SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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WINTRUST FINANCIAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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WINTRUST FINANCIAL CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 2003
The 2003 Annual Meeting of Shareholders of Wintrust Financial Corporation
will be held at the Michigan Shores Club, 911 Michigan Avenue, Wilmette, IL
60091, on Thursday, May 22, 2003, at 10:00 a.m. local time, for the following
purposes:
1. To elect four Class I directors to hold office for a three-year term;
2. To transact such other business as may properly come before the
Meeting and any adjournment thereof.
The record date for determining shareholders entitled to notice of, and to vote
at, the Meeting is the close of business on April 2, 2003. To make it easier for
you to vote, we are again providing the options of internet and telephone
voting. The instructions printed on your proxy card describe how to use these
convenient services. Of course, if you prefer, you can vote by mail by
completing your proxy card and returning it in the enclosed postage-paid
envelope.
By order of the Board of Directors,
David A. Dykstra
Secretary
April 29, 2003
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, IT IS IMPORTANT THAT YOU
VOTE BY ONE OF THE METHODS NOTED ABOVE.
WINTRUST FINANCIAL CORPORATION
727 North Bank Lane
Lake Forest, Illinois 60045
PROXY STATEMENT
FOR THE 2003 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD THURSDAY, MAY 22, 2003
These proxy materials are furnished in connection with the solicitation by
the Board of Directors of Wintrust Financial Corporation (the "Company"), an
Illinois corporation, of proxies to be used at the 2003 Annual Meeting of
Shareholders of the Company and at any adjournment of such meeting.
You are cordially invited to attend the Company's Annual Meeting of
Shareholders to be held on May 22, 2003, at 10:00 a.m., at the Michigan Shores
Club, 911 Michigan Avenue, Wilmette, Illinois 60091.
PROXIES, OUTSTANDING VOTING SECURITIES, AND SHAREHOLDERS ENTITLED TO VOTE
The Board of Directors has fixed the close of business on April 2, 2003 as
the record date for determining shareholders entitled to notice of, and to vote
at, the Annual Meeting. Only record holders of the Company's common stock as of
the close of business on the record date will be entitled to vote at the
meeting. On the record date, the Company had outstanding 17,371,140 shares
without par value of common stock. Each outstanding share of common stock
entitles the holder to one vote. Representation at the meeting of a majority of
shares will constitute a quorum.
Proxies received from shareholders in proper form will be voted at the
Annual Meeting and, if specified, as directed by the shareholder. Unless
contrary instructions are given, the proxy will be voted at the meeting FOR the
election of each of the nominees for Class I Director as set forth below and, in
accordance with the best judgment of the persons voting the proxies, with
respect to any other business which may properly come before the meeting and at
any adjournment of the meeting and is submitted to a vote of the shareholders,
including whether or not to adjourn the meeting. Under Illinois law and the
Company's By-laws, directors are elected by a plurality of votes cast. With
respect to brokers who are prohibited from exercising discretionary authority
for beneficial owners who have not returned proxies to the brokers, those shares
WILL NOT be included in the vote totals, although both abstentions and broker
non-votes are counted as shares present for the purpose of determining whether
the shares represented at the Annual Meeting constitute a quorum. A proxy may be
revoked at any time prior to its exercise by means of a written revocation or
submission of a properly executed proxy bearing a later date. Shareholders of
record having executed and returned a proxy who attend the meeting and desire to
vote in person are requested to so notify the Secretary of the Company prior to
or at the time of a vote taken at the Annual Meeting.
YOUR VOTE IS IMPORTANT. Because many shareholders cannot personally attend
the Annual Meeting, it is necessary that a large number be represented by proxy.
Whether or not you plan to attend the meeting in person, prompt voting will be
appreciated. Registered shareholders can vote their shares via the Internet or
by using a toll-free telephone number. Instructions for using these convenient
services are provided on the proxy card. Of course, you may still vote your
shares on the proxy card. To do so, we ask that you complete, sign, date and
return the enclosed proxy card promptly in the postage-paid envelope.
This Proxy Statement is being mailed to shareholders on or about April 29,
2003.
COST OF PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. Directors,
officers, employees and agents of the Company may solicit proxies in person or
by mail, telephone, facsimile transmission and other means. Directors, officers
and employees will receive no additional compensation for solicitation services.
Brokerage houses, nominees, fiduciaries and other custodians have been requested
to forward soliciting materials to the beneficial owners of shares of record
held by them and will be reimbursed for their expenses.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The By-laws of the Company provide for three classes of Directors with
staggered three-year terms. Currently the Board of Directors is comprised of a
total of 14 Directors. Each year the shareholders elect members of one class of
Directors for a term of three years. The term of office of those persons
currently serving as Class I Directors will expire at this Annual Meeting. The
term of those persons currently serving as Class II Directors expires at the
Annual Meeting of Shareholders to be held in 2004; and the term of Class III
Directors expires at the Annual Meeting of Shareholders to be held in 2005.
The four persons named below have been nominated for election as Class I
directors for a term to end at the Annual Meeting of Shareholders in the year
2006 or until their successors are elected and qualified. All of the nominees
currently serve as Class I directors. Each nominee has indicated a willingness
to serve, and the Board of Directors has no reason to believe that any of the
nominees will not be available for election. However, if any of the nominees is
not available for election, proxies may be voted for the election of other
persons selected by the Board of Directors. Proxies cannot, however, be voted
for a greater number of persons than the number of nominees named. Shareholders
of the Company have no cumulative voting rights with respect to the election of
directors.
The following sections set forth the names of nominees, continuing
directors of each class, their ages, a brief description of their recent
business experience, including present occupation and employment, certain
directorships held by each, and the year in which they became directors of the
Company. Director positions in the Company's subsidiaries are included in the
biographical information set forth below. Such subsidiaries include Lake Forest
Bank & Trust Company ("Lake Forest Bank"), Hinsdale Bank & Trust Company
("Hinsdale Bank"), North Shore Community Bank & Trust Company ("North Shore
Bank"), Libertyville Bank & Trust Company ("Libertyville Bank"), Barrington Bank
& Trust Company, N.A. ("Barrington Bank"), Crystal Lake Bank & Trust Company,
N.A. ("Crystal Lake Bank"), Northbrook Bank & Trust Company ("Northbrook Bank"),
Crabtree Capital Corporation ("Crabtree"), First Insurance Funding Corp.
("FIFC"), Wayne Hummer Trust Company, N.A. ("WHTC"), Tricom, Inc. of Milwaukee
("Tricom"), Wintrust Information Technology Services Company ("WITS"), Wayne
Hummer Investments LLC ("WHI"), Wayne Hummer Asset Management Company ("WHAMC"),
and Focused Investments LLC ("Focused").
2
NOMINEES TO SERVE AS CLASS I DIRECTORS UNTIL THE ANNUAL
MEETING OF SHAREHOLDERS IN THE YEAR 2006
JAMES B. MCCARTHY (51), DIRECTOR SINCE 1996 From 1991 to present, Mr. McCarthy
has been Chairman and Chief Executive Officer of Gemini Consulting Group, Inc.,
Oak Brook, Illinois, an international health care company that specializes in
the development of ambulatory surgery center joint ventures. Mr. McCarthy also
serves on the Board of Directors of Sirigen Corporation, Santa Barbara,
California, and International Medical Enterprises, LLC, Nashville, Tennessee.
Mr. McCarthy is a Director of Hinsdale Bank.
THOMAS J. NEIS (54), DIRECTOR SINCE 1999 Mr. Neis is the owner of Neis Insurance
Agency, Inc., Longaker Insurance Agency and Neis Insurance Consultants, Inc. and
is an independent insurance agent with these companies. He serves as a chairman
of the Crystal Lake Sister City organization and several other charitable and
fraternal organizations. Mr. Neis is a Director of Crystal Lake Bank.
J. CHRISTOPHER REYES (49), DIRECTOR SINCE 1996 Mr. Reyes, Chairman of Reyes
Holdings, L.L.C., manages businesses in food and beverage distribution,
transportation management and logistics, equipment leasing and real estate
activities. Mr. Reyes serves on the board of directors of The Allstate
Corporation, Fortune Brands, Inc., the Boys & Girls Clubs of Chicago, Children's
Memorial Hospital, Ronald McDonald House Charities, Northwestern Memorial
Foundation, Museum of Science and Industry, International Council of the John F.
Kennedy School of Government at Harvard University, Lyric Opera of Chicago,
World Business Chicago, El Valor and Lake Forest Academy. Mr. Reyes is a
Director of Lake Forest Bank.
EDWARD J. WEHMER (49), DIRECTOR SINCE 1996 Since May 1998, Mr. Wehmer has served
as President and Chief Executive Officer of Wintrust Financial Corporation.
Prior to May 1998, he served as President and Chief Operating Officer of the
Company since its formation in 1996. He served as the President of Lake Forest
Bank from 1991 to 1998. He was one of the principal organizers of each of the
banking subsidiaries and serves as Chairman or Vice Chairman and a Director of
each of the subsidiary Banks, WHTC, WHI, WHAMC, Focused, FIFC, Tricom and WITS.
Prior to joining the Company, Mr. Wehmer was, from 1985 to 1991, Senior Vice
President, Chief Financial Officer, and a director of River Forest Bancorp, Inc.
(now known as Corus Bankshares, Inc.), Chicago, Illinois. Mr. Wehmer is also a
certified public accountant and earlier in his career spent seven years with the
accounting firm of Ernst & Young LLP specializing in the banking field and
particularly in the area of bank mergers and acquisitions. Mr. Wehmer is
involved in several charitable and fraternal organizations.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF
THE NOMINEES FOR CLASS I DIRECTOR NAMED ABOVE.
3
CLASS II - CONTINUING DIRECTORS SERVING UNTIL THE YEAR 2004
BRUCE K. CROWTHER (51), DIRECTOR SINCE 1998 Mr. Crowther has served as President
and Chief Executive Officer of Northwest Community Healthcare, Northwest
Community Hospital and certain of its affiliates since January 1992. Prior to
that time he served as Executive Vice President and Chief Operating Officer from
1989 to 1991. He is a Fellow of the American College of Healthcare Executives.
