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:
<PAGE>
WINTRUST FINANCIAL CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1998
The 1998 Annual Meeting of Shareholders of Wintrust Financial
Corporation will be held at the Deer Path Inn, 255 East Illinois Road, Lake
Forest, Illinois 60045, on Thursday, May 28, 1998, at 2:00 p.m. local time, for
the following purposes:
1. To elect eight Class II directors to hold office for a three-year
term;
2. 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 20, 1998.
By order of the Board of Directors,
Edward J. Wehmer
Secretary
April 28, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, IT IS IMPORTANT THAT YOU
COMPLETE, SIGN, DATE 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 1998 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD THURSDAY, MAY 28, 1998
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 1998 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 Annual Meeting of
Shareholders to be held on May 28, 1998, at 2:00 p.m. CST, at the Deer Path Inn,
255 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 20,
1998 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
8,137,272 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 II Director, as set forth below and, in
accordance with the best judgment of the persons voting the proxies, any other
business which may properly come before the meeting and be submitted to a vote
of the shareholders. 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. Under Illinois law and the Company's By-laws,
directors are elected by a plurality of votes cast. With respect to brokers who
are prohibited from exercising discretionary authority for beneficial owners who
have not returned proxies to the brokers, those shares WILL NOT be included in
the vote totals. 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. Whether or not you plan to attend the meeting in person, prompt return of
your proxy card in the postage-paid envelope provided will be appreciated.
This Proxy Statement is being mailed to shareholders on or about May 4,
1998.
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<PAGE>
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 have been 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 as amended by the Board of Directors at its
July 23, 1997 meeting provide that the number of directors of the Company shall
be twenty-four (24), divided into three classes of eight Directors who are
elected to hold office for staggered three-year terms. Messrs. Rusin and Graft
and Ms. Horne were appointed by the Board of Directors to fill the three
vacancies created when the size of the Board of Directors was increased to 24
from 21. Currently, there are 23 members of the Board of Directors with one
vacancy in Class II due to the resignation in 1997 of James C. Knollenberg.
Each year the shareholders elect members of one class of Directors for
a term of three years. The term of office of those persons currently serving as
Class II Directors will expire at this Annual Meeting of Shareholders. The term
of those persons currently serving as Class III Directors expires at the Annual
Shareholder Meeting to be held in 1999; the term of Class I Directors expires at
the Annual Shareholder Meeting to be held in 2000.
The eight persons named below have been nominated for election as Class
II directors for a term to end at the Annual Meeting of Shareholders in the year
2001 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 nominees will not be available for election. However,
if any of the 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
nominees named. Shareholders of the Company have no cumulative voting rights
with respect to the election of directors.
The following sections set forth the names of nominees, continuing
directors, retiring director and "Named Executive Officers," as defined in the
Summary Compensation Table, their ages, a brief description of their recent
business experience, including present occupation and employment, certain
directorships held by each, the year in which they became a director of the
Company, and the year in which director terms expire. Director positions in the
Company's subsidiaries are included in the biographical information set forth
below. Such subsidiaries include Lake Forest Bank & Trust Company ("Lake Forest
Bank"), Hinsdale Bank & Trust Company ("Hinsdale Bank"), North Shore Community
Bank & Trust Company ("North Shore Bank") and Libertyville Bank & Trust Company
("Libertyville Bank"), Barrington Bank & Trust Company ("Barrington Bank"),
Crystal Lake Bank & Trust Company ("Crystal Lake Bank"), Crabtree Capital
Corporation ("Crabtree") and First Insurance Funding Corp. ("FIFC").
NOMINEES TO SERVE AS CLASS II DIRECTORS UNTIL THE ANNUAL
MEETING OF SHAREHOLDERS IN THE YEAR 2001
BRUCE K. CROWTHER (46), DIRECTOR NOMINEE Mr. Crowther has served as President
and Chief Executive Officer of Northwest Community Healthcare, Northwest
Community Hospital and certain of its affiliates since January 1992. Prior to
that time he served as Executive Vice President and Chief Operating Officer from
1989 to 1991. He is a Fellow of the American College of Healthcare Executives.
Mr. Crowther is Chairman of the Board of Directors of the Illinois Hospital and
Health Systems Association as well as a member of the boards of directors of the
Chicago Hospital Risk Pooling Program and Dianon Systems, Inc. Mr. Crowther is a
Director of Barrington Bank.
