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 240.14a-11(c) or 240.14a-12
WINTRUST FINANCIAL CORPORATION
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
{X} No fee required.
{ } Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
{ } Fee paid previously with preliminary materials:
{ } Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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WINTRUST FINANCIAL CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1997
The 1997 Annual Meeting of Shareholders of Wintrust Financial
Corporation will be held at the Gorton Community Center, 400 East Illinois Road,
Lake Forest, Illinois 60045, on Thursday, May 22, 1997, at 6:00 p.m. local time,
for the following purposes:
1. To elect seven Class I directors to hold office for a three-year
term;
2. To consider a proposal to approve the Wintrust Financial
Corporation 1997 Stock Incentive Plan;
3. To consider a proposal to approve the Wintrust Financial
Corporation Employee Stock Purchase Plan; and
4. To transact such other business as may properly come before the
Meeting and any adjournment thereof.
The record date for determining shareholders entitled to notice of, and to vote
at, the Meeting is the close of business on April 30, 1997.
By order of the Board of Directors,
Edward J. Wehmer
Secretary
April 30, 1997
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED FORM OF PROXY IN THE ENVELOPE
PROVIDED FOR THAT PURPOSE.
<PAGE>
WINTRUST FINANCIAL CORPORATION
727 North Bank Lane
Lake Forest, Illinois 60045
PROXY STATEMENT
FOR THE 1997 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD THURSDAY, MAY 22, 1997
These proxy materials are furnished in connection with the solicitation
by the Board of Directors of Wintrust Financial Corporation ("the Company"), an
Illinois Corporation, of proxies to be used at the 1997 Annual Meeting of
Shareholders of the Company (the "Annual Meeting of Shareholders" or "Annual
Meeting") and at any adjournment of such meeting.
You are cordially invited to attend the Company's first Annual Meeting
of Shareholders to be held on May 22, 1997, at 6:00 p.m. C.S.T., at the Gorton
Community Center, 400 East Illinois Road, Lake Forest, Illinois 60045.
PROXIES, OUTSTANDING VOTING SECURITIES, AND SHAREHOLDERS ENTITLED TO VOTE
The Board of Directors has fixed the close of business on April 30,
1997 as the record date for determining shareholders entitled to notice of, and
to vote at, the Annual Meeting. On the record date, the Company had outstanding
8,019,893 shares without par value Common Stock ("Common Stock"). Each
outstanding share of Common Stock entitles the holder to one vote.
Proxies received from shareholders in proper form will be voted at the
meeting and, if specified, as directed by the shareholder. Unless contrary
instructions are given, the proxy will be voted at the meeting for the election
of each of the nominees for Class I Director, as set forth below, the approval
of the 1997 Stock Incentive Plan, and the approval of the Employee Stock
Purchase Plan and, in accordance with the best judgment of the holders thereof,
any other business which may properly come before the meeting and be submitted
to a vote of the shareholders. Shares represented by proxies which are marked
"withholding authority" with respect to the election of one or more nominees for
election as directors, proxies which are marked "abstain" on other proposals,
and proxies which are marked deny discretionary authority on other matters WILL
NOT be counted as votes cast in determining whether a majority vote was obtained
in such matters. With respect to brokers who are prohibited from exercising
discretionary authority for beneficial owners who have not returned proxies to
the brokers, those shares also WILL NOT be included in the vote totals.
Abstentions and broker non-votes are counted as shares present for the purpose
of determining whether the shares represented at the meeting constitute a
quorum. A proxy may be revoked at any time prior to its exercise by means of a
written revocation or a properly executed proxy bearing a later date.
Shareholders having executed and returned a proxy who attend the meeting and
desire to vote in person are requested to so notify the Secretary of the Company
prior to or at the time of a vote taken at the meeting.
Your vote is important. Because many shareholders cannot personally
attend the Annual Meeting, it is necessary that a large number be represented by
proxy. Prompt return of your proxy card in the postage-paid envelope provided
will be appreciated.
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COST OF PROXY SOLICITATION
The cost of soliciting proxies has been or will be borne by the
Company. Directors, officers, employees and agents of the Company may solicit
proxies in person or by mail, telephone, facsimile transmission and other means.
Directors, officers and employees will receive no additional compensation for
solicitation services. Brokerage houses, nominees, fiduciaries and other
custodians will be requested to forward soliciting materials to the beneficial
owners of shares of record held by them and will be reimbursed for their
expenses.
ELECTION OF DIRECTORS
The By-laws of the Company provide that the number of directors of the
Company shall be twenty-one (21). The number of directors may be increased or
decreased (provided, however, that such number shall never be less than six)
from time to time by the amendment of the Bylaws by a resolution adopted by the
majority of the members of the Board of Directors; but no decrease shall have
the effect of shortening the term of any incumbent director. The By-laws also
state that at the Annual Meeting of Shareholders the concurrence of a majority
of all the issued and outstanding stock entitled to vote thereat shall be
required for taking any action by the shareholders including the election of
directors.
The Company's Board of Directors consists of 21 members divided into
three classes of Directors who are elected to hold office for staggered
three-year terms as provided in the Company's By-laws. Those persons currently
serving as Class I Directors have been nominated for election at this Annual
Meeting of Shareholders to serve for a three-year term to end in the year 2000.
The term of those persons currently serving as Class II Directors expires at the
Annual Shareholder Meeting to be held in 1998; the term of Class III Directors
expires at the Annual Shareholder Meeting to be held in 1999.
Each year the shareholders elect members of a class of Directors for a
term of three years. The Class I Director Nominees named below have been
nominated for election for a term to end at the Annual Meeting of Shareholders
in the year 2000 or until their successors are elected and qualified. All of the
nominees have indicated a willingness to serve and the Board of Directors has no
reason to believe that any of the Director Nominees will not be available for
election. However, if any of the Director Nominees is not available for
election, proxies may be voted for the election of other persons selected by the
Board of Directors. Proxies cannot, however, be voted for a greater number of
persons than the number of Director Nominees named. To be elected as a director,
each Director Nominee must receive the affirmative vote of a majority of the
shares voting in the election of that directors at the Annual Meeting of
Shareholders. Shareholders of the Company have no cumulative voting rights with
respect to the election of directors.
The names, ages and certain background information of the persons who
constitute the Board of Directors of the Company (the "Directors") are set forth
on the following pages. Each of the Directors was elected to the Board of the
Company in connection with the Reorganization transaction except Mr. Alaimo who
was appointed by the Board on January 20, 1997, to fill the vacancy then
existing.
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<PAGE>
CLASS I - DIRECTOR NOMINEES TO SERVE UNTIL THE YEAR 2000
HOWARD D. ADAMS (64), DIRECTOR SINCE 1996 Mr. Adams is Chairman and Chief
Executive Officer of Wintrust Financial Corporation. He was the principal
organizer of the Company and each of its subsidiaries. During the past five
years, he was one of the principal founders of Lake Forest Bancorp, Inc. ("Lake
Forest"), Hinsdale Bancorp, Inc. ("Hinsdale"), North Shore Community Bank and
Trust Company ("North Shore Bank") and Libertyville Bancorp, Inc.
("Libertyville"). He is currently the Chairman and a Director of Crabtree
Capital Corporation ("Crabtree"), Lake Forest and Libertyville, and he is the
Vice-Chairman and a Director of Hinsdale. He also serves as a director of each
of the subsidiary Banks and First Premium Services, Inc. ("First Premium"). Mr.
Adams is a Trustee of the Chicago Horticultural Society and Colby College of
Waterville, Maine (retired) and is a member of the Lake Forest Open Lands
Association.
ALAN W. ADAMS (31), DIRECTOR SINCE 1996 Mr. Adams has been Vice
President/Lending at Lake Forest Bank and Trust Company ("Lake Forest Bank")
since August 1993 after obtaining his law degree. He is licensed to practice law
in the State of Illinois and is a member of the Illinois and American Bar
Associations. Prior to law school and his association with Lake Forest Bank, Mr.
Adams was the Senior Financial and Strategic Analyst for Crabtree from March
through August 1990. From 1987 through 1989, Mr. Adams was a commercial lending
representative for Harris Trust and Savings Bank, specializing in banking
relationships with companies in the food and agribusiness industries. Mr. Adams
serves on the board of directors of the Gorton Community Center and the
Associate Board of the Lake Forest Open Lands Association. He is the son of
Howard D. Adams.
JAMES E. MAHONEY (59), DIRECTOR SINCE 1996 From 1978 to present, Mr. Mahoney has
been the owner and President of Heidi's Cheese Products, Inc., Mundelein,
Illinois. Mr. Mahoney is a Director of Libertyville and Libertyville Bank and
Trust Company ("Libertyville Bank").
JAMES B. MCCARTHY (45), DIRECTOR SINCE 1996 From 1991 to present, Mr. McCarthy
has been President and a Director of Gemini Consulting Group, Inc., Oak Brook,
Illinois, a management consulting firm focusing on the health care industry. Mr.
McCarthy is a Director of Hinsdale and Hinsdale Bank and Trust Company
("Hinsdale Bank").
J. CHRISTOPHER REYES (43), DIRECTOR SINCE 1996 Mr. Reyes is Chairman of Reyes
Holdings which owns businesses in beverage distribution, food distribution and
processing with headquarters in Lake Forest, IL. Mr. Reyes serves on the board
of directors of the Boys & Girls Clubs of Chicago. Mr. Reyes is a Director of
Lake Forest and Lake Forest Bank.
LEMUEL H. TATE, JR.(70), DIRECTOR SINCE 1996 From 1982 to 1988, Mr. Tate was an
executive with Northwestern Telecommunication Services (now known as
Northwestern Technologies Group) which is a venture partnership jointly owned by
Northwestern University and Northwestern Memorial Hospital Group. He retired as
President and Chief Operating Officer of the company in 1988. Since 1988, he has
been active in volunteer work in the local Chicago area. He is a member of the
Evanston Rotary Club and is active in the International Executive Service Corps.
Since its inception, Mr. Tate has been Chairman and a Director of North Shore
Bank, which opened in 1994.
EDWARD J. WEHMER (43), DIRECTOR SINCE 1996 Mr. Wehmer is President and Chief
Operating Officer of Wintrust Financial Corporation. For the past five years, he
has been the President of Lake Forest and Lake Forest Bank & Trust Company. He
was one of the principal organizers of each of the banking organizations and
serves as the Vice Chairman and a Director of First Premium, Lake Forest,
Hinsdale, Libertyville and each of the Banks.
Prior to joining Lake Forest, Mr. Wehmer was President and a director
of Lincoln National Bank, Chicago, Illinois and from 1985 to 1991, Senior Vice
President, Chief Financial Officer, and a director of its parent company, River
Forest Bancorp, Chicago, Illinois. Mr.
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<PAGE>
Wehmer also served as a managing director of that organization's six other
banking subsidiaries and as President of a mortgage banking subsidiary and a
commercial finance subsidiary. Mr. Wehmer is also a certified public accountant
and earlier in his career spent seven years with the accounting firm of Ernst &
Whinney specializing in the banking field and particularly in the area of bank
mergers and acquisitions. Mr. Wehmer is a Trustee of Barat College, Lake Forest,
Illinois, and is involved in several other charitable and fraternal
organizations.
CLASS II - CONTINUING DIRECTORS SERVING UNTIL THE YEAR 1998
MAURICE F. DUNNE, JR.(70), DIRECTOR SINCE 1996 Mr. Dunne has been the President
of Maurice F. Dunne Ltd., an educational consulting firm, since September 1991.
Prior thereto, he served as President of the Lake Forest Graduate School of
Management, Lake Forest, Illinois for more than 25 years. Mr. Dunne also served
as the chief operating officer of the Northern Illinois Business Association
from September 1991 to June 1993. Mr. Dunne is a Director of Lake Forest, Lake
Forest Bank and North Shore Bank.
EUGENE HOTCHKISS III (69), DIRECTOR SINCE 1996 Mr. Hotchkiss served as the
President of Lake Forest College from 1970 to 1993 and has been the President
Emeritus of Lake Forest College since 1993. Since 1994, Mr. Hotchkiss has been
Senior Fellow of the Foundation for Independent Higher Education, Chicago,
Illinois and since 1996 has been Senior Fellow of the Association of Governing
Boards, Washington, D.C. Mr. Hotchkiss is a Director of Lake Forest and Lake
Forest Bank.
JAMES KNOLLENBERG (49) DIRECTOR SINCE 1996 Mr. Knollenberg served as the
President of First Premium, a position he held from 1990 through late April,
1997. He has extensive experience in the financial services industry. Mr.
Knollenberg has tendered a letter of resignation indicating his decision to
resign as a Director of the Company effective July 15, 1997.
MARGUERITE SAVARD MCKENNA (54), DIRECTOR SINCE 1996 Ms. McKenna, an attorney,
has practiced law in Wilmette since 1983. She is a member of the Rotary Club,
the Wilmette Chamber of Commerce and the North Suburban Bar Association. Ms.
McKenna is a Director of North Shore Bank.
ALBIN F. MOSCHNER (44), DIRECTOR SINCE 1996 Mr. Moschner is currently Vice
Chairman and director and an officer of Diba, Inc., a development stage internet
technology company, a position he has held since August 1996. Mr. Moschner
served as President and CEO and a director of Zenith Electronics, Glenview,
Illinois, from 1991 to July 1996. Previously he held the positions of Chief
Operating Officer and Senior Vice President of Operations of Zenith. Mr.
Moschner is also a director of Polaroid Corporation and Pella Windows
Corporation. He serves as a Director of Lake Forest and Lake Forest Bank.
JANE R. STEIN (52), DIRECTOR SINCE 1996 Since 1983, Ms. Stein has been the
Executive Director of the Lake County Medical Society, Vernon Hills, Illinois, a
not-for-profit professional association for physicians in Lake County. Ms. Stein
is a Director of Libertyville and Libertyville Bank.
KATHARINE V. SYLVESTER (57), DIRECTOR SINCE 1996 Ms. Sylvester has been active
in civic affairs in the Hinsdale area for many years. She is on the Board of
Trustees of the Hinsdale Community House and is an Associate Member of the
Women's Auxiliary of the Robert Crown Center for Health Education. Ms. Sylvester
is a Director of Hinsdale and Hinsdale Bank.
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<PAGE>
CLASS III - CONTINUING DIRECTORS SERVING UNTIL THE YEAR 1999
JOSEPH ALAIMO (66), DIRECTOR SINCE 1997 Mr. Alaimo has been Director of Trust
Investments at Lake Forest Bank since December 1994. Prior to joining Lake
Forest Bank, he was employed for more than 30 years by Continental Bank, where
he served most recently as Director of Investor Relations. Mr. Alaimo held
various senior positions in the trust department at Continental Bank before he
became their Director of Investor Relations.
PETER CRIST (45), DIRECTOR SINCE 1996 Mr. Crist is President of Crist Partners,
Ltd., an executive search firm he founded in 1994. Immediately prior thereto he
was the Managing Director of the Chicago office of Russell Reynolds Associates,
Inc., the largest executive search firm in the Midwest, where he was employed
for more than 18 years. He is a Director of Hinsdale and Hinsdale Bank.
JOHN S. LILLARD (66), DIRECTOR SINCE 1996 Mr. Lillard spent more than 15 years
as an executive with JMB Institutional Realty Corporation, a real estate
investment firm, where he served as President from 1979 to 1991 and as
Chairman-Founder from 1992 to 1994. In addition, Mr. Lillard serves as a
director of Cintas Corporation and Stryker Corporation. Mr. Lillard was a
general partner of Scudder Stevens & Clark until joining JMB in 1979. Mr.