Mr. Crowther is the past Chairman of the Board of Directors of the Illinois
Hospital and Health Systems Association as well as a member of the boards of
directors of the Chicago Hospital Risk Pooling Program. Mr. Crowther is a
Director of Barrington Bank.
BERT A. GETZ, JR. (35), DIRECTOR SINCE 2001 Mr. Getz is Executive Vice President
and Director of Globe Corporation where he has worked since 1991. Globe
Corporation is a diversified investment company focused on real estate
investment and development, asset management and private equity investments.
Founded in 1901, Globe Corporation is currently managed by the fourth generation
of Getz family members. Mr. Getz is also a Director of HDO, Inc. and IMS
Companies, LLC. Additionally, Mr. Getz serves on the Zoning Board of Appeals for
the Village of Northfield, is a Trustee of the Brookfield Zoo and a Director of
Children's Memorial Hospital. Mr. Getz serves as a Director of Libertyville
Bank, WHTC and WHAMC.
MARGUERITE SAVARD MCKENNA (60), DIRECTOR SINCE 1996 Ms. McKenna is an attorney
who has practiced law in Wilmette since 1983 with an emphasis in real
estate/construction. She has served as President of the Wilmette Chamber of
Commerce and the New Trier High School Parents Association, organizations in
which she continues active membership. She is also a member of the Wilmette
Harbor Rotary Club, the North Suburban Bar Association as well as a Director of
the New Trier Educational Foundation. Ms. McKenna is a Director of North Shore
Bank.
ALBIN F. MOSCHNER (50), DIRECTOR SINCE 1996 Since December 2001, Mr. Moschner
has been President of Verizon Card Services. Mr. Moschner had been President and
Chief Executive Officer, from December 1999 to December 2001, of One Point
Services, LLC, a telecommunications company. From September 1997 to November
1999, he served as President and Chief Executive Officer of Millecom, LLC, a
developmental stage internet communications company. From August 1996 to August
1997, he served as Vice Chairman and director and an officer of Diba, Inc., a
development stage internet technology company. Mr. Moschner served as President
and CEO and a director of Zenith Electronics, Glenview, Illinois, from 1991 to
July 1996. Mr. Moschner is also a director of Polaroid Corporation and Pella
Windows Corporation. Mr. Moschner serves as a Director of Lake Forest Bank.
INGRID S. STAFFORD (49), DIRECTOR SINCE 1998 Ms. Stafford has held various
positions since 1977 with Northwestern University, where she is currently
Associate Vice President for Finance and Controller. She has been a Director of
Wittenberg University since 1993 and serves as its Chair. She is a member of the
National Association of College and University Business Officers. Ms. Stafford
is the immediate past Chair of Leadership Evanston, Director of APTE, Inc. and a
board member of the Evanston Community Foundation. She is also the former
President of the Board of Directors of Childcare Network of Evanston and former
chair of the Board of Directors of the Evanston McGaw YMCA. Ms. Stafford is a
Director of North Shore Bank.
4
CLASS III - CONTINUING DIRECTORS SERVING UNTIL THE YEAR 2005
PETER D. CRIST (51), DIRECTOR SINCE 1996 Mr. Crist is President & CEO of Crist
Associates, an executive recruitment and assessment firm. From December 1999 to
January 2003, Mr. Crist served as Vice Chairman of Korn/Ferry, International,
the largest executive search firm in the world. Previously, he was President of
Crist Partners, Ltd., an executive search firm he founded in 1995 and sold to
Korn/Ferry, International in 1999. Immediately prior thereto he was Co-Head of
North America and the Managing Director of the Chicago office of Russell
Reynolds Associates, Inc., the largest executive search firm in the Midwest,
where he was employed for more than 18 years. Mr. Crist also serves as a
director of Northwestern Memorial Corporation. He is a Director of Hinsdale
Bank.
PHILIP W. HUMMER (71), DIRECTOR SINCE 2002 Mr. Hummer joined Wayne Hummer
Investments in 1954. He served as Chairman from 1980 to 1997 and a principal
until the firm was acquired by Wintrust Financial Corporation on February 20,
2002. He is currently Senior Vice President of Wayne Hummer Investments. Mr.
Hummer is Chairman of the Field Foundation of Illinois and a board member and
past Chairman of the Chicago Historical Society. Mr. Hummer is a Director of
WHAMC, WHI and WHTC.
JOHN S. LILLARD (72), DIRECTOR SINCE 1996 Mr. Lillard has served as the
Company's Chairman since May 1998. He spent more than 15 years as an executive
with JMB Institutional Realty Corporation, a real estate investment firm, where
he served as President from 1979 to 1991 and as Chairman-Founder from 1992 to
1994. Mr. Lillard was a general partner of Scudder Stevens & Clark until joining
JMB in 1979. He is a Life Trustee of the Chicago Symphony Orchestra and a
Trustee of Lake Forest College. Mr. Lillard currently serves as a director of
Stryker Corporation. Mr. Lillard is a Director of Lake Forest Bank, WHTC, WHI
and WHAMC.
HOLLIS W. RADEMACHER (67), DIRECTOR SINCE 1996 Mr. Rademacher is self-employed
as a business consultant and private investor. He has participated in the
organization of six of the seven Banks. From 1957 to 1993, Mr. Rademacher held
various positions, including Officer in Charge, U.S. Banking Department and
Chief Credit Officer of Continental Bank, N.A., Chicago, Illinois, and from 1988
to 1993 held the position of Chief Financial Officer. Mr. Rademacher is a
director of Schawk, Inc., CTN Media Group and The Restaurant Company, as well as
several other private business enterprises. Mr. Rademacher currently serves as a
Director of each of the subsidiary Banks, WHTC, WHI, WHAMC, FIFC and Tricom.
JOHN J. SCHORNACK (72), DIRECTOR SINCE 1996 Since 1999, Mr. Schornack has served
as Chairman of Strong Arm Products, LLC. Mr. Schornack is also the former
Chairman and CEO of KraftSeal Corporation, Lake Forest, Illinois, a position he
held from 1991 to 1997, and retired Chairman of Binks Sames Corporation,
Chicago, Illinois, where he served from 1996 to 1998. From 1955 to 1991, Mr.
Schornack was with Ernst & Young LLP, serving most recently as Vice Chairman and
Managing Partner of the Midwest Region. He is a retired Trustee of the Chicago
Symphony Orchestra; a trustee of the Kohl Children's Museum and The Night
Ministry. He also is the retired Chairman of the Board of Trustees of Barat
College, Lake Forest, Illinois. Mr. Schornack is a Director of North Shore Bank
and several other private business enterprises.
5
RETIRING DIRECTORS AND DIRECTORS EMERITUS
In response to extreme failures in corporate governance of a few large U.S.
corporations, Congress enacted the Sarbanes-Oxley Act of 2002 and the Nasdaq
proposed rules relating to corporate governance for its members. The Company has
always had a solid foundation for corporate governance and the new corporate
governance requirements will not significantly impact our method of governing
the Company. A majority of the directors were independent before the new rules
were enacted and the Company will continue with a majority of independent
directors. The Compensation and Nominating Committee and the Audit Committee
have been comprised solely of independent directors and that practice continues.
The Board and its committees routinely convene executive sessions without
management present but now we require such executive sessions to be held at each
meeting of the Board and its committees. At each meeting, the Board also
convenes an executive session exclusively with independent directors. The
functions of the Compensation and Nominating Committee have been realigned into
two separate committees: a Compensation Committee and a Corporate Governance
Committee. The Board also decided that a 24-member Board was too large to
operate effectively and the Board was reduced to 14 members in April 2003.
The following Board members and Directors Emeritus retired from the Company's
Board in late 2002 or early in 2003:
BOARD MEMBER:
Joseph Alaimo, Director since 1997
William C. Graft, Director since 1997
Raymond L. Kratzer, Director since 2002
Dorothy M. Mueller, Director since 2000
Christopher J. Perry, Director since 2001
Penelope J. Randel, Director since 2002
Peter P. Rusin, Director since 1997
John N. Schaper, Director since 1996
Katharine V. Sylvester, Director since 1996
Larry V. Wright, Director since 1996
DIRECTOR EMERITUS:
Maurice F. Dunne, Jr., Director 1996-2001
Lemuel H. Tate, Jr., Director 1996-2000
The guidance and leadership of each of the retired Directors was greatly
appreciated. Their input and counsel were vital to the success of the Company.
6
BOARD OF DIRECTORS' COMMITTEES AND COMPENSATION
BOARD OF DIRECTORS' COMMITTEES
Members of the Company's Board of Directors have been appointed to serve on
various committees of the Board. The Board of Directors has established five
committees: (i) the Compensation Committee; (ii) the Corporate Governance
Committee; (iii) the Audit Committee; (iv) the Risk Management Committee; and
(v) the Executive Committee.
Compensation Committee. The Compensation Committee is composed entirely of
independent outside directors who are not now, and have never been, officers of
the Company. The Compensation Committee is responsible for reviewing the
Company's compensation policies and administering the Company's employee benefit
and stock incentive programs, and reports to the Board regarding executive
compensation recommendations. During 2002, the Compensation Committee, then
called the Compensation and Nominating Committee, held six meetings.
Corporate Governance Committee. The Corporate Governance Committee is
composed entirely of independent outside directors who are not now, and have
never been, officers of the Company. The Corporate Governance Committee assists
the Board of Directors in monitoring developments concerning corporate
governance to ensure that the Company is in compliance with all applicable laws
and regulations, developing and recommending to the Board a set of corporate
governance principles and establishing and reviewing codes of ethics and
conduct. The Corporate Governance Committee also functions as a nominating
committee to propose to the full Board a slate of nominees for election as
directors. Any nominations for director, other than the slate proposed by the
Board, must comply with the procedures set forth in the Company's By-Laws (see
"Shareholder Proposals"). The Corporate Governance Committee was formally
created in 2003. During 2002, the Compensation Committee, then called the
Compensation and Nominating Committee, also carried out the responsibilities
that are now assigned to the Corporate Governance Committee.
