SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
UNIONBANCORP, INC.
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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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: NA
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(2) Aggregate number of securities to which transaction applies: NA
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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): NA
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[ ] 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: NA
(2) Form, Schedule or Registration Statement No.: NA
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(4) Date Filed: NA
Notes:
ub [LOGO OF UNION BANCORP]
UNION BANCORP, INC.
March 15, 2002
Dear Fellow Stockholder:
You are cordially invited to attend UnionBancorp, Inc.'s annual meeting
of stockholders at the Starved Rock Lodge and Conference Center located in
Utica, Illinois, on Tuesday, April 23, 2002, at 10:00 a.m. At the meeting, we
will report to you on the progress of UnionBancorp and respond to your comments
or questions. Moreover, several members of our management team will be available
to speak with you individually about our record of achievement and plans for the
future.
Your board of directors has nominated three persons to serve as Class I
directors on the board of directors. Their names appear in the enclosed proxy
material. All three of the nominees are incumbent directors. We recommend that
you vote your shares for the nominees.
We encourage you to attend the meeting in person. Because it is
important that your shares be represented at the meeting, please sign and return
the enclosed proxy, whether or not you plan to attend the meeting.
We look forward with pleasure to seeing and visiting with you at the
meeting.
With best personal wishes,
/s/ CHARLES J. GRAKO
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Charles J. Grako
President and
Chief Executive Officer
321 West Main Street o Ottawa Illinois o (815) 431-2720
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ub
UNIONBANCORP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 2002
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TO HOLDERS OF COMMON STOCK:
The annual meeting of stockholders of UnionBancorp, Inc., a Delaware
corporation, will be held at the Starved Rock Lodge and Conference Center
located in Utica, Illinois, on Tuesday, April 23, 2002, at 10:00 a.m., local
time, for the purpose of considering and voting upon the following matters:
1. to elect three Class I directors.
2. to transact such other business as may properly come before
the meeting or any adjournments or postponements of the
meeting.
We are not aware of any other business to come before the meeting. Only
those stockholders of record as of the close of business on March 1, 2002, shall
be entitled to notice of the meeting and to vote at the meeting and any
adjournments or postponements of the meeting. In the event there are not
sufficient votes for a quorum or to approve or ratify any of the foregoing
proposals at the time of the meeting, the meeting may be adjourned or postponed
in order to permit our further solicitation of proxies.
By Order of the Board of Directors
/s/ CHARLES J. GRAKO
------------------------------
Charles J. Grako
President and
Chief Executive Officer
Ottawa, Illinois
March 15, 2002
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE
AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON. IT IS HOPED THAT YOU WILL BE ABLE TO ATTEND THE MEETING, AND IF YOU DO
YOU MAY VOTE YOUR STOCK IN PERSON IF YOU WISH. THE PROXY MAY BE REVOKED AT ANY
TIME PRIOR TO ITS EXERCISE.
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ub
UNIONBANCORP, INC.
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
by the board of directors of UnionBancorp, Inc. of proxies to be voted at the
annual meeting of stockholders to be held at the Starved Rock Lodge and
Conference Center located in Utica, Illinois, on Tuesday, April 23, 2002, at
10:00 a.m., local time, or at any adjournments or postponements of the meeting.
UnionBancorp, a Delaware corporation, is a regional financial services
company based in Ottawa, Illinois which has four bank subsidiaries. Our banks
serve communities throughout Central and Northern Illinois through twenty-five
locations. We also own the following non-bank subsidiary:
o UnionFinancial Services & Trust Company, an
insurance/brokerage agency and trust company which also serves
as an owner and lessor of banking offices to several of our
banks.
The proxy statement and the accompanying notice of meeting and proxy
are first being mailed to holders of shares of our common stock, par value $1.00
per share, on or about March 15, 2002. Our 2001 annual report, including
financial statements, is enclosed.
Voting Rights and Proxy Information
The board of directors has fixed the close of business on March 1,
2002, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the annual meeting. Our transfer books will not be
closed between the record date and the date of the annual meeting. The board of
directors hopes that all stockholders can be represented at the annual meeting.
