuesday, April 25, 2000, at 10:00 a.m.,
local time, or at any adjournments or postponements of the meeting.
UnionBancorp, a Delaware corporation, is a regional financial services
company based in Ottawa, Illinois which has four bank subsidiaries. Our banks
serve communities throughout Central and Northern Illinois through twenty-nine
locations. We also own the following three non-bank subsidiaries:
- UnionData Corp, Inc., which provides data processing
services;
- UnionTrust Corporation, a trust company which also
serves as an owner and lessor of banking offices to
several of our banks; and
- UnionFinancial Services, Inc., an insurance/brokerage
agency located in Peru, Illinois.
The proxy statement and the accompanying notice of meeting and proxy
are first being mailed to holders of shares of our common stock, par value $1.00
per share, on or about March 17, 2000. Our 1999 annual report, including
financial statements, is enclosed.
VOTING RIGHTS AND PROXY INFORMATION
The board of directors has fixed the close of business on March 3,
2000, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the annual meeting. Our transfer books will not be
closed between the record date and the date of the annual meeting. 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 return your proxy in
the enclosed self-addressed, stamped envelope. 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 UnionBancorp, and stockholders present
at the meeting may revoke their proxy and vote in person.
On March 3, 2000, we had 4,047,309 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
<PAGE>
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.
ELECTION OF DIRECTORS
We have a staggered board of directors divided into three classes. One
class is elected annually to serve for three years. At the annual meeting, our
stockholders will be entitled to elect four 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 which we are
soliciting 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, current as of March 3, 2000, 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. Unless otherwise
indicated, each person has held the positions shown for at least five years. The
four nominees, if elected at the annual meeting, will serve as Class II
directors for three year terms expiring in 2003. WE RECOMMEND THAT YOU VOTE YOUR
SHARES FOR ALL FOUR NOMINEES.
<TABLE>
<CAPTION>
NOMINEES
NAME POSITION WITH UNIONBANCORP
(AGE) DIRECTOR SINCE AND PRINCIPAL OCCUPATION
- ----- -------------- --------------------------
<S> <C> <C>
CLASS II
(TERM EXPIRES 2003)
L. Paul Broadus 1986 Director of UnionBancorp; Founder and President,
(Age 65) Broadus Oil Company
Robert J. Doty 1996 Director of UnionBancorp; Chairman of Prairie Bancorp,
(Age 72) Inc. (1989-1996); Consultant, Farm Management
Jimmie D. Lansford 1988 Director and Senior Vice President, Organizational
(Age 60) Development and Planning (since 1996) of UnionBancorp;
Chief Executive Officer, St. Mary's Hospital
(1987-1996)
I. J. Reinhardt, Jr. 1991 Director of UnionBancorp; Director and General
(Age 62) Manager, St. Louis Beverage Company
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
CONTINUING DIRECTORS
NAME POSITION WITH UNIONBANCORP
(AGE) DIRECTOR SINCE AND PRINCIPAL OCCUPATION
- ----- -------------- --------------------------
<S> <C> <C>
CLASS III
(TERM EXPIRES 2001)
Charles J. Grako 2000 Director, President (since 1999) and Chief Financial
(Age 46) Officer (since 1990) of UnionBancorp
Joseph D. O'Brien, Jr. 1999 Director of UnionBancorp; President, O'Brien
(Age 49) Automotive Team
John A. Shinkle 1997 Director of UnionBancorp; Executive Vice President,
(Age 48) Synovus Securities, Inc. (1986-present)
Scott C. Sullivan 1996 Director of UnionBancorp; Attorney, Williams & McCarthy
(Age 45)
CLASS I
(TERM EXPIRES 2002)
Richard J. Berry 1985 Director of UnionBancorp; Attorney, Myers, Daugherity,
(Age 47) Berry, O'Conor & Kuzma, Ltd.
Walter E. Breipohl 1993 Director of UnionBancorp; Owner, Kaszynski/Breipohl
(Age 46) Realtors/Developers
Lawrence J. McGrogan 1987 Director of UnionBancorp; Owner, Handy Foods, Inc.
(Age 62)
John A. Trainor 1985 Chairman of the Board (since 2000) and Director of
(Age 69) UnionBancorp; Owner, Trainor Grain & Supply Company,
Inc.
</TABLE>
All of our 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 UnionBancorp and any person pursuant to
which any director has been selected. No member of the board of directors is
related to any other member of the board of directors.
