<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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
Upbancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Merrill Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
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>
CHICAGO, ILLINOIS
MARCH 22, 1996
UPBANCORP, INC.
4753 NORTH BROADWAY
CHICAGO, ILLINOIS 60640
(312) 878-2000
PROXY STATEMENT AND NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 16, 1996
To The Stockholders of Upbancorp, Inc.:
The Annual Meeting of Stockholders of Upbancorp, Inc. (the "Corporation"),
will be held at Uptown National Bank of Chicago, 4753 North Broadway, Chicago,
Illinois, on Tuesday, April 16, 1996, at 9:45 A.M., for the purpose of
considering and voting upon the following matters:
1. To elect two (2) Directors to serve as Class I Directors until the
regular Annual Meeting of Stockholders in 1999 and until their
successors are elected and have qualified; and
2. To transact such other business as may properly be brought before the
Annual Meeting or any adjournment thereof.
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED POSTAGE
PAID ENVELOPE AS PROMPTLY AS POSSIBLE WHETHER YOU PLAN TO ATTEND THE ANNUAL
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>
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of the Corporation of proxies for use at the Annual
Meeting of Stockholders of the Corporation to be held April 16, 1996. The
record date for determining stock ownership is March 11, 1996. Only
Stockholders of record as of March 11, 1996, will be entitled to notice of, and
to vote at, the Annual Meeting. As of March 11, 1996, the Corporation had
issued and outstanding 222,000 shares of Common Stock with a par value of $10.00
per share. Each share is entitled to one vote on all matters to be considered
at the Annual Meeting.
The Corporation's 1995 Annual Report on Form 10-K, including financial
statements consolidated with those of Uptown National Bank of Chicago ("Uptown")
and Heritage Bank of Tempe, Tempe, Arizona ("Heritage"), is being transmitted to
each Stockholder with this Proxy Statement. This Proxy Statement (and the
accompanying proxy) is being mailed to all Stockholders on or about March 22,
1996.
The Corporation was established as a one-bank holding company with respect
to Uptown on June 1, 1983, and became a multi-bank holding company when Heritage
became a wholly-owned subsidiary on July 12, 1988.
Your proxy is being solicited by the Board of Directors of the Corporation.
The cost of soliciting proxies will be borne by the Corporation. In addition to
use of the mails, proxies may be solicited personally or by telephone or
telegraph by officers, Directors and certain employees of the Corporation or
Uptown who will not be specially compensated for such soliciting. The
Corporation 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.
Stockholders are urged to specify the way they wish to vote their shares by
marking the appropriate boxes on the enclosed proxy. Shares represented by
proxies which are properly executed and returned will be voted at the Annual
Meeting as specified on the proxy. If no choice is specified, the shares will
be voted FOR the nominees listed under Proposal 1 in this Proxy Statement. It
is not anticipated that any action will be asked of the Stockholders other than
that set forth herein; proxies in the enclosed form, however, will confer
discretionary voting authority regarding any other matters which may properly
come before the Annual Meeting on the individuals specified in the enclosed
proxy.
Any Stockholder giving a proxy will have the right to revoke it at any time
prior to the voting thereof by filing a revoking instrument or a duly executed
proxy bearing a later date with the Secretary of the Corporation or by attending
the Annual Meeting and voting in person.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Judges of Election appointed by the Board of Directors for the Annual
Meeting who will determine whether a quorum is present. The Judges of Election
will treat abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum but as unvoted for purposes of
determining the approval of any matter submitted to the Stockholders for a vote.
If a broker indicates on the proxy that it does not have discretionary authority
as to certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Corporation has a staggered Board of Directors divided into three
classes. One class is elected annually to serve for three years. At the Annual
Meeting of Stockholders on April 16, 1996, two Class I Directors will be elected
for terms of three years or until their successors are elected and qualified.