Whether or not you expect to be present, please sign and return your proxy in
the enclosed self-addressed, stamped envelope. Stockholders giving proxies
retain the right to revoke them at any time before they are voted by written
notice of revocation to the Secretary of UnionBancorp, and stockholders present
at the meeting may revoke their proxy and vote in person.
On March 1, 2002, we had 3,979,056 issued and outstanding shares of
common stock. For the election of directors, and for all other matters to be
voted upon at the annual meeting, each share of common stock is entitled to one
vote. A majority of the outstanding shares of the common stock must be present
in person or represented by proxy to constitute a quorum for purposes of the
annual meeting. Abstentions and broker non-votes will be counted for purposes of
determining a quorum. Directors will be elected by a plurality of the votes
present in person or represented by proxy at the meeting and entitled to vote.
In all other matters, the affirmative vote of the majority of shares of common
stock present in person or represented by proxy at the annual meeting and
entitled to vote on the subject matter shall be required to constitute
stockholder approval. Abstentions will be treated as votes against a proposal
and broker non-votes will have no effect on the vote.
1.
ELECTION OF DIRECTORS
We have a staggered board of directors, divided into three classes. One
class is elected annually to serve for three years. At the annual meeting, our
stockholders will be entitled to elect three Class I directors for terms of
three years or until their successors are elected and qualified. Each of the
nominees for election as Class I directors are incumbent directors.
The proxy provides instructions for voting for all director nominees or
for withholding authority to vote for one or more director nominees. Unless
instructed to the contrary, the persons acting under the proxy which we are
soliciting will vote for the nominees listed below. In the event, however, that
any nominee shall be unable to serve, which is not now contemplated, the proxy
holders reserve the right to vote at the annual meeting for a substitute
nominee.
Information About Directors and Nominees
Set forth below is information, current as of March 1, 2002, concerning
the nominees for election and for the other directors whose terms of office will
continue after the meeting, including the age, year first elected a director and
business experience of each during the previous five years. Unless otherwise
indicated, each person has held the positions shown for at least five years. The
three nominees, if elected at the annual meeting, will serve as Class I
directors for three-year terms, expiring in 2005. We recommend that you vote
your shares FOR all three nominees.
NOMINEES
Name Position with UnionBancorp
(Age) Director Since and Principal Occupation
----- -------------- ------------------------
Class I
(term expires 2005)
Richard J. Berry 1985 Director of UnionBancorp; Attorney,
(Age 49) Myers, Berry, O'Conor & Kuzma, Ltd.
Walter E. Breipohl 1993 Director of UnionBancorp; Owner,
(Age 48) Kaszynski/Breipohl Realtors/
Developers
John A. Trainor 1985 Chairman of the Board (since 2000)
(Age 71) and Director of UnionBancorp; Owner,
Trainor Grain & Supply Company, Inc.
CONTINUING DIRECTORS
Class II
(term expires 2003)
L. Paul Broadus 1986 Director of UnionBancorp; Founder and
(Age 67) President, Broadus Oil Company
Robert J. Doty 1996 Director of UnionBancorp; Chairman of
(Age 74) Prairie Bancorp, Inc. (1989-1996);
Consultant, Farm Management
2.
Name Position with UnionBancorp
(Age) Director Since and Principal Occupation
----- -------------- ------------------------
Jimmie D. Lansford 1988 Director and Executive Vice
(Age 62) President, Organizational Development
and Planning (since 1996) of
UnionBancorp; Chief Executive
Officer, St. Mary's Hospital
(1987-1996)
Class III
(term expires 2004)
Charles J. Grako 2000 Director, President (since 1999) and
(Age 48) Chief Executive Officer (since 2000)
of UnionBancorp; Chief Financial
Officer of UnionBancorp (1990-2000)
Dennis J. McDonnell 2000 Director of UnionBancorp; Chairman of
(Age 59) McDonnell Investment Management,
(2001-present); Director of Global
Decisions Group; President and Chief
Operating Officer of Van Kampen
Investment Advisory Corporation
(1983-2000)
John A. Shinkle 1997 Director of UnionBancorp; Executive
(Age 50) Vice President and Director, Synovus
Securities, Inc. (1986-present)
Scott C. Sullivan 1996 Director of UnionBancorp; Attorney,
(Age 47) Williams & McCarthy
All of our directors will hold office for the terms indicated, or until
their respective successors are duly elected and qualified. There are no
arrangements or understandings between UnionBancorp and any person pursuant to
which any director has been selected. No member of the board of directors is
related to any other member of the board of directors.
