e424b5
The information in
this preliminary prospectus supplement is not complete and may
be changed. This preliminary prospectus supplement and the
accompanying prospectus are not an offer to sell these
securities and are not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
|
Filed
Pursuant to Rule 424(b)(5)
File No.
333-165166
Subject
to Completion
Preliminary Prospectus Supplement dated December 6,
2010
PROSPECTUS
SUPPLEMENT
(To prospectus dated March 3, 2010)
%
tangible equity units
Wintrust Financial
Corporation
Wintrust is offering 4,000,000 of its tangible equity units.
Each tangible equity unit has a stated amount of $50. Each
tangible equity unit is a unit composed of a prepaid stock
purchase contract and a junior subordinated amortizing note due
December 15, 2013 issued by Wintrust, which has an initial
principal amount of
$
per amortizing note and a scheduled final installment payment
date of December 15, 2013.
On December 15, 2013, each purchase contract will
automatically settle and we will deliver a number of shares of
Wintrust common stock, based on the applicable market value,
which is the average of the daily volume weighted average
prices, or VWAPs (as defined herein), of Wintrust common stock
on each of the 20 consecutive trading days ending on the third
trading day immediately preceding December 15, 2013:
|
|
|
|
|
if the applicable market value equals or exceeds
$ ,
you will
receive
shares;
|
|
|
|
if the applicable market value is greater than
$
but less than
$ ,
you will receive a number of shares per purchase contract equal
to $50, divided by the applicable market value; and
|
|
|
|
if the applicable market value is less than or equal to
$ ,
you will
receive
shares.
|
At any time prior to the third business day immediately
preceding December 15, 2013, you may settle your purchase
contract early and we will deliver to
you shares
of our common stock, subject to customary anti-dilution
adjustments. In addition, if a fundamental change (as defined
herein) occurs and you elect to settle your purchase contracts
early in connection with such fundamental change, you will
receive a number of shares of Wintrusts common stock based
on the fundamental change early settlement rate, as described
herein. The purchase contract holders will not receive any cash
distributions.
The amortizing notes will pay you equal quarterly installments
of $ per amortizing note, which in
the aggregate will be equivalent to
a % cash payment per year with
respect to each $50 stated amount of tangible equity unit.
We will have the right to defer installment payments at any time
and from time to time under the circumstances, and subject to
the conditions, described herein, so long as such deferral
period does not extend beyond December 15, 2015. The
amortizing notes will be junior subordinated obligations of
Wintrust, and will rank (i) junior both in liquidation and
right of payment, to the extent set forth in the junior
subordinated debt indenture, to all of Wintrusts
Senior Indebtedness (as defined under
Description of the Amortizing Notes
Subordination) and (ii) equally with all of
Wintrusts unsecured and junior subordinated indebtedness,
whether currently existing or hereinafter created, other than
junior subordinated indebtedness that is designated as junior to
the amortizing notes.
Each tangible equity unit may be separated into its constituent
purchase contract and amortizing note after the initial issuance
date of the tangible equity units. We do not intend to apply for
a listing of the tangible equity units or the constituent
purchase contracts or amortizing notes on any securities
exchange.
Wintrust common stock trades on the NASDAQ Global Select Market
under the symbol WTFC. On December 3, 2010, the
last sale price of the shares as reported on the NASDAQ Global
Select Market was $31.20 per share.
Investing in the tangible equity units involves risks. See
the Risk Factors section beginning on
page S-14
of this prospectus supplement for a discussion of certain risks
you should consider before investing in the tangible equity
units.
|
|
|
|
|
|
|
|
|
|
|
Per unit
|
|
|
Total
|
|
|
Public offering price
|
|
$
|
|
|
|
$
|
|
|
Underwriting discount
|
|
$
|
|
|
|
$
|
|
|
Proceeds, before expenses, to us
|
|
$
|
|
|
|
$
|
|
|
The underwriters may also purchase up to an additional 600,000
tangible equity units from us at the public offering price, less
the underwriting discount, within 30 days from the date of
this prospectus supplement to cover overallotments, if any.
Concurrently with this offering, we are offering
3,205,128 shares of our common stock (or
3,685,897 shares if the underwriters of that offering
exercise their overallotment option in full). The common stock
is being offered by means of a separate prospectus supplement.
Neither of the offerings is conditioned upon the consummation of
the other offering. See Concurrent Offering on
page S-24
of this prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these
securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Neither the tangible equity units, the purchase contracts nor
the amortizing notes will be savings accounts, deposits or other
obligations of Wintrusts bank or nonbank subsidiaries.
These securities are not insured or guaranteed by the FDIC or
any other governmental agency.
The tangible equity units will be ready for delivery in
book-entry only form through the facilities of The Depository
Trust Company for the accounts of its participants on or
about ,
2010.
Sole Book-Running Manager
BofA Merrill Lynch
|
|
|
RBC
Capital Markets |
Sandler ONeill + Partners, L.P. |
Wells Fargo Securities |
The date of this prospectus
supplement
is ,
2010.
TABLE OF
CONTENTS
Prospectus
Supplement
|
|
|
|
|
|
|
|
S-ii
|
|
|
|
|
S-ii
|
|
|
|
|
S-iv
|
|
|
|
|
S-v
|
|
|
|
|
S-1
|
|
|
|
|
S-7
|
|
|
|
|
S-12
|
|
|
|
|
S-14
|
|
|
|
|
S-24
|
|
|
|
|
S-24
|
|
|
|
|
S-25
|
|
|
|
|
S-26
|
|
|
|
|
S-27
|
|
|
|
|
S-28
|
|
|
|
|
S-31
|
|
|
|
|
S-45
|
|
|
|
|
S-55
|
|
|
|
|
S-58
|
|
|
|
|
S-66
|
|
|
|
|
S-71
|
|
|
|
|
S-71
|
|
Prospectus
|
|
|
|
|
Special Notes Concerning Forward-Looking Statements
|
|
|
ii
|
|
Where You Can Find More Information
|
|
|
ii
|
|
Documents Incorporated By Reference
|
|
|
iii
|
|
Prospectus Summary
|
|
|
1
|
|
Risk Factors
|
|
|
2
|
|
Use of Proceeds
|
|
|
2
|
|
Ratio of Earnings to Fixed Charges
|
|
|
2
|
|
General Description of Securities
|
|
|
2
|
|
Description of Debt Securities
|
|
|
3
|
|
Description of Capital Stock
|
|
|
9
|
|
Description of Stock Purchase Contracts and Stock Purchase Units
|
|
|
17
|
|
Description of Warrants
|
|
|
18
|
|
Description Of The Trust
|
|
|
18
|
|
Description Of Trust Preferred Securities
|
|
|
20
|
|
Description Of Junior Subordinated Debentures
|
|
|
30
|
|
Description Of Guarantee
|
|
|
35
|
|
Certain ERISA Considerations
|
|
|
38
|
|
Book-Entry System
|
|
|
38
|
|
Plan Of Distribution
|
|
|
40
|
|
Legal Matters
|
|
|
42
|
|
Experts
|
|
|
42
|
|
ABOUT
THIS PROSPECTUS
This prospectus supplement incorporates by reference
important business and financial information about us that is
not included in or delivered with this document. This
information, other than exhibits to documents that are not
specifically incorporated by reference in this prospectus, is
available to you without charge upon written or oral request to
Wintrust Financial Corporation at the address or telephone
number indicated in the section titled Where You Can Find
More Information in this prospectus supplement.
This document is in two parts. The first part is this prospectus
supplement, which contains specific information about us and the
terms on which we are selling our tangible equity units. The
second part is the accompanying prospectus dated March 3,
2010, which contains and incorporates by reference important
business and financial information about us and other
information about the offering.
You should rely only on the information contained or
incorporated by reference in this prospectus supplement and the
accompanying prospectus or in any free writing prospectus. We
have not, and the underwriters have not, authorized anyone to
provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely
on it. We are not, and the underwriters are not, making an offer
to sell the common stock in any jurisdiction where the offer or
sale is not permitted. You should assume that the information
appearing in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference in either
this prospectus supplement or the accompanying prospectus is
accurate only as of their respective dates. Our business,
financial condition, results of operations and prospects may
have changed since those dates.
Before you invest in our tangible equity units, you should
carefully read the registration statement (including the
exhibits thereto) of which this prospectus supplement and the
accompanying prospectus form a part, this prospectus supplement,
the accompanying prospectus and the documents incorporated by
reference into this prospectus supplement and accompanying
prospectus. The incorporated documents are described under
Where You Can Find More Information.
Unless the context indicates otherwise, the terms
Wintrust, Company, we and
our in this prospectus supplement refer to Wintrust
Financial Corporation and its subsidiaries. References to a
particular year mean the Companys year commencing on
January 1 and ending on December 31 of that year.
SPECIAL
NOTES CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus, and any
documents which we incorporated by reference may contain
forward-looking statements within the meaning of federal
securities laws. Forward-looking information can be identified
through the use of words such as intend,
plan, project, expect,
anticipate, believe,
estimate, contemplate,
possible, point, will,
may, should, would and
could. Forward-looking statements and information
are not historical facts, are premised on many factors and
assumptions, and represent only managements expectations,
estimates and projections regarding future events. Similarly,
these statements are not guarantees of future performance and
involve certain risks and uncertainties that are difficult to
predict, which may include, but are not limited to, those listed
below and the Risk Factors discussed under Item 1A of our
Annual Report on
Form 10-K
for the year ended December 31, 2009, Item 1A of our
Quarterly Reports on
Form 10-Q
for the quarters ended June 30, 2010 and September 30,
2010 and in any of our subsequent SEC filings. The Company
intends such forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and is
including this statement for purposes of invoking these safe
harbor provisions. Such forward-looking statements may be deemed
to include, among other things, statements relating to our
future financial performance, the performance of our loan
portfolio, the expected amount of future credit reserves and
charge-offs, delinquency trends, growth plans, regulatory
developments, securities that the Company may offer from time to
time, and managements long-term performance goals, as well
as statements relating to the anticipated effects on financial
condition and results of operations from expected developments
or events, our business and growth strategies, including future
acquisitions of banks, specialty
S-ii
finance or wealth management businesses, internal growth and
plans to form additional de novo banks or branch offices.
Actual results could differ materially from those addressed in
the forward-looking statements as a result of numerous factors,
including the following:
|
|
|
|
|
our ability to consummate the common stock offering in the size
and manner described herein;
|
|
|
|
negative economic conditions that adversely affect the economy,
housing prices, the job market and other factors that may affect
the Companys liquidity and the performance of its loan
portfolios, particularly in the markets in which it operates;
|
|
|
|
the extent of defaults and losses on the Companys loan
portfolio, which may require further increases in its allowance
for credit losses;
|
|
|
|
estimates of fair value of certain of the Companys assets
and liabilities, which could change in value significantly from
period to period;
|
|
|
|
changes in the level and volatility of interest rates, the
capital markets and other market indices that may affect, among
other things, the Companys liquidity and the value of its
assets and liabilities;
|
|
|
|
a decrease in the Companys regulatory capital ratios,
including as a result of further declines in the value of its
loan portfolios, or otherwise;
|
|
|
|
effects resulting from the Companys participation in the
Capital Purchase Program (CPP), including
restrictions on dividends and executive compensation practices,
as well as any future restrictions that may become applicable to
the Company, and the risk that our regulators will not approve
redemption of the Series B Preferred Stock issued and sold
pursuant to the CPP;
|
|
|
|
increased costs of compliance, heightened regulatory capital
requirements and other risks associated with changes in
regulation and the current regulatory environment, including the
requirements of the Basel II and III capital regimes
and the Dodd-Frank Wall Street Reform and Consumer Protection
Act (the Dodd-Frank Act);
|
|
|
|
legislative or regulatory changes, particularly changes in
regulation of financial services companies
and/or the
products and services offered by financial services companies;
|
|
|
|
increases in the Companys Federal Deposit Insurance
Corporation (FDIC) insurance premiums, or the
collection of special assessments by the FDIC;
|
|
|
|
competitive pressures in the financial services business which
may affect the pricing of the Companys loan and deposit
products as well as its services (including wealth management
services);
|
|
|
|
delinquencies or fraud with respect to the Companys
premium finance business;
|
|
|
|
the Companys ability to comply with covenants under its
securitization facility and credit facility;
|
|
|
|
credit downgrades among commercial and life insurance providers
that could negatively affect the value of collateral securing
the Companys premium finance loans;
|
|
|
|
any negative perception of the Companys reputation or
financial strength;
|
|
|
|
the loss of customers as a result of technological changes
allowing consumers to complete their financial transactions
without the use of a bank;
|
|
|
|
the ability of the Company to attract and retain senior
management experienced in the banking and financial services
industries;
|
|
|
|
failure to identify and complete favorable acquisitions in the
future, or unexpected difficulties or developments related to
the integration of recent or future acquisitions, including with
respect to any FDIC-assisted acquisitions;
|
S-iii
|
|
|
|
|
unexpected difficulties or unanticipated developments related to
the Companys strategy of de novo bank formations and
openings, which typically require over 13 months of
operations before becoming profitable due to the impact of
organizational and overhead expenses, the startup phase of
generating deposits and the time lag typically involved in
redeploying deposits into attractively priced loans and other
higher yielding earning assets;
|
|
|
|
changes in accounting standards, rules and interpretations and
the impact on the Corporations financial statements;
|
|
|
|
significant litigation involving the Company; and
|
|
|
|
the ability of the Company to receive dividends from its
subsidiaries.
|
Therefore, there can be no assurances that future actual results
will correspond to these forward-looking statements. The reader
is cautioned not to place undue reliance on any forward-looking
statement made by or on behalf of Wintrust. Forward-looking
statements speak only as of the date they are made, and the
Company undertakes no obligation to update any forward-looking
statement to reflect the impact of circumstances or events that
arise after the date the forward-looking statement was made.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements
and other information with the Securities and Exchange
Commission (SEC). Our SEC filings are available to
the public over the Internet at the SECs web site at
http://www.sec.gov
and on the investor relations page of our website at
http://www.wintrust.com.
Except for those SEC filings incorporated by reference in this
prospectus supplement and the accompanying prospectus, none of
the other information on our website is part of this prospectus
supplement or the accompanying prospectus. You may also read and
copy any document we file with the SEC at its public reference
facilities at 100 F Street N.E., Washington, D.C.
20549. You can also obtain copies of the documents upon the
payment of a duplicating fee to the SEC. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
facilities.
You should rely only on the information incorporated by
reference or provided in this prospectus supplement and the
accompanying prospectus. We have not authorized anyone else to
provide you with different information or to make any
representations other than as contained in this prospectus
supplement and in the accompanying prospectus. We are not making
any offer of these securities in any state where the offer is
not permitted. Our website address is
http://www.wintrust.com.
Except for those SEC filings posted on our website and
incorporated by reference in this prospectus supplement and the
accompanying prospectus, none of the other information on our
website is part of this prospectus supplement or the
accompanying prospectus.
S-iv
DOCUMENTS
INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference much of the
information that we file with it, which means that we can
disclose important information to you by referring you to those
publicly available documents. The information that we
incorporate by reference is an important part of this prospectus
supplement and the accompanying prospectus. Any statement
contained in a document incorporated or deemed to be
incorporated by reference in this prospectus will be deemed to
be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or in any
other subsequently filed document that also is or is deemed to
be incorporated by reference in this prospectus modifies or
supersedes that statement. Any statement that is modified or
superseded will not constitute a part of this prospectus, except
as modified or superseded.
This prospectus supplement incorporates by reference the
documents listed below and any filings we make with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 after the initial filing of the
registration statement related to this prospectus supplement
until the termination of the offering of the securities
described in this prospectus supplement; provided, however, that
we are not incorporating by reference any documents, portions of
documents or other information that is deemed to have been
furnished and not filed with
the SEC:
|
|
|
|
|
our Annual Report on
Form 10-K
for the year ended December 31, 2009, including information
specifically incorporated by reference into our
Form 10-K
for the year ended December 31, 2009;
|
|
|
|
our Quarterly Reports on
Form 10-Q
for the quarterly periods ended March 31, 2010,
June 30, 2010 and September 30, 2010;
|
|
|
|
the sections of our Definitive Proxy Statement for the 2010
Annual Meeting of Stockholders filed with the SEC on
April 29, 2010 that are incorporated by reference in our
Annual Report on
Form 10-K
for the year ended December 31, 2009;
|
|
|
|
our Current Reports on
Form 8-K,
filed with the SEC on March 9, 2010 and June 2,
2010; and
|
|
|
|
the description of our common stock, which is registered under
Section 12 of the Securities Exchange Act, in our
Form 8-A
filed with the SEC on January 3, 1997, including any
subsequently filed amendments and reports updating such
description.
|
You may request a copy of these filings, other than an exhibit
to a filing unless that exhibit is specifically incorporated by
reference into that filing, at no cost, by writing to us at the
following address or calling us at the following telephone
number:
Investor
Relations
Wintrust Financial Corporation
727 North Bank Lane
Lake Forest, Illinois 60045
(847) 615-4096
S-v
PROSPECTUS
SUMMARY
This summary highlights selected information from this
prospectus supplement and does not contain all of the
information that you should consider in making your investment
decision. You should read this summary together with the more
detailed information appearing elsewhere in this prospectus
supplement, as well as the information in the accompanying
prospectus and in the documents incorporated by reference or
deemed incorporated by reference into this prospectus supplement
or the accompanying prospectus. You should carefully consider,
among other things, the matters discussed in the sections titled
Risk Factors in this prospectus supplement, in our
Annual Report on
Form 10-K
for the year ended December 31, 2009 and in our Quarterly
Reports on
Form 10-Q
for the quarterly periods ended June 30, 2010 and
September 30, 2010. In addition, certain statements include
forward-looking information that involves risks and
uncertainties. See Special Notes Concerning
Forward-Looking Statements in this prospectus
supplement.
Wintrust
Financial Corporation
Wintrust Financial Corporation, an Illinois corporation, which
was incorporated in 1992, is a financial holding company based
in Lake Forest, Illinois, with total assets of approximately
$14.1 billion as of September 30, 2010. We conduct our
businesses through three segments: community banking, specialty
finance and wealth management.
We provide community-oriented, personal and commercial banking
services to customers located in the greater Chicago, Illinois
metropolitan area and in southeastern Wisconsin through our
fifteen wholly owned banking subsidiaries (collectively, the
banks), as well as the origination and purchase of
residential mortgages for sale into the secondary market through
our wholly owned subsidiary, Wintrust Mortgage Corporation.
We provide financing for the payment of commercial insurance
premiums and life insurance premiums (premium finance
receivables) on a national basis through our wholly owned
subsidiary, First Insurance Funding Corporation, and short-term
accounts receivable financing (Tricom finance
receivables) and out-sourced administrative services
through our wholly owned subsidiary, Tricom, Inc. of Milwaukee.
We provide a full range of wealth management services primarily
to customers in the Chicago, Illinois metropolitan area and in
southeastern Wisconsin through three separate subsidiaries,
including The Chicago Trust Company, N.A.
(CTC), Wayne Hummer Investments, LLC
(WHI) and Wintrust Capital Management, LLC
(WCM).
Our
Business
Community
Banking
Through our banks, we provide community-oriented, personal and
commercial banking services to customers located in the greater
Chicago, Illinois metropolitan area and in southeastern
Wisconsin. Our customers include individuals, small to mid-sized
businesses, local governmental units and institutional clients
residing primarily in the banks local service areas. The
banks have a community banking and marketing strategy. In
keeping with this strategy, the banks provide highly
personalized and responsive service, a characteristic of
locally-owned and managed institutions. As such, the banks
compete for deposits principally by offering depositors a
variety of deposit programs, convenient office locations, hours
and other services, and for loan originations primarily through
the interest rates and loan fees they charge, the efficiency and
quality of services they provide to borrowers and the variety of
their loan and cash management products. Using our decentralized
corporate structure to our advantage, in 2008, we announced the
creation of our
MaxSafe®
deposit accounts, which provide customers with expanded FDIC
insurance coverage by spreading a customers deposit across
our fifteen banks. This product differentiates our banks from
many of our competitors that have consolidated their bank
charters into branches. The banks also offer home equity, home
mortgage, consumer, real estate and commercial loans, safe
deposit facilities, ATMs, internet banking and other innovative
and traditional services specially tailored to meet the needs of
customers in their market areas.
S-1
We developed our banking franchise through the de novo
organization of nine banks and the purchase of seven banks,
one of which was merged into an existing Wintrust bank. The
organizational efforts began in 1991, when a group of
experienced bankers and local business people identified an
unfilled niche in the Chicago metropolitan area retail banking
market. As large banks acquired smaller ones and personal
service was subjected to consolidation strategies, the
opportunity increased for locally owned and operated, highly
personal service-oriented banks. As a result, Lake Forest Bank
was founded in December 1991 to service the Lake Forest and Lake
Bluff communities. Following the same business plan, we have
formed several additional banks in the Chicago metropolitan
market, and completed several acquisitions. As of
September 30, 2010, we had 85 banking locations.
We now own fifteen banks, including nine Illinois-chartered
banks, Lake Forest Bank and Trust Company (Lake
Forest Bank), Hinsdale Bank and Trust Company
(Hinsdale Bank), North Shore Community Bank and
Trust Company, Libertyville Bank and Trust Company,
Northbrook Bank & Trust Company (Northbrook
Bank), Village Bank & Trust, Wheaton
Bank & Trust Company (Wheaton Bank),
State Bank of The Lakes and St. Charles Bank &
Trust Company. In addition, we have one Wisconsin-chartered
bank, Town Bank, and five nationally chartered banks, Barrington
Bank and Trust Company, N.A. (Barrington Bank),
Crystal Lake Bank & Trust Company, N.A.
(Crystal Lake Bank), Advantage National Bank,
Beverly Bank & Trust Company, N.A. and Old Plank
Trail Community Bank, N.A.
We also engage in the origination and purchase of residential
mortgages for sale into the secondary market through our wholly
owned subsidiary, Wintrust Mortgage Corporation, and provide the
document preparation and other loan closing services to a
network of mortgage brokers. Wintrust Mortgage Corporation sells
its loans servicing released and does not currently engage in
mortgage loan servicing. Mortgage banking operations are also
performed within each of the banks. Some of our banks engage in
loan servicing, as a portion of the loans sold by the banks into
the secondary market are sold to the Federal National Mortgage
Association with the servicing of those loans retained. Wintrust
Mortgage Corporation maintains principal origination offices in
a number of other states, including Illinois, and originates
loans in other states through correspondent channels. Wintrust
Mortgage Corporation also established offices at several of the
banks and provides the banks with the ability to use an enhanced
loan origination and documentation system. This allows Wintrust
Mortgage Corporation and the banks to better utilize existing
operational capacity and improve the product offering for the
banks customers. In December 2008, Wintrust Mortgage
Corporation acquired certain assets and assumed certain
liabilities of the mortgage banking business of Professional
Mortgage Partners.
We also offer several niche lending products through the banks.
These include Barrington Banks Community Advantage program
which provides lending, deposit and cash management services to
condominium, homeowner and community associations, Hinsdale
Banks mortgage warehouse lending program which provides
loan and deposit services to mortgage brokerage companies
located predominantly in the Chicago metropolitan area, Crystal
Lake Banks North American Aviation Financing division
which provides small aircraft lending and Lake Forest
Banks franchise lending program which provides lending
primarily to restaurant franchisees. Hinsdale Bank operated an
indirect auto lending program which originated new and used
automobile loans that were purchased by the banks. In the third
quarter of 2008, we exited this business due to competitive
pricing pressures, the current economic environment and the
retirement of the founder of this niche business. Changes in the
economic environment in the fourth quarter of 2010 led Hinsdale
Bank to restart its indirect auto lending program. The loans are
generated through a network of automobile dealers located in the
Chicago area, secured by new and used vehicles and diversified
among many individual borrowers.
Specialty
Finance
We conduct our specialty finance businesses through indirect
non-bank subsidiaries. Our wholly owned subsidiary, FIFC engages
in the premium finance receivables business, our most
significant specialized lending niche, including commercial
insurance premium finance and life insurance premium finance.
FIFC makes loans to businesses to finance the insurance premiums
they pay on their commercial insurance policies. Approved medium
and large insurance agents and brokers located throughout the
United
S-2
States assist FIFC in arranging each commercial premium finance
loan between the borrower and FIFC. FIFC evaluates each loan
request according to its underwriting criteria including the
down payment amount, the term of the loan, the credit quality of
the insurance company providing the financed insurance policy,
the interest rate, the borrowers previous payment history,
if any, and other factors deemed necessary. Upon approval of the
loan by FIFC, the borrower makes a down payment on the financed
insurance policy, which is generally done by providing payment
to the agent or broker, who then forwards it to the insurance
company. FIFC may either forward the financed amount of the
remaining policy premiums directly to the insurance carrier or
to the agent or broker for remittance to the insurance carrier
on FIFCs behalf. In some cases, the agent or broker may
hold our collateral, in the form of the proceeds of the unearned
insurance premium from the insurance company, and forward it to
FIFC in the event of a default by the borrower. Because the
agent or broker is the primary contact to the ultimate borrowers
who are located nationwide and because proceeds and our
collateral may be handled by the agent or brokers during the
term of the loan, FIFC may be more susceptible to third party
(i.e., agent or broker) fraud. The Company performs ongoing
credit and other reviews of the agents and brokers, and performs
various internal audit steps to mitigate against the risk of any
fraud. However, in the second quarter of 2010, fraud perpetrated
against a number of premium finance companies in the industry,
including the property and casualty division of our premium
financing subsidiary, increased both the Companys net
charge-offs and provision for credit losses by
$15.7 million. Actions have been taken by the Company to
decrease the likelihood of this type of loss from recurring in
this line of business for the Company. The Company has conducted
a thorough review of the premium finance commercial
portfolio and found no signs of similar situations.
In 2007, FIFC expanded and began financing life insurance policy
premiums for high net-worth individuals. These loans are
originated directly with the borrowers with assistance from life
insurance carriers, independent insurance agents, financial
advisors and legal counsel. The life insurance policy is the
primary form of collateral. In addition, these loans often are
secured with a letter of credit, marketable securities or
certificates of deposit. In some cases, FIFC may make a loan
that has a partially unsecured position. In 2009, FIFC
significantly expanded its life insurance premium finance
business by purchasing a portfolio of domestic life insurance
premium finance loans with an aggregate unpaid principal balance
of approximately $1.0 billion and certain related assets,
for an aggregate purchase price of approximately
$745.9 million.
Through our wholly owned subsidiary, Tricom, we provide
high-yielding, short-term accounts receivable financing and
value-added, outsourced administrative services, such as data
processing of payrolls, billing and cash management services to
the temporary staffing industry. Tricoms clients, located
throughout the United States, provide staffing services to
businesses in diversified industries.
Wealth
Management Activities
We currently offer a full range of wealth management services
through three separate subsidiaries, including trust and
investment services, asset management and securities brokerage
services. We acquired WHI and WCM, which are headquartered in
Chicago, in February 2002. To further expand our wealth
management business, in February 2003, we acquired Lake Forest
Capital Management Company, a registered investment adviser with
approximately $300 million of assets under management at
the time of acquisition. Lake Forest Capital Management Company
was merged into WCM. In April 2009, WCM purchased certain assets
and assumed certain liabilities of Advanced Investment Partners,
LLC (AIP). AIP specializes in the active management
of domestic equity investment strategies and expands WCMs
institutional investment business.
CTC, our trust subsidiary, offers trust and investment
management services to clients through offices located in
downtown Chicago and at various banking offices of our fifteen
banks. CTC is subject to regulation, supervision and regular
examination by the OCC.
WHI, our registered broker/dealer subsidiary, has been in
operations since 1931. Through WHI, we provide a full range of
private client and securities brokerage services to clients
located primarily in the Midwest. WHI is headquartered in
downtown Chicago, operates an office in Appleton, Wisconsin, and
as of September 30, 2010, established branch locations in
offices at a majority of our banks. WHI also provides a
S-3
full range of investment services to clients through a network
of relationships with community- based financial institutions
primarily located in Illinois.
WCM, a registered investment adviser, provides money management
services and advisory services to individuals, mutual funds and
institutional municipal and tax-exempt organizations. WCM also
provides portfolio management and financial supervision for a
wide range of pension and money management and advisory services
to CTC.
Strategy
and Competition
Historically, we have executed a growth strategy through branch
openings and de novo bank formations, expansion of our
wealth management and premium finance business, development of
specialized earning asset niches and acquisitions of other
community-oriented banks or specialty finance companies.
However, beginning in 2006, we made a decision to slow our
growth due to unfavorable credit spreads, loosened underwriting
standards by many of our competitors, and intense price
competition. In August 2008, we raised $50 million of
private equity. This investment was followed shortly by an
investment by the U.S. Treasury of $250 million
through the CPP. The CPP investment was not necessary for our
short- or long-term health. However, the CPP investment
presented an opportunity for the Company. By providing us with a
significant source of relatively inexpensive capital, the
Treasurys CPP investment allowed us to accelerate our
growth cycle, expand lending and meet former Treasury Secretary
Paulsons stated purpose for the program, which was
designed to attract broad participation by healthy
institutions that have plenty of capital to get
through this period, but are not positioned to lend as widely as
is necessary to support our economy.
With this additional $300 million of additional capital, we
began to increase our lending and deposits in late 2008 and into
2009. This additional capital allowed us to be in a position to
take advantage of opportunities in a disrupted marketplace
during 2009 by increasing our lending as other financial
institutions pulled back and to hire quality lenders and other
staff away from larger and smaller institutions that may have
substantially deviated from a customer-focused approach or who
may have substantially limited the ability of their staff to
provide credit or other services to their customers.
In March 2010, we further strengthened our capital position
through a public offering of 6,670,000 shares of our common
stock at $33.25 per share. Our net proceeds totaled
$210.4 million.
Our strategy and competitive position for each of our business
segments is summarized in further detail, below.
Community
Banking
We compete in the commercial banking industry through our banks
in the communities they serve. The commercial banking industry
is highly competitive and the banks face strong direct
competition for deposits, loans, and other financial related
services. The banks compete with other commercial banks,
thrifts, credit unions and stockbrokers. Some of these
competitors are local, while others are statewide or nationwide.
As a mid-size financial services company, we expect to benefit
from greater access to financial and managerial resources than
our smaller local competitors while maintaining our commitment
to local decision-making and to our community banking
philosophy. In particular, we are able to provide a wider
product selection and larger credit facilities than many of our
smaller competitors, and we believe our service offerings help
us in recruiting talented staff. Additionally, we have access to
public capital markets whereas many of our local competitors are
privately held and may have limited capital raising capabilities.
We also believe we are positioned to compete more effectively
with other larger and more diversified banks, bank holding
companies and other financial services companies due to the
multi-chartered approach that pushes accountability for building
a franchise and a high level of customer service down to each of
our banking franchises. Additionally, we believe that we provide
a relatively complete portfolio of products that is responsive
to the majority of our customers needs through the retail
and commercial operations supplied by our banks, and through our
mortgage and wealth management operations. The breadth of our
product mix allows us to compete effectively with our larger
competitors while our multi-chartered approach with local and
S-4
accountable management provides for what we believe is superior
customer service relative to our larger and more centralized
competitors.
However, some of the financial institutions and financial
services organizations with which the banks compete are not
subject to the same degree of regulation as imposed on financial
holding companies, Illinois or Wisconsin state banks and
national banking associations. In addition, the larger banking
organizations have significantly greater resources than those
available to the banks. As a result, such competitors have
advantages over the banks in providing certain non-deposit
services. Management views technology as a great equalizer to
offset some of the inherent advantages of its significantly
larger competitors.
Wintrust Mortgage Corporation, as well as the mortgage banking
functions within the banks, competes with large mortgage brokers
as well as other banking organizations. The mortgage banking
business is very competitive and significantly impacted by
changes in mortgage interest rates. We believe that mortgage
banking revenue will be a continuous source of revenue, but the
level of revenue will be impacted by changes in and the general
level of mortgage interest rates.
Specialty
Finance
FIFC encounters intense competition from numerous other firms,
including a number of national commercial premium finance
companies, companies affiliated with insurance carriers,
independent insurance brokers who offer premium finance
services, and other lending institutions. Some of its
competitors are larger and have greater financial and other
resources. FIFC competes with these entities by emphasizing a
high level of knowledge of the insurance industry, flexibility
in structuring financing transactions, and the timely funding of
qualifying contracts. We believe that our commitment to service
also distinguishes us from our competitors. Additionally, we
believe that FIFCs acquisition of a large life insurance
premium finance portfolio and related assets in 2009 will
enhance our ability to market and sell life insurance premium
finance products.
Tricom competes with numerous other firms, including a small
number of similar niche finance companies and payroll processing
firms, as well as various finance companies, banks and other
lending institutions. Tricoms management believes that its
commitment to service distinguishes it from competitors. To the
extent that other finance companies, financial institutions and
payroll processing firms add greater programs and services to
their existing businesses, Tricoms operations could be
negatively affected.
Wealth
Management Activities
Our wealth management companies (CTC, WHI and WCM) compete with
larger wealth management subsidiaries of other larger bank
holding companies as well as with other trust companies,
brokerage and other financial service companies, stockbrokers
and financial advisors. We believe we can successfully compete
for trust, asset management and brokerage business by offering
personalized attention and customer service to small to midsize
businesses and affluent individuals. We continue to recruit and
hire experienced professionals from the larger Chicago area
wealth management companies, which is expected to help in
attracting new customer relationships.
|
|
|
Recent
Developments Acquisition of Lincoln Park Savings
Bank, Wheatland Bank and
Ravenswood Bank
|
We recently acquired the banking operations of three entities in
FDIC-assisted transactions. On April 23, 2010, Northbrook
Bank assumed certain deposits and acquired certain assets and
the banking operations of Lincoln Park Savings Bank
(Lincoln Park Bank) pursuant to the terms of a
purchase and assumption agreement entered into by Northbrook
Bank and the FDIC. Northbrook Bank acquired approximately
$157 million in assets, including $103 million of
loans, along with liabilities of $192 million, including
$163 million of deposits of Lincoln Park Bank. Pursuant to
the terms of the loss sharing agreements with Northbrook Bank,
the FDICs obligation to reimburse Northbrook Bank for
losses with respect to Lincoln Park Bank covered assets begins
with the first dollar of loss incurred. The FDIC will reimburse
Northbrook Bank for 80% of losses with respect to certain of the
Lincoln Park Bank covered assets. The loss sharing
S-5
agreements applicable to single family residential mortgage
loans provides for FDIC loss sharing for ten years, and the loss
sharing agreements applicable to commercial loans provides for
FDIC loss sharing for five years.
Also on April 23, 2010, Wheaton Bank assumed certain
deposits and acquired certain assets and the banking operations
of Wheatland Bank pursuant to the terms of a purchase and
assumption agreement entered into by Wheaton Bank and the FDIC.
Wheaton Bank acquired approximately $344 million in assets,
including $175 million of loans, along with liabilities of
$416 million, including $409 million of deposits of
Wheatland Bank. Pursuant to the terms of the loss sharing
agreements with Wheaton Bank, the FDICs obligation to
reimburse Wheaton Bank for losses with respect to Wheatland Bank
covered assets begins with the first dollar of loss incurred.
The FDIC will reimburse Wheaton Bank for 80% of losses with
respect to certain of the Wheatland Bank covered assets. The
loss sharing agreements applicable to single family residential
mortgage loans provides for FDIC loss sharing for ten years, and
the loss sharing agreements applicable to commercial loans
provides for FDIC loss sharing for five years.
On August 6, 2010, Northbrook Bank assumed certain deposits
and acquired certain assets and the banking operations of
Ravenswood Bank (Ravenswood Bank) pursuant to the
terms of a purchase and assumption agreement entered into by
Northbrook Bank and the FDIC. Northbrook Bank acquired
approximately $172 million in assets, including
$94 million of loans, along with liabilities of
$123 million, including $121 million of deposits of
Ravenswood Bank. Pursuant to the terms of the loss sharing
agreements with Northbrook Bank, the FDICs obligation to
reimburse Northbrook Bank for losses with respect to Ravenswood
Bank covered assets begins with the first dollar of loss
incurred. The FDIC will reimburse Northbrook Bank for 80% of
losses with respect to certain of the Ravenswood Bank covered
assets. The loss sharing agreements applicable to single family
residential mortgage loans provides for FDIC loss sharing for
ten years, and the loss sharing agreements applicable to
commercial loans provides for FDIC loss sharing for five years.
The above reimbursable losses and recoveries are based on the
book value of the relevant loans and other assets as determined
by the FDIC as of the effective date of the acquisitions. The
amount that the acquiring banks realize on these assets could
differ materially from the carrying value that will be reflected
in any financial statements, based upon the timing and amount of
collections and recoveries on the covered assets in future
periods.
Concurrent
Offering
Concurrently with this offering, we are offering
3,205,128 shares of our common stock (or
3,685,897 shares if the underwriters of that offering
exercise their overallotment option in full) (the common
stock offering). We estimate that the net proceeds of the
common stock offering will be approximately $94.8 million
plus net proceeds of up to an additional $14.3 million if
the underwriters overallotment option is exercised in full
(in both cases based on an assumed offering price of $31.20 per
share, which was the last reported sale price of our common
stock on the NASDAQ Global Select Market on December 3,
2010, and after deducting underwriting discounts and commissions
and expenses payable by us), although there can be no assurance
that the common stock offering will be completed. See
Concurrent Offering.
The common stock is being offered by means of a separate
prospectus supplement and not by means of this prospectus
supplement. Neither of the offerings is conditioned upon the
consummation of the other offering.
* * * * * * *
Our common stock is traded on the NASDAQ Global Select Market
under the ticker symbol WTFC. Our principal
executive office is located at 727 North Bank Lane, Lake Forest,
Illinois 60045, telephone number:
(847) 615-4096.
S-6
THE
OFFERING
|
|
|
Issuer |
|
Wintrust Financial Corporation |
|
Number of tangible equity units offered |
|
4,000,000 tangible equity units (or 4,600,000 tangible equity
units if the underwriters exercise their overallotment option in
full). |
|
Stated amount and initial offering price |
|
$50 for each tangible equity unit. |
|
Components of each tangible equity unit |
|
Each tangible equity unit is a unit composed of two parts: |
|
|
|
|
|
a prepaid stock purchase contract (a purchase
contract); and
|
|
|
|
a junior subordinated amortizing note issued by Wintrust (an
amortizing note).
|
|
|
|
|
|
Each purchase contract will automatically settle on
December 15, 2013 (the mandatory settlement
date), and Wintrust will deliver not more
than shares
and not less
than shares
of its common stock, subject to adjustment, based upon the
applicable settlement rate and applicable market value of its
common stock, as described below under Description of the
Purchase Contracts Delivery of Common Stock. |
|
|
|
The purchase contract holders will not receive any cash
distributions. |
|
|
|
Each amortizing note will have an initial principal amount of
$ ,
bear interest at the rate of % per
annum and have a scheduled final installment payment date of
December 15, 2013. On each March 15, June 15,
September 15 and December 15, commencing on
March 15, 2011, Wintrust will pay equal quarterly
installments of $ on each
amortizing note. The quarterly installment payable on
March 15, 2011, however, will be
$ .
Each installment will constitute a payment of interest and a
partial repayment of principal, allocated as set forth on the
amortization schedule set forth under Description of the
Amortizing Notes Amortization Schedule.
Wintrust will have the right to defer installment payments at
any time and from time to time under the circumstances, and
subject to the conditions, described herein, so long as such
deferral period does not extend beyond December 15, 2015. |
|
|
|
The return to an investor on a tangible equity unit will depend
upon the return provided by each component. The overall return
will consist of the value of the shares of Wintrust common stock
delivered upon settlement of the purchase contracts and the cash
installments paid on the amortizing notes. |
|
Each tangible equity unit may be separated into its components |
|
Each tangible equity unit may be separated into its constituent
purchase contract and amortizing note on any business day during
the period beginning on, and including, the business day
immediately succeeding the date of initial issuance of the
tangible equity unit |
S-7
|
|
|
|
|
to, but excluding, the third business day immediately preceding
the mandatory settlement date. Prior to separation, the tangible
equity units may be purchased and transferred only as tangible
equity units. |
|
A tangible equity unit may be recreated from its components |
|
If you hold a separate purchase contract and a separate
amortizing note, you may combine the two components to recreate
a tangible equity unit. |
|
Absence of a public market |
|
We cannot make any assurance as to the development or liquidity
of any market for the tangible equity units, the purchase
contracts or the amortizing notes or that an established trading
market for the tangible equity units, the purchase contracts or
the amortizing notes, if developed, will be maintained. Certain
of the underwriters have advised us that they intend to make a
market in the tangible equity units. However, they are not
obligated to do so, and they may discontinue any market making
with respect to the tangible equity units without notice. |
|
|
|
We do not intend to apply for a listing of the tangible equity
units, the purchase contracts or the amortizing notes on any
securities exchange. |
|
Use of Proceeds |
|
We estimate that our net proceeds from this offering without
exercise of the over-allotment option will be approximately
$193.6 million (after deducting underwriting discounts and
commissions and estimated offering expenses). If the
underwriters exercise their over-allotment option in full, we
estimate that our net proceeds from this offering will be
approximately $222.7 million (after deducting underwriting
discounts and commissions and estimated offering expenses). |
|
|
|
We have been consulting with our regulators and intend to use
the capital raised hereby, plus additional resources (including
approximately $94.8 million of net proceeds that we expect
to receive from the common stock offering), to redeem all of the
shares of our Fixed Rate Cumulative Perpetual Preferred Stock,
Series B , liquidation preference of $1,000 per share
(Series B Preferred Stock) issued and sold to
the U.S. Treasury under its Capital Purchase Program
(CPP) (subject to regulatory approval). There can be
no assurance as to when the Series B Preferred Stock can be
redeemed. Proceeds from this offering and the common stock
offering in excess of the amounts needed to redeem the
Series B Preferred Stock will be used for general corporate
purposes. Enhancing our capital levels will enable us to pursue
investments for growth and acquisitions, including FDIC-assisted
acquisitions. If we are unable to redeem the Series B
Preferred Stock, we will use the net proceeds of this offering
for general corporate purposes. For more information, see
Use of Proceeds in this prospectus supplement. |
|
NASDAQ Global Select Market symbol for our common stock |
|
WTFC. |
S-8
|
|
|
Risk Factors |
|
Investing in the tangible equity units involves risks. Potential
investors are urged to read and consider the risk factors
relating to an investment in the tangible equity units set forth
under Risk Factors in this prospectus supplement as
well as other information we include or incorporate by reference
in this prospectus supplement and the accompanying prospectus. |
|
Concurrent Offering |
|
Concurrently with this offering, we are offering
3,205,128 shares of our common stock (or
3,685,897 shares if the underwriters of that offering
exercise their overallotment option in full). The common stock
is being offered by means of a separate prospectus supplement
and not by means of this prospectus supplement. Neither of the
offerings is conditioned on the consummation of the other
offering. For more information, see Concurrent
Offering in this prospectus supplement. |
|
The Purchase Contracts |
|
|
|
Mandatory Settlement |
|
On the mandatory settlement date, December 15, 2013, each
purchase contract will automatically settle and Wintrust will
deliver a number of shares of its common stock, based on the
applicable settlement rate, unless such purchase contract has
been previously settled at the holders option. The
settlement of the purchase contracts on the mandatory settlement
date cannot be deferred. |
|
Settlement Rate |
|
The settlement rate for each purchase contract will
be not more
than shares
and not less
than shares
of Wintrust common stock, subject to adjustment as described
herein, depending on the applicable market value of Wintrust
common stock, calculated as described below. |
|
|
|
|
|
If the applicable market value equals or exceeds
$
(the threshold appreciation price), you will
receive shares
of common stock per purchase contract (the minimum
settlement rate).
|
|
|
|
If the applicable market value is greater than
$
(the reference price), but is less than the
threshold appreciation price, you will receive a number of
shares per purchase contract equal to $50, divided by the
applicable market value.
|
|
|
|
If the applicable market value is less than or equal to the
reference price, you will
receive shares
of common stock per purchase contract (the maximum
settlement rate).
|
|
|
|
|
|
The reference price is the public offering price of Wintrust
common stock in the concurrent common stock offering. |
|
|
|
The settlement rate is subject to adjustment as described below
under Description of the Purchase Contracts
Adjustments to the Fixed Settlement Rates. |
|
|
|
The applicable market value means the average of the
daily VWAPs of Wintrust common stock on each of the 20
consecutive trading days ending on the third trading day
immediately preceding |
S-9
|
|
|
|
|
the mandatory settlement date. The threshold appreciation price
represents a % appreciation over
the reference price. |
The following table illustrates the settlement rate per purchase
contract and the value of Wintrust common stock issuable upon
settlement on the mandatory settlement date, determined using
the applicable market value shown, subject to adjustment.
|
|
|
|
|
Applicable Market Value of
|
|
|
|
|
Wintrust Common Stock
|
|
Settlement Rate
|
|
Value of Common Stock
|
|
Less than or equal to $
|
|
|
|
Less than $50
|
Between $ and
$
|
|
Number of shares equal to $50
divided by the applicable
market value
|
|
$50
|
Greater than or equal to $
|
|
|
|
Greater than $50
|
|
|
|
Early Settlement at your election |
|
At any time prior to the third business day immediately
preceding the mandatory settlement date, you may settle any or
all of your purchase contracts early, in which case Wintrust
will deliver a number of shares of its common stock equal to the
minimum settlement rate, which is subject to adjustment as
described below under Description of the Purchase
Contracts Adjustments to the Fixed Settlement
Rates. That is, the market value of Wintrust common stock
on the early settlement date will not affect the early
settlement rate. Your right to settle your purchase contract
prior to the mandatory settlement date is subject to the
delivery of your purchase contract. |
|
|
|
In addition, if a fundamental change (as defined
herein) occurs and you elect to settle your purchase contracts
early in connection with such fundamental change, you will
receive a number of shares of Wintrust common stock based on the
fundamental change early settlement rate as
described under Description of the Purchase
Contracts Early Settlement Upon a Fundamental
Change. |
|
The Amortizing Notes |
|
|
|
Initial principal amount of each amortizing note |
|
$ . |
|
Installment payments |
|
Each quarterly installment payment of
$
will be paid in cash and will constitute a partial repayment of
principal and a payment of interest, computed at a rate
of % per year. The quarterly
installment payable on March 15, 2011, however, will be
$ .
