SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
HBANCORPORATION, INC.
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(Name of Registrant as Specified In Its Charter)
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(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.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
[_] Fee paid previously with preliminary materials:
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[_] 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>
[HBANCORPORATION, INC. LETTERHEAD]
September 25, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of HBancorporation, Inc.
(the "Company"), I cordially invite you to attend the Annual Meeting of
Stockholders. The meeting will be held at 10:00 a.m. on October 27, 1998 at the
main office located at 619 12th Street, Lawrenceville, Illinois.
In addition to the annual stockholder vote on corporate business items, the
meeting will include management's report to you on the Company's 1998 financial
and operating performance.
An important aspect of the meeting process is the stockholder vote on
corporate business items. I urge you to exercise your rights as a stockholder to
vote and participate in this process. This year stockholders are being asked to
vote on the election of two directors and the ratification of the appointment of
independent auditors. The Board of Directors unanimously recommends that you
vote for each of the proposals.
I encourage you to attend the meeting in person. Whether or not you attend
the meeting, I hope that you will read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy card and return it in the postage
prepaid envelope provided. This will save HBancorporation, Inc. additional
expense in soliciting proxies and will ensure that your shares are represented.
Please note that you may vote in person at the meeting even if you have
previously returned the proxy.
Thank you for your attention to this important matter.
Sincerely,
/s/ KEVIN J. KAVANAUGH
KEVIN J. KAVANAUGH
President and Chief Executive Officer
<PAGE>
HBancorporation, Inc.
619 12th Street
Lawrenceville, Illinois 62439
(618) 943-2515
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 27, 1998
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of HBancorporation, Inc. (the "Company") will be held at the
Company's main office located at 619 12th Street, Lawrenceville, Illinois at
10:00 a.m., Lawrenceville, Illinois time, on October 27, 1998.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. The ratification of the appointment of Kemper CPA Group, L.L.C., as
auditors of the Company for the fiscal year ending June 30, 1999;
and such other matters as may properly come before the Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on September 11, 1998
are the stockholders entitled to vote at the Meeting and any adjournments
thereof.
You are requested to complete and sign the enclosed form of proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kevin J. Kavanaugh
Kevin J. Kavanaugh
President and Chief Executive Officer
Lawrenceville, Illinois
September 25, 1998
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
MAILED WITHIN THE UNITED STATES.
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<PAGE>
PROXY STATEMENT
HBancorporation, Inc.
619 12th Street
Lawrenceville, Illinois 62439
(618) 943-2515
ANNUAL MEETING OF STOCKHOLDERS
October 27, 1998
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of HBancorporation, Inc. (the "Company"), the
parent company of Heritage National Bank (the "Bank"), of proxies to be used at
the Annual Meeting of Stockholders of the Company (the "Meeting") which will be
held at the Company's main office located at 619 12th Street, Lawrenceville,
Illinois on October 27, 1998, at 10:00 a.m., Lawrenceville, Illinois time, and
all adjournments of the Meeting. The accompanying Notice of Annual Meeting and
this Proxy Statement are first being mailed to stockholders on or about
September 25, 1998.
At the Meeting, stockholders of the Company are being asked to consider and
vote upon the election of two directors and the ratification of the appointment
of Kemper CPA Group, L.L.C. as auditors for the Company.
Vote Required and Proxy Information
All shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the director nominee and
the proposals set forth in this Proxy Statement. The Company does not know of
any matters, other than as described in the Notice of Annual Meeting, that are
to come before the Meeting. If any other matters are properly presented at the
Meeting for action, the persons named in the enclosed form of proxy and acting
thereunder will have the discretion to vote on such matters in accordance with
their best judgment.
The directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. The appointment of Kemper CPA Group, L.L.C. as
independent auditors requires the affirmative vote of a majority of shares
present in person or represented by proxy at the Meeting and entitled to vote on
the matter. Proxies marked to abstain with respect to a proposal have the same
effect as votes against the proposal. Broker non-votes have no effect on the
vote. One-third of the shares of the Common Stock, present in person or
represented by proxy, shall constitute a quorum for purposes of the Meeting.
Abstentions and broker non-votes are counted for purposes of determining a
quorum.
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy, (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting, or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Secretary,
HBancorporation, Inc., 619 12th Street, Lawrenceville, Illinois 62439.