Audit Committee. The Audit Committee is composed entirely of outside
independent (as defined in Rule 4200(a)(15) of the National Association of
Securities Dealers' listing standards as currently in effect) directors who are
not now, and have never been, officers of the Company. The Audit Committee is
responsible for oversight of the Company's accounting, reporting and financial
controls practices, reports to the Board regarding audit activities and
examinations, and annually reviews the qualifications of independent auditors.
Additional information regarding the functions performed by the Audit Committee
is set forth in the "Report of the Audit Committee," included in this Proxy
Statement. A written charter approved by the Board of Directors governs the
Audit Committee. A copy of this charter as amended in April 2003 is included in
Appendix A. During 2002, five Audit Committee meetings were held.
Risk Management Committee. The Risk Management Committee is responsible for
monitoring and overseeing the Company's insurance program, interest rate risk
and credit risk exposure on a consolidated basis and at the subsidiaries. This
Committee is also responsible for development and implementation of the
Company's overall asset/liability management and credit policies. During 2002,
four Risk Management Committee meetings were held.
Executive Committee The Executive Committee is authorized to exercise
certain powers of the Board, and meets as needed, usually in situations where it
is not feasible to take action by the full Board. The Executive Committee did
not meet in 2002.
7
The following table summarizes the current membership of the Board and each of
its committees:
CORPORATE RISK
COMPENSATION GOVERNANCE AUDIT MANAGEMENT EXECUTIVE
BOARD OF DIRECTORS COMMITTEE COMMITTEE COMMITTEE COMMITTEE COMMITTEE
-----------------------------------------------------------------------------------------------------------------------------------
Peter D. Crist Chair Member Member
Bruce K. Crowther Member Member
Bert A. Getz, Jr. Member Member Member
Philip W. Hummer Member
John S. Lillard (Chair) Member Member Chair
James B. McCarthy Member Member
Marguerite Savard McKenna Member Member
Albin F. Moschner Member Member
Thomas J. Neis Member Member
Hollis W. Rademacher Member Chair Member
J. Christopher Reyes Member Chair Member
John J. Schornack Member Chair Member
Ingrid S. Stafford Member Member
Edward J. Wehmer Member
-----------------------------------------------------------------------------------------------------------------------------------
BOARD OF DIRECTORS' COMPENSATION
Non-employee members of the Board of Directors are compensated by the
Company at the rate of $500 for each Board of Directors meeting attended and
$200 for each committee meeting attended. There were four meetings of the Board
of Directors held during 2002. In addition to regular Board and committee
meeting fees, the Company pays retainers to the Chairman of the Board, the
Chairman of the Risk Management Committee, the Chairman of the Audit Committee
and the Chairman of the Compensation Committee. During 2002, such retainers were
$60,000, $40,000, $15,000 and $15,000, respectively, and are set to be $65,000,
$45,000 $30,000, $20,000, and $20,000 for the Chairman of the Board, the
Chairman of the Risk Management Committee, the Chairman of the Audit Committee,
the Chairman of the Compensation Committee and the Chairman of the Corporate
Governance Committee, respectively, in 2003. Employee members of the Board of
Directors receive no Board of Director compensation. All non-employee directors
who serve on the subsidiary boards of directors are also entitled to
compensation for such service. For the period during 2002 in which they served,
all of the directors attended at least 75% of the total number of meetings held
of the Board and those committees on which they served, except for Mr. Crowther.
8
DEFERRED COMPENSATION FOR NON-EMPLOYEE DIRECTORS
The Wintrust Financial Corporation Directors Deferred Fee and Stock Plan
(the "Fee Plan") allows non-employee Directors of the Company and its
subsidiaries to choose payment of directors' fees in either cash or Common Stock
of the Company and to facilitate deferral of receipt of fees for income tax
purposes, both in cash or Common Stock. The Fee Plan is designed to encourage
stock ownership by directors by facilitating receipt of Common Stock in lieu of
directors' fees. Eligible directors who do not participate in the Fee Plan
continue to receive cash compensation for attendance at Board of Director
meetings or committee meetings. Eligible directors who elect to participate in
the Fee Plan must choose from the following three compensation options:
1. Fees Paid in Stock. If so elected by the director, the fees payable to
such director will be paid in shares of the Company's common stock. The
number of shares of common stock to be issued will be determined by
dividing the fees earned during a calendar quarter by the fair market value
(as defined in the Fee Plan) of the common stock on the last trading day of
the preceding quarter. The shares of common stock to be paid will be issued
once a year on or about January 15th or more frequently if so determined by
the administrator. Once issued, the shares will be entitled to full
dividend and voting rights.
2. Deferral of Common Stock. If a director elects to defer receipt of the
common stock, the Company will maintain on its books deferred stock units
("Units") representing an obligation to issue shares of common stock to the
director. The number of Units credited will be equal to the number of
shares that would have been issued but for the deferral election.
Additional Units will be credited at the time dividends are paid on the
common stock. The number of additional Units to be credited each quarter
will be computed by dividing the amount of the dividends that would have
been received if the Units were outstanding shares by the fair market value
of the common stock on the last trading day of the preceding quarter.
Because Units represent a right to receive common stock in the future, and
not actual shares, there are no voting rights associated with them. In the
event of an adjustment in the Company's capitalization or a merger or other
transaction that results in a conversion of the common stock, corresponding
adjustments will be made to the Units. The director will be a general
unsecured creditor of the Company for purposes of the common stock to be
paid in the future. The shares of common stock represented by the Units
will be issued on or about January 15th in the year specified by the
director in his participation agreement or in annual installments over a
specified period not to exceed ten years.
3. Deferral of Cash. If a director elects to defer receipt of directors
fees in cash, the Company will maintain on its books a deferred
compensation account representing an obligation to pay the director cash in
the future. The amount of the director's fees will be credited to this
account as of the date such fees otherwise would be payable to the
director. All amounts credited to a director's deferred compensation
account will accrue interest based on the 91-day Treasury Bill discount
rate, adjusted quarterly, until paid. Accrued interest will be credited at
the end of each calendar quarter. No funds will actually be set aside for
payment to the director and the director will be a general unsecured
creditor of the Company for purposes of the amount in his deferred
compensation account. The amount in the deferred compensation account will
be paid to the director on or about January 15th in the year specified by
the director in his participation agreement or in annual installments over
a specified period not to exceed ten years.
9
EXECUTIVE OFFICERS OF THE COMPANY
The Company's executive officers are elected annually by the Company's
Board of Directors at the first meeting of the Board following the Annual
Meeting. Certain information regarding those persons serving as the Company's
executive officers is set forth below.
Edward J. Wehmer (49) -- President and Chief Executive Officer - Mr. Wehmer
serves as the Company's President and performs the functions of the Chief
Executive Officer. Accordingly, he is responsible for overseeing the execution
of the Company's day-to-day operations and strategic initiatives. See the
description above under "Election of Directors" for additional biographical
information.
David A. Dykstra (42) -- Senior Executive Vice President and Chief Operating
Officer, Secretary and Treasurer - Mr. Dykstra serves as the Company's Chief
Operating Officer overseeing all treasury, financial, audit, compliance and
human resources affairs of the Company. Prior thereto, Mr. Dykstra was employed
from 1990 to 1995 by River Forest Bancorp, Inc. (now known as Corus Bankshares,
Inc.), Chicago, Illinois, most recently holding the position of Senior Vice
President and Chief Financial Officer. Prior to his association with River
Forest Bancorp, Mr. Dykstra spent seven years with KPMG LLP, most recently
holding the position of Audit Manager in the banking practice. Mr. Dykstra is a
Director of Libertyville Bank, Northbrook Bank, WHI, WHAMC, WHTC, Focused, FIFC,
Tricom and WITS.
David L. Stoehr (43) -- Executive Vice President and Chief Financial Officer -
Mr. Stoehr joined the Company in January 2002 and manages all financial and
accounting affairs of the Company, including internal and external reporting.
Previously, Mr. Stoehr was Senior Vice President/Reporting & Analysis at
Firstar/U.S. Bancorp, Director of Finance/Controller of Associated Banc-Corp
with primary responsibility for financial accounting and reporting, business
unit financial management and data warehouse design and implementation. Prior to
his association with Associated, Mr. Stoehr was Assistant Vice President/Balance
Sheet Management at Huntington Bancshares, Inc., Columbus, Ohio, from 1993 to
1995 and Financial Reporting Officer at Valley Bancorporation, Appleton,
Wisconsin from 1983 to 1993.
Lloyd M. Bowden (49) -- Executive Vice President -- Technology - Mr. Bowden
serves as Executive Vice President - Technology for the Company and as President
of WITS. He is responsible for planning, implementing and maintaining all
aspects of the subsidiary banks' internal data processing systems and technology
designed to service the subsidiary banks' customer base. Mr. Bowden joined the
Company in April 1996 to serve as the Director of Technology with responsibility
for implementing technological improvements to enhance customer service
capabilities and operational efficiencies. Prior thereto, he was employed by
Electronic Data Systems, Inc. in various capacities since 1982, most recently in
an executive management position with the Banking Services Division and
previously in the Banking Group of the Management Consulting Division. Mr.
Bowden is a Director of WITS.
James F. Duca, II (45) -- Executive Vice President -- Wealth Management - Mr.
Duca serves as Executive Vice President - Wealth Management (appointed March
2003) for the Company. He is responsible for the Company's Wealth Management
group (WHI, WHAMC, WHTC and Focused) and serves as President and Chief Executive
Officer of WHTC and WHAMC. Prior to joining Wintrust in December 2001, Mr. Duca
was President of the Kent Funds; the mutual funds of Old Kent Financial Corp.,
where he also served as Senior Vice President. Before his association with Old
Kent, Mr. Duca held a variety of positions over 14 years with various
subsidiaries of Marshall & Ilsley Corp., including serving as President of
Marshall & Ilsley's mutual fund family, and Vice President and Trust Counsel.
