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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(4) Proposed maximum aggregate value of transaction: NA
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(5) Total fee paid: 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
(3) Filing Party: NA
(4) Date Filed: NA
Notes:
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UNIONBANCORP, INC.
March 24, 2006
Dear Fellow Stockholder:
You are cordially invited to attend UnionBancorp, Inc.'s annual meeting
of stockholders at the Starved Rock Lodge and Conference Center located in
Utica, Illinois, on Tuesday, April 25, 2006, at 10:00 a.m. local time. 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
II directors on the board of directors. Their names appear in the enclosed proxy
materials. 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/ SCOTT A. YEOMAN
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Scott A. Yeoman
President and
Chief Executive Officer
122 W. Madison Street o Ottawa Illinois o 815-431-2720
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UNIONBANCORP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 2006
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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 25, 2006, at 10:00 a.m., local
time, for the purpose of considering and voting upon the following matters:
1. To elect three Class II directors.
2. To take action with respect to any other matters that may be
properly brought before the meeting and that might be
considered by the stockholders of a Delaware corporation at
their annual 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, 2006, 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/ SCOTT A. YEOMAN
-----------------------------------------
Scott A. Yeoman
President and
Chief Executive Officer
Ottawa, Illinois
March 24, 2006
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. YOUR VOTE IS IMPORTANT TO ENSURE THAT A MAJORITY OF THE STOCK IS
REPRESENTED. 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. IF YOU LATER FIND THAT YOU MAY
BE PRESENT AT THE MEETING OR FOR ANY OTHER REASON DESIRE TO REVOKE YOUR PROXY,
YOU MAY DO SO AT ANY TIME PRIOR TO ITS EXERCISE. STOCKHOLDERS HOLDING SHARES IN
BROKERAGE ACCOUNTS ("STREET NAME" HOLDERS) WHO WISH TO VOTE AT THE MEETING WILL
NEED TO OBTAIN A PROXY FROM THE INSTITUTION THAT HOLDS THEIR SHARES.
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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 25, 2006, at 10:00 a.m.,
local time, or at any adjournments or postponements of the meeting.
UnionBancorp, Inc., a Delaware corporation, is a regional financial services
company based in Ottawa, Illinois which has one bank subsidiary. Our offices
serve communities throughout central and northern Illinois through twenty
locations.
This 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 24, 2006 to stockholders of record as of March 1, 2006.
We are required to file an annual report, called a Form 10-K, with the SEC. A
copy of Form 10-K for the fiscal year ended December 31, 2005 is enclosed for
your reference.
Voting Rights and Proxy Information
The board of directors has fixed the close of business on March 1, 2006, 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.
The shares represented by each valid proxy received in time will be voted at the
annual meeting and, if a choice is specified on the proxy, it will be voted in
accordance with that specification. If no instructions are specified in a signed
proxy returned to the Company, the shares represented thereby will be voted in
FAVOR of the election of the directors listed in the enclosed proxy. If any
other matters are properly presented at the annual meeting, including, among
other things, consideration of a motion to adjourn the meeting to another time
or place, the individuals named as proxies and acting thereunder will have the
authority to vote on those matters according to their best judgment to the same
extent as the person delivering the proxy would be entitled to vote. If the
annual meeting is adjourned or postponed, a proxy will remain valid and may be
voted at the adjourned or postponed meeting. As of the date of printing of this
proxy statement, we do not know of any other matters that are to be presented at
the annual meeting other than the election of three Class II directors.
1.
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,
or by a later executed proxy. Attendance at the annual meeting will not
automatically revoke a proxy, but a stockholder attending the annual meeting may
request a ballot and vote in person, thereby revoking a prior granted proxy.
On March 1, 2006, we had 3,762,876 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 (i.e., shares held by brokers in
street name, voting on certain matters due to discretionary authority or
instructions from the beneficial owners but not voting on other matters due to
lack of authority to vote on such matters without instructions from the
beneficial owner) will be counted for purposes of determining a quorum but will
not count toward the determination of whether such matters are approved or
directors are elected. 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.
I. 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 II directors for terms of
three years or until their successors are elected and qualified. Each of the
nominees for election as Class II directors are incumbent directors. Our board
of directors has reviewed the independence of the nominees for election to the
board and the independence of the incumbent directors in accordance with the
standards of the Nasdaq Stock Market. In accordance with such review, the board
of directors has determined that each of Messrs. Breipohl, Doty, McDonnell,
Reinhardt, Shinkle, Sullivan and Trainor are independent under those standards.
These independent directors constitute a majority of the incumbent members and
nominees for election to the board.
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, 2006, 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 II
directors for three-year terms, expiring in 2009. We recommend that you vote
your shares FOR all three nominees.
2.
NOMINEES
Name Position with UnionBancorp
(Age) Director Since and Principal Occupation
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Class II
(term expires 2009)
Robert J. Doty 1996 Director of UnionBancorp; Chairman of Prairie Bancorp,
(Age 78) Inc. (1989-1996); Owner, Farm Management
I. J. Reinhardt, Jr. 1991 Director of UnionBancorp; General Manager, St. Louis
(Age 68) Beverage Company (1968-2005)
Scott A. Yeoman 2005 Director of UnionBancorp; President and Chief
(Age 48) Executive Officer of UnionBancorp (since June 2005);
Regional President and Chief Executive Officer,
Associated Bancorp (1994-2004)
CONTINUING DIRECTORS
Name Position with UnionBancorp
(Age) Director Since and Principal Occupation
--------------------- -------------- -------------------------------------------------------
Class I
(term expires 2008)
Richard J. Berry 1985 Director of UnionBancorp; Attorney, Myers, Berry,
(Age 53) O'Conor & Kuzma, Ltd.