Lillard is a Director of Lake Forest and Lake Forest Bank.
HOLLIS W. RADEMACHER (61), DIRECTOR SINCE 1996 Mr. Rademacher is currently
self-employed as a business consultant and private investor. He has participated
with Mr. Adams and Mr. Wehmer as an organizer of four of the five Banks. From
1957 to 1993, Mr. Rademacher held various positions, including Officer in
Charge, U.S. Banking Department and Chief Credit Officer, of Continental Bank,
N.A., Chicago, Illinois, and from 1988 to 1993 held the position of Chief
Financial Officer. Mr. Rademacher is a director of Schawk, Inc. and Cityscape
Financial Corp. He currently serves as a Director of each of the subsidiary
holding companies and each of the Banks.
JOHN N. SCHAPER (45), DIRECTOR SINCE 1996 Since 1991, Mr. Schaper has been a
general agent for American United Life Insurance Company. Mr. Schaper is a
Director of Libertyville and Libertyville Bank.
JOHN J. SCHORNACK (66), DIRECTOR SINCE 1996 Mr. Schornack is Chairman and CEO of
KraftSeal Corporation, Lake Forest, Illinois, and is currently serving as
Chairman and a director of Binks Manufacturing Company, Chicago, Illinois. From
1955 to 1991, Mr. Schornack was with Ernst & Young, serving most recently as
Vice Chairman and Managing Partner of the Midwest Region. He also is the
Chairman of the Board of Trustees of Barat College, Lake Forest, Illinois. Mr.
Schornack is a Director of North Shore Bank.
LARRY WRIGHT (57), DIRECTOR SINCE 1996 For the past 32 years, Mr. Wright has
been Vice President of Milbank Corporation, Chicago, Illinois, an investment
advisory firm.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Common
Stock as of the Annual Meeting Record Date, with respect to (i) each Director
and executive officer of the Company; (ii) all Directors and executive officers
of the Company as a whole; and (iii) any shareholder known to hold in excess of
5% of any class of the Company's voting securities.
<TABLE>
<CAPTION>
CURRENTLY
AMOUNT OF EXERISABLE TOTAL
COMMON SHARES OPTIONS, AMOUNT OF TOTAL
BENEFICIALLY RIGHTS, & BENEFICIAL PERCENTAGE
OWNED(1) WARRANTS(1) OWNERSHIP(1) OWNERSHIP
---------- ---------- ------------ ----------
DIRECTOR
- --------
<S> <C> <C> <C> <C>
Alan W. Adams(2)....................... 190,688 50,011 240,699 2.99%
Howard D. Adams(3)**................... 466,106 21,661 487,767 6.06%
Joseph Alaimo.......................... 6,895 4,837 11,732 *
Peter Crist............................ 28,884 2,672 31,556 *
Maurice F. Dunne, Jr................... 46,802 9,415 56,217 *
Eugene Hotchkiss III................... 3,739 1,296 5,035 *
James Knollenberg ..................... 7,501 72,609 80,110 *
John S. Lillard........................ 46,260 4,511 50,771 *
James E. Mahoney....................... 7,020 604 7,624 *
James B. McCarthy...................... 13,840 2,551 16,391 *
Marguerite Savard McKenna.............. 15,074 4,156 19,230 *
Albin F. Moschner...................... 18,869 -- 18,869 *
Hollis W. Rademacher................... 51,007 9,260 60,267 *
J. Christopher Reyes................... 144,473 4,005 148,478 1.85%
John N. Schaper........................ 1,207 604 1,811 *
John J. Schornack...................... 7,766 3,804 11,570 *
Jane R. Stein.......................... -- 604 604 *
Katharine V. Sylvester................. 3,120 2,793 5,913 *
Lemuel H. Tate......................... 15,879 6,070 21,949 *
Edward J. Wehmer**..................... 146,000 145,224 291,224 3.57%
Larry Wright(4)........................ 457,263 30,734 487,997 6.07%
--------- ------- --------- -------
Total Directors...................... 1,678,393 377,421 2,055,814 25.51%
--------- ------- --------- -------
NON-DIRECTOR EXECUTIVE OFFICERS
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Lloyd M. Bowden........................ 15,641 3,637 19,278 *
David A. Dykstra....................... 17,424 12,770 30,194 *
Robert F. Key.......................... 22,152 5,620 27,772 *
--------- ------- --------- -------
Total Directors and Executive
Officers............................. 1,733,610 399,448 2,133,058 26.48%
========= ======= ========= =======
OTHER SIGNIFICANT SHAREHOLDERS
- ------------------------------
Milbank Corporation(5)................. 466,935 30,734 497,669 6.18%
Emmett McCarthy(6)..................... 398,585 93,302 491,887 6.10%
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<FN>
* Less than 1%
** Denotes person who serves as Director and as an executive officer.
(1) Beneficial ownership percentages are calculated in accordance with SEC Rule
13d-3 promulgated under the Securities Exchange Act of 1934.
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(2) Includes shares held in certain family trusts for the benefit of Alan W.
Adams and with respect to which he has shared voting and investment power.
Also includes shares held by Mr. Adams' wife. Does not include shares held
in certain other family trusts (for which Alan W. Adams does not act as
co-trustee but of which Alan Adams or his son is a direct or indirect
beneficiary) and does not include shares held directly by, or indirectly
through other family trusts for the benefit of Sarah K. Adams, Alan W.
Adams' sister. See footnote (6) below. Sarah K. Adams and Alan W. Adams are
the two adult children of Howard D. Adams.
(3) Includes shares held in certain family trusts for the benefit of Howard D.
Adams' children or in charitable foundations with respect to which either
Mr. Adams or his wife has voting power and with respect to which Mr. Adams
disclaims beneficial ownership. Does not include shares held directly by,
or indirectly through certain other family trusts (for which neither Mr.
Adams nor his wife act as co-trustees) for the benefit of, Mr. Adams' two
adult children.
(4) Includes (i) 21,379 shares and 4,667 shares subject to Warrants held
directly by Larry Wright; (ii) 3,000 shares held by Milbank Corporation
("Milbank") of which Mr. Wright is an officer, director and sole
shareholder and with respect to which shares he exercises shared voting and
investment power; (iii) 26,173 shares and 3,334 shares subject to Warrants
held by an employee retirement plan of Milbank of which Mr. Wright is a
trustee with shared voting and investment power; (iv) 401,884 shares and
22,733 shares subject to Warrants held in Deerpath Investments LLP, a
limited partnership ("Deerpath"), to which Milbank serves as investment
advisor and with respect to which Mr. Wright exercises shared voting and
investment power; and (v) 4,827 shares held in certain family trusts of
another officer of Milbank with respect to which Mr. Wright acts as
co-trustee and exercises shared voting power. See footnote (5) below for a
description of Milbank's total pro forma beneficial ownership which
includes that of Mr. Wright.
(5) Includes (i) 21,379 shares and 4,667 shares subject to Warrants held by
Larry Wright, a director of the Company, who is an officer of Milbank; (ii)
3,000 shares held by Milbank; (iii) 26,173 shares and 3,334 shares subject
to Warrants held by an employee retirement plan of Milbank of which Mr.
Wright is a trustee with voting and investment power; (iv) 401,884 shares
and 22,733 shares subject to Warrants held in Deerpath to which Milbank
serves as investment advisor and with respect to which Mr. Wright exercises
voting and investment power; and (v) 14,499 shares held in certain family
trusts of another officer of Milbank with respect to which certain officers
of Milbank act as co-trustees and exercise shared voting power. The address
of Milbank Corporation is 135 South LaSalle Street, Chicago, Illinois
60603. See footnote (4) above for a description of the beneficial ownership
of Mr. Wright included within that of Milbank.
(6) Includes 17,550 shares owned by Emmett D. McCarthy and his family. Also
reflects 176,311 shares, 28,962 shares subject to Warrants, and 17,689
shares subject to Rights held by the Alan W. Adams Family Trust and 176,470
shares, 28,962 shares subject to Warrants, and 17,689 shares subject to
Rights held by the Sarah K. Adams Family Trust, irrevocable trusts for
which Emmett D. McCarthy and either Alan W. Adams or Sarah K. Adams,
respectively, serve as co-trustees. The beneficiaries of the respective
trusts are Alan W. Adams and Sarah K. Adams, respectively, the two adult
children of Howard D. Adams. Mr. McCarthy disclaims beneficial ownership of
all such shares. Also reflects 28,254 shares held by the Sarah Katherine
Adams Trust, an irrevocable trust for which Emmett D. McCarthy serves as
trustee, the beneficiary of which trust is Sarah K. Adams. The address of
Mr. McCarthy, as Trustee, is Suite 303, 727 North Bank Lane, Lake Forest,
Illinois 60045. See footnote (2) above regarding beneficial ownership of
Alan W. Adams, a vice president of Lake Forest Bank and a Director of the
Company.
</FN>
</TABLE>
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BOARD OF DIRECTORS' STRUCTURE AND COMPENSATION
Members of the Company's Board of Directors have been appointed to
serve on various committees of the Board of Directors. The Board of Directors
has currently established three committees: (i) the Executive Committee; (ii)
the Compensation and Nominating Committee; and (iii) the Audit Committee.
Executive Committee. The Executive Committee has the authority to act
in place of the full Board of Directors, when required, in connection with the
following matters: critical real estate purchases and sales; temporary funding
requirements; limited personnel issues (especially as they relate to strategic
expansion initiatives); acquisition negotiations within specifically approved
parameters; capital allocation among subsidiaries; and other issues as
specifically approved by the full Board of Directors. Actions of the Executive
Committee are subject to the ratification by the full Board of Directors. The
Executive Committee consists of Messrs. Rademacher (Chairman), Alan Adams,
McCarthy, Schaper, Tate, Wehmer and Wright and Ms. McKenna. No Executive
Committee meetings have been held to date.
Compensation and Nominating Committee. The Compensation and Nominating
Committee is responsible for reviewing and recommending compensation of the
Company's officers and the chairmen and presidents of the Banks and First
Premium; reviewing and recommending non-cash compensation programs including
stock option plans, grants and terms thereunder, retirement plans, 401(k) plans
and employee stock purchase plans; recommending and slating the Company's
Directors; reviewing and recommending Director compensation for the Company, the
Banks and First Premium; and the preparation of the proxy statement report
regarding compensation philosophy. With respect to stock option grants, it is
anticipated that the committee will recommend the total number of options to be
granted and allocations among the Banks and First Premium and will generally
rely on recommendations of management and boards of the Banks and First Premium
as to awards to key employees. The members of the Compensation Committee are Mr.
Howard D. Adams (Chairman) and Messrs. Crist, Dunne, Hotchkiss, Lillard,
Mahoney, Rademacher and Reyes. During 1996, one Compensation Committee meeting
was held on December 11, 1996, with all committee members present.
Audit Committee. The Audit Committee reports to the Board of Directors
in discharging its responsibilities relating to the accounting, reporting and
financial control practices of the Company. The Audit Committee has general
responsibility for oversight of financial controls, as well as the Company's
accounting and audit activities, and annually reviews the qualifications of the
independent auditors. The Audit Committee is composed entirely of outside
directors who are not now, and have never been, officers of the Company. The
members of the Audit Committee are Messrs. Schornack (Chairman) and Moschner and
Ms. Stein and Ms. Sylvester. The first Audit Committee meeting was held on
January 20, 1997, with all committee members present.
BOARD OF DIRECTORS' COMPENSATION
Non-employee members of the Board of Directors are compensated by the
Company at the rate of $500 for each Board of Directors' meeting attended and
$200 for each committee meeting of the Board attended. Those Directors who serve
on the subsidiary boards of directors are also entitled to compensation for such
service. Employee members of the Board of Directors receive no Board of Director
compensation. During 1996, the employee members of the Board of Directors were
Messrs. H. Adams, A. Adams, Alaimo, Knollenberg, Tate and Wehmer.
During 1996, two Board of Directors meetings and one Compensation and
Nominating Committee meeting were held. Messrs. Hotchkiss, Knollenberg, Lillard,
McCarthy, Stein, Tate and Wehmer each were absent for one of the Board of
Directors meetings during 1996.
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DEFERRED COMPENSATION FOR NON-EMPLOYEE DIRECTORS
The Wintrust Financial Corporation Deferred Director Fee Plan allows
non-employee Directors to defer receipt of director fees due such Directors. The
deferred director fees are payable at the Director's option as a lump sum or in
installments over a period not to exceed ten years. Payments under the plan
begin at the date specified by the director or upon cessation of service as a
Director.
EXECUTIVE OFFICERS OF THE COMPANY
The Company's Executive Officers are elected annually by the Company's
Board of Directors. Certain information regarding the Company's Executive
Officers is set forth below.
Howard D. Adams (64) -- Chairman and Chief Executive Officer - Mr. Adams serves
as the Company's Chairman and Chief Executive Officer and oversees the long-term
strategic, marketing and organizational planning of the Company. See the
description above under "Election of Directors and Ownership of Shares" for
biographical information.
Edward J. Wehmer (43) -- President and Chief Operating Officer - Mr. Wehmer
serves as the Company's President and performs the functions of the Chief
Operating Officer. Accordingly, he is responsible for overseeing the execution
of the Company's day-to-day operations and strategic initiatives. Mr. Wehmer
also serves as President of Lake Forest and Lake Forest Bank. See the
description above under " Election of Directors and Ownership of Shares" for
biographical information.
David A. Dykstra (36) -- Executive Vice President, Chief Financial Officer and
Treasurer - Mr. Dykstra serves as the Company's Chief Financial Officer and
oversees all financial affairs of the Company, including internal and external
financial reporting. Prior thereto, Mr. Dykstra was employed from 1990 to 1995
in a similar capacity by River Forest Bancorp, Inc., Chicago, Illinois, most
recently holding the position of Senior Vice President and Chief Financial
Officer. Prior to his association with River Forest Bancorp, Mr. Dykstra spent
seven years with KPMG Peat Marwick LLP, most recently holding the position of
Audit Manager in the Financial Institutions practice. In addition to various
civic and charitable activities, Mr. Dykstra is a Trustee of the Village of Lake
Villa. Mr. Dykstra is a Director of Libertyville and Libertyville Bank.
Lloyd M. Bowden (43) -- Executive Vice President -- Technology - Mr. Bowden
serves as Executive Vice President - Technology for the Company and is
responsible for planning, implementing and maintaining all aspects of the
subsidiary banks' internal data processing systems and technology designed to
service the subsidiary banks' customer base. Mr. Bowden joined the Company in
April 1996 to serve as the Director of Technology with responsibility for
implementing technological improvements to enhance customer service capabilities
and operational efficiencies. Prior thereto, he was employed by Electronic Data
Systems, Inc. in various capacities since 1982, most recently in an executive
management position with the Banking Services Division and previously in the
Banking Group of the Management Consulting Division.
Robert F. Key (42) -- Executive Vice President -- Marketing - Mr. Key serves as
the Executive Vice President - Marketing for the Company and directs all
advertising and marketing programs for each of the subsidiary banks. Mr. Key
joined the Company in March 1996 to serve as Executive Vice President of
Marketing. From 1978 through March 1996, Mr. Key was a Vice President/Account
Director at Leo Burnett Company where he most recently had responsibility for
the $30 million advertising budget of a business with $600 million in sales.