Board Committees and Meetings
Our board of directors generally meets on a quarterly basis. The board
of directors met four times during 2001. During 2001, all directors attended at
least 75 percent of the meetings of the board and the committees on which they
served. Our board of directors has standing executive, audit and compensation
committees.
The executive committee is comprised of Messrs. Berry, Broadus, Grako,
Sullivan and Trainor. The executive committee meets on an as needed basis and
exercises the power of the board of directors between board meetings. This
committee met four times in 2001.
The audit committee recommends independent auditors to the board,
reviews the results of the auditors' services, reviews with management and the
internal auditor the systems of internal control and internal audit reports and
assures that our books and records are kept in accordance with applicable
accounting principles and standards. The audit committee charter, which sets
forth the duties and responsibilities of the committee, was attached as an
exhibit to the proxy statement for the 2001 Annual Meeting of Stockholders. The
members of the audit committee are Messrs. Reinhardt (Chair), Doty and McGrogan.
During 2001, the audit committee met five times.
3.
The compensation committee establishes compensation and benefits for
the chief executive officer and reviews and recommends compensation and benefits
for the other officers and employees of UnionBancorp and our subsidiaries. The
committee also administers and oversees our stock-based incentive compensation
plans. The members of the compensation committee are Messrs. Shinkle (Chair),
Breipohl, McDonnell and Lansford (ex officio). The compensation committee met
six times in 2001.
Compensation of Directors
Each of our directors was paid a fee of $1,000 for each board meeting
attended and $250 for each committee meeting attended. In addition, each
director was paid an annual retainer of $2,500. Each of our directors may also
receive an annual grant of options to purchase shares of common stock under
UnionBancorp's stock option plan. The stock option plan provides for annual
formula grants to each of our directors of options to purchase shares of common
stock with an exercise price of not less than 75% of the then current market
price of the common stock on the date of the grant. Such options become
exercisable over five years. During 2001, each director was granted options to
purchase 3,750 shares of common stock at a price of $11.75 per share.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of our common stock at March 1, 2002, by each person known
by us to be the beneficial owner of more than 5% of the outstanding common
stock, by each director or nominee, by each executive officer named in the
summary compensation table which can be found later in this proxy statement, and
by all of our directors and executive officers as a group.
Name of Individual or Amount and Nature of Percent
Number of Individuals in Group Beneficial Ownership(1)(2) of Class
------------------------------ -------------------------- --------
5% Stockholders
UnionBank, as Trustee for the 489,917 (3) 12.3%
UnionBancorp, Inc. Employee Stock Ownership
Plan ("ESOP")
201 East Main Street
Streator, Illinois 61364
Wayne W. Whalen 758,997 (4) 18.7%
333 W. Wacker Drive, Suite 2100
Chicago, Illinois 60606
Jeffrey L. Gendell 354,500 (5) 8.9%
37 Park Avenue, 9th Floor
New York, New York 10017
Directors and Nominees
Richard J. Berry 42,179 (6) 1.1%
Walter E. Breipohl 23,879 *
L. Paul Broadus 27,114 (7) *
Robert J. Doty 6,534 *
4.
Name of Individual or Amount and Nature of Percent
Number of Individuals in Group Beneficial Ownership(1)(2) of Class
------------------------------ -------------------------- --------
Charles J. Grako 42,438 (8) 1.1%
Jimmie D. Lansford 30,889 (9) *
Dennis J. McDonnell 586,766 (10) 14.4%
Lawrence J. McGrogan 32,203 (11) *
I.J. Reinhardt, Jr. 19,200 (12) *
John A. Shinkle 6,729 (13) *
Scott C. Sullivan 13,505 (14) *
John A. Trainor 35,199 (15) *
Other Named Executive Officers
Gaylon E. Martin -- *
All directors and executive officers as a group 873,055 21.5%
(13 persons)
-----------------------
* Indicates less than one percent.