Walter E. Breipohl 1993 Director of UnionBancorp; Broker/Owner,
(Age 52) Kaszynski-Breipohl Realtors
John A. Trainor 1985 Director of UnionBancorp; Chairman of UnionBancorp
(Age 75) (2000-2002); Owner, Trainor Grain & Supply Company, Inc.
3.
Name Position with UnionBancorp
(Age) Director Since and Principal Occupation
--------------------- -------------- -------------------------------------------------------
Class III
(term expires 2007)
Dennis J. McDonnell 2000 Chairman of the Board (since 2002) and Director of
(Age 63) UnionBancorp; Chairman, McDonnell Investment Management, LLC
(2001-present)
John A. Shinkle 1997 Director of UnionBancorp; Executive Vice President and
(Age 54) Director, Synovus Securities, Inc.
Scott C. Sullivan 1996 Director of UnionBancorp; Attorney, Williams & McCarthy
(Age 51)
All of our directors will hold office for the terms indicated, or until their
respective successors are duly elected and qualified. There are no arrangements
or understandings between UnionBancorp and any person pursuant to which any
director has been selected. No member of the board of directors is related to
any other member of the board of directors.
Board Committees and Meetings
Our board of directors generally meets on a quarterly basis. The board of
directors met six times during 2005. During 2005, 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, nominating and corporate
governance, audit, compensation and facilities committees.
The executive committee is comprised of Messrs. McDonnell (Chair), Sullivan,
Trainor and Yeoman. The executive committee meets on an as needed basis and
exercises the power of the board of directors between board meetings. This
committee did not meet in 2005.
The audit committee is responsible for assisting the board of directors with
oversight of (1) the integrity of our financial statements, (2) our compliance
with legal and regulatory requirements, (3) the independent auditor's
qualifications and independence and (4) the performance of our internal
accounting function and independent auditors. The audit committee has the direct
authority and responsibility to select, evaluate and, where appropriate, replace
the independent auditors, and is an "audit committee" for purposes of Section
3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the audit
committee are Messrs. Reinhardt (Chair), Breipohl and Doty. During 2005, the
audit committee met nine times.
The compensation committee establishes compensation and benefits for the chief
executive officer and reviews and recommends compensation and benefits for the
other executive officers and employees of our subsidiary, UnionBank. The
committee also administers and oversees our stock-based incentive compensation
plans. The members of the compensation committee are Messrs. Shinkle (Chair),
McDonnell, Sullivan and Yeoman (ex officio). As an ex officio member of the
committee, Mr. Yeoman has no voting rights. The compensation committee met five
times in 2005.
4.
The facilities committee examines and analyzes existing locations on an ongoing
basis and assists the board in implementation of long-range strategies. The
members of the facilities committee are Messrs. Breipohl (Chair), Doty and
Sullivan. The facilities committee meets on an as needed basis and met six times
in 2005.
Nominating and Corporate Governance Committee
Our board of directors has a nominating and corporate governance committee which
consists of three directors. Messrs. McDonnell (Chair), Shinkle and Sullivan are
the current members of this committee. The nominating and corporate governance
committee identifies individuals to become board members and selects, or
recommends for the board's selection, director nominees to be presented for
stockholder approval at the annual meeting of stockholders or to fill any
vacancies. The nominating and corporate governance committee met two times in
2005.
Our board of directors has adopted a written charter for the nominating and
corporate governance committee. A copy of the charter was filed as an exhibit to
the 2004 proxy statement. Based upon the review described above under the
section "Election of Directors", the board of directors has determined that each
of the members of our nominating and corporate governance committee is
independent under the applicable standards of the Nasdaq Stock Market.
The nominating and corporate governance committee will consider director
nominees recommended by stockholders. A stockholder who wishes to recommend a
person or persons for consideration as a nominee for election to the board of
directors must send a written notice by mail, c/o nominating and corporate
governance committee, UnionBancorp, Inc., 122 W. Madison, Ottawa, Illinois
61350, that sets forth: (1) the name, address (business and residence), date of
birth and principal occupation or employment (present and for the past five
years) of each person whom the stockholder proposes to be considered as a
nominee; (2) the number of shares of the common stock beneficially owned (as
defined by section 13(d) of the Securities Exchange Act of 1934) by each such
proposed nominee; (3) any other information regarding such proposed nominee that
would be required to be disclosed in a definitive proxy statement to
stockholders prepared in connection with an election of directors pursuant to
section 14(a) of the Securities Exchange Act of 1934; and (4) the name and
address (business and residential) of the stockholder making the recommendation
and the number of shares of the common stock beneficially owned (as defined by
section 13(d) of the Securities Exchange Act of 1934) by the stockholder making
the recommendation. We may require any proposed nominee to furnish additional
information as may be reasonably required to determine the qualifications of
such proposed nominee to serve as a director of UnionBancorp. Stockholder
recommendations will be considered only if received no less than 120 days nor
more than 150 days before the date of the proxy statement sent to stockholders
in connection with the previous year's annual meeting of stockholders. The
nominating and corporate governance committee will consider any nominee
recommended by a stockholder in accordance with the preceding paragraph under
the same criteria as any other potential nominee.
