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CHICAGO, ILLINOIS
SEPTEMBER 24, 1998
UPBANCORP, INC.
4753 NORTH BROADWAY
CHICAGO, ILLINOIS 60640
(773) 878-2000
PROXY STATEMENT AND NOTICE OF
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 20, 1998
To the Stockholders of Upbancorp, Inc.:
A Special Meeting of Stockholders of Upbancorp, Inc. (the "Corporation"),
will be held at Uptown National Bank of Chicago, 4753 North Broadway, Chicago,
Illinois, on Tuesday, October 20, 1998, at 9:45 A.M., for the purpose of
considering and voting upon the following matters:
1. To vote on an amendment to the Corporation's Certificate of
Incorporation increasing the number of authorized shares of Common
Stock from 300,000 to 3,000,000 and reduce the par value of each share
of Common Stock from $10.00 to $1.00 (the "Charter Amendment"); and
2. To transact such other business as may properly be brought before the
Special 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 SPECIAL
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.
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This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of the Corporation (the "Board") of proxies for use at
the Special Meeting of Stockholders of the Corporation to be held October 20,
1998. The record date for determining stock ownership is September 7, 1998 (the
"Record Date"). Only Stockholders of record as of September 7, 1998, will be
entitled to notice of, and to vote at, the Special Meeting. As of the Record
Date, the Corporation had issued and outstanding 218,263 shares of Common Stock
with a par value of $10.00 per share (the "Common Stock"). Each share is
entitled to one vote on all matters to be considered at the Special Meeting.
This Proxy Statement (and the accompanying proxy) is being mailed to all
Stockholders on or about September 24, 1998.
Your proxy is being solicited by the Board. 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 its subsidiaries 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 Special
Meeting as specified on the proxy. If no choice is specified, the shares will
be voted FOR the Charter Amendment. 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 Special 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 Special Meeting and voting in person.
Votes cast by proxy or in person at the Special Meeting will be tabulated
by the Judges of Election appointed by the Board of Directors for the Special
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 voting against the
approval of the Charter Amendment and as unvoted for all other purposes. 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.
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CHARTER AMENDMENT
GENERAL
The Board has approved the Charter Amendment which, if approved by the
Corporation's Stockholders, would increase the number of authorized shares of
the Common Stock from 300,000 to 3,000,000 and reduce the par value of each
share of Common Stock from $10.00 to $1.00.
Following the approval of the Charter Amendment, the Corporation will
declare a four-to-one stock split on all of its issued shares of Common Stock
(the "Stock Split"). The record date for the Stock Split will be October 20,
1998, and the Stock Split will be effective on October 31, 1998. A Stockholder
who owns 100 shares of Common Stock prior to the Stock Split will own 400 shares
of Common Stock following the Stock Split. Certificates representing the new
shares will be mailed to Stockholders in November of 1998.
INCREASE IN AUTHORIZED STOCK; CHANGE IN PAR VALUE
The Corporation is currently authorized to issue 300,000 shares of Common
Stock. As of the Record Date, 218,263 shares of Common Stock were issued and
outstanding and 31,737 shares were held in the treasury of the Corporation.
Following the approval of the Charter Amendment and the completion of the Stock
Split, 873,052 shares of the Common Stock will be issued and outstanding and
126,948 shares will be held in the treasury of the Corporation. An increase in
the number of authorized shares of the Common Stock of the Corporation is,
therefore, necessary so that the Corporation will have a sufficient number of
shares available for issuance upon the consummation of the Stock Split.
The Board also believes that the authorization of additional shares of the
Common Stock is advisable to provide the Corporation with the flexibility to
take advantage of opportunities to issue such stock in order to obtain capital,
as consideration for possible acquisitions, to grant stock options to employees
or to establish the stock programs for the benefit of employees and directors,
or for other purposes (including, without limitation, the issuance of additional
shares of the Common Stock through additional stock splits and stock dividends
in appropriate circumstances). There are, at present, no plans, understandings,
agreements or arrangements concerning the issuance of additional shares of the
Common Stock except for the shares to be issued pursuant to the Stock Split.
Uncommitted authorized but unissued shares of the Common Stock may be
issued from time to time to such persons and for such consideration as the Board
may determine, and holders of the then-outstanding shares of the Common Stock
may or may not be given the opportunity to vote with respect to such issuance,
depending upon the nature of any such transactions, applicable law, the rules
and regulations of any stock market on which the Common Stock may then be traded
and the judgment of the Board regarding the submission of such issuance to a
vote of the Stockholders. The Stockholders have no preemptive rights to
subscribe for newly issued shares.
