As filed with the Securities and Exchange Registration No. 333-
Commission on August 20, 2003.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WINTRUST FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ILLINOIS 6022 36-3873352
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
727 NORTH BANK LANE
LAKE FOREST, ILLINOIS 60045-1951
(847) 615-4096
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
DAVID A. DYKSTRA
SENIOR EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING 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)
COPIES TO:
JENNIFER R. EVANS, ESQ. DENNIS R. WENDTE, ESQ.
VEDDER, PRICE, KAUFMAN & KAMMHOLZ, P.C. BARACK FERRAZZANO KIRSCHBAUM PERLMAN & NAGELBERG LLC
222 NORTH LASALLE STREET, SUITE 2600 333 WEST WACKER DRIVE, SUITE 2700
CHICAGO, ILLINOIS 60601 CHICAGO, ILLINOIS 60606
(312) 609-7500 (312) 984-3100
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the Registration Statement becomes effective.
------------------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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(d) 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. |_|
------------------------------
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount Offering Price Aggregate Amount of
Securities to be Registered to be Registered Per Share(1) Offering Price(1) registration fee(1)
----------------------------------------------------------------------------------------------------------------------------
Common stock, without par value* 989,909 $17.10 $16,927,444 $1,372
============================================================================================================================
* Including the preferred share purchase rights associated therewith.
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(f), based on the book value of the shares of
Advantage National Bancorp, Inc. as of June 30, 2003, divided by the
exchange ratio computed assuming an average Wintrust trading price of
$35.22, the average of the high and low sales prices of Wintrust common
stock on August 18, 2003, as reported on the Nasdaq National Market, of
$35.58 and $34.86, respectively.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
The information in this proxy statement is not complete and may be changed. We
may not offer or sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This proxy statement
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 AUGUST 20, 2003
ADVANTAGE NATIONAL BANCORP, INC. WINTRUST FINANCIAL CORPORATION
LOGO LOGO
----------------
PROXY STATEMENT OF ADVANTAGE
----------------
PROSPECTUS OF WINTRUST
----------------
Merger Proposed - Your Vote Is Very Important
DEAR ADVANTAGE SHAREHOLDERS:
You are cordially invited to attend a Special Meeting of Shareholders
of Advantage National Bancorp, Inc. which will be held on _______________, 2003
at _____ a.m. at ________________.
At the meeting, you will be asked to approve the merger agreement
between Advantage and Wintrust Financial Corporation that provides for
Wintrust's acquisition of Advantage. If the merger is completed, each share of
Advantage common stock you own will be valued at $26.50 and converted into the
right to receive shares of Wintrust's common stock based on an average high and
low sales price for Wintrust's common stock over a period of time prior to the
merger, as described in this proxy statement/prospectus.
Wintrust's common stock is traded on the Nasdaq National Market under
the symbol "WTFC." The closing price of Wintrust common stock on August 18, 2003
was $35.57.
The merger cannot be completed unless a majority of the holders of
Advantage common stock approve the merger agreement. YOUR BOARD OF DIRECTORS HAS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND RECOMMENDS THAT YOU APPROVE IT.
Additional information regarding the transaction, the merger agreement,
Advantage and Wintrust is set forth in the attached proxy statement/prospectus.
This document also serves as the prospectus for the 989,909 shares of Wintrust
common stock that were registered by Wintrust for use in connection with the
merger. WE URGE YOU TO READ THIS ENTIRE DOCUMENT CAREFULLY, INCLUDING "RISK
FACTORS" BEGINNING ON PAGE 14.
Sincerely,
Gerhardt E. Umlauf
President of
Advantage National Bancorp, Inc.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED UNDER
THIS PROXY STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE MERGER ARE NOT SAVINGS OR
DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF ANY
OF THE PARTIES, AND THEY ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.
THIS PROXY STATEMENT/PROSPECTUS IS DATED _____________, 2003, AND IS FIRST BEING
MAILED TO ADVANTAGE SHAREHOLDERS ON OR ABOUT ______________, 2003.
AVAILABLE INFORMATION
This document incorporates certain important business and financial
information about Wintrust from other documents that are not included in or
delivered with this document. These documents are available to you without
charge upon your written or oral request. Your requests for these documents
should be directed to the following:
WINTRUST FINANCIAL CORPORATION
727 NORTH BANK LANE
LAKE FOREST, ILLINOIS 60045
ATTENTION: DAVID A. DYKSTRA
CHIEF OPERATING OFFICER
(847) 615-4096
IN ORDER TO ENSURE TIMELY DELIVERY OF THESE DOCUMENTS, YOU SHOULD MAKE
YOUR REQUEST BY _________, 2003 TO RECEIVE THEM BEFORE THE SPECIAL MEETING.
YOU CAN ALSO OBTAIN DOCUMENTS INCORPORATED BY REFERENCE IN THIS
DOCUMENT THROUGH THE SEC WEBSITE AT WWW.SEC.GOV. SEE "WHERE YOU CAN FIND MORE
INFORMATION" BEGINNING ON PAGE 40.
ADVANTAGE NATIONAL BANCORP, INC.
75 East Turner Avenue
Elk Grove Village, Illinois 60007
-----------------------------------
Notice of Special Meeting of Shareholders
to be Held __________, 2003
-----------------------------------
Date:
Time:
Place:
To Advantage National Bancorp, Inc. Shareholders:
We are pleased to notify you and invite you to the Special Meeting of
Shareholders. At the meeting you will be asked to vote on the following matters:
o Approval of the Agreement and Plan of Merger, dated July 2,
2003, that provides for Wintrust Financial Corporation to
acquire Advantage, as described in the attached proxy
statement/prospectus.
o To transact any other business that properly comes before
the Special Meeting, or any adjournments or postponements of
the Special Meeting.
Holders of record of Advantage common stock at the close of business on
___________, 2003 may vote at the meeting. Approval of the merger agreement
requires the affirmative vote at the meeting of a majority of the issued and
outstanding shares of Advantage common stock.
THE BOARD OF DIRECTORS OF ADVANTAGE UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
APPROVAL OF THE MERGER AGREEMENT.
To ensure that your shares are voted at the Special Meeting, please promptly
complete, sign and return the proxy form in the enclosed envelope.
Elk Grove Village, Illinois
_____________, 2003
By Order of the Board of Directors
Gerhardt E. Umlauf
President
TABLE OF CONTENTS
PAGE
Questions and Answers About the Merger...........................................................................1
Summary 3
Information about Wintrust and Advantage................................................................3
Historical Comparative Per Share Data; Pro Forma Per Share Data.........................................8
Selected Financial Data of Wintrust....................................................................10
Supplemental Financial Measures/Ratios.................................................................13
Risk Factors....................................................................................................14
The market price of Wintrust's common stock may vary over time and the market price of the
common stock you will receive in the merger is uncertain......................................14
The anticipated benefits of the merger may never be realized...........................................14
Advantage's shareholders will not control Wintrust's future operations.................................14
Wintrust may be adversely affected by interest rate changes............................................14
Wintrust's future success is dependent on its ability to compete effectively in the highly
competitive banking industry..................................................................15
Wintrust's business may be adversely affected by the highly regulated environment in which it
operates......................................................................................15
Since Wintrust's business is concentrated in the Chicago metropolitan area, a downturn in the
Chicago economy may adversely affect its business.............................................15
Future acquisitions and/or sales of Wintrust's common stock or other securities may dilute the
value of Wintrust's common stock..............................................................15
Wintrust's shareholder rights plan and provisions in its articles of incorporation and by-laws
may delay or prevent an acquisition of Wintrust by a third party..............................16
Caution About Forward-Looking Statements........................................................................16
Special Meeting of Advantage Shareholders.......................................................................18
Date, Place, Time and Purpose..........................................................................18
Record Date, Voting Rights, Quorum and Required Vote...................................................18
Voting and Revocability of Proxies.....................................................................18
Dissenters' Rights.....................................................................................18
Description of the Merger.......................................................................................20
General ..............................................................................................20
Background of the merger...............................................................................20
Wintrust's reasons for the merger......................................................................21
Advantage's reasons for the merger and recommendation of the Board of Directors........................22
Accounting treatment...................................................................................23
Tax consequences of the merger.........................................................................23
Regulatory Approvals...................................................................................25
Interests of certain persons in the merger.............................................................25
Voting agreements......................................................................................25
Restrictions on resale of Wintrust common stock........................................................26
Description of the Merger Agreement.............................................................................27
Time of completion.....................................................................................27
Consideration to be received in the merger.............................................................27
Exchange of certificates...............................................................................28
Conduct of business pending the merger and certain covenants...........................................29
Representations and warranties.........................................................................30
TABLE OF CONTENTS
(continued)
PAGE
Conditions to completion of the merger.................................................................31
Termination............................................................................................32
Termination fee........................................................................................33
Waiver; amendment......................................................................................33
Management and operations after the merger.............................................................33
Employee benefit matters...............................................................................33
Expenses...............................................................................................33
Nasdaq stock listing...................................................................................33
Comparison of Shareholder Rights................................................................................34
Authorized capital stock...............................................................................34
Payment of dividends...................................................................................34
Advance notice requirements for presentation of business and nominations of directors at annual
meetings of shareholders......................................................................34
Quorum ..............................................................................................34
Restrictions on voting rights; voting at meetings......................................................34
Election, classification and number of Board of Directors..............................................35
Removal of directors...................................................................................35
Filling vacancies on the Board of Directors............................................................35
Amendment of Articles of incorporation and By-laws.....................................................35
Business combinations with interested shareholders.....................................................35
Limitations on directors' liability....................................................................36
Indemnification........................................................................................36
Mergers, acquisitions and other transactions...........................................................36
Action by shareholders without a meeting...............................................................37
Special meetings of shareholders.......................................................................37
Preemptive rights......................................................................................37
Appraisal rights of dissenting shareholders............................................................37
Rights Plan............................................................................................37
Business of Wintrust............................................................................................38
Recent Developments....................................................................................38
Business of Advantage...........................................................................................38
Legal Matters...................................................................................................40
Experts .......................................................................................................40
Shareholder Proposals...........................................................................................40
Where You Can Find More Information.............................................................................40
Incorporation of Certain Information by Reference...............................................................41
Annex A: Agreement and Plan of Merger.........................................................................A-1
Annex B: Illinois Dissenters' Rights Law......................................................................A-2
Annex C: Form of Voting Agreement.............................................................................A-3
ii
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: WHAT AM I BEING ASKED TO VOTE ON? WHAT IS THE PROPOSED TRANSACTION?
A: You are being asked to vote on the approval of a merger agreement that
provides for the acquisition of Advantage by Wintrust. Wintrust will
own all of Advantage's outstanding common stock after the merger is
completed and you will become a shareholder of Wintrust.
Q: WHAT WILL I BE ENTITLED TO RECEIVE IN THE MERGER?
A: If the merger is completed, each share of Advantage common stock you
own will be valued at $26.50 and converted into the right to receive
shares of Wintrust common stock based on an average high and low sales
price for Wintrust's common stock over a period of time prior to the
merger. See "Summary -- What Advantage shareholders will receive" on
page 5.
Q: WHY DO ADVANTAGE AND WINTRUST WANT TO MERGE?
A: Advantage believes the proposed merger will provide Advantage
shareholders with substantial benefits, and Wintrust believes that the
merger will further its strategic growth plans. The products and
markets of Advantage and Wintrust generally are complementary and the
combined company should be able to better serve customers and compete
more effectively within its market. To review the reasons for the
merger in more detail, see "Description of the Merger -- Wintrust's
reasons for the merger" on page 21 and "Description of the Merger --
Advantage's reasons for the merger and recommendation of the Board of
Directors" on page 22.
Q: WHAT DOES THE ADVANTAGE BOARD OF DIRECTORS RECOMMEND?
A: Advantage's Board of Directors unanimously recommends that you vote
"FOR" adoption of the merger agreement. Advantage's Board of Directors
has determined that the merger agreement and the merger are fair to and
in the best interests of Advantage and its shareholders. To review the
background and reasons for the merger in greater detail, see pages 22
to 23.
Q: WHAT VOTE IS REQUIRED TO ADOPT THE MERGER AGREEMENT?
A: Holders of a majority of the outstanding shares of Advantage common
stock must vote in favor of the merger. All of the officers and
directors of Advantage and Advantage National Bank have agreed to vote
their shares of Advantage common stock in favor of the merger at the
Special Meeting. Wintrust shareholders will not be voting on the merger
agreement.
Q: WHAT DO I NEED TO DO NOW? HOW DO I VOTE?
A: After you have carefully read and considered the information contained
in this proxy statement/prospectus, please complete, sign, date and
mail your proxy form in the enclosed return envelope as soon as
possible. This will enable your shares to be represented at the
meeting. You may also vote in person at the meeting. If you do not
return a properly executed proxy form and do not vote at the Special
Meeting, this will have the same effect as a vote against the approval
of the merger agreement. If you sign, date and send in your proxy form,
but you do not indicate how you want to vote, your proxy will be voted
in favor of approval of the merger agreement.
Q: WHAT IF I OPPOSE THE MERGER? DO I HAVE DISSENTERS' RIGHTS?
A: Advantage shareholders who do not vote in favor of the merger agreement
and otherwise comply with all of the procedures of Sections 11.65 and
11.70 of the Illinois Business Corporation Act will be entitled to
receive payment in cash of the estimated fair value of their shares of
Advantage common stock as ultimately determined under the statutory
process. A copy of these provisions is attached as Annex B to this
proxy statement/prospectus. This value could be more but could also be
less than the merger consideration.
1
Q: CAN I CHANGE MY VOTE OR REVOKE MY PROXY AFTER I HAVE MAILED MY SIGNED
PROXY FORM?
A: Yes. Until exercised at the Special Meeting, you can revoke your proxy
and change your vote in any of the following ways:
o by filing with the secretary of Advantage a duly executed
revocation of proxy;
o by submitting a new proxy form with a later date; or
o by voting in person at the Special Meeting.
You may request a new proxy form by calling Gerhardt E. Umlauf at
Advantage at (847) 364-0100.
Q: WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO ME?
A: In general, the exchange of your shares of Advantage common stock for
Wintrust common stock will be tax-free for United States federal income
tax purposes. However, you will recognize gain on cash received instead
of fractional shares of Wintrust's common stock and in exchange for
your warrants to purchase Advantage common stock, if any. You should
consult with your tax adviser for the specific tax consequences of the
merger to you. See "Description of the Merger - Tax consequences of the
merger" on page 23.
Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?
A: No. Either at the time of closing or shortly after the merger is
completed, Wintrust's exchange agent will send you a letter of
transmittal with instructions informing you how to send in your stock
certificates to the exchange agent. You should use the letter of
transmittal to exchange your Advantage stock certificates for new
certificates representing the shares of Wintrust common stock you will
own after the merger is complete. DO NOT SEND IN YOUR STOCK
CERTIFICATES WITH YOUR PROXY FORM.
Q: WHEN IS THE MERGER EXPECTED TO BE COMPLETED?
A: We will try to complete the merger as soon as possible. Before that
happens, the merger agreement must be approved and adopted by
Advantage's shareholders and we must obtain the necessary regulatory
approvals. Assuming shareholders vote at least a majority of
Advantage's outstanding shares of common stock in favor of the approval
and adoption of the merger agreement and we obtain the other necessary
approvals, we expect to complete the merger during the fourth quarter
of 2003.
Q: WHAT IS THE PURPOSE OF THIS DOCUMENT?
A: This document serves as both a proxy statement of Advantage and a
prospectus of Wintrust. As a proxy statement, this document is being
used to solicit your proxy to vote in favor of the merger agreement at
the Special Meeting. As a prospectus, it is being provided because
Wintrust is offering to exchange shares of its common stock for your
shares of Advantage common stock when the merger is completed.
Q: WHO CAN ANSWER MY OTHER QUESTIONS?
A: If you have more questions about the merger or how to submit your
proxy, or if you need additional copies of this proxy
statement/prospectus or the enclosed proxy form, you should contact
Advantage's president, Gerhardt E. Umlauf, at (847) 364-0100.
2
SUMMARY
This Section highlights selected information in this proxy
statement/prospectus and may not contain all of the information important to
you. To understand the merger more fully, you should read this entire document
carefully, including the annexes and the documents referred to in this proxy
statement/prospectus. A list of the documents incorporated by reference appears
on page 40 under the heading "Where You Can Find More Information."
INFORMATION ABOUT WINTRUST AND ADVANTAGE
WINTRUST FINANCIAL CORPORATION (See page 38)
727 North Bank Lane
Lake Forest, Illinois 60045
(847) 615-4096
Wintrust Financial Corporation, an Illinois corporation, is a financial
holding company headquartered in Lake Forest, Illinois. Wintrust operates seven
community banks, all in affluent suburbs of Chicago, which provide
community-oriented, personal and commercial banking services primarily to
individuals and small to mid-size businesses through 32 banking facilities. As
of June 30, 2003, Wintrust had consolidated total assets of $4.1 billion,
deposits of $3.4 billion and shareholders' equity of $249.4 million.
ADVANTAGE (See pages 38-39)
75 East Turner Avenue
Elk Grove Village, Illinois 60007
(847) 364-0100
Advantage, an Illinois corporation, is a bank holding company. Its
primary business is operating its bank subsidiary, Advantage National Bank, a
nationally chartered bank with offices in Elk Grove Village and Roselle,
Illinois. As of June 30, 2003, Advantage had consolidated total assets of $107.5
million, deposits of $95.6 million and shareholders' equity of $9.4 million.
THE MERGER AND THE MERGER AGREEMENT (See page 27)
The acquisition of Advantage by Wintrust is governed by a merger
agreement. The merger agreement provides that, if all of the conditions are
satisfied or waived, a newly formed subsidiary of Wintrust will be merged with
and into Advantage. After the consummation of the merger, Advantage will become
a wholly-owned subsidiary of Wintrust. We encourage you to read the merger
agreement, which is included as Annex A to this proxy statement/prospectus.
REASONS FOR THE MERGER (See pages 21 to 23)
The Board of Directors of Advantage unanimously determined that the
merger agreement and the merger consideration were fair to and in the best
interests of Advantage and its shareholders and unanimously recommends that
holders of Advantage common stock vote in favor of the approval and adoption of
the merger agreement and the transactions contemplated by the merger agreement.
In its deliberations and in making its determination, with the
assistance of its legal and financial advisors, Advantage's Board of Directors
considered many factors including, without limitation, the following:
o its knowledge of the business, operations, properties, assets,
competitive position, financial condition, operating results,
management, strategic objectives and prospects of Advantage;
o developments relating to consolidation and additional
competition within the U.S. banking industry in general and in
the Chicago metropolitan market in particular, and Advantage's
position as a "community" bank in the communities of Elk Grove
Village and Roselle, Illinois;
3
o other possible alternatives to the merger, including
continuing to operate Advantage, and the perceived risks and
uncertainties attendant to Advantage's execution of its
strategic growth plans as an independent banking organization,
including the need to access additional capital and enhance
its technology platform on a cost-effective basis to support
future growth;
o the value of the shares of Wintrust common stock comprising
the merger consideration, the formula that calculates the
merger consideration at the effective time, and the fact that
Wintrust common stock is traded on Nasdaq Stock Market and has
substantially greater liquidity than the shares of Advantage
common stock;
o information concerning the business, financial condition, and
results of operations of Wintrust, including recent
performance of Wintrust common stock; and
o its view as to the likelihood of the willingness of a third
party to pay more for Advantage, and the ability of Advantage
to agree to this type of transaction, despite the merger
agreement and the voting agreements.
Wintrust's Board of Directors believes that the merger is in the best
interests of Wintrust and its shareholders. Wintrust's Board of Directors has
approved the merger agreement. In deciding to approve the merger agreement, the
Wintrust Board of Directors considered a number of factors, including:
o management's view that the acquisition of Advantage provides
an attractive opportunity to expand into the northwest Chicago
metropolitan area, which they consider a desirable market;
o the community banking orientation of Advantage and the
compatability of Advantage with Wintrust and its subsidiaries;
o a review of the demographic, economic and financial
characteristics of the markets in which Advantage operates,
including existing and potential competition and history of
the market areas with respect to financial institutions;
o management's review of the business, operations, earnings and
financial condition, including capital levels and asset
quality, of Advantage since its de novo formation in 2001; and
o the likelihood of regulators approving the merger without
undue conditions or delay.
The Boards of Directors of both Wintrust and Advantage believe that the
merger will result in expanded resources for profitable growth and that the
combined resources of Wintrust and Advantage will provide greater ability to
compete in the changing and increasingly competitive financial services
industry, including increasing the availability of and access to additional
financial services and products for its customers.
BOARD RECOMMENDATION TO ADVANTAGE SHAREHOLDERS (See page 22)
Advantage's Board of Directors believes that the merger of Advantage
with Wintrust is in the best interests of Advantage and Advantage's
shareholders. ADVANTAGE'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "FOR" THE MERGER.
ADVANTAGE SPECIAL MEETING (See page 18)
The Special Meeting will be held at ______________, located at
_____________________, on ____________________ at ____ a.m., Chicago time.
Advantage's Board of Directors is soliciting proxies for use at the Special
Meeting. At the Special Meeting, Advantage shareholders will be asked to vote on
a proposal to approve the merger agreement.
4
RECORD DATE FOR THE SPECIAL MEETING; REVOCABILITY OF PROXIES (See page 18)
You may vote at the Special Meeting if you own shares of Advantage
common stock of record at the close of business on _________, 2003. You will
have one vote for each share of Advantage common stock you owned on that date.
You may revoke your proxy at any time before the vote at the Special Meeting.
VOTE REQUIRED (See page 18)
To approve the merger, a majority of the outstanding shares of
Advantage common stock must be voted in favor of the merger agreement at the
Special Meeting. Therefore, shareholders holding a majority of the outstanding
shares of Advantage common stock entitled to vote at the Special Meeting must be
present in person or by proxy at the Special Meeting. Shareholders may vote
their shares in person at the Special Meeting or by executing and returning the
enclosed proxy form.
All of the officers and directors of Advantage and Advantage National
Bank have committed to vote their shares of Advantage common stock in favor of
the merger. At the record date, the directors and executive officers of
Advantage owned _______ shares of Advantage common stock, constituting __% of
the total number of outstanding shares of Advantage common stock at that date.
See "Description of the Merger -- Voting agreements" on page 25.
WHAT ADVANTAGE SHAREHOLDERS WILL RECEIVE (See page 27)
Under the merger agreement, for each share of Advantage common stock
you own, Wintrust will pay you the number of shares of Wintrust common stock
equal to $26.50 divided by the average price of Wintrust common stock during the
pricing period, which is defined as the unweighted average high and low sales
prices of Wintrust common stock on the Nasdaq National Market during the pricing
period. This number is referred to as the "exchange ratio." The pricing period
is the period of 10 trading days ending two trading days before the merger is
completed. If the average price is within the range of $25.00 to $35.00, the
higher the average price, the fewer shares you will receive and the lower the
average price, the more shares you will receive, so that the value of the shares
you are to receive in the merger will be $26.50 based on the actual average
price during the pricing period. Outside this price range, there are certain
limitations in the merger agreement, as described below, that affect the number
of shares you receive in the merger.
If the average price of Wintrust common stock during the pricing period
is greater than $35.00 per share, the exchange ratio will be $26.50 divided by
$35.00 for purposes of determining the number of shares of Wintrust common stock
to be issued to you. This means that the value of the shares you are to receive
would be more than $26.50.
If the average price of Wintrust common stock during the pricing period
is less than $25.00 per share, the exchange ratio will be $26.50 divided by
$25.00 for purposes of determining the number of shares of Wintrust common stock
to be issued to you. This means that the value of the shares you are to receive
would be less than $26.50.
Advantage shareholders will not receive fractional shares of Wintrust
common stock. Instead, they will receive a cash payment for any fractional
shares based on the value of Wintrust common stock determined in the manner
described above.
Once the merger is complete, Illinois Stock Transfer Company,
Wintrust's exchange agent, will mail you materials and instructions for
exchanging your Advantage stock certificates for Wintrust stock certificates.
You should not send in your Advantage stock certificates until you receive the
transmittal materials and instructions from the exchange agent.
REGULATORY APPROVALS (See page 25)
We cannot complete the merger until we receive the regulatory approval
of the Board of Governors of the Federal Reserve System, commonly known as the
Federal Reserve. Wintrust filed a notice with The Federal Reserve Bank of
Chicago on August 1, 2003, seeking approval of the merger. We currently expect
the Federal
5
Reserve to give its decision on the application by early fourth quarter 2003. In
approving the merger, the Federal Reserve may impose conditions or restrictions.
If any of these conditions or restrictions are unusual for this type of
transaction and would materially adversely affect the benefits of the merger to
Wintrust, the Board of Directors of Wintrust may choose to terminate the merger.
NEW WINTRUST SHARES WILL BE ELIGIBLE FOR TRADING ON NASDAQ (See page 33)
The shares of Wintrust common stock to be issued in the merger can be
traded on the Nasdaq National Market.
CONDITIONS TO THE MERGER (See page 31)
The completion of the merger is subject to the fulfillment of a number
of conditions, including:
o approval of the merger agreement at the Special Meeting by a
majority of the outstanding shares of Advantage common stock;
o approval of the transaction by the Federal Reserve or
expiration and termination of all waiting periods required by
law; and
o the representations and warranties made by the parties in the
merger agreement must be materially true and correct as of the
effective date of the merger or as otherwise required in the
merger agreement.
TERMINATION (See page 32)
Subject to conditions and circumstances described in the merger
agreement, either Wintrust or Advantage may terminate the merger agreement if,
among other things, any of the following occur:
o the merger is not completed by December 31, 2003, subject to
certain exceptions;
o any condition to the merger has become impossible to satisfy;
o the other party has materially breached the agreement and has
failed to cure the breach;
o the holders of a majority of Advantage common stock do not
approve the merger; or
o in certain circumstances if Advantage has received a superior
offer to sell to a third party.
TERMINATION FEE (See page 33)
Under certain circumstances described in the merger agreement, Wintrust
may demand a $1,000,000 termination fee from Advantage if the transaction is not
consummated.
INTERESTS OF OFFICERS AND DIRECTORS IN THE MERGER THAT ARE DIFFERENT THAN YOURS
(See page 25)
You should be aware that some Advantage directors may have interests in
the merger that are different from, or in addition to, their interests as
shareholders. Advantage's Board of Directors was aware of these interests and
took them into account in approving the merger. The merger contains a provision
requiring Wintrust to provide continuing indemnification to Advantage directors
and officers.
VOTING AGREEMENTS (See page 25)
Officers and directors of Advantage and Advantage National Bank owning
a total of approximately __% of the outstanding shares of Advantage common stock
have agreed to vote all of their shares of common stock in favor of the merger
agreement at the Special Meeting. These agreements terminate if the merger
agreement is terminated in accordance with its terms. A copy of the form of
voting agreement is attached to this proxy statement/prospectus as Annex C.
6
ACCOUNTING TREATMENT OF THE MERGER (See page 23)
The merger will be accounted for as a purchase transaction in
accordance with accounting principles generally accepted in the United States.
CERTAIN DIFFERENCES IN SHAREHOLDER RIGHTS (See page 34)
When the merger is completed, Advantage shareholders, whose rights are
governed by Illinois law and Advantage's articles of incorporation and by-laws,
automatically will become Wintrust shareholders, and their rights will continue
to be governed by Illinois law, as well as Wintrust's articles of incorporation
and by-laws, in addition to laws and requirements that apply to public
companies.
DISSENTERS' RIGHTS (See page 18)
Advantage shareholders may dissent to the merger and, upon following
the requirements of Illinois law, receive cash in the amount of the fair value
of their shares instead of shares of Wintrust common stock.
A copy of the sections of the Illinois Business Corporation Act
pertaining to dissenters' rights is attached as Annex B to this proxy
statement/prospectus. You should read the statute carefully and consult with
your legal counsel if you intend to exercise these rights.
TAX CONSEQUENCES OF THE MERGER (See page 23)
Your receipt of the merger consideration generally will be tax-free for
United States federal income tax purposes, except to the extent you receive cash
instead of fractional shares of Wintrust common stock and cash in exchange for
warrants to purchase shares of Advantage common stock, if any. You should
consult your tax adviser for a full understanding of the federal, state, local
and foreign tax consequences of the merger to you.
RISK FACTORS (See page 14)
The merger consideration consists of shares of Wintrust common stock.
You should consider the risks involved with the merger and with ownership of
Wintrust common stock before deciding to vote "FOR" approval and adoption of the
merger agreement. These risks include, but are not limited to, the following:
o the market price of Wintrust's common stock may vary over
time, and the market price of the common stock you will
receive in the merger is uncertain;
o the anticipated benefits of the merger may never be realized;
o Advantage shareholders will not control Wintrust's future
operations;
o Wintrust may be adversely affected by interest rate changes;
o Wintrust may encounter intense competition in the banking
industry;
o Wintrust's business may be adversely affected by the highly
regulated environment it operates in;
o a downturn in the Chicago economy could adversely affect
Wintrust's business; and
o future acquisitions and/or capital-raising efforts by Wintrust
may dilute your ownership interest in Wintrust.
7
HISTORICAL COMPARATIVE PER SHARE DATA; PRO FORMA PER SHARE DATA
The table below shows the reported high and low sales prices of
Wintrust's common stock during the periods indicated. This information gives
effect to a 3-for-2 stock split, effected in the form of a 50% stock dividend,
as of March 14, 2002.
HIGH LOW
---- ---
YEAR ENDED DECEMBER 31, 2001
First Quarter.......................... $12.75 $10.54
Second Quarter......................... 17.62 11.67
Third Quarter.......................... 21.41 16.27
Fourth Quarter......................... 22.13 17.93
YEAR ENDED DECEMBER 31, 2002
First Quarter.......................... $22.99 $18.33
Second Quarter......................... 34.58 22.22
Third Quarter.......................... 36.00 26.54
Fourth Quarter......................... 32.66 25.45
YEAR-TO-DATE 2003
First Quarter.......................... $33.65 $27.19
Second Quarter......................... 32.40 27.74
Third Quarter (through August 18, 2003). 35.64 29.30
The following table presents selected comparative per share data for
Wintrust common stock and Advantage common stock on a historical and pro forma
combined basis, giving effect to the merger using the purchase method of
accounting. The information included in the table below for Advantage at
December 31, 2002 is based on per share data for the common stock of Advantage
National Bank. Amounts at June 30, 2003 reflect per share data for Advantage
National Bancorp, Inc.
The pro forma combined information is not necessarily indicative of the
actual results that would have occurred had the merger been consummated at the
beginning of the periods indicated, or of the future operations of the combined
entity.
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31, 2002
---------------- -----------------
WINTRUST HISTORICAL:
Diluted earnings per share............. $ 0.94 $ 1.60
Cash dividends declared per share...... 0.08 0.12
Book value per share (at period end)... 14.31 13.19
WINTRUST PRO FORMA COMBINED:
Diluted earnings per share............. $ 0.92 $ 1.54
Cash dividends declared per share...... 0.08 0.12
Book value per share (at period end)... 14.94 13.85
ADVANTAGE HISTORICAL:
Diluted earnings per share............. $ 0.23 $ (0.12)
Cash dividends declared per share...... -- --
Book value per share (at period end)... 12.86 12.85
ADVANTAGE PRO FORMA COMBINED(1):
Diluted earnings per share............. $ 0.70 $ 1.18
Cash dividends per share............... 0.06 0.09
Book value per share (at period end)... 11.45 10.62
---------------------------
(1) Computed using an exchange ratio of 0.767, which is based on an
assumed Wintrust common stock value of $34.57, the closing price of
Wintrust common stock on August 13, 2003.
8
The following table sets forth the last sales prices as reported by
Nasdaq for Wintrust common stock on the dates indicated, and the equivalent per
share value for Advantage common stock, giving effect to the merger as of the
same dates:
HISTORICAL
CLOSING PRICE PRICE ADVANTAGE
WINTRUST ADVANTAGE EQUIVALENT PER
COMMON STOCK COMMON STOCK SHARE VALUE
------------- ------------ --------------
July 1, 2003(1)........... $30.03 (2) $26.50
August 18, 2003........... $35.57 (2) $26.93
---------------------------
(1) Trading date preceding the date of public announcement of the proposed
merger.
(2) There is no established trading market for the shares of Advantage.
During 2000, in connection with the de novo formation of Advantage's
bank subsidiary, Advantage National Bank sold shares to investors at a
price equivalent to $15.00 per share of Advantage common stock.
9
SELECTED FINANCIAL DATA OF WINTRUST
The summary consolidated financial data presented below as of or for
each of the years in the five-year period ended December 31, 2002, are derived
from Wintrust's audited historical financial statements. The summary data
presented below as of or for the six-month periods ended June 30, 2003 and 2002,
are derived from unaudited consolidated financial statements. In Wintrust's
opinion, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of results as of or for the three-month periods
have been included. Per share amounts have been adjusted to reflect the 3-for-2
stock split effected as a stock dividend effective as of March 14, 2002. 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 Wintrust's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002, and Wintrust's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2003. Results for past periods are not necessarily indicative of
results that may be expected for any future period, and results for the
six-month period ended June 30, 2003 are not necessarily indicative of results
that may be expected for the entire year ending December 31, 2003.