(1) The information contained in this column is based upon information
furnished to us by the persons named above and the members of the
designated group. Amounts reported include shares held directly as well
as shares which are held in retirement accounts and shares held by
members of the named individuals' families or held by trusts of which
the named individual is a trustee or substantial beneficiary, with
respect to which shares the respective individual may be deemed to have
sole or shared voting and/or investment power. The nature of beneficial
ownership for shares shown in this column is sole voting and investment
power, except as set forth in the footnotes below. Inclusion of shares
shall not constitute an admission of beneficial ownership or voting and
investment power over included shares.
(2) Amounts shown include shares presently obtainable through the exercise
of options to purchase shares of common stock granted under
UnionBancorp's stock option plan as follows: Mr. Berry - 12,200 shares;
Mr. Breipohl - 12,200 shares; Mr. Broadus - 11,450 shares; Mr. Doty -
3,550 shares; Mr. Grako - 14,421 shares; Mr. Lansford - 16,867 shares;
Mr. McDonnell - 750 shares; Mr. McGrogan - 12,200 shares; Mr. Reinhardt
- 10,200 shares; Mr. Shinkle - 3,550 shares; Mr. Sullivan - 3,550
shares and Mr. Trainor - 11,700 shares. Option holders have the sole
power to exercise their respective options and would also be entitled
to exercise sole voting and investment power over the shares issued
upon the exercise of such options.
(3) All of the shares held by the employee stock ownership plan are
allocated to particular participants' accounts and over which shares
the employee stock ownership plan trustee has shared voting and no
investment power over such shares.
(4) As reported to the Securities and Exchange Commission on a Schedule
13D/A dated January 14, 2002. In addition, Mr. Whalen's wife, Paula
Wolff, and WPW Associates, L.P., a family limited partnership, were
also named as parties sharing voting and investment power over such
shares. The amount above also includes approximately 86,016 shares
which are issuable upon the conversion of 1,381 shares of UnionBancorp,
Inc. convertible preferred stock held by Mr. Whalen.
(5) As reported to the Securities and Exchange Commission on a Schedule 13G
dated February 5, 2002. Includes 18,200 shares allocated to Tontine
Partners, L.P., 308,500 shares allocated to Tontine Financial Partners,
L.P. and 27,800 shares allocated to Tontine Overseas Associates,
L.L.C., over which Mr. Gendell has shared voting and investment power
over such shares.
(6) Includes 3,000 shares held individually by Mr. Berry's spouse and
11,100 shares held in trusts for which Mr. Berry is a co-trustee, over
which shares Mr. Berry has shared voting and investment power.
(7) Includes 7,380 shares held by Mr. Broadus jointly with his spouse, over
which shares Mr. Broadus has shared voting and investment power.
(8) Includes 2,000 shares held by Mr. Grako jointly with his spouse, over
which shares Mr. Grako has shared voting and investment power. Also
includes 22,028 shares allocated to Mr. Grako under the employee stock
ownership plan.
5.
(9) Includes 2,000 shares held by Mr. Lansford jointly with his spouse,
over which shares Mr. Lansford has shared voting and investment power.
Also includes 1,943 shares allocated to Mr. Lansford under the employee
stock ownership plan.
(10) Includes shares held jointly by Mr. McDonnell and his wife over which
voting and dispositive power is shared, plus shares held by the Dennis
J. McDonnell Trust, for which Mr. McDonnell serves as trustee. The
amount above also includes approximately 86,016 shares which are
issuable upon the conversion of 1,381 shares of UnionBancorp, Inc.
convertible preferred stock held by Mr. McDonnell. Mr. McDonnell's
address is 815 Jackson Avenue, River Forest, Illinois 60305.