The two nominees are indicated in the table below. 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
named as Class I Directors. The Corporation has no knowledge that any of the
nominees will refuse or be unable to serve, but if any of the nominees becomes
unavailable for election, the holders of the proxies reserve the right to
substitute another person of their choice as a nominee when voting at the Annual
Meeting. To be elected as a Director, each Director nominee must receive the
favorable vote of a plurality of the shares represented and entitled to vote at
the Annual Meeting.
INFORMATION ABOUT DIRECTORS AND NOMINEES
The following table contains certain information with respect to the
nominees and the Continuing Directors, including the number of shares of Common
Stock of the Corporation beneficially owned, directly or indirectly, as of
March 11, 1996, and the year each nominee and Continuing Director became a
Director of the Corporation or its predecessor, Uptown.
NOMINEES
The following persons, if elected at the Annual Meeting of Stockholders,
will serve as Class I Directors for three years:
CLASS I (TERM EXPIRES 1999)
<TABLE>
<CAPTION>
NAME, AGE AND YEAR COMMON STOCK BENE-
BECAME DIRECTOR OF PRINCIPAL OCCUPATION FICIALLY OWNED AS OF
THE CORPORATION AND OTHER INFORMATION MARCH 11, 1996(1)
- -------------------- --------------------- ---------------------------
NO. OF PERCENT
SHARES OF CLASS
----------------------------
<S> <C> <C> <C>
Marvin L. Kocian President, Komar Screw Corporation; 3,790 1.71
Age 59 - 1982 Director of the Corporation and Uptown. (2)(3)
Richard K. Ostrom President, Chief Executive Officer and 36,293 16.35
Age 56 - 1976 Director of the Corporation; Chairman (2),(4-8)
of the Board, Chief Executive Officer
and Director of Uptown; Chairman of
the Board and Director of Heritage.
2
<PAGE>
CONTINUING DIRECTORS
The following persons will continue to serve as Directors for the periods indicated:
CLASS II (TERM EXPIRES 1997)
Stephen W. Edwards President, Planned Futures, Inc.; 14,317 6.45
Age 63 - 1985 Director of the Corporation and Uptown. (2)(4)
John E. Fahrendorf, Jr. President, Chief Executive Officer and 1,767 .80
Age 49 - 1993 Director of Heritage; Vice President (2)
and Director of the Corporation.
Alfred E. Hackbarth, Jr. Attorney and CPA, Owner, A. E. 1,767 .80
Age 65 - 1988 Hackbarth & Associates; Retired (2)(3)
Partner, Arthur Andersen & Co.,S.C.;
Director of the Corporation, Uptown
and Heritage.
CLASS III (TERM EXPIRES 1998)
Roger P. Eklund Partner, Eklund and Eklund (Attorneys); 67,669 30.48
Age 64 - 1963 Chairman of the Board of the Corpora- (2)-(6)(9)
tion; Director of Uptown; Vice Chairman
of the Board and Director of Heritage.
James E. Heraty President, Ready-Men, Inc., and 4,889 2.20
Age 64 - 1984 Director of the Corporation and
Uptown.
B. Arthur Russell Retired, former Chairman of the Board 19,175 8.64
Age 72 - 1971 and President, Russell Enterprises, Inc.; (3)(9)
Director of the Corporation.
</TABLE>
(1) The information contained in this column is based upon information
furnished to the Corporation by the individuals named above. 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. The above
amounts do not include shares beneficially owned by the adult children of
the Directors. Beneficial ownership of such shares is disclaimed by the
Directors. The above amounts include shares held in joint tenancy with
certain members of the families of the Directors. Shares so held are
deemed to be shared as to voting and investment power.
(2) The above amount includes 1,017 shares held by Vanilla III Enterprises.
Voting and investment power with respect to these shares is shared by
Messrs. Edwards, Eklund, Fahrendorf, Hackbarth, Heraty, Kocian, Ostrom and
Robert P. Griffiths, President of Uptown.
3
<PAGE>
(3) The above amounts do not include shares beneficially owned by the spouses
and adult children of certain Directors as follows: Eklund - 550; Russell
- 100; Kocian -150; and Hackbarth - 1,550. Beneficial ownership of these
shares is disclaimed.
