<PAGE>
As filed with the Securities and Exchange Commission on May 25, 2000.
Registration No. 333-37520
Registration No. 333-37520-01
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
WINTRUST FINANCIAL CORPORATION WINTRUST CAPITAL TRUST II
(Exact Name of Co-Registrants as Specified in Charters)
Illinois 36-3873352 Delaware Applied for
(State or Other (I.R.S. Employer (State or Other (I.R.S. Employer
Jurisdiction of Identification Jurisdiction of Identification
Incorporation or Number) Incorporation or Number)
Organization) Organization)
727 North Bank Lane
Lake Forest, Illinois 60045-1951
(847) 615-4096
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Co-Registrants' Principal Executive Offices)
David A. Dykstra
Executive Vice President and Chief Financial Officer
727 North Bank Lane
Lake Forest, Illinois 60045-1951
(847) 615-4096
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service for Co-Registrants)
Copies to:
Jennifer R. Evans, Esq. Harold R. Burroughs, Esq.
Jennifer D. King, Esq. Bryan Cave LLP
Vedder, Price, Kaufman & Kammholz One Metropolitan Square
222 North LaSalle Street, Suite 2600 211 North Broadway, Suite 3600
Chicago, Illinois 60601 St. Louis, Missouri 63102-2750
(312) 609-7500 (314) 259-2000
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
================================================================================
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 25, 2000
PROSPECTUS
1,800,000 Preferred Securities
WINTRUST CAPITAL TRUST II
___ % Cumulative Trust Preferred Securities
(Liquidation Amount $10 Per Preferred Security)
Fully, irrevocably and unconditionally guaranteed
on a subordinated basis, as described in this prospectus, by
WINTRUST FINANCIAL CORPORATION
___________________
The preferred securities represent undivided beneficial interests in the
assets of Wintrust Capital Trust II. The trust will invest all of the proceeds
of this offering of preferred securities to purchase ___% junior subordinated
debentures due 2030 of Wintrust Financial Corporation.
For each of the preferred securities that you own, you will receive
cumulative cash distributions at an annual rate of ___% on March 31, June 30,
September 30 and December 31 of each year, beginning September 30, 2000, from
payments on the debentures. We may defer payments of distributions at any time
for up to 20 consecutive quarters. The preferred securities are effectively
subordinated to all senior and subordinated indebtedness of Wintrust and its
subsidiaries. The debentures mature and the preferred securities must be
redeemed by June 30, 2030. The trust may redeem the preferred securities, at a
redemption price of $10 per preferred security plus accrued and unpaid
distributions, at any time on or after June 30, 2005, or earlier under
circumstances specified in this prospectus.
The preferred securities are expected to be approved for trading on the
Nasdaq National Market under the symbol "WTFCO."
Investing in the preferred securities involves risks. See "Risk Factors"
beginning on page 11.
The preferred securities are not savings accounts, deposits or obligations
of any bank and are not insured by the Bank Insurance Fund of the Federal
Deposit Insurance Corporation or any other governmental agency.
<TABLE>
<CAPTION>
Per Preferred
Security Total
------------- -----------
<S> <C> <C>
Public offering price........... $10.00 $18,000,000
Proceeds to the trust........... $10.00 $18,000,000
</TABLE>
This is a firm commitment underwriting. Wintrust will pay underwriting
commissions of $__________ per preferred security, or a total of $__________,
for arranging the investment in its junior subordinated debentures. The
underwriters have been granted a 30-day option to purchase up to an additional
200,000 preferred securities to cover over-allotments, if any.
- --------------------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
- --------------------------------------------------------------------------------
Stifel, Nicolaus & Company Howe Barnes Investments, Inc.
Incorporated
________________, 2000
<PAGE>
[MAP]
[Reflects locations and addresses of
Wintrust's operating subsidiaries]
i
<PAGE>
SUMMARY
This summary highlights information contained elsewhere in, or incorporated
by reference into, this prospectus. Because this is a summary, it may not
contain all of the information that is important to you. Therefore, you should
also read the more detailed information set forth in this prospectus, our
financial statements and the other information that is incorporated by reference
in this prospectus. Unless otherwise indicated, the information in this
prospectus assumes that the underwriters will not exercise their option to
purchase additional preferred securities to cover over-allotments.
Wintrust Financial Corporation
Wintrust Financial Corporation, an Illinois corporation, is a bank holding
company headquartered in Lake Forest, Illinois, with total assets of
approximately $1.8 billion at March 31, 2000. Wintrust engages in community
banking and specialty lending businesses through its operating subsidiaries:
Lake Forest Bank and Trust Company; Hinsdale Bank and Trust Company; North Shore
Community Bank and Trust Company; Libertyville Bank and Trust Company;
Barrington Bank and Trust Company, N.A.; Crystal Lake Bank and Trust Company,
N.A.; First Insurance Funding Corp., a commercial insurance premium finance
company; Wintrust Asset Management Company, N.A., a trust company subsidiary;
and Tricom, Inc., which provides financial and administrative services to the
temporary staffing industry.
Wintrust currently provides community-oriented, personal and commercial
banking services primarily to individuals and small to mid-size businesses
through 26 banking facilities. The table below provides information regarding
each of our banks and their respective markets.
<TABLE>
<CAPTION>
Total Assets at Chicago-Area
March 31, 2000 Communities Number
Bank Date Opened (in thousands) Served of Facilities
- -------------- -------------- --------------- --------------- -------------
<S> <C> <C> <C> <C>
Lake Forest December 1991 $546,763 Lake Forest 5
Lake Bluff 1
Highwood 1
Hinsdale October 1993 372,832 Hinsdale 2
Clarendon Hills 1
Western Springs 1
Burr Ridge -
North Shore September 1994 394,084 Wilmette 3
Community Kenilworth -
Glencoe 2
Winnetka 1
Skokie 1
Libertyville October 1995 227,903 Libertyville 3
Mundelein -
Vernon Hills -
Wauconda 1
Barrington December 1996 198,699 Barrington 1
Barrington Hills -
Lake Barrington -
North Barrington -
South Barrington -
Inverness -
Crystal Lake December 1997 108,748 Crystal Lake 3
Cary -
</TABLE>
1
<PAGE>
Each of Wintrust's banking subsidiaries was founded as a de novo banking
organization (which means started new) within the last nine years. The
organizational efforts began in 1991, when a group of experienced bankers and
local business people identified an unfilled niche in the Chicago metropolitan
area community banking market. As large banks acquired smaller ones and personal
service was subjected to consolidation strategies, opportunities arose in
affluent suburbs for locally owned and operated banks emphasizing personal
service. In pursuit of this strategic opportunity, the group founded Lake Forest
Bank in December 1991 to serve the Lake Forest and Lake Bluff communities.
Thereafter, as desirable locations were procured in other attractive communities
where management successfully recruited locally known, experienced bank
officers, our other banks were organized with the participation of local
residents and business leaders in those communities.
Through First Insurance Funding, Wintrust originates commercial insurance
premium finance loans on a national basis. The majority of these loans are being
purchased by our banks in order to fulfill the lending capacity of the banks,
although from time to time we have sold a portion of new receivables to an
unrelated third party. The loans originated by First Insurance Funding provide
our banks with attractive yielding assets as a supplement to their lending
activities. First Insurance Funding, which commenced operations approximately
nine years ago, is headquartered in Deerfield, Illinois. Based on limited
industry data available and First Insurance Funding management's experience in
the industry, management estimates that First Insurance Funding is one of the
largest premium finance companies operating in the United States. First
Insurance Funding's loan volume is expected to exceed $900 million during 2000.
These loans are originated by First Insurance Funding, working with independent
medium and large insurance agents and brokers throughout the United States.
Insurance premiums are financed primarily for commercial customers' purchases of
liability, property and casualty and other commercial insurance.
Wintrust conducts trust operations through Wintrust Asset Management, a
separate subsidiary that began operations on September 30, 1998, to expand
Wintrust's trust services in the communities served by our banks. We employ
experienced trust professionals and offer a full range of trust and investment
services at Lake Forest Bank, North Shore Community Bank, Hinsdale Bank and
Barrington Bank. Prospective trust and investment customers at the other two
banks are currently being served on an appointment basis.
Wintrust has grown rapidly during the past few years; its banks have been
among the fastest growing community-oriented de novo banking operations in the
country. The historical financial performance of Wintrust has been affected by
costs associated with growing market share in deposits and loans, opening new
banking facilities and building an experienced management team. Wintrust's
financial performance over the past five years generally reflects the improving
profitability of our operating subsidiaries as they mature, offset by the
significant costs of opening new banks and branch offices. Wintrust's experience
has been that it generally takes from 13 to 24 months for new banking facilities
to first achieve operational profitability. Similarly, management currently
expects a start-up phase for Wintrust Asset Management for up to two more years
before the trust operations become profitable.
While committed to a continuing growth strategy, management's current focus
is to balance further asset growth with earnings growth. A key aspect of our
strategy is to continue to pursue specialized earning-asset niches and to manage
the mix of our earning assets so that loans are maintained within a target range
of 85% to 90% of our deposit funds. To date, Wintrust has identified and
finances loans in several specialized asset niches to enhance its loan-to-
deposit ratio, including premium finance loans originated by First Insurance
Funding, indirect auto loans, mortgage warehouse lending, medical and municipal
equipment leasing, and, more recently, homeowners and condominium association
lending. On October 26, 1999, we added a new earning-asset and fee-based
business niche through our
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<PAGE>
acquisition of Tricom, Inc., a financial and administrative service bureau to
the temporary staffing industry. Tricom provides high-yielding, short-term
accounts receivable financing and value-added, out-sourced administrative
services, such as data processing of payrolls, billing and cash management
services. Tricom's clients, located throughout the United States, provide
staffing services to businesses in diversified industries. Wintrust's funding
resources provide Tricom access to the additional capital necessary to expand
financing services in a national market. Based on first quarter 2000 volume,
Tricom currently processes payrolls with associated billings in excess of $200
million on an annualized basis.
Operational Strategy
Since the first bank was opened in 1991, Wintrust has been committed to the
same fundamental operational strategy, the key elements of which are:
. Maintaining decision-making authority locally within each of our banks
and providing a high level of personal and professional service. Our community
banking philosophy is driven by our emphasis on local independence and our
goal of maintaining decision-making authority within each of our banks. While
senior management provides expertise to each of the subsidiaries in the areas of
capital planning, long-term strategic planning, marketing and advertising,
financial management, investment and asset/liability management, and technology,
the separate management teams of each of the banks, First Insurance Funding,
Wintrust Asset Management and Tricom have full managerial responsibilities with
respect to customer service and the ongoing day-to-day operations of their
respective organizations. Management believes that local authority and
management allow the banks to emphasize highly responsive and personalized
attention to customer service as a top priority. Our banks enjoy the competitive
advantages of being able to tailor products and services to meet the differing
needs of the customers that they serve, to make decisions affecting customers
quickly, and to participate actively in their communities. To ensure a high
level of personal and professional service to commercial and retail customers of
the banks, Wintrust emphasizes the recruitment and training of competent and
highly motivated employees at all levels of the organization and tries to
minimize employee turnover.
. Employing fewer, but highly qualified and productive individuals at
relatively high compensation rates and focusing on low net overhead ratios. Key
to Wintrust's growth and profitability is management's extensive experience in
providing community banking services. The banks' presidents and chief executive
officers were selected not only for their years of banking experience but also
for their business development skills and their strong ties to the communities
they serve. Wintrust's practice of employing fewer, but highly qualified and
productive individuals at all levels of the organization is key to maintaining a
decentralized management structure, and is designed to promote and support local
autonomy at our operating subsidiaries while at the same time enhancing overall
performance. Management believes its organizational structure and a strong
commitment to cost control throughout the organization will allow Wintrust to
continue to improve and maintain favorable net overhead ratios as the banks,
First Insurance Funding, Wintrust Asset Management and Tricom mature.
. Marketing innovative deposit and loan products. Each of our banks has
developed a strong customer base within its communities through the utilization
of innovative community-oriented marketing programs. Wintrust expects to
continue to exploit this community banking approach as we pursue expansion into
new communities, whether through branching, additional de novo bank formations
or selective acquisitions. Our banks have offered local residents highly
competitive retail products designed to attract customers and to provide the
banks with the opportunity to introduce their full range of personalized banking
services. To be more responsive to the needs of consumers in their specific
markets, the banks have introduced a variety of innovative deposit and loan
products to appeal to the unique needs of different types of bank customers,
such as different age groups and other special segments of the target markets.
Our banks market their products aggressively through creative
3
<PAGE>
newspaper and other advertising, special promotions and frequently sponsored
community events. Recently, we have introduced internet banking services to
offer customers an alternative service channel. In addition, each of our banks
has a large board of directors comprised of influential business persons and
prominent individuals within the respective communities who assist the banking
officers with business development.
Growth Strategy
Key elements of Wintrust's growth strategy are:
. Internal growth. Due to Wintrust's relatively short operating history, we
believe we have not yet realized the full deposit and asset generation potential
in the communities now served by our existing banking facilities. We believe we
can leverage our existing infrastructure to support additional business while
maintaining a high level of personalized customer service and responsiveness. As
the rapid pace of consolidation in the financial services industry persists,
management expects that more individuals and small businesses will become
disenchanted with the perceived lower level of service offered by the larger
institutions, providing continuing market share opportunity for Wintrust. With
management's focus on balancing further asset growth with earnings growth, our
current strategy is to continue to focus on less aggressive deposit pricing at
those banks with significant market share and more established customer bases.
. Expanding into attractive markets with limited local banking competition.
We plan to continue our geographic expansion where we believe we can leverage
our experience. As in the past, we will likely expand operations of our existing
banks by opening branch facilities in nearby communities where management
believes targeted customers would be attracted to a community banking
alternative. Consistent with this strategy, Libertyville Bank opened a new
branch in Wauconda, Illinois, in May of this year, and our banks are exploring
other new market opportunities. We also intend to continue the formation of
additional de novo banks in attractive markets in and around the Chicago
metropolitan area. Management has determined the location of our seventh bank
subsidiary in an affluent Chicago suburb and currently expects to open the new
bank during 2000. In addition, Wintrust intends to explore and consider
potential acquisitions of other community-oriented financial institutions that
are already operating in desirable markets. In this regard, management believes
there are a number of recently organized banks in and around the Chicago area in
need of capital or managerial resources to continue their growth that could
provide opportunities for Wintrust. These banks may be attracted to Wintrust's
commitment to local operational autonomy and may desire to provide their
investors the liquidity that could be offered by Wintrust's publicly traded
stock.
. Augmenting the loan portfolio with specialized asset niches which allow
the banks to more fully utilize their lending capacity. In order to expand
Wintrust's opportunities to invest in specialized earning-asset niches, we may
pursue acquisitions or development of additional specialty lending businesses
engaged in asset generation suitable for bank investment and/or secondary market
sales. Management intends to continue to explore various commercial and consumer
finance activities and to seek attractive potential acquisition candidates.
. Growth of trust and investment services provided to small and mid-size
businesses and affluent individuals. With the formation of Wintrust Asset
Management, we plan to market trust and investment services more aggressively to
customers in all the banks' communities in an effort to expand our market share
and increase our fee income. Management believes Wintrust Asset Management can
successfully compete for trust business by targeting newly affluent customers
and customers whose trust or investment needs command the personalized attention
offered by our service-oriented banks. We may also seek opportunities to expand
our trust business through selective acquisitions.
4
<PAGE>
Our principal executive offices are located at 727 North Bank Lane, Lake
Forest, Illinois 60045-1951, and our telephone number is (847) 615-4096.
Wintrust Capital Trust II
The trust is a newly formed financing subsidiary of Wintrust. Upon issuance
of the preferred securities offered by this prospectus, the purchasers in this
offering will own all of the issued and outstanding preferred securities of the
trust. In exchange for our capital contribution to the trust, we will own all of
the common securities of the trust. The trust exists exclusively for the
following purposes:
. issuing the preferred securities to the public for cash;
. issuing the common securities to us;
. investing the proceeds from the sale of the preferred and common
securities in an equivalent amount of % junior subordinated debentures
due June 30, 2030, to be issued by us; and
. engaging in activities that are incidental to those listed above.
The trust's address is 727 North Bank Lane, Lake Forest, Illinois 60045-
1951, and its telephone number is (847) 615-4096.
The Offering
<TABLE>
<CAPTION>
<S> <C>
The issuer........................... Wintrust Capital Trust II
Securities being offered............. 1,800,000 preferred securities, which
represent preferred undivided
beneficial interests in the assets of
the trust. Those assets will consist
solely of the debentures and payments
received on the debentures.
The trust will sell the preferred
securities to the public for cash.
The trust will use that cash to buy
the debentures from us.
Offering price....................... $10 per preferred security.
When distributions will be paid to
you................................ If you purchase the preferred
securities, you are entitled to receive
cumulative cash distributions at
a % annual rate. Distributions
will accumulate from the date the trust
issues the preferred securities and are
to be paid quarterly on March 31, June
30, September 30 and December 31 of each
year, beginning September 30, 2000. As
long as the preferred securities are
represented by a global security, the
record date for distributions on the
preferred securities will be the
business day prior to the distribution
date. We may defer the payment of cash
distributions, as described below.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
When the preferred securities must
be redeemed........................ The debentures will mature and the
preferred securities must be redeemed
on June 30, 2030. We have the
option, however, to shorten the
maturity date to a date not earlier
than June 30, 2005. We will not
shorten the maturity date unless we
have received the prior approval of
the Board of Governors of the Federal
Reserve System, if required.
Redemption of the preferred
securities before June 30, 2030
is possible........................ The trust must redeem the preferred
securities when the debentures are
paid at maturity or upon any earlier
redemption of the debentures. We may
redeem all or part of the debentures
at any time on or after June 30,
2005. In addition, we may redeem, at
any time, all of the debentures if:
. the interest we pay on the
debentures is no longer deductible
by us for federal tax purposes; or
the trust becomes subject to
federal income tax; or the trust
becomes or will become subject to
certain other taxes or governmental
charges;
. there is a change in existing laws
or regulations that requires the
trust to register as an investment
company; or
. there is a change in the capital
adequacy guidelines of the Federal
Reserve that results in the
preferred securities not being
counted as Tier 1 capital.
We may also redeem debentures at any
time, and from time to time, in an
amount equal to the liquidation amount
of any preferred securities we
purchase, plus a proportionate amount
of common securities, but only in
exchange for a like amount of the
preferred securities and common
securities then owned by us.
Redemption of the debentures prior to
maturity will be subject to the prior
approval of the Federal Reserve, if
approval is then required. If your
preferred securities are redeemed by the
trust, you will receive the liquidation
amount of $10 per preferred security,
plus any accrued and unpaid
distributions to the date of redemption.
We have the option to extend the
interest payment period............ The trust will rely solely on payments
made by us under the debentures to pay
distributions on the preferred
securities. As long as we are not in
default under the indenture relating to
the debentures, we may, at one or more
times, defer interest payments on the
debentures for up to 20 consecutive
quarters, but not beyond June 30, 2030.
If we defer interest payments on the
debentures:
. the trust will also defer
distributions on the preferred
securities;
. the distributions you are entitled
to will accumulate; and
. these accumulated distributions will
earn interest at an annual rate of
%, compounded quarterly, until
paid.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
At the end of any deferral period, we
will pay to the trust all accrued and
unpaid interest under the debentures.
The trust will then pay all accumulated
and unpaid distributions to you.
You will still be taxed if
distributions on the preferred
securities are deferred............ If a deferral of payment occurs, you
will still be required to recognize
the deferred amounts as income for
United States federal income tax
purposes in advance of receiving
these amounts, even if you are a cash
basis taxpayer.
Our guarantee of payment............. We guarantee the trust will use its
assets to pay the distributions on the
preferred securities and the liquidation
amount upon liquidation of the trust.
However, the guarantee does not apply
when the trust does not have sufficient
funds to make the payments. If we do not
make payments on the debentures, the
trust will not have sufficient funds to
make payments on the preferred
securities. In this event, your remedy
is to institute a legal proceeding
directly against us for enforcement of
payments under the debentures.