The nominating and corporate governance committee has not established specific,
minimum qualifications for recommended nominees or specific qualities or skills
for one or more of our directors to possess. The nominating and corporate
governance committee uses a subjective process for identifying and evaluating
nominees for director, based on the information available to, and the subjective
judgments of, the members of the nominating and corporate governance committee
and our then current needs. We do not believe there would be any difference in
the manner in which the committee evaluates nominees based on whether the
nominee is recommended by a stockholder or not.
5.
Code of Ethics
The Company has adopted a Code of Ethics that applies to all of our employees,
officers and directors, including our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions. Our Code of Ethics contains written standards that
we believe are reasonably designed to deter wrongdoing and to promote:
o Honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between personal and
professional relationships;
o Full, fair, accurate, timely, and understandable disclosure in
reports and documents that we file with, or submit to, the
Securities and Exchange Commission and in other public
communications we make;
o Compliance with applicable governmental laws, rules and
regulations;
o The prompt internal reporting of violations of the code to an
appropriate person or persons named in the code; and
o Accountability for adherence to the code.
We will provide to any person without charge, upon request, a copy of our Code
of Ethics. Requests for a copy of our Code of Ethics should be made to our
secretary at 122 W. Madison Street, Ottawa, Illinois 61350.
Stockholder Communications with the Board and Policy for Director Attendance at
Annual Meetings
Our board of directors has a process for stockholders to send communications to
the board of directors, its nominating and corporate governance committee or its
audit committee, including complaints regarding accounting, internal accounting
controls, or auditing matters. Communications can be sent to the board of
directors, its nominating and corporate governance committee or its audit
committee or specific directors either by regular mail to the attention of the
board of directors, its nominating and corporate governance committee, its audit
committee or specific directors, at our principal executive offices at 122 W.
Madison Street, Ottawa, Illinois 61350. All of these communications will be
reviewed by our secretary (1) to filter out communications that our secretary
deems, in his or her reasonable judgment, are not appropriate for our directors,
such as spam and communications offering to buy or sell products or services,
and (2) to sort and relay the remainder to the appropriate committee or
directors.
We expect and encourage all of our directors and nominees for election as
directors to attend the annual meeting of stockholders, absent a compelling
reason. All of our directors attended the 2005 annual meeting of stockholders
with the exception of Mr. Shinkle.
Compensation of Directors
Each non-employee director was paid a fee of $1,000 for each board meeting
attended and $250 for each committee meeting attended. In addition, each
non-employee director was paid an annual retainer of $2,500, and the audit
committee chairman was paid an additional annual retainer of $1,000. Each of our
non-employee directors may also receive an annual grant of options to purchase
shares of common stock under the UnionBancorp, Inc. 2003 Stock Option Plan. The
UnionBancorp, Inc. 2003 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 100% of the then current market price of the
common stock on the date of the grant. Such options become exercisable over five
years. During 2005, each non-employee director was granted options to purchase
2,500 shares of common stock at a price of $21.15 per share. The options vest
pro rata over a five year period and terminate on December 15, 2015.
6.
Existing Equity Compensation Plans
The Company currently maintains the UnionBancorp, Inc. 2003 Stock Option Plan
(the "2003 Stock Option Plan"), which the Company's board of directors adopted
on December 19, 2002 and the stockholders of the Company approved on April 22,
2003. The UnionBancorp, Inc. 1993 Stock Option Plan (the "1993 Stock Option
Plan"), which the Company's board of directors adopted on February 18, 1993 and
the stockholders of the Company approved on April 12, 1993 was terminated on
April 12, 2003. The following table provides information regarding the number of
shares of common stock subject to each of these plans as well as information
regarding outstanding options to purchase the Company's common stock under the
plans as of December 31, 2005.
Equity Compensation Plan Information
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Plan category Number of securities to Weighted-average exercise Number of securities remaining
be issued upon exercise price of outstanding available for future issuance
of outstanding options, options, warrants and under equity compensation plans
warrants and rights rights (excluding securities in column (a))
(a) (b) (c)
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Equity compensation 288,425 $15.7284 110,000
plans approved by
stockholders (1)
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Equity compensation 13,250 $16.0625 9,250
plan not approved by
stockholders (2)
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Total 301,675 $15.7430 119,250
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(1) Includes shares issuable under the UnionBancorp, Inc. 2003 Stock Option
Plan.
(2) In 1999, the Company adopted the UnionBancorp, Inc. Non-qualified Stock
Option Plan ("the 1999 Option Plan"), a broadly based compensation plan.
Under the 1999 Option Plan, non-qualified options may be granted to
employees and eligible directors of the Company and its subsidiaries to
purchase the Company's common stock at 100% of the fair market value on the
date the option is granted. The Company has authorized 50,000 shares for
issuance under the 1999 Option Plan. During 1999, 40,750 of these shares
were granted and are vested in three years. The options have an exercise
period of ten years from the date of grant.