(4) The above amount includes 12,100 shares held by Uptown's pension plan for
its employees. Voting and investment power with respect to these shares is
shared by Messrs. Edwards, Eklund and Ostrom. Beneficial ownership of
these shares is disclaimed by Mr. Edwards. Messrs. Eklund and Ostrom are
vested participants in the pension plan.
(5) The above amount includes 11,478 shares held by WEO Enterprises, which is a
partnership comprised of Messrs. Eklund and Ostrom and the Estate of Henry
J. Wilkens. Voting and investment power with respect to these shares is
shared.
(6) The above amount includes 6,815 shares held by a charitable foundation of
which Mr. Eklund is a director and officer. Voting and investment power
with respect to these shares is shared. Beneficial ownership of these
shares is disclaimed. The above amount includes 6,295 shares held by a
charitable foundation of which Messrs. Eklund and Ostrom are directors and
officers. Voting and investment power with respect to these shares is
shared. Beneficial ownership of these shares is disclaimed. The above
amount includes 5,276 shares held by five trusts (exclusive of the trusts
referred to in this Note (6)) for which Mr. Eklund is a trustee or
co-trustee. Voting and investment power with respect to these shares is
shared. Beneficial ownership of 4,247 of these shares is disclaimed.
(7) The above amount includes 2,346 shares held by J.R. Enterprises. Messrs.
Heraty and Ostrom are partners in J.R. Enterprises. Voting and investment
power with respect to these shares is shared by Messrs. Heraty and Ostrom.
(8) The above amount includes 600 shares held in joint tenancy with one of
Mr. Ostrom's parents and 177 shares in joint tenancy with Mr. Ostrom's
adult children.
(9) The above amount includes 19,075 shares held by two trusts for which
Messrs. Eklund and Russell are co-trustees. Voting and investment power
with respect to these shares is shared. Beneficial ownership of these
shares is disclaimed by Mr. Eklund.
EXECUTIVE OFFICERS
Set forth below is a list of all executive officers of the Corporation.
NAME AGE POSITION WITH THE CORPORATION, UPTOWN AND
---- --- HERITAGE
-----------------------------------------
Roger P. Eklund 64 Chairman of the Board of the Corporation;
Director of Uptown; Vice Chairman of the
Board and Director of Heritage.
Richard K. Ostrom 56 President, Chief Executive Officer and
Director of the Corporation; Chairman of the
Board, Chief Executive Officer and Director
of Uptown; Chairman of the Board and
Director of Heritage.
John E. Fahrendorf, Jr. 49 Director of the Corporation since 1993 and
Vice President of the Corporation since
December, 1991; President and Chief
Executive Officer of Heritage since July,
1991.
4
<PAGE>
Robert P. Griffiths 46 Vice President of the Corporation since
August 1994; President and Chief Operating
Officer of Uptown since November 1993;
Executive Vice President of Uptown from
April 1993 until November 1993.
All of the Corporation's Directors hold office for the terms indicated and
all of the Corporation's executive officers hold office for a term of one year,
or until their respective successors are duly elected and qualified. There are
no arrangements or understandings between any of the Directors, executive
officers, or any other person pursuant to which any of the Directors or
executive officers have been selected for their respective positions, except
with respect to the employment agreements with Messrs. Eklund, Ostrom,
Fahrendorf and Griffiths as described below (see "EMPLOYMENT AGREEMENTS"). Mr.
Eklund serves as a director of Thomas Industries, Inc., which has a class of
securities registered pursuant to Section 12 of the Securities and Exchange Act
of 1934.
BOARD COMMITTEES AND MEETINGS
The Corporation has a standing Audit Committee and Compensation and
Organization Committee, but does not have a Nominating Committee. The
Compensation and Organization Committee, however, functions as the Nominating
Committee.
