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UNDER THE SECURITIES ACT OF 1933
Illinois | 6022 | 36-3873352 | ||
(State or Other Jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer | ||
Incorporation or Organization) | Classification Code Number) | Identification Number) |
Lake Forest, Illinois 60045-1951
(847) 615-4096
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
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)
Lisa J. Reategui Sidley Austin LLP One South Dearborn Street Chicago, Illinois 60603 (312) 853-7000 | Edwin S. del Hierro Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP 333 West Wacker Drive, Suite 2700 Chicago, Illinois 60606 (312) 984-3100 |
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The information in this proxy statement/prospectus 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 preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Wintrust Financial Corporation |
President and Chief Executive Officer
Hinsbrook Bancshares, Inc.
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727 North Bank Lane
Lake Forest, Illinois 60045-1951
Attention: David A. Dykstra
Senior Executive Vice President and Chief Operating Officer
(847) 615-4096
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Willowbrook, Illinois 60527
Date: | May 30, 2006 | |
Time: | 4:00 p.m., local time | |
Place: Main office of Hinsbrook Bank & Trust located at 6262 South Route 83, Willowbrook, Illinois 60527 | ||
• | A proposal to approve the Agreement and Plan of Merger, dated as of December 5, 2005 by and between Wintrust Financial Corporation and Hinsbrook Bancshares, Inc. A copy of the merger agreement is included asAnnex Ato the proxy statement/prospectus accompanying this notice. | ||
• | The approval to adjourn the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the merger agreement and the transactions it contemplates. | ||
• | To transact any other business that properly comes before the special meeting, or any adjournments or postponements thereof. |
May 4, 2006
President and Chief Executive Officer
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Annex A: Agreement and Plan of Merger | A-1 | |||||||
Annex B: Illinois Dissenters’ Rights Law | B-1 | |||||||
Annex C: Voting Agreement | C-1 | |||||||
Annex D: Fairness Opinion of Hinsbrook’s Financial Advisor | D-1 | |||||||
Consent of Ernst & Young LLP | ||||||||
Consent of Capital Market Securities, Inc. | ||||||||
Form of Proxy Card | ||||||||
Form of Election Card |
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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 Wintrust’s acquisition of Hinsbrook through the merger of Hinsbrook with and into Wintrust. If you elect to receive shares of Wintrust common stock in exchange for half or all of your Hinsbrook shares or, if as a result of the proration procedures described in this proxy statement/prospectus, your cash election is prorated to include shares of Wintrust common stock, you will become a shareholder of Wintrust as a result of the merger. | |
Q: | What will Hinsbrook shareholders be entitled to receive in the merger? | |
A: | If the merger is completed, the shares of Hinsbrook common stock that you own immediately before the completion of the merger will be converted into the right to receive cash, shares of Wintrust common stock, or a combination of 50% cash and 50% shares of Wintrust common stock (in each case subject to possible proration). For each of your shares of Hinsbrook common stock, you will receive the “per share merger consideration” to be calculated as set forth in the merger agreement. All elections for cash consideration, stock consideration or the combination of cash and stock consideration are subject to proration as described in this proxy statement/prospectus. For example, if you elect to receive all cash consideration, depending on the elections made by other Hinsbrook shareholders, it is possible that you will receive a portion of the merger consideration in cash and a portion in stock. The same might be true if you elect to receive all stock consideration. For a description of the possible proration of elections, see “Description of the merger agreement – Consideration to be received in the merger – Proration of merger consideration.” | |
You may elect to receive the “per share merger consideration” in cash, shares of Wintrust’s common stock, or a combination of cash and shares of Wintrust common. Subject to possible proration, if you elect to receive all cash consideration, you will receive $41.59 per share in cash. Subject to possible proration, if you elect to receive the merger consideration in all shares of Wintrust common stock, you will receive between 0.680 and 0.846 of a share of Wintrust common stock for each share of Hinsbrook common stock, depending on the average high and low sale price of Wintrust common stock on the Nasdaq National Market during the 10 trading day period ending on the fourth trading day prior to completion of the merger. If you elect to receive merger consideration consisting of cash and shares of Wintrust common stock, you will receive merger consideration consisting of cash consideration of $41.59 for one-half of your Hinsbrook shares and the above-described stock consideration for the other half of your Hinsbrook shares. | ||
In this proxy statement/prospectus, we refer to the fraction of a share of Wintrust common stock to be issued for each share of Hinsbrook common stock subject to the stock election or the combination election as the “exchange ratio” and we refer to the average high and low sale price of Wintrust common stock on the Nasdaq National Market during the 10 trading day period ending on the fourth trading day prior to completion of the merger (which we refer to as the “reference period”) as the “reference price.” The merger agreement provides that: |
• | The exchange ratio will adjust upward or downward to ensure that the fraction of a share of Wintrust common stock you receive for each share of Hinsbrook common stock that you own will be equal to $41.59 divided by the reference price so long as the reference price is between $49.14 and $61.14. However, the market value of the fraction of a share of Wintrust common stock that you receive in the merger may be greater or less than $41.59, as the trading price of Wintrust common stock on the date the merger is completed may be greater or less than the reference price used to determine the exchange ratio. | ||
• | If the reference price is less than $49.14, the exchange ratio will no longer adjust upward, and you will receive 0.846 of a share of Wintrust common stock for each share of Hinsbrook common stock that you own. This means that the value of the fraction of a share of Wintrust common stock you will receive will be below $41.59 per share to the extent the market price of Wintrust common stock is below $49.14 when the merger is completed. |
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• | If the reference price is greater than $61.14, the exchange ratio will no longer adjust downward, and you will receive 0.680 of a share of Wintrust common stock for each share of Hinsbrook common stock that you own. This means that the value of the fraction of a share of Wintrust common stock you will receive will be above $41.59 per share to the extent the market price of Wintrust common stock is above $61.14 when the merger is completed. |
Subject to certain conditions, Hinsbrook may terminate the merger agreement if the reference price of Wintrust’s common stock during the reference period is less than $47.14. | ||
Q: | What will Hinsbrook option holders be entitled to receive in the merger? | |
A: | If the merger is completed, each outstanding and unexercised option to purchase Hinsbrook common stock will automatically be converted into an option to purchase shares of Wintrust common stock, exercisable on generally the same terms and conditions that applied before the merger. The number of shares of Wintrust common stock subject to the substitute Wintrust option will equal the number of shares of Hinsbrook common stock subject to the option immediately prior to the merger, multiplied by the “option exchange ratio,” rounded down to the nearest whole share. The per share exercise price of each substitute Wintrust option will equal the exercise price of the option immediately prior to the merger divided by the option exchange ratio, rounded down to the nearest whole cent. The “option exchange ratio” is equal to 41.59 divided by the reference price. | |
Q: | How do I make an election for the merger consideration? | |
A: | You have been provided with an election form to select whether you desire to receive merger consideration of cash, Wintrust common stock or a combination of cash and Wintrust common stock. The election form is separate from the proxy form and should be returned to Illinois Stock Transfer Company in the enclosed prepaid return envelope. Depending on the results of all shareholders’ elections, the amount of stock or cash you receive may be prorated under certain circumstances. The completed election form must be received by Wintrust’s exchange agent, Illinois Stock Transfer Company, on or before the fifth business day before the effective time of the merger. Do not send in your stock certificates with your stock election form. | |
Q: | What if I fail to make an election specifying how I desire to receive the merger consideration? | |
A: | If you do not submit a properly completed election form by the fifth business day before the effective time of the merger, you will be deemed to have elected to receive the merger consideration in a combination of cash consideration for 50% of your Hinsbrook shares and Wintrust common stock consideration for the other 50% of your Hinsbrook shares, subject to proration. | |
Q: | Will I get the form of consideration that I specify on my merger consideration election form? | |
A: | There can be no assurances that you will receive the merger consideration in exactly the form you specify on your election form. The merger agreement provides that all elections for cash consideration, stock consideration or the combination of cash and stock consideration are subject to proration so that the actual number of shares of Hinsbrook common stock that may be converted into the right to receive cash consideration, in the aggregate, may not exceed 50% of Hinsbrook’s outstanding common stock and the number of shares that may be converted into the right to receive stock consideration (including any shares subject to the stock portions of a combination election), in the aggregate, may not exceed 50% of Hinsbrook’s outstanding common stock. As a result, if you elect to receive all cash consideration, depending on the elections made by other Hinsbrook shareholders, it is possible that you will receive a portion of the merger consideration in cash and a portion in stock. The same might be true if you elect to receive all stock consideration. For a description of the possible proration of elections, see “Description of the merger agreement – Consideration to be received in the merger – Proration of merger consideration.” |
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Q: | Why do Hinsbrook and Wintrust want to merge? | |
A: | Hinsbrook believes that the proposed merger will provide Hinsbrook shareholders with substantial benefits, and Wintrust believes that the merger will further its strategic growth plans. As a larger company, Wintrust can provide the capital and resources that Hinsbrook Bank & Trust needs to compete more effectively and to offer a broader array of products and services to better serve its banking customers. To review the reasons for the merger in more detail, see “The merger—Wintrust’s reasons for the merger” on page 29 and “The merger—Hinsbrook’s reasons for the merger and recommendation of the board of directors” on page 28. | |
Q: | What does the Hinsbrook board of directors recommend? | |
A: | Hinsbrook’s board of directors unanimously recommends that you vote “FOR” approval of the merger agreement. Hinsbrook’s board of directors has determined that the merger agreement and the merger are in the best interests of Hinsbrook and its shareholders. To review the background and reasons for the merger in greater detail, see pages 26 to 29. | |
Q: | What vote is required to approve the merger agreement? | |
A: | Holders of at least a majority of the voting power of the outstanding shares of Hinsbrook common stock entitled to vote must vote in favor of the merger. Absentations and broker non-votes have the effect of votes against the approval of the merger agreement. On December 5, 2005, all of Hinsbrook’s directors and executive officers, including one executive officer who has since resigned, agreed to vote their shares in favor of the merger at the special meeting. These shareholders and their affiliates owned approximately 39.4% of Hinsbrook’s outstanding common stock on the record date. Wintrust’s shareholders will not be voting on the merger agreement. See “The merger—Interests of certain persons in the merger” on page 39 and “The merger—Voting agreement” on page 41. | |
Q: | Why is my vote important? | |
A: | Hinsbrook shareholders are being asked to approve the merger agreement and thereby approve the proposed merger. If you do not submit your proxy by mail or vote in person at the special meeting, it will be more difficult for Hinsbrook to obtain the necessary quorum to hold the special meeting. In addition, your failure to submit your proxy or attend the special meeting will have the same effect as a vote against the merger agreement and make it more difficult to obtain approval of the merger agreement. | |
Q: | What do I need to do now? How do I vote? | |
A: | You may vote at the special meeting if you own shares of Hinsbrook common stock of record at the close of business on April 24, 2006. After you have carefully read and considered the information contained in this proxy statement/prospectus, please complete, sign, date and mail your proxy form, which is separate from the election form, in the enclosed prepaid return envelope as soon as possible. This will enable your shares to be represented at the special meeting. You may also vote in person at the special 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. | |