- 9 -
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by the Company and
its subsidiaries to the Chairman and Chief Executive Officer and the four other
most highly paid executive officers (the "Named Executive Officers") during
1996, 1995 and 1994.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------- ------------
OTHER
ANNUAL SECURITIES ALL OTHER
COMPEN- UNDERLYING COMPEN-
NAME AND SALARY BONUS SATION(1) OPTIONS/ SATION(2)
PRINCIPAL POSITION YEAR ($) ($) ($) SARS (#) ($)
------------------ ---- ------- ------- ----- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Howard D. Adams 1996(3) 331,250 40,000 373 -- --
Chairman and CEO 1995(3) 190,000 43,000 629 -- --
1994(3) 141,000 10,000 -- -- --
Edward J. Wehmer 1996(4) 395,000 40,000 6,431 36,730 1,224
President & 1995 326,250 43,000 5,935 -- 3,482
Chief Operating Officer 1994 255,000 25,000 4,862 -- --
David A. Dykstra 1996 155,000 32,000 4,790 6,824 582
Executive Vice President & 1995(5) 80,889 12,000 2,486 30,880 --
Chief Financial Officer 1994 N/A N/A N/A -- --
Robert F. Key 1996(5)(6) 121,634 40,000 1,116 29,100 --
Executive Vice President & 1995 N/A N/A N/A -- --
Director of Marketing 1994 N/A N/A N/A -- --
Lloyd M. Bowden 1996(5)(6) 90,000 20,000 2,745 18,670 --
Executive Vice President & 1995 N/A N/A N/A -- --
Director of Technology 1994 N/A N/A N/A -- --
- --------------------------------------------
<FN>
(1) Other annual compensation represents the sum of compensation for the use of
a Company car and/or the payment of club dues.
(2) Represents compensation to the executive officer for the aggregate life
insurance premium paid on behalf of the named executive officer by the
Company or other miscellaneous compensation.
(3) Howard D. Adams also received a salary from HDA Capital Corporation ("HDA")
of $50,000 for 1995 and 1994. Such amounts are not included as compensation
in the above table. HDA was paid consulting fees from Crabtree for Mr.
Adams' services. Specifically, HDA received consulting fees of $95,548,
$142,692 and $111,030 for the year ended December 31, 1996, 1995 and 1994,
respectively. Subsequent to the Reorganization, these consulting fees were
discontinued. HDA is owned by the Alan W. Adams Family Trust and the Sarah
K. Adams Family Trust. See "Transactions with Management and Others."
(4) During 1996, Edward J. Wehmer entered into "Phantom Stock Agreements"
pursuant to which he is entitled to cash payments equal to any appreciation
in the value of an aggregate of 36,730 shares of Common Stock from their
fair market value as of the date of the agreements (the weighted average
fair market value as of the date of the agreements was $12.06 per share
after adjustments resulting from the Reorganization) until such time as Mr.
Wehmer elects to exercise such stock appreciation rights. Mr. Wehmer did
not exercise any rights under the agreements in 1996 and elected to defer
receipt of compensation thereunder. The agreements expire in 2006.
(5) Reflects compensation for partial year service. The 1996 base salaries for
Messrs. Key and Bowden were $150,000 and $120,000, respectively, and the
1995 base salary for Mr. Dykstra was $140,000.
(6) Includes signing bonuses of $15,000 and $10,000, respectively, for Robert
F. Key and Lloyd M. Bowden.
</FN>
</TABLE>
- 10 -
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The table below summarizes certain information about the Options/SARs
which were granted in 1996 by the Company for each Named Executive Officer or by
one or more of its subsidiaries prior to the Reorganization, which options
converted as a result of that transaction into Options to purchase Common Stock
of the Company. All Options/SARs were granted at per share exercise prices equal
to the fair market value per share of the shares subject to such Options/SARs on
the date of grant.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
WINTRUST OPTIONS/ ANNUAL RATES OF
SHARES SARS STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION
OPTIONS/ EMPLOYEES OR BASE FOR OPTION/SAR TERM
SARS IN FISCAL PRICE EXPIRATION -------------------
NAME GRANTED YEAR ($/SH) DATE 5% 10%
---- --------- --------- ------- ------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Howard D. Adams............ -- -- -- -- -- --
Edward J. Wehmer........... 36,730(1) 10.79% --(1) 2006 $ 278,601 $ 706,030
David A. Dykstra........... 1,508(2) 0.44% $ 12.43 2006 11,792 29,883
1,290(4) 0.38% 14.53 2006 11,792 29,883
4,026(5) 1.18% 15.00 2006 38,608 97,840
Robert F. Key.............. 10,834(3) 3.18% 11.37 2006 77,480 196,349
7,241(2) 2.13% 14.09 2006 64,147 162,562
6,194(4) 1.82% 14.53 2006 56,601 143,437
4,831(5) 1.42% 12.42 2006 37,734 95,625
Lloyd M. Bowden............ 7,255(3) 2.13% 11.37 2006 51,884 131,484
4,525(2) 1.33% 14.09 2006 40,092 101,601
3,871(4) 1.14% 14.53 2006 35,375 89,648
3,019(5) 0.89% 12.42 2006 23,584 59,765
- -------------------------------------------------
<FN>
(1) The per share base price for calculation of the stock appreciation value to
which Mr. Wehmer is entitled under his "phantom stock" agreements is $12.42
with respect to 24,155 shares and $11.37 with respect to 12,575 shares. For
a description of Mr. Wehmer's "phantom stock" agreements, see footnote (4)
to the Summary Compensation Table.
(2) Such Options vest in 25% annual increments in years in which the
Company's Hinsdale Bank & Trust Company subsidiary attains certain
profitability levels.
(3) Such Options vest 25% on the December 31, 1996, and continue to vest in
25% annual increments thereafter in years in which the Company's Lake
Forest Bank & Trust Company subsidiary attains certain profitability
levels.
(4) Such Options vested 25% on December 31, 1996, and continue to vest in
25% annual increments thereafter in years in which the Company's North
Shore Community Bank & Trust Company subsidiary attains certain
profitability levels.
(5) Such Options vested 10% on the first anniversary of the date of grant; vest
an additional 10% on the second anniversary of the date of grant, and vest
in 20% annual increments, beginning in the second year, in years in which
the Company's Libertyville Bank & Trust subsidiary attains certain
profitability levels.
</FN>
</TABLE>
- 11 -
<PAGE>
AGGREGATED OPTION/SAR EXERCISES AND YEAR-END VALUES
The following table summarizes for each Named Executive Officer the
number of shares of Common Stock subject to outstanding Options/SARs and the
value of such Options/SARs that were unexercised at December 31, 1996. No
Options/SARs were exercised by the Named Executive Officers during 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS/SARS AT OPTIONS/SARS AT
NAME EXERCISE (#) REALIZED ($) DECEMBER 31, 1996 (#) DECEMBER 31, 1996 ($)
---- ------------ ------------ --------------------- ---------------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE(1) UNEXERCISABLE(1)
----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Howard D. Adams........... -- -- 12,926 / 1,209 $ 39,130 / $ 8,460
Edward J. Wehmer.......... -- -- 147,625 / 5,185 1,012,681 / 36,278
David A. Dykstra.......... -- -- 9,523 / 28,182 43,060 / 85,710
Robert F. Key............. -- -- 5,621 / 23,479 11,613 / 42,412
Lloyd M. Bowden........... -- -- 3,642 / 15,028 7,685 / 27,715
- ----------------------------------------
<FN>
(1) The numbers and amounts in the above table represent shares of Common Stock
subject to Options/SARs granted by the Company or its subsidiaries that
were unexercised as of December 31, 1996.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with Howard D. Adams on
November 27, 1996 and with Edward J. Wehmer on December 16, 1996. The employment
agreements contain confidentiality agreements and two-year non-compete
provisions in the event of termination of employment for any reason, and provide
for up to 24 months of severance pay in the event of (i) termination without
cause, (ii) a change of control of the Company where the executive is not
offered employment in a similar capacity; (iii) any other material reduction in
duties and responsibilities or (iv) reduction in base annual compensation to
less than 75% of the amount being earned as of the first date following the
dates of the agreements. The annual base salaries as of such dates for Messrs.
Adams and Wehmer were $445,000 and $395,000, respectively. In addition to any
increases in base salaries that may be agreed to from time to time, the
executives are entitled to participate in any employee insurance and fringe
benefit programs that may be established by the Company for its employees.
COMPENSATION AND NOMINATING COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Howard D. Adams, Chairman and Chief Executive Officer, serves on the
Compensation and Nominating Committee of the Company's Board of Directors that
is responsible for determining compensation of the Company's executive officers.
Mr. Adams and Edward J. Wehmer, President of the Company, serve on the
compensation committee of Lake Forest Bank which is responsible for determining
the compensation of Lake Forest Bank's senior officers. Joseph Alaimo and Alan
W. Adams, senior officers of Lake Forest Bank, are Directors of the Company. In
addition, Messrs. H. Adams, Wehmer and David A. Dykstra, the Company's Chief
Financial Officer, serve on the board of directors of First Premium, which is
responsible for determining the compensation of First Premium's executive
officers. James Knollenberg, who served as President of First Premium during
1996, is a Director of the Company
- 12 -
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION: The Compensation Committee of the Board of Directors has
the responsibility to monitor and implement the overall compensation program of
the Company. In 1996, the base salaries of the Chief Executive Officer and the
other Named Executive Officers were established by the predecessor companies
prior to the Reorganization that created the Company effective September 1,
1996. As such, the Compensation Committee of Wintrust did not establish such
base salaries. However, the Compensation Committee did approve any bonuses that
were awarded subsequent to September 1, 1996, the date of the Reorganization.
Accordingly, this report focuses on the overall philosophy of awarding
compensation rather than specific compensation criteria for the CEO and other
Named Executive Officers.
OVERALL GENERAL COMPENSATION PHILOSOPHY: The Compensation Committee
believes that the Company's compensation philosophy should be designed to: focus
executive officer attention on achieving performance objectives that enhance
shareholder value; create and sustain high performance; attract and retain
executives individuals who can contribute to the growth of the business and
contribute substantially to the Company's short and long term goals; and to
provide incentives for executives to act as shareholders of the Company. The
philosophy is to provide for competitive base salaries which reflect individual
levels of responsibility and performance, annual bonuses based upon achievement
of annual corporate performance, and awarding of stock-based incentive
opportunities. The combined result is a strengthening of the mutuality of
interest in the Company's long-term performance between its executive officers
and the Company's shareholders. Executive officers who are members of the
Compensation and Nominating Committee and of the Board of Directors do not
participate in the approval process of their own compensation.
BASE SALARIES: Base salaries for executive officers are determined
annually by comparing responsibilities of the position with those of other
similar executive officer positions in the marketplace and long term
performance. Annual salary adjustments are determined by the Company's
performance and the individual's contribution to that performance. While there
are no individual performance weightings established by the Board of Directors,
the salary recommendations are based on performance criteria such as:
o financial performance with a balance between long and short term o growth
in earnings, revenue and asset growth; long term strategic o decisions;
responsiveness to changes in the financial institution o marketplace; and
growth and diversification of the Company.
BONUSES: Executives may earn cash bonuses on an annual basis based upon
a pay-for-performance philosophy. The Board considers the achievements of each
executive officer for that year, as well as the Company's performance. The
achievements may be quantitative or qualitative. Qualitative factors include but
are not limited to commitment, dedication, demonstration of the entrepreneurial
spirit, idea development, and attention to personnel relations. The Board is of
the opinion that the Company is small enough so that it knows what contributions
an executive officer has made in a given year.
As a matter of policy, the Board does not assign specific Company or
individual objectives for the awarding of bonuses due to the belief that the
evaluation of an executive officer's annual performance cannot be simplified to
a mathematical computation. As such, the policy used by the Board to set cash
bonuses is considered subjective.
STOCK OPTIONS: To ensure a direct connection between the executive
officer interests and the shareholders of the Company, the Company has awarded
and intends to award stock-based incentive opportunities. Such stock-based
incentives are generally longer term in nature than the base salary and annual
bonus components of overall compensation. Until September 1, 1996, grants of
stock-based incentives were awarded by the predecessor companies to the
Reorganization. Outstanding stock options were granted at exercise prices at or
above fair market
- 13 -
<PAGE>
value on the date of grant and generally had a term of ten years. Accordingly
the stock options were granted with the intention of creating of shareholder
value over the long term since the full benefit of the compensation package
cannot be realized unless an appreciation in the share price occurs over a
specified number of years.
CONCLUSION: The Compensation Committee believes the executive officers'
individual compensation programs discussed in this report are designed in a
manner which is consistent with the Company's overall compensation philosophy.
HOWARD D. ADAMS (CHAIRMAN)
PETER CRIST
MAURICE F. DUNNE
EUGENE HOTCHKISS III
JOHN LILLARD
JAMES MAHONEY
HOLLIS W. RADEMACHER
PERFORMANCE GRAPH
For companies with common stock registered under the Securities
Exchange Act of 1934, Securities and Exchange Commission regulations require the
presentation of a performance graph comparing the yearly percentage change in
the Company's cumulative total shareholder return on its Common Stock to the
cumulative total return of a broad equity market index and of a peer group of
issuers for the past five years. No performance graph is required to be
presented for the Company's Common Stock since the Company first became subject
to such requirements in 1997.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Some of the executive officers and Directors of the Company are, and
have been during the preceding three years, customers of the Bank, and some of
the officers and Directors of the Company are direct or indirect owners of 10%
or more of the stock of corporations which are, or have been in the past,
customers of the Bank. As such customers, they have had transactions in the
ordinary course of business of the Bank, including borrowings, all of which
transactions are or were on substantially the same terms (including interest
rates and collateral on loans) as those prevailing at the time for comparable
transactions with nonaffiliated persons. In the opinion of management of the
Company, none of the transactions involved more than the normal risk of
collectibility or presented any other unfavorable features. At December 31,
1996, the Bank had $10.0 million in loans outstanding to certain Directors and
executive officers of the Company and certain executive officers of the Banks,
which amount represented 23.4% of total shareholders' equity as of that date.
On October 24, 1996, the Board of Directors approved the acquisition of
Wolfhoya Investments, Inc. ("Wolfhoya"), a company organized prior to the
Reorganization by Howard D. Adams and Edward J. Wehmer, and certain other
persons who are Directors and/or executive officers of the Company, for purposes
of establishing a de novo bank in Barrington, Illinois. In December 1996, the
Company issued an aggregate of 87,556 shares of Common Stock to consummate the
acquisition, all of which shares are restricted securities under Rule 144
promulgated under the Securities Act. Pursuant to the terms of the transaction,
the family of Howard D. Adams, and Messrs. Edward J. Wehmer, David A. Dykstra,
Robert F. Key, Hollis W. Rademacher and Lemuel H. Tate, Jr. received, in
exchange for their respective ownership interests in Wolfhoya, Common Stock of
the Company in the amounts of 36,054 shares (including 18,027 shares which are
held in trust for the benefit of Alan W. Adams, a Director of the Company),
15,342 shares, 5,479 shares, 5,479 shares, 1,095 shares and 5,479 shares,
respectively. In addition, outstanding warrants to purchase shares of Wolfhoya
were converted, in accordance with their terms, to Warrants to purchase Common
Stock of the Company, and as a result, members of Howard D. Adams' Family and
Edward J. Wehmer received Warrants to purchase shares of Common Stock in the
amounts of 12,096 (including Warrants to purchase 6,048 shares which are held in
trust for the benefit of Alan W. Adams) and 4,742 shares, respectively, at a
purchase price of $14.85 per share.