The members of the Audit Committee are Messrs. Edwards, Hackbarth, Heraty
and Kocian. Delbert R. Ellis, a Director of Heritage, serves as an advisory
member of the Audit Committee. The functions of the Audit Committee consist of
reviewing, with the Corporation's independent auditors, the scope and results of
the Corporation's procedures for internal auditing, the scope and results of the
auditing engagement and the adequacy of the Corporation's system of internal
controls. The Audit Committee also makes a recommendation on the selection of
the Corporation's independent auditors to the Board of Directors. This
Committee met five times during 1995.
The current members of the Compensation and Organization Committee are
Messrs. Eklund, Fahrendorf, Griffiths, Heraty, Kocian and Ostrom. This
Committee has the responsibility of reviewing and determining employee
compensation and benefits and recommending to the Board of Directors of the
Corporation and the Corporation's subsidiary banks changes in such compensation
and benefits. The Committee also reviews official personnel changes within the
organizational structure of the Corporation and the Corporation's subsidiary
banks. This Committee met once in 1995.
The Compensation and Organization Committee also functions as a Nominating
Committee and will consider nominees recommended by the Stockholders.
Recommendations should be forwarded to Evy Johansen, Senior Vice President and
Cashier, Uptown National Bank of Chicago, 4753 North Broadway, Chicago, Illinois
60640.
5
<PAGE>
The Board of Directors of the Corporation met thirteen times during 1995.
The Board of Directors of Uptown met thirteen times during 1995. The Board of
Directors of Heritage met twelve times during 1995. All of the present
Directors attended more than 75% of the meetings of the Boards and the
committees of the Boards on which they served during 1995.
EXECUTIVE COMPENSATION
The following table sets forth compensation information about the
Corporation's President and Chief Executive Officer, its Chairman of the Board,
the Vice President and Director of the Corporation and President and Chief
Executive Officer of Heritage and the Vice President of the Corporation and
President and Chief Operating Officer of Uptown. No other officer of the
Corporation or its subsidiaries received more than $100,000 in salary and bonus
during 1995.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
OTHER
ANNUAL ALL OTHER
NAME AND COMPEN- COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS SATION (1) SATION(2)
- --------------------------------------------------------------------------------
Richard K. Ostrom, 1995 $200,000 -0- $14,375 $11,910
President and Chief 1994 200,000 -0- 13,375 8,433
Executive Officer 1993 200,000 -0- 13,375 6,019
- --------------------------------------------------------------------------------
Roger P. Eklund, 1995 $120,000 -0- $13,800 $3,629
Chairman of the Board 1994 120,000 -0- 12,625 3,622
1993 120,000 -0- 12,800 3,600
- --------------------------------------------------------------------------------
John E. Fahrendorf, Jr., 1995 $118,000 -0- $ 2,800 $1,856
Vice President and 1994 112,000 $10,000 2,800 4,919
Director of the 1993 100,000 -0- 600 3,041
Corporation
- --------------------------------------------------------------------------------
Robert P. Griffiths 1995 $118,000 -0- $10,875 $5,101
Vice President of the 1994 112,000 -0- 10,525 3,501
Corporation 1993 N/A N/A N/A N/A
- --------------------------------------------------------------------------------
(1) The amount indicated for Messrs. Ostrom, Eklund, Fahrendorf and Griffiths
represents Board of Directors and Committee fees.
(2) The amount indicates the Corporation's 401(k) Flexible Compensation Plan
match of the executive's contribution, limited to 3% of the individual's
annual salary; the Corporation's 401(k) optional contribution, and in the
case of Messrs. Ostrom, Fahrendorf and Griffiths the reportable amount of
the annual premium associated with a Split Dollar Life Insurance Policy,
which in 1995, 1994 and 1993 was $4,910, $4,433 and $4,019, respectively,
for Mr. Ostrom; $1,856 and $1,776, respectively, for Mr. Fahrendorf in 1995
and 1994; and $1,623 and $1,541, respectively, for Mr. Griffiths in 1995
and 1994.