(11) Includes 11,040 shares held by Mr. McGrogan jointly with his spouse,
over which shares Mr. McGrogan has shared voting and investment power,
and also includes 1,884 shares owned solely by his spouse, over which
shares Mr. McGrogan has no voting or investment power. Mr. McGrogan
will retire as a director effective at the conclusion of his current
term of office expiring in 2002.
(12) Includes 6,000 shares held by Mr. Reinhardt jointly with his spouse,
over which shares Mr. Reinhardt has shared voting and investment power.
(13) Includes 400 shares held by members of Mr. Shinkle's family. Mr.
Shinkle has no voting or investment power over 100 of such shares and
has shared voting and investment power over the remaining 300 shares.
Mr. Shinkle also has voting and investment power over 700 shares held
in an investment club.
(14) Includes 1,660 shares held by Mr. Sullivan jointly with his spouse and
1,000 shares held by members of Mr. Sullivan's family. Mr. Sullivan has
shared voting and investment power over the 2,660 shares.
(15) Includes 4,670 shares held solely by Mr. Trainor's spouse, over which
shares Mr. Trainor has no voting or investment power.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires that our
executive officers, directors and persons who own more than 10% of our common
stock file reports of ownership and changes in ownership with the Securities and
Exchange Commission. They are also required to furnish us with copies of all
Section 16(a) forms they file. Based solely on our review of the copies of such
forms, and, if appropriate, representations made to us by any reporting person
concerning whether a Form 5 was required to be filed for 2001, we are not aware
that any of our directors, executive officers or 10% stockholders failed to
comply with the filing requirements of Section 16(a) during 2001.
6.
EXECUTIVE COMPENSATION
Cash Compensation
The following table shows the compensation earned for the last three
fiscal years by the chief executive officer and our executive officers whose
2001 salary and bonus exceeded $100,000:
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SUMMARY COMPENSATION TABLE
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Long Term
Compensation
Annual Compensation Awards
-------------------------------------------
(a) (b) (c) (d) (g) (i)
Securities
Underlying All Other
Name and Options/SARs Compensation
Principal Position Year Salary($) Bonus($) (#)(1) ($)
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Charles J. Grako(2) 2001 $ 175,000 $ -- 5,707 $ 25,511(2)
President and Chief 2000 162,648 -- -- 26,234(2)
Executive Officer 1999 129,170 -- 4,600 19,088(2)
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Jimmie D. Lansford(3) 2001 $ 110,000 $ -- 3,587 $ 22,310(3)
Executive Vice President 2000 102,954 -- -- 19,377(3)
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Gaylon E. Martin(4) 2001 $ 119,218 $ -- -- $ 4,969(4)
Senior Vice President
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(1) All options vest at a rate of 20% per year on or about each anniversary
of the date of grant.
(2) Mr. Grako was named chief executive officer on June 22, 2000.
Represents the dollar value of allocations under our employee stock
ownership plan in the amounts of $6,657 for 2001, $5,953 for 2000 and
$7,946 for 1999, premiums for split dollar life insurance of $404 for
2001, $678 for 2000 and $2,034 for 1999, fees for services provided to
our board of directors and director fees for serving on the boards of
various subsidiaries of $15,050 for 2001, $16,350 for 2000, $6,525 for
1999. In addition, it includes $3,400 of 401(k) matching contributions
in 2001, $3,253 for 2000 and $2,583 for 1999.
(3) We were not required to disclose Mr. Lansford's salary information with
respect to his compensation prior to 2000. Represents the dollar value
of allocations under our employee stock ownership plan in the amount of
$4,308 for 2001 and $3,768 for 2000, premiums for split dollar life
insurance of $802 for 2001, fees for services provided to our board of
directors and director fees for serving on the boards of various
subsidiaries of $15,000 for 2001 and $13,550 for 2000, and $2,200 of
401(k) matching contributions in 2001 and $2,059 for 2000.
