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
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(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 27, 1999
The 1999 Annual Meeting of Shareholders of Wintrust Financial
Corporation will be held at The Drake Oak Brook Hotel, 2301 S. York Road, Oak
Brook, Illinois 60523, on Thursday, May 27, 1999, at 2:30 p.m. local time, for
the following purposes:
1. To elect eight Class III 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 5, 1999.
By order of the Board of Directors,
David A. Dykstra
Secretary
April 14, 1999
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 1999 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD THURSDAY, MAY 27, 1999
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 1999 Annual Meeting of
Shareholders of the Company 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 27, 1999, at 2:30 p.m. CST, at the Drake Oak
Brook Hotel, 2301 S. York Road, Oak Brook, Illinois 60523.
PROXIES, OUTSTANDING VOTING SECURITIES, AND SHAREHOLDERS ENTITLED TO VOTE
The Board of Directors has fixed the close of business on April 5, 1999
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
8,160,795 shares without par value Common Stock ("Common Stock"). Each
outstanding share of Common Stock entitles the holder to one vote.
Representation at the meeting of a majority of shares will constitute a quorum.
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 III Director as set forth below and, in
accordance with the best judgment of the persons voting the proxies, with
respect to any other business which may properly come before the meeting and is
submitted to a vote of the shareholders. 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, although 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. 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 April
14, 1999.
- 1 -
<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 provide that the number of directors of the
Company shall be 24, divided into three classes of eight Directors who are
elected to hold office for staggered three-year terms. 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 III Directors
will expire at this Annual Meeting of Shareholders. The term of those persons
currently serving as Class I Directors expires at the Annual Shareholder Meeting
to be held in 2000; the term of Class II Directors expires at the Annual
Shareholder Meeting to be held in 2001. Two Class II directors, Mr. Alan W.
Adams and Mr. Howard D. Adams, resigned from the Board of Directors in October
1998 and November 1998, respectively, and in January 1999, Mr. Thomas J. Neis
was appointed by the Board of Directors to fill one of the vacancies created
thereby. Currently, there are 23 members of the Board of Directors with one
Class II vacancy.
The eight persons named below have been nominated for election as Class
III directors for a term to end at the Annual Meeting of Shareholders in the
year 2002 or until their successors are elected and qualified. All of the
nominees currently serve as Class III directors and have indicated a willingness
to continue 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 of each class, their ages, a brief description of their recent
business experience, including present occupation and employment, certain
directorships held by each, and the year in which they became directors of the
Company. 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"), Libertyville Bank & Trust Company ("Libertyville Bank"), Barrington Bank
& Trust Company, N.A. ("Barrington Bank"), Crystal Lake Bank & Trust Company,
N.A. ("Crystal Lake Bank"), Crabtree Capital Corporation ("Crabtree"), First
Insurance Funding Corp. ("FIFC") and Wintrust Asset Management Company, N.A.
("WAMC").
NOMINEES TO SERVE AS CLASS III DIRECTORS UNTIL THE ANNUAL
MEETING OF SHAREHOLDERS IN THE YEAR 2002
JOSEPH ALAIMO (68), DIRECTOR SINCE 1997 Since September 1998, Mr. Alaimo has
been the President of WAMC. Immediately prior thereto, Mr. Alaimo served as
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.
- 2 -
<PAGE>
PETER D. CRIST (47), 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. Mr. Crist also serves as a director of
Northwestern Memorial Corporation. He is a Director of Hinsdale Bank.
KATHLEEN R. HORNE (55), DIRECTOR SINCE 1997 Mrs. Horne is a former elementary
school teacher. For 14 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 Advisor to the Flower Arranging
Study Group of The Garden Club of America. She is a Director of Barrington Bank.
JOHN S. LILLARD (68), DIRECTOR SINCE 1996 Mr. Lillard has served as the
Company's Chairman since May 1998. He 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 from 1992 to 1994. Mr.
Lillard was a general partner of Scudder Stevens & Clark until joining JMB in
1979. Mr. Lillard currently serves as a director of Cintas Corporation and
Stryker Corporation. He is a Director of Lake Forest Bank.
HOLLIS W. RADEMACHER (63), DIRECTOR SINCE 1996 Mr. Rademacher is currently
self-employed as a business consultant and private investor. He has participated
in the organization 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, FIFC and WAMC.