6
<PAGE>
DIRECTORS' FEES
Directors received during 1995, $200 for each meeting of the Board of
Directors of the Corporation, $500 for each meeting of the Board of Directors of
Uptown and $300 for each meeting of the Board of Directors of Heritage they
attend. In addition, they receive the following amounts for each Committee
meeting they attend: Audit Committee - $300; Loan and Investment Committee -
$200; and Compensation and Organization Committee - $150.
The Board of Directors of the Corporation and Uptown have adopted and
administer a directors' deferred compensation plan (the "Deferred Plan") in
which participation is voluntary. The Deferred Plan is not a "qualified plan"
within the meaning of Section 401(a) of the Internal Revenue Code (the "Code").
The Deferred Plan allows participants to request that all or a portion of the
amounts deferred be utilized to purchase annuities for the benefit of the
participants. Directors' fees paid to participants are placed in a cash reserve
account from which premiums on the annuities are paid quarterly. Currently, no
director participates in the Deferred Plan.
RETIREMENT BENEFITS
Substantially all employees of the Corporation who have met a service
requirement are participating in Uptown's noncontributory pension plan. The
following table illustrates the estimated annual benefits payable upon
retirement pursuant to the pension plan for specified average base salary rates
and years of credited service classifications.
PENSION TABLE
ANNUAL RETIREMENT BENEFITS BASED UPON
YEARS OF SERVICE
<TABLE>
<CAPTION>
REMUNERATION 10 15 20 25 30 35
------------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$125,000 $18,750 $28,125 $37,500 $46,875 $56,250 $65,625
$150,000-$500,000 22,500 33,750 45,000 56,250 67,500 78,750
</TABLE>
"Remuneration" is determined by averaging the employee's annual salary for
the five consecutive plan years of the participant's benefit service that
produces the highest average earnings preceding retirement. Only the actual
salary paid to an employee is considered in determining the employee's average
annual remuneration; all bonuses and fees, including fees paid for serving as a
Director, are excluded from this computation. Benefits are computed on straight
life annuity amounts; such benefits are not subject to any deduction for Social
Security or other offsets. Roger P. Eklund has eighteen years of credited
service, Richard K. Ostrom has thirty-three years of credited service, John E.
Fahrendorf, Jr., has four years of credited service and Robert P. Griffiths has
two years of credited service.
7
<PAGE>
The above table reflects benefit amounts being equal from $150,000 to
$500,000 of salary due to the $150,000 compensation limit required by Section
401(a)(17) of the Code. This limitation became effective January 1, 1994.
EMPLOYMENT AGREEMENTS
In January of 1992, the Corporation entered into five-year employment
agreements with its two executive officers, Messrs. Eklund and Ostrom, which
agreements were effective as of January 1, 1992. These agreements will expire
on December 31, 1996.
Under the terms of the agreements, Mr. Eklund receives a salary of $120,000
per year and Mr. Ostrom receives a salary of $200,000 per year. The agreements
also provide for an adjustment to the annual salary of Messrs. Eklund and Ostrom
in the event the cost of living in the Chicago area increases more than 10% from
its December 1987 level.
Under the terms of each agreement, if the employment of the executive with
the Corporation is terminated within three years of a "change in control" of the
Corporation, the Corporation must continue to pay the terminated executive the
salary due under the agreement and continue certain insurance coverages for the
five-year period immediately following his separation from service. These
payments, however, shall be reduced by any amount which, under the Internal
Revenue Code, is deemed an "excess parachute payment."
A "change in control" of the Corporation is defined as a "change in
control" which must be reported to the Securities and Exchange Commission or the
Board of Governors of the Federal Reserve System, or if (1) any person or entity
acquires or controls 30% or more of the Corporation's outstanding voting
securities; or (2) during any period of two consecutive years, the persons who
were directors of the Corporation immediately prior to such period cease to
constitute a majority of the Board of Directors of the Corporation.
If the executive is terminated "for cause" or due to death or retirement
following a "change in control", the Corporation has no obligation to provide
continued benefits to the terminated executive. "Cause" is defined as the
commission of a criminal act against the Corporation, personally profiting from
a transaction to the detriment of the Corporation or gross neglect of the
executive's duties.