We may distribute the debentures
directly to you.................... We may, at any time, dissolve the
trust and distribute the debentures to
you, subject to the prior approval of
the Federal Reserve, if required. If we
distribute the debentures, we will use
our reasonable efforts to list them on a
national securities exchange or
comparable automated quotation system.
How the securities will rank in right
of payment......................... Our obligations under the preferred
securities, debentures and guarantee are
unsecured and will rank as follows with
regard to right of payment:
. the preferred securities will rank
equally with the common securities
of the trust. The trust will pay
distributions on the preferred
securities and the common securities
pro rata. However, if we default
with respect to the debentures, then
no distributions on the common
securities of the trust or our
common stock will be paid until all
accumulated and unpaid distributions
on the preferred securities have
been paid;
. our obligations under the debentures
and the guarantee are unsecured and
generally will rank: (1) junior in
priority to our existing and future
senior and subordinated
indebtedness, and (2) pari passu,
which means equal in priority, to
our subordinated debentures
associated with the $31.1 million of
trust preferred securities that an
affiliated trust of ours currently
has outstanding; and
. because we are a holding company,
the junior subordinated debentures
and the guarantee will effectively
be
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
subordinated to all depositors'
claims, as well as existing and
future liabilities of our
subsidiaries.
Voting rights of the preferred
securities......................... Except in limited circumstances,
holders of the preferred securities will
have no voting rights.
Nasdaq National Market symbol........ WTFCO
You will not receive certificates.... The preferred securities will be
represented by a global security that
will be deposited with and registered in
the name of The Depository Trust
Company, New York, New York, or its
nominee. This means that you will not
receive a certificate for the preferred
securities, and your beneficial
ownership interests will be recorded
through the DTC book-entry system.
How the proceeds of this offering
will be used...................... The trust will invest all of the
proceeds from the sale of the preferred
securities in the debentures. We
estimate that the net proceeds to us
from the sale of the debentures to the
trust, after deducting underwriting
expenses and commissions, will be
approximately $17.0 million. We expect
to use approximately $15.0 million of
the net proceeds from the sale of the
debentures to repay all of the
indebtedness currently outstanding under
our revolving credit line. The remaining
net proceeds will be used to make
additional capital contributions to our
existing banks and operating
subsidiaries to support future growth
and for general corporate purposes.
</TABLE>
Before purchasing the preferred securities being offered, you should
carefully consider the "Risk Factors" beginning on page 11.
8
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for, and as of the
end of, each of the years in the five-year period ended December 31, 1999, are
derived from our historical financial statements. Our consolidated financial
statements for the year ended December 31, 1999 have been audited by Ernst &
Young LLP, independent auditors, and our consolidated financial statements for
the four years ended December 31, 1998 have been audited by KPMG LLP,
independent auditors. The summary data presented below for the three-month
periods ended March 31, 2000 and 1999, are derived from unaudited financial
statements. In our opinion, all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of results as of or for the three-
month periods indicated have been included. This information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and the
notes thereto incorporated by reference into this prospectus from our Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 and our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000. Results for
past periods are not necessarily indicative of results that may be expected for
any future period, and results for the three-month period ended March 31, 2000,
are not necessarily indicative of results that may be expected for the entire
year ending December 31, 2000.
<TABLE>
<CAPTION>
Three Months Ended
March 31, Years Ended December 31,
------------------------ --------------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ---------- -------- --------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statements of Income Data:
Total interest income................... $ 32,309 $ 24,278 $ 109,331 $ 87,979 $ 65,111 $ 39,037 $ 25,472
Total interest expense.................. 18,441 13,462 61,597 51,215 38,339 24,155 15,772
---------- ---------- ---------- ---------- ---------- -------- --------
Net interest income................... 13,868 10,816 47,734 36,764 26,772 14,882 9,700
Provision for possible loan losses...... 1,141 784 3,713 4,297 3,404 1,935 1,430
---------- ---------- ---------- ---------- ---------- -------- --------
Net interest income after provision
for possible loan losses............. 12,727 10,032 44,021 32,467 23,368 12,947 8,270
---------- ---------- ---------- ---------- ---------- -------- --------
Non-interest income:
Gain on sale of premium finance
receivables............................ 1,241 -- 1,033 -- -- 3,078 4,421
Fees on mortgage loans sold............. 483 1,298 3,206 5,569 2,341 1,393 850
Trust fees.............................. 472 225 1,171 788 626 522 399
Service charges on deposit accounts..... 469 334 1,562 1,065 724 468 196
Administrative services revenues........ 1,013 -- 996 -- -- -- --
Securities gains, net................... 3 -- 5 -- 111 18 --
Other................................... 597 451 1,835 653 1,142 2,053 2,678
---------- ---------- ---------- ---------- ---------- -------- --------
Total non-interest income............. 4,278 2,308 9,808 8,075 4,944 7,532 8,544
---------- ---------- ---------- ---------- ---------- -------- --------
Non-interest expense:
Salaries and employee benefits/(1)/..... 6,335 5,079 20,808 18,944 14,204 11,551 8,011
Equipment expense....................... 1,149 628 3,199 2,221 1,713 1,313 763
Occupancy expense, net.................. 1,010 676 2,991 2,435 1,896 1,649 951
Data processing......................... 680 482 2,169 1,676 1,337 1,014 624
Advertising and marketing............... 249 369 1,402 1,612 1,309 1,102 682
Professional fees....................... 295 310 1,203 1,654 1,343 906 615
Nonrecurring merger related expenses.... -- -- -- -- -- 891 --
Other non-interest expenses/(1)/........ 2,391 1,992 7,906 7,291 5,452 4,336 4,183
---------- ---------- ---------- ---------- ---------- -------- --------
Total non-interest expense/(1)/....... 12,109 9,536 39,678 35,833 27,254 22,762 15,829
---------- ---------- ---------- ---------- ---------- -------- --------
Income (loss) before income taxes....... 4,896 2,804 14,151 4,709 1,058 (2,283) 985
Income tax expense (benefit)............ 1,774 970 4,724 (1,536) (3,788) (1,310) (512)
---------- ---------- ---------- ---------- ---------- -------- --------
Net income (loss)/(1)/................ $ 3,122 $ 1,834 $ 9,427 $ 6,245 $ 4,846 $ (973) $ 1,497
========== ========== ========== ========== ========== ======== ========
Common Share Data:
Net income (loss) per common share:
Basic/(1)/............................ $ 0.35 $ 0.22 $ 1.14 $ 0.77 $ 0.62 $ (0.16) $ 0.27
========== ========== ========== ========== ========== ======== ========
Diluted/(1)/.......................... $ 0.35 $ 0.22 $ 1.10 $ 0.74 $ 0.60 $ (0.16) $ 0.24
========== ========== ========== ========== ========== ======== ========
Cash dividends per common share/(2)/.... $ 0.05 $ -- $ -- $ -- $ -- $ -- $ --
========== ========== ========== ========== ========== ======== ========
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
March 31, Years Ended December 31,
------------------------ --------------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ---------- -------- --------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Consolidated Financial
Condition Data (at end of period):
Total assets............................ $1,771,891 $1,419,436 $1,679,382 $1,348,048 $1,053,400 $706,037 $470,890
Total deposits.......................... 1,533,661 1,252,799 1,463,622 1,229,154 917,701 618,029 405,658
Total loans............................. 1,307,796 1,071,016 1,278,249 992,062 712,631 492,548 258,231
Long-term debt and notes payable........ 45,100 33,050 39,400 31,050 20,402 22,057 10,758
Total shareholders' equity.............. 94,835 77,224 92,947 75,205 68,790 42,620 40,487
Selected Financial Ratios and Other
Data:
Performance Ratios:
Net interest margin/(3)(4)(5)/........ 3.65% 3.58% 3.54% 3.43% 3.41% 2.91% 2.96%
Net interest spread/(3)(5)(6)/........ 3.31 3.22 3.23 3.00 2.92 2.40 2.41
Non-interest income to average
assets/(3)/.......................... 1.01 0.69 0.66 0.69 0.58 1.34 2.36
Non-interest expense to average
assets/(1)(3)(7)/.................... 2.85 2.86 2.65 3.04 3.18 4.05 4.37
Net overhead ratio/(1)(3)(8)/......... 1.84 2.17 2.00 2.36 2.60 2.71 2.01
Return on average assets/(1)(3)(7)/... 0.73 0.55 0.63 0.53 0.56 (0.17) 0.40
Return on average equity/(1)(3)(7)/... 13.32 9.75 11.58 8.68 7.88 (2.33) 4.66
Average loan-to-average deposit ratio. 88.4 84.8 86.6 80.1 80.1 69.8 61.3
Average interest-earning assets to.... 107.0 108.0 107.0 108.9 109.9 110.7 111.4
average interest-bearing liabilities
Asset Quality Ratios:
Non-performing loans to total loans... 0.56% 0.44% 0.54% 0.55% 0.59% 0.36% 0.74%
Allowance for possible loan losses to:
Total loans......................... 0.72 0.70 0.69 0.71 0.72 0.74 1.07
Non-performing loans................ 128.50 158.94 126.10 129.66 121.64 204.15 143.91
Net charge-offs to average loans/(3)/. 0.17 0.12 0.19 0.28 0.31 0.31 0.20
Non-performing assets to total assets. 0.41 0.37 0.41 0.45 0.40 0.25 0.41
Ratio of earnings to fixed charges:
Including deposit interest............ 1.27x 1.21x 1.23x 1.09x 1.03x (a) 1.06x
Excluding deposit interest............ 3.66x 4.07x 3.54x 3.19x 2.10x (a) 1.60x
Dividend payout ratio/(2)/.............. 7.1% -- -- -- -- -- --
Other Data at end of period:
Number of banking facilities.......... 25 22 24 21 17 14 11
</TABLE>
- --------------------
(a) Earnings were inadequate to cover fixed charges in the year ended December
31, 1996, by $2.3 million.
(1) In 1998 Wintrust recorded a nonrecurring $1.0 million pretax charge related
to severance amounts payable to our former chairman and chief executive
officer under the terms of his employment contract and related legal
expenses.
(2) Reflects Wintrust's first semi-annual dividend payment.
(3) Certain financial ratios for interim periods have been annualized.
(4) Net interest income divided by average interest-earning assets.
(5) Calculated on a tax-equivalent basis.
(6) Yield on average interest-earning assets less rate on average interest-
bearing liabilities.
(7) For the year ended December 31, 1996, Wintrust recorded nonrecurring merger-
related expenses of $891,000.
(8) Non-interest expense less non-interest income divided by average total
assets.
10
<PAGE>
RISK FACTORS
An investment in the preferred securities involves a number of risks. We
urge you to read all of the information contained in this prospectus. In
addition, we urge you to consider carefully the following factors in evaluating
an investment in the trust before you purchase the preferred securities offered
by this prospectus.
Because the trust will rely on the payments it receives on the debentures
to fund all payments on the preferred securities, and because the trust may
distribute the debentures in exchange for the preferred securities, purchasers
of the preferred securities are making an investment decision that relates to
the debentures being issued by Wintrust as well as the preferred securities.
Purchasers should carefully review the information in this prospectus about the
preferred securities, the debentures and the guarantee.
Risks Related to an Investment in Wintrust Financial Corporation
De novo operations and branch openings impact our profitability.
Wintrust's historical results have been impacted by our strategy of de novo
bank formations and branch openings through which we have built an
infrastructure that management believes can support additional internal growth
in our banks' respective markets. To expand into additional communities in and
around Chicago, Wintrust may undertake additional de novo bank formations or
branch openings. Based on Wintrust's experience, management believes that it
generally takes from 13 to 24 months for new banking facilities to first achieve
operational profitability, due to the impact of organizational and overhead
expenses, the start-up phase of generating deposits and the time lag typically
involved in redeploying deposits into attractively priced loans and other higher
yielding earning assets. Crystal Lake Bank, which opened in December 1997, and
Wintrust Asset Management, which we formed on September 30, 1998, are not yet
operating profitably. We are planning to start our seventh de novo bank during
2000.
The level of reported net income, return on average equity and return on
average assets for Wintrust will in the near term continue to be impacted by
start-up costs associated with our de novo bank and branching operations and the
start-up of Wintrust Asset Management. To the extent Wintrust undertakes
additional branching and de novo bank and business formations, we are likely to
continue to experience the effects of higher operating expenses relative to
operating income from the new operations.
We may not be able to successfully implement our acquisition strategy.
Although Wintrust has historically grown through de novo bank formations
and the establishment of new branch offices, our strategic plan also includes
potential acquisitions of other financial institutions in attractive markets and
potential acquisitions of specialty lending or commercial or consumer finance
businesses that offer unique earning-asset niches. Growth through acquisition
may offer Wintrust the opportunity to increase market share in existing and new
markets without incurring the full earnings impact of start-up operations.
However, there can be no assurance that potential acquisitions will be available
on terms acceptable or favorable to us or that we will be able to obtain the
required regulatory approvals for any proposed acquisitions. There also can be
no assurance that we will be able to successfully integrate, operate and manage
any business that we acquire so as to maintain or increase profitability.
During October 1999, Wintrust completed a part cash, part stock acquisition
of 10-year old, Milwaukee-based Tricom, Inc., a financial and administrative
service bureau to the temporary staffing
11
<PAGE>
industry. While we entered into employment agreements ranging from one to three
years with four senior officers of Tricom and expect the acquisition to be
accretive to earnings per share during the first full year of operations,
Wintrust management has no direct experience managing or financing this type of
business, and we could encounter unanticipated difficulties that could adversely
affect profitability.
We rely heavily on our management team, and the unexpected loss of key managers
may adversely affect our operations.
Our success to date has been influenced strongly by our ability to attract
and to retain senior management experienced in banking and financial services.
Our ability to retain executive officers and the current management teams of
each of our banks, First Insurance Funding, Tricom and Wintrust Asset Management
will continue to be important to successful implementation of our strategies. It
is also critical, as we grow, to be able to attract and retain qualified
additional senior and middle management. We do not currently maintain key-man
life insurance policies. The unexpected loss of services of any key management
personnel, or the inability to recruit and retain qualified personnel in the
future, could have an adverse effect on our business and financial results.
We have entered into an employment agreement with Edward J. Wehmer, our
chief executive officer, as well as with other executive management and key
officers of our subsidiaries. The agreements provide for, among other things,
certain non-competition agreements, severance arrangements and benefits.
Our allowance for loan losses may prove to be insufficient to absorb potential
losses in our loan portfolio.
Wintrust's allowance for possible loan losses is established in
consultation with management of our operating subsidiaries and is maintained at
a level considered adequate by management to absorb loan losses that are
inherent in the portfolio. The amount of future loan losses is susceptible to
changes in economic, operating and other conditions, including changes in
interest rates, that may be beyond our control, and such losses may exceed
current estimates. Rapidly growing and de novo bank loan portfolios are, by
their nature, unseasoned. As a result, estimating loan loss allowances for our
banks is more difficult, and therefore the banks may be more susceptible to
changes in estimates, and to losses exceeding estimates, than banks with more
seasoned loan portfolios. Although management believes that the allowance for
possible loan losses is adequate to absorb losses on any existing loans that may
become uncollectible, there can be no assurance that the allowance for possible
loan losses will prove sufficient to cover actual loan losses in the future. At
March 31, 2000, our allowance for possible loan losses as a percentage of total
loans was 0.72% and as a percentage of total non-performing loans was 128.50%.
A significant portion of Wintrust's assets are comprised of insurance
premium finance receivables that Wintrust generates through First Insurance
Funding. These loans, intended to enhance the average yield of earning assets of
the banks, may involve a different, and possibly higher, level of risk of
delinquency or collection than generally associated with loan portfolios of more
traditional community banks.
We may be adversely affected by interest rate changes.
Our earnings are derived from the operations of our subsidiaries, and we
are principally dependent on net interest income, calculated as the difference
between interest earned on loans and investments and the interest expense paid
on deposits and other borrowings. Like other banks and financial institutions,
Wintrust's interest income and interest expense are affected by general economic
conditions and by the policies of regulatory authorities, including the monetary
policies of the Federal
12
<PAGE>
Reserve. Changes in the economic environment may influence the growth rate of
loans and deposits, the quality of the loan portfolio and loan and deposit
pricing. While management has taken measures intended to manage the risks of
operating in a changing interest rate environment, there can be no assurance
that such measures will be effective in avoiding undue interest rate risk. If
market interest rates should move contrary to our "gap" position on interest
earning assets and interest bearing liabilities, the "gap" will work against us
and our net interest income may be negatively affected. Measured as of March 31,
2000, our short-term gap position was relatively neutral in that the level of
our interest-sensitive assets that reprice within one year approximately matched
the level of our liabilities that reprice within the same period when adjusted
for the effect of interest rate cap contracts that we have entered into.
Measured as of the same date, we were slightly asset sensitive for the one- to
five-year time frame. While this would suggest that we would generally benefit
from rising interest rates, there can be no assurance that a dramatic change in
the interest rate environment will not adversely affect our results.
Our future success is dependent on our ability to compete effectively in the
highly competitive banking industry.
The financial services business is highly competitive, and Wintrust
encounters strong direct competition for deposits, loans and other financial
services in all of its market areas. Wintrust's principal competitors include
other commercial banks, savings banks, savings and loan associations, mutual
funds, money market funds, finance companies, trust companies, insurers, leasing
companies, credit unions, mortgage companies, private issuers of debt
obligations and suppliers of other investment alternatives, such as securities
firms. Many of Wintrust's non-bank competitors are not subject to the same
degree of regulation as that imposed on bank holding companies, federally
insured banks and national or Illinois chartered banks. As a result, such non-
bank competitors have advantages over Wintrust in providing certain services. In
addition, in recent years, several major multi-bank holding companies have
entered or expanded in the Chicago metropolitan market. Generally, these
financial institutions are significantly larger than Wintrust and have greater
access to capital and other resources. In addition, our ability to compete
effectively in the marketplace is also dependent on our ability to adapt
successfully to technological changes within the banking and financial services
industries.
Our business may be adversely affected by the highly regulated environment in
which we operate.
Wintrust, our banks and our trust company subsidiary are subject to
extensive federal and state legislation, regulation and supervision. Recently
enacted, proposed and future legislation and regulations have had, will continue
to have or may have significant impact on the financial services industry. Some
of the legislative and regulatory changes may benefit Wintrust, the banks and
Wintrust Asset Management; other changes, however, could increase our costs of
doing business and, as a result, provide an advantage to our competitors.
Risks Related to an Investment in the Preferred Securities
If we do not make interest payments under the debentures, the trust will be
unable to pay distributions and liquidation amounts. The guarantee will not
apply because the guarantee covers payments only if the trust has funds
available.
The trust will depend solely on our payments on the debentures to pay
amounts due to you on the preferred securities. If we default on our obligation
to pay the principal or interest on the debentures, the trust will not have
sufficient funds to pay distributions or the liquidation amount on the preferred
securities. In that case, you will not be able to rely on the guarantee for
payment of these amounts because the guarantee only applies if the trust has
sufficient funds to make distributions on or to pay the
13
<PAGE>
liquidation amount of the preferred securities. Instead, you or the property
trustee will have to institute a direct action against us to enforce the
property trustee's rights under the indenture relating to the debentures.
To the extent we must rely on dividends from our subsidiaries to make interest
payments on the debentures to the trust, our available cash flow may be
restricted.
We are a holding company and substantially all of our assets are held by
our subsidiaries. Our ability to make payments on the debentures when due will
depend primarily on available cash resources at the bank holding company and
dividends from our subsidiaries. Dividend payments or extensions of credit from
our banking subsidiaries are subject to regulatory limitations, generally based
on capital levels and current and retained earnings, imposed by the various
regulatory agencies with authority over such subsidiaries. The ability of each
banking subsidiary to pay dividends is also subject to its profitability,
financial condition, capital expenditures and other cash flow requirements. To
date, only one of our banking subsidiaries has paid cash dividends to Wintrust,
although as of March 31, 2000, based on applicable regulatory limitations, our
banking subsidiaries (other than Crystal Lake Bank) had the capacity to pay a
total of approximately $16.5 million as dividends to Wintrust, subject to our
need to maintain adequate capital ratios at each bank. We cannot assure you that
our subsidiaries will be able to pay dividends in the future.