Payments will be applied first to the interest due and payable
and then to the reduction of the unpaid principal amount,
allocated as set forth on the amortization schedule set forth
under Description of the Amortizing Notes
Amortization Schedule. |
|
Installment Payment Dates |
|
Each March 15, June 15, September 15 and
December 15, commencing on March 15, 2011. |
|
Right to defer installment payments |
|
Wintrust will have the right to defer installment payments at
any time and from time to time under the circumstances, and
subject to the conditions, described under Description of
the Amortizing Notes Option to Extend Installment
Payment Period so long as such deferral period does not
extend beyond December 15, 2015. |
S-10
|
|
|
Ranking of the amortizing notes |
|
The amortizing notes will be junior subordinated obligations of
Wintrust and will rank junior both in liquidation and right of
payment to all Senior Indebtedness (as defined under
Description of the Amortizing Notes
Subordination). The amortizing notes will rank equally
with all of Wintrusts unsecured and junior subordinated
indebtedness, whether currently existing or hereinafter created,
other than junior subordinated indebtedness that is designated
as junior to the amortizing notes. Wintrust may issue additional
series of junior subordinated notes that rank pari passu with
the amortizing notes. |
S-11
SUMMARY
CONSOLIDATED FINANCIAL INFORMATION
WINTRUST
FINANCIAL CORPORATION
Selected
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
Years Ended December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
|
(Dollars in thousands, except per share data)
|
|
|
Selected Financial Condition Data
(at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
14,100,368
|
|
|
$
|
12,136,021
|
|
|
$
|
12,215,620
|
|
|
$
|
10,658,326
|
|
|
$
|
9,368,859
|
|
|
$
|
9,571,852
|
|
|
$
|
8,177,042
|
|
Total loans
|
|
|
9,814,995
|
|
|
|
8,275,257
|
|
|
|
8,411,771
|
|
|
|
7,621,069
|
|
|
|
6,801,602
|
|
|
|
6,496,480
|
|
|
|
5,213,871
|
|
Total deposits
|
|
|
10,962,239
|
|
|
|
9,847,163
|
|
|
|
9,917,074
|
|
|
|
8,376,750
|
|
|
|
7,471,441
|
|
|
|
7,869,240
|
|
|
|
6,729,434
|
|
Junior subordinated debentures
|
|
|
249,493
|
|
|
|
249,493
|
|
|
|
249,493
|
|
|
|
249,515
|
|
|
|
249,662
|
|
|
|
249,828
|
|
|
|
230,458
|
|
Total shareholders equity
|
|
|
1,398,912
|
|
|
|
1,106,082
|
|
|
|
1,138,639
|
|
|
|
1,066,572
|
|
|
|
739,555
|
|
|
|
773,346
|
|
|
|
627,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
303,159
|
|
|
$
|
224,942
|
|
|
$
|
311,876
|
|
|
$
|
244,567
|
|
|
$
|
261,550
|
|
|
$
|
248,886
|
|
|
$
|
216,759
|
|
Net revenue(1)
|
|
|
450,859
|
|
|
|
457,501
|
|
|
|
629,523
|
|
|
|
344,245
|
|
|
|
341,493
|
|
|
|
339,926
|
|
|
|
310,318
|
|
Net income
|
|
|
49,125
|
|
|
|
44,902
|
|
|
|
73,069
|
|
|
|
20,488
|
|
|
|
55,653
|
|
|
|
66,493
|
|
|
|
67,016
|
|
Net income per common share Basic
|
|
$
|
1.17
|
|
|
$
|
1.26
|
|
|
$
|
2.23
|
|
|
$
|
0.78
|
|
|
$
|
2.31
|
|
|
$
|
2.66
|
|
|
$
|
2.89
|
|
Net income per common share Diluted
|
|
$
|
1.12
|
|
|
$
|
1.25
|
|
|
$
|
2.18
|
|
|
$
|
0.76
|
|
|
$
|
2.24
|
|
|
$
|
2.56
|
|
|
$
|
2.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Ratios and Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin(2)
|
|
|
3.34
|
%
|
|
|
2.98
|
%
|
|
|
3.01
|
%
|
|
|
2.81
|
%
|
|
|
3.11
|
%
|
|
|
3.10
|
%
|
|
|
3.16
|
%
|
Non-interest income to average assets
|
|
|
1.48
|
%
|
|
|
2.79
|
%
|
|
|
2.78
|
%
|
|
|
1.02
|
%
|
|
|
0.85
|
%
|
|
|
1.02
|
%
|
|
|
1.23
|
%
|
Non-interest expense to average assets
|
|
|
2.77
|
%
|
|
|
3.04
|
%
|
|
|
3.01
|
%
|
|
|
2.63
|
%
|
|
|
2.57
|
%
|
|
|
2.56
|
%
|
|
|
2.62
|
%
|
Net overhead ratio(3)
|
|
|
1.29
|
%
|
|
|
0.25
|
%
|
|
|
0.23
|
%
|
|
|
1.60
|
%
|
|
|
1.72
|
%
|
|
|
1.54
|
%
|
|
|
1.39
|
%
|
Efficiency ratio(2)(4)
|
|
|
62.45
|
%
|
|
|
55.15
|
%
|
|
|
54.44
|
%
|
|
|
73.00
|
%
|
|
|
71.05
|
%
|
|
|
66.94
|
%
|
|
|
63.97
|
%
|
Return on average assets
|
|
|
0.49
|
%
|
|
|
0.54
|
%
|
|
|
0.64
|
%
|
|
|
0.21
|
%
|
|
|
0.59
|
%
|
|
|
0.74
|
%
|
|
|
0.88
|
%
|
Return on average common equity
|
|
|
4.43
|
%
|
|
|
5.16
|
%
|
|
|
6.70
|
%
|
|
|
2.44
|
%
|
|
|
7.64
|
%
|
|
|
9.47
|
%
|
|
|
11.00
|
%
|
Average total assets
|
|
$
|
13,322,460
|
|
|
$
|
11,154,193
|
|
|
$
|
11,415,322
|
|
|
$
|
9,753,220
|
|
|
$
|
9,442,277
|
|
|
$
|
8,925,557
|
|
|
$
|
7,587,602
|
|
Average total shareholders equity
|
|
|
1,320,611
|
|
|
|
1,066,447
|
|
|
|
1,081,792
|
|
|
|
779,437
|
|
|
|
727,972
|
|
|
|
701,794
|
|
|
|
609,167
|
|
Average loans to average deposits ratio
|
|
|
92.8
|
%
|
|
|
91.9
|
%
|
|
|
90.5
|
%
|
|
|
94.3
|
%
|
|
|
90.1
|
%
|
|
|
82.2
|
%
|
|
|
83.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Data (at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price per common share
|
|
$
|
32.41
|
|
|
$
|
27.96
|
|
|
$
|
30.79
|
|
|
$
|
20.57
|
|
|
$
|
33.13
|
|
|
$
|
48.02
|
|
|
$
|
54.90
|
|
Book value per common share
|
|
$
|
35.70
|
|
|
$
|
34.10
|
|
|
$
|
35.27
|
|
|
$
|
33.03
|
|
|
$
|
31.56
|
|
|
$
|
30.38
|
|
|
$
|
26.23
|
|
Common shares outstanding
|
|
|
31,143,740
|
|
|
|
24,103,068
|
|
|
|
24,206,819
|
|
|
|
23,756,674
|
|
|
|
23,430,490
|
|
|
|
25,457,935
|
|
|
|
23,940,744
|
|
S-12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30,
|
|
|
At December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
|
(Dollars in thousands, except per share data)
|
|
|
Leverage Ratio(5)
|
|
|
10.0
|
%
|
|
|
9.3
|
%
|
|
|
9.3
|
%
|
|
|
10.6
|
%
|
|
|
7.7
|
%
|
|
|
8.2
|
%
|
|
|
8.3
|
%
|
Tier 1 Capital to risk-weighted assets(5)
|
|
|
12.7
|
%
|
|
|
10.8
|
%
|
|
|
11.0
|
%
|
|
|
11.6
|
%
|
|
|
8.7
|
%
|
|
|
9.8
|
%
|
|
|
10.3
|
%
|
Total capital to risk-weighted assets(5)
|
|
|
14.1
|
%
|
|
|
12.3
|
%
|
|
|
12.4
|
%
|
|
|
13.1
|
%
|
|
|
10.2
|
%
|
|
|
11.3
|
%
|
|
|
11.9
|
%
|
Allowance for credit losses(6)
|
|
$
|
112,807
|
|
|
$
|
98,225
|
|
|
$
|
101,831
|
|
|
$
|
71,353
|
|
|
$
|
50,882
|
|
|
$
|
46,512
|
|
|
$
|
40,774
|
|
Credit discounts on purchased loans(7)
|
|
$
|
26,399
|
|
|
$
|
36,195
|
|
|
$
|
37,323
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Total credit-related reserves(8)
|
|
$
|
139,206
|
|
|
$
|
134,420
|
|
|
$
|
139,154
|
|
|
$
|
71,353
|
|
|
$
|
50,882
|
|
|
$
|
46,512
|
|
|
$
|
40,774
|
|
Non-performing loans(9)
|
|
$
|
134,323
|
|
|
$
|
231,659
|
|
|
$
|
131,804
|
|
|
$
|
136,094
|
|
|
$
|
71,854
|
|
|
$
|
36,874
|
|
|
$
|
26,189
|
|
Allowance for credit losses to total loans(6)(9)
|
|
|
1.19
|
%
|
|
|
1.19
|
%
|
|
|
1.21
|
%
|
|
|
0.94
|
%
|
|
|
0.75
|
%
|
|
|
0.72
|
%
|
|
|
0.78
|
%
|
Total credit-related reserves to total loans(8)(9)
|
|
|
1.41
|
%
|
|
|
1.62
|
%
|
|
|
1.65
|
%
|
|
|
0.94
|
%
|
|
|
0.75
|
%
|
|
|
0.72
|
%
|
|
|
0.78
|
%
|
Non-performing loans to total loans(9)
|
|
|
1.42
|
%
|
|
|
2.80
|
%
|
|
|
1.57
|
%
|
|
|
1.79
|
%
|
|
|
1.06
|
%
|
|
|
0.57
|
%
|
|
|
0.50
|
%
|
Number of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank subsidiaries
|
|
|
15
|
|
|
|
15
|
|
|
|
15
|
|
|
|
15
|
|
|
|
15
|
|
|
|
15
|
|
|
|
13
|
|
Non-bank subsidiaries
|
|
|
8
|
|
|
|
8
|
|
|
|
8
|
|
|
|
7
|
|
|
|
8
|
|
|
|
8
|
|
|
|
10
|
|
Banking offices
|
|
|
85
|
|
|
|
78
|
|
|
|
78
|
|
|
|
79
|
|
|
|
77
|
|
|
|
73
|
|
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Net revenue is net interest income plus non-interest income. |
|
(2) |
|
See Item 6, Managements Discussion and Analysis of
Financial Condition and Results of Operations
Non-GAAP Financial Measures/Ratios of the
Companys 2009
Form 10-K
for a reconciliation of this performance measure/ratio. |
|
(3) |
|
The net overhead ratio is calculated by netting total
non-interest expense and total non-interest income, annualizing
this amount, and dividing by that periods total average
assets. A lower ratio indicates a higher degree of efficiency. |
|
(4) |
|
The efficiency ratio is calculated by dividing total
non-interest expense by tax-equivalent net revenue (less
securities gains or losses). A lower ratio indicates more
efficient revenue generation. |
|
(5) |
|
Capital ratios for current quarter-end are estimated. |
|
(6) |
|
The allowance for credit losses includes both the allowance for
loan losses and the allowance for unfunded lending-related
commitments. |
|
(7) |
|
Represents the credit discounts on purchased life insurance
premium finance loans. |
|
(8) |
|
The sum of the allowance for credit losses and credit discounts
on purchased life insurance premium finance loans divided by
total loans outstanding plus the credit discounts on purchased
life insurance premium finance loans. |
|
(9) |
|
Excludes covered loans. |
S-13
RISK
FACTORS
An investment in our securities is subject to risks inherent
to our business. Before making an investment decision, you
should carefully consider the risks and uncertainties described
below together with the information included in our Annual
Report on
Form 10-K
for the year ended December 31, 2009, Quarterly Reports on
Form 10-Q
for the quarters ended June 30, 2010 and September 30,
2010 and in other documents that we subsequently file with the
SEC, all of which are incorporated by reference into this
prospectus supplement and the accompanying prospectus.
Additional risks and uncertainties that management is not aware
of or that management currently deems immaterial may also impair
Wintrusts business operations. This prospectus supplement
is qualified in its entirety by these risk factors. If any of
these risks actually occur, our financial condition and results
of operations could be materially and adversely affected. If
this were to happen, the value of our securities could decline
significantly, and you could lose all or part of your
investment.
Risks
Related to the Tangible Equity Units
You
assume the risk that the market value of Wintrust common stock
may decline.
The purchase contracts, pursuant to which Wintrust will deliver
to you shares of its common stock, are components of the
tangible equity units. The number of shares of common stock that
you will receive upon settlement of a purchase contract on the
mandatory settlement date, whether as a component of a tangible
equity unit or a separate purchase contract, will depend upon
the average of the daily volume weighted average prices, or
VWAPs, of Wintrust common stock on each of the 20 consecutive
trading days ending on the third trading day immediately
preceding the mandatory settlement date (the applicable
market value). Because the price of Wintrust common stock
fluctuates, there can be no assurance that the market value of
the common stock received by you will be equal to or greater
than the reference price of
$ .
If the applicable market value of Wintrust common stock is less
than the reference price, then the market value of the common
stock issued to you on the mandatory settlement date (assuming
that the market value is the same as the applicable market value
of the common stock) will be less than the effective price per
share paid by you for such common stock on the date of issuance
of the tangible equity units. Therefore, you assume the entire
risk that the market value of Wintrust common stock may decline
before the mandatory settlement date. Any decline in the market
value of Wintrust common stock may be substantial.
You will
receive only a portion of any appreciation in the market price
of Wintrust common stock.
The aggregate market value of Wintrust common stock delivered to
you upon settlement of a purchase contract generally will exceed
the $50 stated amount of each tangible equity unit only if
the applicable market value of Wintrust common stock equals or
exceeds the threshold appreciation price. Therefore, during the
period prior to the mandatory settlement date, an investment in
a tangible equity unit affords less opportunity for equity
appreciation than a direct investment in Wintrust common stock.
If the applicable market value exceeds the reference price but
is less than the threshold appreciation price, you will realize
no equity appreciation on Wintrust common stock above the
reference price. Furthermore, if the applicable market price
equals or exceeds the threshold appreciation price, you would
receive on the mandatory settlement date only
approximately % of the value of the
shares of Wintrust common stock you would have received had you
purchased shares of common stock with $50 at the public offering
price in the concurrent public offering . See Description
of the Purchase Contracts Delivery of Common
Stock for a table showing the number of shares of common
stock that you would receive at various applicable market values.
Wintrust
may not be able to settle your purchase contracts and deliver
shares of its common stock, or make payments on the amortizing
notes, in the event that Wintrust files for
bankruptcy.
If Wintrust files for bankruptcy protection prior to settlement
of the purchase contracts, it may be unable to deliver Wintrust
common stock to you and, in such circumstances, Wintrust expects
that your claim with respect to the purchase contracts will be
relegated to a claim in bankruptcy that ranks equally with the
S-14
claims of Wintrust common stockholders, in which case you will
only be able to recover damages to the extent holders of
Wintrust common stock receive any recovery. See
Description of the Purchase Contracts
Consequences of Bankruptcy.
In addition, bankruptcy law generally prohibits the payment of
pre-bankruptcy debt by a company that has commenced a bankruptcy
case while the case is pending. If Wintrust becomes a debtor in
a bankruptcy case, so long as the case were pending you would
likely not receive payments of principal and interest due under
the amortizing note component of the tangible equity unit and
any distribution at the completion of the bankruptcy proceeding
may not be of the full amount owing in respect of such principal
and interest.
The
trading prices for the tangible equity units, the purchase
contracts and the amortizing notes will be directly affected by
the trading prices for Wintrust common stock, the general level
of interest rates and Wintrusts credit quality, each of
which is impossible to predict.
It is impossible to predict whether the prices of Wintrust
common stock, interest rates or Wintrusts credit quality
will rise or fall. Trading prices of the common stock will be
influenced by Wintrusts operating results and prospects
and by economic, financial, industry and other factors. In
addition, general market conditions, including the level of, and
fluctuations in, the trading prices of stocks generally, can
affect the price of Wintrust common stock, as can sales by
Wintrust or its stockholders of substantial amounts of common
stock in the market after the offering of the tangible equity
units or the perception that those sales could occur. The market
for Wintrust common stock likely will influence, and be
influenced by, any market that develops for the tangible equity
units or the separate purchase contracts. For example,
investors anticipation of the distribution into the market
of the additional shares of common stock issuable upon
settlement of the purchase contracts could depress the price of
Wintrust common stock and increase the volatility of the common
stock price, which could in turn depress the price of the
tangible equity units or the purchase contracts. The price of
Wintrust common stock also could be affected by possible sales
of such common stock by investors who view the tangible equity
units as a more attractive means of equity participation in
Wintrust and by hedging or arbitrage trading activity that is
likely to develop involving the tangible equity units, separate
purchase contracts and the common stock. The arbitrage activity
could, in turn, affect the trading prices of the tangible equity
units, the separate purchase contracts and the common stock.
Recent
developments in the equity-linked and convertible securities
markets may adversely affect the market value of the tangible
equity units.
Governmental actions that interfere with the ability of
equity-linked and convertible securities investors to effect
short sales of the underlying shares of common stock could
significantly affect the market value of the tangible equity
units. Such government actions could make the convertible
arbitrage strategy that many equity-linked and convertible
securities investors employ difficult to execute for outstanding
equity-linked or convertible securities of any company whose
shares of common stock are subject to such actions. At an open
meeting on February 24, 2010 the SEC adopted Rule 201
of Regulation SHO, which restricts short selling when the
price of a covered security has triggered a
circuit breaker by falling at least 10 percent
from the prior days closing price, at which point short
sale orders can be displayed or executed only if the order price
is above the current national best bid. This restriction on
short sales is in effect for the remainder of the day and the
next day, subject to certain limited exceptions. Compliance with
Rule 201 is required by February 28, 2011. If such new
price test precludes, or is perceived to preclude, equity-linked
and convertible securities investors from executing the
convertible arbitrage strategy that they employ or other
limitations are instituted by the SEC or any other regulatory
agencies, the market value of the tangible equity units could be
adversely affected.
In addition, national securities exchanges and FINRA have begun
pilot programs to halt trading in certain individual stocks if
the price moves 10% or more from a sale in a five-minute period.
If similar limitations become effective with respect to trading
in our common stock, they may decrease, or prevent an increase
in, the market price
and/or
liquidity of our common stock
and/or
interfere with the ability of investors in, and potential
purchasers of, the notes, to effect hedging transactions in or
relating to our common stock
S-15
and conduct the convertible arbitrage strategy that we believe
they will employ, or will seek to employ, with respect to the
notes.
Although the direction and magnitude of the effect that the
amendments to Regulation SHO and rules of the national
securities exchanges and FINRA may have on the trading price and
the liquidity of the notes will depend on a variety of factors,
many of which cannot be determined at this time, past regulatory
actions have had a significant impact on the trading prices and
liquidity of convertible debt instruments. For example, in
September 2008, the SEC issued emergency orders generally
prohibiting short sales in the common stock of a variety of
financial services companies while Congress worked to provide a
comprehensive legislative plan to stabilize the credit and
capital markets. The orders made the convertible arbitrage
strategy that many convertible debt investors employ difficult
to execute and adversely affected both the liquidity and trading
price of convertible notes issued by many of the financial
services companies subject to the prohibition. Any governmental
actions that restrict the ability of investors in, or potential
purchasers of, the notes to effect short sales in our common
stock or to implement hedging strategies, including the recently
adopted amendments to Regulation SHO and the national
securities exchange and FINRA rule changes, could similarly
adversely affect the trading price and the liquidity of the
notes.
You may
receive shares of common stock upon settlement of the purchase
contracts that are lower in value than the price of the common
stock just prior to the mandatory settlement date.
Because the applicable market value of the common stock is
determined over the 20 consecutive trading days ending on the
third trading day immediately preceding the mandatory settlement
date, the number of shares of common stock delivered for each
purchase contract may on the mandatory settlement date be less
than the number that would have been delivered based on the VWAP
of the common stock on the last trading day in such period. In
addition, you will bear the risk of fluctuations in the market
price of the shares of common stock deliverable upon settlement
of the purchase contracts between the end of such period and the
date such shares are delivered.
If you
elect to settle your purchase contracts prior to the mandatory
settlement date, you may not receive the same return on your
investment as purchasers whose purchase contracts are settled on
the mandatory settlement date.
Holders of the tangible equity units or separate purchase
contracts have the option to settle their purchase contracts at
any time during the period beginning on, and including, the
business day immediately succeeding the date of initial issuance
of the tangible equity units and ending on, but excluding, the
third business day immediately preceding the mandatory
settlement date. However, if you settle your purchase contracts
prior to the third business day immediately preceding the
mandatory settlement date, you will receive for each purchase
contract a number of shares of common stock equal to the minimum
settlement rate, regardless of the current market value of
Wintrust common stock, unless you elect to settle your purchase
contracts early in connection with a fundamental change, in
which case you will be entitled to settle your purchase
contracts at the fundamental change early settlement rate, which
may be greater than the minimum settlement rate. In either case,
you may not receive the same return on your investment as
purchasers whose purchase contracts are settled on the mandatory
settlement date.
The
settlement rate for the purchase contracts may not be adjusted
for all dilutive events.
The number of shares of common stock issuable upon settlement of
the purchase contracts is subject to adjustment only for certain
events, including, but not limited to stock splits and
combinations, the issuance of certain rights, options or
warrants to holders of Wintrust common stock, stock dividends,
certain distributions of assets, indebtedness, capital stock or
cash to holders of Wintrust common stock and certain tender or
exchange offers as described under Description of the
Purchase Contracts Adjustments to the Fixed
Settlement Rates. The number of shares of common stock
deliverable upon settlement is not subject to adjustment for
other events that may adversely affect the value of Wintrust
common stock, such as employee stock options grants, offerings
of Wintrust common stock for cash (including the offering of
common stock made concurrently with this offering), certain
exchanges of Wintrust common stock for other Wintrust
S-16
securities or in connection with acquisitions and other
transactions. The terms of the tangible equity units do not
restrict Wintrusts ability to offer its common stock in
the future or to engage in other transactions that could dilute
its common stock, which may adversely affect the value of the
purchase contracts. The trading price of Wintrust common stock
may be adversely affected if Wintrust issues additional shares
of its common stock.
If
Wintrust exercises its right to defer installment payments on
the amortizing notes, the market price of the tangible equity
units and separate amortizing notes is likely to be adversely
affected.
Wintrust will have the right to defer installment payments at
any time and from time to time under the circumstances, and
subject to the conditions, described under Description of
the Amortizing Notes Option to Extend Installment
Payment Period so long as such deferral period does not
extend beyond December 15, 2015. During any such deferral
period, holders of the tangible equity units and separate
amortizing notes will have no remedies against Wintrust for
nonpayment. If Wintrust exercises its right to defer installment
payments, the market price of the tangible equity units and
separate amortizing notes may be more volatile than the market
prices of other securities that are not subject to optional
payment deferral features.
The
secondary market for the tangible equity units, the purchase
contracts and the amortizing notes may be illiquid.
We do not intend to list the tangible equity units on any
securities exchange nor do we intend to list the purchase
contracts or the amortizing notes, if any, that have been
separated from the tangible equity units as described under
Description of the Tangible Equity Units
Separating Tangible Equity Units. Although Wintrust has been
informed by certain of the underwriters that they intend to make
a market in the tangible equity units after the offering is
completed, they are not obligated to do so and may discontinue
any market-making at any time without notice. Accordingly, an
active public trading market may not develop for the tangible
equity units, the purchase contracts or the amortizing notes
and, even if one develops, it may not be maintained. If an
active public trading market is not developed or maintained, the
market price and liquidity of the tangible equity units, the
purchase contracts and the amortizing notes is likely to be
adversely affected and holders may not be able to sell these
securities at desired times and prices or at all. If the
tangible equity units are traded after their purchase, they may
trade at a discount from their purchase price.
The
purchase contract agreement will not be qualified under the
Trust Indenture Act, and the obligations of the purchase
contract agent are limited.
The purchase contract agreement among Wintrust, the purchase
contract agent and the trustee will not be qualified as an
indenture under the Trust Indenture Act of 1939, and the
purchase contract agent will not be required to qualify as a
trustee under the Trust Indenture Act. Thus, you will not
have the benefit of the protection of the Trust Indenture
Act with respect to the purchase contract agreement or the
purchase contract agent. The amortizing notes constituting a
part of the tangible equity units will be issued pursuant to an
indenture, which has been qualified under the
Trust Indenture Act. Accordingly, if you hold tangible
equity units, you will have the benefit of the protections of
the Trust Indenture Act only to the extent applicable to
the amortizing notes. The protections generally afforded the
holder of a security issued under an indenture that has been
qualified under the Trust Indenture Act include:
|
|
|
|
|
disqualification of the indenture trustee for conflicting
interests, as defined under the Trust Indenture Act;
|
|
|
|
provisions preventing a trustee that is also a creditor of the
issuer from improving its own credit position at the expense of
the security holders immediately prior to or after a default
under such indenture; and
|
|
|
|
the requirement that the indenture trustee deliver reports at
least annually with respect to certain matters concerning the
indenture trustee and the securities.
|
S-17
Wintrusts
obligations to make payments on the amortizing notes are
subordinate to its payment obligations under Wintrusts
Senior Indebtedness. Wintrust will largely depend upon dividends
or other intercompany transfers from its subsidiaries to meet
its obligations under the amortizing notes. Claims of creditors
of these subsidiaries may have priority over claims by Wintrust
with respect to the assets and earnings of these
subsidiaries.
Wintrusts obligations under the amortizing notes rank
junior in right of payment to all of its existing and future
Senior Indebtedness, as defined under the caption
Description of the Amortizing Notes
Subordination. This means that, unless all Senior
Indebtedness is repaid in full, Wintrust cannot make any
payments on the amortizing notes in the event of Wintrusts
bankruptcy, insolvency or liquidation. In addition, the
amortizing notes will not be guaranteed by any of
Wintrusts subsidiaries, which are separate legal entities
that have no obligation to pay, or make funds available to pay,
any amounts due on the amortizing notes. The amortizing notes
will therefore be effectively subordinated to all indebtedness
and other obligations, including trade payables and preferred
stock, if any, of Wintrusts subsidiaries.
The terms of the junior subordinated indenture do not limit
Wintrusts ability to incur additional debt, including
secured or unsecured debt that will rank senior to the
amortizing notes and purchase contracts.
The
fundamental change early settlement rate may not adequately
compensate you.
If a fundamental change occurs and you elect to
exercise your fundamental change early settlement right, you
will be entitled to settle your purchase contracts at the
fundamental change early settlement rate. Although the
fundamental change early settlement rate is designed to
compensate you for the lost value of your purchase contracts as
a result of the early settlement of the purchase contracts, this
feature may not adequately compensate you for such loss. In
addition, if the stock price in the fundamental change is
greater than $ per share (subject
to adjustment as described herein), this feature of the purchase
contracts will not compensate you for any additional loss
suffered in connection with a fundamental change. See
Description of the Purchase Contracts Early
Settlement Upon a Fundamental Change. In addition, the
term fundamental change is limited and may not
encompass all transactions that could negatively impact the
value of the tangible equity units.
Wintrusts obligation to settle the purchase contracts at
the fundamental change early settlement rate could be considered
a penalty, in which case the enforceability thereof would be
subject to general principles of reasonableness of economic
remedies.
You have
limited remedies for defaults under the indenture.
Although various events (including a payment default) may
constitute a default under the indenture, only an event of
default as a result of specified events of bankruptcy,
insolvency or reorganization of Wintrust will trigger the right
of not less than 25% of holders in aggregate principal amount of
the amortizing notes then outstanding to accelerate all amounts
due and payable under the amortizing notes. See
Description of the Amortizing Notes Events of
Default.
You will
have no rights as a Wintrust common shareholder until you
acquire its common stock.
Until you acquire shares of Wintrust common stock upon
settlement on the mandatory settlement date or any early
settlement, you will have no rights with respect to its common
stock, including voting rights, rights to respond to tender
offers and rights to receive any dividends or other
distributions on the common stock, but you will be subject to
all changes affecting the common stock. You will be entitled to
rights with respect to Wintrust common stock only when Wintrust
delivers shares of common stock upon settlement of your purchase
contracts. For example, if an amendment is proposed to
Wintrusts articles of incorporation and the record date
for determining the shareowners of record entitled to vote on
that amendment occurs prior to the delivery date for common
stock under the purchase contracts, then you will not be
entitled to vote on that amendment, although you will
nevertheless be subject to any changes in the powers,
preferences or special rights of such common stock.
S-18
Sales of
a significant number of shares of our common stock in the public
markets, and other transactions that we may pursue, could
depress the market price of our common stock, and therefore the
market price of our tangible equity units.
Sales of a substantial number of shares of our common stock in
the public markets and the perception that those sales may occur
could adversely affect the market price of our common stock, and
therefore the market price of our tangible equity units. In
addition, future issuances of equity securities, including
pursuant to the common stock offering and other transactions
that we may pursue, may dilute the interests of our existing
shareholders, including you, and cause the market price of our
common stock to decline, and therefore adversely affect the
market price of the tangible equity unit. We may issue equity
securities (including convertible securities, preferred
securities, and options and warrants on our common or preferred
stock) in the future for a number of reasons, including to
finance our operations and business strategy, to adjust our
ratio of debt to equity, to address regulatory capital concerns,
or to satisfy our obligations upon the exercise of outstanding
options or warrants. We may issue equity securities in
transactions that generate cash proceeds, such as this offering
and the common stock offering, transactions that free up
regulatory capital but do not immediately generate or preserve
substantial amounts of cash, and transactions that generate
regulatory or balance sheet capital only and do not generate or
preserve cash. In addition, the Warrant we issued to the
U.S. Treasury entitles the holder to purchase
1,643,295 shares of our common stock at an exercise price
of $22.82 per share, and may be exercised, in whole or in part,
over a ten-year period ending December 19, 2018. If the
Warrant is exercised, the percentage ownership of holders of our
common stock would be diluted. We may also issue additional
common stock to participate in FDIC-assisted transactions or
other acquisitions or to meet other regulatory requirements. We
cannot predict the effect that these transactions would have on
the market price of our common stock or the tangible equity
units.
Our share
price may fluctuate.
The market price of our common stock could be subject to
significant fluctuations due to a change in sentiment in the
market regarding our operations or business prospects, future
sales or acquisitions to which we are a party, this offering,
the common stock offering, or future sales of our securities.
Such risks may be affected by:
|
|
|
|
|
operating results that vary from the expectations of management,
securities analysts, and investors;
|
|
|
|
developments in our business or in the financial sector
generally;
|
|
|
|
regulatory changes affecting our industry generally or our
business and operations;
|
|
|
|
the operating and securities price performance of companies that
investors consider to be comparable to us;
|
|
|
|
announcements of strategic developments, acquisitions, and other
material events by us or our competitors;
|
|
|
|
changes in the credit, mortgage, and real estate markets,
including the market for mortgage-related and other asset-backed
securities;
|
|
|
|
changes in global financial markets and global economies and
general market conditions, such as interest or foreign exchange
rates, stock, commodity, credit or asset valuations or
volatility; and
|
|
|
|
our ability to integrate the companies and the businesses that
we acquire.
|
Stock markets, in general, have experienced, and continue to
experience, significant price and volume volatility, and the
market price of our common stock may continue to be subject to
similar market fluctuations that may be unrelated to our
operating performance or prospects. Increased volatility could
result in a decline in the market price of our common stock.
These broad market and industry factors may seriously harm the
market price of our common stock, and therefore the market price
of our tangible equity units, regardless of
S-19
our operating performance. Furthermore, the value of your
investment may decline, and you may be unable to sell your
tangible equity units at or above the offering price.
If you
purchase tangible equity units in this offering, you will
effectively incur immediate and substantial dilution in the book
value of the underlying shares of common stock.
If you purchase tangible equity units in this offering, the
value of the underlying shares based on our actual book value
will immediately be less than the effective offering price you
paid. This reduction in value is known as dilution. As a result
of this dilution, investors purchasing tangible equity units in
this offering may receive significantly less than the purchase
price paid in this offering in the event of liquidation.
The
common stock underlying the tangible equity units is equity and
is subordinate to our existing and future indebtedness and
preferred stock.
Shares of common stock are equity interests in us and do not
constitute indebtedness. As such, shares of common stock will
rank junior to all of our indebtedness and to other non-equity
claims against us and our assets available to satisfy claims
against us, including in our liquidation. Additionally, holders
of our common stock are subject to the prior dividend and
liquidation rights of holders of our outstanding preferred
stock. The issued and outstanding shares of our Series A
Preferred Stock and Series B Preferred Stock, the latter of
which are held by the Treasury, have an aggregate liquidation
preference of $50 million and $250 million,
respectively. We may also issue preferred stock in the future
that has a preference over the common stock with respect to the
payment of dividends or upon liquidation, dissolution or winding
up, or voting rights that dilute the voting power of the common
stock. Our board of directors is authorized to issue additional
classes or series of preferred stock without any action on the
part of the holders of our common stock and we are permitted to
incur additional debt. Upon liquidation, lenders and holders of
our debt securities and preferred stock would receive
distributions of our available assets prior to holders of our
common stock.
We will
issue up to 3,205,128 shares of our common stock if we
complete the common stock offering, and may issue additional
equity securities in connection with other transactions we may
pursue, either of which will result in dilution to the holders
of our common stock.
We could issue up to 3,205,128 shares of our common stock
in the common stock offering (excluding any shares which may be
issued in the overallotment). The issuance of common stock in
the common stock offering and the issuance of additional equity
securities in connection with other transactions we may pursue
could cause significant dilution to the holders of our common
stock, and therefore will adversely affect holders who purchase
tangible equity units in this offering. We are not restricted
from issuing additional shares of our common stock, including
securities that are convertible into or exercisable or
exchangeable for common stock, except for the restrictions
contained in our purchase agreement with the underwriters, which
restricts our ability to do so during the
90-day
period beginning on the date of this prospectus supplement.
We are a
holding company, and as a result we are largely dependent on
dividends from our subsidiaries, including our banks, to provide
funds for payment of dividends to our stockholders.
We are a non-operating holding company, whose principal assets
and source of income are our investments in our subsidiaries,
including our banks. We rely primarily on dividends from these
subsidiaries to provide funds for payment of dividends to our
shareholders, to the extent declared by our board of directors.
There are various legal limitations on the extent to which our
banks and our other subsidiaries can finance or otherwise supply
funds to us (by dividend or otherwise) and certain of our
affiliates. Although we maintain cash positions for liquidity at
the holding company level, if our banks or other of our
subsidiaries were unable to supply us with cash over time, we
could be unable to pay dividends to our stockholders. See
Bank Regulation; Bank Holding Company and Subsidiary
Regulations Dividend Limitations, Bank
Regulation; Additional Regulation of Dividends and
Risk Factors Our agreements with the Treasury
restrict our ability to pay dividends and repurchase common or
preferred stock, place limitations on our executive compensation
practices, and may result in dilution to our common
stockholders in our Annual Report on
S-20
Form 10-K
for the year ended December 31, 2009 for a discussion of
regulatory and other restrictions on dividend declarations.
There can
be no assurance as to when the Series B Preferred Stock can
be redeemed.
While we intend to redeem the Series B Preferred Stock with
the proceeds from this offering, as described in Use of
Proceeds, and the common stock offering, there can be no
assurance as to when the Series B Preferred Stock can be
redeemed because regulatory approval is required. Until the
Series B Preferred Stock is redeemed, we will remain
subject to the terms and conditions set forth in the Letter
Agreement, including the Securities Purchase Agreement
incorporated therein, with the U.S. Treasury and the
Series B Preferred Stock designations. Moreover, to the
extent the common stock offering is not consummated or we
receive less proceeds than is contemplated, we also may not be
able to fully redeem or may choose not to redeem the
Series B Preferred Stock.
If we are
unable to redeem the Series B Preferred Stock, we will
retain broad discretion in using the net proceeds from this
offering, and may not use the proceeds effectively.
If we are unable to redeem the Series B Preferred Stock, we
will use the net proceeds of this offering for general corporate
purposes, which may include, without limitation, investments at
the holding company level, providing capital to support our
growth, acquisitions or other business combinations and reducing
or refinancing existing debt. We have not designated the amount
of net proceeds we will use for any of these particular
purposes. Accordingly, we will retain broad discretion to
allocate the net proceeds of this offering. Moreover, we may use
the proceeds for corporate purposes that may not increase our
market value or make us more profitable. In addition, it may
take us some time to effectively deploy the proceeds from this
offering. Until the proceeds are effectively deployed, our
return on equity and earnings per share may be negatively
impacted. Managements failure to use the net proceeds of
this offering effectively could have an negative effect on our
business, financial condition and results of operations.
Our
ability to pay dividends on our common stock may be
limited.
Although we have historically declared cash dividends on our
common stock, we are not required to do so and may reduce or
cease to pay common stock dividends in the future.
Our ability to pay common stock dividends is subject to the
quarterly preferred dividend rights of our Series A
Preferred Stock and Series B Preferred Stock. In addition,
prior to December 19, 2011, unless we have redeemed all of
the Series B Preferred Stock (with the proceeds from this
offering or otherwise) or the U.S. Treasury has transferred
all of such preferred stock to a third party, the consent of the
Treasury will be required for us to, among other things,
increase our common stock dividend above $0.18 per share
semi-annually, or repurchase our common stock or other preferred
stock (with certain exceptions, including the repurchase of
common stock to offset share dilution from equity based employee
compensation awards). The payment of dividends is also subject
to statutory restrictions and restrictions arising under the
terms of the Companys Trust Preferred Securities
offerings as well as to compliance with certain financial
covenants under the Companys revolving line of credit. If
we reduce or cease to pay common stock dividends, the market
price of our common stock could be adversely affected. See
Bank Regulation; Bank Holding Company and Subsidiary
Regulations Dividend Limitations, Bank
Regulation; Additional Regulation of Dividends and
Risk Factors Our agreements with the Treasury
restrict our ability to pay dividends and repurchase common or
preferred stock, place limitations on our executive compensation
practices, and may result in dilution to our common
stockholders in our Annual Report on
Form 10-K
for the year ended December 31, 2009 for a discussion of
regulatory and other restrictions on dividend declarations.
Our
participation in FDIC-assisted acquisitions may present
additional risks to our financial condition and results of
operations.
As part of our growth strategy, we have pursued opportunistic
whole and partial acquisitions of troubled financial
institutions in transactions facilitated by the FDIC, including
our recent acquisitions of
S-21
Lincoln Park Bank, Wheatland Bank and Ravenswood Bank through
our bank subsidiaries. These acquisitions, and any future
FDIC-assisted transactions we may undertake, involve greater
risk than traditional acquisitions because they are typically
conducted on an accelerated basis, allowing less time for us to
prepare for and evaluate possible transactions, or to prepare
for integration of an acquired institution. These transactions
also present risks of customer loss, strain on management
resources related to collection and management of problem loans
and problems related to the integration of operations and
personnel of the acquired financial institutions. As a result,
there can be no assurance that we will be able to successfully
integrate the financial institutions we acquire, or that we will
realize the anticipated benefits of the acquisitions.
We are also subject to certain risks relating to our loss
sharing agreements with the FDIC. Under a loss sharing
agreement, the FDIC generally agrees to reimburse the acquiring
bank for a portion of any losses relating to covered assets of
the acquired financial institution. This is an important
financial term of any FDIC-assisted transaction, as troubled
financial institutions often have poorer asset quality. As a
condition to reimbursement, however, the FDIC requires the
acquiring bank to follow certain servicing procedures. A failure
to follow servicing procedures or any other breach of a loss
sharing agreement by us could result in the loss of FDIC
reimbursement. While we have established a group dedicated to
servicing the loans covered by the FDIC loss sharing agreements,
there can be no assurance that we will be able to comply with
the FDIC servicing procedures. In addition, reimbursable losses
and recoveries under loss sharing agreements are based on the
book value of the relevant loans and other assets as determined
by the FDIC as of the effective dates of the acquisitions. The
amount that the acquiring banks realize on these assets could
differ materially from the carrying value that will be reflected
in our financial statements, based upon the timing and amount of
collections on the covered loans in future periods. Any failure
to receive reimbursement, or any material differences between
the amount of reimbursements that we do receive and the carrying
value reflected in our financial statements, could have a
material negative effect on our financial condition and results
of operations.
Anti-takeover
provisions could negatively impact our stockholders.
Certain provisions of our articles of incorporation, by-laws and
Illinois law may have the effect of impeding the acquisition of
control of Wintrust by means of a tender offer, a proxy fight,
open-market purchases or otherwise in a transaction not approved
by our board of directors. For example, our board of directors
may issue additional authorized shares of our capital stock to
deter future attempts to gain control of Wintrust, including the
authority to determine the terms of any one or more series of
preferred stock, such as voting rights, conversion rates and
liquidation preferences. As a result of the ability to fix
voting rights for a series of preferred stock, the board has the
power, to the extent consistent with its fiduciary duty, to
issue a series of preferred stock to persons friendly to
management in order to attempt to block a merger or other
transaction by which a third party seeks control, and thereby
assist the incumbent board of directors and management to retain
their respective positions. In addition, our articles of
incorporation expressly elect to be governed by the provisions
of Section 7.85 of the Illinois Business Corporation Act,
which would make it more difficult for another party to acquire
us without the approval of our board of directors. The ability
of a third party to acquire us is also limited under applicable
banking regulations.
The Bank Holding Company Act of 1956 requires any bank
holding company (as defined in that Act) to obtain the
approval of the Federal Reserve prior to acquiring more than 5%
of our outstanding common stock. Any person other than a bank
holding company is required to obtain prior approval of the
Federal Reserve to acquire 10% or more of our outstanding common
stock under the Change in Bank Control Act of 1978. Any holder
of 25% or more of our outstanding common stock, other than an
individual, is subject to regulation as a bank holding company
under the Bank Holding Company Act. For purposes of calculating
ownership thresholds under these banking regulations, bank
regulators would likely at least take the position that the
minimum number of shares, and could take the position that the
maximum number of shares, of Wintrust common stock that a holder
is entitled to receive pursuant to securities convertible into
or settled in Wintrust common stock, including any tangible
equity units issued by Wintrust pursuant to this offering, must
be taken into account in calculating a stockholders
aggregate holdings of Wintrust common stock.
These provisions may have the effect of discouraging a future
takeover attempt that is not approved by our board of directors
but which our individual shareholders may deem to be in their
best interests or in
S-22
which our shareholders may receive a substantial premium for
their shares over then-current market prices. As a result,
shareholders who might desire to participate in such a
transaction may not have an opportunity to do so. Such
provisions will also render the removal of our current board of
directors or management more difficult.
The U.S.
federal income tax consequences relating to the tangible equity
units are uncertain.
No statutory, judicial or administrative authority directly
addresses the characterization of the tangible equity units or
instruments similar to the tangible equity units for
U.S. federal income tax purposes. As a result, some aspects
of the U.S. federal income tax consequences of an
investment in the tangible equity units are not certain.
Specifically, the amortizing notes and the purchase contracts
could potentially be recharacterized as a single instrument for
U.S. federal income tax purposes, in which case
(i) you could be required to recognize as income the entire
amount of each payment on the amortizing notes (rather than
treating a portion as a tax-free return of principal) and
(ii) if you are a
Non-U.S. Holder
(as defined below under Certain Material U.S. Federal
Income Tax Considerations), payments made to you on the
amortizing notes, including payments denominated as principal,
could potentially be subject to U.S. federal withholding
tax (currently at a 30% rate, or such lower rate as may be
specified by an applicable treaty). No ruling is being requested
from the IRS with respect to the tangible equity units, and no
assurance can be given that the IRS will agree with the
conclusions expressed below under Certain Material
U.S. Federal Income Tax Considerations. You should
consult your own tax advisor regarding potential alternative tax
characterizations of the tangible equity units.
You may
be subject to tax upon an adjustment to the settlement rate of
the purchase contracts even though you do not receive a
corresponding cash distribution.