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
----------------------- ---------------------------------------------------------------
2003(1) 2002(2) 2002(2) 2001 2000 1999 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
STATEMENT OF INCOME
DATA:
Total interest income.. $ 96,504 $ 86,509 $ 182,233 $ 166,455 $ 148,184 $ 109,331 $ 87,979
Total interest expense. 41,572 39,924 84,105 92,441 87,184 61,597 51,215
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income. 54,932 46,585 98,128 74,014 61,000 47,734 36,764
Provision for loan
losses.............. 5,493 4,831 10,321 7,900 5,055 3,713 4,297
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income
after provision
for loan losses.. 49,439 41,754 87,807 66,114 55,945 44,021 32,467
Non-interest Income:
Gain on sale of
premium finance
receivables...... 2,270 1,594 3,374 4,564 3,831 1,033 --
Fees on mortgage
loans sold....... 9,142 3,951 12,259 7,831 2,911 3,206 5,569
Wealth management
fees............. 12,953 12,001 25,229 1,996 1,971 1,171 788
Service charges on
deposit accounts. 1,722 1,491 3,121 2,504 1,936 1,562 1,065
Administrative
services revenues 2,159 1,753 3,501 4,084 4,402 996 --
Premium finance
defalcation-partial
settlement(3).... -- 1,250 1,250 -- -- -- --
Securities (losses)
gains, net....... 606 (153) 107 337 (40) 5 --
Other............... 7,996 4,636 11,831 7,482 3,295 1,835 653
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total non-interest
income(2)...... 36,848 26,523 60,672 28,798 18,306 9,808 8,075
---------- ---------- ---------- ---------- ---------- ---------- ----------
(See footnotes on page 12)
10
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
----------------------- ---------------------------------------------------------------
2003(1) 2002(2) 2002(2) 2001 2000 1999 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Non-interest Expense:
Salaries and
employee benefits $ 35,715 $ 28,762 $ 63,442 $ 35,628 $ 28,119 $ 20,808 $ 18,944
Equipment expense... 3,758 3,526 7,191 6,297 5,101 3,199 2,221
Occupancy expense,
net.............. 3,785 3,153 6,691 4,821 4,252 2,991 2,435
Data processing..... 2,079 2,056 4,161 3,393 2,837 2,169 1,676
Advertising and
marketing........ 1,043 1,057 2,302 1,604 1,309 1,402 1,612
Professional fees... 1,704 1,296 2,801 2,055 1,681 1,203 1,654
Amortization of
intangibles...... 298 117 324 685 713 251 120
Premium finance
defalcation(2)... -- -- -- -- 4,320 -- --
Other non-interest
expenses......... 11,038 8,618 19,072 11,300 9,471 7,655 7,171
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
non-interest
expense(2)..... 59,420 48,585 105,984 65,783 57,803 39,678 35,833
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before taxes
and cumulative
effective of
accounting change... 26,867 19,692 42,495 29,129 16,448 14,151 4,709
Income tax expense
(benefit)........... 9,585 7,023 14,620 10,436 5,293 4,724 (1,536)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before
cumulative effect
of accounting change 17,282 12,669 27,875 18,693 11,155 9,427 6,245
Cumulative effect of
change in
accounting for
derivatives, net of
tax................. -- -- -- (254) -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income.......... $ 17,282 $ 12,669 $ 27,875 $ 18,439 $ 11,155 $ 9,427 $ 6,245
========== ========== ========== ========== ========== ========== ==========
COMMON SHARE DATA:
Earnings per share:
Basic............... $ 1.00 $ 0.82 $ 1.71 $ 1.34 $ 0.85 $ 0.76 $ 0.51
Diluted............. 0.94 0.77 1.60 1.27 0.83 0.73 0.49
Cash dividends per
common share(3)..... 0.08 0.06 0.12 0.093 0.067 -- --
Book value per share... 14.31 12.15 13.19 9.72 7.92 7.06 6.15
Weighted average
common shares
outstanding:
Basic............... 17,360 15,513 16,334 13,734 13,066 12,373 12,212
Diluted............. 18,473 16,526 17,445 14,545 13,411 12,837 12,742
SELECTED FINANCIAL
CONDITION DATA (AT
END OF PERIOD):
Total assets........... $4,132,394 $3,219,400 $3,721,555 $2,705,422 $2,102,806 $1,679,382 $1,348,048
Total loans............ 2,896,148 2,308,945 2,556,086 2,018,479 1,547,596 1,270,126 974,031
Total deposits......... 3,419,946 2,608,507 3,089,124 2,314,636 1,826,576 1,463,622 1,229,154
Notes payable.......... 26,000 58,650 44,025 46,575 27,575 8,350 --
Long term debt - trust
preferred securities 76,816 51,050 50,894 51,050 51,050 31,050 31,050
Total shareholders'
equity.............. 249,399 205,999 227,002 141,278 102,276 92,947 75,205
(See footnotes on following page)
11
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
----------------------- ---------------------------------------------------------------
2003(1) 2002(2) 2002(2) 2001 2000 1999 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
SELECTED FINANCIAL
RATIOS AND OTHER
DATA:
Performance Ratios:
Net interest
margin(5)(6)(7)(12) 3.14% 3.52% 3.34% 3.49% 3.66% 3.54% 3.43%
Core net interest
margin(5)(7)(8).. 3.26 3.72 3.51 3.73 3.91 3.75 3.50
Net interest
spread(5)(7)(9).. 2.92 3.22 3.06 3.08 3.29 3.23 3.00
Non-interest income
to average
assets(5)........ 1.92 1.85 1.89 1.24 0.99 0.66 0.69
Non-interest
expense to
average
assets(3)(5)..... 3.10 3.38 3.30 2.83 3.12 2.65 3.04
Net overhead
ratio(3)(5)(10).. 1.18 1.54 1.41 1.59 2.13 2.00 2.36
Efficiency
ratio(3)(11) (12) 64.86 65.96 66.4 63.7 72.3 68.6 79.8
Return on average
assets(3)(5)..... 0.90 0.88 0.87 0.79 0.60 0.63 0.53
Return on average
equity(3)(5)..... 14.74 15.85 14.76 15.24 11.51 11.58 8.68
Average
loan-to-average
deposit ratio.... 86.1 90.4 88.5 87.4 87.7 86.6 80.1
Dividend payout
ratio(4)(5)...... 8.5 7.7 7.5 7.4 8.0 -- --
Asset Quality Ratios:
Non-performing
loans to total
loans............ 0.47% 0.48% 0.49% 0.64% 0.63% 0.55% 0.56%
Allowance for loan
losses to:
Total loans...... 0.74 0.69 0.72 0.68 0.67 0.69 0.72
Non-performing
loans.......... 156.42 143.39 146.63 105.63 107.75 126.10 129.66
Net charge-offs to
average
loans(3)(5)...... 0.19 0.23 0.24 0.26 0.24 0.19 0.28
Non-performing
assets to total
assets........... 0.35 0.37 0.34 0.48 0.46 0.41 0.45
Other data at end of
period:
Number of banking
facilities....... 32 31 31 29 28 24 21
---------------------------
(1) Wintrust completed its acquisition of Lake Forest Capital Management
Company on February 1, 2003. The results for the six months ended June
30, 2003 include the results of Lake Forest Capital Management Company
since that date.
(2) Wintrust completed its acquisition of the Wayne Hummer Companies
effective as of February 1, 2002. The results for the six months ended
June 30, 2002 and year ended December 31, 2002 include the results of
the Wayne Hummer Companies since February 1, 2002.
(3) In 2000, Wintrust recorded a $4.3 million pre-tax charge ($2.6 million
after-tax) related to a fraudulent loan scheme perpetrated against its
premium finance subsidiary. The amount of this charge was not included
in loans charged-off because a lending relationship had never been
established. In the first quarter of 2002, Wintrust recovered $1.25
million (pre-tax) of this amount ($754,000 after-tax).
(4) Wintrust declared its first semi-annual dividend payment in January
2000. Dividend data reflected for the interim periods reflect
semi-annual, not quarterly, dividends.
(5) Certain financial ratios for interim periods have been annualized.
(6) Net interest income divided by average interest-earning assets.
(7) Calculated on a tax-equivalent basis.
(8) Core net interest margin excludes the interest expense associated with
the trust preferred securities.
(9) Yield earned on average interest-earning assets less rate paid on
average interest-bearing liabilities.
(10) Non-interest expense less non-interest income divided by average total
assets.
(11) Non-interest expense (excluding non-recurring items) divided by the sum
of net interest income, on a tax equivalent basis, plus non-interest
income (excluding securities gains and losses).
(12) See "Supplemental Financial Measures/Ratios" on page 13 for a
reconciliation of net interest income on a tax equivalent basis.
12
SUPPLEMENTAL FINANCIAL MEASURES/RATIOS
Certain non-GAAP performance measures and ratios are used by management
to evaluate and measure our performance. These include taxable-equivalent net
interest income (including its individual components), net interest margin
(including its individual components), core net interest margin and the
efficiency ratio. Management believes that these measures and ratios provide
users of our financial information a more accurate view of the performance of
the interest-earning assets and interest-bearing liabilities and of our
operating efficiency for comparative purposes than the most directly comparable
GAAP measures would provide. Other financial holding companies may define or
calculate these measures and ratios differently. See the table below for
supplemental data and the corresponding reconciliation to GAAP financial
measures for the six months ended June 30, 2003 and 2002, and for the years
ended December 31, 1998 through 2002.
Management reviews yields on certain asset categories and the net
interest margin of the company, and our banking subsidiaries, on a fully
taxable-equivalent basis or "FTE." In this non-GAAP presentation, net interest
income is adjusted to reflect tax-exempt interest income on an equivalent
before-tax basis. This measure ensures comparability of net interest income
arising from both taxable and tax-exempt sources. Net interest income on a
taxable-equivalent basis is also used in the calculation of our efficiency
ratio. The efficiency ratio, which is calculated by dividing non-interest
expense by total taxable-equivalent net revenue (less securities gains or
losses), measures how much it costs to produce one dollar of revenue. Securities
gains or losses are excluded from this calculation to better match revenue from
daily operations to operational expenses.
Management also evaluates the net interest margin excluding the
interest expense associated with our Long-term Debt - Trust Preferred
Securities, or core net interest margin. Because we utilize these instruments
primarily as capital instruments, management finds it useful to view the net
interest margin excluding this expense and deems it to be a more accurate view
of our operational net interest margin than the most directly comparable GAAP
measure.
The following table reconciles the GAAP calculations to the financial
measures and ratios used by management as discussed above.
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
----------------------- ---------------------------------------------------------------
2003 2002 2002 2001 2000 1999 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
(A) INTEREST INCOME
(GAAP)............... $96,504 $86,509 $182,233 $166,455 $148,184 $109,331 $87,979
FTEA - Loans(2)...... 265 356 685 793 518 259 95
FTEA - Liquidity
management
assets(2)......... 134 43 209 65 48 15 --
FTEA - Other earning
assets(2)......... 39 -- -- -- -- -- --
------- ------- -------- -------- -------- -------- -------
Interest income - FTE 96,942 86,908 183,127 167,313 148,750 109,605 88,074
(B) INTEREST EXPENSE
(GAAP)............... 41,572 39,924 84,105 92,441 87,184 61,597 51,215
------- ------- -------- -------- -------- -------- -------
Net interest
income - FTE...... $55,370 $46,984 $99,022 $74,872 $61,566 $48,008 $36,859
------- ------- -------- -------- -------- -------- -------
(C) NET INTEREST INCOME
(GAAP) (A MINUS B)... $54,932 $46,585 $98,128 $74,014 $61,000 $47,734 $36,764
Net interest
income - FTE...... $55,370 $46,984 $99,022 $74,872 $61,566 $48,008 $36,859
Add: Interest
expense on
long-term debt -
trust preferred
securities........ 2,083 2,576 4,931 5,151 4,143 2,938 747
------- ------- -------- -------- -------- -------- -------
Core net interest
income - FTE(1)... $57,453 $49,560 $103,953 $80,023 $65,709 $50,946 $37,606
------- ------- -------- -------- -------- -------- -------
(D) NET INTEREST MARGIN
(GAAP)............... 3.12% 3.49% 3.31% 3.45% 3.63% 3.52% 3.42%
Net interest
margin - FTE...... 3.14 3.52 3.34 3.49 3.66 3.54 3.43
Core net interest
margin - FTE(1)... 3.26 3.72 3.51 3.73 3.91 3.75 3.50
(E) EFFICIENCY RATIO
(GAAP)............... 65.17 66.32 66.79 64.19 72.85 68.96 79.91
Efficiency ratio -
FTE............... 64.86 65.96 66.41 63.66 72.33 68.63 79.75
---------------------------
(1) Core net interest income and core net interest margin are by definition
non-GAAP measures/ratios. The GAAP equivalents are the net interest
income and net interest margin determined in accordance with GAAP
(lines C and D in the table).
(2) FTEA = Fully taxable-equivalent adjustment.
13
RISK FACTORS
In addition to the other information contained in or incorporated by
reference into this proxy statement/prospectus, including the matters addressed
under the caption "Caution About Forward-Looking Statements" on page 16, you
should consider the following risk factors carefully in deciding whether to vote
for the adoption of the merger agreement.
THE MARKET PRICE OF WINTRUST'S COMMON STOCK MAY VARY OVER TIME AND THE MARKET
PRICE OF THE COMMON STOCK YOU WILL RECEIVE IN THE MERGER IS UNCERTAIN.
You will receive Wintrust common stock in the merger. The number of
shares you receive will depend on the average price of Wintrust common stock
prior to the merger. Changes in the market price of Wintrust common stock may
result from a variety of factors, including general market and economic
conditions, the future financial condition and operating results of Wintrust,
changes in Wintrust's businesses, operations and prospects and regulatory
considerations, many of which are beyond Wintrust's control.
The price of Wintrust common stock at completion of the merger may vary
from its price on the date the merger agreement was signed, from its price on
the date of this proxy statement/prospectus, from its price on the date of the
Special Meeting and from the average price during the 10-day pricing period used
to determine the number of shares you are to receive. You will not be entitled
to receive additional cash or shares in the merger if the price of Wintrust
common stock on the closing date of the merger is less than the average price
during the pricing period. Because the merger will be completed after the date
of the Special Meeting, at the time of the Special Meeting you will not know
what the market value of the Wintrust common stock you will receive after the
merger will be. See "Description of the Merger Agreement -- Consideration to be
received in the merger."
THE ANTICIPATED BENEFITS OF THE MERGER MAY NEVER BE REALIZED.
The success of the merger will depend partly on Wintrust's ability to
successfully integrate the business and operations of Advantage with those of
Wintrust. As Advantage National Bank matures, in order for Wintrust to recognize
the anticipated operational efficiencies, it will have to successfully grow the
operations of the bank. This growth may be inhibited by a lack of synergies
between the customers, employees or operations of the two companies, as well as
the inability to successfully introduce its customers to new and existing
products and services. Uncertainties exist in integrating the business of
Advantage into Wintrust and these benefits may never be realized.
ADVANTAGE'S SHAREHOLDERS WILL NOT CONTROL WINTRUST'S FUTURE OPERATIONS.
Together, Advantage's shareholders own 100% of Advantage and have
absolute power to approve or reject any matters requiring shareholder approval
under Illinois law and Advantage's articles of incorporation and by-laws. After
the merger, Advantage shareholders will become owners of less than 5% of the
outstanding shares of Wintrust common stock. Even if all former Advantage
shareholders voted together on all matters presented to Wintrust shareholders
from time to time, the former Advantage shareholders most likely would not have
a significant impact on the approval or rejection of future Wintrust proposals
submitted to a shareholder vote.
WINTRUST MAY BE ADVERSELY AFFECTED BY INTEREST RATE CHANGES.
Wintrust's earnings are derived from the operations of its
subsidiaries, and is 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. 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
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 Wintrust 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 Wintrust's "gap" position on
interest earning assets and interest bearing liabilities, the "gap" will work
against Wintrust and its net interest income may be negatively affected. The
success of Wintrust's covered call option strategy may also be affected by
changes in interest rates. With the decline in interest rates over the last two
years to historically low levels, Wintrust has been able to augment the total
return of its investment securities portfolio by selling call options
14
on fixed-income securities it owns. Wintrust recorded fee income of $6.0 million
during 2002 compared to $4.3 million in 2001, from premiums earned on these
covered call option transactions. In a rising interest rate environment,
particularly if the yield curve remains steep, the amount of premium income
Wintrust earns on these transactions will likely decline.
WINTRUST'S FUTURE SUCCESS IS DEPENDENT ON ITS 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 its 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 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. Wintrust's ability to compete effectively in the marketplace is also
dependent on its ability to adapt successfully to technological changes within
the banking and financial services industries.
WINTRUST'S BUSINESS MAY BE ADVERSELY AFFECTED BY THE HIGHLY REGULATED
ENVIRONMENT IN WHICH IT OPERATES.
Wintrust is subject to extensive federal and state legislation,
regulation and supervision. Recently enacted, proposed and future banking
legislation and regulations have had, will continue to have or may have a
significant impact on the financial services industry. Some of the legislative
and regulatory changes may increase Wintrust's costs of doing business and, as a
result, advantage Wintrust's competitors who may not be subject to similar
legislative and regulatory requirements. In addition, self regulatory
organizations, such as the New York Stock Exchange and the National Association
of Securities Dealers, require Wintrust's securities brokerage subsidiaries to
comply with their extensive rules and regulations, and Wintrust could be
adversely affected by applicable changes in such legislation and regulation.
SINCE WINTRUST'S BUSINESS IS CONCENTRATED IN THE CHICAGO METROPOLITAN AREA, A
DOWNTURN IN THE CHICAGO ECONOMY MAY ADVERSELY AFFECT ITS BUSINESS.
Currently, Wintrust's lending and deposit gathering activities are
concentrated primarily in the greater Chicago metropolitan area. Wintrust's
success depends on the general economic condition of Chicago and its surrounding
areas. Declining economic conditions could reduce Wintrust's growth rate, impair
its ability to collect loans, and generally affect its financial condition and
results of operations.
FUTURE ACQUISITIONS AND/OR SALES OF WINTRUST'S COMMON STOCK OR OTHER SECURITIES
MAY DILUTE THE VALUE OF WINTRUST'S COMMON STOCK.
Under certain conditions, Wintrust's board of directors has the
authority, without action or vote of its shareholders, to issue all or part of
any authorized but unissued shares of its common stock and preferred stock,
including common shares authorized to be issued under Wintrust's stock option
plan, shares that employees may purchase at their election pursuant to
Wintrust's Employee Stock Purchase Plan and shares that may be issued to
Wintrust's directors as compensation for attendance at Board meetings pursuant
to Wintrust's Directors' Deferred Fee and Stock Plan. In the future, Wintrust
may issue additional securities, through public or private offerings, in order
to raise additional capital to support its growth or in connection with possible
acquisitions. Future issuances will dilute the percentage of ownership interest
of shareholders and may dilute the per share book value of their common stock.
In addition, holders of warrants Wintrust has outstanding and option holders may
exercise their rights to purchase Wintrust's stock at a time when Wintrust would
otherwise be able to obtain additional equity capital on more favorable terms.
15
WINTRUST'S SHAREHOLDER RIGHTS PLAN AND PROVISIONS IN ITS ARTICLES OF
INCORPORATION AND BY-LAWS MAY DELAY OR PREVENT AN ACQUISITION OF WINTRUST BY A
THIRD PARTY.
Wintrust's board of directors has implemented a shareholder rights
plan. The rights, which are attached to Wintrust's shares and trade together
with its common stock, have certain anti-takeover effects. The plan may
discourage or make it more difficult for another party to complete a merger or
tender offer for Wintrust's shares without negotiating with Wintrust's board of
directors or to launch a proxy contest or to acquire control of a larger block
of Wintrust's shares. If triggered, the rights will cause substantial dilution
to a person or group that attempts to acquire Wintrust without approval of its
board of directors, and under certain circumstances, the rights beneficially
owned by the person or group may become void. The plan also may have the effect
of limiting shareholder participation in certain transactions such as mergers or
tender offers whether or not such transactions are favored by Wintrust's
incumbent directors and key management. In addition, Wintrust's executive
officers may be more likely to retain their positions with the company as a
result of the plan, even if their removal would be beneficial to shareholders
generally.
Wintrust's articles of incorporation and by-laws contain provisions,
including a staggered board provision, that make it more difficult for a third
party to gain control or acquire Wintrust without the consent of its board of
directors. These provisions also could discourage proxy contests and may make it
more difficult for dissident shareholders to elect representatives as directors
and take other corporate actions.
These provisions of Wintrust's governing documents may have the effect
of delaying, deferring or preventing a transaction or a change in control that
might be in the best interest of Wintrust's shareholders.
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
Certain statements contained in this document, including information
incorporated into this document by reference, that are not historical facts may
constitute forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Securities Exchange Act,
and are intended to be covered by the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The sections of this document which
contain forward-looking statements include, but are not limited to, "Questions
and answers about the merger," "Summary," "Risk Factors," "Description of the
merger -- Background of the merger," "Description of the merger -- Wintrust's
reasons for the merger," and "Description of the merger -- Advantage's reasons
for the merger and recommendation of the Board of Directors." You can identify
these statements from our use of the words "may," "will," "should," "could,"
"would," "plan," "potential," "estimate," "project," "believe," "intend,"
"anticipate," "expect," "target" and similar expressions. These forward-looking
statements include statements relating to:
o Wintrust's goals, intentions and expectations;
o Wintrust's business plans and growth strategies; and
o estimates of Wintrust's risks and future costs and benefits.
These forward-looking statements are subject to significant risks,
assumptions and uncertainties, including among other things, changes in general
economic and business conditions and the risks and other factors set forth in
the "Risk Factors" section beginning on page 14.
Because of these and other uncertainties, Wintrust's actual results,
performance or achievements, or industry results, may be materially different
from the results indicated by these forward-looking statements. In addition,
Wintrust's past results of operations do not necessarily indicate Wintrust's
future results. You should not place undue reliance on any forward-looking
statement, which speak only as of the date they were made. Wintrust will not
update these forward-looking statements, even though its situation may change in
the future, unless Wintrust is obligated to do so under the federal securities
laws. Wintrust qualifies all of its forward-looking statements by these
cautionary statements.
16
Further information on other factors which could affect the financial
results of Wintrust before and after the merger is included in Wintrust's
filings with the Securities and Exchange Commission, or SEC, incorporated by
reference into this proxy statement/prospectus. See "Where You Can Find More
Information" on page 40.
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SPECIAL MEETING OF ADVANTAGE SHAREHOLDERS
DATE, PLACE, TIME AND PURPOSE
Wintrust's and Advantage's boards of directors are sending you this
proxy statement/prospectus and proxy form to use at the Special Meeting. At the
Special Meeting, the Advantage board of directors will ask you to vote on a
proposal to approve the merger. Advantage and Wintrust will share the costs
associated with the solicitation of proxies for the Special Meeting. The Special
Meeting will be held at the ________________________________, on
__________________ at _____ a.m., Chicago time.
RECORD DATE, VOTING RIGHTS, QUORUM AND REQUIRED VOTE
Advantage has set the close of business on __________, 2003, as the
record date for determining the holders of Advantage common stock entitled to
notice of and to vote at the Special Meeting. Only Advantage shareholders at the
close of business on the record date are entitled to notice of and to vote at
the Special Meeting.
The approval of the merger agreement will require the affirmative vote
of at least a majority of the outstanding shares of Advantage. As of the record
date, there were _______ shares of Advantage common stock entitled to vote at
the Special Meeting. There must be at least a majority of the outstanding shares
of Advantage present in person or by proxy at the Special Meeting in order for
the vote on the merger to occur. Certain executive officers and directors of
Advantage, whose aggregate ownership represents approximately __% of the
outstanding shares of Advantage, have committed to vote their shares of
Advantage common stock in favor of the merger. Wintrust holds no shares of
Advantage common stock.
Abstentions from voting will have the same effect as voting against the
merger agreement.
VOTING AND REVOCABILITY OF PROXIES
You may vote in person at the Special Meeting or by proxy. To ensure
your representation at the Special Meeting, we recommend you vote by proxy even
if you plan to attend the Special Meeting. You can always change your vote at
the Special Meeting.
Voting instructions are included on your proxy form. If you properly
complete and timely submit your proxy, your shares will be voted as you have
directed. You may vote for, against, or abstain with respect to the approval of
the merger. If you are the record holder of your shares and submit your proxy
without specifying a voting instruction, your shares will be voted "FOR"
approval of the merger agreement.
You may revoke your proxy before it is voted by:
o filing with the secretary of Advantage a duly executed
revocation of proxy;
o submitting a new proxy with a later date; or
o voting in person at the Special Meeting.
Attendance at the Special Meeting will not, in and of itself,
constitute a revocation of a proxy. All written notices of revocation and other
communication with respect to the revocation of proxies should be addressed to:
Advantage National Bank, 75 E. Turner Avenue, Elk Grove Village, Illinois 60007,
Attention: Gerhardt E. Umlauf.
DISSENTERS' RIGHTS
Under Illinois law, you are entitled to exercise dissenters' rights and
obtain a cash payment for your shares as a result of Wintrust's acquisition of
Advantage, provided that you comply with the provisions of Sections 11.65 and
11.70 of the Illinois Business Corporation Act, or the IBCA. A copy of those
sections are attached as Annex C and incorporated in this proxy
statement/prospectus by reference. If you comply with the provisions of Section
11.70 of the IBCA, then upon consummation of the merger, you are entitled to
receive payment from Wintrust for the fair value of your shares, with accrued
interest. The term "fair value" means the value of the shares immediately before
the merger closing excluding any appreciation or depreciation in anticipation of
the merger, unless the exclusion would be inequitable. If Wintrust and you
cannot agree on the fair value of your shares or the
18
accrued interest, then the IBCA provides for a judicial determination of these
amounts. The value determined by an Illinois court may be more or less than the
value you are entitled to under the merger agreement. If you desire to exercise
dissenters' rights, you should refer to the statute in its entirety and should
consult with legal counsel before taking any action to ensure that you comply
strictly with the applicable statutory provisions.
In summary, to exercise dissenters' rights, you must do all of the
following:
o deliver to Advantage a written demand for payment of your
shares before the vote on the merger is taken;
o not vote in favor of the merger; note, however, that a vote,
in person or by proxy, against approval and adoption of the
merger agreement will not constitute a written demand for
appraisal; and
o continue to hold your shares of Advantage common stock through
the effective time of the merger.
Your failure to vote against the proposal to adopt the merger agreement
will not constitute a waiver of your dissenters' rights under the IBCA. Also, a
vote against approval of the merger agreement will not by itself be sufficient
to satisfy your obligations if you are seeking an appraisal. You must follow the
procedures set forth in Section 11.70 of the IBCA to obtain dissenters' rights.
Each outstanding share of Advantage common stock for which a legally
sufficient demand in accordance with Section 11.70 of the IBCA has been made and
that was not voted in favor of approval of the merger will, after the effective
time of the merger, represent only the rights of a dissenting shareholder under
the IBCA. This includes the right to obtain payment for the estimated fair value
of those shares as provided under the IBCA.
If you make a legally sufficient demand, within ten days after the
effective date of the merger or 30 days after you have delivered your written
demand for payment, whichever is later, Wintrust will send to you a statement
setting forth its opinion as to the fair value of your shares, as well as
certain financial statements and a commitment to pay to you the estimated fair
value for your shares. If you do not agree with the opinion of Wintrust as to
the estimated fair value of the shares, then within 30 days of your receipt of
Wintrust's valuation statement, you must notify Wintrust of your estimated fair
value of your shares and demand the difference between your estimated fair value
and the amount of the payment by Wintrust.
If, within 60 days from delivery of Wintrust's notice to the dissenting
shareholders, you and Wintrust have not agreed in writing to the fair value of
the shares, Wintrust either will pay the difference in value demanded by you, or
file a petition in the circuit court requesting the court to determine the fair
value of the shares. Wintrust will be required to then make all dissenters to
the merger a party to this proceeding. If Wintrust does not commence the action,
you are permitted by law to commence an action.
In a proceeding brought by Wintrust to determine value, the court will
determine the costs of the proceeding, including the reasonable compensation of
expenses of the appraisers appointed by the court and excluding fees and
expenses of counsel and experts for the respective parties. If the fair value of
the shares as determined by the court materially exceeds the price that Wintrust
estimated to be the fair value of the shares or if no estimate was given, then
all or any part of the costs may be assessed against Wintrust. If the amount
that any dissenter estimated to be the fair value of the shares materially
exceeds the fair value of the shares as determined by the court, then all or any
part of the costs may be assessed against that dissenter. The costs may be
awarded to the dissenter if the court finds that Wintrust did not substantially
comply with the procedure to dissent in the statute. In addition, costs can be
assessed against either party if the court finds that that party acted
arbitrarily or not in good faith with respect to the dissenter's rights.
A share for which you have properly exercised your dissenters' rights
and followed the correct procedures in the IBCA will not be converted into, or
represent, a right to receive Wintrust common stock and cash as provided under
the merger agreement. Any of these shares will not, after the effective time of
the merger, be entitled to vote for any purpose or receive any dividends or
other distributions. If, however, you, as the holder of the shares, fail to
properly perfect, effectively withdraw, waive or lose, or otherwise become
ineligible to exercise dissenting shareholder's rights under the IBCA, then at
that time the shares held by you will be converted into Wintrust common stock as
provided in the merger agreement.
19
DESCRIPTION OF THE MERGER
The following information describes certain aspects of the merger. The
merger agreement, which you should read carefully, is attached as Annex A to
this proxy statement/prospectus.
GENERAL
When the merger is consummated, Wintrust Merger Co., a subsidiary which
is 100% owned by Wintrust, will merge with and into Advantage. Advantage will be
the surviving entity and will be 100% owned by Wintrust. At the effective time
of the merger, each share of Advantage common stock automatically will be
converted into and exchanged for the right to receive the number of shares of
Wintrust common stock equal to $26.50 divided by the average price of Wintrust
common stock during the pricing period. This number is referred to as the
"exchange ratio." The pricing period is the ten consecutive trading days ending
two trading days before consummation of the merger, and the average price of
Wintrust common stock is defined as the unweighted average high and low sales
prices of Wintrust common stock on the Nasdaq National Market during this
period. The determination of the number of shares of Wintrust common stock to be
issued is subject to possible adjustment as described in the following two
paragraphs.
If the average price of Wintrust common stock during the pricing period
is greater than $35.00 per share, the exchange rate will be $26.50 divided by
$35.00 for purposes of determining the number of shares of Wintrust common stock
to be issued to each former Advantage shareholder. If the average price of
Wintrust common stock during the pricing period is less than $25.00 per share,
the exchange ratio will be $26.50 divided by $25.00 for purposes of determining
the number of shares of Wintrust common stock to be issued to each former
Advantage shareholder.
Cash also will be paid instead of any fractional share interests in
Wintrust common stock. Shares of Advantage common stock held by Advantage
shareholders who elect to exercise their dissenters' rights will not be
converted into Wintrust common stock.
BACKGROUND OF THE MERGER
In late March 2003, one of Advantage's directors was contacted by a
representative of Wintrust who invited him and another director to a meeting
with Wintrust's chairman of the board to discuss Wintrust's potential interest
in affiliating with Advantage. At a subsequent meeting with a number of
Advantage directors in early April, Wintrust's officers again expressed interest
in exploring a possible affiliation with Advantage and thereafter furnished a
written indication of interest, including a price proposal, to one of the
directors. Advantage's director responded to this indication of interest by
saying that he did not believe Advantage's board of directors would have any
interest at the initial price level expressed by Wintrust.
Following further discussions between Wintrust and Advantage board
members, on April 9, 2003, Advantage's chairman of the board received a written
expression of interest proposing that Wintrust acquire 100% of Advantage's
common stock at an increased price of $26.50 per share, with the majority of the
consideration to be paid in Wintrust common stock. Advantage's executive
committee held several informal discussions about Wintrust's level of interest
and Advantage's prospects on a stand-alone basis.
On April 11, 2003, Wintrust's chief executive officer met at
Advantage's Elk Grove office with three of Advantage's directors to discuss the
Wintrust philosophy, its commitment to community banking and the general
business terms of a possible stock-for-stock merger between Wintrust and
Advantage. On April 16, 2003, four of Advantage's directors (two of whom are
attorneys) and two of its executive officers met at Wintrust's headquarters with
its chief executive officer and its chief operating officer. They discussed
general business plans for both organizations and possible synergies resulting
from any affiliation. At this meeting, Advantage and Wintrust also signed an
exclusivity and mutual confidentiality agreement.