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, 2006, 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.
The following table is based on information supplied to us by the directors,
officers and stockholders described above. The Company has determined beneficial
ownership in accordance with the rules of the SEC. Shares of common stock
subject to options that are either currently exercisable or exercisable within
60 days of March 1, 2006 are treated as outstanding and beneficially owned by
the option holder for the purpose of computing the percentage ownership of the
option holder. However, these shares are not treated as outstanding for the
purpose of computing the percentage ownership of any other person. The table
lists applicable percentage ownership based on 3,762,876 shares outstanding as
of March 1, 2006. Unless otherwise indicated, the address for each person listed
below is 122 W. Madison Street, Ottawa, Illinois 61350.
7.
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 310,020(3) 8.2%
UnionBancorp, Inc.
Employee Stock Ownership Plan ("ESOP")
122 W. Madison Street
Ottawa, Illinois 61350
Wayne W. Whalen 851,951(4) 22.1%
333 W. Wacker Drive, Suite 2100
Chicago, Illinois 60606
Jeffrey L. Gendell 371,300(5) 9.9%
55 Railroad Avenue, 3rd Floor
Greenwich, Connecticut 06830
Directors and Nominees
Richard J. Berry 45,779(6) 1.2%
Walter E. Breipohl 34,079 *
Robert J. Doty 16,734 *
Dennis J. McDonnell 662,908(7) 17.2%
I.J. Reinhardt, Jr. 28,050(8) *
John A. Shinkle 20,790(9) *
Scott C. Sullivan 26,718(10) *
John A. Trainor 38,214(11) 1.0%
Scott A. Yeoman 3,300 *
Other Named Executive Officers
Robert L. Davidson 5,733(12) *
Kurt R. Stevenson 14,826(13) *
All directors and executive officers as a group 897,131(14) 23.3%
(11 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 obtainable as of March 1, 2006 (or obtainable
within 60 days of March 1, 2006) through the exercise of options to
purchase shares of common stock granted under UnionBancorp's stock option
plans as follows: Mr. Berry - 16,250 shares; Mr. Breipohl - 16,250 shares;
Mr. Doty - 13,750 shares; Mr. McDonnell - 9,750 shares; Mr. Reinhardt -
15,750 shares; Mr. Shinkle - 13,750 shares; Mr. Sullivan - 13,750 shares;
Mr. Trainor - 15,750 shares; Mr. Davidson - 100 shares; and Mr. Stevenson -
8,118 shares. Option holders have the sole power to exercise their
8.
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 the employee stock ownership plan
trustee has shared voting and no investment power over such shares.
(4) Includes shares held by Mr. Whalen's wife, Paula Wolff, Mr. Whalen's
children, the WPW Family Foundation and WPW Associates, L.P., a family
limited partnership, with shared voting and investment power over such
shares. The amount above also includes approximately 86,070 shares which
are issuable upon the conversion of 1,381 shares of UnionBancorp, Inc.
convertible preferred stock held by Mr. Whalen.
(5) Jeffrey L. Gendell ("Gendell") filed a Schedule 13G/A dated February 14,
2006 reporting that as of December 31, 2005 Gendell, along with certain
affiliates (Tontine Financial Partners, L.P. and Tontine Management,
L.L.C.), collectively beneficially owned 371,300 shares of common stock,
with sole voting and investment power over such shares. Gendell is located
at 55 Railroad Avenue, 3rd Floor, Greenwich, Connecticut 06830.
(6) Includes 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 shares held jointly by Mr. McDonnell and his wife over which
voting and dispositive power is shared. Also includes shares held in trust
for which Mr. McDonnell is trustee. The amount above also includes
approximately 86,070 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.
(8) Includes 6,000 shares held by Mr. Reinhardt jointly with his spouse, over
which shares Mr. Reinhardt has shared voting and investment power.
(9) 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. Also includes
4,061 shares held in trust for which Mr. Shinkle serves as trustee. Mr.
Shinkle also has voting and investment power over 1,500 shares held in an
investment club.
(10) Includes 1,687 shares held by Mr. Sullivan jointly with his spouse and
1,000 shares held by members of Mr. Sullivan's family, over which shares
Mr. Sullivan has shared voting and investment power.
(11) Includes 8,515 shares held solely by Mr. Trainor's spouse, over which
shares Mr. Trainor has no voting or investment power.
(12) Includes 2,633 shares allocated to Mr. Davidson under the employee stock
ownership plan.
(13) Includes 425 shares held by Mr. Stevenson jointly with his spouse, over
which shares Mr. Stevenson has shared voting and investment power. Also
includes 593 shares held by Mr. Stevenson in his 401(k) plan and 5,690
shares allocated to Mr. Stevenson under the employee stock ownership plan.
(14) Footnotes (2) and (6) through (13) are incorporated herein.
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 2005, 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 2005.
9.