Mr. Duca is a director of WHI, WHAMC, WHTC, Focused and WITS.
Robert F. Key (48) -- Executive Vice President -- Marketing - Mr. Key serves as
the Executive Vice President - Marketing for the Company and directs all
advertising and marketing programs for each of the subsidiary banks, WHI, WHAMC,
WHTC and Focused. Mr. Key joined the Company in March 1996 to serve as Executive
Vice President of Marketing. From 1978 through March 1996, Mr. Key was a Vice
President/Account Director at Leo Burnett Company. Mr. Key also serves as a
Trustee for Woodlands Academy.
10
Richard B. Murphy (43) -- Executive Vice President and Chief Credit Officer -
Since January 2002, Mr. Murphy has served as the Company's Chief Credit Officer
and is responsible for coordinating all the credit functions of the Company. Mr.
Murphy also serves as the President of Hinsdale Bank, a position he has held
since 1996. From 1993 until his promotion to President of Hinsdale Bank, Mr.
Murphy served as the Executive Vice President and Senior Lender of Hinsdale
Bank. Prior to his association with the Company, Mr. Murphy served as President
of the First State Bank of Calumet City. Mr. Murphy is a director of Hinsdale
Bank and WITS.
Barbara A. Kilian (44) -- Senior Vice President -- Finance - Ms. Kilian serves
as the Senior Vice President - Finance for the Company and is responsible for
tax accounting and reporting and certain accounting and financial reporting
activities of the Company and its subsidiaries. Ms. Kilian joined the Company in
October 2000. Previously Ms. Kilian was employed from 1995 to 2000 as Vice
President - Corporate Acquisitions at FBOP Corporation, Oak Park, Illinois, and
from 1986 to 1995 at First Colonial Bankshares Corporation, Chicago, Illinois,
most recently holding the position of Senior Vice President and Chief Financial
Officer. Prior to her association with First Colonial, Ms. Kilian spent seven
years with KPMG LLP, in various audit and tax positions serving the financial
institutions industry.
David J. Galvan (42) -- Vice President -- Investments - Mr. Galvan has served as
the Vice President of Investments for the Company since June 1999. He directs
all securities investment activity, wholesale funding and interest rate risk
management for the Company. Previously, Mr. Galvan was employed for 16 years at
Amcore Financial, Inc., Rockford, Illinois, where he served as Vice President
and Funds Manager. Mr. Galvan also serves as a Vice President and Portfolio
Manager of WHAMC.
11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table sets forth the beneficial ownership of the common stock
as of the record date, with respect to (i) each Director and each Named
Executive Officer (as defined herein) of the Company; and (ii) all Directors and
executive officers of the Company as a group. No shareholders are known to hold
in excess of 5% of any class of the Company's voting securities. All share data
has been adjusted to reflect the 3-for-2 stock split effective March 4, 2002.
AMOUNT OF CURRENTLY TOTAL
COMMON SHARES EXERCISABLE AMOUNT OF TOTAL
BENEFICIALLY OPTIONS & BENEFICIAL PERCENTAGE
OWNED(1) WARRANTS (1) OWNERSHIP(1) OWNERSHIP(1)
------------- ------------ ------------ ------------
DIRECTORS
Peter D. Crist......................... 47,266 3,257 50,523 *
Bruce K. Crowther...................... 1,840 382 2,222 *
Bert A. Getz, Jr....................... 2,955 1,812 4,767 *
Philip W. Hummer....................... 40,078 -- 40,078 *
John S. Lillard........................ 181,189 6,760 187,949 1.08%
James B. McCarthy...................... 21,793 3,076 24,869 *
Marguerite Savard McKenna.............. 22,610 6,232 28,842 *
Albin F. Moschner...................... 23,928 -- 23,928 *
Thomas J. Neis......................... 1,155 -- 1,155 *
Hollis W. Rademacher................... 77,260 14,452 91,712 *
J. Christopher Reyes................... 309,363 6,007 315,370 1.82%
John J. Schornack...................... 14,461 5,705 20,166 *
Ingrid S. Stafford..................... 4,488 5,829 10,317 *
Edward J. Wehmer**..................... 235,910 134,744 370,654 2.12%
OTHER NAMED EXECUTIVE OFFICERS
David A. Dykstra....................... 53,311 105,915 159,226 *
Robert F. Key.......................... 44,717 67,248 111,965 *
Richard B. Murphy...................... 17,347 79,327 96,674 *
David L. Stoehr........................ -- 2,550 2,550 *
TOTAL DIRECTORS, & EXECUTIVE
OFFICERS ( 22 PERSONS) ........... 1,131,107 513,848 1,644,955 9.21%
_____________________________________
* Less than 1%
** Denotes person serving as Director and as an executive officer.
(1) Beneficial ownership and percentages are calculated in accordance with
Securities and Exchange Commission ("SEC") Rule 13d-3 promulgated under the
Securities Exchange Act of 1934.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by the Company and its
subsidiaries to those persons serving as Chief Executive Officer and the four
other most highly compensated executive officers (the "Named Executive
Officers") during 2002, 2001 and 2000. In determining the level of bonuses in
2002 and 2001, the Company's Compensation Committee evaluated the bonus amount
in conjunction with stock incentive awards. See further discussion of the
Company's overall compensation philosophy in the "Compensation Committee Report
on
12
Executive Compensation" contained later in this Proxy Statement. All share
and per share data has been adjusted to reflect the 3-for-2 stock split
effective March 4, 2002.
SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------- ---------------------------
OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPEN- STOCK UNDERLYING COMPEN-
NAME AND SALARY BONUS SATION(1) AWARDS(S) OPTIONS/ SATION(3)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (2) SARS (#) ($)
---------------------------------------------------------------------------------------------------------------------------------
Edward J. Wehmer 2002 498,333 145,000 9,053 55,007(4) 180,000 56,207
President & 2001 479,167 73,806 5,751 358,394(5) -- 84,900
Chief Executive Officer 2000 470,000 50,000 8,499 -- -- 84,900
David A. Dykstra 2002 300,208 90,625 7,818 34,376(4) -- 20,596
Senior Executive Vice President & 2001 272,917 44,848 7,517 45,152(5) 21,000(6) 600
Chief Operating Officer 2000 250,000 50,000 7,484 -- -- 600
Richard B. Murphy 2002 224,375 43,500 1,246 16,505(4) -- 138
Executive Vice President & 2001 189,167 14,123 684 9,877(5) 4,999(6) 138
Chief Credit Officer 2000 179,438 27,000 875 -- -- 138
Robert F. Key 2002 215,792 45,675 6,614 17,312(4) -- 720
Executive Vice President - 2001 207,333 18,140 6,152 14,110(5) 1,000(6) 720
Marketing 2000 200,000 20,000 5,558 -- -- 720
David L. Stoehr
Executive Vice President &
Chief Financial Officer 2002(7) 156,667 40,525 10,411 13,465(4) 22,750 --
_________________________________________________
(1) Other annual compensation represents the value of certain perquisites,
including the use of a Company car and/or the payment of club dues.
(2) The number and value of the aggregate restricted stock holdings of each of
the named executives as of December 31, 2002, based on the closing price of
$31.32 of the Company's common stock on that date, assuming the awards had
been made on that date, were as follows:
Name Shares Value
------------------------------------ ------------- -------------------
Edward J. Wehmer................... 20,823 $ 652,176
David A. Dykstra................... 3,508 109,871
Richard B. Murphy.................. 1,057 33,105
Robert F. Key...................... 1,308 40,967
David L. Stoehr.................... 434 13,593
(3) Represents the aggregate life insurance premium paid on behalf of the Named
Executive Officer by the Company and/or other miscellaneous benefits. For
Mr. Wehmer, the amount includes interest forgiven of $55,307, $84,900 and
$84,900 related to 2002, 2001 and 2000 service, respectively, for interest
related to a term loan agreement. For Mr. Dykstra, the amount for 2002
includes $19,996 of interest forgiven related to 2002 service for interest
related to a term loan agreement. Mr. Wehmer's and Mr. Dykstra's loans were
paid in full in January 2003. See "Transactions with Management and
Others."
(4) Represents the value of restricted stock units approved in January 2003
with respect to executive's service in 2002, granted on January 21, 2003.
The per share value of units awarded was $31.025 on that date. All units
vest fully on January 21, 2004 subject to the individuals continued
employment.
(5) Represents the value of restricted stock units approved in January 2002
with respect to executive's service in 2001, granted on January 22, 2002.
The per share value of units awarded was $18.8133 on that date. All units,
with the exception of Mr. Wehmer's awards, vested fully on January 22,
2003. Mr. Wehmer has 9,050 restricted stock units that vested on January
22, 2003, 5,000 restricted stock units that vest on January 22, 2004 and
5,000 restricted stock units that vest on January 22, 2005.
(6) Represents grants of options approved in January 2002 with respect to
executives' service in 2001.
(7) Reflects compensation for full year service during executive's initial year
of employment with the Company. The 2002 bonus amount includes a signing
bonus of $5,000.
13
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The table below summarizes for each Named Executive Officer certain
information about options, which were granted by the Company under the 1997
Stock Incentive Plan with respect to the executives' service in 2002. All
options were granted at per share exercise prices equal to the fair market value
per share on the date of grant.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
% OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS/ VALUE AT ASSUMED
SHARES SARS ANNUAL RATES OF
UNDERLYING GRANTED TO EXERCISE STOCK PRICE
OPTIONS/ EMPLOYEES OR BASE APPRECIATION
SARS IN FISCAL PRICE EXPIRATION FOR OPTION/SAR TERM
NAME GRANTED (1) YEAR ($/SH) DATE 5% 10%
---- ----------- ------------ -------- ---------- ------------- -------------
Edward J. Wehmer .......... 180,000 32.2% 18.8133 1/22/12 2,129,685 5,397,040
David A. Dykstra .......... -- -- -- -- -- --
Richard B. Murphy ......... -- -- -- -- -- --
Robert F. Key ............. -- -- -- -- -- --
David L. Stoehr ........... 12,750 2.3% 18.8133 1/22/12 150,853 382,290
10,000 1.8% 30.5650 10/24/12 192,222 487,127
_________________________________________________
(1) Pursuant to the terms of the option awards, all such options vest in 20%
annual increments beginning on the first anniversary date of grant with an
additional 20% vesting on each of the next four succeeding anniversary
dates.