Following the April 16th meeting, Advantage's management engaged Barack
Ferrazzano Kirschbaum Perlman & Nagelberg LLC, as special counsel to Advantage,
to provide advice regarding a possible affiliation transaction with Wintrust. In
addition, Advantage's management provided to the directors who are not on the
executive committee preliminary information concerning the contacts with
Wintrust.
20
Advantage's board of directors met on April 22, 2003, to discuss
Wintrust's indication of interest and the board's long-term strategic outlook
for Advantage. A representative of Barack Ferrazzano was also present at this
meeting. At the meeting, senior executive officers of Advantage presented to
directors a recently-completed five-year business plan for Advantage and the
board compared the financial aspects of Wintrust's indication of interest with
the likelihood that Advantage would be able to achieve the growth objectives
indicated in the business plan.
Based on the outcome of its deliberations at the meeting, the Board
directed members of its executive committee and management to continue
discussions with Wintrust in an effort to reach a final definitive proposal that
could be considered by the directors. Thereafter, both Wintrust and Advantage
commenced due diligence investigations of the other party.
After the completion of the first phase of Wintrust's due diligence,
Advantage's executive committee and its special counsel met with representatives
of Wintrust and its counsel on May 16, 2003, to discuss the principal terms of a
proposed merger agreement that had been previously prepared and distributed by
Wintrust. After several hours of discussion, negotiations were halted due to the
parties' inability to agree on terms for the calculation of the exchange ratio.
Members of Advantage's executive committee held additional discussions about
this issue over the next few days with members of Wintrust's management.
Negotiations resumed the following week after the executive committee reached a
mutual understanding with Wintrust's officers regarding pricing and certain
limits placed on the maximum and minimum number of Wintrust shares of stock to
be issued in connection with the proposed merger.
Over the ensuing weeks and with regular updates to their respective
boards, the parties, assisted by their respective legal advisers, continued due
diligence and negotiation of a definitive merger agreement.
The Advantage board met on June 17, 2003 to consider the proposed
transaction and the terms of the proposed merger agreement, a draft and summary
of which had been provided to directors in advance. Also in attendance was a
representative of Barack Ferrazzano. Members of the board's executive committee
reviewed the process leading to the proposed transaction and described their
analysis of the proposed purchase price. The committee noted that it had
reviewed comparable sale transactions of other banks and concluded that the
price offered by Wintrust was at the upper end of this range, especially given
Advantage's relatively short business history. Based on these discussions and
review, the committee members said that they believed accepting the purchase
price offered by Wintrust was in the best interests of Advantage's shareholders.
In light of these conclusions, the board decided not to retain an outside
investment banking firm to issue a fairness opinion or pursue any alternative
strategic options. Following review and discussion at the meeting of the terms
of the transaction and the proposed merger agreement with management and legal
counsel, Advantage's board of directors approved the merger and authorized its
president to execute the merger agreement on behalf of Advantage.
Advantage and Wintrust executed the merger agreement on July 2, 2003,
and issued a joint press release on the same date, announcing the execution of
the agreement.
WINTRUST'S REASONS FOR THE MERGER
Wintrust's board of directors believes that the merger is in the best
interests of Wintrust and its shareholders. In deciding to approve the merger,
Wintrust's board of directors considered a number of factors, including:
o management's view that the acquisition of Advantage provides
an attractive opportunity to expand into the northwest Chicago
metropolitan area, which they consider a desirable market;
o the community banking orientation of Advantage and the
compatability of Advantage with Wintrust and its subsidiaries;
o a review of the demographic, economic and financial
characteristics of the markets in which Advantage operates,
including existing and potential competition and history of
the market areas with respect to financial institutions;
21
o management's review of the business, operations, earnings, and
financial condition, including capital levels and asset
quality, of Advantage since its de novo formation in 2001; and
o the likelihood of regulators approving the merger without
undue conditions or delay.
While Wintrust's board of directors considered these and other factors,
the board of directors did not assign any specific or relative weights to the
factors considered and did not make any determination with respect to any
individual factor. Wintrust's board of directors collectively made its
determination with respect to the merger based on the conclusion reached by its
members, based on the factors that each of them considered appropriate, that the
merger is in the best interests of Wintrust's shareholders. The terms of the
merger were the result of arm's-length negotiations between representatives of
Wintrust and representatives of Advantage.
ADVANTAGE'S REASONS FOR THE MERGER AND RECOMMENDATION OF THE BOARD OF DIRECTORS
The Advantage board believes that the merger is fair to, and in the
best interests of, Advantage and its shareholders. Accordingly, the Advantage
board has unanimously approved the merger agreement and unanimously recommends
that its shareholders vote FOR the approval of the merger agreement and the
transactions it contemplates.
Advantage's board has concluded that the proposed merger offers the
Advantage shareholders an opportunity to achieve the company's strategic
business objectives sooner than originally contemplated at the time that
Advantage formed Advantage National Bank in January 2001. These objectives
included increasing shareholder value, growing the size of the business and
enhancing liquidity for Advantage's shareholders, who will benefit by owning
shares of a publicly traded company.
In deciding to approve the merger agreement and the transactions it
contemplates, Advantage's board consulted with Advantage's management, as well
as its legal counsel, and considered numerous factors, including the following:
o information with respect to the businesses, earnings,
operations, financial condition, prospects, capital levels and
asset quality of Advantage and Wintrust, both individually and
as a combined company;
o the market value of the Wintrust shares to be received by
Advantage shareholders, based upon the trading price of
Wintrust's common stock before the execution of the merger
agreement, that reflected a premium of more than 75% over the
$15.00 per share price paid by Advantage's shareholders during
2000 in connection with the organization of Advantage National
Bank;
o the perceived risks and uncertainties attendant to Advantage's
execution of its strategic growth plans as an independent
banking organization, including the need to access additional
capital and enhance its technology platform on a
cost-effective basis to support future growth;
o the belief that the market value of Wintrust's common stock
prior to the execution of the merger agreement was very
attractive and offered favorable prospects for future
appreciation as a result of the proposed merger and other
strategic initiatives being implemented by Wintrust;
o the strategic vision of the management of Wintrust to seek
profitable future expansion in the Chicago metropolitan area,
leading to continued growth in overall shareholder value;
o the fact that Wintrust is publicly held and the merger would
provide Advantage shareholders, whose investments currently
are in a privately held company, an ownership interest in a
publicly traded company, as well as enhanced access to capital
markets to finance the combined company's capital
requirements; and
o the likelihood that the merger will be approved by the
relevant bank regulatory authorities.
22
The above discussion of the information and factors considered by the
Advantage board is not intended to be exhaustive, but includes all material
factors considered by the Advantage board in arriving at its determination to
approve, and to recommend that the Advantage shareholders vote to approve, the
merger agreement and related transactions. The Advantage board did not assign
any relative or specific weights to the above factors, and individual directors
may have given differing weights to different factors. The Advantage board
unanimously recommends that its shareholders vote to approve the merger
agreement and the related transactions.
ACCOUNTING TREATMENT
Wintrust will account for the merger under the "purchase" method of
accounting in accordance with accounting principles generally accepted in the
United States. Using the purchase method of accounting, the assets and
liabilities of Advantage will be recorded by Wintrust at their respective fair
values at the time of the completion of the merger. The excess of Wintrust's
purchase price over the net fair value of the assets acquired and liabilities
assumed will then be allocated to identified intangible assets, with any
remaining unallocated cost recorded as goodwill.
TAX CONSEQUENCES OF THE MERGER
General. The following discussion addresses the material United States
federal income tax consequences of the merger that are generally applicable to
Advantage shareholders. It does not address the tax consequences of the merger
under foreign, state, or local tax laws or the tax consequences of transactions
completed before or after the merger. Also, the following discussion does not
deal with all federal income tax considerations that may be relevant to certain
Advantage shareholders in light of their particular circumstances, such as
shareholders who:
o are dealers in securities;
o are insurance companies or tax-exempt organizations;
o are subject to alternative minimum tax;
o hold their shares as part of a hedge, straddle, or other risk
reduction transaction; or
o are foreign persons.
YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISORS REGARDING THE TAX
CONSEQUENCES OF THE MERGER TO YOU BASED ON YOUR OWN CIRCUMSTANCES, INCLUDING THE
APPLICABLE FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES.
The following discussion is based on the advice of Barack Ferrazzano
regarding the Internal Revenue Code of 1986, as amended, or the Code, applicable
Treasury Regulations, judicial decisions, and administrative rulings and
practice, all as of the date of this document and all of which are subject to
change. Any change could be applied to transactions that were completed before
the change, and could affect the accuracy of the statements and conclusions in
this discussion and the tax consequences of the merger to Wintrust, Advantage
and the Advantage shareholders.
Tax Opinion of Barack Ferrazzano. Neither Wintrust nor Advantage has
requested, nor will they request, a ruling from the Internal Revenue Service
with regard to the federal tax consequences of the merger. Instead, as a
condition to the closing of the merger, Barack Ferrazzano, special legal counsel
to Advantage, will render its opinion to Advantage, subject to customary
representations and assumptions referred to in the opinion, substantially to the
effect that the merger will constitute a reorganization within the meaning of
Section 368(a) of the Code and Advantage and Wintrust will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code.
Barack Ferrazzano's opinion will be based upon the assumption that the
merger will take place in the manner described in the merger agreement and will
qualify as a statutory merger under state law, and will also assume the truth
and accuracy of certain factual representations that have been made by Wintrust
and Advantage and which are customarily given in transactions of this nature.
Barack Ferrazzano's opinion is not binding on the Internal Revenue Service or
the courts and there can be no assurance that the Internal Revenue Service will
not take
23
a contrary position to one or more positions reflected herein or that the
opinion will be upheld by the courts if challenged by the Internal Revenue
Service.
Provided that the merger constitutes a reorganization within the
meaning of Section 368(a) of the Code, Barack Ferrazzano has advised that for
federal income tax purposes:
o no gain or loss will be recognized by Wintrust or Advantage as
a result of the transactions contemplated in the merger;
o no income, gain or loss will be recognized by Advantage
shareholders upon the receipt of Wintrust common stock in
exchange for Advantage common stock, except with respect to
cash received for a fractional share of Wintrust common stock;
o the basis of the Wintrust common stock received by Advantage
shareholders in the merger will be the same as the basis of
the Advantage common stock surrendered, decreased by the
amount of any cash received and increased by the amount of any
gain recognized in the exchange;
o the holding period of the Wintrust common stock received by
Advantage shareholders will include the holding period of the
Advantage common stock surrendered, provided that the
Advantage common stock was held as a capital asset in the
hands of the Advantage shareholders on the date of the
exchange;
o the basis of the Advantage assets in the hands of Wintrust
will be the same as the basis of such assets in the hands of
Advantage immediately prior to the exchange; and
o the holding period of the Advantage assets transferred to
Wintrust will include the period during which such assets were
held by Advantage prior to the exchange.
In general, holders of warrants to purchase Advantage common stock who
exchange those warrants for cash will recognize gain for federal income tax
purposes equal to the difference between the amount of cash received and their
basis in the warrants.
Withholding. Cash payments in respect of a fractional share of Wintrust
common stock may be subject to the information reporting requirements of the
Internal Revenue Service and to backup withholding at the current rate of 28%.
Backup withholding will not apply to a payment made to you if you complete and
sign the substitute Form W-9 that will be included as part of the transmittal
letter and notice from Wintrust's exchange agent, or you otherwise prove to
Wintrust and its exchange agent that you are exempt from backup withholding.
Backup withholding is not an additional tax, but an advance payment.
Any amount withheld from the payment of the merger consideration may be credited
against the United States federal income tax liability of the beneficial owner
subject to the withholding and may be refunded to the extent it results in an
overpayment of tax. You should consult with your tax advisor as to your
qualification for exemption from backup withholding and the procedures for
obtaining this exemption.
Reporting and Record Keeping. If you exchange shares of Advantage
common stock in the merger for Wintrust common stock, you are required to retain
records of the transaction, and to attach to your federal income tax return for
the year of the merger a statement setting forth all relevant facts with respect
to the nonrecognition of gain or loss upon the exchange. At a minimum, the
statement must include:
o your tax basis in the Advantage common stock surrendered; and
o the amount of cash (if any) received and the fair market
value, as of the effective date of the merger, of the Wintrust
common stock received in exchange therefor.
THE PRECEDING DISCUSSION DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OF
ALL POTENTIAL TAX CONSEQUENCES OF THE MERGER THAT MAY BE RELEVANT TO A
PARTICULAR ADVANTAGE SHAREHOLDER. YOU ARE URGED TO CONSULT WITH YOUR OWN TAX
ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU AS A RESULT OF THE
MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF FOREIGN, STATE, LOCAL AND
OTHER TAX LAWS.
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REGULATORY APPROVALS
The merger of Wintrust and Advantage is subject to prior approval of
the Board of Governors of the Federal Reserve System, commonly known as the
Federal Reserve. Wintrust filed the required notice for Federal Reserve approval
on August 1, 2003 under the process for expedited treatment, and the Federal
Reserve has indicated that it anticipates that Wintrust's notice for approval of
the merger will be acted on no sooner than September 10, 2003, and no later than
September 12, 2003, unless delayed for some reason by the Federal Reserve. Also,
the United States Department of Justice may challenge the merger on antitrust
grounds. The commencement of an antitrust action would stay the effectiveness of
the Federal Reserve's approval, unless a court specifically orders otherwise.
Publication of notice of the merger filing is required and public comment will
be permitted. The Federal Reserve is authorized to permit interested parties to
intervene in the proceedings.
Copies of Wintrust's notification filed with the Federal Reserve were
also provided by the Federal Reserve to the Illinois Office of Banks and Real
Estate, the Office of the Comptroller of the Currency, and the Federal Deposit
Insurance Corporation for comment.
The merger cannot proceed without obtaining all requisite regulatory
approvals. See "Description of the Merger Agreement -- Conditions to Completion
of the Merger," "Description of the Merger Agreement -- Termination," and
"Description of the Merger Agreement -- Waiver; Amendment." Wintrust and
Advantage have agreed to take all reasonable actions necessary to obtain
approvals and comply with the requirements of the applicable regulatory
authorities. However, the obligation of Wintrust or Advantage to take reasonable
actions is not to be construed as including an obligation to accept any terms or
conditions that would be unusual in approvals of similar transactions granted by
the Federal Reserve or objectionable to Wintrust if it in good faith determines
that the terms or conditions would materially adversely affect the benefits of
the merger to Wintrust. There can be no assurance that any regulatory approvals
will not contain a term or condition that causes the approvals to fail to
satisfy the conditions described above.
Wintrust and Advantage are not aware of any other governmental
approvals or actions that are required for consummation of the merger except as
described above. If any other approval or action is required, both parties
contemplate seeking approval or action. There can be no assurance that any
approval or action, if needed, could be obtained and, if the approvals or
actions are obtained, there can be no assurance as to the timing thereof.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
As of _______________, 2003, directors and officers of Advantage
beneficially owned, in the aggregate, ________ shares of Advantage common stock,
representing approximately __% of the outstanding shares of Advantage common
stock. None of Wintrust or its directors, officers or affiliates holds any
shares of Advantage common stock.
Continued Director and Officer Liability Coverage. Pursuant to the
terms of the merger agreement, Wintrust will provide to each of the directors
and officers of Advantage and Advantage National Bank following the effective
time coverage against personal liability for actions taken after the effective
time of the merger that is substantially similar to the coverage Wintrust
provides to its current directors and officers. For a period of five years after
the effective time, Wintrust has agreed to indemnify and hold harmless the
current and former directors and officers of Advantage and Advantage National
Bank for all actions taken by them prior to the effective time of the merger, to
the same extent as Advantage and Advantage National Bank currently provide for
indemnification of their officers and directors.
VOTING AGREEMENTS
Each of the officers and directors of Advantage and Advantage National
Bank have entered into voting agreements with Wintrust. Under these agreements,
these shareholders have each agreed to vote their respective shares of Advantage
common stock:
o in favor of the merger and the transactions contemplated by
the merger agreement;
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o against any action or agreement which would result in a
material breach of term of or any other obligation of
Advantage under the merger agreement; and
o against any action or agreement which would impede, interfere
with or attempt to discourage the transactions contemplated by
the merger agreement.
Furthermore, each of these shareholders has also agreed not to grant
any proxies, deposit any shares of Advantage common stock into a voting trust or
enter into a voting agreement with respect to any Advantage common stock or
solicit, initiate or encourage any inquiries or proposals for a merger or other
business combination. The shares subject to the voting agreements represent
approximately __% of the outstanding shares of Advantage common stock. Each
shareholder voting agreement will terminate upon the earlier of the consummation
of the merger or termination of the merger agreement in accordance with its
terms.
RESTRICTIONS ON RESALE OF WINTRUST COMMON STOCK
This proxy statement/prospectus does not cover any resales of the
shares of Wintrust common stock to be received by Advantage's shareholders upon
completion of the merger, and no person may use this proxy statement/prospectus
in connection with any resale.
All shares of Wintrust common stock issued to shareholders of Advantage
in connection with the merger will be freely transferable, except that shares
received by persons deemed to be "affiliates" of Advantage under the Securities
Act at the time of the Special Meeting may be resold only in transactions
permitted by Rule 145 under the Securities Act or otherwise permitted under the
Securities Act. Based on the number of shares of Wintrust common stock
anticipated to be received in the merger, it is expected that Rule 145 will not
limit the amount of shares that former Advantage shareholders will be able to
sell into the market. Persons who may be deemed affiliates of Advantage for this
purpose generally include directors, executive officers, and the holders of 10%
or more of the outstanding shares of Advantage common stock.
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DESCRIPTION OF THE MERGER AGREEMENT
The following summary of the merger agreement is qualified by reference
to the complete text of the merger agreement. A copy of the merger agreement is
attached as Annex A to this proxy statement/prospectus and is incorporated by
reference into this proxy statement/prospectus. You should read the merger
agreement completely and carefully as it, rather than this description, is the
legal document that governs the merger.
TIME OF COMPLETION
The completion of the merger will take place on the fifth business day
after the day on which the last of the conditions to closing set forth in the
merger agreement have been fulfilled or waived or at another time that both
parties mutually agree upon. The completion of the merger sometimes is referred
to in this proxy statement/prospectus as the closing date. The time at which the
merger becomes effective is sometimes referred to in this proxy
statement/prospectus as the "effective time."
CONSIDERATION TO BE RECEIVED IN THE MERGER
Each share of Advantage common stock outstanding immediately before the
effective time will, at the effective time, be converted into the right to
receive the number of shares of Wintrust common stock equal to $26.50 divided by
the average price of Wintrust common stock during the pricing period. This
number is referred to as the "exchange ratio." The pricing period is the ten
consecutive trading days ending two trading days before, but not including, the
closing date, and the average price of Wintrust common stock is defined as the
unweighted average high and low sales prices of Wintrust common stock on the
Nasdaq National Market during this period. If Wintrust or Advantage, before the
effective time, changes the number of shares of its common stock issued and
outstanding through a stock split, stock combination, stock dividend or other
distribution, the cash and stock consideration will be appropriately adjusted to
reflect the split, combination, dividend or distribution. The exchange ratio is
subject to possible adjustment as described in the following paragraph.
If the average price of Wintrust common stock during the 10-day pricing
period before closing of the merger is less than $25.00 per share, the exchange
ratio will be $26.50 divided by $25.00 for purposes of determining the number of
shares of Wintrust common stock to be issued to each Advantage shareholder. If
the average price of Wintrust common stock during this 10-day pricing period is
greater than $35.00 per share, the exchange ratio will be $26.50 divided by
$35.00 for purposes of determining the number of shares of Wintrust common stock
to be issued to each Advantage shareholder.
27
The following table illustrates the per share consideration that
Advantage shareholders will receive in the merger based on a range of Wintrust
common stock prices.
PER SHARE VALUE OF
WINTRUST AVERAGE EXCHANGE ADVANTAGE STOCK
STOCK PRICE RATIO AT CLOSING(1)
----------- ----- -------------
$ 40.00 0.757 $ 30.28
39.00 0.757 29.52
38.00 0.757 28.77
37.00 0.757 28.10
36.00 0.757 27.25
35.00 0.757 26.50
34.00 0.779 26.50
33.00 0.803 26.50
32.00 0.828 26.50
31.00 0.855 26.50
30.00 0.883 26.50
29.00 0.914 26.50
28.00 0.946 26.50
27.00 0.981 26.50
26.00 1.019 26.50
25.00 1.060 26.50
24.00 1.060 25.44
23.00 1.060 24.38
22.00 1.060 23.32
21.00 1.060 22.26
20.00 1.060 21.20
--------------
(1) Assumes the closing price of Wintrust common stock on the date of the
merger is the same as the average price during the pricing period. The
actual trading price of Wintrust common stock is subject to market
fluctuations, and Advantage shareholders will not be entitled to receive
additional shares in the merger if the trading price of Wintrust common
stock on the closing date of the merger is less than the average price
during the pricing period.
Instead of issuing a fractional share of Wintrust common stock in
connection with payment of the stock consideration, cash will be paid in an
amount determined by multiplying the fractional share by the average price
during the pricing period.
Warrants and Stock Options. Each warrant to purchase Advantage common
stock outstanding at the effective time of the merger will be converted into the
right to receive an amount in cash equal to the number of shares of Advantage
common stock subject to the warrant multiplied by the difference between (i)
$26.50 and (ii) the per share exercise price associated with that warrant.
Options to purchase Advantage common stock that are outstanding and unexercised
immediately before the effective time of the merger will be converted into the
right to receive options to purchase Wintrust common stock. The number of shares
of Wintrust common stock subject to the converted stock option will be equal to
the number of shares of Advantage common stock subject to the Advantage stock
option multiplied by the exchange ratio. The exercise price of the converted
stock option will equal the Advantage stock option's exercise price divided by
the exchange ratio. Except as described above, the converted stock options will
have the same terms and conditions as the Advantage stock options. All
outstanding Advantage stock options, subject to limited exceptions, will become
vested and immediately exercisable at the effective time of the merger.
EXCHANGE OF CERTIFICATES
Wintrust has engaged Illinois Stock Transfer Company to act as its
exchange agent to handle the exchange of Advantage common stock for the merger
consideration and the payment of cash for any fractional share interest. Within
five days of the effective time, the exchange agent will send to each Advantage
shareholder a letter of transmittal for use in the exchange with instructions
explaining how to surrender Advantage common stock
28
certificates to the exchange agent. Advantage shareholders that surrender their
certificates to the exchange agent, together with a properly completed letter of
transmittal, will receive the merger consideration. Advantage shareholders that
do not exchange their Advantage common stock will not be entitled to receive any
dividends or other distributions by Wintrust until their certificates are
surrendered. After surrender of the certificates representing Advantage shares,
any unpaid dividends or distributions with respect to the Wintrust common stock
represented by the certificates will be paid.
CONDUCT OF BUSINESS PENDING THE MERGER AND CERTAIN COVENANTS
Under the merger agreement, Advantage has agreed to certain
restrictions on its activities until the merger is completed or terminated. In
general, Advantage and its subsidiaries are required to conduct their business
in the ordinary course of business, consistent with prudent banking practice.
The following is a summary of the more significant restrictions imposed
upon Advantage, subject to the exceptions set forth in the merger agreement:
o issuing, selling, purchasing or redeeming its securities;
o paying any dividends or other distributions;
o amending its articles of incorporation or by-laws;
o increasing compensation or benefits for officers or key
employees or paying any bonuses;
o making any expenditure for fixed assets in excess of $25,000
for any single item, or $100,000 in the aggregate;
o making or becoming party to a contract, commitment, or
transaction, other than in the ordinary course of business
consistent with prudent banking practice and Advantage's
policies;
o making any loan in excess of $500,000 other than in the
ordinary course of business consistent with prudent banking
practice;
o entering into employment, consulting, or similar agreements
that cannot be terminated with less than 30 days notice
without penalty;
o buying or investing in government securities that have
maturities of more than five years and a rating agency rating
below "A"; and
o changing in any material respect any accounting, banking, or
investment policies.
Wintrust has agreed to file all applications and notices to obtain the
necessary regulatory approvals for the transactions contemplated by the merger
agreement. Advantage has agreed to cooperate with Wintrust in connection with
obtaining the regulatory approvals. Both parties agree:
o to use all reasonable efforts and to cooperate in the
preparation and filing of all applications, notices and
documents required to obtain regulatory approval and/or
consents from governmental authorities for the merger and the
merger agreement;
o to use reasonable and diligent good faith efforts to satisfy
the conditions required to close the merger and to consummate
the merger as soon as practicable;
o that neither will intentionally act in a manner that would
cause a breach of the merger agreement or that would cause a
representation made in the merger agreement to become untrue;
o to provide the other party with reasonable access to
information under the condition that the information be kept
confidential; and
29
o to coordinate publicity of the transactions contemplated by
the merger agreement with the media and Advantage
shareholders.
Advantage has agreed that it will not encourage any third-party
proposals to acquire Advantage and will not participate in negotiations
regarding a proposal to acquire Advantage. However, Advantage may provide
information and negotiate with a third party if the Advantage Board of Directors
determines that failure to do so would be inconsistent with their fiduciary
duties. Advantage is required under the agreement to provide Wintrust notice of
any proposal to acquire Advantage.
Advantage has also agreed to provide Wintrust with certain documents
before the closing date, including:
o interim financial statements;
o prompt notice of any exercise of dissenters' rights;
o reasonable notice of any Advantage board and committee
meetings; and
o loan information.
The merger agreement also contains certain covenants relating to
employee benefits and other matters pertaining to officers and directors. See
"Description of the Merger -- Employee Benefit Matters" and "Description of the
Merger -- Interests of Certain Persons in the Merger."
REPRESENTATIONS AND WARRANTIES
The merger agreement contains representations and warranties made by
Advantage and Wintrust. These include, among other things, representations
relating to:
o valid corporate organization and existence;
o corporate power and authority to enter into the merger and the
merger agreement;
o capitalization;
o financial statements;
o tax matters;
o environmental matters;
o absence of material adverse changes;
o government approvals required in connection with the merger;
o compliance with material contracts;
o absence of undisclosed investigations and litigation;
o compliance with laws;
o investment banker/finder fees;
o governmental registrations, licenses, permits, and reports;
o absence of default under any material contract;
o absence of material omissions; and
o absence of any breach of organizational documents, law or
other agreements as a result of the merger.
30
Wintrust and Wintrust Merger Co. also represent and warrant to
Advantage in the merger agreement regarding:
o compliance with SEC filing requirements;
o compliance with ERISA; and
o administration of fiduciary accounts.
Advantage makes additional representations and warranties to Wintrust
in the merger agreement relating to, among other things:
o organizational documents and stock records;
o title to real property, personal property, and other material
assets;
o insurance matters;
o employee benefits;
o ownership of subsidiaries;
o material contracts;
o loans;
o investment securities;
o compliance with the Community Reinvestment Act;
o conduct of business and maintenance of business relationships;
o technology and intellectual property;
o absence of undisclosed liabilities;
o reserve for loan and lease losses; and
o affiliate transactions.
CONDITIONS TO COMPLETION OF THE MERGER
Closing Conditions for the Benefit of Wintrust. Wintrust's obligations
are subject to fulfillment of the following conditions:
o the accuracy of representations and warranties of Advantage in
all material respects as of the effective time;
o performance by Advantage in all material respects of its
agreements under the merger agreement;
o the registration statement has been declared effective by the
SEC and continues to be effective as of the effective time;
o approval of the merger by Advantage shareholders;
o receipt of all necessary regulatory approvals;
o no adverse material change in Advantage since July 2, 2003;
31
o no litigation resulting from the transactions contemplated by
the merger agreement;
o receipt of certain certificates and a legal opinion from
Advantage;
o receipt of voting agreements;
o receipt of environmental surveys;
o continued employment of certain Advantage employees;
o maintenance of minimum net worth and loan loss reserve
requirements; and
o receipt of necessary consents/waivers and opinions.
Closing Conditions for the Benefit of Advantage. Advantage's
obligations are subject to fulfillment of the following conditions:
o accuracy of representations and warranties of Wintrust and
Wintrust Merger Co. in all material respects as of the
effective time
o performance by Wintrust and Wintrust Merger Co. in all
material respects of their agreements under the merger
agreement;
o Wintrust's common stock, when issued as merger consideration,
shall be included for trading on Nasdaq;
o receipt of all necessary regulatory approvals;
o execution and delivery of the merger agreement and articles of
merger suitable for filing with the Illinois Secretary of
State;
o the registration statement has been declared effective by the
SEC and continues to be effective as of the effective time;
o no litigation resulting from the transactions contemplated by
the merger agreement;
o no material adverse change in Wintrust since July 2, 2003; and
o receipt of certain certificates and opinions.
TERMINATION
The merger agreement may be terminated under any of the following
circumstances, as set forth in the merger agreement:
o at any time by written agreement of Wintrust and Advantage;
o by either party if:
o the effective time has not occurred by December 31,
2003 or such later date agreed to by the parties;
provided, that the termination date will be extended
to March 31, 2004 if the sole impediment to closing
is due to delays in receiving regulatory approval
from the SEC or the Federal Reserve;
o the other party has not satisfied any of the closing
conditions set forth in the merger agreement; or
o Advantage receives and accepts a superior proposal
for acquisition by a third party.
32
o by Wintrust if Advantage has not satisfied a condition under
the merger agreement required to be met by Advantage prior to
the closing date, or if it becomes impossible for Advantage to
satisfy a condition and Advantage's inability to satisfy the
condition was not caused by Wintrust's failure to meet any of
its obligations under the Agreement;
o by Advantage if Wintrust has not satisfied a condition under
the merger agreement required to be met by Wintrust prior to
the closing date, or if it becomes impossible for Wintrust to
satisfy a condition and Wintrust's inability to satisfy the
condition was not caused by Advantage's failure to meet any of
its obligations under the Agreement;
TERMINATION FEE
Wintrust may demand a $1,000,000 termination fee from Advantage if the
merger agreement is terminated under the following circumstances:
o Advantage solicits or facilitates an acquisition proposal by a
third party, or receives and accepts a superior proposal for
acquisition by a third party;
o If, within six months following a termination of the
agreement, Advantage consummates or enters into a transaction
that would result in a change of control of Advantage or
Advantage National Bank pursuant to the terms of a proposal
known to Advantage before the termination of the agreement,
but which was not disclosed to Wintrust.
WAIVER; AMENDMENT
Any of the terms of the merger agreement may be amended or modified by
a writing signed by Advantage, Wintrust and Wintrust Merger Co.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
After the merger, the Wintrust board of directors will remain the same;
the Advantage board of directors will likely change to include certain members
of Wintrust's board of directors.
EMPLOYEE BENEFIT MATTERS
The merger agreement calls for Wintrust to assume and continue most of
Advantage's employee benefit plans and arrangements, but Wintrust reserves the
right to amend or terminate these plans and arrangements in accordance with the
terms of the plans and arrangements and applicable laws. If Wintrust chooses to
terminate any Advantage plan after the closing date, employees previously
covered under the terminated plan will be eligible to participate in a similar
Wintrust benefit plan.
EXPENSES
All expenses incurred in connection with the merger agreement will be
paid by the party incurring the expenses, except that the fees paid in
connection with the filing and distribution of the registration statement will
be shared equally between Advantage and Wintrust. Wintrust and Advantage have
also agreed to pay each other certain expenses not exceeding $150,000 in the
event the merger is terminated prior to the closing date for certain specified
reasons relating to a material breach of the merger agreement.
NASDAQ STOCK LISTING
Wintrust common stock currently is listed on the Nasdaq National Market
under the symbol "WTFC." The shares to be issued to the Advantage shareholders
as merger consideration also will be eligible for trading on the Nasdaq National
Market.
33
COMPARISON OF SHAREHOLDER RIGHTS
At present, the rights of shareholders of Advantage, an Illinois
corporation, are governed by Advantage's articles of incorporation and by-laws
and the Illinois Business Corporation Act (the "IBCA"). Upon completion of the
merger, the rights of Advantage shareholders who receive shares of Wintrust
common stock in exchange for their shares of Advantage common stock will be
governed by the articles of incorporation and by-laws of Wintrust. Wintrust is
also an Illinois corporation governed by the IBCA, as well as the rules and
regulations applying to public companies. The following discussion summarizes
material differences between the rights of Advantage and Wintrust shareholders
and is not a complete description of all the differences. This discussion is
qualified in its entirety by reference to the IBCA and Wintrust's and
Advantage's articles of incorporation and by-laws.
AUTHORIZED CAPITAL STOCK
The authorized capital stock of Advantage consists of 100,000 shares of
preferred stock, par value $5.00 per share, and 3 million shares of common
stock, par value $5.00 per share. The authorized capital stock of Wintrust
consists of 20 million shares of preferred stock, no par value per share, and 30
million shares of common stock, no par value per share.