The debentures and the guarantee rank lower than most of our other indebtedness
and our holding company structure effectively subordinates any claims against us
to those of our subsidiaries' creditors.
Our obligations under the debentures and the guarantee are unsecured and
will rank junior in priority of payment to our existing and future senior and
subordinated indebtedness, which totaled $82.8 million outstanding principal
amount at March 31, 2000, and will rank pari passu with our subordinated
debentures associated with the $31.1 million of trust preferred securities a
trust affiliate of ours currently has outstanding. The issuance of the
debentures and the preferred securities does not limit our ability or the
ability of our subsidiaries to incur additional indebtedness, guarantees or
other liabilities.
Because we are a holding company, the creditors of our subsidiaries,
including depositors, also will have priority over you in any distribution of
our subsidiaries' assets in liquidation, reorganization or otherwise.
Accordingly, the debentures and the guarantee will be effectively subordinated
to all existing and future liabilities of our subsidiaries, and you should look
only to our assets for payments on the preferred securities and the debentures.
We have the option to defer interest payments on the debentures for substantial
periods.
We may, at one or more times, defer interest payments on the debentures for
up to 20 consecutive quarters. If we defer interest payments on the debentures,
the trust will defer distributions on the preferred securities during any
deferral period. During a deferral period, you will be required to recognize as
income for federal income tax purposes the amount approximately equal to the
interest that accrues on your proportionate share of the debentures held by the
trust in the tax year in which that interest accrues, even though you will not
receive these amounts until a later date.
You will also not receive the cash related to any accrued and unpaid
interest from the trust if you sell the preferred securities before the end of
any deferral period. During a deferral period, accrued but unpaid distributions
will increase your tax basis in the preferred securities. If you sell the
preferred securities during a deferral period, your increased tax basis will
decrease the amount of any capital gain
14
<PAGE>
or increase the amount of any capital loss that you may have otherwise realized
on the sale. A capital loss, except in certain limited circumstances, cannot be
applied to offset ordinary income. As a result, deferral of distributions could
result in ordinary income, and a related tax liability for the holder, and a
capital loss that may only be used to offset a capital gain.
We do not currently intend to exercise our right to defer interest payments
on the debentures. However, if we exercise our right in the future, the market
price of the preferred securities would likely be adversely affected. The
preferred securities may trade at a price that does not fully reflect the value
of accrued but unpaid interest on the debentures. If you sell the preferred
securities during a deferral period, you may not receive the same return on
investment as someone who continues to hold the preferred securities. Due to our
right to defer interest payments, the market price of the preferred securities
may be more volatile than the market prices of other securities without the
deferral feature.
We have made only limited covenants in the indenture and the trust agreement.
The indenture governing the debentures and the trust agreement governing
the trust do not require us to maintain any financial ratios or specified levels
of net worth, revenues, income, cash flow or liquidity, and therefore do not
protect holders of the debentures or the preferred securities in the event we
experience significant adverse changes in our financial condition or results of
operations. In addition, neither the indenture nor the trust agreement limits
our ability or the ability of any subsidiary to incur additional indebtedness.
Therefore, you should not consider the provisions of these governing instruments
as a significant factor in evaluating whether we will be able to comply with our
obligations under the debentures or the guarantee.
We may redeem the debentures before June 30, 2030.
Under the following circumstances, we may redeem the debentures before
their stated maturity:
. We may redeem the debentures, in whole or in part, at any time on or
after June 30, 2005.
. We may redeem the debentures in whole, but not in part, within 180
days after certain occurrences at any time during the life of the
trust. These occurrences may include adverse tax, investment company
or bank regulatory developments. See "Description of the Debentures --
Redemption" beginning on page 37.
You should assume that we will exercise our redemption option if we are
able to obtain capital at a lower cost than we must pay on the debentures or if
it is otherwise in our interest to redeem the debentures. If the debentures are
redeemed, the trust must redeem preferred securities having an aggregate
liquidation amount equal to the aggregate principal amount of debentures
redeemed, and you may be required to reinvest your principal at a time when you
may not be able to earn a return that is as high as you were earning on the
preferred securities.
We can distribute the debentures to you, which may have adverse tax consequences
for you and which may adversely affect the market price of the preferred
securities.
The trust may be dissolved at any time before maturity of the debentures on
June 30, 2030. As a result, and subject to the terms of the trust agreement, the
trustees may distribute the debentures to you.
We cannot predict the market prices for the debentures that may be
distributed in exchange for preferred securities upon liquidation of the trust.
The preferred securities, or the debentures that you may receive if the trust is
liquidated, may trade at a discount to the price that you paid to purchase the
15
<PAGE>
preferred securities. Because you may receive debentures, your investment
decision with regard to the preferred securities will also be an investment
decision with regard to the debentures. You should carefully review all of the
information contained in this prospectus regarding the debentures.
Under current interpretations of United States federal income tax laws
supporting classification of the trust as a grantor trust for tax purposes, a
distribution of the debentures to you upon the dissolution of the trust would
not be a taxable event to you. Nevertheless, if the trust is classified for
United States income tax purposes as an association taxable as a corporation at
the time it is dissolved, the distribution of the debentures would be a taxable
event to you. In addition, if there is a change in law, a distribution of
debentures upon the dissolution of the trust could be a taxable event to you.
There is no current public market for the preferred securities and their market
price may be subject to significant fluctuations.
There is currently no public market for the preferred securities. Although
we have applied to have the preferred securities included on the Nasdaq National
Market, there is no guarantee that an active or liquid trading market will
develop for the preferred securities or that the quotation of the preferred
securities will continue on the Nasdaq National Market. If an active trading
market does not develop, the market price and liquidity of the preferred
securities will be adversely affected. Even if an active public market does
develop, there is no guarantee that the market price for the preferred
securities will equal or exceed the price you pay for the preferred securities.
Future trading prices of the preferred securities may be subject to
significant fluctuations in response to prevailing interest rates, our future
operating results and financial condition, the market for similar securities and
general economic and market conditions. The initial public offering price of the
preferred securities has been set at the liquidation amount of the preferred
securities and may be greater than the market price following the offering.
The market price for the preferred securities, or the debentures that you
may receive in a distribution, is also likely to decline during any period that
we are deferring interest payments on the debentures.
You must rely on the property trustee to enforce your rights if there is an
event of default under the indenture.
You may not be able to directly enforce your rights against us if an event
of default under the indenture occurs. If an event of default under the
indenture occurs and is continuing, this event will also be an event of default
under the trust agreement. In that case, you must rely on the enforcement by the
property trustee of its rights as holder of the debentures against us. The
holders of a majority in liquidation amount of the preferred securities will
have the right to direct the property trustee to enforce its rights. If the
property trustee does not enforce its rights following an event of default and a
request by the record holders to do so, any record holder may, to the extent
permitted by applicable law, take action directly against us to enforce the
property trustee's rights. If an event of default occurs under the trust
agreement that is attributable to our failure to pay interest or principal on
the debentures, or if we default under the guarantee, you may proceed directly
against us. You will not be able to exercise directly any other remedies
available to the holders of the debentures unless the property trustee fails to
do so.
16
<PAGE>
As a holder of preferred securities you have limited voting rights.
Holders of preferred securities have limited voting rights. Your voting
rights pertain primarily to amendments to the trust agreement. In general, only
we can replace or remove any of the trustees. However, if an event of default
under the trust agreement occurs and is continuing, the holders of at least a
majority in aggregate liquidation amount of the preferred securities may replace
the property trustee and the Delaware trustee.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in or incorporated by reference into this
prospectus constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Wintrust intends such forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and is including this statement for
purposes of invoking these safe harbor provisions. You can identify these
statements from our use of the words "estimate," "project," "believe," "intend,"
"anticipate," "expect," "target" and similar expressions. These forward-looking
statements may include, among other things:
. statements relating to projected growth; anticipated improvements in
earnings, earnings per share, and other financial performance
measures; and management's long term performance goals;
. statements relating to the anticipated effects on results of
operations or financial condition from expected developments or
events;
. statements relating to Wintrust's business and growth strategies,
including potential acquisitions; and
. any other statements which are not historical facts.
Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause our actual results,
performance or achievements, or industry results, to differ materially from our
expectations of future results, performance or achievements expressed or implied
by such forward-looking statements. In addition, our past results of operations
do not necessarily indicate our future results. We discuss these and other
uncertainties in the "Risk Factors" section of this prospectus.
17
<PAGE>
USE OF PROCEEDS
The trust will invest all of the proceeds from the sale of the preferred
securities in the debentures. We anticipate that the net proceeds from the sale
of the debentures will be approximately $17.0 million after deduction of
offering expenses estimated to be $250,000 and underwriting commissions.
We expect to use approximately $15.0 million of the net proceeds to repay
all of the indebtedness currently outstanding under our revolving credit line
with an unaffiliated bank. The credit facility provides for maximum borrowings
of $40.0 million. Interest is payable on outstanding principal balances at a
floating rate equal to, at our option, either the lender's prime rate or LIBOR
plus 1.25%, repricing quarterly. The borrowings outstanding under the line of
credit as of May 15, 2000, mature on or before August 30, 2000, and bear
interest at a weighted average annual rate of 7.35%. The revolving line of
credit is secured by a pledge of the stock of each of the banks, other than the
stock of Crystal Lake Bank. After we repay the current borrowings, we plan to
keep the credit line available for future borrowings.
We will use the remaining net proceeds of the offering to provide capital
to fund continued growth at our existing banks and other operating subsidiaries
and for general corporate purposes.
In the future, we may use the amounts remaining available under the line of
credit to support continued growth of our existing subsidiaries, to capitalize
the de novo bank we plan to form in 2000, to repurchase shares of our common
stock and to finance further expansion and potential acquisitions of banks,
finance companies and fee-based businesses. While we are currently evaluating
several possible acquisition candidates, there are no transactions currently
pending and we have not negotiated the terms of any specific acquisition.
18
<PAGE>
CAPITALIZATION
The following table sets forth our total deposits, indebtedness and
capitalization at March 31, 2000, on a historical basis and as adjusted for the
offering (assuming no exercise of the underwriters' over-allotment option) and
the application of the estimated net proceeds from the corresponding sale of the
debentures as if such sale had been consummated on March 31, 2000. This data
should be read in conjunction with the consolidated financial statements and
notes thereto incorporated by reference into this prospectus from our Annual
Report on Form 10-K for the fiscal year ended December 31, 1999, and from our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000. See
"Documents Incorporated by Reference."
<TABLE>
<CAPTION>
March 31, 2000
------------------------
Actual As Adjusted
---------- ------------
(Dollars in thousands)
<S> <C> <C>
Indebtedness:
Short-term borrowings (including securities sold under agreement to
repurchase and federal funds purchased)............................................. $ 68,721 $ 68,721
Notes payable under revolving credit line with commercial bank/(1)/................... 14,050 --
-------- --------
Total indebtedness............................................................... 82,771 68,721
-------- --------
Long-term debt--trust preferred securities............................................ 31,050 49,050
Shareholders' Equity:
Preferred stock, no par value; 20,000,000 shares authorized, of which
100,000 shares are designated Junior Serial Preferred Stock A; no shares
issued and outstanding.............................................................. -- --
Common stock, no par value; 30,000,000 shares authorized; 8,837,843 shares
issued and 8,752,643 shares outstanding............................................. 8,838 8,838
Surplus............................................................................... 83,487 83,487
Common stock warrants to acquire 155,433 shares/(2)/.................................. 100 100
Treasury stock, 82,500 shares at cost................................................. (1,306) (1,306)
Retained earnings..................................................................... 6,235 6,235
Accumulated other comprehensive loss.................................................. (2,519) (2,519)
Total shareholders' equity....................................................... 94,835 94,835
-------- --------
Total capitalization........................................................... $208,656 $212,606
======== ========
Capital Ratios/(3)/:
Leverage ratio/(4)/................................................................... 6.9% 7.0%
Tier 1 capital ratio/(5)/............................................................. 7.5 7.6
Total risk based capital ratio/(5)/................................................... 8.1 9.3
</TABLE>
____________________
(1) The notes payable under the revolving credit facility will be repaid in
their entirety out of proceeds from the sale of the debentures to the
trust.
(2) The warrants are exercisable at prices ranging from $14.85 to $15.00 per
share and expire between December 2002 and November 2005.
(3) The capital ratios, as adjusted, are computed including the estimated net
proceeds from the sale of the preferred securities, in a manner consistent
with Federal Reserve regulations.
(4) The leverage ratio is core capital divided by average quarterly assets,
after deducting intangible assets and net deferred tax assets in excess of
regulatory maximum limits.
(5) The preferred securities have been structured to qualify as Tier 1 capital.
However, in calculating the amount of Tier 1 qualifying capital, the
preferred securities, together with any other trust preferred securities or
cumulative preferred stock of Wintrust that may be outstanding in the
future, can only be included up to the amount constituting 25% of total
Tier 1 capital. As adjusted for this offering, Wintrust's Tier 1 capital as
of March 31, 2000, would have been approximately $118.4 million, of which
$1.4 million would have been attributable to the preferred securities
offered by this prospectus.
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<PAGE>
ACCOUNTING AND REGULATORY TREATMENT
The trust will be treated, for financial reporting purposes, as our
subsidiary and, accordingly, the accounts of the trust will be included in our
consolidated financial statements. The preferred securities will be presented as
a separate line item in our consolidated balance sheet under the caption "Long-
term debt--trust preferred securities," or other similar caption. In addition,
appropriate disclosures about the preferred securities, the guarantee and the
debentures will be included in the notes to our consolidated financial
statements. For financial reporting purposes, we will record distributions
payable on the preferred securities in our consolidated statements of income.
Our future reports filed under the Securities Exchange Act of 1934 will
include a footnote to the audited consolidated financial statements stating
that:
. the trust is wholly-owned;
. the sole assets of the trust are the debentures, specifying the
debentures' outstanding principal amount, interest rate and maturity
date; and
. our obligations described in this prospectus, in the aggregate,
constitute a full, irrevocable and unconditional guarantee on a
subordinated basis by us of the obligations of the trust under the
preferred securities.
We have not included separate financial statements of the trust in this
prospectus. We do not consider that separate financial statements would be
material to holders of preferred securities because we will own all of the
trust's voting securities, the trust has no independent operations and we
guarantee the payments on the preferred securities to the extent described in
this prospectus.
20
<PAGE>
DESCRIPTION OF THE TRUST
The trust is a statutory business trust formed pursuant to the Delaware
Business Trust Act under a trust agreement executed by us, as sponsor for the
trust, and the trustees, and a certificate of trust has been filed with the
Delaware Secretary of State. The trust agreement will be amended and restated in
its entirety in the form filed as an exhibit to the registration statement of
which this prospectus is a part, as of the date the preferred securities are
initially issued. The trust agreement will be qualified under the Trust
Indenture Act of 1939.
The holders of the preferred securities issued pursuant to the offering
described in this prospectus will own all of the issued and outstanding
preferred securities of the trust which have certain prior rights over the other
securities of the trust. We will not initially own any of the preferred
securities. We will acquire common securities in an amount equal to at least 3%
of the total capital of the trust and will initially own, directly or
indirectly, all of the issued and outstanding common securities. The common
securities, together with the preferred securities, are called the trust
securities.
The trust exists exclusively for the purposes of:
. issuing the preferred securities to the public for cash;
. issuing its common securities to us in exchange for our capitalization
of the trust;
. investing the proceeds from the sale of the trust securities in an
equivalent amount of debentures; and
. engaging in other activities that are incidental to those listed
above.
The rights of the holders of the trust securities are as set forth in the
trust agreement, the Delaware Business Trust Act and the Trust Indenture Act.
The trust agreement does not permit the trust to borrow money or make any
investment other than in the debentures. Other than with respect to the trust
securities, Wintrust has agreed to pay for all debts and obligations and all
costs and expenses of the trust, including the fees and expenses of the trustees
and any income taxes, duties and other governmental charges, and all costs and
expenses related to these charges, to which the trust may become subject, except
for United States withholding taxes that are properly withheld.
The number of trustees of the trust will initially be five. Three of the
trustees will be persons who are employees or officers of or who are affiliated
with Wintrust. They are the administrative trustees. The fourth trustee will be
an entity that maintains its principal place of business in the State of
Delaware. It is the Delaware trustee. Initially, Wilmington Trust Company, a
Delaware banking corporation, will act as Delaware trustee. The fifth trustee,
called the property trustee, will also initially be Wilmington Trust Company.
The property trustee is the institutional trustee under the trust agreement and
acts as the indenture trustee called for under the applicable provisions of the
Trust Indenture Act. Also for purposes of compliance with the Trust Indenture
Act, Wilmington Trust Company will act as guarantee trustee and indenture
trustee under the guarantee agreement and the indenture. See "Description of the
Debentures" and "Description of the Guarantee." We, as holder of all of the
common securities, will have the right to appoint or remove any trustee unless
an event of default under the indenture has occurred and is continuing, in which
case only the holders of the preferred securities may remove the Delaware
trustee or the property trustee. The trust has a term of approximately 31 years
but may terminate earlier as provided in the trust agreement.
21
<PAGE>
The property trustee will hold the debentures for the benefit of the
holders of the trust securities and will have the power to exercise all rights,
powers and privileges under the indenture as the holder of the debentures. In
addition, the property trustee will maintain exclusive control of a segregated
noninterest-bearing "payment account" established with Wilmington Trust Company
to hold all payments made on the debentures for the benefit of the holders of
the trust securities. The property trustee will make payments of distributions
and payments on liquidation, redemption and otherwise to the holders of the
trust securities out of funds from the payment account. The guarantee trustee
will hold the guarantee for the benefit of the holders of the preferred
securities. We will pay all fees and expenses related to the trust and the
offering of the preferred securities, including the fees and expenses of the
trustees.
DESCRIPTION OF THE PREFERRED SECURITIES
The preferred securities will be issued pursuant to the trust agreement.
For more information about the trust agreement, see "Description of the Trust"
beginning on page 21. Wilmington Trust Company will act as property trustee for
the preferred securities under the trust agreement for purposes of complying
with the provisions of the Trust Indenture Act. The terms of the preferred
securities will include those stated in the trust agreement and those made part
of the trust agreement by the Trust Indenture Act.
General
The trust agreement authorizes the administrative trustees, on behalf of
the trust, to issue the trust securities, which are comprised of the preferred
securities to be sold to the public and the common securities. We will own all
of the common securities issued by the trust. The trust is not permitted to
issue any securities other than the trust securities or incur any other
indebtedness.
The preferred securities will represent preferred undivided beneficial
interests in the assets of the trust, and the holders of the preferred
securities will be entitled to a preference over the common securities upon an
event of default with respect to distributions and amounts payable on redemption
or liquidation. The preferred securities will rank equally, and payments on the
preferred securities will be made proportionally, with the common securities,
except as described under "-- Subordination of Common Securities of the Trust"
below.
The property trustee will hold legal title to the debentures in trust for
the benefit of the holders of the trust securities. We will guarantee the
payment of distributions out of money held by the trust, and payments upon
redemption of the preferred securities or liquidation of the trust, to the
extent described under "Description of the Guarantee." The guarantee agreement
does not cover the payment of any distribution or the liquidation amount when
the trust does not have sufficient funds available to make these payments.
Distributions
Source of Distributions. The funds of the trust available for distribution
to holders of the preferred securities will be limited to payments made under
the debentures, which the trust will purchase with the proceeds from the sale of
the trust securities. Distributions will be paid through the property trustee,
which will hold the amounts received from our interest payments on the
debentures in the payment account for the benefit of the holders of the trust
securities. If we do not make interest payments on the debentures, the property
trustee will not have funds available to pay distributions on the preferred
securities.
22
<PAGE>
Payment of Distributions. Distributions on the preferred securities will be
payable at the annual rate of _____ % of the $10 stated liquidation amount,
payable quarterly on March 31, June 30, September 30 and December 31 of each
year, to the holders of the preferred securities on the relevant record dates.
So long as the preferred securities are represented by a global security, as
described below, the record date will be the business day immediately preceding
the relevant distribution date. The first distribution date for the preferred
securities will be September 30, 2000.