The agreements allow an executive to terminate his employment for a "Good
Reason" and receive compensation from the Corporation after a "change in
control" of the Corporation. "Good Reason" occurs under the agreements in the
following circumstances: (1) the Corporation reduces the executive's salary;
(2) the Corporation discontinues his participation in any benefit and/or
incentive program; (3) the Corporation asks him to relocate; or (4) the
Corporation reduces his current duties, authority or status.
8
<PAGE>
The agreements provide that during the one year period immediately
following termination of the executive's employment, the executive will not
render services similar to those being performed for the Corporation to any
financial business in competition with the Corporation and located within a ten
mile radius of the Corporation. This limitation does not apply to financial
businesses located in the central business district of Chicago which is located
six miles from the Corporation.
Effective January 1, 1994, the Corporation and Heritage entered into a
three-year employment agreement with Mr. Fahrendorf and the Corporation and
Uptown entered into a three-year employment agreement with Mr. Griffiths. Under
the terms of these agreements, Messrs. Fahrendorf and Griffiths will each
receive from his respective bank a base salary of $112,000 for 1994, a base
salary of $118,000 for 1995 and a base salary of $130,000 for 1996. Mr.
Fahrendorf's agreement also provides for incentives based on the regulatory
performance of Heritage and the financial performance of Heritage and the
Corporation. Mr. Griffiths' agreement provides for incentives based on the
financial performance of Uptown and the Corporation.
Under the terms of both of these agreements, if the executive's employment
is terminated within three years of a "change in control" of the bank or the
Corporation, the bank must continue to pay the salary due under the agreement
and continue certain insurance coverages for the twelve months immediately
following the separation from service. These payments, however, shall be
reduced by any amount which, under the Internal Revenue Code, is deemed an
"excess parachute payment."
A "change in control" in both agreements is defined as a "change in
control" which must be reported to the Securities and Exchange Commission, the
applicable bank regulatory agency or the Board of Governors of the Federal
Reserve System, or if (1) any person or entity acquires or controls 30% or more
of the Corporation's outstanding voting securities; (2) during any period of two
consecutive years, the persons who were directors of the Corporation immediately
prior to such period cease to constitute a majority of the Board of Directors of
the Corporation; or (3) the bank or the Corporation is sold, merged or
consolidated with another bank holding company or bank.
If the bank executive is terminated "for cause" or due to death or
retirement following a "change in control", neither the bank nor the Corporation
has any obligation to provide continued benefits. "Cause" is defined as the
commission of a criminal act against the bank or the Corporation, personally
profiting from a transaction to the detriment of the bank or the Corporation or
gross neglect of their respective duties.
Each agreement allows the bank executive to terminate his employment for a
"Good Reason" and receive compensation from the bank after a "change in control"
of the bank or the Corporation. "Good Reason" occurs under both agreements in
the following circumstances: (1) the bank reduces the executive's salary; (2)
the bank discontinues the executive's participation in any benefit and/or
incentive program; (3) the bank asks the executive to relocate; or (4) the bank
reduces the executive's current duties, authority or status.
9
<PAGE>
Mr. Fahrendorf's agreement provides that during the one year period
immediately following termination of his employment, Mr. Fahrendorf will not
render services similar to those being performed for Heritage to any financial
business in competition with Heritage and located within the metropolitan
Phoenix area.
Mr. Griffiths' agreement provides that during the one year period
immediately following termination of his employment, Mr. Griffiths will not
render services similar to those being performed for Uptown or the Corporation
to any financial business in competition with Uptown or the Corporation and
located within a ten mile radius from the principal office of Uptown or the
Corporation, except for the central loop area of Chicago.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Directors and executive officers of the Corporation, Uptown and Heritage
and their associates were customers of, and have had transactions with, Uptown
and Heritage in the ordinary course of business during 1995. Comparable
transactions may be expected to take place in the future.