PAYMENT OF DIVIDENDS
The IBCA governs the ability of Advantage and Wintrust to pay
dividends. As an Illinois corporation, no dividends or other distributions may
be paid to shareholders if the distribution would have the effect of making the
corporation insolvent or if, after payment of the dividend, the net assets of
the corporation would be less than zero or less than the maximum amount payable
at the time of distribution to shareholders having preferential rights in the
liquidation of the corporation if it were to be liquidated.
ADVANCE NOTICE REQUIREMENTS FOR PRESENTATION OF BUSINESS AND NOMINATIONS OF
DIRECTORS AT ANNUAL MEETINGS OF SHAREHOLDERS
Wintrust's by-laws provide that Wintrust must receive written notice of
any shareholder director nomination or proposal for business at an annual
meeting of shareholders no later than 60 days before the date of the mailing of
the proxy materials. If, however, the date of the meeting has changed more than
30 days from the anniversary date of the prior year annual meeting, the notice
must be delivered to Wintrust no later than 90 days before the meeting. Approval
of any shareholder proposals or director nominations requires a super majority
vote of 85% of the outstanding shares.
Advantage's by-laws and the IBCA do not provide any advance notice
requirements for shareholder nomination or election of directors at annual
meetings.
QUORUM
Advantage's by-laws provide that a majority of the outstanding shares
of the corporation entitled to vote on a matter, in person or by proxy,
constitutes a quorum for the taking of action at a meeting of shareholders.
Wintrust's by-laws contain essentially the same provision.
ELECTION, CLASSIFICATION AND NUMBER OF BOARD OF DIRECTORS
Under Advantage's articles of incorporation and by-laws, the directors
are divided into three classes with one class elected for a three-year term at
each annual meeting of shareholders. The articles and by-laws provide that the
number of directors shall be not less than 10 or more than 20. The number
currently designated by Advantage is 12.
Similarly, the Wintrust directors are divided into three classes with
one class elected for a three-year term at each annual meeting of shareholders.
Wintrust's by-laws state that the number of directors shall be 14; however, the
Board of Directors may increase or decrease that number so long as there are not
less than six directors at any time. The number of directors currently
designated by Wintrust is 14.
34
REMOVAL OF DIRECTORS
As permitted under the IBCA, Advantage's articles of incorporation
provide that a director may be removed only for cause, at a meeting of
shareholders, by the affirmative vote of the holders of a majority of
outstanding shares entitled to vote. Under the IBCA, the notice of the meeting
must state that a purpose of the meeting is to vote on the removal of the
director named in the notice.
Wintrust's directors may be removed by shareholders with or without
cause, at a duly called meeting of shareholders by the affirmative vote of the
holders of a majority of outstanding shares entitled to vote.
FILLING VACANCIES ON THE BOARD OF DIRECTORS
Wintrust's by-laws provide that any vacancies and newly created
directorships on the Board of Directors may be filled by a majority vote of the
directors then in office. Shareholders do not have the right to fill vacancies.
Any director so chosen will hold office for the remainder of the term of the
class the director has been elected to.
Advantage's articles of incorporation and by-laws provide that any
vacancies on the Board of Directors may be filled by the vote of 75% of the
directors then in office or by shareholder action. Any appointed directors will
serve until the next shareholder meeting electing the class for which such
directors have been chosen.
AMENDMENT OF ARTICLES OF INCORPORATION AND BY-LAWS
Advantage's articles of incorporation may be amended by the affirmative
vote of a majority of the shares entitled to vote so long as at least 75% of the
number of directors then authorized to serve have first approved the proposed
amendment. Advantage's by-laws may be amended or repealed by a majority of
directors or shareholders.
Any amendment of Wintrust's articles of incorporation must be approved
by a majority vote of the board of directors and also by a vote of at least 2/3
of the outstanding shares of common stock. However, amendment of certain
provisions of Wintrust's articles of incorporation requires a higher vote of 85%
or more of the outstanding shares. These include provisions relating to:
prohibiting cumulative voting rights; the prohibition of shareholder action by
written consent; indemnification; the number and classification of directors;
and amendment of certain sections of the articles of incorporation. Wintrust's
by-laws may be amended only by the board of directors.
MERGERS, ACQUISITIONS AND OTHER TRANSACTIONS
Under the IBCA, unless a corporation's articles of incorporation
provide otherwise, approval by two-thirds of the voting power of the corporation
is required for mergers, consolidating other transactions involving any sale,
lease, exchange or disposition of all or substantially all of its assets or
dissolution. Advantage's articles of incorporation state that transactions
involving any sale, lease, exchange or disposition of all or substantially all
of its assets or dissolution requires the affirmative vote of the holders of at
least 75% of its outstanding common stock. However, if the transaction has been
approved by 75% or more of Advantage's directors, approval by only a majority of
shareholders is required.
Wintrust's articles of incorporation do not specify a different
percentage than required by law, except as discussed below regarding business
combinations with certain persons. See "Business combinations with interested
shareholders."
BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
As a public company, Wintrust is governed by the provisions of Section
7.85 of the IBCA which applies to a transaction with an "Interested Shareholder"
(as defined below) (the "IBCA fair price provision"). Fair price provisions are
designed to impede two-step takeover transactions which might otherwise result
in disparate treatment of Wintrust's shareholders. Advantage is not governed by
Section 7.85.
Under the IBCA fair price provision, the approval of at least 80
percent of the shares is required in connection with any transaction involving
an Interested Shareholder except (i) in the cases where the proposed transaction
has been approved in advance by a majority of those members of the corporation's
board of directors who are unaffiliated with the Interested Shareholder and were
directors prior to the time when the Interested
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Shareholder became an Interested Shareholder or (ii) if the proposed transaction
meets certain conditions set forth therein which are designed to afford the
shareholders a fair price in consideration for their shares, in which case
approval of only a majority of the outstanding shares of voting stock is
required.
The term "Interested Shareholder" is defined in the IBCA to include any
individual, corporation, partnership or other entity (other than the corporation
or any subsidiary) which owns beneficially or controls, directly or indirectly,
10% or more of the outstanding shares of the corporation's voting stock.
LIMITATIONS ON DIRECTORS' LIABILITY
Wintrust's articles of incorporation provides that no director will be
personally liable to the corporation or any of its shareholders for monetary
damages for any breach of fiduciary duty except, as required by the IBCA, as
follows:
(1) for breach of duty of loyalty to the corporation or the
shareholders;
(2) for acts and omissions not in good faith or which involved
intentional misconduct or a knowing violation of law;
(3) for deriving an improper personal benefit from a
transaction with the corporation; or
(4) under Section 8.65 of the IBCA, which creates liability
for unlawful payment of dividends and unlawful stock purchases or
redemptions.
Similarly, Advantage's articles of incorporation provide that, to the
extent permitted under the IBCA, no director will be personally liable to the
corporation or any of its shareholders for monetary damages for any breach of
fiduciary duty.
INDEMNIFICATION
Under the IBCA, a corporation may indemnify its directors, officers,
employees and certain other individuals against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement in connection with
actions, suits or proceedings arising because of the person's relationship to
the corporation. The indemnification generally will cover expenses regardless of
whether it is a civil, criminal, administrative or investigative proceeding if
the individual acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to, the best interest of the corporation and, in the
case of a criminal proceeding, had no reasonable cause to believe his or her
conduct was unlawful. A similar standard applies in an action or suit by or in
the right of the corporation, but only extends to expenses, including attorneys'
fees, incurred in defense of the proceeding. In these cases, court approval is
required before there can be any indemnification when the person seeking
indemnification has been found liable to the corporation. To the extent a person
otherwise eligible for indemnification is successful on the merits or otherwise
in defense of any action, suit or proceeding described above, indemnification
for expenses, including attorneys' fees, actually and reasonably incurred is
required under the IBCA.
Advantage's articles of incorporation and by-laws provide for the same
indemnification as the IBCA.
Wintrust's articles of incorporation generally provides for the same
indemnification as the IBCA, including the advancement of expenses to the extent
permitted by law. Wintrust's articles of incorporation also provide for the
continuation of indemnification after the termination of the indemnified
person's association with Wintrust.
ACTION BY SHAREHOLDERS WITHOUT A MEETING
Under the IBCA, unless the articles of incorporation provide otherwise,
shareholders may act by written consent if the consent is signed by shareholders
who collectively own the number of shares that would have been required to take
action at an actual shareholder meeting. Advantage's and Wintrust's articles of
incorporation provide that no action by written consent is permitted by
shareholders. All action required or permitted to be taken by shareholders must
be effected at a duly called annual or special meeting of Advantage or Wintrust
shareholders, as the case may be.
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SPECIAL MEETINGS OF SHAREHOLDERS
The IBCA provides that special meetings may be called by the president,
by the Board of Directors, by the holders of not less than one-fifth of all the
outstanding shares entitled to vote on the matter for which the meeting is
called, or by any other persons as the articles of incorporation or by-laws may
provide. Advantage's by-laws state that a special meeting may be called by the
persons named in the statute, while Wintrust's by-laws state that special
meetings only may be called by the chairman of the board of directors or the
president of Wintrust.
PREEMPTIVE RIGHTS
Under the IBCA, preemptive rights will not be available unless a
corporation's articles of incorporation specifically provides for these rights.
Both Wintrust and Advantage's articles of incorporation do not provide for
preemptive rights.
APPRAISAL RIGHTS OF DISSENTING SHAREHOLDERS
Under the IBCA, the rights of dissenting shareholders to obtain the
fair value for their shares may be available in connection with a merger or
consolidation in certain situations. Dissenters' rights are available to
Advantage shareholders in connection with the merger because the merger requires
shareholder approval. For a description of dissenters' rights, see "Special
Meeting of Advantage Shareholders -- Dissenters' Rights."
RIGHTS PLAN
Wintrust has a shareholders rights plan which could discourage
unsolicited or hostile takeover attempts which are not negotiated with its board
of directors. The plan discourages such attempts by causing substantial dilution
to any person who acquires an amount in excess of a specified percentage of
Wintrust's common stock and by making an acquisition of Wintrust, without the
consent of its board of directors, prohibitively expensive. The description of
the rights plan set forth below does not purport to be complete and is qualified
in its entirety by reference the description of the rights plan set forth in
Wintrust's Registration Statement on Form 8-A dated August 28, 1998. See
"Incorporation of Certain Information by Reference" on page 41.
Each share of Wintrust common stock has attached to it a stock purchase
right having the terms set forth in a rights agreement between Wintrust and
Illinois Stock Transfer Company, as rights agent. Each right will entitle its
registered holder to purchase from Wintrust one one-hundredth of a share of
Junior Serial Preferred Stock A, without par value, at a price of $85.00 per one
one-hundredth share, subject to certain adjustments. Generally, the rights
become exercisable when any person or group (i) acquires or obtains the right to
acquire 15% or more of Wintrust's common stock, or (ii) commences (or announces
its intention to commence) a tender or exchange offer to acquire 15% or more of
Wintrust's common stock.
In the event that any person or group becomes the beneficial owner of
15% or more of Wintrust's common stock, rights owned by that person or group
will immediately become null and void. Thereafter, other registered rights
holders will have the right to receive, upon exercise at the then current
exercise price of the right, Wintrust common stock having a value equal to two
times the exercise price of the right. Additionally, if, after any person or
group has acquired 15% or more Wintrust's common stock, Wintrust is acquired in
a merger or other business combination or 50% or more of Wintrust's assets or
earning power are sold, then each registered right holder will receive the right
to purchase, for the exercise price, common stock of the entity which acquires
or survives Wintrust having a value equal to twice the exercise price of the
right.
Prior to any person or group acquiring 15% or more of Wintrust's common
stock, Wintrust may redeem the rights in whole, but not in part, at a price of
$0.01 per right to be paid in cash, shares of Wintrust common stock or other
consideration. In addition, at any time after a person or group acquires 15% of
Wintrust's common stock, but prior to such person or group acquiring 50% or more
of Wintrust's common stock, Wintrust may exchange the rights, in whole or in
part, at an exchange ratio of one share of common stock per right. The rights
will expire on July 31, 2008 unless exercised, redeemed, exchanged or otherwise
cancelled before that date.
Advantage does not have a shareholder rights plan.
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BUSINESS OF WINTRUST
Financial and other information relating to Wintrust, including
information relating to Wintrust's current directors and executive officers, is
set forth in Wintrust's 2002 Annual Report on Form 10-K, Wintrust's Proxy
Statement for its 2003 Annual Meeting of Shareholders filed with the SEC on
April 29, 2003, Wintrust's 2003 Quarterly Reports on Form 10-Q and Wintrust's
Current Reports on Form 8-K filed during 2003, which are incorporated by
reference to this proxy statement/prospectus and copies of which may be obtained
from Wintrust as indicated under "Where You Can Find More Information" on
page 40. See "Incorporation of Certain Information by Reference" on page 41.
Wintrust Financial Corporation, an Illinois corporation, is a financial
holding company headquartered in Lake Forest, Illinois. Wintrust operates seven
community banks, all in affluent suburbs of Chicago, which provide
community-oriented, personal and commercial banking services primarily to
individuals and small to mid-size businesses through 32 banking facilities.
Wintrust also provides trust, investment and asset management services through
its subsidiaries to customers of its banks. Through Wayne Hummer Investments,
LLC and Wayne Hummer Asset Management Company, Wintrust provides brokerage,
investment and asset management services to over 35,000 customers, primarily in
the Midwest, as well as to customers of its banks. Wintrust also provides trust
and asset management services through its subsidiary, Wayne Hummer Trust
Company. In addition, Wintrust is involved in specialty lending through
operating subsidiaries or divisions of certain of its banks. Its specialty
lending niches include one of the five largest, based on management's estimates,
commercial insurance premium finance companies in the United States; a company
which provides accounts receivable financing and administrative services to the
temporary staffing industry; and an indirect auto lending business which
purchases loans through Chicago-area automobile dealerships. As of June 30,
2003, Wintrust had consolidated total assets of $4.1 billion, deposits of $3.4
billion and shareholders' equity of $249.4 million.
RECENT DEVELOPMENTS
On August 7, 2003, Wintrust announced the signing of a definitive
agreement to acquire Village Bancorp, Inc. ("Village") in a stock merger
transaction. Village is the parent company of Village Bank and Trust-Arlington
Heights ("Village Bank") that has locations in Arlington Heights and Prospect
Heights, Illinois. Village Bank began operations as a de novo bank in 1995 and
had total assets of approximately $74 million as of June 30, 2003.
In the proposed merger, each share of Village common stock outstanding
will be converted into the right to receive shares of Wintrust's common stock
based on Wintrust's average trading price at closing determined in accordance
with the merger agreement. The aggregate purchase price would be approximately
$9.0 million, or approximately two times the current book value of Village. At
June 30, 2003, Village had outstanding 1,052,054 shares of common stock and
in-the-money warrants to acquire approximately 150,000 shares of common stock at
exercise prices ranging from $6.50 to $7.50 per share. Under the agreement, any
warrants not exercised prior to the closing date will be cashed out based on the
resulting per share value. Consummation of the transaction is not expected to
have a material impact on Wintrust's 2003 or 2004 earnings per share.
The transaction is subject to approval by regulators and Village's
shareholders and certain closing conditions. The transaction is expected to
close in the fourth quarter of 2003.
BUSINESS OF ADVANTAGE
Advantage, an Illinois corporation, is a bank holding company
registered pursuant to the Bank Holding Company Act of 1956, as amended. As of
June 30, 2003, Advantage had consolidated total assets of $107.5 million,
deposits of $95.6 million and shareholders' equity of $9.4 million. Advantage
owns 100% of the capital stock of Advantage National Bank, a nationally
chartered bank with offices in Elk Grove Village and Roselle, Illinois.
Advantage National Bank, which commenced operations on January 22,
2001, provides full-service commercial and consumer banking from its main office
in Elk Grove Village, Illinois, and its single branch office in Roselle,
Illinois. The bank's market area is comprised of the communities of Elk Grove
Village, Roselle and Bloomingdale, Illinois.
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Advantage National Bank serves the commercial banking and personal
needs of individuals, small- and medium-sized businesses, professional
organizations and governmental and public entities located within its market by
providing a broad range of commercial and personal banking services, including a
full range of deposit services, short to intermediate term commercial, real
estate and personal loans, and various related banking products, including debit
cards, money orders, traveler's checks, automated teller services, electronic
banking and safe deposit boxes.
39
LEGAL MATTERS
Certain matters pertaining to the validity of the authorization and
issuance of the Wintrust common stock to be issued in the proposed merger will
be passed upon by Vedder, Price, Kaufman & Kammholz, P.C., 222 North LaSalle
Street, Chicago, Illinois 60601. Certain matters pertaining to the federal
income tax consequences of the proposed merger will be passed upon by Barack
Ferrazzano Kirschbaum Perlman & Nagelberg LLC, 333 West Wacker Drive, Chicago,
Illinois 60606.
EXPERTS
The consolidated financial statements of Wintrust as of December 31,
2002 and 2001, and for each of the years in the three years in the period ended
December 31, 2002, included in Wintrust's Annual Report on Form 10-K for the
year ended December 31, 2002, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included in
Wintrust's Annual Report on Form 10-K for the year ended December 31, 2002, and
are incorporated by reference herein in reliance upon such report given on the
authority of Ernst & Young LLP as experts in accounting and auditing.
SHAREHOLDER PROPOSALS
After the merger is completed, the next annual meeting of Wintrust's
shareholders will be held in 2004. To be eligible for inclusion in Wintrust's
proxy materials for that annual meeting, any shareholder proposal must be
received at Wintrust's principal office at 727 North Bank Lane, Lake Forest,
Illinois 60045, no later than December 31, 2003.
All shareholder proposals submitted for inclusion in Wintrust's proxy
materials will be subject to the requirements of the proxy rules adopted under
the Securities Exchange Act, and, as with any shareholder proposal, Wintrust's
articles of incorporation and by-laws and Illinois law.
If the merger occurs, Advantage will not have another annual meeting of
shareholders. If the merger does not occur, Advantage's next meeting of
shareholders will be held in 2004. To be eligible for inclusion in Advantage's
proxy materials for that annual meeting, there is no requirement that
shareholder proposals must be made before the meeting.
WHERE YOU CAN FIND MORE INFORMATION
Wintrust files annual, quarterly and current reports, proxy statements
and other information with the SEC. These filings are available to the public
over the Internet at the SEC's website at www.sec.gov. You may also read and
copy any document Wintrust files with the SEC at its public reference room
located at 450 Fifth Street, N.W., Washington D.C. 20549. Copies of these
documents also can be obtained at prescribed rates by writing to the Public
Reference Section of the SEC, at 450 Fifth Street, N.W., Washington D.C. 20549
or by calling 1-800-SEC-0330 for additional information on the operation of the
public reference facilities. Wintrust's SEC filings are also available on its
Web site at http://www.wintrust.com, and at the office of Nasdaq National
Market. For further information on obtaining copies of Wintrust's public filings
at the Nasdaq National Market, you should call (212) 656-5060.
Wintrust filed with the SEC a registration statement on Form S-4 under
the Securities Act, as amended, to register the shares of Wintrust common stock
to be issued to Advantage shareholders in the merger. This proxy
statement/prospectus is a part of that registration statement and constitutes a
prospectus of Wintrust in addition to being a proxy statement of Advantage for
its Special Meeting. As permitted by the SEC rules, this proxy
statement/prospectus does not contain all of the information that you can find
in the registration statement or in the exhibits to the registration statement.
The additional information may be inspected and copied as set forth above.
40
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows Wintrust to incorporate by reference information into
this proxy statement/prospectus. This means that Wintrust can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is an important part of this
proxy statement/prospectus, except for any information superseded by information
in this proxy statement/prospectus. This proxy statement/prospectus incorporates
by reference the documents set forth below that Wintrust has filed previously
with the SEC:
o Wintrust's Annual Report on Form 10-K for the year ended
December 31, 2002 (File No. 0-21923);
o Wintrust's proxy statement in connection with its 2003 annual
meeting of shareholders filed with the SEC on April 29, 2003;
o Wintrust's Quarterly Report on Form 10-Q for the three months
ended March 31, 2003 (File No. 0-21923);
o Wintrust's Quarterly Report on Form 10-Q for the three months
ended June 30, 2003 (File No. 0-21923);
o Wintrust's Current Report on Form 8-K filed with the SEC on
January 16, 2003 (File No. 0-21923);
o Wintrust's Current Report on Form 8-K filed with the SEC on
February 4, 2003 (File No. 0-21923);
o Wintrust's Current Report on Form 8-K filed with the SEC on
April 18, 2003 (File No. 0-21923);
o Wintrust's Current Report on Form 8-K filed with the SEC on
April 24, 2003 (File No. 0-21923);
o Wintrust's Current Report on Form 8-K filed with the SEC on
May 30, 2003 (File No. 0-21923);
o Wintrust's Current Report on Form 8-K filed with the SEC on
July 17, 2003 (File No. 0-21923); and
o the description of (a) Wintrust's common stock contained in
Wintrust's Registration Statement on Form 8-A dated January 3,
1997 (File No. 0-21923), and (b) the associated preferred
share purchase rights contained in Wintrust's Registration
Statement on Form 8-A dated August 28, 1998 (File No.
0-21923).
Wintrust also incorporates by reference any filings it makes with the
SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act after the date of this proxy statement/prospectus and before the Special
Meeting.
Any statement contained in a document incorporated by reference in this
proxy statement/prospectus shall be deemed to be modified or superseded for
purposes of this proxy statement/prospectus to the extent that a statement
contained in this proxy statement/prospectus, or in any other document filed
later which is also incorporated in this proxy statement/prospectus by
reference, modifies or supersedes the statement. Any statement so modified or
superseded shall not be deemed to constitute a part of this proxy
statement/prospectus except as so modified or superseded. The information
relating to Wintrust contained in this proxy statement/prospectus should be read
together with the information in the documents incorporated in this proxy
statement/prospectus by reference.
You may request, either orally or in writing, and Wintrust will
provide, a copy of these filings without charge by contacting David A. Dykstra,
Wintrust's Chief Operating Officer, at 727 North Bank Lane, Lake Forest,
Illinois 60045, (847) 615-4096. IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE
DO SO BY __________, 2003, TO RECEIVE THEM BEFORE THE SPECIAL MEETING.
All information concerning Wintrust and its subsidiaries has been
furnished by Wintrust, and all information concerning Advantage has been
furnished by Advantage.
41
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
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 or 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, 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
II-1
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.
Section 6.3 of the Registrant's By-laws provides as follows:
SECTION 6.3. MANDATORY INDEMNIFICATION. To the extent that a director,
officer, employee or agent of a corporation, or any subsidiary or subsidiaries,
as the case may be, has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Sections 6.1 and 6.2, 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
him or her in connection therewith.
The Illinois Business Corporation Act provides for indemnification of
officers, directors, employees and agents as follows:
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 present or former director, officer or
employee 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 if the person
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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.
(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 present or former
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 with respect to a person who is a
director or officer at the time of the determination: (1) by the majority vote
of the directors who are not parties to such action, suit or proceeding, even
though less than a quorum, (2) by a committee of the directors designated by a
majority vote of the directors, even though less than a quorum, (3) if there are
no such directors, or if the directors so direct, by independent legal counsel
in a written opinion, or (4) by the shareholders.
(e) Expenses (including attorney's fees) incurred by an officer or
director 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 or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation as authorized in
this Section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid on such
terms and conditions, if any, as the corporation deems appropriate.
(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.
II-3
(l) The changes to this Section made by this amendatory Act of the 92nd
General Assembly apply only to actions commenced on or after the effective date
of this amendatory Act of the 92nd General Assembly. (Last amended by P.A.
92-0033, L. '01, eff. 7-1-01.)
Wintrust has purchased $30 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 $5 million limit and trust errors and
omissions coverage up to a limit of $15 million.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
A list of the exhibits included as part of this registration statement
is set forth on the list of exhibits immediately preceding such exhibits and is
incorporated herein by reference.
(b) Financial Statement Schedules:
All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission have been omitted because
they are not required, amounts which would otherwise be required to be shown
with respect to any item are not material, are inapplicable or the required
information has already been provided elsewhere or incorporated by reference in
the registration statement.
ITEM 22: UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(b) The undersigned registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(c) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended, that is incorporated by reference
in this 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.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant 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, the 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 policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(e) The undersigned registrant hereby undertakes 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 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-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Lake
Forest, State of Illinois, on this 19th day of August, 2003.
WINTRUST FINANCIAL CORPORATION
By:/s/ David A. Dykstra
-------------------------------------------
David A. Dykstra
Senior Executive Vice President and Chief
Operating Officer
We, the undersigned directors of Wintrust Financial Corporation, and
each of us, do hereby constitute and appoint each and any of Edward J. Wehmer
and David A. Dykstra, our true and lawful attorney-in-fact and agents, with full
power of substitution and re-substitution, for us and in our name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as we might or could do in
person, hereby ratifying and confirming said attorneys-in-fact and agents or
their substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
NAME TITLE DATE
---- ----- ----
/s/ Edward J. Wehmer President, Chief Executive August 19, 2003
--------------------------------------- Officer and Director
Edward J. Wehmer
/s/ David L. Stoehr Executive Vice President and August 19, 2003
--------------------------------------- Chief Financial Officer
David L. Stoehr (Principal Accounting Officer)
/s/John S. Lillard Chairman and Director August 19, 2003
---------------------------------------
John S. Lillard
/s/ Peter D. Crist Director August 19, 2003
---------------------------------------
Peter D. Crist
/s/ Bruce K. Crowther Director August 19, 2003
---------------------------------------
Bruce K. Crowther
/s/ Bert A. Getz, Jr. Director August 19, 2003
---------------------------------------
Bert A. Getz, Jr.
/s/ Philip W. Hummer Director August 19, 2003
---------------------------------------
Philip W. Hummer
/s/ James B. McCarthy Director August 19, 2003
---------------------------------------
James B. McCarthy
S-1
NAME TITLE DATE
---- ----- ----
/s/ Marguerite Savard McKenna Director August 19, 2003
---------------------------------------
Marguerite Savard McKenna
/s/ Albin F. Moschner Director August 19, 2003
---------------------------------------
Albin F. Moschner
/s/ Thomas J. Neis Director August 19, 2003
---------------------------------------
Thomas J. Neis
/s/ Hollis W. Rademacher Director August 19, 2003
---------------------------------------
Hollis W. Rademacher
Director
---------------------------------------
J. Christopher Reyes
/s/ John J. Schornack Director August 19, 2003
---------------------------------------
John J. Schornack
Director
---------------------------------------
Ingrid S. Stafford
S-2
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
---- ----------------------
2.1 Agreement and Plan of Merger by and among Wintrust Financial
Corporation, Wintrust Merger Co. and Advantage National Bancorp, Inc.
(Included as Annex A to this proxy statement/prospectus).
3.1 Amended and Restated Articles of Incorporation of Wintrust Financial
Corporation (incorporated by reference to Exhibit 3.1 of the Company's
Form S-1 Registration Statement (No. 333-18699) filed with the
Securities and Exchange Commission on December 24, 1996).
3.2 Statement of Resolution Establishing Series of Junior Serial Preferred
Stock A of Wintrust Financial Corporation (incorporated by reference to
Exhibit 3.2 of the Company's Form 10-K for the year ended December 31,
1998).
3.3 Amended and Restated By-laws of Wintrust Financial Corporation
(incorporated by reference to Exhibit 3.3 of the Company's Form 10-Q
for the quarter ended March 31, 2003).
4.1 Rights Agreement between Wintrust Financial Corporation and Illinois
Stock Transfer Company, as Rights Agent, dated July 28, 1998
(incorporated by reference to Exhibit 4.1 of the Company's Form 8-A
Registration Statement (No. 000-21923) filed with the Securities and
Exchange Commission on August 28, 1998).
5.1 Opinion of Vedder, Price, Kaufman & Kammholz, P.C.+
8.1 Tax Opinion of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLC.+
23.1 Consent of Ernst & Young LLP.+
24.1 Power of Attorney (contained in signature page to the registration
statement).
99.1 Form of Proxy for Special Meeting of Advantage+
---------------------------
+ Filed herewith.
ANNEX A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WINTRUST FINANCIAL CORPORATION,
WINTRUST MERGER CO.,
AND
ADVANTAGE NATIONAL BANCORP, INC.