Distributions will accumulate from the date of issuance, will be cumulative
and will be computed on the basis of a 360-day year of twelve 30-day months. If
the distribution date is not a business day, then payment of the distributions
will be made on the next day that is a business day, without any additional
interest or other payment for the delay. However, if the next business day is in
the next calendar year, payment of the distribution will be made on the business
day immediately preceding the scheduled distribution date. When we use the term
"business day" we mean any day other than a Saturday, a Sunday, a day on which
banking institutions in New York, New York are authorized or required by law,
regulation or executive order to remain closed or a day on which the corporate
trust office of the property trustee or the indenture trustee is closed for
business.
Extension Period. As long as no event of default under the indenture has
occurred and is continuing, we have the right to defer the payment of interest
on the debentures at any time for a period not exceeding 20 consecutive
quarters. We refer to this period of deferral as an "extension period." No
extension period may extend beyond June 30, 2030 or end on a date other than an
interest payment date, which dates are the same as the distribution dates. If we
defer the payment of interest, quarterly distributions on the preferred
securities will also be deferred during any such extension period. Any deferred
distributions under the preferred securities will accumulate additional amounts
at the annual rate of ______ %, compounded quarterly from the relevant
distribution date. The term "distributions" as used in this prospectus includes
those accumulated amounts.
During an extension period, we may not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our
capital stock (other than stock dividends, non-cash dividends in
connection with the implementation of a shareholder rights plan,
purchases of common stock in connection with employee benefit plans or
in connection with the reclassification of any class of our capital
stock into another class of capital stock) or allow any of our
subsidiaries to do the same with respect to their capital stock (other
than the payment of dividends or distributions to us);
. make any payment of principal, interest or premium on or repay,
repurchase or redeem any debt securities that rank equally with
(including the debentures issued to our other affiliated Delaware
trust), or junior in interest to, the debentures or allow any of our
subsidiaries to do the same;
. make any guarantee payments with respect to any other guarantee by us
of any other debt securities of any of our subsidiaries if the
guarantee ranks equally with or junior to the debentures (other than
payments under the guarantee); or
. redeem, purchase or acquire less than all of the debentures or any of
the preferred securities.
After the termination of any extension period and the payment of all amounts
due, we may elect to begin a new extension period, subject to the above
requirements.
23
<PAGE>
We do not currently intend to exercise our right to defer distributions on
the preferred securities by deferring the payment of interest on the debentures.
Redemption or Exchange
General. Subject to the prior approval of the Federal Reserve, if required,
we will have the right to redeem the debentures:
. in whole at any time, or in part from time to time, on or after June
30, 2005;
. at any time, in whole, within 180 days following the occurrence of a
Tax Event, an Investment Company Event or a Capital Treatment Event,
which terms we define below; or
. at any time, and from time to time, to the extent of any preferred
securities we purchase plus a proportionate amount of the common
securities we hold.
Mandatory Redemption. Upon our repayment or redemption, in whole or in
part, of any debentures, whether on June 30, 2030 or earlier, the property
trustee will apply the proceeds to redeem the same amount of the trust
securities, upon not less than 30 days' nor more than 60 days' notice, at the
redemption price. The redemption price will equal 100% of the aggregate
liquidation amount of the trust securities plus accumulated but unpaid
distributions to the date of redemption. If less than all of the debentures are
to be repaid or redeemed on a date of redemption, then the proceeds from such
repayment or redemption will be allocated to redemption of preferred securities
and common securities proportionately.
Distribution of Debentures in Exchange for Preferred Securities. Upon prior
approval of the Federal Reserve, if required, we will have the right at any time
to dissolve, wind-up or terminate the trust and, after satisfaction of the
liabilities of creditors of the trust as provided by applicable law, including,
without limitation, amounts due and owing the trustees of the trust, cause the
debentures to be distributed directly to the holders of trust securities in
liquidation of the trust. See "-- Liquidation Distribution Upon Termination."
After the liquidation date fixed for any distribution of debentures in
exchange for preferred securities:
. those trust securities will no longer be deemed to be outstanding;
. certificates representing debentures in a principal amount equal to
the liquidation amount of those preferred securities will be issued in
exchange for the preferred securities certificates;
. we will use our reasonable efforts to list the debentures on the
Nasdaq National Market or a national exchange;
. any certificates representing trust securities that are not
surrendered for exchange will be deemed to represent debentures with a
principal amount equal to the liquidation amount of those preferred
securities, accruing interest at the rate provided for in the
debentures from the last distribution date on the preferred
securities;
. all rights of the trust securityholders other than the right to
receive debentures upon surrender of a certificate representing trust
securities will terminate.
We cannot assure you that the market prices for the preferred securities or
the debentures that may be distributed if a dissolution and liquidation of the
trust were to occur would be favorable. The preferred securities that an
investor may purchase, or the debentures that an investor may receive on
24
<PAGE>
dissolution and liquidation of the trust, may trade at a discount to the price
that the investor paid to purchase the preferred securities.
Redemption upon a Tax Event, Investment Company Event or Capital Treatment
Event. If a Tax Event, an Investment Company Event or a Capital Treatment Event
occurs, we will have the right to redeem the debentures in whole, but not in
part, and thereby cause a mandatory redemption of all of the trust securities at
the redemption price. If one of these events occurs and we do not elect to
redeem the debentures, or to dissolve the trust and cause the debentures to be
distributed to holders of the trust securities, then the preferred securities
will remain outstanding and additional interest may be payable on the
debentures. See "Description of the Debentures -- Redemption or Exchange."
"Tax Event" means the receipt by the trust and us of an opinion of counsel
experienced in such matters stating that there is more than an insubstantial
risk that:
. interest payable by us on the debentures is not, or within 90 days of
the date of the opinion will not be, deductible by us, in whole or in
part, for federal income tax purposes;
. the trust is, or will be within 90 days after the date of the opinion,
subject to federal income tax with respect to income received or
accrued on the debentures; or
. the trust is, or will be within 90 days after the date of opinion,
subject to more than an immaterial amount of other taxes, duties,
assessments or other governmental charges, as a result of any
amendment to any tax laws or regulations.
"Investment Company Event" means the receipt by the trust and us of an
opinion of counsel experienced in such matters to the effect that the trust is
or will be considered an "investment company" that is required to be registered
under the Investment Company Act, as a result of a change in law or regulation
or a change in interpretation or application of law or regulation.
"Capital Treatment Event" means the receipt by the trust and us of an
opinion of counsel experienced in such matters to the effect that there is more
than an insubstantial risk of impairment of our ability to treat the preferred
securities as Tier 1 capital for purposes of the current capital adequacy
guidelines of the Federal Reserve, as a result of any amendment to any laws or
any regulations.
For all of the events described above, we or the trust must request and
receive an opinion with regard to the event within a reasonable period of time
after we become aware of the possible occurrence of an event of this kind.
Redemption of Debentures in Exchange for Preferred Securities We
Purchase. Upon prior approval of the Federal Reserve, if required, we will
also have the right at any time, and from time to time, to redeem debentures in
exchange for any preferred securities we may have purchased in the market. If
we elect to surrender any preferred securities beneficially owned by us in
exchange for redemption of a like amount of debentures, we will also surrender a
proportionate amount of common securities in exchange for debentures. Preferred
securities owned by other holders will not be called for redemption at any time
when we elect to exchange trust securities we own to redeem debentures.
The common securities we surrender will be in the same proportion to the
preferred securities we surrender as is the ratio of common securities purchased
by us to the preferred securities issued by the trust. In exchange for the trust
securities surrendered by us, the property trustee will cause to be released to
us for cancellation debentures with a principal amount equal to the liquidation
amount of the trust securities, plus any accumulated but unpaid distributions,
if any, then held by the property trustee allocable to those trust securities.
After the date of redemption involving an exchange by us, the trust securities
we surrender will no longer be deemed outstanding and the debentures redeemed in
exchange will be cancelled.
Redemption Procedures
Preferred securities will be redeemed at the redemption price with the
applicable proceeds from our contemporaneous redemption of the debentures.
Redemptions of the preferred securities will be made, and the redemption price
will be payable, on each redemption date only to the extent that the trust has
funds available for the payment of the redemption price.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the date of redemption to each holder of trust securities to be
redeemed at its registered address. Unless we default in payment of the
redemption price on the debentures, interest will cease to accumulate on the
debentures called for redemption on and after the date of redemption.
25
<PAGE>
If the trust gives notice of redemption of its trust securities, then the
property trustee, to the extent funds are available, will irrevocably deposit
with the depositary for the trust securities funds sufficient to pay the
aggregate redemption price and will give the depositary for the trust securities
irrevocable instructions and authority to pay the redemption price to the
holders of the trust securities. See "Book-Entry Issuance." If the preferred
securities are no longer in book-entry only form, the property trustee, to the
extent funds are available, will deposit with the designated paying agent for
such preferred securities funds sufficient to pay the aggregate redemption price
and will give the paying agent irrevocable instructions and authority to pay the
redemption price to the holders upon surrender of their certificates evidencing
the preferred securities. Notwithstanding the foregoing, distributions payable
on or prior to the date of redemption for any trust securities called for
redemption will be payable to the holders of the trust securities on the
relevant record dates for the related distribution dates.
If notice of redemption has been given and we have deposited funds as
required, then on the date of the deposit all rights of the holders of the trust
securities called for redemption will cease, except the right to receive the
redemption price, but without interest on such redemption price after the date
of redemption. The trust securities will also cease to be outstanding on the
date of the deposit. If any date fixed for redemption of trust securities is not
a business day, then payment of the redemption price payable on that date will
be made on the next day that is a business day without any additional interest
or other payment in respect of the delay. However, if the next business day is
in the next succeeding calendar year, payment of the interest will be made on
the immediately preceding business day.
If payment of the redemption price in respect of trust securities called
for redemption is improperly withheld or refused and not paid by the trust, or
by us pursuant to the guarantee, distributions on the trust securities will
continue to accumulate at the applicable rate from the date of redemption
originally established by the trust for the trust securities to the date the
redemption price is actually paid. In this case, the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
redemption price. See "Description of the Guarantee."
Payment of the redemption price on the preferred securities and any
distribution of debentures to holders of preferred securities will be made to
the applicable recordholders as they appear on the register for the preferred
securities on the relevant record date. As long as the preferred securities are
represented by a global security, the record date will be the business day
immediately preceding the date of redemption or liquidation date, as applicable.
If less than all of the trust securities are to be redeemed, then the
aggregate liquidation amount of the trust securities to be redeemed will be
allocated proportionately to those trust securities based upon the relative
liquidation amounts. The particular preferred securities to be redeemed will be
selected by the property trustee from the outstanding preferred securities not
previously called for redemption by a method the property trustee deems fair and
appropriate. This method may provide for the redemption of portions equal to $10
or an integral multiple of $10 of the liquidation amount of the preferred
securities. The property trustee will promptly notify the registrar for the
preferred securities in writing of the preferred securities selected for
redemption and, in the case of any preferred securities selected for partial
redemption, the liquidation amount to be redeemed.
Subject to applicable law, and if we are not exercising our right to defer
interest payments on the debentures, we may, at any time, purchase outstanding
preferred securities.
26
<PAGE>
Subordination of Common Securities
Payment of distributions on, and the redemption price of, the preferred
securities and common securities will be made based on the liquidation amount of
these securities. However, if an event of default under the indenture has
occurred and is continuing, no distributions on or redemption of the common
securities may be made unless payment in full in cash of all accumulated and
unpaid distributions on all of the outstanding preferred securities for all
distribution periods terminating on or before that time, or in the case of
payment of the redemption price, payment of the full amount of the redemption
price on all of the outstanding preferred securities then called for redemption,
has been made or provided for. All funds available to the property trustee will
first be applied to the payment in full in cash of all distributions on, or the
redemption price of, the preferred securities then due and payable.
In the case of the occurrence and continuance of any event of default under
the trust agreement resulting from an event of default under the indenture, we,
as holder of the common securities, will be deemed to have waived any right to
act with respect to that event of default under the trust agreement until the
effect of the event of default has been cured, waived or otherwise eliminated.
Until the event of default under the trust agreement has been so cured, waived
or otherwise eliminated, the property trustee will act solely on behalf of the
holders of the preferred securities and not on our behalf, and only the holders
of the preferred securities will have the right to direct the property trustee
to act on their behalf.
Liquidation Distribution Upon Termination
We will have the right at any time to dissolve, wind-up or terminate the
trust and cause the debentures to be distributed to the holders of the preferred
securities. This right is subject, however, to us receiving approval of the
Federal Reserve, if required.
In addition, the trust will automatically terminate upon expiration of its
term and will terminate earlier on the first to occur of:
. our bankruptcy, dissolution or liquidation;
. the distribution of a like amount of the debentures to the holders of
trust securities, if we have given written direction to the property
trustee to terminate the trust;
. redemption of all of the preferred securities as described on page 24
under "-- Redemption or Exchange -- Mandatory Redemption"; or
. the entry of a court order for the dissolution of the trust.
With the exception of a redemption as described on page 24 under "--
Redemption or Exchange -- Mandatory Redemption," if an early termination of the
trust occurs, the trust will be liquidated by the administrative trustees as
expeditiously as they determine to be possible. After satisfaction of
liabilities to creditors of the trust as provided by applicable law, the
trustees will distribute to the holders of trust securities, debentures:
. in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of the trust securities;
. with an interest rate identical to the distribution rate on the trust
securities; and
27
<PAGE>
. with accrued and unpaid interest equal to accumulated and unpaid
distributions on the trust securities.
However, if the property trustee determines that the distribution is not
practical, then the holders of trust securities will be entitled to receive,
instead of debentures, a proportionate amount of the liquidation distribution.
The liquidation distribution will be the amount equal to the aggregate of the
liquidation amount plus accumulated and unpaid distributions to the date of
payment. If the liquidation distribution can be paid only in part because the
trust has insufficient assets available to pay in full the aggregate liquidation
distribution, then the amounts payable directly by the trust on the trust
securities will be paid on a proportional basis, based on liquidation amounts,
to us, as the holder of the common securities, and to the holders of the
preferred securities. However, if an event of default under the indenture has
occurred and is continuing, the preferred securities will have a priority over
the common securities. See "-- Subordination of Common Securities."
Under current United States federal income tax law and interpretations and
assuming that the trust is treated as a grantor trust, as is expected, a
distribution of the debentures should not be a taxable event to holders of the
preferred securities. Should there be a change in law, a change in legal
interpretation, a Tax Event or another circumstance, however, the distribution
could be a taxable event to holders of the preferred securities. See "Federal
Income Tax Consequences -- Receipt of Debentures or Cash Upon Liquidation of the
Trust." If we do not elect to redeem the debentures prior to maturity or to
liquidate the trust and distribute the debentures to holders of the preferred
securities, the preferred securities will remain outstanding until the repayment
of the debentures.
If we elect to dissolve the trust and thus cause the debentures to be
distributed to holders of the preferred securities in liquidation of the trust,
we will continue to have the right to shorten the maturity of the debentures.
See "Description of the Debentures -- General."
Liquidation Value
The amount of the liquidation distribution payable on the preferred
securities in the event of any liquidation of the trust is $10 per preferred
security plus accumulated and unpaid distributions to the date of payment, which
may be in the form of a distribution of debentures having a liquidation value
and accrued interest of an equal amount. See "-- Liquidation Distribution Upon
Termination."
Events of Default; Notice
Any one of the following events constitutes an event of default under the
trust agreement with respect to the preferred securities:
. the occurrence of an event of default under the indenture (see
"Description of the Debentures -- Debenture Events of Default");
. a default by the trust in the payment of any distribution when it
becomes due and payable, and continuation of the default for a period
of 30 days;
. a default by the trust in the payment of any redemption price of any
of the trust securities when it becomes due and payable;
. a default in the performance, or breach, in any material respect, of
any covenant or warranty of the trustees in the trust agreement, other
than those defaults covered in the previous two points, and
continuation of the default or breach for a period of 60 days after
there has been
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<PAGE>
given, by registered or certified mail, to the trustee(s) by the
holders of at least 25% in aggregate liquidation amount of the
outstanding preferred securities, a written notice specifying the
default or breach and requiring it to be remedied and stating that the
notice is a "Notice of Default" under the trust agreement; or
. the occurrence of events of bankruptcy or insolvency with respect to
the property trustee and our failure to appoint a successor property
trustee within 60 days.
Within five business days after the occurrence of any event of default
actually known to the property trustee, the property trustee will transmit
notice of the event of default to the holders of the preferred securities, the
administrative trustees and to us, unless the event of default has been cured or
waived. Wintrust and the administrative trustees are required to file annually
with the property trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to them under the
trust agreement.
If an event of default under the indenture has occurred and is continuing,
the preferred securities will have preference over the common securities upon
termination of the trust. See "-- Subordination of Common Securities" and
"-- Liquidation Distribution Upon Termination." The existence of an event of
default under the trust agreement does not entitle the holders of preferred
securities to accelerate the maturity thereof, unless the event of default is
caused by the occurrence of an event of default under the indenture and both
the indenture trustee and holders of at least 25% in principal amount of the
debentures fail to accelerate the maturity thereof.
Removal of the Trustees
Unless an event of default under the indenture has occurred and is
continuing, we may remove any trustee at any time. If an event of default under
the indenture has occurred and is continuing, only the holders of a majority in
liquidation amount of the outstanding preferred securities may remove the
property trustee or the Delaware trustee. The holders of the preferred
securities have no right to vote to appoint, remove or replace the
administrative trustees. These rights are vested exclusively with us as the
holder of the common securities. No resignation or removal of a trustee and no
appointment of a successor trustee will be effective until the successor trustee
accepts the appointment in accordance with the trust agreement.
Co-Trustees and Separate Property Trustee
Unless an event of default under the indenture has occurred and is
continuing, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the trust property may
at the time be located, we will have the power to appoint at any time or times,
and upon written request of the property trustee will appoint, one or more
persons or entities either (1) to act as a co-trustee, jointly with the property
trustee, of all or any part of the trust property, or (2) to act as separate
trustee of any trust property. In either case these trustees will have the
powers that may be provided in the instrument of appointment, and will have
vested in them any property, title, right or power deemed necessary or
desirable, subject to the provisions of the trust agreement. In case an event of
default under the indenture has occurred and is continuing, the property trustee
alone will have power to make the appointment.
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Merger or Consolidation of Trustees
Generally, any person or successor to any of the trustees may be a
successor trustee to any of the trustees, including a successor resulting from a
merger or consolidation. However, any successor trustee must meet all of the
qualifications and eligibility standards to act as a trustee.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below. For these purposes, if we consolidate or merge with another
entity, or transfer or sell substantially all of our assets to another entity,
in some cases that transaction may be considered to involve a replacement of the
trust, and the conditions set forth below would apply to such transaction. The
trust may, at our request, with the consent of the administrative trustees and
without the consent of the holders of the preferred securities, the property
trustee or the Delaware trustee, undertake a transaction listed above if the
following conditions are met:
. the successor entity either (a) expressly assumes all of the
obligations of the trust with respect to the preferred securities, or
(b) substitutes for the preferred securities other securities having
substantially the same terms as the preferred securities (referred to
as "successor securities") so long as the successor securities rank
the same in priority as the preferred securities with respect to
distributions and payments upon liquidation, redemption and otherwise;
. we appoint a trustee of the successor entity possessing substantially
the same powers and duties as the property trustee in its capacity as
the holder of the debentures;
. the successor securities are listed or traded or will be listed or
traded on any national securities exchange or other organization on
which the preferred securities are then listed, if any;
. the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the preferred securities (including
any successor securities) in any material respect;
. the successor entity has a purpose substantially identical to that of
the trust;
. prior to the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, we have received an opinion from
independent counsel that (a) any transaction of this kind does not
adversely affect the rights, preferences and privileges of the holders
of the preferred securities (including any successor securities) in
any material respect, and (b) following the transaction, neither the
trust nor the successor entity will be required to register as an
"investment company" under the Investment Company Act; and
. we own all of the common securities of the successor entity and
guarantee the obligations of the successor entity under the successor
securities at least to the extent provided by the guarantee, the
debentures, the trust agreement and the expense agreement.
Notwithstanding the foregoing, the trust may not, except with the consent of
every holder of the preferred securities, enter into any transaction of this
kind if the transaction would cause the trust or the successor entity not to be
classified as a grantor trust for United States federal income tax purposes.