BOARD COMMITTEES AND MEETINGS
Our board of directors generally meets on a quarterly basis. The board
of directors met six times during 1999. During 1999, all directors attended at
least 75 percent of the meetings of the board and the committees on which they
served. Our board of directors has standing executive, audit and compensation
committees.
3
<PAGE>
The executive committee is comprised of Messrs. Berry, Broadus,
Grako, Sullivan 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 six times in 1999.
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 and
assures that our books and records are kept in accordance with applicable
accounting principles and standards. The members of the audit committee are
Messrs. Reinhardt (Chair), Doty and O'Brien. During 1999, 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 UnionBancorp and our subsidiaries. The
committee also administers and oversees our stock-based incentive compensation
plans. The members of the compensation committee are Messrs. McGrogan (Chair),
Breipohl, Broadus, Shinkle and Lansford (ex officio). The compensation committee
met four times in 1999.
COMPENSATION OF DIRECTORS
Each of our directors was paid a fee of $1,000 for each board meeting
attended and $250 for each committee meeting attended. In addition, each
director was paid an annual retainer of $2,500. Each of our directors also
receives an annual grant of options to purchase shares of common stock under
UnionBancorp's stock option plan. The stock option plan provides for annual
formula grants to each of our 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 become
exercisable over five years. During 1999, each director, with the exception of
Mr. O'Brien who joined the board during the year, was granted options to
purchase 2,000 shares of common stock at a price of $11.25 per share.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of our common stock at March 15, 2000, by each person known
by us 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 which can be found later in this proxy statement, and
by all of our directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF PERCENT
NUMBER OF INDIVIDUALS IN GROUP BENEFICIAL OWNERSHIP(1)(2) OF CLASS
------------------------------ -------------------------- --------
<S> <C> <C>
5% STOCKHOLDERS
UnionBank, as Trustee for the 508,485(3) 12.6%
UnionBancorp, Inc. Employee Stock Ownership
Plan ("ESOP")
201 East Main Street
Streator, Illinois 61364
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF PERCENT
NUMBER OF INDIVIDUALS IN GROUP BENEFICIAL OWNERSHIP(1)(2) OF CLASS
------------------------------ -------------------------- --------
<S> <C> <C>
Dennis J. McDonnell 355,288(4) 8.8%
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Wayne W. Whalen 484,688(5) 12.0%
333 W. Wacker Drive, Suite 2100
Chicago, Illinois 60606
Jeffrey L. Gendell 323,400(6) 8.0%
200 Park Avenue, Suite 3900
New York, New York 10166
DIRECTORS AND NOMINEES
Richard J. Berry 38,319(7) *
Walter E. Breipohl 20,019 *
L. Paul Broadus 23,254(8) *
John Michael Daw 26,561(9) *
Robert J. Doty 4,184 *
Charles J. Grako 873,855(10) 21.6%
Jimmie D. Lansford 23,853(11) *
Lawrence J. McGrogan 28,343(12) *
Joseph D. O'Brien, Jr. 9,000 *
I.J. Reinhardt, Jr. 30,690(13) *
John A. Shinkle 4,379(14) *
Scott C. Sullivan 8,700(15) *
John A. Trainor 22,269(16) *
OTHER NAMED EXECUTIVE OFFICERS
Wayne L. Bismark 18,514(17) *
R. Scott Grigsby 83,689(18) 2.1%
All directors and executive officers as a group 1,215,629(19) 30.0%
(15 persons)
</TABLE>
- -----------------------
* Indicates less than one percent.
(1) The information contained in this column is based upon information
furnished to us by the persons named above and the members of the
designated group. Amounts reported include shares held directly as well
as shares which are held in retirement accounts and shares held by
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.
(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 18,900 shares of common
stock representing 2,079 shares by each director. Mr. Grako also has an
interest in the partnership amounting to 189 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
UnionBancorp's stock option plan as follows: Mr. Berry - 8,340 shares;
Mr. Breipohl - 8,340 shares; Mr. Broadus - 7,590 shares; Mr. Daw -
10,440 shares; Mr. Doty - 1,200 shares; Mr. Grigsby - 15,659 shares;
Mr. Lansford - 10,440 shares;
5
<PAGE>
Mr. McGrogan - 8,340 shares; Mr.Reinhardt - 6,690 shares; Mr. Shinkle
- 1,200 shares; Mr. Sullivan - 1,200 shares; Mr. Trainor - 8,040
shares; Mr. Grako - 8,860 shares; and Mr. Bismark - 5,260 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 employee stock ownership plan are
allocated to particular participants' accounts and over which shares
the employee stock ownership plan 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 UnionBancorp and Mr. McDonnell in connection with our acquisition of
Prairie Bancorp, Inc., the President of UnionBancorp has a limited
proxy with respect to these shares until August 6, 2000.