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<PAGE>
MAURICE F. DUNNE, JR. (71), 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 Bank
and North Shore Bank. Mr. Dunne is currently a Class II Director of the Company
whose term expires at the 1998 Annual Meeting of Shareholders.
WILLIAM C. GRAFT (36), DIRECTOR SINCE 1997 Mr. Graft is the sole shareholder and
President of his law firm, with a practice concentrated in corporate, finance
and commercial real estate law. Until December 1996, Mr. Graft was a partner in
the national law firm of Keck Mahin & Cate. Mr. Graft is also a principal and
general partner of several real estate investment partnerships and corporations.
He serves on the Advisory Board of the Barrington Area Arts Council. Mr. Graft
is a Director of Barrington Bank. Mr. Graft is currently a Class II Director of
the Company whose term expires at the 1998 Annual Meeting of Shareholders.
MARGUERITE SAVARD MCKENNA (55), 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. Ms. McKenna is currently a Class II
Director of the Company whose term expires at the 1998 Annual Meeting of
Shareholders.
ALBIN F. MOSCHNER (45), DIRECTOR SINCE 1996 Since September 1997, Mr. Moschner
has been President and Chief Executive Officer of Millecom, LLC, a development
stage internet communication company. From August 1996 to August 1997, he served
as Vice Chairman and director and an officer of Diba, Inc., a development stage
internet technology company. 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 Bank. Mr. Moschner is currently a Class II Director of the Company whose
term expires at the 1998 Annual Meeting of Shareholders.
INGRID S. STAFFORD (44), DIRECTOR NOMINEE Ms. Stafford has held various
positions since 1977 with Northwestern University, where she is currently
Associate Vice President for Finance and Controller. She has been a Director of
Wittenberg University since 1993. She is a member of the National Association of
College and University Business Officers. Ms. Stafford is also the former
President of the Board of Directors of Childcare Network of Evanston and chair
of the Board of Directors of the Evanston McGaw YMCA. Ms. Stafford is a Director
of North Shore Bank.
JANE R. STEIN (53), 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 Bank. Ms. Stein is currently a Class II Director
of the Company whose term expires at the 1998 Annual Meeting of Shareholders.
KATHARINE V. SYLVESTER (58), DIRECTOR SINCE 1996 Since November 1997, Ms.
Sylvester has been the Office Manager for Fibrex Sales, Ltd. 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 Bank. Ms. Sylvester is currently a Class II
Director of the Company whose term expires at the 1998 Annual Meeting of
Shareholders.
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<PAGE>
CLASS I - CONTINUING DIRECTORS SERVING UNTIL THE YEAR 2000
ALAN W. ADAMS (32), DIRECTOR SINCE 1996 Mr. Adams has been Vice
President/Lending at 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.
HOWARD D. ADAMS (65), DIRECTOR SINCE 1996 Mr. Adams has served as the Chairman
and Chief Executive Officer of Wintrust Financial Corporation since the
formation of the Company as a holding company in 1996 through its
reorganization. He was a principal organizer of each of its subsidiaries. The
Company has announced Mr. Adams' plans to retire from the Company effective as
of the Annual Meeting of Shareholders. He is currently the Chairman and a
Director of Crabtree, Lake Forest Bank, Libertyville Bank, Barrington Bank,
Crystal Lake Bank and FIFC, and he is the Vice-Chairman and a Director of
Hinsdale Bank. He also serves as a director of North Shore Bank. 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.
JAMES E. MAHONEY (60), 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 Bank.
JAMES B. MCCARTHY (46), DIRECTOR SINCE 1996 From 1991 to present, Mr. McCarthy
has been Chairman and Chief Executive Officer of Gemini Consulting Group, Inc.,
Oak Brook, Illinois, an international management consulting firm focusing on the
health care industry. Mr. McCarthy is a Director of Hinsdale Bank.
J. CHRISTOPHER REYES (44), 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 and the Childrens Memorial
Hospital. Mr. Reyes is a Director of Lake Forest Bank.
PETER RUSIN (45), DIRECTOR SINCE 1997 Since 1994, Mr. Rusin has served as
Executive Director of JFK Health World, a not for profit children's health
education center and museum, located in Barrington, Illinois. Mr. Rusin is a
Director of Barrington Bank.