Q: | How will my proxy be voted? | |
A: | If you complete, sign, date and mail your proxy form, your proxy will be voted in accordance with your instructions. If you sign, date and send in your proxy form, but you do not indicate how you want to vote, your proxy will be votedFOR approval of the merger agreement and the other proposals in the notice. | |
Q: | Can I revoke my proxy and change my vote? | |
A: | You may change your vote or revoke your proxy prior to the special meeting by filing with the secretary of Hinsbrook a duly executed revocation of proxy, submitting a new proxy form with a later date or voting in person at the special meeting. |
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Q: | What if I oppose the merger? Do I have dissenters’ rights? | |
A: | Hinsbrook shareholders who do not vote in favor of approval of the merger agreement and otherwise comply with all of the procedures of Sections 11.65 and 11.70 of the Illinois Business Corporations Act (the IBCA), will be entitled to receive payment in cash of the fair value of their shares of Hinsbrook common stock as ultimately determined under the statutory process. A copy of these sections of the IBCA is attached asAnnex Bto this document. This value could be more than the merger consideration but could also be less. | |
Q: | What are the tax consequences of the merger to me? | |
In general, the conversion of your shares of Hinsbrook common stock into Wintrust common stock in the merger will be tax-free for United States federal income tax purposes. However, you will recognize gain (but not loss) in an amount limited to the amount of cash you receive in the merger. Additionally, you will recognize gain or loss on any cash that you receive instead of fractional shares of Wintrust’s common stock.You should consult with your tax adviser for the specific tax consequences of the merger to you.See “The merger – Certain federal income tax consequences of the merger” on page 37. | ||
Q: | When and where is the special meeting? | |
A: | The Hinsbrook special meeting will take place on May 30, 2006, at 4:00 p.m. local time, at the main office of Hinsbrook Bank & Trust located at 6262 South Route 83, Willowbrook, Illinois 60527. | |
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 Hinsbrook 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 or your stock election form. | |
Q: | When is the merger expected to be completed? | |
A: | We will try to complete the merger as soon as reasonably possible. Before that happens, the merger agreement must be approved by Hinsbrook’s shareholders and we must obtain the necessary regulatory approvals. Assuming shareholders vote at least a majority of Hinsbrook’s outstanding shares of common stock in favor of the merger agreement and we obtain the other necessary approvals, we expect to complete the merger in the second quarter of 2006. | |
Q: | Is completion of the merger subject to any conditions besides shareholder approval? | |
A: | Yes. The transaction must receive the required regulatory approvals, and there are other closing conditions that must be satisfied. For example, as a condition to Wintrust’s obligation to close, as of the closing date, Hinsbrook must satisfy certain financial measures set forth in the merger agreement. | |
Q: | Are there risks I should consider in deciding to vote on approval of the merger agreement? | |
A: | Yes, in evaluating the merger agreement, you should read this proxy statement/prospectus carefully, including the factors discussed in the section titled “Risk Factors” beginning on page 17. | |
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 either Robert K. Buhrke, Hinsbrook’s President and Chief Executive Officer, at (630) 920-2700, or Illinois Stock Transfer Company, which is assisting Hinsbrook in the solicitation of proxies, at (312) 427-2951. |
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727 North Bank Lane
Lake Forest, Illinois 60045
(847) 615-4096
6262 South Route 83
Willowbrook, Illinois 60527
(630) 920-2700
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• | The exchange ratio will adjust upward or downward to ensure that the fraction of a share of Wintrust common stock you receive for each share of Hinsbrook common stock that you own will be equal to $41.59 divided by the reference price so long as the reference price is between $49.14 and $61.14. However, the market value of the fraction of a share of Wintrust common stock that you receive in the merger may be greater or less than $41.59, as the trading price of Wintrust common stock on the date the merger is completed may be greater or less than the reference price used to determine the exchange ratio. | ||
• | If the reference price is less than $49.14, the exchange ratio will no longer adjust upward, and you will receive 0.846 of a share of Wintrust common stock for each share of Hinsbrook common stock that you own. This means that the value of the fraction of a share of Wintrust common stock you will receive will be below $41.59 per share to the extent the market price of Wintrust common stock is below $49.14 when the merger is completed. | ||
• | If the reference price is greater than $61.14, the exchange ratio will no longer adjust downward, and you will receive 0.680 of a share of Wintrust common stock for each share of Hinsbrook common stock that you own. This means that the value of the fraction of a share of Wintrust common stock you will receive will be above $41.59 per share to the extent the market price of Wintrust common stock is above $61.14 when the merger is completed. |
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• | information with respect to the businesses, earnings, operations, financial condition, prospects, capital levels and asset quality of Hinsbrook and Wintrust, both individually and as a combined company; |
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• | the perceived risks and uncertainties attendant to Hinsbrook’s execution of its strategic growth plans as an independent banking organization, including the need to access additional capital on a cost-effective basis to support future growth; | ||
• | 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; | ||
• | 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; | ||
• | the fact that Wintrust is publicly held and the merger would provide access to a public trading market for Hinsbrook shareholders whose investments currently are in a privately held company, as well as enhanced access to capital markets to finance the combined company’s capital requirements; and | ||
• | the likelihood that the merger will be approved by the relevant bank regulatory authorities. |
• | Hinsbrook’s community banking orientation and its compatibility with Wintrust and its subsidiaries; | ||
• | a review of the demographic, economic and financial characteristics of the markets in which Hinsbrook operates, including existing and potential competition and history of the market areas with respect to financial institutions; | ||
• | management’s review of Hinsbrook’s business, operations, earnings and financial condition, including its management, capital levels and asset quality, since Hinsbrook Bank & Trust’sde novoformation in 1987; and | ||
• | the likelihood of regulators approving the merger without undue conditions or delay. |
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• | approval of the merger agreement at the special meeting by the holders of at least a majority of the outstanding shares of Hinsbrook common stock entitled to vote; | ||
• | approval of the transaction by the appropriate regulatory authorities, including the Federal Reserve and the IDFPR, and expiration or termination of all waiting periods required by law; | ||
• | absence of any threatened or pending suit, judgment or other action seeking to enjoin the consummation of the merger or seeking other relief that either Wintrust or Hinsbrook reasonably believes, subject to certain conditions, would have a material adverse effect on the other party; | ||
• | authorization for listing the shares of Wintrust common stock issuable pursuant to the merger agreement on the Nasdaq National Market, subject to notice of final issuance; | ||
• | maintenance by Hinsbrook of certain minimum net worth and loan loss reserve requirements; | ||
• | receipt of an opinion of counsel to Hinsbrook that the merger constitutes a “reorganization” within the meaning of Section 368(a) of the Code; | ||
• | the holders of not more than 5% of the outstanding shares of Hinsbrook common stock giving written demand for dissenters’ rights in accordance with the IBCA; | ||
• | no material adverse change in Wintrust or Hinsbrook since December 5, 2005; | ||
• | the execution of amendments to certain deferred compensation agreements; | ||
• | the execution of an employment agreement by Jeffrey D. Baker, Andrew M. Collins, Jr., L. Thomas McNamara and Regina R. Miller; and | ||
• | 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. |
• | the merger is not completed by July 31, 2006 (or August 31, 2006, if there is a delay due to regulatory approval); | ||
• | in certain circumstances, if a condition to the merger has become impossible to satisfy; | ||
• | in certain circumstances, if Hinsbrook has received and accepted a superior offer to sell to a third party; or | ||
• | in certain circumstances by Hinsbrook if the average of the high and low sales price of Wintrust’s common stock on the Nasdaq National Market during the 10 days ending four trading days before the closing date is less than $47.14. | ||
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High | Low | Dividend | ||||||||||
Year Ending December 31, 2003 | ||||||||||||
First Quarter | $ | 33.65 | $ | 27.19 | $ | 0.08 | ||||||
Second Quarter | 32.40 | 27.74 | 0.00 | |||||||||
Third Quarter | 38.89 | 29.30 | 0.08 | |||||||||
Fourth Quarter | 46.85 | 37.64 | 0.00 | |||||||||
Year Ending December 31, 2004 | ||||||||||||
First Quarter | $ | 50.44 | $ | 41.85 | $ | 0.10 | ||||||
Second Quarter | 50.80 | 45.18 | 0.00 | |||||||||
Third Quarter | 58.42 | 49.82 | 0.10 | |||||||||
Fourth Quarter | 63.39 | 54.33 | 0.00 | |||||||||
Year Ending December 31, 2005 | ||||||||||||
First Quarter | $ | 57.23 | $ | 46.78 | $ | 0.12 | ||||||
Second Quarter | 52.93 | 45.00 | 0.00 | |||||||||
Third Quarter | 55.50 | 49.01 | 0.12 | |||||||||
Fourth Quarter | 59.63 | 48.00 | 0.00 | |||||||||
Year Ending December 31, 2006 | ||||||||||||
First Quarter | $ | 58.94 | $ | 49.79 | $ | 0.14 | ||||||
Second Quarter (through May 3) | $ | 59.64 | $ | 50.00 | $ | 0.00 | ||||||
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Year Ended | |||||
December 31, 2005 | |||||
Wintrust Historical: | |||||
Diluted earnings per share | $ | 2.75 | |||
Cash dividends declared per share | 0.24 | ||||
Book value per share (at period end) | 26.23 | ||||
Wintrust Pro Forma Combined:(1) | |||||
Diluted earnings per share | $ | 2.82 | |||
Cash dividends declared per share | 0.24 | ||||
Book value per share (at period end) | 27.36 | ||||
Hinsbrook Historical: | |||||
Diluted earnings per share | $ | 2.55 | |||
Cash dividends declared per share | 0.35 | ||||
Book value per share (at period end) | 15.03 | ||||
Hinsbrook Pro Forma Combined:(1) | |||||
Diluted earnings per share | $ | 2.31 | |||
Cash dividends declared per share | 0.20 | ||||
Book value per share (at period end) | 22.38 |
(1) | Computed using per share merger consideration of $41.59 per share, assuming a Wintrust common stock price of $50.87 for the anticipated acquisition of Hinsbrook. | |
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Year Ended December 31, | |||||||||||||||||||
2005(1) | 2004(2) | 2003(3) | 2002(4) | 2001 | |||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||
Statement of Income Data: | |||||||||||||||||||
Total interest income | $ | 407,036 | $ | 261,746 | $ | 203,991 | $ | 182,233 | $ | 166,455 | |||||||||
Total interest expense | 197,227 | 103,922 | 83,499 | 84,105 | 92,441 | ||||||||||||||
Net interest income | 216,759 | 157,824 | 120,492 | 98,128 | 74,014 | ||||||||||||||
Provision for loan losses | 6,676 | 6,298 | 10,999 | 10,321 | 7,900 | ||||||||||||||
Net interest income after provision for loan losses | 210,083 | 151,526 | 109,493 | 87,807 | 66,114 | ||||||||||||||
Non-interest Income: | |||||||||||||||||||
Gain on sale of premium finance receivables | 6,499 | 7,347 | 4,911 | 3,374 | 4,564 | ||||||||||||||
Mortgage banking revenue | 25,913 | 18,250 | 16,718 | 13,271 | 8,106 | ||||||||||||||
Wealth management fees | 30,008 | 31,656 | 28,871 | 25,229 | 1,996 | ||||||||||||||
Services charges on deposit account | 5,983 | 4,100 | 3,525 | 3,121 | 2,504 | ||||||||||||||
Administrative services revenue | 4,539 | 3,984 | 4,151 | 3,501 | 4,084 | ||||||||||||||
Premium finance Defalcation-partial settlement(5) | — | — | 500 | 1,250 | — | ||||||||||||||
Securities (losses) gains, net | 1,063 | 1,863 | 642 | 107 | 337 | ||||||||||||||
Other | 19,552 | 18,252 | 13,274 | 10,819 | 7,207 | ||||||||||||||
Total non-interest Income | 93,557 | 85,452 | 72,592 | 60,672 | 28,798 | ||||||||||||||
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Year Ended December 31, | |||||||||||||||||||
2005(1) | 2004(2) | 2003(3) | 2002(4) | 2001 | |||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||
Non-interest Expense: | |||||||||||||||||||
Salaries and employee benefits | $ | 118,071 | $ | 94,049 | $ | 74,775 | $ | 63,442 | $ | 35,628 | |||||||||
Equipment expense | 11,779 | 9,074 | 7,957 | 7,191 | 6,297 | ||||||||||||||
Occupancy expense, net | 16,176 | 10,083 | 7,436 | 6,691 | 4,821 | ||||||||||||||
Data processing | 7,129 | 5,560 | 4,304 | 4,161 | 3,393 | ||||||||||||||
Advertising and marketing | 4,970 | 3,403 | 2,215 | 2,302 | 1,604 | ||||||||||||||
Professional fees | 5,609 | 5,376 | 3,342 | 2,801 | 2,055 | ||||||||||||||
Amortization of intangibles | 3,394 | 1,110 | 640 | 324 | 685 | ||||||||||||||
Premium finance defalcation(5) | — | — | — | — | — | ||||||||||||||
Other non-interest expenses | 31,562 | 27,436 | 22,072 | 19,072 | 11,300 | ||||||||||||||
Total non-interest expenses | 198,690 | 156,091 | 122,741 | 105,984 | 65,783 | ||||||||||||||