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Voting Rights; Amendment of Trust Agreement
Except as described below and under "Description of the Guarantee --
Amendments and Assignment" and as otherwise required by the Trust Indenture Act
and the trust agreement, the holders of the preferred securities will have no
voting rights.
The trust agreement may be amended from time to time by us and the
trustees, without the consent of the holders of the preferred securities, in the
following circumstances:
. with respect to acceptance of appointment by a successor trustee;
. to cure any ambiguity, correct or supplement any provisions in the
trust agreement that may be inconsistent with any other provision, or
to make any other provisions with respect to matters or questions
arising under the trust agreement, as long as the amendment is not
inconsistent with the other provisions of the trust agreement and does
not have a material adverse effect on the interests of any holder of
trust securities; or
. to modify, eliminate or add to any provisions of the trust agreement
if necessary to ensure that the trust will be classified for federal
income tax purposes as a grantor trust at all times that any trust
securities are outstanding or to ensure that the trust will not be
required to register as an "investment company" under the Investment
Company Act.
With the consent of the holders of a majority of the aggregate liquidation
amount of the outstanding trust securities, we and the trustees may amend the
trust agreement if the trustees receive an opinion of counsel to the effect that
the amendment or the exercise of any power granted to the trustees in accordance
with the amendment will not affect the trust's status as a grantor trust for
federal income tax purposes or the trust's exemption from status as an
"investment company" under the Investment Company Act. However, without the
consent of each holder of trust securities, the trust agreement may not be
amended to (a) change the amount or timing of any distribution on the trust
securities or otherwise adversely affect the amount of any distribution required
to be made in respect of the trust securities as of a specified date, or (b)
restrict the right of a holder of trust securities to institute suit for the
enforcement of the payment on or after that date.
As long as the property trustee holds any debentures, the trustees will
not, without obtaining the prior approval of the holders of a majority in
aggregate liquidation amount of all outstanding preferred securities:
. direct the time, method and place of conducting any proceeding for any
remedy available to the indenture trustee, or executing any trust or
power conferred on the property trustee with respect to the
debentures;
. waive any past default that is waivable under the indenture;
. exercise any right to rescind or annul a declaration that the
principal of all the debentures will be due and payable; or
. consent to any amendment or termination of the indenture or the
debentures, where the property trustee's consent is required. However,
where a consent under the indenture requires the consent of each
holder of the affected debentures, no consent will be given by the
property trustee without the prior consent of each holder of the
preferred securities.
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The trustees may not revoke any action previously authorized or approved by a
vote of the holders of the preferred securities except by subsequent vote of the
holders of the preferred securities. The property trustee will notify each
holder of preferred securities of any notice of default with respect to the
debentures. In addition to obtaining the foregoing approvals of the holders of
the preferred securities, prior to taking any of the foregoing actions, the
trustees must obtain an opinion of counsel experienced in these matters to the
effect that the trust will not be classified as an association taxable as a
corporation for federal income tax purposes on account of the action.
Any required approval of holders of trust securities may be given at a
meeting or by written consent. The property trustee will cause a notice of any
meeting at which holders of the trust securities are entitled to vote, or of any
matter upon which action by written consent of the holders is to be taken, to be
given to each holder of record of trust securities.
No vote or consent of the holders of preferred securities will be required
for the trust to redeem and cancel its preferred securities in accordance with
the trust agreement.
Notwithstanding the fact that holders of preferred securities are entitled
to vote or consent under any of the circumstances described above, any of the
preferred securities that are owned by Wintrust, the trustees or any affiliate
of Wintrust or any trustee, will, for purposes of the vote or consent, be
treated as if they were not outstanding.
Global Preferred Securities
The preferred securities will be represented by one or more global
preferred securities registered in the name of The Depository Trust Company, New
York, New York ("DTC"), or its nominee. A global preferred security is a
security representing interests of more than one beneficial holder. Ownership of
beneficial interests in the global preferred securities will be reflected in DTC
participant account records through DTC's book-entry transfer and registration
system. Participants are brokers, dealers, or others having accounts with DTC.
Indirect beneficial interests of other persons investing in the preferred
securities will be shown on, and transfers will be effected only through,
records maintained by DTC participants. Except as described below, preferred
securities in definitive form will not be issued in exchange for the global
preferred securities. See "Book-Entry Issuance."
No global preferred security may be exchanged for preferred securities
registered in the names of persons other than DTC or its nominee unless:
. DTC notifies the indenture trustee that it is unwilling or unable to
continue as a depositary for the global preferred security and we are
unable to locate a qualified successor depositary;
. we execute and deliver to the indenture trustee a written order
stating that we elect to terminate the book-entry system through DTC;
or
. there shall have occurred and be continuing an event of default under
the indenture.
Any global preferred security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for definitive certificates registered in the
names as DTC shall direct. It is expected that the instructions will be based
upon directions received by DTC with respect to ownership of beneficial
interests in the global preferred security. If preferred securities are issued
in definitive form, the preferred securities will be in denominations of $10 and
integral multiples of $10 and may be transferred or exchanged at the offices
described below.
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Unless and until it is exchanged in whole or in part for the individual
preferred securities represented thereby, a global preferred security may not be
transferred except as a whole by DTC to a nominee of DTC, by a nominee of DTC to
DTC or another nominee of DTC or by DTC or any nominee to a successor depositary
or any nominee of the successor.
Payments on global preferred securities will be made to DTC, as the
depositary for the global preferred securities. If the preferred securities are
issued in definitive form, distributions will be payable by check mailed to the
address of record of the persons entitled to the distribution, and the transfer
of the preferred securities will be registrable, and preferred securities will
be exchangeable for preferred securities of other denominations of a like
aggregate liquidation amount, at the corporate office of the property trustee,
or at the offices of any paying agent or transfer agent appointed by the
administrative trustees. In addition, if the preferred securities are issued in
definitive form, the record dates for payment of distributions will be the 15th
day of the month in which the relevant distribution date occurs. For a
description of the terms of DTC arrangements relating to payments, transfers,
voting rights, redemptions and other notices and other matters, see "Book-Entry
Issuance."
Upon the issuance of one or more global preferred securities, and the
deposit of the global preferred security with or on behalf of DTC or its
nominee, DTC or its nominee will credit, on its book-entry registration and
transfer system, the respective aggregate liquidation amounts of the individual
preferred securities represented by the global preferred security to the
designated accounts of persons that participate in the DTC system. These
participant accounts will be designated by the dealers, underwriters or agents
selling the preferred securities. Ownership of beneficial interests in a global
preferred security will be limited to persons or entities having an account with
DTC or who may hold interests through participants. With respect to interests of
any person or entity that is a DTC participant, ownership of beneficial
interests in a global preferred security will be shown on, and the transfer of
that ownership will be effected only through, records maintained by DTC or its
nominee. With respect to persons or entities who hold interests in a global
preferred security through a participant, the interest and any transfer of the
interest will be shown only on the participant's records. The laws of some
states require that certain purchasers of securities take physical delivery of
securities in definitive form. These laws may impair the ability to transfer
beneficial interests in a global preferred security.
So long as DTC or another depositary, or its nominee, is the registered
owner of the global preferred security, the depositary or the nominee, as the
case may be, will be considered the sole owner or holder of the preferred
securities represented by the global preferred security for all purposes under
the trust agreement. Except as described in this prospectus, owners of
beneficial interests in a global preferred security will not be entitled to have
any of the individual preferred securities represented by the global preferred
security registered in their names, will not receive or be entitled to receive
physical delivery of any the preferred securities in definitive form and will
not be considered the owners or holders of the preferred securities under the
trust agreement.
None of us, the property trustee, any paying agent or the securities
registrar for the preferred securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of the global preferred security representing the
preferred securities or for maintaining, supervising or reviewing any records
relating to the beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of the
liquidation amount or distributions in respect of a global preferred security,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the aggregate
liquidation amount of the global preferred security as shown on the records of
DTC or its nominee. We also expect that payments by participants to owners of
beneficial interests in the global preferred security held
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through the participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name." The payments will be the
responsibility of the participants. See "Book-Entry Issuance."
Payment and Paying Agency
Payments in respect of the preferred securities shall be made to DTC, which
shall credit the relevant accounts of participants on the applicable
distribution dates, or, if any of the preferred securities are not held by DTC,
the payments shall be made by check mailed to the address of the holder as
listed on the register of holders of the preferred securities. The paying agent
for the preferred securities will initially be the property trustee and any co-
paying agent chosen by the property trustee and acceptable to us and the
administrative trustees. The paying agent for the preferred securities may
resign as paying agent upon 30 days' written notice to the administrative
trustees, the property trustee and us. If the property trustee no longer is the
paying agent for the preferred securities, the administrative trustees will
appoint a successor to act as paying agent. The successor must be a bank or
trust company acceptable to us and the property trustee.
Registrar and Transfer Agent
The property trustee will act as the registrar and the transfer agent for
the preferred securities. Registration of transfers of preferred securities will
be effected without charge by or on behalf of the trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The trust and its registrar and transfer agent will not be
required to register or cause to be registered the transfer of preferred
securities after they have been called for redemption.
Information Concerning the Property Trustee
The property trustee undertakes to perform only the duties set forth in the
trust agreement. After the occurrence of an event of default that is continuing,
the property trustee must exercise the same degree of care and skill as a
prudent person exercises or uses in the conduct of its own affairs. The property
trustee is under no obligation to exercise any of the powers vested in it by the
trust agreement at the request of any holder of preferred securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred. If no event of default under the trust agreement has occurred
and is continuing and the property trustee is required to decide between
alternative causes of action, construe ambiguous or inconsistent provisions in
the trust agreement or is unsure of the application of any provision of the
trust agreement, and the matter is not one on which holders of preferred
securities are entitled to vote upon, then the property trustee will take the
action directed in writing by us. If the property trustee is not so directed,
then it will take the action it deems advisable and in the best interests of the
holders of the trust securities and will have no liability except for its own
bad faith, negligence or willful misconduct.
Miscellaneous
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the trust in such a way that:
. the trust will not be deemed to be an "investment company" required to
be registered under Investment Company Act;
. the trust will not be classified as an association taxable as a
corporation for federal income tax purposes; and
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. the debentures will be treated as indebtedness of Wintrust for federal
income tax purposes.
In this regard, we and the administrative trustees are authorized to take any
action not inconsistent with applicable law, the certificate of trust or the
trust agreement, that we and the administrative trustees determine to be
necessary or desirable for these purposes.
Holders of the preferred securities have no preemptive or similar rights.
The trust agreement and the trust securities will be governed by Delaware law.
DESCRIPTION OF THE DEBENTURES
Concurrently with the issuance of the preferred securities, the trust will
invest the proceeds from the sale of the trust securities in the debentures
issued by us. The debentures will be issued as unsecured debt under the
indenture between us and Wilmington Trust Company, as indenture trustee. The
indenture will be qualified under the Trust Indenture Act.
The following discussion is subject to, and is qualified in its entirety by
reference to, the indenture and to the Trust Indenture Act. We urge prospective
investors to read the form of the indenture, which is filed as an exhibit to the
registration statement of which this prospectus forms a part.
General
The debentures will be limited in aggregate principal amount to $18,556,710
or $20,618,560 if the Underwriters' over-allotment option is exercised in full.
This amount represents the sum of the aggregate stated liquidation amounts of
the trust securities. The debentures will bear interest at the annual rate of %
of the principal amount. The interest will be payable quarterly on March 31,
June 30, September 30 and December 31 of each year, beginning September 30,
2000, to the person in whose name each debenture is registered at the close of
business on the 15/th/ day of the last month of the calendar quarter. It is
anticipated that, until the liquidation, if any, of the trust, the debentures
will be held in the name of the property trustee in trust for the benefit of the
holders of the trust securities.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. If any date on which interest is
payable on the debentures is not a business day, then payment of interest will
be made on the next day that is a business day without any additional interest
or other payment in respect of the delay. However, if the next business day is
in the next calendar year, payment of interest will be made on the immediately
preceding business day. Accrued interest that is not paid on the applicable
interest payment date will bear additional interest on the amount due at the
annual rate of _____ %, compounded quarterly.
The debentures will mature on June 30, 2030, the stated maturity date. We
may shorten this date once at any time to any date not earlier than June 30,
2005, subject to the prior approval of the Federal Reserve, if required.
We will give notice to the indenture trustee and the holders of the
debentures, no more than 180 days and no less than 30 days prior to the
effectiveness of any change in the stated maturity date. We will not have the
right to redeem the debentures from the trust until after June 30, 2005, except
if (a) a Tax Event, an Investment Company Event or a Capital Treatment Event,
which terms are defined on page 25, has occurred, or (b) we repurchase preferred
securities in the market, in which case we can elect to redeem debentures
specifically in exchange for a like amount of preferred securities owned by us
plus a proportionate amount of common securities.
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The debentures will be unsecured and will rank junior to all of our senior
and subordinated debt, including indebtedness we may incur in the future.
Because we are a holding company, our right to participate in any distribution
of assets of any of our subsidiaries, upon any subsidiary's liquidation or
reorganization or otherwise, and thus the ability of holders of the debentures
to benefit indirectly from any distribution by a subsidiary, is subject to the
prior claim of creditors of the subsidiary, except to the extent that we may be
recognized as a creditor of the subsidiary. The debentures will, therefore, be
effectively subordinated to all existing and future liabilities of our
subsidiaries, and holders of debentures should look only to our assets for
payment. The indenture does not limit our ability to incur or issue secured or
unsecured senior and junior debt. See "-- Subordination."
The indenture does not contain provisions that afford holders of the
debentures protection in the event of a highly leveraged transaction or other
similar transaction involving us, nor does it require us to maintain or achieve
any financial performance levels or to obtain or maintain any credit rating on
the debentures.
Option to Extend Interest Payment Period
As long as no event of default under the indenture has occurred and is
continuing, we have the right under the indenture to defer the payment of
interest on the debentures at any time for a period not exceeding 20 consecutive
quarters. However, no extension period may extend beyond the stated maturity of
the debentures or end on a date other than a date interest is normally due. At
the end of an extension period, we must pay all interest then accrued and
unpaid, together with interest thereon at the annual rate of %, compounded
quarterly. During an extension period, interest will continue to accrue and
holders of debentures, or the holders of preferred securities if they are then
outstanding, will be required to accrue and recognize as income for federal
income tax purposes the accrued but unpaid interest amounts in the year in which
such amounts accrued. See "Federal Income Tax Consequences -- Interest Payment
Period and Original Issue Discount."
During an extension period, we may not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our
capital stock (other than the reclassification of any class of capital
stock into another class of capital stock) or allow any of our
subsidiaries to do the same with respect to their capital stock (other
than payment of dividends or distributions to us);
. make or allow any of our subsidiaries to make any payment of
principal, interest or premium on, or repay, repurchase or redeem any
debt securities issued by us that rank equally with or junior to the
debentures;
. make or allow any of our subsidiaries to make any guarantee payments
with respect to any other guarantee by us of any other debt securities
of any of our subsidiaries if the guarantee ranks equally with or
junior to the debentures (other than payments under the guarantee); or
. redeem, purchase or acquire less than all of the debentures or any of
the preferred securities.
Prior to the termination of any extension period, so long as no event of
default under the indenture is continuing, we may further defer the payment of
interest subject to the above stated requirements. Upon the termination of any
extension period and the payment of all amounts then due, we may elect to begin
a new extension period at any time. We do not currently intend to exercise our
right to defer payments of interest on the debentures.
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We must give the property trustee, the administrative trustees and the
indenture trustee notice of our election of an extension period at least two
business days prior to the earlier of (a) the next date on which distributions
on the trust securities would have been payable except for the election to begin
an extension period, or (b) the date we are required to give notice of the
record date, or the date the distributions are payable, to the Nasdaq National
Market, or other applicable self-regulatory organization, or to holders of the
preferred securities, but in any event at least one business day prior to the
record date.
Other than as described above, there is no limitation on the number of
times that we may elect to begin an extension period.
Additional Sums to be Paid as a Result of Additional Taxes
If the trust is required to pay any additional taxes, duties, assessments
or other governmental charges as a result of the occurrence of a Tax Event, we
will pay as additional interest on the debentures any amounts which may be
required so that the net amounts received and retained by the trust after paying
any additional taxes, duties, assessments or other governmental charges will not
be less than the amounts the trust would have received had the additional taxes,
duties, assessments or other governmental charges not been imposed.
Redemption
Subject to prior approval of the Federal Reserve, if required, we may
redeem the debentures prior to maturity:
. on or after June 30, 2005, in whole at any time or in part from time
to time; or
. in whole at any time within 180 days following the occurrence of a Tax
Event, an Investment Company Event or a Capital Treatment Event; or
. at any time, and from time to time, to the extent of any preferred
securities we purchase, plus a proportionate amount of the common
securities we hold.
In each case we will pay a redemption price equal to the accrued and unpaid
interest on the debentures so redeemed to the date fixed for redemption, plus
100% of the principal amount of the redeemed debentures.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of debentures to be redeemed
at its registered address. Redemption of less than all outstanding debentures
must be effected proportionately, by lot or in any other manner deemed to be
fair and appropriate by the indenture trustee. Unless we default in payment of
the redemption price for the debentures, on and after the redemption date
interest will no longer accrue on the debentures or the portions of the
debentures called for redemption.
The debentures will not be subject to any sinking fund.
Distribution Upon Liquidation
As described under "Description of the Preferred Securities -- Liquidation
Distribution Upon Termination," under certain circumstances and with the Federal
Reserve's approval, the debentures may be distributed to the holders of the
preferred securities in liquidation of the trust after satisfaction of
liabilities to creditors of the trust. If this occurs, we will use our
reasonable efforts to list the debentures on the Nasdaq National Market or other
stock exchange or national quotation system on which the preferred securities
are then listed, if any. There can be no assurance as to the market price of any
debentures that may be distributed to the holders of preferred securities.
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Restrictions on Payments
We are restricted from making certain payments (as described below) if we
have chosen to defer payment of interest on the debentures, if an event of
default has occurred and is continuing under the indenture, or if we are in
default with respect to our obligations under the guarantee.
If any of these events occur, we will not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of our
capital stock (other than stock dividends, non-cash dividends in
connection with the implementation of a shareholder rights plan,
purchases of common stock in connection with employee benefit plans or
in connection with the reclassification of any class of our capital
stock into another class of capital stock) or allow any of our
subsidiaries to do the same with respect to their capital stock (other
than payment of dividends or distributions to us);
. make or allow any of our subsidiaries to make any payment of
principal, interest or premium on, or repay or repurchase or redeem
any of our debt securities that rank equally with or junior to the
debentures;
. make or allow any of our subsidiaries to make any guarantee payments
with respect to any guarantee by us of the debt securities of any of
our subsidiaries if the guarantee ranks equally with or junior to the
debentures (other than payments under the guarantee); or
. redeem, purchase or acquire less than all of the debentures or any of
the preferred securities.
Subordination
The debentures are subordinated and junior in right of payment to all of
our senior and subordinated debt, as defined below. Upon any payment or
distribution of assets to creditors upon any liquidation, dissolution, winding
up or reorganization of Wintrust, whether voluntary or involuntary in
bankruptcy, insolvency, receivership or other proceedings in connection with any
insolvency or bankruptcy proceedings, the holders of our senior and subordinated
debt will first be entitled to receive payment in full of principal and interest
before the holders of debentures will be entitled to receive or retain any
payment in respect of the debentures.
If the maturity of any debentures is accelerated, the holders of all of our
senior and subordinated debt outstanding at the time of the acceleration will
also be entitled to first receive payment in full of all amounts due to them,
including any amounts due upon acceleration, before the holders of the
debentures will be entitled to receive or retain any principal or interest
payments on the debentures.
No payments of principal or interest on the debentures may be made if there
has occurred and is continuing a default in any payment with respect to any of
our senior or subordinated debt or an event of default with respect to any of
our senior or subordinated debt resulting in the acceleration of the maturity of
the senior or subordinated debt, or if any judicial proceeding is pending with
respect to any default.