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on September 11, 1998
will be entitled to one vote for each share of Common Stock then held. As of
that date, the Company had 409,560 shares of Common Stock issued and
outstanding. The following table sets forth information regarding share
ownership of those persons or entities known by management to beneficially own
more than five percent of the Common Stock and all directors and executive
officers of the Company and the Bank as a group.
1
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<TABLE>
<CAPTION>
Shares
Beneficially Percent
Beneficial Owner Owned of Class
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<S> <C> <C>
HBancorporation, Inc. Employee Stock Ownership Plan 39,465(1) 9.64%
619 12th Street
Lawrenceville, Illinois 62439
Kevin J. Kavanaugh 34,634 8.46
President and Chief Executive Officer
619 12th Street
Lawrenceville, Illinois 62439
Santa Monica Partners, L.P. 32,350 7.90
2 Madison Avenue
Larchmont, New York 10538(3)
Directors and executive officers of the Company 94,467(2) 23.07
and the Bank, as a group (6 persons)
</TABLE>
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(1) The amount reported represents shares held by the Employee Stock Ownership
Plan ("ESOP"), 11,248 of which have been allocated to accounts of
participants. First Bankers Trust Company, N.A., Quincy, Illinois, the
trustee of the ESOP, may be deemed to beneficially own the shares held by
the ESOP which have not been allocated to accounts of participants.
Participants in the ESOP are entitled to instruct the trustee as to the
voting of shares allocated to their accounts under the ESOP. Unallocated
shares held in the ESOP's suspense account or allocated shares for which no
voting instructions are received are voted by the trustee in the same
proportion as allocated shares voted by participants.
(2) Amount includes shares held directly, as well as shares held jointly with
family members, shares held in retirement accounts, shares allocated to the
ESOP accounts of the group members, held in a fiduciary capacity or by
certain family members, with respect to which shares the group members may
be deemed to have sole voting and/or investment power.
(3) As reported on Schedule 13D dated May 10, 1997.
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of six members, each
of whom is also a director of the Bank. Directors of the Company are generally
elected to serve for a three-year term or until their respective successors
shall have been elected and shall qualify. Approximately one-third of the
directors are elected annually.
The following table sets forth certain information regarding the
Company's Board of Directors, including their terms of office and the nominees
for election as directors. It is intended that the proxies solicited on behalf
of the Board of Directors (other than proxies in which the vote is withheld as
to the nominees) will be voted at the Meeting for the election of the nominees
identified in the following table. If such nominees are unable to serve, the
shares represented by all such proxies will be voted for the election of such
substitutes as the Board of Directors may recommend. At this time, the Board of
Directors knows of no reason why the nominees might be unable to serve, if
elected. Except as described herein, there are no arrangements or understandings
between any director or nominee and any other person pursuant to which such
director or nominee was selected.
2
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<TABLE>
<CAPTION>
Shares of Common
Term Stock Beneficially Percent
Director to Owned at of
Name Age Position(s) Held Since(1) Expire September 11, 1998(2) Class
---- --- ---------------- -------- ------ --------------------- -----
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
Kevin J. Kavanaugh 44 Chairman of the 1987 2001 34,634 8.46%
Board, President and
Chief Executive
Officer
Mary E. Denison 76 Director 1954 2001 12,200 2.98
DIRECTORS CONTINUING IN OFFICE
John H. White 70 Director 1979 2000 11,720 2.86
L. Patrick Kavanaugh 63 Director 1995 2000 17,200 4.20
Robert R. Ernst 75 Director 1983 1999 7,200 1.76
Henry J. DeBuisseret, Jr. 52 Director 1997 1999 11,513 2.81
</TABLE>
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(1) Includes service as a director of the Bank.
(2) Includes shares held directly, as well as, shares held in retirement
accounts, shares allocated to the ESOP accounts of certain of the named
persons, held by certain members of the named individuals' families, or
held by trusts of which the named individual is a trustee or
substantial beneficiary, with respect to which shares the named
individuals may be deemed to have sole voting and/or investment power.
The business experience of each director and director nominee is set forth
below. All directors have held their present positions for at least the past
five years, except as otherwise indicated.
Kevin J. Kavanaugh. Mr. Kavanaugh is President and Chief Executive Officer
of the Company and the Bank. He has held his positions with the Company since
its formation in 1995 and with the Bank since 1983. Mr. Kavanaugh is the nephew
of L. Patrick Kavanaugh.