Income before taxes and cumulative effect of accounting change | 104,950 | 80,887 | 59,344 | 42,495 | 29,129 | ||||||||||||||
Income tax expense | 37,934 | 29,553 | 21,226 | 14,620 | 10,436 | ||||||||||||||
Income before cumulative effect of accounting change | $ | 67,016 | 51,334 | 38,118 | 27,875 | 18,693 | |||||||||||||
Cumulative effect of change in accounting for derivatives, net of tax | — | — | — | — | (254) | ||||||||||||||
Net income | $ | 67,016 | $ | 51,334 | $ | 38,118 | $ | 27,875 | $ | 18,439 | |||||||||
Common Share Data: | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 2.89 | $ | 2.49 | $ | 2.11 | $ | 1.71 | $ | 1.34 | |||||||||
Diluted | 2.75 | 2.34 | 1.98 | 1.60 | 1.27 | ||||||||||||||
Cash dividends per common share(6) | 0.24 | 0.20 | 0.16 | 0.12 | 0.093 | ||||||||||||||
Book value per share | 26.23 | 21.81 | 17.43 | 13.19 | 9.72 | ||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||
Basic | 23,198 | 20,646 | 18,032 | 16,334 | 13,734 | ||||||||||||||
Diluted: | 24,337 | 21,972 | 19,219 | 17,445 | 14,545 | ||||||||||||||
Selected Financial Condition Data (at end of period): | |||||||||||||||||||
Total assets | $ | 8,117,042 | $ | 6,419,048 | $ | 4,747,398 | $ | 3,721,555 | $ | 2,705,422 | |||||||||
Total loans | 5,213,871 | 4,348,346 | 3,297,794 | 2,556,086 | 2,018,479 | ||||||||||||||
Mortgage loans held-for-sale | 85,985 | 104,709 | 24,041 | 90,446 | 42,904 | ||||||||||||||
Total deposits | 6,729,434 | 5,104,734 | 3,876,621 | 3,089,124 | 2,314,636 | ||||||||||||||
Notes payable | 1,000 | 1,000 | 26,000 | 44,025 | 46,575 | ||||||||||||||
Subordinated notes | 50,000 | 50,000 | 50,000 | 25,000 | — | ||||||||||||||
Long term debt – trust preferred securities | 230,458 | 204,489 | 96,811 | 50,894 | 51,050 | ||||||||||||||
Total stockholders’ equity | 627,911 | 473,912 | 349,837 | 227,002 | 141,278 |
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Year Ended December 31, | ||||||||||||||||||||
2005(1) | 2004(2) | 2003(3) | 2002(4) | 2001 | ||||||||||||||||
Selected Financial Ratios and Other Data: | ||||||||||||||||||||
Performance Ratios: | ||||||||||||||||||||
Net interest margin(7)(8) | 3.16 | % | 3.17 | % | 3.20 | % | 3.34 | % | 3.49 | % | ||||||||||
Net interest spread(7)(9)(10) | 2.92 | 2.96 | 2.99 | 3.06 | 3.08 | |||||||||||||||
Non-interest income to average assets(7) | 1.23 | 1.57 | 1.76 | 1.89 | 1.24 | |||||||||||||||
Non-interest expense to average assets(5)(7) | 2.62 | 2.86 | 2.98 | 3.30 | 2.83 | |||||||||||||||
Net overhead ratio(5)(7)(11) | 1.39 | 1.30 | 1.22 | 1.41 | 1.59 | |||||||||||||||
Efficiency ratio(5)(12) | 63.97 | 64.45 | 63.52 | 66.41 | 63.66 | |||||||||||||||
Return on average assets(5)(7) | 0.88 | 0.94 | 0.93 | 0.87 | 0.79 | |||||||||||||||
Return on average equity(5)(7) | 11.00 | 13.12 | 14.36 | 14.76 | 15.24 | |||||||||||||||
Average loan-to-average deposit ratio | 83.4 | 87.7 | 86.4 | 88.5 | 87.4 | |||||||||||||||
Dividend payout ratio(6)(7) | 8.7 | 8.5 | 8.1 | 7.5 | 7.4 | |||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||
Non-performing loans to total loans | 0.50 | % | 0.43 | % | 0.72 | % | 0.49 | % | 0.64 | % | ||||||||||
Allowance for credit losses to: | ||||||||||||||||||||
Total loans | 0.78 | 0.79 | 0.77 | 0.72 | 0.68 | |||||||||||||||
Non-performing loans | 155.69 | 184.13 | 107.59 | 146.63 | 105.63 | |||||||||||||||
Net charge-offs to average loans(5)(7) | 0.10 | 0.07 | 0.18 | 0.24 | 0.26 | |||||||||||||||
Non-performing assets to total assets | 0.34 | 0.29 | 0.51 | 0.34 | 0.48 | |||||||||||||||
Other data at end of period: | ||||||||||||||||||||
Number of banking facilities | 62 | 50 | 36 | 31 | 29 |
(1) | Wintrust completed its acquisitions of Antioch Holding Company on January 18, 2005 and First Northwest Bancorp, Inc. on March 31, 2005. The results for the fiscal year ended December 31, 2005 include the results of Antioch Holding Company and First Northwest Bancorp, Inc. since the effective date of the acquisitions. | |
(2) | Wintrust completed its acquisitions of SGB Corporation d/b/a WestAmerica Mortgage Company and Guardian Real Estate Services, Inc. on May 19, 2004, and Northview Financial Corporation on September 30, 2004. The results for year ended December 31, 2004 include the results of WestAmerica and Guardian since the effective date of the acquisition. | |
(3) | Wintrust completed its acquisitions of Lake Forest Capital Management Company on February 1, 2003, Advantage National Bancorp, Inc. on October 1, 2003 and Village Bancorp, Inc. on December 5, 2003. The results for the year ended December 31, 2003 include the results of the companies acquired as of and since the effective date of the acquisitions only. | |
(4) | Wintrust completed its acquisition of the Wayne Hummer Companies effective as of February 1, 2002. The results for the year ended December 31, 2002 include the results of the Wayne Hummer Companies since February 1, 2002. | |
(5) | 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), and in the fourth quarter of 2003, it recovered $500,000 (pre-tax) of this amount ($302,000 after-tax). | |
(6) | Wintrust declared its first semi-annual dividend payment in January 2000. Dividend data reflected for the interim periods reflect semi-annual, not quarterly, dividends. | |
(7) | These financial ratios for interim periods have been annualized. | |
(8) | Net interest income on a tax-equivalent basis divided by average interest-earning assets. | |
(9) | Calculated on a tax-equivalent basis. | |
(10) | Yield earned on average interest-earning assets less rate paid on average interest-bearing liabilities. | |
(11) | Non-interest expense less non-interest income divided by average total assets. | |
(12) | 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). |
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• | The change of control payments, pursuant to existing contracts, to each of Jeffrey D. Baker, Robert K. Buhrke, Andrew M. Collins, Jr., James R. Hannon, Jr., L. Thomas McNamara and Regina R. Miller in connection with the merger; | ||
• | The entry into employment agreement with each of Jeffrey D. Baker, Andrew M. Collins, Jr., L. Thomas McNamara and Regina R. Miller upon completion of the merger; | ||
• | Wintrust’s agreement to provide severance and other benefit payments under certain circumstances to Jeffrey D. Baker, Andrew M. Collins, Jr., L. Thomas McNamara and Regina R. Miller; | ||
• | Wintrust’s agreement to provide officers and directors of Hinsbrook with continuing indemnification rights; and | ||
• | Wintrust’s agreement to provide directors’ and officers’ insurance to the officers and directors of Hinsbrook for five years following the merger. |
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• | management forecasts, projections and estimates; | ||
• | efficiencies and cost savings; | ||
• | business and growth strategies (including anticipated internal growth, plans to form additionalde novobanks and to open new branch offices, and to pursue additional potential development or acquisition of banks, wealth management entities, specialty finance business or fee-related businesses); | ||
• | regulatory matters; | ||
• | combined operations; | ||
• | the economy; | ||
• | future economic performance; | ||
• | conditions to, and the timetable for, completing the merger; | ||
• | future acquisitions or dispositions; | ||
• | litigation; | ||
• | potential and contingent liabilities; | ||
• | management’s plans; | ||
• | taxes; and | ||
• | merger and integration expenses. |
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• | a proposal to approve the merger agreement and thereby approve the merger; | ||
• | a proposal to approve an adjournment of the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the merger agreement and the transactions it contemplates; and | ||
• | any other business that properly comes before the special meeting and any adjournment or postponement thereof. |
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• | filing with Hinsbrook’s secretary a duly executed revocation of proxy; | ||
• | submitting a new proxy with a later date; or | ||
• | voting in person at the special meeting. |
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• | deliver a written demand for appraisal of your shares to Hinsbrook before the vote on the approval of the merger agreement at the special meeting (voting against the merger agreement will not satisfy this requirement); | ||
• | not vote in favor of the merger agreement (if you return your signed proxy and do not specify a vote against the merger agreement or a direction to abstain, your shares will be voted in favor of the merger agreement and you will waive your right to dissent); and | ||
• | continuously hold your Hinsbrook shares from the date of making the demand through the time the merger is completed. |
• | a statement setting forth its opinion of the fair value of the shares; | ||
• | Hinsbrook’s latest balance sheet as of the end of a fiscal year ending not earlier than 16 months before delivery of the statement, together with the statement of income for that year; | ||
• | the latest available interim financial statements; and | ||
• | a commitment to pay for the shares held by the dissenting shareholder at the estimated fair value upon the transmittal to Wintrust of the certificate(s), or other evidence of ownership. |
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• | information with respect to the businesses, earnings, operations, financial condition, prospects, capital levels and asset quality of Hinsbrook and Wintrust, both individually and as a combined company; | ||
• | the perceived risks and uncertainties attendant to Hinsbrook’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; | ||
• | 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; | ||
• | the strategic vision of the management of Wintrust to seek profitable future expansion in the Chicago metropolitan area, leading to continued growth in overall stockholder value; | ||
• | the fact that Wintrust is publicly held and the merger would provide access to a public trading market for Hinsbrook’s shareholders whose investments currently are in a privately held company, as well as enhanced access to capital markets to finance the combined company’s capital requirements; and | ||
• | the likelihood that the merger will be approved by the relevant bank regulatory authorities and the other conditions to closing satisfied. |
• | management’s view that the acquisition of Hinsbrook provides an attractive opportunity to expand into desirable markets; | ||
• | Hinsbrook’s community banking orientation and its compatibility with Wintrust and its subsidiaries; |
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• | a review of the demographic, economic and financial characteristics of the markets in which Hinsbrook operates, including existing and potential competition and history of the market areas with respect to financial institutions; | ||
• | management’s review of the business, operations, earnings and financial condition, including capital levels and asset quality, of Hinsbrook Bank & Trust since itsde novo formation in 1987; | ||
• | efficiencies to come from integrating certain of Hinsbrook’s operations into Wintrust’s existing operations; and | ||
• | the likelihood of regulators approving the merger without undue conditions or delay. |
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• | the merger agreement; | ||
• | certain publicly available financial statements and other historical financial information of Hinsbrook that Capital Market Securities deemed relevant; | ||
• | certain publicly available financial statements and other historical financial information of Wintrust that Capital Market Securities deemed relevant; | ||
• | the pro forma financial impact of the merger on Wintrust based on assumptions relating to transaction expenses, cost savings and other factors; | ||
• | the publicly reported historical price and trading activity for Wintrust’s common stock, including a comparison of certain financial and stock market information for Wintrust with similar publicly available information for certain other banks which are publicly traded; | ||
• | the financial terms of certain recent mergers in the banking industry, to the extent publicly available; | ||
• | the current banking environment and economic conditions generally; and | ||
• | such other information, financial studies, analyses and investigations and financial, economic and market criteria as Capital Market Securities considered appropriate for purposes of its analysis. |
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(Dollar information in thousands)
Shareholder equity | $ | 39,888 | ||
Tangible shareholder equity | $ | 39,888 | ||
LTM net income | $ | 6,788 | ||
Total deposits | $ | 424,820 | ||
Shares Outstanding | 2,750,798 | |||
Pricing Ratios | ||||
Price/Tangible Book Value | 287 | % | ||
Price/Book Value | 287 | % | ||
Price to Last Twelve Months Earnings | 16.9 | X | ||
Purchase Price Premium above Tangible Book Value/Deposits | 17.5 | % |
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DCB Financial Corp
FNBH Bancorp, Inc.
Guaranty Federal Bancshares, Inc.
Monroe Bancorp
Southern Michigan Bancorp, Incorporated
Peer Group | ||||||||
Hinsbrook | Average | |||||||
Total Assets(in millions) | $ | 497.0 | $ | 554.8 | ||||
Tangible Equity/Tangible Assets | 8.03 | % | 8.30 | % | ||||
Loans/Deposits | 94.36 | % | 103.52 | % | ||||
Total Borrowings/Total Assets | 3.88 | % | 12.79 | % | ||||
NPAs/Assets | 0.34 | % | 0.58 | % | ||||
ALLL/Gross Loans | 0.97 | % | 1.38 | % | ||||
LTM Return on Average Assets | 1.42 | % | 1.19 | % | ||||
LTM Return on Average Equity | 19.36 | % | 13.71 | % | ||||
Net Interest Margin | 3.96 | % | 4.04 | % | ||||
Non Interest Income/Average Assets | 0.40 | % | 0.95 | % | ||||
Non-Interest Expense/Average assets | 1.90 | % | 2.67 | % | ||||
Efficiency Ratio | 46.04 | % | 56.12 | % | ||||
Price/Book Value | NM | 182.60 | % | |||||
Price/Tangible Book Value | NM | 185.45 | % | |||||
Price/LTM EPS | NM | 13.82 | x |
FirstMerit Corporation
MB Financial, Inc.
Old National Bancorp
Park National Corporation.
Republic Bancorp Inc.