JOHN N. SCHAPER (47), 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 (68), DIRECTOR SINCE 1996 Mr. Schornack is the former Chairman
and CEO of KraftSeal Corporation, Lake Forest, Illinois, a position he held from
1991 to 1997, and retired Chairman of Binks Sames Corporation, Chicago,
Illinois., where he served from 1996 to 1998. From 1955 to 1991, Mr. Schornack
was with Ernst & Young LLP, serving most recently as Vice Chairman and Managing
Partner of the Midwest Region. He is a Life Trustee of the Chicago Symphony
Orchestra, a trustee of the Kohl Children's Museum and The Night Ministry. 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 and several
other private business enterprises.
LARRY V. WRIGHT (59), 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.
CLASS I - CONTINUING DIRECTORS SERVING UNTIL THE YEAR 2000
JAMES E. MAHONEY (61), 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 (47), 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.
- 3 -
<PAGE>
THOMAS J. NEIS (50), DIRECTOR SINCE 1999 Mr. Neis is the owner of Neis Insurance
Agency, Inc., Longaker Insurance Agency and Neis Insurance Consultants, Inc. and
is an independent insurance agent with these companies. Mr. Neis is a Director
of Crystal Lake Bank.
J. CHRISTOPHER REYES (45), 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 Children's Memorial
Hospital. Mr. Reyes is a Director of Lake Forest Bank.
PETER P. RUSIN (46), 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. (72), DIRECTOR SINCE 1996 For the past two years, Mr. Tate
has served as a consultant to the Company and its subsidiaries regarding real
estate leasing and acquisition matters in connection with expansion activities.
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 in 1994, Mr. Tate has
been Chairman and a Director of North Shore Bank.
EDWARD J. WEHMER (45), DIRECTOR SINCE 1996 Since May 1998, Mr. Wehmer has served
as President and Chief Executive Officer of Wintrust Financial Corporation.
Prior to May 1998, he served as President and Chief Operating Officer of the
Company since its formation in 1996. He served as the President of Lake Forest
Bank from 1991 to 1998. He was one of the principal organizers of each of the
banking subsidiaries and serves as the Chairman and a Director of FIFC and as
Chairman or Vice Chairman and 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 & Young LLP
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 2001
BRUCE K. CROWTHER (47), DIRECTOR SINCE 1998 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 the past 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.
MAURICE F. DUNNE, JR. (72), 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.
- 4 -
<PAGE>
WILLIAM C. GRAFT (37), DIRECTOR SINCE 1997 Mr. Graft is the sole shareholder and
President of his law firm professional corporation, with a practice concentrated
in corporate, finance and complex 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 actively owning and developing commercial and
medical real estate facilities. He serves on the Good Shepherd Hospital
Development Council and is President of the Board of Directors of the Barrington
Area Arts Council. Mr. Graft is a Director of Barrington Bank.
MARGUERITE SAVARD MCKENNA (56), 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 (46), DIRECTOR SINCE 1996 Since September 1997, Mr. Moschner
has been President and Chief Executive Officer of Millecom, LLC, a development
stage internet communications 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.
INGRID S. STAFFORD (45), DIRECTOR SINCE 1998 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 (54), 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. Since
February, 1999, she has been the Executive Director of the Illinois Society of
Oral and Maxillofacial Surgeons. Ms. Stein is also the past president of the
Chicago Association of Healthcare Executives. Ms. Stein is a Director of
Libertyville Bank.
KATHARINE V. SYLVESTER (59), 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.
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 four committees: (i) the Compensation and Nominating Committee;
(ii) the Audit Committee; (iii) the Risk Management Committee; and (iv) the
Executive Committee.
Compensation and Nominating Committee. The Compensation and Nominating
Committee is composed entirely of outside directors who are not now, and have
never been, officers of the Company. Currently, the members of the Compensation
and Nominating Committee are Messrs. Crist (Chairman), Lillard, Mahoney,
Moschner, Rademacher and Reyes and Ms. McKenna. The Compensation and Nominating
Committee is responsible for reviewing the Company's compensation policies and
administering the Company's employee benefit and stock
- 5 -
<PAGE>
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
1998, six 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),
Crowther, Dunne, and Graft 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 1998, four Audit Committee meetings were held.
Risk Management Committee. The Risk Management Committee currently
consists of Messrs. Rademacher (Chairman), Moschner, Rusin, Schaper, Tate, and
Wehmer and Ms. Horne. The Risk Management Committee is responsible for
monitoring and overseeing the Company's interest rate risk and credit risk
exposure on a consolidated basis and at the subsidiaries. This Committee is also
responsible for development and implementation of the Company's overall
asset/liability management and credit policies. During 1998, two Risk Management
Committee meetings were held.