(4) We were not required to disclose Mr. Martin's salary information in the
past. Accordingly, no information is given with respect to his
compensation in 1999 and 2000. Represents the dollar value of fees for
services provided to our board of directors and director fees for
serving on the board of one subsidiary of $4,400 for 2001 and $569 of
401(k) matching contributions in 2001.
Stock Option Information
The following table sets forth certain information concerning the
number and value of stock options granted in the last fiscal year to the
individuals named above in the summary compensation table:
7.
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OPTION GRANTS IN LAST FISCAL YEAR
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Individual Grants
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Potential realizable value
at assumed annual rates of
stock price appreciation
for option term
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(a) (b) (c) (d) (e) (f) (g)
% of Total
Options
Options Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#)(1) Fiscal Year ($/Sh) Date 5%($) 10%($)
-------------------------------------------------------------------------------------------------------------
Charles J. Grako 5,707 28% $ 11.75 02/15/11 $ 42,172 $ 106,872
-------------------------------------------------------------------------------------------------------------
Jimmie D. Lansford 3,587 18% $ 11.75 02/15/11 $ 26,506 $ 67,172
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(1) All options vest at a rate of 20% per year on or about each anniversary
of the date of grant.
8.
The following table sets forth certain information concerning the
exercisable and nonexercisable stock options at December 31, 2001 held by the
individuals named in the summary compensation table.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTIONS VALUES
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Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired on Options at FY-End In-the-Money Options at
Name Exercise Value Realized (#)(d) FY-End ($)(e)
(#)(a) (#)(b) ($)(c) Exercisable Unexercisable Exercisable Unexercisable
---------------------------------------------------------------------------------------------------------------------
Charles J. Grako -- -- 11,280 10,407 $ 35,284 $ 12,540
---------------------------------------------------------------------------------------------------------------------
Jimmie D. Lansford -- -- 13,550 9,287 $ 57,117 $ 13,073
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Employment Agreements and Other Arrangements
We are not a party to any employment agreements with our executive
officers, except for the employment agreement entered into on August 22, 2001
with Paul R. Tingley, President of UnionFinancial Services & Trust Company. The
employment agreement with Mr. Tingley provides that beginning January 2002,
UnionBancorp, Inc. will pay Mr. Tingley a minimum of $10,000 monthly. Mr.
Tingley's total compensation, including bonuses, is valued at $150,000 annually.
Mr. Tingley is entitled to other customary employee benefits provided by
UnionBancorp. Mr. Tingley's employment agreement terminates on August 22nd,
2004.
Compensation Committee Interlocks and Insider Participation
During 2001, the members of the compensation committee were Messrs.
Shinkle, Breipohl, McDonnell and Lansford (ex officio). None of these
individuals was an officer or employee of UnionBancorp or any of our
subsidiaries during 2001, and none of these individuals is a former officer or
employee of UnionBancorp or any of our subsidiaries, except for Mr. Lansford who
is Executive Vice President, Organizational Development and Planning. Mr.
Lansford did not participate in any decisions pertaining to his compensation.
Board Compensation Committee Report on Executive Compensation
The incorporation by reference of this proxy statement into any
document filed with the Securities and Exchange Commission by UnionBancorp shall
not be deemed to include the following report unless the report is specifically
stated to be incorporated by reference into such document.
The compensation committee of our board of directors is comprised of
three outside directors and is responsible for recommendations to the board of
directors for compensation of executive officers of our subsidiaries and
UnionBancorp. In determining compensation, the following factors are generally
taken into consideration:
o the performance of the executive officers in achieving our
short and long-term goals;
o payment of compensation commensurate with the ability and
expertise of the executive officers; and
o payment of compensation that is competitive with similar
companies.
9.
The committee considers the foregoing factors, as well as others, in determining
compensation. There is no assigned weight given to any of these factors.
Additionally, the compensation committee considers various benefits,
such as our employee stock ownership plan, 401(k) plan and the stock option
plan, together with perquisites in determining compensation. The committee
believes that the benefits provided through the stock-based plans more closely
tie the compensation of the officers to the interests of the stockholders and
provide significant additional performance incentives for the officers which
directly benefit the stockholders through an increase in the stock value.