(5) As reported to the Securities and Exchange Commission on a Schedule 13D
dated February 29, 2000. Pursuant to the terms of an agreement executed
by UnionBancorp and Mr. Whalen in connection with our acquisition of
Prairie Bancorp, Inc., the president of UnionBancorp has a limited
proxy with respect to these shares until August 6, 2000. In addition,
Mr. Whalen's wife, Paula Wolff, filed a Schedule 13D with the
Securities and Exchange Commission on March 6, 2000, reporting shared
voting and investment power over such shares.
(6) As reported to the Securities and Exchange Commission on a Schedule 13G
dated March 6, 2000. Mr. Gendell reported shared voting and investment
power over such shares.
(7) 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.
(8) Includes 7,380 shares held by Mr. Broadus jointly with his spouse, over
which shares Mr. Broadus has shared voting and investment power.
(9) Includes 900 shares held solely by Mr. Daw's spouse over which Mr. Daw
has no voting or investment power. Also includes 866 shares allocated
to Mr. Daw under the employee stock ownership plan. Mr. Daw is
currently on the board, but will not stand for reelection at the annual
meeting.
(10) Includes 1,500 shares held by Mr. Grako jointly with his spouse, over
which shares Mr. Grako has shared voting and investment power. Also
includes 20,030 shares allocated to Mr. Grako under the employee stock
ownership plan. Includes 839,976 shares over which Mr. Grako, as
President of UnionBancorp, is entitled to exercise a limited proxy
pursuant to an agreement entered into between UnionBancorp and Messrs.
McDonnell and Whalen in connection with our acquisition of Prairie
Bancorp.
(11) Includes 2,400 shares held by Mr. Lansford jointly with his spouse,
over which shares Mr. Lansford has shared voting and investment power.
Also includes 1,134 shares allocated to Mr. Lansford under the employee
stock ownership plan.
(12) 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.
(13) 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.
(14) 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.
Mr. Shinkle also has voting and investment power over 700 shares held
in an Investment Club.
(15) Includes 1,500 shares held by Mr. Sullivan jointly with his spouse and
1,000 shares held by members of Mr. Sullivan's family. Mr. Sullivan has
shared voting and investment power over the 2,500 shares.
6
<PAGE>
(16) Includes 1,200 shares held solely by Mr. Trainor's spouse, over which
shares Mr. Trainor has no voting or investment power.
(17) Includes 3,754 shares allocated to Mr. Bismark under the employee stock
ownership plan.
(18) Mr. Grigsby resigned as chairman of the board and chief executive
officer of UnionBancorp, effective February 8, 2000. Includes 17,458
shares held by Mr. Grigsby jointly with his spouse and with or for
other family members, over which shares Mr. Grigsby has shared voting
and investment power, 400 shares held solely by members of Mr.
Grigsby's family, over which shares Mr. Grigsby has no voting or
investment power, and 38,376 shares allocated to Mr. Grigsby under our
employee stock ownership plan.
(19) Includes 839,976 shares over which Mr. Grako, as President of
UnionBancorp, is entitled to exercise a limited proxy pursuant to an
agreement entered into between UnionBancorp and Messrs. McDonnell and
Whalen in connection with the Prairie Bancorp acquisition.
Section 16(a) of the Securities Exchange Act of 1934 requires that our
executive officers, directors and persons who own more than 10% of our common
stock file reports of ownership and changes in ownership with the Securities and
Exchange Commission. They are also required to furnish us with copies of all
Section 16(a) forms they file. Based solely on our review of the copies of such
forms, and, if appropriate, representations made to us by any reporting person
concerning whether a Form 5 was required to be filed for 1999, we are not aware
that any of our directors, executive officers or 10% stockholders failed to
comply with the filing requirements of Section 16(a) during 1999.