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Peer Group | ||||||||
Wintrust | Average | |||||||
Total Assets(in millions) | $ | 7,894 | $ | 7,217 | ||||
Tangible Equity/Tangible Assets | 5.20 | % | 7.15 | % | ||||
Loans/Deposits | 79.39 | % | 94.84 | % | ||||
Total Borrowings/Total Assets | 8.91 | % | 21.12 | % | ||||
NPAs/Assets | 0.25 | % | 0.51 | % | ||||
ALLL/Gross Loans | 0.77 | % | 1.42 | % | ||||
LTM Return on Average Assets | 0.90 | % | 1.28 | % | ||||
LTM Return on Average Equity | 12.15 | % | 15.06 | % | ||||
Net Interest Margin | 3.18 | % | 3.62 | % | ||||
Non Interest Income/Average Assets | 1.33 | % | 1.27 | % | ||||
Non-Interest Expense/Average assets | 2.71 | % | 2.52 | % | ||||
Efficiency Ratio | 63.27 | % | 53.54 | % | ||||
Price/Book Value | 216.30 | % | 251.23 | % | ||||
Price/Tangible Book Value | 332.50 | % | 299.83 | % | ||||
Price/LTM EPS | 20.90 | x | 17.32 | x |
• | transaction price at announcement to book value per share, | ||
• | transaction price to tangible book value per share, | ||
• | transaction price to last twelve months earnings, and | ||
• | purchase price premium above tangible book value to deposits and computed mean and median multiples and premiums for the transactions. |
Median | ||||||||||||||||
Median | Chicago | |||||||||||||||
Midwest | Implied | Area | Implied | |||||||||||||
Multiple | Value | Multiple | Value | |||||||||||||
Transaction Price/Book Value | 234.6 | % | $ | 34.03 | 256.1 | % | $ | 37.14 | ||||||||
Transaction Price/Tangible Book Value | 244.6 | % | $ | 35.47 | 281.3 | % | $ | 40.79 | ||||||||
Transaction Price/LTM Earnings | 17.3 | x | $ | 42.67 | 18.6 | x | $ | 46.01 | ||||||||
Transaction Value Premium above Tangible Book Value/Deposits | 14.1 | % | $ | 36.26 | 14.0 | % | $ | 36.08 |
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Discount Rate | 15.0 | x | 17.0 | x | 19.0 | x | ||||||
12.5% | $ | 34.82 | $ | 39.24 | $ | 43.66 | ||||||
15.0% | $ | 28.01 | $ | 31.55 | $ | 35.09 | ||||||
�� 17.5% | $ | 25.22 | $ | 28.40 | $ | 31.58 |
• | the merger closed on January 1, 2006, | ||
• | 50% of the Hinsbrook shares are exchanged for Wintrust common shares and 50% of Hinsbrook’s shares are exchanged for $41.59 per share in cash, | ||
• | projections for Hinsbrook estimated by Capital Market Securities are consistent with estimates for 2005 as provided by Hinsbrook’s management, | ||
• | projections for Wintrust are consistent with Wintrust’s historical results, and, | ||
• | purchase accounting adjustments, charges and transaction costs associated with the merger and cost savings estimated by Capital Market Securities. |
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• | are dealers in securities; | ||
• | are insurance companies or tax-exempt organizations; | ||
• | are subject to alternative minimum tax; | ||
• | hold their shares as part of a hedge, straddle, or other risk reduction transaction; or | ||
• | are foreign persons. |
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• | the merger will constitute a reorganization within the meaning of Section 368(a) of the Code and Hinsbrook and Wintrust will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code; and | ||
• | no gain or loss will be recognized by Hinsbrook shareholders upon the receipt of Wintrust common stock in exchange for Hinsbrook common stock, except with respect to the cash portion of the merger consideration and cash received for fractional shares of Wintrust common stock. |
• | your tax basis in the Hinsbrook common stock surrendered; and | ||
• | 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. |
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• | if the executive terminates his or her employment for any reason during the 12 month period immediately following a change of control of Hinsbrook; or | ||
• | Hinsbrook Bank & Trust terminates the executive’s employment for any reason other than “cause,” or the executive voluntarily terminates his or her employment for “good reason” during the 24 month period immediately following a change of control, |
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• | in favor of the merger and the transactions contemplated by the merger agreement; | ||
• | against any action or agreement that would result in a material breach of any term or obligation of Hinsbrook under the merger agreement; and | ||
• | against any action or agreement that would impede, interfere with or attempt to discourage the transactions contemplated by the merger agreement. |
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• | The exchange ratio will adjust upward or downward to ensure that the fraction of a share of Wintrust common stock you receive for each share of Hinsbrook common stock that you own will be equal to $41.59 divided by the reference price so long as the reference price is between $49.14 and $61.14. However, the market value of the fraction of a share of Wintrust common stock that you receive in the merger may be greater or less than $41.59, as the trading price of Wintrust common stock on the date the merger is completed may be greater or less than the reference price used to determine the exchange ratio. | ||
• | If the reference price is less than $49.14, the exchange ratio will no longer adjust upward, and you will receive 0.846 of a share of Wintrust common stock for each share of Hinsbrook common stock that you own. This means that the value of the fraction of a share of Wintrust common stock you will receive will be below $41.59 per share to the extent the market price of Wintrust common stock is below $49.14 when the merger is completed. | ||
• | If the reference price is greater than $61.14, the exchange ratio will no longer adjust downward, and you will receive 0.680 of a share of Wintrust common stock for each share of Hinsbrook common stock that you own. This means that the value of the fraction of a share of Wintrust common stock you will receive will be above $41.59 per share to the extent the market price of Wintrust common stock is above $61.14 when the merger is completed. |
STOCK | ||||||||||
Wintrust | CASH ELECTION | ELECTION | COMBINATION ELECTION | |||||||
Reference | Per Share Cash | Per Share Stock | Cash | Stock | Total Per Share | |||||
Price | Consideration | Consideration(1)(2) | Consideration | Consideration | Consideration(1)(2) | |||||
$46.00 | $41.59 | $38.92 | $20.795 | $19.458 | $40.25 | |||||
47.00 | 41.59 | 39.76 | 20.795 | 19.881 | 40.68 | |||||
48.00 | 41.59 | 40.61 | 20.795 | 20.304 | 41.10 | |||||
49.00 | 41.59 | 41.45 | 20.795 | 20.727 | 41.52 | |||||
50.00 | 41.59 | 41.60 | 20.795 | 20.800 | 41.60 | |||||
51.00 | 41.59 | 41.57 | 20.795 | 20.783 | 41.58 | |||||
52.00 | 41.59 | 41.60 | 20.795 | 20.800 | 41.60 | |||||
53.00 | 41.59 | 41.61 | 20.795 | 20.803 | 41.60 | |||||
54.00 | 41.59 | 41.58 | 20.795 | 20.790 | 41.59 |
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STOCK | ||||||||||
Wintrust | CASH ELECTION | ELECTION | COMBINATION ELECTION | |||||||
Reference | Per Share Cash | Per Share Stock | Cash | Stock | Total Per Share | |||||
Price | Consideration | Consideration(1)(2) | Consideration | Consideration | Consideration(1)(2) | |||||
55.00 | 41.59 | 41.58 | 20.795 | 20.790 | 41.59 | |||||
56.00 | 41.59 | 41.61 | 20.795 | 20.804 | 41.60 | |||||
57.00 | 41.59 | 41.61 | 20.795 | 20.805 | 41.60 | |||||
58.00 | 41.59 | 41.59 | 20.795 | 20.793 | 41.59 | |||||
59.00 | 41.59 | 41.60 | 20.795 | 20.798 | 41.59 | |||||
60.00 | 41.59 | 41.58 | 20.795 | 20.790 | 41.59 | |||||
61.00 | 41.59 | 41.60 | 20.795 | 20.801 | 41.60 | |||||
62.00 | 41.59 | 42.16 | 20.795 | 21.080 | 41.88 | |||||
63.00 | 41.59 | 42.84 | 20.795 | 21.420 | 42.22 | |||||
64.00 | 41.59 | 43.52 | 20.795 | 21.760 | 42.56 | |||||
65.00 | 41.59 | 44.20 | 20.795 | 22.100 | 42.90 | |||||
66.00 | 41.59 | 44.88 | 20.795 | 22.440 | 43.24 |
(1) | Assumes the closing price of Wintrust’s common stock on the date of the merger is the same as the reference price during the reference period. The actual trading price of Wintrust common stock is subject to market fluctuations, and Hinsbrook shareholders will not be entitled to receive additional shares in the merger if the trading price of Wintrust’s common stock on the closing date of the merger is less than the average price during the pricing period. | |
(2) | The numbers in this column represent the value of the shares of Wintrust common stock which you will receive for each share of Hinsbrook common stock that you own, subject to the assumption in footnote 1. |
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• | making changes to the charter and by-laws of Hinsbrook and Hinsbrook Bank & Trust; | ||
• | except with respect to the exercise of outstanding options to purchase Hinsbrook common stock, effecting any change in the capitalization or the number of issued and outstanding shares of Hinsbrook or Hinsbrook Bank & Trust; | ||
• | except as otherwise set forth in the merger agreement, paying any dividends or other distributions; | ||
• | except as otherwise set forth in the merger agreement, increasing the compensation of the officers or key employees of Hinsbrook or any of its subsidiaries or paying any bonuses; | ||
• | making any expenditure for fixed assets in excess of $50,000 for any single item, or $250,000 in the aggregate, or entering into any lease for any fixed assets having an annual rental in excess of $50,000; | ||
• | making or becoming party to a contract, commitment, or transaction, acquiring or disposing of any property or asset, or incurring any liabilities or obligations, other than in the ordinary course of business consistent with prudent banking practice and its current policies; | ||
• | doing or failing to do anything that will cause a breach or default under any material contract; | ||
• | without Wintrust’s prior written consent, making, renewing or restructuring any loan in excess of $1,000,000, except as provided for in the merger agreement; | ||
• | entering into employment, consulting, or similar agreements that cannot be terminated with less than 30 days notice without penalty; | ||
• | buying or investing in government securities that have maturities of more than five years and a rating agency rating below “A”; | ||
• | exceeding, at any time, $65,000,000 in brokered deposits; |
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• | terminating, curtailing or discontinuing any of its benefit plans; and | ||
• | changing in any material respect any accounting or recordkeeping procedures, policies or practices. |
• | to use all reasonable and diligent 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; | ||
• | 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; | ||
• | 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; and | ||
• | to coordinate publicity of the transactions contemplated by the merger agreement to the media and Hinsbrook’s shareholders. |
• | interim financial statements; | ||
• | prompt notice of any written assertions of dissenters’ rights; | ||
• | reasonable notice and minutes of any meetings of the boards and committees of Hinsbrook or Hinsbrook Bank & Trust; and | ||
• | certain information regarding the loans in Hinsbrook Bank & Trust’s loan portfolio. |
• | valid corporate organization and existence; | ||
• | corporate power and authority to enter into the merger and the merger agreement; | ||
• | capitalization; | ||
• | financial statements; | ||
• | certain tax matters; |
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• | absence of material adverse changes; | ||
• | government approvals required in connection with the merger; | ||
• | absence of undisclosed investigations and litigation; | ||
• | compliance with laws; | ||
• | broker/finder fees; and | ||
• | absence of any breach of organizational documents, law or other agreements as a result of the merger. |
• | compliance with SEC filing requirements; | ||
• | filing of necessary reports with regulatory authorities; and | ||
• | its financial ability to consummate the merger. |
• | organizational documents, minutes and stock records; | ||
• | title to real property, personal property and other material assets; | ||
• | insurance matters; | ||
• | employee benefits; | ||
• | environmental matters; | ||
• | ownership of Hinsbrook Bank & Trust and other subsidiaries; | ||
• | compliance with, absence of default under and information regarding material contracts; | ||
• | loans and its allowance for loan losses; | ||
• | investment securities; | ||
• | compliance with the Community Reinvestment Act; | ||
• | conduct of business and maintenance of business relationships; | ||
• | technology and intellectual property; | ||
• | absence of undisclosed liabilities; and | ||
• | affiliate transactions. |
• | the accuracy of representations and warranties of Hinsbrook in the merger agreement as of the closing date; |
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• | performance by Hinsbrook in all material respects of its agreements under the merger agreement; | ||
• | the registration statement has been declared effective by the SEC and continues to be effective as of the effective time; | ||
• | approval of the merger agreement at the special meeting by the holders of at least a majority of the outstanding shares of Hinsbrook common stock entitled to vote; | ||
• | the holders of not more than 5% of the outstanding shares of Hinsbrook common stock give written demand for appraisal rights in accordance with Illinois law; | ||
• | receipt of all necessary regulatory approvals; | ||
• | no material adverse change in Hinsbrook since December 5, 2005; | ||
• | no threatened or pending litigation resulting from or seeking to enjoin the transactions contemplated by the merger agreement or seeking other relief that Wintrust reasonably believes, subject to certain conditions, would have a material adverse effect on Hinsbrook or its bank subsidiary; | ||
• | execution of an employment agreement by Jeffrey D. Baker, Andrew M. Collins, Jr., L. Thomas McNamara and Regina R. Miller; | ||
• | the entry of certain directors and officers of Hinsbrook into voting agreements; | ||
• | amendment of Hinsbrook’s deferred compensation and deferred fee arrangements; | ||
• | payment or accrual of an increased purchase price for certain shares of Hinsbrook’s common stock acquired from an individual in August and October of 2005 such that such individual will receive total consideration equal to $41.59 per share; and | ||
• | receipt of necessary consents, permissions and approvals. |
• | accuracy of representations and warranties of Wintrust in the merger agreement as of the closing date; | ||
• | performance by Wintrust in all material respects of their agreements under the merger agreement; | ||
• | authorization for listing the shares of Wintrust common stock issuable pursuant to the merger agreement on the Nasdaq National Market, subject to notice of final issuance; | ||
• | receipt of all necessary regulatory approvals; | ||
• | execution and delivery of articles of merger suitable for filing with the Illinois Secretary of State; | ||
• | the registration statement has been declared effective by the SEC and continues to be effective as of the effective time; | ||
• | no threatened or pending litigation resulting from or seeking to enjoin the transactions contemplated by the merger agreement or seeking other relief that Hinsbrook reasonably believes, subject to certain conditions, makes it inadvisable to consummate the merger; | ||
• | no material adverse change in Wintrust since December 5, 2005; and |
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• | receipt of certain certificates from Wintrust and a tax opinion from Hinsbrook’s special tax counsel that the merger constitutes a “reorganization” within the meaning of Section 368(a) of the Code. |