LEMUEL H. TATE, JR. (71), 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 (44), DIRECTOR SINCE 1996 Mr. Wehmer is President and Chief
Operating Officer of Wintrust Financial Corporation. For the past six years, he
has been the President of Lake Forest Bank. He was one of the principal
organizers of each of the banking subsidiaries and serves as the Vice Chairman
and a Director of FIFC and as a Director of each of the subsidiary Banks. Prior
to joining the Company, Mr. Wehmer was, from 1985 to 1991, Senior Vice
President, Chief Financial Officer, and a director of River Forest Bancorp,
Chicago, Illinois. 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.
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<PAGE>
CLASS III - CONTINUING DIRECTORS SERVING UNTIL THE YEAR 1999
JOSEPH ALAIMO (67), 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 (46), DIRECTOR SINCE 1996 Mr. Crist is President of Crist Partners,
Ltd., an executive search firm he founded in 1995. 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 Bank.
KATHLEEN R. HORNE (54), DIRECTOR SINCE 1997 Mrs. Horne is a former elementary
school teacher. For 13 years she was Vice President of the International
Creative Group - London/Chicago Ltd., a creative-marketing consultancy. From
1995 to 1997, she served as President of the Woman's Board of the Chicago
Horticultural Society and as a member of the Board of Directors of that
organization. Currently, Mrs. Horne is National Chairman of the Flower Arranging
Study Group of The Garden Club of America. She is a Director of Barrington Bank.
JOHN S. LILLARD (67), 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 Bank.
HOLLIS W. RADEMACHER (62), 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 five of the six 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., Cityscape
Financial Corp. and College Television Network, as well as several other private
business enterprises. He currently serves as a Director of each of each of the
subsidiary Banks and FIFC.
JOHN N. SCHAPER (46), 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 Bank.
JOHN J. SCHORNACK (67), DIRECTOR SINCE 1996 Mr. Schornack is the former Chairman
and CEO of KraftSeal Corporation, Lake Forest, Illinois, and retired Chairman of
Binks Sames Corporation, 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 is a Life Trustee of the Chicago Symphony Orchestra
and a trustee of the Graham Foundation. He also is the retired Chairman of the
Board of Trustees of Barat College, Lake Forest, Illinois. Mr. Schornack is a
Director of North Shore Bank.
LARRY WRIGHT (58), DIRECTOR SINCE 1996 For the past 34 years, Mr. Wright has
been Vice President of Milbank Corporation, Chicago, Illinois, an investment
advisory firm. Mr. Wright also serves as a director of Milbank Corporation.
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<PAGE>
RETIRING DIRECTOR
EUGENE HOTCHKISS III (70), 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 Bank.
BOARD OF DIRECTORS' COMMITTEES AND COMPENSATION
BOARD OF DIRECTORS COMMITTEES
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 established three committees: (i) the Executive Committee; (ii) the
Compensation and Nominating Committee; and (iii) the Audit Committee.
Executive Committee. The Executive Committee currently consists of
Messrs. Rademacher (Chairman), Alan Adams, McCarthy, Schaper, Tate, Wehmer and
Wright and Ms. McKenna. The Executive Committee is authorized to exercise
certain of the powers of the Board, subject to ratification by the full Board,
and meets as needed, usually in situations where it is not feasible to take
action by the full Board. No Executive Committee meetings were held during 1997.
Compensation and Nominating Committee. Currently, the members of the
Compensation and Nominating Committee are Messrs. Crist (Chairman), Dunne,
Hotchkiss, Lillard, Mahoney, Rademacher and Reyes. Mr. Howard D. Adams also
served as a member of the Committee until April 1998. The Compensation and
Nominating Committee is responsible for reviewing the Company's compensation
policies and administering the Company's employee benefit and stock incentive
programs, and reports to the Board regarding executive compensation
recommendations. This Committee also functions as a nominating committee to
propose to the full Board a slate of nominees for election as directors. During
1997, seven Compensation Committee meetings were held.
Audit Committee. The Audit Committee is composed entirely of outside
directors who are not now, and have never been, officers of the Company.
Currently, the members of the Audit Committee are Messrs. Schornack (Chairman),
Rademacher and Moschner and Ms. Stein and Ms. Sylvester. The Audit Committee is
responsible for oversight of the Company's accounting, reporting and financial
controls practices, reports to the Board regarding audit activities and
examinations, and annually reviews the qualifications of independent auditors.