- 14 -
<PAGE>
At the time of its acquisition by the Company, Wolfhoya had debt outstanding
under a promissory note which was personally guaranteed by Howard D. Adams and
Edward J. Wehmer. Following the acquisition, the outstanding principal balance
and accrued interest of approximately $502,000 on the promissory note were
repaid out of borrowings under the Company's revolving line of credit. As a
result of this acquisition, the Company opened Barrington Bank and Trust Company
in December, 1996.
Prior to the Reorganization, certain of the Directors and officers of
the Company held rights and options to acquire common stock of the various
predecessor companies. In the Reorganization, such rights and options were
converted on the basis of the applicable exchange ratios so as to represent the
right to acquire an aggregate of 1,186,239 shares of Common Stock, at
appropriately adjusted exercise prices.
In addition, certain of the Directors and officers of the Company held
warrants to purchase the common stock of predecessor companies which were
exchanged, in connection with and as part of the Reorganization, for a
combination of Common Stock and Warrants to purchase Common Stock on a basis
reflective of and consistent with the applicable exchange ratios. As a result of
the contribution of the outstanding warrants to the Company in exchange for
Common Stock and Warrants, such directors and officers acquired an aggregate of
98,381 additional shares of Common Stock in the Reorganization without being
required to pay any portion of the cash exercise price relating to their
warrants, as all of such exercise price was reallocated to the Warrants issued
as part of the exchange and will be payable only in the event of subsequent
exercise of the Warrants. Of the Common Stock and Warrants issued in exchange
for outstanding warrants, Howard D. Adams and/or certain members of his family
and Edward J. Wehmer received 35,317 and 10,268 shares, respectively, and 56,230
and 14,396 Warrants, respectively.
Howard D. Adams held certain options relating to shares of a subsidiary
of Crabtree that had discontinued operations prior to the Reorganization. Such
options were amended in connection with the Reorganization so as to convert to
Options to acquire 9,298 shares of Common Stock at an exercise price
appropriately adjusted to reflect such conversion. In addition, Mr. Adams owned
40,000 shares of Crabtree common stock which were purchased at a discount of $20
per share from the fair value determined at the time by the board and were
subject to continuing restrictions pursuant to the Crabtree Capital Corporation
1990 Stock Purchase Plan. As a result of the Reorganization and fulfillment of
the appropriate vesting period, Crabtree shares were converted into shares of
Common Stock with no continuing restrictions or discounts on repurchase.
Prior to the Reorganization, Mr. James Knollenberg, a Director of the
Company, held certain options to purchase 950 shares of First Premium. Such
options were converted in the Reorganization so as to represent options to
acquire 65,509 shares of the Company's Common Stock at an exercise price
appropriately adjusted to reflect such conversion.
Prior to the Reorganization, each of the predecessor companies jointly
reimbursed expenses incurred by HDA Capital Corporation ("HDA Capital") for
their share of marketing and secretarial personnel and direct costs incurred on
behalf of the respective companies. HDA Capital provided periodic invoices to
each of the companies for such marketing and secretarial time and direct
expenses based upon specific activities attributable to each of the respective
companies and based on actual cost. HDA Capital is owned by the Alan W. Adams
Family Trust and the Sarah K. Adams Family Trust which are co-trusteed by Emmett
McCarthy and either Alan W. Adams and Sarah K. Adams, respectively, the two
adult children of Howard D. Adams. Alan W. Adams is also a Director of the
Company. In addition to the expense sharing arrangement noted above, HDA Capital
received consulting fees from Crabtree for services rendered by Howard D. Adams.
Such fees amounted to $95,548 for the nine months ended September 30, 1996.
Following consummation of the Reorganization, Howard D. Adams is compensated
directly for his services as an executive officer of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and executive officers to file reports of holdings and
transactions in the Company's Common Stock with the the Securities and Exchange
Commission and The Nasdaq National Market. The Company and its affiliates first
became subject to such requirements in 1997.
- 15 -
<PAGE>
SHAREHOLDER APPROVAL OF 1997 STOCK INCENTIVE PLAN
Introduction. At the Annual Meeting, there will be submitted a proposal
to approve the "Wintrust Financial Corporation 1997 Stock Incentive Plan" (the
"Stock Incentive Plan" or the "Plan"). The Compensation and Nominating Committee
of the Board of Directors adopted the Stock Incentive Plan on April 14, 1997,
subject to Board of Director ratification and shareholder approval. Based on the
committee's recommendation of the Plan, the Board of Directors approved the Plan
at a meeting held on April 30, 1997.
The Plan is intended to amend, restate, continue and combine into a
single plan, the eleven stock-based incentive plans that had been implemented by
the Company's predecessor corporations. As part of the Reorganization
transaction in September 1996, the different shares previously issuable under
the predecessor plans were converted into shares issuable into Wintrust Common
Stock. It is expected that one combined Plan will provide ongoing ease of
administration and greater flexibility in designing stock-based awards in the
future. The predecessor companies' stock-based incentive plans that are being
amended, restated, continued and combined by this Plan are as follows:
Wintrust Common
Stock Reserved
Shares currently authorized and reserved and Available
for issuance under predecessor plans: for Issuance
- -------------------------------------- ------------
Lake Forest Bancorp, Inc. 1991 Stock Option Plan 229,771
Lake Forest Bancorp, Inc. 1993 Stock Option Plan 117,048
Hinsdale Bancorp, Inc. 1993 Stock Option Plan 232,188
North Shore Community Bancorp, Inc. 1994 Stock Option Plan 265,059
North Shore Community Bancorp, Inc. 1993 Stock Rights Plan 103,236
Libertyville Bancorp, Inc. 1995 Stock Option Plan 128,825
Wolfhoya Investments, Inc. 1995 Stock Option Plan 107,768
Crabtree Capital Corporation 1987 Stock Option Plan 325,413
Crabtree Capital Corporation 1990 Stock Purchase Plan 76,916
First Premium Services, Incorporated 1992 Stock Option Plan 142,191
The Credit Life Companies, Incorporated 1987 Stock Option Plan 48,944
-----------
1,777,359
Proposed additional shares to be authorized and
reserved for issuance 160,000
-----------
Total number of shares of Common Stock as to which awards
may be granted assuming shareholder approval. 1,937,359
===========
The following description of the Plan sets forth the material and
summary terms of the Plan. It does not purport to be complete and is qualified
in its entirety by reference to the provisions of the Plan, a copy of which is
attached to this proxy statement as Appendix A.
Purpose. The Stock Incentive Plan is intended to provide the Company
with the ability to provide market-responsive, stock-based incentives and other
rewards for employees and directors of the Company and its subsidiaries and
consultants to the Company and its subsidiaries (i) to provide such employees,
directors and consultants a stake in the growth of the Company, and (ii) to
encourage them to continue in the service of the Company and its subsidiaries.
Participants. All of the approximately 261 employees and the 67
non-employee directors of the Company and its subsidiaries will be eligible to
participate in the Plan. In addition, certain persons who have consulting
arrangements with the Company or its subsidiaries may be selected to participate
if it is determined that any such individual has a significant responsibility
for the success and future growth and profitability of the Company.
- 16 -
<PAGE>
Authorization. The Stock Incentive Plan provides that the total number
of shares of Common Stock as to which awards may be granted may not exceed
1,937,359 shares, which number of shares includes the 1,777,359 shares of Common
Stock which have already been reserved for issuance under the predecessor plans.
The shares of Common Stock subject to awards under the Stock Incentive
Plan will be reserved for issuance out of the Company's total authorized shares.
A participant in the Plan is permitted to receive multiple grants of stock-based
awards. The terms and provisions of a type of award with respect to any
recipient need not be the same with respect to any other recipient of such
award. The Plan provides that during any calendar year the maximum number of
shares of Common Stock which may be made subject to award to any single
participant may not exceed 100,000.
Administration. The Board of Directors of the Company has delegated the
administration of the Stock Incentive Plan to its Compensation and Nominating
Committee (the "Compensation Committee" or "Committee"). The Committee will make
determinations with respect to the participation of employees, directors and
consultants in the Plan and, except as otherwise required by law or the Plan,
the grant terms of awards including vesting schedules, price, length of relevant
performance, restriction or option period, dividend rights, rights to dividend
equivalents, post-retirement and termination rights, payment alternatives, and
such other terms and conditions as the Committee deems appropriate. The
Committee may designate other persons to carry out its responsibilities under
such conditions and limitations as it may set, other than its authority with
regard to awards granted to employees who are executive officers or directors of
the Company.
The disposition of an award in the event of the retirement, disability,
death or other termination of a participant's employment shall be as determined
by the Committee as set forth in the award agreement.
Awards. The following types of awards may be granted under the Stock
Incentive Plan:
Stock Options. Stock Options may be granted in the form of
incentive stock options within the meaning of Section 422 of the Code
or stock options not meeting such Code definition ("nonqualified stock
options"). The exercise period for any stock option will be determined
by the Committee at the time of grant which may provide that options
may be exercisable in installments. The exercise price per share of
Common Stock of any option may not be less than the fair market value
of a share of Common Stock on the date of grant. Each stock option may
be exercised in whole, at any time, or in part, from time to time,
after the grant become exercisable. The exercise price is payable in
cash, in shares of already owned Common Stock or in any combination of
cash and shares, or by such methods as the Committee may deem
appropriate, including but not limited to loans by the Company on such
terms and conditions as the Committee may determine. No award other
than stock options may be made to any director (other than a director
who is an employee at the time of the award) on or after May 22, 1997.
Stock Appreciation Rights. Stock appreciation rights ("SARs")
may be granted independently of any stock option or in tandem with all
or any part of a stock option granted under the Plan, upon such terms
and conditions as the Committee may determine. Upon exercise, an SAR
entitles a participant to receive the excess of the fair market value
of a share of Common Stock on the date the SAR is exercised over the
fair market value of a share of Common Stock on the date the SAR is
granted. The Committee will determine whether an SAR will be settled in
cash, Common Stock or combination of cash and Common Stock. Upon
exercise of an SAR granted in conjunction with a stock option, the
option or the portion thereof to which the SAR relates will be
surrendered.
Restricted Shares. Restricted shares are shares of Common
Stock that may not be sold or otherwise disposed of during a restricted
period after grant, the duration of which will be determined by the
Committee. The Committee may provide for the lapse of such restrictions
in installments. Restricted shares may be voted by the recipient.
Dividends on the restricted shares may be payable to
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the recipient in cash or in additional restricted shares. A recipient
of a grant of restricted shares will generally earn unrestricted
ownership thereof only if the individual is continuously employed by
the Company or a subsidiary during the entire restricted period.
Performance Shares. Performance shares are grants of shares of
Common Stock which are earned by achievement of performance goals
established for the award by the Committee. During the applicable
performance period determined by the Committee for an award, the shares
may be voted by the recipient and the recipient is also entitled to
receive dividends thereon unless the Committee determines otherwise. If
the applicable performance criteria are met, at the end of the
applicable performance period, the shares are earned and become
unrestricted. The Committee may provide that a certain percentage
(which may be greater than 100%) of the number of shares originally
awarded may be earned based upon the attainment of the performance
goals.
Stock Units. Stock units are fixed or variable share or dollar
denominated units valued, at the Committee's discretion, in whole or in
part by reference to, or otherwise based on, the fair market value of
the Company's Common Stock, The Committee will determine the terms and
conditions applicable to stock units, including any applicable
restrictions, conditions or contingencies, which may be related to
individual, corporate or other categories of performance. A stock unit
may be payable in Common Stock, cash or a combination of both. An
employee who receives a stock unit may be given rights to dividend
equivalents on such stock units, payable in cash, stock, or additional
stock units, subject to any conditions the Committee may impose.
Other Incentive Awards. The Committee may grant other types of
awards of Common Stock or awards based in whole or in part by reference
to Common Stock ("Other Incentive Awards"). Such Other Incentive Awards
include, without limitation, restricted share units, performance share
units, unrestricted stock grants (to other than executive officers),
dividend or dividend equivalent rights or awards related to the
establishment or acquisition by the Company or any subsidiary of a new
or start-up business or facility. The Committee will determine the time
at which grants of such Other Incentive Awards are to be made, the size
of such awards and all other conditions of such awards, including any
restrictions, deferral period or performance requirements. The
recipient will have the right to receive currently or on a deferred
basis as determined by the Committee, interest or dividends, or
interest or dividend equivalents. Common Stock issued on a bonus basis
pursuant to Other Incentive Awards may be issued for no cash
consideration to nonexecutive officers of the Company.
Except to the extent permitted by specific terms of any nonqualified
stock options, no award will be assignable or transferable except by will, the
laws of descent and distribution or, in the Committee's discretion, in certain
other manners.
Adjustments. In the event there is a change in the capital structure of
the Company as a result of any stock dividend or split, recapitalization,
merger, consolidation or spin-off or other similar corporate change, the
Committee may make an adjustment in the number of shares of Common Stock
available for issuance, the number of shares covered by any outstanding award
and the price per share thereof. In the event there is a change of control (as
defined in the Stock Incentive Plan) of the Company all options and SARs
outstanding shall become immediately exercisable and remain exercisable for
their entire term, all restrictions imposed on restricted shares will lapse and,
unless otherwise specified in a participant's award agreement, all performance
goals applicable to any awards shall be deemed attained at the maximum payment
level.
Amendments and Termination. The Board of Directors may at any time
amend, suspend or terminate the Stock Incentive Plan, to the extent permitted by
law; provided, however, no such action may affect in any material way any awards
previously granted thereunder. Any such action by the Board of Directors may be
taken without the approval of the shareholders of the Company to the extent that
such approvals are not required by applicable law or regulation.
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<PAGE>
There is no set termination date for the Plan, although no incentive options may
be granted more than 10 years after the effective date of the Plan.
Federal Income Tax Considerations. The following discussion summarizes
the federal income tax consequences to participants who may receive grants of
awards under the Stock Incentive Plan. The discussion is based upon
interpretations of the Code in effect as of January 1, 1997, and the regulations
promulgated thereunder as of such date.
Nonqualified Stock Options. For federal income tax purposes,
no income is recognized by a participant upon the grant of a
nonqualified stock option under the Stock Incentive Plan. Upon the
exercise of a nonqualified option, compensation taxable as ordinary
income will be realized by the participant in an amount equal to the
excess of the fair market value of a share of Common Stock on the date
of such exercise over the exercise price. A subsequent sale or exchange
of such shares will result in gain or loss measured by the difference
between (a) the exercise price, increased by any compensation reported
upon the participant's exercise of the option and (b) the amount
realized on such sale or exchange. Such gain or loss will be capital in
nature if the shares were held as a capital asset and will be long-term
if such shares were held for more than one year.
The Company is entitled to a deduction for compensation paid
to a participant at the same time and in the same amount as the
participant is considered to have realized compensation by reason of
the exercise of an option.
Incentive Stock Options. No taxable income is realized by the
participant pursuant to the exercise of an incentive stock option
granted under the Stock Incentive Plan, and if no disqualifying
disposition of such shares is made by such participant within two years
after the date of grant or within one year after the transfer of such
shares to such participant, then (a) upon sale of such shares, any
amount realized in excess of the option price will be taxed to such
participant as a long-term capital gain and any loss sustained will be
a long-term capital loss, and (b) no deduction will be allowed to the
Company for Federal income tax purposes. Upon exercise of an incentive
stock option, the participant may be subject to alternative minimum tax
on certain items of tax preference.