Executive Committee. The Executive Committee currently consists of
Messrs. Rademacher (Chairman), Crist, Lillard, McCarthy, Reyes, Schornack, Tate,
Wehmer and Wright and Ms. Stafford. The Executive Committee is authorized to
exercise certain of the powers of the 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 1998.
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 six meetings of the Board
of Directors during 1998. Effective May 1998, in addition to regular board and
committee meeting fees, the Company commenced the payment of retainers to the
Chairman of the Board and the chairman of the Risk Management Committee at an
annualized rate of $40,000 and $20,000, respectively. Effective January 1999,
the chairman of the Compensation and Nominating Committee and the chairman of
the Audit Committee also began receiving retainers in the annualized amount of
$2,000 each. Employee members of the Board of Directors receive no Board of
Director compensation. All non-employee directors who serve on the subsidiary
boards of directors are also entitled to compensation for such service. For the
period during 1998 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 for Messrs. Rusin and Mr. Alaimo, and Ms. Stafford who
missed one of the three meetings held after her election in May 1998.
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 and retainers
due such Directors. The deferred director fees and retainers are payable at the
Director's option as a lump sum or in installments over a period not to exceed
ten years. Cumulative deferred amounts bear interest at the 91-day Treasury Bill
discount rate, adjusted monthly, until paid. Payments under the plan, which are
unfunded obligations of the Company, begin at the date specified by the Director
or upon cessation of service as a Director.
- 6 -
<PAGE>
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.
Edward J. Wehmer (45) -- President and Chief Executive Officer - Mr. Wehmer
serves as the Company's President and performs the functions of the Chief
Executive Officer. Accordingly, he is responsible for overseeing the execution
of the Company's day-to-day operations and strategic initiatives. See the
description above under "Election of Directors" for additional biographical
information.
David A. Dykstra (38) -- 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
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
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 (45) -- 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.
Randolph M. Hibben (41) -- Executive Vice President -- Investments - Mr. Hibben
serves as the Executive Vice President - Investments for the Company and directs
all securities investing and the day-to-day management of the Company's
asset/liability position. Mr. Hibben joined the Company in 1991 as an Executive
Vice President of Lake Forest Bank. Prior thereto, Mr. Hibben was employed from
1987 to 1991 in a similar capacity by River Forest Bancorp, Inc., Chicago,
Illinois, most recently holding the position of Vice President - Investments.
Robert F. Key (44) -- 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 and WAMC.
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.
Todd A. Gustafson (36) -- Vice President -- Finance - Mr. Gustafson has served
as the Vice President of Finance since June 1998. He is responsible for the
management of all accounting, audit, financial and tax activities of the Company
and its subsidiaries. Previously, Mr. Gustafson was employed from 1990 to 1996
as Vice President and Corporate Controller for Amcore Financial, Inc., Rockford,
Illinois and from 1997 to 1998 as Manager of Financial Reporting and Analysis
for Woodward Governor Company, Rockford, Illinois. Mr. Gustafson is a certified
public accountant and previously specialized in the financial institutions
industry as a Senior Audit Manager for BDO Seidman, LLP and as an Audit Manager
for KPMG LLP.