AGGREGATED OPTION/SAR EXERCISES AND YEAR-END VALUES
The following table summarizes for each Named Executive Officer the number
of shares of common stock subject to outstanding Options/SARs and the value of
such Options/SARs at December 31, 2002.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS/SARS AT OPTIONS/SARS AT
NAME EXERCISE (#) REALIZED ($) DECEMBER 31, 2002 (#) DECEMBER 31, 2002 ($)(2)
---- ------------ ------------ --------------------- ------------------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE(1) UNEXERCISABLE(1)
--------------- ----------------
Edward J. Wehmer.......... 174,106 2,719,871 68,786 / 186,000 1,499,316 / 2,367,126
David A. Dykstra.......... -- -- 94,155 / 26,400 2,079,114 / 366,969
Richard B. Murphy......... -- -- 75,036 / 7,699 1,776,947 / 114,685
Robert F. Key............. -- -- 64,048 / 4,000 1,391,592 / 70,467
David L. Stoehr........... -- -- -- 22,750 -- 167,010
________________________________________
(1) The numbers and amounts represent shares of common stock subject to
outstanding Options/SARs granted by the Company or its predecessors that
were unexercised as of December 31, 2002.
(2) The estimated fair value of the Company's common stock at December 31, 2002
was $31.32 per share.
14
EMPLOYMENT AGREEMENTS
In 1998, the Company entered into new employment agreements with Edward J.
Wehmer, David A. Dykstra, Robert F. Key, and Richard B. Murphy as well as
certain other officers of the Company and its subsidiaries. David L. Stoehr
entered into an employment agreement upon his employment in 2002. The employment
agreements contain confidentiality agreements and two-year non-compete
provisions in the event of termination of employment for any reason, and provide
for up to 24 months of severance pay at an annual rate equal to the executive's
current base salary and prior year bonus amount in the event of (i) termination
without cause, (ii) a material reduction in duties and responsibilities, (iii)
permanent disability (as defined in the agreement), or (iv) reduction in base
annual compensation to less than 75% of the executive's "Adjusted Total
Compensation", as defined in the agreement to be the aggregate of current base
salary plus the dollar value of all perquisites for the preceding twelve month
period. "Adjusted Total Compensation" excludes any bonus payments paid or earned
by the executives. The severance amounts payable under the agreement are subject
to reduction for any income earned from other employment during the two-year
period or, in the case of disability, any long-term disability insurance
benefits from policies maintained or paid for by the Company. In addition, in
the event of the executive's death resulting in termination of employment, the
executive's beneficiaries are entitled to a lump sum payment equal to the
aggregate severance pay amount, reduced by any life insurance benefits under
policies paid for by the Company. The "Adjusted Total Compensation" as of the
respective dates of such agreements for Messrs. Wehmer, Dykstra, Murphy, Key and
Stoehr were $469,000, $214,000, $168,000, $190,000 and $155,000, respectively.
In addition to any increases in base salaries that may be agreed to from time to
time, the executives are entitled to participate in any employee insurance and
fringe benefit programs that may be established by the Company for its
employees. The current annual base salaries of Messrs. Wehmer, Dykstra, Murphy,
Key and Stoehr are $600,000, $400,000, $227,500, $223,000 and $171,600,
respectively.
The employment agreements also provide for a lump sum payment in the event
the executive's employment is terminated without cause (or constructively
terminated due to a material reduction in duties and responsibilities or a
reduction in Adjusted Total Compensation as described above) within 12 months
following a change in control (as defined in the agreement) of the Company. Such
change in control payment shall be equal to two times the sum of the executive's
base annual salary plus prior year's bonus, subject to reduction in certain
circumstances if the amount payable under the agreement together with any other
amounts payable by the Company to the executive is deemed to result in "excess
parachute payments" under Section 280G of the Internal Revenue Code. The
agreement does not require the amount to be scaled back to satisfy the Section
280G limit, however, if the contractual change in control payment minus the
excise taxes that would be payable by the executive would be greater than the
reduced amount.
Amendments made to Mr. Wehmer's and Mr. Dykstra's employment agreements in
January 2000 and January 2002, respectively, entitled them to certain special
bonus payments to pay interest on loans made to them by the Company. See
"Transactions with Management and Others". In January 2003, the executives
agreed to refinance these loans with an unaffiliated bank and paid their loans
from the Company in full. Accordingly, the executives will not receive these
special bonus payments in future years, which the Compensation Committee took
into account in adjusting their base salaries in 2003.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The committee that determines executive compensation consists entirely of
non-employee Directors, although Edward J. Wehmer, President and Chief Executive
Officer of the Company, makes recommendations to the Committee regarding
compensation of officers other than himself. Mr. Wehmer serves on the
compensation committees of each of the Company's subsidiaries, including WHTC
and WHI, which are responsible for determining the compensation of the senior
officers of those subsidiaries. Mr. Hummer is a Senior Vice President of WHI and
is a Director of the Company.
15
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any other filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934 except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such acts.
Overall Compensation Philosophy: The Compensation Committee of the Board of
Directors (the "Committee") has the responsibility to monitor and implement the
overall executive compensation program of the Company. The objectives of the
Company's compensation policies are to enhance shareholder value; to create and
sustain high performance; to attract and retain as executives individuals who
can contribute substantially to the Company's short- and long-term goals; and to
align the interests of executives with those of the shareholders of the Company.
The philosophy is to provide competitive base salaries which reflect individual
levels of responsibility and performance, annual bonuses based upon personal
achievement and contributions to annual corporate performance, and stock-based
incentive awards. The combined result is a strengthening of the mutuality of
interest in the Company's long-term performance between its executive officers
and the Company's shareholders.
Base Salaries: Base salaries for executive officers are determined at the
time of hire by comparing responsibilities of the position with those of other
similar executive officer positions in the marketplace and the individual's
experience. Annual salary adjustments are determined giving consideration to the
Company's performance and the individual's contribution to that performance.
While there are no specific performance weightings established, the salary
recommendations are based on performance criteria such as:
o financial performance of the Company with a balance between long- and
short-term growth in earnings, revenue and asset growth;
o role in development and implementation of long term strategic plans;
o responsiveness to changes in the financial institution marketplace;
and
o growth and diversification of the Company.
The Company's strategy has been to pay executives very competitive salaries
in an effort to attract and retain highly qualified, well-experienced
individuals which, given the relatively young history of the Company, currently
may be higher than those paid by comparably sized financial institutions.
However, as the Company continues to mature, the Committee believes that
increases to total compensation should increasingly be more heavily weighted
toward the bonus and stock incentive components than the base salary component.
This philosophy is intended to ensure a pay for performance compensation
framework which is aligned with shareholder value.
Bonuses: Executives may earn annual cash bonuses based upon a
pay-for-performance philosophy which are determined at the conclusion of each
fiscal year. In recommending bonuses, the Committee considers the achievements
of each executive officer for that year, as well as the Company's performance.
The achievements may be quantitative or qualitative. Qualitative factors
include, but are not limited to, commitment, dedication, demonstration of the
entrepreneurial spirit, creativity and initiative, and attention to personnel
relations. The Committee also evaluates the bonus amount in conjunction with
stock incentive awards, if any, and the Committee may determine to pay a portion
of annual bonuses in the form of restricted stock or options rather than cash.
Given the size of the Company, the Committee believes it is feasible to
evaluate the different individual contributions of each of the Company's
executive officers, and, as a matter of policy, there has not been a defined
bonus plan established. However, the Committee does evaluate the attainment of
certain specific Company and individual objectives, which are typically set at
the beginning of the year, in determining the bonus amounts awarded to
executives. The primary objectives are based upon net income, deposit growth,
loan growth, certain financial performance measures such as net interest margin,
credit quality issues and net overhead ratios, and tailored personal objectives
for each executive. The Committee uses these measurable objectives as a
guideline to establish executive
16
bonuses relative to a targeted bonus percentage established in connection with
the performance objectives, but the end determination of such bonuses is
ultimately a discretionary decision. Accordingly, the policy used by the Board
to set cash bonuses is considered subjective. The bonuses for each of the
executive officers other than the President and CEO are recommended to the
Committee by management.
Stock-based Incentives: To ensure a direct connection between the executive
officer interests and the shareholders of the Company, the Company has awarded
and intends to continue to award stock-based incentives which are longer term in
nature than the base salary and annual cash bonus components of overall
compensation. The incentives have been primarily in the form of restricted stock
awards or stock options granted at exercise prices at or above fair market value
on the date of grant. The intention is to incentivize employees to create
shareholder value over the long term since the full benefit of the compensation
package cannot be realized unless appreciation in the share price occurs over a
number of years.
In 2002 and 2001, the Company granted restricted stock unit awards to
senior management as part of annual bonuses. These units vest one year from the
date of grant, with the exception of one grant in 2001 to Mr. Wehmer which vests
at a rate of one-third on each of the first three anniversary dates of the
award. All vested shares are to be issued within 40 days from the vesting date.
In 2002 and 2000, the Company did not award stock options to any Named
Executive Officers other than one award to Mr. Wehmer as described below. For
2001 performance, the Company granted non-qualified stock options to senior
management as part of their overall compensation package. The stock option
awards were determined in the first quarter of 2002. Such stock options were
granted at exercise prices equal to fair market value on the date of grant, vest
in equal increments over five years and have a term of ten years.