The settlement rate of the purchase contracts is subject to
adjustment in certain circumstances, including upon the payment
of certain cash dividends or upon a fundamental change. If the
settlement rate is adjusted as a result of a distribution that
is taxable to our common stockholders, such as a cash dividend,
you will be deemed to have received for U.S. federal income
tax purposes a taxable dividend to the extent of our earnings
and profits (as determined for U.S. federal income tax
purposes) without the receipt of any cash. If you are a
Non-U.S. Holder,
such deemed dividend may be subject to U.S. federal
withholding tax (currently at a 30% rate, or such lower rate as
may be specified by an applicable treaty), which may be withheld
from shares of common stock or sales proceeds subsequently paid
or credited to you. See Certain Material U.S. Federal
Income Tax Considerations.
S-23
CONCURRENT
OFFERING
Concurrently with this offering, we are offering
3,205,128 shares of our common stock (or
3,685,897 shares if the underwriters of that offering
exercise their overallotment option in full) pursuant to a
separate prospectus supplement. We expect to raise approximately
$288.4 million in aggregate net proceeds from this offering
and the common stock offering (or approximately
$331.8 million if the underwriters exercise each of their
overallotment options in full). However, we may, in our
discretion, increase or decrease the size of this offering or
the common stock offering.
We cannot assure you that we will complete the common stock
offering. Neither of the offerings is conditioned upon the
consummation of the other offering.
This description and the other information in this prospectus
supplement regarding the common stock offering is included in
this prospectus supplement solely for informational purposes.
Nothing in this prospectus supplement should be construed as an
offer to sell, or the solicitation of an offer to buy, our
common stock.
USE OF
PROCEEDS
We estimate that our net proceeds from this offering will be
approximately $193.6 million, or approximately
$222.7 million if the underwriters exercise their
over-allotment option in full, based on a public offering price
of $50 per Unit, in each case, after deducting underwriting
discounts and commissions and estimated offering expenses.
We have been consulting with our regulators and intend to use
the capital raised hereby, plus additional resources (including
approximately $94.8 million of net proceeds that we expect
to receive from the common stock offering, or
$109.1 million if the underwriters overallotment
option is exercised in full), to redeem all of the shares of our
Series B Preferred Stock issued and sold to the
U.S. Treasury under its CPP (subject to regulatory
approval). Neither of the offerings is conditioned upon the
consummation of the other offering. There can be no assurance as
to when the Series B Preferred Stock can be redeemed.
Proceeds from this offering and the common stock offering in
excess of the amounts needed to redeem the Series B
Preferred Stock will be used for general corporate purposes. To
the extent the common stock offering is not consummated or if we
receive less proceeds than is contemplated we may not be able to
fully redeem or may choose not to redeem the Series B
Preferred Stock. Enhancing our capital levels will enable us to
pursue investments for growth and acquisitions, including
FDIC-assisted acquisitions.
If we are unable to redeem the Series B Preferred Stock, we
will use the net proceeds of this offering for general corporate
purposes, which may include, without limitation, investments at
the holding company level, providing capital to support our
growth, acquisitions or other business combinations and reducing
or refinancing existing debt.
The foregoing represents our intentions based upon our present
plans and business conditions. The occurrence of unforeseen
events or changed business conditions, however, could result in
the application of the proceeds of the offering and the common
stock offering in a manner other than as described in this
prospectus supplement.
S-24
CAPITALIZATION
The following table shows our capitalization and short-term
indebtedness at September 30, 2010:
(1) on a consolidated basis;
(2) on a consolidated basis as adjusted to reflect the sale
of 4,000,000 Units at an stated per Unit amount of $50,
excluding any Units issued pursuant to the underwriters
overallotment option (this Offering) (after
deducting underwriting discounts and commissions and estimated
offering expenses);
(3) on a consolidated basis as adjusted to reflect this
offering and the sale of 3,205,128 shares of common stock
at an assumed public offering price of $31.20 per share in
the concurrent common stock offering described in
Concurrent Offering, which was the last reported
sale price of our common stock on the NASDAQ Global Select
Market on December 3, 2010, and excluding any shares issued
pursuant to the underwriters overallotment option
(together with this offering, the Offerings) (after
deducting underwriting discounts and commissions and estimated
offering expenses); and
(4) on a consolidated basis as adjusted to reflect
(i) the transactions described in (2) and
(3) above and (ii) the use of the net proceeds from
the offerings to redeem the Series B Preferred Stock for
the aggregate liquidation amount thereof (plus accrued and
unpaid dividends, the payment of which is not reflected in the
table below) (the Transactions), as described in
Use of Proceeds.
This table should be read in conjunction with the risk factors
and our consolidated financial statements and related notes for
the year ended December 31, 2009 and the quarterly periods
ended March 31, 2010, June 30, 2010 and
September 30, 2010, included and incorporated by reference
in this prospectus supplement and the accompanying prospectus.
See Where You Can Find More Information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2010
|
|
|
|
|
|
|
As Adjusted
|
|
|
As Adjusted
|
|
|
As Adjusted
|
|
|
|
|
|
|
for this
|
|
|
for the
|
|
|
for the
|
|
|
|
Actual
|
|
|
Offering
|
|
|
Offerings
|
|
|
Transactions
|
|
|
|
(In thousands) (Unaudited)
|
|
|
Indebtedness:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under repurchase agreements and other
|
|
$
|
241,522
|
|
|
$
|
241,522
|
|
|
$
|
241,522
|
|
|
$
|
241,522
|
|
Federal Home Loan Bank advances
|
|
|
414,832
|
|
|
|
414,832
|
|
|
|
414,832
|
|
|
|
414,832
|
|
Notes payable under revolving credit line with an unaffiliated
commercial bank
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
1,000
|
|
Secured borrowings owed to securitization investors
|
|
|
600,000
|
|
|
|
600,000
|
|
|
|
600,000
|
|
|
|
600,000
|
|
Subordinated notes
|
|
|
55,000
|
|
|
|
55,000
|
|
|
|
55,000
|
|
|
|
55,000
|
|
Amortizing notes to be issued in connection with this Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Junior subordinate debentures
|
|
|
249,493
|
|
|
|
249,493
|
|
|
|
249,493
|
|
|
|
249,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total indebtedness
|
|
$
|
1,561,847
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, no par value; 20,000,000 shares authorized:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A $1,000 liquidation value;
50,000 shares issued and outstanding
|
|
$
|
49,379
|
|
|
$
|
49,379
|
|
|
$
|
49,379
|
|
|
$
|
49,379
|
|
Series B $1,000 liquidation value;
250,000 shares issued and outstanding
|
|
|
237,855
|
|
|
|
237,855
|
|
|
|
237,855
|
|
|
|
|
|
Common Stock, no par value; $1.00 stated value;
60,000,000 shares authorized; 31,145,332 shares issued
actual and as adjusted for this Offering, and
34,350,460 shares issued as adjusted for the Offerings, and
the Transactions
|
|
|
31,145
|
|
|
|
31,145
|
|
|
|
34,350
|
|
|
|
34,350
|
|
Surplus
|
|
|
682,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury stock, at cost, 1,592 shares
|
|
|
(51
|
)
|
|
|
(51
|
)
|
|
|
(51
|
)
|
|
|
(51
|
)
|
Retained earnings
|
|
|
394,323
|
|
|
|
394,323
|
|
|
|
394,323
|
|
|
|
382,178
|
|
Accumulated other comprehensive loss
|
|
|
3,943
|
|
|
|
3,943
|
|
|
|
3,943
|
|
|
|
3,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
$
|
1,398,912
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
2,960,759
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S-25
PRICE
RANGE OF OUR COMMON STOCK
Our common stock is listed on the NASDAQ Global Select Market
under the symbol WTFC. The following table sets
forth, for the periods indicated, the range of high and low
sales prices per share for our common stock as reported on the
NASDAQ Global Select Market.
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
December 31, 2008
|
|
High
|
|
Low
|
|
First Quarter
|
|
$
|
38.99
|
|
|
$
|
28.87
|
|
Second Quarter
|
|
|
37.08
|
|
|
|
22.88
|
|
Third Quarter
|
|
|
44.90
|
|
|
|
17.04
|
|
Fourth Quarter
|
|
|
32.00
|
|
|
|
15.37
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
December 31, 2009
|
|
High
|
|
Low
|
|
First Quarter
|
|
$
|
20.90
|
|
|
$
|
9.70
|
|
Second Quarter
|
|
|
22.75
|
|
|
|
11.80
|
|
Third Quarter
|
|
|
29.73
|
|
|
|
14.66
|
|
Fourth Quarter
|
|
|
33.87
|
|
|
|
25.00
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
December 31, 2010
|
|
High
|
|
Low
|
|
First Quarter
|
|
$
|
38.47
|
|
|
$
|
29.86
|
|
Second Quarter
|
|
|
44.93
|
|
|
|
33.05
|
|
Third Quarter
|
|
|
37.25
|
|
|
|
27.79
|
|
Fourth Quarter (through December 3, 2010)
|
|
|
32.90
|
|
|
|
28.40
|
|
The last reported sale price of our common stock on the NASDAQ
Global Select Market on December 3, 2010 was $31.20 per
share. As of December 3, 2010, there were approximately
1,503 registered holders of record of our common stock.
S-26
DIVIDEND
POLICY
Holders of our common stock are entitled to receive dividends
that the board of directors may declare from time to time. We
may only pay dividends out of funds that are legally available
for that purpose. Because consolidated net income consists
largely of the net income of our subsidiaries, dividend payments
to shareholders are largely dependent upon our receipt of
dividends from our subsidiaries.
The Companys Board of Directors approved the first
semi-annual dividend on the Companys common stock in
January 2000 and has continued to approve a semi-annual dividend
since that time. The payment of any future dividends on our
common stock or our preferred stock will, however, depend on our
earnings and financial condition, regulatory limitations and tax
considerations. There can be no assurance that we will continue
to pay dividends on our common stock or our preferred stock at
the current levels or at all. The following table shows the
history of per share cash dividends declared and paid on our
common stock during 2010, as of the date hereof, and for each of
2009 and 2008.
|
|
|
|
|
Record Date
|
|
Dividend
|
|
February 7, 2008
|
|
$
|
0.18
|
|
August 7, 2008
|
|
|
0.18
|
|
February 12, 2009
|
|
|
0.18
|
|
August 13, 2009
|
|
|
0.09
|
|
February 11, 2010
|
|
|
0.09
|
|
August 12, 2010
|
|
|
0.09
|
|
Our ability to pay dividends is subject to a number of
limitations, including:
|
|
|
|
|
Under the CPP, before the earlier of December 19, 2011 or
until our Series B Preferred Stock has been redeemed or
transferred by the U.S. Treasury, a prohibition upon the
payment of a semi-annual cash dividend on our common stock above
$0.18 per common share without the U.S. Treasurys
consent;
|
|
|
|
A prohibition on the payment of dividends on our common stock in
the event that we are not current on our payment obligations
under:
|
|
|
|
|
|
Our Series A or Series B Preferred Stock;
|
|
|
|
Our outstanding issuances of trust preferred securities; and
|
|
|
|
Our credit facility.
|
|
|
|
|
|
Regulatory limitations which require us to keep a minimum level
of capital at each of the banks and limit the total dividends we
can receive from each of the banks; and
|
|
|
|
Restrictions resulting from our bank holding company status, as
a result of which we are subject to the guidelines of the
Federal Reserve regarding capital adequacy and dividends and are
required to consult with the Federal Reserve before declaring or
paying any dividends. Dividends also may be limited as a result
of safety and soundness considerations.
|
See the sections entitled Bank Regulation; Bank Holding
Company and Subsidiary Regulations Dividend
Limitations, Bank Regulation; Additional Regulation
of Dividends and Risk Factors Our
agreements with the Treasury restrict our ability to pay
dividends and repurchase common or preferred stock, place
limitations on our executive compensation practices, and may
result in dilution to our common stockholders in our
Annual Report on
Form 10-K
for the year ended December 31, 2009 for a discussion of
regulatory and other restrictions on dividend declarations.
S-27
DESCRIPTION
OF THE TANGIBLE EQUITY UNITS
Wintrust is offering 4,000,000 tangible equity units (or
4,600,000 tangible equity units if the underwriters exercise
their over-allotment option in full), each with a stated amount
of $50. Each tangible equity unit is a unit composed of a
prepaid stock purchase contract (a purchase
contract) and a junior subordinated amortizing note issued
by Wintrust (amortizing note). The following summary
of the terms of the tangible equity units, the summary of the
terms of the purchase contracts set forth under the caption
Description of the Purchase Contracts and the
summary of the terms of the amortizing notes set forth under the
caption Description of the Amortizing Notes in this
prospectus supplement contain a description of all of the
material terms of the tangible equity units and their components
but are not complete. Wintrust refers you to:
|
|
|
|
|
the form of purchase contract agreement to be entered into among
Wintrust, U.S. Bank National Association, as purchase
contract agent and U.S. Bank National Association, as
trustee under the junior subordinated debt indenture described
below (the purchase contract agreement) under which
the purchase contracts and tangible equity units will be
issued; and
|
|
|
|
the form of junior subordinated debt indenture, and a related
supplemental indenture for such amortizing notes, each to be
dated the date of issuance of such amortizing notes and each
between Wintrust, as issuer, and U.S. Bank National
Association, as trustee, under which the amortizing notes will
be issued.
|
This form of junior subordinated debt indenture has been, and
the related supplemental indenture for the amortizing notes and
the form of purchase contract agreement will be, filed as
exhibits to the registration statement of which this prospectus
forms a part. Whenever particular sections or defined terms are
referred to, such sections or defined terms are incorporated
herein by reference.
Components
of the Tangible Equity Units
Each tangible equity unit offered is a unit composed of:
|
|
|
|
|
a prepaid purchase contract pursuant to which Wintrust will
deliver to the holder, not later than December 15, 2013
(the mandatory settlement date), a number of shares
of Wintrust common stock equal to the settlement rate described
below under Description of the Purchase
Contracts Delivery of Common Stock, subject to
adjustment; and
|
|
|
|
a junior subordinated amortizing note issued by Wintrust with an
initial principal amount of $ that
pays equal quarterly installments of
$ per amortizing note, which in
the aggregate would be equivalent to
a % cash distribution per year on
the $50 stated amount per tangible equity unit.
|
Unless previously settled at your option as described in
Description of the Purchase Contracts Early
Settlement or Description of the Purchase
Contracts Early Settlement Upon a Fundamental
Change, Wintrust will deliver to you not more
than shares
and not less
than
shares of Wintrust common stock, no par value per share (the
common stock), on the mandatory settlement date,
based upon the applicable settlement rate (as defined below),
which is subject to adjustment as described herein, and the
applicable market value (as defined below) of Wintrust common
stock, as described below under Description of the
Purchase Contracts Delivery of Common Stock.
Each amortizing note will have an initial principal amount of
$ .
On each March 15, June 15, September 15 and
December 15, commencing on March 15, 2011, Wintrust
will pay equal quarterly installments of
$ on
each amortizing note. The quarterly installment payable on
March 15, 2011, however, will be
$ .
Each installment will constitute a payment of interest (at a
rate of % per annum) and a partial
repayment of principal on the amortizing note, allocated as set
forth on the amortization schedule set forth under
Description of the Amortizing Notes
Amortization Schedule. Wintrust will have the right to
defer installment payments at any time and from time to time
under the circumstances, and subject
S-28
to the conditions, described under Description of the
Amortizing Notes Option to Extend Installment
Payment Period so long as such deferral period does not
extend beyond December 15, 2015.
The stated amount of each tangible equity unit must be allocated
between the amortizing note and the purchase contract based upon
their relative fair market values. Wintrust has determined that
the fair market value of each amortizing note is
$
and the fair market value of each purchase contract is
$ .
This position will be binding upon each holder (but not on the
Internal Revenue Service) unless such holder explicitly
discloses a contrary position on a statement attached to such
holders timely filed U.S. federal income tax return
for the taxable year in which it acquires a tangible equity unit.
Separating
and Recreating Tangible Equity Units
Upon the conditions and under the circumstances described below,
a holder of a tangible equity unit will have the right to
separate a tangible equity unit into its component parts, and a
holder of a separate purchase contract and a separate amortizing
note will have the right to recreate a tangible equity unit.
Separating
Tangible Equity Units
At initial issuance, the purchase contracts and amortizing notes
may be purchased and transferred only as tangible equity units
and will trade under the CUSIP number for the tangible equity
units.
On any business day during the period beginning on, and
including, the business day immediately succeeding the date of
initial issuance of the tangible equity units to, but excluding,
the third business day immediately preceding the mandatory
settlement date, you will have the right to separate your
tangible equity unit into its constituent purchase contract and
amortizing note (which Wintrust refers to as a separate
purchase contract and a separate amortizing
note, respectively, and which will thereafter trade under
their respective CUSIP numbers), in which case that tangible
equity unit will cease to exist.
Your tangible equity units, purchase contract and amortizing
note will be represented by global securities registered in the
name of a nominee of The Depository Trust Company
(DTC). You will not be entitled to receive
definitive physical certificates for your tangible equity units,
purchase contracts or amortizing notes, except under the limited
circumstances described under Book-Entry Procedures and
Settlement Definitive Securities and Paying
Agent. Beneficial interests in a tangible equity unit and,
after separation, the separate purchase contract and separate
amortizing note will be shown on and transfers will be effected
through direct or indirect participants in DTC. In order to
separate your tangible equity unit into its component parts, you
must deliver written instruction to the broker or other direct
or indirect participant through which you hold an interest in
your tangible equity units (your participant) to
notify DTC through DTCs Deposit/Withdrawal at Custodian
(DWAC) System of your election to separate the
tangible equity units.
Separate purchase contracts and separate amortizing notes will
be transferable independently from each other.
The term business day means any day other than a
Saturday, Sunday or any day on which banking institutions or
trust companies in New York, New York are authorized or
obligated by applicable law, regulation or executive order to
close.
Recreating
Tangible Equity Units
On any business day during the period beginning on, and
including, the business day immediately succeeding the date of
initial issuance of the tangible equity units to, but excluding,
the third business day immediately preceding the mandatory
settlement date, if you beneficially own a separate purchase
contract and a separate amortizing note, you may recreate a
tangible equity unit by delivering written instruction to your
participant to notify DTC through its DWAC System of your desire
to recreate the tangible equity unit.
S-29
Title
Wintrust and the purchase contract agent may treat the
registered owner of any tangible equity unit or separate
purchase contract as the absolute owner of the tangible equity
unit or separate purchase contract for the purpose of settling
the related purchase contracts and for all other purposes.
Replacement
of Tangible Equity Unit Certificates
In the event that physical certificates evidencing the tangible
equity units have been issued, any mutilated tangible equity
unit certificate will be replaced by Wintrust at the expense of
the holder upon surrender of the certificate to the purchase
contract agent. Tangible equity unit certificates that become
destroyed, lost or stolen will be replaced by Wintrust at the
expense of the holder upon delivery to Wintrust and the purchase
contract agent of evidence of their destruction, loss or theft
satisfactory to Wintrust and the purchase contract agent. In the
case of a destroyed, lost or stolen tangible equity unit
certificate, an indemnity satisfactory to the purchase contract
agent and Wintrust may be required at the expense of the
registered holder of the tangible equity unit before a
replacement will be issued.
Notwithstanding the foregoing, Wintrust will not be obligated to
replace any tangible equity unit certificates on or after the
business day immediately preceding the mandatory settlement date
or any early settlement date. In those circumstances, the
purchase contract agreement will provide that, in lieu of the
delivery of a replacement tangible equity unit certificate, the
purchase contract agent, upon delivery of the evidence and
indemnity described above, will deliver the shares of common
stock issuable pursuant to the purchase contracts included in
the tangible equity units evidenced by the certificate.
Miscellaneous
The purchase contract agreement will provide that Wintrust will
pay all fees and expenses related to the offering of the
tangible equity units and the enforcement by the purchase
contract agent of the rights of the holders of the tangible
equity units or the separate purchase contracts, other than
expenses (including legal fees) of the underwriters.
Should you elect to separate or recreate tangible equity units,
you will be responsible for any fees or expenses payable in
connection with that separation or recreation and Wintrust will
have no liability therefor.
Each purchaser or holder of a tangible equity unit will be
required or deemed to represent and warrant that its
acquisition, holding and subsequent settlement or disposition of
each component of the tangible equity unit (i) is
consistent with its fiduciary duties, if any under the Employee
Retirement Income Security Act of 1974, as amended
(ERISA) or any federal, state, local,
non-U.S., or
other laws or regulations that are substantially similar to any
of the provisions of Title I of ERISA or Section 4975
of the Code (Similar Law), and (ii) will not
constitute or result in a non-exempt prohibited transaction
under ERISA or Section 4975 of the Code or a violation of
any applicable Similar Law.
S-30
DESCRIPTION
OF THE PURCHASE CONTRACTS
Each purchase contract, which initially forms a part of a
tangible equity unit and which, at the holders option
after the date of initial issuance of the tangible equity units,
can be transferred separately from the amortizing note also
forming a part of a tangible equity unit, will be issued
pursuant to the terms and provisions of the purchase contract
agreement. The following summary of the terms of the purchase
contracts contains a description of all of the material terms of
the purchase contracts but is not complete and is subject to,
and is qualified in its entirety reference to, all of the
provisions of the purchase contract agreement, including the
definitions in the purchase contract agreement of certain terms.
Wintrust refers you to the purchase contract agreement to be
filed and incorporated by reference as an exhibit to the
registration statement of which this prospectus forms a part.
As used in this section, the term Wintrust means
Wintrust Financial Corporation and does not include any of its
subsidiaries.
Delivery
of Common Stock
Unless previously settled early at your option, for each
purchase contract Wintrust will deliver to you on
December 15, 2013 (the mandatory settlement
date) a number of shares of its common stock calculated as
described below. The settlement of the purchase contracts on the
mandatory settlement date is not deferrable. The number of
shares of Wintrust common stock issuable upon settlement of each
purchase contract (the settlement rate) will be
determined as follows:
|
|
|
|
|
if the applicable market value of Wintrust common stock is equal
to or greater than
$
(the threshold appreciation price), then you will
receive shares
of common stock for each purchase contract (the minimum
settlement rate);
|
|
|
|
if the applicable market value of Wintrust common stock is less
than the threshold appreciation price of
$
but greater than
$
(the reference price), then you will receive a
number of shares of common stock for each purchase contract
equal to the tangible equity unit stated amount of $50,
divided by the applicable market value; and
|
|
|
|
if the applicable market value of Wintrust common stock is less
than or equal to the reference price of
$ ,
then you will
receive shares
of common stock for each purchase contract (the maximum
settlement rate).
|
The maximum settlement rate, minimum settlement rate and the
applicable market value are each subject to adjustment as
described under Adjustments to the Fixed
Settlement Rates below. Each of the minimum settlement
rate and the maximum settlement rate is referred to as a
fixed settlement rate.
For illustrative purposes only, the following table shows the
number of shares of common stock issuable upon settlement of a
purchase contract at the assumed applicable market values, based
on the reference price of $ and
the threshold appreciation price of
$ .
The threshold appreciation price represents an appreciation
of % above the reference price of
$ .
The table assumes that there will be no adjustments to the
settlement rate described under Adjustments to
the Fixed Settlement Rates below and that the holders do
not elect to settle early as described under
Early Settlement or
Early Settlement Upon a Fundamental
Change below. Wintrust cannot assure you that the actual
applicable market value will be within the assumed range set
forth below. The reference price is the public offering price of
Wintrust common stock in the concurrent common stock offering.
S-31
A holder of a tangible equity unit or a separate purchase
contract, as applicable, will receive on the mandatory
settlement date the following numbers of shares of common stock
at the following assumed applicable market values:
|
|
|
|
|
Assumed Applicable Market
Value
|
|
Number of Shares of Common
Stock
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
As the above table illustrates, if, on the mandatory settlement
date, the applicable market value is greater than or equal to
the threshold appreciation price of
$ ,
Wintrust would be obligated to
deliver shares
of common stock for each purchase contract. As a result, you
would receive only approximately %
of the value of the shares of Wintrust common stock that you
would have received had you purchased $50 worth of shares of
Wintrust common stock at the public offering price in the
concurrent public offering.
If, on the mandatory settlement date, the applicable market
value is less than the threshold appreciation price of
$
but greater than the reference price of
$ ,
Wintrust would be obligated to deliver a number of shares of its
common stock on the mandatory settlement date equal to $50 (the
stated amount of the tangible equity units), divided by
the applicable market value. As a result, Wintrust would
retain all appreciation in the market value of its common stock
underlying each purchase contract.
If, on the mandatory settlement date, the applicable market
value is less than or equal to the reference price of
$ ,
Wintrust would be obligated to deliver upon settlement of the
purchase
contract shares
of common stock for each purchase contract, regardless of the
market price of Wintrust common stock. As a result, the holder
would realize the entire loss on the decline in market value of
the common stock underlying each purchase contract since the
initial issuance date of the tangible equity units. Because the
applicable market value (as defined below) of the common stock
is determined over the 20 trading days ending on the third
trading day immediately preceding the mandatory settlement date,
the number of shares of common stock delivered for each purchase
contract may be greater than or less than the number that would
have been delivered based on the closing price of the common
stock on the last trading day in such period. In addition, you
will bear the risk of fluctuations in the market price of the
shares of common stock deliverable upon settlement of the
purchase contracts between the end of such period and the date
such shares are delivered.
The term applicable market value means the average
of the daily VWAPs of Wintrust common stock on each of the 20
consecutive trading days ending on the third trading day
immediately preceding the mandatory settlement date.
S-32
The term daily VWAP of Wintrust common stock means,
on any date of determination, the per share volume-weighted
average price as displayed under the heading Bloomberg VWAP on
Bloomberg page WTFC.UQ <equity> AQR (or its
equivalent successor if such page is not available) in respect
of the period from the scheduled open of trading on the relevant
trading day until the scheduled close of trading on the relevant
trading day (or if such volume-weighted average price is
unavailable, the market price of one share of Wintrust common
stock on such trading day determined, using a volume-weighted
average method, by a nationally recognized independent
investment banking firm retained for this purpose by Wintrust).
The term trading day means a day on which:
|
|
|
|
|
there is no market disruption event (as defined
below); and
|
|
|
|
the NASDAQ Global Select Market is open for trading or, if
Wintrusts common stock is not then listed on the NASDAQ
Global Select Market, the principal other United States national
or regional securities exchange on which Wintrust common stock
is then listed is open for trading or, if Wintrust common stock
is not then listed on a United States national or regional
securities exchange, the principal other market on which
Wintrust common stock is then listed or admitted for trading is
open for trading.
|
If Wintrusts common stock (or other security for which a
daily VWAP must be determined) is not listed or admitted for
trading as described in the immediately preceding bullet,
trading day means a business day.
A market disruption event is defined as any of the
following events that has occurred:
|
|
|
|
|
any suspension of, or limitation imposed on, trading by the
NASDAQ Global Select Market during the
one-hour
period prior to the close of trading for the regular trading
session on the NASDAQ Global Select Market (or for purposes of
determining daily VWAP any period or periods aggregating one
half hour or longer), whether by reason of movements in price
exceeding limits permitted by the NASDAQ Global Select Market or
otherwise, relating to Wintrusts common stock or in
futures or option contracts relating to Wintrusts common
stock on the relevant exchange or quotation system;
|
|
|
|
any event (other than a failure to open or a closure as
described below) that disrupts or impairs the ability of market
participants during the
one-hour
period prior to the close of trading for the regular trading
session on the NASDAQ Global Select Market (or for purposes of
determining daily VWAP any period or periods aggregating one
half hour or longer) in general to effect transactions in, or
obtain market values for, Wintrusts common stock on the
NASDAQ Global Select Market system or futures or options
contracts relating to Wintrusts common stock on any
relevant exchange or quotation system; or
|
|
|
|
the failure to open of the exchange or quotation system on which
futures or options contracts relating to Wintrusts common
stock are traded or the closure of such exchange or quotation
system prior to its respective scheduled closing time for the
regular trading session on such day (without regard to after
hours or other trading outside the regular trading session
hours) unless such earlier closing time is announced by such
exchange or quotation system at least one hour prior to the
earlier of the actual closing time for the regular trading
session on such day and the submission deadline for orders to be
entered into such exchange or quotation system for execution at
the actual closing time on such day.
|
For the purposes of determining a market disruption
event, if Wintrusts common stock is not listed on
the NASDAQ Global Select Market, the term NASDAQ Global
Select Market in the definition of market disruption
event shall be deemed to be replaced by the principal
national securities exchange on which Wintrusts common
stock is listed for trading.
On the mandatory settlement date, Wintrust common stock will be
issued and delivered to you or your designee, upon
(i) surrender of certificates representing the purchase
contracts, if such purchase contracts are held in certificated
form, and (ii) payment by you of any transfer or similar
taxes payable in connection
S-33
with the issuance of Wintrust common stock to any person other
than you. As long as the purchase contracts are evidenced by one
or more global purchase contract certificates deposited with
DTC, procedures for settlement will be governed by standing
arrangements between DTC and the purchase contract agent.
Prior to the settlement of any purchase contract, the shares of
common stock underlying each purchase contract will not be
outstanding, and the holder of such purchase contract will not
have any voting rights, rights to dividends or other
distributions or other rights of a holder of Wintrust common
stock by virtue of holding such purchase contract.
Early
Settlement
On any trading day prior to the third business day immediately
preceding the mandatory settlement date, you, as a holder of
tangible equity units or a holder of separate purchase
contracts, may elect to settle your purchase contracts early, in
whole or in part, and receive shares of common stock, at the
early settlement rate, subject to adjustment as
described below under Adjustments to the Fixed
Settlement Rates. The early settlement rate is equal to
the minimum settlement rate, unless you elect to settle your
purchase contracts early in connection with a fundamental
change, in which case you will receive upon settlement of your
purchase contracts a number of shares of Wintrust common stock
based on the fundamental change early settlement
rate as described under Early Settlement
Upon a Fundamental Change.
Your right to receive common stock upon early settlement of your
purchase contract is subject to (i) delivery of a written
and signed notice of election (an early settlement
notice) to the purchase contract agent electing early
settlement of your purchase contract, (ii) surrendering the
certificates representing the purchase contract, if such
purchase contract or the tangible equity unit that includes such
purchase contract is held in certificated form and
(iii) payment by you of any transfer or similar taxes
payable in connection with the issuance of Wintrust common stock
to any person other than you. As long as the purchase contracts
or the tangible equity units are evidenced by one or more global
certificates deposited with DTC, procedures for early settlement
will be governed by standing arrangements between DTC and the
purchase contract agent. Upon surrender of the purchase contract
or the related tangible equity unit, you will receive the
applicable number of shares of common stock (and cash in lieu of
any fractional share) as promptly as practicable, but no later
than the third business day following the early settlement date.
Upon early settlement of the purchase contract component of a
tangible equity unit, the corresponding amortizing note will
remain outstanding and, beneficially owned by, or registered in
the name of, the holder thereof.
If you comply with the requirements for effecting early
settlement of your purchase contracts earlier than
5:00 p.m., New York City time, on any business day, then
that day will be considered the early settlement
date. If you comply with such requirements on or after
5:00 p.m., New York City time, on any business day or at
any time on a day that is not a business day, then the next
business day will be considered the early settlement
date.
Early
Settlement Upon a Fundamental Change
If a fundamental change occurs and you elect to
settle your purchase contracts early in connection with such
fundamental change, you will receive a number of shares of
Wintrust common stock (or cash, securities or other property)
based on the fundamental change early settlement
rate, as described below. An early settlement will be
deemed for these purposes to be in connection with
such fundamental change if you deliver your early settlement
notice to the purchase contract agent, and otherwise satisfy the
requirements for effecting early settlement of your purchase
contracts, during the period beginning on, and including, the
effective date of the fundamental change and ending on, and
including, the 30th business day thereafter (or, if
earlier, the third business day immediately preceding the
mandatory settlement date) (the fundamental change early
settlement date). Wintrust refers to this right as the
fundamental change early settlement right. An early
settlement in connection with a fundamental change will be
subject to the provisions set forth in the second paragraph
above under Early Settlement, except
that Wintrust will deliver the related settlement amounts owed
as promptly as practicable, but no later than the third business
day following the fundamental change early settlement date.
S-34
Wintrust will provide the purchase contract agent and the
holders of tangible equity units and separate purchase contracts
with a notice of a fundamental change within five business days
after its occurrence, issue a press release announcing such
effective date and post such press release on its website. The
notice will also set forth, among other things, (i) the
applicable fundamental change early settlement rate,
(ii) the kind and amount of the cash, securities and other
consideration receivable by the holder upon settlement and
(iii) the deadline by which each holders fundamental
change early settlement right must be exercised.
A fundamental change will be deemed to occur if any
of the following occurs:
(a) a person or group within the
meaning of Section 13(d) of the Exchange Act files a
Schedule TO or any schedule, form or report under the
Exchange Act disclosing that such person or group has become the
direct or indirect ultimate beneficial owner, as
defined in
Rule 13d-3
under the Exchange Act, of Wintrust common equity representing
more than 50% of the voting power of Wintrust common
stock; or
(b) consummation of any consolidation or merger of Wintrust
or similar transaction with, or any sale, lease or other
transfer in one transaction or a series of transactions of all
or substantially all of the property and assets of Wintrust to,
any person other than one of Wintrusts subsidiaries, in
each case pursuant to which Wintrusts common stock will be
converted into cash, securities or other property;
provided, however, that a fundamental change will
not be deemed to have occurred as a result of a transaction
described in clause (b) above if at least 90% of the
consideration received by holders of Wintrust common stock,
excluding cash payments for fractional shares and cash payments
made in respect of dissenters appraisal rights, in the
transaction or transactions consists of shares of common stock
or depositary receipts in respect of common stock that are
traded on a U.S. national securities exchange or that will
be so traded when issued or exchanged in connection with such
transaction or transactions.
The fundamental change early settlement rate will be
determined by reference to the table below, based on the date on
which the fundamental change occurs or becomes effective (the
effective date) and the stock price in
the fundamental change, which will be:
|
|
|
|
|
in the case of a fundamental change described in clause (b)
above in which holders of shares of Wintrust common stock
receive only cash in the fundamental change, the cash amount
paid per share of Wintrust common stock; and
|
|
|
|
in all other cases, the average of the daily VWAPs of Wintrust
common stock on each of the 10 consecutive trading days ending
on and including the trading day immediately preceding the
effective date.
|
The stock prices set forth in the first column of the table
below will be adjusted as of any date on which any fixed
settlement rate is otherwise adjusted. The adjusted stock prices
will equal the stock prices applicable immediately prior to such
adjustment, multiplied by a fraction, the numerator of
which is the minimum settlement rate immediately prior to the
adjustment giving rise to the stock price adjustment and the
denominator of which is the minimum settlement rate as so
adjusted. The number of shares in the table below will be
adjusted in the same manner as the fixed settlement rates as set
forth under Adjustments to the Fixed
Settlement Rates.
S-35
The following table sets forth the fundamental change early
settlement rate per purchase contract for each stock price and
effective date set forth below:
|
|
|
|
|
|
|
|
|
|
|
Effective Date
|
|
|
December ,
|
|
December 15,
|
|
December 15,
|
|
December 15,
|
Stock Price
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
The exact stock prices and effective dates may not be set forth
in the table above, in which case:
|
|
|
|
|
if the stock price is between two stock prices in the table or
the effective date is between two effective dates in the table,
the fundamental change early settlement rate will be determined
by a straight-line interpolation between the number of shares
set forth for the higher and lower stock prices and the earlier
and later effective dates, as applicable, based on a
365-day year;
|
|
|
|
if the stock price is greater than
$ per share, subject to adjustment
in the same manner as the stock prices set forth in the table
above, the fundamental change early settlement rate will be the
minimum settlement rate; or
|
|
|
|
if the stock price is less than $
per share (subject to adjustment in the same manner as the stock
prices set forth in the table above, the minimum stock
price), the fundamental change early settlement rate will
be determined as if the stock price equaled the minimum stock
price, using straight line interpolation, as described in the
first bullet of this paragraph, if the effective date is between
two effective dates in the table.
|
The maximum number of shares of Wintrust common stock
deliverable under a purchase contract
is ,
subject to adjustment in the same manner as the fixed settlement
rates as set forth under Adjustments to the
Fixed Settlement Rates.
Wintrusts obligation to settle the purchase contracts at
the fundamental change early settlement rate could be considered
a penalty, in which case the enforceability thereof would be
subject to general principles of reasonableness of economic
remedies.
If you exercise the fundamental change early settlement right
following the effective date of a fundamental change described
in clause (b) of the definition thereof, Wintrust will
deliver to you, for each purchase contract being settled early,
the kind and amount of securities, cash or other property that
you would have been entitled to receive in such fundamental
change transaction as a holder of a number of shares of Wintrust
common stock equal to the fundamental change settlement rate. If
such fundamental change causes Wintrust common stock to be
converted into the right to receive more than a single type of
consideration
S-36
(determined based in part upon any form of shareholder election)
and you exercise the fundamental change early settlement right,
Wintrust will deliver to you the types and amounts of
consideration as are proportional to the types and amounts of
consideration received by the holders of Wintrust common stock
that affirmatively make such an election. Wintrust will deliver
the shares of Wintrust common stock, securities, cash or other
property payable as a result of your exercise of the fundamental
change early settlement right on the third business day
following the fundamental change early settlement date.
If you do not elect to exercise your fundamental change early
settlement right, your purchase contracts will remain
outstanding and will be subject to normal settlement on any
subsequent early settlement date or the mandatory settlement
date, including, if applicable, in accordance with the
provisions set forth under Adjustments to the
Fixed Settlement Rates regarding the occurrence of a
business combination.
Adjustments
to the Fixed Settlement Rates
Each fixed settlement rate will be adjusted, without
duplication, if any of the following events occur:
(1) the issuance of Wintrust common stock as a dividend or
distribution to all holders of Wintrust common stock, or a
subdivision or combination of Wintrust common stock, in which
event each fixed settlement rate will be adjusted based on the
following formula:
SR1
=
SR0
×
(OS1
¸
OS0)
where,
SR0
= the fixed settlement rate in effect immediately prior to the
open of business on the ex-date (as defined below) for such
dividend or distribution or immediately prior to the open of
business on the effective date for such subdivision or
combination, as the case may be;
SR1
= the fixed settlement rate in effect immediately after the open
of business on such ex-date or immediately after the open of
business on such effective date, as the case may be;
OS0
= the number of shares of Wintrust common stock outstanding
immediately prior to such ex-date or immediately prior to such
effective date, as the case may be, in either case prior to
giving effect to such event; and
OS1
= the number of shares of Wintrust common stock that would be
outstanding immediately after giving effect to such dividend,
distribution, subdivision or combination.
Any adjustment made under this clause (1) shall become
effective immediately after the open of business on the ex- date
for such dividend or distribution, or immediately after the open
of business on the effective date for such share split or share
combination, as the case may be. If any dividend or distribution
of the type described in this clause (1) is declared but
not so paid or made, each fixed settlement rate shall be
immediately readjusted, effective as of the date the Wintrust
board of directors determines not to pay such dividend or
distribution, to the fixed settlement rate that would then be in
effect if such dividend or distribution had not been declared.
(2) the issuance to all holders of Wintrust common stock of
rights, options or warrants entitling them for a period expiring
60 days or less from the date of issuance of such rights,
options or warrants to subscribe for or purchase shares of
Wintrust common stock at less than the average of the daily
VWAPs for the 10 consecutive trading day period ending on and
including the trading day immediately preceding the date of the
announcement date of such issuance, in which event each fixed
settlement rate will be adjusted based on the following formula:
SR1
=
SR0
×
(OS0
+ X)
¸
(OS0
+ Y)
where,
SR0
= the fixed settlement rate in effect immediately prior to the
open of business on the ex-date for such issuance;
S-37
SR1
= the fixed settlement rate in effect immediately after the open
of business on such ex-date;
OS0
= the number of shares of Wintrust common stock outstanding
immediately prior to the open of business on such ex-date;
X = the total number of shares of Wintrust common stock issuable
pursuant to such rights, options or warrants; and
Y = the aggregate price payable to exercise such rights, options
or warrants, divided by the average of the daily VWAPs
for the 10 consecutive trading day period ending on and
including the trading day immediately preceding the announcement
date for such issuance.
Any increase made under this clause (2) will be made
successively whenever any such rights, options or warrants are
issued and shall become effective immediately after the open of
business on the ex-date for such issuance. To the extent that
shares of common stock are not delivered after the expiration of
such rights, options or warrants, each fixed settlement rate
shall be decreased, effective as of the date of such expiration,
to the fixed settlement rate that would then be in effect had
the increase with respect to the issuance of such rights,
options or warrants been made on the basis of delivery of only
the number of shares of common stock actually delivered. If such
rights, options or warrants are not so issued, each fixed
settlement rate shall be decreased, effective as of the date the
Wintrust board of directors determines not to make such
issuance, to the fixed settlement rate that would then be in
effect if such record date for such issuance had not occurred.
In determining whether any rights, options or warrants entitle
the holders to subscribe for or purchase shares of the common
stock at less than the average of the daily VWAPs for the 10
consecutive trading day period ending on and including the
trading day immediately preceding the announcement date for such
issuance, and in determining the aggregate price payable to
exercise such rights, options or warrants, there shall be taken
into account any consideration received by Wintrust for such
rights, options or warrants and any amount payable on exercise
or conversion thereof, the value of such consideration, if other
than cash, to be determined by the Wintrust board of directors.
(3) the dividend or other distribution to all holders of
Wintrust common stock of shares of Wintrust capital stock (other
than common stock), evidences of Wintrust indebtedness, Wintrust
assets or rights to acquire Wintrust capital stock, Wintrust
indebtedness or Wintrust assets (excluding any dividend,
distribution or issuance as to which an adjustment was made
pursuant to clauses (1) or (2) above, (4) below
or the provisions of this clause (3) relating to
spin-offs), in which event each fixed settlement rate will be
adjusted based on the following formula:
SR1
=
SR0
×
SP0
¸
(SP0
FMV)
where,
SR0
= the fixed settlement rate in effect immediately prior to the
open of business on the ex-date for such dividend or
distribution;
SR1
= the fixed settlement rate in effect immediately after the open
of business on such ex-date;
SP0
= the average of the daily VWAPs for the 10 consecutive trading
day period ending on and including the trading day immediately
preceding such ex-date; and
FMV = the fair market value (as determined by the Wintrust board
of directors), on the ex-date, for such dividend or distribution
of the shares of capital stock, evidences of indebtedness,
assets or rights so distributed, expressed as an amount per
share of Wintrust common stock.
Any increase made under the portion of this clause (3)
above will become effective immediately after the open of
business on the ex-date for such dividend or distribution. If
such distribution is not so paid or made, each fixed settlement
rate shall be decreased, effective as of the date the Wintrust
board of directors determines not to pay the dividend or
distribution, to the fixed settlement rate that would then be in
effect if such dividend or distribution had not been declared.
S-38
Notwithstanding the foregoing, if the transaction that gives
rise to an adjustment pursuant to this clause (3) is one
pursuant to which the payment of a dividend or other
distribution on Wintrust common stock consists of shares of
capital stock of, or similar equity interests in, a subsidiary
or other business unit of ours, (i.e., a spin-off) that are, or,
when issued, will be, traded on a U.S. national or regional
securities exchange, then each fixed settlement rate will
instead be adjusted based on the following formula:
SR1
=
SR0
×
(FMV0
+
MP0)
¸
MP0
where,
SR0
= the fixed settlement rate in effect immediately prior to the
close of business on the 10th consecutive trading day
commencing on, and including, the third trading day after the
date on which ex-distribution trading commences for
such dividend or distribution on the relevant exchange;
SR1
= the fixed settlement rate in effect immediately after the
close of business on the 10th consecutive trading day
commencing on, and including, the third trading day after the
date on which ex-distribution trading commences for
such dividend or distribution on the relevant exchange;
FMV0
= the average of the volume-weighted average prices of the
capital stock or similar equity interests distributed to holders
of Wintrust common stock applicable to one share of Wintrust
common stock over each of the 10 consecutive trading days
commencing on, and including, the third trading day after the
date on which ex-distribution trading commences for
such dividend or distribution on the NASDAQ Global Select Market
or such other U.S. national or regional securities exchange
on which such capital stock or similar equity interests are then
listed; and
MP0
= the average of the daily VWAPs of Wintrust common stock over
each of the 10 consecutive trading days commencing on, and
including, the third trading day after the date on which
ex-distribution trading commences for such dividend
or distribution.
The adjustment to each fixed settlement rate under this portion
of clause (3) will become effective immediately after the
close of business on the 10th consecutive trading day
commencing on, and including, the third trading day after the
date on which ex-distribution trading commences for
such dividend or distribution on the relevant exchange;
provided that in respect of any settlement within 10
trading days immediately following the third trading day after
the date on which ex-distribution trading commences
for such dividend or distribution on the relevant exchange, the
reference set forth in the calculation above to 10 consecutive
trading days shall be deemed replaced with such lesser number of
trading days as have elapsed between such third trading day and
the settlement date in determining the applicable fixed
settlement rates.