If the shares of Common Stock acquired upon the exercise of an
incentive stock option are disposed of prior to the expiration of the
two-years-from-grant/one-year-from-transfer holding period, generally
(a) the participant will realize ordinary income in the year of
disposition in an amount equal to the excess (if any) of the fair
market value of the shares at exercise (or, if less, the amount
realized on the disposition of the shares) over the option price
thereof, and (b) the Company will be entitled to deduct such amount.
Any further gain or loss realized will be taxed as short-term or
long-term capital gain or loss, as the case may be, and will not result
in any deduction by the Company.
If an incentive stock option is exercised at a time when it no
longer qualifies as an incentive stock option, the option is treated as
a nonqualified stock option.
Stock Appreciation Rights. No taxable income is recognized by
a participant upon the grant of an SAR under the Stock Incentive Plan.
Upon the exercise of an SAR, however, compensation taxable as ordinary
income will be realized by the participant in an amount equal to the
cash received upon exercise, plus the fair market value on the date of
exercise of any shares of Common Stock received upon exercise. Shares
of Common Stock received on the exercise of an SAR will be eligible for
capital gain treatment, with the capital gain holding period commencing
on the date of exercise of the SAR.
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<PAGE>
The Company is entitled to a deduction for compensation paid
to a participant at the same time and in the same amount as the
participant is considered to have realized compensation by reason of
the exercise of the SAR.
Restricted and Performance Shares. A recipient of restricted
shares or performance shares generally will be subject to tax at
ordinary income rates on the fair market value of the Common Stock at
the time the restricted shares or performance shares are no longer
subject to forfeiture. However, a recipient who so elects under Section
83(b) of the Code within 30 days of the date of the grant will have
ordinary taxable income on the date of the grant equal to the fair
market value of the restricted shares or performance shares as if the
restricted share were unrestricted or the performance shares were
earned and could be sold immediately. If the shares subject to such
election are forfeited, the recipient will not be entitled to any
deduction, refund or loss for tax purposes with respect to the
forfeited shares. Upon sale of the restricted shares or performance
shares after the forfeiture period has expired, the holding period to
determine whether the recipient has long-term or short-term capital
gain or loss begins when the restriction period expires. However, if
the recipient timely elects to be taxed as of the date of the grant,
the holding period commences on the date of the grant and the tax basis
will be equal to the fair market value of the shares on the date of the
grant as if the shares were then unrestricted and could be sold
immediately.
Stock Units. A recipient of stock units will generally be
subject to tax at ordinary income rates on the fair market value of any
Common Stock issued pursuant to such an award, and the Company will
generally be entitled to a deduction equal to the amount of the
ordinary income realized by the recipient. The fair market value of any
Common Stock received will generally be included in income (and a
corresponding deduction will generally be available to the Company) at
the time of receipt. The capital gain or loss holding period for any
Common Stock distributed under an award will begin when the recipient
recognizes ordinary income in respect of that distribution.
Other Incentive Awards. The federal income tax consequences of
Other Incentive Awards will depend on how such awards are structured.
Generally, the Company will be entitled to a deduction with respect to
such awards only to the extent that the recipient realizes compensation
income in connection with such awards. It is anticipated that Other
Incentive Awards will usually result in compensation income to the
recipient in some amount. However, some forms of Other Incentive Awards
may not result in any compensation income to the recipient or any
income tax deduction for the Company.
Performance Goals and Maximum Awards. Section 162(m) disallows federal
income tax deductions for certain compensation in excess of $1,000,000 per year
paid to each of the Company's Chief Executive Officer and its other four most
highly compensated executive officers (collectively, the "Covered Employees").
Under Section 162(m), compensation that qualifies as "other performance-based
compensation" is not subject to the $1,000,000 limit. One of the conditions
necessary to qualify certain incentive awards as "other performance-based
compensation" is that the material terms of the performance goals under which
the award is made must be disclosed to, and approved by, the shareholders of the
Company before the incentive compensation is paid.
For those types of awards under the Stock Incentive Plan which require
performance criteria to meet the definition of "other performance-based
compensation" the Committee will, from time to time, establish performance
criteria with respect to an award. These performance criteria may be measured in
absolute terms or measured against, or in relationship to, other companies
comparably, similarly or otherwise situated and may be based on, or adjusted
for, other objective goals, events, or occurrences established by the Committee
for a performance period, including earnings, earnings growth, revenues,
expenses, stock price, market share, charge-offs, loan loss reserves, reductions
in nonperforming assets, return on assets, return on equity, return on
investment, regulatory compliance, satisfactory internal or external audits,
improvements in financial ratings, achievement of balance sheet or income
statement
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<PAGE>
objectives, extraordinary charges, losses from discontinued operations,
restatements and accounting changes and other unplanned special charges such as
restructuring expenses, acquisition expenses including goodwill, unplanned stock
offerings and strategic loan loss provisions. The performance criteria related
to an award must be established by the Committee prior to the completion of 25%
of the performance period or such earlier date as may be required by Section
162(m) of the Code.
At the end of each performance period for an award, the Committee will
determine the extent to which the performance criteria established for the
performance period have been achieved and determine the pay out of the
performance award. The Committee may, in its sole discretion, reduce or
eliminate the payout of any award to the extent permitted under the Stock
Incentive Plan and applicable law.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS APPROVED THE 1997
STOCK INCENTIVE PLAN AT ITS APRIL 14, 1997 MEETING. BASED ON THE RECOMMENDATION
OF THE COMPENSATION COMMITTEE, THE BOARD OF DIRECTORS APPROVED THE 1997 STOCK
INCENTIVE PLAN AT A MEETING HELD ON APRIL 30, 1997. THE BOARD OF DIRECTORS
RECOMMENDS SHAREHOLDERS VOTE FOR APPROVAL OF THE 1997 STOCK INCENTIVE PLAN.
SHAREHOLDER APPROVAL OF EMPLOYEE STOCK PURCHASE PLAN
Introduction. At the Annual Meeting, there will be submitted a proposal
to approve the Company's Employee Stock Purchase Plan (the "Stock Purchase Plan"
or the "Plan"). The Plan gives eligible employees the right to accumulate funds
over an offering period of not more than 26 months and, with such funds,
purchase shares of Common Stock. The Compensation Committee of the Board of
Directors adopted the Stock Purchase Plan on April 14, 1997, subject to Board of
Director ratification and shareholder approval. The Board of Directors approved
the Plan at a meeting held on April 30, 1997. If shareholder approval is
obtained, it is anticipated that the first offering to eligible employees under
the Stock Purchase Plan will be made in third quarter of 1997.
The description of the Stock Purchase Plan set forth below is a summary,
does not purport to be complete and is qualified in its entirety by reference to
the provisions of the Stock Purchase Plan, a copy of which is attached to this
proxy statement as Appendix B.
Purpose. The Stock Purchase Plan is designed to encourage greater stock
ownership among employees thereby enhancing employee commitment to the Company
and providing employees an opportunity to share in the Company's success.
Participants. All employees (including officers and directors who are
employees) of the Company and certain participating subsidiaries (currently 328
individuals) will be eligible to participate in the Plan except that the
Committee may, with respect to any offering, exclude from eligibility any
employee who (i) has been employed by the Company or such subsidiaries for less
than 24 months (or such lesser number determined by the Committee) as of the
first day of an enrollment period; (ii) is scheduled to work less than 20 hours
per week (or such lesser number determined by the Committee); (iii) is scheduled
to work less than five months per year (or such lesser number determined by the
Committee); or (iv) is a highly compensated employee (as defined in Section
414(g) of the Code).
Shares Authorized. Under the Stock Purchase Plan, The Company will
reserve for issuance up to 250,000 shares of its authorized Common Stock,
subject to certain stock adjustments in the event of stock splits, stock
dividends or changes in corporate structure affecting the Common Stock. If
employees elect to purchase more shares of Common Stock in any offering than are
available at that time under the Stock Purchase Plan, the Company may reduce pro
rata the number of shares each employee may purchase so that the total number of
shares purchased does not exceed the amount of shares available.
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<PAGE>
Administration. The Stock Purchase Plan provides that the Compensation
Committee will administer the Plan. The Committee will, in its sole discretion,
determine from time to time when the Company will make an offering under the
Stock Purchase Plan. The Committee also will act as the administrator of the
Plan and make administrative and procedural decisions regarding the Stock
Purchase Plan, will adopt rules and regulations concerning the operation of the
Plan and will decide questions of construction and interpretation regarding the
Plan and an employee's participation therein. The Committee may employ such
other persons and delegate to them such powers, rights and duties as the
Committee may consider necessary to properly carry out the administration of the
Plan.
Operation of Plan. Employees will be able to enroll in the Stock
Purchase Plan during the first enrollment period for each offering after they
become eligible. Each participating employee will authorize payroll deductions
and will become entitled to purchase shares of Common Stock on such dates during
and/or at the end of the offering period as determined by the Committee. A
participating employee will be entitled to purchase up to such number of shares
as the employee's accumulated payroll deductions, plus interest, may permit,
provided that the aggregate purchase price (including accrued interest) may not
exceed the lesser of (i) $50,000, or (ii) 20% of such employee's compensation
(as defined by the Committee and consistent with the Code), or (iii) such lesser
amount as the Committee may determine. All shares offered under the Plan will be
newly issued shares of the Company, and the purchase price of the shares of
Common Stock will be determined by the Committee prior to the commencement of
such offering, provided that the price may not be lower than the lesser of 85%
of the fair market value per share of the Common Stock on the first day of the
offering period or 85% of the fair market value per share of the Common Stock on
the purchase date for the offering. The Committee may also limit for any
offering period the number of shares which may be purchased by an employee.
Payroll deductions will be deposited into a participant's purchase
savings account at the banking subsidiaries of the Company designated by the
Committee and will earn interest at such rate as then paid with respect to the
bank's customer's regular statement savings accounts, or at such rate as
determined by the Committee. Unless otherwise directed by an employee, the funds
credited to an employee's account on a purchase date (which may occur
periodically during the offering period or only at the end of the offering
period) are applied to the purchase of shares of Common Stock, and any excess
over the purchase price is paid to the employee. However, if the fair market
value of a share of Common Stock on the last day of the offering period is less
than the purchase price of one share of Common Stock, all funds on deposit in
the employee's account will be paid to the employee and the employee's account
will be closed.
The Committee has the authority under the Stock Purchase Plan to permit
all employees to apply the funds on deposit in their purchase savings accounts
toward the purchase of shares of Common Stock prior to the stated purchase date
or dates.
The Committee may permit an employee participating in the Stock
Purchase Plan to increase the amount of the employee's payroll deduction at any
time during the offering period. In addition, an employee may reduce
participation, discontinue and restart participation, withdraw the funds
credited to the employee's savings account or voluntarily terminate
participation in the Stock Purchase Plan. Should an employee terminate
participation in the Stock Purchase Plan entirely, the accumulated payroll
deductions, plus interest earned, will be returned to such employee. If an
employee terminates employment, other than by retirement or total and permanent
disability, the employee's right to purchase the stock immediately terminates.
An employee's participation rights in the Stock Purchase Plan and the related
purchase savings account are not assignable or transferable except by will or
the laws of descent and distribution. An employee has no rights as a shareholder
with respect to the shares the employee is eligible to purchase until the shares
are so purchased and issued by the Company.
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<PAGE>
Change of Control. The Stock Purchase Plan provides that in the event
of a change of control of the Company, the end of the offering period will be
accelerated to the date of the change of control, and each participant in the
Plan will have the right to elect to purchase up to such number of shares as the
employee's accumulated payroll deductions plus interest may permit or to be paid
in cash all of the employee's accumulated payroll deductions plus interest.
Amendment. The Board, at its discretion, may alter, amend, suspend or
discontinue the Stock Purchase Plan or, at any time prior to a change of control
may alter or amend any and all terms of participation in an offering being made
thereunder. However, if applicable laws require shareholder approval, then such
amendment will be subject to the requisite shareholder approval.
Federal Income Tax Considerations. The Stock Purchase Plan is not
qualified under Section 401 of the Code, but is a qualified employee stock
purchase plan under Section 423 of the Code. An employee pays no tax when the
employee enrolls in the Plan, when the employee purchases shares of Common Stock
pursuant to the Plan or when the employee receives shares of Common Stock.
Interest on the purchase savings account will be taxable in the year earned.
An employee will have a taxable gain or loss when any shares of Common
Stock purchased through the Plan are sold. If an employee sells the stock within
two years of the commencement of the employee's enrollment period or within one
year of the actual purchase of the shares (each, a "disqualifying disposition"),
then the difference between the purchase price and market value of the shares on
the purchase date will be taxed as ordinary income. Any difference between the
market value of the shares on the purchase date and the sale price will be
capital gains or losses for income tax purposes. The Company will be entitled to
a deduction from income in an amount equal to the ordinary income reported by
the employee arising from a disqualifying disposition.
If an employee sells the stock after the holding period described
above, then the difference between the market price on the enrollment date and
the actual purchase price will be taxed as ordinary income (to the extent of
gain) and the balance of the employee's gain, if any, will be capital gain.
Miscellaneous. The closing price per share of Common Stock on April 28,
1997, as recorded on the Nasdaq National Market, was $14.25.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS APPROVED THE
EMPLOYEE STOCK PURCHASE PLAN AT ITS APRIL 14, 1997 MEETING. BASED ON ITS
RECOMMENDATION, THE BOARD OF DIRECTORS APPROVED THE EMPLOYEE STOCK PURCHASE PLAN
AT A MEETING HELD ON APRIL 30, 1997. THE BOARD OF DIRECTORS RECOMMEND
SHAREHOLDERS VOTE FOR APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN.
INDEPENDENT AUDITORS
The accounting services supplied by KPMG Peat Marwick LLP during 1996
were reviewed and approved by the audit committees of the predecessor companies
prior to the Reorganization on September 1, 1996. Subsequent to the
Reorganization, the Company's Audit Committee reviewed and approved the
accounting services supplied by KPMG Peat Marwick LLP during the year. Existing
policy requires that all services furnished to the Company by its independent
auditors be furnished at customary rates and terms. One or more representatives
of KPMG Peat Marwick LLP will be present at the meeting and will have the
opportunity to make a statement if they desire to do so. KPMG Peat Marwick LLP
representatives will be available at the meeting to respond to appropriate
questions. At a meeting held on April 30, 1997, the Board ratified and approved
the recommendation of the Audit Committee to appoint KPMG Peat Marwick LLP as
the Company's independent auditors for 1997.
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<PAGE>
Prior to September 1, 1996, the date of the Reorganization, Arthur
Andersen LLP was engaged by Crabtree Capital Corporation, a predecessor company
to the Reorganization and a current subsidiary of the Company, as its principal
accountant to audit its consolidated financial statements. Effective September
1, 1996, upon recommendation of the Audit Committee, the Company chose not to
continue Arthur Andersen LLP as the principal accountant for that subsidiary.
During the Company's two fiscal years prior to 1996 and any interim period
subsequent to December 31, 1995 through September 1, 1996, there were no
disagreements with Arthur Andersen LLP on any matter of accounting principles or
practices, financial statement disclosure, auditing scope or procedure, or any
reportable events. Also, during the Company's two fiscal years prior to 1996 and
any interim period subsequent to December 31, 1995 through September 1, 1996,
Arthur Andersen LLP did not contain any adverse opinion or a disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope or
accounting principles.