During 1997, three Audit Committee meetings were held.
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 attended. There were five meetings of the Board
of Directors during 1997. 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.
For the period during 1997 in which they served, all of the directors
attended at least 75% of the total number of meetings held of the Board and
those Committees on which they served, except that Ms. Horne and Mr. Rusin were
each absent from the one Board meeting held in 1997 after their appointment to
the Board.
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<PAGE>
DEFERRED COMPENSATION FOR NON-EMPLOYEE DIRECTORS
The Wintrust Financial Corporation Deferred Director Fee Plan allows
non-employee Directors to elect 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, which are an unfunded obligation of the Company, begin at the
date specified by the director or upon cessation of service as a Director, and
bear interest at a market rate of interest until paid.
EXECUTIVE OFFICERS OF THE COMPANY
The Company's Executive Officers are elected annually by the Company's
Board of Directors at the first meeting of the Board following the Annual
Meeting of Shareholders. Certain information regarding those persons serving as
the Company's Executive Officers is set forth below.
Howard D. Adams (65) -- Chairman and Chief Executive Officer - Mr. Adams has
served as the Company's Chairman and Chief Executive Officer since the formation
of Wintrust Financial Corporation as a holding company in 1996. The Company has
announced Mr. Adams' plans to retire from the Company effective as of the Annual
Meeting of Shareholders. See the description above under "Election of Directors"
for additional biographical information.
Edward J. Wehmer (44) -- 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 Bank. See the description above under "
Election of Directors" for additional biographical information.
David A. Dykstra (37) -- 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 Bank and FIFC.
Lloyd M. Bowden (44) -- 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 (43) -- 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.
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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 group; and (iii) any shareholder known to hold in excess of
5% of any class of the Company's voting securities.
<TABLE>
<CAPTION>
AMOUNT OF CURRENTLY TOTAL
COMMON SHARES EXERCISABLE AMOUNT OF TOTAL
BENEFICIALLY OPTIONS & BENEFICIAL PERCENTAGE
OWNED(1) WARRANTS (1) OWNERSHIP(1) OWNERSHIP
---------- -------------- -------------- -----------
DIRECTORS
<S> <C> <C> <C> <C>
Alan W. Adams(2)....................... 192,788 50,737 243,525 2.97%
Howard D. Adams(3)**................... 469,997 15,529 485,526 5.96%
Joseph Alaimo.......................... 6,895 7,255 14,150 *
Peter Crist............................ 28,884 2,672 31,556 *
Maurice F. Dunne, Jr................... 44,802 9,415 54,217 *
William C. Graft....................... 1,000 -- 1,000 *
Kathleen R. Horne...................... 500 -- 500 *
Eugene Hotchkiss III................... 3,739 1,296 5,035 *
John S. Lillard........................ 46,260 4,507 50,767 *
James E. Mahoney....................... 8,720 1,208 9,928 *
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 9,864 60,871 *
J. Christopher Reyes................... 153,940 4,005 157,945 1.94%
Peter Rusin............................ 1,000 -- 1,000 *
John N. Schaper........................ 1,207 1,208 2,415 *
John J. Schornack...................... 8,766 3,804 12,570 *
Jane R. Stein.......................... -- 1,208 1,208 *
Katharine V. Sylvester................. 3,120 2,793 5,913 *
Lemuel H. Tate......................... 15,879 6,070 21,949 *
Edward J. Wehmer**..................... 146,000 150,409 296,409 3.58%
Larry Wright(4)........................ 429,865 28,492 458,357 5.61%
NON-DIRECTOR EXECUTIVE OFFICERS
- -------------------------------
Lloyd M. Bowden........................ 15,641 9,034 24,675 *
David A. Dykstra....................... 17,424 19,176 36,600 *
Robert F. Key.......................... 22,152 14,069 36,221 *
--------- ------- ---------- -------
Total Directors & Exec. Officers..... 1,717,369 349,458 2,066,827 24.35%
========= ======= ========== =======
DIRECTOR NOMINEES NOT CURRENTLY SERVING
- ---------------------------------------
Bruce K. Crowther...................... 645 -- 645 *
Ingrid S. Stafford..................... 2,992 3,887 6,879 *
OTHER SIGNIFICANT SHAREHOLDER
- -----------------------------
Emmett McCarthy(5)..................... 397,402 93,302 490,704 5.96%
- ------------------------------------------
<FN>
* Less than 1%
** Denotes person serving as Director and as an executive officer.
- 8 -
<PAGE>
(1) Beneficial ownership percentages are calculated in accordance with SEC Rule
13d-3 promulgated under the Securities Exchange Act of 1934.