Moreover, it is possible that additional shares of the Common Stock would
be issued for the purpose of making an acquisition by an unwanted suitor of a
controlling interest in the Corporation more difficult, time-consuming or costly
or to otherwise discourage an attempt to acquire control of the Corporation.
Under such circumstances the availability of authorized and unissued shares of
the Common Stock may make it more difficult for the Stockholders to obtain a
premium for their
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shares. Such authorized and unissued shares could be used to create voting
or other impediments or to frustrate a person seeking to obtain control of
the Corporation by means of a merger, tender offer, proxy contest or other
means. Such shares could be privately placed with purchasers who might
cooperate with the Board in opposing such an attempt by a third party to gain
control of the Corporation or could also be used to dilute ownership of a
person or entity seeking to obtain control of the Corporation. Although the
Corporation does not currently contemplate taking such action, shares of the
Common Stock could be issued for the purposes and effects described above and
the Board reserves its rights (if consistent with its fiduciary
responsibilities) to issue such stock for such purposes.
At the present time, the par value of a share of Common Stock is $10.00.
Following the approval of the Charter Amendment, the par value of a share of
Common Stock will be $1.00. Franchise taxes are payable to the State of
Illinois under a method that following the Stock Split would result in an
increase in the Corporation's franchise taxes if the par value remained at
$10.00 per share. For this reason, the Board of Directors has recommended that
the par value be reduced to a $1.00 per share. This reduction will not reduce
the ownership interests of Stockholders nor would it have any other impact on
the rights and privileges of the holders of the Common Stock.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is required for the approval of the Charter Amendment.
Abstentions and non-broker votes will have the same effect as votes against the
Charter Amendment.
RECOMMENDATION OF THE BOARD
Because the Corporation does not have sufficient uncommitted authorized but
unissued shares of the Common Stock to consummate the Stock Split without
approval of the Charter Amendment, approval of the Charter Amendment is required
for, and a condition to, consummation of the Stock Split, which the Board
believes is in the best interests of the Corporation and its Stockholders. In
addition, as described above, the Board believes that the proposed increase in
the number of authorized shares of Common Stock will provide flexibility needed
to meet corporate objectives and is in the best interests of the Corporation and
its Stockholders. AS A CONSEQUENCE, THE BOARD RECOMMENDS THAT THE STOCKHOLDERS
OF THE CORPORATION VOTE FOR THE APPROVAL OF THE CHARTER AMENDMENT.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, 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 by
each Director of the Corporation, certain officers of the Corporation, and by
all officers and Directors of the Corporation as a group.
<TABLE>
<CAPTION>
NAME OR NUMBER OF AMOUNT AND NATURE OF PERCENT OF
PERSONS IN GROUP BENEFICIAL OWNERSHIP (1) CLASS
- ----------------- ------------------------ ----------
<S> <C> <C>
Cede & Co. 55,599 (2) 25.47%
c/o Depository Trust Company
Estate of Roger P. Eklund 12,422 (3) 5.69%
Richard K. Ostrom 32,978 (4)-(10) 15.11%
B. Arthur Russell 19,175 (10)(12) 8.79%
James E. Heraty 16,866 (4)(6)(8)(10) 7.73%
Robert P. Griffiths 14,263 (4)(6)(10) 6.54%
Stephen W. Edwards 13,858 (4)(6)(10) 6.35%
Raymond K. Jorgensen 12,550 (13) 5.75%
Delbert R. Ellis 908 (4) .42%
Marvin L. Kocian 3,705 (4)(11) 1.70%
Alfred E. Hackbarth, Jr. 8,732 (4)(5)(11) 4.00%
John E. Fahrendorf, Jr. 1,383 (4) .63%
All officers and Directors
(13 persons) as a group 69,269 31.74%
</TABLE>
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(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.
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(2) Cede & Co. is a trust company which is a depository for trustees for
several trusts holding Common Stock, including the shares held by the
Corporation's pension plan for its employees. The mailing address for Cede
& Co. is 55 Water Street, New York, N.Y. 10041.
(3) The mailing address for the Estate of Roger P. Eklund is 4753 North
Broadway, Chicago, Illinois 60640. On October 19, 1997, Roger P. Eklund
and Richard K. Ostrom entered into a Right of First Refusal Agreement.
This Agreement granted Mr. Ostrom an option to purchase the shares of
Common Stock owned by Mr. Eklund, or his estate, in the event Mr. Eklund,
or his estate, desired to sell such shares for value. The sale price of
the shares to Mr. Ostrom under the option is the amount accepted by Mr.
Eklund, or his estate, pursuant to a bona fide third-party offer. In the
event the bona fide offer consists of non-cash consideration, the Board
shall value the non-cash portion. Such determination is binding upon the
parties under the terms of the Agreement.