VOTING AGREEMENTS
Pursuant to the terms of a standstill agreement entered into between
UnionBancorp and Messrs. McDonnell and Whalen, the president of UnionBancorp has
sole voting power with respect to all 839,976 shares of common stock held by
them in any election of our directors. 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 our executive officers whose
1999 salary and bonus exceeded $100,000:
7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- ------------------
(a) (b) (c) (d) (g) (i)
SECURITIES
UNDERLYING ALL OTHER
NAME AND OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) (#)(1) ($)
- ------------------------------- ---------- -------------------- -------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
R. Scott Grigsby(2) 1999 $ 207,882 $ --- 7,600 $ 15,944(2)
Chairman of the Board, and 1998 197,983 15,000 7,000 15,216
Chief Executive Officer 1997 156,555 8,000 4,000 10,050
- ------------------------------- ---------- -------------------- -------------- ------------------ ------------------
Charles J. Grako 1999 $ 129,170 $ --- 4,600 $ 19,088(3)
President and Chief Financial 1998 112,545 7,000 4,000 17,275
Officer 1997 104,878 4,000 1,500 13,200
- ------------------------------- ---------- -------------------- -------------- ------------------ ------------------
Wayne L. Bismark 1999 $ 118,173 $ --- 2,100 $ 11,433(4)
Executive Vice President and 1998 112,545 --- 3,000 24,752
Chief Credit Officer 1997 104,878 2,000 1,500 21,734
- ------------------------------- ---------- -------------------- -------------- ------------------ ------------------
</TABLE>
- ---------------
(1) All options vest at a rate of 20% per year on or about each anniversary of
the date of grant, except for 100 shares granted to Messrs. Grigsby, Grako
and Bismark in 1999, that fully vest three years after the date of grant.
(2) Mr. Grigsby resigned as chairman of the board and chief executive officer,
effective February 8, 2000. Represents the dollar value of allocations
under our employee stock ownership plan in the amounts of $9,843 for 1999,
$9,115 for 1998, and $7,149 for 1997, and premiums for split dollar life
insurance of $2,901 for 1999, $2,901 for 1998 and $2,901 for 1997. In
addition, it includes $3,200 of 401(k) matching contributions in 1999 and
1998.
(3) Represents the dollar value of allocations under our employee stock
ownership plan in the amounts of $7,946 for 1999, $7,062 for 1998 and
$4,941 for 1997, premiums for split dollar life insurance of $2,034 for
each of 1999, 1998 and 1997, fees for services provided to our board of
directors and director fees for serving on the boards of various
subsidiaries of $6,525 for 1999, $5,700 for 1998 and $6,225 for 1997. In
addition, it includes $2,583 of 401(k) matching contributions in 1999 and
$2,479 for 1998.
(4) Represents the dollar value of allocations under our employee stock
ownership plan in the amounts of $7,270 for 1999, $6,626 for 1998 and
$4,934 for 1997, and fees for services provided to our board of directors
and director fees for serving on the boards of various subsidiaries of
$1,800 for 1999, $15,800 for 1998 and, $16,800 for 1997. In addition, it
includes $2,363 of 401(k) matching contributions in 1999 and $2,326 for
1998.
8
<PAGE>
STOCK OPTION INFORMATION
The following table sets forth certain information concerning the
number and value of stock options granted in the last fiscal year to the
individuals named above in the summary compensation table:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
OPTION GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM
- ------------------------- --------------- ---------------- ---------------- ------------ --------------- -------------
(a) (b) (c) (d) (e) (f) (g)
% OF TOTAL
OPTIONS
OPTIONS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ------------------------- --------------- ---------------- ---------------- ------------ --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. Scott Grigsby(2) 5,500 11% $ 15.00 02/11/08 $ 51,884 $ 131,484
2,000(3) 8% $ 11.25 02/11/09 $ 26,367 $ 55,312
100(4) 0.2% $ 16.0625 02/18/02 $ 253 $ 532
- ------------------------- --------------- ---------------- ---------------- ------------ --------------- -------------
Charles J. Grako 4,500 9% $ 15.00 02/11/09 $ 42,450 $ 107,578
100(4) 0.2% $ 16.0625 02/18/02 $ 253 $ 532
- ------------------------- --------------- ---------------- ---------------- ------------ --------------- -------------
Wayne L. Bismark 2,000 4% $ 15.00 02/11/09 $ 18,867 $ 47,812
100(4) 0.2% $ 16.0625 02/18/02 $ 253 $ 532
- ------------------------- --------------- ---------------- ---------------- ------------ --------------- -------------
</TABLE>
(1) All options vest at a rate of 20% per year on or about each anniversary of
the date of grant, except for 100 shares granted to Messrs. Grako and
Bismark in 1999, that fully vest three years after the date of grant.