EXECUTIVE COMPENSATION
Summary Compensation
The following table shows the compensation earned for the last three fiscal
years by the chief executive officer and our four other executive officers whose
2005 salary and bonus exceeded $100,000:
-----------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
----------------------------------------------------------------------------------------------------------------------------
Awards Payouts
----------------------------------------------------------------------------------------------------------------------------
Securities
Other Restricted Underlying
Name and Annual Stock Options/ LTIP All Other
Principal Salary Bonus Compensation Award(s) SARs Payouts Compensation
Position Year ($) ($) ($)(7) ($) (#) (1) ($) ($)
----------------------------------------------------------------------------------------------------------------------------
Scott A. Yeoman (2) 2005 $ 120,859 $ 44,000 --- --- 10,000 --- $ 351(2)
President and
Chief Executive Officer
----------------------------------------------------------------------------------------------------------------------------
Kurt R. Stevenson (3) 2005 $ 144,500 $ 28,900 --- --- 5,000 --- $ 10,749(3)
Senior Executive Vice 2004 $ 137,500 $ 22,688 --- --- --- --- $ 9,235(3)
President and 2003 $ 110,000 $ 16,500 --- --- --- --- $ 6,040(3)
Chief Financial Officer
----------------------------------------------------------------------------------------------------------------------------
Robert L. Davidson (4) 2005 $ 99,500 $ 9,950 --- --- --- --- $ 7,287(4)
Executive Vice President
& Chief Investment Officer
----------------------------------------------------------------------------------------------------------------------------
Dewey R. Yaeger (5) 2005 $ 239,461 $ 27,500 --- --- --- --- $ 21,150(5)
Former President, Chief 2004 $ 220,000 $ 45,000 --- --- --- --- $ 18,141(5)
Executive Officer and Head 2003 $ 121,821 $ 25,000 --- --- --- --- $ 7,256(5)
of Corporate Development
----------------------------------------------------------------------------------------------------------------------------
Rick R. Clary (6) 2005 $ 157,500 $ 31,500 --- --- 5,000 --- $ 16,308(6)
Former Vice President and 2004 $ 150,000 $ 25,500 --- --- --- --- $ 12,716(6)
Chief Operating Officer 2003 $ 131,875 $ 20,250 --- --- --- --- $ 10,976(6)
----------------------------------------------------------------------------------------------------------------------------
(1) All options vest 50% in the 4th and 5th years on or about the anniversary
of the date of grant.
(2) We were not required to disclose Mr. Yeoman's salary information with
respect to his compensation prior to 2005.
(3) Represents the dollar value of allocations under our employee stock
ownership plan in the amount of $3,836 for 2005, $4,409 for 2004 and $2,354
for 2003, premiums for split dollar life insurance of $225 for 2005, $206
for 2004 and $155 for 2003 and $6,687 of 401(k) employer contributions for
2005, $4,620 for 2004 and $3,531 for 2003.
(4) We were not required to disclose Mr. Davidson's salary information prior to
2005. Represents the dollar value of allocations under our employee stock
ownership plan in the amount of $2,473 for 2005, premiums for split dollar
life insurance of $502 and $4,312 of 401(k) employer contributions for
2005.
(5) Mr. Yaeger ceased employment with the Company effective December 31, 2005.
The amount shown for Mr. Yaeger under All Other Compensation represents the
dollar value of allocations under our employee stock ownership plan in the
amount of $4,819 for 2005 $5,869 for 2004, premiums for split dollar life
insurance of $4,953 for 2005, $2,772 for 2004 and $1,056 for 2003, fees for
services provided to our board of directors and director fees for serving
on the boards of various subsidiaries of $2,150 for 2004 and $6,200 for
2003 and $11,379 of 401(k) employer contributions for 2005 and $7,350 for
2004.
(6) Mr. Clary ceased employment with the Company effective January 11, 2006.
The amount shown for Mr. Clary under All Other Compensation represents the
dollar value of allocations under our employee stock ownership plan in the
10.
amount of $4,300 for 2005, $4,943 for 2004 and $2,820 for 2003, premiums
for split dollar life insurance of $288 for 2005, $266 for 2004 and $227
for 2003, director fees for serving on the board of a subsidiary of $1,200
for 2003 and $7,320 of 401(k) employer contributions for 2005, $5,108 for
2004 and $4,230 for 2003.
(7) Perquisites that do not exceed the lower of $50,000 or 10% of salary and
bonus in the aggregate in any year for a named executive officer are not
disclosed in the table in accordance with SEC rules.
Stock Option Information
The following table sets forth certain information concerning the number and
value of stock options granted in the last fiscal year to the individuals named
above in the summary compensation table:
--------------------------------------------------------------------------------------------------------------------
OPTION GRANTS IN LAST FISCAL YEAR
--------------------------------------------------------------------------------------------------------------------
Individual Grants
--------------------------------------------------------------------------------------------------------------------
Potential realizable value
at assumed annual rates of
stock price appreciation
for option term
--------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options
Options Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#)(1) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
--------------------------------------------------------------------------------------------------------------------
Scott A. Yeoman 10,000(2) 33% $ 20.30 06/16/15 $ 127,666 $ 323,530
--------------------------------------------------------------------------------------------------------------------
Kurt R. Stevenson 5,000(2) 17% $ 20.30 06/16/15 $ 63,833 $ 161,765
--------------------------------------------------------------------------------------------------------------------
Rick R. Clary 5,000(2) 17% $ 20.30 06/16/15 $ 63,833 $ 161,765
--------------------------------------------------------------------------------------------------------------------
(1) All options vest 50% in the 4th and 5th years on or about the anniversary
of the date of grant.