In January 2002, the Committee granted Mr. Wehmer a non-qualified stock
option for 180,000 shares of the Company's common stock. Mr. Wehmer's tenure
with the Company has been since its inception over eleven years ago and a
significant portion of his options matured in 2002. This grant was intended to
substantively replace those maturing options and was made as an incentive for
Mr. Wehmer to continue to create shareholder value over the long term through
appreciation in the share price over the ten-year term of the option award.
Chief Executive Officer Compensation: Mr. Edward J. Wehmer's base salary
for 2002 was established by the Committee in January of 2002 and his salary
level was increased by $20,000, or 4.2%, to $500,000. The salary adjustment
reflects the Committee's philosophy that, as the Company grows, Mr. Wehmer's
compensation should be influenced more heavily by incentive-based compensation
than by base salary increases.
In determining the level of bonuses in 2002, the Committee evaluated the
bonus amount in conjunction with stock incentive awards. To that end, Mr. Wehmer
received a cash bonus of $145,000 and was awarded restricted stock units with
respect to 1,773 shares, granted on January 21, 2003 at which time the fair
market price of the common stock was $31.025. The restricted stock units vest on
the first anniversary date of the award. The 2002 bonus amount awarded to Mr.
Wehmer was based on the recognition by the members of the Committee of his
dedication to the success of the Company as exhibited through long-term vision,
entrepreneurial spirit, hard work ethic, knowledge of the financial services
industry, strong operational and financial control knowledge and his ability to
recruit a management team with similar characteristics. In addition, the
Committee considered the following corporate achievements:
(1) The continued growth of the Company as one of the largest de novo
banking operations in the country.
(2) The increase in the profitability of the Company to $27.9 million in
2002 from $18.4 million in 2001, up 51%.
17
(3) The growth of the Company's assets, deposits and loans during 2002 of
$1.0 billion, $774 million and $538 million, respectively. The
increases show growth in these categories in the range of 27% to 38%.
(4) The Company's net revenues increased 54% in 2002 over the prior year
level.
(5) The successful completion of a common stock offering during the year
that generated net capital to the Company of approximately $36.5
million.
(6) The reduction in the net overhead ratio to 1.41% in 2002 from 1.59% in
2001.
(7) The completion of the acquisition of the Wayne Hummer Companies in
February 2002, and the agreement to purchase Lake Forest Capital
Management Company in late December. These acquisitions will further
diversify the Company's revenue stream.
(8) The continuing stability in the manageable level of non-performing
assets.
(9) Continued growth of the Company's market price of its common stock,
ending the year at $31.32, up 54% over the closing price of the common
stock on December 31, 2001.
Section 162(m): The provisions of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), limit the tax deductibility of
compensation paid to the Named Executive Officers for compensation in excess of
$1 million. However, certain "performance based" compensation is excluded from
the Section 162(m) limit if paid pursuant to plans approved by shareholders. In
2002 and prior years, the Company has not been impacted by the provisions of
Section 162(m). The Committee will continue to evaluate the impact of such
provisions and to consider compensation policies and programs appropriate for an
organization of the Company's size and history in an effort to address the
potential impact, if any, in the future. The Committee may determine that it is
appropriate to compensate the executives above the limit in circumstances of
outstanding corporate or executive achievement.
Conclusion: The Committee believes the executive officers' individual
compensation packages are designed in a manner which is consistent with the
Company's overall compensation philosophy.
PETER D. CRIST (Chairman of the Committee) ALBIN F. MOSCHNER
JOHN S. LILLARD HOLLIS W. RADEMACHER
MARGUERITE SAVARD MCKENNA J. CHRISTOPHER REYES
18
PERFORMANCE GRAPH
The performance graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any other
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934
except to the extent that the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under such acts.
The following performance graph compares the percentage change in the
Company's cumulative shareholder return on common stock compared with the
cumulative total return on composites of (1) all Nasdaq National Market stocks
for United States companies (broad market index) and (2) all Nasdaq National
Market bank stocks (peer group index). Cumulative total return is computed by
dividing the sum of the cumulative amount of dividends for the measurement
period and the difference between the Company's share price at the end and the
beginning of the measurement period by the share price at the beginning of the
measurement period. The Nasdaq National Market for United States companies index
comprises all domestic common shares traded on the Nasdaq National Market and
the Nasdaq Small-Cap Market. The Nasdaq National Market bank stocks index
comprises all banks traded on the Nasdaq National Market and the Nasdaq
Small-Cap Market.
TOTAL RETURN PERFORMANCE
[GRAPH]
12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
-------- -------- -------- -------- -------- --------
Wintrust Financial Corporation $100.00 $115.44 $ 89.71 $ 94.33 $182.02 $281.03
Nasdaq - Total US 100.00 140.99 261.48 157.42 124.89 86.33
Nasdaq - Bank Index 100.00 99.36 95.51 108.95 117.97 120.61
19
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Some of the executive officers and Directors of the Company are, and have
been during the preceding year, customers of the Bank, and some of the officers
and Directors of the Company are direct or indirect owners of 10% or more of the
stock of corporations which are, or have been in the past, customers of the
Bank. As such customers, they have had transactions in the ordinary course of
business of the Bank, including borrowings, all of which transactions are or
were on substantially the same terms (including interest rates and collateral on
loans) as those prevailing at the time for comparable transactions with
nonaffiliated persons. In the opinion of management of the Company, none of the
transactions involved more than the normal risk of collectibility or presented
any other unfavorable features. At December 31, 2002, the Banks had $11.9
million in loans outstanding to certain Directors and executive officers of the
Company and certain executive officers of the Banks, which amount represented
5.2% of total shareholders' equity and 0.5% of the Company's total loans
outstanding as of that date.
During the organization of the Company's predecessor companies, Edward J.
Wehmer, President and Chief Executive Officer, purchased various shares of
Company stock using borrowed funds. Mr. Wehmer maintained the loan for such
purchases at an unaffiliated bank. In January 2000, the Company entered into a
term note agreement with Mr. Wehmer and his spouse and loaned them $1,200,000 in
order for Mr. Wehmer to retire the debt at the unaffiliated bank. The note had a
maturity date of January 31, 2005. From its inception until January 31, 2002,
the note had an interest rate of 7%. Effective January 31, 2002, the interest
rate was adjusted to the prime rate with a cap of 7%. Interest was compounded
and paid annually. The note was full recourse to the borrowers and was also
secured by a pledge of 150,000 shares of the Company's common stock. If Mr.
Wehmer's employment with the Company terminated for any reason, the Company had
the right to immediately accelerate the maturity of the note if the principal
and accrued interest on the note had not been paid in full within 90 days of the
date of termination. The Company had also agreed to amend Mr. Wehmer's
employment agreement to provide for a special annual bonus paid to Mr. Wehmer in
the amount equal to the accrued interest on the note, paid one business day
prior to each anniversary of the date of the note. In January 2003, Mr. Wehmer
paid this loan in full by refinancing such loan with an unaffiliated bank.
In January 2002, David A. Dykstra, Senior Executive Vice President and
Chief Operating Officer entered into a term loan agreement with the Company. Mr.
Dykstra could have borrowed up to $500,000 for the purpose of acquiring common
stock of the Company. The note had a maturity date of January 31, 2007 and
accrued interest at the prime rate not to exceed 7%. Interest was compounded and
paid annually. The note was full recourse to the borrower and was also secured
by 22,300 shares of the Company's common stock. If Mr. Dykstra's employment with
the Company terminated for any reason, the Company had the right to immediately
accelerate the maturity of the note if the principal and accrued interest on the
note had not been paid in full within 90 days of the date of termination. The
Company also agreed to amend Mr. Dykstra's employment agreement to provide for a
special annual bonus paid to Mr. Dykstra in the amount equal to the accrued
interest on the note, paid one business day prior to each anniversary of the
date of the note. In 2002, Mr. Dykstra borrowed $500,000 to acquire 22,300
shares of the Company's common stock. In January 2003, Mr. Dykstra paid this
loan in full by refinancing such loan with an unaffiliated bank.
On February 20, 2002, the Company completed it acquisition of 100% of the
ownership interest of Wayne Hummer Investments LLC (including its wholly owned
subsidiary, Focused Investments LLC) and Wayne Hummer Management Company
(collectively the "Wayne Hummer Companies"). The Company paid a purchase price
of $28 million consisting of $8 million of cash, 762,742 shares of the Company's
common stock (valued at $15 million) and $5 million of deferred cash payments to
be made over a three-year period subsequent to the closing date. The Company
could pay additional contingent consideration upon the attainment of certain
performance objectives over the next five years. Mr. Hummer was a principal in
the Wayne Hummer Companies with an individual ownership percentage of 7%. In
conjunction with the transaction, Mr. Hummer also entered into an employment
agreement with the Company that has a term of three years from the date of the
acquisition with possible renewable one-year terms. The employment agreement
contains confidentiality agreements and provides for non-solicitation provisions
of up to 24 months of in the event of termination of employment for any reason,
and provide for up to 24 months of severance pay in the event of (i) termination
without cause, (ii) a material reduction in duties and responsibilities, (iii)
permanent disability (as defined in the agreement), or (iv) death. The severance
amounts payable under the agreement
20
are subject to reduction for any income earned from other employment during the
two-year period or, in the case of death or disability, any long-term disability
insurance benefits from policies maintained or paid for by the Company. In
addition, in the event of the executive's death resulting in termination of
employment, the executive's beneficiaries are entitled to a lump sum payment
equal to the aggregate severance pay amount, reduced by any life insurance
benefits under policies paid for by the Company. In addition, the executive is
entitled to participate in any employee insurance and fringe benefit programs
that may be established by the Company for its employees.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers to file reports of holdings and transactions in
the Company's common stock with the Securities and Exchange Commission. Based
upon its review of copies of such reports and of trading in the Company's common
stock, the Company is not aware of any late filings during 2002.
21
REPORT OF THE AUDIT COMMITTEE
The report of the Audit Committee shall not be deemed incorporated by reference
by any general statement incorporating by reference in this Proxy Statement into
any other filing under the Securities Act of 1933 or the Securities Exchange Act
of 1934 except that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed under such Acts.