- 7 -
<PAGE>
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 each Named 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>
Joseph Alaimo.......................... 7,395 11,473 18,868 *
Peter D. Crist......................... 28,884 2,672 31,556 *
Bruce Crowther......................... 645 255 900 *
Maurice F. Dunne, Jr................... 44,302 9,415 53,717 *
William C. Graft....................... 1,000 340 1,340 *
Kathleen R. Horne...................... 500 306 806 *
John S. Lillard........................ 76,260 4,507 80,767 *
James E. Mahoney....................... 10,720 1,208 11,928 *
James B. McCarthy...................... 13,840 2,551 16,391 *
Marguerite Savard McKenna.............. 15,074 4,156 19,230 *
Albin F. Moschner...................... 8,869 -- 8,869 *
Thomas J. Neis......................... 100 -- 100 *
Hollis W. Rademacher................... 51,007 10,136 61,143 *
J. Christopher Reyes................... 153,940 4,005 157,945 1.93%
Peter P. Rusin......................... 1,000 187 1,187 *
John N. Schaper........................ 1,207 1,208 2,415 *
John J. Schornack...................... 8,766 3,804 12,570 *
Ingrid Stafford........................ 2,992 3,887 6,879 *
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**..................... 147,000 154,409 301,409 3.62%
Larry V. Wright(2)..................... 429,865 28,492 458,357 5.60%
OTHER NAMED EXECUTIVE OFFICERS
------------------------------
Lloyd M. Bowden........................ 15,641 14,183 29,824 *
David A. Dykstra....................... 18,374 32,518 50,892 *
Randolph M. Hibben..................... 19,685 34,220 53,905 *
Robert F. Key.......................... 22,652 21,554 44,206 *
TOTAL DIRECTORS & EXECUTIVE
---------------------------
OFFICERS (28 PERSONS) ............. 1,098,717 355,557 1,454,274 17.08%
----------------------
OTHER SIGNIFICANT SHAREHOLDERS
------------------------------
Howard D. Adams(3) .................... 478,121 8,735 486,856 5.96%
Emmett McCarthy(4)..................... 390,222 93,302 483,524 5.86%
- ------------------------------------------
<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. Information
for Other Significant Shareholders is based on the respective Schedule 13G
filings with the SEC.
(2) 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.
(3) Includes 30,137 shares held in certain family trusts for the benefit of
Howard D. Adams' son and 3,957 shares held in a charitable foundation with
respect to which either Mr. Adams or his wife has voting power and with
respect to which Mr. Adams disclaims beneficial ownership. Also includes
29,626 shares held by Mr. Adams' wife. Does not include additional shares
held directly by, or indirectly through certain other family trusts (for
which neither Mr. Adams nor his wife acts as co-trustee) for the benefit
of, Mr. Adams' two adult children. The address of Mr. Adams is 570 Crabtree
Lane, Lake Forest, Illinois 60045.
(4) Includes 16,367 shares owned by Emmett D. McCarthy and his family. Also
reflects 173,661 shares, 28,962 shares subject to Warrants, and 17,689
shares subject to options held by the Alan W. Adams Family Trust and
171,320 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 28,874 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 570 Crabtree Lane, Lake Forest,
Illinois 60045.
</FN>
</TABLE>
- 9 -
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by the Company and
its subsidiaries to those persons serving as Chief Executive Officer and the
four other most highly compensated executive officers (the "Named Executive
Officers") during 1998, 1997 and 1996.
<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>
Edward J. Wehmer 1998 450,000 45,000 9,895 -- 1,200
President & Chief 1997 425,000 40,000 12,420 20,000(7) 881
Executive Officer 1996 395,000 40,000 6,431 36,730(4) 1,224
David A. Dykstra 1998 206,000 30,000 6,517 -- --
Executive Vice President & 1997 176,000 35,000 6,862 18,000 980
Chief Financial Officer 1996 155,000 32,000 4,790 6,824 582
Robert F. Key 1998 180,000 18,000 6,482 -- 469
Executive Vice President & 1997 165,000 25,000 6,233 10,000 434
Director of Marketing 1996(5)(6) 121,634 40,000 1,116 29,100 --
Lloyd M. Bowden 1998 140,500 18,000 2,523 -- 332
Executive Vice President & 1997 128,000 15,000 2,533 8,000 296
Director of Technology 1996(5)(6) 90,000 20,000 2,745 18,670 --
Randolph M. Hibben 1998 135,000 15,000 4,856 -- 228
Executive Vice President - 1997 124,000 12,000 5,368 6,000 228
Investments 1996 113,000 10,000 4,749 -- 165
Howard D. Adams 1998 197,917(8) -- -- -- 323,750(8)
Former Chairman and Chief 1997 465,000 55,000 6,504 30,000(7) --
Executive Officer 1996(3) 331,250 40,000 373 -- --
- --------------------------------------------
<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) In addition, HDA Capital Corporation ("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
for the year ended December 31, 1996. 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.
(6) Includes signing bonuses of $15,000 and $10,000, respectively, for
Messrs. Key and Bowden.
(7) Represents grants of options approved in January 1998 with respect to
executives' service in 1997. In the case of Mr. Adams, those options
terminated unexercised upon his departure from employment with the
Company in May 1998.
(8) Mr. Adams served as CEO until May 22, 1998. The amount of $197,917
shown as salary represents salary paid to Mr. Adams from January 1,
1998 until May 22, 1998. Amounts paid to Mr. Adams under the terms of
his employment agreement subsequent to May 22, 1998 are included in the
column titled "All Other Compensation".