• | Hinsbrook’s shareholders’ equity as of the closing date, adjusted to disregard any changes in the “other comprehensive income” account recorded after June 30, 2005, must be equal to or exceed the sum of the following, which we refer to in this proxy statement/prospectus as the “Minimum Adjusted Net Worth,” (1) $40,600,000, plus (2) any cash receipts and tax benefits recorded by Hinsbrook from the exercise of outstanding options to purchase Hinsbrook common stock, minus, on an after-tax basis, as appropriate (3) fees for attorneys, accountants and other advisors incurred by Hinsbrook in connection with the merger, minus (4) change of control payments due to any director or officer of Hinsbrook under existing agreements to terminate such agreements as contemplated in the merger agreement, minus (5) the amount paid by Hinsbrook to the shareholder from whom Hinsbrook repurchased shares of common stock in August and October of 2005; and | ||
• | Hinsbrook may have no more than $8,000,000 in outstanding holding company-level debt (including any subordinated or senior debt or debentures). |
• | the merger is not completed by July 31, 2006 or such later date agreed to by the parties; provided, that the termination date will be extended to August 31, 2005, if the sole impediments to closing are due to delays in receiving regulatory approval from the Federal Reserve or in the SEC declaring the registration statement effective; | ||
• | the other party has not satisfied a condition under the merger agreement required to be met by it prior to the closing date, or if it becomes impossible for the other party to satisfy a condition and its inability to satisfy the condition was not caused by the non-breaching party’s failure to meet any of its obligations under the merger agreement and such non-breaching party has not waived such condition; or | ||
• | Hinsbrook receives and accepts a superior proposal for acquisition by a third party. |
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• | Wintrust terminates the merger agreement because Hinsbrook breaches its covenant not to solicit an acquisition proposal from a third party; | ||
• | Hinsbrook terminates the merger agreement upon its receipt and approval of a superior proposal for an acquisition by a third party; or | ||
• | the merger agreement is terminated (a) by either Wintrust or Hinsbrook because the closing has not occurred by July 31, 2006 or such later date agreed to by the parties (or August 31, 2006, if the sole impediments to closing are due to delays in receiving regulatory approval from the Federal Reserve or in the SEC declaring the registration statement effective) or (b) by Wintrust because Hinsbrook has not satisfied a condition under the merger agreement required to be met by it prior to the closing date, or if it becomes impossible for Hinsbrook to satisfy a condition and its inability to satisfy the condition was not caused by Wintrust’s failure to meet any of its obligations under the merger agreement and Wintrust has not waived such condition, and in each such case, within six months after termination of the merger agreement, Hinsbrook or the Bank consummates or enters into a definitive agreement relating to an acquisition transaction which was made known to any member of Hinsbrook’s board of directors and not disclosed to Wintrust prior to the date of such termination. |
• | by Wintrust because Hinsbrook committed a material breach of its material obligations under the merger agreement and such breach is not the result of Wintrust’s failure to comply or perform in all material respects with any of its material obligations under the merger agreement; or | ||
• | by either party because the closing has not occurred by July 31, 2006 or such later date agreed to by the parties (or August 31, 2006, if the sole impediments to closing are due to delays in receiving regulatory approval from the Federal Reserve or in the SEC declaring the registration statement effective) due to the failure of Wintrust to obtain the necessary regulatory approvals because of matters relating solely to Hinsbrook and Hinsbrook Bank & Trust. |
• | by Hinsbrook because Wintrust committed a material breach of its material obligations under the merger agreement and such breach is not the result of Hinsbrook’s failure to comply or perform in all material respects with any of its material obligations under the merger agreement; or | ||
• | by either party because the closing has not occurred by July 31, 2006 or such later date agreed to by the parties (or August 31, 2006, if the sole impediments to closing are due to delays in receiving regulatory approval from the Federal Reserve or in the SEC declaring the registration statement effective) due to the failure of Wintrust to obtain the necessary regulatory approvals for any reason other than matters relating solely to Hinsbrook and Hinsbrook Bank & Trust. |
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Common Stock directly, | ||||||||
indirectly or beneficially | Percent of | |||||||
Name(1) | owned as of December 31, 2005 | Outstanding | ||||||
Neal A. Anderson | 141,500 | (2) | 5.12 | % | ||||
Robert K. Buhrke | 159,377 | (3) | 5.77 | % | ||||
Jeffrey D. Baker | 7,363 | * | ||||||
Andrew M. Collins, Jr. | 96,316 | (4) | 3.49 | % | ||||
James R. Hannon | 170,969 | (5) | 6.19 | % | ||||
L. Thomas McNamara | 80,586 | (6) | 2.92 | % | ||||
Regina R. Miller | 10,222 | (7) | * | |||||
Daniel Regan | 214,784 | (8) | 7.78 | % | ||||
Ying-Yih Wu | 180,579 | (9) | 6.54 | % | ||||
All directors and executive officers as a group (9 persons) | 1,061,696 | 38.44 | % |
* | Indicates that the individual or entity owns less than one percent of Hinsbrook’s common stock. |
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(1) | The address for each of the directors and executive officers named in the table is c/o Hinsbrook Bancshares, Inc., 6262 South Route 83, Willowbrook, Illinois 60527. |
(2) | The amount shown for Mr. Anderson includes 59,662 shares of common stock which is owned by a trust over which Mr. Anderson shares voting and investment power. |
(3) | The amount shown for Mr. Buhrke includes 135,185 shares of common stock which is owned by trusts over which Mr. Buhrke shares voting and investment power and 19,776 shares of common stock held through the Hinsbrook Bank & Trust 401(k) Plan, pursuant to which Mr. Buhrke has shared voting and investment power. The amount shown for Mr. Buhrke also includes 4,416 shares of common stock held by Hinsbrook Bank & Trust as custodian for the benefit of an IRA for Geraldine K. Buhrke, Mr. Burke’s spouse, of which Mr. Buhrke disclaims beneficial ownership. |
(4) | The amount shown for Mr. Collins includes 23,800 shares of common stock which is owned jointly by Mr. Collins and his spouse, Mrs. Margaret M. Collins, and 1,000 shares of common stock held through the Hinsbrook Bank & Trust 401(k) Plan, pursuant to which Mr. Collins has shared voting and investment power. |
(5) | The amount shown for Mr. Hannon includes 48,092 shares of common stock held through the Hinsbrook Bank & Trust 401(k) Plan, pursuant to which Mr. Hannon has shared voting and investment power. The amount shown for Mr. Hannon also includes 32,318 shares of common stock owned by his spouse, Gail Hannon, and 5,310 shares of common stock held by Hinsbrook Bank & Trust as custodian for the benefit of the Gail Hannon IRA, of which Mr. Hannon disclaims beneficial ownership.. |
(6) | The amount shown for Mr. McNamara includes 67,354 shares of common stock owned jointly by Mr. McNamara and his spouse, Mrs. Margaret McNamara and 13,232 shares of common stock held through the Hinsbrook Bank & Trust 401(k) Plan, pursuant to which Mr. McNamara has shared voting and investment power. |
(7) | The amount shown for Ms. Miller includes 10,222 shares of common stock owned jointly with her spouse, Mr. Robert Miller. |
(8) | The amount shown for Mr. Regan includes 54,166 shares of common stock held through the Daniel R. Regan, Inc. Profit Sharing Trust and 15,906 shares of common stock held by Hinsbrook Bank & Trust as custodian for the benefit of the Daniel R. Regan IRA. The amount shown for Mr. Regan also includes 338 shares of common stock held by Hinsbrook Bank & Trust as custodian for the benefit of an IRA for Barbara Regan, Mr. Regan’s spouse, of which Mr. Regan disclaims beneficial ownership. |
(9) | The amount shown for Dr. Wu includes 95,519 shares of common stock held through the Wu Family Medical Center, 5,717 shares of common stock held by Hinsbrook Bank & Trust as custodian for the benefit of certain of Dr. Wu’s IRAs and 4,427 shares of common stock held by Hinsbrook Bank & Trust as custodian for the benefit of the Wu Family Medical Center IRA. |
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Wintrust Shareholder Rights | Hinsbrook Shareholder Rights | |||
Authorized Capital Stock: | Wintrust is authorized to issue 60 million shares, without par value, of common stock, and 20 million shares, without par value, of preferred stock. On April 6, 2006, Wintrust had 24,243,388 shares of common stock outstanding. Wintrust has not issued any shares of preferred stock. Issuance of shares of Wintrust’s preferred stock would affect the relative rights of the holders of its common stock, depending upon the exact terms, qualifications, limitations and relative rights and preferences, if any, of the shares of the preferred stock as determined by Wintrust’s board of directors. | Hinsbrook is authorized to issue 10 million shares of common stock, par value $0.05 per share. On the record date Hinsbrook had 2,761,723 shares of common stock outstanding. | ||
Rights of Preferred Shareholders: | Wintrust has not issued any of its authorized preferred stock. | Hinsbrook is not authorized to issue preferred stock. | ||
Dividends: | Subject to any rights of holders of preferred stock if such stock is ever issued, Wintrust may pay dividends if, as and when declared by its board of directors from any funds legally available therefor. | Hinsbrook may pay dividends if, as and when declared by its board of directors from any funds legally available therefor. | ||
Number of Directors, Classification: | The Wintrust board of directors currently consists of fourteen (14) members. Wintrust’s by-laws provide, however, that the number may be increased or decreased (provided the number is never less than nine (9)) by an amendment of the by-laws by the shareholders, or by a resolution adopted by the majority of the board of directors. | The Hinsbrook board of directors currently consists of five (5) members. Hinsbrook’s articles of incorporation provide that its board of directors must consist of not less than three (3) and no more than ten (10) directors, as may be established by resolution of the then-current board. | ||
Wintrust’s board of directors is divided into three classes, with each class consisting of approximately one-third of the total number of directors. Directors are elected for three-year terms, with one class of directors up for election at each annual meeting of shareholders. | Hinsbrook’s board of directors consists of a single class of directors. | |||
Election of Directors: | Each Wintrust shareholder is entitled to vote the number of shares owned by such shareholder for as many persons as there are directors to be elected. | Each Hinsbrook shareholder is entitled to vote the number of shares owned by such shareholder for as many persons as there are directors to be elected. | ||
The Wintrust by-laws provide that no cumulative voting is permitted. | The Hinsbrook by-laws provide that no cumulative voting is permitted. | |||
Removal of Directors: | A Wintrust director may be removed at a shareholders’ meeting, with or without | A Hinsbrook director may be removed at a shareholders’ meeting, with or without |
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Wintrust Shareholder Rights | Hinsbrook Shareholder Rights | |||
cause, by the affirmative vote of a majority of the outstanding shares entitled to vote. | cause, by the affirmative vote of a majority of the outstanding shares entitled to vote. | |||
Call of Special Meeting of Directors: | Wintrust’s by-laws provide that a special meeting of the board of directors may be called by or at the request of the chairman of the board, president or a majority of then-acting directors. | Hinsbrook’s by-laws provide that a special meeting of the board of directors may be called by or at the request of the chairman of the board, the president, secretary or any two directors. | ||
Limitation on Director Liability: | Wintrust’s articles of incorporation provide 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 for liability: | Hinsbrook’s articles of incorporation, provide that a director will not be liable to the corporation or any of its shareholders for monetary damages for breach of fiduciary duty except for liability: | ||
• for any breach of the director’s duty of loyalty to the corporation or its shareholders; | • for any breach of the director’s duty of loyalty to the corporation or its shareholders; | |||
• for acts and omissions not in good faith or that involve intentional misconduct or a knowing violation of law; | • for acts and omissions not in good faith or that involve intentional misconduct or a knowing violation of law; | |||
• under Section 8.65 of the IBCA (which creates liability for unlawful payment of dividends and unlawful stock purchases or redemptions), as it exists or hereafter may be amended; or | • under Section 8.65 of the IBCA (which creates liability for unlawful payment of dividends and unlawful stock purchases or redemptions), as it exists or hereafter may be amended; or | |||
• for any transaction from which the director derived an improper benefit. | • for any transaction from which the director derived an improper personal benefit. | |||
Indemnification: | Wintrust’s articles of incorporation and by-laws provide that the corporation has the power to indemnify its directors, officers, employees and agents to the fullest extent authorized by the IBCA. | Hinsbrook’s by-laws provide for indemnification of its officers and directors to the fullest extent authorized by the IBCA. | ||
The by-laws provide that, to the extent a present or former director, officer or employee of the corporation (or of any subsidiary, as the case may be) has been successful on the merits or otherwise in defense of any proceeding, or in connection with any claim, issue or matter therein, the corporationshall indemnify the director or officer against expenses actually and reasonably incurred by him in connection with such proceeding to the extent he was a party as a result of being a director, officer or employee, provided that such person acted in good faith and in a manner he or she reasonably believed to be in, or not | The by-laws provide that, to the extent a present or former director or officer has been successful on the merits or otherwise in defense of any proceeding, or in connection with any claim, issue or matter therein, the corporationshallindemnify the director or officer against expenses actually and reasonably incurred by him in connection with such proceeding to the extent he was a party as a result of being a director or officer. The corporation shall not indemnify, however, if the liability was incurred because the director or officer breached or failed to perform a duty he owes the corporation and the breach or failure to perform constitutes any of the |
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Wintrust Shareholder Rights | Hinsbrook Shareholder Rights | |||
opposed to, the best interests of the corporation. The boardmay indemnify agents of the corporation in this context. | following: | |||
• a willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest; | ||||
• a violation of criminal law, unless the director or officer had reasonable cause to believe his conduct was lawful or no reasonable cause to believe it was unlawful; | ||||
• a transaction from which the director or officer derived an improper personal profit; or | ||||
• willful misconduct. | ||||
In addition to the mandatory indemnification describe above, the by-laws provide that the board of directorsmay, in its sole discretion, provide indemnification to an employee or agent of the corporation who is not a director or officer in connection with any proceeding in which the employee or agent was a defendant because of his actions as an employee or agent, provided that the employee or agent acted in good faith and in a manner he reasonably believed to be in and not opposed to the best interests of the corporation. | ||||