(2) Mr. Grigsby resigned as chairman of the board and chief executive officer,
effective February 8, 2000. The options granted to Mr. Grigsby in 1999 will
not be exercisable.
(3) Represents non-qualified options granted for service on the board of
directors.
(4) Represents one-time non-qualified options granted to all employees and
directors of affiliates.
9
<PAGE>
The following table sets forth certain information concerning the
exercisable and nonexercisable stock options at December 31, 1999 held by the
individuals named in the summary compensation table:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTIONS VALUES
- ----------------------------------------------------------------------------------------------------------------------
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired on Options at FY-End In-the-Money Options at
Name Exercise Value Realized (#)(d) FY-End ($)(e)
(#)(a) (#)(b) ($)(c) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- --------------- ---------------- ------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
R. Scott Grigsby(1) --- --- 15,659 18,427 $ 94,896 $ 30,352
- -------------------------- --------------- ---------------- ------------- -------------- -------------- --------------
Charles J. Grako --- --- 6,224 9,756 $ 31,886 $ 6,251
- -------------------------- --------------- ---------------- ------------- -------------- -------------- --------------
Wayne L. Bismark --- --- 3,324 6,456 $ 11,636 $ 6,251
- -------------------------- --------------- ---------------- ------------- -------------- -------------- --------------
</TABLE>
- --------------------
(1) Mr. Grigsby resigned as chairman of the board and chief executive officer,
effective February 8, 2000.
EMPLOYMENT AGREEMENTS
Messrs. Grako and Bismark have three-year employment agreements. Unless
earlier terminated by us (or our 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 five 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 us or any of our applicable subsidiaries.
Each agreement is terminable by the employee upon thirty days' prior
written notice and automatically terminates upon the death or disability of the
employee. We 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
UnionBancorp to provide each employee with indemnification insurance and
indemnification for any expenses arising out of each person's employment with
UnionBancorp or the applicable subsidiary.
10
<PAGE>
Effective February 8, 2000, Mr. Grigsby resigned as chairman of the
board and chief executive officer of UnionBancorp. In recognition of his
service, the board approved a severance package for Mr. Grigsby which included a
continuation to receive his base salary of $218,275 as of February 8, 2000, on a
bi-monthly basis, expiring in December of 2001. In addition, his company
automobile, valued at approximately $40,000, will be transferred to his name and
he will receive his group health insurance benefits through the expiration of
the COBRA period.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the members of the compensation committee were Messrs.
McGrogan, Breiphol, Broadus, Shinkle and Lansford (ex officio). None of these
individuals was an officer or employee of UnionBancorp or any of our
subsidiaries during 1999, and none of these individuals is a former officer or
employee of UnionBancorp or any of our subsidiaries, except for Mr. Lansford who
is Senior Vice President, Organizational Development and Planning. Mr. Lansford
did not participate in any decisions pertaining to his compensation.
THE INCORPORATION BY REFERENCE OF THIS PROXY STATEMENT INTO ANY
DOCUMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY UNIONBANCORP SHALL
NOT BE DEEMED TO INCLUDE THE FOLLOWING REPORT UNLESS THE REPORT IS SPECIFICALLY
STATED TO BE INCORPORATED BY REFERENCE INTO SUCH DOCUMENT.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of our board of directors is comprised of
four outside directors and is responsible for recommendations to the board of
directors for compensation of executive officers of our subsidiaries and
UnionBancorp. In determining compensation, the following factors are generally
taken into consideration:
- the performance of the executive officers in
achieving our short and long term goals;
- payment of compensation commensurate with the ability
and expertise of the executive officers; and
- we 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.
Additionally, the compensation committee considers various benefits,
such as our employee stock ownership plan, 401(k) plan 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 the chief executive officer's level of compensation.
These areas are:
- long-range strategic planning and implementation;
11
<PAGE>
- our financial performance;
- our compliance with regulatory requirements and
relations with regulatory agencies; and
- the individual's effectiveness of managing
relationships with stockholders and the board of
directors.