DATED JULY 2, 2003
TABLE OF CONTENTS
ARTICLE I THE MERGER.............................................A-1
1.1 The Merger.................................................A-1
1.2 Effective Time.............................................A-1
1.3 Effect of the Merger.......................................A-1
1.4 Conversion of Shares; Merger Consideration.................A-2
1.5 Company Stock Options......................................A-3
1.6 Cancellation of Treasury Shares............................A-3
1.7 Capital Stock of Merger Co.................................A-3
1.8 Recapitalization...........................................A-3
1.9 Tax Treatment..............................................A-4
1.10 Closing....................................................A-4
ARTICLE II EXCHANGE OF CERTIFICATES...............................A-4
2.1 Wintrust to Make Shares and Cash Available.................A-4
2.2 No Fractional Shares.......................................A-4
2.3 Exchange of Certificates; Surrender of Warrants............A-5
ARTICLE III REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY..A-6
3.1 Organization...............................................A-6
3.2 Organizational Documents; Minutes and Stock Records........A-7
3.3 Capitalization.............................................A-7
3.4 Authorization; No Violation................................A-8
3.5 Consents and Approvals.....................................A-8
3.6 Financial Statements.......................................A-8
3.7 No Undisclosed Liabilities.................................A-9
3.8 Loans; Loan Loss Reserves..................................A-9
3.9 Properties and Assets.....................................A-10
3.10 Material Contracts........................................A-10
3.11 No Defaults...............................................A-12
3.12 Conflict of Interest Transactions.........................A-12
3.13 Investments...............................................A-12
3.14 Compliance with Laws; Legal Proceedings...................A-13
3.15 Insurance.................................................A-13
3.16 Taxes.....................................................A-13
3.17 Environmental Laws and Regulations........................A-14
A-i
3.18 Community Reinvestment Act Compliance.....................A-15
3.19 Company Regulatory Reports................................A-15
3.20 Employee Benefit Plans....................................A-15
3.21 Technology and Intellectual Property......................A-17
3.22 No Adverse Change.........................................A-17
3.23 Conduct of Business in Normal Course......................A-17
3.24 Change in Business Relationships..........................A-17
3.25 Brokers' and Finders' Fees................................A-18
3.26 No Omissions..............................................A-18
ARTICLE IV REPRESENTATIONS AND WARRANTIES CONCERNING WINTRUST AND
MERGER CO.............................................A-18
4.1 Organization..............................................A-18
4.2 Capitalization............................................A-18
4.3 Authorization; No Violations..............................A-18
4.4 Consents and Approvals....................................A-19
4.5 Wintrust SEC Documents and Financial Statements...........A-19
4.6 Compliance with Laws; Legal Proceedings...................A-20
4.7 Wintrust Regulatory Reports...............................A-20
4.8 Taxes.....................................................A-20
4.9 Compliance with ERISA.....................................A-21
4.10 No Defaults...............................................A-21
4.11 Compliance with Environmental Laws........................A-21
4.12 Fiduciary Accounts........................................A-21
4.13 No Adverse Change.........................................A-21
4.14 Brokers' and Finders' Fees................................A-22
4.15 No Omissions..............................................A-22
ARTICLE V AGREEMENTS AND COVENANTS..............................A-22
5.1 Conduct of Business.......................................A-22
5.2 Access to Information.....................................A-23
5.3 Meeting of Shareholders of the Company....................A-24
5.4 Registration Statement and Regulatory Filings.............A-24
5.5 Listing of Shares.........................................A-25
5.6 Reasonable and Diligent Efforts...........................A-25
5.7 Business Relations and Publicity..........................A-25
5.8 No Conduct Inconsistent with this Agreement...............A-25
A-ii
5.9 Pre-Closing Loan Review...................................A-26
5.10 Board of Directors' Notices and Minutes...................A-27
5.11 Untrue Representations and Warranties.....................A-27
5.12 Director and Officer Liability Coverage...................A-27
5.13 Interim Financial Statements..............................A-27
5.14 Dissent Process...........................................A-27
5.15 Section 368(a) Reorganization.............................A-28
5.16 Exercise of Warrants and Options..........................A-28
5.17 Converted Options.........................................A-28
5.18 TM Acceptance Corp. Lease Financing Portfolio.............A-28
ARTICLE VI EMPLOYEE BENEFIT MATTERS..............................A-29
6.1 Benefit Plans.............................................A-29
6.2 No Rights or Remedies.....................................A-29
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF WINTRUST AND
MERGER CO.............................................A-29
7.1 Representations and Warranties; Performance of Agreements.A-29
7.2 Closing Certificate.......................................A-30
7.3 Regulatory and Other Approvals............................A-30
7.4 Approval of Merger and Delivery of Agreement..............A-30
7.5 Effectiveness of the Registration Statement...............A-30
7.6 No Litigation.............................................A-30
7.7 Environmental Surveys.....................................A-30
7.8 Opinion of Counsel........................................A-30
7.9 Employment Agreements.....................................A-30
7.10 No Adverse Changes........................................A-31
7.11 Minimum Net Worth and Loan Loss Reserve Requirements......A-31
7.12 Voting Agreements.........................................A-31
7.13 TM Acceptance Corp. Lease Financing Portfolio.............A-31
7.14 Consents..................................................A-31
7.15 Other Documents...........................................A-31
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY....A-31
8.1 Representations and Warranties; Performance of Agreements.A-32
8.2 Closing Certificates......................................A-32
8.3 Regulatory and Other Approvals............................A-32
8.4 Delivery of Agreement.....................................A-32
A-iii
8.5 Effectiveness of the Registration Statement...............A-32
8.6 No Litigation.............................................A-32
8.7 Opinions of Counsel.......................................A-32
8.8 No Adverse Changes........................................A-33
8.9 Nasdaq Listing............................................A-33
8.10 Other Documents...........................................A-33
ARTICLE IX NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS.............................................A-33
9.1 Non-Survival..............................................A-33
ARTICLE X GENERAL...............................................A-33
10.1 Expenses..................................................A-33
10.2 Termination...............................................A-35
10.3 Confidential Information..................................A-35
10.4 Non-Assignment............................................A-35
10.5 Notices...................................................A-36
10.6 Counterparts..............................................A-36
10.7 Knowledge.................................................A-36
10.8 Entire Agreement..........................................A-36
10.9 Governing Law.............................................A-37
10.10 Severability..............................................A-37
A-iv
DEFINED TERMS
Acquisition Proposal........................................................A-26
Agreement...................................................................A-1
ANB Mortgage................................................................A-7
Articles of Merger..........................................................A-1
Bank........................................................................A-7
Benefit Plans...............................................................A-15
BHCA........................................................................A-6
CERCLA......................................................................A-14
Closing.....................................................................A-4
Closing Date................................................................A-4
Code........................................................................A-1
Commission..................................................................A-8
Company.....................................................................A-1
Company Board...............................................................A-8
Company Common Stock........................................................A-2
Company Regulatory Reports..................................................A-15
Company Stock Certificates..................................................A-4
Company Stock Option Plan...................................................A-3
Confidentiality Agreement...................................................A-24
Conversion Fund.............................................................A-4
Converted Option............................................................A-3
CRA.........................................................................A-15
Effective Time..............................................................A-1
Employees...................................................................A-29
Encumbrances................................................................A-10
Environmental Laws..........................................................A-14
ERISA Affiliate.............................................................A-15
ERISA Plans.................................................................A-15
Exchange Act................................................................A-19
Exchange Agent..............................................................A-4
Exchange Ratio..............................................................A-2
Federal Reserve.............................................................A-8
Federal Reserve Application.................................................A-8
Financial Statements........................................................A-8
GAAP........................................................................A-6
Governmental Authority......................................................A-8
Hazardous Substance.........................................................A-15
Illinois Act................................................................A-1
Intellectual Property.......................................................A-17
Interim Balance Sheet.......................................................A-8
Interim Financial Statements................................................A-8
Investment Securities.......................................................A-12
knowledge...................................................................A-36
Loans.......................................................................A-9
Material Adverse Effect.....................................................A-6
Material Contracts..........................................................A-10
Merger......................................................................A-1
Merger Co...................................................................A-1
OCC.........................................................................A-15
A-v
Option Conversion Agreement.................................................A-3
OREO........................................................................A-10
Outstanding Company Option..................................................A-3
Parties.....................................................................A-1
Permitted Encumbrances......................................................A-10
Plan Amendment..............................................................A-3
Program Agreement...........................................................A-28
Proxy Statement/Prospectus..................................................A-8
Recapitalization............................................................A-3
Registration Statement......................................................A-24
Retained Plans..............................................................A-29
Returns.....................................................................A-13
Securities Act..............................................................A-8
Shareholders Meeting........................................................A-24
Subsidiaries................................................................A-7
Superior Acquisition Proposal...............................................A-26
Surviving Corporation.......................................................A-1
Warrant Cancellation Agreement..............................................A-2
Warrant Consideration.......................................................A-2
Warrants....................................................................A-7
Wintrust....................................................................A-1
Wintrust Bank...............................................................A-19
Wintrust Common Stock.......................................................A-2
Wintrust Common Stock Price.................................................A-2
Wintrust Regulatory Reports.................................................A-20
Wintrust SEC Documents......................................................A-19
Wintrust Stock Certificates.................................................A-4
A-vi
DISCLOSURE SCHEDULES
Schedule of Warrant Holders...............................................3.3(a)
Authorization; No Violation..................................................3.4
Consents and Approvals.......................................................3.5
Financial Statements.........................................................3.6
Undisclosed Liabilities......................................................3.7
Loans; Loan Loss Reserves....................................................3.8
Schedule of Real Property.................................................3.9(a)
Schedule of Intangible Personal Property..................................3.9(b)
Schedule of Material Contracts..............................................3.10
Schedule of Interested Transactions.........................................3.12
Investments.................................................................3.13
Legal Proceedings........................................................3.14(b)
Schedule of Insurance.......................................................3.15
Environmental Laws and Regulations..........................................3.17
Employee Benefit Plans......................................................3.20
Schedule of Intellectual Property...........................................3.21
Wintrust Exceptions Regarding Material Contracts..........................4.5(d)
Wintrust Disclosure Regarding Enforcement Actions.........................4.6(b)
Wintrust Compliance with Environmental Laws.................................4.11
Wintrust Finder's Fees......................................................4.14
Proposed ISS Investment...................................................5.1(h)
Employees....................................................................6.1
Key Management Personnel.....................................................7.9
Voting Agreement Signatories................................................7.12
EXHIBITS
Exhibit A.................................Form of Warrant Cancellation Agreement
Exhibit B....................................Form of Option Conversion Agreement
Exhibit C.....................................Form of Opinion of Company Counsel
Exhibit D............................Form of Key Management Employment Agreement
Exhibit E...............................................Form of Voting Agreement
Exhibit F....................................Form of Opinion of Wintrust Counsel
A-vii
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), is entered into
as of the 2nd day of July, 2003, by and among WINTRUST FINANCIAL CORPORATION, an
Illinois corporation ("Wintrust"), WINTRUST MERGER CO., an Illinois corporation
and wholly owned subsidiary of Wintrust ("Merger Co."), and ADVANTAGE NATIONAL
BANCORP, INC., an Illinois corporation (the "Company"). Wintrust, Merger Co.,
and the Company are referred to collectively in this Agreement as the "Parties."
RECITALS
WHEREAS, the boards of directors of each of the Parties have approved
and declared it advisable and in the best interest of the Parties and their
respective shareholders to effect a reorganization, whereby Merger Co. will
merge with and into the Company, in the manner and on the terms and subject to
the conditions set forth in Article I below (the "Merger"), as a result of which
the Company will become a wholly owned subsidiary of Wintrust.
WHEREAS, for federal income tax purposes the Parties desire and intend
that the Merger qualify as a reorganization in accordance with Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties and
covenants herein contained, the agree as follows.
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2), in
accordance with this Agreement and the Illinois Business Corporation Act (the
"Illinois Act"), Merger Co. shall be merged with and into the Company, and the
Company shall continue as the corporation surviving the Merger (the "Surviving
Corporation"), and shall be a wholly owned subsidiary of Wintrust.
1.2 Effective Time. As of the Closing, the Parties will cause articles
of merger (the "Articles of Merger") with respect to the Merger to be executed
and filed with the Secretary of State of the State of Illinois as provided in
the Illinois Act. The Merger shall become effective on the date and time at
which the Articles of Merger are duly filed by the Secretary of State of the
State of Illinois, or at such other date and time as is agreed among the Parties
and specified in the Articles of Merger (the "Effective Time").
1.3 Effect of the Merger. At and after the Effective Time:
(a) the Merger shall have the effect set forth in Section
11.50 of the Illinois Act;
(b) the articles of incorporation and by-laws of Merger Co.,
copies of which have been previously provided to the Company, as in
effect immediately prior to the Effective Time shall be the articles of
incorporation and by-laws of the Surviving Corporation until thereafter
amended as provided therein or by applicable law; and
A-1
(c) the directors and officers of the Company immediately
prior to the Effective Time shall be the directors and officers of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified, or until their earlier death, resignation or
removal in accordance with the articles of incorporation and the
by-laws of the Surviving Corporation.
1.4 Conversion of Shares; Merger Consideration.
(a) Wintrust Common Stock. At the Effective Time, each share
of common stock of the Company, par value $5.00 per share ("Company
Common Stock"), issued and outstanding immediately prior to the
Effective Time shall by reason of the Merger and without any action by
the holder thereof, be converted into the right to receive that number
(the "Exchange Ratio") of shares, rounded to the nearest one thousandth
of a share, of common stock of Wintrust ("Wintrust Common Stock"),
determined as follows:
(i) If the unweighted average of the high and low
sale prices of a share of Wintrust Common Stock as reported on
the Nasdaq National Market for each of the ten trading days
ending on the second trading day preceding the Closing Date
(as defined in Section 1.10) (the "Wintrust Common Stock
Price") is at least $25.00 and no more than $35.00, the
Exchange Ratio shall be equal to the quotient of $26.50
divided by the Wintrust Common Stock Price.
(ii) If the Wintrust Common Stock Price is less than
$25.00, the Exchange Ratio shall be equal to the quotient of
$26.50 divided by $25.00.
(iii) If the Wintrust Common Stock Price is greater
than $35.00, the Exchange Ratio shall be equal to the quotient
of $26.50 divided by $35.00.
(b) Warrant Consideration.
(i) Each Warrant (as defined in Section 3.3)
outstanding at the Effective Time for the purchase of shares
of Company Common Stock shall be converted into the right to
receive an amount (the "Warrant Consideration") in cash equal
to the number of shares of Company Common Stock subject to
such Warrant multiplied by the difference between (i) $26.50
and (ii) the per share exercise price associated with such
Warrant.
(ii) The Company shall provide to Wintrust, not less
than five (5) business days prior to the Closing Date, copies
of an agreement in the form of Exhibit A attached hereto (the
"Warrant Cancellation Agreement") executed by each of the
holders of outstanding Warrants acknowledging their agreement
and consent to such terms of conversion.
(c) Effect on Capital Stock. All of the shares of Company
Common Stock converted into Wintrust Common Stock in accordance with
this Article I shall no longer be outstanding and shall automatically
be cancelled and retired and shall cease to exist as of the Effective
Time, and each certificate previously representing any such shares of
Company Common Stock shall cease to have any rights with respect
thereto, except the right to (i) receive, in accordance with Section
2.3(a), a certificate representing the number of whole shares of
Wintrust Common Stock determined pursuant to this Section 1.4 and cash
in lieu of any fractional shares thereof determined pursuant to Section
2.2, or (ii) exercise dissenters' rights in accordance with, and
subject to the provisions of, the Illinois Act.
A-2
1.5 Company Stock Options.
(a) At the Effective Time, each option granted by the Company
under the terms of the Advantage National Bancorp, Inc. 2002 Stock
Incentive Plan (the "Company Option Plan") to purchase shares of
Company Common Stock that is outstanding and unexercised immediately
prior to the Effective Time (an "Outstanding Company Option"), shall be
converted into an option to purchase shares of Wintrust Common Stock (a
"Converted Option"), in such number and at such exercise price as set
forth herein, and otherwise having the same terms and conditions as in
effect immediately prior to the Effective Time except to the extent
that (i) such Outstanding Company Options shall be altered in
accordance with their terms as a result of the Merger contemplated
hereby, as follows: (1) the number of shares of Wintrust Common Stock
to be subject to the Converted Option shall be equal to the product of
(A) the number of shares of Company Common Stock subject to the
original Outstanding Company Option and (B) the Exchange Ratio; (2) the
exercise price per share of Wintrust Common Stock under the Converted
Option shall be equal to (A) the exercise price per share of Company
Common Stock under the original Outstanding Company Option divided by
(B) the Exchange Ratio; and (3) upon exercise of each Converted Option
by a holder thereof, the aggregate number of shares of Wintrust Common
Stock deliverable upon such exercise shall be rounded down, if
necessary, to the nearest whole share and the aggregate exercise price
shall be rounded up, if necessary, to the nearest cent, and (ii) the
vesting of Outstanding Company Options held immediately prior to the
Effective Time (1) by all directors of the Company and (2) by all
employees of the Company other than those unvested Outstanding Company
Options held by Gerhardt E. Umlauf pursuant to his employment agreement
with the Company and each of Paul Katauskas and Mark Stetson pursuant
to their employment agreements dated June 17, 2003, shall be
accelerated such that all of such Outstanding Company Options to the
extent not previously vested shall become fully vested and immediately
exercisable at the Effective Time.
(b) The adjustments provided herein with respect to any
Outstanding Company Options that are "incentive stock options" (as
defined in Section 422 of the Code) shall be effected in a manner
consistent with the requirements of Section 424(a) of the Code.
(c) The Company Option Plan shall be amended, effective as of
the Effective Time, to provide for the conversion of Outstanding
Company Options in accordance with Section 1.5(a) (the "Plan
Amendment"). The Company shall provide to Wintrust, not less than five
(5) business days prior to the Closing Date, copies of an agreement in
the form of Exhibit B attached hereto (the "Option Conversion
Agreement") from each of the holders of Outstanding Company Options
acknowledging their agreement and consent to the Plan Amendment and to
such terms of conversion set forth in this Section 1.5.
1.6 Cancellation of Treasury Shares. At the Effective Time, each share
of Company Common Stock held as treasury stock, if any, immediately prior to the
Effective Time shall automatically be cancelled and retired and cease to exist,
and no shares of Wintrust Common Stock or other consideration shall be exchanged
therefor.
1.7 Capital Stock of Merger Co. Each share of common stock of Merger
Co. issued and outstanding immediately prior to the Effective Time shall be
converted into and become one share of common stock, par value $1.00, of the
Surviving Corporation with the same rights, powers and privileges as the shares
so converted and shall constitute the only outstanding capital stock of the
Surviving Corporation.
1.8 Recapitalization. In the event that Wintrust changes (or
establishes a record date for changing) the number of shares of Wintrust Common
Stock issued and outstanding as a result of a stock dividend, stock split,
recapitalization, reclassification, combination or similar transaction with
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respect to the outstanding shares of Wintrust Common Stock (a
"Recapitalization"), and the record date therefor shall be after the date of
this Agreement and prior to the commencement of the ten trading day-period
during which the Exchange Ratio is determined, then the conversion provisions
described in Section 1.4(a) shall be appropriately and proportionately adjusted.
Wintrust agrees it shall not effect, establish a record date to effect, or
announce a Recapitalization (or record date therefor) during the ten trading
day-period during which the Exchange Ratio is determined.
1.9 Tax Treatment. It is intended that the Merger shall constitute a
reorganization within the meaning Section 368(a) of the Code, and that this
Agreement shall constitute a "plan of reorganization" for purposes of Section
368 of the Code.
1.10 Closing. The consummation of the transactions contemplated by this
Agreement shall take place at a closing (the "Closing") to be held on the fifth
business day following the date on which all of the conditions set forth in
Sections 7.3 and 7.4 of this Agreement have been satisfied or on such other date
as Wintrust and the Company may mutually agree (the "Closing Date"). In the
event of the filing of any motion for rehearing or any appeal from the decision
of any regulatory authority approving the transactions contemplated in this
Agreement or any legal proceedings of the type contemplated by Sections 7.6 or
8.6, Wintrust or the Company may postpone the Closing by written notice to the
other parties until such approvals have been obtained or such motion, appeal or
litigation has been resolved, but in no event shall such Closing be postponed
beyond the close of business on December 31, 2003 (except as may be extended
pursuant to Section 10.2(b)) without the consent of the boards of directors of
Wintrust and the Company. The Closing shall take place at 10:00 a.m., local
time, on the Closing Date at the offices of Schiff Hardin & Waite, 6600 Sears
Tower, Chicago, Illinois, or at such other place and time upon which the parties
may agree.
ARTICLE II
EXCHANGE OF CERTIFICATES
2.1 Wintrust to Make Shares and Cash Available. At or prior to the
Effective Time, Wintrust shall authorize the issuance of and shall make
available to the Illinois Stock Transfer Company (the "Exchange Agent"), for the
benefit of the holders of certificates of Company Common Stock (the "Company
Stock Certificates") and the Warrants, for exchange in accordance with this
Article II, a sufficient number of certificates for shares of Wintrust Common
Stock (the "Wintrust Stock Certificates") to be issued pursuant to Section
1.4(a), and sufficient cash for payment of (a) the Warrant Consideration in
accordance with Section 1.4(b) and (b) cash in lieu of any fractional shares of
Wintrust Common Stock in accordance with Section 2.2. Such Wintrust Stock
Certificates and cash, together with any dividends or distributions with respect
thereto paid after the Effective Time, are referred to in this Article II as the
"Conversion Fund." Wintrust shall be solely responsible for the payment of any
fees and expenses of the Exchange Agent.
2.2 No Fractional Shares. Notwithstanding anything to the contrary
contained in this Agreement, no fractional shares of Wintrust Common Stock shall
be issued in the Merger. Each holder of shares of Company Common Stock who would
otherwise be entitled to receive a fractional part of a share of Wintrust Common
Stock pursuant to Section 1.4(a) shall instead be entitled to receive an amount
in cash (without interest) rounded to the nearest whole cent, determined by
multiplying the Wintrust Common Stock Price (as determined in accordance with
Section 1.4(a)) by the fractional share of Wintrust Common Stock to which such
former holder would otherwise be entitled.
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2.3 Exchange of Certificates; Surrender of Warrants.
(a) As soon as practicable after the Effective Time, and in no
event later than five (5) business days thereafter, the Surviving
Corporation shall cause the Exchange Agent to mail to each holder of
record of one or more Company Stock Certificates or Warrants a letter
of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to Company Stock Certificates and/or
Warrants shall pass, only upon delivery of such certificates and/or
Warrants to the Exchange Agent) and instructions for use in effecting
the surrender of the Company Stock Certificates and the Warrants
pursuant to this Agreement.
(i) Upon proper surrender of a Company Stock
Certificate for exchange to the Exchange Agent, together with
such properly completed letter of transmittal, duly executed,
the holder of such Company Stock Certificate shall be entitled
to receive in exchange therefor, as applicable, (1) a Wintrust
Stock Certificate representing that number of whole shares of
Wintrust Common Stock to which such holder of Company Common
Stock shall have become entitled pursuant to Section 1.4(a)
(after taking into account all shares of Company Common Stock
then held by such holder), and (2) a check representing the
amount of any cash in lieu of fractional shares that such
holder has the right to receive pursuant to Section 2.2 in
respect of such Company Stock Certificate, and the Company
Stock Certificate so surrendered shall forthwith be canceled.
No interest will be paid or accrued on any cash in lieu of
fractional shares payable to holders of Company Stock
Certificates.
(ii) Upon proper surrender of a Warrant for exchange
to the Exchange Agent, together with such properly completed
letter of transmittal, duly executed, the holder of such
Warrant shall be entitled to receive in exchange therefor a
check representing the amount of Warrant Consideration to
which such holder shall have become entitled pursuant to
Section 1.4(b) (after taking into account all Warrants then
held by such holder), and the Warrant so surrendered shall
forthwith be canceled. No interest will be paid or accrued on
any Warrant Consideration payable to holders of Warrants.
(b) If any Wintrust Stock Certificate is to be issued in a
name other than that in which the Company Stock Certificate surrendered
in exchange therefor is registered, it shall be a condition of the
issuance thereof that the Company Stock Certificate so surrendered
shall be properly endorsed (or accompanied by an appropriate instrument
of transfer) and otherwise in proper form for transfer, and that the
person requesting such exchange shall pay to the Exchange Agent in
advance any transfer or other taxes required by reason of the issuance
of a Wintrust Stock Certificate in any name other than that of the
registered holder of the Company Stock Certificate surrendered, or
required for any other reason, or shall establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not payable.
(c) After the Effective Time, there shall be no transfers on
the stock transfer books of the Company of the shares of Company Common
Stock or Warrants that were issued and outstanding immediately prior to
the Effective Time.
(d) Any portion of the Conversion Fund that remains unclaimed
by the shareholders of the Company for twelve (12) months after the
Effective Time shall be paid to the Surviving Corporation. Any
shareholders of the Company who have not theretofore complied with this
Article II shall thereafter look only to the Surviving Corporation for
the issuance of certificates representing shares of Wintrust Common
Stock and the payment of cash in lieu of any fractional shares and any
unpaid dividends and distributions on Wintrust Common Stock deliverable
in respect of each share of Company Common Stock such shareholder holds
as determined pursuant to this Agreement, in each case, without any
interest thereon, and any holders of Warrants who have not theretofore
complied
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with this Article II shall thereafter look only to the Surviving
Corporation for the payment of the Warrant Consideration, without any
interest thereon. Notwithstanding the foregoing, none of Wintrust, the
Surviving Corporation, the Company, the Exchange Agent or any other
person shall be liable to any former holder of shares of Company Common
Stock or Warrants, for any amount delivered in good faith to a public
official pursuant to applicable abandoned property, escheat or similar
laws.
(e) In the event any Company Stock Certificate or Warrant
shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Company Stock
Certificate or Warrant to be lost, stolen or destroyed and, if
reasonably required by the Surviving Corporation, the posting by such
person of a bond in such amount as the Exchange Agent may determine is
reasonably necessary as indemnity against any claim that may be made
against it with respect to such Company Stock Certificate or Warrant,
the Exchange Agent will issue in exchange for (i) such lost, stolen or
destroyed Company Stock Certificate, a Wintrust Stock Certificate
representing the shares of Wintrust Common Stock and cash in lieu of
any fractional shares deliverable in respect thereof pursuant to this
Agreement, or (ii) such lost, stolen or destroyed Warrant, the Warrant
Consideration to which such holder shall have become entitled pursuant
to Section 1.4(b).
(f) No dividends or other distributions declared with respect
to Wintrust Common Stock and payable to the holders of record thereof
after the Effective Time shall be paid to the holder of any
unsurrendered Company Stock Certificate until the holder thereof shall
surrender such Company Stock Certificate in accordance with this
Article II. Promptly after the surrender of a Company Stock Certificate
in accordance with this Article II, the record holder thereof shall be
entitled to receive any such dividends or other distributions, without
interest thereon, which theretofore had become payable with respect to
shares of Wintrust Common Stock represented by such Company Stock
Certificate. No holder of an unsurrendered Company Stock Certificate
shall be entitled, until the surrender of such Company Stock
Certificate, to vote the shares of Wintrust Common Stock into which
Company Common Stock shall have been converted.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY
The Company hereby represents and warrants to Wintrust and Merger Co.
as follows:
3.1 Organization.
(a) The Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHCA"), is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Illinois, and has the corporate power
and authority to own its properties and to carry on its business as
presently conducted. The Company is duly qualified and in good standing
as a foreign corporation in each other jurisdiction where the location
and character of its properties and the business conducted by it
require such qualification, except where the failure to be so qualified
would not have a Material Adverse Effect on the Company. As used in
this Agreement, "Material Adverse Effect" shall mean a material adverse
effect on (i) the business, assets, properties, results of operations
or financial condition of a Party and its subsidiaries, taken as a
whole, or (ii) on the consummation of the Merger, but shall exclude any
such material adverse effect resulting from: (1) a change with respect
to, or effect on, a Party resulting from a change in applicable laws,
rules or regulations, generally accepted accounting principles ("GAAP")
or regulatory accounting principles, as such would apply to the
financial statements of a Party on a consolidated basis; (2) a change
with respect to, or effect on, a Party resulting from expenses (such as
legal or accounting fees) incurred in connection
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with the transactions contemplated by this Agreement, including the
costs of litigation defending any of the transactions contemplated
herein; (3) a change with respect to, or effect on, a Party resulting
from any other matter affecting depository institutions generally
(including financial institutions and their holding companies)
including changes in general economic conditions and changes in
prevailing interest and deposit rates; and (4) actions or omissions
taken by a Party as required hereunder.
(b) Other than (i) Advantage National Bank (the "Bank"), (ii)
a 50% ownership interest by the Bank in Advantage National Bank
Mortgage, LLC ("ANB Mortgage," and together with the Bank, the
"Subsidiaries"), and (iii) stock of the Federal Home Loan Bank of
Chicago and the Federal Reserve Bank of Chicago owned by the Bank, the
Company does not own, whether directly or indirectly, any voting stock,
equity securities or membership, partnership, joint venture or similar
ownership interest in any corporation, association, partnership,
limited liability company or other entity.
(c) The Bank is a national banking association, duly chartered
and organized, validly existing and currently authorized to transact
the business of banking under the National Banking Act, and has the
requisite power and authority to own its properties and to carry on its
business as presently conducted.
3.2 Organizational Documents; Minutes and Stock Records. The Company
has furnished Wintrust with copies of the articles of incorporation and by-laws
of the Company and the articles of association and by-laws of the Bank, in each
case as amended to the date hereof, and with such other documents as requested
by Wintrust relating to the authority of the Company and the Bank to conduct
their respective businesses. All such documents are complete and correct. The
stock registers and minute books of the Company and the Bank are each complete,
correct and accurately reflect, in each case in all material respects, all
meetings, consents, and other actions of the organizers, incorporators,
shareholders, board of directors, and committees of the board of directors of
the Company and the Bank, respectively, and all transactions reported to the
Company or the Bank, as the case may be, by its respective shareholders, in such
entity's capital stock occurring since the initial organization of the Company
and the Bank, respectively.
3.3 Capitalization.
(a) The Company. The authorized capital stock of the Company
consists of (i) 3,000,000 shares of common stock, par value $5.00 per
share, of which 729,389 shares are issued and outstanding as of the
date of this Agreement, (ii) 100,000 shares of preferred stock, par
value $5.00 per share, of which no shares are issued and outstanding,
and (iii) no shares are held in treasury. The issued and outstanding
shares of Company Common Stock have been duly and validly authorized
and issued and are fully paid and nonassessable. The Company has issued
and has outstanding warrants for the purchase of 189,614 shares of
Company Common Stock (the "Warrants"), the beneficial and record
holders of which are set forth on Schedule 3.3(a). The Warrants have
been duly authorized by all necessary corporate action (including
shareholder approval if necessary), have been validly executed, issued
and delivered by the Company, constitute the legal, valid and binding
obligations of the Company, and are enforceable as to the Company in
accordance with their terms. The shares of Company Common Stock to be
issued upon exercise of the Warrants are validly authorized and, upon
such exercise of the Warrants in accordance with their terms, will be
validly issued, fully paid, and nonassessable. The Company Common Stock
is subject to no preferences, qualifications, limitations, restrictions
or special or relative rights under the Company's articles of
incorporation. Except for the Warrants and the Outstanding Company
Options under the Company Option Plan, there are no options,
agreements, contracts, or other rights in existence to purchase or
acquire from the Company any shares of capital stock of the Company,
whether now or hereafter authorized or issued.
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(b) The Bank. The authorized capital stock of the Bank
consists of 1,500,000 shares of common stock, par value $5.00 per
share, of which 725,723 are issued and outstanding and no shares are
held in treasury. The issued and outstanding shares of common stock of
the Bank have been duly and validly authorized and issued and are fully
paid and nonassessable (except as provided in 12 U.S.C. ss.55) and
owned by the Company. There are no options, agreements, contracts, or
other rights in existence to purchase or acquire from the Bank any
shares of capital stock of the Bank, whether now or hereafter
authorized or issued. Other than shares of the Federal Reserve Bank of
Chicago and the Federal Home Loan Bank of Chicago and a 50% ownership
interest in ANB Mortgage, the Bank does not own, whether directly or
indirectly, any voting stock, equity securities or membership,
partnership, joint venture or similar ownership interest in any
corporation, association, partnership, limited liability company or
other entity.
3.4 Authorization; No Violation. The execution and delivery of this
Agreement and the performance of the Company's obligations hereunder have been
duly and validly authorized by the Board of Directors of the Company (the
"Company Board"), and do not violate or conflict with the Company's articles of
incorporation, by-laws, the Illinois Act, or any applicable law, court order or
decree to which the Company or the Bank is a party or subject, or by which the
Company, the Bank or their respective properties are bound, subject to the
approval of this Agreement and the Merger by the shareholders of the Company.
Except as set forth on Schedule 3.4, the execution and delivery of this
Agreement and the performance of the Company's obligations hereunder do not and
will not result in any default or give rise to any right of termination,
cancellation or acceleration under any material note, bond, mortgage, indenture
or other agreement by which the Company, the Bank or their respective properties
are bound. This Agreement, when executed and delivered, and subject to the
regulatory approvals described in Section 7.3, will be a valid, binding and
enforceable obligation of the Company, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors
generally and to general principles of equity.
3.5 Consents and Approvals. Except as set forth on Schedule 3.5, no
consents or approvals of, or filings or registrations with, any court,
administrative agency or commission or other governmental authority or
instrumentality (each, a "Governmental Authority") or with any third party are
necessary in connection with the execution and delivery by the Company of this
Agreement and the consummation by the Company of the Merger except for (a) the
filing by Wintrust of an application (the "Federal Reserve Application") with
the Board of Governors of the Federal Reserve System (the "Federal Reserve")
under the BHCA, (b) the filing with the Securities and Exchange Commission (the
"Commission") of a proxy statement in definitive form and a registration
statement on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the meeting of the Company's shareholders to
be held in connection with this Agreement and the Merger and the registration of
the shares of Wintrust Common Stock (the "Proxy Statement/Prospectus"), (c) the
filing of the Articles of Merger with the Secretary of State of the State of
Illinois under the Illinois Act, and (d) the approval of this Agreement and the
Merger by the requisite vote of the shareholders of the Company.
3.6 Financial Statements. Schedule 3.6 sets forth true and complete
copies of the following financial statements (collectively, the "Financial
Statements"): (a) the audited balance sheets of the Bank as of December 31, 2002
and 2001 and the related statements of income, changes in stockholders' equity
and cash flows for the fiscal years then ended, and (b) the unaudited
consolidated interim balance sheet of the Company as of March 31, 2003 (the
"Interim Balance Sheet") and the related statement of income and changes in
stockholders' equity for the three-month period then ended (together with the
Interim Balance Sheet, the "Interim Financial Statements"). The Financial
Statements are complete and correct as of their respective dates and have been
prepared in conformity with GAAP applied on a consistent basis throughout the
periods involved. Each balance sheet (including any related notes) included in
the Financial Statements presents fairly the financial position of the Company
as of the
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date thereof, and each income statement (including any related notes) and
statement of cash flow included in the Financial Statements presents fairly the
results of operations and cash flow, respectively, of the Company for the period
set forth therein; provided, however, that the Interim Financial Statements
contain all adjustments necessary for a fair presentation, subject to normal,
recurring year-end adjustments (which adjustments will not be, individually or
in the aggregate, material), and lack footnotes. Each of the audited Financial
Statements has been certified by the Company's independent auditor, and each of
the Interim Financial Statements has been certified by the Company's chief
executive officer and principal accounting officer. The books, records and
accounts of the Company accurately and fairly reflect, in reasonable detail, all
transactions and all items of income and expense, assets and liabilities and
accruals relating to the Company.
3.7 No Undisclosed Liabilities. Except as set forth on Schedule 3.7,
the Company has no liabilities, whether accrued, absolute, contingent, or
otherwise, existing or arising out of any transaction or state of facts existing
on or prior to the date hereof, except (a) as and to the extent disclosed,
reflected or reserved against in the Financial Statements, (b) as and to the
extent arising under contracts, commitments, transactions, or circumstances
identified in the Schedules provided for herein, excluding any liabilities for
Company breaches thereunder, and (c) liabilities, not material in the aggregate
and incurred in the ordinary course of business, which, under GAAP, would not be
required to be reflected on a balance sheet prepared as of the date hereof. For
purposes of the preceding subsection (c), any liabilities incurred in connection
with litigation or judicial, administrative or arbitration proceedings or claims
against the Company shall not be deemed to be incurred in the ordinary course of
business.
3.8 Loans; Loan Loss Reserves.
(a) Except as set forth on Schedule 3.8, each outstanding
loan, loan agreement, note, lease or other borrowing agreement, any
participation therein and any guaranty, renewal or extension thereof
(collectively, "Loans") reflected on the books and records of the Bank
is evidenced by appropriate and sufficient documentation and
constitutes the legal, valid and binding obligation of the obligor
named therein, enforceable in accordance with its terms, except to the
extent such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights and remedies generally from time
to time in effect and by applicable laws which may effect the
availability of equitable remedies. No obligor named in any Loan has
provided notice (whether written or, to the knowledge of the Company,
oral) to the Company or the Bank that such obligor intends to attempt
to avoid the enforceability of any term of any Loan under any such laws
or equitable remedies, and no Loan is subject to any valid defense,
set-off, or counterclaim that has been asserted with respect to such
Loan. All Loans that are secured, as evidenced by the appropriate and
sufficient ancillary security documents, are so secured by valid and
enforceable liens. Neither the Bank nor the Company has entered into
any loan repurchase agreements.