Call of Special Meetings of Shareholders: | Wintrust’s by-laws provide that a special meeting of the shareholders may be called by the board of directors, the president or 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, for the purpose or purposes stated in the call of the meeting. Written notice stating the place, date, hour and purpose(s) of the special meeting must be delivered, either personally or by mail, not less than ten (10) nor more than sixty (60) days before the date of the meeting. | Hinsbrook’s by-laws provide that a special meeting of the shareholders may be called by the chairman of the board, president or the board of directors, and shall be called by the president at the written request (a) of the holders of not less than one-tenth of all shares of the corporation entitled to vote at the meeting, or (b) of one-third, but in no event less than two, of the directors then in office. Written notice stating the place, day, hour and purpose(s) of the special meeting must be delivered, either personally or by mail, not less than ten (10) nor more than sixty (60) days before the date of the meeting. | ||
Quorum of Shareholders: | Wintrust’s by-laws provide that a majority of the shares entitled to vote on a matter, present in person or represented by proxy, constitutes a quorum at any meeting of shareholders. | Hinsbrook’s by-laws provide that a majority of the shares entitled to vote on a matter, present in person or represented by proxy, constitutes a quorum at any meeting of shareholders. |
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Wintrust Shareholder Rights | Hinsbrook Shareholder Rights | |||
Shareholders Proposals: | Wintrust’s by-laws provide that for a shareholder to properly bring business before an annual or special meeting of shareholders, written notice of such shareholder’s intent to make such proposal(s) must be given by personal delivery or U.S. mail postage prepaid and received by the secretary of the corporation no later than the following dates: (i) with respect to an annual meeting of shareholders, sixty (60) days in advance of such meeting if such meeting is to be held on a day which is within thirty (30) days preceding the anniversary date of the previous year’s annual meeting or ninety (90) days in advance of such meeting if such meeting is to be held on or after the anniversary of the previous year’s annual meeting; and (ii) with respect to any other annual or special meeting of shareholders, the close of business on the tenth (10th) day following the date of public disclosure of the date of such meeting. | Hinsbrook’s by-laws do not contain any restrictions on the making by its shareholders of proposals for annual or special meetings. | ||
A shareholder’s notice to the secretary shall set forth as to each item of business the shareholder proposes to bring before such meeting: (a) a brief description of the business desired to be brought before the meeting; (b) the name and record address of the shareholder who proposes such business; (c) the number of shares of stock of the corporation beneficially owned by such shareholder; and (d) a description of all arrangements or understandings between the shareholder and any other person(s) pursuant to which the proposal or proposals are to be made by the shareholder and any material interest of the shareholder in the business being proposed. | ||||
Shareholder Action by Written Consent: | Wintrust’s articles of incorporation and by-laws provide that its shareholders are not permitted to act by written consent. Any action required or permitted to be taken at a meeting of the shareholders must be effected at a duly called annual or special meeting. | Hinsbrook’s by-laws provide that any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting. | ||
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Wintrust Shareholder Rights | Hinsbrook Shareholder Rights | |||
Appointment and Removal of Officers: | Wintrust’s by-laws provide that the officers shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of the shareholders. Each officer will hold office until his successor is duly elected or until his prior death, resignation or removal. | Hinsbrook’s by-laws provide that the officers shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of the shareholders. Each officer will hold office until his successor is duly elected or until his prior death, resignation or removal. | ||
Any officer may be removed by the board of directors whenever in its judgment the best interests of the corporation will be served thereby. | Any officer may be removed by the board of directors whenever in its judgment the best interests of the corporation will be served thereby. | |||
Required Vote for Certain Transactions | The Wintrust articles of incorporation do not specifically discuss transactions involving merger, consolidation, or sale, lease or exchange of all or substantially all of the property or assets of the corporation. But the applicable IBCA provisions state that such a transaction must be approved by two-thirds of the outstanding shares of stock entitled to vote on the matter. The corporation may, however, without approval by a vote of shareholders, merge into itself any corporation of which at least ninety percent (90%) of the outstanding shares of each class is owned by the corporation. | As provided in the Hinsbrook articles of incorporation, the following transactions require the affirmative vote of the holders of at least eighty percent (80%) of the outstanding shares of stock entitled to vote on the matter: • any merger or consolidation of the corporation with one or more other corporations (regardless of which is the surviving corporation); or • any sale, lease or exchange of all or substantially all of the property and assets of the corporation to or with one or more other corporations, persons or other entities. | ||
However, the affirmative vote of the holders of a simple majority of the outstanding shares of stock entitled to vote on either of these matters shall apply to any such transaction which is approved by resolution adopted by the affirmative vote of the majority of the entire board of directors in office at the time. | ||||
In addition, the articles of incorporation provide that the corporation may merge into itself any corporation of which at least ninety percent (90%) of the outstanding shares of each class is owned by the corporation, without approval by a vote of shareholders of either corporation. | ||||
Amendment to Charter and By-laws: | Otherwise, as provided by the IBCA or discussed below, the articles of incorporation may be amended by the affirmative vote of at least two-thirds of the shares entitled to vote on the proposal after the board of directors has passed a resolution by majority vote setting forth the proposed amendment and directing that it | Hinsbrook’s articles of incorporation may be amended, altered, changed or repealed by the affirmative vote of at least two-thirds of all outstanding shares of stock entitled to vote on such amendment; provided, however, that in the case of an amendment relating to the tenure and number of directors, repurchase rights, mergers, |
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be submitted to a vote at a shareholders’ meeting. An amendment to the articles of incorporation that relates to certain provisions, including, the prohibition of cumulative voting, shareholder purchase rights, the prohibition of shareholder action by written consent, the number and classification of the board of directors, director liability, indemnification and insurance, number, tenure and qualification of directors or the amendment process, must be approved by the affirmative vote of the holders of eighty-five percent (85%) or more of the voting power of the then-outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class. Otherwise, as provided by the IBCA, the articles of incorporation may be amended by the affirmative vote of at least two-thirds of the shares entitled to vote on the proposal after the board of directors has passed a resolution by majority vote setting forth the proposed amendment and directing that it be submitted to a vote at a shareholders’ meeting. The power to make, alter, amend or repeal the by-laws of the corporation is vested in the shareholders or the board of directors by a resolution adopted by a majority of the board of directors. | consolidations, the sale, lease or exchange of all or substantially all of the corporation’s property and assets, or the amendment process, the affirmative vote of the holders of at least eighty percent (80%) of the outstanding shares of stock entitled to vote on such amendment is required. However, the affirmative vote of the holders of a simple majority of the outstanding shares entitled to vote is sufficient for any amendment which is approved by resolution of a majority of the board of directors. Hinsbrook’s by-laws may be amended, altered, changed or repealed by the affirmative vote of at least two-thirds of all outstanding shares of stock entitled to vote on such amendment; provided, however, that in the case of an amendment relating to the tenure and qualifications of directors, the affirmative vote of the holders of at least eighty percent (80%) of the outstanding shares of stock entitled to vote on such amendment is required. However, the affirmative vote of the holders of a majority of the outstanding shares entitled to vote is sufficient for any amendment which is approved by resolution of a majority of the board of directors. The by-laws may also be altered, amended or repealed and new by-laws may be adopted by the affirmative vote of a majority of the board of directors present at any meeting at which a quorum is in attendance; provided, however, that no by-law adopted by the shareholders may be amended or repealed by the board of directors if the by-law adopted by the shareholders so provides. | |||
Shareholder Rights Plan: | None. | None. | ||
Preemptive Rights: | None. | None. |
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• | Wintrust’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 0-21923); |
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• | Wintrust’s proxy statement in connection with its 2006 annual meeting of shareholders filed with the SEC on April 24, 2006; | ||
• | Wintrust’s Current Reports on Form 8-K filed with the SEC on January 5, January 20, January 31, February 15, February 28, March 16, March 30 and April 21, 2006; and | ||
• | the description of Wintrust’s common stock contained in Wintrust’s Registration Statement on Form 8-A dated January 3, 1997 filed pursuant to Section 12 of the Securities Exchange Act of 1934 (File No. 0-21923). |
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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 | A-1 | ||||||
1.5 | Company Stock Options | A-2 | ||||||
1.6 | Cancellation of Treasury Shares | A-2 | ||||||
1.7 | Dissenting Shares | A-2 | ||||||
1.8 | Recapitalization | A-3 | ||||||
1.9 | Tax Treatment | A-3 | ||||||
1.10 | Closing | A-3 | ||||||
ARTICLE II CONVERSION AND EXCHANGE OF CERTIFICATES IN MERGER | A-3 | |||||||
2.1 | Per Share Merger Consideration | A-3 | ||||||
2.2 | Election Procedures | A-4 | ||||||
2.3 | Proration and Redesignation Procedures | A-4 | ||||||
2.4 | No Fractional Shares | A-5 | ||||||
2.5 | Exchange of Certificates | A-5 | ||||||
ARTICLE III REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY | A-7 | |||||||
3.1 | Organization | A-7 | ||||||
3.2 | Organizational Documents; Minutes and Stock Records | A-7 | ||||||
3.3 | Capitalization | A-8 | ||||||
3.4 | Authorization; No Violation | A-8 | ||||||
3.5 | Consents and Approvals | A-8 | ||||||
3.6 | Financial Statements | A-9 | ||||||
3.7 | No Undisclosed Liabilities | A-9 | ||||||
3.8 | Loans; Loan Loss Reserves | A-10 | ||||||
3.9 | Properties and Assets | A-10 | ||||||
3.10 | Material Contracts | A-11 | ||||||
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 | ||||||
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-18 | ||||||
3.23 | Conduct of Business in Normal Course | A-18 | ||||||
3.24 | Change in Business Relationships | A-18 | ||||||
3.25 | Brokers’ and Finders’ Fees | A-18 |
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3.26 | Section 280G Payments | A-18 | ||||||
3.27 | No Omissions | A-18 | ||||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES CONCERNING WINTRUST | A-18 | |||||||
4.1 | Organization | A-18 | ||||||
4.2 | Capitalization | A-18 | ||||||
4.3 | Authorization; No Violations | A-19 | ||||||
4.4 | Consents and Approvals | A-19 | ||||||
4.5 | Wintrust SEC Filings and Financial Statements | A-19 | ||||||
4.6 | Compliance with Laws; Legal Proceedings | A-20 | ||||||
4.7 | Wintrust Regulatory Reports | A-20 | ||||||
4.8 | No Adverse Change | A-20 | ||||||
4.9 | Brokers’ and Finders’ Fees | A-21 | ||||||
4.10 | Taxation of the Merger | A-21 | ||||||
4.11 | Financial Ability | A-21 | ||||||
4.12 | No Omissions | A-21 | ||||||
ARTICLE V AGREEMENTS AND COVENANTS | A-21 | |||||||
5.1 | Conduct of Business | A-21 | ||||||
5.2 | Access to Information | A-22 | ||||||
5.3 | Meeting of Shareholders of the Company | A-23 | ||||||
5.4 | Registration Statement and Regulatory Filings | A-23 | ||||||
5.5 | Listing of Shares | A-24 | ||||||
5.6 | Reasonable and Diligent Efforts | A-24 | ||||||
5.7 | Business Relations and Publicity | A-24 | ||||||
5.8 | No Conduct Inconsistent with this Agreement | A-24 | ||||||
5.9 | Loan Charge-Off; Pre-Closing Loan Review | A-25 | ||||||
5.10 | Board of Directors’ Notices and Minutes | A-25 | ||||||
5.11 | Untrue Representations and Warranties | A-26 | ||||||
5.12 | Director and Officer Liability Coverage | A-26 | ||||||
5.13 | Interim Financial Statements | A-26 | ||||||
5.14 | Dissent Process | A-26 | ||||||
5.15 | Section 368(a) Reorganization | A-26 | ||||||
5.16 | Exercise of Options | A-26 | ||||||
5.17 | Converted Options | A-26 | ||||||
5.18 | Termination of Ownership Interests | A-27 | ||||||
ARTICLE VI EMPLOYEE BENEFIT MATTERS | A-27 | |||||||
6.1 | Benefit Plans | A-27 | ||||||
6.2 | No Rights or Remedies | A-27 | ||||||
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF WINTRUST | A-28 | |||||||
7.1 | Representations and Warranties; Performance of Agreements | A-28 | ||||||
7.2 | Closing Certificate | A-28 | ||||||
7.3 | Regulatory and Other Approvals | A-28 | ||||||
7.4 | Approval of Merger and Delivery of Agreement | A-28 | ||||||
7.5 | Effectiveness of the Registration Statement | A-28 |
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7.6 | No Litigation | A-28 | ||||||
7.7 | Environmental Surveys | A-28 | ||||||
7.8 | Opinion of Counsel | A-29 | ||||||
7.9 | Employment Agreements | A-29 | ||||||
7.10 | No Adverse Changes | A-29 | ||||||
7.11 | Minimum Net Worth and Loan Loss Reserve Requirements | A-29 | ||||||
7.12 | Voting Agreements | A-29 | ||||||
7.13 | Amendments to Deferred Compensation Agreements | A-29 | ||||||
7.14 | Settlement | A-30 | ||||||
7.15 | Consents | A-30 | ||||||
7.16 | Other Documents | A-30 | ||||||
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY | A-30 | |||||||
8.1 | Representations and Warranties; Performance of Agreements | A-30 | ||||||
8.2 | Closing Certificates | A-30 | ||||||
8.3 | Regulatory and Other Approvals | A-30 | ||||||
8.4 | Delivery of Agreement | A-30 | ||||||
8.5 | Effectiveness of the Registration Statement | A-30 | ||||||
8.6 | No Litigation | A-30 | ||||||
8.7 | Opinions of Counsel | A-31 | ||||||
8.8 | No Adverse Changes | A-31 | ||||||
8.9 | Nasdaq Listing | A-31 | ||||||
8.10 | Other Documents | A-31 | ||||||
ARTICLE IX NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS | A-31 | |||||||
9.1 | Non-Survival | A-31 | ||||||
ARTICLE X GENERAL | A-31 | |||||||
10.1 | Expenses | A-31 | ||||||
10.2 | Termination | A-33 | ||||||
10.3 | Confidential Information | A-34 | ||||||
10.4 | Non-Assignment | A-34 | ||||||
10.5 | Notices | A-34 | ||||||
10.6 | Counterparts | A-34 | ||||||
10.7 | Knowledge | A-34 | ||||||
10.8 | Interpretation | A-35 | ||||||
10.9 | Entire Agreement | A-35 | ||||||