The term "debt" means, with respect to any person, whether recourse is to
all or a portion of the assets of the person and whether or not contingent:
. every obligation of the person for money borrowed;
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. every obligation of the person evidenced by bonds, debentures, notes
or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses;
. every reimbursement obligation of the person with respect to letters
of credit, bankers' acceptances or similar facilities issued for the
account of the person;
. every obligation of the person issued or assumed as the deferred
purchase price of property or services, excluding trade accounts
payable or accrued liabilities arising in the ordinary course of
business;
. every capital lease obligation of the person; and
. every obligation of the type referred to in the first five points of
another person and all dividends of another person the payment of
which, in either case, the first person has guaranteed or is
responsible or liable, directly or indirectly, as obligor or
otherwise.
The term "senior debt" means the principal of, and premium and interest,
including interest accruing on or after the filing of any petition in bankruptcy
or for reorganization relating to us, on, debt, whether incurred on or prior to
the date of the indenture or incurred after the date. However, senior debt will
not be deemed to include:
. any debt where it is provided in the instrument creating the debt that
the obligations are not superior in right of payment to the debentures
or to other debt which is equal with, or subordinated to, the
debentures including our 9.00% Subordinated Debentures due 2028,
issued to Wintrust Capital Trust I;
. any of our debt that when incurred and without regard to any election
under the federal bankruptcy laws, was without recourse to us;
. any debt of ours to any of our subsidiaries;
. any debt to any of our employees;
. any debt that by its terms is subordinated to trade accounts payable
or accrued liabilities arising in the ordinary course of business to
the extent that payments made to the holders of the debt by the
holders of the debentures as a result of the subordination provisions
of the indenture would be greater than they otherwise would have been
as a result of any obligation of the holders to pay amounts over to
the obligees on the trade accounts payable or accrued liabilities
arising in the ordinary course of business as a result of
subordination provisions to which the debt is subject; and
. debt which constitutes subordinated debt.
The term "subordinated debt" means the principal of, and premium and
interest, including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to us, on, debt. Subordinated debt
includes debt incurred on or prior to the date of the indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to other debt of ours, other than the debentures. However, subordinated debt
will not be deemed to include:
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. any of our debt which when incurred and without regard to any election
under the federal bankruptcy laws was without recourse to us;
. any debt of ours to any of our subsidiaries;
. any debt to any of our employees;
. any debt which by its terms is subordinated to trade accounts payable
or accrued liabilities arising in the ordinary course of business to
the extent that payments made to the holders of the debt by the
holders of the debentures as a result of the subordination provisions
of the indenture would be greater than they otherwise would have been
as a result of any obligation of the holders to pay amounts over to
the obligees on the trade accounts payable or accrued liabilities
arising in the ordinary course of business as a result of
subordination provisions to which the debt is subject;
. debt which constitutes senior debt; and
. any debt of ours under debt securities (and guarantees in respect of
these debt securities) initially issued to any trust, or a trustee of
a trust, partnership or other entity affiliated with us that is,
directly or indirectly, our financing subsidiary in connection with
the issuance by that entity of preferred securities or other
securities which are intended to qualify for "Tier 1" capital
treatment, such as the approximately $31.1 million of 9.00%
Subordinated Debentures due September 30, 2028 that we issued to
Wintrust Capital Trust I in 1998.
We expect from time to time to incur additional indebtedness, and there is
no limitation under the indenture on the amount of indebtedness we may incur. We
had consolidated senior and subordinated debt of $82.8 million outstanding
principal amount at March 31, 2000. Although a portion of these amounts is
expected to be repaid with a portion of the proceeds from the sale of the
debentures, we expect to incur additional senior or subordinated debt in the
future.
Payment and Paying Agents
Generally, payment of principal of and interest on the debentures will be
made at the office of the indenture trustee in Wilmington, Delaware. However, we
have the option to make payment of any interest by (a) check mailed to the
address of the person entitled to payment at the address listed in the register
of holders of the debentures, or (b) wire transfer to an account maintained by
the person entitled thereto as specified in the register of holders of the
debentures, provided that proper transfer instructions have been received by the
applicable record date. Payment of any interest on debentures will be made to
the person in whose name the debenture is registered at the close of business on
the regular record date for the interest payment, except in the case of
defaulted interest.
Any moneys deposited with the indenture trustee or any paying agent for the
debentures, or then held by us in trust, for the payment of the principal of or
interest on the debentures and remaining unclaimed for two years after the
principal or interest has become due and payable, will be repaid to us on June
30 of each year. If we hold any of this money in trust, then it will be
discharged from the trust to us and the holder of the debenture will thereafter
look, as a general unsecured creditor, only to us for payment.
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Registrar and Transfer Agent
The indenture trustee will act as the registrar and the transfer agent for
the debentures. Debentures may be presented for registration of transfer, with
the form of transfer endorsed thereon, or a satisfactory written instrument of
transfer, duly executed, at the office of the registrar. Provided that we
maintain a transfer agent in Wilmington, Delaware, we may rescind the
designation of any transfer agent or approve a change in the location through
which any transfer agent acts. We may at any time designate additional transfer
agents with respect to the debentures.
If we redeem any of the debentures, neither we nor the indenture trustee
will be required to (a) issue, register the transfer of or exchange any
debentures during a period beginning at the opening of business 15 days before
the day of the mailing of and ending at the close of business on the day of the
mailing of the relevant notice of redemption, or (b) transfer or exchange any
debentures so selected for redemption, except, in the case of any debentures
being redeemed in part, any portion not to be redeemed.
Modification of Indenture
We and the indenture trustee may, from time to time without the consent of
the holders of the debentures, amend, waive our rights under or supplement the
indenture for purposes which do not materially adversely affect the rights of
the holders of the debentures. Other changes may be made by us and the indenture
trustee with the consent of the holders of a majority in principal amount of the
outstanding debentures. However, without the consent of the holder of each
outstanding debenture affected by the proposed modification, no modification
may:
. extend the maturity date of the debentures; or
. reduce the principal amount or the rate or extend the time of payment of
interest; or
. reduce the percentage of principal amount of debentures required to amend
the indenture.
As long as any of the preferred securities remain outstanding, no modification
of the indenture may be made that requires the consent of the holders of the
debentures, no termination of the indenture may occur, and no waiver of any
event of default under the indenture may be effective, without the prior consent
of the holders of a majority of the aggregate liquidation amount of the
preferred securities.
Debenture Events of Default
The indenture provides that any one or more of the following events with
respect to the debentures that has occurred and is continuing constitutes an
event of default under the indenture:
. our failure to pay any interest on the debentures for 30 days after the
due date, except where we have properly deferred the interest payment;
. our failure to pay any principal on the debentures when due whether at
maturity, upon redemption or otherwise;
. our failure to observe or perform in any material respect any other
covenants or agreements contained in the indenture for 90 days after
written notice to us from the indenture trustee or the holders of at
least 25% in aggregate outstanding principal amount of the debentures; or
. our bankruptcy, insolvency or reorganization or dissolution of the trust.
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The holders of a majority of the aggregate outstanding principal amount of
the debentures have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the indenture trustee. The indenture
trustee, or the holders of at least 25% in aggregate outstanding principal
amount of the debentures, may declare the principal due and payable immediately
upon an event of default under the indenture. The holders of a majority of the
outstanding principal amount of the debentures may rescind and annul the
declaration and waive the default if the default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration, has been deposited with the indenture trustee.
The holders may not annul the declaration and waive a default if the default is
the non-payment of the principal of the debentures which has become due solely
by the acceleration. Should the holders of the debentures fail to annul the
declaration and waive the default, the holders of at least 25% in aggregate
liquidation amount of the preferred securities will have this right.
If an event of default under the indenture has occurred and is continuing,
the property trustee will have the right to declare the principal of and the
interest on the debentures, and any other amounts payable under the indenture,
to be immediately due and payable and to enforce its other rights as a creditor
with respect to the debentures.
We are required to file annually with the indenture trustee a certificate
as to whether or not we are in compliance with all of the conditions and
covenants applicable to us under the indenture.
Enforcement of Certain Rights by Holders of the Preferred Securities
If an event of default under the indenture has occurred and is continuing
and the event is attributable to the failure by us to pay interest on or
principal of the debentures on the date on which the payment is due and payable,
then a holder of preferred securities may institute a direct action against us
to compel us to make the payment. We may not amend the indenture to remove the
foregoing right to bring a direct action without the prior written consent of
all of the holders of the preferred securities. If the right to bring a direct
action is removed, the trust may become subject to the reporting obligations
under the Securities Exchange Act of 1934.
The holders of the preferred securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the debentures unless there has been an event of
default under the trust agreement. See "Description of the Preferred Securities
- --Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
We may not consolidate with or merge into any other entity or convey or
transfer our properties and assets substantially as an entirety to any entity,
and no entity may be consolidated with or merged into us or sell, convey,
transfer or otherwise dispose of its properties and assets substantially as an
entirety to us, unless:
. if we consolidate with or merge into another person or convey or transfer
our properties and assets substantially as an entirety to any person, the
successor person is organized under the laws of the United States or any
state or the District of Columbia, and the successor person expressly
assumes by supplemental indenture our obligations on the debentures;
. immediately after the transaction, no event of default under the
indenture, and no event which, after notice or lapse of time, or both,
would become an event of default under the indenture, has occurred and is
continuing; and
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. other conditions as prescribed in the indenture are met.
Under certain circumstances, if we consolidate or merge with another
entity, or transfer or sell substantially all of our assets to another entity,
such transaction may be considered to involve a replacement of the trust, and
the provisions of the trust agreement relating to a replacement of the trust
would apply to such transaction. See "Description of the Preferred Securities--
Mergers, Consolidations, Amalgamations or Replacements of the Trust."
Satisfaction and Discharge
The indenture will cease to be of further effect and we will be deemed to
have satisfied and discharged our obligations under the indenture when all
debentures not previously delivered to the indenture trustee for cancellation:
. have become due and payable;
. will become due and payable at their stated maturity within one year or
are to be called for redemption within one year, and we deposit or cause
to be deposited with the indenture trustee funds, in trust, for the
purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the debentures not previously delivered to the indenture
trustee for cancellation, for the principal and interest due to the date
of the deposit or to the stated maturity or redemption date, as the case
may be.
We may still be required to provide officers' certificates, opinions of
counsel and pay fees and expenses due after these events occur.
Governing Law
The indenture and the debentures will be governed by and construed in
accordance with Illinois law.
Information Concerning the Indenture Trustee
The indenture trustee is subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to these provisions, the indenture trustee is under no obligation to
exercise any of the powers vested in it by the indenture at the request of any
holder of debentures, unless offered reasonable security or indemnity by the
holder against the costs, expenses and liabilities which might be incurred. The
indenture trustee is not required to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties if the
indenture trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it.
Miscellaneous
We have agreed, pursuant to the indenture, for so long as preferred
securities remain outstanding:
. to maintain directly or indirectly 100% ownership of the common
securities of the trust, except that certain successors that are
permitted pursuant to the indenture may succeed to our ownership of the
common securities;
. not to voluntarily terminate, wind up or liquidate the trust without
prior approval of the Federal Reserve, if required;
. to use our reasonable efforts to cause the trust (a) to remain a business
trust (and to avoid involuntary termination, winding up or liquidation),
except in connection with a distribution of debentures, the redemption of
all of the trust securities of the trust or mergers, consolidations or
amalgamations, each as permitted by the trust agreement; and (b) to
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otherwise continue not to be treated as an association taxable as a
corporation or partnership for federal income tax purposes; and
. to use our reasonable efforts to cause each holder of trust securities to
be treated as owning an individual beneficial interest in the debentures.
BOOK-ENTRY ISSUANCE
General
DTC will act as securities depositary for the preferred securities and may
act as securities depositary for all of the debentures in the event of the
distribution of the debentures to the holders of preferred securities. Except as
described below, the preferred securities will be issued only as registered
securities in the name of Cede & Co. (DTC's nominee). One or more global
preferred securities will be issued for the preferred securities and will be
deposited with DTC.
DTC is a limited purpose trust company organized under New York banking
law, a "banking organization" within the meaning of the New York banking law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to Section 17A of the Securities Exchange Act of 1934. DTC
holds securities that its participants deposit with DTC. DTC also facilitates
the settlement among participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its direct participants and by
the New York Stock Exchange, the American Stock Exchange and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to indirect participants, such as securities brokers and dealers,
banks and trust companies that clear through or maintain custodial relationships
with direct participants, either directly or indirectly. The rules applicable to
DTC and its participants are on file with the SEC.
Purchases of preferred securities within the DTC system must be made by or
through direct participants, which will receive a credit for the preferred
securities on DTC's records. The ownership interest of each actual purchaser of
each preferred security ("beneficial owner") is in turn to be recorded on the
direct and indirect participants' records. Beneficial owners will not receive
written confirmation from DTC of their purchases, but beneficial owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the direct or indirect
participants through which the beneficial owners purchased preferred securities.
Transfers of ownership interests in the preferred securities are to be
accomplished by entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates representing
their ownership interest in preferred securities, except if use of the book-
entry-only system for the preferred securities is discontinued.
DTC will have no knowledge of the actual beneficial owners of the preferred
securities; DTC's records reflect only the identity of the direct participants
to whose accounts the preferred securities are credited, which may or may not be
the beneficial owners. The participants will remain responsible for keeping
account of their holdings on behalf of their customers.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be accurate, but we and the
trust assume no responsibility for the
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accuracy thereof. Neither we nor the trust have any responsibility for the
performance by DTC or its participants of their respective obligations as
described in this prospectus or under the rules and procedures governing their
respective operations.
Notices and Voting
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the preferred securities. If less than all of the preferred securities are being
redeemed, the amount to be redeemed will be determined in accordance with the
trust agreement.
Although voting with respect to the preferred securities is limited to the
holders of record of the preferred securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to preferred securities. Under its usual procedures, DTC would mail an
omnibus proxy to the property trustee as soon as possible after the record date.
The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those
direct participants to whose accounts the preferred securities are credited on
the record date.
Distribution of Funds
The property trustee will make distribution payments on the preferred
securities to DTC. DTC's practice is to credit direct participants' accounts on
the relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payments
on the payment date. Payments by participants to beneficial owners will be
governed by standing instructions and customary practices and will be the
responsibility of the participant and not of DTC, the property trustee, the
trust or us, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions to DTC is the responsibility
of the property trustee, disbursement of the payments to direct participants is
the responsibility of DTC, and disbursements of the payments to the beneficial
owners is the responsibility of direct and indirect participants.
Successor Depositaries and Termination of Book-Entry System
DTC may discontinue providing its services with respect to any of the
preferred securities at any time by giving reasonable notice to the property
trustee or us. If no successor securities depositary is obtained, definitive
certificates representing the preferred securities are required to be printed
and delivered. We also have the option to discontinue use of the system of book-
entry transfers through DTC (or a successor depositary). After an event of
default under the indenture, the holders of a majority in liquidation amount of
preferred securities may determine to discontinue the system of book-entry
transfers through DTC. In these events, definitive certificates for the
preferred securities will be printed and delivered.
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DESCRIPTION OF THE GUARANTEE
The preferred securities guarantee agreement will be executed and delivered
by us concurrently with the issuance of the preferred securities for the benefit
of the holders of the preferred securities. The guarantee agreement will be
qualified as an indenture under the Trust Indenture Act. Wilmington Trust
Company, the guarantee trustee, will act as trustee for purposes of complying
with the provisions of the Trust Indenture Act, and will also hold the guarantee
for the benefit of the holders of the preferred securities. Prospective
investors are urged to read the form of the guarantee agreement, which has been
filed as an exhibit to the registration statement of which this prospectus forms
a part.
General
We agree to pay in full on a subordinated basis, to the extent described in
the guarantee agreement, the guarantee payments (as defined below) to the
holders of the preferred securities, as and when due, regardless of any defense,
right of set-off or counterclaim that the trust may have or assert other than
the defense of payment.
The following payments with respect to the preferred securities are called
the "guarantee payments" and, to the extent not paid or made by the trust and to
the extent that the trust has funds available for those distributions, will be
subject to the guarantee:
. any accumulated and unpaid distributions required to be paid on the
preferred securities;
. with respect to any preferred securities called for redemption, the
redemption price; and
. upon a voluntary or involuntary dissolution, winding up or termination
of the trust (other than in connection with the distribution of
debentures to the holders of preferred securities in exchange for
preferred securities), the lesser of:
(a) the amount of the liquidation distribution; and
(b) the amount of assets of the trust remaining available for
distribution to holders of preferred securities in liquidation of
the trust.
We may satisfy our obligations to make a guarantee payment by making a direct
payment of the required amounts to the holders of the preferred securities or by
causing the trust to pay the amounts to the holders.
The guarantee agreement is a guarantee, on a subordinated basis, of the
guarantee payments, but the guarantee only applies to the extent the trust has
funds available for those distributions. If we do not make interest payments on
the debentures purchased by the trust, the trust will not have funds available
to make the distributions and will not pay distributions on the preferred
securities.
Status of the Guarantee
The guarantee constitutes our unsecured obligation that ranks subordinate
and junior in right of payment to all of our senior and subordinated debt in the
same manner as the debentures. We expect to incur additional indebtedness in the
future, although we have no specific plans in this regard presently, and neither
the indenture nor the trust agreement limits the amounts of the obligations that
we may incur.
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The guarantee constitutes a guarantee of payment and not of collection. If
we fail to make guarantee payments when required, holders of preferred
securities may institute a legal proceeding directly against us to enforce their
rights under the guarantee without first instituting a legal proceeding against
any other person or entity.
The guarantee will not be discharged except by payment of the guarantee
payments in full to the extent not paid by the trust or upon distribution of the
debentures to the holders of the preferred securities. Because we are a bank
holding company, our right to participate in any distribution of assets of any
subsidiary upon the subsidiary's liquidation or reorganization or otherwise is
subject to the prior claims of creditors of that subsidiary, except to the
extent we may be recognized as a creditor of that subsidiary. Our obligations
under the guarantee, therefore, will be effectively subordinated to all existing
and future liabilities of our subsidiaries, and claimants should look only to
our assets for payments under the guarantee.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the preferred securities, in which case no vote will be
required, the guarantee may be amended only with the prior approval of the
holders of a majority of the aggregate liquidation amount of the outstanding
preferred securities. See "Description of the Preferred Securities -- Voting
Rights; Amendment of Trust Agreement."
Events of Default; Remedies
An event of default under the guarantee agreement will occur upon our
failure to make any required guarantee payments or to perform any other
obligations under the guarantee. The holders of a majority in aggregate
liquidation amount of the preferred securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the guarantee trustee in respect of the guarantee and may direct the exercise of
any power conferred upon the guarantee trustee under the guarantee agreement.
Any holder of preferred securities may institute and prosecute a legal
proceeding directly against us to enforce its rights under the guarantee without
first instituting a legal proceeding against the trust, the guarantee trustee or
any other person or entity.
We are required to provide to the guarantee trustee annually a certificate
as to whether or not we are in compliance with all of the conditions and
covenants applicable to us under the guarantee agreement.
Termination of the Guarantee
The guarantee will terminate and be of no further force and effect upon:
. full payment of the redemption price of the preferred securities;
. full payment of the amounts payable upon liquidation of the trust; or
. distribution of the debentures to the holders of the preferred
securities.
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If at any time any holder of the preferred securities must restore payment of
any sums paid under the preferred securities or the guarantee, the guarantee
will continue to be effective or will be reinstated with respect to such
amounts.
Information Concerning the Guarantee Trustee
The guarantee trustee, other than during the occurrence and continuance of
our default in performance of the guarantee, undertakes to perform only those
duties as are specifically set forth in the guarantee. When an event of default
has occurred and is continuing, the guarantee trustee must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to those provisions, the guarantee
trustee is under no obligation to exercise any of the powers vested in it by the
guarantee at the request of any holder of any preferred securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
Expense Agreement
We will, pursuant to the Agreement as to Expenses and Liabilities entered
into by us and the trust under the trust agreement, irrevocably and
unconditionally guarantee to each person or entity to whom the trust becomes
indebted or liable, the full payment of any costs, expenses or liabilities of
the trust, other than obligations of the trust to pay to the holders of the
preferred securities or other similar interests in the trust of the amounts due
to the holders pursuant to the terms of the preferred securities or other
similar interests, as the case may be. Third party creditors of the trust may
proceed directly against us under the expense agreement, regardless of whether
they had notice of the expense agreement.