The Audit Committee of the Board is composed of six directors and operates under
a written charter adopted by the Audit Committee. The Board appoints the Audit
Committee and its Chairman, with the Committee to consist of no fewer than three
directors. The Charter of the Audit Committee is attached hereto as Appendix A.
Each member of the Committee meets the independence requirements of the listing
standards set forth by the National Association of Securities Dealers, Inc. for
companies whose securities are listed on the Nasdaq National Market. The
Committee assists the Board, through review and recommendation, in its oversight
responsibility related to the quality and integrity of the Company's financial
information and reporting functions, the adequacy and effectiveness of the
Company's system of internal accounting and financial controls, and the
independent audit process.
Management has primary responsibility for the Company's internal controls and
for preparation of the consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America. Ernst
& Young LLP, the Company's independent accountants, are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States of America and issuing a report thereon. The Audit Committee is
responsible for monitoring and overseeing these processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants to review and discuss consolidated
financial statements of the Company for the year ended December 31, 2002.
Management represented to the Audit Committee that the financial statements of
the Company were prepared in accordance with accounting principles generally
accepted in the United States. The Audit Committee also reviewed and discussed
with the independent accountants the matters required by Statement on Auditing
Standards No. 61, as amended (Communication with Audit Committees).
The Audit Committee also received written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard No.1
(Independence Discussions with Audit Committees). Consistent with Independence
Standards Board Statement No. 1 and the SEC's "Revision of the Commission's
Auditor Independence Requirements," which became effective February 5, 2001, the
Audit Committee considered at a meeting held on March 18, 2003, whether these
relationships and arrangements are compatible with maintaining the independent
accountants' independence and has discussed with the independent accountants its
independence from the Company.
Based upon the Audit Committee's discussion with management and the independent
accountants, including discussions with them without management present, and its
review of the representations of management and independent accountants, the
Audit Committee recommended that the Board of Directors include the audited
financial statements in the Company's Annual Report on Form 10-K for the year
ended December 31, 2002, filed with the Securities and Exchange Commission.
JOHN J. SCHORNACK (Chairman of the Committee) JAMES B. McCARTHY
BRUCE K. CROWTHER ALBIN F. MOSCHNER
BERT A. GETZ, JR. INGRID S. STAFFORD
22
INDEPENDENT AUDITOR AND FEES PAID
The Company's independent public accountants for the fiscal year ended December
31, 2002 were Ernst & Young LLP. The Company's Audit Committee has selected
Ernst & Young LLP to serve as the Company's independent auditor for 2003. Under
its charter, the Audit Committee is solely responsible for reviewing the
qualifications of the Company's independent auditors, and selecting the
independent auditors for the current fiscal year. One or more representatives of
Ernst & Young LLP will be present at the Annual Meeting and will have the
opportunity to make a statement if they desire to do so, and will be available
at the Annual Meeting to respond to appropriate questions.
The following is a description of the fees billed to the Company by Ernst &
Young LLP during the year ended December 31, 2002:
AUDIT FEES: Audit fees billed to the Company by Ernst & Young LLP for
professional services rendered by them in connection with Ernst & Young's
review and audit of the Company's annual financial statements for the year
ended December 31, 2002 and Ernst & Young's review of the Company's interim
financial statements included in Wintrust's Quarterly Reports on Form 10-Q
for the year ended December 31, 2002 totaled $327,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES: The Company
did not engage Ernst & Young LLP to provide professional services regarding
financial information systems design and implementation of the nature
described in SEC Regulation S-X 2-01(c)(4)(ii) during the year ended
December 31, 2002.
ALL OTHER FEES: Fees billed to the Company by Ernst & Young LLP during the
year ended December 31, 2002 for all other non-audit services (including
fees for tax related services in the amount of $138,180) totaled $348,805.
New SEC rules, which will be applicable to the Company in 2004, will require in
next year's proxy statement a description of aggregate fees billed by the
independent auditor in the newly defined four categories described below. Under
the newly defined categories, some fees that are reported above as Audit Fees
and All Other Fees are reported under the new SEC definitions below as
Audit-Related Fees and Tax Fees. The following is a description of the 2002 fees
discussed above but under the new SEC categories as currently understood:
AUDIT FEES: Audit fees include fees billed by Ernst & Young LLP for the
review and audit of the Company's annual financial statements and review of
financial statements included in the Company's quarterly reports filed with
the SEC, as well as services normally provided by an independent public
accountant in connection with statutory and regulatory filings or
engagements. Aggregate fees for audit services totaled $420,000 in 2002.
AUDIT-RELATED FEES: Audit-related fees include fees for assurance and
related services that are reasonably related to the performance of the
audit or review of the financial statements. Aggregate fees for
audit-related services in 2002 were $117,625.
TAX FEES: Tax fees include fees for tax compliance, tax advice and tax
planning services. Aggregate fees for tax services were $138,180 in 2002.
ALL OTHER FEES: This category comprises all fees billed by Ernst & Young
LLP to the Company not included in the previous three categories. No other
fees were billed in 2002.
The Audit Committee has considered whether the provision of non-audit services
by the Company's independent auditor is compatible with maintaining the
auditor's independence.
23
SHAREHOLDER PROPOSALS
Shareholders' proposals intended to be presented at the Company's 2004
Annual Meeting of Shareholders must be received in writing by the Secretary of
the Company no later than December 31, 2003, in order to be considered for
inclusion in the proxy material for that meeting. Any such proposals shall be
subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934 (the "Exchange Act"). Furthermore, in order for any
shareholder to properly propose any business for consideration at the 2004
Annual Meeting, including the nomination of any person for election as a
director, or any other matter raised other than pursuant to Rule 14a-8 of the
proxy rules adopted under the Exchange Act, written notice of the shareholder's
intention to make such proposal must be furnished to the Company in accordance
with the By-laws. Under the existing provisions of the By-laws, if the 2004
Annual Meeting is held on May 27, 2004, the deadline for such notice is March
28, 2004.
OTHER BUSINESS
The Company is unaware of any other matter to be acted upon at the Annual
Meeting for shareholder vote. In case of any matter properly coming before the
Annual Meeting for shareholder vote, unless discretionary authority has been
denied the proxy holders named in the proxy accompanying this statement shall
vote them in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
David A. Dykstra
Secretary
24
APPENDIX A
----------
WINTRUST FINANCIAL CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
COMMITTEE CHARTER
(APPROVED BY THE BOARD ON APRIL 9, 2003)
ORGANIZATION
------------
This charter governs the operation of the Audit Committee. The Committee shall
review and reassess the charter at least annually and obtain the approval of the
Board of Directors. The Committee shall be members of, and appointed by, the
Board of Directors and shall comprise at least three directors, each of whom is
independent of management and the Company. Members of the Committee shall be
considered independent as long as they do not accept any consulting, advisory,
or other compensatory fee from the Company with the exception of Directors' fees
and are not an affiliated person of the Company or its subsidiaries, and meet
the independence requirements of SEC regulations and applicable stock exchange
listing requirements. All members shall be financially literate, and at least
one member shall be a "financial expert" as defined by SEC regulations. The
Chairman of the Committee shall be elected by the Board out of those members
appointed to the Committee. The Chairman shall preside at meetings of the
Committee.
PURPOSE
-------
The Audit Committee shall fulfill the Board's oversight responsibility to the
shareholders, potential shareholders, the investment community, and others
relating to: integrity of the Company's financial statements and the financial
reporting process; the systems of internal accounting and financial reporting
controls, the performance of the Company's internal audit function and
independent auditors; the independent auditor's qualifications and independence;
annual independent audit of the Company's financial statements, and the
Company's compliance with ethics policies and legal and regulatory requirements.
In so doing, it is the responsibility of the Committee to maintain free and open
communication between the Committee, independent auditors, the internal
auditors, and management of the Company.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities, and personnel of the Company and the authority to engage independent
counsel and other advisors as it determines necessary to carry out its duties.
DUTIES AND RESPONSIBILITIES
---------------------------
The primary responsibilities of the Audit Committee are to select the Company's
independent auditors and to oversee the Company's financial reporting process on
behalf of the Board and report the results of their activities to the Board.
While the Audit Committee has the responsibilities and powers set forth in the
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. Management
is responsible for the preparation, presentation, and integrity of the Company's
financial statements and for the appropriateness of the accounting principles
and reporting policies that are used by the Company. The independent auditors
are responsible for auditing the Company's financial statements and for
reviewing the Company's un-audited interim financial statements.
The Committee shall have a clear understanding with Company management that the
independent auditors shall report directly to the Audit Committee and are
ultimately accountable to the Committee as representatives of the Company's
shareholders.
A-1
The Committee, in carrying out its responsibilities, believes its policies and
procedures should remain flexible, in order to best react to changing conditions
and circumstances. The Committee should take appropriate actions to set the
overall corporate "tone" for quality of financial reporting, sound business risk
practices, and ethical behavior. The following shall be principal duties and
responsibilities of the Audit Committee. These are set forth as a guide with the
understanding that the Committee may supplement them as appropriate.
1) The Committee shall be directly responsible for the appointment and
termination, compensation, and oversight of the work of the independent
auditors, including resolution of disagreements between management and the
auditor regarding financial reporting. The Committee shall pre-approve all
audits and non-audit services provided by the independent auditors and
shall not engage the independent auditors to perform the specific non-audit
services proscribed by law or regulation. The Committee may delegate
pre-approval authority to a member of the Audit Committee. The decisions of
any Audit Committee member to whom pre-approval authority is delegated must
be presented to the full Audit Committee at its next scheduled meeting.
2) At least annually, the Committee shall obtain and review a report by the
independent auditors describing:
- The firm's internal quality control procedures;
- Any material issues raised by the most recent internal quality control
review, or peer review, of the firm, or by an inquiry or investigation
by the governmental or professional authorities, within the preceding
five years, respecting one or more independent audits carried out by
the firm, and any steps taken to deal with any such issues; and
- All relationships between the independent auditor and the Company (to
assess the auditor's independence). In addition, the Committee shall
set clear hiring policies for employees or former employees of the
independent auditors that meet the SEC regulations and applicable
stock exchange listing standards.