(4) Wintrust makes a distribution consisting exclusively of
cash to all holders of Wintrust common stock, excluding
(a) any cash that is distributed as part of a distribution
referred to in clause (3) above, (b) any consideration
payable in connection with a tender or exchange offer made by
Wintrust or any of its subsidiaries referred to in
clause (5) below and (c) any regular semi-annual
dividend that does not exceed $0.09 per share (the
dividend threshold amount), in which event, each
fixed settlement rate will be adjusted based on the following
formula:
SR1
=
SR0
×
SP0
¸
(SP0 −
C)
where,
SR0
= the fixed settlement rate in effect immediately prior to the
open of business on the ex-date for such distribution;
SR1
= the fixed settlement rate in effect immediately after the open
of business on such ex-date;
SP0
= the average of the daily VWAPs for the 10 consecutive trading
day period ending on and including the trading day immediately
preceding such ex-date; and
C = the amount in cash per share Wintrust distributes to holders
in excess of the dividend threshold amount; provided that
if the distribution is not a regular semi-annual cash dividend,
then the dividend threshold amount will be deemed to be zero.
S-39
The dividend threshold amount is subject to adjustment on an
inversely proportional basis whenever the fixed settlement rate
is adjusted (by multiplying the dividend threshold amount by a
fraction, the numerator of which will be the minimum settlement
rate in effect immediately prior to the adjustment and the
denominator of which will be the minimum settlement rate as
adjusted), but no adjustment will be made to the dividend
threshold amount for any adjustment made to the fixed settlement
rate pursuant to this clause (4). Any increase to each fixed
settlement rate made pursuant to this clause (4) shall
become effective immediately after the open of business on the
ex-date for such distribution. If any dividend or distribution
described in this clause (4) is declared but not so paid or
made, each fixed settlement rate shall be decreased, effective
as of the date the Wintrust board of directors not to pay or
make such distribution, to the fixed settlement rate that would
then be in effect if such distribution had not been declared.
(5) Wintrust or one or more of its subsidiaries makes
purchases of Wintrust common stock pursuant to a tender offer or
exchange offer by Wintrust or one of its subsidiaries for
Wintrust common stock to the extent that the cash and value of
any other consideration included in the payment per share of
Wintrust common stock validly tendered or exchanged exceeds the
daily VWAP per share of Wintrust common stock on the trading day
next succeeding the last date on which tenders or exchanges may
be made pursuant to such tender or exchange offer (the
expiration date), in which event each fixed
settlement rate will be adjusted based on the following formula:
SR1
=
SR0
× (FMV +
(SP1
×
OS1))
¸
(SP1
×
OS0)
where,
SR0
= the fixed settlement rate in effect immediately prior to the
close of business on the 10th trading day immediately
following, and including, the trading day next succeeding the
expiration date;
SR1
= the fixed settlement rate in effect immediately after the
close of business on the 10th trading day immediately
following, and including, the trading day next succeeding the
expiration date;
FMV = the fair market value (as determined by the Wintrust board
of directors), on the expiration date, of the aggregate value of
all cash and any other consideration paid or payable for shares
validly tendered or exchanged and not withdrawn as of the
expiration date;
OS1
= the number of shares of Wintrust common stock outstanding
immediately prior to the last time tenders or exchanges may be
made pursuant to such tender or exchange offer (the
expiration time) (without giving effect to the
purchase or exchange of shares pursuant to such tender offer or
exchange offer);
OS0
= the number of shares of Wintrust common stock outstanding at
the expiration time (after giving effect to the purchase or
exchange of shares pursuant to such tender offer or exchange
offer); and
SP1
= the average of the daily VWAPs of Wintrust common stock over
the 10 consecutive trading day period commencing on, and
including, the trading day immediately after the expiration date.
The adjustments to the fixed settlement rates under this
clause (5) will become effective immediately after the
close of business on the 10th trading day immediately
following, and including, the trading day next succeeding the
expiration date; provided that in respect of any
settlement within 10 trading days immediately following, and
including, the expiration date, references with respect to 10
trading days shall be deemed replaced with such lesser number of
trading days as have elapsed between the expiration date and the
settlement date in determining the applicable fixed settlement
rates. If Wintrust or one of its subsidiaries is obligated to
purchase Wintrust common stock pursuant to any such tender or
exchange offer but Wintrust or the relevant subsidiary is
permanently prevented by applicable law from effecting any such
purchase or all such purchases are rescinded, the fixed
settlement rates shall be immediately adjusted to the fixed
settlement rates that would then be in effect if such tender or
exchange offer had not been made.
Ex-date means the first date on which shares of
Wintrust common stock trade on the applicable exchange or in the
applicable market, regular way, without the right to receive the
issuance, dividend or distribution in question, from Wintrust
or, if applicable, from the seller of Wintrust common stock on
such exchange or market (in the form of due bills or otherwise)
as determined by such exchange or market.
S-40
Record date means, for purpose of this section, with
respect to any dividend, distribution or other transaction or
event in which the holders of Wintrust common stock have the
right to receive any cash, securities or other property or in
which Wintrust common stock (or other applicable security) is
exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination
of holders of Wintrust common stock entitled to receive such
cash, securities or other property (whether such date is fixed
by the Wintrust board of directors or by statute, contract or
otherwise).
Except as stated above or as otherwise agreed, the fixed
settlement rates will not be adjusted for the issuance of
Wintrust common stock or any securities convertible into or
exchangeable for Wintrust common stock or carrying the right to
purchase any of the foregoing or for the repurchase of Wintrust
common stock.
To the extent that Wintrust has a rights plan in effect upon
settlement of a purchase contract, you will receive, in addition
to Wintrust common stock, the rights under the rights plan,
unless, prior to the settlement of a purchase contract, the
rights have separated from the common stock, in which case each
fixed settlement rate will be adjusted at the time of separation
as if Wintrust made a distribution to all holders of Wintrust
common stock as described in clause (3) above, subject to
readjustment in the event of the expiration, termination or
redemption of such rights.
In the event of any consolidation, merger, sale or transfer of
assets, share exchange or other reorganization event, in each
case, pursuant to which Wintrust common stock is converted into
the right to receive other securities, cash or property (each, a
business combination), then, at and after the
effective time of the business combination, (i) each
purchase contract then outstanding will become a contract to
purchase the kind and amount of securities, cash or property
receivable upon any such transaction by the holder of one share
of common stock, multiplied by the applicable settlement rate
(the reference property) and (ii) the
applicable market value of Wintrust common stock will be
calculated based on the value of a unit of reference property
that a holder of one share of Wintrust common stock would have
received in such transaction. In the event holders of Wintrust
common stock have the opportunity to elect the form of
consideration to be received in such transaction, the reference
property will be deemed to be the weighted average of the types
and amounts of consideration received by the holders of Wintrust
common stock that affirmatively make an election. Wintrust will
agree in the purchase contract agreement not to become a party
to any such transaction unless its terms are consistent with the
foregoing.
In connection with any adjustment to the fixed settlement rates
described above, Wintrust will also adjust the dividend
threshold amount based on the number of shares of common stock
comprising the reference property and (if applicable) the value
of any non-stock consideration comprising the reference
property. If the reference property is comprised solely of
non-stock consideration, the dividend threshold amount will be
zero.
In the event of a taxable distribution of cash or property to
stockholders of Wintrust that results in an adjustment of each
fixed settlement rate or an increase in each fixed settlement
rate in Wintrusts discretion, holders of tangible equity
units and separate purchase contracts may, in certain
circumstances, be deemed to have received a distribution subject
to U.S. federal income tax as a dividend. In addition,
Non-U.S. Holders
(as defined below under Certain Material U.S. Federal
Income Tax Considerations) of tangible equity units and
separate purchase contracts may, in certain circumstances, be
deemed to have received a distribution subject to
U.S. federal withholding tax requirements.
In addition, Wintrust may make such increases in each fixed
settlement rate as Wintrust deems advisable. Wintrust may only
make such a discretionary adjustment if Wintrust makes the same
proportionate adjustment to each fixed settlement rate. No
adjustment in either fixed settlement rate will be required
unless such adjustment would require an increase or decrease of
at least one percent; provided, however, that any
such minor adjustments that are not required to be made will be
carried forward and taken into account in any subsequent
adjustment, and provided further that any such adjustment
of less than one percent that has not been made shall be made
(x) upon the end of the issuers fiscal year
commencing with the 2010 fiscal year and (y) upon the
purchase contract settlement date or any early settlement date.
Adjustments to each fixed settlement rate will be calculated to
the nearest 1/10,000th of a share.
S-41
Whenever the fixed settlement rates are adjusted, Wintrust must
deliver to the purchase contract agent a certificate setting
forth each fixed settlement rate, detailing the calculation of
each fixed settlement rate and describing the facts upon which
the adjustment is based. In addition, Wintrust must notify the
holders of tangible equity units and separate purchase contracts
of the adjustment within ten business days of any event
requiring such adjustment and describe in reasonable detail the
method by which each fixed settlement rate was adjusted; such
notification may be made by a press release.
There will be no adjustment to the fixed settlement rates in
case of the issuance of any shares of Wintrust common stock in a
merger, reorganization, acquisition, reclassification,
recapitalization or other similar transaction except as provided
in this section.
Each adjustment to each fixed settlement rate will result in a
corresponding adjustment to the early settlement rate. Each
adjustment to each fixed settlement rate will also result in an
adjustment to the applicable market value solely to determine
which of the three clauses in the definition of settlement rate
will be applicable on the mandatory settlement date. In
addition, if any adjustment to the settlement rate becomes
effective, or any ex-date or record date for any issuance,
dividend or distribution (relating to a required fixed
settlement rate adjustment) occurs, during the period beginning
on, and including, (i) the open of business on a first
trading day of the 20 trading day period during which the
applicable market value is calculated or (ii) in the case
of an early settlement or an early settlement upon a fundamental
change, the relevant early settlement date or fundamental change
early settlement date and, in each case, ending on, and
including, the date on which Wintrust delivers shares of its
common stock under the related purchase contract, Wintrust will
make appropriate adjustments to the fixed settlement rates, the
applicable market value
and/or the
number of shares of its common stock deliverable upon settlement
of the purchase contract, in each case, consistent with, and in
order to give effect to the intent of, the anti-dilution
adjustments set forth above.
The Wintrust board of directors will have the power to resolve
any ambiguity or, subject to applicable law, correct any error
in this section, and its action in so doing will be final and
conclusive.
Fractional
Shares
No fractional shares of Wintrust common stock will be issued to
holders upon settlement of the purchase contracts. In lieu of
fractional shares otherwise issuable, holders will be entitled
to receive an amount in cash equal to the fraction of a share of
Wintrust common stock, calculated on an aggregate basis in
respect of the purchase contracts being settled, multiplied
by the closing price of Wintrust common stock on the trading
day immediately preceding the mandatory settlement date, early
settlement date or fundamental change early settlement date, as
the case may be.
The closing price means, on any date of
determination (i) the closing sale price (or, if no closing
sale price is reported, the last reported sale price) of
Wintrusts common stock on the NASDAQ Global Select Market
on such date or, if Wintrusts common stock is not listed
for trading on the NASDAQ Global Select Market on any such date,
as reported in the composite transactions for the principal
United States national or regional securities exchange on which
Wintrusts common stock is so listed; or (ii) if
Wintrusts common stock is not so reported, the last quoted
bid price for Wintrusts common stock in the
over-the-counter
market as reported by the Pink OTC Markets Inc. or a similar
organization, or, if such bid price is not available, the
average of the mid-point of the last bid and ask prices of
Wintrusts common stock on such date from at least three
nationally recognized independent investment banking firms
retained by Wintrust for this purpose.
Consequences
of Bankruptcy
The mandatory settlement date for each purchase contract,
whether held separately or as part of a tangible equity unit,
will automatically accelerate upon the occurrence of specified
events of bankruptcy, insolvency or reorganization with respect
to Wintrust. Upon acceleration, holders will be entitled to
receive a number of shares of Wintrust common stock per purchase
contract equal to the maximum settlement rate in effect
immediately prior to such acceleration (regardless of the market
value of Wintrust common stock at that time). If Wintrust files
for bankruptcy court protection prior to the settlement of the
purchase contracts, however, Wintrust may be unable to deliver
Wintrust common stock in settlement of the accelerated purchase
S-42
contracts after such filing. Instead, a holder would have a
damage claim against Wintrust for the value of the common stock
that Wintrust would have otherwise been required to deliver upon
settlement of the purchase contracts. Wintrust expects that this
claim for damages will be subordinated to rank equally with the
claims by holders of Wintrust common stock in the bankruptcy
proceeding, in which case you will only be able to recover
damages to the extent holders of Wintrust common stock receive
any recovery.
Modification
The purchase contract agreement will contain provisions
permitting Wintrust and the purchase contract agent to modify
the purchase contract agreement without the consent of the
holders of purchase contracts (whether held separately or as a
component of tangible equity units) for any of the following
purposes:
|
|
|
|
|
to evidence the succession of another person to Wintrusts
obligations;
|
|
|
|
to add to the covenants for the benefit of holders of purchase
contracts or to surrender any of Wintrusts rights or
powers under the agreement;
|
|
|
|
to evidence and provide for the acceptance of appointment of a
successor purchase contract agent;
|
|
|
|
to make provision with respect to the rights of holders of
purchase contracts pursuant to adjustments in the settlement
rate due to consolidations, mergers or other reorganization
events;
|
|
|
|
to conform the provisions of the purchase contract agreement to
the Description of the Purchase Contracts section in
this prospectus supplement;
|
|
|
|
to cure any ambiguity or to correct or supplement any provisions
that may be defective or inconsistent with other provisions of
the purchase contract agreement provided such change does not
adversely affect the interests or rights of any holder of
purchase contracts in any material respect; and
|
|
|
|
to make any other change that does not adversely affect the
interests or rights of any holder of purchase contracts in any
material respect.
|
The purchase contract agreement will contain provisions
permitting Wintrust and the purchase contract agent, with the
consent of the holders of not less than a majority of the
purchase contracts at the time outstanding, to modify the terms
of the purchase contracts or the purchase contract agreement.
However, no such modification may, without the consent of the
holder of each outstanding purchase contract affected by the
modification,
|
|
|
|
|
reduce the number of shares of common stock deliverable upon
settlement of the purchase contract,
|
|
|
|
change the mandatory settlement date, the right to settle
purchase contracts early or the fundamental change early
settlement right, or otherwise adversely affect the
holders rights relating to settlement under the purchase
contract,
|
|
|
|
reduce the above-stated percentage of outstanding purchase
contracts the consent of the holders of which is required for
the modification or amendment of the provisions of the purchase
contracts or the purchase contract agreement, or
|
|
|
|
impair the right to institute suit for the enforcement of the
purchase contracts.
|
S-43
Consolidation,
Merger, Sale or Conveyance
Wintrust will covenant in the purchase contract agreement that
it will not merge with and into, consolidate with or convert
into any other entity or sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any
person or entity, unless:
|
|
|
|
|
Wintrust is the surviving entity or the successor entity, if
other than Wintrust, is a corporation organized and existing
under the laws of the United States of America, any state
thereof or the District of Columbia and that entity expressly
assumes Wintrusts obligations under the tangible equity
units, the purchase contracts and the purchase contract
agreement; and
|
|
|
|
immediately after the merger, consolidation, conversion, sale,
assignment, transfer, lease or conveyance, no default under the
tangible equity units, the purchase contracts or the purchase
contract agreement shall have occurred or be continuing.
|
Miscellaneous
Wintrust will at all times reserve and keep available out of
Wintrust authorized and unissued common stock, solely for
issuance upon settlement of the purchase contracts, that number
of shares of common stock as shall from time to time be issuable
upon the settlement of all purchase contracts then outstanding,
assuming settlement at the maximum settlement rate.
Governing
Law
The purchase contract agreement, the purchase contracts and any
claim, controversy or dispute arising under or related to the
purchase contract agreement or the purchase contracts will be
governed by, and construed in accordance with, the laws of the
State of New York (without regard to the conflicts of laws
provisions thereof).
Information
Concerning the Purchase Contract Agent
U.S. Bank National Association will be the purchase
contract agent. The purchase contract agent will act as the
agent for the holders of tangible equity units and separate
purchase contracts from time to time. The purchase contract
agreement will not obligate the purchase contract agent to
exercise any discretionary actions in connection with a default
under the terms of the purchase contracts or the purchase
contract agreement.
The purchase contract agreement will contain provisions limiting
the liability of the purchase contract agent. The purchase
contract agreement will contain provisions under which the
purchase contract agent may resign or be replaced. This
resignation or replacement would be effective upon the
acceptance of appointment by a successor.
U.S. Bank National Association acts as trustee under
certain of our indentures and performs other services for us in
the ordinary course of business.
S-44
DESCRIPTION
OF THE AMORTIZING NOTES
The amortizing notes will be issued under a junior subordinated
debt indenture (the base indenture), and a related
supplemental indenture for such amortizing notes (the
supplemental indenture), each to be dated the date
of issuance of such amortizing notes and each between Wintrust
and U.S. Bank National Association, collectively referred
to in this section as the indenture. The following
summary of the terms of the amortizing notes contains a
description of all of the material terms of the amortizing notes
but is not complete and is subject to, and is qualified in its
entirety reference to, all of the provisions of the indenture,
including the definitions in the indenture of certain terms.
Wintrust refers you to the form of base indenture, which has
been filed and is incorporated by reference as an exhibit to the
registration statement of which this prospectus forms a part.
Copies of the base indenture and the supplemental indenture will
be available for inspection at the office of the trustee.
As used in this section, the term Wintrust means
Wintrust Financial Corporation and does not include any of its
subsidiaries. The indenture does not limit the aggregate
principal amount of indebtedness that may be issued thereunder
and provides that junior subordinated debt securities may be
issued thereunder from time to time in one or more series.
General
The amortizing notes will be issued as a separate series of
junior subordinated debt securities under the indenture. The
amortizing notes will be issued in an aggregate principal amount
of $
(or
$
aggregate principal amount if the underwriters exercise their
over-allotment option in full). The scheduled final installment
payment date (as defined below) will be December 15, 2013,
subject to extension as described below. We may not redeem the
amortizing notes.
As described under Book-entry Procedures and
Settlement, amortizing notes may be issued in certificated
form in exchange for a global security. In the event that
amortizing notes are issued in certificated form, such
amortizing notes may be transferred or exchanged at the offices
described below. Payments on amortizing notes issued as a global
security will be made to DTC, to a successor depositary or, in
the event that no depositary is used, to a paying agent for the
amortizing notes. In the event amortizing notes are issued in
certificated form, installments will be payable, the transfer of
the amortizing notes will be registrable and amortizing notes
will be exchangeable for amortizing notes of other denominations
of a like aggregate principal amount at the corporate trust
office of the trustee in New York, New York. Installment
payments on certificated amortizing notes may be made at the
option of Wintrust by check mailed to the address of the persons
entitled thereto. See Book-entry Procedures and
Settlement.
There are no covenants or provisions in the indenture that would
afford the holders of the amortizing notes protection in the
event of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving Wintrust
that may adversely affect such holders.
Ranking
The amortizing notes will be junior subordinated obligations of
Wintrust and will rank junior both in liquidation and right of
payment to Wintrusts Senior Indebtedness (as
defined below under Subordination). The
amortizing notes will rank equally with all of Wintrusts
unsecured and junior subordinated indebtedness, whether
currently existing or hereinafter created, other than junior
subordinated indebtedness that is described as junior to the
amortizing notes. We may issue additional series of junior
subordinated debt securities that rank pari passu with
the amortizing notes.
Installment
Payments
Each amortizing note will have an initial principal amount of
$ .
On each March 15, June 15, September 15 and
December 15, commencing on March 15, 2011 (each, an
installment payment date), Wintrust will pay, in
cash, equal quarterly installments of
$ on
each amortizing note. Each installment will constitute a payment
of interest (at a rate of % per
annum) and a partial repayment of
S-45
principal on the amortizing note, allocated as set forth on the
amortization schedule set forth under
Amortization Schedule. The quarterly
installment payable on March 15, 2011, however, will be
$ .
Wintrust will have the right to defer installment payments at
any time and from time to time under the circumstances, and
subject to the conditions, described under
Option to Extend Installment Payment
Period so long as such deferral period does not extend
beyond December 15, 2015. Installments will be paid to the
person in whose name an amortizing note is registered, with
limited exceptions, at the close of business on the business day
immediately preceding the related installment payment date. In
the event the amortizing notes do not continue to remain in
book-entry only form, Wintrust will have the right to select
regular record dates, which will be more than 14 days but
less than 60 days prior to the relevant installment payment
date.
Each installment payment for any period will be computed on the
basis of a
360-day year
of twelve
30-day
months. The installment payable for any period shorter than a
full installment payment period will be computed on the basis of
the actual number of days elapsed per
30-day
month. In the event that any date on which an installment is
payable is not a business day, then payment of the installment
on such date will be made on the next succeeding day that is a
business day, and without any interest or other payment in
respect of any such delay. However, if such business day is in
the next succeeding calendar year, then such installment payment
shall be made on the immediately preceding business day, in each
case with the same force and effect as if made on such date.
Amortization
Schedule
The total installments of principal on the amortizing notes for
each scheduled installment payment date are set forth below:
|
|
|
|
|
|
|
|
|
|
|
Amount of
|
|
|
Amount of
|
|
Scheduled Installment Payment
Date
|
|
Principal
|
|
|
Interest
|
|
|
March 15, 2011
|
|
$
|
|
|
|
$
|
|
|
June 15, 2011
|
|
$
|
|
|
|
$
|
|
|
September 15, 2011
|
|
$
|
|
|
|
$
|
|
|
December 15, 2011
|
|
$
|
|
|
|
$
|
|
|
March 15, 2012
|
|
$
|
|
|
|
$
|
|
|
June 15, 2012
|
|
$
|
|
|
|
$
|
|
|
September 15, 2012
|
|
$
|
|
|
|
$
|
|
|
December 15, 2012
|
|
$
|
|
|
|
$
|
|
|
March 15, 2013
|
|
$
|
|
|
|
$
|
|
|
June 15, 2013
|
|
$
|
|
|
|
$
|
|
|
September 15, 2013
|
|
$
|
|
|
|
$
|
|
|
December 15, 2013
|
|
$
|
|
|
|
$
|
|
|
For the avoidance of doubt and notwithstanding anything to the
contrary in this prospectus supplement, the first installment
payment for the amortizing notes, payable on March 15,
2011, shall be equal to $ per
amortizing note.
Option to
Extend Installment Payment Period
Wintrust may defer installment payments, at any time and from
time to time, by extending the installment payment period, so
long as such period of time does not extend beyond
December 15, 2015 (the extension period).
Wintrust may end an extension period on any installment payment
date occurring on or before December 15, 2013 or, in the
case of an extension period that extends beyond
December 15, 2013, on any business day thereafter that is
on or before December 15, 2015.
At the end of any extension period, Wintrust will pay all
installment payments for which the related installment payment
date occurred during such extension period, together with
interest on the full amount of such installment payments
compounded quarterly at the rate specified for the interest
component of the
S-46
amortizing notes to the extent permitted by applicable law.
Wintrust will give the holders of tangible equity units and
separate amortizing notes at least 10 business days notice
prior to the end of an extension period.
Prior to the termination of any extension period, Wintrust may
further defer installment payments by extending such extension
period. Such extension period, including all such previous and
further extensions, may not extend beyond December 15,
2015. Upon the termination of any extension period and the
payment of all amounts then due, Wintrust may commence a new
extension period, if consistent with the terms set forth in this
section. No installment payment (or interest thereon) during an
extension period, except at the end of such period, shall be due
and payable.
Wintrust has no present intention of exercising its right to
defer installment payments by extending the installment payment
period on the amortizing notes.
Wintrust will give the holders of tangible equity units and
amortizing notes notice of its election of an extension period
(or any extension thereof) at least 10 business days prior to
the earlier of:
|
|
|
|
|
the next succeeding installment payment date; or
|
|
|
|
the date upon which Wintrust is required to give notice to
holders of the amortizing notes of the record date or payment
date of such installment payment.
|
Restrictions
Applicable During an Extension Period and Certain Other
Circumstances
If:
|
|
|
|
|
there shall have occurred and be continuing an event of default
or a default in respect of any of our payment obligations under
the indenture; or
|
|
|
|
Wintrust shall have given notice of its election to defer
installment payments on amortizing notes by extending the
installment payment period and such period, or any extension of
such period, shall be continuing,
|
then:
|
|
|
|
|
Wintrust and its subsidiaries shall not declare or pay any
dividend on, make any distributions relating to, or redeem,
purchase, acquire or make a liquidation payment relating to, any
of Wintrusts capital stock or make any guarantee payment
with respect thereto other than:
|
|
|
|
|
|
purchases, redemptions or other acquisitions of shares of
capital stock of Wintrust in connection with any employment
contract, benefit plan or other similar arrangement with or for
the benefit of employees, officers, directors or consultants;
|
|
|
|
purchases of shares of common stock of Wintrust pursuant to a
contractually binding requirement to buy stock existing prior to
the commencement of the extension period, including under a
contractually binding stock repurchase plan;
|
|
|
|
as a result of an exchange or conversion of any class or series
of Wintrusts capital stock for any other class or series
of Wintrusts capital stock;
|
|
|
|
the purchase of fractional interests in shares of
Wintrusts capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being
converted or exchanged; or
|
|
|
|
purchases of Wintrusts capital stock in connection with
the distribution thereof; and
|
|
|
|
|
|
Wintrust and its subsidiaries shall not make any payment of
interest, principal or premium on, or repay, purchase or redeem,
any debt securities or guarantees issued by Wintrust that rank
equally with or junior to the amortizing notes other than pro
rata payments of accrued and unpaid interest on the amortizing
notes and any other debt securities or guarantees issued by
Wintrust that rank equally with the amortizing notes, except and
to the extent the terms of any such debt securities would
prohibit Wintrust from making such pro rata payment.
|
S-47
These restrictions, however, will not apply to any stock
dividends paid by Wintrust where the dividend stock is the same
stock as, or junior to, that stock on which the dividend is
being paid.
Subordination
The indenture provides that the amortizing notes are
subordinated and junior in right of payment to Wintrusts
obligations to the holders of Senior Indebtedness (as defined
below) to the extent specified in the indenture. This means that
in the case of any insolvency, liquidation or other certain
specified events of or relating to Wintrust as a whole, whether
voluntary or involuntary, all obligations to holders of Senior
Indebtedness shall be entitled to be paid in full before any
payment shall be made on account of the principal of or interest
on the amortizing notes. In the event of any such proceeding,
after payment in full of all sums owing with respect to Senior
Indebtedness, the holders of the amortizing notes, together with
the holders of any obligations of Wintrust ranking on a parity
with the amortizing notes, shall be entitled to be paid from the
remaining assets of Wintrust the amounts at the time due and
owing on account of unpaid principal of and interest on the
amortizing notes before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account
of any capital stock or any obligations of Wintrust ranking
junior to the amortizing notes.
In addition, if there shall have occurred and be continuing
(a) a default in any payment with respect to any Senior
Indebtedness or (b) an event of default with respect to any
Senior Indebtedness as a result of which the maturity thereof is
accelerated, unless and until such payment default or event of
default shall have been cured or waived or shall have ceased to
exist, no installment payments shall be made by Wintrust with
respect to the amortizing notes.
The term Senior Indebtedness means the following,
whether now outstanding or subsequently created, assumed or
incurred:
|
|
|
|
|
all indebtedness of Wintrust for money borrowed, including any
obligation of, or any obligation guaranteed by, Wintrust, for
the repayment of borrowed money, whether or not evidenced by
bonds, debentures, securities, notes or other written
instruments (including, without limitation, (i) the
$25 million Subordinated Note between Wintrust Financial
Corporation and Bank of America, N.A. (as successor by merger
with LaSalle Bank National Association), dated October 29,
2002, as amended from time to time; (ii) the
$25 million Subordinated Note between Wintrust Financial
Corporation and Bank of America, N.A. (as successor by merger
with LaSalle Bank National Association), dated April 30,
2003, as amended from time to time; and (iii) the
$25 million Subordinated Note between Wintrust Financial
Corporation and Bank of America, N.A. (as successor by merger
with LaSalle Bank National Association), dated October 25,
2005, as amended from time to time);
|
|
|
|
any deferred obligation of Wintrust for the payment of the
purchase price of property or assets acquired other than in the
ordinary course of business;
|
|
|
|
all obligations, contingent or otherwise, of Wintrust in respect
of any letters of credit, bankers acceptances, security purchase
facilities and similar transactions;
|
|
|
|
all capital lease obligations of Wintrust;
|
|
|
|
all obligations of Wintrust in respect of interest rate swap,
cap or other agreements, interest rate future or option
contracts, currency swap agreements, currency future or option
contacts, commodity contracts and other similar agreements;
|
|
|
|
all obligations of the type referred to in the above five
bullets of other persons for the payment of which Wintrust is
responsible or liable as obligor, guarantor or otherwise;
|
|
|
|
all obligations of the type referred to in the above six bullets
of other persons secured by any lien on any property or asset of
Wintrust, whether or not such obligation is assumed by Wintrust;
|
S-48
provided, however, that the term Senior
Indebtedness does not include:
|
|
|
|
|
any securities issued under the base indenture (including the
amortizing notes),
|
|
|
|
Wintrusts junior subordinated debt securities underlying
trust preferred securities issued by subsidiary trusts of
Wintrust which are outstanding as of the date the tangible
equity units are issued or which are thereafter issued by a
subsidiary trust of Wintrust,
|
|
|
|
any guarantee in respect of the trust preferred securities of a
subsidiary trust of Wintrust, or
|
|
|
|
any indebtedness or any guarantee ranking junior to, or ranking
on a parity with, such securities and the issuance of which
(i) has received the concurrence or approval of the Federal
Reserve or its staff or (ii) does not at the time of
issuance prevent such securities (or any security or unit of
which such securities comprise a part) from qualifying for
Tier 1 capital treatment (irrespective of any limits on the
amount of Wintrusts Tier 1 capital) under applicable
capital adequacy guidelines, regulations, policies, published
interpretations or any applicable concurrence or approval of the
Federal Reserve or its staff.
|
The amortizing notes will rank senior to all of Wintrusts
equity securities, including its preferred stock, whether now
outstanding or subsequently created.
The indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued by Wintrust.
Notwithstanding the above and anything to the contrary in this
prospectus supplement, holders of Senior Indebtedness who are
not also holders of tangible equity units or amortizing notes
will not have any rights under the indenture to enforce any of
the covenants in the indenture.
Events of
Default
Each of the following will be an event of default
with respect to the amortizing notes:
|
|
|
|
|
default in the payment in full of all deferred installment
payments on the amortizing notes on or by December 15, 2015
and continuance of such failure to pay for a period of
30 days;
|
|
|
|
failure on the part of Wintrust duly to observe or perform any
other of the covenants or agreements on the part of Wintrust in
the amortizing notes or in the indenture, and continuance of
such failure for a period of 90 days after the date on
which written notice of such failure, requiring Wintrust to
remedy the same, shall have been given to Wintrust by the
trustee, or to Wintrust and the trustee by the holders of at
least 25% in aggregate principal amount of the securities of all
series affected thereby specifying such default or
breach; and
|
|
|
|
specified events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of
Wintrust.
|
If an event of default described in the third bullet above (a
bankruptcy event of default) occurs and is
continuing, then and in each such case either the trustee or the
holders of not less than 25% in aggregate initial principal
amount of the amortizing notes then outstanding, by notice in
writing to Wintrust (and to the trustee if given by holders),
may declare the principal amount of all the amortizing notes to
be due and payable immediately, and upon any such declaration
the same shall become immediately due and payable. This
provision, however, is subject to the condition that, at any
time after such a declaration of acceleration, and before any
judgment or decree for the payment of the money due shall have
been obtained or entered, the holders of a majority in aggregate
principal amount of the amortizing notes then outstanding, by
written notice to Wintrust and to the trustee, may waive all
defaults and rescind and annul such declaration and its
consequences, if:
|
|
|
|
|
Wintrust shall pay or shall deposit with the trustee a sum
sufficient to pay:
|
|
|
|
|
|
all matured installments of interest on all the amortizing notes
that shall have become due otherwise than by acceleration (with
interest on overdue installments of interest (to the
|
S-49
|
|
|
|
|
extent that payment of such interest is enforceable under
applicable law) at the rate borne by the amortizing notes, to
the date of such payment or deposit); and
|
|
|
|
|
|
all sums paid or advanced by the trustee and the reasonable
compensation, expenses, disbursements and advances of the
trustee, its agents and counsel and any other amounts due the
trustee under the indenture; and
|
|
|
|
|
|
any and all defaults with respect to amortizing notes under the
indenture, other than the nonpayment of installments on
amortizing notes that shall have become due by acceleration,
shall have been cured or waived as provided below in the
penultimate paragraph of this section.
|
No such waiver or rescission and annulment shall extend or shall
affect any subsequent default or shall impair any right
consequent thereon.
There is no right of acceleration upon the occurrence of an
event of default described in the first bullet or second bullet
of the definition of event of default above. In
addition, any deferral of installment payments on the amortizing
notes made in accordance with the provisions described under
Option to Extend Installment Payment
Period will not constitute an event of default under the
indenture.
In the case of an event of default described in the first bullet
of the definition thereof, then, upon demand of the trustee,
Wintrust will pay to the trustee, for the benefit of the holders
of the amortizing notes, the whole amount that then shall have
become due and payable on all such amortizing notes for
principal, premium, if any, or interest, or any combination
thereof, as the case may be, with interest upon the overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments
of interest, at the rate borne by the amortizing notes; and, in
addition, such further amount as shall be sufficient to cover
the costs and expenses of collection, including reasonable
compensation, expenses, disbursements and advances of the
trustee, its agent, attorneys and counsel. If Wintrust does not
pay such amounts upon such demand, the trustee shall be entitled
and empowered to institute any actions or proceeding at law or
in equity for the collection of the sums so due and unpaid, and
may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree
against Wintrust or any other obligor on the amortizing notes
and collect in the manner provided by law out of the property of
Wintrust or any other obligor on the amortizing notes, wherever
situated, the money adjudged or decreed to be payable.
No holder of any amortizing note shall have any right to
institute any suit, action or proceeding in equity or at law
upon or under or with respect to the indenture or for the
appointment of a receiver or trustee, or for any other remedy
under the indenture, unless such holder previously shall have
given to the trustee written notice of default and of the
continuance thereof and unless also:
|
|
|
|
|
the holders of not less than 25% in aggregate principal amount
of the amortizing notes then outstanding shall have made written
request upon the trustee to institute such action, suit or
proceeding in its own name as trustee under the indenture and
shall have offered to the trustee such reasonable security or
indemnity as the trustee may require against the costs, expenses
and liabilities to be incurred in compliance with such request;
|
|
|
|
the trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused
to institute any such action, suit or proceeding and
|
|
|
|
no direction inconsistent with such written request has been
given to the trustee during such
60-day
period by the holders of a majority in principal amount of the
outstanding amortizing notes;
|
it being understood and intended, and being expressly covenanted
by each person who acquires and holds an amortizing note with
every other such person holding an outstanding note under the
base indenture, that no one or more holders of outstanding notes
under the base indenture shall have any right in any manner
whatever by virtue of or by availing of any provision of the
indenture to affect, disturb or prejudice the rights of any
other holder of such notes, or to obtain or seek to obtain
priority over or preference to any other such holder, or to
enforce any right under the indenture, except in the manner
provided in the indenture and for the equal,
S-50
ratable and common benefit of all holders of outstanding notes
under the base indenture. Notwithstanding any other provision of
the indenture, however, the right of any holder of any
amortizing note to receive payment of installments on or after
their respective due dates, or to institute suit for the
enforcement of any such payment on or after such respective
dates against Wintrust, shall not be impaired or affected
without the consent of such holder.
Subject to certain restrictions, the holders of a majority in
aggregate principal amount of the amortizing notes affected
(voting as one class) at the time outstanding shall have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee, or
exercising any trust or power conferred on the trustee.
Prior to any declaration that the principal of the outstanding
amortizing notes is due and payable, the holders of a majority
in aggregate principal amount of the amortizing notes at the
time outstanding on behalf of the holders of all of the
amortizing notes may waive any past default or event of default
under the Indenture and its consequences except a default under
a covenant in the indenture that cannot be modified without the
consent of each holder of an amortizing note affected thereby.
Upon any such waiver, Wintrust, the trustee and the holders of
the amortizing notes shall be restored to their former positions
and rights under the Indenture, respectively; but no such waiver
shall extend to any subsequent or other default or event of
default or impair any right consequent thereon.
Wintrust is required to file annually with the trustee a
statement of an officer as to the fulfillment by Wintrust of its
obligations under the indenture during the preceding year.
The trustee, within 90 days after the occurrence of a
default with respect to amortizing notes, shall mail to all
holders notice of all such defaults known to the trustee, unless
such defaults shall have been cured or waived before the giving
of such notice; provided that, except in the case of
default in the payment of an installment on any of the
amortizing notes, the trustee shall be protected in withholding
such notice if and so long as its board of directors, the
executive committee or a trust committee of directors
and/or
responsible officers of the trustee in good faith determines
that the withholding of such notice is in the interest of the
holders.
Modifications
and Amendments
Wintrust and the trustee may amend or supplement the indenture
or the amortizing notes without notice to or the consent of any
holder:
|
|
|
|
|
to cure any ambiguity, defect or inconsistency in the indenture;
provided that such amendment or supplement shall not
materially and adversely affect the interests of the holders;
|
|
|
|
to evidence the succession of another person to Wintrust and the
assumption by any such successor of the covenants of Wintrust
contained in the indenture and the amortizing notes pursuant to
the obligations set forth in Consolidation,
Merger and Sale of Assets;
|
|
|
|
to comply with any requirements of the SEC in connection with
the qualification of the indenture under the
Trust Indenture Act;
|
|
|
|
to evidence and provide for the acceptance of appointment with
respect to the amortizing notes by a successor trustee and to
add to or change any of the provisions of the indenture as shall
be necessary to provide for or facilitate the administration of
the trusts under the indenture by more than one trustee;
|
|
|
|
to provide for uncertificated or unregistered securities and to
make all appropriate changes for such purpose;
|
|
|
|
to make any change that does not materially and adversely affect
the rights of any holder; and
|
|
|
|
to conform the provisions of the indenture and the amortizing
notes to the Description of the Amortizing Notes
section in this prospectus supplement.
|
S-51
Without prior notice to any holders, Wintrust and the trustee
may amend the indenture with respect to the amortizing notes
with the written consent of the holders of a majority in
principal amount of the outstanding amortizing notes, and the
holders of a majority in principal amount of the outstanding
amortizing notes by written notice to the trustee may waive
future compliance by Wintrust with any provision of the
indenture with respect to the amortizing notes. However, without
the consent of each holder affected thereby, an amendment or
waiver may not:
|
|
|
|
|
change the stated maturity of the principal of, or any
installment of interest on, such holders amortizing notes,
|
|
|
|
reduce the principal amount thereof or the rate of interest
thereon;
|
|
|
|
reduce the above-stated percentage of outstanding amortizing
notes the consent of whose holders is necessary to modify
or amend the indenture with respect to the amortizing
notes; or
|
|
|
|
reduce the percentage in principal amount of outstanding
amortizing notes the consent of whose holders is required for
any supplemental indenture or for any waiver of compliance with
certain provisions of the indenture or certain events of default
and their consequences provided for in the indenture.
|
It is not necessary for the consent of any holder to approve the
particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the
substance thereof. After an amendment, supplement or waiver
becomes effective, Wintrust shall give to the holders affected
thereby a notice briefly describing the amendment, supplement or
waiver. Wintrust will mail supplemental indentures to holders
upon request. Any failure of Wintrust to mail such notice, or
any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver.
Satisfaction,
Discharge and Defeasance
Wintrust may discharge most of its obligations under the
indenture to holders of the amortizing notes if:
|
|
|
|
|
it has paid or caused to be paid the installments on all
amortizing notes outstanding as and when the same shall have
become due and payable, or
|
|
|
|
it has delivered to the trustee for cancellation all amortizing
notes authenticated, or
|
|
|
|
all amortizing notes not delivered to the trustee for
cancellation have become due and payable, or are by their terms
to become due and payable within one year, and
(ii) Wintrust has irrevocably deposited or caused to be
deposited an amount of cash or U.S. government obligations
with the trustee sufficient to pay at maturity all amortizing
notes not theretofore delivered to the trustee for cancellation,
including installments to become due on or prior to such date of
maturity.
|
Wintrust, at its option:
|
|
|
|
|
will be released from any and all obligations in respect of the
amortizing notes, which is known as defeasance and
discharge; or
|
|
|
|
need not comply with certain designated covenants regarding the
amortizing notes, which is known as covenant
defeasance.
|
If Wintrust exercises its covenant defeasance option, the
failure to comply with any defeased covenant and any default in
the indenture will no longer be a default thereunder.
To exercise either its defeasance and discharge or covenant
defeasance option, Wintrust must
|
|
|
|
|
deposit with the trustee, in trust, cash or U.S. government
obligations in an amount sufficient to pay all the remaining
installments on the amortizing notes when such payments are
due; and
|
S-52
|
|
|
|
|
deliver an opinion of counsel, which, in the case of defeasance
and discharge, must be based upon a change in applicable
U.S. federal income tax law or a ruling or administrative
pronouncement of the IRS, to the effect that the holders of the
amortizing notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such
deposit or defeasance and will be required to pay
U.S. federal income tax in the same manner as if such
defeasance had not occurred.
|
When there is a defeasance and discharge, the indenture will no
longer govern the amortizing notes, Wintrust will no longer be
liable for payment and the holders of such amortizing notes will
be entitled only to the deposited funds. When there is a
covenant defeasance, however, Wintrust will continue to be
obligated for installment payments when due if the deposited
funds are not sufficient to pay the holders.
The obligations under the indenture to register the transfer or
exchange of amortizing notes, to replace mutilated, defaced,
destroyed, lost or stolen amortizing notes, and to maintain
paying agents and hold monies for payment in trust will continue
even if Wintrust exercises its defeasance and discharge or
covenant defeasance option.
Consolidation,
Merger and Sale of Assets
The indenture provides that Wintrust shall not consolidate with,
merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property
and assets (in one transaction or a series of related
transactions) to, any person unless either:
|
|
|
|
|
Wintrust is the continuing person or the person (if other than
Wintrust) formed by such consolidation or into which Wintrust is
merged or to which properties and assets of Wintrust are sold,
conveyed, transferred or leased shall be an entity organized and
validly existing under the laws of the United States of America,
any state thereof or the District of Columbia or any
jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the trustee,
all of the obligations of Wintrust on all of the junior
subordinated debt securities and under the indenture and the
performance of every other covenant of the indenture on the part
of Wintrust; and
|
|
|
|
Wintrust delivers to the trustee (A) an opinion of counsel
regarding the transactions compliance with the relevant
provisions of the indenture and (B) an officers
certificate to the effect that immediately after giving effect
to such transaction, no default and no event which, after notice
or lapse of time, or both, would become a default, shall have
occurred and be continuing.
|
Upon any such consolidation or merger, or any sale, conveyance,
transfer, lease or other disposition of all or substantially all
of the property and assets of Wintrust, the successor person
formed by such consolidation or into which Wintrust is merged or
to which such sale, conveyance, transfer, lease or other
disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, Wintrust under the
indenture with the same effect as if such successor person had
been named as the company in the indenture and thereafter the
predecessor person, except in the case of a lease, shall be
relieved of all obligations and covenants under the indenture
and the junior subordinated debt securities, including the
amortizing notes, outstanding thereunder.
Concerning
the Trustee
U.S. Bank National Association will act as trustee under
the indenture pursuant to which the amortizing notes will be
issued. U.S. Bank National Association acts as trustee
under certain of our other indentures and performs other
services for us in the ordinary course of business.
Governing
Law
The indenture and the amortizing notes, and any claim,
controversy or dispute arising under or related to the indenture
or amortizing notes, for all purposes shall be governed by and
construed in accordance with the laws of the State of New York
(without regard to the conflicts of laws provisions thereof).
S-53
Unclaimed
Funds
All funds deposited with the trustee for the payment of
installment payments in respect of the amortizing notes that
remain unclaimed for two years after the final installment date
will be repaid to Wintrust upon its request. Thereafter, any
right of any holder of the amortizing notes to such funds shall
be enforceable only against Wintrust, and the trustee will have
no liability therefor.
S-54
BOOK-ENTRY
PROCEDURES AND SETTLEMENT
The tangible equity units, the separate purchase contracts and
the separate amortizing notes will initially be issued under a
book-entry system in the form of global securities. Wintrust
will register the global securities in the name of The
Depository Trust Company, New York, New York
(DTC), or its nominee and will deposit the global
securities with that depositary.
Following the issuance of a global security in registered form,
the depositary will credit the accounts of its participants with
the tangible equity units, the separate purchase contracts and
the separate amortizing notes, as the case may be, upon
Wintrusts instructions. Only persons who hold directly or
indirectly through financial institutions that are participants
in the depositary can hold beneficial interests in the global
securities. Because the laws of some jurisdictions require
certain types of purchasers to take physical delivery of such
securities in definitive form, you may encounter difficulties in
your ability to own, transfer or pledge beneficial interests in
a global security.
So long as the depositary or its nominee is the registered owner
of a global security, Wintrust and the trustee will treat the
depositary as the sole owner or holder of the tangible equity
units, the separate purchase contracts and the separate
amortizing notes, as the case may be. Therefore, except as set
forth below, you will not be entitled to have tangible equity
units, separate purchase contracts or separate amortizing notes
registered in your name or to receive physical delivery of
certificates representing the tangible equity units, the
separate purchase contracts or the separate amortizing notes.