10.10 | Governing Law | A-35 | ||||||
10.11 | Severability | A-35 |
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Acquisition Proposal | A-24 | |||
Agreement | A-1 | |||
Articles of Merger | A-1 | |||
Bank | A-1 | |||
Benefit Plans | A-15 | |||
BHCA | A-7 | |||
Cash Consideration | A-3 | |||
Cash Election | A-4 | |||
Cash Election Shares | A-4 | |||
CERCLA | A-15 | |||
Closing | A-3 | |||
Closing Balance Sheet | A-29 | |||
Closing Date | A-3 | |||
Code | A-1 | |||
Combination Election | A-4 | |||
Commission | A-9 | |||
Company | A-1 | |||
Company Board | A-8 | |||
Company Common Stock | A-1 | |||
Company Option Plan | A-2 | |||
Company Regulatory Reports | A-15 | |||
Company Stock Certificates | A-5 | |||
Confidentiality Agreement | A-23 | |||
Conversion Fund | A-6 | |||
Converted Option | A-2 | |||
CRA | A-15 | |||
Dissenting Shares | A-2 | |||
Effective Time | A-1 | |||
Election Deadline | A-4 | |||
Election Form | A-4 | |||
Employees | A-27 | |||
Encumbrances | A-10 | |||
Environmental Laws | A-14 | |||
ERISA Affiliate | A-15 | |||
ERISA Plans | A-15 | |||
Exchange Act | A-19 | |||
Exchange Agent | A-4 | |||
FDIC | A-10 | |||
Federal Reserve | A-9 | |||
Federal Reserve Application | A-9 | |||
Financial Statements | A-9 | |||
GAAP | A-7 | |||
Governmental Authority | A-8 | |||
Hazardous Substance | A-15 | |||
IDFPR | A-9 |
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IDFPR Application | A-9 | |||
Illinois Act | A-1 | |||
Intellectual Property | A-17 | |||
Interim Balance Sheet | A-9 | |||
Interim Financial Statements | A-9 | |||
Investment Securities | A-12 | |||
IRS | A-16 | |||
IT Assets | A-17 | |||
knowledge | A-34 | |||
Licenses | A-13 | |||
Loans | A-10 | |||
Material Adverse Effect | A-7 | |||
Material Contracts | A-11 | |||
Maximum Cash Election Number | A-4 | |||
Maximum Stock Election Number | A-4 | |||
Merger | A-1 | |||
Minimum Adjusted Net Worth | A-29 | |||
OCC | A-20 | |||
Option Conversion Agreement | A-2 | |||
Options | A-8 | |||
Ordinary Course of Business | A-9 | |||
OREO | ||||
Outstanding Company Option | A-2 | |||
Parties | A-1 | |||
Per Share Merger Consideration | A-3 | |||
Permitted Encumbrances | A-10 | |||
Plan Amendments | A-2 | |||
Price Per Share | A-3 | |||
Proxy Statement/ Prospectus | A-9 | |||
Registration Statement | A-23 | |||
Representatives | A-4 | |||
Retained Plans | A-27 | |||
Securities Act | A-9 | |||
Shareholders Meeting | A-23 | |||
Stock Consideration | A-3 | |||
Stock Election | A-4 | |||
Stock Election Shares | A-5 | |||
Superior Acquisition Proposal | A-25 | |||
Surviving Corporation | A-1 | |||
Tax Return | A-14 | |||
Taxes | A-14 | |||
Wintrust | A-1 | |||
Wintrust Common Stock Price | A-3 | |||
Wintrust Regulatory Reports | A-20 | |||
Wintrust SEC Documents | A-19 | |||
Wintrust Stock Certificates | A-5 |
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Ownership Interests | 3.1 | (b) | ||
Schedule of Option Holders | 3.3 | (a) | ||
Stock Owned by the Bank | 3.3 | (b) | ||
Authorization; No Violation | 3.4 | |||
Required Consents | 3.5 | |||
Financial Statements | 3.6 | |||
Schedule of Real Property | 3.9 | (a) | ||
Schedule of Tangible Personal Property | 3.9 | (b) | ||
Schedule of Material Contracts | 3.10 | |||
Schedule of Interested Transactions | 3.12 | |||
Schedule of Investments | 3.13 | (a) | ||
Schedule of Restricted Investment Securities | 3.13 | (b) | ||
Schedule of Disposed Investment Securities | 3.13 | (c) | ||
Legal Proceedings | 3.14 | (c) | ||
Schedule of Insurance | 3.15 | |||
Taxes | 3.16 | |||
Environmental Matters | 3.17 | |||
Change of Control Provisions Under Benefit Plans | 3.20 | (b) | ||
Medical Benefits | 3.20 | (c) | ||
Exceptions Under Benefit Plans | 3.20 | (e) | ||
Schedule of Intellectual Property | 3.21 | |||
Conduct of Business in Normal Course; Exceptions | 3.23 | |||
Brokers’ and Finders’ Fees | 3.25 | |||
280G Payments | 3.26 | |||
Scheduled Compensation Changes | 5.1 | (c) | ||
Employees | 6.1 | |||
Employment Agreements | 7.9 | |||
Signatories to Voting Agreement | 7.12 | |||
Deferred Compensation Agreements | 7.13 | |||
Settlement | 7.14 |
Exhibit A | Form of Option Conversion Agreement | |||
Exhibit B | Form of Opinion of Company Counsel | |||
Exhibit C | Form of Employment Agreement | |||
Exhibit D | Form of Voting Agreement | |||
Exhibit E | Forms of Amendment to Deferred Compensation Agreements | |||
Exhibit F | Form of Opinion of Wintrust Counsel |
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(i) cash in the amount of $41.59 (the “Price Per Share”), without interest (the “Cash Consideration”); | |
(ii) that number of shares of Wintrust Common Stock, rounded to the nearest thousandth of a share, equal to the quotient obtained by dividing the Price Per Share by the Wintrust Common Stock Price (as determined in accordance with Section 2.1(b)) (the “Stock Consideration”); or | |
(iii) a combination of Cash Consideration and Stock Consideration determined in accordance with Section 2.2(a). |
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(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; | |
(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 $50,000; | |
(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 $500,000; | |
(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. §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 $50,000 or which requires performance by the Company or the Bank beyond the second anniversary |
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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 certificate of incorporation and by-laws of the Company and the charter and by-laws of 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 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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(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”). |
(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, 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; |
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(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 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. |
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(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 Option, 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 Options; | |
(c) the compensation of officers or key employees of the Company or the Bank shall not be increased, nor any bonuses paid except in each case as set forth on Schedule 5.1(c); | |
(d) no Loan, or renewal or restructuring of a Loan, in the amount of $1,000,000 or more (including Loans to any one borrower or related group of borrowers which, in the aggregate, equal or exceed $1,000,000) shall be made by the Bank except after delivering to Wintrust a complete loan package for such Loan, renewal or restructuring, in a form consistent with the Bank’s policies and practice, and obtaining Wintrust’s prior consent, which consent shall not be unreasonably withheld or delayed and shall be deemed given if Wintrust shall have not responded to the Company’s request within two (2) business days after receipt of such complete loan package, and such Loan or renewal or restructuring of a Loan shall be made in the Ordinary Course of Business consistent with prudent banking practices, 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 to the extent it would cause the shareholders’ equity in the Company, as adjusted pursuant to Section 7.11 below, to fall below the Minimum Adjusted Net Worth, or as otherwise would not be permitted under applicable law; |
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(f) no dividends or other distributions shall be declared or paid by the Bank to the extent it would cause the minimum net worth of the Bank to fall below well-capitalized status, as defined by applicable FDIC regulations, or as would not be permitted under applicable law; | |
(g) 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; | |
(h) no significant changes shall be made in the general nature of the business conducted by the Company or the Bank; | |
(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, nor shall the Bank terminate the employment of any officer without first notifying Wintrust; | |
(j) except as expressly provided in this Agreement, 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 Tax Returns in a timely manner and shall not make any application for or consent to any extension of time for filing any Tax Return or any extension of the period of limitations applicable thereto; | |
(l) neither the Company nor the Bank shall make any expenditure for fixed assets in excess of $50,000 for any single item, or $250,000 in the aggregate, or shall enter into leases of fixed assets having an annual rental in excess of $50,000; | |
(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 of Business 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 Sections 23A and B 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 (5) years and which municipal obligations have been assigned a rating of A or better by Moody’s Investors Service or by Standard and Poor’s, which may include purchases by the Bank in the open market of direct debt obligations of the Federal Home Loan Bank of Chicago,provided that such direct debt obligations do not exceed an aggregate amount of $10,000,000 and are not purchased by the Bank at a premium; | |
(q) the amount of brokered deposits maintained by the Bank at any time and from time to time shall not exceed $65,000,000; and | |
(r) 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. |
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(a) such Party shall promptly 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 Party. |
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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 the Company on or before the Closing. | |
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 the Articles of Merger, in form suitable for filing with the Illinois Secretary of State, 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 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 the right, at its sole option and cost, to obtain Phase I environmental audits of all real property or facilities owned or used by either the Company or the Bank in the conduct of their respective businesses, conducted by an independent environmental consultant selected by Wintrust. 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. |
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7.8 Opinion of Counsel. Wintrust shall have received the opinion of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, counsel for the Company, dated as of the Closing Date, and in form substantially similar toExhibit B and reasonably satisfactory to Wintrust and its counsel. | |
7.9 Employment Agreements. Those persons identified on Schedule 7.9 shall each have entered into an employment agreement with Wintrust or the Bank, dated the Closing Date, in substantially the form attached asExhibit C, and shall each be capable of performing his or her duties under his or her employment agreement as of the Closing Date. | |
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 of Business, except as otherwise required under this Agreement, 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 required under this Agreement, that would have a Material Adverse Effect on the Company. | |
7.11 Minimum Net Worth and Loan Loss Reserve Requirements. The Company shall have delivered to Wintrust a balance sheet as of the Closing Date (the “Closing Balance Sheet”), prepared in conformity with past practices and policies of the Company and GAAP applied on a basis consistent with the preparation of the Financial Statements, which shall reflect that shareholders’ equity in the Company, adjusted to reflect the following adjustments, specifications and charges (which adjustments, specifications and charges are each separate conditions hereunder and shall be made by the Company on or prior to the Closing Date), shall be equal to or greater than the sum of $40,600,000.00plus any cash receipts and attendant tax benefits recorded from the exercise of Options in accordance with Section 5.16 (such sum, after giving effect to such adjustments, specifications and charges, the “Minimum Adjusted Net Worth”): |
(a) the Closing Balance Sheet shall reflect accruals for, on an after-tax basis as appropriate, (i) any professional fees and expenses (including legal, investment banking and accounting fees) actually incurred by the Company in connection with this Agreement and the transactions contemplated hereby, (ii) change of control payments due to any officers, directors or employees under any change in control, deferred compensation, employment or other agreements with the Company as a result of the Merger, which shall be paid or accrued by the Company concurrently with the Closing, and (iii) that amount to be paid by the Company in accordance with Section 7.14; | |
(b) any changes in the Other Comprehensive Income account recorded as equity after June 30, 2005 shall be disregarded for purposes of determining Minimum Adjusted Net Worth; | |
(c) the Company shall have no more than $8,000,000 of indebtedness (including any subordinated or senior debt or debentures); and | |
(d) the Bank’s reserve for loan losses, determined as described in Section 3.8, shall be not less than 1.00% of the Bank’s net Loans (gross Loans less unearned discounts). |
The Company may distribute to its shareholders immediately prior to Closing the amount by which shareholders’ equity is greater than the Minimum Adjusted Net Worth. |
7.12 Voting Agreements. On or before December 19, 2005, Wintrust shall have received a Voting Agreement, in the form attached hereto asExhibit D, executed by each of those shareholders of the Company identified on Schedule 7.12. | |
7.13 Amendments to Deferred Compensation Agreements. Prior to the Effective Time, the Company shall have amended those deferred compensation and deferred fee agreements entered into between the Company and certain employees as set forth on Schedule 7.13, which amendments shall be in the forms attached hereto asExhibit E. |
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7.14 Settlement. The Company shall have accrued on the Closing Balance Sheet that amount described on Schedule 7.14, to be paid at or immediately following Closing in settlement of the potential claim described on Schedule 7.14, and the Company shall have used its best efforts to obtain a release in a form reasonably satisfactory to Wintrust of any claim against the Company or the Bank. | |
7.15 Consents. The Company shall have obtained or caused to be obtained (a) all written consents under those Material Contracts set forth on Schedule 3.5, and (b) all other written consents, permissions and approvals as required under any agreements, contracts, appointments, indentures, plans, trusts or other arrangements with third parties required to effect the transactions contemplated by this Agreement where failure to obtain such consents, permissions and approvals would have a Material Adverse Effect on the Company or Wintrust’s rights under this Agreement. | |
7.16 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. |
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 shall have performed in all material respects all agreements herein required to be performed by Wintrust 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 Wintrust 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 shall have executed and delivered to the Company the Articles of Merger, in form suitable for filing with the Illinois Secretary of State, 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, no 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 |
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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 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 LLP, special counsel for Wintrust, dated as of the Closing Date, and in form substantially similar toExhibit F and reasonably satisfactory to the Company and its counsel. | |