3) The Committee shall discuss with the internal auditors and the independent
auditors the overall scope and plans for their respective audits, including
the adequacy of staffing and compensation. Also, the Committee shall
discuss with management, the internal auditors, and independent auditors
the adequacy and effectiveness of the accounting and financial controls,
including the Company's policies and procedures to assess, monitor, and
manage business risk, and legal and ethical compliance programs.
4) The Committee shall meet separately periodically with management, the
internal auditors and the independent auditors to discuss issues and
concerns warranting Committee's attention. The Committee shall provide
sufficient opportunity for the internal auditors and the independent
auditors to meet privately with the members of the Audit Committee. The
Committee shall review with the independent auditor any audit problems or
difficulties and management's response.
5) The Committee shall review with the independent auditors the competence of
the key partners and managers who are responsible for the audit and quality
control procedures the auditing firm has established.
6) The Committee shall periodically review Company policy statements to
determine adherence to an appropriate corporate code of conduct.
7) The Committee shall oversee the internal audit function of the Company
which will report to the Chairman of the Audit Committee, including the
independence, the proposed audit plans for the coming year, and the
coordination of such plans with any third party internal audit firm and the
independent auditors.
8) The Committee shall receive prior to each meeting a summary of findings
from completed internal audits and a progress report on the proposed
internal audit plan, with explanations for any deviations from the original
plan.
A-2
9) The Committee shall review the interim financial statements and disclosures
under Management's Discussion and Analysis of Financial Condition and
Results of Operations with management and the independent auditors prior to
the press release to the public and the filing of the Company's Quarterly
Report on Form 10-Q. Also, the committee shall discuss the results of the
quarterly review and any other matters required to be communicated by the
independent auditors under generally accepted auditing standards. On at
least a quarterly basis, the Committee shall consider reports from
management regarding any significant differences or material weakness in
the design or operation of the Company's disclosure controls and procedures
or internal controls provided in connection with the CEO and CFO
certification of periodic reports filed with the SEC. The Chairman may
represent the entire Committee for the purpose of this timely review.
The Committee shall also review and discuss earning press releases, as well
as financial information and earnings guidance provided to analysts and
rating agencies.
10) The Committee shall review with management and the independent auditors the
financial statements and disclosures under Management's Discussion and
Analysis of Financial Condition and Results of Operation to be included in
the Company's Annual Report on Form 10-K (or the annual report to
shareholders if distributed prior to the filing of Form 10-K), including
their judgement about the quality, not just acceptability, of accounting
principles, the reasonableness of significant judgements, and the clarity
of the disclosures in the financial statements. Also, the Committee shall
discuss the results of the annual audit and any other matters required to
be communicated to the Committee under generally accepted auditing
standards.
11) The Committee shall review regular reports from the independent auditor on
the critical policies and practices of the Company and all alternative
treatments of financial information within generally accepted accounting
principles that have been discussed with management, as well as any other
material written communications between the independent auditor and
management, such as any management letter. The Committee shall also review
management's assertion on its assessement of the effectiveness of internal
controls as of the end of the most recent fiscal year and the independent
auditor's report on management's assertion.
12) The Committee shall review staffing needs associated with accounting,
finance and human resources functions as well as succession planning within
the Company;
13) The Committee shall oversee the whistleblower protection process and
establish procedures for the receipt, retention, and treatment of
complaints received by the issuer regarding accounting, internal accounting
controls, or auditing matters, and the confidential, anonymous submission
by employees of concerns regarding questionable accounting or auditing
matters; and
14) The Committee shall receive corporate attorney's reports of evidence of a
material violation of securities laws or breaches of fiduciary duty.
FORMAL REPORTING
----------------
The Committee shall prepare its report to be included in the Company's annual
proxy statement, as required by SEC regulations. The report that states whether
the Committee has: 1) reviewed the annual audited financial statements with the
management; 2) discussed with the independent auditors the matters required by
SAS No. 61; 3) received from the independent auditors the required written
communication and discussed with them their independence and, based on the above
reviews and discussions; 4) recommended to the Board that the audited financial
statements be included in the Company's Form 10-K for filing with the Securities
and Exchange Commission.
A-3
MANNER OF ACTING
----------------
A majority of the members of the Audit Committee present (in person or by
telephone) at any meeting of the Committee shall constitute a quorum and
approval by a majority of the quorum is necessary for Committee action. Minutes
shall be recorded of each meeting held. When appropriate, action may be taken by
written consent in lieu of a meeting of the Committee.
REPORTS
-------
The Chairman of the Audit Committee (or in his absence such other Committee
member as the Committee may select) shall report on behalf of the Committee to
the full Board at each regularly scheduled meeting thereof with respect to any
action taken by the Committee if any meetings of the Committee have been held
(or action otherwise taken) since the date of the previous Board meeting. In
lieu of any such report, the minutes of meetings held or other record of action
taken may be submitted to the Board of Directors for review.
A-4
The Directors and Officers of
WINTRUST FINANCIAL CORPORATION
cordially invite you to attend our
2003 Annual Meeting of Shareholders
Thursday, May 22, 2003, 10:00 a.m.
Michigan Shores Club
911 Michigan Avenue
Wilmette, Illinois
YOU CAN VOTE IN ONE OF THREE WAYS: 1) BY MAIL, 2) BY PHONE, 3) BY INTERNET.
See the reverse side of this sheet for instructions.
IF YOU ARE NOT VOTING BY TELEPHONE OR BY INTERNET,
COMPLETE BOTH SIDES OF PROXY CARD,
DETACH AND RETURN IN THE ENCLOSED ENVELOPE TO:
Illinois Stock Transfer Co.
209 West Jackson Boulevard, Suite 903
Chicago, Illinois 60606
IMPORTANT
Please complete both sides of the PROXY CARD, sign, date, detach and return in
the enclosed envelope.
DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF NOT OTHERWISE
SPECIFIED ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED.
THE UNDERSIGNED REVOKES ALL PROXIES HERETOFORE GIVEN TO VOTE AT SUCH MEETING AND
ALL ADJOURNMENTS OR POSTPONEMENTS.
Dated ___________________________
__________________________________
__________________________________
(Please sign here)
Please sign your name as it appears above. If executed by a corporation, a duly
authorized officer should sign. Executors, administrators, attorneys, guardians
and trustees should so indicate when signing. If shares are held jointly, at
least one holder must sign.
DETACH ATTENDANCE CARD HERE
AND MAIL WITH PROXY CARD
--------------------------------------------------------------------------------
WINTRUST FINANCIAL
CORPORATION
If you personally plan to attend the Annual Meeting of Shareholders, please
check the box below and list names of attendees on reverse side.
Return this stub in the enclosed envelope with your completed proxy card.
I/We do plan to attend
the 2003 meeting. [ ]
TO VOTE BY MAIL
To vote by mail, complete both sides, sign and date the proxy card below. Detach
the card below and return it in the envelope provided.
TO VOTE BY TELEPHONE
Your telephone vote is quick, confidential and immediate. Just follow these easy
steps:
1. Read the accompanying Proxy Statement.
2. Using a Touch-Tone telephone, call Toll Free 1-800-555-8140 and follow
the instructions.
3. When asked for your Voter Control Number, enter the number printed
just above your name on the front of the proxy card below.
Please note that all votes cast by telephone must be COMPLETED and SUBMITTED
prior to Monday, May 19, 2003 at 11:59 Central Time.
Your telephone vote authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated and returned the proxy card.
IF YOU VOTE BY TELEPHONE PLEASE DO NOT RETURN YOUR PROXY CARD BY MAIL
TO VOTE BY INTERNET
Your Internet vote is quick, confidential and your vote is immediately
submitted. Just follow these easy steps:
1. Read the accompanying Proxy Statement.
2. Visit our Internet voting Site at http://www.eproxyvote.com/ist-wfccm/
and follow the instructions on the screen.
3. When prompted for your Voter Control Number, enter the number printed
just above your name on the front of the proxy card.
Please note that all votes cast by Internet must be COMPLETED and SUBMITTED
prior to Monday, May 19, 2003 at 11:59 pm Central Time.
Your Internet vote authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated and returned the proxy card.
THIS IS A "SECURED" WEB PAGE SITE. YOUR SOFTWARE AND/OR INTERNET PROVIDER MUST
BE "ENABLED" TO ACCESS THIS SITE. PLEASE CALL YOUR SOFTWARE OR INTERNET PROVIDER
FOR FURTHER INFORMATION IF NEEDED.
IF YOU VOTE BY INTERNET, PLEASE DO NOT RETURN YOUR PROXY CARD BY MAIL
Wintrust Financial Corporation
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John S. Lillard and Edward J. Wehmer and either
of them as Proxies, each with the power to appoint his substitute, and hereby
authorizes each of them to represent and to vote, as designated below, all the
shares of Common Stock of Wintrust Financial Corporation which the undersigned
is entitled to vote at the Annual Meeting of Shareholders to be held on May 22,
2003 or any adjournment thereof. If any other business is presented at the
Annual Meeting, including whether or not to adjourn the meeting, this proxy will
be voted, to the extent legally permissible, by those named in this proxy in
their best judgement.
PROPOSAL 1 - ELECTION OF DIRECTORS (To be designated as a Class I Director with
term ending in 2006.)
[ ] FOR ALL NOMINEES Listed Below
(except as marked to the contrary below).
[ ] WITHHOLD AUTHORITY to vote for all nominees below.
(Instructions: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name).
01 JAMES B. MCCARTHY 03 J. CHRISTOPHER REYES
02 THOMAS J. NEIS 04 EDWARD J. WEHMER
PLEASE LIST NAMES OF PERSONS ATTENDING
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
(to be signed on the other side)