</FN>
</TABLE>
- 10 -
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Company did not grant options to any Named Executive Officer with
respect to the executives' service in 1998.
AGGREGATED OPTION/SAR EXERCISES AND YEAR-END VALUES
The following table summarizes for each Named Executive Officer the number
of shares of Common Stock subject to outstanding Options/SARs and the value of
such Options/SARs that were unexercised at December 31, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS/SARS AT OPTIONS/SARS AT
NAME EXERCISE (#) REALIZED ($) DECEMBER 31, 1998 (#) DECEMBER 31, 1998 ($)
---- ------------ ------------ --------------------- ---------------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE(1) UNEXERCISABLE(1)
<S> <C> <C> <C> <C> <C> <C>
Edward J. Wehmer.......... -- -- 131,271 / 20,000 $1,687,957 / $ 31,250
David A. Dykstra.......... -- -- 27,478 / 28,226 235,343 / 101,072
Robert F. Key............. -- -- 19,554 / 19,546 132,590 / 77,095
Lloyd M. Bowden........... -- -- 12,583 / 14,087 85,835 / 51,908
Randolph M. Hibben........ -- -- 33,020 / 6,569 424,261 / 12,893
Howard D. Adams........... 6,794 $79,039 -- / -- -- / --
- ----------------------------------------
<FN>
(1) The numbers and amounts represent shares of Common Stock subject to
outstanding Options/SARs granted by the Company or its predecessors
that were unexercised as of December 31, 1998.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS
In 1998, the Company entered into a new employment agreements with
Edward J. Wehmer, David A. Dykstra, Robert F. Key, Lloyd M. Bowden, and Randolph
M. Hibben, as well as certain other officers of the Company and its
subsidiaries. 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 at an annual rate
equal to the executive's current base salary and prior year bonus amount in the
event of (i) termination without cause, (ii) a material reduction in duties and
responsibilities, (iii) permanent disability (as defined in the agreement), or
(iv) reduction in base annual compensation to less than 75% of the executive's
"Adjusted Total Compensation", as defined in the agreement to be the aggregate
of current base salary plus the dollar value of all perquisites for the
preceding twelve month period. "Adjusted Total Compensation" excludes any bonus
payments paid or earned by the executives. The severance amounts payable under
the agreement are subject to reduction for any income earned from other
employment during the two-year period or, in the case of disability, any
long-term disability insurance benefits from policies maintained or paid for by
the Company. In addition, in the event of the executive's death resulting in
termination of employment, the executive's beneficiaries are entitled to a lump
sum payment equal to the aggregate severance pay amount, reduced by any life
insurance benefits under policies paid for by the Company. The "Adjusted Total
Compensation" as of the respective dates of such agreements for Messrs. Wehmer,
Dykstra, Key, Bowden, and Hibben were $469,000, $214,000, $190,000, $149,000 and
$146,000, 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.
- 11 -
<PAGE>
The employment agreements also provide for a lump sum payment in the event the
executive's employment is terminated without cause (or constructively terminated
due to a material reduction in duties and responsibilities or a reduction in
Adjusted Total Compensation as described above) within 12 months following a
change in control (as defined in the agreement) of the Company. Such change in
control payment shall be equal to two times the sum of the executive's base
annual salary plus prior year's bonus, subject to reduction in certain
circumstances if the amount payable under the agreement together with any other
amounts payable by the Company to the executive is deemed to result in "excess
parachute payments" under Section 280G of the Internal Revenue Code. The
agreement does not require the amount to be scaled back to satisfy the 280G
limit, however, if the contractual change in control payment minus the excise
taxes that would be payable by the executive would be greater than the reduced
amount. The current annual base salaries of Messrs. Wehmer, Dykstra, Key, Bowden
and Hibben are $450,000, $225,000, $190,000, $150,500 and $150,000,
respectively.
The Company entered into an employment agreement with Mr. Howard D.
Adams in 1996 pursuant to which Mr. Adams served as the Company's Chairman and
Chief Executive Officer until May 22, 1998. The agreement provides for 24 months
of severance payments to Mr. Adams aggregating $1,110,000, which is the amount
equal to two times the sum of Mr. Adams' 1998 annualized salary and his 1997
bonus, provided, however that the severance amount is subject to reduction by
the amount of income earned from any other employment during the severance
period. Under the agreement, during this two-year period following his
departure, Mr. Adams has agreed not to compete with the Company, not to
participate in opening a bank or other financial institution which operates in
the Company's market area, and not to hire or solicit employees, agents or
consultants of the Company for other employment. Consistent with the terms of
the agreement, Mr. Adams is receiving monthly severance payments from the
Company of $46,250 which are expected to continue until May 2000.