Accordingly, you will have to rely on the procedures of the
depositary and the participant in the depositary through whom
you hold your beneficial interest in order to exercise any
rights of a holder under the indenture or the purchase contract
agreement, as the case may be. It is the understanding of
Wintrust that under existing practices, the depositary would act
upon the instructions of a participant or authorize that
participant to take any action that a holder is entitled to take.
You may elect to hold interests in the global securities either
in the United States through DTC or outside the United States
through Clearstream Banking, société anonyme
(Clearstream) or Euroclear Bank, S.A./N.V., or its
successor, as operator of the Euroclear System,
(Euroclear) if you are a participant of such system,
or indirectly through organizations that are participants in
such systems. Interests held through Clearstream and Euroclear
will be recorded on DTCs books as being held by the
U.S. depositary for each of Clearstream and Euroclear,
which U.S. depositaries will in turn hold interests on
behalf of their participants customers securities
accounts.
As long as the separate amortizing notes are represented by the
global securities, Wintrust will pay installments on those
separate amortizing notes to or as directed by DTC as the
registered holder of the global securities. Payments to DTC will
be in immediately available funds by wire transfer. DTC,
Clearstream or Euroclear, as applicable, will credit the
relevant accounts of their participants on the applicable date.
Neither Wintrust nor the trustee will be responsible for making
any payments to participants or customers of participants or for
maintaining any records relating to the holdings of participants
and their customers, and you will have to rely on the procedures
of the depositary and its participants.
Settlement
Secondary market trading between DTC participants will occur in
the ordinary way in accordance with DTC rules and will be
settled in immediately available funds using DTCs
Same-Day
Funds Settlement System. Secondary market trading between
Clearstream customers
and/or
Euroclear participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of
Clearstream and Euroclear and will be settled using the
procedures applicable to conventional eurobonds in immediately
available funds.
Cross-market transfers between persons holding directly or
indirectly through DTC, on the one hand, and directly or
indirectly through Clearstream customers or Euroclear
participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European
international clearing system by its U.S. depositary;
however, such cross-market transactions will require delivery of
instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its
S-55
rules and procedures and within its established deadlines (based
on European time). The relevant European international clearing
system will, if the transaction meets its settlement
requirements, deliver instructions to the U.S. depositary
to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or
receiving payment in accordance with normal procedures for
same-day
funds settlement applicable to DTC. Clearstream customers and
Euroclear participants may not deliver instructions directly to
their respective U.S. depositaries.
Because of time-zone differences, credits of securities received
in Clearstream or Euroclear as a result of a transaction with a
DTC participant will be made during subsequent securities
settlement processing and dated the business day following the
DTC settlement date. Such credits or any transactions in
tangible equity units, separate purchase contracts or separate
amortizing notes, as the case may be, that are settled during
such processing will be reported to the relevant Clearstream
customers or Euroclear participants on such business day. Cash
received in Clearstream or Euroclear as a result of sales of
tangible equity units, separate purchase contracts or separate
amortizing notes, as the case may be, by or through a
Clearstream customer or a Euroclear participant to a DTC
participant will be received with value on the DTC settlement
date but will be available in the relevant Clearstream or
Euroclear cash account only as of the business day following
settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of
tangible equity units, separate purchase contracts and separate
amortizing notes, as the case may be, among participants of DTC,
Clearstream and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such
procedures may be discontinued at any time.
Definitive
securities and paying agents
A beneficial owner of book-entry securities represented by a
global security may exchange the securities for definitive
(paper) securities only if:
(a) the depositary is unwilling or unable to continue as
depositary for such global security and Wintrust is unable to
find a qualified replacement for the depositary within
90 days;
(b) at any time the depositary ceases to be a clearing
agency registered under the Securities Exchange Act of
1934; or
(c) Wintrust in its sole discretion decides to allow some
or all book-entry securities to be exchangeable for definitive
securities in registered form.
The global security will be exchangeable in whole for definitive
securities in registered form, with the same terms and of an
equal aggregate principal amount. Definitive tangible equity
units and definitive separate purchase contracts will be
issuable in denominations of one tangible equity unit and one
purchase contract, respectively, and integral multiples thereof.
Definitive separate amortizing notes will be issuable in
denominations of the initial principal amount of
$ per amortizing note and integral
multiples thereof. Definitive tangible equity units, separate
purchase contracts or separate amortizing notes, as the case may
be, will be registered in the name or names of the person or
persons specified by the depositary in a written instruction to
the registrar of the securities. The depositary may base its
written instruction upon directions it receives from its
participants.
If any of the events described above occurs, then the beneficial
owners will be notified through the chain of intermediaries that
definitive securities are available and notice will be published
as described below under Notices.
Beneficial owners of book-entry tangible equity units, separate
purchase contracts or separate amortizing notes, as the case may
be, will then be entitled (1) to receive physical delivery
in certificated form of definitive tangible equity units,
separate purchase contracts or separate amortizing notes, as the
case may be, equal in aggregate amount of tangible equity units,
separate purchase contracts or separate amortizing notes, as the
case may be, to their beneficial interest and (2) to have
the definitive securities registered in their names.
S-56
Thereafter, the holders of the definitive tangible equity units,
separate purchase contracts and separate amortizing notes, as
the case may be, will be recognized as the holders
of the tangible equity units, separate amortizing notes and
separate purchase contracts for purposes of the purchase
contract agreement and indenture, respectively.
Each of the purchase contract agreement and indenture provides
for the replacement of a mutilated, lost, stolen or destroyed
definitive security, so long as the applicant furnishes to
Wintrust and the trustee such security or indemnity and such
evidence of ownership as they may require.
In the event definitive separate notes are issued, the holders
thereof will be able to receive installment payments at the
office of Wintrusts paying agent in the Borough of
Manhattan. The final installment payment of a definitive
separate amortizing note may be made only against surrender of
the separate amortizing note to one of Wintrusts paying
agents. Wintrust also has the option of making installment
payments by mailing checks to the registered holders of the
separate certificated amortizing notes.
In the event definitive tangible equity units, separate purchase
contracts or separate amortizing notes are issued, the holders
thereof will be able to transfer their securities, in whole or
in part, by surrendering such securities for registration of
transfer at the office of U.S. Bank National Association. A
form of such instrument of transfer will be obtainable at the
relevant office of U.S. Bank National Association. Upon
surrender, Wintrust will execute, and the purchase contract
agent and the trustee will authenticate and deliver, new
tangible equity units, separate purchase contracts or separate
amortizing notes, as the case may be, to the designated
transferee in the amount being transferred, and a new security
for any amount not being transferred will be issued to the
transferor. Such new securities will be delivered free of charge
at the relevant office of U.S. Bank National Association,
as requested by the owner of such new tangible equity units,
separate purchase contacts or separate amortizing notes.
Wintrust will not charge any fee for the registration of
transfer or exchange, except that it may require the payment of
a sum sufficient to cover any applicable tax or other
governmental charge payable in connection with the transfer.
Notices
So long as the global securities are held on behalf of DTC or
any other clearing system, notices to holders of securities
represented by a beneficial interest in the global securities
may be given by delivery of the relevant notice to DTC or the
alternative clearing system, as the case may be. Any notice will
be deemed to have been given on the date of publication or, if
published more than once, on the date of the first publication.
S-57
CERTAIN
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain material U.S. federal
income tax consequences of the purchase, ownership and
disposition of the tangible equity units, the purchase contracts
and amortizing notes that are components of tangible equity
units and shares of our common stock acquired under a purchase
contract. This discussion applies only to beneficial owners of
tangible equity units (referred to herein as
holders) that acquire tangible equity units in this
offering at the issue price (as defined below) and
that hold the tangible equity units, the components of the
tangible equity units and shares of our common stock acquired
under a purchase contract as capital assets, within the meaning
of the Internal Revenue Code of 1986, as amended (the
Code).
This discussion does not describe all of the tax consequences
that may be relevant to a holder in light of the holders
particular circumstances or to holders subject to special rules,
such as:
|
|
|
|
|
banks and other financial institutions;
|
|
|
|
insurance companies;
|
|
|
|
real estate investment trusts and regulated investment companies
and their shareholders;
|
|
|
|
brokers and dealers in stocks, securities or currencies or
notional principal contracts;
|
|
|
|
traders subject to a
mark-to-market
method of tax accounting with respect to tangible equity units,
purchase contracts, amortizing notes or shares of our common
stock acquired under a purchase contract;
|
|
|
|
persons holding tangible equity units, purchase contracts,
amortizing notes or shares of our common stock acquired under a
purchase contract as part of a hedge, straddle,
conversion transaction, integrated transaction or similar
transaction;
|
|
|
|
holders deemed to sell the tangible equity units, purchase
contracts, amortizing notes or shares of our common stock
acquired under a purchase contract under the constructive sale
provisions of the Code or that acquired tangible equity units,
purchase contracts, amortizing notes or shares of our common
stock under a purchase contract as part of a wash sale
transaction;
|
|
|
|
U.S. Holders (as defined below) whose functional currency
is not the U.S. dollar;
|
|
|
|
partnerships (or other entities or arrangements classified as
partnerships for U.S. federal income tax purposes) or other
pass-through entities;
|
|
|
|
expatriates for U.S. federal income tax purposes;
|
|
|
|
tax-exempt entities, including private foundations, individual
retirement accounts and tax-deferred accounts;
|
|
|
|
holders subject to the alternative minimum tax; or
|
|
|
|
holders that do not acquire tangible equity units in this
offering at the issue price.
|
If an entity or arrangement that is classified as a partnership
for U.S. federal income tax purposes holds tangible equity
units, purchase contracts, amortizing notes or shares of our
common stock acquired under a purchase contract, the
U.S. federal income tax treatment of a partner in the
partnership will generally depend on the status of the partner,
the activities of the partnership and certain determinations
made at the partner level. Partnerships (or other entities or
arrangements treated as partnerships for U.S. federal
income tax purposes) holding tangible equity units, purchase
contracts, amortizing notes or shares of our common stock
acquired under a purchase contract and partners in such
partnerships should consult their tax advisors as to the
particular U.S. federal income tax consequences of the
purchase, ownership and disposition of the tangible equity
units, purchase contracts, amortizing notes or the shares of our
common stock acquired under a purchase contract.
S-58
This summary is based on the Code, administrative
pronouncements, judicial decisions and final, temporary and
proposed Treasury Regulations, in each case as in effect and
available as of the date of this prospectus supplement. The
Code, Treasury Regulations and judicial and administrative
interpretations thereof may change at any time (possibly with
retroactive effect). The Code, Treasury Regulations and judicial
and administrative interpretations thereof are also subject to
various interpretations, and there can be no guarantee that the
Internal Revenue Service (the IRS) or
U.S. courts will agree with the tax consequences described
in this summary.
PERSONS CONSIDERING THE PURCHASE OF TANGIBLE EQUITY UNITS,
PURCHASE CONTRACTS, AMORTIZING NOTES AND SHARES OF OUR
COMMON STOCK ACQUIRED UNDER A PURCHASE CONTRACT ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH REGARD TO THE APPLICATION OF THE
U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS
AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER OTHER
U.S. FEDERAL TAX LAWS (SUCH AS ESTATE AND GIFT TAX LAWS) OR
THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION,
INCLUDING UNDER ANY TAX TREATY.
Characterization
of Tangible Equity Units and Amortizing Notes
Although there is no authority directly on point and therefore
the issue is not entirely free from doubt, (1) each
tangible equity unit will be treated as an investment unit
composed of two separate instruments for U.S. federal
income tax purposes, and (2) the amortizing notes will be
treated as indebtedness for U.S. federal income tax
purposes. Under this treatment, a holder of tangible equity
units will be treated as if it held each component of tangible
equity units for U.S. federal income tax purposes. By
acquiring a tangible equity unit, you will agree to treat
(i) a tangible equity unit as an investment unit composed
of two separate instruments in accordance with its form and
(ii) the amortizing notes as indebtedness for U.S. tax
purposes. If, however, the components of a tangible equity unit
were treated as a single instrument, the U.S. federal
income tax consequences could differ from the consequences
described below. Specifically, if you are a U.S. Holder, as
defined below, you could be required to recognize the entire
amount of each installment payment on the amortizing notes,
rather than merely the portion of such payment denominated as
interest, as income. In addition, if you are a
Non-U.S. Holder,
as defined below, payments of principal and interest made to you
on the amortizing notes could be subject to U.S. federal
withholding tax. Even if the components of a tangible equity
unit are respected as separate instruments for U.S. federal
income tax purposes, (i) the amortizing notes could be
recharacterized as equity for U.S. federal income tax
purposes, in which case payments of interest to
Non-U.S. Holders
(as defined below) on the amortizing notes could potentially be
subject to U.S. federal withholding tax and (ii) the
purchase contracts could be treated as our stock, in which case
the tax consequences of the purchase, ownership and disposition
thereof would be substantially the same as the tax consequences
described herein with respect to the purchase, ownership and
disposition of shares of our common stock acquired under a
purchase contract.
No ruling has been or will be sought from the IRS with respect
to the characterization of tangible equity units for
U.S. federal income tax purposes or any of the
U.S. federal tax consequences discussed below, and no
assurance can be given that the IRS would not assert, or that a
court would not sustain, a position contrary to any of those
described above. Accordingly, you should consult your tax
advisor regarding the consequences to you of the possible
recharacterization of the components of a tangible equity unit
as a single instrument. Unless stated otherwise, the remainder
of this discussion assumes that the characterization of the
tangible equity units as two separate instruments, the
characterization of the amortizing notes as indebtedness, and
the characterization of the purchase contracts as contracts to
acquire shares of our common stock will be respected for
U.S. federal income tax purposes.
S-59
Tax
Consequences to U.S. Holders
As used herein, the term U.S. Holder means a
beneficial owner of tangible equity units, purchase contracts,
amortizing notes or shares of our common stock acquired under a
purchase contract that is, for U.S. federal income tax
purposes:
|
|
|
|
|
a citizen or resident of the United States;
|
|
|
|
a corporation, or other entity taxable as a corporation, created
or organized in or under the laws of the United States, any
state thereof or the District of Columbia; or
|
|
|
|
an estate or trust the income of which is subject to
U.S. federal income taxation regardless of its source.
|
Allocation
of the Issue Price and Purchase Price
The issue price of each tangible equity unit will be the first
price at which a substantial amount of the tangible equity units
is sold to persons other than bond houses, brokers, or similar
persons acting in the capacity of underwriters, placement agents
or wholesalers. The issue price (and purchase price) of each
tangible equity unit will be allocated between the purchase
contract and the amortizing note that constitute the tangible
equity unit in proportion to their relative fair market values
at the time of issuance. That allocation of the purchase price
will establish a U.S. Holders initial tax basis in
the purchase contract and amortizing note. We have determined
that the issue price allocated to each purchase contract and
amortizing note is
$
and
$ ,
respectively. That allocation will be binding on you (but not
the IRS) unless you explicitly disclose a contrary position on a
statement attached to your timely filed U.S. federal income
tax return for the taxable year in which you acquire tangible
equity units. The remainder of this discussion assumes that this
allocation of issue price to each purchase contract and
amortizing note will be respected for U.S. federal income
tax purposes.
Original
Issue Discount
Due to the deferral feature on the amortizing notes, we intend
to take the position that none of the stated interest on the
notes constitutes qualified stated interest for
U.S. federal income tax purposes. Accordingly,
U.S. Holders of amortizing notes will be required to accrue
interest income on the notes on a constant-yield basis at a rate
of %,
regardless of whether such holders use the cash or accrual
method of accounting for U.S. federal income tax purposes.
As a result, for each day of each accrual period, a
U.S. Holder must accrue:
|
|
|
|
|
the product of (a) the adjusted issue price (as defined
below) of the amortizing note as of the beginning of the accrual
period and
(b) %,
adjusted for the length of the accrual period;
|
|
|
|
divided by the number of days in the accrual period.
|
U.S. Holders will not be required to separately take into
account as income any payments on the amortizing notes. The
adjusted issue price of an amortizing note is its
issue price increased by any original issue discount previously
accrued and decreased by any payments made on the amortizing
note. Accrued original issue discount will increase the
U.S. Holders tax basis in the amortizing notes and
any payments on the notes will decrease the tax basis.
Settlement
of a Purchase Contract
U.S. Holders will not recognize gain or loss on the
acquisition of shares of our common stock upon the mandatory or
early settlement of a purchase contract except with respect to
cash paid in lieu of a fractional share of our common stock. A
U.S. Holders tax basis in the shares of our common
stock received under a purchase contract will be equal to its
tax basis in the purchase contract less the portion of such tax
basis allocable to the fractional share. A
U.S. Holders holding period for the shares of our
common stock received under a purchase contract will begin the
day after that stock is received.
S-60
Constructive
Dividends
The settlement rate of the purchase contracts will be adjusted
in certain circumstances. Under the Code and applicable Treasury
Regulations, adjustments that have the effect of increasing a
holders interest in our assets or earnings and profits
may, in some circumstances, result in a deemed distribution to
the holder of a purchase contract. If we were to make a
distribution of cash or property (for example, distributions of
evidences of indebtedness or assets) to stockholders and the
settlement rate of the purchase contracts were increased
pursuant to the applicable anti-dilution provisions, such
increase would be deemed to be a distribution to
U.S. Holders. In addition, any other increase in the
settlement rate of the purchase contracts (including an
adjustment to the settlement rate in connection with a
fundamental change) may, depending on the circumstances, be
deemed to be a distribution to U.S. Holders. In certain
circumstances, the failure to make an adjustment of the
settlement rate may result in a taxable distribution to holders
of shares of our common stock, if as a result of such failure
the proportionate interest of the stockholders in our assets or
earnings and profits is increased. Any deemed distribution will
generally be taxed in the same manner as an actual distribution.
See Taxation of Distributions on Common Stock
Acquired under the Purchase Contracts below.
U.S. Holders should consult their tax advisors as to the
tax consequences of receiving constructive dividends.
Taxation
of Distributions on Common Stock Acquired under the Purchase
Contracts
Distributions paid on shares of our common stock, other than
certain pro rata distributions of shares of our common
stock, will be treated as a dividend to the extent paid out of
our current or accumulated earnings and profits (as determined
for U.S. federal income tax purposes) and will be
includible in income by the U.S. Holder and taxable as
ordinary income when received. If a distribution exceeds our
current and accumulated earnings and profits, the excess will be
first treated as a tax-free return of the
U.S. Holders investment, up to the
U.S. Holders tax basis in the common stock. Any
remaining excess will be treated as a capital gain. Dividends
received by corporate U.S. Holders will be eligible for the
dividends-received deduction if such U.S. Holders meet
certain holding period and other applicable requirements.
Sale
or Disposition of Tangible Equity Units, Purchase Contracts,
Amortizing Notes or Common Stock
Upon the sale, exchange or retirement of a purchase contract,
amortizing note or share of our common stock acquired under a
purchase contract, a U.S. Holder will recognize taxable
gain or loss in an amount equal to the difference between the
amount realized on the sale, exchange or retirement and the
U.S. Holders adjusted tax basis in the purchase
contract, amortizing note or share of stock, as the case may be.
Gain or loss realized on the sale, exchange or retirement of a
purchase contract, amortizing note or share of our common stock
will generally be capital gain or loss and will be long-term
capital gain or loss if at the time of sale, exchange or
retirement the purchase contract, amortizing note or share of
our common stock acquired under a purchase contract, as the case
may be, has been held for more than one year. Long-term capital
gains recognized by non-corporate U.S. Holders will be
subject to reduced tax rates. The deductibility of capital
losses may be subject to limitations.
Upon the sale, exchange or other disposition of a tangible
equity unit, a U.S. Holder will be treated as having sold
or disposed of the purchase contract and amortizing note that
constitute the tangible equity units. The proceeds realized on a
disposition of a tangible equity unit will be allocated between
the purchase contract and amortizing note of the tangible equity
units in proportion to their relative fair market values. As a
result, a U.S. Holder will calculate its gain or loss on
the purchase contract separately from the gain or loss on the
amortizing note. It is thus possible that a U.S. Holder
could recognize a capital gain on one component of a tangible
equity unit but a capital loss on the other component of the
tangible equity units.
Backup
Withholding and Information Reporting
Information returns will be filed with the IRS in connection
with payments (including original issue discount) on the
amortizing notes, dividends on the shares of our common stock
acquired under a purchase contract and the proceeds from a sale
or other disposition of tangible equity units, purchase
contracts,
S-61
amortizing notes or shares of our common stock acquired under a
purchase contract. A U.S. Holder will be subject to
U.S. backup withholding (currently at a rate of 28%, but
which rate is scheduled to increase to 31% for taxable years
beginning on or after January 1, 2011) on these
payments if the U.S. Holder fails to provide its taxpayer
identification number to the paying agent and comply with
certain certification procedures or otherwise establish an
exemption from backup withholding. The amount of any backup
withholding from a payment to a U.S. Holder will be allowed
as a credit against the U.S. Holders
U.S. federal income tax liability and may entitle the
U.S. Holder to a refund, provided that the required
information is timely furnished to the IRS.
Tax
Consequences to
Non-U.S.
Holders
As used herein, the term
Non-U.S. Holder
means a beneficial owner of a tangible equity unit, purchase
contract, amortizing note or share of our common stock acquired
under a purchase contract that is not, for U.S. federal
income tax purposes a U.S. Holder or a partnership (or
other entity or arrangement that is treated as a partnership)
for U.S. federal income tax purposes.
Payments
on the Amortizing Notes
Subject to the discussion below concerning backup withholding,
under the characterization of each tangible equity unit as an
investment unit consisting of an amortizing note and a purchase
contract for U.S. federal income tax purposes (as described
above), payments of principal and original issue discount on the
amortizing notes to a
Non-U.S. Holder
will not be subject to U.S. federal withholding tax,
provided that, in the case of original issue discount the
Non-U.S. Holder:
|
|
|
|
|
does not own, actually or constructively, 10% or more of the
total combined voting power of all classes of our stock entitled
to vote, within the meaning of Section 871(h)(3) of the Code and
the Treasury Regulations thereunder,
|
|
|
|
is not a bank that receives such original issue discount
pursuant to an extension of credit made pursuant to a loan
agreement entered into in the ordinary course of its trade or
business,
|
|
|
|
the
Non-U.S. Holder
is not a controlled foreign corporation that is directly or
indirectly related to us through stock ownership (as provided in
the Code), and
|
|
|
|
the certification requirement described below has been fulfilled
with respect to the beneficial owner, as discussed below.
|
Original issue discount on an amortizing note will not be exempt
from U.S. federal withholding tax unless the beneficial
owner of the note certifies on a properly executed IRS
Form W-8BEN
(or other applicable form), under penalties of perjury, that it
is not a United States person. However, if, as described above
under Characterization of Tangible Equity
Units and Amortizing Notes, the components of a tangible
equity unit were recharacterized and treated as a single
instrument for U.S. federal income tax purposes, payments
of principal and original issue discount made to
Non-U.S. Holders
could be subject to U.S. federal withholding tax at a rate
of 30%, unless such
Non-U.S. Holder
is entitled to claim a lower rate as may be specified by an
applicable income tax treaty and such holder has satisfied the
relevant certification requirements. Even if the components of a
tangible equity unit are respected as separate instruments for
U.S. federal income tax purposes, if the amortizing notes
were recharacterized as equity for U.S. federal income tax
purposes, payments to
Non-U.S. Holders
on the amortizing notes could potentially be subject to
U.S. federal withholding tax. Under recently enacted
U.S. federal legislation discussed below under the heading
Recently Enacted Legislation, if the tangible equity
units were recharacterized as a single instrument and treated as
equity, or the amortizing notes were recharacterized as equity,
for U.S. federal income tax purposes, a U.S. federal
withholding tax of 30% could be imposed on distributions to, and
dispositions by, certain
Non-U.S. Holders
with respect to the tangible equity units and the amortizing
notes after December 31, 2012. We are not required to pay a
gross up for these or any other taxes imposed or
withheld in respect of payments made on or with respect to the
tangible equity units, the purchase contracts, the amortizing
notes or common stock.
S-62
Settlement
of a Purchase Contract
Non-U.S. Holders
will not be subject to U.S. federal income tax upon the
mandatory or early settlement of a purchase contract.
Constructive
Dividends
An adjustment to the settlement rate of a purchase contract
might result in a taxable constructive stock distribution, as
described above under the caption Tax Consequences to
U.S. Holders Constructive Dividends. Any
taxable constructive stock distribution from an adjustment to
the settlement rate will be treated in the same manner as an
actual distribution on our common stock, as described below
under Dividends.
Sale,
Exchange or Other Disposition of Tangible Equity Units, Purchase
Contracts, Amortizing Notes or Shares of Common Stock acquired
under a Purchase Contract
Subject to the discussion below concerning backup withholding, a
Non-U.S. Holder
generally will not be subject to U.S. federal income or
withholding tax on gain recognized on a sale or other
disposition of tangible equity units, purchase contracts,
amortizing notes or common stock acquired under a purchase
contract, unless:
|
|
|
|
|
the gain is effectively connected with the conduct of a trade or
business of the
Non-U.S. Holder
in the United States, subject to an applicable income tax treaty
providing otherwise,
|
|
|
|
the
non-U.S. Holder
is an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met, or
|
|
|
|
in the case of a sale or other disposition of tangible equity
units, purchase contracts or common stock acquired under a
purchase contract, we are or have been a U.S. real
property holding corporation, as defined in the Code, at
any time within the five-year period preceding the disposition
or the
Non-U.S. Holders
holding period, whichever period is shorter.
|
An individual
non-U.S. Holder
described in the first bullet point immediately above will be
subject to tax on the net gain derived from the disposition of
shares of our common stock under regular graduated
U.S. federal income tax rates. If a
non-U.S. Holder
that is a foreign corporation falls under the first bullet point
immediately above, it generally will be subject to tax on its
net gain in the same manner as if it were a domestic corporation
as defined by the Code and, in addition, may be subject to the
branch profits tax equal to 30% of its effectively
connected earnings and profits (subject to certain adjustments)
or at such lower rate as may be specified by an applicable
income tax treaty. Except as otherwise provided by an applicable
income tax treaty, an individual
non-U.S. Holder
described in the second bullet point immediately above will be
subject to a flat 30% tax on the gain derived from the
disposition, which may be offset by United States source capital
losses recognized in the same taxable year by the individual,
even though the individual is not considered a resident of the
United States under the Code.
Generally, a corporation is a U.S. real property
holding corporation if the fair market value of its
U.S. real property interests equals or exceeds
50% of the sum of the fair market value of its worldwide real
property interests plus its other assets used or held for use in
a trade or business. The tax relating to stock in a
U.S. real property holding corporation generally will not
apply to a
Non-U.S. Holder
whose holdings, direct and indirect, at all times during the
applicable period, constituted 5% or less of our common stock,
provided that our common stock was regularly traded on an
established securities market. We do not believe that we are or
have been, and do not expect to become, a United States real
property holding corporation for U.S. federal income tax
purposes.
Dividends
Dividends (including deemed dividends on the tangible equity
units or purchase contracts described above under Tax
Consequences to U.S. Holders Constructive
Dividends) paid to a
Non-U.S. Holder
S-63
generally will be subject to U.S. federal withholding tax
at a 30% rate or a reduced rate specified by an applicable
income tax treaty. In order to obtain a reduced rate of
withholding, a
Non-U.S. Holder
will be required to provide a properly executed IRS
Form W-8BEN
certifying its entitlement to benefits under a treaty.
In the case of any constructive dividend, it is possible that
the U.S. federal tax on the constructive dividend would be
withheld from shares of common stock or sales proceeds
subsequently paid or credited to a
Non-U.S. Holder.
A
Non-U.S. Holder
who is subject to U.S. federal withholding tax under such
circumstances should consult its own tax advisor as to whether
it can obtain a refund for all or a portion of the
U.S. federal withholding tax.
Effectively
Connected Income
If a
Non-U.S. Holder
is engaged in a trade or business in the United States, the
Non-U.S. Holder
will generally be taxed in the same manner as a U.S. Holder
(see Tax Consequences to U.S. Holders above) on
payments on the amortizing notes (including original issue
discount), payments on the common stock and gain recognized on a
sale or other disposition of tangible equity units, purchase
contracts, amortizing notes or shares of our common stock
acquired under a purchase contract that is effectively connected
with that trade or business, subject to an applicable income tax
treaty providing otherwise. In order for payments on the
amortizing notes and dividends on the common stock acquired
under a purchase contract to be exempt from the
U.S. federal withholding tax described in
Payments on the Amortizing Notes and
Dividends above, the
Non-U.S. Holder
will generally be required to provide a properly executed IRS
Form W-8ECI.
These
Non-U.S. Holders
are urged to consult their own tax advisors with respect to
other U.S. tax consequences of the ownership and
disposition of tangible equity units, purchase contracts,
amortizing notes and common stock, including the possible
imposition of a branch profits tax at a rate of 30% of its
effectively connected earnings and profits (subject to certain
adjustments) (or a lower treaty rate).
Backup
Withholding and Information Reporting
Information returns will be filed with the IRS in connection
with payments (including original issue discount) on the
amortizing notes and on shares of our common stock acquired
under a purchase contract. Unless the
Non-U.S. Holder
complies with certification procedures to establish that it is
not a United States person, information returns may be filed
with the IRS in connection with the proceeds from a sale or
other disposition of the tangible equity units, purchase
contracts, amortizing notes or common stock acquired under a
purchase contract and the
Non-U.S. Holder
may be subject to United States backup withholding (currently at
a rate of 28%, but which rate is scheduled to increase to 31%
for taxable years beginning on or after January 1,
2011) on payments on the amortizing notes and on the common
stock acquired under a purchase contract or on the proceeds from
a sale or other disposition of the tangible equity units,
purchase contracts, amortizing notes or common stock acquired
under a purchase contract. The certification procedures required
to claim the exemption from U.S. federal withholding tax on
interest described above will satisfy the certification
requirements necessary to avoid backup withholding as well. The
amount of any backup withholding from a payment to a
Non-U.S. Holder
will be allowed as a credit against the
Non-U.S. Holders
U.S. federal income tax liability and may entitle the
Non-U.S. Holder
to a refund, provided that the required information is timely
furnished to the IRS.
Recently
Enacted Legislation
Recently enacted legislation will impose a 30% U.S. federal
withholding tax on dividends and the gross proceeds of a
disposition of shares of our common stock acquired under a
purchase contract paid after December 31, 2012, to
(i) foreign financial institutions (as defined in
Section 1471(d)(4) of the Code) unless they agree to
collect and disclose to the IRS information regarding their
direct and indirect United States account holders and meet
certain other specified requirements and (ii) certain other
foreign entities unless they certify certain information
regarding their direct and indirect United States owners and
meet certain other specified requirements. If payment of this
U.S. federal withholding tax is made,
non-U.S. holders
that are otherwise eligible for an exemption from, or reduction
of, U.S. federal withholding taxes with respect to such
S-64
dividends or gross proceeds will be required to seek a credit or
refund from the IRS to obtain the benefit of such exemption or
reduction.
Non-U.S. Holders
are encouraged to consult with their own tax advisors regarding
the possible implications of this legislation on their
investment in tangible equity units, purchase contracts,
amortizing notes and shares of our common stock acquired under a
purchase contract.
S-65
UNDERWRITING
Merrill Lynch, Pierce, Fenner & Smith Incorporated is
acting as representative of each of the underwriters named
below. Subject to the terms and conditions set forth in a
purchase agreement among us and the underwriters, we have agreed
to sell to the underwriters, and each of the underwriters has
agreed, severally and not jointly, to purchase from us, the
number of tangible equity units set forth opposite its name
below.
|
|
|
|
|
|
|
Number
|
Underwriter
|
|
of Units
|
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated
|
|
|
|
|
RBC Capital Markets, LLC.
|
|
|
|
|
Sandler ONeill & Partners, L.P.
|
|
|
|
|
Wells Fargo Securities, LLC
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,000,000
|
|
|
|
|
|
|
Subject to the terms and conditions set forth in the purchase
agreement, the underwriters have agreed, severally and not
jointly, to purchase all of the tangible equity units sold under
the purchase agreement if any of these tangible equity units are
purchased. If an underwriter defaults, the purchase agreement
provides that the purchase commitments of the nondefaulting
underwriters may be increased or the purchase agreement may be
terminated.
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act, or
to contribute to payments the underwriters may be required to
make in respect of those liabilities.
The underwriters are offering the tangible equity units, subject
to prior sale, when, as and if issued to and accepted by them,
subject to approval of legal matters by their counsel, including
the validity of the tangible equity units, and other conditions
contained in the purchase agreement, such as the receipt by the
underwriters of officers certificates and legal opinions.
The underwriters reserve the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part.
Commissions
and Discounts
The representatives have advised us that the underwriters
propose initially to offer the tangible equity units to the
public at the public offering price set forth on the cover page
of this prospectus supplement and to dealers at that price less
a concession not in excess of $
per tangible equity unit. After the initial offering, the public
offering price, concession or any other term of the offering may
be changed.
The following table shows the public offering price,
underwriting discount and proceeds before expenses to us. The
information assumes either no exercise or full exercise by the
underwriters of their overallotment option.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Tangible
|
|
|
|
|
|
|
Equity Unit
|
|
Without Option
|
|
With Option
|
|
Public offering price
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Underwriting discount
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Proceeds, before expenses, to us
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
The expenses of the offering, not including the underwriting
discount, are estimated at $400,000 and are payable by us.
Overallotment
Option
We have granted an option to the underwriters to purchase up to
600,000 additional tangible equity units at the public offering
price, less the underwriting discount. The underwriters may
exercise this option for
S-66
30 days from the date of this prospectus supplement solely
to cover any overallotments. If the underwriters exercise this
option, each will be obligated, subject to conditions contained
in the purchase agreement, to purchase a number of additional
tangible equity units proportionate to that underwriters
initial amount reflected in the above table.
New Issue
of Units
The tangible equity units are a new issue of securities with no
established trading market. We do not intend to apply for
listing of the tangible equity units on any national securities
exchange or for inclusion of the tangible equity units on any
automated dealer quotation system. We have been advised by
certain of the underwriters that they presently intend to make a
market in the tangible equity units after completion of the
offering. However, they are under no obligation to do so and may
discontinue any market-making activities at any time without any
notice. We cannot assure the liquidity of the trading market for
the tangible equity units or that an active public market for
the tangible equity units will develop. If an active public
trading market for the tangible equity units does not develop,
the market price and liquidity of the tangible equity units may
be adversely affected. If the tangible equity units are traded,
they may trade at a discount from their initial offering price,
depending on the market for similar securities, our operating
performance and financial condition, general economic conditions
and other factors.
NASDAQ
Global Select Market Listing
Our shares are listed on the NASDAQ Global Select Market under
the symbol WTFC.
The transfer agent and registrar for our common stock is IST
Shareholder Services.
No Sales
of Similar Securities
We, our executive officers and directors have agreed not to sell
or transfer common stock or securities convertible into,
exchangeable, exercisable for, or repayable with common stock,
subject to certain exceptions, including the concurrent common
stock offering by us, by means of a separate prospectus
supplement of 3,205,128 shares of our common stock (plus up
to 480,769 shares of common stock if the underwriters of
that offering exercise in full their option to purchase
additional shares to cover overallotments), for 90 days
after the date of this prospectus supplement without first
obtaining the written consent of Merrill Lynch, Pierce,
Fenner & Smith Incorporated. Specifically, we and
these other persons have agreed, with certain limited
exceptions, not to directly or indirectly:
|
|
|
|
|
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of our common stock or any
securities convertible into or exchangeable or exercisable for
shares of our common stock, whether now owned or subsequently
acquired; or,
|
|
|
|
enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of such securities.
|
We have also agreed not to file a registration statement related
to our common stock during the
lock-up
period.
Price
Stabilization, Short Positions
In connection with the offering, the underwriters may purchase
and sell the tangible equity units or shares of our common stock
in the open market. These transactions may include short sales,
purchases on the open market to cover positions created by short
sales and stabilizing transactions. Short sales involve the sale
by the underwriters of a greater number of tangible equity units
than they are required to purchase in the offering.
Covered short sales are sales made in an amount not
greater than the underwriters overallotment option
described above. The underwriters may close out any covered
short position by either exercising their overallotment option
or purchasing tangible equity units in the open market. In
determining the source of tangible equity units to close out the
covered short position, the underwriters will consider, among
other
S-67
things, the price of tangible equity units available for
purchase in the open market as compared to the price at which
they may purchase tangible equity units through the
overallotment option. Naked short sales are sales in
excess of the overallotment option. The underwriters must close
out any naked short position by purchasing tangible equity units
in the open market. A naked short position is more likely to be
created if the underwriters are concerned that there may be
downward pressure on the price of the tangible equity units in
the open market after pricing that could adversely affect
investors who purchase in the offering. Stabilizing transactions
consist of various bids for or purchases of tangible equity
units or shares of common stock made by the underwriters in the
open market to peg, fix or maintain the price of the tangible
equity units or our common stock prior to the completion of the
offering.
Similar to other purchase transactions, the underwriters
purchases to cover the syndicate short sales may have the effect
of raising or maintaining the market price of the tangible
equity units or preventing or retarding a decline in the market
price of the tangible equity units. As a result, the price of
the tangible equity units may be higher than the price that
might otherwise exist in the open market.
Neither we nor any of the underwriters make any representation
or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of
the tangible equity units or our common stock. In addition,
neither we nor any of the underwriters make any representation
that the representatives will engage in these transactions or
that these transactions, once commenced, will not be
discontinued without notice.
Other
Relationships
The underwriters in this offering are also acting as
underwriters in the common stock offering.
Certain of the underwriters in this offering serve as agents and
lenders under our existing credit facilities and other debt
instruments including our revolving credit facility and term
facility, the terms of which are set forth in our amended and
restated credit agreement, dated as of October 30, 2009, as
amended, our subordinated note, due October 29, 2012, our
subordinated note, due May 1, 2013 and our subordinated
note, due May 29, 2015.
Some of the underwriters and their affiliates have engaged in,
and may in the future engage in, investment banking and other
commercial dealings in the ordinary course of business with us
or our affiliates. They have received, or may in the future
receive, customary fees and commissions for these transactions.
In the ordinary course of their business, certain of the
underwriters in this offering purchase mortgages, including
mortgages originated by us. Under certain circumstances disputes
could arise based on the representations and warranties made in,
and the terms and conditions of, these transactions, and whether
any repurchases resulting from the foregoing disputes are
required.
In addition, in the ordinary course of their business
activities, the underwriters and their affiliates may make or
hold a broad array of investments and actively trade debt and
equity securities (or related derivative securities) and
financial instruments (including bank loans) for their own
account and for the accounts of their customers. Such
investments and securities activities may involve securities
and/or
instruments of ours or our affiliates. The underwriters and
their affiliates may also make investment recommendations
and/or
publish or express independent research views in respect of such
securities or financial instruments and may hold, or recommend
to clients that they acquire, long
and/or short
positions in such securities and instruments.
Electronic
Offer, Sale and Distribution of Securities
In connection with the offering, certain of the underwriters or
securities dealers may distribute this prospectus supplement and
the accompanying prospectus by electronic means, such as
e-mail. In
addition, one or more of the underwriters may facilitate
Internet distribution for this offering to certain of their
Internet subscription customers. Certain underwriters may
allocate a limited number of tangible equity units for sale to
their online brokerage customers. An electronic prospectus
supplement and the accompanying prospectus is available on the
Internet web site maintained by one or more of the underwriters.
Other than the prospectus
S-68
supplement and the accompanying prospectus in electronic format,
the information on the web site of such underwriters is not part
of this prospectus supplement.
Notice to
Prospective Investors in the EEA
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a
Relevant Member State) an offer to the public of any
securities which are the subject of the offering contemplated by
this Prospectus (the Securities) may not be made in
that Relevant Member State, except that an offer to the public
in that Relevant Member State of any Securities may be made at
any time under the following exemptions under the Prospectus
Directive, if they have been implemented in that Relevant Member
State:
(a) to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities;
(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
43,000,000 and (3) an annual net turnover of more
than 50,000,000, as shown in its last annual or
consolidated accounts;
(c) by the underwriters to fewer than 100 natural or legal
persons (other than qualified investors as defined in the
Prospectus Directive) subject to obtaining the prior consent of
the representatives for any such offer; or
(d) in any other circumstances falling within
Article 3(2) of the Prospectus Directive,
provided that no such offer of Securities shall result in a
requirement for the publication by us or any underwriter of a
prospectus pursuant to Article 3 of the Prospectus
Directive.
Any person making or intending to make any offer of securities
within the EEA should only do so in circumstances in which no
obligation arises for us or any of the underwriters to produce a
prospectus for such offer. Neither we nor the underwriters have
authorized, nor do they authorize, the making of any offer of
securities through any financial intermediary, other than offers
made by the underwriters which constitute the final offering of
securities contemplated in this prospectus.
For the purposes of this provision, the expression an
offer to the public in relation to any Securities in
any Relevant Member State means the communication in any form
and by any means of sufficient information on the terms of the
offer and any Securities to be offered so as to enable an
investor to decide to purchase any Securities, as the same may
be varied in that Member State by any measure implementing the
Prospectus Directive in that Member State and the expression
Prospectus Directive means Directive 2003/71/EC and
includes any relevant implementing measure in each Relevant
Member State.
Each person in a Relevant Member State who receives any
communication in respect of, or who acquires any securities
under, the offer of securities contemplated by this prospectus
will be deemed to have represented, warranted and agreed to and
with us and each underwriter that:
(A) it is a qualified investor within the
meaning of the law in that Relevant Member State implementing
Article 2(1)(e) of the Prospectus Directive; and
(B) in the case of any securities acquired by it as a
financial intermediary, as that term is used in
Article 3(2) of the Prospectus Directive, (i) the
securities acquired by it in the offering have not been acquired
on behalf of, nor have they been acquired with a view to their
offer or resale to, persons in any Relevant Member State other
than qualified investors (as defined in the
Prospectus Directive), or in circumstances in which the prior
consent of the representatives has been given to the offer or
resale; or (ii) where securities have been acquired by it
on behalf of persons in any Relevant Member State other than
qualified investors, the offer of those securities to it is not
treated under the Prospectus Directive as having been made to
such persons.
In addition, in the United Kingdom, this document is being
distributed only to, and is directed only at, and any offer
subsequently made may only be directed at persons who are
qualified investors (as defined
S-69
in the Prospectus Directive) (i) who have professional
experience in matters relating to investments falling within
Article 19 (5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005, as amended (the
Order)
and/or
(ii) who are high net worth companies (or persons to whom
it may otherwise be lawfully communicated) falling within
Article 49(2)(a) to (d) of the Order (all such persons
together being referred to as relevant persons).
This document must not be acted on or relied on in the United
Kingdom by persons who are not relevant persons. In the United
Kingdom, any investment or investment activity to which this
document relates is only available to, and will be engaged in
with, relevant persons.
Notice to
Prospective Investors in Switzerland
This document, as well as any other material relating to the
securities which are the subject of the offering contemplated by
this prospectus (the Securities), does not
constitute an issue prospectus pursuant to Article 652a
and/or 1156
of the Swiss Code of Obligations. The Securities will not be
listed on the SIX Swiss Exchange and, therefore, the documents
relating to the Securities, including, but not limited to, this
document, do not claim to comply with the disclosure standards
of the listing rules of the SIX Swiss Exchange and corresponding
prospectus schemes annexed to the listing rules of the SIX Swiss
Exchange. The Securities are being offered in Switzerland by way
of a private placement, i.e., to a small number of
selected investors only, without any public offer and only to
investors who do not purchase the Securities with the intention
to distribute them to the public. The investors will be
individually approached by the Issuer from time to time. This
document, as well as any other material relating to the
Securities, is personal and confidential and do not constitute
an offer to any other person. This document may only be used by
those investors to whom it has been handed out in connection
with the offering described herein and may neither directly nor
indirectly be distributed or made available to other persons
without express consent of the Issuer. It may not be used in
connection with any other offer and shall in particular not be
copied
and/or
distributed to the public in (or from) Switzerland.
Notice to
Prospective Investors in the Dubai International Financial
Centre
This document relates to an Exempt Offer in accordance with the
Offered Securities Rules of the Dubai Financial Services
Authority (DFSA). This document is intended for
distribution only to persons of a type specified in the Offered
Securities Rules of the DFSA. It must not be delivered to, or
relied on by, any other person. The DFSA has no responsibility
for reviewing or verifying any documents in connection with
Exempt Offers. The DFSA has not approved this document nor taken
steps to verify the information set forth herein and has no
responsibility for it. The securities to which this documents
relates may be illiquid
and/or
subject to restrictions on their resale. Prospective purchasers
of the securities offered should conduct their own due diligence
on the securities. If you do not understand the contents of this
document you should consult an authorized financial advisor.
S-70
LEGAL
MATTERS
The validity of the securities offered hereby will be passed
upon for Wintrust by Sidley Austin LLP, Chicago, Illinois.
Certain legal matters related to the offering will be passed
upon for the underwriters by Fried, Frank, Harris,
Shriver & Jacobson LLP, New York, New York.
