Filed Pursuant to Rule 424(b)(5)

File No. 333-165166

 

CALCULATION OF REGISTRATION FEE

 

 

 

PROSPECTUS SUPPLEMENT

(To prospectus dated March 3, 2010)

 

7.50% 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 $9.728182 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 is greater than $30.00 but less than $37.50, 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 $30.00, you will receive 1.6666 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 1.3333 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 Wintrust’s 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 $0.9375 per amortizing note, which in the aggregate will be equivalent to a 7.50% 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 Wintrust’s “Senior Indebtedness” (as defined under “Description of the Amortizing Notes — Subordination”) and (ii) equally with all of Wintrust’s 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 6, 2010, the last sale price of the shares as reported on the NASDAQ Global Select Market was $32.23 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.

 

 

 

 

 

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 Wintrust’s 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 December 10, 2010.

 

 

 

 

Sole Book-Running Manager

BofA Merrill Lynch

 

 

 

 

 

 

 

 

The date of this prospectus supplement is December 7, 2010.

 

TABLE OF CONTENTS

 

Prospectus Supplement

 

 

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 Company’s year commencing on January 1 and ending on December 31 of that year.

 

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 management’s 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 management’s 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

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:

 

 

 

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.

 

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 SEC’s 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.

 

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:

 

 

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

 

PROSPECTUS SUMMARY

	Recent Developments — Acquisition of Lincoln Park Savings Bank, Wheatland Bank and Ravenswood Bank

 

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 1.6666 shares and not less than 1.3333 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 $9.728182, bear interest at the rate of 9.50% 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 $0.9375 on each amortizing note. The quarterly installment payable on March 15, 2011, however, will be $0.989583. 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

		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 overallotment option will be approximately $193.6 million (after deducting underwriting discounts and commissions and estimated offering expenses). If the underwriters exercise their overallotment 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 $91.1 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.”

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 holder’s 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 1.6666 shares and not less than 1.3333 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 $37.50 (the “threshold appreciation price”), you will receive 1.3333 shares of common stock per purchase contract (the “minimum settlement rate”).
	•	If the applicable market value is greater than $30.00 (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 1.6666 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 the mandatory settlement date. The threshold appreciation price represents a 25.0% appreciation over the reference price.

Applicable Market Value of
Wintrust Common Stock		Settlement Rate		Value of Common Stock
Less than or equal to $30.00		1.6666		Less than $50
Between $30.00 and $37.50		Number of shares equal to $50 divided by the applicable market value		$50
Greater than or equal to $37.50		1.3333		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		$9.728182.
Installment payments		Each quarterly installment payment of $0.9375 will be paid in cash and will constitute a partial repayment of principal and a payment of interest, computed at a rate of 9.50% per year. The quarterly installment payable on March 15, 2011, however, will be $0.989583. 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.

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 Wintrust’s 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.

 

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

		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

		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 Company’s 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 period’s 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.

 

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 Wintrust’s 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 $30.00. 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 80.0% 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

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 Wintrust’s credit quality, each of which is impossible to predict.

 

It is impossible to predict whether the prices of Wintrust common stock, interest rates or Wintrust’s credit quality will rise or fall. Trading prices of the common stock will be influenced by Wintrust’s 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 day’s 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

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

securities or in connection with acquisitions and other transactions. The terms of the tangible equity units do not restrict Wintrust’s 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:

 

 

Wintrust’s obligations to make payments on the amortizing notes are subordinate to its payment obligations under Wintrust’s 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.

 

Wintrust’s 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 Wintrust’s bankruptcy, insolvency or liquidation. In addition, the amortizing notes will not be guaranteed by any of Wintrust’s 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 Wintrust’s subsidiaries.

 

The terms of the junior subordinated indenture do not limit Wintrust’s 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 $50.00 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.

 

Wintrust’s 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 Wintrust’s 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.

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:

 

 

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

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 will issue up to 3,205,128 shares of our common stock if we complete the common stock offering (excluding any shares which may be issued in the overallotment) and could issue up to 6,666,400 shares of our common stock in settlement of the tangible equity units being offered in this offering (excluding any tangible equity units 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 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, 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. Management’s 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 Company’s Trust Preferred Securities offerings as well as to compliance with certain financial covenants under the Company’s 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

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 stockholder’s 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

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.”

 

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 $284.7 million in aggregate net proceeds from this offering and the common stock offering (or approximately $327.5 million if the underwriters exercise each of their overallotment options in full).

 

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 in that offering.

 

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 overallotment option in full, based on a public offering price of $50 per tangible equity 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 $91.1 million of net proceeds that we expect to receive from the common stock offering, or $104.8 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 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.

 

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 tangible equity units at a stated per unit amount of $50, excluding any tangible equity 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 a public offering price of $30.00 per share in the concurrent common stock offering described in “Concurrent Offering,” 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.”

 

 

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.

 

 

 

 

The last reported sale price of our common stock on the NASDAQ Global Select Market on December 6, 2010 was $32.23 per share. As of December 3, 2010, there were approximately 1,503 registered holders of record of our common stock.

 

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 Company’s Board of Directors approved the first semi-annual dividend on the Company’s 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.