COMPENSATION AND NOMINATING COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Committee that determines executive compensation consists entirely
of non-employee Directors, although Edward J. Wehmer, President and Chief
Executive Officer of the Company, makes recommendations to the Committee
regarding compensation of officers other than himself. Mr. Wehmer serves on the
compensation committees of each of the Company's subsidiaries, including WAMC
and North Shore Bank, which are responsible for determining the compensation of
the senior officers of those subsidiaries. Joseph Alaimo and Lemuel Tate, senior
officers of WAMC and North Shore Bank, respectively, are Directors of the
Company.
Mr. James H. Bishop, President and Chief Executive Officer of
Barrington Bank, serves on the Boards of Directors of Northwest Community
Healthcare and Northwest Community Hospital for which Bruce K. Crowther, a
director of the Company, serves as President and Chief Executive Officer.
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.
BASE SALARIES: Base salaries for executive officers were determined at
the time of hire by comparing responsibilities of the position with those of
other similar executive officer positions in the marketplace and the
individual's experience. Annual salary adjustments have been determined giving
consideration to the Company's
- 12 -
<PAGE>
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;
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. However, as the Company matures, the Committee
believes that increases to total cash compensation should increasingly be more
heavily weighted toward the bonus component than the base salary component. This
philosophy is intended to ensure a pay for performance compensation framework
which is aligned with shareholder value.
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 has not been a defined bonus plan established. However, the
Committee did evaluate the attainment of certain specific Company and individual
objectives in determining the bonus amounts awarded to executives. The primary
objectives were based upon net income, deposit growth, loan growth, certain
financial performance measures such as net interest margin and net overhead
ratios, and tailored personal objectives for each executive. The Committee used
these measurable objectives as a guideline to establish executive bonuses, but
the end determination of such bonuses was ultimately a discretionary decision.
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 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 Company awarded equity incentives to executives with respect to 1997
employment. No additional stock option grants were made with respect to 1998
employment.
CHIEF EXECUTIVE OFFICER COMPENSATION: Mr. Edward J. Wehmer was
appointed Chief Executive Officer, in addition to his role as President, in May
1998. Mr. Wehmer's base salary for 1998 of $450,000 was established by the
Committee at the beginning of the year when he was serving as President and
Chief Operating Officer. At the time Mr. Wehmer assumed the Chief Executive
Officer role, no additional base salary adjustments were made. The 1998 bonus
amount awarded to Mr. Wehmer was based on the recognition by the members of the
Committee of the additional responsibilities Mr. Wehmer has assumed, his
dedication to the success of the Company as exhibited through long-term vision,
entrepreneurial spirit, hard work ethic, knowledge of the financial services
industry,
- 13 -
<PAGE>
strong operational and financial control knowledge and his ability to recruit a
management team with similar characteristics. In addition, the Committee
considered the following corporate achievements:
(1) The continued growth of the Company into one of the largest de novo
banking operations in the seven state Midwest area.
(2) The increase in the profitability of the Company to $6.2 million in
1998 from $4.8 million in 1997, and the exceptional 345% (or $3.7
million) increase in pre-tax earnings to $4.7 million in 1998 from
$1.1 million in 1997. The Committee considers the increase in pre-tax
profits to be a better barometer of growth in core earnings.
(3) The growth of the Company's assets, deposits and loans during 1998 of
$295 million, $311 million and $279 million, respectively. The
increases show growth in these categories in the range of 27% to 39%.
(4) The successful completion of a public offering of $31.05 million of
the Company's Trust Preferred securities and its listing on the Nasdaq
National Market System.
(5) The successful opening of four 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) Mr. Wehmer's leadership in the successful start-up of Wintrust Asset
Management Company, the Company's new trust and investment subsidiary.
(7) The reduction in the ratio of noninterest expenses as a percent of
average assets to 3.04% in 1998 from 3.18% in 1996 despite the opening
of the four additional banking facilities in 1998, the opening of
Crystal Lake Bank in late December 1997, and other one-time
non-recurring charges in 1998.