FUTURE SHAREHOLDER PROPOSALS
Shareholders' proposals intended to be presented at the Company's 1998
Annual Meeting of Shareholders must be received in writing by the Secretary of
the Company no later than January 22, 1998, in order to be considered for
inclusion in the proxy material for that meeting. Any such proposals shall be
subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934. Furthermore, in order for any shareholder to properly
propose any business for consideration at the 1998 Annual Meeting, including the
nomination of any person for election as a director, written notice of the
shareholder's intention to make such proposal must be furnished to the Company
not later than February 21, 1998.
OTHER BUSINESS
The Company is unaware of any other matter to be acted upon at the
meeting for shareholder vote. In case of any matter properly coming before the
meeting for shareholder vote, the proxy holders named in the proxy accompanying
this statement shall vote them in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Edward J. Wehmer
Secretary
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APPENDIX A
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WINTRUST FINANCIAL CORPORATION
1997 STOCK INCENTIVE PLAN
1. Purpose; Effect on Predecessor Plans. The purpose of the
---------------------------------------
Wintrust Financial Corporation 1997 Stock Incentive Plan is to benefit the
Corporation and its Subsidiaries by enabling the Corporation to offer certain
present and future officers, employees, directors and consultants stock-based
incentives and other equity interests in the Corporation, thereby providing them
a stake in the growth of the Corporation and encouraging them to continue in the
service of the Corporation and its Subsidiaries.
This Wintrust Financial Corporation 1997 Stock Incentive Plan is
intended to constitute an amendment, restatement and continuation of the
Predecessor Plans defined herein; provided, however, that to the extent the
application of any provision hereof shall in any manner adversely affect any
Award heretofore made to any Participant under a Predecessor Plan shall not be
applicable to such Award without the written consent of the Participant.
2. Definitions.
------------
(a) "Award" includes, without limitation, stock options
(including incentive stock options under Section 422 of the Code), stock
appreciation rights, performance share or unit awards, dividend or equivalent
rights, stock awards, restricted share or unit awards, or other awards that are
valued in whole or in part by reference to, or are otherwise based on, the
Corporation's Common Stock ("other Incentive Awards"), all on a stand alone,
combination or tandem basis, as described in or granted under this Plan.
(b) "Award Agreement" means a writing provided by the
Corporation to each Participant setting forth the terms and conditions of each
Award made under this Plan.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(e) "Committee" means the Compensation and Nominating
Committee of the Board or such other committee of the Board as may be designated
by the Board from time to time to administer this Plan.
(f) "Common Stock" means the Common Stock, no par value, of
the Corporation.
<PAGE>
(g) "Corporation" means Wintrust Financial Corporation, an
Illinois corporation.
(h) "Director" means a director of the Corporation or a
Subsidiary.
(i) "Effective Date" means May 22, 1997, the date of the
approval of the Plan by the shareholders of the Corporation.
(j) "Employee" means an employee of the Corporation or a
Subsidiary.
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(l) "Fair Market Value" means the average of the highest and
the lowest quoted selling prices on the Nasdaq National Market on the relevant
valuation date or, if there were no sales on the valuation date, on the next
preceding date on which such selling prices were recorded; provided, however,
that the Committee may modify the definition of Fair Market Value with respect
to any particular Award. Notwithstanding the foregoing, with respect to Awards
made under the provisions of the Predecessor Plans prior to the Effective Date,
"Fair Market Value" shall mean the average of the highest and lowest price at
which shares of Common Stock were traded during the twenty trading days prior to
the relevant date, as reported by the established market on which the shares are
traded, or such other definition of Fair Market Value applicable to such Award.
(m) "Participant" means an Employee, Director or a consultant,
who has been granted an Award under the Plan, including the Predecessor Plans.
(n) "Plan" means this Wintrust Financial Corporation 1997
Stock Incentive Plan, which includes the Predecessor Plans.
(o) "Plan Year" means a twelve-month period beginning with
January 1 of each year.
(p) "Predecessor Plan" means the Crabtree Capital
Corporation 1987 Stock Option Plan, The Credit Life Companies, Incorporated 1987
Stock Option Plan, Crabtree Capital Corporation 1990 Stock Purchase Plan, First
Premium Services, Incorporated 1992 Stock Option Plan, Lake Forest Bancorp, Inc.
1991 Stock Option Plan, Lake Forest Bancorp, Inc. 1993 Stock Option Plan,
Hinsdale Bancorp, Inc. 1993 Stock Option Plan, North Shore Community Bancorp,
Inc. 1993 Stock Rights Plan, North Shore Community Bancorp, Inc. 1994 Stock
Option Plan, Libertyville Bancorp, Inc. 1995 Stock Option Plan and the Wolfhoya
Investments, Inc. 1995 Stock Option Plan, each a stock option or stock purchase
plan maintained by a predecessor to the Corporation.
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<PAGE>
(q) "Subsidiary" means any corporation or other entity,
whether domestic or foreign, in which the Corporation has or obtains, directly
or indirectly, a proprietary interest of at least 50% by reason of stock
ownership or otherwise.
3. Eligibility. Any Employee, Director or consultant selected by
------------
the Committee is eligible to receive an Award. In addition, the Committee may
select former Employees and Directors who have a consulting arrangement with the
Corporation or a Subsidiary whom the Committee determines have a significant
responsibility for the success and future growth and profitability of the
Corporation.
4. Plan Administration.
--------------------
(a) Except as otherwise determined by the Board, the Plan
shall be administered by the Committee. The Committee shall make determinations
with respect to the participation of Employees, Directors and consultants in the
Plan and, except as otherwise required by law or this Plan, the terms of Awards,
including vesting schedules, price, length of relevant performance, restriction
or option period, dividend rights, post-retirement and termination rights,
payment alternatives such as cash, stock, contingent awards or other means of
payment consistent with the purposes of this Plan, and such other terms and
conditions as the Committee deems appropriate.
(b) The Committee, by majority action thereof (whether taken
during a meeting or by written consent), shall have authority to interpret and
construe the provisions of the Plan and the Award Agreements and make
determinations pursuant to any Plan provision or Award Agreement which shall be
final and binding on all persons. To the extent deemed necessary or advisable
for purposes of Section 16 of the Exchange Act or Section 162(m) of the Code, a
member or members of the Committee may recuse himself or themselves from any
action, in which case action taken by the majority of the remaining members
shall constitute action by the Committee. No member of the Committee shall be
liable for any action or determination made in good faith, and the members of
the Committee shall be entitled to indemnification and reimbursement in the
manner provided in the Corporation's Articles of Incorporation and By-Laws, as
may be amended from time to time.
(c) The Committee may designate persons other than its members
to carry out its responsibilities under such conditions or limitations as it may
set, other than its authority with regard to Awards granted to Participants who
are officers or directors of the Corporation for purposes of Section 16 of the
Exchange Act. To the extent deemed necessary or advisable for purposes of
Section 16 of the Exchange Act or otherwise, the Board may act as the Committee
hereunder.
5. Stock Subject to the Provisions of this Plan. The stock subject to
the provisions of this Plan shall be shares of authorized but unissued Common
Stock. Subject to adjustment in accordance with the provisions of Section 10,
the total number of shares of Common Stock which may be issued under the Plan or
with respect to which Awards may be
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<PAGE>
granted shall not exceed 1,937,359 shares, including for this purpose the
1,777,359 shares heretofore authorized and available for issuance under the
Predecessors Plans. All shares available for issuance under the Plan may be
issued with respect to incentive stock options. Upon:
(a) a payout of an Award in the form of cash;
(b) a cancellation, termination, expiration, forfeiture, or
lapse for any reason (with the exception of the termination of a tandem Award
upon exercise of the related Award, or the termination of a related Award upon
exercise of the corresponding tandem Award,) of any Award; or
(c) payment of an option price and/or payment of any taxes
arising upon exercise of an option or payout of any Award with previously
acquired shares or by withholding shares which otherwise would be acquired on
exercise or issued upon such payout,
then the number of shares of Common Stock underlying any such Award which were
not issued as a result of any of the foregoing actions shall again be available
for the purposes of Awards under the Plan.
6. Awards under this Plan. As the Board or Committee may
-----------------------
determine, the following types of Awards may be granted under this Plan on a
stand alone, combination or tandem basis:
(a) Stock Option. A right to buy a specified number of shares
of Common Stock at a fixed exercise price during a specified time, all as the
Committee may determine; provided that the exercise price of any option shall
not be less than 100% of the Fair Market Value of the Common Stock on the date
of grant of such Award. Notwithstanding anything herein to the contrary, no
Awards, other than stock options, may be made to any Director (other than a
Director who is also an Employee at the time of the Award) on or after the
Effective Date.
(b) Incentive Stock Option. An Award in the form of a
stock option which shall comply with the requirements of Section 422 of the Code
or any successor Section of the Code as it may be amended from time to time.
(c) Stock Appreciation Right. A right to receive the excess of
the Fair Market Value of a share of Common Stock on the date the stock
appreciation right is exercised over the Fair Market Value of a share of Common
Stock on the date the stock appreciation right was granted.
(d) Restricted and Performance Shares. A transfer of Common
Stock to a Participant, subject to such restrictions on transfer or other
incidents of ownership, or subject to specified performance standards, for such
periods of time as the Committee may determine.
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<PAGE>
(e) Restricted and Performance Share Unit. A fixed or variable
share or dollar denominated unit subject to such conditions of vesting,
performance and time of payment as the Committee may determine, which are valued
at the Committee's discretion in whole or in part by reference to, or otherwise
based on, the Fair Market Value of Common Stock and which may be paid in Common
Stock, cash or a combination of both.
(f) Dividend or Equivalent Right. A right to receive
dividends or their equivalent in value in Common Stock, cash or in a combination
of both with respect to any new or previously existing Award.
(g) Stock Award. An unrestricted transfer of ownership
of Common Stock.
(h) Other Incentive Awards. Other Incentive Awards which are
related to or serve a similar function to those Awards set forth in this Section
6, including, but not limited to, Other Incentive Awards related to the
establishment or acquisition by the Corporation or any Subsidiary of a new or
start-up business or facility.
Notwithstanding the foregoing, the maximum number of shares of Common
Stock which may be made subject to Awards granted under the Plan in any Plan
Year (taking into account any stock option granted in tandem with any stock
appreciation right as an Award with respect to shares subject to the stock
option and any restricted and performance shares or restricted and performance
units as an Award based upon the maximum number of Shares to which the Award
relates) to any single Participant may not exceed 100,000. The Committee may
from time to time, establish performance criteria with respect to an Award. The
performance criteria or standards shall be determined by the Committee in
writing and may be absolute in their terms or measured against or in
relationship to other companies comparably, similarly or otherwise situated and
may be based on or adjusted for any other objective goals, events, or
occurrences established by the Committee, provided that such criteria or
standards relate to one or more of the following: earnings, earnings growth,
revenues, expenses, stock price, market share, charge-offs, loan loss reserves,
reductions in non-performing assets, return on assets, return on equity, or
assets, investment, regulatory compliance, satisfactory internal or external
audits, improvement of financial ratings, achievement of balance sheet or income
statement objectives, extraordinary charges, losses from discontinued
operations, restatements and accounting changes and other unplanned special
charges such as restructuring expenses, acquisition expenses including goodwill,
unplanned stock offerings and strategic loan loss provisions. Such performance
standards may be particular to a line of business, Subsidiary or other unit or
may be based on the performance of the Corporation generally.
7. Award Agreements. Each Award under the Plan shall be
------------------
evidenced by an Award Agreement. Delivery of an Award Agreement to each
Participant shall constitute an agreement, subject to Section 9 hereof, between
the Corporation and the Participant as to the terms and conditions of the Award.
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<PAGE>
8. Other Terms and Conditions.
---------------------------
(a) No Assignment; Limited Transferability of Options. Except
as provided below, no Award granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, otherwise then by
will or by the laws of descent and distribution. Notwithstanding the foregoing,
the Committee may, in its discretion, authorize all or a portion of the stock
options (other than incentive stock options) granted to a Participant to be on
terms which permit transfer by such Participant to:
(i) the spouse, children or grandchildren of the
Participant ("Immediate Family Members");
(ii) a trust or trusts for the exclusive benefit
of such Immediate Family Members, or;
(iii) a partnership in which such Immediate Family
Members are the only partners,
provided that:
(A) there may be no consideration for any such
transfer;
(B) the Award Agreement pursuant to which such stock
options are granted expressly provides for transferability in
a manner consistent with this Section 8(a); and
(C) subsequent transfers of transferred options shall
be prohibited except those in accordance with Section 8(b).
Following transfer, any such options shall continue to be subject to
the same terms and conditions as were applicable immediately prior to transfer,
provided that for purposes of Section 8(b) hereof the term "Participant" shall
be deemed to refer to the transferee. The provisions of the stock option
relating to the period of exercisability and expiration of the stock option
shall continue to be applied with respect to the original Participant, and the
stock options shall be exercisable by the transferee only to the extent, and for
the periods, set forth in said stock option.
(b) Beneficiary Designation. Each Participant under the Plan
may name, from time to time, any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his death before he receives any or all of such benefit. Each
designation will revoke all prior designations by the same Participant, shall be
in a form prescribed by the Committee, and will be effective only when filed by
the Participant in writing with the Committee during his lifetime. In the
absence of any such designation, benefits remaining unpaid at the Participant's
death shall be paid to his estate.
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<PAGE>
(c) Termination of Employment. The disposition of the grant of
each Award in the event of the retirement, disability, death or other
termination of a Participant's employment shall be as determined by the
Committee and set forth in the Award Agreement. Unless expressly provided
otherwise by the Committee, references to the "Plan" set forth in any agreement
representing an award granted under a Predecessor Plan prior to the Effective
Date shall refer to the terms of such Predecessor Plan as in effect immediately
prior to the Effective Date.
(d) Rights as a Shareholder. A Participant shall have no
rights as a stockholder with respect to shares covered by an Award until the
date the Participant or his nominee, guardian or legal representative is the
holder of record. No adjustment will be made for dividends or other rights for
which the record date is prior to such date.
(e) Payments by Participants. The Committee may determine that
Awards for which a payment is due from a Participant may be payable: (i) in cash
by personal check, bank draft or money order payable to the order of the
Corporation, by money transfers or direct account debits; (ii) through the
delivery or deemed delivery based on attestation to the ownership of previously
acquired shares of Common Stock which have been held for at least six months
with a Fair Market Value equal to the total payment due from the Participant;
(iii) by a combination of the methods described in (i) and (ii) above; or (iv)
by such other methods as the Committee may deem appropriate, including, but not
limited to loans by the Corporation on such terms and conditions as the
Committee shall determine.
(f) Withholding. Except as otherwise provided by the Committee
in the Award Agreement or otherwise (i) the deduction of withholding and any
other taxes required by law will be made from all amounts paid in cash, and (ii)
in the case of the exercise of options or payments of Awards in shares of Common
Stock, the Participant shall be required to pay the amount of any taxes required
to be withheld in cash prior to receipt of such stock, or alternatively, to
elect to have a number of shares the Fair Market Value of which equals the
amount required be withheld deducted from the shares to be received upon such
exercise or payment or deliver such number of previously-acquired shares of
Common Stock which have been held for at least six months.