(2) Represents qualified options granted on June 16, 2005.
11.
The following table sets forth certain information concerning the exercisable
and nonexercisable stock options at December 31, 2005 held by the individuals
named in the summary compensation table.
--------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTIONS VALUES
--------------------------------------------------------------------------------------------------------------------
Shares Number of Securities Value of Unexercised
Acquired on Underlying Unexercised In-the-Money Options at
Exercise Value Realized Options at FY-End FY-End ($) (1)
Name (#)
(#) (#) ($) Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------------------------------------------------------------------------------------
Scott A. Yeoman --- --- --- 10,000 $ --- $ 10,000
--------------------------------------------------------------------------------------------------------------------
Kurt R. Stevenson --- --- 6,944 7,718 $ 51,315 $ 24,824
--------------------------------------------------------------------------------------------------------------------
Robert L. Davidson --- --- 100 --- $ 524 $ ---
--------------------------------------------------------------------------------------------------------------------
Rick R. Clary --- --- 10,207 8,404 $ 70,171 $ 29,515
--------------------------------------------------------------------------------------------------------------------
(1) Based on market value of the underlying stock at the fiscal year end of
$21.30 minus the exercise price. The market price on March 1, 2006 was
$20.95 per share.
Employment Agreements and Other Arrangements
We are not a party to any employment agreements with our executive officers
named in the compensation table, except for the following:
In July of 2005, the Company entered into a change of control agreement with
Scott A. Yeoman, President and Chief Executive Officer of UnionBancorp, Inc. The
agreement provides that if, within two years after a change in control occurs,
the executive's employment is terminated without "good cause" or the executive
voluntarily terminates employment with "good reason," then the executive shall
receive a cash payment equal to two times the executive's salary. If, at any
time during the two year period, the executive obtains employment, payments will
be reduced by the amount of compensation being earned in the new position.
In November of 2003, the Company entered into change of control agreements with
two of our executives, Rick R. Clary and Kurt R. Stevenson. The agreements
provide that if, within two years after a change in control occurs, the
executive's employment is terminated without "good cause" or the executive
voluntarily terminates employment with "good reason," then the executive shall
receive a cash payment equal to two times the executive's salary. In October of
2004, Mr. Clary and Mr. Stevenson had their agreements amended to clarify their
reporting channels as a result of organizational restructuring initiatives.
These agreements remain in force for Mr. Yeoman and Mr. Stevenson. Mr. Clary's
agreement was terminated on January 11, 2006 as a result of his departure from
the organization.
Compensation Committee Interlocks and Insider Participation
During 2005, the members of the compensation committee were Messrs. Shinkle
(Chair), McDonnell, Sullivan and Yeoman (ex officio). None of these individuals
was an officer or employee of UnionBancorp or any of our subsidiaries during
2005, and none of these individuals is a former officer or employee of
12.
UnionBancorp or any of our subsidiaries, except for Mr. Yeoman who is president
and chief executive officer. Mr. Yeoman 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.
General. The compensation committee of our board of directors is comprised of
three independent directors and is responsible for providing oversight to ensure
that the Company's compensation incentives and benefits are competitive and that
they are aligned to allow Company goals to be successfully achieved. In
determining the compensation and benefits of our executive officers, the
following factors are generally taken into consideration:
o the performance of the executive officers in achieving 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.
The committee considers the foregoing factors, as well as others, in determining
the compensation and benefits plans of our executive officers. There is no
assigned weight given to any of these factors.
Base Salary. In determining the base salary of executive officers, the
compensation committee defines base salary as the annualized regular cash
compensation of an employee, excluding bonus awards, Company contributions to
employee benefit plans, or other compensation not designated as salary. The
committee considers the individual job performance of the executive officers, as
well as overall corporate performance, and the average salaries as published by
our peers and other third-party consultants.
Short-Term Incentive Compensation (Cash Bonus). The short-term incentive
compensation program is intended to sustain management's focus on the
corporation's requirement for strategic long-range planning by encouraging
attainment of the annual profitability goals. The plan is designed to attract,
develop, retain and reward well-qualified management and executive staff.
Each year, the compensation committee approves participants for the program and
corresponding rewards tiers ranging up to 40% of base salary, commensurate with
the responsibility level of each position. With the exception of the chief
executive officer whose rewards are tied solely to Company performance, eligible
rewards are based on a 50/50 split of personal goals and corporate performance.
A minimum threshold must be met before any rewards are paid, and all rewards are
subject to final approval by the board of directors. Personal goals are set
jointly by the participant and Company management and are comprised of tactical
initiatives to be completed within the period that can ultimately advocate the
successful completion of long-range strategic initiatives.
Long-Term Incentive Compensation and Retirement Benefits. In addition to
cash-based compensation, 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. Executive officers
of the Company are afforded the same participation and rewards terms in the
Company's retirement plans as all other eligible staff.
The Company's primary long-term incentive vehicle is stock options. Inclusion in
the Company's long-term incentive program is based on the recommendation of the
chief executive officer and the compensation committee, and is approved by the
board of directors.
13.
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.
Compensation of the Chief Executive Officer. Mr. Yeoman joined the organization
on June 13, 2005 as the president and chief executive officer of UnionBancorp,
Inc. The terms of his employment, including an initial base salary of $220,000
per annum, were established through negotiations with the board of directors.