EXPERTS
The consolidated financial statements of Wintrust Financial
Corporation incorporated by reference in Wintrust Financial
Corporations Annual Report
(Form 10-K)
for the year ended December 31, 2009 and the effectiveness
of Wintrust Financial Corporations internal control over
financial reporting as of December 31, 2009, have been
audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon
incorporated by reference therein, and incorporated herein by
reference. Such consolidated financial statements and Wintrust
Financial Corporations managements assessment of the
effectiveness of internal control over financial reporting as of
December 31, 2009 are incorporated herein by reference in
reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
S-71
PROSPECTUS
Wintrust Financial
Corporation
Debt Securities, Common Shares,
Preferred Shares, Depositary Shares,
Warrants, Stock Purchase
Contracts, Stock Purchase Units, Junior
Subordinated Debentures,
Guarantee of Trust Preferred Securities
and Hybrid Securities Combining
Elements of the Foregoing
Wintrust Capital
Trust VI
Trust Preferred
Securities
This prospectus relates to the potential offer and sale, in one
or more offerings, of debt securities, common shares, preferred
shares, depositary shares, warrants, stock purchase contracts,
stock purchase units, trust preferred securities, junior
subordinated debentures, guarantee of trust preferred securities
and hybrid securities combining elements of the foregoing. We
will describe the specific terms of the securities in one or
more supplements to this prospectus at the time of each
offering. Those terms may include maturity, interest rate,
sinking fund terms, currency of payments, dividends, redemption
terms, listing on a securities exchange, amount payable at
maturity, conversion or exchange rights, liquidation amount,
subsidiary guarantees and subordination.
The securities may be offered on a continuous or delayed basis
from time to time directly or through underwriters, dealers or
agents and in one or more public or private transactions and at
fixed prices, prevailing market prices, at prices related to
prevailing market prices or at negotiated prices. If any
offering involves underwriters, dealers or agents, we will
describe the arrangements with them in the prospectus supplement
that relates to that offering. This prospectus may not be used
to offer and sell the securities unless accompanied by a
prospectus supplement. A prospectus supplement may add, update
or change information contained in this prospectus. You should
read this prospectus and the applicable prospectus supplement,
as well as the documents incorporated and deemed to be
incorporated by reference in this prospectus, carefully before
you invest.
Our common stock is quoted on The NASDAQ Global Select Market
under the trading symbol WTFC. On March 2,
2010, the closing sale price on The NASDAQ Global Select Market
for our common stock was $34.23. None of the other securities
that may be offered pursuant to this prospectus are listed on an
exchange.
Investing in our securities involves risk. See Risk
Factors on page 2 of this prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
These securities will not be savings accounts, deposits or other
obligations of any bank or nonbank subsidiary of ours and are
not insured or guaranteed by the FDIC or any other governmental
agency.
The date of this prospectus is March 3, 2010
TABLE OF
CONTENTS
|
|
|
|
|
|
ii
|
|
|
ii
|
|
|
iii
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
9
|
|
|
17
|
|
|
18
|
|
|
18
|
|
|
20
|
|
|
30
|
|
|
35
|
|
|
38
|
|
|
38
|
|
|
40
|
|
|
42
|
|
|
42
|
ABOUT
THIS PROSPECTUS
This prospectus is part of an automatic registration statement
that we filed with the Securities and Exchange Commission, or
SEC, as a well-known seasoned issuer as defined in
Rule 405 under the Securities Act of 1933, as amended, or
the Securities Act, utilizing a shelf registration
process. Under this shelf process, we may, from time to time,
offer and sell, in one or more offerings, the securities
described in this prospectus. This prospectus provides you with
a general description of the securities we may offer. Each time
we use this prospectus to offer these securities, we will
provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus
supplement may also add, update or change information contained
in this prospectus. Please carefully read this prospectus and
the prospectus supplement together with the additional
information described under the heading Where You Can Find
More Information.
You should rely only on the information contained or
incorporated by reference in this prospectus and in any
accompanying prospectus supplement. We have not authorized any
other person to provide you with different information. This
document may only be used where it is legal to sell these
securities. We are not making an offer of these securities in
any state where the offer is not permitted. You should only
assume that the information in this prospectus or in any
prospectus supplement is accurate as of the date on the front of
the document. Our business, financial condition, results of
operations and prospects may have changed since that date.
Each reference in this prospectus to Wintrust or
the Company, means Wintrust Financial Corporation
and its consolidated subsidiaries, unless the context requires
otherwise. Each reference in this prospectus to the
trust or the Trust refers to Wintrust
Capital Trust VI. The terms we, us
and our refer to Wintrust when discussing the
securities to be issued by Wintrust, the Trust when discussing
the securities to be issued by the Trust and collectively to all
of the Registrants where the context requires.
SPECIAL
NOTES CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus, the documents that we incorporate by reference
and any related prospectus supplement may contain
forward-looking statements within the meaning of the federal
securities laws statements that are statements concerning our
expectations, plans, objectives, future financial performance
and other items that are not historical facts. These statements
are forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward
looking statements involve risks and uncertainties that may
cause actual results or outcomes to differ materially from those
included in the forward looking statements. In connection with
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, the Registrants are filing herein or
incorporated by reference cautionary statements identifying
important factors that could cause their respective actual
results to differ materially from those projected in forward
looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) made by or on
behalf of the Registrants. Any statements that express or
involve discussions as to expectations, beliefs, plans,
objectives, assumptions or future events, performance or growth
(often, but not always, through the use of words or phrases such
as intend, plan, project,
expect, anticipate, believe,
estimate, contemplate,
possible, point, will,
may, should, would,
could and similar expressions) are not statements of
historical facts and are forward looking. Forward looking
statements involve estimates, assumptions and uncertainties that
could cause actual results to differ materially from those
expressed in the forward looking statements. Accordingly, any
such statements are qualified in their entirety by reference to,
and are accompanied by, the important factors described in the
sections of Wintrusts Annual Report on
Form 10-K
for the year ended December 31, 2009 filed with the SEC on
March 1, 2010 entitled Risk Factors and
Forward-Looking Statements that could cause a
Registrants actual results to differ materially from those
contained in forward looking statements of such Registrant made
by or on behalf of such Registrant.
All such factors are difficult to predict, contain uncertainties
that may materially affect actual results and are beyond the
control of the Registrants. You are cautioned not to place undue
reliance on forward looking statements. Any forward looking
statement speaks only as of the date on which such statement is
made, and the Registrants undertake no obligation to update any
forward looking statement or statements to reflect events or
circumstances after the date on which such statement is made or
to reflect the occurrence of unanticipated events. New factors
emerge from time to time, and it is not possible for each
Registrants management to predict all of such factors, nor
can such management assess the impact of each such factor on the
business of such Registrant or the extent to which any factor,
or combination of factors, may cause actual results of such
Registrant to differ materially from those contained in any
forward looking statements.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements
and other information with the Securities and Exchange
Commission (SEC). Our SEC filings are available to
the public over the Internet at the SECs web site at
http://www.sec.gov
and on the investor relations page of our website at
http://www.wintrust.com.
Except for those SEC filings incorporated by reference in this
prospectus, none of the other information on our website is part
of this prospectus. You may also read and copy any document we
file with the SEC at its public reference facilities at
100 F Street N.E., Washington, D.C. 20549. You
can also obtain copies of the documents upon the payment of a
duplicating fee to the SEC. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
facilities.
This prospectus omits some information contained in the
registration statement in accordance with SEC rules and
regulations. You should review the information and exhibits
included in the registration statement for further information
about us and the securities we are offering. Statements in this
prospectus concerning any document we filed as an exhibit to the
registration statement or that we otherwise filed with the SEC
are not intended to be comprehensive and are qualified by
reference to these filings. You should review the complete
document to evaluate these statements.
We have not included separate financial statements of the Trust.
Wintrust and the Trust do not consider that such financial
statements would be material to holders of Trust Preferred
Securities of the Trust because
ii
the Trust is a special purpose entity, has no operating history
and has no independent operations. The Trust is not currently
involved in and does not anticipate being involved in any
activity other than as described under Prospectus
Summary The Trust. Further, Wintrust and the
Trust believe that financial statements of the Trust are not
material to the holders of the Trust Preferred Securities
of the Trust since Wintrust Financial will guarantee the
Trust Preferred Securities of the Trust. Holders of the
Trust Preferred Securities of the Trust, with respect to
the payment of distributions and amounts upon liquidation,
dissolution and
winding-up,
are at least in the same position vis-à-vis the assets of
Wintrust as a preferred stockholder of Wintrust. Wintrust
beneficially owns all of the undivided beneficial interests in
the assets of the Trust (other than the beneficial interests
represented by the Trust Preferred Securities of the
Trusts). See Prospectus Summary The
Trust, Description of the Trust and
Trust Preferred Securities. In the event that
the Trust issues securities, our filings under the Exchange Act
will include an audited footnote to Wintrusts annual
financial statements stating that the Trust is wholly owned by
Wintrust, that the sole asset of the Trust is the Senior
Debentures or the Subordinated Debentures of Wintrust having a
specified aggregate principal amount, and that, considered
together, the
back-up
undertakings, including the Guarantees of Wintrust, constitute a
full and unconditional guarantee by Wintrust of the Trusts
obligations under any Trust Preferred Securities issued by
the Trust.
DOCUMENTS
INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference much of the
information that we file with it, which means that we can
disclose important information to you by referring you to those
publicly available documents. The information that we
incorporate by reference is an important part of this
prospectus. Any statement contained in a document incorporated
or deemed to be incorporated by reference into this prospectus
will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this
prospectus or any other subsequently filed document that is
deemed to be incorporated by reference into this prospectus
modifies or supersedes the statement. Any statement so modified
or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.
This prospectus incorporates by reference the documents listed
below and any filings we make with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 after the initial filing of the
registration statement related to this prospectus until the
termination of the offering of the securities described in this
prospectus; provided, however, that we are not incorporating by
reference any documents, portions of documents or other
information that is deemed to have been furnished
and not filed with the SEC:
|
|
|
|
|
our Annual Report on
Form 10-K
for the year ended December 31, 2009, including information
specifically incorporated by reference into our
Form 10-K
for the year ended December 31, 2009;
|
|
|
|
the sections of our Definitive Proxy Statement for the 2009
Annual Meeting of Stockholders filed with the SEC on
April 20, 2009 that are incorporated by reference in our
Annual Report on
Form 10-K
for the year ended December 31, 2008;
|
|
|
|
our Current Report on
Form 8-K,
filed with the SEC on August 20, 2009; and
|
|
|
|
the description of our common stock, which is registered under
Section 12 of the Securities Exchange Act, in our
Form 8-A
filed with the SEC on January 3, 1997, including any
subsequently filed amendments and reports updating such
description.
|
iii
You may request a copy of these filings, other than an exhibit
to a filing unless that exhibit is specifically incorporated by
reference into that filing, at no cost, by writing to us at the
following address or calling us at the following telephone
number:
Investor
Relations
Wintrust Financial Corporation
727 North Bank Lane
Lake Forest, Illinois 60045
(847) 615-4096
You should rely only on the information incorporated by
reference or provided in this prospectus or any prospectus
supplement. We have not authorized anyone else to provide you
with different information or to make any representations other
than as contained in this prospectus or in any prospectus
supplement. We are not making any offer of these securities in
any state where the offer is not permitted.
iv
PROSPECTUS
SUMMARY
Wintrust
Wintrust Financial Corporation, an Illinois corporation, which
was incorporated in 1992, is a financial holding company based
in Lake Forest, Illinois, with total assets of approximately
$12.2 billion as of December 31, 2009. We conduct our
businesses through three segments: community banking, specialty
finance and wealth management.
We provide community-oriented, personal and commercial banking
services to customers located in the greater Chicago, Illinois
metropolitan area and in southeastern Wisconsin through our
fifteen wholly owned banking subsidiaries (collectively, the
banks), as well as the origination and purchase of
residential mortgages for sale into the secondary market through
our wholly owned subsidiary, Wintrust Mortgage Corporation.
We provide financing for the payment of commercial insurance
premiums and life insurance premiums (premium finance
receivables) on a national basis through our wholly owned
subsidiary, First Insurance Funding Corporation, and short-term
accounts receivable financing (Tricom finance
receivables) and out-sourced administrative services
through our wholly owned subsidiary, Tricom, Inc. of Milwaukee.
We provide a full range of wealth management services primarily
to customers in the Chicago, Illinois metropolitan area and in
southeastern Wisconsin through three separate subsidiaries,
including Wayne Hummer Trust Company, N.A.
(WHTC), Wayne Hummer Investments, LLC
(WHI) and Wayne Hummer Asset Management Company
(WHAMC). WHTC, WHI and WHAMC are referred to
collectively as the Wayne Hummer Companies.
Our common stock is traded on The NASDAQ Global Select Market
under the ticker symbol WTFC. Our principal
executive office is located at 727 North Bank Lane, Lake Forest,
Illinois, 60045, telephone number:
(847) 615-4096.
The
Trust
The Trust is a statutory business trust formed under the
Delaware Statutory Trust Act pursuant to (i) a trust
agreement executed by Wintrust, as sponsor, and the trustees of
the Trust (the Trustees) and (ii) the filing of
a certificate of trust with the Secretary of State of the State
of Delaware. At the time of public issuance of
Trust Preferred Securities of the Trust, the trust
agreement will be amended and restated in its entirety (as so
amended and restated, the Trust Agreement) and
will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the Trust Indenture
Act). In exchange for our capital contribution to the
Trust, we will own all of the common securities of the trust.
The trust exists exclusively for the following purposes:
|
|
|
|
|
issuing the trust preferred securities to the public for cash;
|
|
|
|
issuing the common securities to us;
|
|
|
|
investing the proceeds from the sale of its preferred and common
securities in an equivalent amount of junior subordinated
debentures to be issued by us; and
|
|
|
|
engaging in activities that are incidental to those listed
above, such as receiving payments on the debentures and making
distributions to security holders, furnishing notices and other
administrative tasks.
|
A detailed description of the general terms of the trust
preferred securities is set forth in Description of the
Trust Preferred Securities and the applicable
prospectus supplement will set forth the specific terms of any
trust preferred securities.
The Trusts principal executive offices are located at 727
North Bank Lane, Lake Forest, Illinois, 60045, telephone number:
(847) 615-4096.
1
RISK
FACTORS
Our business is subject to uncertainties and risks. You should
carefully consider and evaluate all of the information included
and incorporated by reference in this prospectus, including the
risk factors incorporated by reference from our most recent
annual report on
Form 10-K,
as updated by our quarterly reports on
Form 10-Q
and other SEC filings filed after such annual report. It is
possible that our business, financial condition, liquidity or
results of operations could be materially adversely affected by
any of these risks.
USE OF
PROCEEDS
Except as otherwise provided in the related prospectus
supplement, we will use the net proceeds from the sale by the
Company of the offered securities for general corporate
purposes. These purposes may include:
|
|
|
|
|
repayments or refinancing of debt;
|
|
|
|
working capital;
|
|
|
|
capital expenditures;
|
|
|
|
acquisitions; and
|
|
|
|
repurchase or redemption of our securities including our
preferred shares, common shares or warrants.
|
Pending such use, we may temporarily invest the net proceeds in
short-term securities or reduce our short-term indebtedness, or
we may hold the net proceeds in deposit accounts in our
subsidiary banks.
The Trust will invest all proceeds received from the sale of its
preferred securities and common securities in a particular
series of subordinated debt securities of Wintrust Financial
Corporation.
RATIO OF
EARNINGS TO FIXED CHARGES
Our historical ratios of earnings to fixed charges for the
periods indicated are set forth in the table below. The ratio of
earnings to fixed charges is computed by dividing
(1) income before income taxes and fixed charges by
(2) total fixed charges. For purposes of computing these
ratios:
|
|
|
|
|
fixed charges, excluding interest on deposits, include interest
expense (other than on deposits) and the estimated portion of
rental expense attributable to interest, net of income from
subleases; and
|
|
|
|
fixed charges, including interest on deposits, include all
interest expense and the estimated portion of rental expense
attributable to interest, net of income from subleases.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Ratio of Earnings to Fixed Charges
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
Including interest on deposits
|
|
|
1.54x
|
|
|
|
1.11x
|
|
|
|
1.24x
|
|
|
|
1.34x
|
|
|
|
1.55x
|
|
Excluding interest on deposits
|
|
|
3.64x
|
|
|
|
1.60x
|
|
|
|
2.52x
|
|
|
|
3.41x
|
|
|
|
4.08x
|
|
GENERAL
DESCRIPTION OF SECURITIES
We may offer under this prospectus debt securities, common
shares, preferred shares, depositary shares, warrants, stock
purchase contracts, stock purchase units, junior subordinated
debentures, guarantee of trust preferred securities or any
combination of the foregoing, either individually or as units
consisting of two or more securities. The trust may offer trust
preferred securities under this prospectus.
The following description of the terms of these securities sets
forth some of the general terms and provisions of securities
that we may offer. The particular terms of securities offered by
any prospectus supplement and the extent, if any, to which the
general terms set forth below do not apply to those securities,
will be described in the related prospectus supplement. In
addition, if we offer securities as units, the terms of the
units will be described in the applicable prospectus supplement.
If the information contained in the prospectus supplement
differs from the following description, you should rely on the
information in the prospectus supplement.
2
DESCRIPTION
OF DEBT SECURITIES
Debt May
be Senior or Subordinated
We may issue, and offer pursuant to this prospectus, senior or
subordinated debt securities. The senior debt securities and, in
the case of debt securities in bearer form, any coupons to these
securities, will constitute part of our senior debt and, except
as otherwise included in the applicable prospectus supplement,
will rank on a parity with all of our other unsecured and
unsubordinated debt. The subordinated debt securities and any
coupons will constitute part of our subordinated debt and will
be subordinate and junior in right of payment to all of our
senior indebtedness, which will be defined in the
applicable prospectus supplement. If this prospectus is being
delivered in connection with a series of subordinated debt
securities, the accompanying prospectus supplement or the
information we incorporate in this prospectus by reference will
indicate the approximate amount of senior indebtedness
outstanding as of the end of the most recent fiscal quarter. Our
debt securities will be issued under an indenture, the form of
which is included as an exhibit to the registration statement of
which this prospectus is a part.
The following briefly summarizes the material provisions of the
indenture, which has been filed with the SEC and incorporated by
reference in the registration statement of which this prospectus
is a part. This summary of the indenture is not complete and is
qualified in its entirety by reference to the indentures. You
should read the more detailed provisions of the indenture,
including the defined terms, for provisions that may be
important to you. You should also read the particular terms of a
series of debt securities, which will be described in more
detail in the applicable prospectus supplement.
Payments
We may issue debt securities from time to time in one or more
series. The provisions of the indenture allow us to
reopen a previous issue of a series of debt
securities and issue additional debt securities of that issue.
The debt securities may be denominated and payable in
U.S. dollars.
Debt securities may bear interest at a fixed rate or a floating
rate, which, in either case, may be zero, or at a rate that
varies during the lifetime of the debt security. Debt securities
may be sold at a discount below their stated principal amount.
Terms
Specified in Prospectus Supplement
The prospectus supplement will contain, where applicable, the
following terms of and other information relating to any offered
debt securities:
|
|
|
|
|
classification as senior or subordinated debt securities and the
specific designation;
|
|
|
|
aggregate principal amount, purchase price and denomination;
|
|
|
|
the currency in which the debt securities are denominated
and/or in
which principal
and/or
interest, if any, is payable;
|
|
|
|
date of maturity;
|
|
|
|
the interest rate or rates or the method by which the
calculation agent will determine the interest rate or rates, if
any;
|
|
|
|
the interest payment dates, if any;
|
|
|
|
the place or places for payment of the principal of and any
premium
and/or
interest on the debt securities;
|
|
|
|
any repayment, redemption, prepayment or sinking fund
provisions, including any redemption notice provisions;
|
|
|
|
whether we will issue the debt securities in registered form or
bearer form or both and, if we are offering debt securities in
bearer form, any restrictions applicable to the exchange of one
form for
|
3
|
|
|
|
|
another and to the offer, sale and delivery of those debt
securities in bearer form and whether such bearer securities
will be issued with coupons;
|
|
|
|
|
|
whether we will issue the debt securities in definitive form and
under what terms and conditions;
|
|
|
|
the terms on which holders of the debt securities may convert or
exchange these securities into or for common or preferred stock
or other securities of ours offered hereby, into or for common
or preferred stock or other securities of an entity affiliated
with us or debt or equity or other securities of an entity not
affiliated with us, or for the cash value of our stock or any of
the above securities, the terms on which conversion or exchange
may occur, including whether conversion or exchange is
mandatory, at the option of the holder or at our option, the
period during which conversion or exchange may occur, the
initial conversion or exchange price or rate and the
circumstances or manner in which the amount of common or
preferred stock or other securities issuable upon conversion or
exchange may be adjusted;
|
|
|
|
information as to the methods for determining the amount of
principal or interest payable on any date
and/or the
currencies, securities or baskets of securities, commodities or
indices to which the amount payable on that date is linked;
|
|
|
|
any agents for the debt securities, including trustees,
depositories, authenticating or paying agents, transfer agents
or registrars;
|
|
|
|
any applicable United States federal income tax consequences,
including:
|
|
|
|
|
|
whether and under what circumstances we will pay additional
amounts on debt securities held by a person who is not a
U.S. person for any tax, assessment or governmental charge
withheld or deducted and, if so, whether we will have the option
to redeem those debt securities rather than pay the additional
amounts;
|
|
|
|
tax considerations applicable to any discounted debt securities
or to debt securities issued at par that are treated as having
been issued at a discount for United States federal income tax
purposes;
|
|
|
|
tax considerations applicable to any debt securities denominated
and payable in foreign currencies; and
|
|
|
|
any other specific terms of the debt securities, including any
additional events of default or covenants, and any terms
required by or advisable under applicable laws or regulations.
|
|
|
|
|
|
any other terms and conditions set forth therein.
|
Registration
and Transfer of Debt Securities
Holders may present debt securities for exchange, and holders of
registered debt securities may present these securities for
transfer, in the manner, at the places and subject to the
restrictions stated in the debt securities and described in the
applicable prospectus supplement. We will provide these services
without charge except for any tax or other governmental charge
payable in connection with these services and subject to any
limitations provided in the applicable indenture.
If any of the securities are held in global form, the procedures
for transfer of interests in those securities will depend upon
the procedures of the depositary for those global securities.
Subordination
Provisions
Subordinated debt securities will be subordinate and junior in
right of payment, to the extent and in the manner stated in the
applicable prospectus supplement, to all of our senior
indebtedness.
4
Unless all principal of and any premium or interest on the
senior indebtedness has been paid in full, or provision has been
made to make these payments in full, no payment of principal of,
or any premium or interest on, any subordinated debt securities
may be made in the event:
|
|
|
|
|
of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar
proceedings involving us or a substantial part of our property;
|
|
|
|
that (a) a default has occurred in the payment of
principal, any premium, interest or other monetary amounts due
and payable on any senior indebtedness or (b) there has
occurred any other event of default concerning senior
indebtedness that permits the holder or holders of the senior
indebtedness to accelerate the maturity of the senior
indebtedness, with notice or passage of time, or both, and that
event of default has continued beyond the applicable grace
period, if any, and that default or event of default has not
been cured or waived or has not ceased to exist; or
|
|
|
|
that the principal of and accrued interest on any subordinated
debt securities have been declared due and payable upon an event
of default and that declaration has not been rescinded and
annulled as provided under the applicable supplemental indenture.
|
Covenants
Affecting Mergers and Other Significant Corporate
Actions
Merger, Consolidation, Sale, Lease or
Conveyance. The indenture provides that we will
not merge or consolidate with any other person and will not
sell, lease or convey all or substantially all of our assets to
any other person, unless:
|
|
|
|
|
we will be the continuing corporation; or
|
|
|
|
the successor corporation or person that acquires all or
substantially all of our assets:
|
|
|
|
will be a corporation organized under the laws of the United
States, a state of the United States or the District of
Columbia; and
|
|
|
|
will expressly assume all of our obligations under the indenture
and the debt securities issued under the indenture; and
|
|
|
|
immediately prior to or after giving effect to the merger,
consolidation, sale, lease or conveyance, we or that successor
corporation will not be in default in the performance of the
covenants and conditions of the indenture.
|
Absence of Protections Against All Potential Actions of
Wintrust. There are no covenants or other
provisions in the indenture that would afford holders of debt
securities additional protection in the event of a
recapitalization transaction, a change of control of Wintrust or
a highly leveraged transaction. The merger covenant described
above would only apply if the recapitalization transaction,
change of control or highly leveraged transaction were
structured to include a merger or consolidation of Wintrust or a
sale, lease or conveyance of all or substantially all of our
assets. However, we may provide specific protections, such as a
put right or increased interest, for particular debt securities,
which we would describe in the applicable prospectus supplement.
Events of
Default
The indenture provides holders of debt securities with remedies
if we fail to perform specific obligations, such as making
payments on the debt securities or other indebtedness, or if we
become bankrupt. Holders should review these provisions and
understand which of our actions trigger an event of default and
which actions do not. The indenture permits the issuance of debt
securities in one or more series, and, in many cases, whether an
event of default has occurred is determined on a
series-by-series
basis.
5
An event of default is defined under the indenture,
with respect to any series of debt securities issued under that
indenture, as being:
|
|
|
|
|
default in payment of any principal of the debt securities of
that series, either at maturity or upon any redemption or
otherwise;
|
|
|
|
default for 30 days in payment of any interest on any debt
securities of that series;
|
|
|
|
default for 60 days after written notice in the observance
or performance of any covenant or agreement in the debt
securities of that series or the related indenture (other than a
covenant or warranty with respect to the debt securities of that
series the breach or nonperformance of which is otherwise
included in the definition of event of default);
|
|
|
|
specified events of bankruptcy, insolvency or reorganization;
|
|
|
|
failure to make any payment at maturity, including any
applicable grace period, on any indebtedness under the indenture
in an amount in excess of $10,000,000 and continuance of that
failure for a period of 30 days after written notice of the
failure to us by the applicable trustee, or to us and the
applicable trustee by the holders of not less than 25% in
principal amount of the outstanding indebtedness under the
indenture, treated as one class;
|
|
|
|
default with respect to any indebtedness under the indenture in
excess of $10,000,000 which default would have resulted in such
indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise have come due and payable,
without such indebtedness having been discharged or the
acceleration having been cured, waived, rescinded or annulled
for a period of 30 days after written notice of the
acceleration to us by the applicable trustee, or to us and the
applicable trustee by the holders of not less than 25% in
principal amount of such indebtedness, treated as one
class; or
|
|
|
|
any other event of default provided in a board resolution, an
officers certificate or the supplemental indenture under
which that series of debt securities is issued.
|
If a failure, default or acceleration referred to in the fifth
and sixth clauses above ceases or is cured, waived, rescinded or
annulled, then the event of default under the applicable
indenture caused by that failure, default or acceleration will
also be considered cured.
Acceleration of Debt Securities upon an Event of
Default. The indenture provides that:
|
|
|
|
|
if an event of default (other than events of default relating to
certain specified events of bankruptcy, insolvency or
reorganization) occurs and is continuing, either the trustee or
the holders of not less than 50% in aggregate principal amount
of the outstanding debt securities of each affected series,
voting as one class, by notice in writing to Wintrust and to the
trustee, if given by security holders, may declare the principal
of all debt securities of each affected series and interest
accrued thereon to be due and payable immediately; and
|
|
|
|
if an event of default due to specified events of bankruptcy,
insolvency or reorganization of Wintrust occurs and is
continuing, then the principal of all those debt securities,
interest accrued thereon will become immediately due and payable
without any declaration or other act by the trustee or any
security holder.
|
Annulment of Acceleration and Waiver of
Defaults. In some circumstances, with respect to
a series, if any and all events of default under the indenture,
other than the non-payment of the principal of or interest on
the securities that has become due as a result of an
acceleration, have been cured, waived or otherwise remedied,
then the holders of a majority in aggregate principal amount of
such series of outstanding debt securities affected, voting as
one class, may annul past declarations of acceleration of or
waive past defaults of the debt securities in such series.
Indemnification of Trustee for Actions Taken on Your
Behalf. The indenture contains a provision
entitling the trustee, subject to the duty of the trustee during
a default to act with the required standard of care, to be
indemnified by the holders of debt securities issued under the
indenture before proceeding to
6
exercise any trust or power at the request of holders. Subject
to these provisions and some other limitations, the holders of a
majority in aggregate principal amount of each series of
outstanding debt securities, voting as one class, may, with
respect to debt securities of that class, direct the time,
method and place of conducting any proceeding for any remedy
available to the applicable trustee, or exercising any trust or
power conferred on the trustee.
Limitation on Actions by You as an Individual
Holder. The indenture provides that no individual
holder of debt securities may institute any action against us
under the indenture, except actions for payment of overdue
principal and interest, unless the following actions have
occurred:
|
|
|
|
|
the holder must have previously given written notice to the
trustee of the continuing default;
|
|
|
|
the holders of not less than 25% in aggregate principal amount
of the outstanding debt securities of each affected series,
treated as one class, must have (1) requested the trustee
to institute that action and (2) offered the trustee
reasonable indemnity;
|
|
|
|
the trustee must have failed to institute that action within
60 days after receipt of the request referred to
above; and
|
|
|
|
during such
60-day
period, the holders of a majority in aggregate principal amount
of the outstanding debt securities of each affected series,
voting as one class, must not have given directions to the
trustee inconsistent with those of the holders referred to above.
|
Annual Certification. The indenture contains a
covenant that we will file annually with the trustee a
certificate of no default or a certificate specifying any
default that exists.
Discharge,
Defeasance and Covenant Defeasance
We have the ability to eliminate most or all of our obligations
on any series of debt securities prior to maturity if we comply
with the following provisions.
Discharge. Under the indenture, we may
discharge specific obligations to holders of any series of debt
securities (1) that have been delivered to the trustee for
cancellation or (2) that either have become due and payable
or will, within one year, become due and payable or scheduled
for redemption, by depositing with the trustee, in trust, funds
in an amount sufficient to pay when due, whether at maturity or
upon redemption, the principal of and interest on the debt
securities to the stated maturity or redemption date, as the
case may be.
Defeasance and Covenant Defeasance. If the
provisions in the indenture relating to defeasance and covenant
defeasance are applicable to the debt securities of any series,
we may elect either:
|
|
|
|
|
defeasance, which means we elect to defease and be discharged
from any and all obligations with respect to the debt
securities, except for the obligations to register the transfer
or exchange of the debt securities, to replace destroyed, lost
or stolen debt securities, to maintain an office or agency in
respect of the debt securities and to hold moneys for payment in
trust; or
|
|
|
|
covenant defeasance, which means we may elect to be released
from our obligations with respect to the debt securities under
specified provisions of the indenture relating to
(1) delivery to the trustee of certain reports and
certificates, (2) the Companys ability to consolidate
or merge with or into or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its assets,
and (3) any additional covenants contained in a
supplemental indenture for a particular series of debt
securities or a board resolution or officers certificate
delivered pursuant to the indenture, and any failure to comply
with such obligations will not constitute an event of default
with respect to the debt securities;
|
in either case upon the irrevocable deposit by us with the
trustee, in trust, of an amount, in cash
and/or
U.S. government obligations, sufficient to make scheduled
payments of the principal of and interest on the debt
securities, when due, whether at maturity, upon redemption or
otherwise, and any mandatory sinking fund payments.
7
Defeasance will only be permitted if, among other things:
|
|
|
|
|
we have delivered to the trustee an opinion of counsel to the
effect that the holders of the debt securities will not
recognize income, gain or loss for federal income tax purposes
as a result of the defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if the
defeasance or covenant defeasance had not occurred, and the
opinion of counsel, in the case of defeasance, will be required
to refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable U.S. federal income tax
law occurring after the date of the indenture;
|
|
|
|
no event of default has occurred or is continuing;
|
|
|
|
the deposit of funds will not result in a breach or violation
of, or constitute a default under, the indenture or any other
material agreement or instrument to which we are a party or by
which we are bound;
|
|
|
|
certain other provisions set forth in the indenture are
met; and
|
|
|
|
we have delivered to the trustee an officers certificate
and an opinion of counsel, each stating that all conditions
precedent to the defeasance or covenant defeasance have been
complied with.
|
The applicable prospectus supplement may further describe the
provisions, if any, permitting defeasance or covenant
defeasance, including any modifications to the provisions
described above, with respect to the debt securities of a
particular series.
Modification
of the Indenture
Modification Without Consent of Holders. We
and the applicable trustee may enter into supplemental
indentures without the consent of the holders of debt securities
issued under a particular indenture to, among other things:
|
|
|
|
|
secure any debt securities;
|
|
|
|
evidence the assumption by a successor corporation of our
obligations;
|
|
|
|
add covenants for the protection of the holders of debt
securities;
|
|
|
|
add additional events of default;
|
|
|
|
cure any ambiguity or correct any inconsistency;
|
|
|
|
establish the forms or terms of debt securities of any
series; or
|
|
|
|
evidence the acceptance of appointment by a successor trustee.
|
Modification with Consent of Holders. We and
the applicable trustee, with the consent of the holders of not
less than a majority in aggregate principal amount of each
affected series of outstanding debt securities, each affected
series voting as a separate class, may add any provisions to, or
change in any manner or eliminate any of the provisions of, the
applicable indenture or modify in any manner the rights of the
holders of those debt securities. However, we and the trustee
may not, among other things, make any of the following changes
to any outstanding debt security without the consent of each
holder that would be affected by such change:
|
|
|
|
|
extend the final maturity of the principal;
|
|
|
|
reduce the principal amount;
|
|
|
|
reduce the rate or extend the time of payment of interest;
|
|
|
|
reduce any amount payable on redemption;
|
|
|
|
change the currency in which the principal, any amount of
original issue discount, or interest thereon is payable;
|
8
|
|
|
|
|
reduce the amount of any original issue discount security
payable upon acceleration or provable in bankruptcy;
|
|
|
|
alter the terms on which holders of the debt securities may
convert or exchange debt securities for stock or other
securities of Wintrust or of other entities or for other
property or the cash value of the property, other than in
accordance with the antidilution provisions or other similar
adjustment provisions included in the terms of the debt
securities;
|
|
|
|
alter certain provisions of the indenture relating to debt
securities not denominated in U.S. dollars;
|
|
|
|
impair the right of any holder to institute suit for the
enforcement of any payment on any debt security when due; or
|
|
|
|
reduce the percentage of debt securities the consent of whose
holders is required for modification of the indenture.
|
Governing
Law
Unless otherwise specified in a prospectus supplement, the debt
securities and the indenture will be governed by, and construed
in accordance with, the laws of the State of Illinois.
DESCRIPTION
OF CAPITAL STOCK
Below is a brief description of our capital stock. This
description does not purport to be complete and is qualified in
its entirety by reference to our Amended and Restated Articles
of Incorporation, as Amended, our Amended and Restated By-laws,
the Statement of Resolution Establishing Series of Junior Serial
Preferred Stock A, the Amended and Restated Certificate of
Designations of 8.00% Non- Cumulative Perpetual Convertible
Preferred Stock, Series A, or the Series A Certificate
of Designations, and the Certificate of Designations of Fixed
Rate Cumulative Perpetual Preferred Stock, Series B, or the
Series B Certificate of Designations.
Authorized
Capital Stock
Under Wintrusts amended and restated articles of
incorporation, as amended, Wintrust has the authority to issue
60 million shares of common stock, no par value per share,
and 20 million shares of preferred stock, no par value per
share. Of the 20 million shares of preferred stock, 50,000
have been designated 8.00% Non-Cumulative Perpetual Convertible
Preferred Stock, Series A, or the series A preferred,
250,000 have been designated Fixed Rate Cumulative Perpetual
Preferred Stock, Series B, or the series B preferred,
and 100,000 have been designated Junior Serial Preferred Stock
A, or the junior serial preferred stock. Our junior serial
preferred stock was authorized in connection with our adoption
of a rights agreement on July 28, 1998. These rights
expired on June 30, 2005. As of March 1, 2010,
24,342,790 shares of common stock, 50,000 shares of
series A preferred, 250,000 shares of series B
preferred and no shares of junior serial preferred stock were
issued and outstanding.
Common
Stock
General. We may issue and offer shares of our
common stock. All shares of Wintrust common stock are, and the
shares of Wintrust common stock issuable upon conversion of the
series A preferred will be, duly authorized, validly
issued, fully paid and non-assessable. The rights, preferences
and privileges of holders of Wintrust common stock are subject
to, and may be adversely affected by, the rights of the holders
of shares of any series of Wintrust preferred stock, including
the series A preferred, series B preferred, junior
serial preferred stock and any series of preferred stock that
Wintrust may designate and issue in the future. Shares of
Wintrust common stock may be certificated or uncertificated, as
provided by the Illinois Business Corporation Act, or the IBCA.
Voting Rights. Each holder of our common stock
is entitled to one vote for each share held on all matters
submitted to a vote of shareholders and does not have cumulative
voting rights. Accordingly, holders
9
of a majority of the shares of our common stock entitled to vote
in any election of directors may elect all of our directors
standing for election.
Dividend Rights. The holders of our common
stock are entitled to receive dividends, if and when declared
payable by our board of directors from any funds legally
available for the payment of dividends, subject to any
preferential dividend rights of outstanding Wintrust preferred
stock, including the series A preferred and series B
preferred. Upon our liquidation, dissolution or winding up, the
holders of our common stock are entitled to share pro rata in
our net assets available after the payment of all debts and
other liabilities and subject to the prior rights of any
outstanding preferred stock, including the series A
preferred and series B preferred.
Preemptive Rights. Under our amended and
restated articles of incorporation, as amended, the holders of
our common stock have no preemptive, subscription, redemption or
conversion rights.
Listing. Our common shares are listed on The
NASDAQ Global Select Stock Market. We intend to apply to The
NASDAQ Global Select Market to list the additional common shares
offered hereby.
Series A
Preferred Stock
General. Shares of our series A preferred
are not registered for sale pursuant to this prospectus.
Dividends. Non-Cumulative Dividends on the
series A preferred are payable quarterly in arrears if,
when and as declared by our Board of Directors, at a rate of
8.00% per year on the liquidation preference of $1,000 per
share. With certain limited exceptions, if we do not pay full
cash dividends on the series A preferred for the most
recently completed dividend period, we may not pay dividends on,
or repurchase, redeem or make a liquidation payment with respect
to, our common stock or other stock ranking equally with or
junior to the series A preferred. The series A
preferred is not redeemable by the holders thereof or us.
Conversion. Holders of the series A
preferred may convert their shares into common stock at any
time. We may convert all of the series A preferred into
common stock upon the consummation of certain Fundamental
Transactions (as defined in the Series A Certificate of
Designations) consummated on or after August 26, 2010,
provided that we have declared and paid in full dividends on the
series A preferred for the four most recently completed
quarterly dividend periods. On or after August 26, 2013, we
may convert any or all of the series A preferred into
common stock if, for 20 trading days during any period of 30
consecutive trading days, the closing price of our common stock
exceeds $35.59 and we have declared and paid in full dividends
on the series A preferred for the four most recently
completed quarterly dividend periods. The conversion price of
the series A preferred is subject to customary
anti-dilution adjustments. In addition, the conversion price
will be adjusted if we sell more than $10 million of common
stock (or securities convertible into or exchangeable for common
stock) prior to August 26, 2010 at a price per share that
is less than an amount that is $1.00 beneath the then applicable
conversion price.
Reorganization Events and Fundamental
Transactions. If we consummate a Reorganization
Event (as defined in the Series A Certificate of
Designations), each share of the series A preferred will,
without the consent of the holders, become convertible into the
kind of securities, cash and other property receivable in such
Reorganization Event by a holder of the shares of common stock.
If we consummate a Fundamental Transaction prior to
August 26, 2010, holders of shares of series A
preferred may convert such shares into the right to receive the
consideration into which shares of common stock are exchanged or
converted as a result of such Fundamental Transaction. The
consideration to be received by the holders of series A
preferred for each share of common stock into which the
series A preferred is convertible must have a fair value of
at least $36.96 per share, which is equal to 135% of the initial
conversion price, if such Fundamental Transaction is consummated
prior to August 26, 2010, in each case as equitably
adjusted for stock splits, stock combinations, stock dividends
or similar transactions.
Voting Rights. Holders of the series A
preferred generally do not have any voting rights, except as
required by law. However, we may not amend our articles of
incorporation or bylaws in a manner adverse to the rights of the
series A preferred, issue capital stock ranking senior to
the series A preferred or take certain other actions
without the approval of the holders of the series A
preferred. In addition, holders of the series A
10
preferred, together with the holders of other parity securities
having similar voting rights, may elect two directors if we have
not paid dividends on the series A preferred for four or
more quarterly dividend periods, whether or not consecutive.
The series A preferred is not traded or quoted on any
market.
Series B
Preferred Stock
General. The shares of our series B
preferred were originally issued by us pursuant to the Letter
Agreement dated December 19, 2008, and the related
Securities Purchase Agreement Standard Terms,
between us and the United States Department of the Treasury, or
the US Treasury, together with a related warrant to purchase
1,643,295 shares of our common stock, in a transaction
exempt from the registration requirements of the Securities Act
of 1933. We have filed a registration statement on
Form S-3
(Registration
No. 333-155637)
covering the shares of series B preferred, the related
warrant and the shares of common stock issuable upon exercise of
such warrant.
Dividends. Holders of shares of series B
preferred are entitled to receive if, as and when declared by
our board of directors, out of legally available funds,
cumulative cash dividends at a rate per annum of 5% per share on
a liquidation preference of $1,000 per share of series B
preferred with respect to each dividend period from
December 19, 2008 to, but excluding, December 20,
2013. From and after December 20, 2013, holders of shares
of series B preferred are entitled to receive cumulative
cash dividends at a rate per annum of 9% per share on a
liquidation preference of $1,000 per share of series B
preferred with respect to each dividend period thereafter.
Dividends on the series B preferred are payable quarterly
in arrears on each February 15, May 15, August 15 and
November 15 (each, a dividend payment date),
starting with February 15, 2009. If any dividend payment
date is not a business day, then the next business day will be
the applicable dividend payment date, and in that circumstance
no additional dividends will accrue as a result of the
applicable postponement of the dividend payment date. Dividends
payable during any dividend period are computed on the basis of
a 360-day
year consisting of twelve
30-day
months. Dividends payable with respect to the series B
preferred are payable to holders of record of shares of
series B preferred on the date that is 15 calendar days
immediately preceding the applicable dividend payment date or
such other record date as our board of directors or any duly
authorized committee of the board determines, so long as such
record date is not more than 60 nor less than 10 days prior
to the applicable dividend payment date.
If we determine not to pay any dividend or a full dividend with
respect to the series B preferred, we are required to
provide written notice to the holders of shares of series B
preferred prior to the applicable dividend payment date. Unpaid
dividends on the series B preferred will be compounded.
We are subject to various regulatory policies and requirements
relating to the payment of dividends, including requirements to
maintain adequate capital above regulatory minimums. The Board
of Governors of the Federal Reserve System (the Federal
Reserve Board) is authorized to determine, under certain
circumstances relating to the financial condition of a bank
holding company, such as us, that the payment of dividends would
be an unsafe or unsound practice and to prohibit payment thereof.
Priority of Dividends. With respect to the
payment of dividends and the amounts to be paid upon
liquidation, the series B preferred will rank:
|
|
|
|
|
senior to our common stock and all other equity securities
designated as ranking junior to the series B
preferred; and
|
|
|
|
at least equally with all other equity securities designated as
ranking on a parity with the series B preferred
(parity stock), including our outstanding shares of
series A preferred, with respect to the payment of
dividends and distribution of assets upon our liquidation,
dissolution or
winding-up.
|
So long as any shares of series B preferred remain
outstanding, unless all accrued and unpaid dividends for all
prior dividend periods have been paid or are contemporaneously
declared and paid in full, no dividend
11
whatsoever shall be paid or declared on our common stock or
other junior stock, other than a dividend payable solely in
shares of our common stock.
In addition, we may not purchase, redeem or otherwise acquire
for consideration any shares of our common stock or other junior
stock unless we have paid in full all accrued dividends on the
series B preferred for all prior dividend periods, other
than:
|
|
|
|
|
purchases, redemptions or other acquisitions of our common stock
or other junior stock in connection with the administration of
our employee benefit plans in the ordinary course of business;
|
|
|
|
purchases or other acquisitions by broker-dealer subsidiaries of
our company solely for the purpose of market-making,
stabilization or customer facilitation transactions in junior
stock or parity stock in the ordinary course of business;
|
|
|
|
purchases or other acquisitions by broker-dealer subsidiaries of
our company for resale pursuant to an offering by us of our
stock that is underwritten by the related broker-dealer
subsidiary;
|
|
|
|
redemption or repurchases of rights pursuant to any
stockholders rights plan;
|
|
|
|
the acquisition by us of record ownership of junior stock or
parity stock for the beneficial ownership of any other person
(other than us), including as trustees or custodians; and
|
|
|
|
the exchange or conversion of (i) junior stock for or into
other junior stock, or (ii) parity stock for or into other
parity stock or junior stock, but only to the extent that
(x) such acquisition is required pursuant to binding
contractual agreements entered into before December 19,
2008, or (y) any subsequent agreement for the accelerated
exercise, settlement or exchange thereof for common stock.
|
On any dividend payment date for which full dividends are not
paid, or declared and funds set aside therefor, on the
series B preferred and any other parity stock, all
dividends paid or declared for payment on that dividend payment
date (or, with respect to parity stock with a different dividend
payment date, on the applicable dividend date therefor falling
within the dividend period and related to the dividend payment
date for the series B preferred), with respect to the
series B preferred and any other parity stock shall be
declared ratably among the holders of any such shares who have
the right to receive dividends, in proportion to the respective
amounts of the undeclared and unpaid dividends relating to the
dividend period.