Mary E. Denison. Ms. Denison is currently retired. From 1957 to her
retirement in 1983, Ms. Denison served as the Managing Officer of the Bank.
John H. White. Mr. White is currently retired. From 1942 to his retirement,
Mr. White was owner of White Construction Company, Lawrenceville, Illinois.
L. Patrick Kavanaugh. Mr. Kavanaugh is Chairman and Vice President of
Emulsion, Inc., a position he has held since 1951. Mr. Kavanaugh is the uncle of
Kevin J. Kavanaugh.
Robert R. Ernst. Mr. Ernst is currently retired. From 1941 to his
retirement, Mr. Ernst was employed by Marathon Pipeline and Marathon Oil
Company. At the time of his retirement, Mr. Ernst was the general foreman of the
Tri-State Region of Marathon Pipeline.
Henry J. DeBuisseret, Jr. Since 1982, Mr. DeBuisseret has been the owner of
HJD Farms and Fort Knox Incorporated Liquor Stores.
There are no executive officers of the Bank that are not also directors of
the Bank.
3
<PAGE>
Board of Directors' Meetings and Committees
Board and Committee Meetings of the Company. Meetings of the Company's
Board of Directors are generally held on a monthly basis. The Board of Directors
of the Company held 12 meetings during the year ended June 30, 1998 No incumbent
director attended fewer than 75% of the total number of meetings held by the
Board of Directors and by all committees of the Board of Directors on which they
served during the year.
The Board of Directors of the Company has standing Audit of Finance and
Compensation Committees.
The Audit of Finance Committee is composed of all outside Directors to
review the Bank's annual audit report prepared by the Bank's independent
auditors. The review includes a detailed discussion with the auditors before and
after the issuance of the annual audit report, and a recommendation to the full
board concerning any action to be taken with respect to the audit. This
committee held one meeting in fiscal 1998.
The Compensation Committee establishes the Company's compensation policies
and reviews compensation matters. The current members of this Committee are
Directors White, Denison and L.P. Kavanaugh. The committee held one meeting
during fiscal 1998.
The entire Board of Directors acts as the Nominating Committee to select
candidates for membership in the Company's Board.
Board and Committee Meetings of the Bank. The Bank's Board of Directors
meets at least monthly. During the fiscal year ended June 30, 1998, the Board of
Directors held 12 meetings. No director attended fewer than 75% of the total
meetings of the Board of Directors and committees on which such Board member
served during this period.
The Bank has standing Appraisal and Executive, Investment, Advertising,
Purchasing Audit of Finance and Compensation Committees.
The Appraisal and Executive Committee, composed of Directors White, L.P.
Kavanaugh and K. Kavanaugh reviews appraisal policies and procedures, and meets
as needed to act on matters which require attention between meetings of the
Board of Directors and possesses the powers of the full Board of Directors
between meetings of the Board. This committee met 12 times during fiscal 1998.
The Investment Committee, composed of Directors K. Kavanaugh, White, Ernst
and Denison reviews investment policies and procedures. This committee met 12
times during fiscal 1998.
The Advertising Committee, composed of Directors Denison, L.P. Kavanaugh,
K. Kavanaugh and Ernst reviews the Bank's advertising budget. This committee met
12 times during fiscal 1998.
The Purchasing Committee, composed of Directors DeBuisseret, White,
Denison, L.P. Kavanaugh and K. Kavanaugh reviews and approves major purchases by
the Bank. This Committee met 12 times during fiscal 1998.
The Audit of Finance Committee is composed of all outside Directors to
review the Bank's annual audit report prepared by the Bank's independent
auditors. The review includes a detailed discussion with the auditors before and
after the issuance of the annual audit report, and a recommendation to the full
board concerning any action to be taken with respect to the audit. This
committee held one meeting in fiscal 1998.
The Compensation Committee establishes the Bank's compensation policies and
reviews compensation matters. The current members of this Committee are
Directors White, Denison and L.P. Kavanaugh. The committee held one meeting
during fiscal 1998.
The entire Board of Directors acts as the Nominating Committee to select
candidates for membership in the Bank's Board of Directors.
4
<PAGE>
Director Compensation
The Board of Directors of the Company are paid a fee of $300 for attendance
at the Company's Annual Meeting. Compensation of the Bank's directors is
described below.