Annually, the compensation committee evaluates four primary areas of
performance in determining the chief executive officer's level of compensation.
These areas are:
o long-range strategic planning and implementation;
o our financial performance;
o our compliance with regulatory requirements and relations with
regulatory agencies; and
o the individual's effectiveness of managing relationships with
stockholders and the board of directors.
When evaluating our financial performance, the committee considers
profitability, asset growth and risk management. The primary evaluation criteria
are considered to be essential to our long-term viability and are given equal
weight in the evaluation. Finally, the committee reviewed compensation packages
of peer institutions, as well as compensation surveys provided by independent
third parties, to ensure that the chief executive officer's compensation is
competitive and commensurate with his level of performance.
Compensation Committee:
John A. Shinkle (Chair)
Walter E. Breipohl
Dennis J. McDonnell
Jimmie D. Lansford (ex officio)
10.
Stockholder Return Performance Presentation
The incorporation by reference of this proxy statement into any
document filed with the Securities and Exchange Commission by UnionBancorp shall
not be deemed to include the following performance graph and related information
unless such graph and related information are specifically stated to be
incorporated by reference into such document.
The following graph shows a comparison of cumulative total returns for
UnionBancorp, the Nasdaq Stock Market (US Companies) and an index of SNL Midwest
Bank Stocks for the five-year period beginning January 1, 1997 and ending on
December 31, 2001. The graph was prepared at our request by SNL Securities,
Charlottesville, Virginia.
COMPARISON OF CUMULATIVE TOTAL RETURN
(ASSUMES $100 INVESTED ON JANUARY 1, 1997)
--------------------------------------------------------------------------------
Total Return Performance
[GRAPHIC OMITTED]
--------------------------------------------------------------------------------
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Period Ending
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Index 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
--------------------------------------------------------------------------------------------------
UnionBancorp, Inc. 100.00 152.33 117.64 101.24 73.32 102.76
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NASDAQ - Total US * 100.00 122.48 172.68 320.89 193.01 153.15
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SNL Midwest Bank Index 100.00 162.14 172.46 135.50 164.09 167.69
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*Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 2002.
Used with permission. All rights reserved. crsp.com.
11.
TRANSACTIONS WITH MANAGEMENT
Several of our directors and executive officers (including their
affiliates, families and companies in which they are principal owners, officers
or directors) were loan customers of, and had other transactions with, us and
our subsidiaries in the ordinary course of business. These loans and lines of
credit were made in the ordinary course of business on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for transactions with other persons and did not involve more than the normal
risk of collectibility or present other unfavorable features. During 2001, we
paid approximately $191,444 to the law firm of Myers, Berry, O'Conor & Kuzma,
Ltd. for legal services. Richard J. Berry, a director of UnionBancorp, is a
principal of that firm.
ACCOUNTANT FEES
Audit Fees
Our independent auditor during 2001 was Crowe, Chizek and Company LLP.
The aggregate fees and expenses billed by Crowe Chizek in connection with the
audit of our annual financial statements as of and for the year ended December
31, 2001 and for the required review of our financial information included in
our Form 10-Q filings for the year 2001 was $95,500.
Financial Information Systems Design and Implementation Fees
There were no fees incurred for these services for the year 2001.
All Other Fees
The aggregate fees and expenses billed by Crowe Chizek for all other
services rendered to us for 2001 was $248,705.
The audit committee, after consideration of the matter, does not
believe that the rendering of these services by Crowe Chizek to be incompatible
with maintaining its independence as our principal accountant.
AUDIT COMMITTEE REPORT
The incorporation by reference of this proxy statement into any
document filed with the Securities and Exchange Commission by UnionBancorp shall
not be deemed to include the following report unless the report is specifically
stated to be incorporated by reference into such document.
The audit committee assists the board in carrying out its oversight
responsibilities for our financial reporting process, audit process and internal
controls. The audit committee also reviews the audited financial statements and
recommends to the board that they be included in our annual report on Form 10-K.
The committee is comprised solely of independent directors.
12.