(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. Additionally, the shares
presented include 2,050 shares held in trust for his minor son with respect
to which Mr. Alan Adams disclaims beneficial ownership. 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 (5) 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. The address of Mr. Adams is c/o the Company at 727 North
Bank Lane, Lake Forest, Illinois 60045.
(4) Includes (i) 21,433 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) 8,721 shares and 1,092 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) 391,884 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. The address of Mr. Wright is
135 South LaSalle Street, Chicago, Illinois 60603.
(5) Includes 16,367 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 Options held by the Alan W. Adams Family Trust and
176,470 shares, 28,962 shares subject to Warrants, and 17,689 shares
subject to Options 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 c/o the Company at 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>
- 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
executive officers (the "Named Executive Officers") during 1997, 1996 and 1995.
<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 1997 465,000 55,000 6,504 30,000(7) --
Chairman and Chief 1996(3) 331,250 40,000 373 -- --
Executive Officer 1995(3) 190,000 43,000 629 -- --
Edward J. Wehmer 1997 425,000 40,000 12,420 20,000(7) 881
President & Chief 1996 395,000 40,000 6,431 36,730(4) 1,224
Operating Officer 1995 326,250 43,000 5,935 -- 3,482
David A. Dykstra 1997 176,000 35,000 6,862 18,000 980
Executive Vice President & 1996 155,000 32,000 4,790 6,824 582
Chief Financial Officer 1995(5) 80,889 12,000 2,486 30,880 --
Robert F. Key 1997 165,000 25,000 6,233 10,000 434
Executive Vice President & 1996(5)(6) 121,634 40,000 1,116 29,100 --
Director of Marketing 1995 N/A N/A N/A -- --
Lloyd M. Bowden 1997 128,000 15,000 2,533 8,000 296
Executive Vice President & 1996(5)(6) 90,000 20,000 2,745 18,670 --
Director of Technology 1995 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
Capital") of $50,000 for 1995. Such amount is not included as compensation
in the above table. HDA Capital was paid consulting fees and expenses by
Crabtree (a predecessor corporation of the Company) for services of Mr.
Adams and other personnel of $95,548 and $142,692 for the years ended
December 31, 1996 and 1995, respectively. Subsequent to the 1996
Reorganization, these consulting fees were discontinued. HDA Capital is
owned by the Alan W. Adams Family Trust and the Sarah K. Adams Family
Trust.
(4) Represents awards under "Phantom Stock Agreements" entered into in 1996, by
two of the Company's predecessor corporations, pursuant to which Mr. Wehmer
became entitled to cash payments equal to any appreciation until exercised
in the value of an aggregate of 36,730 shares of Common Stock over 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). Mr. Wehmer exercised these
stock appreciation rights in 1997.
(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 $10,000, respectively, for Robert
F. Key and Lloyd M. Bowden.
(7) Represents grants of options approved in January 1998 with respect to
executives' service in 1997.
</FN>
</TABLE>
- 10 -
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The table below summarizes for each Named Executive Officer certain
information about options which were granted by the Company under the 1997 Stock
Incentive Plan with respect to the executives' service in 1997. All options were
granted at per share exercise prices equal to or greater than the fair market
value per share on the date of grant.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
% OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS/ VALUE AT ASSUMED
SHARES SARS ANNUAL RATES OF
UNDERLYING GRANTED TO EXERCISE STOCK PRICE
OPTIONS/ EMPLOYEES OR BASE APPRECIATION
SARS IN FISCAL PRICE EXPIRATION FOR OPTION/SAR TERM
NAME GRANTED YEAR ($/SH) DATE 5% 10%
---- ------- ----- ------- ---- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Howard D. Adams............ 30,000(2) 7.49% $ 18.00 1/22/08 $ 339,603 $ 860,621
Edward J. Wehmer........... 20,000(2) 4.99% 18.00 1/22/08 226,402 573,747
David A. Dykstra........... 18,000 4.49% 18.00 12/05/07 203,762 516,373
Robert F. Key.............. 10,000 2.50% 18.00 12/05/07 113,201 286,873
Lloyd M. Bowden............ 8,000 2.00% 18.00 12/05/07 90,561 229,499
- -------------------------------------------------
<FN>
(1) Pursuant to the terms of the option awards, all such Options vest in 20%
annual increments beginning on February 28, 1999 with an additional 20%
vesting on February 28 of each of the next four succeeding years.