(b) The allowance for loan and lease losses shown on each of
the balance sheets contained in the Financial Statements are adequate
under the requirements under GAAP to provide for possible losses, net
of recoveries relating to loans and leases previously charged off on
loans and leases outstanding (including accrued interest receivable) as
of the applicable date of such balance sheet. The aggregate loan and
lease balances of the Bank as of March 31, 2003 in excess of such
reserves as shown on the Interim Balance Sheet are, to the knowledge of
the Company, collectible in accordance with their respective terms.
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3.9 Properties and Assets.
(a) Real Property. Attached as Schedule 3.9(a) is a Schedule
of Real Property, which sets forth a complete and correct description
of all real property owned or leased by the Company or the Bank or in
which either the Company or the Bank has an interest (other than as a
mortgagee), including all real property carried by the Bank as Other
Real Estate Owned ("OREO"). The Company and the Bank own, or have a
valid right to use or a leasehold interest in, all real property used
by them in the conduct of their respective businesses as such
businesses are presently conducted. Except as otherwise set forth on
Schedule 3.9(a), the ownership or leasehold interest of the Company or
the Bank in such real property (excluding OREO) is not subject to any
mortgage, pledge, lien, option, conditional sale agreement,
encumbrance, security interest, title exceptions or restrictions or
claims or charges of any kind (collectively, "Encumbrances"), except
for Permitted Encumbrances. As used in this Agreement, "Permitted
Encumbrances" shall mean (i) Encumbrances arising under conditional
sales contracts and equipment leases with third parties under which the
Company or the Bank is not delinquent or in default, (ii) carriers',
workers', repairers', materialmen's, warehousemen liens' and similar
Encumbrances incurred in the ordinary course of business, (iii)
Encumbrances for taxes not yet due and payable, or that are being
contested in good faith and for which proper reserves have been
established and reflected on the Interim Balance Sheet, (iv) minor
defects in title to real property that do not materially impair the
intended use thereof, (v) zoning and similar restrictions on the use of
real property, and (vi) Encumbrances created in the ordinary course of
business to secure obligations of the Company or the Bank. All
certificates, licenses and permits required for the lawful use and
occupancy of any real property by the Company or the Bank, as the case
may be, have been obtained and are in full force and effect. Except as
otherwise set forth on Schedule 3.9(a), all OREO is the subject of a
recent appraisal that complies with applicable regulatory requirements
and is carried on the Bank's books at an amount which does not exceed
its current appraised value.
(b) Personal Property. Attached as Schedule 3.9(b)(i) is a
Schedule of Tangible Personal Property which sets forth a complete and
correct description of each item of tangible personal property owned by
the Company or the Bank or used by the Company or the Bank in the
conduct of their businesses that is reflected as a capital asset on the
Interim Balance Sheet and is being depreciated for tax purposes. Except
as otherwise set forth on Schedule 3.9(b)(ii), all such personal
property is owned by the Company or the Bank, all such property is
owned free and clear of any Encumbrances except for Permitted
Encumbrances, and all such property is in good working condition,
normal wear and tear excepted.
(c) Assets. The assets reflected on the Interim Balance Sheet
or identified in this Agreement or on the Schedules provided for herein
include all of the material assets (i) owned by the Company or the
Bank, except for those subsequently disposed of by the Company or the
Bank for fair value in the ordinary course of business, and (2) used or
intended for use by the Company or the Bank in the conduct of their
respective businesses.
3.10 Material Contracts. Attached as Schedule 3.10 is a Schedule of
Material Contracts. The Company has previously delivered to Wintrust, or made
available to Wintrust for its inspection from the books and records of the
Company or the Bank, true and complete copies of all Material Contracts.
"Material Contracts" include every contract, commitment, or arrangement, whether
written or oral (and the Company has delivered to Wintrust written descriptions
of the terms and conditions of all oral Material Contracts), of a material
nature under which the Company or the Bank is obligated on the date hereof,
including the following:
(a) all consulting arrangements, and contracts for
professional, advisory, and other services, including contracts under
which the Company or the Bank performs services for others;
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(b) all leases of real estate and personal property;
(c) all contracts, commitments and agreements for the
acquisition, development or disposition of real or personal property
other than conditional sales contracts and security agreements
whereunder total future payments are, in each instance, less than
$25,000;
(d) all contracts relating to the employment, engagement,
compensation or termination of directors, officers, employees,
consultants or agents of the Company or the Bank, and all pension,
retirement, profit sharing, stock option, stock purchase, stock
appreciation, insurance or similar plans or arrangements for the
benefit of any employees, officers or directors of the Company,
including all Benefit Plans as defined in Section 3.20;
(e) all loans, loan commitments, promissory notes, letters of
credit or other financial accommodations or arrangements or evidences
of indebtedness, including modifications, waivers or amendments
thereof, extended to or for the benefit of the Company or the Bank;
(f) all loans, loan commitments, promissory notes, letters of
credit or other financial accommodations or arrangements or evidences
of indebtedness, including modifications, waivers or amendments
thereof, extended to or for the benefit of any single borrower or
related group of borrowers if the aggregate amount of all such loans,
loan commitments, promissory notes, letters of credit or other
financial accommodations or arrangements or evidences of indebtedness
extended to such borrower or related group of borrowers exceeds
$350,000;
(g) all union and other labor contracts;
(h) all agreements, contracts, mortgages, loans, deeds of
trust, leases, commitments, indentures, notes, instruments and other
arrangements which are with officers or directors of the Company or the
Bank, any "affiliates" of the Company or the Bank within the meaning of
Section 23A of the Federal Reserve Act or any record or beneficial
owner of 5% or more of Company Common Stock, or any member of the
immediate family or a related interest (as such terms are defined in 12
C.F.R. ss.215.2(m)) of any such person, excepting any ordinary and
customary loans and deposits that comply with applicable banking
regulations;
(i) any contract involving total future payments by the
Company or the Bank of more than $25,000 or which requires performance
by the Company or the Bank beyond the second anniversary of the Closing
Date, that by its terms does not terminate or is not terminable by the
Company or the Bank without penalty within 30 days after the date of
this Agreement;
(j) except for provisions of the articles of incorporation,
articles of association and the by-laws of the Company or the Bank, all
contracts under which the Company or the Bank has any obligation,
direct, indirect, contingent or otherwise, to assume or guarantee any
liability or to indemnify any person (other than in a fiduciary
capacity);
(k) all joint venture or marketing agreements with any other
person or entity; and
(l) all other material contracts, made other than in the usual
or ordinary course of business of the Company or the Bank, to which the
Company or the Bank is a party or under which the Company or the Bank
is obligated.
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3.11 No Defaults. Each of the Company and the Bank has fulfilled and
taken all action reasonably necessary to date to enable it to fulfill, when due,
all of its material obligations under all Material Contracts to which it is a
party. There are no defaults by the Company or the Bank under any Material
Contract, and no events have occurred that, with the lapse of time or the
election of any other party, will become defaults by the Company or the Bank. To
the Company's knowledge, no breach or default by any other party under any
Material Contract has occurred or, is threatened that will or could impair the
ability of the Company or the Bank to enforce any of its rights under such
Material Contract in any material respect.
3.12 Conflict of Interest Transactions. Except as set forth on the
Schedule of Interested Transactions, attached hereto as Schedule 3.12, no
principal officer or director of the Company or the Bank, or holder of 10% or
more of the Company Common Stock or any member of the immediate family or a
related interest (as such terms are defined in 12 C.F.R. ss.215.2(m)) of such
person: (a) has any material direct or indirect interest not otherwise disclosed
in this Agreement or the Schedules attached hereto in (i) any entity which does
business with the Company or the Bank or (ii) any property or asset which is
owned or used by the Company or the Bank in the conduct of its business; or (b)
has any financial, business or contractual relationship or arrangement with the
Company or the Bank, excluding any agreements and commitments entered into in
respect of the Bank's acceptance of deposits and investments or the making of
any loans, in each case in the Bank's ordinary course of business.
3.13 Investments.
(a) Set forth on Schedule 3.13(a) is a complete and correct
list and description as of May 31, 2003, of all investment and debt
securities, mortgage-backed and related securities, marketable equity
securities and securities purchased under agreements to resell that are
owned by the Company or the Bank, other than in a fiduciary or agency
capacity (the "Investment Securities"). The Company and the Bank each
has good and marketable title to all Investment Securities held by it,
free and clear of all Encumbrances, except for Permitted Encumbrances.
The Investment Securities are valued on the books of the Company and
the Bank in accordance with GAAP.
(b) Except as set forth on Schedule 3.13(b), and as may be
imposed by applicable securities laws and the documents and instruments
governing the terms of such securities, none of the Investment
Securities is subject to any restriction, whether contractual or
statutory, that materially impairs the ability of the Company or the
Bank freely to dispose of such investment at any time. With respect to
all material repurchase agreements to which the Company or the Bank is
a party, the Company or the Bank, as the case may be, has a valid,
perfected first lien or security interest in the securities or other
collateral securing each such repurchase agreement, and the value of
the collateral securing each such repurchase agreement equals or
exceeds the amount of the debt secured by such collateral under such
agreement.
(c) Except as set forth on Schedule 3.13(c), neither the
Company nor the Bank has sold or otherwise disposed of any Investment
Securities in a transaction in which the acquiror of such Investment
Securities or other person has the right, either conditionally or
absolutely, to require the Company or the Bank to repurchase or
otherwise reacquire any such Investment Securities.
(d) There are no interest rate swaps, caps, floors, option
agreements or other interest rate risk management arrangements to which
the Company or the Bank is bound.
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3.14 Compliance with Laws; Legal Proceedings.
(a) The Company and the Bank are in compliance with all
applicable federal, state, county and municipal laws and regulations
(i) that regulate or are concerned in any way with the ownership and
operation of banks or the business of banking or of acting as a
fiduciary, including those laws and regulations relating to the
investment of funds, the taking of deposits, the lending of money, the
collection of interest, the extension of credit and the location and
operation of banking facilities, or (ii) that otherwise relate to or
affect the business or assets of the Company or the Bank or the assets
owned, used, occupied or managed by either of them, except for such
noncompliance which individually or in the aggregate would not have a
Material Adverse Effect on the Company or the Bank. The Company and the
Bank hold all material licenses, certificates, permits, franchises and
rights from all appropriate federal, state or other Governmental
Authorities necessary for the conduct of their businesses and the
ownership of their assets.
(b) Except as set forth on Schedule 3.14(b), there are no
claims, actions, suits or proceedings pending or, to the knowledge of
the Company, threatened or contemplated against or affecting the
Company or the Bank, at law or in equity, or before any federal, state
or other Governmental Authority or any arbitrator or arbitration panel,
whether by contract or otherwise, and there is no decree, judgment or
order or supervisory agreement of any kind in existence against or
restraining the Company or the Bank from taking any action of any kind
in connection with the business of the Company or the Bank. Except as
set forth on Schedule 3.14(b), neither the Company nor the Bank has
received from any federal, state or other Governmental Authority any
notice or threat (whether written or, to the knowledge of the Company
or the Bank, oral) of enforcement actions, or any criticism,
recommendation or suggestion of a material nature, and neither the
Company nor the Bank has any reasonable basis for believing that any
such notice or threat, criticism, recommendation or suggestion not
otherwise disclosed herein is contemplated, concerning capital,
compliance with laws or regulations, safety or soundness, fiduciary
duties or other banking or business practices that has not been
resolved to the reasonable satisfaction of such Governmental Authority.
3.15 Insurance. Attached as Schedule 3.15 is a Schedule of Insurance,
which sets forth a complete and correct list of all policies of insurance (a) in
which the Company or the Bank is named as an insured party, or (b) pursuant to
which the business, assets or properties of the Company or the Bank are insured,
and which are owned or carried by the Company or the Bank. The Company and the
Bank has in full force and effect policies of insurance issued by reputable
insurance companies against loss or damage of the kinds and in the amounts
identified in the policy summaries, and all premiums and costs with respect
thereto are set forth on Schedule 3.15. Neither the Company nor the Bank has
received notice (whether written or, to the knowledge of the Company, oral) from
any party of interest in or to any such policies claiming any breach or
violation of any provisions thereof, disclaiming or denying coverage thereof or
canceling or threatening cancellation of any such insurance contracts.
3.16 Taxes. The Company and the Bank have each duly and timely filed
all federal, state and local income, franchise, excise, real and personal
property, employment, value-added and other material returns required to be
filed or delivered by the Company or the Bank (respectively) in connection with
the Company's or the Bank's business and operations (collectively, "Returns"),
all information included in such Returns is accurate in all material respects,
and all taxes required to be shown on such Returns as payable by the Company or
the Bank with respect to the income of the Company or the Bank have been paid
when due. Other than in connection with the federal and state income tax returns
related to tax year 2002, no application for an extension of time for filing any
Return or consent to any extension of the period of limitations applicable to
the assessment or collection of any tax is in effect with respect to the Company
or the Bank. Neither the Company nor the Bank is delinquent in the payment of
any taxes claimed to be due from the Company or the Bank by any taxing
authority, and adequate provisions for
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taxes (including any penalties and interest) payable by the Company have been
made on the books of the Company and on the most recent of the Financial
Statements. The Company has not received any notice (whether written or, to the
knowledge of the Company, oral) of any proposed audit or proposed deficiency for
any duty, tax, assessment or governmental charge due from the Company with
respect to the business and operations of the Company, and there are no pending
audits or claims with respect thereto.
3.17 Environmental Laws and Regulations.
(a) Except as set forth on Schedule 3.17, the Company and the
Bank:
(i) have had and now have all environmental
approvals, consents, licenses, permits and orders required to
conduct the businesses in which they have been or are now
engaged;
(ii) have been and are in compliance in all material
respects with all applicable federal, state, county and
municipal laws, regulations, authorizations, licenses,
approvals, permits and orders relating to air, water, soil,
solid waste management, hazardous or toxic substances, or the
protection of health or the environment (collectively,
"Environmental Laws").
(b) Except as set forth on Schedule 3.17:
(i) there are no claims, actions, suits or
proceedings pending or, to the knowledge of the Company,
threatened or contemplated against, or involving, the Company
or the Bank or any assets of the Company or the Bank, under
any of the Environmental Laws (whether by reason of any
failure to comply with any of the Environmental Laws or
otherwise);
(ii) no decree, judgment or order of any kind under
any of the Environmental Laws has been entered against the
Company or the Bank;
(iii) neither the Company nor the Bank:
(1) is or was a generator or transporter of
hazardous waste, or the owner, operator, lessor,
sublessor, lessee or, to its knowledge, mortgagee of
a treatment, storage, or disposal facility or
underground storage tank as those terms are defined
under the Resource Conservation and Recovery Act, as
amended, or regulations promulgated thereunder, or of
real property on which such a treatment, storage or
disposal facility or underground storage tank is or
was located;
(2) owns, operates, leases, subleases or to
its knowledge, holds a security interest in, or
owned, operated, leased or subleased (A) any facility
at which any Hazardous Substances (as defined below)
were treated, stored in significant quantities,
recycled, disposed or are or were installed or
incorporated or (B) any real property on which such a
facility is or was located;
(3) arranged for the disposal or treatment,
arranged with a transporter for transport for
disposal or treatment of Hazardous Substances at any
facility from which there is a release or threat of
release, or accepts or accepted Hazardous Substances
for transport for disposal or treatment at any
facility, as those terms are defined under the
Comprehensive Environmental Response, Compensation
and Liability Act, as amended ("CERCLA"); or
(4) is or was the holder of a security
interest where the party giving the security is or
was the owner or operator of a treatment, storage or
disposal facility, underground storage tank or any
facility at which any Hazardous Substances are or
were treated, stored in
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significant quantities, recycled or disposed and
where either the Company or the Bank participates or
participated in management decisions concerning the
facility's waste disposal activities.
(c) To the Company's knowledge, there are no other facts,
conditions or situations, whether now or heretofore existing, that
could form the basis for any claim against, or result in any liability
of, the Company or the Bank under any of the Environmental Laws.
(d) For purposes of this Section 3.18, "Hazardous Substance"
shall mean a hazardous substance (as defined in CERCLA) and petroleum,
including crude oil or any fraction thereof, but excluding underground
crude oil in its natural unrefined state, prior to its initial
extraction.
3.18 Community Reinvestment Act Compliance. Neither the Company nor the
Bank has received any notice of non-compliance with the applicable provisions of
the Community Reinvestment Act ("CRA") and the regulations promulgated
thereunder, and the Company has never received a CRA rating of any kind from the
Office of the Comptroller of the Currency (the "OCC") or other applicable
Governmental Authority. The Company knows of no facts or circumstances, which
would cause either the Company or the Bank to fail to comply with such
provisions or to cause the Bank to receive a CRA rating of less than
satisfactory.
3.19 Company Regulatory Reports. Since January 1, 2001, the Company and
the Bank have filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, required to be filed with
the Federal Reserve, the OCC and any other Governmental Authority or
self-regulatory organization with jurisdiction over any of the activities of the
Company or the Bank (the "Company Regulatory Reports"), and have paid all fees
and assessments due and payable in connection therewith. As of their respective
dates, the Company Regulatory Reports complied in all material respects with the
statutes, rules and regulations enforced or promulgated by the applicable
regulatory authority with which they were filed and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statement therein, in light of the
circumstances under which they were made, not misleading.
3.20 Employee Benefit Plans.
(a) Schedule 3.20 sets forth a complete and correct list of
each employee benefit plan within the meaning of Section 3(3) of ERISA
(the "ERISA Plans"), each compensation, consulting, employment or
collective bargaining agreement, and each stock option, stock purchase,
stock appreciation right, life, health, disability or other insurance
or benefit, bonus, deferred or incentive compensation, severance or
separation, profit sharing, retirement, or other employee benefit plan,
practice, policy or arrangement of any kind, oral or written, covering
employees or former employees of the Company or the Bank which the
Company or the Bank maintains or contributes to (or, with respect to
any employee pension benefit plan (as defined in Section 3(2) of ERISA)
has maintained or contributed to since the date of its incorporation)
or to which the Company or the Bank is a party or by which it is
otherwise bound (collectively, together with the ERISA Plans, the
"Benefit Plans"). None of the Benefit Plans is a "defined benefit plan"
(as defined in Section 414(j) of the Code). Neither the Company nor the
Bank has, and has ever had, an affiliate that would be treated as a
single employer together with the Company or the Bank (an "ERISA
Affiliate") under Section 414 of the Code.
(b) Other than the employment agreement with the Bank's
president, a true and complete copy of which has been provided to
Wintrust, neither the Company nor the Bank has entered into or
maintained any Benefit Plan which includes any change of control
provisions which would cause an increase or acceleration of benefits or
benefit entitlements to employees or former employees of
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the Company or the Bank or any other increase in the liabilities of the
Company or the Bank under such Benefit Plan as a result of the
transactions contemplated by this Agreement.
(c) Neither the Company nor the Bank maintains or
participates, and has ever maintained or participated, in a
multiemployer plan within the meaning of Section 3(37) of ERISA. None
of the Company, the Bank, any director or employee of the Company or
the Bank, or any fiduciary of any ERISA Plan has engaged in any
transaction in violation of Section 406 or 407 of ERISA or any
"prohibited transaction" (as defined in Section 4975(c)(1) of the Code)
for which no exemption exists under Section 408(b) of ERISA or Section
4975(d) of the Code in connection with such ERISA Plan. Neither the
Company nor the Bank provides nor has ever provided medical benefits to
former employees, except as required by Section 601 of ERISA.
(d) Each ERISA Plan that is intended to qualify under Section
401 and related provisions of the Code is the subject of a
determination letter from the Internal Revenue Service to the effect
that it is so qualified under the Code and that its related funding
instrument is tax exempt under Section 501 of the Code.
(e) Each Benefit Plan is, and since its inception, has been
administered in material compliance with its terms and with all
applicable laws, rules and regulations governing such Benefit Plan,
including the rules and regulations promulgated by the Department of
Labor, the Pension Benefit Guaranty Corporation and the Internal
Revenue Service under ERISA, the Code or any other applicable law.
Neither the Company nor any affiliate of the Company that is a
fiduciary with respect to any Benefit Plan, has breached any of the
responsibilities, obligations or duties imposed on it by ERISA.
(f) There is no litigation, claim or assessment pending or, to
the Company's knowledge, threatened by, on behalf of, or against any of
the Benefit Plans or against the administrators or trustees or other
fiduciaries of any of the Benefit Plans that alleges a violation of
applicable state or federal law. To the Company's knowledge, there is
no reasonable basis for any such litigation, claim or assessment.
(g) No Benefit Plan fiduciary or any other person has, or has
had, any liability to any Benefit Plan participant, beneficiary or any
other person under any provisions of ERISA or any other applicable law
by reason of any action or failure to act in connection with any
Benefit Plan, including, but not limited to, any liability by any
reason of any payment of, or failure to pay, benefits or any other
amounts or by reason of any credit or failure to give credit for any
benefits or rights.
(h) All accrued contributions and other payments to be made by
the Company or the Bank to any Benefit Plan through the date hereof
have been made or reserves adequate for such purposes have been set
aside therefor and reflected in the Financial Statements. Neither the
Company nor the Bank is in default in performing any of its contractual
obligations under any of the Benefit Plans or any related trust
agreement or insurance contract. There are no outstanding liabilities
with respect to any Benefit Plan other than liabilities for benefits to
be paid to participants in such Benefit Plan and their beneficiaries in
accordance with the terms of such Benefit Plan.
(i) No Benefit Plan provides for payment of any amount which,
considered in the aggregate with amounts payable pursuant to all other
Benefit Plans, would exceed the amount deductible for federal income
tax purposes by virtue of Section 280G or 162(m) of the Code.
(j) There are no obligations or liabilities, whether
outstanding or subject to future vesting, for any post-retirement
benefits to be paid to participants under any of the Benefit Plans.
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3.21 Technology and Intellectual Property.
(a) Attached as Schedule 3.21 is a Schedule of Intellectual
Property, which sets forth a complete and correct list of all (i)
registered trademarks, service marks, copyrights and patents; (ii)
applications for registration or grant of any of the foregoing; (iii)
unregistered trademarks, service marks, trade names, logos and assumed
names; and (iv) licenses for any of the foregoing, in each case, owned
by the Company or the Bank or used in or necessary to conduct the
Company's or the Bank's business as presently conducted. The items on
Schedule 3.21, together with all other trademarks, service marks, trade
names, logos, assumed names, patents, copyrights, trade secrets,
computer software, licenses, formulae, customer lists or other
databases, business application designs and inventions currently used
in or necessary to conduct the business of the Company as presently
conducted constitute the "Intellectual Property."
(b) Except as set forth on Schedule 3.21, the Company or the
Bank has ownership of, or such other rights by license, lease or other
agreement in and to, the Intellectual Property as is necessary to
permit the Company and the Bank to use the Intellectual Property in the
conduct of their respective businesses as presently conducted. Neither
the Company nor the Bank has received notice (whether written or, to
the knowledge of the Company or the Bank, oral) alleging that the
Company or the Bank has infringed or violated any trademark, trade
name, copyright, patent, trade secret right or other proprietary right
of others, and to the Company's knowledge, it has not committed any
such violation or infringement. Other than as set forth on Schedule
3.21, to the Company's knowledge, there is no reason to believe that,
upon consummation of the transactions contemplated hereby, the Company
or the Bank will be in any way more restricted in its use of any of the
Intellectual Property than it was on the date hereof under any contract
to which the Company or the Bank is a party or by which it is bound, or
that use of such Intellectual Property by the Company or the Bank will,
as a result of such consummation, violate or infringe the rights of any
person, or subject Wintrust, the Company or the Bank to liability of
any kind, under any such contract.
3.22 No Adverse Change. Other than as specifically disclosed in this
Agreement, the Financial Statements, or the Schedules delivered pursuant to this
Agreement, there has not occurred (a) since December 31, 2002 any Material
Adverse Effect on the Company or the Bank, or (b) any change or condition,
event, circumstance, fact or other occurrence, whether occurring before or since
December 31, 2002, that may reasonably be expected to have or result in a
Material Adverse Effect on the Company or the Bank. The Company knows of no
reason, based on the business or operations of the Company and the Bank, why the
Federal Reserve Application or any of the other regulatory approvals referenced
in Section 7.3 should be denied or unduly delayed.
3.23 Conduct of Business in Normal Course. Since December 31, 2002, the
businesses of the Company and the Bank have been conducted only in the ordinary
and usual course consistent with past practice.
3.24 Change in Business Relationships. As of the date of this
Agreement, neither the Company nor the Bank has received notice (whether written
or, to the knowledge of the Company or the Bank, oral), whether on account of
the transactions contemplated by this Agreement or otherwise, (a) that any
customer, agent, representative, supplier, vendor or business referral source of
the Company or the Bank intends to discontinue, diminish or change its
relationship with the Company or the Bank, that would have a Material Adverse
Effect on the Company, or (b) that any executive officer of the Company or the
Bank intends to terminate or substantially alter the terms of his or her
employment. There have been no complaints or disputes (in each case set forth in
writing) with any customer, agent, representative, supplier, vendor, business
referral source or other parties that have not been resolved which are
reasonably likely to have a Material Adverse Effect on the Company or the Bank.
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3.25 Brokers' and Finders' Fees. Neither the Company nor the Bank has
incurred any liability for brokerage commissions, finders' fees, or like
compensation with respect to the transactions contemplated by this Agreement.
3.26 No Omissions. None of the representations and warranties contained
in Article III, in the Schedules provided for herein by the Company or in the
Financial Statements is false or misleading in any material respect or omits to
state a fact herein or therein necessary to make such statements not misleading
in any material respect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
CONCERNING WINTRUST AND MERGER CO.
Wintrust and Merger Co. hereby jointly and severally represent to the
Company as follows:
4.1 Organization. Each of Wintrust and Merger Co. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois, has the corporate power and authority to own its own properties and to
carry on its business as it is now being conducted, and is duly qualified and in
good standing as a foreign corporation in each jurisdiction where the location
and character of its properties and the business conducted by it require such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect on Wintrust or Merger Co.
4.2 Capitalization. The authorized capital stock of Wintrust consists
of (i) 30,000,000 shares of common stock, no par value per share, of which
17,419,956 shares were issued and outstanding as of June 3, 2003, (ii)
20,000,000 shares of preferred stock, no par value per share, of which 100,000
shares are designated Junior Serial Preferred Stock A, no par value per share,
and no shares of preferred stock are issued and outstanding, and (iii) no shares
are held in treasury. As of June 3, 2003 there were (i) outstanding options in
respect of 2,921,437 shares of Wintrust Common Stock, (ii) outstanding warrants
for the purchase of 263,886 shares of Wintrust Common Stock, and (iii) preferred
share purchase rights outstanding pursuant to the Rights Agreement between
Wintrust and Illinois Stock Transfer Company, as Rights Agent, dated July 28,
1998. Such options, warrants and rights have been duly authorized by all
necessary corporate action (including shareholder approval, if necessary). Such
options and warrants have been validly executed, issued and delivered by
Wintrust, and constitute the legal, valid and binding obligations of Wintrust,
and are enforceable as to Wintrust in accordance with their terms. The shares of
Wintrust Common Stock to be issued upon exercise of such options and warrants
are validly authorized and, upon such exercise in accordance with their terms,
will be validly issued, fully paid, and nonassessable. The Wintrust Common Stock
is subject to certain preferences, qualifications, limitations, restrictions or
special or relative rights under Wintrust's articles of incorporation, a true
and complete copy of which has been previously provided to the Company. Except
for such options and warrants and preferred share purchase rights, there are no
options, agreements, contracts or other rights in existence to purchase or
acquire from Wintrust any shares of capital stock of Wintrust, whether now or
hereafter authorized or issued, other than shares issuable pursuant to employee
benefit or compensation plans referred to in the Wintrust SEC Documents.
4.3 Authorization; No Violations. The execution and delivery of this
Agreement and the performance of Wintrust's and Merger Co.'s obligations
hereunder have been duly and validly authorized by each of the Boards of
Directors of Wintrust and Merger Co., do not violate or conflict with their
respective articles of incorporation or by-laws, the Illinois Act, or any
applicable law, court order or decree to which Wintrust or Merger Co. is a party
or subject, or by which Wintrust or Merger Co. or any
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of their respective properties is bound, and require no further corporate or
shareholder approvals on the part of Wintrust and Merger Co. The execution and
delivery of this Agreement and the performance of Wintrust's and Merger Co.'s
obligations hereunder do not and will not result in any default or give rise to
any right of termination, cancellation or acceleration under any material note,
bond, mortgage, indenture or other agreement by which Wintrust or Merger Co. is
bound. This Agreement, when executed and delivered, will be a valid, binding and
enforceable obligation of each of Wintrust and Merger Co., subject to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors generally and to general principles of equity.
4.4 Consents and Approvals. No consents or approvals of, or filings or
registrations with, any Governmental Authority or with any third party are
necessary in connection with the execution and delivery by Wintrust or Merger
Co. of this Agreement and the consummation by Wintrust and Merger Co. of the
Merger except for (a) the filing by Wintrust of the Federal Reserve Application
with the Federal Reserve under the BHCA, (b) the filing with the Commission of
the Registration Statement (as defined in Section 5.4(a)), and (c) the filing of
the Articles of Merger with the Secretary of State of the State of Illinois
under the Illinois Act.
4.5 Wintrust SEC Documents and Financial Statements.
(a) Since January 1, 2000, Wintrust has timely filed all
reports and other documents (including any amendments thereto) required
to be filed with the Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations of
the Commission (the "Wintrust SEC Documents"), and all such Wintrust
SEC Documents have complied in all material respects, as of their
respective filing dates and effective dates, as the case may be, with
all applicable requirements of the Exchange Act. As of their respective
filing dates, none of the Wintrust SEC Documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(b) The audited consolidated financial statements contained or
incorporated by reference in Wintrust's Annual Report on Form 10-K for
the years ended December 31, 2000, 2001 and 2002 and the unaudited
interim financial statements included in Wintrust's most recent
Quarterly Report on Form 10-Q have been prepared in conformity with
GAAP applied on a consistent basis, and, together with the notes
thereto, present fairly the consolidated financial position of Wintrust
and its subsidiaries at the dates shown and the consolidated results of
their operations, changes in stockholders' equity and cash flows for
the periods then ended. The interim financial statements as of, and
for, the periods ending after December 31, 2002 included in Wintrust's
Quarterly Reports on Form 10-Q, as filed with the Commission, include
all adjustments necessary for a fair presentation of the financial
position of Wintrust and its subsidiaries and the results of their
operations for the interim periods presented, subject to normal,
recurring year-end adjustments and the omission of footnote disclosure.
(c) The reserves for possible loan losses shown on each of the
balance sheets contained in the Wintrust SEC Documents are adequate
under the requirements under GAAP to provide for possible losses, net
of recoveries relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of the
applicable date of such balance sheet. The aggregate consolidated loan
balance of Wintrust as of March 31, 2003, in excess of such reserves
shown on the balance sheet as of March 31, 2003, contained in the
Wintrust SEC Documents is, to the knowledge of Wintrust, collectible in
accordance with their terms.
(d) Except as disclosed in the Wintrust SEC Documents or as
set forth on Schedule 4.5(d), neither Wintrust nor any banking
subsidiary of Wintrust (a "Wintrust Bank") is a party
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to, and none of their respective properties or assets are bound by, any
"material contract" required to be filed under Item 601(b)(10) of
Regulation S-K of the Commission.
4.6 Compliance with Laws; Legal Proceedings.
(a) Wintrust and its subsidiaries are each in compliance in
all material respects with all applicable federal, state, county and
municipal laws and regulations (i) that regulate or are concerned in
any way with the ownership and operation of banks or the business of
banking or of acting as a fiduciary, including those laws and
regulations relating to the investment of funds, the taking of
deposits, the lending of money, the collection of interest, the
extension of credit and the location and operation of banking
facilities, or (ii) that otherwise relate to or affect the business or
assets of Wintrust or any of its subsidiaries or the assets owned,
used, occupied or managed by Wintrust or any of its subsidiaries,
except for such noncompliance which individually or in the aggregate
would not have a Material Adverse Effect on Wintrust. Wintrust and its
subsidiaries (direct and indirect) hold all material licenses,
certificates, permits, franchises and rights from all appropriate
federal, state or other Governmental Authorities necessary for the
conduct of its business and the ownership of its assets.