(g) Deferral. The receipt of payment of cash or delivery of
shares of Common Stock that would otherwise be due to a Participant upon the
exercise of any stock option or under any other Award may be deferred pursuant
to an applicable deferral plan established by the Corporation or a Subsidiary.
The Committee shall establish rules and procedures relating to any such
deferrals and the payment of any tax withholding with respect thereto.
9. Amendments, Modification and Termination. The Board may at any
-----------------------------------------
time and from time to time, alter, amend, suspend or terminate the Plan in whole
or in part, subject to any requirement of shareholder approval imposed by
applicable law, rule or regulation. No termination, amendment, or modification
of the Plan shall adversely affect in any material way
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<PAGE>
any Award previously granted under the Plan, without the written consent of the
Participant holding such Award.
10. Recapitalization. The aggregate number of shares of Common
-----------------
Stock as to which Awards may be granted to Participants, the limitations on the
maximum number of shares of Common Stock which may be made subject to Awards
made to a Participant during a Plan Year, the number of shares of Common Stock
covered by each outstanding Award, and the price per share of Common Stock in
each such Award, shall all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
subdivision or consolidation of shares or other capital adjustment, or the
payment of a stock dividend or other increase or decrease in such shares,
effected without receipt of consideration by the Corporation, or other change in
corporate or capital structure; provided, however, that any fractional shares
resulting from any such adjustment shall be eliminated. The Committee may also
make the foregoing changes and any other changes, including changes in the
classes of securities available, to the extent it is deemed necessary or
desirable to preserve the intended benefits of the Plan for the Corporation and
the Participants in the event of any other reorganization, recapitalization,
merger, consolidation, spinoff, extraordinary dividend or other distribution or
similar transaction.
11. Rights as Employees, Directors or Consultants. No person shall
----------------------------------------------
have any claim or right to be granted an Award, and the grant of an Award shall
not be construed as giving a Participant the right to be retained in the employ
of or as a Director of or as a consultant to the Corporation or a Subsidiary.
Further, the Corporation and each Subsidiary expressly reserve the right at any
time to dismiss a Participant free from any liability, or any claim under the
Plan, except as provided herein or in any Award Agreement issued hereunder.
12. Change of Control.
------------------
(a) Notwithstanding anything contained in this Plan or any
Award Summary to the contrary, in the event of a Change of Control, as defined
below, the following shall occur with respect to any and all Awards outstanding
as of such Change of Control:
(i) any and all options and SARs granted
hereunder shall become immediately exercisable, and shall remain
exercisable throughout their entire term;
(ii) any restrictions imposed on restricted
shares shall lapse; and
(iii) unless otherwise specified in a Participant's
Award Agreement at time of grant, the maximum payout opportunities
attainable under all outstanding Awards of performance units,
performance shares and Other Incentive Awards shall be deemed to have
been fully earned for the entire performance period(s) as of the
effective date of the Change of Control. The vesting of all such Awards
shall be accelerated as of the effective date of the Change of Control,
and in full settlement of such Awards, there shall be paid out in cash,
or in the sole discretion of the Committee, shares of Common
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<PAGE>
Stock with a Fair Market Value equal to the amount of such cash, to
Participants within thirty (30) days following the effective date of
the Change of Control the maximum of payout opportunities associated
with such outstanding Awards.
(b) A "Change of Control" of the Corporation shall be
deemed to have occurred upon the happening of any of the following events:
(i) The acquisition, other than from the Corporation,
by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either the then outstanding shares of Common Stock of
the Corporation or the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the
election of directors, but excluding, for this purpose, any such
acquisition by the Corporation or any of its Subsidiaries, or any
employee benefit plan (or related trust) of the Corporation or its
Subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of all or substantially all
directors is then beneficially owned, directly or indirectly, by the
individuals and entities who were the beneficial owners, respectively,
of the Common Stock and voting securities of the Corporation
immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition,
of the then outstanding shares of Common Stock of the Corporation or
the combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of
directors, as the case may be; or
(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board,
provided that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the
Corporation (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or
(iii) Approval by the shareholders of the Corporation
of a reorganization, merger or consolidation of the Corporation, in
each case, with respect to which all or substantially all of the
individuals and entities who were the respective beneficial owners of
the Common Stock and voting securities of the Corporation immediately
prior to such reorganization, merger or consolidation do not, following
such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more
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<PAGE>
than 50% of, respectively, the then outstanding shares of Common Stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger
or consolidation, or a complete liquidation or dissolution of the
Corporation or of the sale or other disposition of all or substantially
all of the assets of the Corporation.
13. Governing Law. To the extent that federal laws do not otherwise
---------------
control, the Plan and all Award Agreements hereunder shall be construed in
accordance with and governed by the law of the State of Illinois, provided,
however, that in the event the Corporation's state of incorporation shall be
changed, then the law of the new state of incorporation shall govern.
14. Savings Clause. This Plan is intended to comply in all aspects with
---------------
applicable law and regulation, including, with respect to those Employees who
are officers or directors for purposes of Section 16 of the Exchange Act, Rule
16b-3 of the Securities and Exchange Commission. In case any one or more of the
provisions of this Plan shall be held invalid, illegal or unenforceable in any
respect under applicable law and regulation (including Rule 16b-3), the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and the invalid, illegal or
unenforceable provision shall be deemed null and void; however, to the extent
permissible by law, any provision which could be deemed null and void shall
first be construed, interpreted or revised retroactively to permit this Plan to
be construed in compliance with all applicable laws (including Rule 16b-3) so as
to foster the intent of this Plan.
15. Effective Date and Term. The effective date of this Plan is May 22,
------------------------
1997, the date the Plan was approved by the shareholders of the Corporation. The
Plan shall remain in effect until terminated by the Board, provided, however,
that no incentive stock option shall be granted under this Plan on or after May
22, 2007.
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<PAGE>
APPENDIX B
----------
WINTRUST FINANCIAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The purpose of the Wintrust Financial Corporation Employee Stock
Purchase Plan is to encourage employee stock ownership, thereby enhancing
employee commitment to Wintrust Financial Corporation ("Wintrust" or the
"Corporation") and providing an opportunity to share in the Corporation's
success.
2. DEFINITIONS
(a) "Bank" means any banking subsidiary of the
Corporation designated by the Committee with respect to any offering.
(b) "Board" means the Board of Directors of the
Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Compensation and
Nominating Committee of the Board or any other committee designated by
the Board to administer this Plan.
(e) "Common Stock" means of Common Stock, no par value,
of the Corporation.
(f) "Considered Compensation" means compensation as defined by
the Committee in accordance with Section 423 of the Code and applicable
regulations, including total compensation or base compensation for any
pay period during or at the beginning of, an Offering Period.
(g) "Fair Market Value" means the closing price as recorded by
the NASDAQ National Market on the relevant valuation date or if no
closing price has been recorded on such date, on the next preceding day
on which such a closing price was recorded; provided, however, the
Committee may specify some other definition of Fair Market Value.
(h) "Maximum Share Limit" means 250,000 shares of Common
Stock.
(i) "Offering Period" means the term of any offering under the
Plan as determined by the Committee which shall be at least six months
in duration, but no more than 26 months in duration.
<PAGE>
(j) "Participating Subsidiary" means any subsidiary or
affiliate corporation of Wintrust designated by the Committee if on the
first date of the Offering Period, Wintrust or a subsidiary or
affiliate of Wintrust, individually or collectively, owns 50% or more
of the total combined voting power of all classes of stock of such
corporation.
(k) "Plan" means this Wintrust Financial Corporation
Employee Stock Purchase Plan.
(l) "Purchase Date" means the last day of an
Offering Period or any other day or days the Committee may
prescribe under Paragraph 8(d)(ii).
(m) "Purchase Savings Account" means an account opened by a
participating employee with the Bank pursuant to directions set forth
in writing on a form prescribed by the Committee.
(n) "Wintrust" or "Corporation" means Wintrust Financial
Corporation, an Illinois corporation.
The masculine pronoun wherever used herein is deemed to include the
feminine, and the singular shall be deemed to include the plural whenever the
context requires.
3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee, by
majority action thereof (whether taken during a meeting or by written consent),
is authorized to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Corporation, and
to make all other determinations necessary or advisable for the administration
of the Plan. To the extent deemed necessary or advisable for purposes of Rule
16b-3 under the Securities Exchange Act of 1934, as amended, any member of the
Committee who is not a "non-employee director" under such Rule may abstain or
recuse himself from any action of the Committee, in which case a majority action
of the remaining members shall constitute a majority action of the Committee.
The Committee may employ such agents, attorneys, accountants or any
other persons and delegate to them such powers, rights and duties, as the
Committee may consider necessary to properly carry out the administration of the
Plan. The interpretation and construction by the Committee of any provisions of
the Plan and the terms and conditions of an offering including employee
participation thereunder and any determination by the Committee pursuant to any
provision of the Plan shall be final and conclusive.
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<PAGE>
4. OFFERINGS UNDER THE PLAN
The Committee shall determine whether Wintrust shall make an offering
to all of the then eligible employees, provided, however, that it shall be under
no obligation to do so. In the event of an offering under the Plan, an offering
prospectus, or such other document as may then be required under applicable law,
shall be prepared which outlines the specific terms and conditions of such
offering.
5. ELIGIBILITY
All employees of Wintrust or of any Participating Subsidiary shall be
eligible to participate in an offering under the Plan except that the Committee
may, with respect to any offering, exclude from eligibility (i) any employee who
normally works less than 20 (or such lesser number determined by the Committee)
hours a week, (ii) any employee who normally works less than five (or such
lesser number determined by the Committee) months a year, (iii) any employee
who, on the first date of the applicable Offering Period (or, such later date as
may otherwise be required in order to comply with Section 423 of the Code), has
not been employed by Wintrust or a Participating Subsidiary for at least 24 (or
such lesser number determined by the Committee) months immediately prior thereto
and (iv) any employee who is a highly compensated employee (as defined in
Section 414(q) of the Code). Notwithstanding the previous sentence, under any
offering, the Committee may permit employees not otherwise eligible to
participate on the first date of the applicable Offering Period who later
satisfy the eligibility requirements of this paragraph to begin participating as
of a subsequent date determined by the Committee. In the case of an employee of
a Participating Subsidiary who became employed as a result of the acquisition by
Wintrust or a Participating Subsidiary of all or part of the assets or stock of
such employee's previous employer, the employee's employment date will be
considered to be the date he was employed by his previous employer, unless
otherwise determined by the Committee.
6. STOCK
The stock offered hereunder shall be shares of authorized but unissued
Common Stock. Subject to adjustment in accordance with the provisions of
Paragraph 8(g), the total number of shares of Common Stock which may be offered
shall not exceed the Maximum Share Limit. If at any time participating employees
elect to purchase more than the Maximum Share Limit, then the number of shares
of Common Stock which may be purchased by each participating employee shall be
reduced pro rata.
In the event that an employee's participation under the Plan for any
reason ends or is terminated and the shares which are subject to option are not
purchased, such unpurchased shares of Common Stock shall again be available for
offering under the Plan.
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<PAGE>
7. NUMBER OF SHARES WHICH AN EMPLOYEE MAY PURCHASE
Wintrust may grant to each participating employee, on a
nondiscriminatory basis, an option to purchase such number of shares of Common
Stock with respect to a given offering as shall have an aggregate purchase price
not in excess of the lesser of (i) 20 percent of such employee's Considered
Compensation determined on the first date of the Offering Period, plus the
amount of interest paid on such employee's Purchase Savings Account as provided
in Paragraph 8(c) or (ii) $50,000 or (iii) such lesser amount as the Committee
may determine.
Alternatively, Wintrust may grant to each participating employee, on a
nondiscriminatory basis, an option to purchase a fixed or maximum number of
shares of Common Stock provided that the aggregate purchase price must comply
with limitations set forth in the preceding sentence.
Notwithstanding the foregoing provisions of this Plan, no employee may
participate in an offering under the Plan (i) if such participation would permit
the employee to purchase shares of Common Stock under all the employee stock
purchase plans of Wintrust and its Participating Subsidiaries qualified under
Section 423 of the Code at a rate which exceeds $25,000 in fair market value of
such shares for each calendar year in which such employee participates in the
Plan (determined on the first date of the Offering Period), or (ii) if such
employee, immediately after his participation commences, owns stock possessing
five percent or more of the total combined voting power or value of all classes
of stock of Wintrust or any Participating Subsidiary. For such purpose, the
rules of Section 424(d) of the Code, as amended, shall apply in determining the
stock ownership of an employee, and stock which the employee may purchase
pursuant to his participation in the Plan and under all other plans or options
of Wintrust or any Participating Subsidiary shall be treated as stock owned by
the employee.
8. TERMS AND CONDITIONS OF PARTICIPATION IN AN OFFERING UNDER THE PLAN
An eligible employee's participation in an offering under this Plan
shall comply with and be subject to the following:
(a) PURCHASE PRICE. The purchase price per share of Common
Stock shall be determined by the Committee at the outset of the
offering; provided, however, the purchase price may not be lower than
the lesser of 85 percent of the Fair Market Value of the shares of
Common Stock on the first date of the Offering Period or 85 percent of
the Fair Market Value of the shares of Common Stock on the Purchase
Date.
(b) PURCHASE SAVINGS ACCOUNT. A participating employee shall
authorize the withholding from his compensation, throughout the
Offering Period, of a dollar amount or percent of salary per pay
period, the maximum of which is subject to the limits of Paragraph 7 or
other lesser limitations set by the Committee. Withheld amounts will be
deposited in the employee's Purchase Savings Account. The employee
shall not be entitled to make any other deposits to his Purchase
Savings Account, unless
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<PAGE>
the Committee so determines, and then, only to the extent permitted by
the Committee and subject to the applicable limitations contained in
Paragraph 7 hereof.
The employee may, at times and in the manner permitted by the
Committee, elect to change the amounts to be withheld from his
compensation for deposit in his Purchase Savings Account for periods
after such election has been received and approved by Wintrust provided
such election complies with the limitations set forth in Paragraph 7.
The employee may withdraw funds accumulated in his Purchase
Savings Account at any time, except as the Committee may otherwise
provide. The Bank reserves the right, as a condition of any Purchase
Savings Account, to demand and receive thirty days' notice, in writing,
as a condition of the withdrawal of any sum or sums whenever such
requirement may be deemed advisable by the Bank, in its discretion.
(c) INTEREST PAYABLE ON THE PURCHASE SAVINGS ACCOUNT. The Bank
shall pay interest on Purchase Savings Accounts on the same basis as
then paid with respect to the Bank's customers' regular statement
savings accounts, or on such other basis as the Committee from time to
time deems appropriate. However, accrued interest, if any, for any
partial interest period between the last normal interest posting date
and the Purchase Date shall be paid on the Purchase Date.
(d) PURCHASE OF SHARES.
(i) Subject to earlier purchase pursuant to Paragraphs
8(d)(ii), 8(f) and 8(h) hereof, each employee shall specify on or
before the Purchase Date whether he desires to purchase all, a portion
or none of the shares of Common Stock which he is entitled to purchase
as a result of his participation in the offering. Except as set forth
in the next paragraph, if the employee fails to deliver the
notification referred to in this paragraph, such failure shall be
deemed an election by the employee to exercise his right to purchase on
the Purchase Date all of the shares of Common Stock which he is
entitled to purchase.