All outstanding loans, commitments to loan, transactions in repurchase
agreements and certificates of deposit and depository relationships in such
ordinary course of business, were on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for transactions
with other persons and, in the opinion of management of the Corporation, did not
involve more than the normal risk of collectibility or present other unfavorable
features. See the Corporation's Annual Report on Form 10-K, Item 8.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 11, 1996, the total number of
shares of Common Stock of the Corporation beneficially owned, and the percent of
such shares so owned, by each person known to the Corporation to be the
beneficial owner of more than 5% of the Common Stock of the Corporation, and all
officers and Directors of the Corporation as a group.
NAME OR NUMBER OF AMOUNT AND NATURE OF PERCENT OF
PERSONS IN GROUP BENEFICIAL OWNERSHIP (1) CLASS
- ----------------- ------------------------ ----------
Roger P. Eklund 67,669 (2)-(7) 30.48%
4753 North Broadway
Chicago, Illinois 60640
Cede & Co. 45,862 (8) 20.66%
c/o Depository Trust Company
P. O. Box 222
Bowling Green Station
New York, New York 10224
10
<PAGE>
Raymond K. Jorgensen 12,550 5.65%
26878 North Owens Road
Mundelein, Illinois 60060
Richard K. Ostrom 36,293 (2)(3)(6) 16.35%
4753 North Broadway (7)(9)(10)
Chicago, Illinois 60640
B. Arthur Russell 19,175 (4)(5) 8.64%
4753 North Broadway
Chicago, Illinois 60640
Estate of Henry J. Wilkens 16,143 (7) 7.27%
947 Williams Street
River Forest, Illinois 60305
All officers and Directors
(10 persons) as a group 81,471 36.70%
- --------------------------------
(1) The information contained in this column is based upon information
furnished to the Corporation by the individuals named above or was
ascertained from an examination of the Corporation's stock records. 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.
The above amounts do not include shares beneficially owned by the adult
children of certain of the persons named above. Beneficial ownership of
such shares is disclaimed.
(2) The above amount includes 12,100 shares held by Uptown's pension plan for
its employees. Voting and investment power with respect to these shares is
shared by Messrs. Edwards, Eklund and Ostrom. Beneficial ownership of
these shares is disclaimed by Mr. Edwards. Messrs. Eklund and Ostrom are
vested participants in the pension plan.
(3) The above amount includes 1,017 shares held by Vanilla III Enterprises.
Voting and investment power with respect to these shares is shared by
Messrs. Edwards, Eklund, Fahrendorf, Hackbarth, Heraty, Kocian, Ostrom and
Robert P. Griffiths, President of Uptown.
(4) The above amount excludes shares held individually by the spouses and adult
children of certain of the named persons as follows: Eklund - 550; Russell
- 100; Kocian - 150; and Hackbarth - 1,550. Beneficial ownership of these
shares is disclaimed.
(5) The above amount includes 19,075 shares held by two trusts for which
Messrs. Eklund and Russell are co-trustees. Voting and investment power
with respect to these shares is shared. Beneficial ownership of these
shares is disclaimed by Mr. Eklund.
(6) The above amount includes 6,815 shares held by a charitable foundation of
which Mr. Eklund is a director and officer. Voting and investment power
with respect to these shares is shared. Beneficial ownership of these
shares is disclaimed. The above amount includes 6,295 shares held by a
charitable foundation of which Messrs. Eklund and Ostrom are directors and
officers. Voting and investment power with respect to these shares is
shared. Beneficial ownership of these shares is disclaimed. The above
amount includes 5,276 shares held by five trusts (exclusive of the trusts
referred to in this Note (6)) for which Mr. Eklund is a trustee or
co-trustee. Voting and investment power with respect to 5,276 of these
shares is shared. Beneficial ownership of 4,247 of these shares is
disclaimed.
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(7) The above amount includes 11,478 shares held by WEO Enterprises, which is a
partnership comprised of Messrs. Eklund, Ostrom and the Estate of Henry J.
Wilkens. Voting and investment power with respect to these shares is
shared.
(8) Cede & Co. is a trust company which is a depository for trustees for
several trusts holding Common Stock of the Corporation, including the
shares held by Uptown's pension plan for its employees.