As a pre-condition of employment, Mr. Yeoman also entered into an employment
security agreement executed in July of 2005. The terms of this agreement are
outlined in the aforementioned section entitled "Employment Agreements."
In addition, Mr. Yeoman was named a participant in UnionBancorp, Inc.'s
short-term incentive compensation program, whereby Mr. Yeoman would be eligible
for cash rewards equivalent to 40% of his base salary contingent upon the
successful completion of pre-determined goals set forth by the Company's
compensation committee and approved by the full board. In his role as the chief
executive officer, Mr. Yeoman's sole goal was successful execution of the
Company's strategic plan to achieve 2005 budget targets for the remaining months
of 2005.
Since Mr. Yeoman began his employment in June of 2005, and the Company achieved
budgeted targets for 2005, he was paid a pro-rated bonus of $44,000 in January
of 2006. Mr. Yeoman's payment was recommended by the Company's compensation
committee and approved by the Company's board of directors.
The long-term incentive vehicle historically utilized by the Company is stock
options. Eligible participants include all holding Company directors and certain
officers of the Company, including the chief executive officer. The original
stock option plan was approved by stockholders in 1993, and the 2003 Stock
Option Plan was presented and approved by stockholders in 2003. Mr. Yeoman
received a stock option grant of 10,000 shares upon hire. Terms and conditions
of the grant are explained in detail in the Summary Compensation Table of
Executive Compensation.
Mr. Yeoman was eligible for participation in all Company-sponsored benefits
programs in 2005, including the Company's group health coverage, group-term life
insurance coverage, and Company-sponsored retirement programs including the
UnionBancorp, Inc. 401(k) and Profit Sharing Plan and the UnionBancorp, Inc.
Employee Stock Ownership Plan.
Mr. Yeoman did not receive any compensation associated with a car allowance or
country club dues in 2005. The Company did, however, pay approximately $11,000
in expenses related to his relocation and made nominal reimbursements associated
with temporary housing expenses.
Mr. Yeoman's compensation and benefits package for 2005 was approved by the
Company's board of directors and was commensurate with Mr. Yeoman's knowledge,
skills and abilities, as supported by prior professional experience and
accomplishments, as well as the board's belief in Mr. Yeoman's ability to
successfully lead and transform the organization. The compensation committee has
reviewed all components of the total compensation package of the chief executive
officer and the other named executives in this proxy statement and believes them
to be reasonable and not excessive.
In addition to determining the initial compensation and benefits package for the
chief executive officer, annually, the compensation committee evaluates four
primary areas of performance in determining the chief executive officer's level
14.
of compensation. Changes to the base salary, cash bonus, long-term rewards and
other benefits of the chief executive officer are based on:
o long-range strategic planning and implementation;
o the Company's financial performance;
o 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 the Company's financial performance, the committee considers
profitability, asset growth, asset quality 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 reviews
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)
Dennis J. McDonnell
Scott C. Sullivan
Scott A. Yeoman (ex officio)
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, 2001 and ending on
December 31, 2005. The graph was prepared at our request by SNL Financial LC,
Charlottesville, Virginia.
15.
COMPARISON OF CUMULATIVE TOTAL RETURN
(ASSUMES $100 INVESTED ON JANUARY 1, 2001)
[GRAPHIC CHART OMITTED]
Total Return Performance
Period Ending
----------------------------------------------------------------------
Index 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
-----------------------------------------------------------------------------------------------------------------
UnionBancorp, Inc. 100.00 140.15 156.38 229.06 227.02 232.20
NASDAQ Composite 100.00 79.18 54.44 82.09 89.59 91.54
SNL Midwest Bank Index 100.00 102.20 98.59 126.20 142.40 137.21
Source : SNL Financial LC, Charlottesville, VA (434) 977-1600
(C) 2006 www.snl.com
16.
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 2005, we paid
approximately $94,579 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
Audit fees and expenses billed to the Company by Crowe Chizek and Company LLC
for the audit of the Company's financial statements for the fiscal years ended
December 31, 2005 and December 31, 2004, and for the review of the Company's
financial statements included in the Company's quarterly reports on Form 10-Q,
are as follows:
2005 2004
-------- --------
$118,500 $156,100
Audit Related Fees
Audit related fees and expenses billed to the Company by Crowe Chizek and
Company LLC for fiscal years 2005 and 2004 for services related to the
performance of the audit or review of the Company's financial statements that
were not included under the heading "Audit Fees", are as follows:
2005 2004
-------- --------
$ 14,000 $ 13,600
Tax Fees
Tax fees and expenses billed to the Company for fiscal years 2005 and 2004 for
services related to tax compliance, tax advice and tax planning, consisting
primarily of preparing the Company's federal and state income tax returns for
the previous fiscal periods and inclusive of expenses are as follows:
2005 2004
-------- --------
$ 27,600 $ 30,850
All Other Fees
Fees and expenses billed to the Company for fiscal years 2005 and 2004 for all
other services, which primarily consisted of the audit of the benefit plans are
as follows:
2005 2004
-------- --------
$ 45,165 $ 29,815
17.