(b) Except as may be disclosed in the Wintrust SEC Documents,
there are no material claims, actions, suits or proceedings pending or,
to the knowledge of Wintrust, threatened or contemplated against or
affecting Wintrust or its subsidiaries, at law or in equity, or before
any federal, state or other Governmental Authority or any arbitrator or
arbitration panel, whether by contract or otherwise, and there is no
decree, judgment or order or supervisory agreement of any kind in
existence against or restraining Wintrust or its subsidiaries from
taking any action of any kind in connection with their respective
businesses. Except as may be disclosed in the Wintrust SEC Documents or
as set forth on Schedule 4.6(b), none of Wintrust or its subsidiaries
has received from any federal, state or other Governmental Authority
any notice or threat (whether written or, to the knowledge of Wintrust,
oral) of enforcement actions, or any criticism, recommendation or
suggestion of a material nature, and none of Wintrust or its
subsidiaries has any reasonable basis for believing that any such
notice or threat, criticism, recommendation or suggestion not otherwise
disclosed herein is contemplated, concerning capital, compliance with
laws or regulations, safety or soundness, fiduciary duties or other
banking or business practices that has not been resolved to the
reasonable satisfaction of such Governmental Authority.
4.7 Wintrust Regulatory Reports. Since January 1, 2001, Wintrust and
its subsidiaries have filed all reports, registrations and statements, together
with any amendments required to be made with respect thereto, required to be
filed with the Federal Reserve, the OCC and any other Governmental Authority or
self-regulatory organization with jurisdiction over any of the activities of
Wintrust or its subsidiaries (the "Wintrust Regulatory Reports"), and have paid
all fees and assessments due and payable in connection therewith. As of their
respective dates, the Wintrust Regulatory Reports complied in all material
respects with the statutes, rules and regulations enforced or promulgated by the
applicable regulatory authority with which they were filed and did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statement therein, in
light of the circumstances under which they were made, not misleading.
4.8 Taxes. Wintrust and each Wintrust Bank have each duly and timely
filed all state and federal income tax returns required to be filed or delivered
by Wintrust in connection with Wintrust's business and operations, and all
information included in such returns is accurate in all material respects, and
all state and federal taxes required to be shown on such returns as payable by
Wintrust with respect to the income of Wintrust have been paid when due. Other
than in connection with the federal and state income tax returns related to tax
year 2002, no application for an extension of time for filing any such income
tax return or consent to any extension of the period of limitations applicable
to the assessment or collection of any state or federal income tax is in effect
with respect to Wintrust. Wintrust has not
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received any notice (whether written or, to the knowledge of Wintrust, oral) of
any proposed audit or proposed deficiency for any state or federal income tax,
assessment or governmental charge due from Wintrust with respect to the business
and operations of Wintrust, and there are no pending audits or claims with
respect thereto
4.9 Compliance with ERISA. All employee benefit plans (as defined in
Section 3(3) of ERISA) established or maintained by Wintrust or any Wintrust
Bank or to which Wintrust or any Wintrust Bank contributes, are in material
compliance with all applicable requirements of ERISA, and are in material
compliance with all applicable requirements (including qualification and
non-discrimination requirements in effect as of the Closing) of the Code for
obtaining the tax benefits the Code thereupon permits with respect to such
employee benefit plans. No such employee benefit plan has any amount of unfunded
benefit liabilities (as defined in Section 4001(a)(18) of ERISA) for which
Wintrust or any Wintrust Bank would be liable to any person or entity under
Title IV of ERISA if any such employee benefit plan were terminated as of the
Closing. Such employee benefit plans are funded in accordance with Section 412
of the Code (if applicable). There would be no obligations of Wintrust of any
Wintrust Bank under Title IV of ERISA relating to any such employee benefit plan
that is a multi-employer plan if any such plan were terminated or if Wintrust or
such Wintrust Bank withdrew from any such plan as of the Closing. All
contributions and premium payments due prior to the date hereof have been made,
and all contributions and premium payments due prior to Closing will be made by
Wintrust or a Wintrust Bank, as applicable, on a timely basis.
4.10 No Defaults. Each of Wintrust and each Wintrust Bank has fulfilled
and taken all action reasonably necessary to date to enable it to fulfill, when
due, all of its material obligations under all material contracts identified or
required to be identified in the Wintrust SEC Documents. There are no defaults
under any such contract, and no events have occurred that, with the lapse of
time or the election of any other party, will become defaults by Wintrust or any
Wintrust Bank. To Wintrust's knowledge, no breach or default by any other party
under such contract has occurred or is threatened that will or could impair the
ability of Wintrust or any Wintrust Bank to enforce any of its rights under such
contract in any material respect.
4.11 Compliance with Environmental Laws. Except as set forth on
Schedule 4.11, (a) there are no proceedings or orders against Wintrust or any
Wintrust Bank with respect to alleged violation of, or liability under,
Environmental Laws; (b) to the knowledge of Wintrust, there is no proceeding or
order threatened against Wintrust or any Wintrust Bank with respect to the
alleged violation of, or liability under, Environmental Laws; and (c) to the
knowledge of Wintrust, there are no facts, conditions or situations, whether now
or heretofore existing, that could form the basis for any claim against, or
result in any liability of, Wintrust.
4.12 Fiduciary Accounts. Each Wintrust Bank has properly administered
in all material respects all accounts for which it acts as fiduciary, including
accounts for which it serves as trustee, agent, custodian or investment advisor,
in accordance with the material terms of the governing documents and applicable
state and federal law and regulations.
4.13 No Adverse Change. Except as disclosed in the Wintrust SEC
Documents, this Agreement, or the Schedules delivered pursuant to this
Agreement, there has not occurred (a) since December 31, 2002, any Material
Adverse Effect on Wintrust or any of its subsidiaries or (b) any change or
condition, event, circumstance, fact or other occurrence, whether occurring
before or since December 31, 2002, that may reasonably be expected to have or
result in a Material Adverse Effect on Wintrust. Wintrust knows of no reason,
based on the business or operations of Wintrust and its subsidiaries, why the
Federal Reserve Application or any of the other regulatory approvals referenced
in Section 7.3 or 8.3
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would be denied or unduly delayed. The CRA rating of each banking subsidiary of
Wintrust is at least "satisfactory" or better.
4.14 Brokers' and Finders' Fees. Except as set forth on Schedule 4.14,
neither Wintrust nor Merger Co. has incurred any liability for brokerage
commissions, finders' fees, or like compensation with respect to the
transactions contemplated by this Agreement.
4.15 No Omissions. None of the representations and warranties contained
in Article IV or in the Schedules provided for herein is false or misleading in
any material respect or omits to state a fact herein necessary to make such
statements not misleading in any material respect.
ARTICLE V
AGREEMENTS AND COVENANTS
5.1 Conduct of Business. During the period commencing on the date
hereof and continuing until the Effective Time, the Company shall conduct the
Company's business and shall cause the Bank to conduct its business in the usual
and ordinary course consistent with prudent banking practice. Without limiting
the foregoing, without the prior written consent of Wintrust:
(a) no change shall be made in the articles of incorporation
or by-laws of the Company or the charter or by-laws of the Bank;
(b) except with respect to the exercise of any Outstanding
Company Option or Warrant, no change shall be made in the
capitalization of the Company or the Bank or in the number of issued
and outstanding shares of Company Common Stock or Warrants;
(c) the compensation of officers or key employees of the
Company or the Bank shall not be increased, nor any bonuses paid;
(d) no Loans, or renewals or restructurings of Loans, in the
amount of $500,000 or more (including Loans to any one borrower or
related group of borrowers which, in the aggregate, equal or exceed
$500,000) shall be made by the Bank except in the ordinary course of
business and consistent with prudent banking practices and the Bank's
current loan policies and applicable rules and regulations of
applicable Governmental Authorities with respect to amount, term,
security and quality of such borrower's or borrowers' credit;
(e) no dividends or other distributions shall be declared or
paid by the Company or the Bank;
(f) the Company and the Bank shall each use their commercially
reasonable efforts to maintain their present insurance coverage in
respect to its properties and business;
(g) no significant changes shall be made in the general nature
of the business conducted by the Company or the Bank;
(h) No action shall be taken in connection with the proposed
"ISS Investment" further described on Schedule 5.1(h);
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(i) no employment, consulting or similar agreements shall be
entered into by the Company or the Bank that are not terminable by the
Company or the Bank on 30 days' or fewer notice without penalty or
obligation;
(j) neither the Company nor the Bank shall take any action
that would result in a termination, partial termination, curtailment,
discontinuance of a Benefit Plan or merger of any Benefit Plan into
another plan or trust;
(k) the Company and the Bank shall file all Returns in a
timely manner and shall not make any application for or consent to any
extension of time for filing any Return or any extension of the period
of limitations applicable thereto;
(l) neither the Company nor the Bank shall make any
expenditure any expenditure for fixed assets in excess of $25,000 for
any single item, or $100,000 in the aggregate, or shall enter into
leases of fixed assets having an annual rental in excess of $25,000;
(m) neither the Company nor the Bank shall incur any
liabilities or obligations, make any commitments or disbursements,
acquire or dispose of any property or asset, make any contract or
agreement, or engage in any transaction except in the ordinary course
consistent with prudent banking practices and the Bank's current
policies;
(n) neither the Company nor the Bank shall do or fail to do
anything that will cause a breach by the Company or the Bank of, or
default by the Company or the Bank under, any Material Contract;
(o) the Bank shall not engage or agree to engage in any
"covered transaction" within the meaning of Sections 23A or 23B of the
Federal Reserve Act (without regard to the applicability of any
exemptions contained in Section 23A) or any transaction of the kind
referred to in Section 3.12, unless the Bank has complied with all
requirements of Sections 23A or 23B of the Federal Reserve Act;
(p) the Bank shall only purchase or invest in obligations of
the government of the United States or agencies of the United States or
state or local governments having maturities of not more than five
years and which municipal obligations have been assigned a rating of A
or better by Moody's Investors Service or by Standard & Poor's;
(q) no changes of a material nature shall be made in either
the Company's or the Bank's accounting procedures, methods, policies or
practices or the manner in which the Company or the Bank maintain their
records; and
(r) the Bank shall not accept or renew any brokered deposits.
5.2 Access to Information.
(a) Pending the Closing, representatives of Wintrust shall,
during normal business hours and on reasonable advance notice to the
Company, be given full access to the Company's and the Bank's records
and business activities and be afforded the opportunity to observe
their business activities and consult with their officers and employees
regarding the same on an ongoing basis (without limiting the foregoing,
to verify compliance by the Company with all terms of this Agreement);
provided, however, that the foregoing actions do not interfere with the
business operations of the Company and the Bank.
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(b) Wintrust will use such information as is provided to it by
the Company or the Bank or the representatives of either solely for the
purpose of conducting business, legal and financial reviews of the
Company and the Bank and for such other purposes as may be related to
this Agreement, and Wintrust will, and will direct all of its agents,
employees and advisors to, maintain the confidentiality of all such
information in accordance with the terms of the letter agreement
regarding confidentiality entered into by and between the Company and
Wintrust dated April 16, 2003 (the "Confidentiality Agreement").
(c) Pending the Closing and solely for the purpose of
permitting the Company to ascertain the correctness of the
representations and warranties made in this Agreement by Wintrust to
the Company, representatives of the Company shall, during normal
business hours and on reasonable advance notice to Wintrust, be given
access to the records and business activities of Wintrust and the
Wintrust Banks and be afforded the opportunity to observe their
business activities and consult with their officers and employees
regarding the same; provided, however, that in Wintrust's sole
reasonable judgment the foregoing actions do not interfere with the
business operations of Wintrust or any of its subsidiaries. The Company
will, and will direct all of its agents, employees and advisors to,
maintain the confidentiality of all such information in accordance with
the terms of the Confidentiality Agreement.
5.3 Meeting of Shareholders of the Company. As soon as practicable
after the date of this Agreement and the effectiveness of the Registration
Statement pursuant to Section 5.4, the Company shall call and hold a meeting of
its shareholders for the purpose of voting upon this Agreement, the Merger and
the transactions herein contemplated in accordance with the Company's articles
of incorporation, its by-laws and the Illinois Act (the "Shareholders Meeting").
The Company shall, through the Company Board, recommend to its shareholders,
consistent with its fiduciary duties, approval of this Agreement and the Merger.
5.4 Registration Statement and Regulatory Filings.
(a) Wintrust shall file with the Commission within 45 days
after the execution of this Agreement or as soon thereafter as
practicable, a registration statement on an appropriate form under the
Securities Act covering Wintrust Common Stock to be issued pursuant to
this Agreement and shall use its reasonable best efforts to cause the
same to become effective and thereafter, until the Effective Time or
termination of this Agreement, to keep the same effective and, if
necessary, amend and supplement the same. Such registration statement
and any amendments and supplements thereto are referred to herein as
the "Registration Statement." The Registration Statement shall include
a Proxy Statement/Prospectus thereto reasonably acceptable to Wintrust
and the Company, prepared by Wintrust and the Company for use in
connection with the meeting of shareholders of the Company referred to
in Section 5.3, all in accordance with the rules and regulations of the
Commission. Wintrust shall, as soon as practicable after the execution
of this Agreement, make all filings, if any, required to obtain all
blue sky permits, authorizations, consents or approvals required for
the issuance of Wintrust Common Stock. In advance of filing the
Registration Statement, Wintrust shall provide the Company and its
counsel with a copy of the Registration Statement and provide an
opportunity to comment thereon, and thereafter shall promptly advise
the Company and its counsel of any material communication received by
Wintrust or its counsel from the Commission with respect to the
Registration Statement. None of the information furnished by Wintrust
or the Company for inclusion in the Registration Statement, the Proxy
Statement/Prospectus or any other document filed with the Commission or
any state securities commission, at the respective times at which such
documents are filed with the Commission or such state securities
commission, or, in the case of the Registration Statement, when it
becomes effective, or in the case of the Proxy Statement/Prospectus,
when mailed or at the time of the Shareholders Meeting, shall be false
or misleading with respect to any material fact or shall omit to state
any material fact necessary in
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order to make the statements therein, in light of the circumstances
in which they were made, not misleading.
(b) Wintrust, within 30 days following execution and delivery
of this Agreement, will file the Federal Reserve Application and take
all other appropriate actions (except as otherwise specified in Section
5.4(a) above) necessary to obtain the regulatory approvals referred to
in Section 7.3 hereof, and the Company will use all reasonable and
diligent efforts to assist in obtaining all such approvals. The
obligation to take all appropriate actions shall not be construed as
including an obligation to accept any terms of or conditions to a
consent, authorization, order, or approval of, or any exemption by, any
Governmental Authority or other party that are not acceptable to
Wintrust, in its sole reasonable discretion, or to change the business
practices of Wintrust or any of its subsidiaries in a manner not
acceptable to Wintrust, in its sole reasonable discretion. In advance
of filing any applications for such regulatory approvals, Wintrust
shall provide the Company and its counsel with a copy of such
applications (but excluding any information contained therein regarding
Wintrust and its business or operations for which confidential
treatment has been requested) and provide an opportunity to comment
thereon, and thereafter shall promptly advise the Company and its
counsel of any material communication received by Wintrust or its
counsel from any regulatory authorities with respect to such
applications.
5.5 Listing of Shares. Wintrust shall use all reasonable and diligent
efforts to cause the shares of Wintrust Common Stock issuable in the Merger to
be approved for listing on the Nasdaq National Market.
5.6 Reasonable and Diligent Efforts. The Parties shall use reasonable
and diligent efforts in good faith to satisfy the various conditions to Closing
and to consummate the Merger as soon as practicable. None of the Parties will
intentionally take or intentionally permit to be taken any action that would be
in breach of the terms or provisions of this Agreement or that would cause any
of the representations contained herein to be or become untrue.
5.7 Business Relations and Publicity. The Company shall use reasonable
and diligent efforts to preserve the reputation and relationship of the Company
and the Bank with suppliers, clients, customers, employees, and others having
business relations with the Company or the Bank. Wintrust and the Company shall
coordinate all publicity relating to the transactions contemplated by this
Agreement and, except as otherwise required by applicable law or the rules of
the Nasdaq National Market, or with respect to employee meetings, neither Party
shall issue any press release, publicity statement or other public notice
relating to this Agreement or any of the transactions contemplated hereby
without obtaining the prior consent of the other, which consent shall not be
unreasonably withheld, conditioned or delayed. The Company shall obtain the
prior consent (which shall not be unreasonably withheld, conditioned or delayed)
of Wintrust to the content of any communication to its shareholders. In
furtherance of the foregoing the Parties acknowledge that immediately after
execution of this Agreement Wintrust shall issue a news release (after
consultation with the Company as to its content) and file the same with the
Commission on Form 8-K.
5.8 No Conduct Inconsistent with this Agreement.
(a) The Company shall not, and shall cause the Bank to not,
during the term of this Agreement, directly or indirectly, solicit,
encourage or facilitate inquiries or proposals or enter into any
agreement with respect to, or initiate or participate in any
negotiations or discussions with any person or entity concerning, any
proposed transaction or series of transactions involving or affecting
the Company or the Bank (or the securities or assets of either) that,
if effected, would constitute an acquisition of control of either the
Company or the Bank within the meaning of 12 U.S.C.A. ss.1817(j)
(disregarding the exceptions set forth in 12 U.S.C.A. ss.1817(j)(17))
and the regulations of the Federal
A-25
Reserve thereunder (each, an "Acquisition Proposal"), or furnish any
information to any person or entity proposing or seeking an Acquisition
Proposal.
(b) Notwithstanding the foregoing, in the event that the
Company Board determines in good faith and after consultation with
outside counsel, that in light of a Superior Acquisition Proposal (as
defined herein) it is necessary to pursue such Superior Acquisition
Proposal in order to act in a manner consistent with such Board's
fiduciary duties, the Company Board may, in response to an Acquisition
Proposal which was not solicited by or on behalf of the Company or the
Bank or which did not otherwise result from a breach of Section 5.8(a),
subject to its compliance with Section 5.8(c), (i) furnish information
with respect to the Company or the Bank to such person or entity making
such Superior Acquisition Proposal pursuant to a customary
confidentiality agreement that is no less restrictive than the
confidentiality agreement entered into between the Company and
Wintrust, (ii) participate in discussions or negotiations regarding
such Superior Acquisition Proposal, (iii) withdraw, modify or otherwise
change in a manner adverse to Wintrust, the Company's recommendation to
its shareholders with respect to this Agreement and the Merger and/or
(iv) terminate this Agreement in order to concurrently enter into an
agreement with respect to such Superior Acquisition Proposal; provided,
however, that the Company Board may not terminate this Agreement
pursuant to this Section 5.8(b) unless and until (x) five (5) business
days have elapsed following the delivery to Wintrust of a written
notice of such determination by the Company Board and during such five
(5) business day period, the Company and the Bank otherwise cooperate
with Wintrust with the intent of enabling the Parties to engage in good
faith negotiations so that the Merger and other transactions
contemplated hereby may be effected and (y) at the end of such three
business day period the Company Board continue reasonably to believe
the Acquisition Proposal at issue constitutes a Superior Acquisition
Proposal. A "Superior Acquisition Proposal" means any Acquisition
Proposal containing terms which the Company Board determines in its
good faith judgment (based on the advice of a financial advisor of
nationally recognized reputation) to be more favorable to the Company's
shareholders than the Merger and for which financing, to the extent
required, is then committed or which, in the good faith judgment of the
Company Board, is reasonably capable of being obtained by such third
party.
(c) In addition to the obligations of the Company set forth in
Section 5.8(a) and (b), the Company shall immediately advise Wintrust
orally and in writing of any request for information or of any
Acquisition Proposal, the material terms and conditions of such request
or Acquisition Proposal and the identity of the person or entity making
such request or Acquisition Proposal. The Company shall keep Wintrust
reasonably informed of the status and details (including amendments or
proposed amendments) of any such request or Acquisition Proposal,
including the status of any discussions or negotiations with respect to
any Superior Acquisition Proposal.
5.9 Pre-Closing Loan Review.
(a) The Company shall cause the Bank, prior to the Closing
Date, to write off all Loans of the Bank that are required to be
written off by the Bank's regulators or that, in conformity with past
practices and policies of the Bank and GAAP, should be written off as
Loan losses.
(b) The Company shall furnish Wintrust with full information
regarding the status of each Loan contained in the Loan portfolio of
the Bank, as of a date not more than 15 days prior to the Closing Date.
(c) Wintrust and the Company shall negotiate in good faith
regarding the write-down, in conformity with the provisions of Section
5.9(a) above, of potential Loan losses (net of reasonably conservative
estimates of collateral recoveries and of applicable reserves)
identified to the Company by Wintrust; provided, however, that (i) the
Company shall not be required to take any actions
A-26
as a result of such good faith negotiation (1) more than five (5) days
prior to the Closing Date and (2) until such time as the Company shall
have received reasonable assurances that all conditions precedent to
Wintrust's obligations under this Agreement (except for the completion
of actions to be taken at the Closing) have been satisfied, and (ii)
any such actions taken as a result of such good faith negotiations
shall not have any affect on the representations and warranties under
Section 3.8 made by the Company and the Bank as of the date of this
Agreement.
5.10 Board of Directors' Notices and Minutes. The Company shall give
reasonable notice to Wintrust of all meetings of the Company Board and any of
its committees, and the board of directors of the Bank and any of its
committees, and if known, the agenda for or business to be discussed at such
meeting. To the extent permissible under law, the Company shall promptly
transmit to Wintrust copies of all notices, minutes, consents and other
materials that the Company or the Bank provides to their directors, other than
materials relating to any proposed acquisition of the Company or the Bank or
this Agreement or the Merger, subject to the Company's compliance with Section
5.8. Wintrust agrees to hold in confidence and trust and to act in a fiduciary
manner with respect to all such information.
5.11 Untrue Representations and Warranties. During the term of this
Agreement, if any Party becomes aware of any facts or of the occurrence or
impending occurrence of any event that would cause one or more of such Party's
representations and warranties contained in this Agreement to be or to become
untrue as of the Closing Date then:
(a) such Party shall immediately give detailed written notice
thereof to the other Parties; and
(b) such Party shall use reasonable and diligent efforts to
change such facts or events to make such representations and warranties
true, unless the same shall have been waived in writing by the other
Parties.
5.12 Director and Officer Liability Coverage. Wintrust agrees to
provide each of the directors and officers of the Company and the Bank after the
Effective Time substantially the same coverage against personal liability for
actions taken after the Effective Time as is provided to directors and officers
of Wintrust. Such coverage may be provided through an insurance policy or
through an agreement by Wintrust to indemnify such directors and officers.
Wintrust further agrees to cause the Surviving Corporation for a period of five
years after the Effective Time to indemnify the current and past directors and
officers of the Company and the Bank for all actions taken by them prior to the
Effective Time in their respective capacities as directors and officers of the
Company and the Bank to the same extent as the indemnification provided by the
Company and the Bank to such directors and officers immediately prior to the
Effective Time.
5.13 Interim Financial Statements. Prior to the Closing Date, the
Company shall deliver to Wintrust interim financial statements of the Company as
of the end of each month as promptly as practicable after they become available.
Such interim financial statements shall be prepared in conformity in all
material respects with GAAP applied on a basis consistent with the Financial
Statements.
5.14 Dissent Process. The Company will give to Wintrust prompt notice
of any written notice relating to the exercise of dissenters' rights granted
under the Illinois Act, including the name of the dissenting stockholder and the
number of shares of Company Common Stock to which the dissent relates. Wintrust
will have the right to participate in all negotiations and proceedings relating
thereto, and exceptions required by law. The Company will not make any payment
with respect to, or settle or offer to settle, any appraisal demands without
Wintrust's prior written consent.
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5.15 Section 368(a) Reorganization. Either prior to or after the
Closing Date, none of the Parties shall take or cause to be taken any action, or
omit to take any action or cause any omission, which would cause the Merger not
to qualify as a reorganization under Section 368(a) of the Code.
5.16 Exercise of Warrants and Options. Notwithstanding anything
contained in this Agreement to the contrary, Wintrust and the Company each
acknowledge and agree that the holder of any Warrant or Outstanding Company
Option may, at any time prior to the commencement of the ten trading-day period
during which the Exchange Ratio is determined, exercise such Warrant or
Outstanding Company Option in accordance with its terms and conditions.
5.17 Converted Options. Wintrust agrees to assume and honor each of the
Converted Options in accordance with their terms. Within 30 days after the
Closing Date, Wintrust shall file a registration statement with the Commission
with respect to the shares of Wintrust Common Stock to be covered by such
Converted Options. Such shares of Wintrust Common Stock shall be duly authorized
and, upon exercise of such Converted Options, shall be validly issued, fully
paid and nonassessable, and not in violation of or subject to any preemptive
rights except as set forth in Wintrust's articles of incorporation. Wintrust
shall after the Effective Time have reserved sufficient shares of Wintrust
Common Stock for issuance with respect to such options.
5.18 TM Acceptance Corp. Lease Financing Portfolio. The Bank has
entered into that certain Program Agreement dated as of June 22, 2001 by and
among the Bank, TM Acceptance Corp., as Lessor thereunder, and Toshiba Machine
Company, America, as Vendor thereunder (the "Program Agreement"), pursuant to
which Lessor has and may continue to offer to sell to the Bank, and the Bank has
and may continue to purchase from Lessor, Leases regarding the sale or financing
by Lessor of Equipment to certain Lessees (as such terms are defined in the
Program Agreement, and which are used in this Section 5.18). In connection with
the Program Agreement, the Company shall:
(a) within 45 days of the date of this Agreement, certify in
writing and demonstrate to the reasonable satisfaction of Wintrust
that:
(i) the Lessor has perfected first priority security
interests in all Equipment that is the subject of all Leases;
(ii) the Lessor has executed and delivered to the
Bank an Assignment (as such term is defined in the Program
Agreement) for each of the Leases;
(iii) each Lease is covered by adequate insurance,
evidenced by insurance policy certificates naming Lessor as
loss payee, and Lessor has assigned all of its rights as loss
payee under such policies to the Bank; and
(iv) the Bank and Lessor have established the Lock
box as required under Article IV of the Program Agreement, and
as of the expiration of such 45-day period all Payments (as
defined in the Program Agreement) are being directed and
delivered to the Lock box and no such Payments are being
directed or delivered to Lessor; and
(b) as of the Closing Date, cause there to be no Payment
obligations under any Lease greater than 30 days past due.
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ARTICLE VI
EMPLOYEE BENEFIT MATTERS
6.1 Benefit Plans. Schedule 6.1 lists all of the employees of the
Company and the Bank (the "Employees"). Wintrust and the Company Board shall
together review the Benefit Plans and the coverages provided thereunder.
Effective as of the Closing Date, (i) the Company Board shall cause the Company
to terminate all Benefit Plans other than the Company's 401(k) plan, health,
dental, life and disability insurance plans, and long-term care plan (the
"Retained Plans"), and to pay prior to the Closing or accrue fully any
liabilities under the Benefit Plans (including the Retained Plans ) or arising
out of such termination of Benefit Plans, and (ii) each full-time Employee shall
become eligible for and entitled to participate in Wintrust's benefit plans
(other than its benefit plans that are similar to the Retained Plans) on the
same terms and subject to the same conditions as all other U.S. employees of
Wintrust and its subsidiaries. From and after the Closing Date Wintrust shall
continue coverage for the Employees under the Company's Retained Plans in effect
prior to the Closing Date, to the extent not in violation of any statute, law
(including common law), ordinance, rule or regulation applicable to such plans
or the qualifications or requirements of such plans, until such time as Wintrust
determines such plans are to be terminated or merged with existing Wintrust
plans, at which time all Employees previously covered under such Retained Plans
shall become eligible for and entitled to participate in Wintrust's similar
plans on the same terms and subject to the same conditions as all other U.S.
employees of Wintrust and its subsidiaries. To the extent permitted by
applicable law the Company shall notify Wintrust on the Closing Date of the
existence or absence of any significant pre-existing conditions of any insureds
under the Benefit Plans. Wintrust shall use its reasonable and diligent efforts
to cause any pre-existing condition limitations under Wintrust's medical benefit
plans to be waived. For purposes of determining eligibility to participate and,
where applicable, vesting under Wintrust's applicable retirement savings plan
and employee stock purchase plan, Wintrust's short-term disability plans and
vacation policy, each Employee shall receive past service credit for his or her
prior employment with the Company as if such Employee had then been employed by
Wintrust. Credited service under Wintrust's retirement savings plan will
commence as of the date an Employee commences participation in Wintrust's
benefit plans. Wintrust reserves the right to change or terminate its employee
benefit plans at any time.
6.2 No Rights or Remedies. Nothing in this Article shall confer upon
any Employee or his or her legal representative, any rights or remedies,
including any right to employment, or continued employment, for any specified
period, or any nature or kind whatsoever under or by reason of this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT TO
OBLIGATIONS OF WINTRUST AND MERGER CO.
Unless the conditions are waived by Wintrust, all obligations of
Wintrust and Merger Co. under this Agreement are subject to the fulfillment, on
or before the Closing, of each of the following conditions:
7.1 Representations and Warranties; Performance of Agreements. Each of
the representations and warranties contained in Article III of this Agreement
that are qualified by materiality shall be true and correct in all respects as
of the Closing Date, and each of the representations and warranties contained in
Article III that are not qualified by materiality shall be true and correct in
all material respects, except to the extent such representations and warranties
speak as of an earlier date, they shall be tested as of such earlier date. The
Company shall have performed in all material respects all agreements herein
required to be performed by Sellers and the Company on or before the Closing.
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7.2 Closing Certificate. Wintrust shall have received a certificate of
the Company signed by a senior executive officer of the Company, dated as of the
Closing Date, certifying in such detail as Wintrust may reasonably request, as
to the fulfillment of the conditions to the obligations of Wintrust set forth in
this Agreement that are required to be fulfilled by the Company on or before the
Closing.
7.3 Regulatory and Other Approvals. Wintrust shall have obtained the
approval of all appropriate regulatory entities of the transactions contemplated
by this Agreement and the Merger, all required regulatory waiting periods shall
have expired, and there shall be pending on the Closing Date no motion for
rehearing or appeal from such approval or any suit or action seeking to enjoin
the Merger or to obtain substantial damages in respect of such transaction.
7.4 Approval of Merger and Delivery of Agreement. This Agreement and
the Merger shall have been approved by the shareholders of the Company in
accordance with the Company's articles of incorporation, by-laws and the
Illinois Act, and the proper officers of the Company shall have executed and
delivered to Wintrust copies of this Agreement and the Articles of Merger, in
form suitable for filing with the Secretary of State of the State of Illinois,
and shall have executed and delivered all such other certificates, statements or
instruments as may be necessary or appropriate to effect such a filing. The
holders of not more than 5% of the shares of Company Common Stock shall have
given written demand for dissenter's rights in accordance with the Illinois Act.
7.5 Effectiveness of the Registration Statement. The Registration
Statement shall have become effective with respect to the shares of Wintrust
Common Stock to be issued in the Merger, no stop order suspending the
effectiveness of such Registration Statement shall have been issued and no
material proceeding for that purpose shall have been instituted or threatened in
writing.
7.6 No Litigation. No suit or other action shall have been instituted
or threatened in writing seeking to enjoin the consummation of the Merger or to
obtain other relief in connection with this Agreement or the transactions
contemplated herein that Wintrust believes, in good faith and with the written
advice of outside counsel, makes it undesirable or inadvisable to consummate the
Merger by reason of the probability that the proceeding would result in the
issuance of an order enjoining the Merger or in a determination that the Company
or the Bank has failed to comply with applicable legal requirements of a
material nature in connection with the Merger or actions preparatory thereto or
would have a Material Adverse Effect on the Company or the Bank.
7.7 Environmental Surveys. Wintrust shall have received from the
Company copies of reports of Phase I environmental audits of all real property
or facilities used by either the Company or the Bank in the conduct of its
business, conducted by an independent environmental consultant reasonably
acceptable to Wintrust. Wintrust shall pay the costs of obtaining such Phase I
environmental audits. No such environmental audit shall have identified any
violation of the Environmental Laws or condition relating to the environment,
human health or safety which could reasonably be expected to have a Material
Adverse Effect on the Company or the Bank.
7.8 Opinion of Counsel. Wintrust shall have received the opinion of
Barack, Ferrazzano, Kirschbaum, Perlman & Nagelberg LLC, counsel for the
Company, dated as of the Closing Date, and in form substantially similar to
Exhibit C and reasonably satisfactory to Wintrust and its counsel.
7.9 Employment Agreements. At least one of those three persons
identified on Schedule 7.9, who as of the date of this Agreement are either
under an employment agreement with the Company or have entered into an
employment agreement with Merger Co. in the form attached as Exhibit
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D to be effective as of the Effective Time, shall be an employee in good
standing with the Company or the Bank as of the Closing Date and capable of
performing his duties under his employment agreements as of the Effective Time.
7.10 No Adverse Changes. Between the date of this Agreement and the
Closing Date, the business of the Company and the Bank, taken as a whole, shall
have been conducted in the ordinary course, in all respects consistent with
prudent banking practices, and there shall not have occurred any change or any
condition, event, circumstance, fact or occurrence, other than as provided in
this Agreement, that would have a Material Adverse Effect on the Company.