Subject to the foregoing, such dividends (payable in cash, stock
or otherwise) as may be determined by our board of directors may
be declared and paid on our common stock and any other stock
ranking equally with or junior to the series B preferred
from time to time out of any funds legally available for such
payment, and the series B preferred shall not be entitled
to participate in any such dividends.
Redemption. The series B preferred may
not be redeemed prior to February 15, 2012 unless we have
received aggregate gross proceeds from one or more qualified
equity offerings (as described below) equal to $62,500,000,
which equals 25% of the aggregate liquidation amount of the
series B preferred on the date of issuance. In such a case,
we may redeem the series B preferred, in whole or in part,
subject to the approval of the Federal Reserve Board, upon
notice as described below, up to a maximum amount equal to the
aggregate net cash proceeds received by us from such qualified
equity offerings. A qualified equity offering is a
sale and issuance for cash by us, to persons other than us or
our subsidiaries after December 19, 2008, of shares of
perpetual preferred stock, common stock or a combination
thereof, that in each case qualify as Tier 1 capital at the
time of issuance under the applicable risk-based capital
guidelines of the Federal Reserve Board. Qualified equity
offerings do not include issuances made in connection with
acquisitions, issuances of trust preferred securities and
issuances of common stock
and/or
perpetual preferred stock made pursuant to agreements or
arrangements entered into, or pursuant to financing plans that
were publicly announced, on or prior to December 19, 2008.
On or after February 15, 2012, the series B preferred
may be redeemed by us at any time, in whole or in part, subject
to the approval of the Federal Reserve Board and the notice
requirements described below.
In any redemption, the redemption price of the series B
preferred shall be an amount equal to the per share liquidation
amount plus accrued and unpaid dividends to but excluding the
date of redemption.
12
The series B preferred will not be subject to any mandatory
redemption, sinking fund or similar provisions. Holders of
shares of series B preferred have no right to require the
redemption or repurchase of their shares of series B
preferred.
In the case of any redemption of less than all of the shares of
series B preferred, the shares to be redeemed will be
selected either pro rata or in such other manner as our board of
directors may determine to be fair and equitable. Furthermore,
if we repurchase shares of series B preferred from a holder
other than the US Treasury, we must offer to repurchase a
ratable portion of the shares of series B preferred then
held by US Treasury.
We will mail notice of any redemption of the series B
preferred by first class mail, postage prepaid, addressed to the
holders of record of the shares of series B preferred to be
redeemed at their respective last addresses appearing on our
books. This mailing will be at least 30 days and not more
than 60 days before the date fixed for redemption. Any
notice mailed or otherwise given as described in this paragraph
will be conclusively presumed to have been duly given, whether
or not the holder receives the notice, and failure duly to give
the notice by mail or otherwise, or any defect in the notice or
in the mailing or provision of the notice, to any holder of
series B preferred designated for redemption will not
affect the redemption of any other shares of series B
preferred. Each notice of redemption will set forth the
applicable redemption date, the redemption price, the place
where shares of series B preferred are to be redeemed, and
the number of shares of series B preferred to be redeemed
(and, if less than all shares of series B preferred held by
the applicable holder, the number of shares to be redeemed from
such holder).
Shares of series B preferred that are redeemed, repurchased
or otherwise acquired by us will revert to authorized but
unissued shares of our preferred stock.
Pursuant to the American Recovery and Reinvestment Act of 2009,
or the ARRA, a financial institution that receives assistance
under the United States Department of the Treasurys
Troubled Asset Relief Program may repay such assistance without
regard to the waiting period and source requirements described
above, subject to the requirements that the recipient consult
with the appropriate Federal banking agency and that it repay a
minimum of 25% of the issue price of the preferred stock. The
ARRA further provides that in the event a recipient repays such
assistance, the Secretary of the Treasury will liquidate the
warrants associated with such assistance at the current market
price, which may include a repurchase of the warrants by the
issuer. The shares of series B preferred and the warrant
sold by Wintrust to the US Treasury are subject to these
provisions of the ARRA.
Liquidation Rights. In the event that we
voluntarily or involuntarily liquidate, dissolve or winds up our
affairs, holders of series B preferred will be entitled to
receive an amount per share, referred to as the total
liquidation amount, equal to the fixed liquidation preference of
$1,000 per share, plus any accrued and unpaid dividends, whether
or not declared, to the date of payment. Holders of
series B preferred will be entitled to receive the total
liquidation amount out of our assets that are available for
distribution to stockholders, after payment or provision for
payment of our debts and other liabilities but before any
distribution of assets is made to holders of our common stock or
any other shares ranking, as to that distribution, junior to the
series B preferred.
If our assets are not sufficient to pay the total liquidation
amount in full to all holders of series B preferred and all
holders of any shares of outstanding parity stock, the amounts
paid to the holders of series B preferred and other shares
of parity stock will be paid pro rata in accordance with the
respective total liquidation amount for those holders. If the
total liquidation amount per share of series B preferred
has been paid in full to all holders of series B preferred
and other shares of parity stock, the holders of our common
stock or any other shares ranking, as to such distribution,
junior to series B preferred will be entitled to receive
all of our remaining assets according to their respective rights
and preferences.
For purposes of the liquidation rights, neither the sale,
conveyance, exchange or transfer of all or substantially all of
our property and assets, nor the consolidation or merger by us
with or into, any other corporation or by another corporation
with or into us, will constitute a liquidation, dissolution or
winding-up
of our affairs.
13
Voting Rights. Except as indicated below or
otherwise required by law, holders of series B preferred
will not have any voting rights.
If dividends on the series B preferred have not been paid
for an aggregate of six quarterly dividend periods or more
(whether or not consecutive), the authorized number of directors
then constituting our board of directors will be automatically
increased by two. Holders of series B preferred, together
with the holders of any outstanding parity stock with like
voting rights (the Voting Parity Stock), voting as a
single class, will be entitled to elect the two additional
members to our board of directors (the Preferred Stock
Directors), at the next annual meeting (or at a special
meeting called for the purpose of electing the Preferred Stock
Directors prior to the next annual meeting) and at each
subsequent annual meeting until all accrued and unpaid dividends
on the series B preferred for all past dividend periods
have been paid in full. The election of any Preferred Stock
Director is subject to the qualification that his or her
election would not cause us to violate the corporate governance
requirement of The NASDAQ Global Select Market (or any other
exchange on which our securities may be listed) that listed
companies must have a majority of independent directors.
Upon the termination of the right of the holders of
series B preferred and Voting Parity Stock to elect
Preferred Stock Directors, as described above, the Preferred
Stock Directors will immediately cease to be qualified as
directors, their term of office shall terminate immediately and
the number of authorized directors on our board will be reduced
by the number of Preferred Stock Directors that the holders of
series B preferred and Voting Parity Stock had been
entitled to elect. The holders of a majority of shares of
series B preferred and Voting Parity Stock, voting as a
class, may remove any Preferred Stock Director, with or without
cause, and the holders of a majority of the shares of
series B preferred and Voting Parity Stock, voting as a
class, may fill any vacancy created by the removal of a
Preferred Stock Director. If the office of a Preferred Stock
Director becomes vacant for any other reason, the remaining
Preferred Stock Director may choose a successor to fill such
vacancy for the remainder of his or her unexpired term.
So long as any shares of series B preferred are
outstanding, in addition to any other vote or consent of
stockholders required by law or by our amended and restated
certificate of incorporation, as amended, the vote or consent of
the holders of at least
662/3%
of the shares of series B preferred at the time
outstanding, voting separately as a single class, given in
person or by proxy, either in writing without a meeting or by
vote at any meeting called for the purpose, shall be necessary
for effecting or validating:
|
|
|
|
|
any amendment or alteration of our amended and restated
certificate of incorporation, as amended to authorize or create
or increase the authorized amount of, or any issuance of, any
shares of, or any securities convertible into or exchangeable or
exercisable for shares of, any class or series of capital stock
ranking senior to the series B preferred with respect to
payment of dividends
and/or
distribution of assets on our liquidation, dissolution or
winding up;
|
|
|
|
any amendment, alteration or repeal of any provision of the
Series B Certificate of Designations so as to adversely
affect the rights, preferences, privileges or voting powers of
series B preferred; or
|
|
|
|
any consummation of a binding share exchange or reclassification
involving the series B preferred or a merger or
consolidation of us with another entity, unless the shares of
series B preferred remain outstanding following any such
transaction or, if we are not the surviving entity, are
converted into or exchanged for preference securities and such
remaining outstanding shares of series B preferred or
preference securities have rights, references, privileges and
voting powers that are not materially less favorable than the
rights, preferences, privileges or voting powers of the
series B preferred, taken as a whole.
|
The foregoing voting provisions will not apply if, at or prior
to the time when the vote or consent would otherwise be
required, all outstanding shares of series B preferred have
been redeemed or called for redemption upon proper notice and
sufficient funds have been set aside by us for the benefit of
the holders of series B preferred to effect the redemption.
14
Preferred
Stock
General. We may offer shares of any series of
preferred stock that we may designate and issue in the future.
Under our amended and restated articles of incorporation, as
amended, our board of directors has the authority to issue
preferred stock in one or more series, and to fix for each
series the voting powers and the distinctive designations,
preferences and relative, participation, optional or other
special rights and such qualifications, limitations or
restrictions, as may be stated and expressed in the resolution
or resolutions adopted by the board of directors providing for
the issuance of such series as may be permitted by the IBCA,
including dividend rates, conversion rights, terms of redemption
and liquidation preferences and the number of shares
constituting each such series, without any further vote or
action by our shareholders.
Preferred Stock Offered Hereby. If we offer
preferred stock pursuant to this prospectus in the future, the
applicable prospectus supplement will describe the terms of such
preferred shares, including the following, where applicable:
|
|
|
|
|
the designation of the shares and the number of shares that
constitute the series;
|
|
|
|
the dividend rate (or the method of calculating dividends), if
any, on the shares of the series and the priority as to payment
of dividends with respect to other classes or series of our
shares of capital stock;
|
|
|
|
whether dividends will be cumulative or non-cumulative and, if
cumulative, the date from which dividends on the preferred
shares will accumulate;
|
|
|
|
the dividend periods (or the method of calculating the dividend
periods);
|
|
|
|
the voting rights of the preferred shares, if any;
|
|
|
|
the liquidation preference and the priority as to payment of the
liquidation preference with respect to other classes or series
of our capital stock and any other rights of the shares of the
class or series upon our liquidation or
winding-up;
|
|
|
|
whether or not the shares of the series will be convertible and,
if so, the security into which they are convertible and the
terms and conditions of conversion, including the conversion
price or the manner of determining it;
|
|
|
|
whether or not and on what terms the shares of the series will
be subject to redemption or repurchase at our option;
|
|
|
|
whether the preferred shares of the series will be listed on a
national securities exchange or quoted on an automated quotation
system;
|
|
|
|
federal income tax considerations; and
|
|
|
|
the other material terms, rights and privileges and any
qualifications, limitations or restrictions of the rights or
privileges of the series.
|
The description in the prospectus supplement will not
necessarily be complete and reference will be made to the
certificate of designation relating to a series of preferred
shares which will be filed with the SEC.
Depositary
Shares
We may elect to offer fractional preferred shares rather than
full preferred shares. If so, we will issue depositary
receipts for these depositary shares. Each
depositary share will represent a fraction of a share of a
particular series of preferred shares. If we offer depositary
shares pursuant to these projections in the future, the
applicable prospectus supplement will describe the terms of the
depository shares and the underlying preferred shares to which
the depositary shares relate.
The description in the prospectus supplement will not
necessarily be complete, and reference will be made to the
deposit agreement relating to the depositary shares which will
be filed with the SEC.
15
Exchange
Agent and Registrar
Illinois Stock Transfer Company is the exchange agent and
registrar for our common stock. Unless the applicable prospectus
supplement specifies otherwise, the exchange agent and registrar
for each series of preferred stock will be Illinois Stock
Transfer Company.
Certain
Provisions That May Have an Anti-Takeover Effect
Certain provisions of Wintrusts articles of incorporation,
by-laws and the IBCA may have the effect of impeding the
acquisition of control of Wintrust by means of a tender offer, a
proxy fight, open-market purchases or otherwise in a transaction
not approved by Wintrusts board of directors.
These provisions may have the effect of discouraging a future
takeover attempt which is not approved by Wintrusts board
of directors but which individual Wintrust shareholders may deem
to be in their best interests or in which Wintrust shareholders
may receive a substantial premium for their shares over
then-current market prices. As a result, shareholders who might
desire to participate in such a transaction may not have an
opportunity to do so. Such provisions will also render the
removal of Wintrusts current board of directors or
management more difficult.
These provisions of Wintrusts articles of incorporation
and by-laws include the following:
|
|
|
|
|
our board of directors may issue additional authorized shares of
our capital stock to deter future attempts to gain control of
Wintrust, including the authority to determine the terms of any
one or more series of preferred stock, such as voting rights,
conversion rates, and liquidation preferences. As a result of
the ability to fix voting rights for a series of preferred
stock, the board has the power, to the extent consistent with
its fiduciary duty, to issue a series of preferred stock to
persons friendly to management in order to attempt to block a
merger or other transaction by which a third party seeks
control, and thereby assist the incumbent board of directors and
management to retain their respective positions;
|
|
|
|
our articles of incorporation do not provide for cumulative
voting for any purpose, and our articles of incorporation and
by-laws also provide that any action required or permitted to be
taken by shareholders may be taken only at an annual or special
meeting and prohibit shareholder action by written consent in
lieu of a meeting;
|
|
|
|
our articles of incorporation expressly elect to be governed by
the provisions of Section 7.85 of the IBCA.
Section 7.85 prohibits a publicly held Illinois corporation
from engaging in a business combination unless, in addition to
any affirmative vote required by law or the articles of
incorporation of the company, the proposed business combination:
|
|
|
|
|
|
receives the affirmative vote of the holders of at least 80% of
the combined voting power of the then outstanding shares of all
classes and series of the corporation entitled to vote generally
in the election of directors voting together as a single class
(the voting shares), and the affirmative vote of a majority of
the voting shares held by disinterested shareholders;
|
|
|
|
is approved by at least two-thirds of the disinterested
directors; or
|
|
|
|
provides for consideration offered to shareholders that meets
certain fair price standards and satisfies certain procedural
requirements.
|
|
|
|
Such fair price standards require that the fair market value per
share of the consideration offered be equal to or greater than
the higher of:
|
|
|
|
|
|
the highest per share price paid by the interested shareholder
during the two-year period immediately prior to the first public
announcement of the proposed business combination or in the
transaction by which the interested shareholder became an
interested shareholder; and
|
|
|
|
the fair market value per common share on the first trading date
after the first public announcement of the proposed business
combination or on the first trading date after the date of the
first public announcement that the interested shareholder has
become an interested shareholder.
|
16
|
|
|
|
|
For purposes of Section 7.85, disinterested director means
any member of the board of directors of the corporation who:
|
is neither the interested shareholder nor an affiliate or
associate of the interested shareholder;
|
|
|
|
|
was a member of the board of directors prior to the time that
the interested shareholder became an interested shareholder or
was a director of the corporation before January 1, 1997,
or was recommended to succeed a disinterested director by a
majority of the disinterested directors then in office; and
|
|
|
|
was not nominated for election as a director by the interested
shareholder or any affiliate or associate of the interested
shareholder.
|
|
|
|
|
|
the amendment of our articles of incorporation must be approved
by a majority vote of the board of directors and also by a
two-thirds vote of the outstanding shares of our common stock,
provided, however, that an affirmative vote of at least 85% of
the outstanding voting stock entitled to vote is required to
amend or repeal certain provisions of the articles of
incorporation, including provisions (a) prohibiting
cumulative voting rights, (b) relating to certain business
combinations, (c) limiting the shareholders ability
to act by written consent, (d) regarding the minimum number
of directors, (e) indemnification of directors and officers
by Wintrust and limitation of liability for directors, and
(f) regarding amendment of the foregoing supermajority
provisions of our articles of incorporation. Wintrusts
by-laws may be amended only by the board of directors.
|
The provisions described above are intended to reduce our
vulnerability to takeover attempts and certain other
transactions which have not been negotiated with and approved by
members of our board of directors.
Additionally, the Change in Bank Control Act of 1978 prohibits a
person or group of persons from acquiring control of
a bank holding company unless:
|
|
|
|
|
the Federal Reserve has been given 60 days prior
written notice of such proposed acquisition; and
|
|
|
|
within that time period the Federal Reserve has not issued a
notice disapproving the proposed acquisition or extending for up
to another 30 days the period during which such a
disapproval may be issued.
|
An acquisition may be made prior to the expiration of the
disapproval period if the Federal Reserve issues written notice
of its intent not to disapprove the action. Under a rebuttable
presumption established by the Federal Reserve, the acquisition
of more than 10% of a class of voting stock of a bank holding
company with a class of securities registered under
Section 12 of the Exchange Act, such as Wintrust, would,
under the circumstances set forth in the presumption, constitute
the acquisition of control. The receipt of revocable proxies,
provided the proxies terminate within a reasonable time after
the meeting to which they relate, is not included in determining
percentages for change in control purposes.
DESCRIPTION
OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts
obligating holders to purchase from us, and us to sell to the
holders, a specified number of common shares at a future date or
dates, which we refer to in this Prospectus as Stock
Purchase Contracts. The price per common share and number
of common shares may be fixed at the time the Stock Purchase
Contracts are issued or may be determined by reference to a
specific formula set forth in the Stock Purchase Contracts. The
Stock Purchase Contracts may be issued separately or as a part
of units consisting of a Stock Purchase Contract and our debt
securities or debt obligations of third parties, including
U.S. Treasury securities, securing the holders
obligations to purchase the common shares under the Stock
Purchase Contracts, which we refer to in this Prospectus as
Stock Purchase Units. The Stock Purchase Contracts
may require holders to secure their obligations thereunder in a
specified manner. The Stock Purchase Contracts also may require
us to make periodic payments to the holders of the Stock
Purchase Units or vice-versa and such payments may be unsecured
or prefunded on some basis.
17
The applicable prospectus supplement will describe the terms of
any Stock Purchase Contracts or Stock Purchase Units. The
description in the prospectus supplement will not necessarily be
complete, and reference will be made to the Stock Purchase
Contracts, and, if applicable, collateral or depositary
arrangements, relating to the Stock Purchase Contracts or Stock
Purchase Units. Material United States federal income tax
considerations applicable to the Stock Purchase Units and the
Stock Purchase Contracts will also be discussed in the
applicable prospectus supplement.
DESCRIPTION
OF WARRANTS
We may issue warrants to purchase debt securities, common
shares, or preferred shares. We may issue warrants independently
or together with other securities. Warrants sold with other
securities may be attached to or separate from the other
securities. We will issue warrants under one or more warrant
agreements between us and a warrant agent that we will name in
the prospectus supplement.
The prospectus supplement relating to any warrants we are
offering will include specific terms relating to the offering.
These terms will include some or all of the following:
|
|
|
|
|
the title of the warrants;
|
|
|
|
the aggregate number of warrants offered;
|
|
|
|
the designation, number and terms of the debt securities, common
shares or preferred shares purchasable upon exercise of the
warrants and procedures by which those numbers may be adjusted;
|
|
|
|
the exercise price of the warrants;
|
|
|
|
the dates or periods during which the warrants are exercisable;
|
|
|
|
the designation and terms of any securities with which the
warrants are issued;
|
|
|
|
if the warrants are issued as a unit with another security, the
date on and after which the warrants and the other security will
be separately transferable;
|
|
|
|
if the exercise price is not payable in U.S. dollars, the
foreign currency, currency unit or composite currency in which
the exercise price is denominated;
|
|
|
|
any minimum or maximum amount of warrants that may be exercised
at any one time;
|
|
|
|
any terms relating to the modification of the warrants; and
|
|
|
|
any terms, procedures and limitations relating to the
transferability, exchange or exercise of the warrants.
|
The description in the prospectus supplement will not
necessarily be complete, and reference will be made to the
warrant agreements which will be filed with the SEC.
DESCRIPTION
OF THE TRUST
Wintrust Capital Trust VI is a Delaware statutory trust
formed pursuant to the Delaware Statutory Trust Act under a
trust agreement executed by us, as sponsor for the trust, and
the trustees, and a certificate of trust has been filed with the
Delaware Secretary of State. The trust agreement will be amended
and restated in its entirety in the form filed as an exhibit to
the registration statement of which this prospectus is a part,
as of the date the trust preferred securities are initially
issued. The trust agreement will be qualified under the
Trust Indenture Act of 1939.
The following discussion contains a description of the material
terms of the trust agreement for the trust and is subject to,
and is qualified in its entirety by reference to, the amended
and restated trust agreement.
The holders of the trust preferred securities issued pursuant to
an offering described in this prospectus and subsequent
prospectus supplements will own all of the issued and
outstanding trust preferred securities of
18
the trust which have certain prior rights over the other
securities of the trust in certain circumstances as specified in
this prospectus. We will not initially own any of the trust
preferred securities. We will initially own, directly or
indirectly, all of the issued and outstanding common securities.
The common securities, together with the trust preferred
securities, are called the trust securities.
The trust exists exclusively for the purposes of:
|
|
|
|
|
issuing the trust preferred securities to the public for cash;
|
|
|
|
issuing its common securities to us in exchange for our
capitalization of the trust;
|
|
|
|
investing the proceeds from the sale of the trust securities in
an equivalent amount of debentures; and
|
|
|
|
engaging in other activities that are incidental to those listed
above, such as receiving payments on the debentures and making
distributions to security holders, furnishing notices and other
administrative tasks.
|
The trust will not have any independent business operations or
any assets, revenues or cash flows other than those related to
the issuance and administration of the trust securities.
The rights of the holders of the trust securities are as set
forth in the trust agreement, the Delaware Statutory
Trust Act and the Trust Indenture Act. The trust
agreement does not permit the trust to borrow money or make any
investment other than in the debentures. Other than with respect
to payment of distributions on and the liquidation amount of the
trust securities, Wintrust has agreed to pay for all debts and
obligations and all costs and expenses of the trust, including
the fees and expenses of the trustees and any income taxes,
duties and other governmental charges, and all costs and
expenses related to these charges, to which the trust may become
subject, except for United States withholding taxes that are
properly withheld.
The number of trustees of the trust will initially be five.
Three of the trustees will be persons who are employees or
officers of or who are affiliated with Wintrust. They are the
administrative trustees. The fourth trustee will be an entity
that maintains its principal place of business in the State of
Delaware. It is the Delaware trustee. Initially, Wilmington
Trust Company, a Delaware banking corporation, will act as
Delaware trustee. The fifth trustee, called the property
trustee, will also initially be Wilmington Trust Company.
The property trustee is the institutional trustee under the
trust agreement and acts as the indenture trustee called for
under the applicable provisions of the Trust Indenture Act.
Also for purposes of compliance with the Trust Indenture
Act, Wilmington Trust Company will act as guarantee trustee
and indenture trustee under the guarantee agreement and the
indenture. We, as holder of all of the common securities, will
have the right to appoint or remove any trustee unless an event
of default under the indenture has occurred and is continuing,
in which case only the holders of the trust preferred securities
may remove the Delaware trustee or the property trustee. The
trust has a term of approximately 31 years but may
terminate earlier as provided in the trust agreement.
The property trustee will hold the debentures for the benefit of
the holders of the trust securities and will have the power to
exercise all rights, powers and privileges under the indenture
as the holder of the debentures. In addition, the property
trustee will maintain exclusive control of a segregated
noninterest-bearing payment account established with
Wilmington Trust Company to hold all payments made on the
debentures for the benefit of the holders of the trust
securities. The property trustee will make payments of
distributions and payments on liquidation, redemption and
otherwise to the holders of the trust securities out of funds
from the payment account. The guarantee trustee will hold the
guarantee for the benefit of the holders of the trust preferred
securities. We will pay all fees and expenses related to the
trust and the offering of the trust preferred securities,
including the fees and expenses of the trustees.
19
DESCRIPTION
OF TRUST PREFERRED SECURITIES
The trust will issue only one series of trust preferred
securities and one series of common securities. The trust
agreement for the trust will be qualified as an indenture under
the Trust Indenture Act of 1939. The trust preferred
securities will have terms and will be subject to conditions as
set forth in the trust agreement or made a part of the trust
agreement by the Trust Indenture Act. This summary of
certain provisions of the trust preferred securities and each
trust agreement does not purport to be complete and is subject
to, and qualified in its entirety by reference to, all the
provisions of each trust agreement, including the definitions of
certain terms, and those provisions made part of each trust
agreement by the Trust Indenture Act. A form of the trust
agreement to be used in connection with the issuance of the
trust preferred securities and a form of the trust preferred
securities are filed as exhibits to the registration statement
that includes this prospectus. Wherever particular defined terms
of a trust agreement are referred to in this prospectus, those
defined terms are incorporated in this prospectus by reference.
A copy of the form of the trust agreement is available upon
request from the property trustee.
General
The trust agreement authorizes the administrative trustees, on
behalf of the trust, to issue the trust securities, which are
comprised of the trust preferred securities to be sold to the
public and the common securities. We will own all of the common
securities issued by the trust. The trust is not permitted to
issue any securities other than the trust securities or incur
any other indebtedness.
The trust preferred securities will represent preferred
undivided beneficial interests in the assets of the trust, and
the holders of the trust preferred securities will be entitled
to a preference over the common securities upon an event of
default with respect to distributions and amounts payable on
redemption or liquidation. The trust preferred securities will
rank equally, and payments on the trust preferred securities
will be made proportionally, with the common securities, except
as described under Subordination of Common
Securities.
The property trustee will hold legal title to the debentures in
trust for the benefit of the holders of the trust securities. We
will guarantee the payment of distributions out of money held by
the trust, and payments upon redemption of the trust preferred
securities or liquidation of the trust, to the extent described
under Description of the Guarantee. The guarantee
agreement does not cover the payment of any distribution or the
liquidation amount when the trust does not have sufficient funds
available to make these payments.
The specific terms of the trust preferred securities offered by
the trust will be described in a prospectus supplement,
including:
|
|
|
|
|
the specific designation, liquidation amount, number to be
issued by the trust and purchase price;
|
|
|
|
the currency or units based on or relating to currencies in
which distributions and other payments will or may be payable;
|
|
|
|
the distribution rates (or the method by which the rates will be
determined), if any;
|
|
|
|
the dates on which any distributions will be payable;
|
|
|
|
any provisions relating to deferral of distribution payments;
|
|
|
|
the places where distributions and other amounts payable on the
trust preferred securities will be payable;
|
|
|
|
any repayment, redemption, prepayment or sinking fund provisions;
|
|
|
|
any conversion or exchange provisions;
|
|
|
|
the voting rights, if any, of holders of the capital securities;
|
|
|
|
the terms and conditions, if any, upon which the assets of the
trust may be distributed to holders of the trust preferred
securities;
|
20
|
|
|
|
|
any applicable United States federal income tax
consequences; and
|
|
|
|
any other specific terms of the trust preferred securities.
|
If indicated in the applicable prospectus supplement, the terms
of the trust agreement for, and capital securities offered by,
the trust may differ from the terms summarized in this
prospectus.
Distributions
Source of Distributions. The funds of the
trust available for distribution to holders of the trust
preferred securities will be limited to payments made under the
debentures, which the trust will purchase with the proceeds from
the sale of the trust securities.
Distributions will be paid through the property trustee, which
will hold the amounts received from our interest payments on the
debentures in the payment account for the benefit of the holders
of the trust securities. If we do not make interest payments on
the debentures, the property trustee will not have funds
available to pay distributions on the trust preferred securities.
Distributions will accumulate from the date of issuance, will be
cumulative and will be computed on the basis of a
360-day year
of twelve
30-day
months. If the distribution date is not a business day, then
payment of the distributions will be made on the next day that
is a business day, without any additional interest or other
payment for the delay. However, if the next business day is in
the next calendar year, payment of the distribution will be made
on the business day immediately preceding the scheduled
distribution date.
Extension Period. As long as no event of
default under the indenture has occurred and is continuing, we
have the right to defer the payment of interest on the
debentures at any time for a period not exceeding 20 consecutive
quarters. We refer to this period of deferral as an
extension period. No extension period may extend
beyond the maturity date or end on a date other than an interest
payment date, which dates are the same as the distribution
dates. If we defer the payment of interest, quarterly
distributions on the trust preferred securities will also be
deferred during any such extension period. Any deferred
distributions under the trust preferred securities will
accumulate additional amounts at an annual rate compounded
quarterly from the relevant distribution date. The term
distributions as used in this prospectus includes
those accumulated amounts.
During an extension period, we may not:
|
|
|
|
|
declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of our capital stock (other than stock dividends, non-cash
dividends in connection with the implementation of a shareholder
rights plan, purchases of common stock in connection with
employee benefit plans or in connection with the
reclassification of any class of our capital stock into another
class of capital stock);
|
|
|
|
make any payment of principal, interest or premium on or repay,
repurchase or redeem any debt securities that rank equally with
(including the debentures issued to our other affiliated
Delaware trusts), or junior in interest to, the debentures;
|
|
|
|
make any guarantee payments with respect to any other guarantee
by us of any other debt securities of any of our subsidiaries if
the guarantee ranks equally with or junior to the debentures
(other than payments under the guarantee for the trust preferred
securities); or
|
|
|
|
redeem, purchase or acquire less than all of the debentures or
any of the trust preferred securities.
|
After the termination of any extension period and the payment of
all amounts due, we may elect to begin a new extension period,
subject to the above requirements.
We do not currently intend to exercise our right to defer
distributions on the trust preferred securities by deferring the
payment of interest on the debentures.
21
Redemption
or Exchange
General. Subject to the prior approval of the
Federal Reserve, if required, we will have the right to redeem
the debentures:
|
|
|
|
|
in whole at any time, or in part from time to time, on or after
the date set forth in the applicable prospectus supplement;
|
|
|
|
at any time, in whole, within 180 days following the
occurrence of a Tax Event, an Investment Company Event or a
Capital Treatment Event, which terms we define below; or
|
|
|
|
at any time, and from time to time, to the extent of any trust
preferred securities we purchase, plus a proportionate amount of
the common securities we hold.
|
Mandatory Redemption. Upon our repayment or
redemption, in whole or in part, of any debentures, whether on
the date set forth in the applicable prospectus supplement or
earlier, the property trustee will apply the proceeds to redeem
the same amount of the trust securities, upon not less than
30 days nor more than 60 days notice, at
the redemption price. The redemption price will equal 100% of
the aggregate liquidation amount of the trust securities plus
accumulated but unpaid distributions to the date of redemption.
If less than all of the debentures are to be repaid or redeemed
on a date of redemption, then the proceeds from such repayment
or redemption will be allocated to redemption of trust preferred
securities and common securities proportionately.
Distribution of Debentures in Exchange for
Trust Preferred Securities. Upon prior
approval of the Federal Reserve, if required by law or
regulation, we will have the right at any time to dissolve,
wind-up or
terminate the trust and, after satisfaction of the liabilities
of creditors of the trust as provided by applicable law,
including, without limitation, amounts due and owing the
trustees of the trust, cause the debentures to be distributed
directly to the holders of trust securities in liquidation of
the trust. See Liquidation Distribution upon
Termination.
After the liquidation date fixed for any distribution of
debentures in exchange for trust preferred securities:
|
|
|
|
|
those trust securities will no longer be deemed to be
outstanding;
|
|
|
|
certificates representing debentures in a principal amount equal
to the liquidation amount of those trust preferred securities
will be issued in exchange for the trust preferred securities;
|
|
|
|
we will use our best efforts to list the debentures on The
NASDAQ National Market or on such other exchange as the trust
preferred securities are then listed;
|
|
|
|
any certificates representing trust securities that are not
surrendered for exchange will be deemed to represent debentures
with a principal amount equal to the liquidation amount of those
trust preferred securities, accruing interest at the rate
provided for in the debentures from the last distribution date
on the trust preferred securities; and
|
|
|
|
all rights of the trust securityholders other than the right to
receive debentures upon surrender of a certificate representing
trust securities will terminate.
|
We cannot assure you that the market prices for the trust
preferred securities or the debentures that may be distributed
if a dissolution and liquidation of the trust were to occur
would be favorable. The trust preferred securities that an
investor may purchase, or the debentures that an investor may
receive on dissolution and liquidation of the trust, may trade
at a discount to the price that the investor paid to purchase
the trust preferred securities.
Redemption upon a Tax Event, Investment Company Event or
Capital Treatment Event. Subject to the receipt
of approval from the Federal Reserve, if a Tax Event, an
Investment Company Event or a Capital Treatment Event occurs, we
will have the right to redeem the debentures in whole, but not
in part, and thereby cause a mandatory redemption of all of the
trust securities at the redemption price described above. If one
of these events occurs and we do not elect to redeem the
debentures, or to dissolve the trust and cause the
22
debentures to be distributed to holders of the trust securities,
then the trust preferred securities will remain outstanding and
additional interest may be payable on the debentures.
Tax Event means the receipt by the trust and
us of an opinion of counsel experienced in such matters stating
that, as a result of any change or prospective change in the
laws or regulations of the United States or any political
subdivision or taxing authority of the United States, or as a
result of any official administrative pronouncement or judicial
decision interpreting or applying the tax laws or regulations,
there is more than an insubstantial risk that:
|
|
|
|
|
interest payable by us on the debentures is not, or within
90 days of the date of the opinion will not be, deductible
by us, in whole or in part, for federal income tax purposes;
|
|
|
|
the trust is, or will be within 90 days after the date of
the opinion, subject to federal income tax with respect to
income received or accrued on the debentures; or
|
|
|
|
the trust is, or will be within 90 days after the date of
opinion, subject to more than an immaterial amount of other
taxes, duties, assessments or other governmental charges.
|
Investment Company Event means the receipt by
the trust and us of an opinion of counsel experienced in such
matters to the effect that there is more than an insubstantial
risk that the trust is or will be considered an investment
company that is required to be registered under the
Investment Company Act of 1940, as a result of a change in law
or regulation or a change in interpretation or application of
law or regulation.
Capital Treatment Event means the receipt by
the trust and us of an opinion of counsel experienced in such
matters to the effect that there is more than an insubstantial
risk of impairment of our ability to treat the trust preferred
securities as Tier 1 capital for purposes of the current
capital adequacy guidelines of the Federal Reserve, as a result
of any amendment to any laws or any regulations.
For all of the events described above, we or the trust must
request and receive an opinion with regard to the event within a
reasonable period of time after we become aware of the possible
occurrence of an event of this kind.
Redemption of Debentures in Exchange for Trust Preferred
Securities We Purchase. Upon prior approval of
the Federal Reserve, if required by law or regulation, we will
also have the right at any time, and from time to time, to
redeem debentures in exchange for any trust preferred securities
we may have purchased in the market. If we elect to surrender
any trust preferred securities beneficially owned by us in
exchange for redemption of a like amount of debentures, we will
also surrender a proportionate amount of common securities in
exchange for debentures. Trust preferred securities owned by
other holders will not be called for redemption at any time when
we elect to exchange trust securities we own for debentures.
The common securities we surrender will be in the same
proportion to the trust preferred securities we surrender as is
the ratio of common securities purchased by us to the trust
preferred securities issued by the trust. In exchange for the
trust securities surrendered by us, the property trustee will
cause to be released to us for cancellation debentures with a
principal amount equal to the liquidation amount of the trust
securities, plus any accumulated but unpaid distributions, if
any, then held by the property trustee allocable to those trust
securities. After the date of redemption involving an exchange
by us, the trust securities we surrender will no longer be
deemed outstanding and the debentures redeemed in exchange will
be cancelled.
Redemption Procedures
Trust preferred securities will be redeemed at the redemption
price with the applicable proceeds from our contemporaneous
redemption of the debentures. Redemptions of the trust preferred
securities will be made, and the redemption price will be
payable, on each redemption date only to the extent that the
trust has funds available for the payment of the redemption
price.
Notice of any redemption will be mailed at least 30 days
but not more than 60 days before the date of redemption to
each holder of trust securities to be redeemed at its registered
address. Unless we default in
23
payment of the redemption price on the debentures, interest will
cease to accumulate on the debentures called for redemption on
and after the date of redemption.
If the trust gives notice of redemption of its trust securities,
then the property trustee, to the extent funds are available,
will irrevocably deposit with the depositary for the trust
securities funds sufficient to pay the aggregate redemption
price and will give the depositary for the trust securities
irrevocable instructions and authority to pay the redemption
price to the holders of the trust securities. If the trust
preferred securities are no longer in book-entry only form, the
property trustee, to the extent funds are available, will
deposit with the designated paying agent for such trust
preferred securities funds sufficient to pay the aggregate
redemption price and will give the paying agent irrevocable
instructions and authority to pay the redemption price to the
holders upon surrender of their certificates evidencing the
trust preferred securities. Notwithstanding the foregoing,
distributions payable on or prior to the date of redemption for
any trust securities called for redemption will be payable to
the holders of the trust securities on the relevant record dates
for the related distribution dates.
If notice of redemption has been given and we have deposited
funds as required, then on the date of the deposit all rights of
the holders of the trust securities called for redemption will
cease, except the right to receive the redemption price, but
without interest on such redemption price after the date of
redemption. The trust securities will also cease to be
outstanding on the date of the deposit. If any date fixed for
redemption of trust securities is not a business day, then
payment of the redemption price payable on that date will be
made on the next day that is a business day without any
additional interest or other payment in respect of the delay.
However, if the next business day is in the next succeeding
calendar year, payment of the interest will be made on the
immediately preceding business day.
If payment of the redemption price in respect of trust
securities called for redemption is improperly withheld or
refused and not paid by the trust, or by us pursuant to the
guarantee, distributions on the trust securities will continue
to accumulate at the applicable rate from the date of redemption
originally established by the trust for the trust securities to
the date the redemption price is actually paid. In this case,
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the redemption price.
Payment of the redemption price on the trust preferred
securities will be made to the applicable recordholders as they
appear on the register for the trust preferred securities on the
relevant record date, which will be the date 15 days prior
to the relevant redemption date.
If less than all of the trust securities are to be redeemed,
then the aggregate liquidation amount of the trust securities to
be redeemed will be allocated proportionately to those trust
securities based upon the relative liquidation amounts. The
particular trust preferred securities to be redeemed will be
selected by the property trustee from the outstanding trust
preferred securities not previously called for redemption by a
method the property trustee deems fair and appropriate. The
property trustee will promptly notify the registrar for the
trust preferred securities in writing of the trust preferred
securities selected for redemption and, in the case of any trust
preferred securities selected for partial redemption, the
liquidation amount to be redeemed. If the redemption relates to
trust preferred securities purchased by us and being exchanged
for a like amount of debentures, then the trust preferred
securities we own will be the ones selected for redemption.
Subject to applicable law, if we are exercising our right to
defer interest payments on the debentures or an event of default
under the indenture for the debentures shall have occurred and
be continuing, we may not, at any time, purchase outstanding
trust preferred securities.
Subordination
of Common Securities
Payment of distributions on, and the redemption price of, the
trust preferred securities and common securities will be made
based on the liquidation amount of these securities. However, if
an event of default under the indenture has occurred and is
continuing, no distributions on or redemption of the common
securities may be made unless payment in full in cash of all
accumulated and unpaid distributions on all of the outstanding
trust preferred securities for all distribution periods
terminating on or before that time, or in the
24
case of payment of the redemption price, payment of the full
amount of the redemption price on all of the outstanding trust
preferred securities then called for redemption, has been made
or provided for. All funds available to the property trustee
will first be applied to the payment in full in cash of all
distributions on, or the redemption price of, the trust
preferred securities then due and payable.
In the case of the occurrence and continuance of any event of
default under the trust agreement resulting from an event of
default under the indenture, we, as holder of the common
securities, will be deemed to have waived any right to act with
respect to that event of default under the trust agreement until
the effect of the event of default has been cured, waived or
otherwise eliminated. Until the event of default under the trust
agreement has been so cured, waived or otherwise eliminated, the
property trustee will act solely on behalf of the holders of the
trust preferred securities and not on our behalf, and only the
holders of the trust preferred securities will have the right to
direct the property trustee to act on their behalf.
Liquidation
Distribution upon Termination
We will have the right at any time to dissolve,
wind-up or
terminate the trust and cause debentures to be distributed to
the holders of the trust preferred securities. This right is
subject, however, to us receiving approval of the Federal
Reserve, if required by law or regulation.
In addition, the trust will automatically terminate upon
expiration of its term and will terminate earlier on the first
to occur of:
|
|
|
|
|
our bankruptcy, dissolution or liquidation;
|
|
|
|
the distribution of a like amount of the debentures to the
holders of trust securities, if we have given written direction
to the property trustee to terminate the trust;
|
|
|
|
redemption of all of the trust preferred securities as described
under Redemption or Exchange
Mandatory Redemption; or
|
|
|
|
the entry of a court order for the dissolution of the trust.
|
With the exception of a redemption as described under
Redemption or Exchange Mandatory
Redemption, if an early termination of the trust occurs,
the trust will be liquidated by the trustees as expeditiously as
they determine to be possible. After satisfaction of liabilities
to creditors of the trust as provided by applicable law, the
trustees will distribute to the holders of trust securities,
debentures having a principal amount equal to the liquidation
amount of the trust securities of the holder to whom such
debentures are distributed, with accrued and unpaid interest in
an amount equal to the accrued and unpaid interest then due on
such debentures.
However, if the property trustee determines that the
distribution is not practical, then the holders of trust
securities will be entitled to receive, instead of debentures, a
proportionate amount of the liquidation distribution. The
liquidation distribution will be the amount equal to the
aggregate of the liquidation amount plus accumulated and unpaid
distributions to the date of payment. If the liquidation
distribution can be paid only in part because the trust has
insufficient assets available to pay in full the aggregate
liquidation distribution, then the amounts payable directly by
the trust on the trust securities will be paid on a proportional
basis, based on liquidation amounts, to us, as the holder of the
common securities, and to the holders of the trust preferred
securities. However, if an event of default under the indenture
has occurred and is continuing, the trust preferred securities
will have a priority over the common securities. See
Subordination of Common Securities.
Under current United States federal income tax law and
interpretations and assuming that the trust is treated as a
grantor trust, as is expected, a distribution of the debentures
should not be a taxable event to holders of the trust preferred
securities. Should there be a change in law, a change in legal
interpretation, a Tax Event or another circumstance, however,
the distribution could be a taxable event to holders of the
trust preferred securities. The applicable prospectus supplement
will contain a detailed description of these tax consequences.
25
If we do not elect to redeem the debentures prior to maturity or
to liquidate the trust and distribute the debentures to holders
of the trust preferred securities, the trust preferred
securities will remain outstanding until the repayment of the
debentures. If we elect to dissolve the trust and thus cause the
debentures to be distributed to holders of the trust securities
in liquidation of the trust, we will continue to have the right
to shorten the maturity of the debentures.
Events of
Default; Notice
Any one of the following events constitutes an event of default
under the trust agreement with respect to the trust preferred
securities:
|
|
|
|
|
the occurrence of an event of default under the indenture;
|
|
|
|
a default by the trust in the payment of any distribution when
it becomes due and payable, and continuation of the default for
a period of 30 days;
|
|
|
|
a default by the trust in the payment of any redemption price of
any of the trust securities when it becomes due and payable;
|
|
|
|
a default in the performance, or breach, in any material
respect, of any covenant or warranty of the trustees in the
trust agreement, other than those defaults covered in the two
immediately preceding bullet points, and continuation of the
default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the trustee(s)
by the holders of at least 25% in aggregate liquidation amount
of the outstanding trust preferred securities, a written notice
specifying the default or breach and requiring it to be remedied
and stating that the notice is a Notice of Default
under the trust agreement; or
|
|
|
|
the occurrence of events of bankruptcy or insolvency with
respect to the property trustee and our failure to appoint a
successor property trustee within 60 days.
|
Within five business days after the occurrence of any event of
default actually known to the property trustee, the property
trustee will transmit notice of the event of default to the
holders of the trust preferred securities, the administrative
trustees and to us, unless the event of default has been cured
or waived. Wintrust and the administrative trustees are required
to file annually with the property trustee a certificate as to
whether or not they are in compliance with all the conditions
and covenants applicable to them under the trust agreement.
If an event of default under the indenture has occurred and is
continuing, the trust preferred securities will have preference
over the common securities upon termination of the trust. The
existence of an event of default under the trust agreement does
not entitle the holders of trust preferred securities to
accelerate the maturity thereof, unless the event of default is
caused by the occurrence of an event of default under the
indenture and both the indenture trustee and holders of at least
25% in principal amount of the debentures fail to accelerate the
maturity thereof.
Removal
of the Trustees
Unless an event of default under the indenture has occurred and
is continuing, we may remove any trustee at any time. If an
event of default under the indenture has occurred and is
continuing, only the holders of a majority in liquidation amount
of the outstanding trust preferred securities may remove the
property trustee or the Delaware trustee. The holders of the
trust preferred securities have no right to vote to appoint,
remove or replace the administrative trustees. These rights are
vested exclusively with us as the holder of the common
securities. No resignation or removal of a trustee and no
appointment of a successor trustee will be effective until the
successor trustee accepts the appointment in accordance with the
trust agreement.
Co-Trustees
and Separate Property Trustee
Unless an event of default under the indenture has occurred and
is continuing, for the purpose of meeting the legal requirements
of the Trust Indenture Act or of any jurisdiction in which
any part of the trust property
26
may at the time be located, we will have the power to appoint at
any time or times, and upon written request of the property
trustee will appoint, one or more persons or entities either
(1) to act as a co-trustee, jointly with the property
trustee, of all or any part of the trust property, or
(2) to act as separate trustee of any trust property. In
either case these trustees will have the powers that may be
provided in the instrument of appointment, and will have vested
in them any property, title, right or power deemed necessary or
desirable, subject to the provisions of the trust agreement. In
case an event of default under the indenture has occurred and is
continuing, the property trustee alone will have power to make
the appointment.