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. In accordance with
Section 10A(i) of the Exchange Act, before Crowe Chizek and Company LLC is
engaged by us to render audit or non-audit services, the engagement is approved
by our audit committee. None of the audit-related, tax and other services
described in the table above were required to be approved by the audit committee
pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X.
The audit committee is responsible for reviewing and pre-approving any non-audit
services to be performed by the Company's independent auditors. The audit
committee has delegated its pre-approval authority to the chairman of the audit
committee to act between meetings of the audit committee. Any pre-approval given
by the chairman of the audit committee pursuant to this delegation is presented
to the full audit committee at its next regularly scheduled meeting. The audit
committee or chairman of the audit committee reviews and, if appropriate,
approves non-audit service engagements, taking into account the proposed scope
of the non-audit services, the proposed fees for the non-audit services, whether
the non-audit services are permissible under applicable law or regulation and
the likely impact of the non-audit services on the independence of the
independent auditors. Since the effective date of the SEC rules requiring
pre-approval of non-audit services on May 6, 2003, each new engagement of the
Company's independent auditors to perform non-audit services has been approved
in advance by the audit committee or the chairman of the audit committee
pursuant to the foregoing procedures.
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 duties and responsibilities of the audit committee are set forth in the
audit committee charter. A copy of the charter was filed as an exhibit to the
2004 proxy statement. As described above under the section "Election of
Directors", the board of directors has determined that each member of the audit
committee is independent as defined in the applicable standards of the Nasdaq
Stock Market.
The audit committee has reviewed and discussed our audited financial statements
for the fiscal year ended December 31, 2005 with our management and Crowe Chizek
and Company LLC, 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 Committee).
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, 2005 for filing with the Securities and Exchange Commission.
Audit Committee:
I.J. Reinhardt, Jr. (Chair)
Walter E. Breipohl
Robert J. Doty
18.
Audit Committee Financial Expert
While the board of directors endorses the effectiveness of our audit committee,
its membership does not include a director who qualifies for designation as an
"audit committee financial expert" - a concept under federal regulation that
contemplates such designation only when an audit committee member satisfies all
five qualification requirements, such as experience (or "experience actively
supervising" others engaged in), preparing, auditing, analyzing or evaluating
financial statements presenting a level of accounting complexity comparable to
what is encountered in connection with our Company's financial statements. The
Company is currently trying to recruit an individual that meets the requirement
of a financial expert to serve on the board and audit committee.
STOCKHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
For inclusion in our proxy statement and form of proxy relating to the 2007
annual meeting of stockholders, stockholder proposals must be received by us on
or before November 24, 2006. In order to be presented at such meeting, notice of
the proposal must be received by UnionBancorp on or before March 27, 2007, and
must otherwise comply with our bylaws.
"HOUSEHOLDING" OF PROXY MATERIALS
In 2000, the Securities and Exchange Commission adopted 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 Form 10-K 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 Form
10-K annual report, please notify your broker, direct your written request to
UnionBancorp, Inc., Investor Relations, 122 W. Madison Street, Ottawa, IL 61350
or contact Investor Relations at (815) 431-2720.
Stockholders who currently receive multiple copies of the proxy statement and
Form 10-K 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.
19.
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 LLC, 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/ SCOTT A. YEOMAN
-----------------------------------------
Scott A. Yeoman
President and
Chief Executive Officer
Ottawa, Illinois
March 24, 2006
ALL STOCKHOLDERS ARE URGED TO SIGN
AND MAIL THEIR PROXIES PROMPTLY
20.
__________________________
THIS PAGE INTENTIONALLY
LEFT BLANK
__________________________
[GRAPHIC LOGO OMITTED]
UNIONBANCORP, INC.
[ ] Mark this box with an X if you have made
changes to your name or address details above.
________________________________________________________________________________
Annual Meeting Proxy Card
________________________________________________________________________________
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS - APRIL 25, 2006
The undersigned hereby appoints Walter E. Breipohl and John A. Trainor, or
either of them acting in the absence of the other, with power of substitution,
attorneys and proxies, for and in the name and place of the undersigned, to vote
the number of shares of common stock that the undersigned would be entitled to
vote if then personally present at the annual meeting of the stockholders of
UnionBancorp, Inc., to be held at the Starved Rock Lodge and Conference Center
located in Utica, Illinois, on Tuesday, April 25, 2006, 10:00 a.m., local time,
or any adjournments or postponements of the meeting, upon the matters set forth
in the notice of annual meeting and proxy statement (receipt of which is hereby
acknowledged) as designated below, and in their discretion, the proxies are
authorized to vote upon such other business as may come before the meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE BELOW. IF NO
CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES.
A Election of Directors B Other Matters
1. The Board of Directors recommends In their discretion, the proxies are authorized to vote
a vote FOR the listed nominees. upon such other matters as may properly come before
the meeting.
For Withhold
01 - Robert J. Doty [ ] [ ]
For Withhold
02 - I. J. Reinhardt, Jr. [ ] [ ]
For Withhold
03 - Scott A. Yeoman [ ] [ ]
C Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
NOTE: Please sign exactly as your name(s) appears. For joint accounts, each
owner should sign. When signing as executor, administrator, attorney, trustee or
guardian, etc., please give your full title.
Signature 1 - Please keep Signature 2 - Please keep Date (mm/dd/yyyy)
signature within the box signature within the box
_________________________ _________________________ ______________________