(2) Represents option grants approved in 1998 with respect to executives
service in 1997.
</FN>
</TABLE>
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, 1997.
<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 ($) DECEMBER 31, 1997 (#) DECEMBER 31, 1997 ($)
---- ------------ ------------ --------------------- ---------------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE(1) UNEXERCISABLE(1)
------------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Howard D. Adams........... 7,341(2) $ 13,911 6,794 / 30,000(4) $ 62,903 / $ 0
Edward J. Wehmer.......... 36,730(3) 279,662 131,271 / 20,000(4) 1,351,575 / 0
David A. Dykstra.......... -- -- 17,736 / 37,968 109,143 / 102,531
Robert F. Key............. -- -- 14,069 / 25,031 57,541 / 61,951
Lloyd M. Bowden........... -- -- 8,066 / 18,064 34,930 / 42,472
- ----------------------------------------
<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 predecessors that
were unexercised as of December 31, 1997.
(2) Reflects shares acquired upon the exercise of options that had a 1997
expiration date, none of which have been sold.
(3) Reflects the number of shares underlying certain stock appreciation rights
upon the exercise of which in 1997 Mr. Wehmer received a cash payment from
the Company of $279,662. No shares were issued. See footnote (4) to the
Summary Compensation Table.
(4) Represents option grants approved in January 1998 with respect to
executives' service in 1997.
</FN>
</TABLE>
- 11 -
<PAGE>
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with Messrs. Adams and Wehmer in
1996 following completion of the Reorganization transaction, and, during 1997,
the Company entered into similar employment agreements with David A. Dykstra,
Robert F. Key and Lloyd M. Bowden. 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 based upon the executive's current base salary and prior year
bonus amount 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 the respective dates of such
agreements for Messrs. Adams and Wehmer were $445,000 and $395,000,
respectively, and for Messrs. Dykstra, Key and Bowden were $176,000, $165,000
and $128,000, respectively. The current annual base salaries of Messrs. Adams,
Wehmer, Dykstra, Key and Bowden are $500,000, $450,000, $206,000, $180,000 and
$140,500, 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. The Company is currently evaluating the
implications of Mr. Adams' upcoming retirement under the terms of his employment
agreement.
COMPENSATION AND NOMINATING COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, Howard D. Adams, Chairman and Chief Executive Officer,
served 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. It is anticipated that there will be no insider
participation on the Committee that determines 1998 executive compensation. 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.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERALL COMPENSATION PHILOSOPHY: The Compensation and Nominating
Committee of the Board of Directors (the "Committee") has the responsibility to
monitor and implement the overall executive compensation program of the Company.
The objectives of the Company's compensation policies are to enhance shareholder
value; to create and sustain high performance; to attract and retain as
executives individuals who can contribute substantially to the Company's short
and long term goals; and to align the interests of executives with those of the
shareholders of the Company. The philosophy is to provide competitive base
salaries which reflect individual levels of responsibility and performance,
annual bonuses based upon personal achievement and contributions to annual
corporate performance, and stock-based incentive awards. 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.
Howard D. Adams, who served as chairman of the Committee during 1997, did not
participate in the approval process of compensation for Mr. Wehmer or himself.
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 giving consideration to
the Company's performance and the individual's contribution to that performance.
While there are no specific performance weightings established, the salary
recommendations are based on performance criteria such as:
o financial performance of the Company with a balance between long and
short term growth in earnings, revenue and asset growth;
o role in development and implementation of long term strategic plans;
- 12 -
<PAGE>
o responsiveness to changes in the financial institution marketplace;
and
o growth and diversification of the Company.
In the absence of similar de novo bank holding companies, it is
difficult to identify appropriate peer group comparisons for the base salaries
of the Company's executives. In addition, the Company's strategy is to pay
executives very competitive salaries in an effort to attract and retain highly
qualified, well-experienced individuals which, given the relatively young
history of the Company, currently may be higher than those paid by comparably
sized financial institutions.