Governing Law
The guarantee will be governed by Illinois law.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE
DEBENTURES AND THE GUARANTEE
Full and Unconditional Guarantee
We irrevocably guarantee, as and to the extent described in this
prospectus, payments of distributions and other amounts due on the preferred
securities, to the extent the trust has funds available for the payment of these
amounts. We and the trust believe that, taken together, our obligations under
the debentures, the indenture, the trust agreement, the expense agreement and
the guarantee agreement provide, in the aggregate, a full, irrevocable and
unconditional guarantee, on a subordinated basis, of payment of distributions
and other amounts due on the preferred securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes a guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the obligations of the trust under the preferred securities.
If and to the extent that we do not make payments on the debentures, the
trust will not pay distributions or other amounts due on the preferred
securities. The guarantee does not cover payment of distributions when the trust
does not have sufficient funds to pay the distributions. In this event, the
remedy of a holder of preferred securities is to institute a legal proceeding
directly against us for enforcement of payment of the distributions to the
holder. Our obligations under the guarantee are subordinated and junior in right
of payment to all of our other indebtedness.
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Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
debentures, these payments will be sufficient to cover distributions and other
payments due on the preferred securities, primarily because:
. the aggregate principal amount of the debentures will be equal to the
sum of the aggregate stated liquidation amount of the trust securities;
. the interest rate and interest and other payment dates on the debentures
will match the distribution rate and distribution and other payment
dates for the preferred securities;
. we will pay for any and all costs, expenses and liabilities of the
trust, except the obligations of the trust to pay to holders of the
preferred securities the amounts due to the holders pursuant to the
terms of the preferred securities; and
. the trust will not engage in any activity that is not consistent with
the limited purposes of the trust.
Enforcement Rights of Holders of Preferred Securities
A holder of any preferred security may institute a legal proceeding
directly against us to enforce its rights under the guarantee without first
instituting a legal proceeding against the guarantee trustee, the trust or any
other person. A default or event of default under any of our senior or
subordinated debt would not constitute a default or event of default under the
trust agreement. In the event, however, of payment defaults under, or
acceleration of, our senior or subordinated debt, the subordination provisions
of the indenture provide that no payments may be made in respect of the
debentures until the obligations have been paid in full or any payment default
has been cured or waived. Failure to make required payments on the debentures
would constitute an event of default under the trust agreement.
Limited Purpose of the Trust
The preferred securities evidence preferred undivided beneficial interests
in the assets of the trust. The trust exists for the exclusive purposes of
issuing the trust securities, investing the proceeds thereof in debentures and
engaging in only those other activities necessary, advisable or incidental
thereto. A principal difference between the rights of a holder of a preferred
security and the rights of a holder of a debenture is that a holder of a
debenture is entitled to receive from us the principal amount of and interest
accrued on debentures held, while a holder of preferred securities is entitled
to receive distributions from the trust (or from us under the guarantee) if and
to the extent the trust has funds available for the payment of the
distributions.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding-up or liquidation of
the trust involving the liquidation of the debentures, the holders of the
preferred securities will be entitled to receive, out of assets held by the
trust, the liquidation distribution in cash. See "Description of the Preferred
Securities -- Liquidation Distribution Upon Termination."
Upon our voluntary or involuntary liquidation or bankruptcy, the property
trustee, as holder of the debentures, would be a subordinated creditor of ours.
Therefore, the property trustee would be subordinated in right of payment to all
of our senior and subordinated debt, but is entitled to receive
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payment in full of principal and interest before any of our shareholders receive
payments or distributions. Since we are the guarantor under the guarantee and
have agreed to pay for all costs, expenses and liabilities of the trust other
than the obligations of the trust to pay to holders of the preferred securities
the amounts due to the holders pursuant to the terms of the preferred
securities, the positions of a holder of the preferred securities and a holder
of the debentures relative to our other creditors and to our stockholders in the
event of liquidation or bankruptcy are expected to be substantially the same.
FEDERAL INCOME TAX CONSEQUENCES
General
The following summary of the material federal income tax considerations
that may be relevant to the purchasers of preferred securities, insofar as the
discussion relates to matters of law and legal conclusions, represents the
opinion of Vedder, Price, Kaufman & Kammholz, counsel to Wintrust and the trust.
The conclusions expressed herein are based upon current provisions of the
Internal Revenue Code of 1986, as amended, regulations thereunder and current
administrative rulings and court decisions, all of which are subject to change
at any time, with possible retroactive effect. Subsequent changes may cause tax
consequences to vary substantially from the consequences described below.
Furthermore, the authorities on which the following summary is based are subject
to various interpretations, and it is therefore possible that the federal income
tax treatment of the purchase, ownership and disposition of preferred securities
may differ from the treatment described below.
No attempt has been made in the following discussion to comment on all
federal income tax matters affecting purchasers of preferred securities.
Moreover, the discussion generally focuses on holders of preferred securities
who are individual citizens or residents of the United States and trust and
estates whose federal taxable income is taxed in the same manner as individual
citizens or residents of the United States, and who acquire preferred securities
on their original issue at their offering price and hold preferred securities as
capital assets. The discussion has only limited application to dealers in
securities, corporations, partnerships, or nonresident aliens and does not
address all the tax consequences that may be relevant to holders who may be
subject to special tax treatment, such as, for example, banks, thrifts, real
estate investment trusts, regulated investment companies, insurance companies,
dealers in securities or currencies, tax-exempt investors or persons that will
hold the preferred securities as a position in a "straddle," as part of a
"synthetic security" or "hedge," as part of a "conversion transaction" or other
integrated investment, or as other than a capital asset. The following summary
also does not address the tax consequences to persons that have a functional
currency other than the U.S. dollar or the tax consequences to shareholders,
partners or beneficiaries of a holder of preferred securities. Further, it does
not include any description of any alternative minimum tax consequences or the
tax laws of any state or local government or of any foreign government that may
be applicable to the preferred securities. Accordingly, each prospective
investor should consult, and should rely exclusively on, the investor's own tax
advisors in analyzing the federal, state, local and foreign tax consequences of
the purchase, ownership or disposition of preferred securities.
Classification of the Debentures
Based on advice of counsel, we intend to take the position that the
debentures will be classified for federal income tax purposes as indebtedness of
Wintrust under current law, and, by acceptance of a preferred security, each
holder covenants to treat the debentures as indebtedness and the preferred
securities as evidence of an indirect beneficial ownership interest in the
debentures. No assurance can be given, however, that this position will not be
challenged by the Internal Revenue Service or, if
50
<PAGE>
challenged, that it will not be successful. The remainder of this discussion
assumes that the debentures will be classified for federal income tax purposes
as indebtedness of Wintrust.
Classification of the Trust
With respect to the preferred securities, Vedder, Price, Kaufman &
Kammholz, counsel for Wintrust and the trust, has rendered its opinion generally
to the effect that, under then current law and assuming full compliance with the
terms of the trust agreement and indenture, the trust will be classified for
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation. Accordingly, for federal income tax purposes, each holder of
preferred securities generally will be treated as owning an undivided beneficial
interest in the debentures, and each holder will be required to include in its
gross income any interest with respect to the debentures at the time such
interest is accrued or is received, in accordance with the holder's method of
accounting. If the debentures were determined to be subject to the original
issue discount ("OID") rules, each holder would instead be required to include
in its gross income any OID accrued with respect to its allocable share of the
debentures whether or not cash was actually distributed to the holder.
Interest Payment Period and Original Issue Discount
Beneficial owners (including cash basis taxpayers) of debt instruments
issued with OID must generally include such OID in income as it accrues on a
constant yield method even if there is not a corresponding receipt of cash
attributable to such income. A debt instrument such as the debentures will
generally be treated as issued with OID if the stated interest on the instrument
does not constitute "qualified stated interest." Qualified stated interest is
generally any one of a series of stated interest payments on an instrument that
are unconditionally payable at least annually at a single fixed rate. In
determining whether stated interest on an instrument is unconditionally payable
and thus constitutes qualified stated interest, remote contingencies as to the
timely payment of stated interest are ignored. In the case of the debentures, we
have concluded that the likelihood of exercising our option to defer payments of
interest is remote. This is in part because we have commenced paying dividends
on our common stock and intend to continue to do so, and we would be unable to
continue paying these dividends, which could adversely affect the market for our
common stock, if we deferred our payments under the debentures.
If the option to defer any payment of interest was determined not to be
"remote" or if Wintrust actually exercises its option to defer the payment of
interest, the debentures would be treated as issued with OID at the time of
issuance or at the time of such exercise, as the case may be, and all stated
interest would thereafter be treated as OID as long as the debentures remained
outstanding. In such event, all of a holder's taxable interest income in respect
of the debentures would constitute OID that would have to be included in income
on a constant yield method before the receipt of the cash attributable to such
income, regardless of such holder's method of tax accounting, and actual
distributions of stated interest would not be reported as taxable income.
Consequently, a holder of preferred securities would be required to include such
OID in gross income even though Wintrust would not make any actual cash payments
during an extension period.
The above information is based on promulgated Treasury Regulations, which
have not been interpreted by any court decisions or addressed in any ruling or
other pronouncements of the IRS, and it is possible that the IRS could take a
position contrary to the conclusions herein.
Because income on the preferred securities will constitute interest,
corporate holders of preferred securities will not be entitled to a dividends-
received deduction with respect to any income recognized with respect to the
preferred securities.
51
<PAGE>
Market Discount and Acquisition Premium
Holders of preferred securities other than a holder who purchased the
preferred securities upon original issuance may be considered to have acquired
their undivided interests in the debentures with "market discount" or
"acquisition premium" as these phrases are defined for federal income tax
purposes. Such holders are advised to consult their tax advisors as to the
income tax consequences of the acquisition, ownership and disposition of the
preferred securities.
Receipt of Debentures or Cash Upon Liquidation of the Trust
Under the circumstances described under "Description of the Preferred
Securities -- Redemption or Exchange" and "-- Liquidation Distribution Upon
Termination," the debentures may be distributed to holders of preferred
securities upon a liquidation of the trust. Under current federal income tax
law, such a distribution would be treated as a nontaxable event to the holder
and would result in the holder having an aggregate tax basis in the debentures
received in the liquidation equal to the holder's aggregate tax basis in the
preferred securities immediately before the distribution. A holder's holding
period in debentures received in liquidation of the trust would include the
period for which the holder held the preferred securities.
If, however, a Tax Event occurs which results in the trust being treated as
an association taxable as a corporation, the distribution would likely
constitute a taxable event to holders of the preferred securities. Under certain
circumstances described herein, the debentures may be redeemed for cash and the
proceeds of the redemption distributed to holders in redemption of their
preferred securities. Under current law, such a redemption should, to the extent
that it constitutes a complete redemption, constitute a taxable disposition of
the redeemed preferred securities, and, for federal income tax purposes, a
holder should therefore recognize gain or loss as if the holder sold the
preferred securities for cash.
Disposition of Preferred Securities
A holder that sells preferred securities will recognize gain or loss equal
to the difference between the amount realized on the sale of the preferred
securities and the holder's adjusted tax basis in the preferred securities. A
holder's adjusted tax basis in the preferred securities generally will be its
initial purchase price increased by OID, if any, previously includible in the
holder's gross income to the date of disposition and decreased by payments, if
any, received on the preferred securities in respect of OID to the date of
disposition. A gain or loss of this kind will generally be a capital gain or
loss and will be a long-term capital gain or loss if the preferred securities
have been held for more than one year at the time of sale.
The preferred securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
debentures. A holder that disposes of its preferred securities between record
dates for payments of distributions thereon will be required to include accrued
but unpaid interest on the debentures through the date of disposition in income
as ordinary income, and to add the amount to its adjusted tax basis in its
proportionate share of the underlying debentures deemed disposed of. Any OID
included in income will increase a holder's adjusted tax basis as discussed
above. To the extent the selling price is less than the holder's adjusted tax
basis a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
federal income tax purposes.
52
<PAGE>
Effect of Possible Changes in Tax Laws
Congress and the Clinton Administration have considered certain proposed
tax law changes in the past that would, among other things, generally deny
corporate issuers a deduction for interest in respect of certain debt
obligations if the debt obligations have a maximum term in excess of 15 years
and are not shown as indebtedness on the issuer's applicable consolidated
balance sheet. Other proposed tax law changes would have denied interest
deductions if the term was in excess of 20 years. Although these proposed tax
law changes have not been enacted into law, there can be no assurance that tax
law changes will not be reintroduced into future legislation which, if enacted
after the date hereof, may adversely affect the federal income tax deductibility
of interest payable on the debentures. Accordingly, there can be no assurance
that a Tax Event will not occur. A Tax Event would permit us, upon approval of
the Federal Reserve if then required to cause a redemption of the preferred
securities before, as well as after, June 30, 2005. See "Description of the
Debentures -- Redemption" and "Description of the Preferred Securities --
Redemption or Exchange -- Redemption upon a Tax Event, Investment Company Event
or Capital Treatment Event."
Backup Withholding and Information Reporting
Interest paid, or, if applicable, OID accrued, on the preferred securities
held of record by individual citizens or residents of the United States, or
certain trusts, estates and partnerships, will be reported to the Internal
Revenue Service on Forms 1099-INT, or, where applicable, Forms 1099-OID, which
forms should be mailed to the holders by January 31 following each calendar
year. Payments made on, and proceeds from the sale of, the preferred securities
may be subject to a "backup" withholding tax (currently at 31%) unless the
holder complies with certain identification and other requirements. Any amounts
withheld under the backup withholding rules will be allowed as a credit against
the holder's federal income tax liability, provided the required information is
provided to the Internal Revenue Service.
The federal income tax discussion set forth above is included for general
information only and may not be applicable depending upon the particular
situation of a holder of preferred securities. Holders of preferred securities
should consult their tax advisors with respect to the tax consequences to them
of the purchase, ownership and disposition of the preferred securities,
including the tax consequences under state, local, foreign and other tax laws
and the possible effects of changes in federal or other tax laws.
ERISA CONSIDERATIONS
Employee benefit plans that are subject to the Employee Retirement Income
Security Act of 1974, or Section 4975 of the Internal Revenue Code, generally
may purchase preferred securities, subject to the investing fiduciary's
determination that the investment in preferred securities satisfies ERISA's
fiduciary standards and other requirements applicable to investments by the
plan.
In any case, we and/or any of our affiliates may be considered a "party in
interest" (within the meaning of ERISA) or a "disqualified person" (within the
meaning of Section 4975 of the Internal Revenue Code) with respect to certain
plans. These plans generally include plans maintained or sponsored by, or
contributed to by, any such persons with respect to which we or any of our
affiliates are a fiduciary or plans for which we or any of our affiliates
provide services. The acquisition and ownership of preferred securities by a
plan (or by an individual retirement arrangement or other plans described in
Section 4975(e)(1) of the Internal Revenue Code) with respect to which we or any
of our affiliates are considered a party in interest or a disqualified person
may constitute or result in a prohibited transaction
53
<PAGE>
under ERISA or Section 4975 of the Internal Revenue Code, unless the preferred
securities are acquired pursuant to and in accordance with an applicable
exemption.
As a result, plans with respect to which we or any of our affiliates or any
of its affiliates is a party in interest or a disqualified person should not
acquire preferred securities unless the preferred securities are acquired
pursuant to and in accordance with an applicable exemption. Any other plans or
other entities whose assets include plan assets subject to ERISA or Section 4975
of the Internal Revenue Code proposing to acquire preferred securities should
consult with their own counsel.
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement among
Wintrust, the trust and the underwriters named below, for whom Stifel, Nicolaus
& Company, Incorporated and Howe Barnes Investments, Inc. are acting as
representatives (the "Representatives"), the underwriters have severally agreed
to purchase from the trust, and the trust has agreed to sell to them, an
aggregate of 1,800,000 preferred securities in the amounts set forth below
opposite their respective names.
<TABLE>
<CAPTION>
Number of
Underwriters Preferred Securities
- ------------ --------------------
<S> <C>
Stifel, Nicolaus & Company, Incorporated.....
Howe Barnes Investments, Inc. ...............
---------
Total..................................... 1,800,000
=========
</TABLE>
In the underwriting agreement, the obligations of the underwriters are
subject to approval of certain legal matters by their counsel and to various
other conditions. Under the terms and conditions of the underwriting agreement,
the underwriters are committed to accept and pay for all of the preferred
securities, if any are taken.
The underwriters propose to offer the preferred securities directly to the
public at the public offering price set forth on the cover page of this
prospectus, and to certain securities dealers (who may include the underwriters)
at this price, less a concession not in excess of $ ________ per preferred
security. The underwriters may allow, and the selected dealers may reallow, a
concession not in excess of $ per preferred security to certain brokers and
dealers. After the preferred securities are released for sale to the public, the
offering price and other selling terms may from time to time be changed by the
underwriters.
The trust has granted to the underwriters an option, exercisable within 30
days after the date of this prospectus, to purchase up to 200,000 additional
preferred securities at the same price per preferred security to be paid by the
underwriters for the other preferred securities being offered. If the
underwriters purchase any of the additional preferred securities under this
option, each underwriter will be committed to purchase the additional shares in
approximately the same proportion allocated to them in the table above. The
underwriters may exercise the option only for the purpose of covering over-
allotments, if any, made in connection with the distribution of the preferred
securities being offered.
54
<PAGE>
If the underwriters exercise their option to purchase additional preferred
securities, the trust will issue and sell to us additional common securities and
we will issue and sell to the trust junior subordinated debentures in an
aggregate principal amount equal to the total aggregate liquidation amount of
the additional preferred securities being purchased under the option and the
additional common securities sold to Wintrust.
The table below shows the price and proceeds on a per security and
aggregate basis. The proceeds to be received by the trust as shown in the table
below do not reflect estimated expenses of $250,000 payable by Wintrust.
<TABLE>
<CAPTION>
Per Preferred
Security Total
------------- -----------
<S> <C> <C>
Public Offering Price................... $10.00 $18,000,000
Proceeds to Wintrust Capital Trust II... $10.00 $18,000,000
</TABLE>
In view of the fact that the proceeds of the sale of the preferred
securities will be used by the trust to purchase the junior subordinated
debentures from Wintrust, Wintrust has agreed to pay the underwriters $ ______
per preferred security, or a total of $ _______ , as compensation for arranging
the investment in the junior subordinated debentures. Should the underwriters
exercise the over-allotment option, an aggregate of $ _______ will be paid to
the underwriters for arranging the investment in the junior subordinated
debentures.
The offering of the preferred securities is made for delivery when,
as and if accepted by the underwriters and subject to prior sale and to
withdrawal, cancellation or modification of the offering without notice. The
underwriters reserve the right to reject any order for the purchase of the
preferred securities.
Wintrust and the trust have agreed to indemnify the several underwriters
against several liabilities, including liabilities under the Securities Act of
1933.
Application has been made to have the preferred securities approved for
quotation on the Nasdaq National Market. The Representatives have advised the
trust that they presently intend to make a market in the preferred securities
after the commencement of trading on Nasdaq, but no assurances can be made as to
the liquidity of the preferred securities or that an active and liquid market
will develop or, if developed, that the market will continue. The offering price
and distribution rate have been determined by negotiations among representatives
of Wintrust and the underwriters, and the offering price of the preferred
securities may not be indicative of the market price following the offering. The
Representatives will have no obligation to make a market in the preferred
securities, however, and may cease market-making activities, if commenced, at
any time.
In connection with the offering, the underwriters may engage in
transactions that are intended to stabilize, maintain or otherwise affect the
price of the preferred securities during and after the offering, such as the
following:
. the underwriters may over-allot or otherwise create a short position
in the preferred securities for their own account by selling more
preferred securities than have been sold to them;
. the underwriters may elect to cover any short position by purchasing
preferred securities in the open market or by exercising the over-
allotment option;
55
<PAGE>
. the underwriters may stabilize or maintain the price of the preferred
securities by bidding;
. the underwriters may engage in passive market making transactions; and
. the underwriters may impose penalty bids, under which selling
concessions allowed to syndicate members or other broker-dealers
participating in this offering are reclaimed if preferred securities
previously distributed in the offering are repurchased in connection
with stabilization transactions or otherwise.