Mr. Howard D. Adams served at the Company's Chief Executive Officer
until May 1998. The factors discussed above in the "Base Salaries" section were
the basis for determining the base salary of Mr. Adams. The Committee
recommended that a 7.5% increase, or $35,000 increase, in Mr. Adams' 1998 base
salary to $465,000 from the year-end 1997 level of $465,000 was warranted based
on the growth of the Company during 1997, and other factors outlined above in
the "Base Salaries" section. The 1998 base salary amount was awarded prior to
the announcement of his departure in May 1998.
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.
PETER D. CRIST (Chairman of the Committee)
JOHN S. LILLARD
JAMES E. MAHONEY
MARGUERITE SAVARD MCKENNA
ALBIN F. MOSCHNER
J. CHRISTOPHER REYES
HOLLIS W. RADEMACHER
- 14 -
<PAGE>
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 total return is computed by
dividing the sum of the cumulative amount of dividends for the measurement
period and the difference between the Company'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.
The Total Return Performance Graph omitted represented a graph of date points as
follows:
1/24/97 6/30/97 12/31/97 6/30/98 12/31/98
------- ------- -------- ------- --------
Wintrust Financial Corporation 100 110.66 111.48 129.51 128.69
Nasdaq - Total US 100 104.49 114.54 137.90 161.02
Nasdaq - Bank Index 100 118.50 158.61 164.47 157.11
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, 1998.
- 15 -
<PAGE>
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,
1998, the Bank had $19.8 million in loans outstanding to certain Directors and
executive officers of the Company and certain executive officers of the Banks,
which amount represented 26.3% of total shareholders' equity as of that date.
Mr. Lemuel Tate, a director of the Company, provides consulting
services to the Company related to real estate leasing and property acquisitions
for new banking locations. Mr. Tate also oversees certain construction projects
at various bank premises. During 1998, Mr. Tate received an aggregate of $73,500
in fees from the Company and its subsidiaries for such services. The Company has
agreed to pay Mr. Tate annual compensation of $72,000 during 1999 for his
continued consulting services. Mr. Tate also serves as the Chairman of North
Shore Bank and received an annual retainer of $50,000 in lieu of bank director
fees for his service in this role in 1998 and will receive $56,000 in 1999 for
such services. Mr. Tate is eligible for discretionary bonuses in addition to the
amounts noted above.
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. 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 during
1998 with the following exceptions: (1) former Director Howard D. Adams should
have filed a Form 4 in January 1998 to report the exercise of 7,341 options; the
appropriate form was filed in February 1998; and (2) Directors Alaimo and Tate
should have filed a Form 5 in February 1998 to report the grant of 9,000 and
10,000 options to acquire common stock, respectively; the forms were
inadvertently not filed until September 1998.
INDEPENDENT AUDITORS
KPMG LLP served as the Company's independent auditor for 1998. One or
more representatives of KPMG 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.
- 16 -
<PAGE>
SHAREHOLDER PROPOSALS
Shareholders' proposals intended to be presented at the Company's 2000
Annual Meeting of Shareholders must be received in writing by the Secretary of
the Company no later than December 16, 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 (the "Exchange Act"). Furthermore, in order for any
shareholder to properly propose any business for consideration at the 2000
Annual Meeting, including the nomination of any person for election as a
director, or any other matter raised other than pursuant to Rule 14a-8 of the
proxy rules adopted under the Exchange Act, written notice of the shareholder's
intention to make such proposal must be furnished to the Company in accordance
with the By-laws. The deadline for such notice is March 26, 2000.
OTHER BUSINESS
The Company is unaware of any other matter to be acted upon at the
annual 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
David A. Dykstra
Secretary
- 17 -
<PAGE>
The Directors and Officers of
Wintrust Financial Corporation
cordially invite you to attend our
1999 Annual Meeting of Shareholders
Thursday, May 27, 1999, 2:30 p.m.
Drake Oak Brook Hotel
2301 S. York Road
Oak Brook, 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 1999 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 27, 1999 or any adjournment
thereof.
PROPOSAL 1 - ELECTION OF DIRECTORS (To be designated as Class III
Directors with term ending in 2002.)
[ ] 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).
JOSEPH ALAIMO HOLLIS W. RADEMACHER
PETER D. CRIST JOHN N. SCHAPER
KATHLEEN R. HORNE JOHN J. SCHORNACK
JOHN S. LILLARD LARRY WRIGHT
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)