BONUSES: Executives may earn annual cash bonuses based upon a
pay-for-performance philosophy which are determined at year-end. In recommending
bonuses, the Committee 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, creativity
and initiative, and attention to personnel relations.
Given the size of the Company and its relatively early growth stage,
the Committee believes it is feasible to evaluate the different individual
contributions of each of the Company's executive officers, and, as a matter of
policy, there have not been established specific Company or individual
objectives for the awarding of bonuses. Accordingly, the policy used by the
Board to set cash bonuses is considered subjective. The bonuses for each of the
executive officers other than the President and the CEO were set at the levels
recommended by management.
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 which are longer term
in nature than the base salary and annual bonus components of overall
compensation. The incentives have been primarily in the form of stock options
granted at exercise prices at or above fair market value on the date of grant.
The intention is to incentivize employees to create 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. The equity incentives awarded to executives with
respect to 1997 employment were all in the form of stock option grants
determined at year end. Such stock options were granted at exercise prices at or
above fair market value on the date of grant and have a term of ten years.
CHIEF EXECUTIVE OFFICER COMPENSATION: The factors discussed above in
the "Base Salaries" section were the basis for determining the base salary of
the Chief Executive Officer, Mr. Howard D. Adams. The Committee felt that a 4.5%
increase, or $20,000 increase, in Mr. Adams' 1997 base salary to $465,000 from
the year-end 1996 level of $445,000 was warranted based on creation of the
Company through the reorganization transaction in September 1996, the growth of
the Company during 1996, and other factors outlined above in the "Base Salaries"
section.
The 1997 bonus amount and stock options awarded to Mr. Adams, which were
determined prior to the announcement of his retirement, were based on the
recognition by the members of the Committee of Mr. Adams' dedication to the
success of the Company as exhibited through long-term vision, entrepreneurial
spirit, hard work ethic, knowledge of the financial services industry and his
ability to recruit a management team and community Board members with similar
characteristics. In addition, the Committee considered the following corporate
achievements:
(1) The continuation of the growth of the Company as one of the
fastest growing de novo banking operations in the seven state
Midwest area since inception of its first bank subsidiary in late
1991.
(2) The increase in the profitability of the Company to $4.8 million
in 1997 from a loss of $973,000 in 1996; and, a $3.3 million
increase in pre-tax earnings from a pre-tax loss of $2.3 million
in 1996 to a pre-tax profit of $1.1 million in 1997. The related
return on average assets and return on average equity also became
positive in 1997, increasing to 0.56% and 7.88% , respectively.
- 13 -
<PAGE>
(3) The growth of the Company's assets, deposits and loans during 1997
of $347 million, $300 million and $220 million, respectively.
These increases represent growth in these categories in the range
of 45% to 49%.
(4) The successful completion of a public offering of 1.4 million
shares of the Company's common stock and its listing on the Nasdaq
National Market System. The unique offering method utilized by the
Company (the "Subscription and Community Offering") was a cost
effective method of offering the shares that also placed the
majority of the shares in the hands of existing shareholders and
customers of the subsidiary banks.
(5) The successful opening of three additional banking facilities
during the year that expanded the geographical reach of the
organization and enlarged the platform utilized by the Company to
effectuate continued growth.
(6) The Company's net interest margin improved to 3.41% in 1997 from
2.91% in 1996. The reduction in the ratio of noninterest expenses
as a percent of average assets to 3.18% in 1997 from 4.05 % in
1996 despite the opening of three additional banking facilities in
1997 and the opening of Barrington Bank in late December 1996. The
3.18% ratio compares favorably to the Company's peer group that is
at an average ratio of 3.29%.
SECTION 162(M): The Compensation and Nominating Committee does not
believe that the provisions of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), relating to the deductibility of compensation
paid to the Named Executive Officers, will limit the deductibility of the
executive compensation currently expected to be paid by the Company. The
Compensation and Nominating Committee will continue to evaluate the impact of
such provisions and to consider compensation policies and programs appropriate
for an organization of the Company's size and history in an effort to address
the potential impact, if any, in the future.
CONCLUSION: The Compensation Committee believes the executive officers'
individual compensation packages are designed in a manner which is consistent
with the Company's overall compensation philosophy.