(b) The Company shall have received the opinion of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, counsel for 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, that the Company and Wintrust will each be a party to such reorganization within the meaning of Section 368(a) of the Code, and that no gain or loss will be recognized by the holders of shares of Company Common Stock upon the receipt of shares of Wintrust Common Stock in exchange for their shares of Company Common Stock, except to the extent of any Cash Consideration received in the Merger and any cash received in lieu of fractional shares of Wintrust Common Stock. The tax opinion shall be supported by one or more fact certificates or affidavits from Wintrust and the Company, 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 with the terms and conditions of this Agreement. |
(a) Each of Wintrust and the Company shall bear and pay one-half of the costs and expenses incurred in connection with the printing and mailing of the Proxy Statement/ Prospectus, excluding legal and accounting fees and expenses related thereto which shall be borne and paid by the Party incurring such fees and expenses. Registration Statement filing fees to be paid to the Commission shall be borne and paid by Wintrust. |
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(b) In the event that this Agreement is terminated by Wintrust because the Company 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 $250,000, for theout-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. 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 itsout-of-pocket expenses and costs, Wintrust shall be entitled to recover such other amounts, including consequential damages, 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(b) or 10.2(c) 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 is in material compliance with all of its material obligations under this Agreement, Wintrust shall reimburse the Company in an amount, not to exceed $250,000, for theout-of-pocket expenses and costs, 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 itsout-of-pocket expenses and costs, the Company shall be entitled to recover such other amounts, including consequential damages, 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 $250,000,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 $250,000,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. |
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(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 material obligations under this Agreement) by July 31, 2006, or such later date agreed to by the Parties,provided,however, that such termination date shall automatically be extended until August 31, 2006, 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; or | |
(f) by the Company, if the Wintrust Common Stock Price is less than $47.14,provided,however, that the Company may not terminate the Agreement pursuant to this Section 10.2(f) unless and until five (5) business days have elapsed following the delivery to Wintrust of written notice of such termination, and prior to the end of such five (5) business-day period Wintrust fails to notify the Company in writing that Wintrust elects to increase (i) the number of shares of Wintrust Common Stock to be issued and/or (ii) the amount of cash to be paid in exchange for each Stock Election Share (after application of the proration and redesignation procedures provided for in Section 2.3 of this Agreement) so that the amount of consideration exchanged for each such Stock Election Share (valuing Wintrust Common Stock at the unweighted average of the high and low sales prices of a share of Wintrust Common Stock as reported on the Nasdaq National Market for each of the ten (10) trading days ending on the fourth (4th) trading day preceding the Closing) is equivalent to that amount of Stock Consideration which would be obtained using $47.14 as the Wintrust Common Stock Price. For example, if the Wintrust Common Stock Price is determined to be $46.14 and the Company notifies Wintrust of its intention to terminate this Agreement, Wintrust shall have the right to elect to increase the number of shares of Wintrust Common Stock and/or the amount of cash to be paid to those holders of Company Common Shares electing to receive Stock Consideration (whether through a Stock Election or a Combination Election) such that the consideration paid in exchange for each Stock Election Share is equivalent to the value (in shares of Wintrust Common Stock valued as described above, cash or a combination thereof) of that number of shares of Wintrust Common Stock, rounded to the nearest thousandth of a share, equal to $41.59 (the Price Per Share) divided by $47.14. | |
Any termination of this Agreement shall not affect any rights accrued prior to such termination. |
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(i) If to the Company, addressed to: | |
Hinsbrook Bancshares, Inc. | |
6262 S. Route 83 | |
Willowbrook, Illinois 60527 | |
Attention: Mr. Robert K. Buhrke, | |
Chairman, Chief Executive Officer and President | |
with a copy to: | |
Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP | |
333 West Wacker Drive, Suite 2700 | |
Chicago, Illinois 60606 | |
Attention: Edwin S. del Hierro, Esq. | |
(ii) If to Wintrust, 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: | |
Schiff Hardin LLP | |
6600 Sears Tower | |
Chicago, Illinois 60606-6473 | |
Attention: Matthew G. Galo, Esq. |
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WINTRUST FINANCIAL CORPORATION |
By: | /s/ David A. Dykstra |
Name: David A. Dykstra |
Title: | Senior Executive Vice President |
and Chief Operating Officer | |
HINSBROOK BANCSHARES, INC. |
By: | /s/ Robert K. Buhrke |
Name: Robert K. Buhrke |
Title: | President and Chief Executive Officer |
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(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 or 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. |
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(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 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. |
(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, eff. 8-10-90.) |
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Wintrust Financial Corporation, an Illinois Corporation: |
By: | /s/ David A. Dykstra |
Its: | Senior Executive Vice President and |
Chief Operating Officer |
Address for Notices: | With a copy to | ||
Wintrust Financial Corporation | Matthew G. Galo | ||
727 North Bank Lane | Schiff Hardin LLP | ||
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 |
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/s/ Neal A. Anderson | |
Neal A. Anderson, individually and as Trustee | |
Acknowledged by: | |
/s/ Madeline L. Anderson | |
Madeleine L. Anderson, as Trustee | |
/s/ Robert K. Buhrke | |
Robert K. Buhrke, individually and as Trustee | |
Acknowledged by: | |
Hinsbrook Bank and Trust, as Trustee of the | |
Hinsbrook Bank and Trust 401(k) Plan |
By: | /s/ John H. Lohmeier |
Name: John H. Lohmeier |
Title: | Senior Vice President |
/s/ Geraldine K. Buhrke | |
Geraldine K. Buhrke, as Trustee | |
/s/ Jeffrey D. Baker | |
Jeffrey D. Baker | |
Acknowledged by: | |
/s/ Gregory R. Baker | |
Gregory R. Baker, as custodian |
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/s/ Andrew M. Collins | |
Andrew M. Collins | |
Acknowledged by: | |
Hinsbrook Bank and Trust, as Trustee of the | |
Hinsbrook Bank and Trust 401(k) Plan |
By: | /s/ John H. Lohmeier |
Name: John H. Lohmeier |
Title: | Senior Vice President |
/s/ Margaret M. Collins | |
Margaret M. Collins | |
/s/ James R. Hannon | |
James R. Hannon | |
Acknowledged by: | |
Hinsbrook Bank and Trust, as Trustee of the | |
Hinsbrook Bank and Trust 401(k) Plan |
By: | /s/ John H. Lohmeier |
Name: John H. Lohmeier |
Title: | Senior Vice President |
/s/ Gail Hannon | |
Gail Hannon | |
/s/ L. Thomas McNamara | |
L. Thomas McNamara |
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Acknowledged by: | |
Hinsbrook Bank and Trust, as Trustee of the | |
Hinsbrook Bank and Trust 401(k) Plan |
By: | /s/ John H. Lohmeier |
Name: John H. Lohmeier |
Title: | Senior Vice President |
/s/ Margaret McNamara | |
Margaret McNamara | |
/s/ Daniel Regan | |
Daniel Regan | |
Acknowledged by: | |
Hinsbrook Bank and Trust, as Trustee of the | |
Hinsbrook Bank and Trust 401(k) Plan |
By: | /s/ John H. Lohmeier |
Name: John H. Lohmeier |
Title: | Senior Vice President |
/s/ Barbara Regan | |
Barbara Regan | |
/s/ Ying-Yih Wu | |
Ying-Yih Wu |
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Acknowledged by: | |
Wu Med Center |
By: | /s/ Ying-Yih Wu |
Name: Ying-Yih Wu |
Title: | Trustee |
/s/ Regina Miller | |
Regina Miller | |
Acknowledged by: | |
/s/ Robert Miller | |
Robert Miller | |
/s/ John H. Lohmeier | |
John H. Lohmeier | |
Acknowledged by: | |
Hinsbrook Bank and Trust, as Custodian |
By: | /s/ Jeffrey D. Baker |
Name: Jeffrey D. Baker |
Title: | Executive Vice President |
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Number of | ||||||||
Company Common | ||||||||
Number of Company | Shares Issuable | |||||||
Common Shares | Under Options | |||||||
Name, Address and Facsimile Number of Shareholder(1) | Owned by Shareholder | Held by Shareholder | ||||||
Neal A. Anderson | 141,500 | 0 | ||||||
Robert K. Buhrke | 159,377 | 0 | ||||||
Jeffrey D. Baker | 7,363 | 0 | ||||||
Andrew M. Collins, Jr. | 95,316 | 0 | ||||||
James R. Hannon | 170,969 | 0 | ||||||
John Lohmeier | 27,737 | 0 | ||||||
L. Thomas McNamara | 80,586 | 0 | ||||||
Regina R. Miller | 10,222 | 0 | ||||||
Daniel Regan | 214,784 | 0 | ||||||
Ying-Yih Wu | 180,182 | 0 |
(1) | The address and facsimile number for each shareholder is c/o Hinsbrook Bank and Trust, 6262 S. Route 83, Willowbrook, Illinois 60527, facsimile number (630) 321-5290. |
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(i) reviewed the draft form of the Agreement dated December 5, 2005; | |
(ii) reviewed certain historical financial and other information concerning the Company for the five fiscal years ended December 31, 2004 and unaudited financial information for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005; | |
(iii) reviewed certain historical financial and other information concerning Buyer for the five fiscal years ended December 31, 2004 and unaudited financial information for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005; | |
(iv) held discussions with the senior management of the Company and Buyer with respect to their past and current financial performance, financial condition and future prospects; | |
(v) reviewed certain internal financial data, projections and other information of the Company and Buyer; | |
(vi) analyzed certain publicly available information of other financial institutions that we deemed comparable or otherwise relevant to our inquiry, and compared the Company and Buyer from a financial point of view with certain of these institutions; |
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(vii) compared the Merger Consideration to be received by the shareholders of the Company with the consideration received by shareholders in other acquisitions of financial institutions that we deemed comparable or otherwise relevant to our inquiry; | |
(viii) reviewed historical trading activity and ownership data of Buyer Common Stock and considered the prospects for dividends and price movement; | |
(ix) reviewed historical trading activity and ownership data of the Company Common Stock and considered the prospects for dividends and market pricing; and | |
(x) conducted such other financial studies, analyses and investigations and reviewed such other information as we deemed appropriate to enable us to render our opinion. In our review, we have also taken into account an assessment of general economic, market and financial conditions and certain industry trends and related matters. |
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Very truly yours, | |
/s/ Capital Market Securities, Inc. | |
Capital Market Securities, Inc. |
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Exhibit | ||
Number | Description of Exhibit | |
2.1 | Agreement and Plan of Merger by and between Wintrust Financial Corporation and Hinsbrook Bancshares, Inc., dated as of December 5, 2005 (included asAnnex Ato 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 10-Q for the quarter ended June 30, 2005). | |
3.2 | Articles of Amendment of Amended and Restated Articles of Incorporation of Wintrust Financial Corporation (incorporated by reference to Exhibit 3.2 of the Company’s Form 10-Q for the quarter ended June 30, 2005). | |
3.3 | Amended and Restated By-laws of Wintrust Financial Corporation (incorporated by reference to Exhibit 3.3 of the Company’s Form 8-K filed with the Securities and Exchange Commission on January 5, 2006). | |
3.4 | 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). | |
5.1* | Opinion of Sidley Austin LLP. | |
8.1* | Tax Opinion of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP. | |
23.1+ | Consent of Ernst & Young LLP. | |
23.2+ | Consent of Capital Market Securities, Inc. | |
23.3* | Consent of Sidley Austin LLP (included in Exhibit 5.1). | |
23.4* | Consent of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP (included in Exhibit 8.1). | |
24.1* | Power of Attorney (contained in signature page to the registration statement). | |
99.1+ | Form of proxy card. | |
99.2+ | Form of election card. | |
+ Filed herewith
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WINTRUST FINANCIAL CORPORATION | ||||
By: | /s/ David A. Dykstra | |||
David A. Dykstra | ||||
Senior Executive Vice President and Chief | ||||
Operating Officer |
Name | Title | Date | ||
/s/ Edward J. Wehmer | President, Chief Executive | |||
Edward J. Wehmer | Officer and Director | May 5, 2006 | ||
/s/ David L. Stoehr | Executive Vice President and | |||
David L. Stoehr | Chief Financial Officer | |||
(Principal Accounting Officer) | May 5, 2006 | |||
* | Chairman and Director | May 5, 2006 | ||
John S. Lillard | ||||
Director | ||||
Alan E. Bulley | ||||
* | Director | May 5, 2006 | ||
Peter D. Crist | ||||
* | Director | May 5, 2006 | ||
Bruce K. Crowther | ||||
* | Director | May 5, 2006 | ||
Joseph F. Damico | ||||
* | Director | May 5, 2006 | ||
Bert A. Getz, Jr. | ||||
* | Director | May 5, 2006 | ||
James B. McCarthy | ||||
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Name | Title | Date | ||
* | Director | May 5, 2006 | ||
Albin F. Moschner | ||||
* | Director | May 5, 2006 | ||
Thomas J. Neis | ||||
* | Director | May 5, 2006 | ||
Hollis W. Rademacher | ||||
* | Director | May 5, 2006 | ||
J. Christopher Reyes | ||||
* | Director | May 5, 2006 | ||
John J. Schornack | ||||
* | Director | May 5, 2006 | ||
Ingrid S. Stafford | ||||
/s/ David A. Dykstra | |||
David A. Dykstra | |||
Attorney-in-Fact |
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Exhibit | ||
Number | Description of Exhibit | |
2.1 | Agreement and Plan of Merger by and between Wintrust Financial Corporation and Hinsbrook Bancshares, Inc., dated as of December 5, 2005 (included asAnnex Ato 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 10-Q for the quarter ended June 30, 2005). | |
3.2 | Articles of Amendment of Amended and Restated Articles of Incorporation of Wintrust Financial Corporation (incorporated by reference to Exhibit 3.2 of the Company’s Form 10-Q for the quarter ended June 30, 2005). | |
3.3 | Amended and Restated By-laws of Wintrust Financial Corporation (incorporated by reference to Exhibit 3.3 of the Company’s Form 8-K filed with the Securities and Exchange Commission on January 5, 2006). | |
3.4 | 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). | |
5.1* | Opinion of Sidley Austin LLP. | |
8.1* | Tax Opinion of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP. | |
23.1+ | Consent of Ernst & Young LLP. | |
23.2+ | Consent of Capital Market Securities, Inc. | |
23.3* | Consent of Sidley Austin LLP (included in Exhibit 5.1). | |
23.4* | Consent of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP (included in Exhibit 8.1). | |
24.1* | Power of Attorney (contained in signature page to the registration statement). | |
99.1+ | Form of proxy card. | |
99.2+ | Form of election card. | |
+ Filed herewith