The audit committee has reviewed and discussed our audited financial
statements for the fiscal year ended December 31, 2001 with our management and
Crowe, Chizek and Company LLP, our independent auditors. The committee has also
discussed with Crowe Chizek the matters required to be discussed by SAS 61
(Codification for Statements on Auditing Standards) as well as having received
and discussed the written disclosures and the letter from Crowe Chizek required
by Independence Standards Board Statement No. 1 (Independence Discussions with
Audit Committees). Based on the review and discussions with management and Crowe
Chizek, the committee has recommended to the board that the audited financial
statements be included in our annual report on Form 10-K for the fiscal year
ending December 31, 2001 for filing with the Securities and Exchange Commission.
Audit Committee:
I.J. Reinhardt, Jr. (Chair)
Robert J. Doty
Lawrence J. McGrogan
STOCKHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
For inclusion in our proxy statement and form of proxy relating to the
2003 annual meeting of stockholders, stockholder proposals must be received by
us on or before November 15, 2002. In order to be presented at such meeting,
notice of the proposal must be received by UnionBancorp on or before March 24,
2003, and must otherwise comply with our bylaws.
"HOUSEHOLDING" OF PROXY MATERIALS
In December of 2000, the Securities and Exchange Commission adopted new
rules that permit companies and intermediaries (e.g., brokers) to satisfy the
delivery requirements for proxy statements, prospectuses and annual reports with
respect to two or more security holders sharing the same address by delivering a
single copy of proxy statements, prospectuses and annual reports, as the case
may be, addressed to those security holders. This process, which is commonly
referred to as "householding," potentially means extra convenience for security
holders and cost savings for companies.
This year, a number of brokers with accountholders who are UnionBancorp
stockholders will be "householding" our proxy materials. As indicated in the
notice previously provided by these brokers to UnionBancorp stockholders, a
single proxy statement and annual report will be delivered to multiple
stockholders sharing an address unless contrary instructions have been received
from an affected stockholder. Once you have received notice from your broker or
the Company that they will be "householding" communications to your address,
"householding" will continue until you are notified otherwise or until you
revoke your consent. If, at any time, you no longer wish to participate in
"householding" and would prefer to receive a separate proxy statement and annual
report, please notify your broker, direct your written request to UnionBancorp,
Inc., Investor Relations, 321 West Main Street, Ottawa, IL 61350 or contact
Investor Relations at (815) 431-2720.
Stockholders who currently receive multiple copies of the proxy
statement and annual report at their address and would like to request
"householding" of their communications should contact their broker or, if a
stockholder is a direct holder of UnionBancorp shares, they should submit a
written request to Computershare Investor Services, the Company's transfer
agent, at 2 North LaSalle Street, Chicago, IL 60602.
13.
OTHER MATTERS
We do not intend to present any other business at the meeting and know
of no other matters which will be presented. However, if any other matters come
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote in accordance with their best judgment on those matters. A
representative of our independent auditors, Crowe, Chizek and Company, LLP, is
expected to attend the annual meeting and will be available to respond to
appropriate questions and to make a statement if he or she so desires.
Your proxy is solicited by the board of directors, and we will pay the
cost of solicitation. In addition to soliciting proxies by use of the mail,
officers, directors and regular employees of UnionBancorp or our subsidiaries,
acting on our behalf, may solicit proxies by telephone, telegraph or personal
interview. We will, at our expense, upon the receipt of a request from brokers
and other custodians, nominees and fiduciaries, forward proxy soliciting
material to the beneficial owners of shares held of record by such persons.
FAILURE TO INDICATE CHOICE
If any stockholder fails to indicate a choice with respect to any of
the proposals on the proxy for the annual meeting, the shares of such
stockholder shall be voted FOR the nominees listed under proposal 1.
By Order of the Board of Directors
/s/ CHARLES J. GRAKO
-------------------------
Charles J. Grako
President and
Chief Executive Officer
Ottawa, Illinois
March 15, 2002
ALL STOCKHOLDERS ARE URGED TO SIGN
AND MAIL THEIR PROXIES PROMPTLY
14.
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