When evaluating our financial performance, the committee considers
profitability, asset growth and risk management. The primary evaluation criteria
are considered to be essential to our long-term viability and are given equal
weight in the evaluation. Finally, the committee reviewed compensation packages
of peer institutions, as well as compensation surveys provided by independent
third parties, to ensure that the chief executive officer's compensation is
competitive and commensurate with his level of performance.
Messrs. McGrogan (Chair), Breipohl, Broadus, Shinkle and Lansford (ex
officio)
THE INCORPORATION BY REFERENCE OF THIS PROXY STATEMENT INTO ANY
DOCUMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY UNIONBANCORP 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
UnionBancorp, the Nasdaq Stock Market (US Companies) and an index of Nasdaq Bank
Stocks for the period commencing October 1, 1996, the date our shares were first
quoted on the Nasdaq Stock Market. The graph was prepared at our request by SNL
Securities, Charlottesville, Virginia.
12
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN*
(ASSUMES $100 INVESTED ON OCTOBER 1, 1996)
[GRAPH]
*TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Cumulative Total Return
- -------------------------------------------------------------------------------------------------------------------
10/01/96 12/31/96 12/31/97 12/31/98 12/31/99
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
UnionBancorp, Inc. $100 $125 $191 $148 $127
Nasdaq Stock Market - US $100 $105 $129 $182 $329
Nasdaq Bank Index $100 $113 $188 $187 $180
SNL Midwest Bank Index $100 $110 $178 $190 $149
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Several of our directors and executive officers (including their
affiliates, families and companies in which they are principal owners, officers
or directors) were loan customers of, and had other transactions with, us and
our subsidiaries in the ordinary course of business. These loans and lines of
credit were made in the ordinary course of business on substantially the same
terms, including
13
<PAGE>
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 1999, we paid
approximately $80,293 to the law firm of Myers, Daugherity, Berry, O'Conor &
Kuzma, Ltd. for legal services. Richard J. Berry, a director of UnionBancorp,
is a principal of that firm. Additionally, in 1999, we paid premiums of
approximately $74,688 to American Bankers Professional Fidelity Insurance
Company, Ltd. ("ABFIC") for a blanket bond insurance policy. R. Scott
Grigsby, who served as a director during the payment of these premiums, was
also 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 2001 ANNUAL MEETING
For inclusion in our proxy statement and form of proxy relating to the
2001 annual meeting of stockholders, stockholder proposals must be received by
us on or before November 17, 2000. In order to be presented at such meeting,
notice of the proposal must be received by UnionBancorp on or before November
17, 2000, and must otherwise comply with our bylaws.
OTHER MATTERS
We do 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 we will pay the
cost of solicitation. In addition to soliciting proxies by use of the mails,
officers, directors and regular employees of UnionBancorp or our subsidiaries,
acting on our behalf, may solicit proxies by telephone, telegraph or personal
interview. We will, at our 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 for the annual meeting, the shares of such
stockholder shall be voted FOR the nominees listed under proposal 1.
By Order of the Board of Directors
[SIGNATURE]
Charles J. Grako
President
Ottawa, Illinois
March 17, 2000
ALL STOCKHOLDERS ARE URGED TO SIGN
AND MAIL THEIR PROXIES PROMPTLY
14
<PAGE>
PROXY
UNIONBANCORP, INC.
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS--APRIL 25, 2000
The undersigned hereby appoints Lawrence J. McGrogan and John A. Trainor, or
either of them acting in the absence of the other, 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 Starved Rock Lodge and Conference Center
located in Utica, Illinois, on Tuesday, April 25, 2000, 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:
New Address: ___________________________________
________________________________________________
________________________________________________
(Continued and to be signed on reverse side.)
^ FOLD AND DETACH HERE ^
<PAGE>
UNIONBANCORP, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
1. Election of Directors
01-L. Paul Broadus, 02-Robert J. Doty,
03-Jimmie D. Lansford and 04-I.J. Reinhardt, Jr.
The Board of Directors recommends a vote FOR all nominees.
For All
For Withheld Except
/ / / / / /
/ / Check here if you plan to attend the
meeting.
/ / Check here for address change.
THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH SPECIFICATION MADE. IF NO CHOICES
ARE INDICATED, THIS PROXY WILL BE VOTED
FOR ALL NOMINEES.
Dated: ___________________________, 2000
Signature(s) ___________________________
________________________________________
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.
^ FOLD AND DETACH HERE ^
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