The effect of these transactions may be to stabilize or maintain the market
price at a level above that which might otherwise prevail in the open market.
The imposition of a penalty bid may also affect the price of the preferred
securities to the extent that it discourages resales. No representation is made
as to the magnitude or effect of any such stabilization or other transactions.
Such transactions may be effected on the Nasdaq National Market or otherwise
and, if commenced, may be discontinued at any time.
Because the National Association of Securities Dealers, Inc. may view the
preferred securities as interests in a direct participation program, the offer
and sale of the preferred securities is being made in compliance with the
provisions of Rule 2810 under the NASD Conduct Rules.
LEGAL MATTERS
Legal matters, including matters relating to federal income tax
considerations, for Wintrust and the trust will be passed upon by Vedder, Price,
Kaufman & Kammholz, Chicago, Illinois, counsel to Wintrust and the trust.
Certain legal matters will be passed upon for the underwriters by Bryan Cave
LLP, St. Louis, Missouri. Vedder, Price, Kaufman & Kammholz and Bryan Cave LLP
will rely on the opinion of Richards, Layton & Finger, P.A. as to matters of
Delaware law.
WHERE YOU CAN FIND INFORMATION
This prospectus is a part of a Registration Statement on Form S-3 filed by
Wintrust and the trust with the SEC under the Securities Act, with respect to
the preferred securities, the debentures and the guarantee. This prospectus does
not contain all the information set forth in the registration statement, certain
parts of which are omitted in accordance with the rules and regulations of the
SEC. For further information with respect to Wintrust and the securities offered
by this prospectus, reference is made to the registration statement, including
the exhibits to the registration statement and documents incorporated by
reference. Statements contained in this prospectus concerning the provisions of
such documents are necessarily summaries of such documents and each such
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the SEC.
We file periodic reports, proxy statements and other information with the
SEC. Our filings are available to the public over the Internet at the SEC's web
site at http://www.sec.gov. You may also inspect and copy these materials at the
public reference facilities of the SEC at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, as well as at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 75 Park Place, Room 1400, New York, New York 10007.
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information.
The trust is not currently subject to the information reporting
requirements of the Securities Exchange Act of 1934 and although the trust will
become subject to such requirements upon the
56
<PAGE>
effectiveness of the registration statement, it is not expected that the trust
will be required to file separate reports under the Securities Exchange Act.
Each holder of the trust securities will receive a copy of our annual
report at the same time as we furnish the annual report to the holders of our
common stock.
EXPERTS
The consolidated financial statements of Wintrust as of and for the year
ended December 31, 1999, that are incorporated by reference in our Annual Report
on Form 10-K for the year ended December 31, 1999, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report incorporated by
reference in our Annual Report. These consolidated financial statements are
incorporated by reference in this prospectus in reliance upon the report given
on the authority of Ernst & Young LLP as experts in accounting and auditing.
The consolidated financial statements of Wintrust as of December 31, 1998
and for the years ended December 31, 1998 and 1997, that are incorporated by
reference in our Annual Report on Form 10-K for the year ended December 31,
1999, have been audited by KPMG LLP, independent certified public accountants,
as stated in their report incorporated by reference in our Annual Report. Those
consolidated financial statements are incorporated by reference into this
prospectus in reliance upon that report and upon the authority of KPMG LLP as
experts in accounting and auditing.
DOCUMENTS INCORPORATED BY REFERENCE
We "incorporate by reference" into this prospectus the information in
documents we file with the SEC, which means that we can disclose important
information to you through those documents. The information incorporated by
reference is an important part of this prospectus. Some information contained in
this prospectus updates the information incorporated by reference and some
information that we file subsequently with the SEC will automatically update
this prospectus. We incorporate by reference the documents listed below:
(a) our Annual Report on Form 10-K for the year ended December 31,
1999, filed with the SEC on March 30, 2000;
(b) our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000, filed with the SEC on May 15, 2000;
(c) our Current Report on Form 8-K dated January 24, 2000, filed with
the SEC on February 11, 2000; and
(d) our Current Report on Form 8-K dated January 27, 2000, filed with
the SEC on February 11, 2000.
We also incorporate by reference any filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the initial filing of the registration statement that contains this prospectus
and before the time that all of the securities offered in this prospectus are
sold.
57
<PAGE>
You may request, and we will provide, a copy of these filings at no cost by
contacting David A. Dykstra, our Chief Financial Officer, at the following
address and phone number:
Wintrust Financial Corporation
727 North Bank Lane
Lake Forest, Illinois 60045-1951
(847) 615-4096
58
<PAGE>
===================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.......................................... 1
Selected Consolidated Financial Data............. 9
Risk Factors.................................... 11
Special Note Regarding Forward-Looking
Statements.................................... 17
Use of Proceeds................................. 18
Capitalization.................................. 19
Accounting and Regulatory Treatment............. 20
Description of the Trust........................ 21
Description of the Preferred Securities......... 22
Description of the Debentures................... 35
Book-Entry Issuance............................. 45
Description of the Guarantee.................... 46
Relationship among the Preferred Securities,
the Debentures and the Guarantee.............. 49
Federal Income Tax Consequences................. 51
ERISA Considerations............................ 54
Underwriting.................................... 55
Legal Matters................................... 57
Where You Can Find Information.................. 57
Experts......................................... 58
Documents Incorporated by Reference............. 58
</TABLE>
. You should only rely on the information contained or incorporated by
reference in this prospectus. We have not, and our underwriters have not,
authorized any person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely
on it.
. We are not, and our underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted.
. You should assume that the information appearing in this prospectus is
accurate as of the date on the front cover of this prospectus only.
. This prospectus does not constitute an offer to sell, or the solicitation of
an offer to buy, any securities other than the securities to which it
relates.
================================================================================
================================================================================
1,800,000 Preferred Securities
WINTRUST CAPITAL TRUST II
% Cumulative Trust Preferred Securities
(Liquidation Amount $10 per
Preferred Security)
Fully, irrevocably and unconditionally
guaranteed on a subordinated basis, as
described in this prospectus, by
WINTRUST FINANCIAL CORPORATION
____________________
$18,000,000
% Junior Subordinated Debentures
of
WINTRUST FINANCIAL CORPORATION
_______________
Prospectus
, 2000
_______________
Stifel, Nicolaus & Company
Incorporated
Howe Barnes Investments, Inc.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses payable in connection
with the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of such expenses will be paid by
Wintrust. All amounts shown are estimates, except the SEC registration fee and
the NASD and the Nasdaq National Market filing fees:
<TABLE>
<S> <C>
SEC registration fee.......................... $ 5,280
NASD filing fee............................... 2,500
Nasdaq National Market filing fee............. 34,750
Trustees' fees................................ 17,500
Printing and mailing expenses................. 40,000
Fees and expenses of counsel.................. 100,000
Accounting and related expenses............... 40,000
Blue Sky fees and expenses.................... 3,500
Miscellaneous................................. 6,470
--------
Total.................................... $250,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of Wintrust
pursuant to the following provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
In accordance with the Illinois Business Corporation Act (being Chapter
805, Act 5 of the Illinois Compiled Statutes), Articles Eight and Nine of the
Registrant's Certificate of Incorporation provide as follows:
ARTICLE EIGHT: No director of the corporation shall be liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director except for liability (a) for any breach of the director's
duty of loyalty to the corporation or its shareholders, (b) for acts or
omissions not in good faith or that involve intentional misconduct of a knowing
violation of law, (c) under Section 8.65 of the BCA, as the same exists or
hereafter may be amended, or (d) for any transaction from which the director
derived an improper personal benefit.
ARTICLE NINE, Paragraph 1: The corporation shall indemnify, to the full
extent that it shall have power under applicable law to do so and in a manner
permitted by such law, any person made or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation, or who is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against liabilities and expenses reasonably incurred or paid by
such person in connection with such action, suit or proceeding. The corporation
may indemnify, to the full extent that it shall have power under applicable law
to do so and in a manner permitted by such law, any person made or threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil,
II-1
<PAGE>
criminal, administrative or investigative, by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against liabilities and expenses reasonably incurred or paid by such
person in connection with such action, suit or proceeding. The words
"liabilities" and "expenses" shall include, without limitation: liabilities,
losses, damages, judgments, fines, penalties, amounts paid in settlement,
expenses, attorneys' fees and costs. Expenses incurred in defending a civil,
criminal, administrative, investigative or other action, suit or proceeding may
be paid by the corporation in advance of the final disposition of such action,
suit or proceeding in accordance with the provisions of Section 8.75 of the BCA.
The indemnification and advancement of expenses provided by this Article
shall not be deemed exclusive of any other rights to which any person
indemnified may be entitled under any statute, by-law, agreement, vote of
shareholders, or disinterested directors or otherwise, both as to action in his
official capacity and as to action in any other capacity while holding such
office, and shall continue as to a person who has ceased to be such director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
Paragraph 2: The corporation may purchase and maintain insurance on behalf
of any person referred to in the preceding paragraph against any liability
asserted against him or her and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liability under the
provisions of this Article or otherwise.
Paragraph 3: For purposes of this Article, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article with respect to the
resulting or surviving corporation as he or she would have with respect to such
constituent corporation if its separate existence had continued.
Paragraph 4: The provisions of this Article shall be deemed to be a
contract between the corporation and each director or officer who serves in any
such capacity at any time while this Article and the relevant provisions of the
BCA, or other applicable law, if any, are in effect, and any repeal or
modification of any such law or of this Article shall not affect any rights or
obligations then existing with respect to any state of facts then or theretofore
existing or any action, suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of facts.
Paragraph 5: For purposes of this Article, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to any employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner not opposed to the best interests of the corporation.
The Illinois Business Corporation Act provides for indemnification of
officers, directors, employees and agents as follows:
II-2
<PAGE>
5/8.75 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE. (a) A corporation may indemnify any person who was or is a party, or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he or she is or was a director, officer, employee or agent of the
corporation, or who is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding, if
such person acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the corporation or,
with respect to any criminal action or proceeding, that the person had
reasonable cause to believe that his or her conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party, or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection with the
defense or settlement of such action or suit, if such person acted in good faith
and in a manner he or she reasonably believed to be in, or not opposed to, the
best interests of the corporation, provided that no indemnification shall be
made with respect to any claim, issue, or matter as to which such person, has
been adjudged to have been liable to the corporation, unless, and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability, but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful, on the merits or otherwise, in the defense of
any action, suit or proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case,
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in subsections (a) or (b). Such determination
shall be made (1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or proceeding,
or (2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested directors so directs, by independent legal counsel in a written
opinion, or (3) by the shareholders.
(e) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
corporation as authorized in this Section.
II-3
<PAGE>
(f) The indemnification and advancement of expenses provided by or granted
under the other subsections of this Section shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any by-law, agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office.
(g) A corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or who is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against any liability asserted against such person
and incurred by such person in any such capacity, or arising out of his or her
status as such, whether or not the corporation would have the power to indemnify
such person against such liability under the provisions of this Section.
(h) If a corporation indemnifies or advances expenses to a director or
officer under subsection (b) of this section, the corporation shall report the
indemnification or advance in writing to the shareholders with or before the
notice of the next shareholders meeting.
(i) For purposes of this Section, references to "the corporation" shall
include, in addition to the surviving corporation, any merging corporation
(including any corporation having merged with a merging corporation) absorbed in
a merger which, if its separate existence had continued, would have had the
power and authority to indemnify its directors, officers, and employees or
agents, so that any person who was a director, officer, employee or agent of
such merging corporation, or was serving at the request of such merging
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Section with respect to the surviving
corporation as such person would have with respect to such merging corporation
if its separate existence had continued.
(j) For purposes of this Section, reference to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries. A person who acted in good faith and in a manner he or she
reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the corporation" as referred to in
this Section.
(k) The indemnification and advancement of expenses provided by or granted
under this Section shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of that person. (Last amended by P.A. 91-464, L. '99, eff. 1-1-00.)
Wintrust has purchased $20 million of insurance policies which insure
Wintrust's directors and officers against liability which they may incur as a
result of actions taken in such capacities. In addition, Wintrust maintains
fiduciary liability coverage up to a $2 million limit and trust errors and
omissions coverage up to a limit of $15 million.
The Amended and Restated Trust Agreement will provide for indemnification
of the Delaware Trustee and each of the administrative trustees by Wintrust
against any loss, damage, claims, liability, penalty or expense of any kind
incurred by the trustees in connection with the performance of their duties or
powers under the agreement in a manner reasonably believed by the trustee to be
within the scope of
II-4
<PAGE>
its authority under the agreement, except that none of these trustees will be so
indemnified for any loss, damage or claim incurred by reason of such trustee's
gross negligence, bad faith or willful misconduct. Similarly, the agreement
provides for indemnification of the Property Trustee except that the Property
Trustee is not indemnified from liability for its own negligent action,
negligent failure to act or willful misconduct. Under the agreement, Wintrust
agrees to advance those expenses incurred by any trustee in defending any such
claim, demand, action, suit or proceeding.
II-5
<PAGE>
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
1.1 Form of Underwriting Agreement for Preferred Securities.
4.1 Form of Indenture.
4.2 Form of Junior Subordinated Debenture (included as Exhibit A to Exhibit
4.1).
4.3 Certificate of Trust.
4.4 Trust Agreement.
4.5 Form of Amended and Restated Trust Agreement.
4.6 Form of Preferred Securities Certificate (included as Exhibit D to
Exhibit 4.5).
4.7 Form of Preferred Securities Guarantee Agreement.
4.8 Form of Agreement as to Expenses and Liabilities (included as Exhibit C
to Exhibit 4.5).
5.1 Opinion of Vedder, Price, Kaufman & Kammholz.
5.2 Opinion of Richards, Layton & Finger, P.A.
8.1 Opinion of Vedder, Price, Kaufman & Kammholz as to certain tax matters.
12.1 Calculation of ratios of earnings to fixed charges.
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of KPMG LLP.*
23.3 Consent of Vedder, Price, Kaufman & Kammholz (included in opinions filed
as Exhibits 5.1 and 8.1).
23.4 Consent of Richards, Layton & Finger, P.A. (included in opinion filed as
Exhibit 5.2).
24.1 Powers of Attorney (included as part of signature pages).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as trustee under the Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as trustee under the Trust
Agreement.
25.3 Form T- 1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as trustee under the Guarantee
Agreement.
_____________
*Filed herewith.
</TABLE>
II-6
<PAGE>
Item 17. Undertakings.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Company's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of
the Registrants pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrants of expenses incurred or paid by a director, officer, or
controlling person of the Registrants in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, each
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(i) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall
be deemed to be part of this Registration Statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Wintrust
Capital Trust II certifies that it has reasonable grounds to believe that it
meets all of the requirements of filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lake Forest, State of
Illinois, on May 25, 2000.
WINTRUST CAPITAL TRUST II
By: WINTRUST FINANCIAL CORPORATION
as Depositor
By: /s/ Edward J. Wehmer
-------------------------------------
Edward J. Wehmer
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, Wintrust
Financial Corporation certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lake Forest, State of
Illinois, on May 25, 2000.
WINTRUST FINANCIAL CORPORATION
By: /s/ Edward J. Wehmer
-------------------------------------
Edward J. Wehmer
President and Chief Executive Officer
S-1
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Edward J. Wehmer President and Chief Executive May 25, 2000
- ------------------------------- Officer and Director
Edward J. Wehmer
/s/ David A. Dykstra Executive Vice President and May 25, 2000
- ------------------------------- Chief Financial Officer
David A. Dykstra (Principal Financial Officer)
(Principal Accounting Officer)
/s/ John S. Lillard* Chairman and Director May 25, 2000
- -------------------------------
John S. Lillard
/s/ Joseph Alaimo* Director May 25, 2000
- -------------------------------
Joseph Alaimo
Director May 25, 2000
- -------------------------------
Peter Crist
/s/ Bruce K. Crowther* Director May 25, 2000
- -------------------------------
Bruce K. Crowther
/s/ Maurice F. Dunne, Jr.* Director May 25, 2000
- -------------------------------
Maurice F. Dunne, Jr.
/s/ William C. Graft* Director May 25, 2000
- -------------------------------
William C. Graft
Director May 25, 2000
- -------------------------------
Kathleen R. Horne
/s/ John Leopold* Director May 25, 2000
- -------------------------------
John Leopold
/s/ James E. Mahoney* Director May 25, 2000
- -------------------------------
James E. Mahoney
/s/ James B. McCarthy* Director May 25, 2000
- -------------------------------
James B. McCarthy
</TABLE>
S-2
<PAGE>
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Marguerite Savard McKenna* Director May 25, 2000
- -------------------------------
Marguerite Savard McKenna
/s/ Albin F. Moschner* Director May 25, 2000
- -------------------------------
Albin F. Moschner
/s/ Thomas J. Neis* Director May 25, 2000
- -------------------------------
Thomas J. Neis
/s/ Hollis W. Rademacher* Director May 25, 2000
- -------------------------------
Hollis W. Rademacher
Director May 25, 2000
- -------------------------------
J. Christopher Reyes
/s/ Peter Rusin* Director May 25, 2000
- -------------------------------
Peter Rusin
/s/ John N. Schaper* Director May 25, 2000
- -------------------------------
John N. Schaper
/s/ John J. Schornack* Director May 25, 2000
- -------------------------------
John J. Schornack
/s/ Ingrid S. Stafford* Director May 25, 2000
- -------------------------------
Ingrid S. Stafford
/s/ Jane R. Stein* Director May 25, 2000
- -------------------------------
Jane R. Stein
/s/ Katharine V. Sylvester* Director May 25, 2000
- -------------------------------
Katharine V. Sylvester
/s/ Lemuel H. Tate, Jr.* Director May 25, 2000
- -------------------------------
Lemuel H. Tate, Jr.
/s/ Larry Wright* Director May 25, 2000
- -------------------------------
Larry Wright
*Signed pursuant to power of attorney.
By: /s/ Edward J. Wehmer
---------------------------
Edward J. Wehmer
</TABLE>
S-3
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<C> <S>
1.1 Form of Underwriting Agreement for Preferred Securities.
4.1 Form of Indenture.
4.2 Form of Junior Subordinated Debenture (included as Exhibit A to
Exhibit 4.1).
4.3 Certificate of Trust.
4.4 Trust Agreement.
4.5 Form of Amended and Restated Trust Agreement.
4.6 Form of Preferred Securities Certificate (included as Exhibit D to
Exhibit 4.5).
4.7 Form of Preferred Securities Guarantee Agreement.
4.8 Form of Agreement as to Expenses and Liabilities (included as
Exhibit C to Exhibit 4.5).
5.1 Opinion of Vedder, Price, Kaufman & Kammholz.
5.2 Opinion of Richards, Layton & Finger, P.A.
8.1 Opinion of Vedder, Price, Kaufman & Kammholz as to certain tax
matters.
12.1 Calculation of ratios of earnings to fixed charges.
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of KPMG LLP.*
23.3 Consent of Vedder, Price, Kaufman & Kammholz (included in opinions
filed as Exhibits 5.1 and 8.1).
23.4 Consent of Richards, Layton & Finger, P.A. (included in opinion filed
as Exhibit 5.2).
24.1 Powers of Attorney (included as part of signature pages).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as trustee under the
Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as trustee under the
Trust Agreement.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as trustee under the
Guarantee Agreement.
- ---------
*Filed herewith.
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 16, 2000, in Amendment No. 1 to the
Registration Statement (Form S-3 No. 333-37520) and related Prospectus of
Wintrust Financial Corporation and Wintrust Capital Trust II for the
registration of 2,000,000 shares of Trust Preferred Securities, Junior
Subordinated Debentures and Guarantee of Preferred Securities.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
May 24, 2000
Chicago, Illinois
<PAGE>
Exhibit 23.2
CONSENT OF KPMG LLP
The Board of Directors
Wintrust Financial Corporation:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in Amendment No. 1 to the
Registration Statement (No. 333-37520) on Form S-3 of Wintrust Financial
Corporation and Wintrust Capital Trust II.
/s/ KPMG LLP
Chicago, Illinois
May 24, 2000