Merger or
Consolidation of Trustees
Generally, any person or successor to any of the trustees may be
a successor trustee to any of the trustees, including a
successor resulting from a merger or consolidation. However, any
successor trustee must meet all of the qualifications and
eligibility standards to act as a trustee.
Mergers,
Consolidations, Amalgamations or Replacements of the
Trust
The trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any
corporation or other person, except as described below. For
these purposes, if we consolidate or merge with another entity,
or transfer or sell substantially all of our assets to another
entity, in some cases that transaction may be considered to
involve a replacement of the trust, and the conditions set forth
below would apply to such transaction. The trust may, at our
request, with the consent of the administrative trustees and
without the consent of the holders of the trust preferred
securities, the property trustee or the Delaware trustee,
undertake a transaction listed above if the following conditions
are met:
|
|
|
|
|
the successor entity either (a) expressly assumes all of
the obligations of the trust with respect to the trust preferred
securities, or (b) substitutes for the trust preferred
securities other securities having substantially the same terms
as the trust preferred securities (referred to as
successor securities) so long as the successor
securities rank the same in priority as the trust preferred
securities with respect to distributions and payments upon
liquidation, redemption and otherwise;
|
|
|
|
we appoint a trustee of the successor entity possessing
substantially the same powers and duties as the property trustee
in its capacity as the holder of the debentures;
|
|
|
|
the successor securities are listed or traded or will be listed
or traded on any national securities exchange or other
organization on which the trust preferred securities are then
listed, if any;
|
|
|
|
the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the holders of the trust
preferred securities (including any successor securities) in any
material respect;
|
|
|
|
the successor entity has a purpose substantially identical to
that of the trust;
|
|
|
|
prior to the merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, we have received an
opinion from independent counsel that (a) any transaction
of this kind does not adversely affect the rights, preferences
and privileges of the holders of the trust preferred securities
(including any successor securities) in any material respect,
and (b) following the transaction, neither the trust nor
the successor entity will be required to register as an
investment company under the Investment Company
Act; and
|
|
|
|
we own all of the common securities of the successor entity and
guarantee the obligations of the successor entity under the
successor securities at least to the extent provided by the
guarantee, the debentures, the trust agreement and the expense
agreement.
|
Notwithstanding the foregoing, the trust may not, except with
the consent of every holder of the trust preferred securities,
enter into any transaction of this kind if the transaction would
cause the trust or the successor entity not to be classified as
a grantor trust for federal income tax purposes.
27
Voting
Rights; Amendment to Trust Agreement
Except as described below and under Description of the
Guarantee Amendments and as otherwise required
by the Trust Indenture Act and the trust agreement, the
holders of the trust preferred securities will have no voting
rights.
The trust agreement may be amended from time to time by us and
the trustees, without the consent of the holders of the trust
preferred securities, in the following circumstances:
|
|
|
|
|
with respect to acceptance of appointment by a successor trustee;
|
|
|
|
to cure any ambiguity, correct or supplement any provisions in
the trust agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to
matters or questions arising under the trust agreement, as long
as the amendment is not inconsistent with the other provisions
of the trust agreement and does not have a material adverse
effect on the interests of any holder of trust securities;
|
|
|
|
to modify, eliminate or add to any provisions of the trust
agreement if necessary to ensure that the trust will be
classified for federal income tax purposes as a grantor trust at
all times that any trust securities are outstanding or to ensure
that the trust will not be required to register as an
investment company under the Investment Company
Act; or
|
|
|
|
to reduce or increase the liquidation amount of the trust
securities and simultaneously to correspondingly increase or
decrease the number of trust securities issued and outstanding
solely for the purpose of maintaining the eligibility of the
preferred securities for quotation or listing on any national
securities exchange or other organization on which the preferred
securities are then quoted or listed, as long as the aggregate
liquidation amount of the trust securities outstanding upon
completion of such increase or reduction does not change.
|
With the consent of the holders of a majority of the aggregate
liquidation amount of the outstanding trust securities, we and
the trustees may amend the trust agreement if the trustees
receive an opinion of counsel to the effect that the amendment
or the exercise of any power granted to the trustees in
accordance with the amendment will not affect the trusts
status as a grantor trust for federal income tax purposes or the
trusts exemption from status as an investment
company under the Investment Company Act. However, without
the consent of each affected holder of trust securities, the
trust agreement may not be amended to (a) change the amount
or timing of any distribution on the trust securities or
otherwise adversely affect the amount of any distribution
required to be made in respect of the trust securities as of a
specified date, or (b) restrict the right of a holder of
trust securities to institute suit for the enforcement of the
payment on or after that date.
As long as the property trustee holds any debentures, the
trustees will not, without obtaining the prior approval of the
holders of a majority in aggregate liquidation amount of all
outstanding trust preferred securities:
|
|
|
|
|
direct the time, method and place of conducting any proceeding
for any remedy available to the indenture trustee, or executing
any trust or power conferred on the property trustee with
respect to the debentures;
|
|
|
|
waive any past default that is waivable under the indenture;
|
|
|
|
exercise any right to rescind or annul a declaration that the
principal of all the debentures will be due and payable; or
|
|
|
|
consent to any amendment or termination of the indenture or the
debentures, where the property trustees consent is
required. However, where a consent under the indenture requires
the consent of each holder of the affected debentures, no
consent will be given by the property trustee without the prior
consent of each holder of the trust preferred securities.
|
The trustees may not revoke any action previously authorized or
approved by a vote of the holders of the trust preferred
securities except by subsequent vote of the holders of the trust
preferred securities. The property
28
trustee will notify each holder of trust preferred securities of
any notice of default with respect to the debentures. In
addition to obtaining the foregoing approvals of the holders of
the trust preferred securities, prior to taking any of the
foregoing actions, the trustees must obtain an opinion of
counsel experienced in these matters to the effect that the
trust shall continue to be classified as a grantor trust and not
as an association taxable as a corporation for federal income
tax purposes.
Any required approval of holders of trust securities may be
given at a meeting or by written consent. The property trustee
will cause a notice of any meeting at which holders of the trust
securities are entitled to vote, or of any matter upon which
action by written consent of the holders is to be taken, to be
given to each holder of record of trust securities.
No vote or consent of the holders of trust preferred securities
will be required for the trust to redeem and cancel its trust
preferred securities in accordance with the trust agreement.
Notwithstanding the fact that holders of trust preferred
securities are entitled to vote or consent under any of the
circumstances described above, any of the trust preferred
securities that are owned by Wintrust, the trustees or any
affiliate of Wintrust or any trustee, will, for purposes of the
vote or consent, be treated as if they were not outstanding.
Payment
and Paying Agency
Payments in respect of the trust preferred securities will be
made to The Depository Trust Company, or DTC, which will
credit the relevant accounts of participants on the applicable
distribution dates, or, if any of the trust preferred securities
are not held by DTC, the payments will be made by check mailed
to the address of the holder as listed on the register of
holders of the trust preferred securities. The paying agent for
the trust preferred securities will initially be the property
trustee and any co-paying agent chosen by the property trustee
and acceptable to us and the administrative trustees. The paying
agent for the trust preferred securities may resign as paying
agent upon 30 days written notice to the
administrative trustees, the property trustee and us. If the
property trustee no longer is the paying agent for the trust
preferred securities, the administrative trustees will appoint a
successor to act as paying agent. The successor must be a bank
or trust company acceptable to us and the property trustee.
Register
and Transfer Agent
The property trustee will act as the registrar and the transfer
agent for the trust preferred securities. Registration of
transfers of trust preferred securities will be effected without
charge by or on behalf of the trust, but upon payment of any tax
or other governmental charges that may be imposed in connection
with any transfer or exchange. The trust and its registrar and
transfer agent will not be required to register or cause to be
registered the transfer of trust preferred securities after they
have been called for redemption.
Information
Concerning the Property Trustee
The property trustee undertakes to perform only the duties set
forth in the trust agreement. After the occurrence of an event
of default that is continuing, the property trustee must
exercise the same degree of care and skill as a prudent person
exercises or uses in the conduct of its own affairs. The
property trustee is under no obligation to exercise any of the
powers vested in it by the trust agreement at the request of any
holder of trust preferred securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities
that might be incurred. If no event of default under the trust
agreement has occurred and is continuing and the property
trustee is required to decide between alternative causes of
action, construe ambiguous or inconsistent provisions in the
trust agreement or is unsure of the application of any provision
of the trust agreement, and the matter is not one on which
holders of trust preferred securities are entitled to vote upon,
then the property trustee will take the action directed in
writing by us. If the property trustee is not so directed, then
it will take the action it deems advisable and in the best
interests of the holders of the trust securities and will have
no liability except for its own bad faith, negligence or willful
misconduct.
29
Miscellaneous
The administrative trustees are authorized and directed to
conduct the affairs of and to operate the trust in such a way
that:
|
|
|
|
|
the trust will not be deemed to be an investment
company required to be registered under the Investment
Company Act;
|
|
|
|
the trust will not be classified as an association taxable as a
corporation for federal income tax purposes; and
|
|
|
|
the debentures will be treated as indebtedness of Wintrust for
federal income tax purposes.
|
In this regard, we and the administrative trustees are
authorized to take any action not inconsistent with applicable
law, the certificate of trust or the trust agreement, that we
and the administrative trustees determine to be necessary or
desirable for these purposes.
Holders of the trust preferred securities have no preemptive or
similar rights. The trust agreement and the trust securities
will be governed by Delaware law.
DESCRIPTION
OF JUNIOR SUBORDINATED DEBENTURES
Concurrently with the issuance of the trust preferred
securities, the trust will invest the proceeds from the sale of
the trust preferred securities in the debentures issued by us.
The debentures will be issued as unsecured debt under the
indenture between us and an indenture trustee. The indenture
will be qualified under the Trust Indenture Act. When used
in this section, indenture refers only to the indenture for the
junior subordinated debentures of Wintrust, and not the
indenture for the debt securities of Wintrust.
The following discussion contains a description of the material
provisions of the indenture and is subject to, and is qualified
in its entirety by reference to, the indenture and to the
Trust Indenture Act. We urge prospective investors to read
the form of the indenture, which is filed as an exhibit to the
registration statement of which this prospectus forms a part. If
indicated in the prospectus supplement, the terms of any series
may differ from the terms summarized below.
General
The debentures will be unsecured and will rank junior to all of
our senior and subordinated debt, including indebtedness we may
incur in the future. Because we are a holding company, our right
to participate in any distribution of assets of any of our
subsidiaries, upon any subsidiarys liquidation or
reorganization or otherwise, and thus the ability of holders of
the debentures to benefit indirectly from any distribution by a
subsidiary, is subject to the prior claim of creditors of the
subsidiary, except to the extent that we may be recognized as a
creditor of the subsidiary. The debentures will, therefore, be
effectively subordinated to all existing and future liabilities
of our subsidiaries, and holders of debentures should look only
to our assets for payment. Except as otherwise provided in the
applicable prospectus supplement, the indenture does not limit
our ability to incur or issue secured or unsecured senior and
junior debt. See Subordination and
Miscellaneous.
The indenture does not contain provisions that afford holders of
the debentures protection in the event of a highly leveraged
transaction or other similar transaction involving us, nor does
it require us to maintain or achieve any financial performance
levels or to obtain or maintain any credit rating on the
debentures.
The applicable prospectus supplement will contain, where
applicable, the following terms of and other information
relating to any offered junior subordinated debentures:
|
|
|
|
|
the title of the junior subordinated debentures;
|
|
|
|
any limit upon the aggregate principal amount of the junior
subordinated debentures;
|
30
|
|
|
|
|
the date or dates on which the principal of the junior
subordinated debentures is payable or the method of
determination thereof, including the right, if any, of Wintrust
to shorten or extend the stated maturity date in certain
circumstances;
|
|
|
|
the rate or rates, if any, at which the junior subordinated
debentures will bear interest, the dates on which that interest
will be payable, our right, if any, to defer or extend an
interest payment date and the record dates for any interest
payable on any interest payment date or the method by which any
of the foregoing will be determined;
|
|
|
|
the place or places where the principal of and premium, if any,
and interest on the junior subordinated debentures will be
payable and where, subject to the terms of the indenture as
described below under Registration and
Transfer of Junior Subordinated Debentures, the junior
subordinated debentures may be presented for registration of
transfer or exchange and the place or places where notices and
demands to or upon us in respect of the junior subordinated
debentures and the indenture may be made;
|
|
|
|
any period or periods within which, or date or dates on which,
the price or prices at which and the terms and conditions upon
which junior subordinated debentures may be redeemed, in whole
or in part, at our option or at the option of a holder of junior
subordinated debentures;
|
|
|
|
our obligation, if any, to redeem, purchase or repay the junior
subordinated debentures and the period or periods within which,
the price or prices at which, and the other terms and conditions
upon which the junior subordinated debentures will be redeemed,
repaid or purchased, in whole or in part, pursuant to that
obligation;
|
|
|
|
the denominations in which any junior subordinated debentures
will be issuable;
|
|
|
|
if other than in U.S. dollars, in which the principal of
(and premium, if any) and interest, if any, on the junior
subordinated debentures will be payable, or in which the junior
subordinated debentures will be denominated;
|
|
|
|
any additions, modifications or deletions in the events of
default under the indenture or covenants of Wintrust specified
in the indenture with respect to the junior subordinated
debentures;
|
|
|
|
if other than the principal amount, the portion of the principal
amount of junior subordinated debentures that will be payable
upon declaration of acceleration of maturity;
|
|
|
|
any index or indices used to determine the amount of payments of
principal of and premium, if any, and interest on the junior
subordinated debentures and the manner in which those amounts
will be determined;
|
|
|
|
whether the junior subordinated debentures will be issuable in
registered form or bearer form or both and, if bearer securities
are issuable, any restrictions applicable to the exchange of one
form for another and to the offer, sale and delivery of the
bearer securities;
|
|
|
|
any additions or changes to the indenture with respect to a
series of junior subordinated debentures as will be necessary to
permit or facilitate the issuance of that series in bearer form,
registrable or not registrable as to principal, and with or
without interest coupons;
|
|
|
|
the appointment of any trustees, depositaries, authenticating or
paying agents, transfer agents or registrars or other agents;
|
|
|
|
whether the junior subordinated debentures will be convertible
or exchangeable for other securities or property and, if so, the
terms of any conversion or exchange and the terms of the other
securities; and
|
|
|
|
any other terms of the junior subordinated debentures not
inconsistent with the provisions of the indenture.
|
31
Registration
and Transfer of Junior Subordinated Debentures
Holders may present junior subordinated debentures for exchange,
and holders of registered junior subordinated debentures may
present these securities for transfer, in the manner, at the
places and subject to the restrictions stated in the junior
subordinated debentures and described in the applicable
prospectus supplement. We will provide these services without
charge except for any tax or other governmental charge payable
in connection with these services and subject to any limitations
provided in the indenture.
Holders may transfer junior subordinated debentures in bearer
form and the related coupons, if any, by delivery to the
transferee. If any of the securities are held in global form,
the procedures for transfer of interests in those securities
will depend upon the procedures of the depositary for those
global securities.
Subordination
The debentures are subordinated and junior in right of payment
to all of our senior and subordinated debt, as defined in the
applicable prospectus supplement. Upon any payment or
distribution of assets to creditors upon any liquidation,
dissolution, winding up or reorganization of Wintrust, whether
voluntary or involuntary in bankruptcy, insolvency, receivership
or other proceedings in connection with any insolvency or
bankruptcy proceedings, the holders of our senior and
subordinated debt will first be entitled to receive payment in
full of principal and interest before the holders of debentures
will be entitled to receive or retain any payment in respect of
the debentures.
If the maturity of any debentures is accelerated, the holders of
all of our senior and subordinated debt outstanding at the time
of the acceleration will also be entitled to first receive
payment in full of all amounts due to them, including any
amounts due upon acceleration, before the holders of the
debentures will be entitled to receive or retain any principal
or interest payments on the debentures.
No payments of principal or interest on the debentures may be
made if there has occurred and is continuing a default in any
payment with respect to any of our senior or subordinated debt
or an event of default with respect to any of our senior or
subordinated debt resulting in the acceleration of the maturity
of the senior or subordinated debt, or if any judicial
proceeding is pending with respect to any default.
Payment
and Paying Agent
Generally, payment of principal of and interest on the
debentures will be made at the office of the indenture trustee.
However, we have the option to make payment of any interest by
(a) check mailed to the address of the person entitled to
payment at the address listed in the register of holders of the
debentures, or (b) wire transfer to an account maintained
by the person entitled thereto as specified in the register of
holders of the debentures, provided that proper transfer
instructions have been received by the applicable record date.
Payment of any interest on debentures will be made to the person
in whose name the debenture is registered at the close of
business on the regular record date for the interest payment,
except in the case of defaulted interest.
Any moneys deposited with the indenture trustee or any paying
agent for the debentures, or then held by us in trust, for the
payment of the principal of or interest on the debentures and
remaining unclaimed for two years after the principal or
interest has become due and payable, will be repaid to us. If we
hold any of this money in trust, then it will be discharged from
the trust to us and the holder of the debenture will thereafter
look, as a general unsecured creditor, only to us for payment.
Registrar
and Transfer Agent
The indenture trustee will act as the registrar and the transfer
agent for the debentures. Debentures may be presented for
registration of transfer, with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly
executed, at the office of the registrar. Provided that we
maintain a transfer agent in New York City, we may rescind the
designation of any transfer agent or approve a change in the
location through which any transfer agent acts. We may at any
time designate additional transfer agents with respect to the
debentures.
32
If we redeem any of the debentures, neither we nor the indenture
trustee will be required to (a) issue, register the
transfer of or exchange any debentures during a period beginning
at the opening of business 15 days before the day of the
mailing of and ending at the close of business on the day of the
mailing of the relevant notice of redemption, or
(b) transfer or exchange any debentures so selected for
redemption, except, in the case of any debentures being redeemed
in part, any portion not to be redeemed.
Modification
of Indenture
We and the indenture trustee may, from time to time without the
consent of the holders of the debentures, amend, waive our
rights under or supplement the indenture for purposes which do
not materially adversely affect the rights of the holders of the
debentures. Other changes may be made by us and the indenture
trustee with the consent of the holders of a majority in
principal amount of the outstanding debentures. However, without
the consent of the holder of each outstanding debenture affected
by the proposed modification, no modification may:
|
|
|
|
|
extend the maturity date of the debentures;
|
|
|
|
reduce the principal amount or the rate or extend the time of
payment of interest; or
|
|
|
|
reduce the percentage of principal amount of debentures required
to amend the indenture.
|
As long as any of the trust preferred securities remain
outstanding, no modification of the indenture may be made that
requires the consent of the holders of the debentures, no
termination of the indenture may occur, and no waiver of any
event of default under the indenture may be effective, without
the prior consent of the holders of a majority of the aggregate
liquidation amount of the trust securities.
Debenture
Events of Default
The indenture provides that any one or more of the following
events with respect to the debentures that has occurred and is
continuing constitutes an event of default under the indenture:
|
|
|
|
|
our failure to pay any interest on the debentures for
30 days after the due date, except where we have properly
deferred the interest payment;
|
|
|
|
our failure to pay any principal on the debentures when due
whether at maturity, upon redemption or otherwise;
|
|
|
|
our failure to observe or perform in any material respect any
other covenants or agreements contained in the indenture for
90 days after written notice to us from the indenture
trustee or the holders of at least 25% in aggregate outstanding
principal amount of the debentures; or
|
|
|
|
our bankruptcy, insolvency or reorganization or dissolution of
the trust other than in connection with a distribution of the
debentures in connection with such dissolution, redemption of
the trust securities or certain transactions permitted under the
trust agreement.
|
The holders of a majority of the aggregate outstanding principal
amount of the debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the indenture trustee. The indenture trustee, or
the holders of at least 25% in aggregate outstanding principal
amount of the debentures, may declare the principal due and
payable immediately upon an event of default under the
indenture. The holders of a majority of the outstanding
principal amount of the debentures may rescind and annul the
declaration if the default has been cured and a sum sufficient
to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the
indenture trustee and any and all events of default have been
remedied or waived by the holders of a majority of the
outstanding principal amount of the debentures. The holders may
not annul the declaration and waive a default if the default is
the non-payment of the principal of the debentures which has
become due solely by the acceleration.
So long as the property trustee is the holder of the debentures,
an event of default under the indenture has occurred and is
continuing, the property trustee will have the right to declare
the principal of and the interest
33
on the debentures, and any other amounts payable under the
indenture, to be immediately due and payable and to enforce its
other rights as a creditor with respect to the debentures.
We are required to file annually with the indenture trustee a
certificate as to whether or not we are in compliance with all
of the conditions and covenants applicable to us under the
indenture.
Enforcement
of Certain Rights by Holders of the Trust Preferred
Securities
If an event of default under the indenture has occurred and is
continuing and the event is attributable to the failure by us to
pay interest on or principal of the debentures on the date on
which the payment is due and payable, then a holder of trust
preferred securities may institute a direct action against us to
compel us to make the payment. We may not amend the indenture to
remove the foregoing right to bring a direct action without the
prior written consent of all of the holders of the trust
preferred securities. If the right to bring a direct action is
removed, the trust may become subject to the reporting
obligations under the Securities Exchange Act of 1934.
The holders of the trust preferred securities will not be able
to exercise directly any remedies, other than those set forth in
the preceding paragraph, available to the holders of the
debentures unless there has been an event of default under the
trust agreement.
Consolidation,
Merger, Sale of Assets and Other Transactions
We may not consolidate with or merge into any other entity or
convey or transfer our properties and assets substantially as an
entirety to any entity, and no entity may be consolidated with
or merged into us or sell, convey, transfer or otherwise dispose
of its properties and assets substantially as an entirety to us,
unless:
|
|
|
|
|
if we consolidate with or merge into another person or convey or
transfer our properties and assets substantially as an entirety
to any person, the successor person is organized under the laws
of the United States or any state or the District of Columbia,
and the successor person expressly assumes by supplemental
indenture our obligations on the debentures, and the ultimate
parent entity of the successor entity expressly assumes our
obligations under the guarantee, to the extent the trust
preferred securities are then outstanding;
|
|
|
|
immediately after the transaction, no event of default under the
indenture, and no event which, after notice or lapse of time, or
both, would become an event of default under the indenture, has
occurred and is continuing; and
|
|
|
|
other conditions as prescribed in the indenture are met.
|
Under certain circumstances, if we consolidate or merge with
another entity, or transfer or sell substantially all of our
assets to another entity, such transaction may be considered to
involve a replacement of the trust, and the provisions of the
trust agreement relating to a replacement of the trust would
apply to such transaction. See Description of the
Trust Preferred Securities Mergers,
Consolidations, Amalgamations or Replacements of the Trust.
Satisfaction
and Discharge
The indenture will cease to be of further effect and we will be
deemed to have satisfied and discharged our obligations under
the indenture when all debentures not previously delivered to
the indenture trustee for cancellation:
|
|
|
|
|
have become due and payable; and
|
|
|
|
will become due and payable at their stated maturity within one
year or are to be called for redemption within one year, and we
deposit or cause to be deposited with the indenture trustee
funds, in trust, for the purpose and in an amount sufficient to
pay and discharge the entire indebtedness on the debentures not
previously delivered to the indenture trustee for cancellation,
for the principal and interest due to the date of the deposit or
to the stated maturity or redemption date, as the case may be.
|
34
We may still be required to provide officers certificates,
opinions of counsel and pay fees and expenses due after these
events occur.
Governing
Law
Unless otherwise specified in a prospectus supplement, the
indenture and the debentures will be governed by and construed
in accordance with Illinois law.
Information
Concerning the Indenture Trustee
The indenture trustee is subject to all the duties and
responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to these provisions,
the indenture trustee is under no obligation to exercise any of
the powers vested in it by the indenture at the request of any
holder of debentures, unless offered reasonable security or
indemnity by the holder against the costs, expenses and
liabilities which might be incurred. The indenture trustee is
not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if
the indenture trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
Miscellaneous
We have agreed, pursuant to the indenture, for so long as trust
preferred securities remain outstanding:
|
|
|
|
|
to maintain directly or indirectly 100% ownership of the common
securities of the trust, except that certain successors that are
permitted pursuant to the indenture may succeed to our ownership
of the common securities;
|
|
|
|
not to voluntarily terminate, wind up or liquidate the trust
without prior approval of the Federal Reserve, if required by
law or regulation;
|
|
|
|
to use our reasonable efforts to cause the trust (a) to
remain a statutory trust (and to avoid involuntary termination,
winding up or liquidation), except in connection with a
distribution of debentures, the redemption of all of the trust
securities of the trust or mergers, consolidations or
amalgamations, each as permitted by the trust agreement; and
(b) to otherwise continue not to be treated as an
association taxable as a corporation or partnership for federal
income tax purposes;
|
|
|
|
to use our reasonable efforts to cause each holder of trust
securities to be treated as owning an individual beneficial
interest in the debentures; and
|
|
|
|
to use our reasonable efforts to maintain the eligibility of the
trust preferred securities for quotation or listing on a
national securities exchange and to keep the trust preferred
securities listed for so long as they remain outstanding.
|
DESCRIPTION
OF GUARANTEE
The trust preferred securities guarantee agreement will be
executed and delivered by us concurrently with the issuance of
the trust preferred securities for the benefit of the holders of
the trust preferred securities. The guarantee agreement will be
qualified as an indenture under the Trust Indenture Act.
The guarantee trustee will act as trustee for purposes of
complying with the provisions of the Trust Indenture Act,
and will also hold each guarantee for the benefit of the holders
of the trust preferred securities. The following discussion
contains a description of the material provisions of the
guarantee and is qualified in its entirety by reference to the
guarantee agreement and the Trust Indenture Act.
Prospective investors are urged to read the form of the
guarantee agreement, which has been filed as an exhibit to the
registration statement of which this prospectus forms a part.
Specific terms of a guarantee will be described in the
prospectus supplement relating to the applicable trust preferred
securities. If indicated in the applicable prospectus
supplement, the terms of a particular guarantee may differ from
the terms discussed below.
35
General
We agree to pay in full on a subordinated basis, to the extent
described in the guarantee agreement, the guarantee payments (as
defined below) to the holders of the trust preferred securities
as and when due, regardless of any defense, right of set-off or
counterclaim that the trust may have or assert other than the
defense of payment.
The following payments with respect to the trust preferred
securities are called the guarantee payments and, to
the extent not paid or made by the trust and to the extent that
the trust has funds available for those distributions, will be
subject to the guarantee:
|
|
|
|
|
any accumulated and unpaid distributions required to be paid on
the trust preferred securities;
|
|
|
|
with respect to any trust preferred securities called for
redemption, the redemption price; and
|
|
|
|
upon a voluntary or involuntary dissolution, winding up or
termination of the trust (other than in connection with the
distribution of debentures to the holders of trust preferred
securities in exchange for trust preferred securities), the
lesser of:
|
(a) the amount of the liquidation distribution; and
(b) the amount of assets of the trust remaining available
for distribution to holders of trust preferred securities in
liquidation of the trust.
We may satisfy our obligations to make a guarantee payment by
making a direct payment of the required amounts to the holders
of the trust preferred securities or by causing the trust to pay
the amounts to the holders.
The guarantee agreement is a guarantee, on a subordinated basis,
of the guarantee payments, but the guarantee only applies to the
extent the trust has funds available for those distributions. If
we do not make interest payments on the debentures purchased by
the trust, the trust will not have funds available to make the
distributions and will not pay distributions on the trust
preferred securities.
Status of
Guarantee
The guarantee constitutes our unsecured obligation that ranks
subordinate and junior in right of payment to all of our senior
and subordinated debt in the same manner as the debentures. We
expect to incur additional indebtedness in the future, although
we have no specific plans in this regard presently, and neither
of the indenture nor the trust agreement limits the amounts of
the obligations that we may incur.
The guarantee constitutes a guarantee of payment and not of
collection. If we fail to make guarantee payments when required,
holders of trust preferred securities may institute a legal
proceeding directly against us to enforce their rights under the
guarantee without first instituting a legal proceeding against
any other person or entity.
The guarantee will not be discharged except by payment of the
guarantee payments in full to the extent not paid by the trust
or upon distribution of the debentures to the holders of the
trust preferred securities. Because we are a bank holding
company, our right to participate in any distribution of assets
of any subsidiary upon the subsidiarys liquidation or
reorganization or otherwise is subject to the prior claims of
creditors of that subsidiary, except to the extent we may be
recognized as a creditor of that subsidiary. Our obligations
under the guarantee, therefore, will be effectively subordinated
to all existing and future liabilities of our subsidiaries, and
claimants should look only to our assets for payments under the
guarantee.
Amendments
Except with respect to any changes that do not materially
adversely affect the rights of holders of the trust preferred
securities, in which case no vote will be required, the
guarantee may not be amended without the prior approval of the
holders of a majority of the aggregate liquidation amount of the
outstanding trust preferred securities.
36
Events of
Default; Remedies
An event of default under the guarantee agreement will occur
upon our failure to make any required guarantee payments or to
perform any other obligations under the guarantee. If the
guarantee trustee has actual knowledge that an event of default
has occurred and is continuing, the guarantee trustee must
enforce the guarantee for the benefit of the holders of the
trust preferred securities. The holders of a majority in
aggregate liquidation amount of the trust preferred securities
will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the
guarantee trustee in respect of the guarantee and may direct the
exercise of any power conferred upon the guarantee trustee under
the guarantee agreement.
Any holder of trust preferred securities may institute and
prosecute a legal proceeding directly against us to enforce its
rights under the guarantee without first instituting a legal
proceeding against the trust, the guarantee trustee or any other
person or entity.
We are required to provide to the guarantee trustee annually a
certificate as to whether or not we are in compliance with all
of the conditions and covenants applicable to us under the
guarantee agreement.
Termination
of the Guarantee
The guarantee will terminate and be of no further force and
effect upon:
|
|
|
|
|
full payment of the redemption price of the trust preferred
securities;
|
|
|
|
full payment of the amounts payable upon liquidation of the
trust; or
|
|
|
|
distribution of the debentures to the holders of the trust
preferred securities.
|
If at any time any holder of the trust preferred securities must
restore payment of any sums paid under the trust preferred
securities or the guarantee, the guarantee will continue to be
effective or will be reinstated with respect to such amounts.
Information
Concerning the Guarantee Trustee
The guarantee trustee, other than during the occurrence and
continuance of our default in performance of the guarantee,
undertakes to perform only those duties as are specifically set
forth in the guarantee. When an event of default has occurred
and is continuing, the guarantee trustee must exercise the same
degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to those
provisions, the guarantee trustee is under no obligation to
exercise any of the powers vested in it by the guarantee at the
request of any holder of any trust preferred securities, unless
it is offered reasonable security and indemnity against the
costs, expenses and liabilities that might be incurred thereby;
but this does not relieve the guarantee trustee of its
obligation to exercise the rights and powers under the guarantee
in the event of a default.
Expense
Agreement
We will, pursuant to the separate Agreement as to Expenses and
Liabilities entered into by us and the trust under the trust
agreement, irrevocably and unconditionally guarantee to each
person or entity to whom the trust becomes indebted or liable,
the full payment of any costs, expenses or liabilities of the
trust, other than obligations of the trust to pay to the holders
of the trust preferred securities or other similar interests in
the trust of the amounts due to the holders pursuant to the
terms of the trust preferred securities or other similar
interests, as the case may be. Third party creditors of the
trust may proceed directly against us under the expense
agreement, regardless of whether they had notice of the expense
agreement.
Governing
Law
Unless otherwise specified in a prospectus supplement, the
guarantee will be governed by Illinois law.
37
CERTAIN
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus
supplement, the offered securities may, subject to certain legal
restrictions, be held by (i) pension, profit sharing, and
other employee benefit plans which are subject to Title I
of the Employee Retirement Security Act of 1974, as amended
(which we refer to as ERISA), (ii) plans,
accounts, and other arrangements that are subject to
Section 4975 of the Internal Revenue Code of 1986, as
amended (which we refer to as the Code), or
provisions under federal, state, local,
non-U.S., or
other laws or regulations that are similar to any of the
provisions of Title I of ERISA or Section 4975 of the
Code (which we refer to as Similar Laws), and
(iii) entities whose underlying assets are considered to
include plan assets of any such plans, accounts, or
arrangements. Section 406 of ERISA and Section 4975 of
the Code prohibit plans from engaging in specified transactions
involving plan assets with persons who are
parties in interest under ERISA or
disqualified persons under the Code with respect to
such pension, profit sharing, or other employee benefit plans
that are subject to Section 406 of ERISA or
Section 4975 of the Code. A violation of these prohibited
transaction rules may result in an excise tax or other
liabilities under ERISA
and/or
Section 4975 of the Code for such persons, unless exemptive
relief is available under an applicable statutory, class, or
administrative exemption. A fiduciary of any such plan, account,
or arrangement must determine that the purchase and holding of
an interest in the offered securities is consistent with its
fiduciary duties and will not constitute or result in a
non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code, or a violation under any
applicable Similar Laws.
BOOK-ENTRY
SYSTEM
Unless we indicate otherwise in the applicable prospectus
supplement, the Depository Trust Company (DTC),
New York, New York, will act as securities depository for the
Wintrust offered securities and the trust preferred securities
(collectively, the Offered Securities). The Offered
Securities will be issued as fully-registered securities
registered in the name of Cede & Co. (DTCs
partnership nominee) or such other name as may be requested by
an authorized representative of DTC. One fully-registered
Offered Security certificate will be issued for each issue of
the Offered Securities, each in the aggregate principal amount
of such issue, and will be deposited with DTC. If, however, the
aggregate principal amount of any issue exceeds
$500 million, one certificate will be issued with respect
to each $500 million of principal amount, and an additional
certificate will be issued with respect to any remaining
principal amount of such issue.
DTC is a limited-purpose trust company organized under the New
York Banking Law, a banking organization within the
meaning of the New York Banking Law, a member of the Federal
Reserve System, a clearing corporation within the
meaning of the New York Uniform Commercial Code and a
clearing agency registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC holds
and provides asset servicing for securities that DTCs
participants (Direct Participants) deposit with DTC.
DTC also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry
transfers and pledges between Direct Participants
accounts. This eliminates the need for physical movement of
securities certificates. Direct Participants include both
U.S. and
non-U.S. securities
brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is a
wholly-owned subsidiary of The Depository Trust &
Clearing Corporation (DTCC). DTCC is the holding
company for DTC, National Securities Clearing Corporation and
Fixed Income Clearing Corporation, all of which are registered
clearing agencies. DTCC is owned by the users of its regulated
subsidiaries. Access to the DTC system is also available to
others such as both U.S. and
non-U.S. securities
brokers and dealers, banks, trust companies and clearing
corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or
indirectly (Indirect Participants).
Purchases of Offered Securities under the DTC system must be
made by or through Direct Participants, which will receive a
credit for the Offered Securities on DTCs records. The
ownership interest of each actual purchaser of each Offered
Security (Beneficial Owner) is in turn to be
recorded on the Direct Participants and Indirect
Participants records. Beneficial Owners will not receive
written confirmation from DTC of their purchase.
38
Beneficial Owners are, however, expected to receive written
confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct
Participant or Indirect Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership
interests in the Offered Securities are to be accomplished by
entries made on the books of Direct Participants and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their
ownership interests in Offered Securities, except in the event
that use of the book-entry system for the Offered Securities is
discontinued.
To facilitate subsequent transfers, all Offered Securities
deposited by Direct Participants with DTC are registered in the
name of DTCs partnership nominee, Cede & Co., or
such other name as may be requested by an authorized
representative of DTC. The deposit of Offered Securities with
DTC and their registration in the name of Cede & Co.
or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners
of the Offered Securities; DTCs records reflect only the
identity of the Direct Participants to whose accounts such
Offered Securities are credited, which may or may not be the
Beneficial Owners. The Direct Participants and Indirect
Participants will remain responsible for keeping account of
their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants
and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Beneficial Owners of Offered
Securities may wish to take certain steps to augment the
transmission to them of notices of significant events with
respect to the Offered Securities, such as redemptions, tenders,
defaults and proposed amendments to the Offered Security
documents. For example, Beneficial Owners of Offered Securities
may wish to ascertain that the nominee holding the Offered
Securities for their benefit has agreed to obtain and transmit
notices to Beneficial Owners.
Redemption notices shall be sent to DTC. If less than all of the
Offered Securities within an issue are being redeemed,
DTCs practice is to determine by lot the amount of the
interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee)
will consent or vote with respect to Offered Securities unless
authorized by a Direct Participant in accordance with DTCs
MMI Procedures. Under its usual procedures, DTC mails an Omnibus
Proxy to the applicable Registrant as soon as possible after the
record date. The Omnibus Proxy assigns Cede &
Co.s consenting or voting rights to those Direct
Participants to whose accounts Offered Securities are credited
on the record date (identified in a listing attached to the
Omnibus Proxy).
Redemption proceeds, distributions and dividend payments on the
Offered Securities will be made to Cede & Co., or such
other nominee as may be requested by an authorized
representative of DTC. DTCs practice is to credit Direct
Participants accounts upon DTCs receipt of funds and
corresponding detail information from the applicable Registrant
or the agent, on payable date in accordance with their
respective holdings shown on DTCs records. Payments by
participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or
registered in street name, and will be the
responsibility of such participant and not of DTC, the agent or
the applicable Registrant, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, distributions and dividend
payments to Cede & Co. (or such other nominee as may
be requested by an authorized representative of DTC) is the
responsibility of the applicable Registrant or the agent,
disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners will be the responsibility of Direct
Participants and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its
Offered Securities purchased or tendered, through its
participant, to the tender or remarketing agent, and shall
effect delivery of such Offered Securities by causing the Direct
Participant to transfer the such participants interest in
the Offered Securities, on DTCs records, to such agent.
The requirement for physical delivery of Offered Securities in
connection with an optional tender or a mandatory purchase will
be deemed satisfied when the ownership rights in the Offered
39
Securities are transferred by Direct Participants on DTCs
records and followed by a book-entry credit of tendered Offered
Securities to such agents DTC account.
DTC may discontinue providing its services as depository with
respect to the Offered Securities at any time by giving
reasonable notice to the applicable Registrant or the agent.
Under such circumstances, in the event that a successor
depository is not obtained, Offered Security certificates are
required to be printed and delivered.
The applicable Registrant may decide to discontinue use of the
system of book-entry-only transfers through DTC (or a successor
securities depository). In that event, Offered Security
certificates will be printed and delivered to DTC.
The information in this section concerning DTC and DTCs
book-entry system has been obtained from sources that each
Registrant believes to be reliable, but no Registrant takes any
responsibility for the accuracy thereof.
PLAN OF
DISTRIBUTION
We may sell the offered securities inside and outside the United
States from time to time (a) through underwriters or
dealers, (b) directly to one or more purchasers, including
our affiliates, (c) through agents, or (d) through a
combination of any of these methods.
We will file a supplement to this prospectus, if required,
pursuant to Rule 424(b) under the Securities Act. Such
supplement may disclose:
|
|
|
|
|
the terms of the offering;
|
|
|
|
the names of any underwriters or agents;
|
|
|
|
the name or names of any managing underwriter or underwriters;
|
|
|
|
the purchase price of the securities from us;
|
|
|
|
the net proceeds to us from the sale of the securities;
|
|
|
|
any delayed delivery arrangements;
|
|
|
|
any underwriting discounts, commissions and other items
constituting underwriters compensation;
|
|
|
|
any initial public offering price;
|
|
|
|
any discounts or concessions allowed or reallowed or paid to
dealers; and
|
|
|
|
any commissions paid to agents.
|
Any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 or Rule 144A promulgated under
the Securities Act may be sold under Rule 144 or
Rule 144A in certain instances, rather than pursuant to
this prospectus. In addition, we may transfer the securities by
other means not described in this prospectus.
General
Underwriters, dealers, agents and remarketing firms that
participate in the distribution of the offered securities may be
underwriters as defined in the Securities Act of
1933. Any discounts or commissions they receive from us and any
profits they receive on the resale of the offered securities may
be treated as underwriting discounts and commissions under the
Securities Act of 1933. We will identify any underwriters,
agents or dealers and describe their commissions, fees or
discounts in the applicable prospectus supplement.
This prospectus, together with any applicable prospectus
supplement, may also be used by our affiliates in connection
with offers and sales of the securities in market-making
transactions at negotiated prices related to prevailing market
prices at the time of sale. Such affiliates may act as
principals or agents in such
40
transactions. None of our affiliates have any obligation to make
a market in the securities and each may discontinue any
market-making activities at any time, without notice, at its
sole discretion.
Sale
Through Underwriters or Dealers
If we use underwriters in a sale, they will acquire the offered
securities for their own account. The underwriters may resell
the securities in one or more transactions, including negotiated
transactions. These sales will be made at a fixed public
offering price or at varying prices determined at the time of
the sale.
We may offer the securities to the public through an
underwriting syndicate or through a single underwriter.
Unless the applicable prospectus supplement states otherwise,
the obligations of the underwriters to purchase the offered
securities will be subject to certain conditions contained in an
underwriting agreement that we will enter into with the
underwriters. The underwriters will be obligated to purchase all
of the securities of the series offered if any of the securities
are purchased, unless the applicable prospectus supplement says
otherwise. Any initial public offering price and any discounts
or concessions allowed, re-allowed or paid to dealers may be
changed from time to time.
If we use dealers in a sale of securities, we will sell the
securities to them as principals. They may then resell those
securities to the public at varying prices determined by the
dealers at the time of resale. We will include in the prospectus
supplement the names of the dealers and the terms of the
transaction.
Direct
Sales and Sales Through Agents
We may choose to sell the offered securities directly. In this
case, no underwriters or agents would be involved. We may also
sell the securities through agents designated from time to time.
In the prospectus supplement, we will name any agent involved in
the offer or sale of the offered securities, and we will
describe any commissions payable by us to the agent. Unless we
inform you otherwise in the prospectus supplement, any agent
will agree to use its best efforts to solicit purchases for the
period of its appointment.
We may sell the securities directly to institutional investors
or others who may be deemed to be underwriters within the
meaning of the Securities Act of 1933 with respect to any sale
of those securities. We will describe the terms of any such
sales in the prospectus supplement.
Delayed
Delivery Contracts
If we so indicate in the prospectus supplement, we may authorize
agents, underwriters or dealers to solicit offers from certain
types of institutions to purchase securities from us at the
public offering price under delayed delivery contracts. These
contracts would provide for payment and delivery on a specified
date in the future. The contracts would be subject only to those
conditions described in the prospectus supplement. The
prospectus supplement will describe the commission payable for
solicitation of those contracts.
Indemnification
We may have agreements with agents, underwriters, dealers and
remarketing firms and each of their respective affiliates to
indemnify them against certain civil liabilities, including
liabilities under the Securities Act of 1933. Agents,
underwriters, dealers and remarketing firms, and their
affiliates, may engage in transactions with, or perform services
for, us in the ordinary course of business. This includes
commercial banking and investment banking transactions.
Market
Making, Stabilization and Other Transactions
Unless the applicable prospectus supplement states otherwise,
each series of offered securities will be a new issue and will
have no established trading market. We may elect to list any
series of offered securities on an exchange. Any underwriters
that are used in the sale of offered securities may make a
market in such
41
securities, but may discontinue such market making at any time
without notice. Therefore, we cannot assure you that the
securities will have a liquid trading market.
In connection with the distribution of the securities offered
under this prospectus, we may enter into swap or other hedging
transactions with, or arranged by, underwriters or agents or
their affiliates.
Any underwriter may engage in stabilizing transactions,
syndicate covering transactions and penalty bids in accordance
with Rule 104 under the Securities Exchange Act of 1934.
Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a
specified maximum.
Syndicate covering transactions involve purchases of the
securities in the open market after the distribution has been
completed in order to cover syndicate short positions. Penalty
bids permit the underwriters to reclaim a selling concession
from a syndicate member when the securities originally sold by
the syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. These
stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the securities to be higher
than it would be in the absence of the transactions. The
underwriters may, if they commence these transactions,
discontinue them at any time.
LEGAL
MATTERS
The validity of the debt securities, the junior subordinated
debentures, the guarantee, common shares, warrants, preferred
shares, depositary shares, stock purchase contracts and stock
purchase units will be passed upon for Wintrust by Sidley Austin
LLP, Chicago, Illinois. The validity of the trust preferred
securities will be passed upon for the Trust by Sidley Austin
LLP, special Delaware counsel to the Trusts.
EXPERTS
The consolidated financial statements of Wintrust Financial
Corporation incorporated by reference in Wintrust Financial
Corporations Annual Report
(Form 10-K)
for the year ended December 31, 2009 and the effectiveness
of Wintrust Financial Corporations internal control over
financial reporting as of December 31, 2009, have been
audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon
incorporated by reference therein, and incorporated herein by
reference. Such consolidated financial statements and Wintrust
Financial Corporations managements assessment of the
effectiveness of internal control over financial reporting as of
December 31, 2009 are incorporated herein by reference in
reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
42
Wintrust Financial
Corporation
PROSPECTUS SUPPLEMENT
BofA Merrill Lynch
RBC Capital Markets
Sandler ONeill +
Partners, L.P.
Wells Fargo
Securities
,
2010