(9) The above amount includes 600 shares held in joint tenancy with one of
Mr. Ostrom's parents and 177 shares in joint tenancy with Mr. Ostrom's
adult children.
(10) The above amount includes 2,346 shares held by J.R. Enterprises. Messrs.
Heraty and Ostrom are partners in J.R. Enterprises. Voting and investment
power with respect to these shares is shared by Messrs. Hearty and Ostrom.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The Directors, officers and beneficial owners of 10% or more of the equity
securities of the Corporation are required to file certain reports with
Securities and Exchange Commission (the "SEC") pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"). A Form 3 must be
filed with the SEC within 10 days after the event by which the person becomes a
"reporting person" (i.e., director, officer, 10% owner); a Form 4 must be filed
with the SEC on or before the tenth day after the end of the month in which a
change in beneficial ownership has occurred for a reporting person; and a Form 5
must be filed with the SEC on or before the forty-fifth day after the end of the
Corporation's fiscal year for transactions or holdings that should have been
reported but were not reported. For the Corporation's fiscal year ended
December 31, 1995, all Forms 3, 4 and 5 were timely filed with the SEC and the
Corporation knows of no failure to file a required form by any reporting person.
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RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
During 1995, the Corporation engaged Arthur Andersen & Co.,LLP, its
independent public accountants, to audit the Corporation and its subsidiaries
and to provide nonaudit services. The appointment of auditors is approved
annually by the Board of Directors. The decision of the Board of Directors is
based on the recommendation of the Audit Committee. In making its
recommendation, the Audit Committee reviews both the audit scope and estimated
fees for professional services for the coming year. For the year 1996, the
Board of Directors has authorized the engagement of Arthur Andersen & Co., LLP,
as its auditors.
A representative of Arthur Andersen & Co., LLP, will be present at the
Annual Meeting of Stockholders on April 16, 1996, and will be given an
opportunity to make a statement if he or she desires to do so and will be
available to respond to appropriate questions.
STOCKHOLDERS' PROPOSALS FOR 1997 ANNUAL MEETING
Stockholders may submit proposals appropriate for stockholder action at the
1997 Annual Meeting consistent with the regulations of the Securities and
Exchange Commission. All such proposals should be directed to Evy Johansen,
Senior Vice President and Cashier, Uptown National Bank of Chicago, 4753 North
Broadway, Chicago, Illinois 60640, by November 22, 1996.
BY ORDER OF THE
BOARD OF DIRECTORS
RICHARD K. OSTROM, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
ALL STOCKHOLDERS ARE URGED TO SIGN
AND MAIL THEIR PROXIES PROMPTLY
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PROXY FOR SHARES OF COMMON STOCK SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
THE STOCKHOLDERS OF UPBANCORP, INC., TO BE HELD ON
APRIL 16, 1996
The undersigned hereby appoints Alfred E. Hackbarth and James E. Heraty or
either one 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
Stockholders of Upbancorp, Inc., to be held at Uptown National Bank of Chicago,
4753 North Broadway, Chicago, Illinois 60640, on Tuesday, April 16, 1996, at
9:45 A.M., local time, or any adjournment thereof, upon the matters set forth in
the Notice of Annual Meeting and Proxy Statement, receipt of which is hereby
acknowledged, as follows:
1. ELECTION OF DIRECTORS:
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to vote for all nominees
to the contrary below) listed below
/ / / /
MARVIN L. KOCIAN AND RICHARD K. OSTROM
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
- -------------------------------------------------------------------------------
2. In accordance with their discretion, upon all other matters that may
properly come before said Meeting and any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE NOMINEES LISTED UNDER PROPOSAL 1.
Please
---------------------------------
Sign
---------------------------------
Here
---------------------------------
Dated: , 1996
-----------------
NOTE: Please date proxy and sign it exactly as name or names appear above. All
joint owners of shares should sign. State full title when signing as executor,
administrator, trustee, guardian, etc. Please return signed proxy in the
enclosed envelope.