 

 

Our ability to pay dividends is subject to a number of limitations, including:

 

 

 

 

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.

 

Wintrust is offering 4,000,000 tangible equity units (or 4,600,000 tangible equity units if the underwriters exercise their overallotment 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:

 

 

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:

 

 

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 1.6666 shares and not less than 1.3333 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 $9.728182. On each March 15, June 15, September 15 and December 15, commencing on March 15, 2011, Wintrust will pay equal quarterly installments of $0.9375 on each amortizing note. The quarterly installment payable on March 15, 2011, however, will be $0.989583. Each installment will constitute a payment of interest (at a rate of 9.50% 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

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 $9.728182 and the fair market value of each purchase contract is $40.271818. 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 holder’s 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 DTC’s 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.

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.

 

Each purchase contract, which initially forms a part of a tangible equity unit and which, at the holder’s 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:

 

 

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 $30.00 and the threshold appreciation price of $37.50. The threshold appreciation price represents an appreciation of 25.0% above the reference price of $30.00. 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.

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:

 

 

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 $37.50, Wintrust would be obligated to deliver 1.3333 shares of common stock for each purchase contract. As a result, you would receive only approximately 80.0% 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 $37.50 but greater than the reference price of $30.00, 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 $30.00, Wintrust would be obligated to deliver upon settlement of the purchase contract 1.6666 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.

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:

 

 

If Wintrust’s 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:

 

 

For the purposes of determining a “market disruption event,” if Wintrust’s 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 Wintrust’s 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

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.

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 holder’s 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 Wintrust’s subsidiaries, in each case pursuant to which Wintrust’s 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:

 

 

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.”

The following table sets forth the fundamental change early settlement rate per purchase contract for each stock price and effective date set forth below:

 

 

The exact stock prices and effective dates may not be set forth in the table above, in which case:

 

 

The maximum number of shares of Wintrust common stock deliverable under a purchase contract is 1.6666, subject to adjustment in the same manner as the fixed settlement rates as set forth under “— Adjustments to the Fixed Settlement Rates.”

 

Wintrust’s 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

(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;

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.

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.

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 after the last time tenders or exchanges may be made pursuant to such tender or exchange offer (the “expiration time”) (after 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 immediately prior to the expiration time; 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.

“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 Wintrust’s 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 issuer’s 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.

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 Wintrust’s common stock on the NASDAQ Global Select Market on such date or, if Wintrust’s 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 Wintrust’s common stock is so listed; or (ii) if Wintrust’s common stock is not so reported, the last quoted bid price for Wintrust’s 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 Wintrust’s 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

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:

 

 

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,

 

 

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:

 

 

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.

 

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 $38,912,728 (or $44,749,637.20 aggregate principal amount if the underwriters exercise their overallotment 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 Wintrust’s “Senior Indebtedness” (as defined below under “— Subordination”). The amortizing notes will rank equally with all of Wintrust’s 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 $9.728182. 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 $0.9375 on each amortizing note. Each installment will constitute a payment of interest (at a rate of 9.50% per annum) and a partial repayment of 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 $0.989583. 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:

 

 

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 $0.989583 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

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:

 

 

Restrictions Applicable During an Extension Period and Certain Other Circumstances

 

If:

 

 

then:

 

 

 

 

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 Wintrust’s 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:

 

 

provided, however, that the term “Senior Indebtedness” does not include:

 

 

The amortizing notes will rank senior to all of Wintrust’s 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:

 

 

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:

 

 

 

 

 

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:

 

 

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,

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:

 

 

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:

 

 

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:

 

 

Wintrust, at its option:

 

 

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

 

 

 

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:

 

 

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).

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.

 

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 Wintrust’s 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 DTC’s 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 DTC’s 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

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 $9.728182 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.

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 Wintrust’s 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 Wintrust’s 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.

 

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 holder’s particular circumstances or to holders subject to special rules, such as:

 

 

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.

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.

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:

 

 

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. Holder’s 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 $40.271818 and $9.728182, 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 9.50%, 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:

 

 

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. Holder’s 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. Holder’s 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. Holder’s holding period for the shares of our common stock received under a purchase contract will begin the day after that stock is received.

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 holder’s 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. Holder’s investment, up to the U.S. Holder’s 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. Holder’s 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,

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. Holder’s 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:

 

 

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.

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:

 

 

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

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. Holder’s 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

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.

 

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.

 

 

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 officer’s 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 $0.90 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.

 

 

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

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 underwriter’s 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:

 

 

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

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

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

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.

 

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.

 

The consolidated financial statements of Wintrust Financial Corporation incorporated by reference in Wintrust Financial Corporation’s Annual Report (Form 10-K) for the year ended December 31, 2009 and the effectiveness of Wintrust Financial Corporation’s 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 Corporation’s management’s 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.

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

 

 

 

 

 

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.

 

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 Wintrust’s 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 Registrant’s 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 Registrant’s 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.

 

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 SEC’s 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

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 Wintrust’s 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 Trust’s obligations under any Trust Preferred Securities issued by the Trust.

 

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:

 

 

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.

 

PROSPECTUS SUMMARY

	•	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.