HOWARD D. ADAMS
PETER CRIST
MAURICE F. DUNNE
EUGENE HOTCHKISS III
JOHN LILLARD
JAMES MAHONEY
J. CHRISTOPHER REYES
HOLLIS RADEMACHER
PERFORMANCE GRAPH
The following performance graph compares the percentage change in the Company's
cumulative shareholder return on common stock compared with the cumulative total
return on composites of (1) all Nasdaq National Market stocks for United States
companies (broad market index) and (2) all Nasdaq National Market bank stocks
(peer group index). Cumulative shareholder return is computed by dividing the
sum of the cumulative amount of dividends for the measurement period and the
difference between the registrant's share price at the end and the beginning of
the measurement period by the share price at the beginning of the measurement
period. The Nasdaq National Market for United States companies index comprises
all domestic common shares traded on the Nasdaq National Market and the Nasdaq
Small-Cap Market. The Nasdaq National Market bank stocks index comprises all
banks traded on the Nasdaq National Market and the Nasdaq Small-Cap Market.
- 14 -
<PAGE>
The Company became subject to reporting its cumulative shareholder returns as of
January 24, 1997 when the Company became a registrant under the Securities
Exchange Act of 1934. Accordingly, the graph presents the cumulative shareholder
returns from January 24, 1997 through December 31, 1997.
The document contains a performance graph comparing the percentage change in the
Company's cumulative shareholder return on common stock compared with the
cumulative total return on composites of (1) all Nasdaq National Market stocks
for United States companies (broad market index) and (2) all Nasdaq National
Market bank stocks (peer group index). The index values and dates plotted in
such chart are presented below:
<TABLE>
<CAPTION>
1/24/97 3/31/97 6/30/97 9/30/97 12/31/97
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Wintrust Financial Corporation 100 101.64 110.66 134.43 111.48
Nasdaq - Total US 100 89.47 105.87 123.78 116.08
Nasdaq - Bank Index 100 103.33 120.25 141.82 162.42
</TABLE>
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,
1997, the Bank had $9.2 million in loans outstanding to certain Directors and
executive officers of the Company and certain executive officers of the Banks,
which amount represented 13.4% of total shareholders' equity as of that date.
- 15 -
<PAGE>
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. The
Company and its affiliates first became subject to such requirements in 1997.
Based upon its review of copies of such reports and of trading in the Company's
common stock, the Company is not aware of any late filings with the following
exceptions: (1) Directors Graft, Horne and Rusin should have filed Form 3's in
August, 1997 to report their holdings at the time they became directors of the
Company in July, 1997; however, the appropriate forms were not filed until
February, 1998 due to an oversight on the part of the Company to properly inform
the new directors of the reporting requirements; (2) Director Schornack
purchased 1,000 shares of common stock in November of 1997 that was not reported
until 1998; and (3) after his resignation, James C. Knollenberg, a former
director of the Company, sold shares of Common Stock in September 1997 that
should have been reported on a Form 4 but were not reported until February 1998.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP served as the Company's independent auditor for
1997. At a meeting held on April 20, 1998, the Board ratified and approved the
recommendation of the Audit Committee to appoint KPMG Peat Marwick LLP as the
Company's independent auditors for 1998. 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 and will be available at the meeting to
respond to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholders' proposals intended to be presented at the Company's 1999
Annual Meeting of Shareholders must be received in writing by the Secretary of
the Company no later than January 4, 1999, 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 1999 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
in accordance with the By-laws. It is anticipated that the deadline for such
notice will be March 28, 1999.
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, unless discretionary authority has been denied 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
- 16 -
<PAGE>
The Directors and Officers of
Wintrust Financial Corporation
cordially invite you to attend our
1998 Annual Meeting of Shareholders
Thursday, May 28, 1998, 2:00 p.m.
Deer Path Inn
255 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.
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 1998 meeting ________
<PAGE>
Wintrust Financial Corporation
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John S. Lillard 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 28, 1998 or any adjournment
thereof.
PROPOSAL 1 - ELECTION OF DIRECTORS (To be designated as Class II Directors
with term ending in 2001.)
[ ] 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).
BRUCE K. CROWTHER ALBIN F. MOSCHNER
MAURICE F. DUNNE, JR. INGRID S. STAFFORD
WILLIAM C. GRAFT JANE R. STEIN
MARGUERITE SAVARD MCKENNA KATHARINE V. SYLVESTER
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)