Each director of the Bank is currently paid a fee of $300 for each regular
or special meeting attended. Directors do not receive compensation for committee
participation.
Executive Compensation
The Company has not paid any compensation to its executive officers since
its formation. The Company does not presently anticipate paying any compensation
to such persons until it becomes actively involved in the operation or
acquisition of businesses other than the Bank.
The following table sets forth information concerning the compensation paid
or accrued by the Bank for services rendered by the Bank's Chief Executive
Officer. No executive officer of the Bank had aggregate compensation (salary
plus bonus) in excess of $100,000 in fiscal 1998.
<TABLE>
<CAPTION>
======================================================================================================================
Summary Compensation Table
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Long-Term Compensation
Annual Compensation Awards
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Other Annual Restricted All Other
Fiscal Salary Bonus Compensation Stock Options/ Compensation
Name and Principal Position Year ($)(1) ($) ($) Award ($) SARs (#) ($)
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<S> <C> <C> <C> <C> <C> <C> <C>
Kevin J. Kavanaugh, President 1998 $88,170 $ 7,023 $ -- $ -- -- $ 3,073(2)
and Chief Executive Officer 1997 $80,191 $15,512 $ -- 78,000(3) 12,500 $ 2,501(4)
1996 $75,924 $ 7,051 $ -- -- -- $14,285(5)
======================================================================================================================
</TABLE>
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(1) Includes $3,600 in fees received as a director in fiscal year 1996, and
$3,900 as a directors in fiscal years 1997 and 1998.
(2) Includes $3,073 of life, health and disability insurance premiums paid by
the Bank.
(3) The value of the 6,000 shares of Common Stock awarded to Mr. K. Kavanaugh
under the Company's Recognition and Retention Plan, based upon the average
of the closing bid and asked price of $13.00 of the Company's common stock
as reported on the OTC Electronic Bulletin Board on the date of grant.
(4) Includes $2,501 of life, health and disability insurance premiums paid by
the Bank.
(5) Includes $2,319 of life, health and disability premiums paid by the Bank
and $11,891 paid by the Bank in discretionary contributions pursuant to the
Bank's Simplified Employee Pension.
5
<PAGE>
The following table provides information as to the value of the options
held by the Company's Chief Executive Officer on June 30, 1998, none of which
have been exercised. No stock options or stock appreciation rights were granted
during fiscal 1998.
<TABLE>
<CAPTION>
==================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
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Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#)(1) FY-End ($)(2)
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Shares
Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Kevin J. Kavanaugh -- $ -- -- 12,500 $ -- $ --
=================================================================================================================
</TABLE>
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(1) Represents options to purchase the Company's common stock awarded to the
Company's Chief Executive Officer. Of the options granted, 12,500 options
vest in five equal annual installments with the first installment vesting
on January 15, 1997, and the remaining installments to vest equally on each
January 15th thereafter.
(2) Represents the aggregate market value (market price of the common stock
less the exercise price of $13.00) of the option granted based upon the
average of the closing bid and the asked price of $12.875 per share of the
common stock on September 11, 1998, as reported on the OTC Electronic
Bulletin Board.
Employment Agreement
The Bank has entered into an employment agreement with President Kavanaugh.
The employment agreement is designed to assist the Bank in maintaining a stable
and competent management team. The continued success of the Bank depends to a
significant degree on the skills and competence of its officers. The employment
agreement provides for an annual base salary in an amount not less than the
employee's current salary and an initial term of three years. The agreement
provides for extensions of one year, in addition to the then-remaining term
under the agreement, on each anniversary of the effective date of the agreement,
subject to a formal performance evaluation performed by disinterested members of
the Board of Directors of the Bank. The agreement provides for termination upon
the employee's death, for cause or in certain events specified by the agreement.
The employment agreement is terminable by the employee upon 90 days' notice to
the Bank.
The employment agreement provides for continued health benefits for the
remaining term of the agreement and payment to the employee of 299% of the
employee's base amount of compensation in the event there is a "change in
control" of the Bank where employment terminates involuntarily in connection
with such change in control or within 12 months thereafter. This termination
payment is subject to reduction in order to avoid certain adverse tax
consequences. For the purposes of the employment agreement, a "change in
control" is defined as including any event which would require the filing of an
application for acquisition of control or notice of change in control pursuant
to federal law or regulation. Such events are generally triggered prior to the
acquisition or control of 10% of the Common Stock. The agreement guarantees
participation in an equitable manner in employee benefits applicable to
executive personnel.