On the Purchase Date, the Bank shall cause the funds,
including interest, if any, then on deposit in the employee's Purchase
Savings Account to be applied to the purchase price of the shares of
Common Stock the employee elected to purchase. Any funds remaining in
the Purchase Savings Account after such purchase will be paid to the
employee and the Purchase Savings Account will be closed. However,
except as may otherwise be provided by the Committee under Paragraph
8(d)(ii), if the Fair Market Value of one share of Common Stock on the
Purchase Date is less than the purchase price for one share of Common
Stock, Wintrust shall cause the funds, including interest, if any, then
on deposit in his Purchase Savings Account to be paid to the employee
and the Purchase Savings Account to be closed.
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<PAGE>
(ii) The Committee may determine that Wintrust shall make an
offering which shall have more than one Purchase Date and, in such
case, the Committee shall establish the dates (each a "Purchase Date")
on which purchases of shares of Common Stock can or will be made by
participating employees during an Offering Period. The Committee shall
set the terms, conditions and other procedures necessary for the proper
administration of such Offering.
(e) TERMINATION OF PARTICIPATION BY EMPLOYEE. An employee who
participates in an offering may at any time on or before the expiration
of the Offering Period terminate participation by written notice of
such termination on a form prescribed by the Committee and delivered to
Wintrust. As soon as practicable thereafter, all funds, including
interest, if any, then on deposit in his Purchase Savings Account will
be paid to the employee and his Purchase Savings Account will be
closed.
(f) TERMINATION OF EMPLOYMENT.In the event that a
participating employee's employment with Wintrust and/or a
Participating Subsidiary terminates during the term of an Offering
Period, his participation under the Plan shall terminate immediately
and within a reasonable time thereafter all funds, including interest,
if any, then on deposit in his Purchase Savings Account will be paid to
the employee. However, if any termination of employment is for reasons
of total and permanent disability or retirement (as determined by the
Committee), the employee shall have the right within three months from
the date of his retirement or disability (unless the Offering Period
shall first expire in which event such right may be exercised only on
or prior to such expiration) to elect to purchase all or fewer than all
of the shares of Common Stock which he is entitled to purchase or to
receive the proceeds of his Purchase Savings Account in cash.
If the employee dies while in the employment of Wintrust or a
Participating Subsidiary during the term of an offering in which he is
participating, his estate, personal representative, or beneficiary
shall have the right, at any time within 12 months from the date of his
death (unless the expiration of the Offering Period shall first occur
in which event such right may be exercised only on or prior to such
expiration), to elect to purchase all or fewer than all of the shares
of Common Stock which the deceased employee would have otherwise been
entitled to purchase or to receive the cash on deposit in the deceased
employee's Purchase Savings Account.
(g) RECAPITALIZATION.The aggregate number of shares of Common
Stock which may be offered under the Plan, the number of shares of
Common Stock which each employee is entitled to purchase as a result of
his participation in an offering and the purchase price per share for
each such offering shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock
resulting from a subdivision or consolidation of shares or other
capital adjustment, or the payment of a stock dividend, or other
increase or decrease in such shares of Common Stock, effected without
receipt of consideration by Wintrust; provided, however, that any
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<PAGE>
fractional shares of Common Stock resulting from any such adjustment
shall be eliminated.
Subject to any required action by stockholders, if Wintrust
shall be the surviving or resulting corporation in any merger or
consolidation, excluding for this purpose a merger or consolidation
which, or the approval of which by the stockholders of Wintrust,
constitutes a Change of Control (and, thus, the consequences of which
are otherwise provided for in Paragraph 8(h) hereof), any employee's
rights to purchase stock pursuant to participation in an offering
hereunder shall pertain to and apply to the shares of stock to which a
holder of the number of shares of Common Stock subject to such rights
would have been entitled; but a dissolution or liquidation of Wintrust
or a merger or consolidation in which Wintrust is not the surviving or
resulting corporation, excluding for this purpose a merger or
consolidation which, or the approval of which by the stockholders of
Wintrust, constitutes a Change of Control (and, thus, the consequences
of which are otherwise provided for in Paragraph 8(h) hereof), shall
cause all participation in any offering made under the Plan which is
then in effect to terminate, except that the surviving or resulting
corporation may, in its absolute and uncontrolled discretion, tender an
offer to purchase its shares on terms and conditions both as to the
number of shares and otherwise, which will substantially preserve the
rights and benefits of employees participating in an offering then in
effect under the Plan.
In the event of a change in Common Stock which is limited to a
change in the designation thereof to "Capital Stock" or other similar
designation, or to a change in par value thereof, or from par value to
no par value, without increase in the number of issued shares, the
shares resulting from any such change shall be deemed to be Common
Stock within the meaning of the Plan.
(h) CHANGE OF CONTROL. Anything in the Plan to the contrary
notwithstanding, the date on which a "Change of Control" (as defined
below) occurs shall be considered to be a Purchase Date with respect to
all Offering Periods under the Plan and each employee who is a
participant in the Plan shall thereupon have the right to purchase all
or fewer than all of the shares of Common Stock which he is entitled to
purchase as a result of his participation in the offering with the
funds, including interest, if any, then on deposit in his Purchase
Savings Account or to be promptly paid in cash all funds, plus accrued
interest through the date of payment, on deposit in his Purchase
Savings Account. For this purpose, a "Change of Control" shall mean:
(i) The acquisition, other than from Wintrust, by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either the
then outstanding shares of Common Stock of Wintrust or the combined
voting power of the then outstanding voting securities of Wintrust
entitled to vote generally in the election of directors, but excluding,
for this purpose, any such acquisition by Wintrust or any of its
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<PAGE>
subsidiaries, or any employee benefit plan (or related trust) of
Wintrust or its subsidiaries, or any corporation with respect to which,
following such acquisition, more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of all or
substantially all directors is then beneficially owned, directly or
indirectly, by the individuals and entities who were the beneficial
owners, respectively, of the Common Stock and voting securities of
Wintrust immediately prior to such acquisition in substantially the
same proportion as their ownership, immediately prior to such
acquisition, of the then outstanding shares of Common Stock of Wintrust
or the combined voting power of the then outstanding voting securities
of Wintrust entitled to vote generally in the election of directors, as
the case may be; or
(ii) Individuals who, as of the date hereof, constitute the
Board (as of the date hereof the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board, provided that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by Wintrust's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to
the election of the directors of Wintrust (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or
(iii) Approval by the stockholders of Wintrust of a
reorganization, merger or consolidation of Wintrust, in each case, with
respect to which all or substantially all of the individuals and
entities who were the respective beneficial owners of the Common Stock
and voting securities of Wintrust immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares
of Common Stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation, or a complete liquidation or
dissolution of Wintrust or of the sale or other disposition of all or
substantially all of the assets of Wintrust.
(i) ASSIGNABILITY. No Purchase Savings Account, or option to
purchase shares of, Common Stock hereunder shall be assignable, by
pledge or otherwise, or transferable except by will or by the laws of
descent and distribution; and no right of any employee to purchase
stock pursuant to an offering made hereunder shall be subject to any
obligation or liability of such employee or have a lien imposed upon
it. During the lifetime of an employee, the shares of Common Stock
which he is entitled to purchase under the Plan may be purchased only
by the employee.
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<PAGE>
(j) RESTRICTIONS ON TRANSFERABILITY. If, at the time of the
purchase of shares of Common Stock under the Plan, in the opinion of
counsel for Wintrust, it is necessary or desirable, in order to comply
with any applicable laws or regulations relating to the purchase or
sale of securities, that the employee purchasing such shares shall
agree not to purchase or dispose of such shares otherwise than in
compliance with the Securities Act of 1933 or the Exchange Act, as
amended, and the rules and regulations promulgated thereunder, the
employee will, upon the request of Wintrust, execute and deliver to
Wintrust an agreement to such effect.
(k) RIGHTS AS STOCKHOLDER
An employee who is a participant hereunder shall have no
rights as a stockholder with respect to shares of Common Stock which he
is entitled to purchase under the Plan until the date of the issuance
of the shares of Common Stock to the employee.
(l) MISCELLANEOUS.
The terms and conditions of participation under the Plan may
include such other provisions as the Board shall deem advisable,
including without limitation, provisions which may require participants
to notify Wintrust promptly in writing if such participant disposes of
stock acquired hereunder prior to the expiration of applicable holding
periods under Section 423 of the Code.
9. CONFORMANCE WITH TAX AND SECURITIES LAWS
The Plan and all offerings under the Plan are intended to comply in all
aspects with Section 423 of the Code (or its successor section) and Rule 16b-3
promulgated under the Exchange Act, as amended from time to time. Should any of
the terms of the Plan or offerings be found not to be in conformity with the
terms of Section 423 or Rule 16b-3, such terms shall be invalid and shall be
omitted from the Plan or the offering but the remaining terms of the Plan shall
not be affected. However, to the extent permitted by law, any provisions which
could be deemed invalid and omitted shall first be construed, interpreted or
revised retroactively to permit this Plan to be construed in compliance with all
applicable laws (including Rule 16b-3) so as to foster the intent of this Plan.
10. AMENDMENTS
The Board may alter, amend, suspend or discontinue the Plan or at any
time prior to a Change of Control (as defined in Paragraph 8(h)) alter or amend
any and all terms of participation in an offering made thereunder.
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<PAGE>
11. APPLICATION OF FUNDS
The proceeds received by Wintrust from the sale of Common Stock under
the Plan, except as otherwise provided herein, will be used for general
corporate purposes.
12. NO OBLIGATION TO PURCHASE SHARES
Participation under the Plan shall impose no obligation upon the
employee to purchase any shares of Common Stock which are the subject of his
participation.
13. WITHHOLDING
Any amounts to be paid or shares of Common Stock to be delivered by
Wintrust under the Plan shall be reduced to the extent permitted or required
under applicable law by any sums required to be withheld by Wintrust or any
Participating Subsidiary.
14. GOVERNING LAW
Except where such laws may be superseded by Federal Law, this Plan and
the terms and conditions of participation in the Plan, shall be construed in
accordance with and governed by the laws of the State of Illinois; provided,
however, in the event the Corporation's state of incorporation shall be changed,
then the law of such new state of incorporation shall govern.
15. REGULATORY AUTHORITIES
Each and every obligation and undertaking of Wintrust hereunder is
subject to the proviso that if at any time the Board determines that the
listing, registration or qualification of the shares covered hereby or by an
option issued hereunder upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental agency or regulatory
body, is necessary or desirable as a condition to or in connection with the
grant or exercise of any option hereunder, such grant or exercise shall be
deemed to be without effect hereunder until such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.
16. DESIGNATION OF BENEFICIARY
Each employee may designate any person or entity as such employee's
beneficiary who shall, in the event of the employee's death, receive shares of
Common Stock under the Plan or the funds in the employee's Purchase Savings
Account. Each designation of a beneficiary by an employee will revoke all
previous designations under the Plan made by that employee and will be effective
only when filed in writing with Wintrust in accordance with procedures
established by the Committee during the employee's lifetime. If any employee
fails to designate a beneficiary in the manner provided above, or if the
beneficiary designated by an employee dies before the employee or before
issuance of all shares of Common Stock due to the employee
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<PAGE>
under the Plan is completed, the Board or the Committee shall distribute the
employee's shares to the legal representative or representatives of the estate
of the later to die of the employee or the employee's designated beneficiary.
17. INDEMNIFICATION
Any person who is or was a director, officer, or employee of Wintrust
or a Participating Subsidiary and each member of the Committee shall be
indemnified and saved harmless by Wintrust to the extent legally permissible
from and against any and all liability or claim of liability to which such
person may be subjected by reason of any act done or omitted to be done in good
faith with respect to the administration of the Plan, including all expenses
reasonably incurred in his defense in the event that Wintrust fails to provide
such defense.
18. RIGHTS TO EMPLOYMENT
Participation under the Plan shall not confer upon any employee any
right with respect to continued employment by Wintrust or a Participating
Subsidiary.
19. EXPENSES
All expenses of administering the Plan shall be borne by Wintrust.
20. FACILITY OF PAYMENT
Whenever the Committee considers that an employee or a beneficiary
entitled to shares of Common Stock or proceeds under the Plan is under a legal
disability or is incapacitated in any way so as to be unable to manage his
financial affairs, the Committee may direct that such shares of Common Stock or
proceeds be issued directly to such employee or beneficiary, to the legal
guardian or conservator of such employee or beneficiary, to a relative of such
employee or beneficiary to be expended by such relative for the benefit of such
employee or beneficiary, to a custodian for such beneficiary under a Uniform
Transfers or Gifts to Minors Act or comparable statute of any state, or expended
for the benefit of such employee or beneficiary, as the Committee considers
advisable.
21. EFFECTIVE DATE
This effective date of this Plan is May 22, 1997, the date the Plan was
approved by the shareholders of the Corporation.
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<PAGE>
The Directors and Officers of
Wintrust Financial Corporation
cordially invite you to attend our
1997 Annual Meeting of Shareholders
Thursday, May 22, 1997, 6:00 p.m.
(Reception to follow the Annual Meeting)
Gorton Community Center
400 East Illinois Road
Lake Forest, Illinois
IMPORTANT
Please complete both sides of the PROXY CARD, sign, date, detach and return in
the enclosed envelope.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF NOT OTHERWISE
SPECIFIED ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED
AND FOR PROPOSALS 2 AND 3. THE UNDERSIGNED REVOKES ALL PROXIES HERETOFORE GIVEN
TO VOTE AT SUCH MEETING AND ALL ADJOURNMENTS OR POSTPONEMENTS.
Dated _____________________
- ---------------------------
- ---------------------------
(Please sign here)
Please sign your name as it appears above. If executed by a corporation, a duly
authorized officer should sign. Executors, administrators, attorneys, guardians
and trustees should so indicate when signing. If shares are held jointly, at
least one holder must sign.
<PAGE>
Wintrust Financial Corporation
If you personally plan to attend the Annual Meeting of Shareholders, please
check the box below and list the names of attendees on reverse side.
Return this stub in the enclosed envelope with your completed proxy card.
I/We do plan to attend
the 1997 meeting ________
<PAGE>
Wintrust Financial Corporation
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Howard D. Adams and Edward J. Wehmer as Proxies,
each with the power to appoint his substitute and hereby authorizes them to
represent and to vote, as designated below, all the shares of Common Stock of
Wintrust Financial Corporation which the undersigned is entitled to vote at the
Annual Meeting of Shareholders to be held on May 22, 1997 or any adjournment
thereof.
1. Proposal 1 - Election of Directors(1)
[ ] For all Nominees Listed Below
(Except as marked to the contrary below).
[ ] Withhold Authority to vote for all nominees below.
(Instructions: To withhold authority to vote for
any individual nominee, strike a line through the
nominee's name).
Alan W. Adams J. Christopher Reyes
Howard D. Adams Lemuel H. Tate Jr.
James E. Mahoney Edward J. Wehmer
James B. McCarthy
(1) To be designated as Class I Directors with term ending in 2000
2. Proposal 2 - Approval of the 1997 Stock Incentive Plan,
as described in the Proxy Statement
[ ] For [ ] Against [ ] Abstain
3. Proposal 3 - Approval of the Employee Stock Purchase Plan,
as described in the Proxy Statement
[ ] For [ ] Against [ ] Abstain
In their discretion, the Proxies are authorized to vote upon such other business
as many properly come before the meeting.
(To be signed on the other side)