(4) The above amount includes 408 shares held by Vanilla III Enterprises.
Voting and investment power with respect to these shares is shared by
Messrs. Edwards, Ellis, Fahrendorf, Griffiths, Hackbarth, Heraty, Kocian
and Ostrom.
(5) The above amount includes 6,295 shares held by a charitable foundation of
which Messrs. Hackbarth and Ostrom are directors and officers. Voting and
investment power with respect to these shares is shared. Beneficial
ownership of these shares is disclaimed.
(6) The above amount includes 12,100 shares held by the Corporation's pension
plan for its employees. Voting and investment power with respect to these
shares is shared by Messrs. Edwards, Griffiths, Heraty and Ostrom. Messrs.
Griffiths and Ostrom are vested participants in the pension plan.
Beneficial ownership of these shares is disclaimed by Messrs. Edwards and
Heraty.
(7) The above amount includes 7,652 shares held by WEO Enterprises. Mr. Ostrom
is a partner in WEO Enterprises. Voting and investment power with respect
to these shares is shared.
(8) The above amount includes 2,622 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.
(9) The above amount includes 600 shares held in joint tenancy with one of
Mr. Ostrom's parents and 333 shares in joint tenancy with Mr. Ostrom's
adult children.
(10) The mailing address for Messrs. Edwards, Griffiths, Heraty, Ostrom, and
Russell is 4753 North Broadway, Chicago, Illinois, 60640;
(11) The above amount excludes shares held individually by the spouses of
certain of the named persons as follows: Russell - 100; Kocian - 160; and
Hackbarth - 1,700. Beneficial ownership of these shares is disclaimed.
(12) The above amount includes 19,075 shares held by two trusts for which Mr.
Russell is a trustee. Voting and investment power with respect to these
shares is shared. Beneficial ownership of these shares is disclaimed by
Mr. Russell.
(13) The mailing address for Mr. Jorgensen is 26878 North Owens Road, Mundelein,
Illinois 60060.
STOCKHOLDERS' PROPOSALS FOR 1999 ANNUAL MEETING
Stockholders may submit proposals appropriate for stockholder action at the
1999 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 20, 1998.
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BY ORDER OF THE
BOARD OF DIRECTORS
RICHARD K. OSTROM, CHAIRMAN OF THE BOARD,
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 SPECIAL MEETING OF
THE STOCKHOLDERS OF UPBANCORP, INC., TO BE HELD ON
OCTOBER 20, 1998
The undersigned hereby appoints Delbert R. Ellis and Marvin L. Kocian, 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 Special Meeting of
Stockholders of Upbancorp, Inc., to be held at Uptown National Bank of Chicago,
4753 North Broadway, Chicago, Illinois 60640, on Tuesday, October 20, 1998, 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. THE AMENDMENT OF THE CORPORATION'S CERTIFICATE OF INCORPORATION:
To consider and vote upon an amendment to the Corporation's Certificate of
Incorporation increasing the number of authorized shares of Common Stock from
300,000 to 3,000,000 and reduce the par value of a share of Common Stock from
$10.00 to $1.00:
FOR: AGAINST: ABSTAIN:
/ / / / / /
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 PROPOSAL 1.
Please _________________________________
Sign ___________________________________
Here __________________________________
Dated: _________________, 1998
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.
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PROXY FOR SHARES OF COMMON STOCK SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS FOR THE SPECIAL MEETING OF
THE STOCKHOLDERS OF UPBANCORP, INC., TO BE HELD ON
OCTOBER 20, 1998
The undersigned hereby appoints Delbert R. Ellis and Marvin L. Kocian, 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 Special Meeting of
Stockholders of Upbancorp, Inc., to be held at Uptown National Bank of Chicago,
4753 North Broadway, Chicago, Illinois 60640, on Tuesday, October 20, 1998, at
9:45 A.M., local time, or any adjournment thereof, upon the matters set forth in
the Notice of Special Meeting and Proxy Statement, receipt of which is hereby
acknowledged, as follows:
1. THE AMENDMENT OF THE CORPORATION'S CERTIFICATE OF INCORPORATION:
To consider and vote upon an amendment to the Corporation's Certificate of
Incorporation increasing the number of authorized shares of Common Stock from
300,000 to 3,000,000 and reduce the par value of a share of Common Stock from
$10.00 to $1.00:
FOR: / / AGAINST: / / ABSTAIN: / /
2. In accordance with their discretion, upon all other matters that may
properly come before said Meeting and any adjournment thereof.
(CONTINUED ON REVERSE SIDE)
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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 PROPOSAL 1.
Please ________________________
Sign __________________________
Here __________________________
Dated ___________________, 1998
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.