Based on his current salary, if Mr. Kavanaugh's employment had been
terminated as of June 30, 1998, under circumstances entitling him to severance
pay as described above, he would have been entitled to receive a lump sum cash
payment of approximately $286,000.
6
<PAGE>
Certain Transactions
The Bank has followed a policy of granting loans to officers, directors and
employees. Loans to directors and executive officers are made in the ordinary
course of business and on the same terms and conditions as those of comparable
transactions with the general public prevailing at the time, in accordance with
the Bank's underwriting guidelines, and do not involve more than the normal risk
of collectibility or present other unfavorable features.
All loans by the Bank to its directors and executive officers are subject
to OCC regulations restricting loan and other transactions with affiliated
persons of the Bank. Federal law currently requires that all loans to directors
and executive officers be made on terms and conditions comparable to those for
similar transactions with non-affiliates. Loans to all directors, executive
officers, employees and their associates totaled $841,000 at June 30, 1998,
which was 1.2% of the Bank's equity capital at that date. There were no loans
outstanding to any director, executive officer or their affiliates at
preferential rates or terms which in the aggregate exceeded $60,000 during the
three years ended June 30, 1998. All loans to directors and officers were
performing in accordance with their terms at June 30, 1998.
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Kemper CPA Group,
L.L.C., independent accountants, to be the Company's auditors for the fiscal
year ending June 30, 1999. Representatives of Kemper CPA Group, L.L.C., are
expected to attend the Meeting to respond to appropriate questions and to make a
statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KEMPER CPA GROUP, L.L.C., AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1999.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
the next annual meeting of stockholders, any stockholder proposal to take action
at such meeting must be received at the Company's office located at 619 12th
Street, Lawrenceville, Illinois 62439, no later than May 28, 1999. Any such
proposal shall be subject to the requirements of the proxy rules adopted under
the Exchange Act. If a proposal does not meet the above requirements for
inclusion in the Company's proxy materials, but otherwise meets the Company's
eligibility requirements to be presented at the next Annual Meeting of
Stockholders, the persons named in the enclosed form of proxy and acting thereon
will have the discretion to vote on any such proposal in accordance with their
best judgement if the proposal is received at the Company's main office later
than August 29, 1999.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
Lawrenceville, Illinois
September 25, 1998
7
<PAGE>
REVOCABLE PROXY REVOCABLE PROXY
HBancorporation, Inc.
ANNUAL MEETING OF STOCKHOLDERS
October 27, 1998
The undersigned hereby appoints the Board of Directors of HBancorporation,
Inc. (the "Company"), with full powers of substitution, to act as attorneys and
proxies for the undersigned to vote all shares of capital stock of the Company
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
(the "Meeting") to be held at the Elks Lodge located at 519 12th Street,
Lawrenceville, Illinois, on October 27, 1998 at 10:00 a.m. and at any and all
adjournments and postponements thereof.
I. The election as directors of all nominees listed below (except as marked to
the contrary)
|_| FOR |_| VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual nominee, strike a line
in that nominee's name below.
KEVIN J. KAVANAUGH AND MARY E. DENISON
II. The ratification of the appointment of Kemper CPA Group, LLC as auditors of
the Company for the fiscal year ending June 30, 1999.
|_| FOR |_| AGAINST |_| ABSTAIN
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment or
postponement thereof.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS AND THE NOMINEE LISTED ABOVE.
IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD
OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" each of the proposals
and the election of the nominees listed above.
(Continued and to be SIGNED on Reverse Side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and choose to vote at the Meeting or at
any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the stockholder's decision to
terminate this proxy, then the power of such attorneys or proxies shall be
deemed terminated and of no further force and effect. This proxy may also be
revoked by filing a written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of notice of the Meeting, a Proxy Statement and an
Annual Report to Stockholders.
Dated: ____________________, 1998
---------------------------------
Signature of Stockholder
---------------------------------
Signature of Stockholder
Please sign exactly as your
name(s) Appear(s) to the left.
When signing as attorney,
executor, administrator, trustee
or guardian, please give your
full title. If shares are held
jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
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