7.11 Minimum Net Worth and Loan Loss Reserve Requirements. As of the
last day of the month preceding the Closing Date: (a) the shareholders' equity
in the Company, determined in conformity with GAAP applied on a basis consistent
with the preparation of the Financial Statements, shall be at not less than
$9,400,000, provided, however, that for purposes of this Section 7.11(a) only,
the Company's shareholders' equity (i) shall be increased by any fees for
professional services actually incurred by the Company in connection with this
Agreement and the transactions contemplated herein, up to a maximum of $150,000,
and (ii) shall not take into account any additions of shareholders' equity in
excess of a maximum of $100,000 that may result from the exercise by any
shareholders of any Outstanding Company Options or Warrants; and (b) the Bank's
reserve for loan losses, determined as described in Section 3.8, shall be not
less than 1.10% of the Bank's net Loans (gross Loans less unearned discounts).
7.12 Voting Agreements. On or before July 9, 2003, Wintrust shall have
received a Voting Agreement, in the form attached hereto as Exhibit E, executed
by each of those shareholders of the Company identified on Schedule 7.12, each
of whom is an officer or director of the Company or the Bank.
7.13 TM Acceptance Corp. Lease Financing Portfolio. The Company and the
Bank shall have fully complied with the provisions of Section 5.18.
7.14 Consents. The Company shall have obtained or caused to be obtained
(a) all written consents under those Material Contracts as set forth on Schedule
3.5, and (b) all other written consents, permissions and approvals as required
under any other agreements, contracts, appointments, indentures, plans, trusts
or other arrangements with third parties required to effect the transactions
contemplated by this Agreement where the failure to obtain such consents,
permissions and approvals would have a Material Adverse Effect on the Company or
Wintrust's rights under this Agreement.
7.15 Other Documents. Wintrust shall have received at the Closing such
other customary documents, certificates, or instruments as they may have
reasonably requested evidencing compliance by the Company with the terms and
conditions of this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE COMPANY
Unless the conditions are waived by the Company, all obligations of the
Company under this Agreement are subject to the fulfillment, on or before the
Closing, of each of the following conditions:
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8.1 Representations and Warranties; Performance of Agreements. Each of
the representations and warranties contained in Article IV of this Agreement
that are qualified by materiality shall be true and correct in all respects as
of the Closing Date, and each of the representations and warranties contained in
Article IV that are not qualified by materiality shall be true and correct in
all material respects, except to the extent such representations and warranties
speak as of an earlier date, they shall be tested as of such earlier date.
Wintrust and Merger Co. shall have performed in all material respects all
agreements herein required to be performed by Wintrust and Merger Co. on or
before the Closing.
8.2 Closing Certificates. The Company shall have received certificates
signed by the Chief Executive Officer, a Senior Executive Vice President, an
Executive Vice President, or a Senior Vice President of each of Wintrust and
Merger Co. dated as of the Closing Date, certifying in such detail as the
Company may reasonably request, as to the fulfillment of the conditions to the
obligations of the Company as set forth in this Agreement.
8.3 Regulatory and Other Approvals. Wintrust shall have obtained the
approval of all appropriate regulatory entities of the transactions contemplated
by this Agreement and the Merger, all required regulatory waiting periods shall
have expired, and there shall be pending on the Closing Date no motion for
rehearing or appeal from such approval or any suit or action seeking to enjoin
the Merger or to obtain substantial damages in respect of such transaction.
8.4 Delivery of Agreement. The proper officers of Wintrust and Merger
Co. shall have executed and delivered to the Company copies of this Agreement
and the Articles of Merger, in form suitable for filing with the Secretary of
State of the State of Illinois, and shall have executed and delivered all such
other certificates, statements or instruments as may be necessary or appropriate
to effect such a filing.
8.5 Effectiveness of the Registration Statement. The Registration
Statement shall have become effective with respect to the shares of Wintrust
Common Stock to be issued in the Merger, no stop order suspending the
effectiveness of such Registration Statement shall have been issued and no
material proceeding for that purpose shall have been instituted or threatened in
writing.
8.6 No Litigation. No suit or other action shall have been instituted
or threatened in writing seeking to enjoin the consummation of the Merger or to
obtain other relief in connection with this Agreement or the transactions
contemplated herein that the Company believes, in good faith and with the
written advice of outside counsel, makes it undesirable or inadvisable to
consummate the Merger by reason of the probability that the proceeding would
result in the issuance of an order enjoining the Merger or in a determination
that Wintrust or Merger Co. has failed to comply with applicable legal
requirements of a material nature in connection with the Merger or actions
preparatory thereto or would have a Material Adverse Effect on Wintrust.
8.7 Opinions of Counsel.
(a) The Company shall have received the opinion of Schiff
Hardin & Waite, counsel for Wintrust and Merger Co., dated as of the
Closing Date, and in form substantially similar to Exhibit F and
reasonably satisfactory to the Company and its counsel.
(b) The Company shall have received the opinion of Barack,
Ferrazzano, Kirschbaum, Perlman & Nagelberg LLC, counsel to the
Company, dated as of the Closing Date, to the effect that the Merger
will constitute a "reorganization" within the meaning of Section 368(a)
of the Code, and that the Company and Wintrust will each be a party to
such reorganization within the meaning
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of Section 368(a) of the Code. The tax opinion shall be supported by
one or more fact certificates or affidavits from Wintrust or Merger
Co., in such form and content as may reasonably be requested by counsel
to the Company.
8.8 No Adverse Changes. Between the date of this Agreement and the
Closing Date, there shall not have occurred any change or any condition, event,
circumstance, fact or occurrence, other than as provided in this Agreement, that
would have a Material Adverse Effect on Wintrust.
8.9 Nasdaq Listing. The Wintrust Common Stock to be issued to holders
of Company Common Stock pursuant to the Merger shall have been approved for
listing on the Nasdaq National Market, subject to official notice of issuance if
required.
8.10 Other Documents. The Company shall have received at the Closing
all such other customary documents, certificates, or instruments as they may
have reasonably requested evidencing compliance by Wintrust and Merger Co. with
the terms and conditions of this Agreement.
ARTICLE IX
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1 Non-Survival. None of the representations, warranties, covenants
and agreements in this Agreement shall survive the Effective Time, except for
those covenants or agreements contained herein which by their terms apply in
whole or in part after the Effective Time. Without limiting the foregoing, none
of the directors or officers of the Parties shall have any liability for any of
the representations, warranties, covenants and agreements contained herein.
ARTICLE X
GENERAL
10.1 Expenses. Except as otherwise provided in this Section 10.1, all
costs and expenses incurred in the consummation of this transaction, including
any brokers' or finders' fees, shall be paid by the Party incurring such cost or
expense.
(a) Each of Wintrust and the Company shall bear and pay
one-half of the costs and expenses incurred in connection with the
filing, printing and mailing of the Registration Statement, including
filing fees to the Commission but excluding legal and accounting fees
related thereto.
(b) In the event that this Agreement is terminated by Wintrust
because the Company or the Bank committed a material breach of its
material obligations under this Agreement, unless such breach is a
result of the failure by Wintrust to perform and comply in all material
respects with any of its material obligations under this Agreement
which are to be performed or complied with by it prior to or on the
date of such termination, then, provided Wintrust is in material
compliance with all of its material obligations under this Agreement,
the Company shall reimburse Wintrust in an amount, not to exceed
$150,000, for the out-of-pocket expenses and costs, subject to
verification thereof, that Wintrust (i) has incurred in furtherance of
this Agreement and the transactions contemplated herein and (ii) is
reasonably expected to incur as a result of the Company's breach of
this Agreement, including, but not limited to, reasonable fees of
professionals engaged for such purpose by or on behalf of Wintrust;
provided, however, that except as provided in Section 10.1(c), such
sums shall constitute liquidated damages and the receipt thereof shall
be Wintrust's sole and exclusive remedy under this Agreement.
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Notwithstanding the foregoing, if this Agreement is terminated by
Wintrust as a result of the Company's willful breach of this Agreement,
then in addition to recovery of its out-of-pocket expenses and costs,
Wintrust shall be entitled to recover such other amounts as it may be
entitled to receive at law or in equity.
(c) In the event that this Agreement is terminated (i) by
Wintrust as a result of a breach by the Company of its covenant in
Section 5.8(a), (ii) by the Company pursuant to Section 10.2(e), or
(iii) pursuant to Sections 10.2(a) or 10.2(b) and within six months
after the date of such termination the Company or the Bank has either
consummated or entered into a definitive agreement relating to an
Acquisition Proposal which was made known to any member of the Company
Board and not disclosed to Wintrust prior to the date of such
termination, then the Company shall pay to Wintrust a termination fee
equal to $1,000,000.
(d) In the event that this Agreement is terminated by the
Company because Wintrust committed a material breach of its material
obligations under this Agreement, unless such breach is a result of the
failure by the Company or the Bank to perform and comply in all
material respects with any of its material obligations under this
Agreement which are to be performed or complied with by it prior to or
on the date of such termination, then, provided the Company and the
Bank are each in material compliance with all of its material
obligations under this Agreement, Wintrust shall reimburse the Company
in an amount, not to exceed $150,000, for the out-of-pocket expenses,
subject to verification thereof, that the Company (i) has incurred in
furtherance of this Agreement and the transactions contemplated herein
and (ii) is reasonably expected to incur as a result of Wintrust's
breach of this Agreement, including, but not limited to, reasonable
fees of professionals engaged for such purpose by or on behalf of the
Company; provided, however, that such sums shall constitute liquidated
damages and the receipt thereof shall be the Company's sole and
exclusive remedy under this Agreement. Notwithstanding the foregoing,
if this Agreement is terminated by the Company as a result of
Wintrust's willful breach of this Agreement, then in addition to
recovery of its out-of-pocket expenses and costs, the Company shall be
entitled to recover such other amounts as it may be entitled to receive
at law or in equity.
(e) In the event this Agreement is terminated pursuant to
Section 10.2(b) because Wintrust fails to obtain all of the necessary
regulatory approvals described in Sections 7.3 and 8.3 for any reason
other than regulatory matters relating solely to the Company or the
Bank, Wintrust shall pay to the Company $150,000, provided, however,
that such sums shall constitute liquidated damages and the receipt
thereof shall be the Company's sole and exclusive remedy under this
Agreement.
(f) In the event this Agreement is terminated pursuant to
Section 10.2(b) because Wintrust fails to obtain all of the necessary
regulatory approvals described in Sections 7.3 and 8.3 because of
regulatory matters relating solely to the Company or the Bank, the
Company shall pay to Wintrust $150,000, provided, however, that except
as provided in Section 10.1(c), such sums shall constitute liquidated
damages and the receipt thereof shall be Wintrust's sole and exclusive
remedy under this Agreement.
(g) In the event this Agreement is terminated pursuant to
either Section 10.2(a) or Section 10.2(b) for reasons other than as
contemplated by subsections (e) and (f) above, Wintrust shall pay to
the Company $25,000, which amount is intended to compensate the Company
for its out-of-pocket expenses and time and effort in connection with
the Agreement, provided, however, that such sums shall constitute
liquidated damages and the receipt thereof shall be the Company's sole
and exclusive remedy under this Agreement.
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All costs and expenses reasonably estimated to have been incurred by the Company
shall be either paid or accrued for on or prior to the Closing Date; provided,
however, that nothing in this Section 10.1 shall be deemed to relieve the
Company of its liability to pay any expenses incurred in connection with this
Agreement following the Closing.
10.2 Termination. This Agreement may be terminated:
(a) at any time by written agreement between Wintrust and the
Company;
(b) by either Wintrust or the Company if the Closing has not
occurred (other than through the failure of any Party seeking to
terminate this Agreement to comply fully with its obligations under
this Agreement) by December 31, 2003, or such later date agreed to by
the Parties, provided, however, that such termination date shall
automatically be extended until March 31, 2004, if the sole impediment
to Closing is a delay in either (i) the determination of the
effectiveness of the Registration Statement or (ii) the Federal
Reserve's approval of the Federal Reserve Application;
(c) by Wintrust by written notice to the Company, if (i) any
of the conditions in Article VII has not been satisfied as of the
Closing Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of Wintrust to comply with
its obligations under this Agreement); and (ii) Wintrust has not waived
such condition on or before the Closing Date;
(d) by the Company by written notice to Wintrust, if (i) any
of the conditions in Article VIII has not been satisfied as of the
Closing Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of the Company or the Bank
to comply with its obligations under this Agreement); and (ii) the
Company has not waived such condition on or before the Closing Date; or
(e) by the Company, if pursuant to Section 5.8(b) the Company
Board determines that its fiduciary duties require it to accept an
unsolicited Acquisition Proposal from a third party, or by Wintrust if
an Acquisition Proposal from a third party is accepted by the Company
or consummated, in each case by written notice to the other party.
Any termination of this Agreement shall not affect any rights accrued prior to
such termination.
10.3 Confidential Information. Wintrust, Merger Co. and the Company
each covenant that, in the event the transactions contemplated by this Agreement
are not consummated, each such Party will keep in strict confidence and return
all documents containing any information concerning the properties, business,
and assets of the other Parties that may have been obtained in the course of
negotiations or examination of the affairs of each other Party either prior or
subsequent to the execution of this Agreement (other than such information as
shall be in the public domain or otherwise ascertainable from public or outside
sources), except to the extent that disclosure is required by judicial process
or governmental or regulatory authorities.
10.4 Non-Assignment. Neither this Agreement nor any of the rights,
interests or obligations of the Parties under this Agreement shall be assigned
by any Party (whether by operation of law or otherwise) without the prior
written consent of the other Party. Notwithstanding the foregoing, Wintrust and
Merger Co. may assign their respective rights hereunder to another wholly owned
subsidiary of Wintrust. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Parties.
A-35
10.5 Notices. All notices, requests, demands, and other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been given (a) when delivered in person, (b) the third business day after being
deposited in the United States mail, registered or certified mail (return
receipt requested), or (c) the first business day after being deposited with
Federal Express or any other recognized national overnight courier service, in
each case addressed as follows:
(i) If to the Company, addressed to:
Advantage National Bank
75 East Turner Avenue
Elk Grove Village, Illinois 60007
Attention: Gerhardt E. Umlauf, President
with a copy to:
Dennis R. Wendte
Barack, Ferrazzano, Kirschbaum, Perlman & Nagelberg LLC
333 West Wacker Drive, Suite 2700
Chicago, Illinois 60606
(ii) If to Wintrust or Merger Co., addressed to:
Wintrust Financial Corporation
727 North Bank Lane
Lake Forest, Illinois 60045
Attention: David A. Dykstra
Senior Executive Vice President and
Chief Operating Officer
with a copy to:
Matthew G. Galo
Schiff Hardin & Waite
6600 Sears Tower
Chicago, IL 60606-6473
10.6 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon the same instrument.
10.7 Knowledge. References in this Agreement to the "knowledge" of a
party shall mean, with respect to a natural person, the actual knowledge of such
person after reasonable investigation and with respect to an entity, the actual
knowledge of its officers and directors after reasonable investigation.
10.8 Entire Agreement. This Agreement, including the Schedules and
agreements delivered pursuant hereto, and the Confidentiality Agreement sets
forth the entire understanding of the parties and supersedes all prior
agreements, arrangements, and communications, whether oral or written. This
Agreement shall not be modified or amended other than by written agreement of
the parties hereto. Captions appearing in this Agreement are for convenience
only and shall not be deemed to explain, limit, or amplify the provisions
hereof.
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10.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois, without giving effect to
the conflicts of laws principles thereof.
10.10 Severability. In the event that a court of competent jurisdiction
shall finally determine that any provision of this Agreement or any portion
thereof is unlawful or unenforceable, such provision or portion thereof shall be
deemed to be severed from this Agreement, and every other provision and portion
thereof that is not invalidated by such determination shall remain in full force
and effect. To the extent that a provision is deemed unenforceable by virtue of
its scope but may be made enforceable by limitation thereof, such provision
shall be enforceable to the fullest extent permitted under the laws and public
policies of the state whose laws are deemed to govern enforceability.
** SIGNATURE PAGE FOLLOWS **
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IN WITNESS WHEREOF, Wintrust Financial Corporation, Wintrust Merger
Co., and Advantage National Bancorp, Inc. have each executed this Agreement as
of the day and year first written above.
WINTRUST FINANCIAL CORPORATION
By: /s/ Edward J. Wehmer
------------------------------------------
Edward J. Wehmer
President and Chief Executive Officer
WINTRUST MERGER CO.
By: /s/ David A. Dykstra
------------------------------------------
David A. Dykstra
Vice President
ADVANTAGE NATIONAL BANCORP, INC.
By: /s/ Gerhardt E. Umlauf
------------------------------------------
Gerhardt E. Umlauf
President
ANNEX B
SECTIONS 11.65 AND 11.70 OF
THE
ILLINOIS BUSINESS CORPORATION ACT
5/11.65 RIGHT TO DISSENT -- (a) A shareholder of a corporation is entitled to
dissent from, and obtain payment for his or her shares in the event of any of
the following corporate actions:
(1) consummation of a plan of merger or consolidation or a
plan of share exchange to which the corporation is a party if (i)
shareholder authorization is required for the merger or consolidation
of the share exchange by Section 11.20 or the articles of incorporation
or (ii) the corporation is a subsidiary that is merged with its parent
or another subsidiary under Section 11.30;
(2) consummation of a sale, lease or exchange of all, or
substantially all, of the property and assets of the corporation other
than in the usual and regular course of business;
(3) an amendment of the articles of incorporation that
materially and adversely affects rights in respect of a dissenter's
shares because it:
(i) alters or abolishes a preferential right of such
shares;
(ii) alters or abolishes a right in respect of
redemption, including a provision respecting a sinking fund
for the redemption or repurchase, of such shares;
(iii) in the case of a corporation incorporated prior
to January 1, 1982, limits or eliminates cumulative voting
rights with respect to such shares; or
(4) any other corporate action taken pursuant to a shareholder
vote if the articles of incorporation, by laws, or a resolution of the
Board of Directors provide that shareholders are entitled to dissent
and obtain payment for their shares in accordance with the procedures
set forth in Section 11.70 or as may be otherwise provided in the
articles, by-laws or resolution.
(b) A shareholder entitled to dissent and obtain payment for his or her
shares under this Section may not challenge the corporate action creating his or
her entitlement unless the action is fraudulent with respect to the shareholder
or the corporation or constitutes a breach of a fiduciary duty owed to the
shareholder.
(c) A record owner of shares may assert dissenters' rights as to fewer
than all the shares recorded in such person's name only if such person dissents
with respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the record owner asserts dissenters' rights. The rights of a partial dissenter
are determined as if the shares as to which dissent is made and the other shares
are recorded in the names of different shareholders. A beneficial owner of
shares who is not the record owner may assert dissenters' rights as to shares
held on such person's behalf only if the beneficial owner submits to the
corporation the record owner's written consent to the dissent before or at the
same time the beneficial owner asserts dissenters' rights. (Last amended by P.A.
85-1269, L. `88, eff. 1-1-89.)
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5/11.70 PROCEDURE TO DISSENT -- (a) If the corporate action giving rise to the
right to dissent is to be approved at a meeting of shareholders, the notice of
meeting shall inform the shareholders of their right to dissent and the
procedure to dissent. If, prior to the meeting, the corporation furnishes to the
shareholders material information with respect to the transaction that will
objectively enable a shareholder to vote on the transaction and to determine
whether or not to exercise dissenters' rights, a shareholder may assert
dissenters' rights only if the shareholder delivers to the corporation before
the vote is taken a written demand for payment for his or her shares if the
proposed action is consummated, and the shareholder does not vote in favor of
the proposed action.
(b) If the corporate action giving rise to the right to dissent is not
to be approved at a meeting of shareholders, the notice to shareholders
describing the action taken under Section 11.30 or Section 7.10 shall inform the
shareholders of their right to dissent and the procedure to dissent. If, prior
to or concurrently with the notice, the corporation furnishes to the
shareholders material information with respect to the transaction that will
objectively enable a shareholder to determine whether or not to exercise
dissenters' rights, a shareholder may assert dissenter's rights only if he or
she delivers to the corporation within 30 days from the date of mailing the
notice a written demand for payment for his or her shares.
(c) Within 10 days after the date on which the corporate action giving
rise to the right to dissent is effective or 30 days after the shareholder
delivers to the corporation the written demand for payment, whichever is later,
the corporation shall send each shareholder who has delivered a written demand
for payment a statement setting forth the opinion of the corporation as to the
estimated fair value of the shares, the corporation's latest balance sheet as of
the end of a fiscal year ending not earlier than 16 months before the delivery
of the statement, together with the statement of income for that year and the
latest available interim financial statements, and either a commitment to pay
for the shares of the dissenting shareholder at the estimated fair value thereof
upon transmittal to the corporation of the certificate or certificates, or other
evidence of ownership, with respect to the shares, or instructions to the
dissenting shareholder to sell his or her shares within 10 days after delivery
of the corporation's statement to the shareholder. The corporation may instruct
the shareholder to sell only if there is a public market for the shares at which
the shares may be readily sold. If the shareholder does not sell within that 10
day period after being so instructed by the corporation, for purposes of this
Section the shareholder shall be deemed to have sold his or her shares at the
average closing price of the shares, if listed on a national exchange, or the
average of the bid and asked price with respect to the shares quoted by a
principal market maker, if not listed on a national exchange, during that 10 day
period.
(d) A shareholder who makes written demand for payment under this
Section retains all other rights of a shareholder until those rights are
canceled or modified by the consummation of the proposed corporate action. Upon
consummation of that action, the corporation shall pay to each dissenter who
transmits to the corporation the certificate or other evidence of ownership of
the shares the amount the corporation estimates to be the fair value of the
shares, plus accrued interest, accompanied by a written explanation of how the
interest was calculated.
(e) If the shareholder does not agree with the opinion of the
corporation as to the estimated fair value of the shares or the amount of
interest due, the shareholder, within 30 days from the delivery of the
corporation's statement of value, shall notify the corporation in writing of the
shareholder's estimated fair value and the amount of interest due and demand
payment for the difference between the shareholder's estimate of fair value and
interest due and the amount of the payment by the corporation or the proceeds of
sale by the shareholder, whichever is applicable because of the procedure for
which the corporation opted pursuant to subsection (c).
(f) If, within 60 days from delivery to the corporation of the
shareholder notification of estimate of fair value of the shares and interest
due, the corporation and the dissenting shareholder have not agreed in writing
upon the fair value of the shares and interest due, the corporation shall either
pay the difference in value demanded by the shareholder, with interest, or file
a petition in the circuit court of the county in which either the registered
office or the principal office of the corporation is located, requesting the
court to determine the fair value of the shares and interest due. The
corporation shall make all dissenters, whether or not residents of this State,
whose demands remain unsettled parties to the proceeding as an action against
their shares and all parties shall be served with a copy of the petition.
Nonresidents may be served by registered or certified mail or by publication as
provided by law. Failure of the corporation to commence an action pursuant to
this Section shall not limit or affect the right of the dissenting shareholders
to otherwise commence an action as permitted by law.
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(g) The jurisdiction of the court in which the proceeding is commenced
under subsection (f) by a corporation is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the power described
in the order appointing them, or in any amendment to it.
(h) Each dissenter made a party to the proceeding is entitled to
judgment for the amount, if any, by which the court finds that the fair value of
his or her shares, plus interest, exceeds the amount paid by the corporation or
the proceeds of sale by the shareholder, whichever amount is applicable.
(i) The court, in a proceeding commenced under subsection (f), shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of the appraisers, if any, appointed by the court under subsection (g),
but shall exclude the fees and expenses of counsel and experts for the
respective parties. If the fair value of the shares as determined by the court
materially exceeds the amount which the corporation estimated to be the fair
value of the shares or if no estimate was made in accordance with subsection
(c), then all or any part of the costs may be assessed against the corporation.
If the amount which any dissenter estimated to be the fair value of the shares
materially exceeds the fair value of the shares as determined by the court, then
all or any part of the costs may be assessed against that dissenter. The court
may also assess the fees and expenses of counsel and experts for the respective
parties, in amounts the court finds equitable, as follows:
(1) Against the corporation and in favor of any or all
dissenters if the court finds that the corporation did not
substantially comply with the requirements of subsections (a), (b),
(c), (d), or (f).
(2) Against either the corporation or as a dissenter and in
favor of any other party if the court finds that the party against whom
the fees and expenses are assessed acted arbitrarily, vexatiously, or
not in good faith with respect to the rights provided by this Section.
If the court finds that the services of counsel for any
dissenter were of substantial benefit to other dissenters similarly
situated and that the fees for those services should not be assessed
against the corporation, the court may award to that counsel reasonable
fees to be paid out of the amounts awarded to the dissenters who are
benefited. Except as otherwise provided in this Section, the practice,
procedure, judgment and costs shall be governed by the Code of Civil
Procedure.
(j) As used in this Section:
(1) "Fair value", with respect to a dissenter's shares, means
the value of the shares immediately before the consummation of the
corporate action to which the dissenter objects excluding any
appreciation or depreciation in anticipation of the corporate action,
unless exclusion would be inequitable.
(2) "Interest" means interest from the effective date of the
corporate action until the date of payment, at the average rate
currently paid by the corporation on its principal bank loans or, if
none, at a rate that is fair and equitable under all the circumstances.
(Last amended by P.A. 86-1156, L. `90, eff. 8-10-90.)
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ANNEX C
VOTING AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of the ___ day
of June, 2003, by and between the undersigned shareholders (each, a
"Shareholder," and collectively, the "Shareholders"), of ADVANTAGE NATIONAL
BANCORP, INC., an Illinois corporation ("ADVANTAGE"), and WINTRUST FINANCIAL
CORPORATION, an Illinois corporation ("WINTRUST").
WITNESSETH:
WHEREAS, ADVANTAGE, WINTRUST and WINTRUST MERGER CO., an Illinois
corporation ("WMC"), have entered into an Agreement and Plan of Merger dated as
of the date hereof (the "Merger Agreement");
WHEREAS, it is a condition precedent to Wintrust's obligations under
the Merger Agreement that the Shareholders shall have executed and delivered
this Agreement; and
WHEREAS, each Shareholder owns and is entitled to vote the number of
issued and outstanding shares of common stock of Advantage (the "Advantage
Common Shares") set forth opposite such Shareholder's name on Schedule 1
attached hereto and has agreed to vote such Shareholder's Advantage Common
Shares pursuant to the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements set forth herein, the
Shareholders and Wintrust hereby agree as follows:
Section 1. Voting of Shares. Each Shareholder hereby agrees that at
any meeting of the shareholders of Advantage and in any action by written
consent of the shareholders of Advantage, such Shareholder shall vote the
Advantage Common Shares which such Shareholder owns and is entitled to vote (a)
in favor of the transactions contemplated by the Merger Agreement, (b) against
any action or agreement which would result in a breach of any term of, or any
other obligation of Advantage under, the Merger Agreement, and (c) against any
action or agreement which would impede, interfere with or attempt to discourage
the transactions contemplated by the Merger Agreement. Each Shareholder agrees
that Advantage shall be authorized to include in any proxy or material
transmitted to shareholders of Advantage, a statement to the effect that the
Shareholder is a party to this Agreement and has committed to vote in favor of
the transactions contemplated by the Merger Agreement.
Section 2. Term of Agreement. This Agreement shall be effective from
the date hereof and shall terminate and be of no further force and effect upon
the earlier of (i) the Effective Time (as defined in the Merger Agreement), or
(ii) the termination of the Merger Agreement in accordance with its terms.
Section 3. Covenants of Shareholders. Each Shareholder agrees not to:
except to the extent contained in this Agreement, grant any proxies, deposit any
Advantage Common Shares into a voting trust or enter into a voting agreement
with respect to any Advantage Common
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Shares; or without the prior written approval of Wintrust, solicit, initiate or
encourage any inquiries or proposals for a merger or other business combination
involving Advantage.
Section 4. Representations and Warranties of Shareholders. Each
Shareholder represents and warrants to Wintrust as follows: (a) such Shareholder
owns - and is entitled to vote in accordance with such Shareholder's commitments
under this Agreement - the number of Advantage Common Shares set forth opposite
his or her name on Schedule 1 hereto, and, except as disclosed on Schedule
3.3(a) of the Merger Agreement, does not own or have any right to acquire any
Advantage Common Shares not listed on Schedule 1; (b) such Shareholder has the
right, power and authority to execute, deliver and perform under this Agreement;
such execution, delivery and performance will not violate, or require any
consent, approval, or notice under any provision of law or result in the breach
of any outstanding agreements or instruments to which such Shareholder is a
party or is subject; and this Agreement has been duly executed and delivered by
such Shareholder and constitutes a legal, valid and binding agreement of such
Shareholder, enforceable in accordance with its terms; (c) such Shareholder's
Advantage Common Shares listed as owned on Schedule 1 hereto are now and will
remain owned by such Shareholder, free and clear of all voting trusts, voting
agreements, proxies, liens, claims, liabilities, security interests, marital
property rights or any other encumbrances whatsoever (other than (i) pledges for
loans entered into in the ordinary course and (ii) rights of Wintrust and
encumbrances respecting such Advantage Common Shares created pursuant to this
Agreement or the Merger Agreement); and (d) other than this Agreement and the
Merger Agreement, there are no outstanding options, warrants or rights to
purchase or acquire, or agreements related to, such Shareholder's Advantage
Common Shares.
Section 5. Representations and Warranties of Wintrust. Wintrust has
the right, power and authority to execute and deliver this Agreement; such
execution and delivery will not violate, or require any consent, approval, or
notice under any provision of law or result in the breach of any outstanding
agreements or instruments to which Wintrust is a party or is subject; and this
Agreement has been duly executed and delivered by Wintrust and constitutes a
legal, valid and binding agreement of Wintrust, enforceable in accordance with
its terms.
Section 6. Transferability. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Wintrust may assign this
Agreement to a direct or indirect wholly-owned subsidiary or affiliate of
Wintrust, provided that no such assignment shall relieve Wintrust of its
obligations hereunder.
Section 7. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed by any of the Shareholders in accordance with its
specific terms or was otherwise breached. It is accordingly agreed that Wintrust
shall be entitled to an injunction(s) to prevent breaches of this Agreement by
the Shareholders and to enforce specifically the terms and provisions hereof in
addition to any other remedy to which Wintrust is entitled at law or in equity.
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Section 8. Further Assurances. Each Shareholder agrees to execute and
deliver all such further documents and instruments and take all such further
action as may be necessary or appropriate in order to consummate the
transactions contemplated hereby.
Section 9. Entire Agreement and Amendment. (a) Except for the Merger
Agreement and its ancillary agreements and instruments, this Agreement contains
the entire agreement between the parties hereto with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or understandings
with respect hereto.
(b) This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
Section 10. Notices. Each notice, demand or other communication which
may be or is required to be given under this Agreement shall be in writing and
shall be deemed to have been properly given when delivered personally at the
address set forth herein for Wintrust or the address on Schedule 1 for each of
the Shareholders, when sent by facsimile or other electronic transmission to the
respective facsimile transmission numbers of the parties with telephone
confirmation of receipt, or the day after sending by recognized overnight
courier or if by the United States registered or certified mail, return receipt
requested, postage prepaid two days after deposit therein.
Section 11. General Provisions. This Agreement shall be governed by
the laws of the State of Illinois. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original. Headings are for
convenience only and shall not affect the meaning of this Agreement. Any term of
this Agreement which is invalid or unenforceable shall be ineffective only to
the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WINTRUST FINANCIAL CORPORATION, an Illinois Corporation:
By: ______________________________________
Its:______________________________________
Address for Notices: With a copy to
Wintrust Financial Corporation Matthew G. Galo
727 North Bank Lane Schiff Hardin & Waite
Lake Forest, Illinois 60045 6600 Sears Tower
Attn: David A. Dykstra Chicago, Illinois 60606-6473
Senior Executive Vice President and
Chief Operating Officer
Facsimile No.: (847) 615-4091 Facsimile No.: (312) 258-5700
SHAREHOLDERS:
___________________________________ ___________________________________
Chad Arthur Pat De Moon
___________________________________ ___________________________________
Lee Garr Hank Gianvecchio
___________________________________ ___________________________________
Keith Kotche Ed Levato
___________________________________ ___________________________________
Greg Newhuis Branka Poplonski
___________________________________ ___________________________________
Pat Ranallo Ed Schwarzer
___________________________________ ___________________________________
Harvey Seybold Gayle Smolinski
___________________________________
Gary Umlauf
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SCHEDULE 1
NAME, ADDRESS AND NUMBER OF ADVANTAGE NUMBER OF ADVANTAGE
FACSIMILE NUMBER OF COMMON SHARES OWNED BY COMMON SHARES ISSUABLE
SHAREHOLDER SHAREHOLDER UNDER OPTIONS HELD BY
SHAREHOLDER
Chad Arthur
Lee Garr
Keith Kotche
Greg Newhuis
Pat Ranallo
Harvey Seybold
Gary Umlauf
Pat De Moon
Hank Gianvecchio
Ed Levato
Branka Poplonski
Ed Schwarzer
Gayle Smolinski
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